0000898531-18-000695.txt : 20181210 0000898531-18-000695.hdr.sgml : 20181210 20181210164451 ACCESSION NUMBER: 0000898531-18-000695 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 20180930 FILED AS OF DATE: 20181210 DATE AS OF CHANGE: 20181210 EFFECTIVENESS DATE: 20181210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVISORS SERIES TRUST CENTRAL INDEX KEY: 0001027596 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-07959 FILM NUMBER: 181226648 BUSINESS ADDRESS: STREET 1: U.S BANCORP FUND SERVICES, LLC STREET 2: 615 E MICHIGAN STREET CITY: MILWAUKEE STATE: WI ZIP: 53202 BUSINESS PHONE: 414-765-5340 MAIL ADDRESS: STREET 1: 615 E MICHIGAN STREET STREET 2: MK-WI-LC2 CITY: MILWAUKEE STATE: WI ZIP: 53202 0001027596 S000035415 Scharf Fund C000108787 Institutional Class LOGIX C000152038 Retail Class LOGRX C000198253 R6 Class LGRSX 0001027596 S000039497 Scharf Multi-Asset Opportunity Fund C000121649 Institutional Class LOGOX C000168063 Retail Class LOGBX 0001027596 S000046127 Scharf Global Opportunity Fund C000144365 Retail Class WRLDX 0001027596 S000052315 Scharf Alpha Opportunity Fund C000164478 Retail Class HEDJX N-CSR 1 scharf-ncsra.htm SCHARF FUNDS ANNUAL REPORT 9-30-2018
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES




Investment Company Act file number 811-07959



Advisors Series Trust
(Exact name of registrant as specified in charter)



615 East Michigan Street
Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)


Jeffrey T. Rauman, President/Chief Executive Officer
Advisors Series Trust
c/o U.S. Bancorp Fund Services, LLC
777 East Wisconsin Avenue, 10th Floor
Milwaukee, WI 53202
(Name and address of agent for service)



(414) 765-6872
(Registrant's telephone number, including area code)



Date of fiscal year end: September 30, 2018



Date of reporting period: September 30, 2018



Item 1. Reports to Stockholders.

 

 
SCHARF FUNDS
 
 

 
Scharf Fund
Institutional Class – LOGIX
Retail Class – LOGRX
 
Scharf Balanced Opportunity Fund
Institutional Class – LOGOX
Retail Class – LOGBX
 
Scharf Global Opportunity Fund
Retail Class – WRLDX
 
Scharf Alpha Opportunity Fund
Retail Class – HEDJX
 
 

 
ANNUAL REPORT
 
September 30, 2018
 


Scharf Investments, LLC
 

SCHARF FUNDS

TABLE OF CONTENTS

To Our Shareholders
 
2
     
Investment Highlights
 
12
     
Expense Examples
 
18
     
Sector Allocation of Portfolio Assets
 
21
     
Schedules of Investments
 
25
     
Statements of Assets and Liabilities
 
42
     
Statements of Operations
 
46
     
Statements of Changes in Net Assets
 
48
     
Statement of Cash Flows
 
54
     
Financial Highlights
 
55
     
Notes to Financial Statements
 
61
     
Report of Independent Registered Public Accounting Firm
 
82
     
Notice to Shareholders
 
83
     
Information about Trustees and Officers
 
85
     
Householding
 
88
     
Privacy Notice
 
89


SCHARF FUNDS

TO OUR SHAREHOLDERS
 
PERFORMANCE AS OF 9/30/2018
SCHARF FUND
         
Since
Since
 
6
One
Three
Five
Inception
Inception
Cumulative:
Months
Year
Year
Year
12/30/2011
1/28/2015
  Scharf Fund – Institutional Class
  8.05%
  8.93%
30.16%
59.24%
116.08%
N/A
  Scharf Fund – Retail Class
  7.83%
  8.58%
29.02%
N/A
N/A
26.89%
  S&P 500® Index
11.41%
17.91%
61.43%
92.10%
166.96%
57.08%
    (with dividends reinvested)
           
Annualized:
           
  Scharf Fund – Institutional Class
9.19%
9.75%
12.08%
N/A
  Scharf Fund – Retail Class
8.86%
N/A
N/A
6.70%
  S&P 500® Index
17.31%
13.95%
15.65%
13.09%
    (with dividends reinvested)
           
             
SCHARF BALANCED OPPORTUNITY FUND
         
Since
Since
 
6
One
Three
Five
Inception
Inception
Cumulative:
Months
Year
Year
Year
12/31/2012
1/21/2016
  Scharf Balanced Opportunity
           
    Fund – Institutional Class
   5.70%
   6.32%
22.43%
41.46%
  60.03%
N/A
  Scharf Balanced Opportunity
           
    Fund – Retail Class
   5.56%
   6.00%
N/A
N/A
N/A
24.77%
  Lipper Balanced Funds Index
   4.23%
   6.91%
30.00%
42.16%
  56.87%
33.36%
    (with dividends reinvested)
           
  Bloomberg Barclays U.S.
           
    Aggregate Bond Index
  -0.14%
  -1.22%
  3.99%
11.28%
    9.18%
  3.64%
  S&P 500® Index
           
    (with dividends reinvested)
 11.41%
 17.91%
61.43%
92.10%
130.13%
64.77%
Annualized:
           
  Scharf Balanced Opportunity
           
    Fund – Institutional Class
  6.98%
  7.18%
    8.52%
N/A
  Scharf Balanced Opportunity
           
    Fund – Retail Class
N/A
N/A
N/A
  8.56%
  Lipper Balanced Funds Index
  9.14%
  7.29%
    8.15%
11.29%
    (with dividends reinvested)
           
  Bloomberg Barclays U.S.
           
    Aggregate Bond Index
  1.31%
  2.16%
    1.54%
  1.34%
S&P 500® Index
           
    (with dividends reinvested)
17.31%
13.95%
  15.60%
20.37%
             

2

SCHARF FUNDS

 
SCHARF GLOBAL OPPORTUNITY FUND
         
         
Since
   
6
One
Three
Inception
Cumulative:
 
Months
Year
Year
10/14/2014
  Scharf Global Opportunity Fund
 
9.48%
 11.72%
 41.85%
47.12%
  MSCI All Country World Index (Net)
 
4.83%
   9.77%
 45.82%
42.84%
Annualized:
         
  Scharf Global Opportunity Fund
 
 12.34%
10.24%
  MSCI All Country World Index (Net)
 
 13.40%
  9.42%
           
SCHARF ALPHA OPPORTUNITY FUND
         
         
Since
     
6
One
Inception
Cumulative:
   
Months
Year
12/31/2015
  Scharf Alpha Opportunity Fund
   
   2.66%
   0.79%
  2.06%
  HFRX Equity Hedge Index
   
  -2.05%
   1.79%
  9.09%
  Bloomberg Barclays U.S. Aggregate Bond Index
   
  -0.14%
  -1.22%
  4.58%
  S&P 500® Index (with dividends reinvested)
   
 11.41%
 17.91%
50.81%
Annualized:
         
  Scharf Alpha Opportunity Fund
   
  0.74%
  HFRX Equity Hedge Index
   
  3.22%
  Bloomberg Barclays U.S. Aggregate Bond Index
   
  1.64%
  S&P 500® Index (with dividends reinvested)
   
16.11%
           
 
Performance data quoted represents past performance; past performance does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.  Current performance of the Funds may be lower or higher than the performance quoted.  Performance data current to the most recent month end may be obtained by calling 1-866-572-4273.
 
The gross expense ratios, as of the Funds’ registration statement dated January 28, 2018, for the Scharf Fund Institutional Class, Scharf Fund Retail Class, Scharf Balanced Opportunity Fund Institutional Class, Scharf Balanced Opportunity Fund Retail Class, Scharf Global Opportunity Fund, and Scharf Alpha Opportunity Fund are 1.14%, 1.39%, 1.52%, 1.77%, 1.97%, and 3.20%, respectively.  The net expense ratios, as of the Funds’ registration statement dated January 28, 2018, for the Scharf Fund Institutional Class, Scharf Fund Retail Class, Scharf Fund Scharf Balanced Opportunity Fund Institutional Class, Scharf Balanced Opportunity Fund Retail Class, Scharf Global Opportunity Fund, and Scharf Alpha Opportunity Fund represent the percentages paid by investors and are 1.01%, 1.26%, 1.02%, 1.27%, 0.71%, and 2.18%, respectively, after fee waivers and expense reimbursements, including acquired fund fees and expenses, interest, taxes and extraordinary expenses. Scharf Investments, LLC (the “Adviser”), the Funds’ investment adviser, has contractually agreed to waive fees through January 27, 2019 for the Scharf Fund, Scharf Balanced Opportunity Fund, Scharf Global Opportunity Fund, and Scharf Alpha Opportunity Fund.  The Scharf Fund charges a 2.00% redemption fee on redemptions or exchanges of fund shares that are made within 60 days of purchase.  The Scharf Balanced Opportunity Fund, Scharf Global Opportunity Fund, and Scharf Alpha Opportunity Fund charge a 2.00% redemption fee on redemptions or exchanges of fund shares that are made within 15 days of purchase.  Had a redemption fee been included, returns would be lower.
 
3

SCHARF FUNDS
 
Dear Fellow Shareholders,
 
For the fiscal year ended September 30, 2018, the Scharf Fund Institutional Class and Retail Class returned 8.93% and 8.58%, respectively, compared to the 17.91% return for the S&P 500® Index (“S&P 500”).  The key contributors to relative performance for the period were Microsoft Corp., Advance Auto Parts, Inc., Motorola Solutions, Inc., and Apple, Inc.  The key detractors from relative performance were Sodexo SA, Allergan plc, CDK Global, Inc., and Comcast Corp.
 
For the fiscal year ended September 30, 2018, the Scharf Balanced Opportunity Fund (effective November 1, 2018, known as the Scharf Multi-Asset Opportunity Fund) Institutional Class and Retail Class returned 6.32% and 6.00%, respectively, compared to the 6.91% return for the Lipper Balanced Funds Index, -1.22% return for the Bloomberg Barclays U.S. Aggregate Bond Index, and 17.91% return for the S&P 500.  The key contributors to relative performance for the period were Microsoft Corp., Advance Auto Parts, Inc. (“Advance Auto Parts”), Motorola Solutions, Inc., and Apple, Inc. The key detractors from relative performance were Sodexo SA, Allergan plc, CDK Global, Inc., and McKesson Corp. (“McKesson”).
 
For the fiscal year ended September 30, 2018, the Scharf Global Opportunity Fund returned 11.72% compared to the 9.77% return for the MSCI All Country World Index (Net).  The key contributors to relative performance for the period were Advance Auto Parts, Inc., Microsoft Corp., Sherwin-Williams Co., and Sony Corp.  The key detractors from relative performance were Sodexo SA, CDK Global, Inc., Allergan plc, and McKesson Corp.
 
For the fiscal year ended September 30, 2018, the Scharf Alpha Opportunity Fund returned 0.79% compared to the 1.79% return for the HFRX Equity Hedge Index, -1.22% return for the Bloomberg Barclays U.S. Aggregate Bond Index, and 17.91% return for the S&P 500.  The key contributors to relative performance for the period were Microsoft Corp., Advance Auto Parts, Inc., Motorola Solutions, Inc., and Sherwin-Williams Co.  The key detractors from relative performance were Sodexo SA, CDK Global, Inc., Dollar Tree, Inc., and Allergan plc.
 
It is hard to believe a decade has passed since the Global Financial Crisis had investors staring into the financial abyss.  With unprecedented low interest rates and monetary stimulus since, a rising tide lifted all boats, but passive U.S. indices, growth and momentum stocks floated the highest.  While momentum stocks may currently be in favor, our philosophy is rooted in the principle that it is safer and more profitable over the long-run to buy companies with a history of consistent earnings growth trading at a discount to their fair value.  This approach will lead to periods of underperformance, especially in the later stages of a bull market.  However, we do not worry about short-term stock sentiment if we believe the company’s long-term earnings power is intact.  Fundamentally, we believe the market is overvaluing potential future earnings (e.g. growth stocks) and undervaluing actual current earnings (e.g. value stocks).  We recognize that the past few years have been tough on a relative basis for the Scharf Funds but we remain vigilant in our attempt to construct portfolios exhibiting consistent earnings growth at favorable prices.
 
 
MARKET COMMENTARY
 
Surviving the Amazon Effect:  In a momentum driven market, investors have become quick to dump a stock based on speculation or short-term factors while ignoring the company’s longer-term potential.  One such example of this, which negatively impacted several of our stocks in mid-2018, was the announcement of Amazon’s acquisition of PillPack.  An online and mail order pharmacy which charges a premium to ship pre-packaged doses of medicine, PillPack
 
4

SCHARF FUNDS
 
has a small subscriber base of roughly 50,000 (<0.0% market share).  To put this into perspective, CVS Health Corp. (“CVS”) has roughly 25% market share and filled approximately 1.2 billion prescriptions in 2017.  While no one should doubt the ability of Amazon to disrupt an industry, we remain skeptical that the purchase of a company with little market share or scale will have a significant near-term impact on the highly regulated and complex pharmacy industry.  It took Walmart, the last significant competitor in drug retail, more than a decade to establish just a 5% market share despite its $4 generic drug promotion and high volume of daily customers.  In addition, CVS and Walgreens Boots Alliance, Inc. (“Walgreens”) currently have mail order and multi-dose drug dispensing capabilities in place, but both companies have indicated that customers overwhelmingly elect to pick up their prescriptions in-store when presented with the option of mail order.
 
Walgreens, which reported strong earnings the same day as the PillPack announcement, declined roughly 10% on the news.  CVS and McKesson also saw large declines.  A similar story played out for the shares of supermarket companies when Amazon bought Whole Foods Market in June of 2017.  Kroger, for example, was down roughly 25% a week after the announcement.  More diverse retailers with grocery businesses also got punished as Costco, Target and Walmart declined 14%, 12% and 6%, respectively.  These declines were short lived though as shares of the companies rebounded nicely over the following twelve months.
 
Grocery Stock Prices Slump then Rebound after Whole Foods Acquisition
 

 
Source: Bloomberg

It’s not just pharmacies and grocery stores that have come under siege.  In fact, it is difficult to think of an industry that hasn’t been impacted by fears of an Amazon entry.  After increasing reports early last year that Amazon was trying to move deeper into the auto parts segment, shares of auto parts retailers embarked on a slow and steady decline.  Current Scharf stock, Advance Auto Parts, was our worst performing stock last year.  This Amazon-induced selloff was clearly overdone as shares subsequently rebounded more than 100% off the lows, making it our best performing stock this year.  While the stock still hasn’t returned to its all-time highs, this example illustrates the profound distinction between price and value.  Prices are arbitrary and can deviate from value, often to a large degree, but over time they should converge.  By maintaining a longer-term view and ignoring price volatility, we are able to buy businesses at a discount to their fair value.  As successful value investor Preston Athey once said, “One thing you can do as a value investor is to arbitrage time and to recognize that you’re going to be early, but if you get the right price, it all works out in the end.”
 
Revenge of the Downtrodden:  While growth and momentum stocks continued to power forward this past quarter, we are starting to see signs in our own portfolio that indicate investors are recognizing the value in unfairly beaten up names selling at a discount to the market.  The worst performing stocks in the Scharf Fund last year, for example, are among our best performers this most recent quarter.
 
5

SCHARF FUNDS
 


 
Source: Bloomberg.  Performance quoted is stock performance and doesn’t represent gains/losses for Scharf Fund portfolios.  Includes stocks that were owned in the Scharf Fund for all of 2017 and were still owned as of 9/30/2018.
 
 
Is sentiment finally starting to shift?  If interest rates continue to rise, we believe this could be the case.  Growth stocks, whose valuations are predicated on the potential for strong long-term earnings, tend to do well in low interest rate environments when the time value of money is low and growth is at a premium.  Why is this the case?  Imagine you had the option of $1 today or $1.25 five years from now.  At a 0% rate of interest you would be wise to wait to receive the higher sum.  If, however, you could invest $1 at a risk-free rate of 5% per year, you would have $1.28 in five years and would be smarter to take $1 today.  In this way, investors ascribe a lower multiple to stocks, and growth stocks in particular, as rates rise.  Thus, a rising rate environment tends to favor stocks trading at lower valuations.  Just last week, as the 10-year treasury yield hit its highest mark since 2011, stocks across the board fell with technology shares leading the charge.  With the Federal Reserve (“Fed”) on track for more rate increases in coming months, we believe higher multiple stocks could come under further pressure as investors seek safety in those trading at more attractive valuations.
 
S&P Priced for Unrealistic Future Growth:  Now ten years into this current bull market, it is quite remarkable that the S&P just had its best quarter since the fourth quarter of 2013.  Investors seemed to shrug off fears about inflation and tariffs and instead focused on the strong economy and robust corporate profits.  Second quarter gross domestic product (“GDP’) growth was above 4% and roughly 80% of U.S. companies exceeded analyst earnings expectations, growing earnings 25% on a year-over-year basis.  While these numbers were certainly cheered by investors, it is important to remember that they were largely propped up by fiscal stimulus and corporate friendly tax reform.
 
Going forward, there is reason to believe these numbers may not look as rosy.  One quarter does not make a year, and despite the 4% GDP growth achieved in Q2, full year growth is expected to come in at just 3%.  This is better than recent history but lower than the long-run average of 3.2%.  Over the last 25 years, GDP growth has actually declined. Labor input growth, capital input growth, and productivity growth, the three contributors to GDP growth, have all failed to keep up with the levels achieved during the technology powered 1990s.  Since the financial crisis, most of the recovery in GDP growth can be attributed to labor input growth (hiring) while productivity growth has been almost nonexistent.
 
6

SCHARF FUNDS


 
Source: Bernstein Research
 
As the economy runs out of workers, the largest piece of the above pie could shrink considerably. There are now under 6 million unemployed workers, and there are not enough unemployed job seekers available to fill demand for 7 million U.S. job offerings.  A sign of the times: Amazon just raised their minimum wage by 36% from $11 to $15 an hour.
 
The Congressional Budget Office (“CBO”), which puts out a regular report with GDP growth projections, expects economic growth to be relatively strong this year and next but expects average growth over the next 10 years to come in at just 1.9%.  Even with more aggressive assumptions of productivity growth in line with the late 1990s tech boom, GDP growth should only come in at 2.2%, according to a recent analysis from Bernstein Research.  Many market participants, on the other hand, are unrealistically pricing in long term growth of 3-4% with some even calling for 5-6%.
 
 
 
 Source: CBO and Bernstein U.S. Economic Analysis
 
With below average GDP growth going forward, it is difficult to imagine corporate earnings growth keeping pace with the strong double-digit gains of late.  In fact, current projections call for markedly lower EPS growth rates over the next 4 quarters despite CBO expectations of strong economic growth up until 2020.
 
Global Financial Crisis Anniversary: September 15, 2018, marked the 10th Anniversary of the fall of Lehman Brothers.  What initially began with falling house prices quickly morphed into a full blown financial panic.  Federal Reserve Chairman, Ben Bernanke, and Treasury
 
7

SCHARF FUNDS
 
Secretary, Hank Paulsen, warned we might slide into a 1930’s style Great Depression without drastic action.  In response, Congress quickly passed an emergency bank bailout, followed by bailouts of AIG, General Motors, Freddie Mac, and Fannie Mae.
 
The Federal Reserve reduced short-term rates to zero and kept them below inflation for nearly a decade.  They also adopted an unconventional approach called Quantitative Easing, or QE, designed to lower long-term interest rates.  In an effort to prop up the economy and the financial system, the Fed purchased an incredible $4.5 trillion in treasuries and mortgages.  Did these unprecedented and experimental actions work?  To that we have to say a resounding – Maybe!
 
Just as markets were overcome with fear ten years ago, today we are at the opposite end of the pendulum.  Unemployment peaked at 10%, but today is near a 50-year low.  Similarly, the Consumer Confidence Index is near all-time highs last reached on January 2000, a time of euphoria over the “New Economy” and the peak of the internet bubble.  Whereas a decade ago stocks were in freefall, we are now in the longest continuous bull market in history.  Even more amazing, we are less than a year away from this being the longest running economic expansion in history.
 
On the negative side, rates are too low by historical standards and the Federal Reserve still owns trillions of dollars in bonds purchased under QE.  As a result, we expect them to raise rates by at least 0.25% every 3 months for the foreseeable future.  While the economy should be able to handle rising rates, nobody knows for sure.  QE was an untested experiment with unknown long-term ramifications.  The unwinding of QE, as well as other similar programs in Europe and Japan, is not something that has been done before.  To remove trillions of dollars of stimulus without any disruption to the global economy is no easy task.  It might be akin to trying to hit a Nolan Ryan fastball down 0-2 in the count, it can be done, but the results are rarely positive.
 
The unwinding of QE could cause all sorts of disruptions in the global economy.  One potential outcome is if short-term rates rise above long-term rates, an anomaly known as an “inverted yield curve.”  Over the past 60 years, inverted yield curves have provided reliable warning signals of an upcoming economic slowdown.  If this occurs, that would be an omen the sun is setting on this record-breaking bull market and economic expansion.
 
 
INVESTMENT STRATEGY
 
While we are always mindful of how economic conditions and current events impact companies, we continue to focus the bulk of our research on fundamental research and independent company analysis to identify securities which we believe are trading at significant discounts to fair value.  The median stock in our portfolio currently has 61% upside to its historical median high P/E.  We use a bottom-up, valuation-oriented strategy because stocks with low valuation ratios have often outperformed stocks with higher valuation ratios over the long term.  By purchasing securities when they appear to be at a discount to fair value, we also hope to mitigate potential downside risk.  In addition, the firm maintains a limited number of portfolios, favoring quality over quantity.  We focus only on our best ideas as we believe owning too many stocks is counterproductive to enhancing risk/reward.  Finally, we are style box agnostic and search for compelling investments in companies large and small, foreign and domestic.  To that end, we are optimistic about the current portfolios and believe the Funds are well positioned for long-term investors.
 
8

SCHARF FUNDS

 
As an example, Starbucks Corp., (“Starbucks”) the dominant specialty coffee company in the U.S., has a proven track record of growth with high returns on capital and a very strong balance sheet.  The iconic coffee company was an early adopter of technology in mobile payments and ordering and maintains a substantial lead over other restaurant chains.  Starbucks is already very successful in China, with over 3,000 stores, but the growth opportunity there is enormous with management expecting China to be their biggest market someday.  For comparison, the Americas segment has roughly 17,000 stores.  Starbucks has an earnings predictability score of 100 and has compounded EPS at 17% over the last 10 years.  As shown below, Starbucks recently traded below its median low P/E with 122% upside to its median high.
 

 
High Quality
Starbucks Favorability
 

 
Source: Value Line, Scharf Investments, LLC. Data as of 9/30/2018.
 
CAGR = Compound Annual Growth Rate
 
IN CLOSING
 
For over 30 years, Scharf Investments, LLC has operated as an independent, employee-owned firm dedicated to providing the highest quality investment management services.  During this time, the firm has established a track record based on a disciplined investment approach.  That approach continues today with the Scharf Fund, the Scharf Multi-Asset Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund.
 
One of our core beliefs has always been that our personal interests should be aligned with those of our clients.  As such, every member of our investment committee is invested alongside our clients.  On a personal level, as the first and one of the largest individual shareholders in each of the Funds, my family has a significant interest in the Funds’ success.  As a shareholder, I hope you take comfort in the knowledge that having our own money invested alongside yours will be a powerful motivator to sharpen our focus.
 
We thank you for the trust and confidence you have placed in us.  We welcome your comments and questions.
 


Brian Krawez
President and Portfolio Manager
 
9

SCHARF FUNDS
 
Mutual fund investing involves risk.  Principal loss is possible.  The Scharf Alpha Opportunity Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund.  Therefore, the Scharf Alpha Opportunity Fund is more exposed to volatility than a diversified fund.  Diversification does not assure a profit, nor does it protect against a loss in a declining market.  The Funds may invest in securities representing equity or debt.  These securities may be issued by small- and medium-sized companies, which involve additional risks such as limited liquidity and greater volatility.  The Funds may invest in foreign securities which involve greater volatility, political, economic and currency risks, and differences in accounting methods.  These risks are greater for emerging markets.  The Funds may invest in exchange-traded fund (“ETFs”) or mutual funds, the risks of owning either generally reflecting the risks of owning the underlying securities held by the ETF or mutual fund.  The Funds follows an investment style that favors relatively low valuations.  Investment in debt securities typically decrease in value when interest rates rise.  This risk is usually greater for longer-term debt securities.  Investment in lower-rated, non-rated and distressed securities presents a greater risk of loss to principal and interest than higher-rated securities.  The Scharf Alpha Opportunity Fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. The Scharf Alpha Opportunity Fund may use leverage which may exaggerate the effect of any increase or decrease in the value of portfolio securities or the net asset value of the Fund, and money borrowed will be subject to interest costs.
 
Forward earnings and EPS Growth are not measures of the Fund’s future performance.
 
The S&P 500® Index is a broad based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general.
 
The Lipper Balanced Funds Index is an index of open-end mutual funds whose primary objective is to conserve principal by maintaining at all times a balanced portfolio of both equities and bonds.
 
The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government related and corporate securities.
 
MSCI All Country World Index (Net) is a broad measure of stock performance throughout the world, with the exception of U.S. based companies.
 
The HFRX Equity Hedge Index encompasses various equity hedge strategies, also known as long/short equity, that combine core long holdings of equities with short sales of stock, stock indices, related derivatives, or other financial instruments related to the equity markets.
 
You cannot invest directly in an index.
 
Earnings Per Share (“EPS”) is the portion of a company’s profit allocated to each outstanding share of common stock and serves as an indicator of a company’s profitability.
 
Price to Earnings Ratio (P/E) is a valuation ratio of a company’s current share price compared to its per-share earnings.  Upside to historical median P/E and downside to historical median P/E are terms used to describe the adviser’s estimated reward and risk of an individual security.
 
Earnings Growth is the percentage change in a firm’s earnings per share (EPS) over a specific period of time.
 
Value Line is an independent investment research and financial publishing firm.
 
Gross Domestic Product (“GDP”) represents the monetary value of all goods and services produced within a nation’s geographic borders over a specified period of time.
 
The Consumer Confidence Index measures the degree of optimism about the state of the economy that consumers are expressing through their activities of saving and spending.
 
10

SCHARF FUNDS
 
The information provided herein represents the opinion of the Funds’ manager, is subject to change at any time, is not guaranteed and should not be considered investment advice.
 
The Funds’ holdings and sector allocations are subject to change at any time and should not be considered recommendations to buy or sell any security.  Please refer to the Schedule of Investments in this report for a complete list of Fund holdings.
 
Must be preceded or accompanied by a prospectus.
 
The Scharf Funds are distributed by Quasar Distributors, LLC.
 

11

SCHARF FUND

Comparison of the change in value of a hypothetical $10,000 investment
in the Scharf Fund – Institutional Class vs. the S&P 500® Index
 
 
 
Average Annual Total Return for the Periods Ended 9/30/2018:
 
     
Since
Since
     
Inception
Inception
 
1 year
5 year
(12/30/11)
(1/28/15)
Scharf Fund – Institutional Class1
  8.93%
  9.75%
12.08%
Scharf Fund – Retail Class2
  8.58%
  6.70%
S&P 500® Index
17.91%
13.95%
15.65%
13.09%
 
Performance data quoted on this page represents past performance and does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-866-572-4273 (1-866-5SCHARF).
 
Returns reflect reinvestment of dividends and capital gains distributions.  Fee waivers are in effect.  In the absence of fee waivers, returns would be reduced. The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on dividends, capital gains distributions, or redemption of Fund shares. The performance data and graph do not reflect the 2.00% redemption fee imposed on shares held 60 days or less. Indices do not incur expenses and are not available for investment.
 
The S&P 500® Index is an unmanaged capitalization-weighted index of 500 stocks designed to represent the broad domestic economy.
 
1  The Fund commenced operations on December 30, 2011.
2  The Fund commenced operations on January 28, 2015.
12

SCHARF BALANCED OPPORTUNITY FUND

Comparison of the change in value of a hypothetical $10,000 investment in
the Scharf Balanced Opportunity Fund vs. the Lipper Balanced Funds Index,
the S&P 500® Index, and the Bloomberg Barclays U.S. Aggregate Bond Index
 
 
Average Annual Total Return for the Periods Ended 9/30/2018:

     
Since
Since
     
Inception
Inception
 
1 year
5 year
(12/31/12)
(1/12/16)
Scharf Balanced Opportunity Fund –
       
  Institutional Class1
   6.32%
  7.18%
  8.52%
Scharf Balanced Opportunity Fund –
       
  Retail Class2
   6.00%
  8.56%
S&P 500® Index
 17.91%
13.95%
15.60%
20.37%
Bloomberg Barclays U.S.
       
  Aggregate Bond Index
  -1.22%
  2.16%
  1.54%
  1.34%
Lipper Balanced Funds Index
   6.91%
  7.29%
  8.15%
11.29%
 
Performance data quoted on this page represents past performance and does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-866-572-4273 (1-866-5SCHARF).
 
Returns reflect reinvestment of dividends and capital gains distributions.  Fee waivers are in effect.  In the absence of fee waivers, returns would be reduced. The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on
 
13

SCHARF BALANCED OPPORTUNITY FUND
 
dividends, capital gains distributions, or redemption of Fund shares. The performance data and graph do not reflect the 2.00% redemption fee imposed on shares held 15 days or less. Indices do not incur expenses and are not available for investment.
 
The S&P 500® Index is an unmanaged capitalization-weighted index of 500 stocks designed to represent the broad domestic economy.
 
The Lipper Balanced Funds Index is an equally weighted index of the 30 largest U.S. balanced funds.
 
The Bloomberg Barclays U.S. Aggregate Bond Index is a broad based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government related and corporate securities.
 
1  The Fund commenced operations on December 31, 2012.
2  The Fund commenced operations on January 21, 2016.

14

SCHARF GLOBAL OPPORTUNITY FUND

Comparison of the change in value of a hypothetical $10,000 investment in the
Scharf Global Opportunity Fund vs. the MSCI World All Country Index (Net)

 
Average Annual Total Return for the Periods Ended 9/30/2018:

 
1 year
3 year
Since Inception1
Scharf Global Opportunity Fund
11.72%
12.34%
10.24%
MSCI World All Country Index (Net)
  9.77%
13.40%
  9.42%

Performance data quoted on this page represents past performance and does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-866-572-4273 (1-866-5SCHARF).
 
Returns reflect reinvestment of dividends and capital gains distributions.  Fee waivers are in effect.  In the absence of fee waivers, returns would be reduced. The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on dividends, capital gains distributions, or redemption of Fund shares. The performance data and graph do not reflect the 2.00% redemption fee imposed on shares held 15 days or less. Indices do not incur expenses and are not available for investment.
 
The MSCI World All Country Index (Net) captures large and mid cap representation across 23 Developed Markets (DM) and 23 Emerging Markets (EM) countries.  Net total return indexes reinvest dividends after the deduction of withholding taxes, using a tax rate appliable to non-resident institutional investors who do not benefit from double taxation treaties.
 
1  The Fund commenced operations on October 14, 2014.
15

SCHARF ALPHA OPPORTUNITY FUND

Comparison of the change in value of a hypothetical $10,000 investment in
the Scharf Alpha Opportunity Fund vs. the HFRX Equity Hedge Index,
the S&P 500® Index, and the Bloomberg Barclays U.S. Aggregate Bond Index
 

 
Cumulative Total Return for the Period Ended 9/30/2018:
 
1 year
Since Inception1
Scharf Alpha Opportunity Fund
   0.79%
  0.74%
HFRX Equity Hedge Index
   1.79%
  3.22%
Bloomberg Barclays U.S. Aggregate Bond Index
  -1.22%
  1.64%
S&P 500® Index
 17.91%
16.11%
 
Performance data quoted on this page represents past performance and does not guarantee future results.  The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-866-572-4273 (1-866-5SCHARF).
 
Returns reflect reinvestment of dividends and capital gains distributions.  Fee waivers are in effect.  In the absence of fee waivers, returns would be reduced. The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on dividends, capital gains distributions, or redemption of Fund shares. The performance data and graph do not reflect the 2.00% redemption fee imposed on shares held 15 days or less. Indices do not incur expenses and are not available for investment.
 
The HFRX Equity Hedge Index encompasses various equity hedge strategies, also known as long/short equity, that combine core long holdings of equities with short sales of stock, stock indices, related derivatives, or other financial instruments related to the equity markets.
 
16

SCHARF ALPHA OPPORTUNITY FUND

 
The S&P 500® Index is an unmanaged capitalization-weighted index of 500 stocks designed to represent the broad domestic economy.
 
The Bloomberg Barclays U.S. Aggregate Bond Index is a broad based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government related and corporate securities.
 
1  The Fund commenced operations on December 31, 2015.
17

SCHARF FUNDS

EXPENSE EXAMPLES at September 30, 2018 (Unaudited)
Shareholders in mutual funds generally incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees, and exchange fees; and (2) ongoing costs, including management fees, distribution and/or service fees, and other fund expenses. The Scharf Fund, Scharf Balanced Opportunity Fund, Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund are no-load mutual funds. These Examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested in the Scharf Fund, the Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund at the beginning of the period and held for the entire period (4/1/18-9/30/18).
 
Actual Expenses
The first line of each table below provides information about actual account values and actual expenses, with actual net expenses being limited.  Effective January 28, 2018, per the operating expense limitation agreement, the actual net expenses are being limited to 0.99%, and 1.24%, for the Scharf Fund Institutional Class and Retail Class, respectively, and 0.70% for the Scharf Global Opportunity Fund. Prior to January 28, 2018, the Scharf Fund’s actual net expenses for the Institutional Class and Retail Class were limited to 1.09% and 1.34%, respectively, and 0.65% for the Scharf Global Opportunity Fund. Per the operating expense limitation agreement, the actual net expenses are being limited to 0.98% and 1.23% for the Scharf Balanced Opportunity Fund Institutional Class and Retail Class, respectively, and 1.00% for the Scharf Alpha Opportunity Fund.  Although the Funds charge no sales load or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks, and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent.  The Examples below include, but are not limited to, management fees, fund accounting, custody and transfer agent fees. You may use the information in the first line of the tables, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
 
Hypothetical Example for Comparison Purposes
The second line of each table below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds.
 
18

SCHARF FUNDS

EXPENSE EXAMPLES at September 30, 2018 (Unaudited), Continued 
To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and will not help you determine the relative total costs of owning different funds, as they may charge transaction costs, such as sales charges (loads), redemption fees, or exchange fees.
 
 
Beginning
Ending
Expenses Paid
Annualized
 
Account Value
Account Value
During Period*
Expense
Scharf Fund
4/1/18
9/30/18
4/1/18-9/30/18
Ratio*
Institutional Class
       
Actual
$1,000.00
$1,080.50
$4.54
0.87%
Hypothetical (5% return
       
  before expenses)
$1,000.00
$1,020.71
$4.41
0.87%
Retail Class
       
Actual
$1,000.00
$1,078.30
$6.46
1.24%
Hypothetical (5% return
       
  before expenses)
$1,000.00
$1,018.85
$6.28
1.24%
         
 
Beginning
Ending
Expenses Paid
Annualized
Scharf Balanced
Account Value
Account Value
During Period*
Expense
  Opportunity Fund
4/1/18
9/30/18
4/1/18-9/30/18
Ratio*
Institutional Class
       
Actual
$1,000.00
$1,057.00
$5.05
0.98%
Hypothetical (5% return
       
  before expenses)
$1,000.00
$1,020.16
$4.96
0.98%
Retail Class
       
Actual
$1,000.00
$1,055.60
$6.34
1.23%
Hypothetical (5% return
       
  before expenses)
$1,000.00
$1,018.90
$6.23
1.23%
         
 
Beginning
Ending
Expenses Paid
Annualized
Scharf Global
Account Value
Account Value
During Period*
Expense
  Opportunity Fund
4/1/18
9/30/18
4/1/18-9/30/18
Ratio*
Retail Class
       
Actual
$1,000.00
$1,094.80
$2.36
0.45%
Hypothetical (5% return
       
  before expenses)
$1,000.00
$1,022.81
$2.28
0.45%

19

SCHARF FUNDS
 
EXPENSE EXAMPLES at September 30, 2018 (Unaudited), Continued
 
Beginning
Ending
Expenses Paid
Annualized
Scharf Alpha
Account Value
Account Value
During Period*
Expense
  Opportunity Fund
4/1/18
9/30/18
4/1/18-9/30/18
Ratio*
Retail Class
       
Actual(1)
$1,000.00
$1,026.60
$8.94
1.76%
Hypothetical (5% return
       
  before expenses)(1)
$1,000.00
$1,016.24
$8.90
1.76%
 
(1)
Excluding interest expense and dividends on short positions, your actual expenses would be $4.87 and your hypothetical expenses would be $4.86.
*
Expenses are equal to the Fund’s annualized expense ratio of each class, multiplied by the average account value over the period, multiplied by 183 (days in most recent fiscal half-year)/365 days to reflect the one-half year expense.

20

SCHARF FUND

SECTOR ALLOCATION OF PORTFOLIO ASSETS at September 30, 2018 (Unaudited)
 
 
 
 
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

Percentages represent market value as a percentage of total investments.
21

SCHARF BALANCED OPPORTUNITY FUND

SECTOR ALLOCATION OF PORTFOLIO ASSETS at September 30, 2018 (Unaudited)
 
 
 
 
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
 
Percentages represent market value as a percentage of total investments.
22

SCHARF GLOBAL OPPORTUNITY FUND

SECTOR ALLOCATION OF PORTFOLIO ASSETS at September 30, 2018 (Unaudited)
 
 
 
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

Percentages represent market value as a percentage of total investments.
23

SCHARF Alpha OPPORTUNITY FUND

SECTOR ALLOCATION OF PORTFOLIO ASSETS at September 30, 2018 (Unaudited)
 
 
 
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

Percentages represent market value as a percentage of total investments.
24

SCHARF FUND

SCHEDULE OF INVESTMENTS at September 30, 2018
Shares
 
COMMON STOCKS – 86.57%
 
Value
 
           
   
Auto Components – 2.19%
     
 
429,300
 
Gentex Corp.
 
$
9,212,778
 
               
     
Chemicals – 3.91%
       
 
36,119
 
Sherwin-Williams Co.
   
16,441,730
 
               
     
Communications Equipment – 3.23%
       
 
104,374
 
Motorola Solutions, Inc.
   
13,583,232
 
               
     
Diversified Financial Services – 4.34%
       
 
85,173
 
Berkshire Hathaway, Inc. – Class B (a)
   
18,236,391
 
               
     
Food & Staples Retailing – 7.55%
       
 
195,553
 
CVS Health Corp.
   
15,393,932
 
 
224,560
 
Walgreens Boots Alliance, Inc.
   
16,370,424
 
           
31,764,356
 
     
Food Products – 3.76%
       
 
155,200
 
Hershey Co.
   
15,830,400
 
               
     
Health Care Providers & Services – 3.69%
       
 
22,835
 
Aetna, Inc.
   
4,632,080
 
 
82,214
 
McKesson Corp.
   
10,905,687
 
           
15,537,767
 
     
Health Care Technology – 1.51%
       
 
98,481
 
Cerner Corp. (a)
   
6,343,161
 
               
     
Hotels, Restaurants & Leisure – 5.31%
       
 
55,625
 
Sodexo SA (b)
   
5,899,044
 
 
288,936
 
Starbucks Corp.
   
16,423,122
 
           
22,322,166
 
     
Insurance – 5.01%
       
 
136,926
 
Aon plc
   
21,056,480
 
               
     
Internet & Direct Marketing Retail – 3.20%
       
 
6,788
 
Booking Holdings, Inc. (a)
   
13,467,392
 
               
     
IT Services – 1.76%
       
 
95,997
 
Cognizant Technology Solutions Corp. – Class A
   
7,406,169
 
               
     
Media – 8.64%
       
 
497,977
 
Comcast Corp. – Class A
   
17,633,366
 
 
108,000
 
Liberty Broadband Corp. (a)
   
9,104,400
 

The accompanying notes are an integral part of these financial statements.
25

SCHARF FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Shares
 
COMMON STOCKS – 86.57%, Continued
 
Value
 
           
   
Media – 8.64%, Continued
     
 
16,609
 
Liberty Media Corp. – SiriusXM (a)
 
$
721,661
 
 
75,784
 
Walt Disney Co.
   
8,862,181
 
           
36,321,608
 
     
Multiline Retail – 3.27%
       
 
168,822
 
Dollar Tree, Inc. (a)
   
13,767,434
 
               
     
Pharmaceuticals – 4.99%
       
 
70,042
 
Allergan plc
   
13,341,600
 
 
88,496
 
Novartis AG – ADR
   
7,624,815
 
           
20,966,415
 
     
Road & Rail – 2.76%
       
 
102,566
 
Kansas City Southern
   
11,618,676
 
               
     
Software – 15.05%
       
 
265,651
 
CDK Global, Inc.
   
16,619,127
 
 
225,179
 
Microsoft Corp.
   
25,753,722
 
 
405,621
 
Oracle Corp.
   
20,913,819
 
           
63,286,668
 
     
Specialty Retail – 3.98%
       
 
99,429
 
Advance Auto Parts, Inc.
   
16,736,884
 
               
     
Technology Hardware,
       
     
  Storage & Peripherals – 2.42%
       
 
45,173
 
Apple, Inc.
   
10,197,353
 
     
TOTAL COMMON STOCKS
       
     
  (Cost $288,093,160)
   
364,097,060
 
               
     
PREFERRED STOCK – 2.45%
       
               
     
Semiconductors &
       
     
  Semiconductor Equipment – 2.45%
       
 
301,810
 
Samsung Electronics Co., Ltd. 3.03% (b)
   
10,298,408
 
     
TOTAL PREFERRED STOCK
       
     
  (Cost $4,925,806)
   
10,298,408
 

The accompanying notes are an integral part of these financial statements.
26

SCHARF FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Shares
 
SHORT-TERM INVESTMENTS – 11.04%
 
Value
 
           
   
Money Market Fund – 2.86%
     
 
12,010,609
 
First American Treasury Obligations
     
     
  Fund, Class Z, 1.96% (c)
 
$
12,010,609
 
     
TOTAL MONEY MARKET FUND
       
     
  (Cost $12,010,609)
   
12,010,609
 
               
Principal
           
Amount
           
     
U.S. Treasury Bills – 8.18%
       
$
6,605,000
 
2.08%, 11/15/18 (d)
   
6,587,858
 
 
27,967,000
 
2.12%, 12/20/18 (d)
   
27,835,011
 
     
TOTAL U.S. TREASURY BILLS
       
     
  (Cost $34,428,360)
   
34,422,869
 
     
TOTAL SHORT-TERM INVESTMENTS
       
     
  (Cost $46,438,969)
   
46,433,478
 
     
Total Investments in Securities
       
     
  (Cost $339,457,935) – 100.06%
   
420,828,946
 
     
Liabilities in Excess of Other Assets – (0.06)%
   
(259,263
)
     
TOTAL NET ASSETS – 100.00%
 
$
420,569,683
 

ADR
American Depository Receipt
(a)
Non-income producing security.
(b)
Foreign issuer.
(c)
Rate shown is the 7-day annualized yield as of September 30, 2018.
(d)
Rate shown is the discount rate at September 30, 2018.

The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.
27

SCHARF BALANCED OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018
Shares
 
COMMON STOCKS – 61.08%
 
Value
 
           
   
Auto Components – 1.51%
     
 
37,901
 
Gentex Corp.
 
$
813,356
 
               
     
Capital Markets – 0.52%
       
 
6,758
 
Oaktree Cap Group, LLC
   
279,781
 
               
     
Chemicals – 2.57%
       
 
3,031
 
Sherwin-Williams Co.
   
1,379,742
 
               
     
Communications Equipment – 2.11%
       
 
8,715
 
Motorola Solutions, Inc.
   
1,134,170
 
               
     
Diversified Financial Services – 3.01%
       
 
7,558
 
Berkshire Hathaway, Inc. – Class B (a)
   
1,618,243
 
               
     
Food & Staples Retailing – 4.92%
       
 
16,515
 
CVS Health Corp.
   
1,300,061
 
 
18,439
 
Walgreens Boots Alliance, Inc.
   
1,344,203
 
           
2,644,264
 
     
Food Products – 2.72%
       
 
14,331
 
Hershey Co.
   
1,461,762
 
               
     
Health Care Providers & Services – 2.59%
       
 
1,920
 
Aetna, Inc.
   
389,472
 
 
7,537
 
McKesson Corp.
   
999,783
 
           
1,389,255
 
     
Health Care Technology – 1.09%
       
 
9,135
 
Cerner Corp. (a)
   
588,385
 
               
     
Hotels, Restaurants & Leisure – 3.73%
       
 
4,985
 
Sodexo SA (b)
   
528,661
 
 
26,005
 
Starbucks Corp.
   
1,478,124
 
           
2,006,785
 
     
Insurance – 3.55%
       
 
12,389
 
Aon plc
   
1,905,180
 
               
     
Internet & Direct Marketing Retail – 2.23%
       
 
603
 
Booking Holdings, Inc. (a)
   
1,196,352
 
               
     
IT Services – 1.17%
       
 
8,143
 
Cognizant Technology Solutions Corp. – Class A
   
628,232
 

The accompanying notes are an integral part of these financial statements.
28

SCHARF BALANCED OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Shares
 
COMMON STOCKS – 61.08%, Continued
 
Value
 
           
   
Media – 5.93%
     
 
44,719
 
Comcast Corp. – Class A
 
$
1,583,500
 
 
9,600
 
Liberty Broadband Corp. (a)
   
809,280
 
 
6,772
 
Walt Disney Co.
   
791,918
 
           
3,184,698
 
     
Multiline Retail – 2.85%
       
 
18,760
 
Dollar Tree, Inc. (a)
   
1,529,878
 
               
     
Pharmaceuticals – 3.60%
       
 
6,366
 
Allergan plc
   
1,212,596
 
 
8,371
 
Novartis AG – ADR
   
721,245
 
           
1,933,841
 
     
Road & Rail – 2.01%
       
 
9,550
 
Kansas City Southern
   
1,081,824
 
               
     
Software – 10.63%
       
 
24,168
 
CDK Global, Inc.
   
1,511,950
 
 
20,105
 
Microsoft Corp.
   
2,299,409
 
 
36,806
 
Oracle Corp.
   
1,897,717
 
           
5,709,076
 
     
Specialty Retail – 2.72%
       
 
8,677
 
Advance Auto Parts, Inc.
   
1,460,599
 
               
     
Technology Hardware,
       
     
  Storage & Peripherals – 1.62%
       
 
3,863
 
Apple, Inc.
   
872,034
 
     
TOTAL COMMON STOCKS
       
     
  (Cost $25,393,323)
   
32,817,457
 
               
     
PREFERRED STOCKS – 6.23%
       
               
     
Closed-End Fund – 4.08%
       
 
42,653
 
GDL Fund – Series C, 4.00%
   
2,194,070
 
               
     
Semiconductors &
       
     
  Semiconductor Equipment – 2.15%
       
 
33,900
 
Samsung Electronics Co., Ltd. 3.03% (b)
   
1,156,741
 
     
TOTAL PREFERRED STOCKS
       
     
  (Cost $2,677,470)
   
3,350,811
 

The accompanying notes are an integral part of these financial statements.
29

SCHARF BALANCED OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Principal
         
Amount
 
CORPORATE BONDS – 9.38%
 
Value
 
           
   
Beverages – 0.26%
     
   
Coca-Cola European Partners LLC
     
$
85,000
 
  4.50%, 9/1/2021
 
$
86,976
 
     
PepsiCo, Inc.
       
 
54,000
 
  1.50%, 2/22/2019
   
53,772
 
           
140,748
 
     
Communications Equipment – 0.74%
       
     
Motorola Solutions, Inc.
       
 
400,000
 
  3.50%, 9/1/2021
   
397,254
 
               
     
Computer and Electronic
       
     
  Product Manufacturing – 0.18%
       
     
Digital Equipment Corp.
       
 
89,000
 
  7.75%, 4/1/2023
   
96,727
 
               
     
Consumer Finance – 0.22%
       
     
American Express Credit Corp.
       
 
62,000
 
  1.875%, 11/5/2018
   
61,988
 
     
Medtronic, Inc.
       
 
54,000
 
  2.50%, 3/15/2020
   
53,652
 
           
115,640
 
     
Diversified Telecommunication Services – 0.50%
       
     
AT&T, Inc.
       
 
137,000
 
  2.375%, 11/27/2018
   
136,956
 
 
130,000
 
  5.80%, 2/15/2019
   
131,524
 
           
268,480
 
     
Food & Staples Retailing – 0.15%
       
     
Walgreens Boots Alliance, Inc.
       
 
82,000
 
  2.70%, 11/18/2019
   
81,748
 
               
     
Health Care Providers & Services – 0.06%
       
     
Express Scripts Holding Co.
       
 
34,000
 
  2.25%, 6/15/2019
   
33,849
 
               
     
Insurance – 0.06%
       
     
American International Group, Inc.
       
 
34,000
 
  2.30%, 7/16/2019
   
33,854
 

The accompanying notes are an integral part of these financial statements.
30

SCHARF BALANCED OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Principal
         
Amount
 
CORPORATE BONDS – 9.38%, Continued
 
Value
 
           
   
Internet Software & Services – 0.10%
     
   
eBay, Inc.
     
$
54,000
 
  2.20%, 8/1/2019
 
$
53,735
 
               
     
IT Services – 0.10%
       
     
International Business Machines Corp.
       
 
54,000
 
  1.95%, 2/12/2019
   
53,902
 
               
     
Media – 0.02%
       
     
Viacom, Inc.
       
 
11,000
 
  2.75%, 12/15/2019
   
10,941
 
               
     
Petroleum and Coal
       
     
  Products Manufacturing – 3.00%
       
     
Murphy Oil USA, Inc.
       
 
1,022,000
 
  6.00%, 8/15/2023
   
1,055,215
 
 
557,000
 
  5.625%, 5/1/2027
   
554,911
 
           
1,610,126
 
     
Securities and Commodity Contracts
       
     
  Intermediation and Brokerage – 3.56%
       
     
Goldman Sachs Group, Inc.
       
 
2,281,000
 
  4.00%, (3 Month LIBOR + 0.7675%) 6/1/2043 (c)
   
1,910,337
 
               
     
Specialty Retail – 0.38%
       
     
Advance Auto Parts, Inc.
       
 
50,000
 
  5.75%, 5/1/2020
   
51,565
 
     
L Brands, Inc.
       
 
56,000
 
  7.00%, 5/1/2020
   
58,660
 
 
90,000
 
  6.625%, 4/1/2021
   
95,319
 
           
205,544
 
     
Technology Hardware,
       
     
  Storage & Peripherals – 0.05%
       
     
HP, Inc.
       
 
25,000
 
  2.75%, 1/14/2019
   
25,012
 
     
TOTAL CORPORATE BONDS
       
     
  (Cost $4,784,526)
   
5,037,897
 

The accompanying notes are an integral part of these financial statements.
31

SCHARF BALANCED OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Principal
         
Amount
 
MUNICIPAL BONDS – 7.92%
 
Value
 
   
California Health Facilities Financing Authority,
     
   
  Revenue Bonds, Chinese Hospital Association
     
$
10,000
 
  3.00%, 6/1/2024, Series 2012
 
$
10,167
 
     
California Health Facilities Financing
       
     
  Authority, Revenue Bonds, Persons with
       
     
  Developmental Disabilities
       
 
80,000
 
  7.11%, 2/1/2021, Series 2011B
   
85,044
 
 
145,000
 
  7.875%, 2/1/2026, Series 2011B
   
157,798
 
     
California State, General Obligation,
       
     
  Highway Safety, Traffic Reduction,
       
     
  Air Quality and Port Security Bonds
       
 
90,000
 
  6.509%, 4/1/2039, Series 2009B
   
98,104
 
     
California State, General Obligation, Various Purpose
       
 
125,000
 
  6.20%, 10/1/2019
   
129,141
 
 
405,000
 
  5.60%, 11/1/2020
   
427,097
 
 
745,000
 
  6.65%, 3/1/2022, Series 2010
   
813,242
 
 
980,000
 
  7.95%, 3/1/2036, Series 2010
   
1,044,866
 
     
Commonwealth of Massachusetts,
       
     
  Build America Bonds
       
 
205,000
 
  4.20%, 12/1/2021
   
209,809
 
     
Norman Y Mineta San Jose International Airport SJC
       
 
550,000
 
  5.00%, 3/1/2019
   
557,144
 
     
State of California, Build America Bonds
       
 
35,000
 
  5.70%, 11/1/2021
   
37,721
 
 
15,000
 
  4.988%, 4/1/2039
   
15,860
 
     
State of Connecticut, Build America Bonds
       
 
100,000
 
  4.807%, 4/1/2022
   
102,071
 
 
240,000
 
  5.20%, 12/1/2022
   
253,613
 
 
25,000
 
  5.30%, 12/1/2023
   
26,815
 
 
10,000
 
  5.027%, 4/1/2024
   
10,228
 
     
State of Florida, Build America Bonds
       
 
10,000
 
  4.65%, 6/1/2020
   
10,114
 
     
State of Georgia, Build America Bonds
       
 
5,000
 
  4.503%, 11/1/2025
   
5,176
 
     
State of Georgia, Economic Development Bonds
       
 
10,000
 
  3.24%, 10/1/2020
   
10,070
 

The accompanying notes are an integral part of these financial statements.
32

SCHARF BALANCED OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Principal
         
Amount
 
MUNICIPAL BONDS – 7.92%, Continued
 
Value
 
   
State of Georgia, School Construction Bonds
     
$
15,000
 
  4.35%, 2/1/2029
 
$
15,887
 
     
State of Illinois, Build America Bonds
       
 
100,000
 
  5.547%, 4/1/2019
   
101,158
 
 
20,000
 
  5.727%, 4/1/2020
   
20,528
 
     
State of Maryland, Build America Bonds
       
 
10,000
 
  4.10%, 3/1/2020
   
10,136
 
 
20,000
 
  4.20%, 3/1/2021
   
20,449
 
 
5,000
 
  4.55%, 8/15/2024
   
5,061
 
     
State of Michigan, General Obligation,
       
     
  School Loan and Refunding Bonds
       
 
40,000
 
  6.95%, 11/1/2020 Series 2009A
   
43,248
 
     
State of Ohio, Build America Bonds
       
 
35,000
 
  4.621%, 4/1/2020
   
35,874
 
     
TOTAL MUNICIPAL BONDS
       
     
  (Cost $4,421,063)
   
4,256,421
 
               
     
U.S. TREASURY NOTE – 2.29%
       
               
     
U. S. Treasury Note – 2.29%
       
 
1,245,000
 
  1.50%, 11/30/2019
   
1,228,076
 
     
TOTAL U.S. TREASURY NOTE
       
     
  (Cost $1,241,063)
   
1,228,076
 

The accompanying notes are an integral part of these financial statements.
33

SCHARF BALANCED OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Shares
 
SHORT-TERM INVESTMENTS – 13.24%
 
Value
 
           
   
Money Market Fund – 2.10%
     
 
1,126,411
 
First American Treasury Obligations
     
     
  Fund, Class Z, 1.96% (d)
 
$
1,126,411
 
     
TOTAL MONEY MARKET FUND
       
     
  (Cost $1,126,411)
   
1,126,411
 
               
Principal
           
Amount
           
     
U.S. Treasury Bills – 11.14%
       
$
250,000
 
2.08%, 11/15/18 (e)
   
249,351
 
 
1,100,000
 
2.12%, 12/20/18 (e)
   
1,094,809
 
 
695,000
 
2.28%, 2/28/19 (e)
   
688,412
 
 
4,000,000
 
2.30%, 3/28/19 (e)
   
3,954,511
 
     
TOTAL U.S. TREASURY BILLS
       
     
  (Cost $5,993,689)
   
5,987,083
 
     
TOTAL SHORT-TERM INVESTMENTS
       
     
  (Cost $7,120,100)
   
7,113,494
 
     
Total Investments in Securities
       
     
  (Cost $45,637,545) – 100.14%
   
53,804,156
 
     
Liabilities in Excess of Other Assets – (0.14)%
   
(77,589
)
     
TOTAL NET ASSETS – 100.00%
 
$
53,726,567
 

ADR
American Depository Receipt
LIBOR
London Interbank Offered Rate
(a)
Non-income producing security.
(b)
Foreign issuer.
(c)
Variable rate security.  Rate shown reflects the rate in effect as of September 30, 2018.
(d)
Rate shown is the 7-day annualized yield as of September 30, 2018.
(e)
Rate shown is the discount rate at September 30, 2018.

The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.
34

SCHARF GLOBAL OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018
Shares
 
COMMON STOCKS – 80.84%
 
Value
 
           
   
Auto Components – 1.70%
     
 
19,461
 
Gentex Corp.
 
$
417,633
 
 
11,208
 
Nexen Corp. (b)
   
63,555
 
           
481,188
 
     
Automobiles – 0.50%
       
 
4,600
 
Subaru Corp. (b)
   
140,891
 
               
     
Beverages – 1.01%
       
 
177,500
 
Becle, S.A.B. de C.V. (b)
   
286,538
 
               
     
Chemicals – 2.74%
       
 
1,705
 
Sherwin-Williams Co.
   
776,133
 
               
     
Communications Equipment – 0.39%
       
 
859
 
Motorola Solutions, Inc.
   
111,790
 
               
     
Diversified Financial Services – 3.79%
       
 
5,021
 
Berkshire Hathaway, Inc. – Class B (a)
   
1,075,046
 
               
     
Food & Staples Retailing – 7.53%
       
 
18,220
 
CVS Health Corp.
   
1,434,278
 
 
9,621
 
Walgreens Boots Alliance, Inc.
   
701,371
 
           
2,135,649
 
     
Food Products – 1.39%
       
 
1,120
 
Hershey Co.
   
114,240
 
 
3,375
 
Nestle SA – ADR
   
280,800
 
           
395,040
 
     
Health Care Providers & Services – 4.24%
       
 
3,869
 
Aetna, Inc.
   
784,827
 
 
3,145
 
McKesson Corp.
   
417,184
 
           
1,202,011
 
     
Hotels, Restaurants & Leisure – 7.37%
       
 
22,005
 
Compass Group plc (b)
   
489,306
 
 
178,500
 
Domino’s Pizza Group plc (b)
   
650,047
 
 
16,745
 
Starbucks Corp.
   
951,786
 
           
2,091,139
 
     
Household Durables – 1.21%
       
 
5,675
 
Sony Corp. – ADR
   
344,189
 

The accompanying notes are an integral part of these financial statements.
35

SCHARF GLOBAL OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Shares
 
COMMON STOCKS – 80.84%, Continued
 
Value
 
           
   
Insurance – 6.54%
     
 
95,615
 
AIA Group Ltd. (b)
 
$
853,754
 
 
6,498
 
Aon plc
   
999,263
 
           
1,853,017
 
     
Internet & Direct Marketing Retail – 3.09%
       
 
441
 
Booking Holdings, Inc. (a)
   
874,944
 
               
     
Media – 11.51%
       
 
32,250
 
Comcast Corp. – Class A
   
1,141,973
 
 
7,060
 
Liberty Broadband Corp. (a)
   
595,158
 
 
18,380
 
Liberty Media Corp. – SiriusXM (a)
   
798,611
 
 
6,215
 
Walt Disney Co.
   
726,782
 
           
3,262,524
 
     
Multiline Retail – 2.47%
       
 
8,585
 
Dollar Tree, Inc. (a)
   
700,107
 
               
     
Pharmaceuticals – 7.02%
       
 
4,480
 
Allergan plc
   
853,350
 
 
13,194
 
Novartis AG – ADR
   
1,136,795
 
           
1,990,145
 
     
Road & Rail – 3.33%
       
 
8,344
 
Kansas City Southern
   
945,208
 
               
     
Software – 8.18%
       
 
10,038
 
Microsoft Corp.
   
1,148,046
 
 
22,740
 
Oracle Corp.
   
1,172,475
 
           
2,320,521
 
     
Specialty Retail – 3.76%
       
 
6,328
 
Advance Auto Parts, Inc.
   
1,065,192
 
               
     
Wireless Telecommunication Services – 3.07%
       
 
17,480
 
SoftBank Corp. – ADR (a)
   
869,630
 
     
TOTAL COMMON STOCKS
       
     
  (Cost $19,358,365)
   
22,920,902
 

The accompanying notes are an integral part of these financial statements.
36

SCHARF GLOBAL OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Shares
 
PREFERRED STOCKS – 5.83%
 
Value
 
           
   
Auto Components – 0.44%
     
 
14,157
 
Nexen Corp., 1.91% (b)
 
$
53,220
 
 
19,043
 
Nexen Tire Corp., 2.49% (b)
   
72,533
 
           
125,753
 
     
Capital Markets – 0.26%
       
 
2,000
 
Korea Investment Holdings Co. Ltd., 4.16% (b)
   
72,481
 
               
     
Containers & Packaging – 0.04%
       
 
5,450
 
NPC, 4.01% (b)
   
11,644
 
               
     
Personal Products – 0.55%
       
 
830
 
Amorepacific Corp., 0.95% (b)
   
102,885
 
 
75
 
LG Household & Health Care Ltd., 1.13% (b)
   
54,361
 
           
157,246
 
     
Semiconductors &
       
     
  Semiconductor Equipment – 4.54%
       
 
37,700
 
Samsung Electronics Co., Ltd., 3.03% (b)
   
1,286,405
 
     
TOTAL PREFERRED STOCKS
       
     
  (Cost $1,132,678)
   
1,653,529
 
               
     
MONEY MARKET FUND – 1.39%
       
 
392,817
 
First American Treasury Obligations
       
     
  Fund, Class Z, 1.96% (c)
   
392,817
 
     
TOTAL MONEY MARKET FUND
       
     
  (Cost $392,817)
   
392,817
 
     
Total Investments in Securities
       
     
  (Cost $20,883,860) – 88.06%
   
24,967,248
 
     
Other Assets in Excess of Liabilities – 11.94%
   
3,385,343
 
     
TOTAL NET ASSETS – 100.00%
 
$
28,352,591
 

ADR
American Depository Receipt
(a)
Non-income producing security.
(b)
Foreign issuer.
(c)
Rate shown is the 7-day annualized yield as of September 30, 2018.
 
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.
37

SCHARF GLOBAL OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
COUNTRY ALLOCATION
Country
% of Net Assets
United States
  72.9%
Republic of Korea
    6.9%
Switzerland
    5.7%
Japan
    5.4%
United Kingdom
    4.6%
Hong Kong
    3.4%
Mexico
    1.1%
 
100.0%
 

The accompanying notes are an integral part of these financial statements.
38

SCHARF ALPHA OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018
Shares
 
COMMON STOCKS – 98.99%
 
Value
 
           
   
Auto Components – 3.12%
     
 
30,515
 
Gentex Corp. (d)
 
$
654,852
 
               
     
Chemicals – 4.34%
       
 
2,004
 
Sherwin-Williams Co. (d)
   
912,241
 
               
     
Communications Equipment – 3.56%
       
 
5,746
 
Motorola Solutions, Inc. (d)
   
747,784
 
               
     
Diversified Financial Services – 4.52%
       
 
4,433
 
Berkshire Hathaway, Inc. – Class B (a) (d)
   
949,150
 
               
     
Food & Staples Retailing – 7.54%
       
 
8,780
 
CVS Health Corp. (d)
   
691,162
 
 
12,233
 
Walgreens Boots Alliance, Inc. (d)
   
891,785
 
           
1,582,947
 
     
Food Products – 4.12%
       
 
8,470
 
Hershey Co.
   
863,940
 
               
     
Health Care Providers & Services – 6.72%
       
 
4,387
 
Aetna, Inc.
   
889,903
 
 
3,920
 
McKesson Corp. (d)
   
519,988
 
           
1,409,891
 
     
Hotels, Restaurants & Leisure – 7.79%
       
 
19,580
 
Compass Group plc (b)
   
435,383
 
 
3,420
 
Sodexo SA (b)
   
362,692
 
 
14,725
 
Starbucks Corp.
   
836,969
 
           
1,635,044
 
     
Insurance – 4.33%
       
 
5,905
 
Aon plc (d)
   
908,071
 
               
     
Internet & Direct Marketing Retail – 3.65%
       
 
386
 
Booking Holdings, Inc. (a) (d)
   
765,824
 
               
     
IT Services – 1.99%
       
 
5,427
 
Cognizant Technology Solutions Corp. – Class A (d)
   
418,693
 
               
     
Media – 9.99%
       
 
25,533
 
Comcast Corp. – Class A (d)
   
904,123
 
 
5,325
 
Liberty Broadband Corp. (a)
   
448,898
 
 
6,610
 
Liberty Media Corp. – SiriusXM (a)
   
287,205
 

The accompanying notes are an integral part of these financial statements.
39

SCHARF ALPHA OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Shares
 
COMMON STOCKS – 98.99%, Continued
 
Value
 
           
   
Media – 9.99%, Continued
     
 
3,917
 
Walt Disney Co.
 
$
458,053
 
           
2,098,279
 
     
Multiline Retail – 4.03%
       
 
10,369
 
Dollar Tree, Inc. (a)
   
845,592
 
               
     
Pharmaceuticals – 6.49%
       
 
4,983
 
Allergan plc (d)
   
949,162
 
 
4,806
 
Novartis AG – ADR (d)
   
414,085
 
           
1,363,247
 
     
Road & Rail – 3.88%
       
 
7,200
 
Kansas City Southern (d)
   
815,616
 
               
     
Software – 15.17%
       
 
13,319
 
CDK Global, Inc.
   
833,237
 
 
11,032
 
Microsoft Corp. (d)
   
1,261,730
 
 
21,120
 
Oracle Corp. (d)
   
1,088,947
 
           
3,183,914
 
     
Specialty Retail – 4.20%
       
 
5,239
 
Advance Auto Parts, Inc. (d)
   
881,881
 
               
     
Technology Hardware,
       
     
  Storage & Peripherals – 3.55%
       
 
2,254
 
Apple, Inc. (d)
   
508,818
 
 
226
 
Samsung Electronics Co., Ltd. (b)
   
236,622
 
           
745,440
 
     
TOTAL COMMON STOCKS
       
     
  (Cost $17,762,976)
   
20,782,406
 

The accompanying notes are an integral part of these financial statements.
40

SCHARF ALPHA OPPORTUNITY FUND

SCHEDULE OF INVESTMENTS at September 30, 2018, Continued
Shares
 
MONEY MARKET FUND – 1.19%
 
Value
 
 
249,699
 
First American Treasury Obligations
     
     
  Fund, Class Z, 1.96% (c)
 
$
249,699
 
     
TOTAL MONEY MARKET FUND
       
     
  (Cost $249,699)
   
249,699
 
     
Total Investments in Securities
       
     
  (Cost $18,012,675) – 100.18%
   
21,032,105
 
     
Liabilities in Excess of Other Assets – (0.18)%
   
(38,029
)
     
TOTAL NET ASSETS – 100.00%
 
$
20,994,076
 

ADR
American Depository Receipt
(a)
Non-income producing security.
(b)
Foreign issuer.
(c)
Rate shown is the 7-day annualized yield as of September 30, 2018.
(d)
All of a portion of the security has been segregated for open short positions.

 
 

SCHEDULE OF SECURITIES SOLD SHORT at September 30, 2018
Shares
 
SECURITIES SOLD SHORT – 56.24%
 
Value
 
   
Common Stock – 0.92%
     
 
725
 
Tesla Inc.
 
$
191,958
 
     
TOTAL COMMON STOCK
       
     
  (Proceeds $190,024)
   
191,958
 
               
     
Exchange-Traded Funds – 55.32%
       
 
28,930
 
SPDR S&P 500 ETF Trust
   
8,410,530
 
 
17,245
 
Invesco QQQ Trust Series 1
   
3,203,949
 
     
TOTAL EXCHANGE-TRADED FUNDS
       
     
  (Proceeds $9,666,128)
   
11,614,479
 
     
TOTAL SECURITIES SOLD SHORT
       
     
  (Proceeds $9,856,152)
 
$
11,806,437
 

ETF
Exchange-Traded Fund

The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”).  GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
 
The accompanying notes are an integral part of these financial statements.
41

SCHARF FUNDS
 
STATEMENTS OF ASSETS AND LIABILITIES at September 30, 2018
         
Scharf Balanced
 
   
Scharf Fund
   
Opportunity Fund
 
ASSETS
           
Investments in securities, at value (identified cost
           
  $339,457,935 and $45,637,545, respectively)
 
$
420,828,946
   
$
53,804,156
 
Receivables:
               
Fund shares issued
   
133,554
     
 
Dividends and interest
   
220,416
     
120,212
 
Dividend tax reclaim
   
46,474
     
8,894
 
Prepaid expenses
   
19,871
     
5,254
 
Total assets
   
421,249,261
     
53,938,516
 
LIABILITIES
               
Payables:
               
Fund shares redeemed
   
175,485
     
130,294
 
Advisory fees
   
275,407
     
23,198
 
Shareholder servicing fees
   
68,783
     
8,064
 
Administration and fund accounting fees
   
61,739
     
12,369
 
Audit fees
   
21,987
     
21,987
 
12b-1 distribution fees
   
44,425
     
4,648
 
Custody fees
   
7,035
     
2,752
 
Transfer agent fees and expenses
   
10,762
     
4,138
 
Shareholder reporting
   
9,812
     
1,190
 
Chief Compliance Officer fee
   
1,500
     
1,500
 
Legal fees
   
2,150
     
1,488
 
Trustee fees and expenses
   
395
     
275
 
Accrued other expenses
   
98
     
46
 
Total liabilities
   
679,578
     
211,949
 
NET ASSETS
 
$
420,569,683
   
$
53,726,567
 

The accompanying notes are an integral part of these financial statements.
42

SCHARF FUNDS

STATEMENTS OF ASSETS AND LIABILITIES at September 30, 2018, Continued
         
Scharf Balanced
 
   
Scharf Fund
   
Opportunity Fund
 
CALCULATION OF NET ASSET VALUE PER SHARE
           
Institutional Shares
           
Net assets applicable to shares outstanding
 
$
350,204,862
   
$
46,365,748
 
Shares issued and outstanding [unlimited number of shares
               
  (par value $0.01) authorized]
   
7,496,447
     
1,380,941
 
Net asset value, offering and redemption price per share
 
$
46.72
   
$
33.58
 
Retail Shares
               
Net assets applicable to shares outstanding
 
$
70,364,821
   
$
7,360,819
 
Shares issued and outstanding [unlimited number of shares
               
  (par value $0.01) authorized]
   
1,515,395
     
220,110
 
Net asset value, offering and redemption price per share
 
$
46.43
   
$
33.44
 
COMPOSITION OF NET ASSETS
               
Paid-in capital
 
$
311,379,256
   
$
42,860,659
 
Total distributable earnings
   
109,190,427
     
10,865,908
 
Net assets
 
$
420,569,683
   
$
53,726,567
 
 
The accompanying notes are an integral part of these financial statements.
43

SCHARF FUNDS
 
STATEMENTS OF ASSETS AND LIABILITIES at September 30, 2018
   
Scharf Global
   
Scharf Alpha
 
   
Opportunity Fund
   
Opportunity Fund
 
ASSETS
           
Investments in securities, at value (identified cost
           
  $20,883,860 and $18,012,675, respectively)
 
$
24,967,248
   
$
21,032,105
 
Cash
   
     
17,638
 
Deposits at broker for short securities
   
     
11,843,005
 
Receivables:
               
Investments sold
   
4,455,696
     
 
Dividends and interest
   
18,926
     
8,005
 
Dividend tax reclaim
   
4,714
     
2,764
 
Due from Adviser (Note 4)
   
4,646
     
1,431
 
Prepaid expenses
   
16,978
     
10,680
 
Total assets
   
29,468,208
     
32,915,628
 
LIABILITIES
               
Securities sold short (proceeds $0
               
  and $9,856,152, respectively)
   
     
11,806,437
 
Payables:
               
Investments purchased
   
1,054,485
     
 
Fund shares redeemed
   
2,000
     
9,670
 
Dividends on short positions
   
     
47,587
 
Shareholder servicing fees
   
6,683
     
5,203
 
Administration and fund accounting fees
   
8,755
     
8,582
 
Audit fees
   
20,487
     
20,487
 
12b-1 distribution fees
   
15,361
     
16,120
 
Custody fees
   
2,365
     
2,123
 
Transfer agent fees and expenses
   
2,218
     
2,256
 
Shareholder reporting
   
480
     
478
 
Chief Compliance Officer fee
   
1,500
     
1,500
 
Legal fees
   
890
     
889
 
Trustee fees and expenses
   
     
220
 
Accrued other expenses
   
393
     
 
Total liabilities
   
1,115,617
     
11,921,552
 
NET ASSETS
 
$
28,352,591
   
$
20,994,076
 

The accompanying notes are an integral part of these financial statements.
44

SCHARF FUNDS

STATEMENTS OF ASSETS AND LIABILITIES at September 30, 2018, Continued
   
Scharf Global
   
Scharf Alpha
 
   
Opportunity Fund
   
Opportunity Fund
 
CALCULATION OF NET ASSET VALUE PER SHARE
           
Retail Shares
           
Net assets applicable to shares outstanding
 
$
28,352,591
   
$
20,994,076
 
Shares issued and outstanding [unlimited number of shares
               
  (par value $0.01) authorized]
   
905,722
     
877,678
 
Net asset value, offering and
               
  redemption price per share
 
$
31.30
   
$
23.92
 
COMPOSITION OF NET ASSETS
               
Paid-in capital
 
$
21,701,895
   
$
20,694,600
 
Total distributable earnings
   
6,650,696
     
299,476
 
Net assets
 
$
28,352,591
   
$
20,994,076
 

 
The accompanying notes are an integral part of these financial statements.
45

SCHARF FUNDS

STATEMENTS OF OPERATIONS For the Year Ended September 30, 2018
         
Scharf Balanced
 
   
Scharf Fund
   
Opportunity Fund
 
INVESTMENT INCOME
           
Income
           
Dividends (net of foreign tax withheld and issuance
           
  fees of $185,926 and $19,397, respectively)
 
$
7,076,313
   
$
664,103
 
Interest
   
808,579
     
540,348
 
Total income
   
7,884,892
     
1,204,451
 
Expenses
               
Advisory fees (Note 4)
   
4,708,850
     
587,563
 
Administration and fund accounting fees (Note 4)
   
354,180
     
81,946
 
Shareholder servicing fees – Institutional Class (Note 6)
   
139,810
     
44,690
 
Shareholder servicing fees – Retail Class (Note 6)
   
76,205
     
7,737
 
12b-1 distribution fees – Retail Class (Note 5)
   
196,242
     
19,351
 
Transfer agent fees and expenses (Note 4)
   
57,299
     
23,972
 
Custody fees (Note 4)
   
49,908
     
17,091
 
Registration fees
   
46,476
     
31,527
 
Audit fees
   
21,987
     
21,987
 
Reports to shareholders
   
21,576
     
2,211
 
Trustee fees and expenses
   
17,860
     
12,880
 
Miscellaneous expenses
   
12,458
     
5,944
 
Chief Compliance Officer fee (Note 4)
   
9,000
     
9,000
 
Insurance expense
   
8,613
     
2,411
 
Legal fees
   
7,224
     
5,955
 
Interest expense
   
907
     
 
Total expenses
   
5,728,595
     
874,265
 
Less: advisory fee waiver (Note 4)
   
(605,893
)
   
(280,214
)
Net expenses
   
5,122,702
     
594,051
 
Net investment income
   
2,762,190
     
610,400
 
REALIZED AND UNREALIZED GAIN/(LOSS) ON
               
  INVESTMENTS AND FOREIGN CURRENCY
               
Net realized gain/(loss) on:
               
Investments
   
37,326,161
     
2,911,525
 
Foreign currency
   
4,956
     
(1,987
)
Net change in unrealized appreciation/(depreciation) on:
               
Investments
   
(1,872,835
)
   
(53,551
)
Foreign currency
   
(297
)
   
273
 
Net realized and unrealized gain on
               
  investments and foreign currency
   
35,457,985
     
2,856,260
 
Net Increase in Net Assets
               
  Resulting from Operations
 
$
38,220,175
   
$
3,466,660
 
 
The accompanying notes are an integral part of these financial statements.
46

SCHARF FUNDS
 
STATEMENTS OF OPERATIONS For the Year Ended September 30, 2018
   
Scharf Global
   
Scharf Alpha
 
   
Opportunity Fund
   
Opportunity Fund
 
INVESTMENT INCOME
           
Income
           
Dividends (net of foreign tax withheld and issuance
           
  fees of $24,958 and $3,146, respectively)
 
$
432,378
   
$
328,772
 
Interest
   
6,896
     
59,806
 
Total income
   
439,274
     
388,578
 
Expenses
               
Advisory fees (Note 4)
   
297,703
     
219,499
 
Administration and fund accounting fees (Note 4)
   
51,907
     
50,562
 
12b-1 distribution fees – Retail Class (Note 5)
   
30,494
     
29,387
 
Shareholder servicing fees – Retail Class (Note 6)
   
26,973
     
18,573
 
Registration fees
   
21,859
     
16,756
 
Audit fees
   
18,987
     
18,986
 
Custody fees (Note 4)
   
17,858
     
14,223
 
Transfer agent fees and expenses (Note 4)
   
12,888
     
13,411
 
Trustee fees and expenses
   
12,263
     
12,417
 
Chief Compliance Officer fee (Note 4)
   
9,000
     
9,000
 
Miscellaneous expenses
   
7,454
     
9,463
 
Legal fees
   
5,410
     
5,413
 
Insurance expense
   
1,961
     
2,139
 
Reports to shareholders
   
1,203
     
1,305
 
Interest expense
   
428
     
1,245
 
Total expenses before dividends
               
  on short positions
   
516,388
     
422,379
 
Dividends on short positions
   
     
214,862
 
Total expenses before advisory fee waiver
               
  and expense reimbursement
   
516,388
     
637,241
 
Less: advisory fee waiver and
               
  expense reimbursement (Note 4)
   
(358,682
)
   
(230,304
)
Net expenses
   
157,706
     
406,937
 
Net investment income/(loss)
   
281,568
     
(18,359
)
REALIZED AND UNREALIZED GAIN/(LOSS)
               
  ON INVESTMENTS, FOREIGN CURRENCY,
               
  PURCHASED OPTIONS AND SECURITIES SOLD SHORT
               
Net realized gain/(loss) on:
               
Investments
   
2,412,864
     
1,726,775
 
Foreign currency
   
(1,216
)
   
(26
)
Purchased options
   
(89,226
)
   
 
Securities sold short
   
     
(2,399,251
)
Net change in unrealized appreciation/(depreciation) on:
               
Investments
   
499,805
     
428,206
 
Foreign currency
   
(238
)
   
(4
)
Purchased options
   
17,780
     
 
Securities sold short
   
     
391,800
 
Net realized and unrealized gain on
               
  investments, foreign currency,
               
  securities sold short and purchased options
   
2,839,769
     
147,500
 
Net Increase in Net Assets
               
  Resulting from Operations
 
$
3,121,337
   
$
129,141
 
 
The accompanying notes are an integral part of these financial statements.
47

SCHARF FUND
 
STATEMENTS OF CHANGES IN NET ASSETS
   
Year Ended
   
Year Ended
 
   
September 30, 2018
   
September 30, 2017
 
INCREASE/(DECREASE) IN NET ASSETS FROM:
           
OPERATIONS
           
Net investment income
 
$
2,762,190
   
$
1,062,386
 
Net realized gain from:
               
Investments
   
37,326,161
     
14,918,138
 
Foreign currency
   
4,956
     
7,932
 
Capital gain distributions from
               
  regulated investment companies
   
     
382
 
Net change in unrealized appreciation/(depreciation) on:
               
Investments
   
(1,872,835
)
   
33,693,587
 
Foreign currency
   
(297
)
   
2,673
 
Net increase in net assets resulting from operations
   
38,220,175
     
49,685,098
 
DISTRIBUTIONS TO SHAREHOLDERS
               
Net dividends and distributions to shareholders –
               
  Institutional Class shares
   
(13,115,918
)
   
(836,345
)
Net dividends and distributions to shareholders –
               
  Retail Class shares
   
(2,185,843
)
   
 
Total distributions to shareholders
   
(15,301,761
)
   
(836,345
)*
CAPITAL SHARE TRANSACTIONS
               
Net decrease in net assets derived
               
  from net change in outstanding shares (a)
   
(179,275,337
)
   
(79,145,637
)
Total decrease in net assets
   
(156,356,923
)
   
(30,296,884
)
NET ASSETS
               
Beginning of year
   
576,926,606
     
607,223,490
 
End of year
 
$
420,569,683
   
$
576,926,606
**

*
 
Includes net investment income distributions of $836,345.
**
 
Includes accumulated undistributed net investment income of $891,172.

The accompanying notes are an integral part of these financial statements.
48

SCHARF FUND

STATEMENTS OF CHANGES IN NET ASSETS, Continued
(a)
A summary of share transactions is as follows:

 
Institutional Class
                       
     
Year Ended
   
Year Ended
 
     
September 30, 2018
   
September 30, 2017
 
     
Shares
   
Paid-in Capital
   
Shares
   
Paid-in Capital
 
 
Shares sold
   
918,803
   
$
40,683,762
     
2,003,817
   
$
83,841,086
 
 
Shares issued on
                               
 
  reinvestments of distributions
   
294,773
     
13,070,222
     
20,558
     
828,692
 
 
Shares redeemed*
   
(4,791,034
)
   
(210,561,075
)
   
(3,527,496
)
   
(147,136,199
)
 
Net decrease
   
(3,577,458
)
 
$
(156,807,091
)
   
(1,503,121
)
 
$
(62,466,421
)
 
* Net of redemption fees of
          $ 3,164             $ 2,840  
                                   
 
Retail Class
                               
     
Year Ended
   
Year Ended
 
     
September 30, 2018
   
September 30, 2017
 
     
Shares
   
Paid-in Capital
   
Shares
   
Paid-in Capital
 
 
Shares sold
   
94,182
   
$
4,196,546
     
252,962
   
$
10,441,408
 
 
Shares issued on
                               
 
  reinvestments of distributions
   
49,331
     
2,179,918
     
     
 
 
Shares redeemed*
   
(653,191
)
   
(28,844,711
)
   
(665,882
)
   
(27,120,624
)
 
Net decrease
   
(509,678
)
 
$
(22,468,247
)
   
(412,920
)
 
$
(16,679,216
)
 
* Net of redemption fees of
         
$
65
           
$
4,350
 
                                   
 
R6 Class
                               
     
January 29, 2018*
                 
     
to
                 
     
September 30, 2018**
                 
     
Shares
   
Paid-in Capital
                 
 
Shares sold
   
2
   
$
100
                 
 
Shares redeemed*
   
(2
)
   
(99
)
               
 
Net increase
   
   
$
1
                 

*
 
Commencement of operations.
**
 
Ceased operations and was liquidated on September 14, 2018.

The accompanying notes are an integral part of these financial statements.
49

SCHARF BALANCED OPPORTUNITY FUND

STATEMENTS OF CHANGES IN NET ASSETS
   
Year Ended
   
Year Ended
 
   
September 30, 2018
   
September 30, 2017
 
INCREASE/(DECREASE) IN NET ASSETS FROM:
           
OPERATIONS
           
Net investment income
 
$
610,400
   
$
298,034
 
Net realized gain/(loss) from:
               
Investments
   
2,911,525
     
1,219,401
 
Foreign currency
   
(1,987
)
   
1,043
 
Capital gain distributions from
               
  regulated investment companies
   
     
96
 
Net change in unrealized appreciation/(depreciation) on:
               
Investments
   
(53,551
)
   
2,866,990
 
Foreign currency
   
273
     
169
 
Net increase in net assets resulting from operations
   
3,466,660
     
4,385,733
 
DISTRIBUTIONS TO SHAREHOLDERS
               
Net dividends and distributions to shareholders –
               
  Institutional Class shares
   
(1,184,539
)
   
(750,182
)
Net dividends and distributions to shareholders –
               
  Retail Class shares
   
(164,551
)
   
(107,892
)
Total distributions to shareholders
   
(1,349,090
)
   
(858,074
)*
CAPITAL SHARE TRANSACTIONS
               
Net increase/(decrease) in net assets derived from
               
  net change in outstanding shares (a)
   
(17,449,572
)
   
5,055,728
 
Total increase/(decrease) in net assets
   
(15,332,002
)
   
8,583,387
 
NET ASSETS
               
Beginning of year
   
69,058,569
     
60,475,182
 
End of year
 
$
53,726,567
   
$
69,058,569
**

*
 
Includes net investment income distributions of $365,561 and $48,151, and net realized gain distributions of $384,621 and $59,741 for the Institutional and Retail Class, respectively.
**
 
Includes accumulated undistributed net investment income of $120,153.

The accompanying notes are an integral part of these financial statements.
50

SCHARF BALANCED OPPORTUNITY FUND

STATEMENTS OF CHANGES IN NET ASSETS, Continued
(a)
A summary of share transactions is as follows:

Institutional Class
                       
     
Year Ended
   
Year Ended
 
     
September 30, 2018
   
September 30, 2017
 
     
Shares
   
Paid-in Capital
   
Shares
   
Paid-in Capital
 
 
Shares sold
   
152,690
   
$
4,967,643
     
296,792
   
$
9,224,277
 
 
Shares issued on
                               
 
  reinvestments of distributions
   
36,628
     
1,184,198
     
24,887
     
745,357
 
 
Shares redeemed*
   
(669,433
)
   
(21,676,720
)
   
(208,501
)
   
(6,469,050
)
 
Net increase/(decrease)
   
(480,115
)
 
$
(15,524,879
)
   
113,178
   
$
3,500,584
 
 
* Net of redemption fees of
         
$
           
$
4
 
                                   
Retail Class
                               
     
Year Ended
   
Year Ended
 
     
September 30, 2018
   
September 30, 2017
 
     
Shares
   
Paid-in Capital
   
Shares
   
Paid-in Capital
 
 
Shares sold
   
26,301
   
$
849,386
     
82,197
   
$
2,533,898
 
 
Shares issued on
                               
 
  reinvestments of distributions
   
5,099
     
164,551
     
3,607
     
107,89
 
 
Shares redeemed
   
(91,087
)
   
(2,938,630
)
   
(34,900
)
   
(1,086,646
)
 
Net increase/(decrease)
   
(59,687
)
 
$
(1,924,693
)
   
50,904
   
$
1,555,144
 

The accompanying notes are an integral part of these financial statements.
51

SCHARF GLOBAL OPPORTUNITY FUND

STATEMENTS OF CHANGES IN NET ASSETS
   
Year Ended
   
Year Ended
 
   
September 30, 2018
   
September 30, 2017
 
INCREASE/(DECREASE) IN NET ASSETS FROM:
           
OPERATIONS
           
Net investment income
 
$
281,568
   
$
183,836
 
Net realized gain/(loss) from:
               
Investments
   
2,412,864
     
1,302,134
 
Foreign currency
   
(1,216
)
   
(43
)
Purchased options
   
(89,226
)
   
 
Capital gain distributions from
               
  regulated investment companies
   
     
2
 
Net change in unrealized appreciation/(depreciation) on:
               
Investments
   
499,805
     
1,790,187
 
Foreign currency
   
(238
)
   
85
 
Purchased options
   
17,780
     
(17,780
)
Net increase in net assets resulting from operations
   
3,121,337
     
3,258,421
 
DISTRIBUTIONS TO SHAREHOLDERS
               
Net dividends and distributions to shareholders
   
(1,811,431
)
   
(350,164
)
Total distributions to shareholders
   
(1,811,431
)
   
(350,164
)*
CAPITAL SHARE TRANSACTIONS
               
Net decrease in net assets derived
               
  from net change in outstanding shares (a)
   
(3,264,460
)
   
(45,307
)
Total increase/(decrease) in net assets
   
(1,954,554
)
   
2,862,950
 
NET ASSETS
               
Beginning of year
   
30,307,145
     
27,444,195
 
End of year
 
$
28,352,591
   
$
30,307,145
**

(a)
A summary of share transactions is as follows:

 
     
Year Ended
   
Year Ended
 
     
September 30, 2018
   
September 30, 2017
 
     
Shares
   
Paid-in Capital
   
Shares
   
Paid-in Capital
 
 
Shares sold
   
162,303
   
$
4,782,771
     
131,041
   
$
3,726,714
 
 
Shares issued on
                               
 
  reinvestments of distributions
   
61,634
     
1,811,431
     
13,279
     
350,163
 
 
Shares redeemed*
   
(336,697
)
   
(9,858,662
)
   
(146,452
)
   
(4,122,184
)
 
Net decrease
   
(112,760
)
 
$
(3,264,460
)
   
(2,132
)
 
$
(45,307
)
 
* Net of redemption fees of
         
$
4
           
$
92
 

*
 
Includes net investment income distribution of $145,384, and net realized gain distribution of $204,780.
**
 
Includes accumulated undistributed net investment income of $146,045.

The accompanying notes are an integral part of these financial statements.
52

SCHARF ALPHA OPPORTUNITY FUND

STATEMENTS OF CHANGES IN NET ASSETS
   
Year Ended
   
Year Ended
 
   
September 30, 2018
   
September 30, 2017
 
INCREASE/(DECREASE) IN NET ASSETS FROM:
           
OPERATIONS
           
Net investment loss
 
$
(18,359
)
 
$
(196,124
)
Net realized gain/(loss) from:
               
Investments
   
1,726,775
     
587,909
 
Foreign currency
   
(26
)
   
14
 
Purchased options
   
     
(23,424
)
Securities sold short
   
(2,399,251
)
   
(565,375
)
Capital gain distributions from
               
  regulated investment companies
   
     
3
 
Net change in unrealized appreciation/(depreciation) on:
               
Investments
   
428,206
     
1,625,541
 
Foreign currency
   
(4
)
   
3
 
Purchased options
   
     
5,833
 
Securities sold short
   
391,800
     
(1,631,671
)
Net increase/(decrease) in net assets
               
  resulting from operations
   
129,141
     
(197,291
)
DISTRIBUTIONS TO SHAREHOLDERS
               
Net dividends and distributions to shareholders
   
(463,472
)
   
(106,305
)
Total distributions to shareholders
   
(463,472
)
   
(106,305
)*
CAPITAL SHARE TRANSACTIONS
               
Net increase/(decrease) in net assets derived
               
  from net change in outstanding shares (a)
   
(3,800,988
)
   
412,267
 
Total increase/(decrease) in net assets
   
(4,135,319
)
   
108,671
 
NET ASSETS
               
Beginning of year
   
25,129,395
     
25,020,724
 
End of year
 
$
20,994,076
   
$
25,129,395
**

(a)
A summary of share transactions is as follows:

     
Year Ended
   
Year Ended
 
     
September 30, 2018
   
September 30, 2017
 
     
Shares
   
Paid-in Capital
   
Shares
   
Paid-in Capital
 
 
Shares sold
   
112,877
   
$
2,660,266
     
361,662
   
$
8,699,395
 
 
Shares issued on
                               
 
  reinvestments of distributions
   
16,096
     
382,590
     
3,871
     
91,211
 
 
Shares redeemed
   
(289,635
)
   
(6,843,844
)
   
(347,538
)
   
(8,378,339
)
 
Net increase/(decrease)
   
(160,662
)
 
$
(3,800,988
)
   
17,995
   
$
412,267
 
 
* Net of redemption fees of
         
$
52
           
$
 

*
 
Includes net realized gain distribution of $106,305.
**
 
Includes accumulated undistributed net investment loss of $(113,841).

The accompanying notes are an integral part of these financial statements.
53

SCHARF ALPHA OPPORTUNITY FUND

STATEMENT OF CASH FLOWS For the Year Ended September 30, 2018
Increase/(decrease) in cash —
     
       
Cash flows from operating activities:
     
Net increase/(decrease) in net assets from operations
 
$
129,141
 
Adjustments to reconcile net increase/(decrease) in
       
  net assets from operations to net cash provided by operating activities:
       
Purchases of investment securities
   
(10,071,501
)
Proceeds for sales of investment securities
   
14,651,443
 
Proceeds on securities sold short
   
5,544,432
 
Closed short sale transactions
   
(11,010,934
)
Proceeds for short-term investments, net
   
1,221,393
 
Decrease in deposits at broker
   
3,366,098
 
Decrease in dividends and interest receivable
   
9,397
 
Decrease in due from Adviser
   
421
 
Increase in prepaid expenses and other assets
   
(3,441
)
Decrease in payable for dividends on short positions
   
(27,430
)
Decrease in accrued administration fees
   
(9,410
)
Increase in 12b-1 distribution and service fees
   
(11,538
)
Decrease in compliance fees
   
(1,500
)
Decrease in custody fees
   
(3,259
)
Decrease in transfer agent fees and expenses
   
(2,070
)
Decrease in other accrued expenses
   
(7,204
)
Unrealized depreciation on securities
   
(820,006
)
Net realized loss on investments
   
672,476
 
Proceeds received through merger
   
448,705
 
Net cash provided by operating activities
   
4,075,213
 
         
Cash flows from financing activities:
       
Proceeds from shares sold
   
2,830,266
 
Payment on shares redeemed
   
(7,076,731
)
Distributions paid in cash
   
(80,882
)
Net cash used in financing activities
   
(4,327,347
)
         
Net decrease in cash
   
(252,134
)
         
Cash:
       
Beginning balance
   
269,772
 
Ending balance
 
$
17,638
 
         
Supplemental information:
       
Non-cash financing activities not included herein consists of dividend
       
  reinvestment of dividends and distributions
 
$
382,590
 
Cash paid for interest
 
$
1,245
 

The accompanying notes are an integral part of these financial statements.

54

SCHARF FUND

FINANCIAL HIGHLIGHTS For a share outstanding throughout each year
Institutional Class
                             
   
Year Ended September 30,
 
   
2018
   
2017
   
2016
   
2015
   
2014
 
Net asset value,
                             
  beginning of year
 
$
44.08
   
$
40.47
   
$
38.24
   
$
39.00
   
$
32.43
 
                                         
Income from investment operations:
                                       
Net investment income^
   
0.26
     
0.09
     
0.06
     
0.03
     
0.05
 
Net realized and unrealized
                                       
  gain on investments
                                       
  and foreign currency
   
3.61
     
3.59
     
3.53
     
0.60
     
6.56
 
Total from investment operations
   
3.87
     
3.68
     
3.59
     
0.63
     
6.61
 
                                         
Less distributions:
                                       
From net investment income
   
(0.08
)
   
(0.07
)
   
(0.02
)
   
(0.03
)
   
(0.02
)
From net realized
                                       
  gain on investments
   
(1.15
)
   
     
(1.34
)
   
(1.36
)
   
(0.02
)
Total distributions
   
(1.23
)
   
(0.07
)
   
(1.36
)
   
(1.39
)
   
(0.04
)
Paid-in capital from
                                       
  redemption fees^#
   
0.00
     
0.00
     
0.00
     
0.00
     
0.00
 
Net asset value, end of year
 
$
46.72
   
$
44.08
   
$
40.47
   
$
38.24
   
$
39.00
 
                                         
Total return
   
8.93
%
   
9.10
%
   
9.52
%
   
1.62
%
   
20.39
%
                                         
Ratios/supplemental data:
                                       
Net assets, end of year (thousands)
 
$
350,205
   
$
488,084
   
$
508,930
   
$
377,974
   
$
188,453
 
Ratio of expenses
                                       
  to average net assets:
                                       
Before fee waivers
   
1.08
%
   
1.20
%
   
1.19
%
   
1.26
%
   
1.30
%
After fee waivers
 
0.96
%~    
1.07
%
   
1.05
%
   
1.13
%**
   
1.25
%
Ratio of net investment income/(loss)
                                       
  to average net assets:
                                       
Before fee waivers
   
0.47
%
   
0.09
%
   
0.02
%
   
(0.05
)%
   
0.08
%
After fee waivers
   
0.59
%
   
0.22
%
   
0.16
%
   
0.08
%
   
0.13
%
Portfolio turnover rate
   
39.71
%
   
21.63
%
   
30.58
%
   
33.85
%
   
31.20
%

**
 
Effective January 28, 2015, the adviser contractually agreed to lower the net annual operating expense limit to 1.09%.
^
 
Based on average shares outstanding.
#
 
Amount is less than $0.01.
~
 
Effective January 28, 2018, the adviser contractually agreed to lower the net annual operating expense limit to 0.99%.
 
The accompanying notes are an integral part of these financial statements.
55

SCHARF FUND

FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
Retail Class
                     
January 28,
 
                     
2015* to
 
   
Year Ended September 30,
   
September 30,
 
   
2018
   
2017
   
2016
   
2015
 
Net asset value, beginning of period
 
$
43.87
   
$
40.32
   
$
38.21
   
$
38.85
 
                                 
Income from investment operations:
                               
Net investment income/(loss)^
   
0.12
     
(0.02
)
   
(0.05
)
   
(0.02
)
Net realized and unrealized
                               
  gain/(loss) on investments
                               
  and foreign currency
   
3.59
     
3.57
     
3.52
     
(0.62
)
Total from investment operations
   
3.71
     
3.55
     
3.47
     
(0.64
)
                                 
Less distributions:
                               
From net investment income
   
     
     
(0.02
)
   
 
From net realized gain on investments
   
(1.15
)
   
     
(1.34
)
   
 
Total distributions
   
(1.15
)
   
     
(1.36
)
   
 
Paid-in capital from
                               
  redemption fees^#
   
0.00
     
0.00
     
0.00
     
0.00
 
Net asset value, end of period
 
$
46.43
   
$
43.87
   
$
40.32
   
$
38.21
 
                                 
Total return
   
8.58
%
   
8.80
%
   
9.20
%
   
(1.65
)%‡
                                 
Ratios/supplemental data:
                               
Net assets, end of period (thousands)
 
$
70,365
   
$
88,843
   
$
98,293
   
$
41,551
 
Ratio of expenses to average net assets:
                               
Before fee waivers
   
1.39
%
   
1.47
%
   
1.47
%
   
1.53
%†
After fee waivers
 
1.27
%~    
1.34
%
   
1.34
%
   
1.34
%†
Ratio of net investment income/(loss)
                               
  to average net assets:
                               
Before fee waivers
   
0.16
%
   
(0.17
)%
   
(0.25
)%
   
(0.27
)%†
After fee waivers
   
0.28
%
   
(0.04
)%
   
(0.12
)%
   
(0.08
)%†
Portfolio turnover rate
   
39.71
%
   
21.63
%
   
30.58
%
   
33.85
%‡**

*
 
Commencement of operations.
^
 
Based on average shares outstanding.
 
Annualized.
 
Not annualized.
#
 
Amount is less than $0.01.
**
 
Portfolio turnover calculated for the year ended September 30, 2015.
~
 
Effective January 28, 2018, the adviser contractually agreed to lower the net annual operating expense limit to 1.24%.

The accompanying notes are an integral part of these financial statements.
56

SCHARF BALANCED OPPORTUNITY FUND

FINANCIAL HIGHLIGHTS For a share outstanding throughout each year
Institutional Class
   
Year Ended September 30,
 
   
2018
   
2017
   
2016
   
2015
   
2014
 
Net asset value,
                             
  beginning of year
 
$
32.27
   
$
30.60
   
$
29.60
   
$
30.46
   
$
27.16
 
                                         
Income from investment operations:
                                       
Net investment income
 
0.34
^  
0.15
^  
0.14
^  
0.08
^    
0.14
 
Net realized and unrealized
                                       
  gain on investments
                                       
  and foreign currency
   
1.67
     
1.94
     
2.08
     
0.34
     
3.60
 
Total from investment operations
   
2.01
     
2.09
     
2.22
     
0.42
     
3.74
 
                                         
Less distributions:
                                       
From net investment income
   
(0.07
)
   
(0.20
)
   
(0.07
)
   
(0.10
)
   
(0.14
)
From net realized
                                       
  gain on investments
   
(0.63
)
   
(0.22
)
   
(1.15
)
   
(1.18
)
   
(0.30
)
Total distributions
   
(0.70
)
   
(0.42
)
   
(1.22
)
   
(1.28
)
   
(0.44
)
Paid-in capital from
                                       
  redemption fees
   
   
0.00
^#  
0.00
^#  
0.00
^#    
 
Net asset value, end of year
 
$
33.58
   
$
32.27
   
$
30.60
   
$
29.60
   
$
30.46
 
                                         
Total return
   
6.32
%
   
6.94
%
   
7.68
%
   
1.38
%
   
13.93
%
                                         
Ratios/supplemental data:
                                       
Net assets, end of year (thousands)
 
$
46,366
   
$
60,061
   
$
53,485
   
$
47,064
   
$
37,935
 
Ratio of expenses to average net assets:
                                       
Before fee waivers
   
1.44
%
   
1.47
%
   
1.47
%
   
1.45
%
   
1.69
%
After fee waivers
   
0.97
%
   
1.02
%**
   
1.08
%
   
1.20
%
   
1.20
%
Ratio of net investment income
                                       
  to average net assets:
                                       
Before fee waivers
   
0.59
%
   
0.04
%
   
0.08
%
   
0.00
%
   
0.13
%
After fee waivers
   
1.06
%
   
0.49
%
   
0.47
%
   
0.25
%
   
0.62
%
Portfolio turnover rate
   
36.29
%
   
30.04
%
   
34.43
%
   
39.09
%
   
36.18
%

**
 
Effective June 30, 2017, the advisor contractually agreed to lower the net annual operating expense limit to 0.98%.
^
 
Based on average shares outstanding.
#
 
Amount is less than $0.01.

The accompanying notes are an integral part of these financial statements.

57

SCHARF BALANCED OPPORTUNITY FUND

FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
Retail Class
               
January 21,
 
               
2016* to
 
   
Year Ended September 30,
   
September 30,
 
   
2018
   
2017
   
2016
 
Net asset value, beginning of period
 
$
32.16
   
$
30.54
   
$
27.68
 
                         
Income from investment operations:
                       
Net investment income^
   
0.26
     
0.07
     
0.05
 
Net realized and unrealized gain
                       
  on investments and foreign currency
   
1.65
     
1.94
     
2.81
 
Total from investment operations
   
1.91
     
2.01
     
2.86
 
                         
Less distributions:
                       
From net investment income
   
     
(0.17
)
       
From net realized gain on investments
   
(0.63
)
   
(0.22
)
   
 
Total distributions
   
(0.63
)
   
(0.39
)
   
 
Net asset value, end of period
 
$
33.44
   
$
32.16
   
$
30.54
 
                         
Total return
   
6.00
%
   
6.68
%
   
10.33
%‡
                         
Ratios/supplemental data:
                       
Net assets, end of period (thousands)
 
$
7,361
   
$
8,998
   
$
6,990
 
Ratio of expenses to average net assets:
                       
Before fee waivers
   
1.70
%
   
1.73
%
   
1.75
%†
After fee waivers
   
1.23
%
 
1.28
%~    
1.30
%†
Ratio of net investment income/(loss)
                       
  to average net assets:
                       
Before fee waivers
   
0.33
%
   
(0.21
)%
   
(0.23
)%†
After fee waivers
   
0.80
%
   
0.24
%
   
0.22
%†
Portfolio turnover rate
   
36.29
%
   
30.04
%
   
34.43
%‡**

*
 
Commencement of operations.
~
 
Effective June 30, 2017, the advisor contractually agreed to lower the net annual operating expense limit to 1.23%.
^
 
Based on average shares outstanding.
**
 
Portfolio turnover calculated for the period ended September 30, 2016.
 
Annualized.
 
Not annualized.
     
The accompanying notes are an integral part of these financial statements.
58

SCHARF GLOBAL OPPORTUNITY FUND

FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
Retail Class
                     
October 14,
 
                     
2014* to
 
   
Year Ended September 30,
   
September 30,
 
   
2018
   
2017
   
2016
   
2015
 
Net asset value, beginning of period
 
$
29.76
   
$
26.89
   
$
24.87
   
$
24.00
 
                                 
Income from investment operations:
                               
Net investment income
   
0.31
   
0.18
^    
0.16
     
0.19
 
Net realized and unrealized gain on
                               
  investments, foreign currency
                               
  and purchased options
   
3.05
     
3.03
     
3.06
     
0.71
 
Total from investment operations
   
3.36
     
3.21
     
3.22
     
0.90
 
                                 
Less distributions:
                               
From net investment income
   
(0.21
)
   
(0.14
)
   
(0.20
)
   
(0.03
)
From net realized
                               
  gain on investments
   
(1.61
)
   
(0.20
)
   
(1.00
)
   
 
Total distributions
   
(1.82
)
   
(0.34
)
   
(1.20
)
   
(0.03
)
Paid-in capital from redemption fees
 
0.00
^#  
0.00
^#    
     
 
Net asset value, end of period
 
$
31.30
   
$
29.76
   
$
26.89
   
$
24.87
 
                                 
Total return
   
11.72
%
   
12.10
%
   
13.21
%
   
3.75
%‡
                                 
Ratios/supplemental data:
                               
Net assets, end of period (thousands)
 
$
28,353
   
$
30,307
   
$
27,444
   
$
18,348
 
Ratio of expenses to average net assets:
                               
Before fee waivers and
                               
  expense reimbursement
   
1.72
%
   
1.90
%
   
1.97
%
   
2.36
%†
After fee waivers and
                               
  expense reimbursement
 
0.52
%~    
0.65
%
   
0.55
%
   
0.50
%†
Ratio of net investment income/(loss)
                               
  to average net assets:
                               
Before fee waivers and
                               
  expense reimbursement
   
(0.26
)%
   
(0.60
)%
   
(0.74
)%
   
(1.01
)%†
After fee waivers and
                               
  expense reimbursement
   
0.94
%
   
0.65
%
   
0.68
%
   
0.85
%†
Portfolio turnover rate
   
65.99
%
   
75.78
%
   
52.75
%
   
60.44
%‡**

*
 
Commencement of operations.
^
 
Based on average shares outstanding.
 
Annualized.
 
Not annualized.
**
 
Portfolio turnover calculated for the period ended September 30, 2015.
#
 
Amount is less than $0.01.
~
 
Effective January 28, 2018, the adviser contractually changed the net annual operating expense limit to 0.70%.

The accompanying notes are an integral part of these financial statements.
59

SCHARF ALPHA OPPORTUNITY FUND

FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
Retail Class
               
December 31,
 
               
2015* to
 
   
Year Ended September 30,
   
September 30,
 
   
2018
   
2017
   
2016
 
Net asset value, beginning of period
 
$
24.20
   
$
24.52
   
$
24.00
 
                         
Income from investment operations:
                       
Net investment loss
   
(0.04
)
   
(0.19
)
 
(0.21
)^
Net realized and unrealized gain/(loss) on
                       
  investments, foreign currency, purchased
                       
  options and securities sold short
   
0.23
     
(0.03
)
   
0.73
 
Total from investment operations
   
0.19
     
(0.22
)
   
0.52
 
                         
Less distributions:
                       
From net realized gain on investments
   
(0.47
)
   
(0.10
)
   
 
Total distributions
   
(0.47
)
   
(0.10
)
   
 
Paid-in capital from redemption fees
 
0.00
^#    
     
 
Net asset value, end of period
 
$
23.92
   
$
24.20
   
$
24.52
 
                         
Total return
   
0.79
%
   
(0.89
)%
   
2.17
%‡
                         
Ratios/supplemental data:
                       
Net assets, end of period (thousands)
 
$
20,994
   
$
25,129
   
$
25,021
 
Ratio of expenses to average net assets:
                       
Before fee waivers and
                       
  expense reimbursement
   
2.88
%
   
3.15
%
   
3.98
%†
After fee waivers and
                       
  expense reimbursement
   
1.84
%
   
2.14
%
   
2.53
%†
Ratio of net investment loss
                       
  to average net assets:
                       
Before fee waivers and
                       
  expense reimbursement
   
(1.12
)%
   
(1.77
)%
   
(2.62
)%†
After fee waivers and
                       
  expense reimbursement
   
(0.08
)%
   
(0.76
)%
   
(1.17
)%†
Portfolio turnover rate
   
59.57
%
   
27.42
%
   
25.13
%‡

*
 
Commencement of operations.
^
 
Based on average shares outstanding.
 
Annualized.
 
Not annualized.

The accompanying notes are an integral part of these financial statements.

60

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018
NOTE 1 – ORGANIZATION
 
The Scharf Fund, the Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund (each a “Fund” and collectively, the “Funds”) are each a series of Advisors Series Trust (the “Trust”), which is registered under the Investment Company Act of 1940, as amended, (the “1940 Act”) as an open-end management investment company. The Scharf Fund, the Scharf Balanced Opportunity Fund, and the Scharf Global Opportunity Fund are diversified and the Scharf Alpha Opportunity Fund is non-diversified. The Funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services – Investment Companies”.
 
The investment objective of the Scharf Fund and the Scharf Global Opportunity Fund is to seek long-term capital appreciation. The investment objective of the Scharf Balanced Opportunity Fund is to seek long-term capital appreciation and income. The investment objective of the Scharf Alpha Opportunity Fund is to seek long-term capital appreciation and to provide returns above inflation while exposing investors to less volatility than typical equity investments. The Scharf Fund Institutional Class, Retail Class, and R6 Class commenced operations on December 30, 2011, January 28, 2015, and January 29, 2018, respectively. On September 14, 2018 the Scharf Fund R6 Class ceased operations and was closed by the Adviser.  The Scharf Balanced Opportunity Fund Institutional Class and Retail Class commenced operations on December 31, 2012 and January 21, 2016, respectively.
 
The Scharf Global Opportunity Fund commenced operations on October 14, 2014. The initial purchase into the Fund included a transfer in-kind of securities and cash. The transfer in-kind was nontaxable. The Fund issued 419,054 shares on October 14, 2014. The fair value and cost of securities received by the Fund was $7,814,245 and $6,536,468, respectively. In addition, the Fund received $2,243,043 of cash. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
 
The Scharf Alpha Opportunity Fund commenced operations on December 31, 2015. The initial purchase into the Fund included a transfer in-kind of securities and cash. The transfer in-kind was nontaxable. The Fund issued 184,713 shares on December 31, 2015. The fair value and cost of securities received by the Fund was $3,729,932 and $3,291,912, respectively. In addition, the Fund received $703,175 of cash. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
 
61

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
 
The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America.
 
A.
Security Valuation: All investments in securities are recorded at their estimated fair value, as described in note 3.
   
B.
Federal Income Taxes: It is the Funds’ policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no Federal income or excise tax provision is required.
   
 
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed the tax positions of the Scharf Fund, the Scharf Balanced Opportunity Fund, and the Scharf Global Opportunity Fund and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for the open tax years 2015-2017, or expected to be taken in the Funds’ 2018 tax returns. Management has analyzed the Scharf Alpha Opportunity Fund’s tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for the open tax years 2016-2017, or expected to be taken in the Fund’s 2018 tax returns.  The Funds identify their major tax jurisdictions as U.S. Federal and the state of Wisconsin; however, the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
   
C.
Securities Transactions, Income and Distributions: Securities transactions are accounted for on the trade date. Realized gains and losses on securities sold are calculated on the basis of specified cost.  Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security using the effective interest method. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Withholding taxes on foreign dividends have been provided for in accordance with each Fund’s understanding of the applicable country’s tax rules and rates.
   
 
Investment income, expenses (other than those specific to the class of shares), and realized and unrealized gains and losses on investments are allocated to the separate classes of each Fund based upon their relative net assets on the date income is earned or expensed and realized and unrealized gains and losses are incurred.

62

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
 
Each Fund is charged for those expenses that are directly attributable to the Fund, such as investment advisory, custody and transfer agent fees. Expenses that are not attributable to a Fund are typically allocated among the Funds in proportion to their respective net assets.  Common expenses of the Trust are typically allocated among the funds in the Trust based on a fund’s respective net assets, or by other equitable means.
   
 
The Funds distribute substantially all net investment income, if any, and net realized capital gains, if any, annually.  Distributions from net realized gains for book purposes may include short-term capital gains.  All short-term capital gains are included in ordinary income for tax purposes.
   
 
The amount of dividends and distributions to shareholders from net investment income and net realized capital gains is determined in accordance with Federal income tax regulations, which differs from accounting principles generally accepted in the United States of America. To the extent these book/tax differences are permanent, such amounts are reclassified within the capital accounts based on their Federal tax treatment.
   
D.
Reclassification of Capital Accounts: Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share.
   
 
For the year ended September 30, 2018, the Funds made the following permanent tax adjustments on the statements of assets and liabilities:

 
 
 
Distributable
   
Paid-in
 
 
 
 
Earnings
   
Capital
 
 
Scharf Fund
 
$
(10,587,310
)
 
$
10,587,310
 
 
Scharf Balanced Opportunity Fund
   
(743,454
)
   
743,454
 
 
Scharf Global Opportunity Fund
   
(572,003
)
   
572,003
 
 
Scharf Alpha Opportunity Fund
   
132,231
     
(132,231
)
 
E.
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets during the reporting period. Actual results could differ from those estimates.
   
F.
Redemption Fees: The Scharf Fund charges a 2.00% redemption fee to shareholders who redeem shares held for 60 days or less. The Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha

63

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
 
Opportunity Fund each charge a 2.00% redemption fee to shareholders who redeem shares held for 15 days or less. Such fees are retained by the Funds and accounted for as an addition to paid-in capital.  During the year ended September 30, 2018, the Scharf Fund, Scharf Global Opportunity Fund and the Scharf Alpha Opportunity Fund retained $3,230, $4, and $52, respectively, in redemption fees.
   
G.
Foreign Securities: The Funds may invest in securities of foreign companies. Foreign economies may differ from the U.S. economy and individual foreign companies may differ from domestic companies in the same industry. Foreign companies or entities are frequently not subject to accounting and financial reporting standards applicable to domestic companies, and there may be less information available about foreign issuers. Securities of foreign issuers are generally less liquid and more volatile than those of comparable domestic issuers. There is frequently less government regulation of broker-dealers and issuers than in the United States. In addition, investments in foreign countries are subject to the possibility of expropriation, confiscatory taxation, political or social instability or diplomatic developments that could adversely affect the value of those investments.
   
H.
Leverage and Short Sales: The Scharf Alpha Opportunity Fund may use leverage in connection with its investment activities and may affect short sales of securities. Leverage can increase the investment returns of the Fund if the securities purchased increase in value in an amount exceeding the cost of the borrowing. However, if the securities decrease in value, the Fund will suffer a greater loss than would have resulted without the use of leverage. A short sale is the sale by the Fund of a security which it does not own in anticipation of purchasing the same security in the future at a lower price to close the short position. A short sale will be successful if the price of the shorted security decreases. However, if the underlying security goes up in price during the period in which the short position is outstanding, the Fund will realize a loss. The risk on a short sale is unlimited because the Fund must buy the shorted security at the higher price to complete the transaction. Therefore, short sales may be subject to greater risks than investments in long positions.
   
 
With a long position, the maximum sustainable loss is limited to the amount paid for the security plus the transaction costs, whereas there is no maximum attainable price of the shorted security. The Fund would also incur increased transaction costs associated with selling securities short. In addition, if the Fund sells securities short, it must maintain a segregated account with its custodian containing cash or high-grade securities equal to (i) the greater of the current market value of the securities sold short or the market value of such securities at the time they were sold short, less (ii) any collateral deposited with the Fund’s

64

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
 
broker (not including the proceeds from the short sales). The Fund may be required to add to the segregated account as the market price of a shorted security increases. As a result of maintaining and adding to its segregated account, the Fund may maintain higher levels of cash or liquid assets (for example, U.S. Treasury bills, repurchase agreements, high quality commercial paper and long equity positions) for collateral needs thus reducing its overall managed assets available for trading purposes. In lieu of maintaining cash or high-grade securities in a segregated account to cover the Fund’s short sale obligations, the Fund may earmark cash or high-grade securities on the Fund’s records or hold offsetting positions.
   
I.
Derivatives: The Funds have adopted the financial accounting reporting rules as required by the Derivatives and Hedging Topic of the FASB Accounting Standards Codification. The Funds are required to include enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position.
   
 
The Funds may utilize options for hedging purposes as well as direct investment. Some options strategies, including buying puts, tend to hedge the Funds’ investments against price fluctuations. Other strategies, such as writing puts and calls and buying calls, tend to increase market exposure. Options contracts may be combined with each other in order to adjust the risk and return characteristics of each Fund’s overall strategy in a manner deemed appropriate to the Adviser and consistent with each Fund’s investment objective and policies. When a call or put option is written, an amount equal to the premium received is recorded as a liability. The liability is marked-to-market daily to reflect the current fair value of the written option. When a written option expires, a gain is realized in the amount of the premium originally received. If a closing purchase contract is entered into, a gain or loss is realized in the amount of the original premium less the cost of the closing transaction. If a written call option is exercised, a gain or loss is realized from the sale of the underlying security, and the proceeds from such sale are increased by the premium originally received. If a written put option is exercised, the amount of the premium originally received reduces the cost of the security which is purchased upon the exercise of the option.
   
 
With options, there is minimal counterparty credit risk to the Funds since the options are covered or secured, which means that the Funds will own the underlying security or, to the extent they do not hold the security, will maintain liquid assets consisting of cash, short-term securities, or equity or debt securities equal to the market value of the security underlying the option, marked to market daily.

65

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
 
Options purchased are recorded as investments and marked-to-market daily to reflect the current fair value of the option contract. If an option purchased expires, a loss is realized in the amount of the cost of the option contract. If a closing transaction is entered into, a gain or loss is realized to the extent that the proceeds from the sale are greater or less than the cost of the option. If a purchase put option is exercised, a gain or loss is realized from the sale of the underlying security by adjusting the proceeds from such sale by the amount of the premium originally paid. If a purchased call option is exercised, the cost of the security purchased upon exercise is increased by the premium originally paid.
   
 
The Scharf Fund, the Scharf Balanced Opportunity Fund, and the Scharf Alpha Opportunity Fund did not invest in derivative instruments during the year ended September 30, 2018. The average monthly notional value of the purchased options held from September 2017 through January 2018 was $2,891,895. The purchased option held on September 30, 2017 in the Scharf Global Opportunity Fund expired in January 2018.
   
 
Scharf Global Opportunity Fund
   
 
The effect of derivative instruments on the statements of operations for the year ended September 30, 2018 is as follows:

 
Derivative Type
Location of Loss on Derivatives Recognized in Income
Value
 
Equity Contracts
Realized loss on purchased options
$ (89,226)
 
Equity Contracts
Change in unrealized appreciation on purchased options
$   17,780

J.
Events Subsequent to the Fiscal Year End: In preparing the financial statements as of September 30, 2018, management considered the impact of subsequent events for potential recognition or disclosure in the financial statements. Refer to Note 11 for more information about subsequent events.
 
NOTE 3 – SECURITIES VALUATION
 
The Funds have adopted authoritative fair value accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value.  These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value, a discussion in changes in valuation techniques and related inputs during the period and expanded disclosure of valuation levels for major security types.  These inputs are summarized in the three broad levels listed below:
 
 
Level 1 –
Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access.
     
 
Level 2 –
Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These

66

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
   
inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
     
 
Level 3 –
Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
 
Following is a description of the valuation techniques applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis.
 
Each Fund determines the fair value of its investments and computes its net asset value per share as of the close of regular trading on the New York Stock Exchange (4:00 pm EST).
 
Equity Securities: The Funds’ investments are carried at fair value. Equity securities, including common stocks, preferred stocks and exchange-traded funds that are primarily traded on a national securities exchange shall be valued at the last sale price on the exchange on which they are primarily traded on the day of valuation or, if there has been no sale on such day, at the mean between the bid and asked prices.  Securities primarily traded in the NASDAQ Global Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price (“NOCP”).  If the NOCP is not available, such securities shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices.  Over-the-counter securities which are not traded in the NASDAQ Global Market System shall be valued at the most recent sales price.  Investments in open-end mutual funds are valued at their net asset value per share.  To the extent, these securities are actively traded and valuation adjustments are not applied, they are categorized in level 1 of the fair value hierarchy.
 
Fixed Income Securities: Debt securities, such as corporate bonds, asset backed securities, municipal bonds, and U.S. government agency issues are valued at market on the basis of valuations furnished by an independent pricing service which utilizes both dealer-supplied valuations and formula-based techniques.  The pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer.  In addition, the model may incorporate market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data.  Certain securities are valued principally using dealer quotations.  These securities will generally be classified in level 2 of the fair value hierarchy.
 
67

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
Options: Exchange-traded options are valued at the composite price, using the National Best Bid and Offer quotes. Specifically, composite pricing looks at the last trades on the exchanges where the options are traded. If there are no trades for the option on a given business day, composite option pricing calculates the mean of the highest bid price and the lowest ask price across the exchanges where the option is traded. Exchange-traded options that are actively traded are categorized in level 1 of the fair value hierarchy.
 
Short-Term Securities: Short-term debt securities, including those securities having a maturity of 60 days or less, are valued at the evaluated mean between the bid and asked prices. To the extent the inputs are observable and timely, these securities would be classified in level 2 of the fair value hierarchy.
 
The Board of Trustees (the “Board”) has delegated day-to-day valuation issues to a Valuation Committee of the Trust which is comprised of representatives from U.S. Bancorp Fund Services, LLC, the Funds’ administrator. The function of the Valuation Committee is to value securities where current and reliable market quotations are not readily available or the closing price does not represent fair value by following procedures approved by the Board. These procedures consider many factors, including the type of security, size of holding, trading volume and news events. All actions taken by the Valuation Committee are reviewed and ratified by the Board.
 
Depending on the relative significance of the valuation inputs, fair valued securities may be classified in either level 2 or level 3 of the fair value hierarchy.
 
68

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.  The following is a summary of the inputs used to value the Funds’ securities as of September 30, 2018:
 
Scharf Fund
 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stocks
                       
  Communication Services
 
$
36,321,608
   
$
   
$
   
$
36,321,608
 
  Consumer Discretionary
   
75,506,654
     
     
     
75,506,654
 
  Consumer Staples
   
32,200,824
     
     
     
32,200,824
 
  Financials
   
39,292,871
     
     
     
39,292,871
 
  Healthcare
   
58,241,276
     
     
     
58,241,276
 
  Industrials
   
11,618,677
     
     
     
11,618,677
 
  Information Technology
   
94,473,420
     
     
     
94,473,420
 
  Materials
   
16,441,730
     
     
     
16,441,730
 
Total Common Stocks
   
364,097,060
     
     
     
364,097,060
 
Preferred Stock
                               
  Information Technology
   
10,298,408
     
     
     
10,298,408
 
Total Preferred Stock
   
10,298,408
     
     
     
10,298,408
 
U.S. Treasury Bills
   
     
34,422,869
     
     
34,422,869
 
Money Market Fund
   
12,010,609
     
     
     
12,010,609
 
Total Investments
                               
  in Securities
 
$
386,406,077
   
$
34,422,869
   
$
   
$
420,828,946
 

69

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
Scharf Balanced Opportunity Fund
 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stocks
                       
  Communication Services
 
$
3,184,698
   
$
   
$
   
$
3,184,698
 
  Consumer Discretionary
   
7,006,969
     
     
     
7,006,969
 
  Consumer Staples
   
2,805,965
     
     
     
2,805,965
 
  Financials
   
3,803,205
     
     
     
3,803,205
 
  Healthcare
   
5,211,542
     
     
     
5,211,542
 
  Industrials
   
1,081,824
     
     
     
1,081,824
 
  Information Technology
   
8,343,512
     
     
     
8,343,512
 
  Materials
   
1,379,742
     
     
     
1,379,742
 
Total Common Stocks
   
32,817,457
     
     
     
32,817,457
 
Preferred Stocks
                               
  Closed-End Funds
   
2,194,070
     
     
     
2,194,070
 
  Information Technology
   
1,156,741
     
     
     
1,156,741
 
Total Preferred Stocks
   
3,350,811
     
     
     
3,350,811
 
Fixed Income
                               
  Corporate Bonds
   
     
5,037,897
     
     
5,037,897
 
  Municipal Bonds
   
     
4,256,421
     
     
4,256,421
 
Total Fixed Income
   
     
9,294,318
     
     
9,294,318
 
U.S. Treasury Note
   
     
1,228,076
     
     
1,228,076
 
Money Market Fund
   
1,126,411
     
     
     
1,126,411
 
U.S. Treasury Bills
   
     
5,987,083
     
     
5,987,083
 
Total Investments
                               
  in Securities
 
$
37,294,679
   
$
16,509,477
   
$
   
$
53,804,156
 

70

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
Scharf Global Opportunity Fund
 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stocks
                       
  Communication Services
 
$
4,132,154
   
$
   
$
   
$
4,132,154
 
  Consumer Discretionary
   
5,697,649
     
     
     
5,697,649
 
  Consumer Staples
   
1,382,949
     
     
     
1,382,949
 
  Financials
   
2,928,063
     
     
     
2,928,063
 
  Healthcare
   
4,626,435
     
     
     
4,626,435
 
  Industrials
   
945,208
     
     
     
945,208
 
  Information Technology
   
2,432,311
     
     
     
2,432,311
 
  Materials
   
776,133
     
     
     
776,133
 
Total Common Stocks
   
22,920,902
     
     
     
22,920,902
 
Preferred Stocks
                               
  Consumer Discretionary
   
125,753
     
     
     
125,753
 
  Consumer Staples
   
157,246
     
     
     
157,246
 
  Financials
   
72,481
     
     
     
72,481
 
  Information Technology
   
1,286,405
     
     
     
1,286,405
 
  Materials
   
11,644
     
     
     
11,644
 
Total Preferred Stocks
   
1,653,529
     
     
     
1,653,529
 
Money Market Fund
   
392,817
     
     
     
392,817
 
Total Investments
                               
  in Securities
 
$
24,967,248
   
$
   
$
   
$
24,967,248
 

71

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
Scharf Alpha Opportunity Fund
 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Assets:
                       
Common Stocks
                       
  Communication Services
 
$
2,098,279
   
$
   
$
   
$
2,098,279
 
  Consumer Discretionary
   
4,783,193
     
     
     
4,783,193
 
  Consumer Staples
   
1,755,726
     
     
     
1,755,726
 
  Financials
   
1,857,221
     
     
     
1,857,221
 
  Healthcare
   
3,464,299
     
     
     
3,464,299
 
  Industrials
   
815,616
     
     
     
815,616
 
  Information Technology
   
5,095,831
     
     
     
5,095,831
 
  Materials
   
912,241
     
     
     
912,241
 
Total Common Stocks
   
20,782,406
     
     
     
20,782,406
 
Money Market Fund
   
249,699
     
     
     
249,699
 
Total Investments
                               
  in Securities
 
$
21,032,105
   
$
   
$
   
$
21,032,105
 
Liabilities:
                               
Securities Sold Short
                               
  Common Stock
 
$
191,958
   
$
   
$
   
$
191,958
 
  Exchange-Traded Funds
   
11,614,479
     
     
     
11,614,479
 
Total Securities Sold Short
 
$
11,806,437
   
$
   
$
   
$
11,806,437
 
 
Refer to the Funds’ schedule of investments for a detailed break-out of securities by industry classification. Transfers between levels are recognized at September 30, 2018, the end of the reporting period. There were no transfers between levels during the year ended September 30, 2018.
 
In August 2018, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”) 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The primary focus of ASU 2018-13 is to improve the effectiveness of the disclosure requirements for fair value measurements. The changes affect all companies that are required to include fair value measurement disclosures. In general, the amendments in ASU 2018-13 are effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. An entity is permitted to early adopt the removed or modified disclosures upon the issuance of ASU 2018-13 and may delay adoption of the additional disclosures, which are required for public companies only, until their effective date. Management is currently evaluating the impact these changes will have on the Funds’ financial statements and disclosures.
 
72

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
NOTE 4 – INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
 
The Funds have an investment advisory agreement with Scharf Investments, LLC (the “Adviser”) pursuant to which the Adviser is responsible for providing investment management services to the Funds.  The Adviser furnished all investment advice, office space and facilities, and provides most of the personnel needed by each Fund.  As compensation for its services, the Adviser is entitled to a fee, computed daily and payable monthly.  Effective January 28, 2018, the Scharf Fund pays fees calculated at an annual rate of 0.89% based upon the average daily net assets of the Fund. Prior to January 28, 2018, the Scharf Fund paid fees calculated at an annual rate of 0.99% based upon the average daily net assets of the Fund. The Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund pay fees calculated at an annual rate of 0.99% based upon the average daily net assets of each Fund.  For the year ended September 30, 2018, Funds incurred the following in advisory fees.
 
   
Advisory Fees
 
Scharf Fund
$4,708,850
 
Scharf Balanced Opportunity Fund
      587,563
 
Scharf Global Opportunity Fund
      297,703
 
Scharf Alpha Opportunity Fund
      219,499
 
The Funds are responsible for their own operating expenses. The Adviser has agreed to reduce fees payable to it by the Funds and to pay Fund operating expenses (excluding class specific expenses such as the 0.25% 12b-1 fees applied to the Retail Class and 0.10% shareholder servicing fees applied to both the Institutional and Retail Class, acquired fund fees and expenses, interest expense, dividends on securities sold short, taxes and extraordinary expenses, see notes 5 and 6 for class specific information) to the extent necessary to limit the Fund’s aggregate annual operating expenses as follows:
 
   
Institutional Class
Retail Class
 
Scharf Fund*
0.89%
0.89%
 
Scharf Balanced Opportunity Fund
0.88%
0.88%
 
Scharf Global Opportunity Fund^
0.35%
 
Scharf Alpha Opportunity Fund
0.65%
       
 
Percent of average daily net assets of the Funds.
   

 
*
Prior to January 28, 2018, the Scharf Fund’s expense caps for the Institutional Class and Retail Class were 1.09% and 1.34%, respectively.  These expense caps include 0.25% for 12b-1 fees in the Institutional Class and 0.10% for shareholder servicing fees in the Institutional Class and Retail Class.
 
^
Prior to January 28, 2018, the Scharf Global Opportunity Fund’s expense cap for the Retail Class was 0.65%.  This expense cap includes 0.25% for 12b-1 fees and 0.10% for shareholder servicing fees.

73

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
Any such reduction made by the Adviser in its fees or payment of expenses which are the Funds’ obligation are subject to reimbursement by the Funds to the Adviser, if so requested by the Adviser, in any subsequent month in the three year period from the date of the management fee reduction and expense payment if the aggregate amount actually paid by the Funds toward the operating expenses for such fiscal year (taking into the account the reimbursement) will not cause the Fund to exceed the lesser of: (1) the expense limitation in place at the time of the management fee reduction and expense payment: or (2) the expense limitation in place at the time of the reimbursement.  Any such reimbursement is also contingent upon Board of Trustees review and approval at the time the reimbursement is made. Such reimbursement may not be paid prior to the Funds’ payment of current ordinary operating expenses.  For the year ended September 30, 2018, the Adviser reduced its fees in the amount of $605,893, $280,214, $358,682, and $230,304, for the Scharf Fund, the Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund, respectively.
 
No amounts were reimbursed to the Adviser.  The expense limitation for the Scharf Fund, the Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund will remain in effect through at least January 27, 2019.  The Expense Cap may be terminated only by the Board of Trustees (the “Board”) of the Trust.  Cumulative expenses subject to recapture expire as follows:
 
                           
           
Scharf Balanced
Opportunity
   
Scharf Global
Opportunity
   
Scharf Alpha
Opportunity
 
Scharf Fund
   
Fund
   
Fund
   
Fund 
 
Date
   
Amount
   
Date
   
Amount
   
Date
   
Amount
   
Date
   
Amount
 
9/30/
         
9/30/
         
9/30/
         
9/30/
       
  2019
   
$
742,298
     
2019
   
$
214,058
     
2019
   
$
331,358
     
2019
   
$
152,260
 
9/30/
           
9/30/
           
9/30/
           
9/30/
         
  2020
     
777,429
     
2020
     
292,638
     
2020
     
355,261
     
2020
     
260,274
 
  Oct.
           
  Oct.
           
  Oct.
           
  Oct.
         
 
  2020 –
             
   2020 –
             
   2020 –
             
    2020 –
         
  Sept.
           
   Sept.
           
    Sept.
           
    Sept.
         
 
    2021
     
605,893
     
     2021
     
280,214
     
     2021
     
358,682
     
     2021
     
230,304
 
       
$
2,125,620
           
$
786,910
           
$
1,045,301
           
$
642,838
 
 
U.S. Bancorp Fund Services, LLC (“Fund Services” or the “Administrator”) doing business as U.S. Bank Global Fund Services, serves as the Funds’ administrator, fund accountant and transfer agent. In those capacities Fund Services maintains the Funds’ books and records, calculates the Funds’ NAV, prepares various federal and state regulatory filings, coordinates the payment of fund expenses, reviews expense accruals and prepares materials supplied to the Board of Trustees.  The officers of the Trust and the Chief Compliance Officer are also employees of Fund Services.
 
74

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
Quasar Distributors, LLC (the “Distributor”) acts as the Funds’ principal underwriter in a continuous public offering of the Funds’ shares.  U.S. Bank N.A. serves as custodian (the “Custodian”) to the Funds’.  Both the Distributor and Custodian are affiliates of the Administrator.
 
For the year ended September 30, 2018, the Funds incurred the following expenses for administration and fund accounting, custody, transfer agency, and Chief Compliance Officer fees:
 
     
Scharf
Scharf
Scharf
     
Balanced
Global
Alpha
   
Scharf
Opportunity
Opportunity
Opportunity
   
Fund
Fund
Fund
Fund
 
Administration and
       
 
  Fund Accounting
$354,180
$81,946
$51,907
$50,562
 
Custody
    49,908
  17,091
  17,858
  14,223
 
Transfer Agency (a)
    38,900
  21,739
  11,865
  12,715
 
Chief Compliance Officer
      9,000
    9,000
    9,000
    9,000
           
 
(a) Does not include out-of-pocket expenses.
 
At September 30, 2018, the Funds had payables due to Fund Services for administration and fund accounting, U.S. Bank, N.A. for custody fees, transfer agency, and Chief Compliance Officer fees in the following amounts:
 
     
Scharf
Scharf
Scharf
     
Balanced
Global
Alpha
   
Scharf
Opportunity
Opportunity
Opportunity
   
Fund
Fund
Fund
Fund
 
Administration and
       
 
  Fund Accounting
$61,739
$12,369
$8,755
$8,582
 
Custody
    7,035
    2,752
  2,365
  2,123
 
Transfer Agency (a)
    7,127
    3,662
  2,010
  2,094
 
Chief Compliance Officer
    1,500
    1,500
  1,500
  1,500
           
 
(a) Does not include out-of-pocket expenses.
       
 
NOTE 5 – 12B-1 DISTRIBUTION FEES
 
The Retail Class of each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 (the “Plan”). The Plan permits each class to pay for distribution and related expenses up to an annual rate of 0.25% of its average daily net assets.  The expenses covered by the Plan may include the cost in connection with the promotion and distribution of shares and the provision of personal services to shareholders,
 
75

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
including, but not necessarily limited to, advertising, compensation to underwriters, dealers and selling personnel, the printing and mailing of prospectuses to other than current Fund shareholders, and the printing and mailing of sales literature.  Payments made pursuant to the Plan will represent compensation for distribution and service activities, not reimbursements for specific expenses incurred.  For the year ended September 30, 2018, the Funds paid the Distributor the following in 12b-1 fees:
 
   
12b-1 Fees
 
Scharf Fund – Retail Class
$196,242
 
Scharf Balanced Opportunity Fund – Retail Class
    19,351
 
Scharf Global Opportunity Fund
    30,494
 
Scharf Alpha Opportunity Fund
    29,387
 
NOTE 6 – SHAREHOLDER SERVICING FEE
 
The Funds have entered into a Shareholder Servicing Agreement (the “Agreement”) with the Adviser, under which the Funds may pay servicing fees at an annual rate of up to 0.10% of the average daily net assets of each Fund.  Payments to the Adviser under the Agreement may reimburse the Adviser for payments it makes to selected brokers, dealers and administrators which have entered into service agreements with the Adviser for services provided to shareholders of the Funds. The services provided by such intermediaries are primarily designed to assist shareholders of the Funds and include the furnishing of office space and equipment, telephone facilities, personnel and assistance to the Funds in servicing such shareholders. Services provided by such intermediaries also include the provision of support services to the Funds and include establishing and maintaining shareholders’ accounts and record processing, purchase and redemption transactions, answering routine client inquiries regarding the Funds, and providing such other personal services to shareholders as the Funds may reasonably request. For the year ended September 30, 2018, the Funds incurred the following shareholder servicing fees under the agreement:
 
   
Shareholder Servicing Fees
 
Scharf Fund
 
 
  Institutional Class
$139,810
 
  Retail Class
    76,205
 
Scharf Balanced Opportunity Fund
 
 
  Institutional Class
    44,690
 
  Retail Class
      7,737
 
Scharf Global Opportunity Fund
    26,973
 
Scharf Alpha Opportunity Fund
    18,573

76

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
NOTE 7 – LINES OF CREDIT
 
The Scharf Fund, Scharf Balanced Opportunity Fund, Scharf Global Opportunity Fund, and Scharf Alpha Opportunity Fund have lines of credit in the amount of $20,000,000, $5,000,000, $2,500,000, and $1,500,000, respectively. These lines of credit are intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Funds’ custodian, U.S. Bank N.A. During the year ended September 30, 2018, the Scharf Balanced Opportunity Fund did not draw upon its line of credit.
 
During the year ended September 30, 2018, the Scharf Fund drew on its line of credit.  The Fund had an outstanding average balance of $18,833, paid a weighted average interest rate of 4.75%, and incurred interest expense of $907.  The maximum borrowing by the Fund occurred on May 30, 2018 in the amount of $6,874,000.  At September 30, 2018, the Fund had no outstanding loan amounts.
 
During the year ended September 30, 2018, the Scharf Global Opportunity Fund drew on its line of credit.  The Fund had an outstanding average balance of $8,781, paid a weighted average interest rate of 4.81%, and incurred interest expense of $429.  The maximum borrowing by the Fund occurred on April 24, 2018 in the amount of $797,000.  At September 30, 2018, the Fund had no outstanding loan amounts.
 
During the year ended September 30, 2018, the Scharf Alpha Opportunity Fund drew on its line of credit.  The Fund had an outstanding average balance of $29,838, paid a weighted average interest rate of 4.54%, and incurred interest expense of $1,373.  The maximum borrowing by the Fund occurred on February 5, 2018 in the amount of $909,000.  At September 30, 2018, the Fund had no outstanding loan amounts.
 
NOTE 8 – PURCHASES AND SALES OF SECURITIES
 
For the year ended September 30, 2018, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were as follows:
 
   
Purchases
Sales
 
Scharf Fund
$178,838,448
$308,217,731
 
Scharf Balanced Opportunity Fund
  18,563,060
    25,600,753
 
Scharf Global Opportunity Fund
  19,193,149
    25,096,363
 
Scharf Alpha Opportunity Fund
  10,071,501
    14,651,443
 
There were no purchases and sales of U.S. Government securities during the year ended September 30, 2018.
 
For the year ended September 30, 2018 the Scharf Alpha Opportunity Fund had $5,544,432 and $11,010,934 of proceeds from short sales and buy cover transactions, respectively.  This activity is included in the portfolio turnover disclosed in the financial highlights.
 
77

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
NOTE 9 – INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS
 
As of September 30, 2018, the components of accumulated earnings/(losses) on a tax basis were as follows:
 
         
Scharf
 
         
Balanced
 
   
Scharf
   
Opportunity
 
   
Fund
   
Fund
 
Cost of investments (a)
 
$
340,674,372
   
$
45,862,896
 
Gross unrealized appreciation
   
95,397,070
     
9,390,530
 
Gross unrealized depreciation
   
(15,242,496
)
   
(1,449,270
)
Net unrealized appreciation (a)
   
80,154,574
     
7,941,260
 
Net unrealized appreciation/(depreciation)
               
  foreign currency
   
255
     
78
 
Undistributed ordinary income
   
2,767,146
     
610,626
 
Undistributed long-term capital gains
   
26,268,452
     
2,313,944
 
Total distributable earnings
   
29,035,598
     
2,924,570
 
Other accumulated gains/(losses)
   
     
 
Total accumulated earnings/(losses)
 
$
109,190,427
   
$
10,865,908
 
                 
   
Scharf Global
   
Scharf Alpha
 
   
Opportunity
   
Opportunity
 
   
Fund
   
Fund
 
Cost of investments (a)
 
$
20,512,973
   
$
8,248,907
 
Gross unrealized appreciation
   
5,596,406
     
2,612,571
 
Gross unrealized depreciation
   
(1,142,131
)
   
(1,635,810
)
Net unrealized appreciation (a)
   
4,454,275
     
976,761
 
Net unrealized appreciation/(depreciation)
               
  foreign currency
   
(123
)
   
3
 
Undistributed ordinary income
   
521,814
     
 
Undistributed long-term capital gains
   
1,674,730
     
 
Total distributable earnings
   
2,196,544
     
 
Other accumulated gains/(losses)
   
     
(677,288
)
Total accumulated earnings/(losses)
 
$
6,650,696
   
$
299,476
 
 
(a)
The difference between book-basis and tax basis cost and unrealized appreciation is attributable primarily to the tax deferral of losses on wash sales, tax adjustments related to partnerships and transfer in-kind.

78

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized after December 31, 2010, may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses.  Under the law in effect prior to the Act, pre-enactment net capital losses were carried forward for eight years and treated as short-term losses.  As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.
 
At September 30, 2018, the Scharf Alpha Opportunity Fund had a short-term capital loss carryforward of $677,288.
 
The capital losses may be carried forward indefinitely to offset future gains.
 
The tax character of distributions paid during the years ended September 30, 2018 and September 30, 2017 was as follows:
 
     
September 30, 2018
   
September 30, 2017
 
     
Ordinary
   
Long-Term
   
Ordinary
   
Long-Term
 
     
Income
   
Capital Gains
   
Income
   
Capital Gains
 
 
Scharf Fund
 
$
891,172
   
$
14,410,589
   
$
836,345
   
$
 
 
Scharf Balanced
                               
 
  Opportunity Fund
   
124,082
     
1,225,008
     
413,712
     
444,362
 
 
Scharf Global
                               
 
  Opportunity Fund
   
230,126
     
1,581,305
     
145,384
     
204,780
 
 
Scharf Alpha
                               
 
  Opportunity Fund
   
     
463,472
     
28,875
     
77,430
 
 
The Scharf Balanced Opportunity Fund, Scharf Global Opportunity Fund and the Scharf Alpha Opportunity Fund designated as long-term capital gain dividend, pursuant to Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and profits of the Funds related to net capital gain to zero for the tax year ended September 30, 2018.
 
NOTE 10 – PRINCIPAL RISKS
 
Below is a summary of some, but not all, of the principal risks of investing in the Funds, each of which may adversely affect a Fund’s net asset value and total return. The Funds’ most recent prospectus provides further descriptions of each Fund’s investment objective, principal investment strategies and principal risks.
 
 
Foreign and Emerging Market Securities Risk. Investments in foreign currencies and foreign issuers are subject to additional risks, including political and economic risks, greater volatility, civil conflicts and war, sanctions or other measures by the United States or other governments, liquidity risks, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, expropriation and

79

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
   
nationalization risks, and less stringent investor protection and disclosure standards of foreign markets. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable becoming riskier and more volatile. These risks are magnified in countries in “emerging markets.” Emerging market countries typically have less-established market economies than developed countries and may face greater social, economic, regulatory and political uncertainties. In addition, emerging markets typically present greater illiquidity and price volatility concerns due to smaller or limited local capital markets and greater difficulty in determining market valuations of securities due to limited public information on issuers.
     
 
Investment Style Risk. The Adviser follows an investing style that favors relatively low valuations.  At times when this style is out of favor, the Funds may underperform funds that use different investing styles.
     
 
Small- and Medium-Sized Company Risk.  Small- and medium-sized companies often have less predictable earnings, more limited product lines, markets, distribution channels or financial resources and the management of such companies may be dependent upon one or few key people.  The market movements of equity securities of small- and medium-sized companies may be more abrupt and volatile than the market movements of equity securities of larger, more established companies or the stock market in general and small-sized companies in particular, are generally less liquid than the equity securities of larger companies.
     
 
Special Situations Risk.  There is a risk that the special situation (i.e., spin-off, liquidation, merger, etc.) might not occur, which could have a negative impact on the price of the issuer’s securities and fail to produce gains or produce a loss for the Funds.  In addition, investments in special situation companies may be illiquid and difficult to value, which will require a Fund to employ fair value procedures to value its holdings in such investments.
     
 
Non-Diversification Risk (Scharf Alpha Opportunity Fund).  To the extent that the Fund invests its assets in fewer securities, the Fund is subject to a greater risk of loss if any of those securities become permanently impaired than a fund that invests more widely.
     
 
Short Sales Risk (Scharf Alpha Opportunity Fund).  A short sale is the sale by the Fund of a security which it does not own in anticipation of purchasing the same security in the future at a lower price to close the short position.  A short sale will be successful if the price of the shorted security decreases. 

80

SCHARF FUNDS

NOTES TO FINANCIAL STATEMENTS at September 30, 2018, Continued
   
However, if the underlying security goes up in price during the period in which the short position is outstanding, the Fund will realize a loss.  The risk on a short sale is unlimited because the Fund must buy the shorted security at the higher price to complete the transaction.  Therefore, short sales may be subject to greater risks than investments in long positions.
     
 
Leverage Risk (Scharf Alpha Opportunity Fund). Leverage is investment exposure which exceeds the initial amount invested.  Leverage can cause the portfolio to lose more than the principal amount invested.  Leverage can magnify the portfolio’s gains and losses and therefore increase its volatility.
 
NOTE 11 – SUBSEQUENT EVENTS
 
On October 29, 2018 the Scharf Balanced Opportunity Fund Institutional Class and Scharf Balanced Opportunity Fund Retail Class changed their names to Scharf Multi-Asset Opportunity Fund Institutional Class and Scharf Multi-Asset Opportunity Fund Retail Class, respectively.
 
The President, Chief Executive Officer and Principal Executive Officer of the Trust resigned on October 25, 2018.  The Board of Trustees will appoint a new President, Chief Executive Officer and Principal Executive Officer of the Trust at its December 2018 Board meeting.  In the interim, in accordance with the Trust’s governing documents, the Vice Presidents of the Trust are authorized to carry out the duties of President.
 
81

SCHARF FUNDS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees Advisors Series Trust and Shareholders of:
Scharf Funds
 
Opinion on the Financial Statements
 
We have audited the accompanying statements of assets and liabilities of the Scharf Fund, the Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund (the “Funds”), each a series of Advisors Series Trust (the “Trust”), including the schedules of investments, as of September 30, 2018, the related statements of operations and cash flow for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and with respect to Scharf Fund and Scharf Balanced Opportunity Fund, financial highlights for each of the five years in the period then ended, with respect to Scharf Global Opportunity Fund, financial highlights for each of the three years in the period then ended and for the period October 14, 2014 (commencement of operations) to September 30, 2015, with respect to Scharf Alpha Opportunity Fund, financial highlights for each of the two years in the period then ended and for the period December 31, 2015 (commencement of operations) to September 30, 2016, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Funds as of September 30, 2018, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for the periods indicated above, in conformity with accounting principles generally accepted in the United States of America.
 
Basis for Opinion
 
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We have served as the auditor of one or more of the funds in the Trust since 2003.
 
We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of the Funds’ internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
 
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of September 30, 2018 by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.
 
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
November 29, 2018
82

SCHARF FUNDS

NOTICE TO SHAREHOLDERS at September 30, 2018 (Unaudited)
For the year ended September 30, 2018, the Scharf Fund, the Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund designated $891,172, $124,082, $230,126 and $0, respectively, as ordinary income. The Scharf Fund, the Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund designated $14,410,589 $1,225,008, $1,581,305 and $463,472, respectively, as long-term capital gains for purposes of the dividends paid deduction.
 
For the year ended September 30, 2018, certain dividends paid by the Funds may be subject to a maximum tax rate of 23.8%, as provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The percentage of dividends declared from net investment income designated as qualified dividend income for the Scharf Fund, the Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund was 100%, 100%, 93.98%, and 0%, respectively.
 
For corporate shareholders in the Scharf Fund, the Scharf Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the year ended September 30, 2018 was 100%, 99.65%, 87.77%, and 0%, respectively.
 
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871(k)(2)(C) for the Scharf Fund, the Scharf  Balanced Opportunity Fund, the Scharf Global Opportunity Fund, and the Scharf Alpha Opportunity Fund was 0%, 0%, 10.76%, and 0%, respectively.
 
How to Obtain a Copy of the Funds’ Proxy Voting Policies
 
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling 1-866-572-4273 (1-866-5SCHARF) or on the U.S. Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.
 
How to Obtain a Copy of the Funds’ Proxy Voting Records for the 12-Month Period Ended June 30, 2018
 
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 1-866-572-4273 (1-866-5SCHARF). Furthermore, you can obtain the Fund’s proxy voting records on the SEC’s website at http://www.sec.gov.
 
83

SCHARF FUNDS

NOTICE TO SHAREHOLDERS at September 30, 2018 (Unaudited), Continued
Quarterly Filings on Form N-Q
 
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available on the SEC’s website at http://www.sec.gov. The Funds’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC and information on the operation of the Public Reference Room may be obtained by calling 1-202-551-8090. Information included in the Funds’ Form N-Q is also available by calling 1-866-572-4273 (1-866-5SCHARF).
 
84

SCHARF FUNDS

INFORMATION ABOUT TRUSTEES AND OFFICERS (Unaudited)
This chart provides information about the Trustees and Officers who oversee the Funds.  Officers elected by the Trustees manage the day-to-day operations of the Funds and execute policies formulated by the Trustees.
 
Independent Trustees(1)
   
Term of
 
Number of
 
   
Office
 
Portfolios
Other
 
Position
and
Principal
in Fund
Directorships
 
Held
Length
Occupation
Complex
Held During
Name, Address
with the
of Time
During Past
Overseen by
Past Five
and Age
Trust
Served
Five Years
Trustee(2)
Years(3)
Gail S. Duree
Trustee
Indefinite
Director, Alpha
4
Trustee,
(age 72)
 
term; since
Gamma Delta
 
Advisors
615 E. Michigan Street
 
March
Housing Corporation
 
Series Trust
Milwaukee, WI 53202
 
2014.
(collegiate housing
 
(for series not
     
management) (2012
 
affiliated with
     
to present); Trustee
 
the Funds);
     
and Chair (2000 to
 
Independent
     
2012), New Covenant
 
Trustee from
     
Mutual Funds
 
1999 to 2012,
     
(1999 to 2012); Director
 
New Covenant
     
and Board Member,
 
Mutual Funds
     
Alpha Gamma Delta
 
(an open-end
     
Foundation
 
investment
     
(philanthropic
 
company with
     
organization)
 
4 portfolios).
           
     
(2005 to 2011).
   
David G. Mertens
Trustee
Indefinite
Retired; formerly
4
Trustee,
(age 58)
 
term*;
Managing Director and
 
Advisors
615 E. Michigan Street
 
since
Vice President, Jensen
 
Series Trust
Milwaukee, WI 53202
 
March
Investment Management,
 
(for series not
   
2017.
Inc. (a privately-held
 
affiliated with
     
investment advisory
 
the Funds).
     
firm) (2002 to 2017).
   
           
George J. Rebhan
Chairman
Indefinite
Retired; formerly
4
Trustee,
(age 84)
of the
term; since
President, Hotchkis and
 
Advisors
615 E. Michigan Street
Board and
May
Wiley Funds (mutual
 
Series Trust
Milwaukee, WI 53202
Trustee
2002.
funds) (1985 to 1993).
 
(for series not
         
affiliated with
         
the Funds);
         
Independent
         
Trustee from
         
1999 to 2009,
         
E*TRADE
         
Funds.

85

SCHARF FUNDS
 
INFORMATION ABOUT TRUSTEES AND OFFICERS (Unaudited), Continued
   
Term of
 
Number of
 
   
Office
 
Portfolios
Other
 
Position
and
Principal
in Fund
Directorships
 
Held
Length
Occupation
Complex
Held During
Name, Address
with the
of Time
During Past
Overseen by
Past Five
and Age
Trust
Served
Five Years
Trustee(2)
Years(3)
Joe D. Redwine(4)
Trustee
Indefinite
Retired; formerly
4
Trustee,
(age 71)
 
term; since
President, CEO, U.S.
 
Advisors
615 E. Michigan Street
 
January
Bancorp Fund Services,
 
Series Trust
Milwaukee, WI 53202
 
2018.
LLC (May 1991 to July
 
(for series not
     
2017); formerly Manager,
 
affiliated with
     
U.S. Bancorp Fund
 
the Funds).
     
Services, LLC (1998 to
   
     
July 2017).
   
           
Raymond B. Woolson
Trustee
Indefinite
President, Apogee
4
Trustee,
(age 59)
 
term*;
Group, Inc. (financial
 
Advisors
615 E. Michigan Street
 
since
consulting firm)
 
Series Trust
Milwaukee, WI 53202
 
January
(1998 to present).
 
(for series not
   
2016.
   
affiliated with
         
the Funds);
         
Independent
         
Trustee,
         
DoubleLine
         
Funds Trust
         
(an open-end
         
investment
         
company with
         
15 portfolios),
         
DoubleLine
         
Opportunistic
         
Credit Fund
         
and
         
DoubleLine
         
Income
         
Solutions
         
Fund, from
         
2010 to
         
present;
         
Independent
         
Trustee,
         
DoubleLine
         
Equity Funds
         
from 2010
         
to 2016.

86

SCHARF FUNDS
 
INFORMATION ABOUT TRUSTEES AND OFFICERS (Unaudited), Continued
Officers
 
   
Term of Office
 
Name, Address
Position Held
and Length of
Principal Occupation
and Age
with the Trust
Time Served
During Past Five Years
Douglas G. Hess
President, Chief
Indefinite
Senior Vice President, Compliance and
(age 51)
Executive Officer
term; since
Administration, U.S. Bancorp Fund
615 E. Michigan Street
and Principal
June 2003.
Services, LLC (March 1997 to present).
Milwaukee, WI 53202
Executive Officer
   
       
Cheryl L. King
Treasurer and
Indefinite
Vice President, Compliance and
(age 57)
Principal
term; since
Administration, U.S. Bancorp Fund
615 E. Michigan Street
Financial Officer
December 2007.
Services, LLC (October 1998 to
Milwaukee, WI 53202
   
present).
       
Kevin J. Hayden
Assistant
Indefinite
Assistant Vice President, Compliance
(age 47)
Treasurer
term; since
and Administration, U.S. Bancorp Fund
615 E. Michigan Street
 
September 2013.
Services, LLC (June 2005 to present).
Milwaukee, WI 53202
     
       
Michael L. Ceccato
Vice President,
Indefinite
Senior Vice President, U.S. Bancorp
(age 61)
Chief Compliance
term; since
Fund Services, LLC and Vice President,
615 E. Michigan Street
Officer and
September 2009.
U.S. Bank N.A. (February 2008 to
Milwaukee, WI 53202
AML Officer
 
present).
       
Emily R. Enslow, Esq.
Secretary
Indefinite
Vice President, U.S. Bancorp Fund
(age 31)
 
term; since
Services, LLC (July 2013 to present);
615 E. Michigan Street
 
December 2017.
Proxy Voting Coordinator and Class
Milwaukee, WI 53202
   
Action Administrator, Artisan Partners
     
Limited Partnership (September 2012
     
to July 2013).
 
*
Under the Trust’s Agreement and Declaration of Trust, a Trustee serves during the continued lifetime of the Trust until he/she dies, resigns, is declared bankrupt or incompetent by a court of appropriate jurisdiction, or is removed, or, if sooner, until the election and qualification of his/her successor.  In addition, the Trustees have designated a mandatory retirement age of 75, such that each Trustee first elected or appointed to the Board after December 1, 2015, serving as such on the date he or she reaches the age of 75, shall submit his or her resignation not later than the last day of the calendar year in which his or her 75th birthday occurs.
(1)
The Trustees of the Trust who are not “interested persons” of the Trust as defined under the 1940 Act (“Independent Trustees”).
(2)
As of September 30, 2018, the Trust was comprised of 41 active portfolios managed by unaffiliated investment advisers.  The term “Fund Complex” applies only to the Funds.  The Funds do not hold themselves out as related to any other series within the Trust for investment purposes, nor does it share the same investment adviser with any other series.
(3)
“Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the Securities Exchange Act of 1934, as amended, (that is, “public companies”) or other investment companies registered under the 1940 Act.
(4)
Mr. Redwine became an Independent Trustee on January 1, 2018.
 
The Statement of Additional Information includes additional information about the Funds’ Trustees and Officers and is available, without charge, upon request by calling 1-888-861-7556.
 
87

SCHARF FUNDS

HOUSEHOLDING
In an effort to decrease costs, the Funds intend to reduce the number of duplicate prospectuses, annual and semi-annual reports, proxy statement and other similar documents you receive by sending only one copy of each to those addresses shared by two or more accounts and to shareholders the Transfer Agent reasonably believes are from the same family or household. Once implemented, if you would like to discontinue householding for your accounts, please call toll-free at 1-866-572-4273 (1-866-5SCHARF) to request individual copies of these documents. Once the Transfer Agent receives notice to stop householding, the Transfer Agent will begin sending individual copies thirty days after receiving your request. This policy does not apply to account statements.
 
88

SCHARF FUNDS

PRIVACY NOTICE
The Funds collect non-public information about you from the following sources:
 
Information we receive about you on applications or other forms;
   
Information you give us orally; and/or
   
Information about your transactions with us or others.
 
We do not disclose any non-public personal information about our customers or former customers without the customer’s authorization, except as permitted by law or in response to inquiries from governmental authorities. We may share information with affiliated and unaffiliated third parties with whom we have contracts for servicing the Funds.  We will provide unaffiliated third parties with only the information necessary to carry out their assigned responsibilities.  We maintain physical, electronic and procedural safeguards to guard your non-public personal information and require third parties to treat your personal information with the same high degree of confidentiality.
 
In the event that you hold shares of the Funds through a financial intermediary, including, but not limited to, a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary would govern how your non-public personal information would be shared by those entities with unaffiliated third parties.
 
89

Investment Adviser
Scharf Investments, LLC
5619 Scotts Valley Drive, Suite 140
Scotts Valley, CA 95066

Distributor
Quasar Distributors, LLC
777 East Wisconsin Avenue, 6th Floor
Milwaukee, WI 53202

Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302
Milwaukee, WI 53212

Transfer Agent
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
(866) 572-4273

Independent Registered Public Accounting Firm
Tait, Weller & Baker LLP
Two Liberty Place
50 South 16th Street, Suite 2900
Philadelphia, PA 19102

Legal Counsel
Schiff Hardin LLP
666 Fifth Avenue, Suite 1700
New York, NY 10103

 


This report is intended for shareholders of the Funds and may not be used as sales literature unless preceded or accompanied by a current prospectus.  For a current prospectus please call (866)-5SCHARF.  Statements and other information herein are dated and are subject to change.
 
 

 
Item 2. Code of Ethics.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer.  The registrant has not made any substantive amendments to its code of ethics during the period covered by this report.  The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.

A copy of the registrant’s Code of Ethics is filed herewith.

Item 3. Audit Committee Financial Expert.

The registrant’s Board of Trustees has determined that there is at least one audit committee financial expert serving on its audit committee.  Ms. Gail S. Duree is the “audit committee financial expert” and is considered to be “independent” as each term is defined in Item 3 of Form N‑CSR.

Item 4. Principal Accountant Fees and Services.

The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years.  “Audit services” refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.  “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit.  “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.  There were no “other services” provided by the principal accountant.  The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.

 
FYE  9/30/2018
FYE  9/30/2017
Audit Fees
$70,600
$68,600
Audit-Related Fees
N/A
N/A
Tax Fees
$14,400
$14,000
All Other Fees
N/A
N/A

The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre‑approve all audit and non‑audit services of the registrant, including services provided to any entity affiliated with the registrant.

The percentage of fees billed by Tait, Weller & Baker LLP applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:

 
FYE  9/30/2018
FYE  9/30/2017
Audit-Related Fees
0%
0%
Tax Fees
0%
0%
All Other Fees
0%
0%

All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full‑time permanent employees of the principal accountant.

The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (and any other controlling entity, etc.—not sub-adviser) for the last two years.  The audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser is compatible with maintaining the principal accountant's independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.

Non-Audit Related Fees
FYE  9/30/2018
FYE  9/30/2017
Registrant
N/A
N/A
Registrant’s Investment Adviser
N/A
N/A
 
Item 5. Audit Committee of Listed Registrants.

(a)   Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).

(b)  Not Applicable.

Item 6. Investments.

(a)
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
 
(b) Not Applicable.
 
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 9. Purchases of Equity Securities by Closed‑End Management Investment Company and Affiliated Purchasers.

Not applicable to open-end investment companies.

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

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.

Item 11. Controls and Procedures.

(a)
The Registrant’s President/Chief Executive Officer/Principal Executive Officer and Vice President/Treasurer/Principal Financial Officer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended, (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Securities Exchange Act of 1934.  Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider.

(b)
There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the fourth fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 13. Exhibits.

(a)
(1) Any code of ethics or amendment thereto, that is subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Filed herewith.

(2) A separate certification for each principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  Filed herewith.

(3) Any written solicitation to purchase securities under Rule 23c‑1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons.  Not applicable to open-end investment companies.
 
(4) Change in the registrant’s independent public accountant.  There was no change in the registrant’s independent public accountant for the period covered by this report.

(b)
Certification pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.  Furnished herewith.

SIGNATURES

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


(Registrant)  Advisors Series Trust

By (Signature and Title)*                    /s/ Jeffrey T. Rauman
Jeffrey T. Rauman
President/Chief Executive Officer/Principal Executive Officer

Date  12/10/18
 

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

By (Signature and Title)*                     /s/ Jeffrey T. Rauman
Jeffrey T. Rauman
President/Chief Executive Officer/Principal Executive Officer

Date  12/10/18

By (Signature and Title)*                    /s/ Cheryl L. King
   Cheryl L. King, Vice President/Treasurer/Principal Financial Officer

Date 12/10/18

* Print the name and title of each signing officer under his or her signature.
EX-99.CODE ETH 2 scharf-ex99codeeth.htm CODE OF ETHICS
Exhibit A

ADVISORS SERIES TRUST

Code of Ethics
For Principal Executive Officer & Principal Financial Officer


This Code of Ethics is designed to comply with Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated by the Securities and Exchange Commission (the “SEC”) thereunder.  This Code of Ethics is in addition to, not in replacement of, the Advisors Series Trust (the “Trust”) Code of Ethics for access persons (the “Investment Company Code of Ethics”), adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended (the “Investment Company Act”). The persons covered by this Code of Ethics may also be subject to the Investment Company Code of Ethics.

The Trust requires its Principal Executive Officer, Principal Financial Officer, or other Trust officers performing similar functions (the “Principal Officers”), to maintain the highest ethical and legal standards while performing their duties and responsibilities to the Trust and each of its series (each a “Fund,” collectively the “Funds”), with particular emphasis on those duties that relate to the preparation and reporting of the financial information of the Funds.  The following principles and responsibilities shall govern the professional conduct of the Principal Officers:

1.
HONEST AND ETHICAL CONDUCT

The Principal Officers shall act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships, and shall report any material transaction or relationship that reasonably could be expected to give rise to such conflict between their interests and those of a Fund to the Audit Committee, the full Board of Trustees of the Trust, and, in addition, to any other appropriate person or entity that may reasonably be expected to deal with any conflict of interest in timely and expeditious manner.

The Principal Officers shall act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing their independent judgment to be subordinated or compromised.

2.
FINANCIAL RECORDS AND REPORTING

The Principal Officers shall provide full, fair, accurate, timely and understandable disclosure in the reports and/or other documents to be filed with or submitted to the SEC or other applicable body by a Fund, or that is otherwise publicly disclosed or communicated.  The Principal Officers shall comply with applicable rules and regulations of federal, state, and local governments, and other appropriate private and public regulatory agencies.

The Principal Officers shall respect the confidentiality of information acquired in the course of their work and shall not disclose such information except when authorized or legally obligated to disclose.  The Principal Officers will not use confidential information acquired in the course of their duties as Principal Officers.

The Principal Officers shall share knowledge and maintain skills important and relevant to the Trust’s needs; shall proactively promote ethical behavior of the Trust’s employees and as a partner with industry peers and associates; and shall maintain control over and responsibly manage assets and resources employed or entrusted to them by the Trust.

3.
COMPLIANCE WITH LAWS, RULES AND REGULATIONS

The Principal Officers shall establish and maintain mechanisms to oversee the compliance of the Funds with applicable federal, state or local law, regulation or administrative rule, and to identify, report and correct in a swift and certain manner, any detected deviations from applicable federal, state or local law regulation or rule.

4.
COMPLIANCE WITH THIS CODE OF ETHICS

The Principal Officers shall promptly report any violations of this Code of Ethics to the Audit Committee as well as the full Board of Trustees of the Trust and shall be held accountable for strict adherence to this Code of Ethics.  A proven failure to uphold the standards stated herein shall be grounds for such sanctions as shall be reasonably imposed by the Board of Trustees of the Trust.

5.
AMENDMENT AND WAIVER

This Code of Ethics may only be amended or modified by approval of the Board of Trustees.  Any substantive amendment that is not technical or administrative in nature or any material waiver, implicit or otherwise, of any provision of this Code of Ethics, shall be communicated publicly in accordance with Item 2 of Form N-CSR under the Investment Company Act.

Adopted by the Board of Trustees on March 18, 2010

EX-99.CERT 3 scharf-ex99cert302.htm CERTIFICATION 302
CERTIFICATIONS

I, Jeffrey T. Rauman, certify that:

 
1.
 
I have reviewed this report on Form N-CSR of Advisors Series Trust;
 
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.
 
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
 
4.
 
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
 
(a)
 
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)
 
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)
 
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
 
(d)
 
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the fourth fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
 
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)
 
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
 
(b)
 
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:       12/10/18
 
/s/ Jeffrey T. Rauman
Jeffrey T. Rauman
President/Chief Executive Officer/Principal Executive Officer


CERTIFICATIONS

I, Cheryl L. King, certify that:

 
1.
 
I have reviewed this report on Form N-CSR of Advisors Series Trust;
 
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.
 
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
 
4.
 
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
 
(a)
 
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)
 
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)
 
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
 
(d)
 
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the fourth fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
 
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)
 
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
 
(b)
 
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:       12/10/18 
 
/s/ Cheryl L. King 
Cheryl L. King
Vice President/Treasurer/Principal Financial Officer
 
EX-99.906 CERT 4 scharf-ex99cert906.htm CERTIFICATION 906
 
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of the Advisors Series Trust, does hereby certify, to such officer’s knowledge, that the report on Form N-CSR of the Advisors Series Trust for the year ended September 30, 2018 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and that the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Advisors Series Trust for the stated period.


/s/ Jeffrey T. Rauman
Jeffrey T. Rauman
President/Chief Executive Officer/Principal Executive Officer
Advisors Series Trust
 
/s/ Cheryl L. King 
Cheryl L. King
Vice President/Treasurer/Principal Financial Officer
Advisors Series Trust
Dated:      12/10/18 
Dated:      12/10/18 


This statement accompanies this report on Form N-CSR pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed as filed by Advisors Series Trust for purposes of Section 18 of the Securities Exchange Act of 1934.
 
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