Annual Report 2025

Dear Shareholders, 

We are pleased to provide you with the annual report for our fiscal year ending January 31, 2025. The report offers an encompassing review of Yorktown Funds, the financial markets, and expectations for how markets might evolve. It also gives color on how our products and services are designed to meet the needs of our shareholders and their financial advisors.  

The fiscal year saw robust performance across risk assets. U.S. and international equities surged while fixed income credit spreads tightened across product types and ratings classes. The U.S. Treasury curve bear steepened as longer maturities sold off, however, causing rate-driven fixed income products to underperform equities. The S&P 500 Index earned a total return of 26.38% over the fiscal year, while the Dow Jones Industrial Average and NASDAQ Composite returned 18.93% and 30.37%, respectively. The Bloomberg US Aggregate Bond Index, which is composed of a wide range of investment grade U.S. debt securities, managed a small gain of 2.07% over these 12 months, but lagged the higher risk bond indices.  Bond market liquidity was strong and issuance remained robust. 

Economic data consistently surprised to the upside, particularly in the fourth quarter. Growth and employment data failed to slow as much as anticipated, while inflation figures proved stubborn, particularly in the back half of the fiscal year. Meanwhile, the Federal Reserve cut rates in September, its first move since ending its hiking cycle in July of 2023. In total, the central bank reduced the Federal Funds rate by 100 bps between September and December, although its late-summer economic projections missed the mark as the economy ran hotter than expected. 

Equity Market Overview 

Equities began the year on solid footing, buoyed by optimism surrounding easing inflation pressures and the potential for Federal Reserve rate cuts. Volatility reemerged in the second quarter as geopolitical tensions and concerns about slowing economic growth weighed on sentiment. By mid-2024, stronger-than-expected economic data and corporate earnings propelled equities higher, driving major indices to new records. 

Market leadership remained concentrated during the period, with the "Magnificent Seven” (Apple, Microsoft, Google parent Alphabet, Amazon.com, Nvidia, Meta Platforms and Tesla) accounting for more than half of the S&P 500’s gains in 2024—largely fueled by investor enthusiasm for artificial intelligence. However, a rotation into defensive sectors emerged later in the year as inflationary pressures and slowing growth came back into focus. 

All 11 GICS sectors posted positive returns for the fiscal year, with Consumer Discretionary, Communication Services, and Financials leading the market. These sectors benefited from resilient consumer spending, optimism surrounding cloud computing, and higher interest rates. Meanwhile, the Health Care, Energy, and Materials sectors lagged the broader market. 

Large-cap stocks, represented by the S&P 500 Index, outpaced small-cap stocks for the fiscal year, continuing a long-standing trend of dominance. The S&P 500 posted a strong gain of 26.38%, while the Russell 2000 Index—a benchmark for small-cap stocks—delivered a slightly lower return of 19.09%. This marks the eighth consecutive year of underperformance for small-cap stocks relative to their large-cap counterparts. Nevertheless, small-cap stocks demonstrated resilience, reaching a new peak in late November 2024, surpassing their previous high set in 2021. 

Fixed Income Market Overview 

 The fixed income market experienced significant volatility throughout the fiscal year, marked by three distinct phases of movement. The first phase, from February through April 2024, saw rates rise sharply as investors realized projected interest rate cuts were overly optimistic. The 2Y (+83 bps), 5Y (+88 bps), 10Y (+77 bps), and 30Y (+62 bps) sold off as strong jobs reports and persistent inflation data undercut expectations for six to seven rate cuts in 2024. The anticipated March rate cut was delayed, and Chair Powell signaled caution about cutting rates too soon. Credit spreads compressed, with investment grade in by nine bps and high yield tighter by 43 bps for the three months ending April 30, 2024. The rate selloff perhaps didn’t bring in quite as many yield buyers as expected. Nonetheless, spreads compressed comfortably. This three-month period was marked by a recalibration of future Fed Funds pricing, and the bond market felt the brunt of this. 

Momentum reversed over the next four to five months, with Treasuries rallying significantly. The 2Y, 5Y, 10Y, and 30Y yields fell by 148, 131, 106, and 86 bps, respectively. Investment grade (+9 bps) and high yield (+19 bps) corporate bond spreads widened slightly. Softer CPI and jobs data in May and June reignited hopes for multiple rate cuts. While these two months were positive for the bond market, July and August drove the bulk of the bull market that stretched into mid-September. The July CPI report met expectations, and weaker jobs and manufacturing data in August further supported easing. That same month, Powell signaled his belief that 2% target inflation was on track. Policymakers then mildly surprised with a 50-basis-point cut in September, emphasizing “recalibration” rather than easing, reflecting growing concerns about the labor market alongside inflation. 

The third chapter of the fiscal year marked a reversal of the midyear rally. Between mid-September 2024 and January 2025, Treasury yields rose between 65 and 93 bps, while credit spreads tightened, with investment grade better by 17 bps and high yield narrowing by 59 bps. Economic resilience, fiscal uncertainty, election-related volatility, and technical factors contributed to higher rates and tighter spreads. Although policymakers cut rates by 100 bps in total through year-end, the December cut was seen as hawkish. Perhaps the biggest takeaway from the final months of the fiscal year was the discrepancy between actual data and the Fed’s earlier economic projections from late in the summer.  GDP, unemployment, and inflation continually defied the Fed’s summer projections and raised the baseline expectations. The economy was simply stronger than the central bank had anticipated, serving as a signal to slow its easing.  

Income Fund Performance 

Short Term Bond Fund 

Class I (APIBX) 

Inception date 5/31/13
Cusip 028837-78-9 
Avg. Dura: 2.8 
Gross/Net Expense Ratios: 0.96%/0.80% 

 1 without sales charge. 2 with 5.75% sales charge. 3 Inception Date 5/13/2013. 4 Inception Date 7/2/1997. 5 Inception Date 6/30/2004. * Based on Institutional Share Class inception Date 5/31/2013. 

The Performance quoted represents past performance and does not guarantee 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. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-544-6060. 

For the fiscal year, Short Term Bond Fund provided defensive positioning compared to higher duration strategies as medium and long rates sold off. The front end of the Treasury curve ended nearly unchanged, while the Bloomberg US Agg Corporate Index (“LUACTRUU”) tightened 17 bps in spread. This enabled the fund’s Class I Shares (APIBX) to return 4.67%, versus 5.14% for the Bloomberg U.S. Corporate 1–5 Years Total Return Index (“BUC1TRUU”). The fund’s high credit quality provided NAV and income.  

The fund delivered capital appreciation during the midyear rate rally and remained steady through the volatile reversal in the fall. It remains concentrated in securities with diversified, liquid exposures. Throughout the year, we prioritized limiting NAV volatility, increasing the fund’s weighted average coupon, and improving its income profile—positioning the fund to preserve value and build on its solid performance. 

Multi-Sector Bond Fund

Class I (APIIX) 

Inception date 4/1/10 
Cusip 028837-76-3 
Avg. Dura: 4.8 
Expense Ratio: 0.70% 

1 without sales charge. 2 with 5.75% sales charge. 3 Inception Date 3/31/2010. 4 Inception Date 7/2/1997. 5 Inception Date 6/30/2004. 6 Inception Date 5/6/2016. * Based on Institutional Share Class inception Date 3/31/2010. 

The Performance quoted represents past performance and does not guarantee 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. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-544-6060. 

Despite a bear market for interest rates across the fiscal year, Multi-Sector Bond Fund generated positive returns. The fund’s Class I Shares (APIIX) returned 5.50% versus 1.98% for the Bloomberg U.S. Aggregate Index (“AGG”). The fund’s up-in-credit bias helped limit credit surprises and principal loss, though its lower allocation to high yield meant it benefited less from spread tightening than competitors with greater risk exposure. The Bloomberg U.S. Corporate High Yield Bond Index (“LF98TRUU”) spread tightened 83 bps between January 31, 2024, and January 31, 2025.

The fund performed well in the midyear rally and rebounded in January, ending the fiscal year on a strong note after fourth-quarter volatility. The fund remains focused on strong credit quality, risk-adjusted return profiles, and liquid assets, as we continue to balance rate risk while increasing current yield. With credit spreads near historic tights, our positioning reflects caution toward potential spread reversion. 

Equity Fund Performance 

Yorktown Growth Fund 

Class I (APGRX) 

Inception date 5/31/13 
Cusip 028837-81-3 
Gross/Net Expense Ratios: 1.39%/1.01% 

1 without sales charge. 2 with 5.75% sales charge. 3 Inception Date 5/13/2013. 4 Inception Date 7/1/2004. 5 Inception Date 6/14/1985. * Based on Institutional Share Class inception Date 5/31/2013. 

The Performance quoted represents past performance and does not guarantee 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. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-544-6060. 

The Yorktown Growth Fund’s Institutional Class posted a return of 15.14% for the fiscal year ended January 31, 2025, compared to the MSCI World Index of 15.16% and Global Small/Mid Stock Category of 9.66%. 

Top contributors to the Growth Fund’s performance included IES Holdings, Inc., KKR & Co Inc., and Comfort Systems USA, Inc. IES Holdings rose on strong demand for its electrical and infrastructure services. KKR & Co’s stock gained amid asset growth across its private equity and credit businesses. Comfort Systems USA benefited from robust demand for HVAC and mechanical contracting services. 

Key detractors included Lasertec Corp., Five Below, Inc., and Qualys, Inc. Lasertec’s share price fell on weaker demand for semiconductor equipment as the industry cycle slowed. Softer consumer spending and disappointing sales growth pressured Five Below’s stock. Qualys lost ground as waning demand for cybersecurity solutions weighed on revenue expectations. 

Yorktown Small Cap Fund 

Class I (YOVIX) 
Inception date 5/9/16 
Cusip 028837-71-4 
Gross/Net Expense Ratios: 1.82%/1.44% 

1 without sales charge. 2 with 5.75% sales charge. 3 Inception Date 5/9/2016. 4 Inception Date 5/9/2016. 5 Inception Date 5/9/2016. * Based on Institutional Share Class inception Date 5/9/2016. 

The Performance quoted represents past performance and does not guarantee 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. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-544-6060. 

The Yorktown Small Cap Fund Institutional Class posted a return of 12.20% for the fiscal year ended January 31, 2025, compared to the Russell 2000 Growth and the Russell 2000, which returned 22.73% and 19.09%, respectively. 

Top individual contributors to the Small Cap Fund’s performance included Robinhood Markets, Inc. Class A, Insmed Incorporated, and Mueller Industries, Inc. Robinhood Markets advanced on improved profitability and rising customer engagement across its trading and investing platform. Biopharmaceutical firm Insmed rose on positive clinical trial results and growing adoption of its rare disease therapies. Industrial manufacturer Mueller Industries gained on strong demand for its copper and brass products amid healthy construction and infrastructure activity.   

Key detractors included e.l.f. Beauty, Inc., Arcos Dorados Holdings, Inc. Class A, and Alpha Metallurgical Resources, Inc. Cosmetics and skin care company e.l.f. Beauty declined as rising promotional activity and slowing consumer demand pressured profit margins. Weaker consumer spending in key Latin American markets weighed on Arcos Dorados Holdings, the world's largest independent McDonald's franchisee. Mining company Alpha Metallurgical Resources, Inc. declined as softer coal prices and lower production volumes weighed on earnings. 

David D. Basten  
Founder & Chief Executive Officer  
Yorktown Funds

Investing involves risk, including loss of principal. Diversification does not ensure a profit or guarantee against loss. High yield securities are subject to greater levels of interest rate, credit and liquidity risk. In general, as prevailing interest rates rise, fixed income securities prices will fall. 

Important Disclosures: 
 
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 800-544-6060. 
 
Yorktown Funds are distributed by Ultimus Fund Distributors, LLC (member FINRA/SIPC). Yorktown Funds and Ultimus Fund Distributors, LLC are not affiliated. 
 
Diversification does not ensure a profit or guarantee against loss. 

Yorktown Short Term Bond Fund Top 10 Holdings 
As of 12/31/24 

Yorktown Multi-Sector Bond Fund Top 10 Holdings 
As of 12/31/24 

Yorktown Growth Fund Top 10 Holding 
As of 12/31/24 

Yorktown Small Cap Fund Top 10 Holdings 
As of 12/31/24 

Current and future portfolio holdings are subject to risk. 

Definition of Terms

S&P 500 Index - The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on exchanges in the United States. 

Maginificant 7: The Magnificent 7 is a group of major tech companies with stock growth that, on average, far outpaced the high-performing S&P 500® in recent years. Coined in 2023, the group consists of Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla.  

The Bloomberg U.S. Aggregate Bond Index, is a broad base, market capitalization-weighted bond market index representing intermediate term investment grade bonds traded in the United States. Investors cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 

Russell 2000 Index is an index measuring the performance of approximately 2,000 small-cap companies in the Russell 3000 index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000 serves as a benchmark for small cap stocks in the United States. You cannot invest directly in an index. Unmanaged index returns do not reflect any fees, 

The ICE BofA U.S. Corporate & Government, 1-3 Years Index covers the U.S. investment grade debt publicly issued in the U.S. domestic market, including U.S. Treasury, U.S. agency, foreign government, supranational and corporate securities, with a remaining term to final maturity less than 3 years. Investors cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 

Morningstar Short-term bond portfolios invest primarily in corporate and other investment grade U.S. fixed-income issues and have durations of one to 3.5 years (or, if duration is unavailable, average effective maturities of one to four years). These portfolios are attractive to fairly conservative investors, because they are less sensitive to interest rates than portfolios with longer durations. 

The Bloomberg US Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody's, Fitch and S&P is Ba1/BB+/BB+ or below. Bonds from issuers with an emerging markets country of risk, based on Bloomberg EM country definition, are excluded. 

The MSCI World Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance. Investors cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges.