TABLE OF CONTENTS
SECTION PAGE
- ------- ----
A Message From Your Chairman 1
Financial Highlights 2
Statement of Assets and Liabilities 3
Schedule of Investments in Securities 4
Statement of Operations 5
Statements of Changes in Net Assets 6
Notes to Financial Statements 7
<PAGE>
A MESSAGE FROM YOUR CHAIRMAN....
Dear Shareholders,
The first half of the Impact Management Investment Trust's 1999 fiscal year
included a market bottom in October followed by a significant advance in the
various market indices that was, in some ways characterized by a sub-surface
condition that can only be compared to the late 1920's. Of course we all know
how that period of stock market history ended in 1929, followed by the Great
Depression of the 1930's. Though there are similarities, today's world has so
much more interconnectedness in it, it would likely be a bit naive to assume
that the 1920's and `30's are about to repeat themselves exactly.
What the similarities do suggest however is that, as before, the stock
market has been embraced by the general public in a way that tends to occur very
infrequently and usually ends up in a less than "Everyone's Getting Rich"
result, (see the cover of the May 1999 edition of Money Magazine).
Long-term takes a long time when you're living it out one day at a time.
However, every investor should try to keep in mind that many invest for a
lifetime and that the stock market may be positioning itself for a lower risk,
higher potential opportunity in the next few years than anyone has seen in
nearly three decades. In the meantime, the Fund's Trustees want you to know that
they continue to seek ways to bring you the best quality money management team
in order to find the balance between taking advantage of stock market
opportunities and protection of your hard earned money.
Sincerely,
Charles R. Clark
Chairman
Impact Management Investment Trust
1
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
March 31, 1999 September 30,
(Unaudited) 1998
------------- -------------
PER SHARE DATA*
<S> <C> <C>
Investment Income $ 0.15 $ 0.29
Expenses (0.10) (0.21)
------------- -------------
Net investment income 0.05 0.08
Distributions from net investment income (0.05) (0.01)
Net realized and unrealized gain (loss) on investment 0.94 (1.66)
Distributions from realized gain on investments 0.00 0.00
------------- -------------
Net increase (decrease) in net asset value 0.94 (1.59)
Net asset value:
Beginning of period 8.33 9.92
------------- -------------
End of period $ 9.27 $ 8.33
============= =============
RATIOS AND SUPPLEMENTAL DATA
Total return^ 11.28%~ (15.93)%
Ratio of expenses to average net assets^ 2.25%+ 2.25%
Ratio of net investment income to average net assets^ 1.04%+ 0.88%
Portfolio turnover rate 81.64% 221.45%
Average commission rate paid $ 0.1636 $ 0.1296
Net assets, end of period $ 8,396,323 $ 3,925,928
Shares of beneficial interest outstanding, end of period 905,312 471,512
Number of shareholder accounts, end of period 182 136
</TABLE>
- ---------------------------------------------------------------
* Selected data for a share of beneficial interest outstanding throughout
each period.
~ Not annualized.
+ Annualized
^ Excludes administrative fee and account closing fee charged directly to
shareholder accounts (see Note 4 to financial statements).
See accompanying notes to financial statements.
2
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1999
Unaudited
ASSETS
Investments in securities, at value -
identified cost $3,333,891 $ 3,812,457
Cash 4,607,155
Interest Receivable 90
-----------
Total assets 8,419,702
-----------
LIABILITIES
Payable for investment securities purchased 4,881
Investment advisory fee payable 8,879
Distribution expenses payable 7,104
Administrative Fee Payable 2,515
-----------
Total liabilities 23,379
-----------
NET ASSETS $ 8,396,323
===========
NET ASSETS CONSIST OF:
Accumulated net investment income - net of distributions $ 21,552
Accumulated net realized (loss) (220,761)
Net unrealized appreciation 478,566
Paid-in capital applicable to 905,312 no par value
shares of beneficial interest outstanding;
unlimited number of shares authorized 8,116,966
-----------
NET ASSETS $ 8,396,323
===========
NET ASSET VALUE PER SHARE $ 9.27
===========
See accompanying notes to financial statements.
3
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
March 31, 1999
Unaudited
Shares Value
------ -----
COMMON STOCK - 45.0%
Communications - 16.0%
Associated Group Inc. - Class A* 5,440 $ 269,620
Scientific Atlanta Inc. 13,500 367,875
Teligent Inc. - Class A* 6,000 249,750
MCI Worldcom Inc. 5,250 464,953
Computers and Technology - 15.0%
Cisco Systems Inc.* 2,250 246,516
Micron Technology Inc. 6,300 303,975
America Online* 4,800 700,800
Internet Advisory Company* 2,000 19,375
Medical - 3.3%
Atlantic Pharmaceuticals Inc.* 6,000 8,250
Interneuron Pharmaceuticals* 7,200 20,700
LCA-Vision Inc.* 1,725 6,900
Sunrise Technologies International Inc.* 22,000 242,000
Restaurants - 1.2%
Nathan's Famous Inc.* 29,500 103,250
Transportation - 4.2%
Noble International Ltd.* 33,500 355,938
Insurance - 4.3%
Aetna Inc. 4,400 365,200
Other - 1.0%
Harris & Harris Group Inc. 33,250 61,306
----------
Total common stocks (cost $3,307,842) 3,786,408
----------
SHORT-TERM INVESTMENTS - 03%
Rydex Series Trust - U.S. Government Money
Market Fund (seven day yield, cost $26,049) 26,049 26,049
----------
Total investments in securities - 45.3% of net
assets (cost $3,333,891) $3,812,457
==========
- ----------------------------------------------
* Non-income producing security
See accompanying notes to financial statements.
4
<PAGE>
IMPACT MAMAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 1999
Unaudited
INVESTMENT INCOME
Interest income $ 100,978
Dividend income 12,855
----------
Total income 113,833
----------
EXPENSES
Investment advisory fee 43,106
Distribution expenses 34,484
----------
Total expenses 77,590
----------
Net investment income 36,243
----------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on securities 0
Change in net unrealized appreciation on securities 794,213
----------
Net realized and unrealized gain 794,213
----------
Net increase in net assets resulting from operations $ 830,456
==========
See accompanying notes to financial statements.
4
<PAGE>
MPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended March 31, 1999
Unaudited
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
March 31, 1999 September 30,
(Unaudited) 1998
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
Operations
<S> <C> <C>
Net investment income gain (loss) $ 36,243 $ 27,949
Net realized gain (loss) on securities 0 (220,761)
Change in net unrealized appreciation
(depreciation) on securities 794,213 (312,975)
----------- -----------
Increase (decrease) in net assets resulting
from operations 830,456 (505,787)
----------- -----------
Distributions to shareholders from net investment income (39,454) (3,170)
----------- -----------
Beneficial interest share transactions*
Shares sold 4,865,972 4,615,307
Shares redeemed (1,226,033) (685,350)
Shares issued for reinvestment of distributions 39,454 3,170
----------- -----------
Increase in net assets from share transactions 3,679,393 3,933,127
----------- -----------
Total increase in net assets 4,470,395 3,424,170
----------- -----------
Net assets
Beginning of period 3,925,928 501,758
----------- -----------
End of period (including undistributed net investment
income (loss) of $195,502 and $24,762, respectively) $ 8,396,323 $ 3,925,928
=========== ===========
* Share information
Shares sold 567,852 495,928
Shares redeemed (138,576) (75,342)
Shares issued for reinvestment of distributions 4,524 359
----------- -----------
Increase in shares outstanding 433,800 420,945
=========== ===========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN 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 Total
Return Portfolio, f/k/a 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.
Effective May 1, 1999, the Trust changed the name of the Portfolio to
the Impact Total Return Portfolio consistent with the changes made to
the investment objective and policies. Effective May 1, 1999, the
Trust offers four classes of shares of beneficial interest.
B. Security Valuation
Investments in securities listed or traded on a securities exchange
are valued at the last quoted sales price on the security's principal
exchange on that day. Listed securities not traded on an exchange that
day, and other securities which are traded in the over-the-counter
market are valued at the mean between the last closing bid and asked
prices in the market on that day.
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, other than short-term
investments, during the period were $2,573,221 and $0.00,
respectively. At March 31, 1999, the aggregate cost of investments for
federal income tax and financial reporting purposes was $3,333,891.
7
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
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 1.25% of the Fund's average daily net
assets. The investment advisory fee is calculated daily and paid
monthly.
Effective May 1, 1999, the Trust and the Investment Advisor entered
into a sub-investment advisory agreement with Schneider Capital
Management in which the sub-advisor receives from the advisor an
annual investment advisory fee equal to .60% of the Fund's average
daily net assets.
Effective May 5, 1998, a Distribution Plan was adopted by the Trust
pursuant to Rule 12b-1 of the 1940 Act. Under the provisions of the
Distribution Plan, the Fund pays or reimburses the Investment Advisor
affiliates or other third parties for expenses incurred in connection
with the promotion and distribution of the Fund's shares in an amount
up to 1% per annum of the average daily net assets of the Fund.
Effective May 1, 1999, this plan was amended to change the name of the
Portfolio to Impact Total Return Portfolio, Retail Class.
Also, effective May 1, 1999, a Distribution Plan was adopted by the
Trust for the Traditional Class and Wholesale Class pursuant to Rule
12b-1 of the 1940 Act. Under the provisions of the Distribution Plan,
the Fund pays or reimburses the Investment Advisor affiliates or other
third parties for expenses incurred in connection with the promotion
and distribution of the Fund's shares in an amount up to .25% per
annum of the average daily net assets of each class.
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 $7,695 and was reimbursed $34,484 pursuant to the
provisions of the Distribution Plan for the six months ended March 31,
1999.
Certain officers of the Trust and members of the Board of Trustees are
also officers and directors of the Investment Advisor.
Note 4. ADMINISTRATIVE SERVICES
-----------------------
Effective May 5, 1998, the Trust entered into an administrative
service agreement with Impact Administrative Services, Inc. ("IASI"),
a wholly-owned subsidiary of the Investment Advisor. Under the
agreement, IASI provides administrative personnel and services
necessary to operate the Fund including transfer agent and dividend
disbursing agent services. IASI bears substantially all operating
expenses of the Fund, excluding brokerage fees, interest charges and
taxes. For these services, IASI is paid a fee of $165.00 per account,
per year. One twelfth of the annual fee paid to IASI is charged to
shareholder accounts at each month end as redemption of shares of
beneficial interest. In addition, when a shareholder closes an
account, IASI is paid a fee of $2.00 which is charged to the
shareholder as redemption of shares of beneficial interest. Prior to
May 5, 1998, the Trust had an administrative service agreement with
Impact Management Services, Inc. ("IMSI")
8
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
Unaudited
with substantially the same terms and an identical fee structure.
Total fees charged to shareholder accounts under these agreements
amounted to $14,500 for the period ended March 31, 1999.
Effective May 1, 1999, the Trust amended the administrative service
agreement with IASI that changes the fee structure. Effective May 1,
1999, IASI is paid a fee equal to .35% of the Fund's average daily net
assets.
