N-CSRS 1 d678764dncsrs.htm JAMES ADVANTAGE FUNDS JAMES ADVANTAGE FUNDS
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

811-08411

(Investment Company Act file number)

James Advantage Funds

(Exact name of registrant as specified in charter)

1349 Fairground Road

Beavercreek, Ohio 45385

(Address of principal executive offices) (Zip code)

Barry R. James

P.O. Box 8

Alpha, Ohio 45301

(Name and address of agent for service)

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

Date of fiscal year end: June 30

Date of reporting period: July 1, 2013 – December 31, 2013

Table of Contents

Item 1. Reports to Stockholders.

Table of Contents

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Table of Contents

TABLE OF CONTENTS

 

 

Shareholder Letter

      1   
 

Growth of $10,000 Charts

      3   
 

Representation of Schedules of Investments

      6   
 

Disclosure of Fund Expenses

      7   
 

Schedule of Investments

   
 

            James Balanced: Golden Rainbow Fund

      8   
              James Small Cap Fund      18   
              James Mid Cap Fund      21   
              James Micro Cap Fund      23   

    

  

             James Long-Short Fund

      25   
 

Statements of Assets and Liabilities

      31   
 

Statements of Operations

      33   
 

Statements of Changes in Net Assets

      34   
 

Financial Highlights

   
 

            James Balanced: Golden Rainbow Fund - Retail Class

      40   
 

             James Balanced: Golden Rainbow Fund - Institutional Class

      41   
 

            James Small Cap Fund

      42   
 

            James Mid Cap Fund

      43   
 

            James Micro Cap Fund

      44   
 

             James Long-Short Fund

      45   
 

Notes to Financial Statements

      46   
 

Additional Information

      54   
 

Privacy Policy

      55   

Table of Contents

James Advantage Funds

  

Shareholder Letter

  December 31, 2013 (Unaudited)

 

Stock market investors enjoyed one of the most rewarding years in recent history in 2013 with the S&P 500® up over 32 percent. This return was, in our opinion, extraordinary – only four times since 1970 has the market done that well. We note that two good years, back-to-back is not uncommon, so 2012’s 16.00 percent preceding 2013’s have revived investor confidence in the stock markets and taken much of the sting out of the abysmal market performance of the decade from 1999 through 2009. Of course, the question is, how long can this last?

The Markets Over the Past Six Months

First, the good news. All segments of the stock markets rallied nicely over the six months ended December 31, 2013. The indexes that we use as benchmarks for our Funds rose as follows: the S&P 500® returned 16.31 percent, the S&P MidCap 400® Value rose 15.76 percent, the Russell 2000® (small caps) rose 19.82 percent and the Russell Microcap® rose 23.07 percent. On the down side, bonds struggled. The Barclays U.S. Treasury 20+ Year Total Return Index fell 5.99 percent, the Barclays U.S. Aggregate Index rose a very modest 0.57 percent and the Barclays Municipal Bond Index returned only 0.14 percent with maturities greater than five years generally dropping in price.

Investment Goals and Objectives

Preservation of capital and income are the two primary objectives of the Balanced: Golden Rainbow Fund. The Fund will increase exposure to stocks when its research signals a higher probability of a rally and lower risk in the stock market. The Fund’s Adviser, James Investment Research, Inc., does most of its own research in the stock markets and relies on the quality of that research. Even with interest rates at historic lows, the Balanced: Golden Rainbow Fund paid out a dividend every quarter, and supplemented income needs of shareholders with a capital gains dividend in December, meeting the income objective of the Fund.

The Small Cap Fund, the Mid Cap Fund, the Long-Short Fund and the Micro Cap Fund seek long term capital appreciation as their primary objective. These Funds look for stocks the Adviser believes to be undervalued, using its proprietary research to sift through a database of over 8,500 stocks. The Long-Short Fund may employ a short-selling strategy, particularly when the Adviser’s research shows a higher probability of a market decline, and may also use leverage. The basic research is the same for all the Funds. The Adviser prides itself on its own research and does not buy outside research. These Funds do not seek to pay dividends as they have no income objective, but will distribute net income when it is earned through stock dividends or other sources.

Investment Philosophy

We believe that preservation of capital in poor markets is the key to long term success in investing. Since 1972, the Adviser has tried to assess the risk in the markets, both stocks and bonds, and incorporated that research in an active asset allocation strategy. Experience has taught us that stocks with strong earnings growth, low valuations and relative strength are more likely to outperform the broad stock market over time, and we have found that preserving capital in down markets is very important in achieving long term growth. Our independent research is generally free of Wall Street hype and is intended to filter out the hype or hysteria and focus on historical risk/return relationships.

Strategy for Meeting Fund Objectives

We are active tactical asset allocators in the James Balanced: Golden Rainbow Fund and in the James Long-Short Fund. When the Adviser’s risk research indicates that the risk in the stock market is low and that opportunities for stocks to move higher are great, the Fund’s portfolio managers will increase the allocation to common stocks in the Balanced: Golden Rainbow Fund and reduce or eliminate short positions in the Long-Short Fund. Of course, a balanced fund will always hold both bonds and stocks, and the Balanced: Golden Rainbow Fund normally will not fall below 25% in its allocation to either stocks or bonds. In 2013, portfolio managers reduced holdings in long term Treasury securities and focused more on short and intermediate bonds. As always, the Balanced: Golden Rainbow Fund bought only higher quality bonds with investment grade ratings by S&P and Moody’s.

The Small Cap Fund, the Mid Cap Fund, the Micro Cap Fund and the Long-Short Fund generally use the same proprietary research, but concentrate on separate strategies that include market capitalization niches for the first three funds and allows for both long and short positions in all market capitalizations for the Long-Short Fund. The Adviser’s research personnel use independent analysis to identify sectors likely to outperform over coming months, and then ferret out stocks we believe are undervalued. The Adviser often identifies the risk levels in the broad stock market through its research, which then helps Fund managers adjust the Fund holdings accordingly. If the research points towards a decline in economic activity and in stock prices, all the funds will prefer defensive stocks, such as utilities, health care and non-cyclicals, while still retaining the Adviser’s strategy of seeking out bargain stocks. In addition, the Balanced: Golden Rainbow Fund will increase its holdings in bonds and reduce exposure to common equities, and the Long-Short Fund will add short positions. Stocks the Adviser considers to be bargains generally have low value ratios, such as price to earnings and price to cash, but also generally have strong earnings and relative strength. The Adviser has found this strategy to be very useful over the long run.

 

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Shareholder Letter

  

James Advantage Funds

December 31, 2013 (Unaudited)  

 

All of the Funds in the James Advantage Funds family employ a disciplined SELL strategy, eliminating securities that lose their value traits or otherwise fall out of favor due to macro-economic changes, management changes or similar events. The Adviser’s staff regularly monitors all of the Funds’ holdings and employs multiple screens to detect changes in a company profile. As you will see in the Financial Highlights report, the Funds’ turnover ratios are low by most industry standards, helping to reduce transaction costs for the shareholders.

Fund Performance

Over the last six months of 2013, The Balanced: Golden Rainbow Retail Class advanced 8.13 percent and the Institutional Class shares rose 8.29 percent, while their blended Index benchmark rose 9.10 percent (see benchmark details on page 3 of this report). The Small Cap Fund rose 19.02 percent over the last six months of the year versus a 19.82 percent increase in its benchmark. The Mid Cap Fund advanced 19.55 percent, beating its benchmark (the S&P MidCap 400® Value Index) return of 15.76 percent. The Micro Cap Fund rose 23.32 percent versus its benchmark (the Russell Microcap® Index) return of 23.07 percent. The Long-Short Fund rose 10.08 percent, lagging its benchmark (the S&P 500® Index) return of 16.31 percent. In addition to the Micro Cap Fund, the Mid Cap Fund also beat its benchmark, although its benchmark is the Value component of the S&P MidCap 400® Index. It is not unusual for Value stocks, such as those held by our Funds, to lag Growth stocks in very strong markets. The Balanced: Golden Rainbow Fund’s holdings in municipal bonds and Sovereign bonds were a slight drag on performance as both these asset classes suffered as the Federal Reserve publically discussed tapering its quantitative easing program. While the Adviser’s stock selection methodology had not been remarkable in the first part of 2013, it returned to favor in the fourth quarter. We note that most academic research shows that Value investing is remarkable over longer time periods and we are confident that the long term outperformance of Value investing will return in coming months.

Expectations for the Future

2014 brings another Congressional election, more budget debates and the commencement (of some) of the Affordable Care Act. There is plenty of uncertainty surrounding these important events to raise some concern over the stock market, especially given the strong rallies of the preceding two years. In addition, Janet Yellen takes over at the Federal Reserve. While she is not a new face in Washington or in financial circles, the implementation of her strategies concerning unemployment and fair wages will be of great interest to stock and bond market investors. We are confident that 2014 will bring many investment opportunities and we are dedicated to using our research and analytical skills to identify them.

Thomas L. Mangan

Chief Financial Officer

The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. It should not be assumed that an investment in the securities mentioned will be profitable in the future. This information is not a recommendation to buy or sell.

You should carefully consider the investment objectives, potential risks, management fees, and charges and expenses of the Fund before investing. The Fund’s prospectus contains this and other information about the Fund, and should be read carefully before investing. You may obtain a current copy of the Fund’s prospectus by calling 1-800-995-2637.

Past performance is no guarantee of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Tom Mangan is a registered representative of ALPS Distributors, Inc.

 

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James Advantage Funds

  

Growth of $10,000 Charts

  December 31, 2013 (Unaudited)

 

Comparison of the Change in Value of a $10,000 Investment in the James Balanced: Golden Rainbow Fund – Retail Class

 

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James Balanced: Golden Rainbow Fund – Retail, S&P 500® Index and Blended Index Average Annual Total Returns

 

 

   

1

Year

     

5

Years

      10
Years		      Since
Inception(2)		  

James Balanced: Golden Rainbow – Retail Class

      12.97%         9.35%         7.80%         8.44%   

S&P 500® Index

      32.39%         17.94%         7.41%         9.53%   

Russell 2000® Index

      38.82%         20.08%         9.07%         10.49%   

Barclays Capital Intermediate Government/Credit Index

      -0.86%         3.96%         4.09%         5.90%   

Blended Index(1)

      16.17%         11.75%         6.59%         8.39%   

 

(1)

The Blended Index is comprised of a 25% weighting in the S&P 500®Index, a 25% weighting in the Russell 2000® Index and a 50% weighting in the Barclays Capital Intermediate Government/Credit Index.

(2) 

Fund inception was July 1, 1991.

 

The total annual operating expense ratio as stated in the fee table of the most recent prospectus, dated November 1, 2013, was 1.07%.

Comparison of the Change in Value of a $10,000 Investment in the James Balanced: Golden Rainbow Fund – Institutional Class

 

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James Balanced: Golden Rainbow Fund –Institutional, S&P 500® Index and Blended Index Average Annual Total Returns

 

     

1

Year

     

3

Years

      10
Years		      Since
Inception(2)		  

James Balanced: Golden Rainbow – Institutional Class

      13.23%         8.84%         N/A         13.27%   

S&P 500® Index

      32.39%         16.18%         N/A         24.87%   

Russell 2000® Index

      38.82%         15.67%         N/A         28.68%   

Barclays Capital Intermediate Government/Credit Index

      -0.86%         2.91%         N/A         4.22%   

Blended Index(1)

      16.17%         9.54%         N/A         15.46%   

 

(1) 

The Blended Index is comprised of a 25% weighting in the S&P 500®Index, a 25% weighting in the Russell 2000® Index and a 50% weighting in the Barclays Capital Intermediate Government/Credit Index.

(2) 

Fund inception was March 2, 2009.

 

The total annual operating expense ratio as stated in the fee table of the most recent prospectus, dated November 1, 2013, was 0.82%.

 

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. These performance figures do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Please call 1-800-995-2637 for most recent month-end performance information.

The S&P 500® Index is an unmanaged index of 500 common stocks chosen for market size, liquidity and industry group representation.

The Russell 2000® Index is a widely recognized, unmanaged index comprised of the 2,000 smallest U.S. domiciled publicly-traded common stocks of the Russell 3000® Index, which represents approximately 8% of the total market capitalization of the Russell 3000® Index, an unmanaged index of the 3,000 largest U.S. domiciled publicly-traded common stocks by market capitalization.

The Barclays Capital Intermediate Government/Credit Index measures the performance of U.S. Dollar denominated U.S. Treasuries, government-related and investment grade U.S. corporate securities that have a remaining maturity of greater than one year and less than ten years.

The S&P 500® Index, Russell 2000® Index, Barclays Capital Intermediate Government/Credit Index, S&P Mid Cap 400® Index, and Russell Microcap® Index are widely recognized unmanaged indices of security prices and are representative of a broader market and range of securities than is found in the Fund’s portfolio. The Index returns do not reflect the deduction of expenses, which have been deducted from a Fund’s returns. The Index returns assume reinvestment of all distributions and do not reflect the deduction of taxes and fees. Individuals cannot invest directly in any Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.

 

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Table of Contents

Growth of $10,000 Charts

  

James Advantage Funds

December 31, 2013 (Unaudited)  

 

Comparison of the Change in Value of a $10,000 Investment in the James Small Cap Fund

 

LOGO

James Small Cap Fund and Russell 2000® Index Average Annual Total Returns

      1 Year      5 Years      10 Years      Since
Inception(1)		  

James Small Cap Fund

      38.38%         20.17%         8.72%         9.30%   

Russell 2000® Value TR Index

      34.52%         17.64%         8.61%         10.44%   

Russell 2000® TR

      38.82%         20.08%         9.07%         9.63%   

 

(1) 

Fund inception was October 2, 1998.

 

The total annual operating expense ratio as stated inthe fee table of the most recent prospectus, dated November 1, 2013, was 1.53%.

Comparison of the Change in Value of a $10,000 Investment in the James Mid Cap Fund

 

LOGO

James Mid Cap Fund and S&P MidCap 400® Value Index Average Annual Total Returns

      1 Year      5 Year      Since
Inception(1)		  

James Mid Cap Fund

      32.19%         17.93%         6.43%   

S&P MidCap 400® Value Index

      34.25%         20.58%         8.37%   

 

(1) 

Fund inception was June 30, 2006.

 

The total annual operating expense ratio as stated in the fee table of the most recent prospectus, dated November 1, 2013, was 1.54%.

 

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. These performance figures do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Please call 1-800-995-2637 for most recent month-end performance information.

Mid, Small and Micro Cap investing involve greater risk not associated with investing in more established companies, such as greater price volatility, business risk, less liquidity and increased competitive threat.

The Mid-Cap Fund invests in stocks of mid-cap companies which tend to be more volatile and can be less liquid than stocks of large-cap companies. Diversification does not guarantee a profit or protect against loss. Current and future portfolio holdings are subject to risk.

The Russell 2000® Value Index is a widely recognized, unmanaged index that measures the performance of those Russell 2000® Index companies with lower price-to-book ratios and lower forecasted growth values.

The Russell 2000® Index is a widely recognized, unmanaged index comprised of the 2,000 smallest U.S. domiciled publicly-traded common stocks of the Russell 3000® Index, which represents approximately 8% of the total market capitalization of the Russell 3000® Index, an unmanaged index of the 3,000 largest U.S. domiciled publicly-traded common stocks by market capitalization.

The S&P MidCap 400® Value Index is a recognized, unmanaged index of mid cap stocks considered to be value stocks using Standard and Poor’s methodology.

The S&P 500® Index, Russell 2000® Index, Barclays Capital Intermediate Government/Credit Index, S&P MidCap 400® Index, and Russell Microcap® Index are widely recognized unmanaged indices of security prices and are representative of a broader market and range of securities than is found in the Fund’s portfolio. The Index returns do not reflect the deduction of expenses, which have been deducted from a Fund’s returns. The Index returns assume reinvestment of all distributions and do not reflect the deduction of taxes and fees. Individuals cannot invest directly in any Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.

 

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James Advantage Funds

 

Growth of $10,000 Charts

  December 31, 2013 (Unaudited)

 

Comparison of the Change in Value of a $10,000 Investment in the James Micro Cap Fund

 

LOGO

James Micro Cap Fund and Russell Microcap® Index Average Annual Total Returns

      1 Year      3 Year      Since
Inception(1)		  

James Micro Cap Fund

      47.26%         14.75%         17.36%   

Russell Microcap® Index

      45.62%         16.52%         22.84%   

 

(1) 

Fund inception was July 1, 2010.

 

The total annual operating expense ratio as stated in the fee table of the most recent prospectus, dated November 1, 2013, was 1.54%.

Comparison of the Change in Value of a $10,000 Investment in the James Long-Short Fund

 

LOGO

James Long-Short Fund and S&P 500® Index Average Annual Total Returns

      1 Year      Since
Inception(1)		  

James Long-Short Fund

      24.54%         10.45%   

S&P 500® Index

      32.39%         16.40%   

 

(1) 

Fund inception was May 23, 2011.

 

The total annual operating expense ratio as stated in the fee table of the most recent prospectus, dated November 1, 2013, was 2.75%.

 

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. These performance figures do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Please call 1-800-995-2637 for most recent month-end performance information.

Mid, Small and Micro Cap investing involve greater risk not associated with investing in more established companies, such as greater price volatility, business risk, less liquidity and increased competitive threat.

Short selling incurs significant additional risk; theoretically, stocks sold short have unlimited upside risk potential. In addition, this strategy depends on the Adviser’s ability to correctly identify undervalued and overvalued stocks, and that the stock markets are reasonable and efficient. Periods of extreme volatility may harm the performance of this product. The Long-Short Fund may have a high portfolio turnover rate. A high portfolio turnover rate can result in increased brokerage commission costs and may expose taxable shareholders to potentially larger current tax liability.

The Russell Microcap® Index measures the performance of the microcap segment of the U.S. equity market. It makes up less than 3% of the U.S. equity market. It includes 1,000 of the smallest securities in the small cap Russell 2000® Index, plus the next smallest eligible securities by market cap.

The S&P 500® Index is an unmanaged index of 500 common stocks chosen for market size, liquidity and industry group representation.

The S&P 500® Index, Russell 2000® Index, Barclays Capital Intermediate Government/Credit Index, S&P MidCap 400® Index, and Russell Microcap® Index are widely recognized unmanaged indices of security prices and are representative of a broader market and range of securities than is found in the Fund’s portfolio. The Index returns do not reflect the deduction of expenses, which have been deducted from a Fund’s returns. The Index returns assume reinvestment of all distributions and do not reflect the deduction of taxes and fees. Individuals cannot invest directly in any Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.

 

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Table of Contents

Representation of Schedules of Investments

  

James Advantage Funds

December 31, 2013 (Unaudited)  

 

The illustrations below provide the industry sectors for the James Balanced: Golden Rainbow Fund, James Small Cap Fund, James Mid Cap Fund, James Micro Cap Fund, and James Long-Short Fund.

 

James Balanced: Golden Rainbow Fund - Industry Sector Allocation

(% of Net Assets)

 

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James Small Cap Fund - Industry Sector Allocation

(% of Net Assets)

 

LOGO

 

James Mid Cap Fund - Industry Sector Allocation

(% of Net Assets)

 

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James Long-Short Fund - Industry Sector Allocation (% of Net Assets)

(Cash and Cash Equivalents and Other Liabilities in Excess of Assets not included)

 

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James Micro Cap Fund - Industry Sector Allocation

(% of Net Assets)

 

LOGO

For compliance purposes, each Fund’s industry classifications may refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or asdefined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease.

 

 

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James Advantage Funds

 

Disclosure of Fund Expenses

  December 31, 2013 (Unaudited)

 

Example. As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including reinvested dividends or other distributions, and redemption fees; and (2) ongoing costs, including management fees, distribution (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2013 through December 31, 2013.

Actual Expenses. The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expense Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes. The second line of the table below provides information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual returns. 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 a Fund and other mutual funds. 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 expenses shown in the table are meant to highlight and help you compare ongoing costs only. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

 

     

Net Expense

Ratio

Annualized
December 31, 2013(a)

   Beginning
Account Value
July 1, 2013		    Ending
Account Value
December 31, 2013		    Expense
Paid During
Period(b)

James Balanced: Golden Rainbow Fund

                   

Retail Class Actual

        1.01%       $   1,000.00        $   1,081.30        $ 5.30  

Retail Class Hypothetical (5% return before expenses)

        1.01%       $ 1,000.00        $ 1,020.11        $ 5.14  

Institutional Class Actual

        0.76%       $ 1,000.00        $ 1,082.90        $ 3.99  

Institutional Class Hypothetical (5% return before expenses)

        0.76%       $ 1,000.00        $ 1,021.37        $ 3.87  

James Small Cap Fund

                   

Actual

        1.50%       $ 1,000.00        $ 1,190.20        $ 8.28  

Hypothetical (5% return before expenses)

        1.50%       $ 1,000.00        $ 1,017.64        $ 7.63  

James Mid Cap Fund

                   

Actual

        1.50%       $ 1,000.00        $ 1,195.50        $ 8.30  

Hypothetical (5% return before expenses)

        1.50%       $ 1,000.00        $ 1,017.64        $ 7.63  

James Micro Cap Fund

                   

Actual

        1.50%       $ 1,000.00        $ 1,233.20        $ 8.44  

Hypothetical (5% return before expenses)

        1.50%       $ 1,000.00        $ 1,017.64        $ 7.63  

James Long-Short Fund

                   

Actual

        2.66% (c)     $ 1,000.00        $ 1,101.70        $ 14.09  

Hypothetical (5% return before expenses)

        2.66% (c)     $ 1,000.00        $ 1,011.80        $ 13.49  

 

(a) 

Annualized, based on the Fund’s most recent fiscal half year expenses.

(b) 

Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (184), divided by 365.

(c) 

Dividend and interest expense on securities sold short and interest expense totaled 1.16% (annualized) of average net assets for the six months ended December 31, 2013.

 

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Schedule of Investments

  

James Balanced: Golden Rainbow Fund

December 31, 2013 (Unaudited)  

 

Shares or Principal Amount    Value  

 

  

COMMON STOCKS-53.2%

   
     Basic Materials-6.4%   

437,080

      Aceto Corp.                  $10,931,371   

244,380

      Barrick Gold Corp.      4,308,419   

155,940

      CF Industries Holdings, Inc.      36,340,258   

261,930

      Cooper Tire & Rubber Co.      6,296,797   

12,580

      Cytec Industries, Inc.      1,171,953   

65,460

      Eastman Chemical Co.      5,282,622   

205,500

      Goodyear Tire & Rubber Co.      4,901,175   

25,000

      H.B. Fuller Co.      1,301,000   

220,000

      Huntsman Corp.      5,412,000   

74,840

      Innospec, Inc.      3,459,105   

20,000

      Newmont Mining Corp.      460,600   

235,000

      Olin Corp.      6,779,750   

387,810

      PH Glatfelter Co.      10,719,068   

352,810

      PolyOne Corp.      12,471,834   

187,340

      PPG Industries, Inc.      35,530,904   

27,000

      Terra Nitrogen Co. LP      3,809,700   

200,000

      Westlake Chemical Corp.      24,414,000   

175,960

      Worthington Industries, Inc.      7,404,397   
       

 

 

  
          180,994,953   
       

 

 

  
     Consumer, Cyclical-10.5%   

743,780

      Alaska Air Group, Inc.      54,571,139   

9,867

      Allegion PLC*      436,008   

30,000

      Best Buy Co., Inc.      1,196,400   

14,500

      CVS Caremark Corp.      1,037,765   

309,700

      Destination Maternity Corp.      9,253,836   

352,760

      Dillard’s, Inc., Class A      34,291,800   

188,950

      DIRECTV, Class A*      13,054,555   

52,900

      Foot Locker, Inc.      2,192,176   

1,752,435

      Ford Motor Co.      27,040,072   

30,000

      Hanesbrands, Inc.      2,108,100   

241,110

      Haverty Furniture Cos., Inc.      7,546,743   

35,610

      LeapFrog Enterprises, Inc.*      282,743   

671,180

      Macy’s, Inc.      35,841,012   

194,750

      Moody’s Corp.      15,282,032   

393,500

      RR Donnelley & Sons Co.      7,980,180   

822,905

      Sinclair Broadcast Group, Inc., Class A      29,402,396   

152,290

      Southwest Airlines Co.      2,869,144   

184,540

      Target Corp.      11,675,846   

14,000

      Time Warner, Inc.      976,080   

42,770

      TJX Cos., Inc.      2,725,732   

163,500

      Viacom, Inc., Class A      14,350,395   

182,100

      Viacom, Inc., Class B      15,904,614   

70,000

      Wal-Mart Stores, Inc.      5,508,300   
       

 

 

  
          295,527,068   
       

 

 

  
     Consumer, Non-cyclical-7.5%   

50,000

      Dean Foods Co.*      859,500   

565

      DeVry Education Group, Inc.      20,058   

230

      DST Systems, Inc.      20,870   

426,230

      Eli Lilly & Co.      21,737,730   

47,050

      Grand Canyon Education, Inc.*      2,051,380   

 

See Notes to Financial Statements.

8

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Table of Contents

James Balanced: Golden Rainbow Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Shares or Principal Amount    Value  

 

  
    

Consumer, Non-cyclical (continued)

   

42,230

      Helen of Troy, Ltd.*                  $2,090,807   

69,500

      Ingles Markets, Inc., Class A      1,883,450   

221,950

      Ingredion, Inc.      15,194,697   

565,640

      Kroger Co.      22,359,749   

3,768

      Manpowergroup, Inc.      323,520   

481,030

      Merck & Co., Inc.      24,075,552   

675,020

      Mylan, Inc.*      29,295,868   

182,820

      Newell Rubbermaid, Inc.      5,925,196   

224,970

      Omnicare, Inc.      13,579,189   

618,220

      Pfizer, Inc.      18,936,079   

2,850

      Seaboard Corp.      7,965,665   

95,000

      Spartan Stores, Inc.      2,306,600   

10,740

      Toro Co.      683,064   

11,000

      Towers Watson & Co., Class A      1,403,710   

32,080

      Tupperware Brands Corp.      3,032,522   

26,000

      United Therapeutics Corp.*      2,940,080   

168,050

      UnitedHealth Group, Inc.      12,654,165   

76,100

      USANA Health Sciences, Inc.*      5,751,638   

113,915

      WellPoint, Inc.      10,524,607   

195,371

      WhiteWave Foods Co., Class A*      4,481,811   
       

 

 

  
          210,097,507   
       

 

 

  
     Energy-4.6%   

171,910

      Chevron Corp.      21,473,278   

53,460

      Cimarex Energy Co.      5,608,489   

193,050

      ConocoPhillips      13,638,982   

156,165

      Delek US Holdings, Inc.      5,373,638   

105,100

      Exxon Mobil Corp.      10,636,120   

593,704

      HollyFrontier Corp.      29,501,152   

100,290

      Plains All American Pipeline LP      5,192,013   

115,000

      Tesco Corp.*      2,274,700   

588,200

      Tesoro Corp.      34,409,700   

3,200

      Valero Energy Corp.      161,280   
       

 

 

  
          128,269,352   
       

 

 

  
     Financial-7.6%   

352,000

      American Financial Group, Inc.      20,317,440   

215,980

      AmTrust Financial Services, Inc.      7,060,386   

330,000

      Aspen Insurance Holdings, Ltd.      13,632,300   

200,570

      CBL & Associates Properties, Inc., REIT      3,602,237   

44,530

      FBL Financial Group, Inc., Class A      1,994,499   

1,130,130

      Fifth Third Bancorp      23,766,634   

65,000

      Goldman Sachs Group, Inc.      11,521,900   

68,490

      Horace Mann Educators Corp.      2,160,174   

449,140

      JPMorgan Chase & Co.      26,265,707   

1,066,430

      KeyCorp      14,311,491   

42,770

      Montpelier Re Holdings, Ltd.      1,244,607   

348,200

      Nelnet, Inc., Class A      14,673,148   

12,260

      PNC Financial Services Group, Inc.      951,131   

377,170

      Protective Life Corp.      19,107,432   

294,010

      Rent-A-Center, Inc.      9,802,293   

119,740

      Southside Bancshares, Inc.      3,273,692   

118,250

      Torchmark Corp.      9,241,237   

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    9

Table of Contents

Schedule of Investments

  

James Balanced: Golden Rainbow Fund

December 31, 2013 (Unaudited)  

 

Shares or Principal Amount    Value  

 

  
     Financial (continued)   

182,994

      Travelers Cos., Inc.                  $16,568,277   

413,775

      Unum Group      14,515,227   
       

 

 

  
          214,009,812   
       

 

 

  
     Industrial-6.3%   

60,030

      AGCO Corp.      3,553,176   

127,120

      AMERCO*      30,234,221   

358,300

      American Axle & Manufacturing Holdings, Inc.*      7,327,235   

258,260

      American Railcar Industries, Inc.      11,815,395   

187,572

      CNH Industrial NV*      2,128,942   

24,080

      Cummins, Inc.      3,394,558   

20,500

      Deere & Co.      1,872,265   

60,000

      Eaton Corp. PLC      4,567,200   

29,600

      Ingersoll-Rand PLC      1,823,360   

245,900

      Jarden Corp.*      15,085,965   

253,820

      Magna International, Inc.      20,828,469   

4,000

      Republic Services, Inc.      132,800   

30,000

      Ryder System, Inc.      2,213,400   

344,770

      Sturm Ruger & Co., Inc.      25,199,239   

125,000

      Timken Co.      6,883,750   

157,760

      Trinity Industries, Inc.      8,601,075   

366,985

      TRW Automotive Holdings Corp.*      27,300,014   

62,770

      United Rentals, Inc.*      4,892,921   
       

 

 

  
          177,853,985   
       

 

 

  
     Technology-7.1%   

70,000

      AAR Corp.      1,960,700   

169,400

      Alliant Techsystems, Inc.      20,612,592   

177,440

      Amkor Technology, Inc.*      1,087,707   

236,130

      Arrow Electronics, Inc.*      12,810,052   

199,410

      Avnet, Inc.      8,795,975   

105,500

      CSG Systems International, Inc.      3,101,700   

627,170

      Deluxe Corp.      32,732,002   

40,000

      Ingram Micro, Inc., Class A*      938,400   

245,900

      Intel Corp.      6,383,564   

19,500

      International Business Machines Corp.      3,657,615   

288,890

      Kulicke & Soffa Industries, Inc.*      3,842,237   

205,480

      Lexmark International, Inc., Class A      7,298,650   

62,030

      Lockheed Martin Corp.      9,221,380   

137,450

      Northrop Grumman Corp.      15,753,145   

304,700

      PDL BioPharma, Inc.      2,571,668   

2,490

      Symantec Corp.      58,714   

37,600

      SYNNEX Corp.*      2,534,240   

39,390

      TE Connectivity, Ltd.      2,170,783   

349,900

      Triumph Group, Inc.      26,616,893   

459,050

      Western Digital Corp.      38,514,295   
       

 

 

  
          200,662,312   
       

 

 

  
     Utilities-3.2%   

151,280

      American Electric Power Co., Inc.      7,070,827   

19,250

      American States Water Co.      553,052   

340,500

      AT&T, Inc.      11,971,980   

471,070

      BCE, Inc.      20,392,620   

 

See Notes to Financial Statements.

10

    www.jamesfunds.com

Table of Contents

James Balanced: Golden Rainbow Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Shares or Principal Amount    Value  

 

  
     Utilities (continued)   

10,700

      Black Hills Corp.                  $561,857   

120,190

      BT Group PLC, ADR      7,587,595   

142,820

      DTE Energy Co.      9,481,820   

71,630

      El Paso Electric Co.      2,514,929   

56,040

      IDACORP, Inc.      2,905,114   

21,390

      Laclede Group, Inc.      974,101   

106,910

      Pike Corp. *      1,130,039   

85,530

      Pinnacle West Capital Corp.      4,526,248   

203,260

      PNM Resources, Inc.      4,902,631   

276,710

      Portland General Electric Co.      8,356,642   

44,940

      Public Service Enterprise Group, Inc.      1,439,878   

143,260

      TELUS Corp.      4,933,874   

11,000

      UNS Energy Corp.      658,350   

210,370

      Vonage Holdings Corp. *      700,532   

11,730

      Westar Energy, Inc.      377,354   
       

 

 

  
          91,039,443   
       

 

 

  

TOTAL COMMON STOCKS

(Cost $1,055,471,976)

      1,498,454,432   
       

 

 

  

CLOSED-END FUNDS-0.1%

   

140,000

      Eaton Vance Risk-Managed Diversified Equity Income Fund      1,577,800   

11,500

      Nuveen Ohio Quality Income Municipal Fund, Inc.      160,080   

50,000

      Nuveen Premium Income Municipal Fund 2      627,500   
       

 

 

  

TOTAL CLOSED-END FUNDS

(Cost $2,140,294)

      2,365,380   
       

 

 

  

EXCHANGE TRADED FUNDS-0.8%

   

43,810

      iShares® MSCI Canada Index Fund      1,277,500   

16,040

      iShares® MSCI Germany Index Fund      509,430   

32,080

      iShares® MSCI Philippines Investable Market Index Fund      1,013,728   

69,000

      iShares® MSCI Poland Investable Market Index Fund      2,047,920   

339,980

      iShares® MSCI Singapore Index Fund      4,477,537   

6,420

      iShares® MSCI South Korea Index Fund      415,181   

74,840

      iShares® MSCI Switzerland Index Fund      2,468,972   

10,000

      iShares® S&P® National Municipal Bond Fund      1,037,400   

122,900

      SPDR® Nuveen Barclays Capital Short Term Municipal Bond ETF      2,985,241   

195,400

      SPDR® S&P® Homebuilders ETF      6,506,820   
       

 

 

  

TOTAL EXCHANGE TRADED FUNDS

(Cost $20,564,204)

      22,739,729   
       

 

 

  

CORPORATE BONDS-7.2%

   
     Basic Materials-0.4%   

$5,000,000

      BHP Billiton Finance USA, Ltd., 1.000%, 2/24/15      5,027,410   

5,000,000

      E.I. du Pont de Nemours & Co., 2.750%, 4/1/16      5,211,045   

1,500,000

      E.I. du Pont de Nemours & Co., 5.750%, 3/15/19      1,706,634   
       

 

 

  
          11,945,089   
       

 

 

  
     Communications-0.2%   

5,000,000

      BellSouth Corp., 5.200%, 9/15/14      5,163,035   
       

 

 

  

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    11

Table of Contents

Schedule of Investments

  

James Balanced: Golden Rainbow Fund

December 31, 2013 (Unaudited)  

 

Shares or Principal Amount    Value  

 

  
     Consumer, Cyclical-0.5%   

$5,000,000

      eBay, Inc., 2.600%, 7/15/22                  $4,591,545   

5,000,000

      Home Depot, Inc., 5.950%, 4/1/41      5,785,840   

785,000

      McDonald’s Corp., 5.700%, 2/1/39      878,930   

2,000,000

      Wal-Mart Stores, Inc., 5.250%, 9/1/35      2,165,932   
       

 

 

  
          13,422,247   
       

 

 

  
     Consumer, Non-cyclical-0.9%   

5,000,000

      Colgate-Palmolive Co., 3.150%, 8/5/15      5,206,670   

3,000,000

      Hershey Co., 4.125%, 12/1/20      3,204,102   

5,475,000

      Johnson & Johnson, 4.500%, 9/1/40      5,367,717   

5,000,000

      PepsiCo, Inc., 0.800%, 8/25/14      5,012,730   

5,465,000

      Wyeth LLC, 5.500%, 2/15/16      6,000,893   
       

 

 

  
          24,792,112   
       

 

 

  
     Energy-0.9%   

5,000,000

      Apache Corp., 3.250%, 4/15/22      4,919,000   

5,000,000

      BP Capital Markets PLC, 3.245%, 5/6/22      4,839,130   

5,000,000

      Occidental Petroleum Corp., 1.750%, 2/15/17      5,015,450   

5,050,000

      Shell International Finance BV, 2.375%, 8/21/22      4,616,846   

5,000,000

      Shell International Finance BV, 6.375%, 12/15/38      6,190,030   
       

 

 

  
          25,580,456   
       

 

 

  
     Financial-2.6%   

5,000,000

      Aflac, Inc., 2.650%, 2/15/17      5,157,760   

5,000,000

      Bank of America Corp., 1.738%, 4/27/16(a)      4,938,195   

5,000,000

      Berkshire Hathaway, Inc., 3.750%, 8/15/21      5,148,170   

5,000,000

      Citigroup, Inc., 4.450%, 1/10/17      5,417,210   

4,000,000

      General Electric Capital Corp., 0.750%, 2/6/14(a)      4,002,336   

10,000,000

      General Electric Capital Corp., 1.044%, 4/15/20(a)      9,921,380   

2,000,000

      General Electric Capital Corp., 6.875%, 1/10/39      2,563,134   

15,000,000

      JPMorgan Chase & Co., 2.600%, 1/15/16      15,448,965   

5,000,000

      Morgan Stanley & Co., 3.450%, 11/2/15      5,204,530   

5,000,000

      Morgan Stanley & Co., 4.750%, 3/22/17      5,454,690   

5,000,000

      National City Corp., 4.900%, 1/15/15      5,226,850   

5,000,000

      UBS AG, 5.875%, 12/20/17      5,735,255   
       

 

 

  
          74,218,475   
       

 

 

  
     Industrial-0.3%   

1,000,000

      Caterpillar, Inc., 7.900%, 12/15/18      1,252,707   

1,000,000

      Caterpillar, Inc., 8.250%, 12/15/38      1,402,395   

5,000,000

      United Technologies Corp., 3.100%, 6/1/22      4,881,555   
       

 

 

  
          7,536,657   
       

 

 

  
     Technology-1.1%   

8,000,000

      Google, Inc., 3.625%, 5/19/21      8,330,520   

5,000,000

      Intel Corp., 3.300%, 10/1/21      4,960,550   

3,000,000

      International Business Machines Corp., 1.950%, 7/22/16      3,081,834   

7,000,000

      International Business Machines Corp., 1.875%, 8/1/22      6,107,850   

3,700,000

      Microsoft Corp., 5.200%, 6/1/39      3,905,517   

5,000,000

      Oracle Corp., 2.500%, 10/15/22      4,572,400   
       

 

 

  
          30,958,671   
       

 

 

  
     Utilities-0.3%   

5,000,000

      Duke Energy Florida, Inc., 5.800%, 9/15/17      5,684,230   

4,600,000

      San Diego Gas & Electric Co., 3.000%, 8/15/21      4,527,044   
       

 

 

  
          10,211,274   
       

 

 

  

TOTAL CORPORATE BONDS

(Cost $206,702,475)

      203,828,016   
       

 

 

  

 

See Notes to Financial Statements.

12

    www.jamesfunds.com

Table of Contents

James Balanced: Golden Rainbow Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Shares or Principal Amount    Value  

 

  

MORTGAGE BACKED SECURITIES-0.9%

   
     Federal Home Loan Mortgage Corporation-0.3%   

$5,846,531

      3.000%, 11/1/26                  $5,959,965   

3,660,372

      3.500%, 5/1/42      3,636,016   
       

 

 

  
          9,595,981   
       

 

 

  
     Federal National Mortgage Association-0.4%   

3,054,102

      3.000%, 3/1/27, Pool #AB4726      3,120,147   

3,832,849

      3.000%, 4/1/27, Pool #AB4927      3,915,765   

4,464,300

      4.500%, 9/1/40, Pool #MA0547      4,662,292   
       

 

 

  
          11,698,204   
       

 

 

  
     Government National Mortgage Association-0.2%   

6,386,964

      4.000%, 12/20/40, Pool #4882      6,652,942   
       

 

 

  

TOTAL MORTGAGE BACKED SECURITIES

(Cost $28,084,071)

      27,947,127   
       

 

 

  
       

U.S. GOVERNMENT AGENCIES-1.9%

   
     Federal Farm Credit Banks-1.0%   

10,000,000

      1.750%, 5/28/20      9,480,140   

10,000,000

      2.380%, 5/15/23      9,111,850   

10,000,000

      3.220%, 3/26/31      8,399,710   
       

 

 

  
          26,991,700   
       

 

 

  
     Federal Home Loan Bank-0.7%   

5,000,000

      1.600%, 10/22/20      4,644,410   

5,000,000

      1.250%, 7/25/22 (b)      4,901,890   

10,000,000

      2.430%, 10/11/22      9,224,490   
       

 

 

  
          18,770,790   
       

 

 

  
     United States Department of Housing and Urban Development-0.2%   

5,000,000

      2.050%, 8/1/19      4,963,460   
       

 

 

  

TOTAL U.S. GOVERNMENT AGENCIES

(Cost $55,209,276)

      50,725,950   
       

 

 

  

U.S. TREASURY BONDS & NOTES-26.5%

   
     U.S. Treasury Bonds-0.6%   

17,500,000

      3.875%, 8/15/40      17,437,105   
       

 

 

  
     U.S. Treasury Inflation Indexed Notes-1.1%   

15,902,425

      2.500%, 7/15/16      17,447,950   

12,821,235

      1.625%, 1/15/18      13,933,080   
       

 

 

  
          31,381,030   
       

 

 

  
     U.S. Treasury Notes-24.8%   

55,000,000

      2.625%, 12/31/14      56,336,335   

20,000,000

      0.250%, 5/31/15      20,009,380   

140,000,000

      0.250%, 11/30/15      139,721,120   

60,000,000

      2.000%, 1/31/16      61,968,720   

95,000,000

      0.250%, 5/15/16      94,413,660   

45,000,000

      1.000%, 9/30/16      45,383,220   

58,000,000

      4.625%, 2/15/17      64,683,572   

50,000,000

      1.500%, 8/31/18      49,718,750   

110,000,000

      2.750%, 2/15/19      115,190,680   

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    13

Table of Contents

Schedule of Investments

  

James Balanced: Golden Rainbow Fund

December 31, 2013 (Unaudited)  

 

Shares or Principal Amount    Value  

 

  
     U.S. Treasury Notes (continued)   

$50,000,000

      2.625%, 11/15/20                  $50,750,000   
       

 

 

  
          698,175,437   
       

 

 

  

TOTAL U.S. TREASURY BONDS & NOTES

(Cost $741,272,406)

      746,993,572   
       

 

 

  

FOREIGN BONDS-2.1%

   
     Australia Government-0.3%   

AUD 10,000,000

      5.250%, 3/15/19      9,679,807   
       

 

 

  
     Canada Government-0.4%   

CAD 5,000,000

      3.750%, 6/1/19      5,108,355   

CAD 5,000,000

      3.500%, 6/1/20      5,060,861   
       

 

 

  
          10,169,216   
       

 

 

  
     Denmark Government-0.3%   

DKK 56,000,000

      1.500%, 11/15/23      9,878,678   
       

 

 

  
     International Bank for Reconstruction & Development-0.1%   

TRY 8,000,000

      6.000%, 7/23/15      3,554,986   
       

 

 

  
     Netherlands Government-0.2%   

EUR 3,000,000

      4.000%, 7/15/19      4,721,106   
       

 

 

  
     Norway Government-0.3%   

NOK 21,000,000

      4.500%, 5/22/19      3,832,094   

NOK 28,000,000

      2.000%, 5/24/23      4,247,868   
       

 

 

  
          8,079,962   
       

 

 

  
     Queensland Treasury Corp.-0.2%   

AUD 5,000,000

      6.000%, 10/14/15      4,722,199   
       

 

 

  
     Sweden Government-0.3%   

SEK 52,000,000

      5.000%, 12/1/20      9,557,648   
       

 

 

  

TOTAL FOREIGN BONDS

(Cost $60,722,651)

      60,363,602   
       

 

 

  

MUNICIPAL BONDS-3.3%

   
     California-0.0%(c)   

1,000,000

      Citrus Community College District General Obligation Unlimited Bonds, Series B, 4.750%, 6/1/31      1,037,230   
       

 

 

  
     Colorado-0.1%   

1,000,000

      Adams County School District No. 14 General Obligation Unlimited Bonds, 5.000%, 12/1/26      1,127,660   
       

 

 

  
     Connecticut-0.2%   

5,350,000

      State of Connecticut, Series B, 5.000%, 11/1/25      5,949,254   
       

 

 

  
     Florida-0.0%(c)   

1,000,000

     

Florida State Board of Education Capital Outlay General Obligation Bonds, Series D, 5.000%, 6/1/38

      1,040,290   
       

 

 

  
     Georgia-0.3%   

3,000,000

      State of Georgia General Obligation Unlimited Bonds, Series B, 4.500%, 1/1/29      3,226,020   

 

See Notes to Financial Statements.

14

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Table of Contents

James Balanced: Golden Rainbow Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Shares or Principal Amount    Value  

 

  
     Georgia (continued)   

$5,000,000

     

State of Georgia General Obligation Unlimited Bonds, Series D, 5.000%, 2/1/25

                  $5,802,350   
       

 

 

  
          9,028,370   
       

 

 

  
     Illinois-0.1%   

500,000

     

Kane & DeKalb Counties Community Unit School District No. 302 Kaneland General Obligation Unlimited Bonds (School Building), 5.500%, 2/1/28

      532,375   

1,000,000

     

Village of Bolingbrook General Obligation Unlimited Bonds, 5.000%, 1/1/37

      1,015,540   
       

 

 

  
          1,547,915   
       

 

 

  
     Maryland-0.2%   

5,000,000

      County of Montgomery MD, 3.000%, 11/1/29      4,496,950   
       

 

 

  
       
     Massachusetts-0.1%   

1,000,000

     

Commonwealth of Massachusetts General Obligation Limited Bonds, Series C, 5.250%, 8/1/22

      1,158,580   
       

 

 

  
       
     Michigan-0.0%(c)   

1,000,000

     

Marysville Public School District General Obligation Unlimited Bonds (School Building & Site), 5.000%, 5/1/32

      1,018,950   
       

 

 

  
       
     Ohio-1.4%   

5,450,000

     

City of Columbus General Obligation Various Purpose Limited Tax Bonds, Series B, 3.250%, 8/15/24

      5,481,283   

4,620,000

     

Columbus City School District Taxable Facilities & Improvement Build America Bonds, Series B, 6.150%, 12/1/33

      4,741,460   

5,000,000

     

County of Cuyahoga OH, 4.000%, 12/1/37

      4,547,200   
    

Greenville City School District General Obligation Unlimited Bonds (School Improvement):

   

5,000,000

     

5.000%, 1/1/46

      4,913,750   

11,000,000

     

5.500%, 1/1/51

      11,424,820   

1,100,000

     

Miamisburg City School District General Obligation Unlimited Bonds (School Facilities Construction & Improvement), 5.000%, 12/1/33

      1,162,634   

500,000

     

Mount Healthy City School District General Obligation Unlimited Bonds (School Improvement), 5.000%, 12/1/26

      528,300   

1,000,000

     

Ohio State University General Recipients Revenue Bonds, 4.910%, 6/1/40

      1,001,900   

105,000

     

Ohio State University Prerefunded Revenue Bonds, Series A, 5.000%, 12/1/28

      123,449   

895,000

     

Ohio State University Unrefunded Revenue Bonds, Series A, 5.000%, 12/1/28

      972,614   

500,000

     

Springboro Community City School District General Obligation Unlimited Bonds, 5.250%, 12/1/23

      579,085   

1,000,000

     

State of Ohio General Obligation Unlimited Bonds, Series A, 5.375%, 9/1/28

      1,104,990   

2,000,000

     

State of Ohio General Obligation Unlimited Bonds, Series B, 5.000%, 2/1/22

      2,006,740   

1,000,000

     

Wright State University Revenue Bonds, 4.000%, 5/1/18

      1,085,800   
       

 

 

  
          39,674,025   
       

 

 

  
     Texas-0.3%   

1,000,000

     

Friendswood Independent School District General Obligation Unlimited Bonds (Schoolhouse), 5.000%, 2/15/37

      1,060,950   

1,000,000

     

Judson Independent School District General Obligation Unlimited Bonds (School Building), 5.000%, 2/1/37

      1,027,200   

500,000

     

Lamar Consolidated Independent School District General Obligation Unlimited Bonds (Schoolhouse), 5.000%, 2/15/38

      523,750   

5,335,000

     

Port of Houston Authority General Obligation Unlimited Bonds, Series D-1, 5.000%, 10/1/35

      5,676,493   

1,000,000

     

Tyler Independent School District General Obligation Unlimited Bonds (School Building), 5.000%, 2/15/34

      1,041,030   
       

 

 

  
          9,329,423   
       

 

 

  
     Washington-0.4%   

5,000,000

     

State of Washington General Obligation Unlimited Bonds, Series D, 4.000%, 2/1/37

      4,466,050   

5,845,000

     

State of Washington General Obligation Various Purpose Unlimited Bonds, Series D, 5.000%, 2/1/20

      6,854,665   
       

 

 

  
          11,320,715   
       

 

 

  

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    15

Table of Contents

Schedule of Investments

  

James Balanced: Golden Rainbow Fund

December 31, 2013 (Unaudited)  

 

Shares or Principal Amount    Value  

 

  
     Wisconsin-0.2%   

$5,000,000

      State of Wisconsin General Obligation Unlimited Bonds, Series C, 5.000%, 5/1/25                  $5,587,000   
       

 

 

  
       

TOTAL MUNICIPAL BONDS

(Cost $93,920,872)

      92,316,362   
       

 

 

  

SHORT TERM INVESTMENTS-3.8%

   
     Mutual Funds-1.3%   

37,328,496

      First American Government Obligations Fund, 7-Day Yield 0.006%      37,328,496   
       

 

 

  
     U.S. Government Agency Securities-2.5%   
     United States Treasury Bills   

$50,000,000

     

0.097%, 2/6/14 (d)

      49,995,125   

20,000,000

     

0.000%, 3/13/14 (d)(e)

      19,998,440   
       

 

 

  
          69,993,565   
       

 

 

  

TOTAL SHORT TERM INVESTMENTS

(Cost $107,321,255)

      107,322,061   
       

 

 

  

TOTAL INVESTMENT SECURITIES-99.8%

(Cost $2,371,409,480)

      2,813,056,231   

OTHER ASSETS IN EXCESS OF LIABILITIES-0.2%

      5,903,072   
       

 

 

  

NET ASSETS-100.0%

      $2,818,959,303   
       

 

 

  
       

 

 

  

Percentages shown are based on Net Assets.

 

* 

Non-income producing security.

(a) 

Variable rate security. Interest rate disclosed is that which is in effect at December 31, 2013.

(b) 

Step bond. Coupon increases periodically based upon a predetermined schedule. Interest rate disclosed is that which is in effect at December 31, 2013.

  
(c) 

Less than 0.05% of Net Assets

(d) 

Rate shown represents the bond equivalent yield to maturity at date of purchase.

(e) 

Less than 0.0005%

ADR - American Depositary Receipt

AUD - Australian Dollar

BV - Besloten Vennootschap is the Dutch term for private limited liability company

CAD - Canadian Dollar

DKK - Danish Krone

ETF - Exchange Traded Fund

EUR - Euro

LLC - Limited Liability Company

LP - Limited Partnership

Ltd. - Limited

MSCI - Morgan Stanley Capital International

NOK - Norwegian Krone

NV - Naamloze Vennootschap is the Dutch term for a public limited liability corporation

PLC - Public Limited Company

REIT - Real Estate Investment Trust

S&P - Standard & Poor’s

SEK - Swedish Krona

SPDR - Standard & Poor’s Depositary Receipts

TRY - Turkish Lira

 

See Notes to Financial Statements.

16

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Table of Contents

James Balanced: Golden Rainbow Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Foreign Bonds Securities Allocation

 

      % of  
Net Assets  

Europe

        0.7%    

Europe - Euro

        0.5%    

Asia - Pacific

        0.5%    

North America

        0.4%    
  

 

       2.1%    
  

 

    

 

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    17

Table of Contents

Schedule of Investments

  

James Small Cap Fund

December 31, 2013 (Unaudited)  

 

Shares           Value  

 

  

COMMON STOCKS-96.6%

   
     Basic Materials-8.0%   

69,117

      Aceto Corp.                  $1,728,616   

62,975

      Innospec, Inc.      2,910,704   

115,540

      Lydall, Inc.*      2,035,815   

34,714

      Neenah Paper, Inc.      1,484,718   

72,020

      PH Glatfelter Co.      1,990,633   

59,540

      Worthington Industries, Inc.      2,505,443   
       

 

 

  
          12,655,929   
       

 

 

  
     Consumer, Cyclical-15.6%   

71,980

      1-800-Flowers.com, Inc., Class A*      389,412   

9,431

      Bassett Furniture Industries, Inc.      144,106   

28,092

      Courier Corp.      508,184   

24,220

      Destination Maternity Corp.      723,694   

16,370

      Dorman Products, Inc.*      917,866   

22,701

      Flexsteel Industries, Inc.      697,602   

70,420

      Fred’s, Inc., Class A      1,304,178   

125,890

      Haverty Furniture Cos., Inc.      3,940,357   

60,560

      Kona Grill, Inc.*      1,121,571   

87,940

      La-Z-Boy, Inc.      2,726,140   

28,600

      Meritage Homes Corp.*      1,372,514   

114,970

      Myers Industries, Inc.      2,428,166   

16,497

      Patrick Industries, Inc.*      477,258   

59,130

      PC Connection, Inc.      1,469,380   

43,305

      Rocky Brands, Inc.      630,954   

161,605

      Sinclair Broadcast Group, Inc., Class A      5,774,147   
       

 

 

  
          24,625,529   
       

 

 

  
     Consumer, Non-cyclical-9.3%   

31,620

      Andersons, Inc.      2,819,555   

197,780

      Carriage Services, Inc.      3,862,643   

26,240

      G&K Services, Inc., Class A      1,632,915   

20,464

      John B Sanfilippo & Son, Inc.      505,052   

25,437

      Libbey, Inc.*      534,177   

13,255

      Nature’s Sunshine Products, Inc.      229,577   

32,300

      Seneca Foods Corp., Class A*      1,030,047   

38,820

      Spartan Stores, Inc.      942,550   

49,240

      Toro Co.      3,131,664   
       

 

 

  
          14,688,180   
       

 

 

  
     Energy-6.5%   

17,440

      Adams Resources & Energy, Inc.      1,194,640   

62,280

      Alon USA Energy, Inc.      1,030,111   

104,200

      Delek US Holdings, Inc.      3,585,522   

130,965

      EPL Oil & Gas, Inc.*      3,732,502   

55,519

      Star Gas Partners LP      291,475   

22,520

      Tesco Corp.*      445,446   
       

 

 

  
          10,279,696   
       

 

 

  
     Financial-12.4%   

1,437

      Altisource Asset Management Corp.*      1,336,410   

7,424

      Altisource Residential Corp., Class B      223,537   

 

See Notes to Financial Statements.

18

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Table of Contents

James Small Cap Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Shares           Value  

 

  
     Financial (continued)   

52,100

      American Financial Group, Inc.                  $3,007,212   

21,668

      AmTrust Financial Services, Inc.      708,327   

17,460

      BofI Holding, Inc.*      1,369,388   

37,885

      ePlus, Inc.*      2,153,383   

22,760

      Federal Agricultural Mortgage Corp., Class C      779,530   

23,293

      HCI Group, Inc.      1,246,176   

990

      Investors Title Co.      80,170   

61,110

      MainSource Financial Group, Inc.      1,101,813   

32,340

      Montpelier Re Holdings, Ltd.      941,094   

36,385

      Nicholas Financial, Inc.      572,700   

31,230

      Outerwall, Inc.*      2,100,842   

39,030

      Peoples Bancorp, Inc.      878,565   

41,729

      Southside Bancshares, Inc.      1,140,864   

21,220

      World Acceptance Corp.*      1,857,387   
       

 

 

  
          19,497,398   
       

 

 

  
     Industrial-18.7%   

74,185

      Alamo Group, Inc.      4,502,288   

25,990

      AMERCO*      6,181,462   

27,380

      American Railcar Industries, Inc.      1,252,635   

54,080

      Celadon Group, Inc.      1,053,478   

71,000

      Dana Holding Corp.      1,393,020   

45,570

      Franklin Electric Co., Inc.      2,034,245   

30,624

      NN, Inc.      618,298   

22,665

      Park-Ohio Holdings Corp.*      1,187,646   

85,825

      SORL Auto Parts, Inc.*      341,583   

19,485

      Standex International Corp.      1,225,217   

72,607

      StealthGas, Inc.*      739,865   

4,788

      Strattec Security Corp.      213,880   

107,247

      Sturm Ruger & Co., Inc.      7,838,683   

37,020

      Supreme Industries, Inc., Class A*      215,827   

27,594

      UFP Technologies, Inc.*      695,921   
       

 

 

  
          29,494,048   
       

 

 

  
     Technology-13.8%   

31,660

      AAR Corp.      886,796   

17,800

      Alliant Techsystems, Inc.      2,165,904   

24,506

      Anika Therapeutics, Inc.*      935,149   

61,112

      CalAmp Corp.*      1,709,303   

33,760

      CSG Systems International, Inc.      992,544   

130,325

      Deluxe Corp.      6,801,662   

47,630

      Kulicke & Soffa Industries, Inc.*      633,479   

180,445

      Mentor Graphics Corp.      4,343,311   

41,100

      PDL BioPharma, Inc.      346,884   

25,710

      Perion Network, Ltd.*      310,834   

34,330

      Triumph Group, Inc.      2,611,483   
       

 

 

  
          21,737,349   
       

 

 

  
     Utilities-12.3%   

51,771

      Consolidated Water Co., Ltd., Ordinary Shares      729,971   

131,165

      El Paso Electric Co.      4,605,203   

51,320

      Laclede Group, Inc.      2,337,113   

60,355

      NorthWestern Corp.      2,614,579   

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    19

Table of Contents

Schedule of Investments

  

James Small Cap Fund

December 31, 2013 (Unaudited)  

 

Shares         Value  

 

  
   Utilities (continued)   

85,140

    PNM Resources, Inc.                      $2,053,577   

119,435

    Portland General Electric Co.      3,606,937   

13,924

    Shenandoah Telecommunications Co.      357,429   

912,033

    Vonage Holdings Corp.*      3,037,070   
     

 

 

  
        19,341,879   
     

 

 

  

TOTAL COMMON STOCKS

(Cost $96,799,731)

      152,320,008   
     

 

 

  

SHORT TERM INVESTMENTS-3.3%

   
   Mutual Funds-3.3%   

5,239,567

    First American Government Obligations Fund, 7-Day Yield 0.006%      5,239,567   
     

 

 

  

TOTAL SHORT TERM INVESTMENTS

(Cost $5,239,567)

      5,239,567   
     

 

 

  

TOTAL INVESTMENT SECURITIES-99.9%

(Cost $102,039,298)

      157,559,575   

OTHER ASSETS IN EXCESS OF LIABILITIES-0.1%

      135,702   
     

 

 

  

NET ASSETS-100.0%

      $157,695,277   
     

 

 

  
     

 

 

  

Percentages shown are based on Net Assets.

 

* 

Non-income producing security.

LP - Limited Partnership

Ltd. - Limited

 

See Notes to Financial Statements.

20

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Table of Contents

James Mid Cap Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Shares           Value  

 

  

COMMON STOCKS-94.8%

   
     Basic Materials-11.9%   

12,000

      Goodyear Tire & Rubber Co.                  $286,200   

13,000

      Huntsman Corp.      319,800   

1,000

      NewMarket Corp.      334,150   

10,000

      Olin Corp.      288,500   

15,500

      PolyOne Corp.      547,925   

8,000

      Worthington Industries, Inc.      336,640   
       

 

 

  
          2,113,215   
       

 

 

  
     Consumer, Cyclical-11.1%   

8,250

      Alaska Air Group, Inc.      605,302   

5,000

      Dillard’s, Inc., Class A      486,050   

6,500

      Foot Locker, Inc.      269,360   

15,000

      KB Home      274,200   

10,000

      RR Donnelley & Sons Co.      202,800   

7,500

      Steelcase, Inc., Class A      118,950   
       

 

 

  
          1,956,662   
       

 

 

  
     Consumer, Non-cyclical-12.7%   

4,125

      Ingredion, Inc.      282,397   

10,000

      Newell Rubbermaid, Inc.      324,100   

75

      Seaboard Corp.      209,623   

6,400

      Toro Co.      407,040   

7,225

      Tupperware Brands Corp.      682,979   

10,325

      Tyson Foods, Inc., Class A      345,475   
       

 

 

  
          2,251,614   
       

 

 

  
     Energy-11.8%   

4,000

      Cimarex Energy Co.      419,640   

13,000

      Exterran Holdings, Inc.*      444,600   

8,250

      HollyFrontier Corp.      409,942   

14,000

      Tesco Corp.*      276,920   

9,300

      Tesoro Corp.      544,050   
       

 

 

  
          2,095,152   
       

 

 

  
     Financial-11.7%   

8,775

      American Financial Group, Inc.      506,493   

4,000

      Aspen Insurance Holdings, Ltd.      165,240   

5,500

      Horace Mann Educators Corp.      173,470   

11,350

      Nelnet, Inc., Class A      478,289   

8,000

      Protective Life Corp.      405,280   

10,000

      Rent-A-Center, Inc.      333,400   
       

 

 

  
          2,062,172   
       

 

 

  
     Industrial-17.0%   

7,225

      AGCO Corp.      427,648   

3,000

      AMERCO*      713,520   

11,625

      Jarden Corp.*      713,194   

3,700

      Timken Co.      203,759   

6,000

      Trinity Industries, Inc.      327,120   

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    21

Table of Contents

Schedule of Investments

  

James Mid Cap Fund

December 31, 2013 (Unaudited)  

 

Shares           Value  

 

  
     Industrial (continued)   

8,250

      TRW Automotive Holdings Corp.*                  $613,717   
       

 

 

  
          2,998,958   
       

 

 

  
     Technology-11.6%   

2,500

      Alliant Techsystems, Inc.      304,200   

7,750

      Arrow Electronics, Inc.*      420,437   

13,950

      Deluxe Corp.      728,051   

25,500

      LSI Corp.      281,010   

4,125

      Triumph Group, Inc.      313,789   
       

 

 

  
          2,047,487   
       

 

 

  
     Utilities-7.0%   

15,550

      CMS Energy Corp.      416,274   

4,975

      DTE Energy Co.      330,290   

8,000

      Portland General Electric Co.      241,600   

7,000

      Vectren Corp.      248,500   
       

 

 

  
          1,236,664   
       

 

 

  

TOTAL COMMON STOCKS

(Cost $10,265,434)

      16,761,924   
       

 

 

  

SHORT TERM INVESTMENTS-5.2%

   
     Mutual Funds-5.2%   

914,039

      First American Government Obligations Fund, 7-Day Yield 0.006%      914,039   
       

 

 

  

TOTAL SHORT TERM INVESTMENTS

(Cost $914,039)

      914,039   
       

 

 

  

TOTAL INVESTMENT SECURITIES-100.0%

(Cost $11,179,473)

      17,675,963   

OTHER LIABILITIES IN EXCESS OF ASSETS-0.0%(a)

      (3,319 ) 
       

 

 

  

NET ASSETS-100.0%

      $17,672,644   
       

 

 

  
       

 

 

  

Percentages shown are based on Net Assets.

 

* 

Non-income producing security.

(a) 

Less than 0.05% of Net Assets

Ltd. - Limited

 

See Notes to Financial Statements.

22

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Table of Contents

James Micro Cap Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Shares         Value  

 

  

COMMON STOCKS-96.5%

   
   Basic Materials-10.0%   

35,736

    Aceto Corp.                  $893,758   

18,055

    Neenah Paper, Inc.      772,212   
     

 

 

  
        1,665,970   
     

 

 

  
   Consumer, Cyclical-16.8%   

37,520

    1-800-Flowers.com, Inc., Class A*      202,983   

4,924

    Bassett Furniture Industries, Inc.      75,239   

14,380

    Courier Corp.      260,134   

11,824

    Flexsteel Industries, Inc.      363,351   

31,740

    Kona Grill, Inc.*      587,825   

8,064

    Patrick Industries, Inc.*      233,291   

30,795

    PC Connection, Inc.      765,256   

21,703

    Rocky Brands, Inc.      316,213   
     

 

 

  
        2,804,292   
     

 

 

  
   Consumer, Non-cyclical-8.0%   

35,421

    Carriage Services, Inc.      691,772   

10,004

    John B Sanfilippo & Son, Inc.      246,899   

13,460

    Libbey, Inc.*      282,660   

6,880

    Nature’s Sunshine Products, Inc.      119,161   
     

 

 

  
        1,340,492   
     

 

 

  
   Energy-4.5%   

8,720

    Adams Resources & Energy, Inc.      597,320   

29,080

    Star Gas Partners LP      152,670   
     

 

 

  
        749,990   
     

 

 

  
   Financial-25.0%   

8,720

    BofI Holding, Inc.*      683,910   

18,980

    ePlus, Inc.*      1,078,823   

11,370

    Federal Agricultural Mortgage Corp., Class C      389,422   

12,138

    HCI Group, Inc.      649,383   

510

    Investors Title Co.      41,300   

31,800

    MainSource Financial Group, Inc.      573,354   

19,072

    Nicholas Financial, Inc.      300,193   

20,300

    Peoples Bancorp, Inc.      456,953   
     

 

 

  
        4,173,338   
     

 

 

  
   Industrial-18.4%   

14,958

    NN, Inc.      302,002   

11,810

    Park-Ohio Holdings Corp.*      618,844   

43,182

    SORL Auto Parts, Inc.*      171,865   

10,185

    Standex International Corp.      640,433   

37,838

    StealthGas, Inc.*      385,569   

2,486

    Strattec Security Corp.      111,050   

4,970

    Sturm Ruger & Co., Inc.      363,257   

19,281

    Supreme Industries, Inc., Class A*      112,408   

14,374

    UFP Technologies, Inc.*      362,512   
     

 

 

  
        3,067,940   
     

 

 

  

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    23

Table of Contents

Schedule of Investments

  

James Micro Cap Fund

December 31, 2013 (Unaudited)  

 

Shares           Value  

 

  
     Technology-9.1%   

11,961

      Anika Therapeutics, Inc.*                  $456,432   

31,842

      CalAmp Corp.*      890,621   

13,400

      Perion Network, Ltd.*      162,006   
       

 

 

  
          1,509,059   
       

 

 

  
     Utilities-4.7%   

25,311

      Consolidated Water Co., Ltd., Ordinary Shares      356,885   

7,260

      Shenandoah Telecommunications Co.      186,364   

72,725

      Vonage Holdings Corp.*      242,175   
       

 

 

  
          785,424   
       

 

 

  

TOTAL COMMON STOCKS

(Cost $9,597,553)

      16,096,505   
       

 

 

  

SHORT TERM INVESTMENTS-4.2%

   
     Mutual Funds-4.2%   

703,943

      First American Government Obligations Fund, 7-Day Yield 0.006%      703,943   
       

 

 

  

TOTAL SHORT TERM INVESTMENTS

(Cost $703,943)

      703,943   
       

 

 

  

TOTAL INVESTMENT SECURITIES-100.7%

(Cost $10,301,496)

      16,800,448   

OTHER LIABILITIES IN EXCESS OF ASSETS-(0.7)%

      (124,109 ) 
       

 

 

  

NET ASSETS-100.0%

      $16,676,339   
       

 

 

  
       

 

 

  

Percentages shown are based on Net Assets.

 

* 

Non-income producing security.

LP - Limited Partnership

Ltd. - Limited

 

See Notes to Financial Statements.

24

    www.jamesfunds.com

Table of Contents

James Long-Short Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Shares           Value  

 

  

COMMON STOCKS-104.2%

   
     Basic Materials-7.5%   

18,390

      Aceto Corp. (a)                  $459,934   

8,300

      Cooper Tire & Rubber Co. (a)      199,532   

1,340

      Cytec Industries, Inc. (a)      124,834   

7,480

      Olin Corp. (a)      215,798   

6,360

      Worthington Industries, Inc. (a)      267,629   
       

 

 

  
          1,267,727   
       

 

 

  
     Consumer, Cyclical-15.4%   

5,890

      Alaska Air Group, Inc. (a)      432,149   

6,050

      Dillard’s, Inc., Class A(a)      588,120   

6,850

      Haverty Furniture Cos., Inc.(a)      214,405   

17,240

      LeapFrog Enterprises, Inc. *(a)      136,886   

22,675

      Sinclair Broadcast Group, Inc., Class A(a)      810,178   

13,100

      Southwest Airlines Co. (a)      246,804   

2,040

      Viacom, Inc., Class A(a)      179,051   
       

 

 

  
          2,607,593   
       

 

 

  
     Consumer, Non-cyclical-17.2%   

11,245

      Eli Lilly & Co. (a)      573,495   

4,080

      Merck & Co., Inc.(a)      204,204   

22,035

      Pfizer, Inc. (a)      674,932   

7,570

      Spartan Stores, Inc. (a)      183,800   

3,770

      Toro Co. (a)      239,772   

9,650

      UnitedHealth Group, Inc. (a)      726,645   

4,200

      USANA Health Sciences, Inc. *(a)      317,436   
       

 

 

  
          2,920,284   
       

 

 

  
     Energy-10.8%   

4,195

      Chevron Corp. (a)      523,997   

11,885

      HollyFrontier Corp. (a)      590,566   

12,425

      Tesoro Corp.(a)      726,863   
       

 

 

  
          1,841,426   
       

 

 

  
     Financial-16.1%   

31,190

      Fifth Third Bancorp (a)      655,926   

4,400

      JPMorgan Chase & Co.(a)      257,312   

23,290

      KeyCorp (a)      312,552   

6,600

      PNC Financial Services Group, Inc. (a)      512,028   

10,905

      Protective Life Corp.(a)      552,447   

8,022

      Southside Bancshares, Inc. (a)      219,316   

2,380

      Travelers Cos., Inc.(a)      215,485   
       

 

 

  
          2,725,066   
       

 

 

  
     Industrial-12.8%   

4,260

      AGCO Corp. (a)      252,149   

1,470

      AMERCO *(a)      349,625   

13,045

      Sturm Ruger & Co., Inc.(a)      953,459   

3,460

      TRW Automotive Holdings Corp. *(a)      257,389   

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    25

Table of Contents

Schedule of Investments

  

James Long-Short Fund

December 31, 2013 (Unaudited)  

 

Shares           Value  

 

  
     Industrial (continued)   

4,670

      United Rentals, Inc.*(a)                  $364,027   
       

 

 

  
          2,176,649   
       

 

 

  
     Technology-16.4%   

6,890

      CSG Systems International, Inc.(a)      202,566   

13,925

      Deluxe Corp.(a)      726,746   

2,775

      Lockheed Martin Corp.(a)      412,531   

1,380

      Northrop Grumman Corp.(a)      158,162   

11,955

      Symantec Corp.(a)      281,899   

4,665

      Triumph Group, Inc.(a)      354,866   

7,620

      Western Digital Corp.(a)      639,318   
       

 

 

  
          2,776,088   
       

 

 

  
     Utilities-8.0%   

3,135

      DTE Energy Co.(a)      208,133   

10,905

      PNM Resources, Inc.(a)      263,029   

16,630

      Portland General Electric Co.(a)      502,226   

117,065

      Vonage Holdings Corp.*      389,826   
       

 

 

  
          1,363,214   
       

 

 

  

TOTAL COMMON STOCKS

(Cost $12,796,171)

      17,678,047   
       

 

 

  

EXCHANGE TRADED FUNDS-1.4%

   

6,760

      SPDR® S&P® Homebuilders ETF(a)      225,108   
       

 

 

  

TOTAL EXCHANGE TRADED FUNDS

(Cost $188,629)

      225,108   
       

 

 

  

SHORT TERM INVESTMENTS-20.0%

   
     Mutual Funds-20.0%   

3,399,359

      First American Government Obligations Fund, 7-Day Yield 0.006%      3,399,359   
       

 

 

  

TOTAL SHORT TERM INVESTMENTS

(Cost $3,399,359)

      3,399,359   
       

 

 

  

TOTAL INVESTMENT SECURITIES-125.6%

(Cost $16,384,159)

      21,302,514   

SEGREGATED CASH DUE TO BROKERS-18.6%

      3,157,816   

SECURITIES SOLD SHORT-(44.1)%

(Proceeds $7,026,311)

      (7,477,683 ) 

OTHER LIABILITIES IN EXCESS OF ASSETS-(0.1)%

      (18,348 ) 
       

 

 

  

NET ASSETS-100.0%

      $16,964,299   
       

 

 

  
       

 

 

  

 

See Notes to Financial Statements.

26

    www.jamesfunds.com

Table of Contents

James Long-Short Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Shares           Value  

 

  

SCHEDULE OF SECURITIES SOLD SHORT

   

 

  

COMMON STOCKS-(44.1)%

   
     Basic Materials-(4.8)%   

(1,820)

      Allegheny Technologies, Inc.                  $(64,847)   

(2,640)

      Cemex SAB de CV, ADR      (31,231)   

(5,740)

      Coeur Mining, Inc.      (62,279)   

(1,650)

      CONSOL Energy, Inc.      (62,766)   

(3,690)

      Kronos Worldwide, Inc.      (70,294)   

(2,440)

      PVR Partners LP      (65,465)   

(3,460)

      Quanex Building Products Corp.      (68,923)   

(1,370)

      Royal Gold, Inc.      (63,116)   

(1,960)

      Schnitzer Steel Industries, Inc., Class A      (64,033)   

(3,230)

      Solazyme, Inc.      (35,175)   

(1,740)

      Tahoe Resources, Inc.      (28,954)   

(1,370)

      Taminco Corp.      (27,688)   

(1,340)

      Tronox, Ltd., Class A      (30,914)   

(4,140)

      Walter Energy, Inc.      (68,848)   

(5,060)

      Wausau Paper Corp.      (64,161)   
       

 

 

  
          (808,694)   
       

 

 

  
     Consumer, Cyclical-(3.7)%   

(6,130)

      Aeropostale, Inc.      (55,722)   

(150)

      Amazon.com, Inc.      (59,819)   

(2,450)

      Arcos Dorados Holdings, Inc., Class A      (29,694)   

(2,070)

      BJ’s Restaurants, Inc.      (64,294)   

(1,690)

      Cencosud SA, ADR      (18,404)   

(1,620)

      Diamond Resorts International, Inc.      (29,905)   

(1,640)

      eLong, Inc., ADR      (33,587)   

(1,340)

      HD Supply Holdings, Inc.      (32,173)   

(2,010)

      Imax Corp.      (59,255)   

(710)

      Liberty Global PLC, Class A      (63,183)   

(4,540)

      Millennial Media, Inc.      (33,006)   

(1,020)

      Pandora Media, Inc.      (27,132)   

(2,980)

      SFX Entertainment, Inc.      (35,760)   

(1,820)

      Tile Shop Holdings, Inc.      (32,887)   

(390)

      Tribune Co.      (30,186)   

(1,330)

      William Lyon Homes, Class A      (29,446)   
       

 

 

  
          (634,453)   
       

 

 

  
     Consumer, Non-cyclical-(4.0)%   

(7,770)

      Accuray, Inc.      (67,677)   

(2,670)

      Capital Senior Living Corp.      (64,053)   

(880)

      Cubist Pharmaceuticals, Inc.      (60,606)   

(2,690)

      Emeritus Corp.      (58,185)   

(830)

      GW Pharmaceuticals PLC, ADR      (34,478)   

(1,650)

      Insulet Corp.      (61,215)   

(520)

      Intercept Pharmaceuticals, Inc.      (35,506)   

(5,940)

      NxStage Medical, Inc.      (59,400)   

(510)

      Pacira Pharmaceuticals, Inc.      (29,320)   

(2,360)

      Stonemor Partners LP      (60,227)   

(1,650)

      Tornier NV      (31,003)   

(2,660)

      Volcano Corp.      (58,121)   

(2,020)

      Wright Medical Group, Inc.      (62,034)   
       

 

 

  
          (681,825)   
       

 

 

  

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    27

Table of Contents

Schedule of Investments

  

James Long-Short Fund

December 31, 2013 (Unaudited)  

 

Shares           Value  

 

  
     Energy-(8.1)%   

(1,330)

      Atlas Energy LP                  $(62,310)   

(1,700)

      Atlas Pipeline Partners LP      (59,585)   

(2,040)

      Cheniere Energy Partners LP      (58,446)   

(770)

      Crescent Point Energy Corp.      (29,907)   

(3,810)

      Crestwood Equity Partners LP      (52,692)   

(1,300)

      Crestwood Midstream Partners LP      (32,357)   

(10,110)

      Eagle Rock Energy Partners LP      (60,155)   

(1,212)

      Enbridge Energy Management LLC      (34,763)   

(800)

      Energy Transfer Equity LP      (65,392)   

(1,000)

      Gulfport Energy Corp.      (63,150)   

(1,900)

      Holly Energy Partners LP      (61,427)   

(450)

      InterOil Corp.      (23,171)   

(7,560)

      Key Energy Services, Inc.      (59,724)   

(2,560)

      Kosmos Energy, Ltd.      (28,621)   

(8,270)

      Magnum Hunter Resources Corp.      (60,454)   

(880)

      MarkWest Energy Partners LP      (58,194)   

(7,560)

      McDermott International, Inc.      (69,250)   

(1,020)

      PDC Energy, Inc.      (54,284)   

(9,520)

      Pengrowth Energy Corp.      (59,024)   

(1,280)

      QEP Midstream Partners LP      (29,722)   

(6,780)

      Resolute Energy Corp.      (61,223)   

(3,040)

      Rex Energy Corp.      (59,918)   

(420)

      Rocket Fuel, Inc.      (25,826)   

(680)

      Seadrill, Ltd.      (27,934)   

(560)

      SolarCity Corp.      (31,819)   

(4,890)

      Talisman Energy, Inc.      (56,969)   

(560)

      Tesoro Logistics LP      (29,310)   

(4,110)

      Tullow Oil PLC, ADR      (29,017)   

(1,510)

      WPX Energy, Inc.      (30,774)   
       

 

 

  
          (1,375,418)   
       

 

 

  
     Financial-(1.6)%   

(2,160)

      American Realty Capital Properties, Inc., REIT      (27,778)   

(770)

      American Tower Corp., REIT      (61,461)   

(2,830)

      Healthcare Trust of America, Inc., Class A, REIT      (27,847)   

(1,370)

      National Bank Holdings Corp., Class A      (29,318)   

(1,820)

      Silver Bay Realty Trust Corp., REIT      (29,102)   

(2,380)

      ViewPoint Financial Group, Inc.      (65,331)   

(490)

      WageWorks, Inc.      (29,126)   
       

 

 

  
          (269,963)   
       

 

 

  
     Industrial-(4.2)%   

(1,140)

      Clean Harbors, Inc.      (68,355 ) 

(1,930)

      Granite Construction, Inc.      (67,511 ) 

(1,110)

      Macquarie Infrastructure Co. LLC      (60,417 ) 

(7,430)

      Nordic American Tanker Shipping, Ltd.      (72,071 ) 

(400)

      Nortek, Inc.      (29,840 ) 

(1,680)

      Ply Gem Holdings, Inc.      (30,290 ) 

(490)

      Stratasys Ltd.      (66,003 ) 

(1,510)

      Team, Inc.      (63,933 ) 

(1,840)

      Teekay Offshore Partners LP      (60,886 ) 

(3,500)

      Titan International, Inc.      (62,930 ) 

(3,830)

      UTi Worldwide, Inc.      (67,255 ) 

(2,920)

      Westport Innovations, Inc.      (57,261 ) 
       

 

 

  
          (706,752 ) 
       

 

 

  

 

See Notes to Financial Statements.

28

    www.jamesfunds.com

Table of Contents

James Long-Short Fund

  

Schedule of Investments

  December 31, 2013 (Unaudited)

 

Shares           Value  

 

  
     Technology-(17.0)%   

(1,570)

      21Vianet Group, Inc., ADR                  $(36,926)   

(3,980)

      Allscripts Healthcare Solutions, Inc.      (61,531)   

(2,280)

      Angie’s List, Inc.      (34,542)   

(4,820)

      Applied Micro Circuits Corp.      (64,492)   

(3,410)

      Aruba Networks, Inc.      (61,039)   

(450)

      Athenahealth, Inc.      (60,525)   

(1,900)

      AutoNavi Holdings Ltd., ADR      (27,075)   

(850)

      BioMarin Pharmaceutical, Inc.      (59,729)   

(1,130)

      BroadSoft, Inc.      (30,894)   

(2,190)

      Celldex Therapeutics, Inc.      (53,020)   

(620)

      Concur Technologies, Inc.      (63,972)   

(570)

      Cornerstone OnDemand, Inc.      (30,404)   

(800)

      Crown Castle International Corp.      (58,744)   

(6,280)

      Cypress Semiconductor Corp.      (65,940)   

(1,020)

      Ellie Mae, Inc.      (27,407)   

(10,220)

      Exelixis, Inc.      (62,649)   

(1,710)

      Fortinet, Inc.      (32,712)   

(1,240)

      Foundation Medicine, Inc.      (29,537)   

(2,890)

      Fusion-io, Inc.      (25,750)   

(990)

      Gigamon, Inc.      (27,799)   

(2,640)

      HMS Holdings Corp.      (60,007)   

(11,050)

      Idenix Pharmaceuticals, Inc.      (66,079)   

(650)

      Imperva, Inc.      (31,284)   

(1,300)

      InterXion Holding NV      (30,693)   

(2,520)

      Ironwood Pharmaceuticals, Inc.      (29,257)   

(4,940)

      JDS Uniphase Corp.      (64,121)   

(2,690)

      Jive Software, Inc.      (30,262)   

(4,090)

      Keryx Biopharmaceuticals, Inc.      (52,966)   

(5,090)

      LivePerson, Inc.      (75,434)   

(860)

      LogMeIn, Inc.      (28,853)   

(1,810)

      MakeMyTrip, Ltd.      (34,861)   

(1,560)

      Mellanox Technologies Ltd.      (62,353)   

(4,450)

      MiMedx Group, Inc.      (38,893)   

(620)

      NetSuite, Inc.      (63,872)   

(1,000)

      Ophthotech Corp.      (32,350)   

(570)

      Palo Alto Networks, Inc.      (32,758)   

(5,620)

      Polycom, Inc.      (63,113)   

(1,570)

      Polypore International, Inc.      (61,073)   

(1,160)

      Qlik Technologies, Inc.      (30,891)   

(1,610)

      Rackspace Hosting, Inc.      (62,999)   

(2,150)

      Ruckus Wireless, Inc.      (30,530)   

(1,160)

      Salesforce.com, Inc.      (64,020)   

(3,240)

      Sarepta Therapeutics, Inc.      (65,999)   

(3,400)

      Scientific Games Corp., Class A      (57,562)   

(540)

      ServiceNow, Inc.      (30,245)   

(1,420)

      Silver Spring Networks, Inc.      (29,820)   

(2,560)

      Spectranetics Corp.      (64,000)   

(400)

      Splunk, Inc.      (27,468)   

(990)

      Synageva BioPharma Corp.      (64,073)   

(1,820)

      Tangoe, Inc.      (32,778)   

(3,070)

      Tessera Technologies, Inc.      (60,510)   

(900)

      Textura Corp.      (26,946)   

(2,250)

      T-Mobile US, Inc.      (75,690)   

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

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Table of Contents

Schedule of Investments

  

James Long-Short Fund

December 31, 2013 (Unaudited)  

 

Shares           Value  

 

  
     Technology (continued)   

(2,110)

      tw telecom, Inc.                  $(64,292)   

(2,280)

      Ultratech, Inc.      (66,120)   

(1,870)

      Veeco Instruments, Inc.      (61,542)   

(860)

      Vertex Pharmaceuticals, Inc.      (63,898)   

(3,060)

      VirnetX Holding Corp.      (59,395)   

(3,580)

      Vivus, Inc.      (32,506)   

(1,020)

      Youku, Inc., ADR      (30,906)   
       

 

 

  
          (2,875,106)   
       

 

 

  
     Utilities-(0.7)%   

(3,150)

      Calpine Corp.      (61,457)   

(3,500)

      Comstock Resources, Inc.      (64,015)   
       

 

 

  
          (125,472)   
       

 

 

  

TOTAL COMMON STOCKS SOLD SHORT

      (7,477,683)   
       

 

 

  

TOTAL SECURITIES SOLD SHORT-(44.1)%

(Proceeds $7,026,311)

      $(7,477,683)   
       

 

 

  
       

 

 

  

Percentages shown are based on Net Assets.

 

* 

Non-income producing security.

(a) 

Security position is either entirely or partially held in a segregated account as collateral for securities sold short, aggregating a total market value of $12,614,751.

ADR - American Depositary Receipt

ETF - Exchange Traded Fund

LLC - Limited Liability Company

LP - Limited Partnership

Ltd. - Limited

NV - Naamloze Vennootschap is the Dutch term for a public limited liability corporation

PLC - Public Limited Company

REIT - Real Estate Investment Trust

SAB de CV - Sociedad Anonima de Capital Variable

S&P - Standard & Poor’s

SPDR - Standard & Poor’s Depositary Receipts

 

See Notes to Financial Statements.

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Table of Contents

James Advantage Funds

  

Statements of Assets and Liabilities

  December 31, 2013 (Unaudited)

 

 

    

James Balanced:
Golden Rainbow

Fund

    

James Small Cap

Fund

     James Mid Cap
Fund		     

James Micro Cap

Fund

     James Long-Short
Fund		  

 

  

ASSETS:

            

Investment securities:

            

At cost

    $ 2,371,409,480      $ 102,039,298      $ 11,179,473       $ 10,301,496      $ 16,384,159   
  

 

 

  

At value

    $ 2,813,056,231      $ 157,559,575      $ 17,675,963       $ 16,800,448      $ 21,302,514   

Segregated cash with brokers

      –        –        –         –        3,157,816   

Cash

      24,936        –        –         –        –   

Dividends and interest receivable

      9,182,137        110,540        18,644         3,596        16,762   

Receivable for capital shares sold

      6,711,776        264,371        –         –        –   

Other assets

      129,338        –        –         –        –   

 

  

Total Assets

      2,829,104,418        157,934,486        17,694,607         16,804,044        24,477,092   

 

  

LIABILITIES:

            

Payable for securities sold short (proceeds $7,026,311)

      –        –        –         –        7,477,683   

Payable for dividends on securities sold short

      –        –        –         –        14,154   

Payable for capital shares redeemed

      2,831,690        45,315        –         107,200        –   

Payable for securities purchased

      4,983,052        –        –         –        –   

Accrued expenses:

            

Management fees

      1,552,874        161,437        18,284         20,501        17,441   

12b-1 distribution and service fees

      442,320        32,370        3,663         –        3,500   

Trustee fees

      4,481        87        16         4        15   

Other payables

      330,698        –        –         –        –   

 

  

Total Liabilities

      10,145,115        239,209        21,963         127,705        7,512,793   

 

  

Net Assets

    $ 2,818,959,303      $ 157,695,277      $ 17,672,644       $ 16,676,339      $ 16,964,299   

 

  

NET ASSETS CONSIST OF:

  

         

Paid-in capital

    $ 2,381,484,336      $ 133,265,863      $ 11,113,480       $ 11,078,868      $ 14,240,112   

Accumulated net investment income/(loss)

      (341,712 )      (837,663 )      16,730         (42,684 )      (52,463 ) 

Accumulated net realized gain/(loss) on investments, securities sold short and translation of assets and liabilities denominated in foreign currency

      (3,817,812 )      (30,253,200 )      45,943         (858,797 )      (1,690,333 ) 

Net unrealized appreciation on investments, securities sold short and translation of assets and liabilities denominated in foreign currency

      441,634,491        55,520,277        6,496,491         6,498,952        4,466,983   

 

  

Net Assets

    $ 2,818,959,303      $ 157,695,277      $ 17,672,644       $ 16,676,339      $ 16,964,299   

 

  

 

See Notes to Financial Statements.   

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Table of Contents

Statements of Assets and Liabilities

 

James Advantage Funds

December 31, 2013 (Unaudited)  

 

    

James Balanced:
Golden Rainbow

Fund

      James Small Cap
Fund		      James Mid Cap
Fund		      James Micro Cap
Fund		      James Long-Short
Fund		  

 

  

PRICING OF RETAIL CLASS SHARES(a):

 

            

Net assets

    $ 2,124,674,328      $ 157,695,277       $ 17,672,644       $ 16,676,339       $ 16,964,299   

Shares of beneficial interest outstanding (unlimited number of shares authorized, no par)

      88,417,064        4,749,941         1,173,148        969,668         1,315,838   

 

  

Net assets value, offering price and redemption price per share

    $ 24.03      $ 33.20       $ 15.06       $ 17.20       $ 12.89   

 

  

PRICING OF INSTITUTIONAL CLASS SHARES:

 

         

Net assets

    $ 694,284,975        N/A        N/A        N/A        N/A  

Shares of beneficial interest outstanding (unlimited number of shares authorized, no par)

      29,148,515        N/A        N/A        N/A        N/A  

 

  

Net assets value, offering price and redemption price per share

    $ 23.82        N/A        N/A        N/A        N/A  

 

  

 

(a)

James Small Cap Fund, James Mid Cap Fund, James Micro Cap Fund, and James Long-Short Fund do not have a share class and will be presented as Retail Class shares throughout this semi annual report for financial reporting presentation purposes only. 

 

See Notes to Financial Statements.

   

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James Advantage Funds

  

Statements of Operations

  For the Six Months Ended December 31, 2013 (Unaudited)

 

 

    

James Balanced:
Golden Rainbow

Fund

    

James Small Cap

Fund

      James Mid Cap
Fund		     

James Micro Cap

Fund

     James Long-Short
Fund		  

 

  

INVESTMENT INCOME:

  

        

Dividends (Net of withholding taxes of $131,486, $419, $0, $286 and $0, respectively)

    $ 13,356,733      $ 1,273,534       $ 136,078       $ 104,580      $ 184,169   

Interest

      12,401,945        525         32         –        –   

 

  

Total Investment Income

      25,758,678        1,274,059         136,110         104,580        184,169   

 

  

EXPENSES:

  

        

Management fees

      8,629,658        979,553         99,254         105,636        97,999   

12b-1 distribution and service fees - Retail Class

      2,440,790        196,388         19,897         –        19,647   

Dividend and interest expense on securities sold short

      –        –         –         –        79,406   

Administration fee

      517,129        –         –         –        –   

Transfer agent fee

      139,404        –         –         –        –   

Interest expense

      –        –         –         –        11,375   

Custodian fees

      97,773        –         –         –        –   

Professional fees

      92,452        –         –         –        –   

Trustee fees

      39,683        2,385         228         182        234   

Registration fees

      139,113        –         –         –        –   

Shareholder report printing and mailing

      86,961        –         –         –        –   

Other expenses

      48,398        –         –         –        –   

 

  

Total Expenses

      12,231,361        1,178,326         119,379         105,818        208,661   

 

  

Net Investment Income/(Loss)

      13,527,317        95,733         16,731         (1,238 )      (24,492 ) 

 

  

REALIZED AND UNREALIZED GAIN ON INVESTMENTS:

  

        

Net realized gain/(loss) from:

             

Investments

      (769,354 )      11,948,402         45,956         319,327        80,042   

Securities sold short

      –        –         –         –        (720,664 ) 

Foreign currency transactions

      (30,212 )      –         –         –        –   

Net change in unrealized appreciation on investments

      188,487,016        13,955,153         2,803,885         2,686,524        2,530,328   

Net change in unrealized depreciation on securities sold short

      –        –         –         –        (421,615 ) 

Net change in unrealized appreciation on foreign currency translation

      26,625        –         –         –        –   

 

  

Net Realized and Unrealized Gain on Investments

      187,714,075        25,903,555         2,849,841         3,005,851        1,468,091   

 

  

Net Increase in Net Assets Resulting from Operations

    $ 201,241,392      $ 25,999,288       $ 2,866,572       $ 3,004,613      $ 1,443,599   

 

  

 

See Notes to Financial Statements.

   

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Statements of Changes in Net Assets

  

James Balanced: Golden Rainbow Fund

 

 

 

    

 

 

     For the Six
Months Ended
December 31, 2013
(Unaudited)		      For the
Year Ended
June 30, 2013		  

 

  

FROM OPERATIONS:

      

Net investment income

    $ 13,527,317       $ 27,920,428   

Net realized gain/(loss) from investments and foreign currency transactions

      (799,566)         36,755,050   

Net change in unrealized appreciation on investments and foreign currency translation

      188,513,641         93,139,941   

 

  

Net Increase in net assets resulting from operations

      201,241,392         157,815,419   

 

  

DISTRIBUTIONS TO SHAREHOLDERS:

      

Retail Class:

      

From net investment income

      (9,780,483)         (19,795,813)   

From net realized gain on investments

      (20,059,390)         (9,278,093)   

Institutional Class:

      

From net investment income

      (4,032,087)         (8,557,617)   

From net realized gain on investments

      (6,601,353)         (2,721,986)   

 

  

Decrease in net assets from distributions to shareholders

      (40,473,313)         (40,353,509)   

 

  

CAPITAL SHARE TRANSACTIONS:

      

Retail Class Shares:

      

Proceeds from shares sold

      508,190,750         720,893,867   

Net asset value of shares issued in reinvestment of distributions to shareholders

      28,763,396         27,565,964   

Payments for shares redeemed

      (269,236,023)         (356,189,244)   

 

  

Net Increase in net assets from Retail Class capital share transactions

      267,718,123         392,270,587   

 

  

Institutional Class Shares:

      

Proceeds from shares sold

      179,576,920         309,550,391   

Net asset value of shares issued in reinvestment of distributions to shareholders

      6,106,675         6,079,749   

Payments for shares redeemed

      (86,711,837)         (87,819,543)   

 

  

Net Increase in net assets from Institutional Class capital share transactions

      98,971,758         227,810,597   

 

  

Total Increase in Net Assets

      527,457,960         737,543,094   

 

  

NET ASSETS:

      

Beginning of period

      2,291,501,343         1,553,958,249   

 

  

End of period

    $     2,818,959,303       $     2,291,501,343   

 

  

Accumulated Net Investment Loss

    $ (341,712)       $ (56,459)   

 

See Notes to Financial Statements.

   

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James Balanced: Golden Rainbow Fund

  

Statements of Changes in Net Assets

 

 

     For the Six
Months Ended
December 31, 2013
(Unaudited)		      For the
Year Ended
June 30, 2013		  

 

  

SUMMARY OF CAPITAL SHARE ACTIVITY:

      

Retail Class Shares:

      

Shares sold

      21,786,716         32,075,023   

Shares issued in reinvestment of distributions to shareholders

      1,216,301         1,257,838   

Shares redeemed

      (11,571,242)         (16,030,864)   

 

  

Net Increase in shares outstanding

      11,431,775         17,301,997   

 

  

Shares outstanding, beginning of period

      76,985,289         59,683,292   

 

  

Shares outstanding, end of period

      88,417,064         76,985,289   

 

  

Institutional Class Shares:

      

Shares sold

      7,771,000         13,915,324   

Shares issued in reinvestment of distributions to shareholders

      260,503         277,752   

Shares redeemed

      (3,749,459)         (3,966,673)   

 

  

Net Increase in shares outstanding

      4,282,044         10,226,403   

 

  

Shares outstanding, beginning of period

      24,866,471         14,640,068   

 

  

Shares outstanding, end of period

      29,148,515         24,866,471   

 

  

 

See Notes to Financial Statements.

   

Semi-Annual Report  |  December 31, 2013

    35

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Statements of Changes in Net Assets

  

James Small Cap Fund

 

 

     For the Six
Months Ended
December 31, 2013
(Unaudited)		      For the
Year Ended
June 30, 2013		  

 

  

FROM OPERATIONS:

      

Net investment income

    $ 95,733       $ 1,948,262   

Net realized gain from investments

      11,948,402         4,647,983   

Net change in unrealized appreciation on investments

      13,955,153         21,553,320   

 

  

Net Increase in net assets resulting from operations

      25,999,288         28,149,565   

 

  

DISTRIBUTIONS TO SHAREHOLDERS:

      

Retail Class:

      

From net investment income

      (4,195,368)         (2,605,549)   

 

  

Decrease in net assets from distributions to shareholders

      (4,195,368)         (2,605,549)   

 

  

CAPITAL SHARE TRANSACTIONS:

      

Retail Class Shares:

      

Proceeds from shares sold

      28,212,682         57,572,635   

Net asset value of shares issued in reinvestment of distributions to shareholders

      3,187,999         2,207,916   

Payments for shares redeemed

      (56,780,529)         (58,780,402)   

 

  

Net Increase/(Decrease) in net assets from Retail Class capital share transactions

      (25,379,848)         1,000,149   

 

  

Total Increase/(Decrease) in Net Assets

      (3,575,928)         26,544,165   

 

  

NET ASSETS:

      

Beginning of period

      161,271,205         134,727,040   

 

  

End of period

    $ 157,695,277       $ 161,271,205   

 

  

Accumulated Net Investment Income/(Loss)

    $ (837,663)       $ 3,261,972   

SUMMARY OF CAPITAL SHARE ACTIVITY:

      

Retail Class Shares:

      

Shares sold

      905,638         2,172,515   

Shares issued in reinvestment of distributions to shareholders

      96,753         91,615   

Shares redeemed

      (1,879,627)         (2,276,226)   

 

  

Net Decrease in shares outstanding

      (877,236)         (12,096)   

 

  

Shares outstanding, beginning of period

      5,627,177         5,639,273   

 

  

Shares outstanding, end of period

      4,749,941         5,627,177   

 

  

 

See Notes to Financial Statements.

   

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James Mid Cap Fund

  

Statements of Changes in Net Assets

 

 

     For the Six
Months Ended
December 31, 2013
(Unaudited)		     

For the

Year Ended
June 30, 2013

  

 

  

FROM OPERATIONS:

      

Net investment income

    $ 16,731      $ 90,389  

Net realized gain from investments

      45,956        641,430  

Net change in unrealized appreciation on investments

      2,803,885        2,031,821  

 

  

Net Increase in net assets resulting from operations

      2,866,572        2,763,640  

 

  

DISTRIBUTIONS TO SHAREHOLDERS:

      

Retail Class:

      

From net investment income

      (44,965)        (40,000)  

From net realized gain on investments

      (445,588)        –  

 

  

Decrease in net assets from distributions to shareholders

      (490,553)        (40,000)  

 

  

CAPITAL SHARE TRANSACTIONS:

      

Retail Class Shares:

      

Proceeds from shares sold

      1,643,355        2,503,329  

Net asset value of shares issued in reinvestment of distributions to shareholders

      445,408        37,264  

Payments for shares redeemed

      (1,434,962)        (3,278,601)  

 

  

Net Increase/(Decrease) in net assets from Retail Class capital share transactions

      653,801        (738,008)  

 

  

Total Increase in Net Assets

      3,029,820        1,985,632  

 

  

NET ASSETS:

      

Beginning of period

      14,642,824        12,657,192  

 

  

End of period

    $ 17,672,644      $ 14,642,824  

 

  

 

  

Accumulated Net Investment Income

    $ 16,730      $ 44,964  

SUMMARY OF CAPITAL SHARE ACTIVITY:

      

Retail Class Shares:

      

Shares sold

      116,500        211,092  

Shares issued in reinvestment of distributions to shareholders

      30,687        3,238  

Shares redeemed

      (103,430)        (268,737)  

 

  

Net Increase/(Decrease) in shares outstanding

      43,757        (54,407)  

 

  

Shares outstanding, beginning of period

      1,129,391        1,183,798  

 

  

Shares outstanding, end of period

      1,173,148        1,129,391  

 

  

 

  

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

    37

Table of Contents

Statements of Changes in Net Assets

  

James Micro Cap Fund

 

 

    

For the Six

Months Ended
December 31, 2013
(Unaudited)

     

For the

Year Ended
June 30, 2013

  

 

  

FROM OPERATIONS:

      

Net investment income/(loss)

    $ (1,238)       $ 122,321   

Net realized gain/(loss) from investments

      319,327         (218,660)   

Net change in unrealized appreciation on investments

      2,686,524         2,177,958   

 

  

Net Increase in net assets resulting from operations

      3,004,613         2,081,619   

 

  

DISTRIBUTIONS TO SHAREHOLDERS:

      

Retail Class:

      

From net investment income

      (14,357)         (119,999)   

 

  

Decrease in net assets from distributions to shareholders

      (14,357)         (119,999)   

 

  

CAPITAL SHARE TRANSACTIONS:

      

Retail Class Shares:

      

Proceeds from shares sold

      3,247,659         2,469,575   

Net asset value of shares issued in reinvestment of distributions to shareholders

      13,928         111,984   

Payments for shares redeemed, net of redemption fees

      (1,392,331)         (2,899,165)   

 

  

Net Increase/(Decrease) in net assets from Retail Class capital share transactions

      1,869,256         (317,606)   

 

  

Total Increase in Net Assets

      4,859,512         1,644,014   

 

  

NET ASSETS:

      

Beginning of period

      11,816,827         10,172,813   

 

  

End of period

    $ 16,676,339       $ 11,816,827   

 

  

 

  

Accumulated Net Investment Loss

    $ (42,684)       $ (27,089)   

SUMMARY OF CAPITAL SHARE ACTIVITY:

      

Retail Class Shares:

      

Shares sold

      212,446         203,697   

Shares issued in reinvestment of distributions to shareholders

      815         9,780   

Shares redeemed

      (90,236)         (235,683)   

 

  

Net Increase/(Decrease) in shares outstanding

      123,025         (22,206)   

 

  

Shares outstanding, beginning of period

      846,643         868,849   

 

  

Shares outstanding, end of period

      969,668         846,643   

 

  

 

  

 

See Notes to Financial Statements.

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Table of Contents

James Long-Short Fund

  

Statements of Changes in Net Assets

 

 

    

For the Six

Months Ended

December 31, 2013
(Unaudited)

     

For the

Year Ended
June 30, 2013

  

 

  

FROM OPERATIONS:

      

Net investment income/(loss)

    $ (24,492)       $ 37,462   

Net realized loss from investments

      (640,622)         (319,645)   

Net change in unrealized appreciation on investments and securities sold short

      2,108,713         1,870,318   

 

  

Net Increase in net assets resulting from operations

      1,443,599         1,588,135   

 

  

DISTRIBUTIONS TO SHAREHOLDERS:

      

Retail Class:

      

From net investment income

      –         (35,250)   

 

  

Decrease in net assets from distributions to shareholders

      –         (35,250)   

 

  

CAPITAL SHARE TRANSACTIONS:

      

Retail Class Shares:

      

Proceeds from shares sold

      2,874,328         6,372,569   

Net asset value of shares issued in reinvestment of distributions to shareholders

      –         34,844   

Payments for shares redeemed

      (3,047,888)         (1,425,602)   

 

  

Net Increase/(Decrease) in net assets from Retail Class capital share transactions

      (173,560)         4,981,811   

 

  

Total Increase in Net Assets

      1,270,039         6,534,696   

 

  

NET ASSETS:

      

Beginning of period

      15,694,260         9,159,564   

 

  

End of period

    $ 16,964,299       $ 15,694,260   

 

  

 

  

Accumulated Net Investment Loss

    $ (52,463)       $ (27,971)   

SUMMARY OF CAPITAL SHARE ACTIVITY:

      

Retail Class Shares:

      

Shares sold

      234,837         559,409   

Shares issued in reinvestment of distributions to shareholders

      –         3,433   

Shares redeemed

      (260,241)         (138,688)   

 

  

Net Increase/(Decrease) in shares outstanding

      (25,404)         424,154   

 

  

Shares outstanding, beginning of period

      1,341,242         917,088   

 

  

Shares outstanding, end of period

      1,315,838         1,341,242   

 

  

 

  

 

See Notes to Financial Statements.

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Table of Contents

Financial Highlights

  

James Balanced: Golden Rainbow Fund –

Retail Class

For a share outstanding throughout the periods indicated.

 

   

For the

Six Months

Ended
December 31, 2013
(Unaudited)

    

For the

Year Ended
June 30, 2013

    

For the

Year Ended
June 30, 2012

     For the
Year Ended
June 30, 2011		     For the
Year Ended
June 30, 2010		     For the
Year Ended
June 30, 2009		  

 

  

Net asset value - beginning of period

   $ 22.55      $ 20.93      $ 20.66      $ 18.32      $ 16.69      $ 18.09   

Income/(Loss) from investment
operations:

            

Net investment income

     0.12 (a)      0.32 (a)      0.25        0.24        0.30        0.28   

Net realized and unrealized gain/(loss)

     1.70        1.75        0.55        2.50        1.63        (1.40)   

 

  

Total from investment operations

     1.82        2.07        0.80        2.74        1.93        (1.12)   

 

  

Less distributions:

            

From net investment income

     (0.11)        (0.30)        (0.23)        (0.24)        (0.30)        (0.28)   

From net realized gain on investments

     (0.23)        (0.15)        (0.30)        (0.16)        –        (0.00) (b) 

 

  

Total distributions

     (0.34)        (0.45)        (0.53)        (0.40)        (0.30)        (0.28)   

 

  

Net asset value at end of period

   $ 24.03      $ 22.55      $ 20.93      $ 20.66      $ 18.32      $ 16.69   

 

  

 

  

Total return

     8.13 %(c)      9.98 %      3.98 %      15.01 %      11.60 %      (6.19) % 

Net assets, end of period (in thousands)

   $ 2,124,674      $ 1,735,736      $ 1,249,228      $ 937,696      $ 572,484      $ 537,358   

Ratios/Supplemental Data:

            

Ratio of net expenses to average net assets

     1.01 %(d)      1.04 %      1.07 %      1.12 %      1.19 %      1.16 % 

Ratio of net investment income to average net assets

     0.98 %(d)      1.45 %      1.26 %      1.27 %      1.68 %      1.68 % 

Portfolio turnover rate

     15 %(c)      58 %      36 %      36 %      31 %      72 % 

 

(a)

Calculated using the average shares method.

(b)

Amount rounds to less than $(0.005) per share.

(c) 

Not Annualized.

(d)

Annualized.

 

See Notes to Financial Statements.

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Table of Contents

James Balanced: Golden Rainbow Fund –

Institutional Class

  

Financial Highlights

  For a share outstanding throughout the periods indicated.

 

   

For the

Six Months

Ended
December 31, 2013
(Unaudited)

     For the
Year Ended
June 30, 2013		     For the
Year Ended
June 30, 2012		     For the
Year Ended
June 30, 2011		     For the
Year Ended
June 30, 2010		     For the
Period Ended
June 30, 2009(a)		  

 

  

Net asset value - beginning of period

   $ 22.35      $ 20.81      $ 20.61      $ 18.33      $ 16.69      $ 14.80   

Income from investment operations:

            

Net investment income

     0.14 (b)      0.38 (b)      0.33        0.32        0.34        0.09   

Net realized and unrealized gain

     1.70        1.73        0.52        2.47        1.65        1.94   

 

  

Total from investment operations

     1.84        2.11        0.85        2.79        1.99        2.03   

 

  

Less distributions:

            

From net investment income

     (0.14)        (0.42)        (0.35)        (0.35)        (0.35)        (0.14)   

From net realized gain on investments

     (0.23)        (0.15)        (0.30)        (0.16)        –        –   

 

  

Total distributions

     (0.37)        (0.57)        (0.65)        (0.51)        (0.35)        (0.14)   

 

  

Paid-in capital from redemption fees

     –        0.00 (c)      –        –        –        –   

 

  

Net asset value at end of period

   $ 23.82      $ 22.35      $ 20.81      $ 20.61      $ 18.33      $ 16.69   

 

  

 

  

Total return

     8.29 %(d)      10.26 %      4.22 %      15.27 %      11.94 %      13.75 %(d) 

Net assets, end of period (in thousands)

  $ 694,285      $ 555,766      $ 304,731      $ 130,870      $ 60,693      $ 115   

Ratios/Supplemental Data:

            

Ratio of net expenses to average net assets

     0.76 %(e)      0.79 %      0.82 %      0.87 %      1.06 %      0.95 %(e) 

Ratio of net investment income to average net assets

     1.23 %(e)      1.71 %      1.52 %      1.52 %      2.06 %      1.63 %(e) 

Portfolio turnover rate

     15 %(d)      58 %      36 %      36 %      31 %      72 %(d) 

 

(a) 

Share class commenced operations on March 2, 2009.

(b) 

Calculated using the average shares method.

(c) 

Amount rounds to less than $0.005 per share.

(d) 

Not Annualized.

(e) 

Annualized.

 

See Notes to Financial Statements.

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Table of Contents

Financial Highlights

 

James Small Cap Fund

For a share outstanding throughout the periods indicated.  

 

   

For the

Six Months

Ended
December 31, 2013
(Unaudited)

     For the
Year Ended
June 30, 2013		     For the
Year Ended
June 30, 2012		     For the
Year Ended
June 30, 2011		    

For the

Year Ended
June 30, 2010

     For the
Year Ended
June 30, 2009		  

 

  

Net asset value - beginning of period

   $ 28.66      $ 23.89      $ 23.88      $ 17.51      $ 14.18      $ 20.04   

Income/(Loss) from investment operations:

  

          

Net investment income

     0.02 (a)      0.36 (a)      0.15        0.05        0.02        0.06   

Net realized and unrealized gain/(loss)

     5.42        4.92        (0.11 )      6.35        3.33        (5.86 ) 

 

  

Total from investment operations

     5.44        5.28        0.04        6.40        3.35        (5.80 ) 

 

  

Less distributions:

            

From net investment income

     (0.90 )      (0.51 )      (0.03 )      (0.03 )      –        (0.06 ) 

From net tax return of capital

     –        –        –        –        (0.02 )      –   

 

  

Total distributions

     (0.90 )      (0.51 )      (0.03 )      (0.03 )      (0.02 )      (0.06 ) 

 

  

Net asset value at end of period

   $ 33.20      $ 28.66      $ 23.89      $ 23.88      $ 17.51      $ 14.18   

 

  

Total return

     19.02% (b)      22.51%        0.16%        36.59%        23.61%        (28.91 )% 

Net assets, end of period (in thousands)

  $ 157,695      $ 161,271      $ 134,727      $ 81,505      $ 65,443      $ 99,801   

Ratios/Supplemental Data:

  

          

Ratio of net expenses to average net assets

     1.50% (c)      1.50%        1.50%        1.50%        1.50%        1.50%   

Ratio of net investment income to average net assets

     0.12% (c)      1.39%        0.58%        0.23%        0.08%        0.37%   

Portfolio turnover rate

     17 % (b)      41%        89%        60%        38%        46%   

 

(a) 

Calculated using the average shares method.

(b) 

Not Annualized.

(c) 

Annualized.

 

See Notes to Financial Statements.

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James Mid Cap Fund

 

Financial Highlights

  For a share outstanding throughout the periods indicated.

 

 

    

For the

Six Months

Ended
December 31, 2013
(Unaudited)

     For the
Year Ended
June 30, 2013		     For the
Year Ended
June 30, 2012		     For the
Year Ended
June 30, 2011		     For the
Year Ended
June 30, 2010		     For the
Year Ended
June 30, 2009		  

 

  

Net asset value - beginning of period

    $ 12.97      $ 10.69      $ 11.38      $ 8.59      $ 7.05      $ 10.66   

Income/(Loss) from investment operations:

             

Net investment income

      0.01 (a)      0.08 (a)      0.04        0.01        0.02        0.03   

Net realized and unrealized gain/(loss)

      2.51        2.23        (0.64 )      2.82        1.54        (3.61 ) 

 

  

Total from investment operations

      2.52        2.31        (0.60 )      2.83        1.56        (3.58 ) 

 

  

Less distributions:

             

From net investment income

      (0.04 )      (0.03 )      (0.09 )      (0.04 )      (0.02 )      (0.03 ) 

From net realized gain on investments

      (0.39 )      –        –        –        –        –   

 

  

Total distributions

      (0.43 )      (0.03 )      (0.09 )      (0.04 )      (0.02 )      (0.03 ) 

 

  

Net asset value at end of period

    $ 15.06      $ 12.97      $ 10.69      $ 11.38      $ 8.59      $ 7.05   

 

  

Total return

      19.55 %(b)      21.68 %      (5.26 )%      32.97 %      22.13 %      (33.51 )% 

Net assets, end of period (in thousands)

   $ 17,673      $ 14,643      $ 12,657      $ 13,403      $ 9,497      $ 4,438   

Ratios/Supplemental Data:

             

Ratio of net expenses to average net assets

      1.50 %(c)      1.50 %      1.50 %      1.50 %      1.50 %      1.50 % 

Ratio of net investment income to average net assets

      0.21 %(c)      0.64 %      0.32 %      0.13 %      0.24 %      0.48 % 

Portfolio turnover rate

      10  %(b)      26 %      36 %      56 %      37 %      38 % 

 

(a) 

Calculated using the average shares method.

(b) 

Not Annualized.

(c) 

Annualized.

 

See Notes to Financial Statements.

Semi-Annual Report  |  December 31, 2013

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Table of Contents

Financial Highlights

  

James Micro Cap Fund

For a share outstanding throughout the periods indicated.  

 

 

    

For the

Six Months

Ended
December 31, 2013
(Unaudited)

     For the
Year Ended
June 30, 2013		     For the
Year Ended
June 30, 2012		     For the
Year Ended
June 30, 2011(a)		  

 

  

Net asset value - beginning of period

    $ 13.96      $ 11.71      $ 11.91      $ 10.00   

Income/(Loss) from investment operations:

  

      

Net investment income/(loss)

      (0.00) (b)(c)      0.14 (b)      (0.01)        (0.03)   

Net realized and unrealized gain/(loss)

      3.25        2.25        (0.13)        1.94   

 

  

Total from investment operations

      3.25        2.39        (0.14)        1.91   

 

  

Less distributions:

         

From net investment income

      (0.01)        (0.14)        –        –   

From net realized gain on investments

      –        –        (0.06)        –   

 

  

Total distributions

      (0.01)        (0.14)        (0.06)        –   

 

  

Paid-in capital from redemption fees

      0.00 (d)      0.00 (d)      0.00 (d)      –   

 

  

Net asset value at end of period

    $ 17.20      $ 13.96      $ 11.71      $ 11.91   

 

  

Total return

      23.32 %(e)      20.64 %      (1.15) %      19.10 % 

Net assets, end of period (in thousands)

   $ 16,676      $ 11,817      $ 10,173      $ 9,745   

Ratios/Supplemental Data:

         

Ratio of net expenses to average net assets

      1.50 %(f)      1.50 %      1.50 %      1.50 % 

Ratio of net investment income/(loss) to average net assets

      (0.02) %(f)      1.12 %      (0.14) %      (0.31) % 

Portfolio turnover rate

      16  %(e)      46 %      85 %      69 % 

 

(a) 

Fund commenced operations on July 1, 2010.

(b) 

Calculated using the average shares method.

(c) 

Amount rounds to less than ($0.005) per share.

(d) 

Amount rounds to less than $0.005 per share.

(e) 

Not Annualized.

(f) 

Annualized.

 

See Notes to Financial Statements.

   

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James Long-Short Fund

  

Financial Highlights

  For a share outstanding throughout the periods indicated.

 

 

    

For the

Six Months

Ended
December 31, 2013
(Unaudited)

     For the
Year Ended
June 30, 2013		    

For the

Year Ended
June 30, 2012

     For the
Period Ended
June 30, 2011(a)		  

 

  

Net asset value - beginning of period

    $ 11.70      $ 9.99      $ 10.10      $ 10.00   

Income/(Loss) from investment operations:

  

      

Net investment income/(loss)

      (0.02) (b)      0.04 (b)      (0.04)        (0.00) (c) 

Net realized and unrealized gain/(loss)

      1.21        1.71        (0.05)        0.10   

 

  

Total from investment operations

      1.19        1.75        (0.09)        0.10   

 

  

Less distributions:

         

From net investment income

      –        (0.04)        (0.02)        –   

 

  

Total distributions

      –        (0.04)        (0.02)        –   

 

  

Net asset value at end of period

    $ 12.89      $ 11.70      $ 9.99      $ 10.10   

 

  

Total return

      10.17 %(d)      17.57 %      (0.93) %      1.00 %(d) 

Net assets, end of period (in thousands)

   $ 16,964      $ 15,694      $ 9,160      $ 10,718   

Ratios/Supplemental Data:

  

      

Ratio of net expenses to average net assets(e)

      2.66 %(f)      2.70 %      2.66 %      1.73 %(f) 

Ratio of net investment income/(loss) to average net assets

      (0.31) %(f)      0.35 %      (0.44) %      (1.03) %(f) 

Portfolio turnover rate

      51  %(d)      58 %      159 %      0 %(d) 

 

(a) 

Fund commenced operations on May 23, 2011.

(b) 

Calculated using the average shares method.

(c) 

Amount rounds to less than ($0.005) per share.

(d) 

Not Annualized.

(e) 

Dividend and interest expense on securities sold short and interest expense totaled 1.16% (annualized), 1.20%, 1.15% and 0.23% (annualized) of average net assets for the six months ended December 31, 2013, for the years ended June 30, 2013 and June 30, 2012 and for the period ended June 30, 2011, respectively.

(f) 

Annualized.

 

See Notes to Financial Statements.

   

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Notes to Financial Statements

  

James Advantage Funds

December 31, 2013 (Unaudited)

  

 

1. ORGANIZATION

 

The James Advantage Funds (the “Trust”) is an open-end management investment company that was organized as an Ohio business trust on August 29, 1997. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). James Balanced: Golden Rainbow Fund, James Small Cap Fund, James Mid Cap Fund and James Micro Cap Fund are each a diversified series of the Trust, and James Long-Short Fund is a non-diversified series of the Trust (individually a “Fund,” collectively the “Funds”). James Balanced: Golden Rainbow Fund was originally organized as a series of the Flagship Admiral Funds Inc., a Maryland corporation. On June 26, 1998, pursuant to an Agreement and Plan of Reorganization, James Balanced: Golden Rainbow Fund was restructured through a tax-free reorganization as a series of the Trust. The James Small Cap Fund commenced its public offering of shares on October 2, 1998. The James Mid Cap Fund commenced its public offering of shares on June 30, 2006. Effective March 2, 2009, James Balanced: Golden Rainbow began offering a new class of shares: the Institutional Class. The initial class of shares is now referred to as the Retail Class. Each class of James Balanced: Golden Rainbow Fund represents an interest in the same portfolio of investments and has the same rights, but differs primarily in distribution fees and shareholder features. The Retail Class shares are subject to distribution (12b-1) fees but have a lower minimum investment requirement and offer certain shareholder services not available to Institutional Class shareholders. The Institutional Class shares are not subject to distribution (12b-1) fees and are available only through investment advisers and bank trust departments that have made arrangements for shares of all of their clients investing in the Fund to be held in an omnibus account (as well as other entities that are approved by management of the Trust). The James Micro Cap Fund commenced its public offering of shares on July 1, 2010. The James Long-Short Fund commenced its public offering of shares on May 23, 2011.

James Balanced: Golden Rainbow Fund seeks to provide total return through a combination of growth and income and preservation of capital in declining markets. The Fund seeks to achieve its objective by investing primarily in common stocks and/or debt securities that the Fund’s adviser, James Investment Research, Inc. (“James” or the “Adviser”), believes are undervalued.

James Small Cap Fund seeks to provide long-term capital appreciation. The Fund seeks to achieve its objective by investing primarily in common stocks of small capitalization companies. The Adviser defines small capitalization as those companies with market capitalizations at the time of purchase no larger than the stocks in the Fund’s benchmark, the Russell 2000® Index.

James Mid Cap Fund seeks to provide long-term capital appreciation. The Fund seeks to achieve its objective by investing primarily in common stocks of mid capitalization companies. The Adviser defines mid capitalization companies as those with market capitalizations at the time of purchase as $1 billion to $8 billion.

James Micro Cap Fund seeks to provide long-term capital appreciation. The Fund seeks to achieve its objective by investing

primarily in common stocks of micro capitalization companies. Micro capitalization companies are defined as those companies with market capitalizations at the time of purchase no larger than $250 million.

James Long-Short Fund seeks to provide long-term capital appreciation. The Fund seeks to achieve its objective by investing primarily in foreign and domestic equity securities that the Adviser believes are undervalued and more likely to appreciate, and by selling short equity securities that the Adviser believes are overvalued and more likely to depreciate. The Fund also may take long positions in domestic and foreign fixed income securities that the Adviser believes are more likely to appreciate in the interest rate and spread environment anticipated by the Adviser, and short positions in fixed income securities that the Adviser believes are more likely to depreciate in the interest rate and spread environment anticipated by the Adviser. The Fund seeks to achieve positive returns on both the long positions and short positions that it takes in various securities.

2. SIGNIFICANT ACCOUNTING POLICIES

 

The following is a summary of significant accounting policies followed by the Funds in preparation of their financial statements, in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Share Valuation

The net asset value per share of each Fund, other than the James Balanced: Golden Rainbow Fund, is calculated daily by dividing the total value of the Fund’s assets, less liabilities, by the number of shares outstanding. The net asset value per share of each class of shares of the James Balanced: Golden Rainbow Fund is calculated daily by dividing the total value of the Fund’s assets attributable to that class, less liabilities attributable to that class, by the number of outstanding shares of that class. The offering price and redemption price per share is equal to the net asset value per share, except that shares of the James Micro Cap Fund are subject to a redemption fee of 2% if redeemed within 180 days of purchase. Redemption fees received by the James Micro Cap Fund were $549 and $135 for the six months ended December 31, 2013 and year ended June 30, 2013, respectively. The redemption fee is reflected in the “Payment for shares redeemed, net of redemption fees” in the Statements of Changes in Net Assets.

Securities Valuation

Securities are valued at fair value. The Funds’ portfolio securities, including short positions, are valued as of the close of the New York Stock Exchange (“NYSE”) (generally, 4:00 p.m., Eastern time) on each day that the NYSE is open for business. Equity securities that are traded on any exchange, including closed-end funds and exchange-traded funds, are valued at the last quoted sale price on the exchange or market in which such securities are principally traded. Lacking a last sale price, a security is valued at its last bid price except when, in James’s opinion, the last bid price does not accurately reflect the current value of the security. Securities that are traded on the NASDAQ® over-the-counter market are valued at their NASDAQ® Official Closing Price (“NOCP”) for all NASDAQ® National Market (“NNM”) and NASDAQ® Capital Market® securities. When market

 

 

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James Advantage Funds

  

Notes to Financial Statements

  December 31, 2013 (Unaudited)

 

quotations are not readily available, if an event occurs afterthe close of the trading market (but before the time as of which a Fund calculates its net asset value) that materially affects a security’s value, when James determines that the market quotation does not accurately reflect the current value or when a non-144A restricted security is being valued, that security will be valued at its fair value as determined in good faith in conformity with guidelines adopted by and subject to review of the Board of Trustees.The Funds may use pricing services to determine market value for securities. Fixed income securities will be valued at evaluated prices provided by an independent, recognized pricing service, which determines valuations based upon market transactions for normal, institutional-size trading units of securities or a matrix method which considers yieldor price of comparable bonds provided by a pricing service.If the Adviser decides that a price provided by the pricing service does not accurately reflect the fair market value of the securities or when prices are not readily available from a pricing service, those securities will be priced at fair value as determined in good faith by the Adviser. Short-term investments in fixed-income securities with maturities of less than 60 days when acquired, or which subsequentlyare within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board of Trustees has determined will approximate fair value. Sharesof open-end investment companies are valued at net asset value.

For valuation purposes, quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents at the time of pricing the Funds. In computing the net asset value of the Funds by the fund accounting service provider,ALPS Fund Services, Inc., the values of foreign portfolio securities are generally based upon market quotations which, depending upon the exchange or market, may be last sale price, last bid price or the average of the last bidand asked prices as of, in each case, the close of the appropriate exchange or another designated time.

The calculation of the share price of each Fund that holds foreign securities in its portfolio does not take place contemporaneously with the determination of the values of many of the foreign portfolio securities used in such calculation. Events affecting the values of foreign portfolio securities that occur between the time their prices are determined and the calculation of a Fund’s share price will be taken into account by the Adviser, subject to review by the Board of Trustees, in the determination of the value of those securities.

In accordance with the Trust’s good faith pricing guidelines,James is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above. There is no single standard for determining fair value, since fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of an issue of securities being valued by the Adviser would appear to be the amount that the owner might reasonably expect to receive for them upon their current sale. Methods which are in accordance with this principle may, for example, be based on (i) a multiple of earnings, (ii) a discount from market of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers), or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods.

Various inputs are used in determining the value of the Funds’ investments. These inputs are summarized in the three broad levels listed below:

 

Level 1 -

  

Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date;

Level 2 -

  

Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputsother than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and

Level 3 -

  

Significant unobservable prices or inputs (including a Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, securities maturing within 60 days of the reporting date are valued using amortized cost, in accordance with rules under the 1940 Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.

 

 

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Notes to Financial Statements

  

James Advantage Funds

December 31, 2013 (Unaudited)  

 

The following is a summary of the inputs used to value the Funds’ investments as of December 31, 2013:

James Balanced: Golden Rainbow Fund

     Valuation Inputs         
  

 

 

     
Investments in Securities at Value*    Level 1      Level 2      Level 3      Total  

 

  

Common Stocks

    $ 1,498,454,432       $ –       $ –       $ 1,498,454,432   

Closed-End Funds

      2,365,380         –         –         2,365,380   

Exchange Traded Funds

      22,739,729         –         –         22,739,729   

Corporate Bonds

      –         203,828,016         –         203,828,016   

Mortgage Backed Securities

      –         27,947,127         –         27,947,127   

U.S. Government Agencies

      –         50,725,950         –         50,725,950   

U.S. Treasury Bonds & Notes

      746,993,572         –         –         746,993,572   

Foreign Bonds

      –         60,363,602         –         60,363,602   

Municipal Bonds

      –         92,316,362         –         92,316,362   

Short Term Investments

      107,322,061         –         –         107,322,061   

 

  

Total

    $ 2,377,875,174       $ 435,181,057       $ –       $ 2,813,056,231   

 

  

 

  

James Small Cap Fund

            
     Valuation Inputs         
  

 

 

     
Investments in Securities at Value*    Level 1      Level 2      Level 3      Total  

 

  

Common Stocks

    $ 152,320,008       $ –       $ –       $ 152,320,008   

Short Term Investments

      5,239,567         –         –         5,239,567   

 

  

Total

    $ 157,559,575       $ –       $ –       $ 157,559,575   

 

  

 

  

James Mid Cap Fund

            
     Valuation Inputs         
  

 

 

     
Investments in Securities at Value*    Level 1      Level 2      Level 3      Total  

 

  

Common Stocks

    $ 16,761,924       $ –       $ –       $ 16,761,924   

Short Term Investments

      914,039         –         –         914,039   

 

  

Total

    $ 17,675,963       $ –       $ –       $ 17,675,963   

 

  

 

  

James Micro Cap Fund

            
     Valuation Inputs         
  

 

 

     
Investments in Securities at Value*    Level 1      Level 2      Level 3      Total  

 

  

Common Stocks

    $ 16,096,505       $ –       $ –       $ 16,096,505   

Short Term Investments

      703,943         –         –         703,943   

 

  

Total

    $ 16,800,448       $ –       $ –       $ 16,800,448   

 

  

 

  

 

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Notes to Financial Statements

  December 31, 2013 (Unaudited)

 

James Long-Short Fund

     Valuation Inputs         
  

 

 

     
Investments in Securities at Value*    Level 1     Level 2      Level 3      Total  

 

  

Common Stocks

    $ 17,678,047      $ –       $ –       $ 17,678,047   

Exchange Traded Funds

      225,108        –         –         225,108   

Short Term Investments

      3,399,359        –         –         3,399,359   

 

  

Total

    $ 21,302,514      $ –       $ –       $ 21,302,514   

 

  

 

  
               
  

 

 

     
     Valuation Inputs         
  

 

 

     
Other Financial Instruments*    Level 1     Level 2      Level 3      Total  

 

  

Liabilities

           

Securities Sold Short

           

Common Stocks

    $ (7,477,683 )    $ –       $ –       $ (7,477,683 ) 

 

  

TOTAL

    $ (7,477,683 )    $ –       $ –       $ (7,477,683 ) 

 

  

 

  

* For detailed descriptions of sector and industry, see the accompanying Schedule of Investments.

For the six months ended December 31, 2013, the Funds did not have any significant transfers between Level 1 and Level 2 securities.

For the six months ended December 31, 2013, the Funds did not have any securities which used significant unobservable inputs (Level 3) used in determining fair value.

 

Investment Transactions

Investment transactions are recorded on a trade date basis. Gains and losses are determined using the specific identification method, which liquidates all losses first, before any gains. Securities purchased or sold on a when-issued or delayed delivery basis may have extended settlement periods. Any securities so purchased are subject to market fluctuation during this period. The James Balanced: Golden Rainbow Fund will instruct its custodian to segregate assets in a separate account with a current value at least equal to the amount of its when-issued and delayed delivery purchase commitments. As of December 31, 2013, the Funds did not hold when-issued securities or delayed delivery purchase commitments.

Withholding taxes on foreign dividends have been provided for in accordance with the Trust’s understanding of the applicable country’s tax rules and rates.

Foreign Currency Translation

The market value of investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the current exchange rate, provided by WM Reuters, at the close of each business day. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars based at the exchange rate on the date of the transaction.

Reported net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized and between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from the changes in the value of assets and liabilities including investments in securities at the reporting period, resulting from changes in the exchange rate.

Short Sales and Segregated Cash

The James Long-Short Fund may actively sell short equity and fixed income securities. Short sales are transactions in which the Fund sells a security it does not own in anticipation of a decline in the market value of that security. To complete such a transaction, the Fund must borrow the security to deliver to the buyer upon the short sale; the Fund is then obligated to replace the security borrowed by purchasing it in the open market at some later date.

The Fund will incur a loss if the market price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund will realize a gain if the security declines in value between those dates. If a security sold short pays a dividend while the Fund is short that security, the Fund will pay the dividend to the prime broker and record that amount as an expense.

All short sales are collateralized, as required by the Fund’s prime broker. The Fund maintains the collateral in segregated accounts consisting of cash and/or high-grade liquid assets sufficient to collateralize the market value of its short positions.

Investment Income

Dividend income and dividend expense on long securities and securities sold short are recorded on the ex-dividend date. Interest income is determined on the basis of interest accrued, adjusted for amortization of premiums and accretion of discounts on all debt securities. Amortization and accretion is calculated using the effective yield method.

Dividend income includes dividends earned on Real Estate Investment Trusts (“REITs”), which may include a return of capital. As such, important taxation issues may arise, which the Funds account for when information is provided by the issuing REIT.

Due to the actual character of dividends paid by REITs not being available until the end of the calendar year, the net investment income and long-term capital gains of the Funds can be different on the tax

 

 

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Notes to Financial Statements

  

James Advantage Funds

December 31, 2013 (Unaudited)  

 

return compared to this annual report. Substantial unanticipated levels of return of capital may affect the Funds’ earnings and profits from which distributions are made.

Distributions received from Limited Partnership investments of a Fund are usually recorded as a return of capital and are excluded from available income in the calculation of distributions paid by the Funds. Return of capital is recorded as a reduction to the cost of investments in the Statements of Assets and Liabilities and in the Schedule of Investments.

Dividends and Distributions to Shareholders

Net investment income, if any, is generally declared and distributed to shareholders of each Fund on at least an annual basis. Net realized capital gains from security transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to shareholders of net investment income and net realized capital gains are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.

Allocation of Income and Expense

Investment income earned, realized capital gains and losses, and unrealized appreciation and depreciation for the James Balanced: Golden Rainbow Fund is allocated daily to each class of shares based upon its proportionate share of total net assets of the Fund. Class-specific expenses are charged directly to the class incurring the expense. Common expenses, which are not attributable to a specific class, are allocated daily to each class of shares based upon its

proportionate share of total net assets of the Fund. Expenses not directly billed to a particular Fund are allocated proportionally among all Funds daily in relation to net assets of each Fund or another reasonable measure.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

Federal Income Taxes

The Funds generally intend to distribute all taxable income and capital gains to shareholders, if any, and to otherwise continue to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Therefore, no federal tax provision is required.

During the six months ended December 31, 2013, none of the Funds recorded a liability nor were there any disclosures required for any uncertain tax positions in the accompanying financial statements. The Funds file U.S. federal, state, and local tax returns as required. The Funds’ tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return for federal purposes and four years for most state returns. Tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.

 

 

The following information is computed on a tax basis for each item as of December 31, 2013:

 

    James Balanced:
Golden Rainbow
Fund		     James Small Cap
Fund		     James Mid Cap
Fund		     James Micro Cap
Fund		     James Long-Short
Fund		  

 

  

Tax cost of portfolio investments

   $ 2,372,117,253      $ 102,055,105      $ 11,179,473      $ 10,296,087      $ 16,544,490   

 

  

 

  

Gross unrealized appreciation

   $ 473,779,639      $ 56,287,731      $ 6,496,490      $ 6,557,074      $ 4,831,185   

Gross unrealized depreciation

     (32,840,661)        (783,261)        –        (52,713)        (73,161)   

Net appreciation of foreign currency and derivatives

     –        –        –        –        –   

 

  

Net unrealized appreciation

   $ 440,938,978      $ 55,504,470      $ 6,496,490      $ 6,504,361      $ 4,758,024   

 

  

 

  

The difference between the cost of portfolio investments on a tax basis and financial statement cost for the Funds is due primarily to the deferral of wash sale losses and to the differing treatment of certain investments under income tax regulations and GAAP.

The tax character of distributions paid for the year ended June 30, 2013 was as follows:

 

    James Balanced:
Golden Rainbow
Fund		     James Small Cap
Fund		     James Mid Cap
Fund		     James Micro Cap
Fund		     James Long-Short
Fund		  

 

  

Ordinary Income

   $ 28,110,016      $ 2,605,549      $ 40,000      $ 119,999      $ 35,250   

Long-Term Capital Gains

     12,243,493        –        –        –        –   

 

  

Total

   $ 40,353,509      $ 2,605,549      $ 40,000      $ 119,999      $ 35,250   

 

  

 

  

 

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Notes to Financial Statements

  December 31, 2013 (Unaudited)

 

Post-Enactment Capital Losses

The Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year limit on the use of capital loss carryforwards that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, capital losses incurred in the Funds’ taxable years beginning before the taxable year ended June 30, 2012 with an expiration date may not be used to offset capital gains until all net capital losses incurred in taxable years beginning with the taxable year ended June 30, 2012 without an expiration date have been utilized. As a result, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The Funds’ ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

During the year ended June 30, 2013, James Balanced: Golden Rainbow Fund and James Mid Cap Fund each utilized capital loss carryovers in the amount of $265,503 and $142,502, respectively.

Capital losses deferred to next tax year under the provisions of the Act were as follows:

 

      Short Term      Long Term  

James Small Cap Fund

    $ 1,170,293       $ –   

James Micro Cap Fund

      897,692         –   

James Long-Short Fund

      599,538         24,006   

The Funds elect to defer to the period ending June 30, 2014 capital losses recognized during the period November 1, 2012 through June 30, 2013 in the amount of:

 

      Amount  

James Small Cap Fund

    $   532,678   

James Micro Cap Fund

      283,170   

James Long-Short Fund

      206,960   

The Funds elect to defer to the period ending June 30, 2014 late year ordinary losses in the amount of:

 

      Amount  

James Long-Short Fund

    $ 27,971   

The capital loss carryforwards remaining as of June 30, 2013 in the table below expire as follows:

 

      Amount      Expiration Date

James Small Cap Fund

    $   18,052,132       June 30, 2017

James Small Cap Fund

      22,470,686       June 30, 2018

The capital loss carryforwards may be utilized in future years to offset net realized capital gains, if any, prior to distributing such gains to shareholders.

The amounts and characteristic of tax basis distributions and composition of distributable earnings/(accumulated losses) are finalized at fiscal year-end. Accordingly, tax basis balances have not been determined as of December 31, 2013.

3. INVESTMENT TRANSACTIONS

 

Purchases and sales (including maturities) of investments in long-term U.S. Government obligations for the six months ended December 31, 2013 were as follows:

 

      Purchases      Sales  

James Balanced:

      

Golden Rainbow Fund

    $   343,504,034       $   299,580,881   

Purchases and sales (including maturities) of investments in other long-term securities for the six months ended December 31, 2013 were as follows:

 

      Purchases      Sales  

James Balanced:

      

Golden Rainbow Fund

    $   417,125,722       $   67,872,800   

James Small Cap Fund

      24,925,692         47,822,475   

James Mid Cap Fund

      1,655,303         1,556,367   

James Micro Cap Fund

      3,711,903         2,048,004   

James Long-Short Fund

      8,495,670         8,192,247   

For the six months ended December 31, 2013, the cost of securities purchased to cover short sales and the proceeds from securities sold short were $14,365,477 and $15,048,247, respectively, for the Long-Short Fund.

4. MANAGEMENT FEE AND OTHER

    TRANSACTIONS WITH AFFILIATES

 

Investment Management Agreement

The Funds retain James to manage the Funds’ investments. The investment decisions for the Funds are made by a committee of James’ personnel, which is primarily responsible for the day-to-day management of each Fund’s portfolio. James Balanced: Golden Rainbow Fund is authorized to pay James a fee equal to an annual rate of 0.74% of its average daily net assets for assets up to and including $500 million; at the annual rate of 0.70% of the average daily net assets for assets from $500 million up to and including $1 billion; at the annual rate of 0.65% of the average daily net assets for assets from $1 billion up to and including $2 billion; and at the annual rate of 0.60% of the average daily net assets for assets over $2 billion.

James is authorized to receive a fee equal to an annual rate of 1.25% of the average daily net assets of the James Small Cap Fund, James Mid Cap Fund and the James Long-Short Fund, respectively, for net assets up to and including $500 million; 1.20% of average daily assets for net assets from $500 million up to and including $1 billion; 1.15% of the average daily assets for net assets from $1 billion to and including $2 billion; and 1.10% of the daily average net assets over $2 billion. James is authorized to receive a fee equal to 1.50% of James Micro Cap Fund average daily assets for net assets up to

 

 

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Notes to Financial Statements

  

James Advantage Funds

December 31, 2013 (Unaudited)  

 

and including $500 million and 1.45% of average daily assets for net assets over $500 million. Advisory fees for the James Small Cap, James Mid Cap Fund, James Micro Cap Fund and James Long-Short Fund are reduced by the fees and expenses of the non-interested person trustees incurred by the applicable Fund.

James is responsible for the payment of all operating expenses of the James Small Cap Fund, James Mid Cap Fund, James Micro Cap Fund and James Long-Short Fund, except for brokerage fees and commissions, taxes, interest (including dividend expense on securities sold short), fees and expenses of non-interested person trustees, 12b-1 expenses and extraordinary expenses.

Administrative Services Agreement

ALPS Fund Services, Inc. (“ALPS” or the “Administrator”) serves as administrator to the Funds. ALPS receives a monthly fee paid by James Balanced: Golden Rainbow Fund, for itself, and paid by James for the James Small Cap Fund, James Mid Cap Fund, James Micro Cap Fund and James Long-Short Fund, subject to a minimum monthly fee. Pursuant to an administrative agreement, ALPS will provide operational services to the Funds including, but not limited to fund accounting and fund administration and generally assist in each Fund’s operations.

Transfer Agency and Services Agreement

ALPS, pursuant to a Transfer Agency and Services Agreement with the Trust, serves as Transfer Agent for the Funds. Under the Transfer Agency and Services Agreement, ALPS receives an annual minimum fee, a fee based upon the number of shareholder accounts, and is also reimbursed for out-of-pocket expenses. These fees and reimbursements for out of pocket expenses are paid and reimbursed by James Balanced: Golden Rainbow Fund, for itself, and by James, for the James Small Cap Fund, James Mid Cap Fund, James Micro Cap Fund and James Long-Short Fund.

Plans of Distribution

Each Fund (only the Retail Class of the James Balanced: Golden Rainbow Fund), other than the James Micro Cap Fund, has adopted a plan pursuant to Rule 12b-1 under the 1940 Act (collectively, the “Plans”) under which each Fund may incur expenses related to distribution of its shares and for services provided to shareholders. Payments under a Plan are made to James, which uses them to pay distribution and shareholder service expenses on behalf of and as agent of the Fund. The amount payable by each Fund (the Retail Class of the James Balanced: Golden Rainbow Fund), other than the James Micro Cap Fund, under its Plan is 0.25% of its average daily net assets for the year. The Plans are compensation plans, which means that payments are made to James regardless of 12b-1 expenses actually incurred. Therefore, payments under a Plan may exceed distribution and shareholder service expenses incurred pursuant to the Plan, and James is permitted to retain the excess. It is also possible that 12b-1 expenses paid by James for a period will exceed the payments received by James, in which case James may pay such excess expenses out of its own resources. Payments received by James under the Plans are in addition to the fees paid to James pursuant to the Management Agreements. The Plans require

that James act in the Funds’ best interests in expending the payments it receives from the Funds and use payments solely for the purpose of paying distribution and shareholder services expenses on behalf of the Funds. The Funds’ Distributor, ALPS Distributors, Inc., validates all payment amounts to be made to brokers that have properly executed dealer agreements with the Funds before James will make such payments. The expenses of the Funds’ Plans are reflected as 12b-1 distribution and service fees –Retail Class on the Statements of Operations.

5. COMMITMENTS AND CONTINGENCIES

 

The Funds indemnify the Trust’s officers and trustees for certain liabilities that might arise from their performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.

6. LINE OF CREDIT

 

Each Fund has a revolving line of credit agreement with U.S. Bank, N.A. (the “Bank”). Borrowings under these arrangements are secured by investments held in the Funds’ portfolios as notated on the Schedules of Investments and bear interest at the Bank’s prime rate. For the six months ended December 31, 2013, only the James Long-Short Fund utilized its line of credit. The average amount of borrowings was $3,000,000 over 42 days with a weighted-average interest rate of 3.25%. As of December 31, 2013, the James Long-Short Fund did not have an outstanding balance with respect to the line of credit. Interest on funded and unfunded loans can be found under interest expense on the Statements of Operations. The remaining Funds entered into individual line of credit agreements on March 8, 2013. There were no borrowings on these lines during the year. The terms of the agreements can be characterized as follows:

 

Fund   Maximum
Balance
Available		     Interest
Rate		   Expiration Date

James Balanced:

      

Golden Rainbow Fund

   $ 50,000,000      Prime Rate*   July 15, 2014

James Small
Cap Fund

   $ 6,500,000      Prime Rate*   July 15, 2014

James Mid
Cap Fund

   $ 715,000      Prime Rate*   July 15, 2014

James Micro
Cap Fund

   $ 540,000      Prime Rate*   July 15, 2014

James Long-Short Fund

   $ 3,000,000      Prime Rate*   July 15, 2014

*The rate at which the Bank announces as its prime lending rate.

 

 

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Notes to Financial Statements

  December 31, 2013 (Unaudited)

 

7. NEW ACCOUNTING PRONOUNCEMENTS

 

In June 2013, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2013-08, Financial Services-Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements. The FASB standard identifies characteristics a company must assess to determine whether it is considered an investment company for financial reporting purposes. This ASU is effective for fiscal years beginning after December 15, 2013. The Funds believe the adoption of this ASU will not have a material impact on their financial statements.

    

 

 

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Additional Information

  

James Advantage Funds

December 31, 2013 (Unaudited)  

 

PROXY VOTING GUIDELINES

 

James is responsible for exercising the voting rights associated with the securities purchased and held by the Funds. A description of the policies and procedures that James uses in fulfilling this responsibility and information regarding how those proxies were voted during the most recent 12-month period ended June 30 are available without charge upon request by calling toll free 1-800-995-2637. These items are also available on the Securities and Exchange Commission’s website at http://www.sec.gov.

QUARTERLY PORTFOLIO DISCLOSURE

 

James files a complete listing of portfolio holdings for each Fund as of the end of the first and third quarters of each fiscal year on Form N-Q. The complete listing (i) is available on the Commission’s website; (ii) may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; and (iii) will be made available to shareholders upon request by calling 1-800-995-2637. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

    

 

 

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Privacy Policy

  December 31, 2013 (Unaudited)

 

Facts

What does James Advantage Funds do with your personal information?

Why?

Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some, but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What?

The types of personal information we collect and share depends on the product or service that you have with us. This information can include:

  •  

Social Security number and wire transfer instructions

  •  

account transactions and transaction history

  •  

investment experience and purchase history

When you are no longer our customer, we continue to share your information as described in this notice.

How?

All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons James Advantage Funds chooses to share; and whether you can limit this sharing.

 

Reasons we can share your personal information:    Does James Advantage Funds
share information?		    Can you limit this sharing?
For our everyday business purposes - such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus.    YES    NO
For our marketing purposes - to offer our products and services to you.    YES    NO
For joint marketing with other financial companies.    NO    We don’t share
For our affiliates’ everyday business purposes - information about your transactions and records.    NO    We don’t share
For our affiliates’ everyday business purposes - information about your credit worthiness.    NO    We don’t share
For our affiliates to market to you    NO    We don’t share
For non-affiliates to market to you    NO    We don’t share

Questions? Call 1-800-99 James

What we do:

 

How does James Advantage Funds protect my personal information?    To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
   Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information.
How does James Advantage Funds    We collect your personal information, for example, when you
collect my personal information?   

•    open an account or deposit money

  

•    direct us to buy securities or direct us to sell your securities

  

•    seek advice about your investments

   We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can’t I limit all sharing?    Federal law gives you the right to limit only:
  

•    sharing for affiliates’ everyday business purposes –information about your creditworthiness.

  

•    affiliates from using your information to market to you.

  

•    sharing for nonaffiliates to market to you.

   State laws and individual companies may give you additional rights to limit sharing.
Definitions     
Affiliates    Companies related by common ownership or control. They can be financial and non-financial companies.
  

•    Our affiliates include financial companies, such as James Investment Research, Inc. and James Capital Alliance.

Non-affiliates    Companies not related by common ownership or control. They can be financial and non-financial companies.
  

•    James Advantage Funds does not share with nonaffiliates so they can market to you.

Joint marketing    A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
  

•    James Advantage Funds does not jointly market.

 

Semi-Annual Report  |  December 31, 2013

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Privacy Policy

  

James Advantage Funds

December 31, 2013 (Unaudited)  

 

Other Important Information

 

California Residents

  

If your account has a California home address, your personal information will not be disclosed to nonaffiliated third parties except as permitted by applicable California law, and we will limit sharing such personal information with our affiliates to comply with California privacy laws that apply to us.

Vermont Residents

  

The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with affiliated companies and nonaffiliated third parties other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with nonaffiliated third parties or other affiliated companies unless you provide us with your written consent to share such information.

 

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LOGO

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Item 2. Code of Ethics.

Not applicable to this Report.

Item 3. Audit Committee Financial Expert.

Not applicable to this Report.

Item 4. Principal Accountant Fees and Services.

Not applicable to this Report.

Item 5. Audit Committee of Listed Companies.

Not applicable to registrant.

Item 6. Schedule of Investments.

The schedule is included as part of the Reports to Stockholders filed under Item 1 of this Report.

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

Not applicable to the registrant.

Item 8. Portfolio Managers of Closed-End Funds.

Not applicable to the registrant.

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

Not applicable to the registrant.

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

Not applicable to the registrant.

Item 11. Controls and Procedures.

(a) Based on an evaluation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) the registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures are effective as of a date within 90 days of the filing date of this Report.

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(b) There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1)    Not applicable to this Report.
(a)(2)    Certifications required by Item 12(a)(2) of Form N-CSR are filed herewith.

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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.

 

The James Advantage Funds
By:  

/s/ Barry R. James

Barry R. James
President
Date:   March 3, 2014

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:  

/s/ Barry R. James

Barry R. James
President (Principal Executive Officer)
Date:  

March 3, 2014

By:  

/s/ Thomas L. Mangan

Thomas L. Mangan
Chief Financial Officer (Principal Financial Officer)
Date:  

March 3, 2014