================================================================================
PROFIT FUNDS INVESTMENT TRUST
-----------------------------
PROFIT VALUE FUND
-----------------
ANNUAL REPORT
September 30, 1999
INVESTMENT ADVISER ADMINISTRATOR
------------------ -------------
INVESTOR RESOURCES GROUP, LLC COUNTRYWIDE FUND SERVICES, INC.
8720 Georgia Avenue, Suite 808 P.O. Box 5354
Silver Spring, Maryland 20910 Cincinnati, Ohio 45201-5354
1.888.744.2337
================================================================================
<PAGE>
LETTER TO SHAREHOLDERS NOVEMBER 8, 1999
TOP PERFORMING LARGE-CAP VALUE FUND
Dear Profit Value Fund Shareholder:
I have exciting news. For the twelve months coinciding with the Profit
Value Fund's fiscal year ended September 30, 1999, your Fund's 42.52% total
return ranked it #1 out of 251 Large-Cap Value Funds according to data compiled
by Lipper Analytical Services, Inc. During this period, the performance of
traditional "value" funds lagged significantly behind the S&P 500 Index;
however, your Fund outpaced the S&P 500 Index by a large margin.
In its second full year of operations, the Profit Value Fund performed
impressively and gained many new investors. The Fund and its portfolio manager
continued to receive positive media coverage, being featured in several national
publications. Many shareholders have commented positively about their improved
statements and the 24-hour availability of automated shareholder and net asset
value (NAV) information. A shareholder survey gave us high marks for exceeding
your expectations. We will continue to work diligently to maintain the
confidence you have entrusted in us through your investment.
For the fiscal year ended September 30, 1999, the Profit Value Fund closed
at a NAV of $18.02 per share and had a total return (excluding the effect of
applicable sales loads) of 42.52%, as compared to an S&P 500 Index total return
of 27.80% and a Russell Top 200 Value Index average return of 23.43%. The Fund's
outperformance of the market and its value-oriented competitors during the
fiscal year indicates the merits of the Fund's investment style. Even when the
market declined sharply during the quarter ended September 30, 1999, the Fund's
- -3.79% return outperformed both the S&P 500 Index and the Russell Top 200 Value
Index which declined 6.25% and 9.44%, respectively.
Investor Resources Group, as investment adviser, continues to manage the
portfolio as conditions warrant. The turnover ratio of the portfolio was a tax
efficient 23%. In our opinion, one of the best ways to outperform across a
market cycle is by investing in the common stocks of companies that are
currently trading at a discounted price relative to the market and their peers,
yet display a catalyst to return to a normal price relationship. During the
fiscal year, advances in the equity market continued to reward our investment
approach. Management's positioning of the portfolio last year, specifically with
the addition of EMC, Intel, Microsoft, America Online and Sun Microsystems,
placed the Fund in a good position to benefit from the economy's drive toward
technology. Healthcare related companies Merck, Pfizer and Amgen and financial
<PAGE>
services companies Legg Mason, Marsh & McClennan and T. Rowe Price positioned
the portfolio to benefit from the aging of the population.
During the past twelve months, two major issues have continued to
negatively impact the market. First, rising interest rates and inflationary
concerns have tended to overshadow the strong profit growth that U.S. companies
are enjoying. Second, the end of this century has focused significant attention
and resources on the Y2K computer glitch concern. After both of these issues are
addressed, investors will likely refocus on constructive fundamentals, and we
have positioned the portfolio to take advantage of this upcoming environment.
Regardless of the direction the markets take in the coming year, we believe
that the Profit Value Fund will continue to offer an attractive investment
opportunity for individual and institutional investors. We continue to evaluate
companies in a prudent and cautious manner, seeking companies that represent
good valuations relative to their industry and competitors that are not solely
dependent upon an excessive upward market trend.
We urge shareholders to take a similar approach. That is, invest for the
long run, avoid the temptation to "time" your investment based on market
predictions, and diversify among stocks, bonds and mutual funds based on your
individual needs and time horizons. Finally, invest on a consistent basis,
regardless of whether the markets are up or down.
At Profit Funds, we are committed to helping you pursue your financial
goals, whether it's saving for retirement, paying for college tuition, buying a
home or building your own business. Our investment philosophy is that, over the
long term, the most promising investment opportunities can be found among
established, larger capitalization companies which at the time of investment
show an attractive valuation discount relative to their peers.
We would like to again take this opportunity to express our sincere
appreciation to our valued and growing family of shareholders for your continued
support of, and confidence in, the Profit Value Fund. We look forward to serving
your investment needs for many years to come.
Sincerely,
Eugene A. Profit
President
<PAGE>
PROFIT VALUE FUND
Comparison of the Change in Value of a $10,000 Investment in the
Profit Value Fund and the Standard & Poor's (S&P) 500 Index
S&P 500 INDEX: PROFIT VALUE FUND:
-------------- ------------------
DATE BALANCE DATE BALANCE
---- ------- ---- -------
11/15/96 10,000 11/15/96 10,000
12/31/96 10,092 12/31/96 10,240
03/31/97 10,363 03/31/97 10,430
06/30/97 12,172 06/30/97 11,650
09/30/97 13,084 09/30/97 12,880
12/31/97 13,459 12/31/97 12,655
03/31/98 15,337 03/31/98 13,778
06/30/98 15,843 06/30/98 13,929
09/30/98 14,267 09/30/98 12,806
12/31/98 17,306 12/31/98 16,773
03/31/99 18,168 03/31/99 18,982
06/30/99 19,449 06/30/99 18,971
09/30/99 18,234 09/30/99 18,252
-----------------------------
Profit Value Fund
Average Annual Total Return
1 Year Since Inception*
------ ----------------
% %
-----------------------------
* Initial public offering of shares commenced on November 15, 1996.
<PAGE>
PROFIT VALUE FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
================================================================================
MARKET
COMMON STOCKS - 92.7% SHARES VALUE
- --------------------------------------------------------------------------------
AUTOMOBILES - 4.6%
DaimlerChrysler AG 1,000 $ 69,437
Ford Motor Co. 2,200 110,412
---------------
179,849
---------------
BASIC & SPECIALTY CHEMICALS - 4.6%
Dow Chemical Co. 720 81,810
E.I. du Pont de Nemours & Co. 1,584 96,426
---------------
178,236
---------------
BEVERAGES - 1.6%
Pepsico, Inc. 2,000 60,500
---------------
CONGLOMERATE - 2.8%
Berkshire Hathaway, Inc. - Class A* 2 110,000
---------------
CONSUMER STAPLES - 1.9%
Eastman Kodak Co. 1,000 75,438
---------------
ELECTRIC UTILITIES - 1.6%
Southern Co. 2,460 63,345
---------------
ENERGY & RESOURCES - 5.2%
Conoco Inc. - Class B 1,227 33,589
El Paso Energy Corp. 1,500 59,719
Exxon Corp. 800 60,750
Mobil Corp. 500 50,375
---------------
204,433
---------------
FINANCIAL & INSURANCE - 16.0%
American General Corp. 1,375 86,883
Chase Manhattan Corp. 1,300 97,988
Citigroup, Inc. 1,500 66,000
Fannie Mae 2,000 125,375
Legg Mason, Inc. 2,000 76,625
Marsh & McLennan Co., Inc. 750 51,375
Merrill Lynch & Co. 1,000 67,188
T. Rowe Price Associates, Inc. 2,000 54,875
---------------
626,309
---------------
HEALTHCARE - 6.6%
Amgen, Inc.* 1,400 114,100
Merck & Co., Inc. 1,400 90,737
Pfizer, Inc. 1,500 53,906
---------------
258,743
---------------
MEDICAL PRODUCTS - 3.9%
Medtronic, Inc. 2,000 71,000
Safeskin Corp.* 10,000 82,187
---------------
153,187
---------------
<PAGE>
PROFIT VALUE FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
================================================================================
Market
COMMON STOCKS - 92.7% (Continued) Shares Value
- --------------------------------------------------------------------------------
MULTI-MEDIA - 2.3%
The Walt Disney Co. 3,500 $ 90,563
---------------
RETAIL - 7.3%
CompUSA, Inc.* 4,000 24,500
The Limited, Inc. 1,500 57,375
Nike, Inc. - Class B 1,000 56,875
Too, Inc.* 214 3,839
Wal-Mart Stores, Inc. 3,000 142,687
---------------
285,276
---------------
RETIREMENT/AGED CARE - 1.0%
Sunrise Assisted Living, Inc.* 1,500 39,844
---------------
TECHNOLOGY - 24.5%
America Online, Inc.* 2,400 249,600
Cisco Systems, Inc.* 2,055 140,896
EMC Corp.* 3,000 214,312
Intel Corp. 2,000 148,625
Microsoft Corp.* 1,200 108,675
Sun Microsystems, Inc.* 1,000 93,000
---------------
955,108
---------------
TELECOMMUNICATIONS - 8.8%
AT&T Corp. 2,912 126,672
Bell Atlantic Corp. 1,500 100,969
MCI WorldCom, Inc.* 1,624 116,725
---------------
344,366
---------------
TOTAL COMMON STOCKS - 92.7% (Cost $2,737,347) $ 3,625,197
---------------
MONEY MARKETS - 1.8%
Fidelity Institutional Cash Portfolio - Government 31,986 $ 31,986
Fidelity Institutional Cash Portfolio - Class I 38,257 38,257
---------------
TOTAL MONEY MARKETS - 1.8% (Cost $70,243) $ 70,243
---------------
TOTAL INVESTMENTS AT VALUE - 94.5% (Cost $2,807,590) $ 3,695,440
OTHER ASSETS IN EXCESS OF LIABILITIES - 5.5% 215,247
---------------
NET ASSETS - 100.0% $ 3,910,687
===============
* Non-income producing security.
See accompanying notes to financial statements.
<PAGE>
PROFIT VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
================================================================================
ASSETS
Investments in securities:
At acquisition cost $ 2,807,590
==============
At value (Note 1) $ 3,695,440
Cash 45,000
Receivable for securities sold 109,884
Receivable for capital shares sold 5,130
Dividends receivable 3,462
Receivable from Adviser (Note 3) 8,983
Organization costs, net (Note 1) 49,453
Other assets 8,492
--------------
TOTAL ASSETS 3,925,844
--------------
LIABILITIES
Payable to Administrator (Note 3) 4,000
Other accrued expenses and liabilities 11,157
--------------
TOTAL LIABILITIES 15,157
--------------
NET ASSETS $ 3,910,687
==============
Net assets consist of:
Paid-in capital $ 2,808,086
Accumulated net realized gains from security transactions 214,751
Net unrealized appreciation on investments 887,850
--------------
Net assets $ 3,910,687
==============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 217,072
==============
Net asset value and redemption price per share (Note 1) $ 18.02
==============
Maximum offering price per share (Note 1) $ 18.77
==============
See accompanying notes to financial statements.
<PAGE>
PROFIT VALUE FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
================================================================================
INVESTMENT INCOME
Dividends $ 35,826
---------------
EXPENSES
Investment advisory fees (Note 3) 39,860
Professional fees 31,662
Accounting services fees (Note 3) 24,000
Organization expense (Note 1) 23,661
Transfer agent fees (Note 3) 18,119
Trustees' fees and expenses 16,211
Insurance expense 13,725
Administration fees (Note 3) 12,000
Custodian fees 11,705
Registration fees 11,669
Postage and supplies 8,310
Distribution expense (Note 3) 4,454
Reports to shareholders 2,836
Other expenses 944
---------------
TOTAL EXPENSES 219,156
Fees waived and expenses reimbursed (Note 3) (157,075)
---------------
NET EXPENSES 62,081
---------------
NET INVESTMENT LOSS (26,255)
---------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 241,006
Net change in unrealized appreciation/ 620,078
depreciation on investments ---------------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS 861,084
---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 834,829
===============
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PROFIT VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
========================================================================================================
Year Year
Ended Ended
September 30, September 30,
1999 1998
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment loss $ (26,255) $ (3,902)
Net realized gains from security transactions 241,006 3,421
Net change in unrealized appreciation/depreciation
on investments 620,078 (34,188)
---------------- ----------------
Net increase (decrease) in net assets from operations 834,829 (34,669)
---------------- ----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income --- (13,477)
Distributions from net realized gains (3,407) (8,347)
---------------- ----------------
Decrease in net assets from distributions to shareholders (3,407) (21,824)
---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 1,512,964 979,553
Net asset value of shares issued in
reinvestment of distributions to shareholders 3,397 21,756
Payments for shares redeemed (453,228) (938,460)
---------------- ----------------
Net increase in net assets from capital share transactions 1,063,133 62,849
---------------- ----------------
TOTAL INCREASE IN NET ASSETS 1,894,555 6,356
NET ASSETS
Beginning of year 2,016,132 2,009,776
---------------- ----------------
End of year $ 3,910,687 $ 2,016,132
================ ================
CAPITAL SHARE ACTIVITY
Shares sold 85,572 73,832
Shares issued in reinvestment of distributions to shareholders 206 1,766
Shares redeemed (27,917) (72,439)
---------------- ----------------
Net increase in shares outstanding 57,861 3,159
Shares outstanding, beginning of year 159,211 156,052
---------------- ----------------
Shares outstanding, end of year 217,072 159,211
================ ================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PROFIT VALUE FUND
FINANCIAL HIGHLIGHTS
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
=====================================================================================================
Year Year Period
Ended Ended Ended
September 30, September 30, September 30,
1999 1998 1997 (a)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 12.66 $ 12.88 $ 10.00
--------------- --------------- ---------------
Income (loss) from investment operations:
Net investment income (loss) (0.12) (0.02) 0.07
Net realized and unrealized gains 5.50 (0.06) 2.81
(losses) on investments
--------------- --------------- ---------------
Total from investment operations 5.38 (0.08) 2.88
--------------- --------------- ---------------
Less distributions:
Dividends from net investment income -- (0.09) --
Distributions from net realized gains (0.02) (0.05) --
--------------- --------------- ---------------
Total distributions (0.02) (0.14) --
--------------- --------------- ---------------
Net asset value at end of period $ 18.02 $ 12.66 $ 12.88
=============== =============== ===============
Total return (b) 42.52% (0.57%) 28.80% (d)
=============== =============== ===============
Net assets at end of period (000's) $ 3,911 $ 2,016 $ 2,010
=============== =============== ===============
Ratio of net expenses to average 1.95% 1.95% 1.95% (e)
net assets (c)
Ratio of net investment income (loss) (0.82%) (0.18%) 1.19% (e)
to average net assets
Portfolio turnover rate 23% 101% 10% (e)
- -----------------------------------------------------------------------------------------------------
</TABLE>
(a) Represents the period from the initial public offering of shares (November
15, 1996) through September 30, 1997.
(b) Total returns shown exclude the effect of applicable sales loads.
(c) Absent fee waivers and expense reimbursements, the ratios of expenses to
average net assets would have been 6.87%, 8.36% and 18.57% (e) for the
periods ended September 30, 1999, 1998 and 1997, respectively (Note 3).
(d) Not annualized.
(e) Annualized.
See accompanying notes to financial statements.
<PAGE>
PROFIT VALUE FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
The Profit Value Fund (the Fund) is a diversified series of Profit Funds
Investment Trust (the Trust), an open-end management investment company
registered under the Investment Company Act of 1940. The Trust was organized as
a Massachusetts business trust on June 14, 1996. The public offering of shares
of the Fund commenced on November 15, 1996. The Fund had no operations prior to
the public offering of shares except for the initial issuance of shares.
The Fund seeks long-term total return, consistent with the preservation of
capital and maintenance of liquidity, by investing primarily in the common stock
of established, larger capitalization companies (i.e. companies having a market
capitalization exceeding $1 billion). Dividend income is only an incidental
consideration to the Fund's investment objective.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of trading on the New York Stock
Exchange (normally 4:00 p.m., Eastern time). Securities which are traded on
stock exchanges or are quoted by NASDAQ are valued at the closing sales price
or, if not traded on a particular day, at the closing bid price. Securities
traded in the over-the-counter market, and which are not quoted by NASDAQ, are
valued at the last sales price, if available, otherwise, at the last quoted bid
price. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith in accordance with procedures
established by and under the general supervision of the Board of Trustees.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding, rounded to the nearest cent. The maximum offering
price per share of the Fund is equal to the net asset value per share plus a
sales load equal to 4.17% of the net asset value (or 4% of the offering price).
The redemption price per share of the Fund is equal to the net asset value per
share.
Investment income -- Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned.
Distributions to shareholders -- Distributions to shareholders arising from net
investment income and net realized capital gains, if any, are distributed at
least once each year. Dividends from net investment income and capital gain
distributions are determined in accordance with income tax regulations, which
may differ from generally accepted accounting principles.
Security transactions -- Security transactions are accounted for on the trade
date. Securities sold are determined on a specific identification basis.
Organization costs -- Costs incurred by the Fund in connection with its
organization and registration of shares, net of certain expenses, have been
capitalized and are being amortized on a straight-line basis over a five year
period beginning with the commencement of operations. In the event any of the
initial shares of the Fund are redeemed during the amortization period, the
redemption proceeds will be reduced by a pro rata portion of any unamortized
organization costs in the same proportion as the number of initial shares being
redeemed bears to the number of initial shares of the Fund outstanding at the
time of redemption. As of September 30, 1999, unamortized organization costs of
$49,453 are scheduled to be amortized over a remaining 25 months.
<PAGE>
PROFIT VALUE FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code (the Code) available to regulated
investment companies. As provided therein, in any fiscal year in which the Fund
so qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
As of September 30, 1999, net unrealized appreciation on investments was
$887,850 for federal income tax purposes, of which $1,077,063 related to
appreciated securities and $189,213 related to depreciated securities based on a
federal income tax cost basis of $2,807,590.
Reclassification of capital accounts - As of September 30, 1999, the Fund
reclassified $26,255 of accumulated net investment loss against accumulated net
realized gains from security transactions on the Statement of Assets and
Liabilities. The reclassification, a result of permanent differences between
financial statement and income tax reporting requirements, had no effect on the
Fund's net assets or net asset value per share.
2. INVESTMENT TRANSACTIONS
During the year ended September 30, 1999, cost of purchases and proceeds from
sales of portfolio securities, other than short-term investments, amounted to
$1,675,101 and $667,693, respectively.
3. TRANSACTIONS WITH AFFILIATES
The President of the Trust is also the President of Investor Resources Group,
LLC (the Adviser). Certain other Trustees and officers of the Trust are also
officers of the Adviser, or of Countrywide Fund Services, Inc. (CFS), the
administrative services agent, shareholder servicing and transfer agent, and
accounting services agent for the Trust, or of CW Fund Distributors, Inc. (the
Underwriter), the principal underwriter for the Fund and exclusive agent for the
distribution of shares of the Fund.
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by the Adviser pursuant to the terms of an
Investment Advisory Agreement. The Fund pays the Adviser an investment advisory
fee, computed and accrued daily and paid monthly, at an annual rate of 1.25% of
average daily net assets of the Fund.
During the year ended September 30, 1999, the Adviser voluntarily waived its
investment advisory fees of $39,860 and reimbursed the Fund for $117,215 of
other operating expenses in order to limit total operating expenses of the Fund
to 1.95% of the Fund's average daily net assets.
<PAGE>
PROFIT VALUE FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement, CFS supplies non-investment
related statistical and research data, internal regulatory compliance services
and executive and administrative services for the Fund. CFS supervises the
preparation of tax returns, reports to shareholders of the Fund, reports to and
filings with the Securities and Exchange Commission and state securities
commissions and materials for meetings of the Board of Trustees. For these
services, CFS receives a monthly fee at an annual rate of 0.15% of the Fund's
average daily net assets up to $25 million; 0.125% of such net assets between
$25 million and $50 million; and 0.10% of such net assets in excess of $50
million, subject to a minimum monthly fee of $1,000. During the year ended
September 30, 1999, CFS earned $12,000 of administration fees under the
Administration Agreement.
ACCOUNTING SERVICES AGREEMENT
Under the terms of an Accounting Services Agreement, CFS calculates the daily
net asset value per share and maintains the financial books and records of the
Fund. For these services, CFS receives a fee, based on current asset levels, of
$2,000 per month from the Fund. During the year ended September 30, 1999, CFS
earned $24,000 of accounting fees under the Accounting Services Agreement. In
addition, the Fund reimburses CFS for out-of-pocket expenses related to the
pricing of the Fund's portfolio securities.
TRANSFER AGENT AGREEMENT
Under the terms of a Transfer, Dividend Disbursing, Shareholder Service and Plan
Agency Agreement, CFS maintains the records of each shareholder's account,
answers shareholders' inquiries concerning their accounts, processes purchases
and redemptions of the Fund's shares, acts as dividend and distribution
disbursing agent and performs other shareholder service functions. For these
services, CFS receives a monthly fee at an annual rate of $17 per shareholder
account from the Fund, subject to a $1,000 minimum monthly fee. During the year
ended September 30, 1999, CFS earned $12,000 of transfer agent fees under the
Transfer Agent Agreement. In addition, the Fund reimburses CFS for out-of-pocket
expenses including, but not limited to, postage and supplies.
UNDERWRITING AGREEMENT
Under the terms of an Underwriting Agreement between the Trust and the
Underwriter, the Underwriter earned $6,261 from underwriting and brokerage
commissions on the sale of shares of the Fund during the year ended September
30, 1999.
DISTRIBUTION PLAN
The Fund has adopted a Plan of Distribution (the Plan) under which the Fund may
directly incur or reimburse the Adviser for expenses related to the distribution
and promotion of Fund shares. The annual limitation for payment of such expenses
under the Plan is 0.25% of the Fund's average daily net assets. The Fund
incurred distribution expenses of $4,454 under the Plan during the year ended
September 30, 1999.
4. FEDERAL TAX INFORMATION FOR SHAREHOLDERS (UNAUDITED)
On December 31, 1998, the Fund declared and paid a long-term capital gain
distribution of $3,407 or $0.02163 per share. In January of 1999, shareholders
were provided with Form 1099-DIV which reported the amount and tax status of the
capital gain distribution paid during calendar year 1998.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees
Profit Funds Investment Trust
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of portfolio investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Profit Value Fund (hereafter
referred to as the "Fund") at September 30, 1999, and the results of its
operations for the year then ended, the changes in its net assets and the
financial highlights for the periods presented, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which includes confirmation of securities at September 30, 1999 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Columbus, Ohio
November 10, 1999
