================================================================================
PROFIT FUNDS INVESTMENT TRUST
-----------------------------
PROFIT VALUE FUND
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ANNUAL REPORT
September 30, 2000
INVESTMENT ADVISER ADMINISTRATOR
------------------ -------------
INVESTOR RESOURCES GROUP, LLC INTEGRATED FUND SERVICES, INC.
8720 Georgia Avenue, Suite 808 P.O. Box 5354
Silver Spring, Maryland 20910 Cincinnati, Ohio 45201-5354
1.888.744.2337
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<PAGE>
LETTER TO SHAREHOLDERS
November 15, 2000
Dear Profit Value Fund Shareholder:
Happy Birthday! The Profit Value Fund turned four years old today and the
fourth fiscal year of the Profit Value Fund was terrific. In a period of
incredible volatility in the stock market, the Fund's strong performance in 1998
and 1999 continued this year with the Fund's 4.17% increase outperforming the
S&P 500 Index's 5.87% decline and the Lipper Large Value Index's 0.37% increase
year to date November 15, 2000. We are pleased to inform you that the
performance of the Profit Value Fund during the past three years, including the
twelve months covered by this report, ranked as the 3rd best performing large
capitalization value fund of the 278 tracked by Lipper Analytical Services, Inc.
Asset growth continues to be impressive in an environment where many equity
funds are losing assets and the fund continues to receive positive press
coverage. The most exciting news is that. We are excited about the Fund's
performance and how it is helping to generate substantial interest in the Profit
Value Fund.
For the fiscal year ended September 30, 2000, the Profit Value Fund closed
at a net asset value of $21.63 per share. The Fund's total return over the
trailing 12 months of 26.14% reflects its outperformance compared to its S&P 500
Index benchmark's total return of 13.27%.
The stock market and its participants are jittery. There is much confusion
over the inflation outlook and the full impact of the Federal Open Market
Committee's six most recent interest rate increases on corporate profits. We
applaud the Federal Open Market Committee's decision to leave rates unchanged
since June. We believe that corporate profits are still strong; however, the
market will be soft until fourth quarter earnings pre-announcements are
complete. We expect the next interest rate policy decision will be to reduce
rates early next year and believe that the market is positioned on a stronger
foundation for future advances. Alan Greenspan has been successful in reducing
the "irrational exuberance" that had built up in the stock market.
Investors may be too pessimistic currently. Although there is a risk of
recession in 2001, PE multiples are the lowest they have been in three years and
we are aggressive buyers. Assuming the Federal Reserve Open Market Committee
lowers rates in 2001, we expect the market as represented by the S&P 500 Index
to match profit growth of 16%. During these periods of market distress, we
continue to focus on earnings, moderating economic growth and productivity gains
expanding profit margins. We continue to manage portfolios according to the
market climate by buying shares that are inexpensive relative to their peers and
historical valuation standards. Companies that are able to show unit cost
increases and high productivity will be the big winners in the next leg up of
the current bull market expansion. Until the economy gives a clearer picture on
the conclusion of a soft landing, we are paying special attention and taking a
two prong approach, positioning a portion of the Profit Value Fund's portfolio
defensively while taking advantage of the fire sale prices for certain equities.
As always, quality firms will rise to the top following this correction;
some of the more speculative stocks might take much longer if ever to recover.
Those who are overwhelmed by the emotion of the moment and sell with the herd
will be the true losers. Refocusing on the
<PAGE>
fundamentals and ignoring consensus thinking and the noise from the media will
be key elements of performance success. We are patient and still bullish.
At Profit Funds, we are committed to helping you pursue your financial
goals. Our investment philosophy is that, over the long term, the most promising
investment opportunities can be found among large financially sound companies,
which at the time of investment show an attractive valuation discount relative
to their peers.
Profit Value Fund seeks long-term total return by investment primarily in
established, larger capitalization companies (i.e. companies having a market
capitalization exceeding $1 billion) that are attractive relative to their
peers.
The pause in the rapid growth of the U.S. market this year as compared to
the previous three years is a reminder that investors should be diversified and
cautious in equity investing. Regardless of the direction the markets take in
the coming years, 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 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.
We would like to 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
12/31/99 20,947 12/31/99 21,406
03/31/00 21,428 03/31/00 23,332
06/30/00 20,858 06/30/00 22,704
09/30/00 20,656 09/30/00 23,023
-----------------------------
Profit Value Fund
Average Annual Total Return
1 Year Since Inception*
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26.14% 26.14%
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* Initial public offering of shares commenced on November 15, 1996.
<PAGE>
PROFIT VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
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ASSETS
Investments in securities:
At acquisition cost $ 4,581,283
============
At value (Note 1) $ 6,454,339
Receivable for securities sold 577,345
Receivable for capital shares sold 4,707
Dividends receivable 5,061
Receivable from Adviser (Note 3) 7,367
Organization costs, net (Note 1) 25,793
Other assets 5,692
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TOTAL ASSETS 7,080,304
------------
LIABILITIES
Bank overdraft 83,518
Payable to Administrator (Note 3) 4,000
Payable for securities purchased 260,670
Payable for capital shares purchased 692
Other accrued expenses and liabilities 13,738
------------
TOTAL LIABILITIES 362,618
------------
NET ASSETS $ 6,717,686
============
NET ASSETS CONSIST OF:
Paid-in capital $ 4,659,121
Accumulated net realized gains from security transactions 185,509
Net unrealized appreciation on investments 1,873,056
------------
NET ASSETS $ 6,717,686
============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 310,561
============
Net asset value and redemption price per share (Note 1) $ 21.63
============
Maximum offering price per share (Note 1) $ 22.53
============
See accompanying notes to financial statements.
<PAGE>
PROFIT VALUE FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
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INVESTMENT INCOME
Dividends $ 64,394
------------
EXPENSES
Investment advisory fees (Note 3) 70,815
Professional fees 27,308
Accounting services fees (Note 3) 24,000
Organization expense (Note 1) 23,660
Postage and supplies 11,583
Insurance expense 13,950
Distribution expense (Note 3) 9,908
Administration fees (Note 3) 12,000
Transfer agent fees (Note 3) 12,000
Trustees' fees and expenses 12,427
Custodian fees 11,462
Registration fees 9,152
Reports to shareholders 960
Pricing expense 867
Other expenses 172
------------
TOTAL EXPENSES 240,264
Fees waived and expenses reimbursed (Note 3) (129,942)
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NET EXPENSES 110,322
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NET INVESTMENT LOSS (45,928)
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REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 185,509
Net change in unrealized appreciation/
depreciation on investments 985,206
------------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS 1,170,715
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,124,787
============
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PROFIT VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
=============================================================================================
Year Year
Ended Ended
September 30, September 30,
2000 1999
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<S> <C> <C>
FROM OPERATIONS
Net investment loss $ (45,928) $ (26,255)
Net realized gains from security transactions 185,509 241,006
Net change in unrealized appreciation/depreciation
on investments 985,206 620,078
------------ ------------
Net increase in net assets from operations 1,124,787 834,829
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net realized gains (214,751) (3,407)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 2,687,184 1,512,964
Net asset value of shares issued in
reinvestment of distributions to shareholders 214,736 3,397
Payments for shares redeemed (1,004,957) (453,228)
------------ ------------
Net increase in net assets from capital share transactions 1,896,963 1,063,133
------------ ------------
TOTAL INCREASE IN NET ASSETS 2,806,999 1,894,555
NET ASSETS
Beginning of year 3,910,687 2,016,132
------------ ------------
End of year $ 6,717,686 $ 3,910,687
============ ============
CAPITAL SHARE ACTIVITY
Shares sold 131,715 85,572
Shares issued in reinvestment of distributions to shareholders 11,046 206
Shares redeemed (49,272) (27,917)
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Net increase in shares outstanding 93,489 57,861
Shares outstanding, beginning of year 217,072 159,211
------------ ------------
Shares outstanding, end of year 310,561 217,072
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
PROFIT VALUE FUND
FINANCIAL HIGHLIGHTS
=================================================================================================================
Year Year Year Period
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD: 2000 1999 1998 1997(a)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $ 18.02 $ 12.66 $ 12.88 $ 10.00
-------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss) (0.15) (0.12) (0.02) 0.07
Net realized and unrealized gains (losses) on investments 4.75 5.50 (0.06) 2.81
-------- -------- -------- --------
Total from investment operations 4.60 5.38 (0.08) 2.88
-------- -------- -------- --------
Less distributions:
Dividends from net investment income -- -- (0.09) --
Distributions from net realized gains (0.99) (0.02) (0.05) --
-------- -------- -------- --------
Total distributions (0.99) (0.02) (0.14) --
-------- -------- -------- --------
Net asset value at end of period $ 21.63 $ 18.02 $ 12.66 $ 12.88
======== ======== ======== ========
RATIOS AND SUPPLEMENTAL DATA:
Total return (b) 26.14% 42.52% (0.57%) 28.80%(d)
======== ======== ======== ========
Net assets at end of period (000's) $ 6,718 $ 3,911 $ 2,016 $ 2,010
======== ======== ======== ========
Ratio of net expenses to average net assets (c) 1.95% 1.95% 1.95% 1.95%(e)
Ratio of net investment income (loss) to average net assets (0.81%) (0.82%) (0.18%) 1.19%(e)
Portfolio turnover rate 47% 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/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 4.24%, 6.87%, 8.36% and
18.57% (e) for the periods ended September 30, 2000, 1999, 1998 and 1997,
respectively (Note 3).
(d) Not annualized.
(e) Annualized.
See accompanying notes to financial statements.
<PAGE>
PROFIT VALUE FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2000
MARKET
COMMON STOCKS --- 96.1% SHARES VALUE
($)
AEROSPACE --- 2.3%
General Dynamics Corp. 2,500 157,031
AUTOMOBILES --- 2.3%
Visteon Corporation * 10,418 157,572
BEVERAGES --- 1.4%
PepsiCo, Inc. 2,000 92,000
BUSINESS SERVICES --- 4.0%
Nasdaq-100 Shares * 3,000 266,062
COMMERCIAL SERVICES --- 1.9%
Cendant Corp. * 12,000 130,500
CONGLOMERATE --- 3.8%
Bershire Hathaway, Inc. - Class A * 4 257,600
CONSUMER STAPLES --- 2.7%
Eastman Kodak Co. 1,000 40,875
Safeway, Inc. * 3,000 140,062
180,937
ENERGY & RESOURCES --- 6.7%
Conoco, Inc. - Class B 6,227 167,740
El Paso Energy Corp. 2,500 154,062
Exxon Mobil Corp. 1,460 130,122
451,924
FINANCIAL & INSURANCE --- 10.9%
American General Corp. 1,375 107,250
Citigroup, Inc. 2,000 108,125
Conseco, Inc. 20,000 152,500
Goldman Sachs Group, Inc. 1,000 113,938
Legg Mason, Inc. 2,000 116,250
Merrill Lynch & Co., Inc. 2,000 132,000
730,063
<PAGE>
PROFIT VALUE FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2000
MARKET
COMMON STOCKS --- 96.1% SHARES VALUE
($)
HEALTHCARE --- 7.5%
Bristol-Myers Squibb Company 2,000 114,250
Elan Corp. plc * 4,000 219,000
Merck & Co., Inc. 1,400 104,212
Pfizer, Inc. 1,500 67,406
504,868
HOTELS --- 1.7%
Host Marriott Corp. 10,000 112,500
MANUFACTURING --- 1.9%
Tyco International, Ltd. 2,500 129,688
MULTI-MEDIA --- 2.2%
Univision Communications, Inc. - Class A * 4,000 149,500
OIL AND GAS DRILLING --- 1.8%
Global Marine, Inc. * 4,000 123,500
PAPER MILLS --- 4.2%
Georgia-Pacific Group 5,000 117,500
Kimberly-Clark Corporation 3,000 167,438
284,938
RETAIL --- 9.1%
Home Depot, Inc. 2,500 132,656
Intimate Brands, Inc. 6,000 112,125
Limited, Inc. 3,000 66,188
Tricon Global Restaurants, Inc. * 5,000 153,125
Wal-Mart Stores, Inc. 3,000 144,375
608,469
TECHNOLOGY --- 24.8%
America Online, Inc. * 4,800 258,000
Cisco Systems, Inc. * 4,110 227,078
EMC Corp. * 6,000 594,750
Intel Corp. 2,000 83,250
Microsoft Corp. * 3,000 180,750
Sun Microsystems, Inc. * 2,000 233,500
Western Digital Corp. * 15,000 88,125
1,665,453
<PAGE>
PROFIT VALUE FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2000
MARKET
COMMON STOCKS --- 96.1% SHARES VALUE
($)
TELECOMMUNICATIONS --- 5.3%
AT&T Corp. 2,912 85,540
Lucent Technologies, Inc. 4,000 122,250
WorldCom, Inc. * 4,436 134,744
342,534
TRANSPORT SERVICES --- 1.6%
UAL Corp. 2,600 109,200
TOTAL COMMON STOCKS --- (COST $4,581,283) 6,454,339
TOTAL INVESTMENTS AT VALUE --- 96.1% (COST $4,581,283) $6,454,339
OTHER ASSETS IN EXCESS OF LIABILITIES --- 3.9% 263,347
NET ASSETS --- 100.0% $6,717,686
* Non-income producing security.
See accompanying notes to financial statements.
<PAGE>
PROFIT VALUE FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
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, 2000, unamortized organization costs of
$25,793 are scheduled to be amortized over a remaining 13 months.
<PAGE>
PROFIT VALUE FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
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, 2000, net unrealized appreciation on investments was
$1,873,056 for federal income tax purposes, of which $2,123,130 related to
appreciated securities and $250,074 related to depreciated securities based on a
federal income tax cost basis of $4,581,283.
Reclassification of capital accounts - As of September 31, 2000, the Fund
reclassified $45,928 of accumulated net investment loss against paid-in capital
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, 2000, cost of purchases and proceeds from
sales of portfolio securities, other than short-term investments, amounted to
$4,186,570 and $2,528,322, 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 Integrated Fund Services, Inc. (IFS), the
administrative services agent, shareholder servicing and transfer agent, and
accounting services agent for the Trust, or of IFS 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, 2000, the Adviser voluntarily waived its
investment advisory fees of $70,815 and reimbursed the Fund for $59,127 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, 2000
--------------------------------------------------------------------------------
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement, IFS supplies non-investment
related statistical and research data, internal regulatory compliance services
and executive and administrative services for the Fund. IFS 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, IFS 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.
ACCOUNTING SERVICES AGREEMENT
Under the terms of an Accounting Services Agreement, IFS calculates the daily
net asset value per share and maintains the financial books and records of the
Fund. For these services, IFS receives a fee, based on current asset levels, of
$2,000 per month from the Fund. In addition, the Fund reimburses IFS 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, IFS 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, IFS receives a monthly fee at an annual rate of $17 per shareholder
account from the Fund, subject to a $1,000 minimum monthly fee. In addition, the
Fund reimburses IFS 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 $33,411 from underwriting and brokerage
commissions on the sale of shares of the Fund during the year ended September
30, 2000.
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 $9,908 under the Plan during the year ended
September 30, 2000.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of
Profit Funds Investment Trust:
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of 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 (the "Fund")
at September 30, 2000, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then ended
and the financial highlights for each of the periods presented, in conformity
with accounting principles generally accepted in the United States of America.
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 audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
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 audits, which included
confirmation of securities at September 30, 2000, by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
November 27, 2000
