STAAR Investment Trust
604 McKnight Park Dr.
Pittsburgh, PA 15237
Phone 412-367-9076
Fax 412-367-9141
Semi-Annual Report
January 1 to June 30, 1999
Our Purpose: To Increase Your Assets and Income
Letter to Shareholders
September 12, 1999
Dear Shareholder:
The first half of 1999 saw the continuation of the bull market in
domestic stocks. International stocks, especially in emerging markets,
surged ahead after a tough 1998. However, rising interest rates caused
bonds to suffer losses.
Overall, I am pleased with our performance. I am happy to report
that Morningstar ranked four of the Funds highly in their categories.
Looking ahead, I expect continued volatility in both domestic and
foreign stock markets. Concerns about inflation and higher interest rates
will be a big factor. While I do not expect the Y2K computer issue to
create a huge problem in this country, some conservative behavior could
affect markets toward the end of the year, and there is always the
possibility of isolated computer problems that could affect your
investments. Some other countries are less compliant than the United
States.
The Federal Reserve's determination to prevent higher inflation has
resulted in higher interest rates. The last time the Fed preemptively
attacked inflation was 1994, a year in which most bond investments lost
money. Hopefully, the Fed will not need to raise rates much further, if
at all, which should stabilize the bond market and help support stocks.
Overall, the economy is remarkably healthy. Barring another
international monetary crisis or some other catastrophic event, the
beginning of the new century looks very promising. The momentous
technological advancements heralded in the advent of the personal computer
and the Internet are the equivalent of the technological advances of the
late 1800's and early 1900's. That period saw a tremendous increase in
productivity and leaps in standards of living. The early part of this new
century could see the greatest advancements in history.
I anticipate excellent opportunities for investors. While there will
continue to be significant risks, long term investors will have potential
rewards which parallel economic progress. I look forward to serving you
during these exciting times.
The detailed information in this report is provided to assist you in
understanding your investment. Please feel free to call me personally if
you have a question.
On behalf of the Trustees and people of STAAR Financial Advisors,
Inc., I want to thank you for your continued confidence in us. We remain
deeply grateful for you and committed to your well being.
Sincerely Yours,
J. Andre Weisbrod, Trustee
President, STAAR Financial Advisors, Inc., Advisor to the Trust
Visit Our Web Site:
www.staarinvest.com
* Articles
* Working Principles
* Funny File (We can't take everything too seriously, including ourselves)
* Performance Updates
* Prospectus and Application Form
* Q & A (This is a place to ask questions and get answers. We hope to begin
collecting questions this month, and we will publish the first ones next month)
We invite your comments, and you may even submit material to the Funny File.
Our objective is to update information by the second week of the month.
Y2K Compliance Update:
As you are probably aware, January 1, 2000, is a critical date for anyone
and any business dependent on computers. The Securities and Exchange
Commission has required all mutual funds to file progress reports with them
and to provide ongoing reports to shareholders regarding compliance. These
reports are available upon request.
In brief, a third party has tested the internal hardware and software
systems critical to the management of the Trust and those tests indicated that
our critical systems were compliant. We continue to check with third-party
entities regarding their status. While we can offer no guarantees, we are
optimistic that the systems involved in managing and administrating the Funds
will be functional.
Perspective & Performance
Indexes used for comparisons are selected as being closest to each Fund's
objectives. Multiple indexes are used where a single index may not
correlate completely with a Fund's objectives, strategies and/or
portfolio holdings.
Intermediate Bond Fund
We are pleased to report that Morningstar ranked the IBF in the top 10%
of all funds in the Intermediate-term Bond Funds category for the 12-month
period ending 6/30/99.
The Federal Reserve has raised interest rates as part of its strategy
to prevent higher inflation. This caused the value of bonds to go down, and
resulted in a slight negative return for the first six months of 1999. As
long as inflation does not increase significantly, interest rates should not
rise much higher over the next few months and could go lower. Much depends on
how the Federal Reserve interprets the risks of inflation. There is still a
possibility of another quarter point rate hike by the Fed.
<TABLE>
Performance for periods ending 6/30/99 1.
<CAPTION>
Description Last Quarter Year-to-Date One Year Three Year Avg. Annual
Return2 Since Public Inception (5/28/97)2 Since Private Inception (4/4/96) 2
<S> <C> <C> <C> <C>
<C> <C>
Intermediate
Bond Fund (IBF)
A high grade
general bond
portfolio of
US Gov't, Gov't
Agency and
Investment
Grade Corp.
Bonds with an
average maturity
usually between
3 and 7 years. -0.5% -0.7% 3.3% 6.1%
5 .9% 4.6%
Lehman Bros
Intermed Gov/
Corp Index -0.4% -0.6% 4.2% 6.6%
6.8% 6.3%
Morningstar
Interm-Term
Bd Fd Avg -1.2% -1.8% 1.8% 6.3%
6.2% 5.9%
</TABLE>
Current Yield as of 06/30/99 ........................... 6.0% 3
S.E.C. Yield as of 06/30/99 ............................ 5.3%4
Average Maturity ....................................... 4.4 Years
Portfolio Turnover ..................................... 9.3%
1 Total returns include reinvested dividends and gains.
2 The Fund's public registration with the S.E.C. was effective 5/28/97. The
Fund was in existence from 4/4/96 to 5/28/97 as a private trust. There were no
operational changes as a result of public inception.
3 Current Yield is calculated by dividing the projected annual income by the
current net assets (total portfolio value less accrued expenses)
4 S.E.C. Yield is calculated by taking actual net income received during the
past thirty days divided by the average shares for the last thirty days,
divided by the maximum offering price on the last day of the period and then
annualized.
Long Term Bond Fund
We are pleased to report that Morningstar ranked the LTBF in the
top 18% of all funds in the Long-term Bond Funds category for the past
12 months and in the top 21% for the past three years. (Periods ending
6/30/99.)
Rising interest rates caused continued declines in long-term bond
values during the first half of 1999. If inflation remains tame and the
Federal Reserve does not raise rates again, bond values could stabilize and
even rise by year end.
<TABLE>
Performance for periods ending 6/30/99 1
<CAPTION>
Description Last Quarter Year-to-Date One Year Three Year Avg. Annual
Return2 Since Public Inception (5/28/97) 2 Since Private Incept.(4/4/96)2
<S> <C> <C> <C> <C>
<C> <C>
Long Term Bond
Fund (LTBF)
A high grade
general bond
portfolio of US
Gov't, Gov't
Agency and
Investment
Grade Corporate
Bonds with an
average
maturity over
10 years. -1.0% -2.2% 2.5% 7.6%
8.4% 6.8%
Lehman Bros
Long-Trm Gov/
Corp Index -2.7% -6.0% -0.6% 8.6%
9.3% 8.0%
Morningstar
Long-Term Bd
Fds Avg -1.4% -2.1% 0.3% 6.8%
6.5% 6.4%
</TABLE>
Current Yield as of 06/30/99 ........................... 6.6% 3
S.E.C. Yield as of 06/30/99 ............................ 5.5% 4
Average Maturity ....................................... 16.4 Years
Portfolio Turnover ..................................... 4.4%
1 Total returns include reinvested dividends and gains.
2 The Fund's public registration with the S.E.C. was effective 5/28/97. The
Fund was in existence from 4/4/96 to 5/28/97 as a private trust. There were no
operational changes as a result of public inception.
3 Current Yield is calculated by dividing the projected annual income by the
current net assets (total portfolio value less accrued expenses)
4 S.E.C. Yield is calculated by taking actual net income received during the
past thirty days divided by the average shares for the last thirty days,
divided by the maximum offering price on the last day of the period and then
annualized.
Larger Company Stock Fund
While there has been improvement since last year, the LCSF still has
not performed as well as we would like. We have been continually
evaluating the other mutual funds owned by the LCSF, and have made some
changes over the past year. The overall track records and positioning of
these funds are appropriate to the objectives of the Fund. We hope to see
better relative performance as we move ahead. Overall market conditions
are favorable, but risks include more increases in inflation/interest,
negative earnings surprises, Y2K behavior or an unknown event, any of which
could trigger market declines.
<TABLE>
Performance for periods ending 6/30/99 1
<CAPTION>
Description Last Quarter Year-to-Date One Year Three Year Avg. Annual
Return2 Since Public Inception (5/28/97) 2 Since Private Inception 4/4/96)2
<S> <C> <C> <C> <C>
<C> <C>
Larger Co. Stock
Fund (LCSF)
A fund of funds
investing in
funds that
invest in large
and larger
mid-cap stocks
with the
objective of
Growth with some
Income.
Individual
stocks may be
owned 6.7% 10.3% 13.6% 18.8%
17.9% 18.0%
Dow Jones
Industrial
Average 12.5% 20.5% 24.7% 27.0%
22.9% 24.7%
S&P 500
Index 7.1% 12.4% 22.8% 29.1%
27.7% 27.8%
Morningstar
Growth & Inc
Fds Avg 8.5% 10.7% 15.6% 22.6%
21.1% 21.6%
</TABLE>
Portfolio Turnover .................................. 16.0%
1 Total returns include reinvested dividends and gains.
2 The Fund's public registration with the S.E.C. was effective 5/28/97.
The Fund was in existence from 4/4/96 to 5/28/97 as a private trust. There
were no operational changes as a result of public inception.
Smaller Company Stock Fund
The second quarter produced strong gains in smaller stocks. After a
number of years trailing large companies, a shift favoring small companies
could be coming. Of course one quarter does not make a long-term trend,
but this certainly is a positive sign for small companies.
Unfortunately, after a number of above-average years, the SCSF
underperformed the averages during the second quarter. We believe the
Fund owns some excellent mutual funds, which over time should continue to
produce acceptable performance. We continually monitor them, and will
consider any appropriate changes.
<TABLE>
Performance for periods ending 6/30/99 1
<CAPTION>
Description Last Quarter Year-to-Date One Year Three Year Avg. Annual
Return2 Since Public Inception (5/28/97) 2 Since Private Inception(4/4/96)2
<S> <C> <C> <C> <C>
<C> <C>
Smaller Co.
Stock Fund (SCSF)
A fund of funds
investing in
funds that
invest in small,
micro-cap and
smaller mid-cap
stocks with an
objective of long
term growth.
Individual stocks
may be owned. 10.8% 5.0% 0.8% 8.5%
10.4% 9.2%
Russell 2000
Index 15.6% 9.3% 1.5% 11.2%
11.1% 11.6%
Morningstar
Small Company
Fds Avg 16.0% 9.4% 3.0% 10.7%
12.7% 12.9%
</TABLE>
Portfolio Turnover ........................................ 19.3%
1 Total returns include reinvested dividends and gains.
2 The Fund's public registration with the S.E.C. was effective 5/28/97. The
Fund was in existence from 4/4/96 to 5/28/97 as a private trust. There
were no operational changes as a result of public inception.
International Fund
The INTF has performed well, and we are pleased to report that
Morningstar ranked the INTF in the top 19% of all funds in the Foreign Stock
Funds category for the past 12 months (period ending 6/30/99).
International markets continued their recovery in the second quarter.
Emerging markets have been exceptionally strong. While there continue to
be many risks associated with international investing, we believe that the
long-term potential is excellent. Some continued volatility would not be
surprising as the year continues.
<TABLE>
Performance for periods ending 6/30/99 1
<CAPTION>
Description Last Quarter Year-to-Date One Year Three Year Avg. Annual
Return2 Since Public Inception (5/28/97) 2 Since Private Inception(4/4/96)2
<S> <C> <C> <C> <C>
<C> <C>
International
Fund (INTF)
A fund of funds
investing in
funds that
primarily invest
in foreign
stocks,
including
emerging markets.
Individual
stocks may be
owned. 9.1% 13.4% 10.0% 8.9%
4.9% 9.2%
EAFE Index 2.5% 4.0% 7.6% 8.8%
8.6% 8.6%
Morningstar
Foreign Stock
Fds Avg 7.0% 10.0% 5.6% 8.6%
7.4% 10.0%
Morningstar
Divers Emerg
Mkts Fds Avg 25.5% 34.8% 17.5% -2.9%
- -7.9% -0.3%
</TABLE>
Portfolio Turnover .................................. 1.7%
1 Total returns include reinvested dividends and gains.
2 The Fund's public registration with the S.E.C. was effective 5/28/97. The
Fund was in existence from 4/4/96 to 5/28/97 as a private trust. There were
no operational changes as a result of public inception.
AltCat (Alternative Categories) Fund
We are pleased to report that Morningstar ranked the ACF in the top
20% of all funds in the Mid-cap value Funds category for the past 12 months,
and if compared to the Morningstar funds having a Multi-Asset Global objective,
it would have been in the top 12%.
The first half of 1999 saw a dramatic upturn in many of the mutual
funds owned by the ACF. Most of these positions were chosen because of the
potential participation in long-term economic trends. China continues to
move forward economically. Energy prices recovered, and the long-term
demand for natural resources is significant. This Fund will continue its
diversified global approach, and many of its positions will continue to
be aggressive.
<TABLE>
Performance for periods ending 6/30/99 1
<CAPTION>
Description Last Quarter Year-to-Date One Year Three Year Avg. Annual
Return2 Since Public Inception (5/28/97) 2 Since Private Inception(4/4/96)2
<S> <C> <C> <C> <C>
<C> <C>
AltCat Fund (ACF)
A multi-asset
global fund of
funds investing
in assets that
offer
opportunities
for growth. 15.4% 18.9% 13.3% 6.8%
5.4% 6.3%
Morningstar
Multi-Asset
Global Fds
Avg 4.7% 6.1% 6.4% 7.9%
7.7% 8.8%
</TABLE>
Portfolio Turnover ........................................ 0%
1 Total returns include reinvested dividends and gains.
2 The Fund's public registration with the S.E.C. was effective 5/28/97. The
Fund was in existence from 4/4/96 to 5/28/97 as a private trust. There were
no operational changes as a result of public inception.
Notes regarding performance: Total Return assumes dividends and/or capital
gains reinvested. STAAR Fund returns are based on Net Asset Value. Indexes
such as the DOW Jones Industrials, Lehman Bros. (LB) and EAFE are unmanaged,
and therefore have little or no expenses. Morningstar mutual fund
indexes reflect net returns after expenses. Performance numbers are quoted
directly or derived from data published in the Wall St. Journal ands other
public sources and may be preliminary data. Past performance is no guarantee
of future results. Investment returns and principal values fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
Portfolio Holdings as of 6/30/99
1 SST INTERMEDIATE BOND FUND
Portfolio Valuation Date 6/30/99
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of Val.
<S> <C> <C> <C> <C> <C>
<C> <C>
62,493 Cash & Equiv.* 100.00 100.00 62,493 62,493
0 4.7%
Sub-Total Cash & Cash Equiv. 62,493 62,493
0 4.7%
U.S. Treasury Obligations
45,000 US Tr Nt 6.25 8/31/00 98.97 101.00 44,535 45,450
915 3.4%
20,000 US Tr Nt 6.375 8/15/02 100.45 101.78 20,089 20,356
267 1.5%
20,000 US Tr Nt 6.5 5/15/05 100.19 102.81 20,038 20,563
525 1.5%
25,000 US Tr Nt 7.0 7/15/06 100.77 105.91 25,192 26,477
1,285 2.0%
20,000 US Tr Nt 5.5 2/15/08 100.42 97.19 20,084 19,438
(646) 1.5%
90,000 US Tr Nt 5.375 2/15/01 101.35 99.88 91,213 89,888
(1,325) 6.8%
50,000 US Tr Nt 5.5 12/31/00 102.69 100.06 51,344 50,032
(1,312) 3.8%
30,000 US Tr Nt 5.25 5/15/04 97.75 98.34 29,325 29,503
178 2.2%
Sub-Total U.S.Treasury 301,818 301,705
(113) 22.7%
Gov. Agency Obligations
50,000 FHLMC Deb 6.49 12/19/05 100.70 99.63 50,350 49,813
(537) 3.7%
60,000 FHLMC Deb 6.25 6/24/08 100.00 95.50 60,000 57,300
(2,700) 4.3%
20,000 Fed Hm Ln Bk 6.17 7/30/02 102.22 100.56 20,433 20,113
(330) 1.5%
40,000 Fed Hm Ln Bk 5.925 8/14/03 100.98 98.66 40,391 39,462
(929) 3.0%
60,000 Fed Hm Ln Bk 5.8 11/04/05 96.63 95.50 57,975 57,300
(675) 4.3%
25,000 Fed Nat Mtg Ass 7.32 5/3/06 100.00 100.09 25,000 25,023
23 1.9%
35,000 Fed Nat Mtg Ass 7.37 3/09/07 103.12 100.13 36,092 35,046
(1,046) 2.6%
75,000 Fed Nat Mtg Ass 5.39 11/5/03 99.56 96.29 74,672 72,218
(2,454) 5.4%
20,000 TVA Pwr 93Ser 6.125 7/15/03 97.00 98.84 19,400 19,769
369 1.5%
13,000 TVA Pwr 95Ser 6.375 6/15/05 97.25 100.17 12,643 13,022
379 1.0%
Sub-Total Gov. Agency 396,965 389,064
(7,901) 29.3%
Corp. Agency Obligations
50,000 Am. Gen. Corp. 6.25 3/15/03 103.07 98.92 51,537 49,460
(2,077) 3.7%
25,000 Avco Fin Srv 7.375 8/15/01 102.00 102.30 25,500 25,575
75 1.9%
20,000 BellSouth Tele 6.5% 2/01/00 100.25 100.53 20,050 20,106
56 1.5%
30,000 Columb/HCA Hlth 6.87 9/15/03 98.63 93.90 29,588 28,170
(1,418) 2.1%
20,000 DetEd SecMdTr59 6.27 3/15/00 100.00 100.29 20,000 20,058
58 1.5%
40,000 Disney Walt 6.375 3/30/01 102.79 100.65 41,117 40,260
(857) 3.0%
80,000 Ford Motor Cr 6.0 1/14/03 102.84 98.32 82,268 78,656
(3,612) 5.9%
20,000 IBM NT BkEntNC 7.25 11/01/02 102.14 102.82 20,427 20,564
137 1.5%
50,000 Lehman Bros. 6.625 2/5/06 97.07 95.96 48,534 47,980
(554) 3.6%
40,000 Mellon Fin. Co. 6.0% 3/1/04 100.09 97.89 40,036 39,156
(880) 2.9%
25,000 M Lynch&Co Nts NC 8.0 2/1/02 103.50 103.90 25,875 25,975
100 2.0%
45,000 M Lynch&Co Nt NC 5.5 2/12/04 100.00 95.31 45,000 42,890
(2,110) 3.2%
15,000 Morg Stnly Nt 6.375 12/15/03 96.90 99.33 14,535 14,900
365 1.1%
50,000 Morg Stnly Nt 5.625 1/20/04 99.72 96.34 49,859 48,170
(1,689) 3.6%
35,000 NE Tele Co 6.125 10/01/06 101.03 96.23 35,359 33,681
(1,678) 2.5%
40,000 Sears Acc Corp 6.92 6/17/04 104.80 100.49 41,920 40,196
(1,724) 3.0%
Sub-Total Corp. Obligations 591,603 575,796
(15,807) 43.3%
Total Account 1,352,879 1,329,057
(23,821) 100.0%
* Net, including interest/dividend and expense accruals
</TABLE>
Breakdown By General Asset Type
Cash & Equivalents = 5%
US Treasury & Gov't Agency = 52%
Corporate Bonds = 43%
Breakdown by General Rating
AAA Rated = 56%
AA Rated = 12%
A Rated = 28%
BBB Rated = 4%
<PAGE>
Page 9
2 SST LONG TERM BOND FUND Portfolio Valuation Date 6/30/99
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of Val.
<S> <C> <C> <C> <C> <C>
<C> <C>
58,875 Cash & Equiv.* 1.00 1.00 58,875 58,875
0 7.6%
Sub-Total Cash & Equiv. 58,875 58,875
0 7.6%
U.S.Treasury Obligations
10,000 US Tr Nt 5.625 2/15/06 92.70 98.22 9,270 9,822
552 1.3%
75,000 US Tr Nt 7.25 5/15/16 105.59 109.94 79,194 82,454
3,260 10.7%
25,000 US Tr Nt 7.125 2/15/23 100.88 110.78 25,219 27,695
2,476 3.6%
15,000 US Tr Nt 6.875 8/15/25 99.99 108.34 14,998 16,252
1,254 2.1%
20,000 US Tr Nt 7.25 8/15/22 100.81 111.94 20,163 22,388
2,225 2.9%
35,000 US Tr Nt 6.25 8/15/23 237.86 234.36 35,680 35,153
(527) 4.5%
40,000 US Tr Nt 5.50 8/15/28 100.75 91.44 40,300 36,575
(3,725) 4.7%
Sub-Total U.S. Treasury 224,824 230,338
5,515 29.8%
Gov. Agency Obligations
20,000 FHLMC 7.375 10/25/11 99.50 100.34 19,900 20,069
169 2.6%
35,000 FHLMC 6.85 5/14/13 100.28 96.59 35,099 33,808
(1,291) 4.4%
30,000 FHLMC 6.42 8/19/13 101.26 92.22 30,379 27,666
(2,713) 3.6%
25,000 FHLMC 6.7 2/15/11 102.94 99.50 25,734 24,875
(859) 3.2%
40,000 Fedl Farm 6.9% 9/08/15 101.95 102.94 40,780 41,176
396 5.3%
Sub-Total Gov. Agency 151,892 147,593
(4,299) 19.1%
Corporate Obligations
25,000 Arkansas Pwr & Lt 7.0 9/8/15 103.50 93.49 25,875 23,373
(2,502) 3.0%
15,000 Bankamer Corp MTN 6.0 12/23/13 100.00 96.91 15,000 14,537
(463) 1.9%
15,000 Chase Man Corp MTN 6.5 5/6/13 100.25 94.84 15,038 14,226
(812) 1.8%
35,000 Citicorp 7.2 9/15/10 102.38 101.10 35,831 35,385
(446) 4.6%
20,000 Disney Mtn Semi 7.75 9/30/11 100.00 100.35 20,000 20,070
70 2.6%
40,000 Ford Mtr Cred MTN 7.0 9/20/10 101.00 100.67 40,400 40,268
(132) 5.2%
25,000 GE Cap Corp 6.4 1/16/13 99.75 100.01 24,938 25,003
65 3.2%
20,000 Gen Mot Corp Nts 7.10 3/15/06 99.31 100.94 19,861 20,188
327 2.6%
50,000 Merrill Lynch 6.33 2/25/14 99.40 97.30 49,700 48,650
(1,050) 6.3%
15,000 Morgn Stnly Cap Gr 7.45 7/3/12 100.00 100.07 15,000 15,011
11 1.9%
15,000 So.Westn Bell Deb 6.75 6/01/08 96.25 98.81 14,438 14,822
384 1.9%
30,000 Xerox Cr Corp MTN 6.5 1/28/13 100.00 100.15 30,000 30,045
45 3.9%
35,000 Xerox Cr Corp MTN 6.5 2/11/13 100.00 100.10 35,000 35,035
35 4.5%
Sub-Total Corp. Obligations 341,080 336,611
(4,468) 43.5%
Total
Account 776,671 773,413
(3,251) 100.0%
* Net, including interest/dividend and expense accruals
</TABLE>
Breakdown By General Asset Type
Cash & Equivalents = 8%
US Treasury & Gov't Agency = 48%
Corporate Bonds = 44%
Breakdown by General Rating
AAA Rated = 60%
AA Rated = 9%
A Rated = 31%
<PAGE>
Page 10
3 SST LARGER COMPANY STOCK FUND Portfolio Valuation Date 6/30/99
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of Val.
<S> <C> <C> <C> <C> <C>
<C> <C>
116,610 Cash & Equiv. * 1.00 1.00 116,610 116,610
0 5.2%
Sub-Total Cash & Equiv. 116,610 116,610
0 5.2%
U.S. Lar
ger Comp
any Stoc
k Mutual
Funds
7442 Bear Stearns S&P Stars A 21.09 26.41 156,914 196,532
39,618 8.7%
1999 Clipper Fund 69.84 78.22 139,604 156,351
16,747 6.9%
5145 Fundamental Investors Fund 25.19 32.91 129,622 169,325
39,702 7.5%
1196 Janus Twenty Fund 45.98 62.79 55,000 75,102
20,103 3.3%
4581 Putnam Cap. Appreciation 22.84 23.14 104,632 106,006
1,374 4.7%
27725 Putnam Investors A Fund 13.11 16.26 363,414 450,814
87,400 19.9%
6135 Torray Fund 36.87 43.92 226,206 269,468
43,262 11.9%
6369 Washington Mutual Investors 25.62 35.78 163,143 227,867
64,724 10.1%
Sub-Total U.S. Larger Co. 1,338,535 1,651,465
312,929 73.1%
U.S. Lar
ger Comp
any Stoc
k Unit
Trusts
10302 Peroni Top 10 Grwth Tr 99 Ser 11.08 13.24 114,146 136,398
22,252 6.0%
Sub-Total Larger Co. Unit Tr 114,146 136,398
22,252 6.0%
U.S. Mi
d-Cap L
arger
Company
Stocks
1539 Longleaf Partners 29.25 29.58 45,000 45,509
509 2.0%
2634 Mairs and Power Growth Fund 79.64 101.63 209,739 267,652
57,913 11.8%
772 Strong Schafer Value Fund 58.80 55.44 45,382 42,788
(2,594) 1.9%
Sub-Total Mid-Cap Stocks 300,121 355,950
55,828 15.7%
Total
Account 1,869,412 2,260,422
391,010 100%
* Net, including interest/dividend and expense accruals
</TABLE>
Breakdown By General Asset Type
(Includes estimated cash positions of mutual funds owned by the Fund)
Cash & Equivalents = 5%
Domestic Stock = 88%
Foreign Stock = 3%
Bonds = 2%
Other = 2%
Breakdown by Management Style
Large Cap Growth = 38%
Large Cap Value = 36%
Large Cap Blend = 5%
Larger Mid Cap Value = 4%
Larger Mid Cap Blend = 12%
Cash Equiv. = 5%
Notes: Breakdown percentages are estimates based on information gathered from
prospectuses, quarterly reports and other sources, including Morningstar
Principia for Mutual Funds. Accuracy is not guaranteed.
<PAGE>
Page 11
4 SST SMALLER COMPANY STOCK FUND Portfolio Valuation Date 6/30/99
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of Val.
<S> <C> <C> <C> <C> <C>
<C> <C>
59270 Cash & Equiv.* 1.00 1.00 59,270 59,270
0 3.5%
Sub-Total Cash & Equiv. 59,270 59,270
0 3.5%
U.S.
Small
er
Com
pany
Stock
Mutu
al
Fund
s
12429 Acorn Fund 16.35 18.59 203,212 231,059
27,847 13.4%
8518 Frnkln Small Cap Growth Fd I 20.36 26.60 173,453 226,570
53,117 13.1%
9276 Ivy Emerging Growth Fund A 26.37 33.71 244,628 312,704
68,076 18.1%
9269 Putnam Cap. Opportunities 8.30 8.42 76,933 78,046
1,113 4.5%
16682 Royce Opportunities Fd 6.89 6.94 115,000 115,773
773 6.7%
8003 SSGA Small Cap Fund 19.46 18.20 155,736 145,659
(10,077) 8.4%
6981 T Rowe Price New Horizons Fd 23.52 25.08 164,192 175,092
10,900 10.1%
Sub-Total Smaller Co. Stocks 1,133,154 1,284,902
151,749 74.3%
U.S.
Larger
Com
pany
Stock
Mutual
Funds
3531 Putnam Cap. Apprec. Fund A 21.70 23.14 76,616 81,715
5,099 4.7%
Sub-Total Mid-Cap Smaller Co. 76,616 81,715
5,099 4.7%
U.S.
Micr
ocap
Stock
Mutu
al
Fund
s
14911 Frnkln Microcap Value Fund I 19.36 20.31 288,678 302,836
14,158 17.56%
Sub-Total Microcap Stock 288,678 302,836
14,158 17.56%
Total
Account 1,557,718 1,728,724
171,006 100%
* Net, including interest/dividend and expense accruals
</TABLE>
Breakdown By General Asset Type
(Includes estimated cash positions of mutual funds owned by the Fund)
Cash & Equivalents = 3%
Domestic Stock = 90%
Foreign Stock = 3%
Other = 4%
Breakdown by Management Style
Small Cap Growth = 50%
Small Cap Value = 24%
Small Cap Blend = 18%
Large Cap Blend = 5%
Cash equiv. = 3%
Notes: Breakdown percentages are estimates based on information gathered from
prospectuses, quarterly reports and other sources, including Morningstar
Principia for Mutual Funds. Accuracy is not guaranteed.
<PAGE>
Page 12
5 SST INTERNATIONAL FUND Portfolio Valuation Date 6/30/99
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of Val.
<S> <C> <C> <C> <C> <C>
<C> <C>
36127 Cash & Equiv.* 1.00 1.00 36,127 36,127
0 2.7%
Sub-Total Cash & Equiv. 36,127 36,127
0 2.7%
Inter
natio
nal
Stock
Mutu
al
Fund
s
5509 Europacific Fund 26.24 32.39 144,541 178,449
33,908 10.4%
6339 Hotchkis & Wiley Int'l Fund 22.29 25.73 141,317 163,100
21,783 9.5%
6496 Ivy International Fund 35.92 44.12 233,321 286,615
53,294 16.7%
18394 Putnam Int'l Growth Fund A 18.34 21.64 337,355 398,040
60,685 23.3%
7857 T R Price Int'l Stock Fund 13.76 15.62 108,150 122,732
14,582 7.2%
22866 Templeton Foreign Fund I 10.04 10.30 229,559 235,518
5,959 13.8%
3136 Warburg Pincus Int'l Eq Fd 19.14 19.06 60,005 59,769
(236) 3.5%
Sub-Total International Stock 1,254,249 1,444,223
189,974 84.4%
Develop
ing Mar
kets Mu
tual
Funds
16468 Templeton Devel. Mkts Tr I 14.32 14.05 235,830 231,371
(4,459) 13.5%
Sub-Total Devel. Markets 235,830 231,371
(4,459) 13.5%
Total
Account 1,526,204 1,711,721
185,516 100%
* Net, including interest/dividend and expense accruals
</TABLE>
Breakdown By General Asset Type
(Includes estimated cash positions of mutual funds owned by the Fund)
Cash & Equivalents = 2%
Foreign Stock = 94%
Other = 4%
Breakdown by Management Style
Large Cap Value = 40%
Large Cap Blend = 44%
Mid Cap Value = 14%
Cash Equiv. = 2%
Notes: Breakdown percentages are estimates based on information gathered from
prospectuses, quarterly reports and other sources, including Morningstar
Principia for Mutual Funds. Accuracy is not guaranteed.
<PAGE>
Page 13
6 SST ALTCAT FUND Portfolio Valuation Date 6/30/99
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of Val.
<S> <C> <C> <C> <C> <C>
<C> <C>
31084 Cash & Equiv. * 1.00 1.00 31,084 31,084
0 6.3%
Sub-Total Cash & Equiv. 31,084 31,084
0 6.3%
U.S.
Mid-
Cap
Large
r
Com
pany
Stock
Mutu
al
Fund
s
1091 Muhlenkamp Fund 34.49 43.49 37,618 47,682
10,064 9.7%
Sub-Total Mid-Cap Stocks 37,618 47,682
10,064 9.7%
Glob
al
Small
er
Co.
Stock
Mutu
al
Fund
s
2294 Mutual Series Discovery Fd I 18.45 19.45 42,325 44,618
2,293 9.1%
446 Small Cap World Fund I 25.97 28.81 11,576 12,840
1,264 2.6%
Sub-Total Global Sm. Mutual 53,901 57,458
3,558 11.7%
Alter
nativ
e
Cate
gorie
s
1046 Franklin Gold Fund I 11.49 8.56 12,020 8,952
(3,068) 1.8%
2401 Frnkln Real Estate Sec Fd I 14.50 15.12 34,806 36,296
1,490 7.4%
2967 Frnkln Nat. Resources Fd I 14.52 13.44 43,087 39,871
(3,216) 8.1%
955 Invesco Strategic Tech Fd 31.41 46.72 30,000 44,623
14,623 9.1%
7960 Ivy China Region Fund A 8.13 8.81 64,684 70,129
5,445 14.3%
4564 Templeton Latin Amer Fund I 10.64 9.59 48,561 43,772
(4,789) 8.9%
1276 Templeton Global Real Est I 14.45 14.62 18,426 18,649
223 3.8%
1218 Vanguard Special Energy Fund 22.27 22.98 27,124 27,986
862 5.7%
640 Vanguard Special Health Fund 75.70 99.61 48,415 63,709
15,294 13.0%
Sub-Total Alternative Cat. 327,123 353,987
26,864 72.2%
Total
Account 449,725 490,210
40,485 100%
* Net, including interest/dividend and expense accruals
</TABLE>
Breakdown By General Asset Type
(Includes estimated cash positions of mutual funds owned by the Fund)
Cash & Equivalents = 6%
US Flexibly Managed = 10%
Global Flexibly Managed = 9%
Global Smaller Cos. = 3%
Pacific Rim/China = 14%
Latin America = 9%
Specific Energy/Natural Resources = 14%
Prec. Metals/Mining = 2%
Real Estate & Related = 11%
Specific Health Care = 13%
Specific Technology = 9%
Breakdown by Management Style
Large Cap Growth = 13%
Mid Cap Growth = 9%
Mid Cap Value = 67%
Mid Cap Blend = 2%
Small Cap Growth = 3%
Cash Equiv. = 6%
Notes: Breakdown percentages are estimates based on information gathered from
prospectuses, quarterly reports and other sources, including Morningstar
Principia for Mutual Funds. Accuracy is not guaranteed.
<PAGE>
STAAR Investment Trust Financial Statements
For the Six Month Period Ending 6/30/99 (unaudited)
Statement of Assets & Liabilities
<TABLE>
<CAPTION>
(000's omitted) IBF LTBF
LCSF SCSF INTF ACF
<S> <C> <C>
<C> <C> <C> <C>
ASSETS
Investments in Securities at Value Identified 1,309 764
2,262 1,730 1,713 491
Cash (not including money market funds) 0 0
0 0 0 0
Interest Receivable 21 10
1 0 0 0
Total Assets 1,330 774
2,262 1,730 1,713 491
LIABILITIES
Accounts Payable for Securities 0 0
0 0 0 0
Accounts Payable - Sr. Long-term Debt 0 0
0 0 0 0
Accounts Payable- Other (incl. Advisor & TTEE Fee s) (1) (0)
(2) (1) (2) (0)
Total Liabilities (1) (0)
(2) (1) (2) (0)
NET ASSETS 1,330 775
2,264 1,732 1,714 492
Shares of Beneficial Interest Outstanding 129,689 71,917
157,891 143,882 142,503 42,622
Net Asset Value Per Share $10.25 $10.75
$14.32 $12.01 $12.01 $11.50
</TABLE>
Statement of Operations
<TABLE>
<CAPTION>
Description IBF LTBF
LCSF SCSF INTF ACF
<S> <C> <C>
<C> <C> <C> <C>
INVESTMENT INCOME
Mutual Fund Dividends (Including Money Market Funds) 2.08 1.81
10.17 3.70 1.86 3.09
Less: Foreign Withholding Taxes 0.00 0.00
0.00 0.00 0.00 0.00
Interest 39.22 22.85
0.00 0.00 0.00 0.00
Total Income 41.31 24.66
10.17 3.70 1.86 3.09
EXPENSES
Advisory Fees 3.08 2.09
9.12 7.24 7.51 1.87
Directors Fees 0.56 0.31
0.91 0.72 0.74 0.19
Interest 0.00 0.00
0.00 0.00 0.00 0.00
Marketing Distribs: 12-b-1 0.12 0.00
0.02 0.00 0.00 0.00
Other 0.00 0.00
0.00 0.00 0.00 0.00
Total Expenses 3.76 2.40
10.05 7.96 8.25 2.06
Less: Fees Waived
Net Expenses 3.76 2.40
10.05 7.96 8.25 2.06
Net Investment Income 37.54 22.26
0.12 (4.26) (6.39) 1.03
</TABLE>
REALIZED & UNREALIZED APPRECIATION ON INVESTMENTS
<TABLE>
<CAPTION>
Description IBF LTBF
LCSF SCSF INTF ACF
<S> <C> <C>
<C> <C> <C> <C>
Realized Long Term Capital Gains 0.36 0.27
57.49 2.02 5.23 0.00
Unrealized Appreciation (Depreciation) (40.40) (35.28)
148.91 81.65 220.08 73.55
Net Realized & Unrealized Appreciation (Depreciation) (40.04) (35.01)
206.40 83.66 225.31 73.55
NET INCREASE IN NET ASSETS FROM OPERATIONS (2.50) (12.75)
206.52 79.41 218.92 74.58
</TABLE>
Statement of Change in Net Assets
<TABLE>
<CAPTION>
Description IBF LTBF
LCSF SCSF INTF ACF
<S> <C> <C>
<C> <C> <C> <C>
Increase/(Decrease) in net Assets from Operations
Net Investment Income 37.5 22.3
0.1 (4.3) (6.4) 1.0
Accum Net Gains (Realized) 0.4 (0.3)
55.6 2.0 (5.2) 0.0
Accum-Apprec-or-Deprec (Unrealized) (40.4) (35.3)
148.9 81.6 220.1 73.6
Net Change from Ops (2.5) (13.3)
204.6 79.4 208.5 74.6
Distributions to Shareholders from:
Investment Income 16.5 10.5
0.0 0.0 0.0 0.0
Realized Long-Term gains 0.0 0.0
1.9 0.0 0.0 0.0
Total Distributions 16.5 10.5
1.9 0.0 0.0 0.0
Capital Share Transactions
Purchases 263.2 176.6
550.7 330.6 27.4 33.4
Redemptions 80.0 15.7
112.3 155.1 249.5 17.7
Reinvestment of Dividends and Distributions 16.3 10.3
1.9 0.0 0.0 0.0
Net Increase in net assets from capital share transac 359.5 202.7
664.9 485.7 276.9 51.2
Net Assets Beginning of Period 1,153.5 598.3
1,851.6 1,612.9 1,607.9 373.8
Net Assets End of Period 1,329.1 773.4
2,260.4 1,728.7 1,711.7 490.2
Total Increase in Net Assets 175.6 175.1
408.8 115.9 103.9 116.4
</TABLE>
Statement of Change in Cash Flows
<TABLE>
<CAPTION>
Description IBF LTBF
LCSF SCSF INTF ACF
<S> <C> <C>
<C> <C> <C> <C>
CASH PROVIDED BY OPERATING ACTIVITIES
Net Increase in Net Assets from Operations (2.5) (12.7)
206.5 79.4 218.9 74.6
Adjustments Required to reconcile to net assets
provided by operating activities
Unrealized (Appreciation) Depreciation of Investments 40.4 35.3
(148.9) (81.6) (220.1) (73.6)
(Increase) Decrease in Interest Receivable (Accum NII) (16.1) 6.7
3.9 (2.7) 16.4 4.0
Increase (Decrease) in Accrued Interest 20.8 9.9
0.7 0.2 0.1 0.1
Increase (Decrease) in Taxes Payable 0.0 0.0
0.0 0.0 0.0 0.0
Increase (Decrease) in Accounts Payable (0.7) (0.5)
(1.9) (1.5) (1.5) (0.4)
Net Cash Provided by Operating Activities 41.9 38.7
60.2 (6.3) 13.8 4.7
CASH USED BY INVESTMENT ACTIVITIES
Investments Purchased (388.7) (176.6)
(550.7) (330.6) (27.4) (33.4)
Sales or Redemptions 115.0 30.4
326.8 314.1 142.8 0.0
Net Used by Investment Activities (273.7) (146.2)
(223.9) (16.5) 115.4 (33.4)
CASH PROVIDED BY FINANCING ACTIVITIES
Shareholder Contributions 279.5 216.7
316.1 188.6 168.2 58.0
Shareholder Redemptions (including amounts re-investe 80.0 15.7
112.3 155.1 249.5 17.7
Dividends Declared (16.5) (10.5)
(1.9) 0.0 0.0 0.0
Dividends Reinvested by Shareholders 16.3 10.3
1.9 0.0 0.0 0.0
Net Cash Provided by Financing Activities 359.3 232.3
428.3 343.6 417.6 75.8
INCREASE/(DECREASE) IN CASH DURING PERIOD 127.5 124.8
264.6 320.8 546.9 47.0
<PAGE>
Page 9
STAAR Investment Trust
Supplementary Information -- Selected per Share Data and Ratios
Period from Public Inception (5/28/97) through June 30, 1999
</TABLE>
<TABLE>
<CAPTION>
IBF LTBF
LCSF
PER SHARE DATA 6/30/99 12/31/98 12/31/97 6/30/99 12/31/98 12/31/97
6/30/99 12/31/98 12/31/97
(6 mos.) (6 mos.)
(6 mos.)
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C>
Net Asset Value Beginning
Of Period $10.45 $10.22 $9.97 $11.16 $10.81 $10.25
$12.99 $12.16 $10.62
Net Investment Income 0.31 0.57 0.52 0.35 0.63 0.62
0.00 0.03 0.21
Net Realized & Unrealized
Gains (0.20) 0.19 0.13 (0.41) 0.30 0.50
1.34 1.56 2.37
Total Inc. from Operations 0.11 0.76 0.65 (0.06) 0.93 1.12
1.34 1.59 2.58
Distributions from Net
Investment Income (0.14) (0.51) (0.39) (0.16) (0.58) (0.56)
0.00 (0.04) (0.21)
Distributions from Net
Realized Gains 0.00 (0.02) (0.01) 0.00 0.00 0.00
(0.01) (0.72) 0.83)
Total Distributions to
Shareholders (0.14) (0.53) (0.40) (0.16) (0.58) (0.56)
(0.01) (0.76) (1.04)
Net Asset Val. End of Per. $10.25 $10.45 $10.22 $10.75 $11.16 $10.81
$14.32 $12.99 $12.16
Total Return -0.65% 7.41% 7.00% -2.16% 8.63% 11.18%
10.29% 13.10% 24.40%
RATIOS
Net Expenses to Daily Avg.
Net Assets 0.62% 0.58% 0.56% 0.70% 0.69% 0.64%
0.98% 1.00% 0.65%
Net Investment Inc. to Avg 3.02% 5.48% 5.56% 3.18% 5.70% 5.86%
0.01% 0.23% 2.22%
Portfolio Turnover Rate 9.30% 22.54% 8.97% 4.36% 6.40% 0.00%
16.00% 30.21% 10.47%
NET ASSETS, END OF PERIOD
(000's omitted) $1,330 $1,154 $622 $774 $598 $339
$2,264 $1,852 $1,276
</TABLE>
INTF expense ratio includes foreign tax paid of .18% in 1997.
Advisory fees were waived for periods ending as follows:
<TABLE>
<CAPTION>
IBF LTBF
LCSF
PER SHARE DATA 6/30/99 12/31/98 12/31/97 6/30/99 12/31/98 12/31/97
6/30/99 12/31/98 12/31/97
(6 mos.) (6 mos.)
(6 mos.)
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C>
Advisory Fees Waived $0.00 $0.01 $0.02 $0.00 $0.01 $0.02
$0.00 $0.00 $0.05
</TABLE>
<TABLE>
<CAPTION>
SCSF INTF
ACF
PER SHARE DATA 6/30/99 12/31/98 12/31/97 6/30/99 12/31/98 12/31/97
6/30/99 12/31/98 12/31/97
(6 mos.) (6 mos.)
(6 mos.)
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C>
Net Asset Value Beginning
Of Period $11.45 $11.45 $10.31 $10.60 $10.50 $10.76
$9.67 $10.53 $10.25
Net Investment Income (0.03) (0.05) 0.13 0.04 0.07 0.16
0.03 0.13 0.10
Net Realized & Unrealized
Gains 0.57 0.38 1.33 1.42 0.31 0.15
1.83 (0.73) 0.28
Total Inc. from Operations 0.54 0.33 1.46 1.38 0.38 0.31
1.85 (0.60) 0.38
Distributions from Net
Investment Income 0.00 0.00 (0.13) 0.00 (0.08) (0.16)
0.00 (0.13) (0.10)
Distributions from Net
Realized Gains 0.00 (0.33) (0.19) 0.00 (0.20) (0.41)
0.00 (0.13) 0.00
Total Distributions to
Shareholders 0.00 (0.33) (0.32) 0.00 (0.28) (0.57)
0.00 (0.26) (0.10)
Net Asset Value
End of Period $12.01 $11.45 $11.45 $12.01 $10.60 $10.50
$11.50 $9.67 $10.53
Total Return 4.95% 2.89% 14.10% 13.36% 3.64% 2.86%
18.89% -5.75% 3.82%
RATIOS
Net Expenses to Daily Avg.
Net Assets 0.99% 0.99% 0.97% 1.00% 1.17% 0.96%
1.00% 1.04% 0.82%
Net Investment Income to
Avg. Net Assets -0.26% -0.47% 1.36% -0.39% 0.65% 1.76%
0.25% 1.24% 1.29%
Portfolio Turnover Rate 19.26% 6.45% 5.04% 1.67% 2.30% 0.00%
0.00% 0.02% 3.48%
NET ASSETS, END OF PERIOD
(000's omitted) $1,732 $1,613 $1,177 $1,715 $1,608 $1,126
$491 $374 $307
</TABLE>
* INTF expense ratio includes foreign tax paid of .18% in 1997.
Advisory fees were waived for periods ending as follows:
<TABLE>
<CAPTION>
IBF LTBF
LCSF
PER SHARE DATA 6/30/99 12/31/98 12/31/97 6/30/99 12/31/98 12/31/97
6/30/99 12/31/98 12/31/97
(6 mos.) (6 mos.)
(6 mos.)
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C>
Advisory Fees Waived $0.00 $0.01 $0.02 $0.00 $0.00 $0.00
$0.00 $0.00 $0.05
</TABLE>
<PAGE>
Offices of the Trust
604 McKnight Park Dr.
Pittsburgh, PA 15237
Investment Advisor
STAAR Financial Advisors, Inc.
604 McKnight Park Dr.
Pittsburgh, PA 15237
E-Mail: [email protected]
Web Site: www.staarinvest.com
Transfer Agent for Shareholder Accounts
STAAR Financial Advisors, Inc.
604 McKnight Park Dr.
Pittsburgh, PA 15237
Counsel
Alan Lefkowitz
Kabala & Geeseman
200 First Ave., Pittsburgh, PA 15222
Independent Auditors
Carson & Co.
201 Village Commons, Sewickley, PA 15143
Trustees
Ronald G. Benson
Coraopolis, PA
Business Consultant
Regional Coordinator, Fellowship of Companies for Christ, International
Jeffrey A. Dewhirst
Sewickley, PA
Investment Banker, Corporate Finance Associates
Thomas J. Smith
Sewickley, PA
Owner/President, CapMasters
John H. Weisbrod
Cranberry, PA
Former President, Sea Breeze Laboratories, Inc.
J. Andre Weisbrod
Wexford, PA
President, STAAR Financial Advisors, Inc.
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
The STAAR Investment Trust, 604 McKnight Park Dr., Pittsburgh, PA 15237 412-367-
9076
