IMPACT MANAGEMENT
INVESTMENT TRUST
IMPACT TOTAL RETURN
PORTFOLIO
ANNUAL REPORT
TO
SHAREHOLDERS
SEPTEMBER 30, 2000
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
--------------------------------------------------------------------------------
A Message From Your Chairman 1
Fund Performance 2-4
Financial Highlights 5-6
Statement of Assets and Liabilities 7
Schedule of Investments in Securities 8-9
Statement of Operations 10
Statements of Changes in Net Assets 11
Notes to Financial Statements 12-15
Independent Auditors' Report 16
<PAGE>
Dear Shareholders,
The IMPACT Total Return Portfolio had its most successful year in providing
investment results for its investors in fiscal 2000, though the U.S. stock
market has had significantly greater volatility over the past 12 months. As
opined in our semi-annual report dated March 31, 2000, "The time appears to be
right for a well-timed, valued-oriented portfolio of securities to be part of an
investor's core holdings.", and indeed that has played itself out in the second
half of fiscal year 2000. The fund's investment advisor, Equity Assets
Management, focused on the more reliable cyclical patterns of the stock market
as delineated in their proprietary analysis and kept the fund heavily invested
in equity securities throughout the past year. That combined with Schneider
Capital Management's capable handling of and focus on identifying value stocks
in which change is foreseeable but not yet reflected in the company's stock has
achieved an important facet of the fund's objective, namely, providing capital
appreciation.
At the time of this writing, we still do not know who our president will be
in the United States. Uncertainty and surprises are the two factors that the
stock market dislikes more than any other. To summarize - the uncertainties that
have been in place in the U.S. stock market over the past 18 months have
included: Y2K fears, Federal Reserve interest rate policy and Federal Open
Market Committee activity and the outcome of the U.S. presidential election.
Only the third item in this list however, the outcome of the presidential
election, can be said to have negatively jolted the stock market with both
surprise and uncertainty. The other influences worked only in the arena of
uncertainty, not surprise. It is safe to say that the U.S. will eventually get a
president and that point will likely come when the court of public opinion turns
on the candidates for protracting the election process.
As for the economy, it has shown signs of slowing down in the second half
of 2000. At times during that period there has been talk of the economy
experiencing a soft landing. The question that now appears most pertinent is
this, will the Federal Reserve give the green light to the stock market by
saying one of the two following things, and if so, when? First, and less
positive for the market, would be if the Fed were to simply say nothing more
about their inflation concerns following a Federal Open Market Committee
meeting. Or, secondly, they could be more aggressive and state that they are
essentially no longer concerned about inflation thus communicating to the stock
market that they are through raising rates, even leaving the door open to
lowering rates later.
Equity Assets Management's expectations are that the market cycle and
business cycle will complete their normal duration and that the market likely
has more upside left in it. After the cycles run their course the second facet
of the fund's objective, income, through positioning the fund's assets in
interest bearing cash equivalent securities will likely then come into play as
the focus shifts from capital appreciation to protection of the investment
capital. In the meantime, stockpicking by the fund's sub-advisor, Arnie
Schneider of Schneider Capital Management, who has been described in a Barron's
Magazine article as an "artist," will continue and we will eagerly watch as
results progress.
Sincerely,
Charles R. Clark
Chairman - Impact Management Investment Trust
<PAGE>
GROWTH OF A $10,000 INVESTMENT
RETAIL CLASS SHARES
[GRAPHIC OMITTED]
9/30/97 9/30/98 9/30/99 9/30/00
------- ------- ------- -------
Impact Total Return $10,000 $ 8,407 $ 9,374 $12,319
Russell 1000 Value Index $10,000 $10,359 $12,298 $13,394
Russell 2000 Index $10,000 $ 8,100 $ 9,645 $11,901
S&P 500 Index $10,000 $10,900 $13,925 $15,774
The graph above compares the initial and subsequent account values at the fiscal
years ended September 30, 1998, 1999 and 2000 of the Fund, in relation to the
S&P 500 Index, the Russell 2000 Index and the Russell 1000 Value Index. The
graph assumes a $10,000 initial investment at October 1, 1997. Past performance
is not indicative of future results.
GROWTH OF A $10,000 INVESTMENT
RETAIL CLASS SHARES
[GRAPHIC OMITTED]
5/03/99 9/30/99 9/30/00
------- ------- -------
Impact Total Return $10,000 $ 9,400 $12.353
Russell 1000 Value Index $10,000 $ 8,994 $ 9,795
S&P 500 Index $10,000 $ 9,657 $10,939
Effective May 3, 1999, the Fund seeks to achieve it's objective by investing in
companies with either characteristics similar to or listed in the Russell 1000
Value Index. The graph above compares the initial and subsequent account values
at the fiscal years ended September 30, 1999 and 2000 in relation to the S&P 500
Index, and the Russell 1000 Value Index. The graph assumes a $10,000 initial
investment at May 3, 1999. Past performance is not indicative of future results.
<PAGE>
GROWTH OF A $10,000 INVESTMENT
TRADITIONAL CLASS SHARES
[GRAPHIC OMITTED]
2/03/00 9/30/00
------- -------
Impact Total Return $10,000 $12,780
Russell 1000 Value Index $10,000 $10,698
S&P 500 Index $10,000 $10,155
The Traditional Class commenced operations on February 3, 2000. The graph above
compares the initial and subsequent account values at the fiscal year ended
September 30, 2000 in relation to the S&P 500 Index and the Russell 1000 Value
Index. The graph assumes a $10,000 initial investment on February 3, 2000. Past
performance is not indicative of future results.
GROWTH OF A $10,000 INVESTMENT
WHOLESALE CLASS SHARES
[GRAPHIC OMITTED]
10/5/99 9/30/00
------- -------
Impact Total Return $10,000 $13,220
Russell 1000 Value Index $10,000 $10,854
S&P 500 Index $10,000 $11,165
The Wholesale Class commenced operations on October 5, 1999. The graph above
compares the initial and subsequent account values at the fiscal year ended
September 30, 2000 in relation to the S&P 500 Index and the Russell 1000 Value
Index. The graph assumes a $10,000 initial investment on October 5, 1999. Past
performance is not indicative of future results.
<PAGE>
---------------------------------------------------------------
Total Return as of 9/30/00
---------------------------------------------------------------
Total Return
---------------------------------------------------------------
Since
Category 1 Year Inception
---------------------------------------------------------------
Impact Total Return - Retail Class 31.3% 5.5%*
Impact Total Return - Traditional Class N/A 27.8%+
Impact Total Return - Wholesale Class N/A 32.2%^
---------------------------------------------------------------
Russell 1000 Value Index 8.9% 13.9%*
---------------------------------------------------------------
Russell 2000 Index 23.4% 11.6%*
---------------------------------------------------------------
S&P 500 Index 13.3% 20.71%*
---------------------------------------------------------------
The table above provides the average annual total return for the fiscal year of
the Fund and since inception in relation the S&P 500 Index, the Russell 2000
Index and the Russell 1000 Value Index.
* Inception - July 1, 1997 (Annualized)
+ Inception - February 3, 2000 (Not Annualized)
^ Inception - October 5, 1999 (Not Annualized)
Past performance does not predict future results. Investment return and
principal value will fluctuate so that a investor's shares may be worth more or
less than the original cost. All returns assume reinvestment of dividends.
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
FINANCIAL HIGHLIGHTS
--------------------
<TABLE>
<CAPTION>
OCTOBER 5, 1999~ FEBRUARY 3, 2000{ YEAR ENDED YEAR ENDED YEAR ENDED JUNE 17,1997+ TO
TO SEPTEMBER 30, TO SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2000 1999 1998 1997
WHOLESALE CLASS TRADITIONAL CLASS RETAIL CLASS RETAIL CLASS RETAIL CLASS RETAIL CLASS
--------------- ----------------- ------------ ------------ ------------ ------------
PER SHARE DATA *
<S> <C> <C> <C> <C> <C> <C>
Investment income $ .52 $ 1.55 $ .20 $ .26 $ .29 $ .01
Expenses (.30) (.84) (.19) (.22) (.21) (.01)
---------- ---------- ---------- ---------- ---------- ----------
Net investment income .22 .71 .01 .04 .08 .00
Distributions from net
investment income .00 .00 .00 (.08) (.01) .00
Net realized and unrealized
gain (loss) on investments 2.50 2.07 2.55 .86 (1.66) (.08)
Distributions from realized
gains on investments .00 .00 (.48) (.69) .00 . 00
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in
net asset value 2.72 2.78 2.08 .13 (1.59) (.08)
Net asset value:
Beginning of period 8.45 10.00 8.46 8.33 9.92 10.00
---------- ---------- ---------- ---------- ---------- ----------
End of period $ 11.17 $ 12.78 $ 10.54 $ 8.46 $ 8.33 $ 9.92
========== ========== ========== ========== ========== ==========
RATIOS AND SUPPLEMENTAL DATA
Total return # 32.19%^ 27.80%^ 31.42% 11.50% (15.93)% (.80)%^
Ratio of expenses to average
net assets 3.13%^ 7.07%^ 2.22% 2.47%# 2.25%# 2.25%^#
Ratio of net investment income
to average net assets 2.36%^ 6.08%^ .10% .42%# 0.88%# 0.00%^
Portfolio turnover rate 202.02% 93.35% 206.32% 254.79% 221.45% 0.00%
Average commission rate paid .0023 .0023 .0023 $ .0612 $ .1296 $ .1437
Net assets, end of period $1,441,027 $ 9,348 $1,969,144 $6,270,819 $3,925,928 $ 501,758
Shares of beneficial interest
outstanding, end of period 129 052 732 186 760 741 369 471 512 50 567
Number of shareholder accounts,
end of period 75 4 81 156 136 17
</TABLE>
+ Commencement of operations.
* Selected data for a share of beneficial interest outstanding throughout
each period.
^ Based on operations for the period shown and, accordingly, not
representative of a full year
# Excludes administrative fee and account closing fee charged directly to
shareholder accounts (see Note 3 to financial statements).
~ Wholesale class began trading October 5, 1999 at $8.45 per share
{ Traditional class began trading February 3, 2000 at $10.00 per share
The accompanying notes are an integral part of these statements.
-3-
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
==================
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments in securities, at value - identified cost $2,898,457 $ 2,977,017
Cash 416,520
Dividends and interest receivable 4,297
Receivable from securities sold 39,269
------------
TOTAL ASSETS 3,437,103
------------
LIABILITIES
Payable for securities purchased 11,428
Investment advisory fee payable 3,373
Distribution expenses payable 1,839
Administrative fee payable 944
------------
TOTAL LIABILITIES 17,584
------------
NET ASSETS $ 3,419,519
============
NET ASSETS CONSIST OF:
Accumulated net investment income net of distributions $ 21,047
Accumulated net realized gain 205,321
Net unrealized appreciation 78,560
Paid-in capital applicable to 316,544 no par value
shares of beneficial interest outstanding;
unlimited number of shares authorized 3,114,591
------------
NET ASSETS $ 3,419,519
============
</TABLE>
NET ASSET
NET SHARES VALUE
ASSETS OUTSTANDING PER SHARE
------------ ------------ ------------
RETAIL CLASS $ 1,969,144 186,760 $ 10.54
WHOLESALE CLASS 1,441,027 129,052 $ 11.17
TRADITIONAL CLASS 9,348 732 $ 12.78
------------ ------------
$ 3,419,519 316,544
============ ============
The accompanying notes are an integral part of this statement.
-4-
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2000
==================
SHARES VALUES
------ ------
CONVERTIBLE BONDS-2.7% OF NET ASSETS
Consumer Products
Asia Pulp & Paper Company Conv. (cost $131,143) $ 94,437
----------
COMMON STOCKS-83.4%
Consumer Products-11.5%
Archer-Daniels-Midland Co. 14,175 $ 122,259
Litton Industries, Inc.* 1,000 44,688
Visteon Corp. 1,800 27,225
Tate & Lyle PLC 8,000 111,420
Tyson Foods, Inc. 8,700 87,000
Computers & Technology-3.8%
Arrow Electronics, Inc.* 200 6,813
Compuware Corporation* 1,700 14,238
Ingram Micro, Inc.* 2,900 39,875
Technip* 500 69,711
Energy and Utilities-10.4%
CMS Energy Corporation 1,600 43,100
PG & E Corporation 500 12,094
Niagara Mohawk Holdings, Inc.* 10,500 165,375
R&B Falcon Corp.* 3,400 94,775
Diamond Offshore Drilling, Inc. 1,000 41,000
Insurance-18.4%
Washington Mutual, Inc. 4,000 159,250
Aetna Inc. 2,400 139,350
AON Corporation 2,800 109,900
Progressive Corporation 800 65,500
Humana, Inc. 6,700 72,025
Partner Re, Ltd. 1,000 47,437
UNUM Provident Corp. 1,300 35,425
Basic Materials-5.6%
IMC Global, Inc. 6,700 97,150
Eastman Chemical Company 1,500 55,406
International Paper 1,400 40,162
Services-2.8%
Circuit City Stores 1,100 25,300
JC Penney Company 3,400 40,162
Toys R Us, Inc.* 2,000 32,500
Capital Goods-8.5%
CNH Global NV 9,100 91,000
The Boeing Company 1,000 63,000
Raytheon Class A 2,100 57,488
Mesto Corporation 3,200 32,400
Fluor Corporation 1,500 45,000
Financial-13.6%
Dime Bancorp, Inc. 4,500 97,031
Loews Corporation 900 75,038
Cincinnati Financial Corporation 1,000 35,500
Golden State Bancorp 6,000 141,750
Ace Limited 3,000 117,750
Communications-2.6%
Loral Space & Communications Ltd.* 14,500 88,812
The accompanying notes are an integral part of this statement.
-5-
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2000
==================
(continued)
SHARES VALUES
------ ------
Transportation -4.0%
CSX Corporation 4,200 91,613
Tidewater, Inc. 1,000 45,500
Healthcare -2.2%
Tenet Healthcare Corporation* 1,600 58,200
Healthsouth Corporation* 1,900 15,438
----------
TOTAL COMMON STOCKS (cost $2,739,394) 2,854,660
----------
SHORT-TERM INVESTMENTS-1.0%
Rydex Series Trust-U.S. Government Money
Market Fund (5.63% seven day yield, cost $27,920) 27,920
----------
TOTAL INVESTMENTS IN SECURITIES-87.1% OF NET ASSETS
(cost $2,898,457) $2,977,017
==========
---------------------------------------
*Non-income producing security
The accompanying notes are an integral part of this statement.
-6-
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
=====================================
INVESTMENT INCOME
Interest income $ 61,635
Dividend income 76,085
--------
TOTAL INCOME 137,720
--------
EXPENSES
Investment advisory fee 56,650
Distribution expenses 37,633
Administrative expenses 15,861
--------
TOTAL EXPENSES 110,144
--------
NET INVESTMENT INCOME 27,576
--------
REALIZED AND UNREALIZED GAIN
Net realized gain on securities 198,792
Change in net unrealized appreciation or depreciation on securities 725,257
--------
NET REALIZED AND UNREALIZED GAIN 924,049
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $951,625
========
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS BY CLASS:
RETAIL CLASS $621,039
WHOLESALE CLASS 329,887
TRADITIONAL CLASS 699
--------
$951,625
========
The accompanying notes are an integral part of this statement.
-7-
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999
===============================================
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations
Net investment income $ 27,576 $ 30,248
Net realized gain on securities 198,792 1,082,431
Change in net unrealized appreciation
or depreciation on securities 725,257 (331,051)
------------ ------------
Increase in net assets resulting from operations 951,625 781,628
------------ ------------
Distributions to shareholders
from net investment income -- (61,540)
from net realized gains on investments (302,987) (552,154)
------------ ------------
Total distributions to shareholders 302,987 613,694
------------ ------------
Beneficial interest share transactions*
Shares sold 1,276,472 5,244,694
Shares redeemed (5,079,397) (3,681,431)
Shares issued for reinvestment of distributions (302,987) (613,694)
------------ ------------
Increase (decrease) in net assets from share transactions (3,499,938) 2,176,957
------------ ------------
Total increase (decrease) in net assets (2,851,300) 2,344,891
Net assets
Beginning of period 6,270,819 3,925,928
------------ ------------
End of period (including undistributed net
investment income (loss)
of $27,576 and $(6,529), respectively) $ 3,419,519 $ 6,270,819
============ ============
*Share information
Shares sold 138,039 606,390
Shares redeemed (577,864) (400,831)
Change in shares resulting from transfers between classes (17,932) --
Shares issued for reinvestment of distributions 32,933 64,298
------------ ------------
Increase in shares outstanding 424,824 269,857
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
-8-
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
=============================
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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
(formerly 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 began
offering four classes of shares of beneficial interest (See Note 3).
SECURITIES VALUATION
--------------------
Investments in securities listed or traded on a securities exchange are
valued at the last quoted sales price on the securities' 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.
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 securities 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.
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 of
its taxable income to its shareholders.
-9-
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
=============================
(continued)
NOTE 2. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, other than short-term
investments, during the year ended September 30, 2000 were $18,568,672 and
$12,346,872, respectively. At September 30, 2000, the aggregate cost of
investments for federal income tax and financial reporting purposes was
$2,898,457 and net unrealized appreciation aggregated $78,560, of which
$485,175 related to appreciated investments and $406,615 to depreciated
investments.
NOTE 3. FEES, EXPENSES 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 based on
the Fund's average daily net assets. The investment advisory fee is
calculated daily and paid monthly. Effective May 1, 1999 the Trust entered
into a sub-advisory agreement with Schneider Capital Management, Inc.
("Schneider"). Pursuant to the sub-advisory agreement, the Investment
Advisor pays Schneider monthly at the rate of 60 basis points annually, out
of its advisory fee.
The Trust has a Distribution Plan 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 based on the average daily net assets of the Fund.
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 was paid a fee of $165.00 per account
through April 30, 1999. The annual fee paid to IASI was charged to
shareholder accounts at each month end as a redemption of shares of
beneficial interest. Subsequent to April 30, 1999, the Trust began charging
an administrative service fee based on the daily net assets of the Fund.
The administrative service fee is calculated daily and paid monthly to
IASI. In addition, when a shareholder closes an account, IASI is paid a fee
of $2.00 which is charged to the shareholder as a redemption of shares of
beneficial interest.
-10-
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
=============================
(continued)
NOTE 3. FEES, EXPENSES AND OTHER TRANSACTIONS WITH AFFILIATES
(continued)
The following table describes the fees and expenses applicable to each
class of shares.
<TABLE>
<CAPTION>
Retail Traditional Wholesale Institutional
Class Class Class Class (2)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales Charge (1) -- 5.75 % -- --
Investment Advisory Fee 1.25 % 1.25 % 1.25 % 1.25 %
Distribution (12b-1) Fees 1.00 % 0.25 % 0.25 % none
Administrative Expenses 0.35 % 0.35 % 0.35 % 0.35 %
</TABLE>
(1) Reduced for purchases of $50,000 or more, decreasing to zero for
purchases over $1 million.
(2) As of September 30, 2000 no shares of beneficial interest have been
sold.
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 $0 and $7,695
and was reimbursed $37,633 and $74,430 pursuant to the provisions of the
Distribution Plan for the years ended September 30, 2000 and 1999.
Certain officers of the Trust and members of the Board of Trustees are also
officers and directors of the Investment Advisor.
-11-
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
=============================
(continued)
NOTE 4. CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
AMOUNT SHARES AMOUNT SHARES
------------ ------------ ------------ ------------
RETAIL CLASS:
-------------
<S> <C> <C> <C> <C>
Sold $ 220,940 23,374 $ 5,244,694 606,390
Reinvestment 302,987 32,933 613,694 64,298
Repurchased (2,107,310) (242,281) (3,681,431) (400,831)
Transfers between classes (3,036,344) (368,634) -- --
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
RETAIL CLASS (4,619,727) (554,608) 2,176,957 269,857
------------ ------------ ------------ ------------
WHOLESALE CLASS:
----------------
Sold 1,046,883 113,933 -- --
Reinvestment -- -- -- --
Repurchased (2,972,087) (335,583) -- --
Transfers between classes 3,036,344 350,702 -- --
------------ ------------ ------------ ------------
NET INCREASE IN WHOLESALE CLASS 1,111,140 129,052 -- --
------------ ------------ ------------ ------------
TRADITIONAL CLASS:
------------------
Sold 8,649 732 -- --
Reinvestment -- -- -- --
Repurchased -- -- -- --
------------ ------------ ------------ ------------
NET INCREASE IN TRADITIONAL
CLASS 8,649 732 -- --
------------ ------------ ------------ ------------
TOTAL NET INCREASE (DECREASE) IN
FUND $ (3,499,938) (424,824) $ 2,176,957 269,857
============ ============ ============ ============
</TABLE>
-12-
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
IMPACT Management Investment Trust
IMPACT Total Return Portfolio
We have audited the accompanying statement of assets and liabilities of IMPACT
Total Return Portfolio (the "Fund"), a Series of IMPACT Management Investment
Trust, including the schedule of investments in securities, as of September 30,
2000, and the related statement of operations for the year ended September 30,
2000 and changes in net assets and financial highlights for the years ended
September 30, 2000 and 1999. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits. The financial highlights for the year ended September 30, 1998
and the period from inception (June 17, 1997) to September 30, 1997 were audited
by other auditors whose report dated October 22, 1998 expressed an unqualified
opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of September 30, 2000, by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of IMPACT
Total Return Portfolio, a Series of IMPACT Management Investment Trust, as of
September 30, 2000 and 1999, and the results of its operations, changes in its
net assets and the financial highlights for the years ended September 30, 2000
and 1999 in conformity with generally accepted accounting principles.
SPICER, JEFFRIES & CO.
Denver, Colorado
October 27, 2000
11
