GOVERNMENT INVESTORS TRUST
Annual Report
March 31, 1995/Audited
GIT
GIT INVESTMENT FUNDS
<PAGE>
Letter to Shareholders
May 15, 1995
Dear Shareholder:
During the fiscal year of Government Investors Trust that ended
March 31, the Federal Reserve raised interest rates on five
separate occasions to reach the current federal funds target
rate of 6%, after starting the period at only 3.5%.
Shareholders saw the fund's seven-day yield increase to 4.88%
from 2.33% during this period, and as of this writing the fund
has an effective annual yield of 4.95%.
Economic growth remained firm over most of the fiscal year, with
employment rising and capacity utilization edging upward. This
economic strength led to expectations of higher inflation,
forcing the Fed to tighten, but data released during the first
quarter of 1995 suggested otherwise. Automobile and housing
sales slowed as earlier interest rate increases began to have an
impact, and these new economic reports prompted the bond market
to shift from a bearish stance to a more positive outlook, based
on the hope of a "soft landing" for the economy.
The Federal Reserve has signaled that for now its rate increases
have stopped, amid signs that the economy is slowing and that
inflation remains subdued. While the Fed may succeed in
achieving its hoped-for "soft landing", there remains the risk
that weakness in the U.S. dollar, the inflationary effects of
higher raw material costs, and a revival of higher economic
growth may prompt another round of Fed tightening. It is with
this possible tightening in mind that we have maintained a
relatively short average maturity, currently only 27 days.
Therefore, we are positioned to quickly reap the benefits of
higher short-term interest rates.
Moreover, with a relatively flat yield curve we see little
current benefit from the longer maturities. However, should the
pendulum swing the other way, with signs that the Fed will be
forced by a further slowing of the economy to reverse course and
begin to lower short-term interest rates again, then we intend
to lengthen our average maturity to lock in prevailing yields.
We appreciate your confidence in Government Investors Trust and
encourage you to call our shareholder service department with
any questions you may have.
Sincerely,
A. Bruce Cleveland
President
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
To the Board of Trustees and Shareholders, Government
Investors Trust:
We have audited the accompanying statement of assets and
liabilities of Government Investors Trust, including the
portfolio of investments, as of March 31, 1995, and the
related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years
in the period then ended, and the financial highlights for
each of the five years in the period then ended. These
financial statements and financial highlights are the
responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit 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. Our
procedures included confirmation of securities owned as of
March 31, 1995, 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 Government Investors
Trust at March 31, 1995, 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 five years in the period then
ended, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Washington, DC
May 5, 1995
<PAGE>
<TABLE>
Government Investors Trust
Portfolio of Investments - March 31, 1995
<CAPTION>
Principal
Amount Value
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS:
77.2% of Net Assets
Federal Home Loan Mortgage
Corporation Discount
Notes, 5.89%, 4/3/95 $5,000,000 $5,000,000
Federal Home Loan Mortgage
Corporation Discount
Notes, 5.9%, 4/4/95 5,000,000 4,999,181
Federal Home Loan Mortgage
Corporation Discount
Notes, 5.91%, 4/7/95 5,000,000 4,996,717
Federal Home Loan Mortgage
Corporation Discount
Notes, 5.91%, 4/13/95 5,000,000 4,991,792
Federal Home Loan Mortgage
Corporation Discount
Notes, 5.92%, 4/13/95 5,000,000 4,991,778
Federal Home Loan Mortgage
Corporation Discount
Notes, 5.91%, 4/25/95 5,000,000 4,981,942
Federal Home Loan Mortgage
Corporation Discount
Notes, 5.95%, 5/1/95 5,000,000 4,976,861
Federal Home Loan Mortgage
Corporation Discount
Notes, 5.92%, 5/2/95 5,000,000 4,976,155
Federal Home Loan Mortgage
Corporation Discount
Notes, 5.97%, 5/9/95 5,000,000 4,970,150
Federal National Mortgage
Association Discount
Notes, 5.93%, 5/17/95 5,000,000 4,963,761
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS
(Cost $49,848,337)<F2> 49,848,337
VARIABLE RATE LOANS GUARANTEED
BY U.S. GOVERNMENT AGENCIES:
0.4% of Net Assets
Farmers Mortgage Housing
Administration Loan,
9.08% <F1>, 2/1/10 45,739 45,739
Small Business Administration
Loan, 8.5%<F1>, 9/4/00 134,612 134,612
Small Business Administration
Loan, 8.5%<F1>, 1/5/01 62,305 62,305
TOTAL VARIABLE RATE LOANS
GUARANTEED BY U.S. GOVERNMENT
AGENCIES (Cost $242,656)<F2> 242,656
REPURCHASE AGREEMENT: 18.4% of Net Assets
With Donaldson, Lufkin & Jenrette Securities Corporation
issued 3/31/95 at 6.15%, due 4/03/95 collateralized by
$12,105,809 in United States Treasury Bills due 4/15/95.
Proceeds at maturity are $11,873,082.
(Cost $11,867,000)<F2> 11,867,000
TOTAL INVESTMENTS
(Cost $61,957,993)<F2> $61,957,993
Notes to Portfolio of Investments:
<FN>
<F1>
Floating interest rate - rate disclosed is as of March 31,
1995
<F2>
Aggregate cost for federal income tax purposes
</FN>
</TABLE>
The Notes to Financial Statements are an integral part of
these statements.
<PAGE>
Government Investors Trust
Statement of Assets and Liabilities
March 31, 1995
ASSETS
Investments, at value
(Notes 1 and 2)
(Cost $61,957,993)
Investment securities $50,090,993
Repurchase agreement 11,867,000
Total investments 61,957,993
Cash 479
Receivables
Interest 7,900
Capital shares sold 2,737,558
Share subscriptions (Note 1) 224,348
Total assets 64,928,278
LIABILITIES
Payables
Shares reserved for
subscription (Note 1) 224,348
Capital shares redeemed 148,257
Dividends 9,856
Oher liabilities 4,704
Total liabilities 387,165
NET ASSETS $64,541,113
CAPITAL SHARES OUTSTANDING 64,541,201
NET ASSET VALUE PER SHARE $1.000
Government Investors Trust
Statement of Operations
For the Year Ended March 31, 1995
INVESTMENT INCOME (Note 1)
Interest income $3,346,001
EXPENSES (Notes 3 and 4)
Investment advisory fee 342,725
Custodian fees 24,971
Professional fees 57,382
Salaries and related expenses 206,728
Securities registration
and blue sky expense 18,977
Telephone expense 15,320
Data processing and office
equipment expense 73,910
Office and miscellaneous
expenses 52,597
Depreciation and amortization 5,936
Total expenses 798,546
NET INVESTMENT INCOME 2,547,455
REALIZED LOSS ON INVESTMENTS
Net realized loss on
investments (101)
TOTAL INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,547,354
The Notes to Financial Staements are an integral part of these statements.
<PAGE>
<TABLE>
Government Investors Trust
Statement of Changes in Net Assets
For the Years Ended March 31
<CAPTION>
1995 1994
<S> <C> <C>
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
Net investment income $2,547,455 $1,696,257
Net realized gain (loss)
on investments (101) 14
Total increase in net assets
resulting from operations 2,547,354 1,696,271
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (2,547,455) (1,696,257)
CAPITAL SHARE TRANSACTIONS
(Note 5) (13,548,671) (10,820,700)
TOTAL DECREASE IN NET ASSETS (13,548,772) (10,820,686)
NET ASSETS
Beginning of year 78,089,885 88,910,571
End of year $64,541,113 $78,089,885
</TABLE>
<TABLE>
Government Investors Trust
Financial Highlights
Selected data for a share outstanding throughout each year:
<CAPTION>
Year Year Year Year Year
ended ended ended ended ended
Mar. 31 Mar. 31 Mar.31 Mar. 31 Mar. 31
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net asset value
beginning
of year $1.000 1.000 1.000 1.000 1.000
Net investment
income $0.037 0.021 0.024 0.044 0.067
Total from
investment
operations $0.037 0.021 0.024 0.044 0.067
Distributions from
net investment
income $(0.037) (0.021) (0.024) (0.044) (0.067)
Total
distributions $(0.037) (0.021) (0.024) (0.044) (0.067)
Net asset value
end of year $1.000 1.000 1.000 1.000 1.000
Total return 3.80% 2.08 2.44 4.44 6.96
Net assets
end of year
(in thousands) $64,541 78,090 88,911 117,170 153,206
Ratio of expenses
to average net
assets 1.16% 1.11 1.06 1.06 1.05
Ratio of net
investment
income to average
net assets 3.70% 2.08 2.44 4.41 6.69
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
Government Investors Trust
Notes to Financial Statements
March 31, 1995
1. Summary of Significant Accounting Policies. Government
Investors Trust (the "Trust") is registered with the
Securities and Exchange Commission under the Investment
Company Act of 1940 as an open-end, diversified investment
management company. The Trust invests solely in securities
issued and guaranteed by the U.S. Government or any of its
agencies or instrumentalities or in repurchase agreements
backed by such securities (under policies described in its
current prospectus).
Securities Valuation: The Trust uses the amortized cost
method of valuation for money market funds whereby portfolio
securities are valued at acquisition cost as adjusted for
amortization of premium or accretion of discount rather than
at value based on market factors. As required, the Trust
monitors the difference between market value and amortized
cost to assure that this valuation method fairly reflects
market value. Investment transactions are recorded on the
trade date. The cost of investments sold is determined on
the identified cost basis for financial statement and
federal income tax purposes.
<PAGE>
Notes to Financial Statements (continued)
Investment Income: Interest income, net of amortization of
premium or discount, and other income (if any) are accrued
as earned.
Dividends and Income Tax: Net investment income, determined
as gross investment income less expenses, is declared as a
dividend each business day. Declared dividends are
distributed to shareholders or reinvested in additional
shares as of the close of business at the end of each month.
In accordance with the requirement of Subchapter M of the
Internal Revenue Code applicable to regulated investment
companies, all of the taxable income of the Trust is
distributed to its shareholders, and therefore no federal
income tax provision is required.
Share Subscriptions: Shares purchased by check or otherwise
not paid for in immediately available funds are accounted
for as share subscriptions receivable and shares reserved
for subscriptions.
2. Investment in Repurchase Agreements. When the Trust
purchases securities under agreements to resell, the
securities are held for safekeeping by the Trust's custodian
bank as collateral. Should the market value of the
securities purchased under such an agreement decrease below
the principal amount to be received at the termination of
the agreement plus accrued interest, the counterparty is
required to place an equivalent amount of additional
securities in safekeeping with the Trust's custodian bank.
Repurchase agreements may be terminated within seven days.
Pursuant to an Exemptive Order issued by the Securities and
Exchange Commission, the Trust, along with other registered
investment companies having Advisory and Services Agreements
with Bankers Finance Investment Management Corp. ("BFIMC"),
transfers uninvested cash balances into a joint trading
account. The aggregate balance in this joint trading
account is invested in one or more consolidated repurchase
agreements whose underlying securities are U.S. Treasury or
federal agency obligations.
3. Investment Advisory Fees and Other Transactions with
Affiliates. The Investment Adviser to the Trust, BFIMC,
earns an advisory fee equal to 0.5% per annum of the average
net assets of the Trust; the fees accrue daily and are
payable monthly. In order to meet the securities
registration requirements of certain states, the Adviser has
undertaken to reimburse the Trust by the amount, if any, by
which the total expenses of the Trust (less certain excepted
expenses) exceed the applicable expense limitation in any
state or other jurisdiction in which the Trust is subject to
regulation during the fiscal year. The Trust believes the
current applicable expense limitation is 2.5% per annum of
the average net assets of the Trust up to $30 million, 2% of
any amount of such net assets exceeding $30 million but not
exceeding $100 million, and 1.5% per annum of such amount in
excess of $100 million. The Adviser is responsible for the
fees and expenses of Trustees who are affiliated with the
Adviser, the rent expense of the Trust's principal executive
office premises and certain promotional expenses. For the
year ended March 31, 1995, outside Trustee fees of $18,000
were paid by the Trust. At March 31, 1995, certain
officers, Trustees, companies and individuals affiliated
with the Trust own shares in the Trust aggregating 2.7% of
the shares outstanding.
4. Other Expenses. With the exception of certain expenses
of the Trust payable by it directly, all support services
are provided to the Trust under a Services Agreement between
the Trust and BFIMC, pursuant to which such services are
provided for amounts not exceeding the cost to BFIMC of the
support provided. For the year ended March 31, 1995,
operating expenses of $455,821 have been reimbursed to BFIMC
under the Services Agreement. As of March 31, 1995, expenses
of $50,141 have been incurred by BFIMC on behalf of the
Trust, the billing of which has been deferred.
5. Capital Share Transactions. An unlimited number of
capital shares, without par value, are authorized.
Transactions in capital shares (in dollars and shares) for
the years ended March 31 were as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Shares 210,702,717 209,166,105
Shares issued in
reinvestment 2,447,951 1,632,107
Total shares issued 213,150,668 210,798,212
Shares redeemed (226,699,339) (221,618,912)
Net decrease (13,548,671) (10,820,700)
</TABLE>
<PAGE>
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<PAGE>
Telephone Numbers
Shareholder Service
Washington, DC area: 703/528-6500
Toll-free nationwide: 800/336-3063
24-Hour ACCESS
Toll-free nationwide: 800/448-4422
The GIT Family of Mutual Funds
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Government Investors Trust
For more complete information on any GIT Investment Fund,
including charges and expenses, request a prospectus by
calling the numbers above. Read it carefully before you
invest or send money.
GIT
GIT INVESTMENT FUNDS
1655 Fort Myer Drive
Arlington Virginia 22209
