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IMPACT MANAGEMENT INVESTMENT TRUST
SEMIANNUAL REPORT
March 31, 1998
THE GROWTH PORTFOLIO
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<TABLE>
TABLE OF CONTENTS
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SECTION PAGE
A Message from Your Chairman 1
A Letter from the Portfolio Manager 2
Financial Highlights 3
Statement of Assets and Liabilities 4
Schedule of Investments in Securities 5
Statement of Operations 6
Statement of Changes in Net Assets 7
Notes to Financial Statements 8
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Dear Shareholders:
The general trend and increased volatility of the U.S. stock market
turned out as we expected for the first half of the fiscal year through
March 31, 1998. With the Federal Reserve Board in a generally accomodative
posture with regard to interest rates and money supply, the market averages
continued to be strong. There are, however, some things that have occurred
during this time which should not be overlooked. Most significantly was the
stock market's ability to drop some 554 Dow Jones points in a single day, as
triggered by a sell-off in the Asian markets that could be characterized as
somewhat "out of the blue." In spite of the increased volatility, 1997 ended
with consumer confidence at the highest level in 28 years. Not since 1969 had
public been as optimistic about the general economic environment. It is
important to remember that what followed in the stock market AFTER 1969 was a
period of downward adjustment in equity prices that culminated at the
"Watergate Bottom" in 1974. In a study published recently by the Investment
Company Institute, 37.4% of U.S. households owned mutual funds in 1997. That
percentage figure does not include those who own stocks or bonds directly
rather than through mutual funds. The percentage of Americans involved in the
stock market is at an all-time high.
With these things in mind, Neal Jordan, Senior Portfolio Manager of
Jordan American Holdings, Inc., the advisor to the Fund, continues to keep a
strong eye on the exit.
/s/Charles R. Clark
Charles R. Clark
Chairman
1
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My primary objective in managing the Impact Management Growth Portfolio
is to attempt to control the Fund's assets in such a way that the Fund will be
consistently the beneficiary of both bull and bear market trends.
I believe that our proactive management of the Fund allows us to take
full advantage of the Fund's range of investment policies as market conditions
warrant, and allows us to remain poised to act quickly in response to changes
in the trend of the market to benefit from major downward movements by the
market, rather than being victimized by them.
The times of highest potential in the stock market always follow
important declines by the market. We believe that nothing in stock market
investing is more important than taking maximum advantage of the major
opportunities which are created when important bottoms are made and new rising
trends follow.
Our goal at all times is to remain in harmony with the long-term market
trend, thereby benefiting from major movements in both directions. We expect
1998 to provide an excellent buying opportunity, followed by a powerfully
rising trend in the two years approaching the Presidential Election in the
year 2000.
/s/W. Neal Jordan
W. Neal Jordan
Senior Portfolio Manager
2
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IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT MANAGEMENT GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
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Six Months
Ended
March 31, June 17, 1997+ to
1998 September 30,
(Unaudited) 1997
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Per Share Data*
Investment income $ .11 $ .01
Expenses (.11) (.01)
-------- --------
Net investment income (loss) .00 .00
Distributions from net investment income (.01) .00
Net realized and unrealized gain (loss)
on investments (.45) (.08)
Distributions from realized gains on
investments .00 .00
-------- --------
Net decrease in net asset value (.46) (.08)
Net asset value:
Beginning of period 9.92 10.00
-------- --------
End of period $ 9.46 $ 9.92
======== ========
Ratios and Supplemental Data
Total return (not annualized)# (4.54)% (.80)%
Ratio of expenses to average net
assets**# 2.25% 2.25%
Ratio of net investment income to average
net assets**# 0.00% 0.00%
Portfolio turnover rate (not annualized) 76.01% 0.00%
Average commission rate paid $ .1242 $ .1437
Net assets, end of period $ 3,790,335 $ 501,758
Shares of beneficial interest outstanding,
end of period 400,621 50,567
Number of shareholder accounts, end of period 114 17
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_____________________
+ Commencement of operations.
* Selected data for a share of beneficial interest outstanding throughout
each period.
** Annualized.
# Excludes administrative fee charged directly to shareholder accounts (see
Note 4 to financial statements).
See accompanying notes to financial statements.
3
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IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT MANAGEMENT GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1998
Unaudited
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ASSETS
Investments in securities, at value
- identified cost $2,496,740 $2,433,380
Cash and cash equivalents 1,359,218
Receivable for shares of beneficial interest sold 6,100
---------
Total assets 3,798,698
---------
LIABILITIES
Investment advisory fee payable 6,836
Administrative fee payable 1,527
---------
Total liabilities 8,363
---------
NET ASSETS $3,790,335
=========
NET ASSETS CONSIST OF:
Accumulated net investment income (loss)
- net of distributions $ (3,280)
Accumulated net realized gain (loss) 92,205
Net unrealized appreciation (depreciation) (63,360)
Paid-in capital applicable to 400,621 no par value
shares of beneficial interest outstanding;
unlimited number of shares authorized 3,764,770
---------
NET ASSETS $3,790,335
=========
NET ASSET VALUE PER SHARE $ 9.46
=========
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See accompanying notes to financial statements.
4
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IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT MANAGEMENT GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
March 31, 1998
Unaudited
<TABLE>
Shares Value
<S> <C> <C>
Common Stocks - 64.2%
Computers and Technology - 18.2%
Cisco Systems Inc.* 2,000 $ 136,750
Intel Corp. 1,600 124,900
Intergraph Corp.* 3,000 25,406
Micron Technology Inc. 3,700 107,531
Microsoft Corp.* 1,800 161,100
Sun Microsystems Inc.* 3,240 135,169
Communications - 16.7%
Associated Group Inc. - Class A* 4,440 170,940
Lucent Technologies Inc. 1,600 204,600
Plantronics Inc.* 2,000 81,875
Scientific Atlanta Inc. 9,000 176,063
Medical - 19.8%
Amgen Inc.* 2,500 152,188
Atlantic Pharmaceuticals Inc.* 3,000 19,500
Interneuron Pharmaceuticals* 5,100 53,231
LCA-Vision Inc.* 1,725 3,073
Lifecore Biomedical Inc.* 4,500 105,187
Summit Technology Inc.* 25,000 135,938
Sunrise Technologies International Inc.* 7,000 49,219
Vivus Inc.* 7,020 82,485
Zonagen Inc.* 6,800 149,600
Transportation - 4.2%
Noble International Ltd.* 15,000 157,500
Restaurants - 3.1%
Nathan's Famous Inc.* 29,500 118,000
Other - 2.2%
Harris & Harris Group Inc.* 33,250 83,125
---------
Total investments in securities
- 64.2% of net assets (cost $2,496,740) $2,433,380
=========
</TABLE>
_____________________
* Non-income producing security
See accompanying notes to financial statements.
5
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IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT MANAGEMENT GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 1998
Unaudited
<TABLE>
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Investment income
Interest income $ 25,382
Dividend income 193
------
Total income 25,575
------
Expenses
Investment advisory fee 25,668
------
Net investment income (loss) (93)
------
Realized and unrealized gain (loss)
Net realized gain on securities 92,205
Change in net unrealized appreciation or
depreciation on securities (60,689)
------
Net gain (loss) on investments 31,516
------
Net increase in net assets resulting from operations $ 31,423
======
</TABLE>
See accompanying notes to financial statements.
6
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IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT MANAGEMENT GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended March 31, 1998 (Unaudited), and For the
Period June 17, 1997 (commencement of operations) to September 30, 1997
<TABLE>
Six Months
Ended
March 31, June 17, 1997 to
1998 September 30,
(Unaudited) 1997
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ (93) $ (17)
Net realized gain on securities 92,205 0
Change in net unrealized appreciation or
depreciation on securities (60,689) (2,671)
--------- ---------
Increase (decrease) in net assets
resulting from operations 31,423 (2,688)
--------- ---------
Distributions to shareholders from net
investment income (3,170) 0
--------- ---------
Beneficial interest share transactions*
Shares sold 3,348,628 504,560
Shares redeemed (91,474) (114)
Shares issued for reinvestment of
distributions 3,170 0
--------- ---------
Increase in net assets from share
transactions 3,260,324 504,446
--------- ---------
Total increase in net assets 3,288,577 501,758
Net assets
Beginning of period 501,758 0
--------- ---------
End of period (including undistributed
net investment income (loss) of $(3,280)
and $(17), respectively) $3,790,335 $ 501,758
========= =========
* Share information
Shares sold 359,825 50,579
Shares redeemed (10,130) (12)
Shares issued for reinvestment of
distributions 359 0
--------- ---------
Increase in shares outstanding 350,054 50,567
========= =========
</TABLE>
See accompanying notes to financial statements.
7
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IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT MANAGEMENT GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
Unaudited
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. General Description
Impact Management Investment Trust (the "Trust") was organized as a
Massachusetts business trust on December 18, 1996. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as
a diversified, open-end management investment company. Impact
Management Growth Portfolio (the "Fund") is the initial Series of the
Trust. The Trust commenced operations on June 17, 1997, with the sale
of 10,000 shares of beneficial interest of the Fund to Jordan American
Holdings, Inc., d/b/a Equity Assets Management (the "Investment
Advisor"), for cash in the amount of $100,000. The Trust commenced
investing in securities on September 16, 1997.
The Trust's fiscal year end is September 30th.
B. Security Valuation
Investments in securities traded on a national securities exchange (or
reported on the NASDAQ national market) are stated at the last reported
sales price on the day of valuation.
C. Method of Reporting
The financial statements are presented in accordance with generally
accepted accounting principles, which require the use of certain
estimates made by the Fund's management. The Fund follows industry
practice and records security transactions on the trade date. Realized
gains and losses are reported on the identified cost basis. Dividend
income is recognized on the ex-dividend date, and interest income is
recorded on the accrual basis.
D. Federal Income Taxes
No provision for federal income taxes is required since the Fund
intends to continue to qualify as a regulated investment company and
distribute all its taxable income to its shareholders.
Note 2. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities during the period were
$3,155,133 and $916,022, respectively. At March 31, 1998, the
aggregate cost of investments for federal income tax and financial
reporting purposes was $2,496,740 and net unrealized depreciation
aggregated $63,360, of which $149,630 related to appreciated
investments and $212,990 to depreciated investments.
8
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IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT MANAGEMENT GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Unaudited
Note 3. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into an investment advisory agreement with the
Investment Advisor. The Investment Advisor makes investment decisions
with respect to the assets of the Fund and reviews, supervises and
administers the investment program of the Fund. As compensation for
services rendered, the Investment Advisor receives an annual investment
advisory fee equal to 2.25% of the Fund's average daily net assets.
The investment advisory fee, which may be voluntarily waived in whole
or in part by the Investment Advisor, is paid on a monthly basis.
Certain officers of the Trust and members of the Board of Trustees are
also officers and directors of the Investment Advisor.
Effective May 5, 1998, the investment advisory fee was reduced to an
annual fee of 1.25% of the Fund's average daily net assets.
Additionally, the Fund may now pay up to 1% of its average daily net
assets per year for expenses incurred in the distribution and servicing
of shares pursuant to Rule 12b-1 of the 1940 Act.
A wholly-owned subsidiary of the Investment Advisor, IMPACT Financial
Network, Inc., a broker and dealer in securities registered with the
Securities and Exchange Commission and a member of the National
Association of Securities Dealers, Inc., earned brokerage fees on the
Fund's purchases and sales of investment securities aggregating
approximately $23,000 for the six months ended March 31, 1998.
Note 4. ADMINISTRATIVE SERVICES
The Trust has entered into an administrative services agreement with
IMPACT Administrative Services, Inc. (the "Administrator"), a wholly-
owned subsidiary of the Investment Advisor. Under the agreement, the
Administrator provides administrative personnel and services necessary
to operate the Fund and provides transfer agent and dividend
disbursing agent services. The Administrator bears substantially all
operating expenses of the Fund, excluding brokerage fees, interest
charges and taxes. For these services, the Administrator is paid a
fee of $165.00 per account, per year. One twelfth of the annual fee
paid to the Administrator is charged to shareholder accounts at each
month end as a redemption of shares of beneficial interest. Total
fees charged to shareholder accounts amounted to $6,188 for the six
months ended March 31, 1998.
9
