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DUNHILL INVESTMENT TRUST
REGIONAL OPPORTUNITY FUND:
OHIO, INDIANA, KENTUCKY
FINANCIAL STATEMENTS
AND
SEMI-ANNUAL REPORT
AUGUST 31, 1999
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<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
Portfolio of Investments
August 31, 1999
MARKET
SHARES VALUE
------ -----
COMMON STOCKS - 89.2%
AIRLINES - 1.4%
7,282 Comair Holdings, Inc. $ 153,832
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AUTOMOBILE PARTS - 0.6%
1,500 Dana Corp. 65,344
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BEVERAGES - WINE/SPIRITS - 0.5%
1,000 Brown-Forman Corp. Class B 58,750
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COMMUNICATIONS - 1.4%
1,000 Aware, Inc. (a) 33,500
1,000 Lucent Technologies 64,063
600 Qwest Communications International (a) 17,250
600 Tellabs, Inc. (a) 35,737
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150,550
-----------
COMPUTERS & INFORMATION - 17.5%
3,000 3Com Corp. (a) 74,438
14,000 Dell Computer Corp. (a) 683,375
10,000 EMC Corp. (a) 600,000
6,000 Lexmark International, Inc. Class A (a) 472,500
3,000 Miami Computer Supply Company (a) 53,250
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1,883,563
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COMPUTER SERVICES - 0.3%
1,000 Checkfree Holdings Corp. (a) 29,250
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CONGLOMERATES - 2.1%
2,000 General Electric Co. 224,625
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CONSULTING SERVICES - 0.2%
1,000 USWeb Corp. (a) 19,500
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CONTAINERS - METAL/GLASS - 1.7%
4,000 Ball Corp. 179,750
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COSMETICS/TOILETRIES - 0.4%
1,000 Avon Products, Inc. 43,875
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DIVERSIFIED MANUFACTURING - 1.9%
2,000 Tyco International, Inc. 202,625
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ELECTRONIC COMPONENTS - 0.9%
2,000 CTS Corp. 95,250
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See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
Portfolio of Investments (continued)
August 31, 1999
MARKET
SHARES VALUE
------ -----
FOOD - 0.6%
1,600 Papa John's International, Inc. (a) $ 63,600
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FOOD RETAILERS - 0.9%
4,000 Kroger Company (a) 92,500
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FOOTWEAR - 0.3%
1,000 K-Swiss, Inc. Class A 31,375
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GAMBLING (NON-HOTEL) - 0.3%
2,000 Argosy Gaming Company (a) 27,125
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HOUSEHOLD PRODUCTS, NONDURABLE - 0.8%
860 The Procter & Gamble Co. 85,355
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INDUSTRIAL & COMMERCIAL SERVICES - 2.2%
3,500 Cintas Corp. 179,812
3,000 Convergys Corp. (a) 61,875
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241,687
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INSURANCE, LIFE - 0.2%
1,000 Conseco, Inc. 24,000
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INTERNET CONTENT - 1.1%
1,400 Cnet Corp. (a) 52,588
1,000 Go2Net (a) 65,000
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117,588
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MEDICAL SUPPLIES - 7.3%
7,000 Biomet, Inc. 250,250
3,000 Gliatech Inc. (a) 60,562
7,600 Guidant Corp. (a) 446,025
2,000 LCA Vision, Inc. (a) 13,375
1,000 Steris Corp. (a) 12,563
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782,775
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MOTORCYCLES/MOTOR SCOOTERS - 0.5%
1,000 Harley-Davidson, Inc. 54,500
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See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
Portfolio of Investments (continued)
August 31, 1999
MARKET
SHARES VALUE
------ -----
PHARMACEUTICALS - 12.0%
5,333 Bindley Western Industries, Inc. $ 89,328
3,000 Biogen, Inc. (a) 230,250
2,700 Duramed Pharmaceuticals, Inc. (a) 27,675
5,700 Eli Lilly & Co. 425,362
2,800 Johnson & Johnson 286,300
2,016 Priority Healthcare, Class B (a) 56,700
4,800 Pfizer, Inc. 181,200
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1,296,815
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POWER (INDEPENDENT) - 0.8%
1,000 Calpine Corp. (a) 90,625
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REGIONAL BANKS - 5.9%
1,100 Bank One Corp. 44,138
3,375 Fifth Third Bancorp 223,594
13,865 Firstar Corp. 371,755
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639,487
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RETAILERS, APPAREL - 5.6%
7,000 Abercrombie & Fitch (a) 244,125
8,250 Gap, Inc. 322,781
1,050 Intimate Brands, Inc. 40,491
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607,397
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RETAILERS, DRUG-BASED - 0.3%
500 Cardinal Health, Inc. 31,875
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SECURITY SERVICES - 0.4%
2,000 Kroll-O'Gara Company (a) 38,375
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SEMICONDUCTOR & RELATED - 1.5%
2,000 Intel Corp. 164,375
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SOFTWARE & PROCESSING - 19.1%
9,800 America Online, Inc. (a) 894,862
1,000 At Home Corp. (a) 40,125
9,550 Cisco Systems, Inc. (a) 647,609
5,000 Microsoft Corp. (a) 462,812
400 Mindspring Enterprises, Inc. (a) 11,675
1,000 Symix Systems, Inc. (a) 10,063
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2,067,146
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See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
Portfolio of Investments (continued)
August 31, 1999
MARKET
SHARES VALUE
------ -----
TELEPHONE SYSTEMS - 0.5%
3,000 Cincinnati Bell, Inc. $ 55,500
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TOTAL COMMON STOCKS (COST $6,180,644) $ 9,619,014
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FACE AMOUNT
- -----------
REPURCHASE AGREEMENTS (B) - 10.7%
$1,154,513 Fifth Third Bank, 4.90%, dated 8/31/99,
due 9/1/99, repurchase proceeds $1,154,670
(Cost $1,154,513) $ 1,154,513
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TOTAL INVESTMENTS IN COMMON STOCKS AND
REPURCHASE AGREEMENTS AT VALUE - 99.9% 10,773,527
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.1% 15,691
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NET ASSETS - 100.0% $10,789,218
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(a) Non-income producing security
(b) Repurchase agreement is fully collateralized by $1,167,000 par value FNMA
Pool #313004, 7.50%, due 7/1/2011. (Market value $1,177,940)
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
Statement of Assets and Liabilities
August 31, 1999
ASSETS
Investments in securities at market value
(identified cost $6,180,644)(Note 1) $ 9,619,014
Investment in repurchase agreements (Note 1) 1,154,513
Dividends receivable 3,804
Interest receivable 157
Prepaid Expenses 15,348
Unamortized organization costs (Note 1) 3,502
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Total Assets 10,796,338
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LIABILITIES
Payable to Adviser (Note 3) 61
Accrued expenses 7,059
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Total Liabilities 7,120
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$10,789,218
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NET ASSETS
Net Assets Consist of:
Paid in capital $ 6,160,930
Accumulated net realized gain on investments 1,189,918
Net unrealized appreciation of securities 3,438,370
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$10,789,218
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Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 467,914
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Net asset value and offering price per share $ 23.06
===========
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
Statement of Operations
Six Months Ended August 31, 1999
INVESTMENT INCOME:
Dividends $ 18,460
Interest 22,062
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Total Investment Income 40,522
EXPENSES:
Advisory fees (Note 3) 66,163
Distribution fees (Note 4) 55,113
Administration fees (Note 3) 7,760
Shareholder services and transfer agent fees (Note 3) 7,760
Reports and notices to stockholders 3,932
Audit fees 4,760
Legal fees 4,152
Directors' fees and expenses 1,690
Custodian fees 4,980
Fund accounting fees 19,268
Registration and filing fees 6,611
Amortization of organization expenses (Note 1) 3,752
Insurance expense 1,800
Miscellaneous 3,480
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Total Expenses 191,221
Less fees waived by the Manager (Note 3) (42,932)
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Net Expenses 148,289
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NET INVESTMENT LOSS (107,767)
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REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gain from security transactions 1,269,451
Unrealized appreciation of investments:
Beginning of period $ 4,196,899
End of period 3,438,370
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Net change in unrealized appreciation of investments (758,529)
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NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 510,922
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NET INCREASE IN NET ASSETS FROM OPERATIONS $ 403,155
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See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
AUGUST 31, 1999 FEBRUARY 28, 1999
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OPERATIONS:
<S> <C> <C>
Net investment loss $ (107,767) $ (132,530)
Net realized gains (losses) on investments 1,269,451 (7,832)
Net change in unrealized appreciation of investments (758,529) 3,122,231
------------ ------------
Net increase in net assets resulting from operations 403,155 2,981,869
FUND SHARE TRANSACTIONS:
Proceeds from shares sold 501,688 2,869,376
Payments for shares redeemed (231,307) (700,997)
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Net increase in net assets from capital share transactions 270,381 2,168,379
TOTAL INCREASE IN NET ASSETS 673,536 5,150,248
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NET ASSETS:
Beginning of period 10,115,682 4,965,434
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End of period $ 10,789,218 $ 10,115,682
============ ============
SUMMARY OF FUND SHARE ACTIVITY:
Shares sold 21,402 177,719
Shares redeemed (9,910) (43,511)
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Net increase in shares outstanding 11,492 134,208
Shares outstanding, beginning of period 456,422 322,214
------------ ------------
Shares outstanding, end of period 467,914 456,422
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
Financial Highlights
Selected Per Share Data and Ratios for a Share
Outstanding Throughout Each Period
<TABLE>
<CAPTION>
SIX MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
AUGUST 31, FEBRUARY 28, FEBRUARY 28, FEBRUARY 28,
1999 1999 1998 1997 (2)
------------ ------------ ------------ ------------
PER SHARE DATA
<S> <C> <C> <C> <C>
Net asset value at beginning of period $ 22.16 $ 15.41 $ 11.33 $ 10.46
Income from investment operations:
Net investment loss (0.23) (0.32) (0.13) (0.02)
Net realized and unrealized gain 1.13 7.07 4.21 1.30
------------ ------------ ------------ ------------
Total from investment operations 0.90 6.75 4.08 1.28
------------ ------------ ------------ ------------
Less distributions:
In excess of net realized gains -- -- -- (0.41)
------------ ------------ ------------ ------------
Total distributions -- -- -- (0.41)
------------ ------------ ------------ ------------
Net asset value at end of period $ 23.06 $ 22.16 $ 15.41 $ 11.33
============ ============ ============ ============
TOTAL RETURN (1) 4.06% 43.80% 36.01% 12.25%
============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period $ 10,789,218 $ 10,115,682 $ 4,965,434 $ 646,067
============ ============ ============ ============
Ratio of expenses to average net assets:
Before expense reimbursement and waived fees 3.47%(3) 3.64% 5.81% 12.14%(3)
After expense reimbursement and waived fees 2.70%(3) 2.70% 2.69% 2.66%(3)
Ratio of net investment loss to average net assets (1.95)%(3) (1.87)% (1.69)% (1.04)%(3)
Portfolio turnover rate 15% 26% 21% 39%(3)
</TABLE>
(1) Calculated without sales charge.
(2) Represents the period from the first public offering to shareholders (July
24, 1996) through February 28, 1997. Class B shares were initially
purchased on April 10, 1995 by the Adviser, who subsequently redeemed the
initial shares on March 13, 1996.
(3) Annualized
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Regional Opportunity Fund: Ohio, Indiana, Kentucky (the Fund) is a
non-diversified, open-end series of the Dunhill Investment Trust (the
Trust), a registered management investment Company under the Investment
Company Act of 1940 (the 1940 Act). The Trust was organized as an Ohio
business trust on March 31, 1998. Pursuant to an Agreement and Plan of
Reorganization dated May 1, 1998, the Fund, on June 29, 1998 was successor
of the assets and liabilities of another mutual fund of the same name which
was an investment series of Maplewood Investment Trust. 381,360 Shares and
Net Assets of $6,200,646 of the Fund were transferred to the Trust on June
29, 1998. The Financial Statements presented include the assets and
liabilities, results of operations, changes in net assets and financial
highlights of the Fund from the first public offering to shareholders (July
24, 1996) of the shares transferred from the former Trust.
The Fund's investment objective is to provide long-term capital growth by
investing primarily in common stocks and other equity securities of
publicly-traded companies headquartered in Greater Cincinnati and the
Cincinnati tri-state region, and those companies having a significant
presence in the region.
Shares of the Fund are offered at net asset value and are subject to a
maximum 5% contingent deferred sales charge and 12b-1 distribution fees up
to 1% of average daily net assets. The contingent deferred sales charge is
applicable to redemptions during the five-year period from the date of
purchase. The charge declines from 5% to 0% over the five year period.
SECURITIES VALUATION - The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m. Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available,
otherwise, at the last quoted bid price. Securities traded on a national
stock exchange are valued based upon the closing price on the principal
exchange where the security is traded.
REPURCHASE AGREEMENTS - The Fund generally invests its cash reserves by
entering into repurchase agreement with its custodian bank. The repurchase
agreement, which is collateralized by U.S. Government obligations, is
valued at cost which, together with accrued interest, approximates market.
At the time the Fund enters into the repurchase agreement, the seller
agrees that the value of the underlying securities, including accrued
interest, will at times be equal to or exceed the face amount of the
repurchase agreement. In addition, the Fund actively monitors and seeks
additional collateral, as needed.
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.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENT INCOME - Interest income is accrued as earned. Dividend income
is recorded on the ex-dividend date.
DISTRIBUTIONS TO SHAREHOLDERS - Dividends arising from net investment
income, if any, are declared and paid annually to shareholders of the Fund.
Net realized short-term capital gains, if any, may be distributed
throughout the year and net realized long-term capital gains, if any, are
distributed at least once a year. Income distributions and capital gain
distributions are determined in accordance with income tax regulations.
ORGANIZATION EXPENSES - Expenses of organization have been capitalized and
are being amortized on a straight-line basis over five years. 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 expenses 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 the redemption.
SECURITY TRANSACTIONS - Security transactions are accounted for on trade
date. Securities sold are valued on a specific identification basis.
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 or revenue and expenses during the reporting period. Management
believes the estimates utilized in preparing these financial statements are
reasonable and prudent. Actual results could differ from these estimates.
FEDERAL INCOME TAX - It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a 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.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
2. INVESTMENTS
During the six months ended August 31, 1999, purchases and proceeds from
sales and maturities of investment securities, other than short-term
investments, amounted to $1,440,229 and $2,070,493 respectively.
For federal income tax purposes, the cost of portfolio investments amounted
to $6,180,644 at August 31, 1999. The composition of unrealized
appreciation (the excess of value over cost) and unrealized depreciation
(the excess of tax cost over value) was as follows:
Gross unrealized appreciation $ 3,808,601
Gross unrealized depreciation (370,231)
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Net unrealized appreciation $ 3,438,370
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3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Trust are also officers of Dunhill Investment
Advisors, Limited (Dunhill), the manager, administrator and transfer agent
for the Fund, and CityFund Advisory, Inc. (CityFund), the investment
advisor to the fund.
FUND MANAGER AGREEMENT
The Fund is managed by Dunhill under the terms of a management agreement.
The Fund pays Dunhill a fee equal to the annual rate of 1.20% of the
average value of its daily net assets. Dunhill currently intends to waive
its management fees and reimburse expenses of the Fund to the extent
necessary to limit the total operating expenses of the Fund to 2.70% of
average daily net assets of the Fund. Accordingly, for the six months ended
August 31, 1999, Dunhill waived $42,932 of advisory fees.
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by CityFund under the terms of an
Investment Advisory Agreement. Under the Investment Advisory Agreement,
Dunhill (not the Fund) pays CityFund a fee equal to an annual rate of .50%
of the average daily net assets of the Fund.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement, Dunhill supplies executive,
administrative and regulatory services to the Fund, supervises the
preparation of tax returns, and coordinates the preparation of reports to
shareholders and reports to and filings with the Securities and Exchange
Commission and state securities authorities.
For these services, Dunhill receives a monthly fee from the Fund at an
annual rate of 0.15% on its average daily net assets up to $50 million;
0.125% on the next $50 million of such net assets; and 0.10% of such net
assets in excess of $100 million. During the six months ended August 31,
1999, Dunhill was paid $6,000 of fees under the Agreement.
TRANSFER AGENT AND SHAREHOLDER SERVICING AGREEMENT
Under the terms of a Transfer Agent and Shareholder Servicing Agreement,
Dunhill 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, Dunhill receives a monthly fee from the Fund at the annual
rate of $17 per shareholder account, subject to a minimum monthly fee of
$1,000. During the six months ended August 31, 1999, Dunhill was paid
$6,000 of fees under the Agreement. In addition, the Fund pays
out-of-pocket expenses including, but not limited to, postage and supplies.
DISTRIBUTION AGREEMENT
The Fund distributes its shares under the terms of an Underwriting
Agreement with Unified Management Corporation. Unified Management
Corporation may sell Fund shares to or through qualified securities dealers
or brokers.
4. DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the Plan) pursuant to Rule 12b-1
under the 1940 Act. The Plan provides that the Fund may incur certain costs
related to the distribution of Fund shares, generally not to exceed 1.00%
of the Fund's average daily net assets. During the year ended February 28,
1999, the Fund incurred and paid approximately $55,113 of distribution
expenses under the Plan.
