From the vantage point just after the close of 2004, we are optimistic on a number of fronts. We are confident that our shareholders maintain partial ownership interests in what we view as twenty very good businesses held in the Fund portfolio. The Fund is invested across various profitable economic activities including travel, insurance, entertainment, beverages, media & information, and retail. These are businesses we know well and have researched thoroughly; for example, over three fourths of the Fund's capital is allocated to companies which it also owned at the end of both 2003 and 2002. Nearly two thirds is invested in companies the Fund has held since December 2001. These long term holding periods notwithstanding, we regularly challenge the assumptions which support these very important allocations of capital.

While pleased with the portfolio's prospects and the late year performance improvement, we remain cautious and mindful of those factors outside the control of the companies in which we invest. While cognizant of such concerns, our experience suggests that a focus on a few high quality businesses is the most productive expenditure of our thoughts and effort. We plan to continue down that path. We also find ourselves somewhat less than satisfied with the Fund's 2004 shortfall relative to its performance benchmark, the S&P 500 Index. Returns in the broad market were largely propelled by energy in 2004, an unsurprising outcome in an environment of significantly rising crude oil prices. We prefer to cast our lot with companies that are not dependent on such hard to predict cycles of commodity pricing. While we gave up some return in exchange for that conviction this year, history has more than adequately confirmed our position in this regard.

We also note that as of January 1, 2005 the Fund received an Overall Morningstar Rating of Five Stars, the highest rating available, out of 1216 "Large Blend" funds. Morningstar is an independent rating service which uses a risk adjusted rating system that is expressed on a scale of 1 to 5 stars and is an indication of how well a fund has balanced its risk and return in the past. We were pleased to have an independent rating system recognize what we believe - that long term principles can lead to solid returns for shareholders.

During the closing two months of 2004, both the tone of the capital markets and performance for market indices and the Fund turned upward, a desirable trend we hope will continue, though we know it will not do so in linear fashion. The Fund ended calendar 2004 at a modest cash position of roughly 5%, a reflection that though valuations, in general, make finding actionable new ideas more challenging, our efforts continue to be rewarded with periodic opportunities. We added three new companies to the Fund portfolio during 2004, including one in November. While portfolio activity has been on the lighter side, research activity remains brisk, as evaluating threats and considering opportunities are essential components of our analytical process.

We will of course remain vigilant, recognizing that while hyperactivity does not pave the road to investment success, neither is the investment business one which rewards ignorance or sloth. We recognize that business values are constantly changing, expanding or contracting in response to competitive forces, business evolution, acquisition, and development, and other environmental changes. We are proud of and energized by our research effort which remains focused on understanding these factors that influence intrinsic value for portfolio positions and other companies we may be following.

The Oak Value Fund remains dedicated to serving the best interests of its shareholders with respect to corporate governance and regulatory compliance. In this regard, we have expended significant effort over the past twelve months considering the evolving regulatory environment, examining structural and policy issues, and studying industry best practices. At a meeting in November 2004, the board members of the Oak Value Trust unanimously elected a long-time independent board member with an accounting and financial background to serve as Chairman of the Oak Value Trust effective January 1, 2005, one year in advance of the compliance date mandated by the Securities and Exchange Commission ("SEC").

Additionally, as we previously reported to you, in April of 2004, the Oak Value Trust Board elected to institute a 2% redemption fee on Oak Value Fund shares redeemed within 90 days of their date of purchase. The SEC has studied this issue extensively without yet issuing new requirements. Nonetheless, we believe this action will help ensure that long-term shareholders of the Fund are not unfairly burdened by the active trading of short-term speculators. Coupled with the accelerated observance of the SEC's independence initiatives, as well as other required governance actions implemented over the past year, we believe these actions evidence an ongoing commitment to the Oak Value Fund's shareholders and will serve their interests well.

We have been fortunate to maintain long-term holding periods for many companies because we remain focused not simply on stock price movements, but on long term intrinsic value and how it develops. When our efforts are rewarded with finding good businesses, with good management, we want our shareholders to benefit from ownership for as long as they remain available at attractive prices. Despite significant ebb and flow in both the businesses and stock market prices, we believe many of the existing Fund portfolio positions continue to sell at market prices that remain substantively discounted from their long term intrinsic value. Therefore, despite two consecutive positive years in performance since the lows of 2002, we continue to have confidence in both the prospect for reasonable investment outcomes and in the margin of safety inherent in the Fund's portfolio.

We thank you for your continued interest and partnership and welcome your questions and comments

Oak Value Fund Co-Managers,

David R. Carr, Jr.

Larry D. Coats, Jr.

Matthew F. Sauer

Important Information: The information presented above is not to be construed as an offer or solicitation to purchase the Oak Value Fund (the "Fund"), which is offered only by prospectus. Information concerning the performance of the Fund and its investment adviser's recommendations over the last year are available upon request. Past performance is no indication of future performance. You should not assume that future recommendations will be as profitable or will equal the performance of past recommendations. The Fund and its investment adviser do not subscribe to any particular viewpoint about causes and effects of events in the broad capital markets, other than that they are not predictable in advance. Specifically, nothing contained in this letter should be construed as a forecast of overall market movements, either in the short or long term.

The Overall Morningstar Rating™ is derived from a weighted average of the performance figures associated with a fund's 3-, 5-, and 10-year (if applicable) Morningstar Rating™ metrics. For funds with at least a 3-year history, a Morningstar Rating™ is based on a risk-adjusted return measure (including the effects of sales charges, loads, and redemption fees) with emphasis on downward variations and consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% 4 stars, the next 35% 3 stars, the next 22.5% 2 stars, and the bottom 10% 1 star. Each share class is counted as a fraction of one fund within this scale and rated separately. Morningstar Rating™ is for the retail share class only; other classes may have different performance characteristics.

An investor should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. The Fund's prospectus contains this and other important information. To obtain a copy of the Oak Value Fund's prospectus please visit our website at www.oakvaluefund.com or call 1-800-622-2474 and a copy will be sent to you free of charge. Please read the prospectus carefully before you invest. The Oak Value Fund is distributed by Ultimus Fund Distributors, LLC.