As Filed with the
Commission on July 28, 1995
Registration No. 2-63713
SEC File No. 811-2910
Securities and Exchange Commission
Washington, D.C.
Form N-1A
Registration Statement Under The Securities Act Of 1933 X
Pre-Effective Amendment No. _____
Post-Effective Amendment No. 18 X
Registration Statement Uuder The Investment Company Act
of 1940 X
Amendment No. 20
Government Investors Trust
(Exact Name of Registrant as Specified in Charter)
1655 Fort Myer Drive, Arlington, Virginia 22209
Registrant's Telephone Number: (703) 528-3600
W. Richard Mason, Assistant Secretary
Government Investors Trust
1655 Fort Myer Drive
Arlington, Virginia 22209
(Name and Address of Agent for Service)
Copy to:
John A. Dudley, Esquire
Sullivan & Worcester
1025 Connecticut Avenue, N.W.
Washington, D.C. 20036
Approximate Date of Proposed Public Offering
It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to Rule 485(b)
__X__ on July 31, 1995 pursuant to Rule 485(b)
_____ 60 days after filing pursuant to Rule 485(a)
_____ on ________________ pursuant to Rule 485(a)
_____ 75 days after filing pursuant to Rule 485(a)
The Registrant has registered an indefinite number of
its shares pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Registrant's Notice under Rule
24f-2 for the fiscal year ended March 31, 1995 was filed on May 16, 1995.
<PAGE>
Government Investors Trust
Prospectus
July 31, 1995
GIT
GIT Investment Funds
<PAGE>
Table of Contents
About Government Investors Trust 2
Expense Summary 2
Financial Highlights 3
Investment Objective 3
Investment Policies 3
Management of the Trust 5
The Trust and Its Shares 6
Dividends 6
Performance Information 6
Taxes 6
Net Asset Value 7
How to Purchase and Redeem Shares 7
Office
1700 North Moore Street
Arlington, VA 22209
Custodian
Star Bank, N.A.
Cincinnati, OH 45202
Auditors
Ernst & Young LLP
Telephone Numbers
Shareholder Services
Washington, DC area: 703-528-6500
Toll-free nationwide: 800-336-3063
24-Hour ACCESS
Toll-free nationwide: 800-448-4422
<PAGE>
Prospectus/July 31, 1995
1655 Fort Myer Drive, Arlington, Virginia 22209-3108
GOVERNMENT INVESTORS TRUST
Government Investors Trust is a money market mutual fund whose
goal is to obtain the highest possible current income, consistent
with investment solely in short-term debt securities issued or
guaranteed by agencies and instrumentalities of the United States
Government. Investments in the Trust are neither insured nor
guaranteed by the United States Government. The Trust is managed
for a stable $1.00 share price, although there can be no
assurance that this share price will be maintained.
Features
*No commissions or sales charges
*No "12b-1" expenses
*Dividends accrue from day of investment to day of withdrawal,
and can be paid by check or direct deposit, or reinvested
monthly
*Invest or withdraw funds by mail, wire transfer or in person
*$2,500 minimum initial investment
*Checking privileges monthly
This Prospectus is intended to be a concise statement of
information which investors should know before investing. After
reading the Prospectus, it should be retained for future
reference. For investors who received an electronic copy of the prospectus,
a paper copy of the prospectus is available without charge by calling or
writing the Trust.
A Statement of Additional Information concerning the Trust,
bearing the same date as this Prospectus, has been filed with the
Securities and Exchange Commission and is incorporated herein by
reference. It is available without charge by calling or writing
the Trust.
Shares of the Trust are not deposits or obligations of, or
guaranteed or endorsed by any bank. Shares are not federally
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Bankers Finance Investment Management Corp.
Investment Adviser
<PAGE>
About Government Investors Trust
Government Investors Trust (the "Trust") is a diversified open-
end management investment company, commonly known as a money
market fund. The Trust was organized as a Massachusetts business
trust under a Declaration of Trust dated February 14, 1979. The
Trust is managed by Bankers Finance Investment Management Corp.
(the "Adviser") of the same address as the Trust. Only one
series of the Trust's shares is currently authorized.
Expense Summary
The purpose of this table is to assist investors in understanding
the various costs and expenses that an investor will bear
directly or indirectly (see also "Management of the Trust"
below).
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases None
Redemption Fee None
Exchange Fee None
Annual Fund Operating Expenses (as a percentage of
average net assets)
Management Fee 0.50%
Other Expenses 0.66%
Total Fund Operating Expenses 1.16%
Example
1 Year 3 Years 5 Years 10 Years
You would pay the
following expenses on
a $1,000 investment,
assuming (1) a five
percent annual return
and (2) redemption
at the end of each
time period: $12 $37 $64 $142
The hypothetical example shown above is based on the expense
levels listed under the caption "Annual Fund Operating Expenses"
and is intended to provide the investor with an understanding of
the level of expenses that might be incurred in the future. The
five percent return used in the example is arbitrary and is for
illustrative purposes only. It should not be considered
representative of the Trust's past or future performance, nor
should the expenses in the example be considered representative
of future expenses, which may actually be greater or less than
those shown.
<PAGE>
Financial Highlights
The financial highlights data for a share outstanding and other
performance information for the fiscal year ended March 31, 1995
appearing below is derived from the financial statements audited
by Ernst & Young LLP, independent auditors, whose report appears
in the Annual Report to Shareholders. This report is incorporated
by reference in the Statement of Additional Information and can
be obtained by calling the Trust. The tabulation below of
information for the fiscal years ended March 31, 1986, 1987,
1988, 1989, 1990, 1991, 1992, 1993 and 1994 has also been derived
from the financial statements audited by Ernst & Young LLP. The
Trust experienced no net gains or losses on securities and
provided no distributions from capital gains or returns of
capital for the fiscal years shown below.
<TABLE>
<CAPTION>
Net asset Distributions Net Asset Net assets Net Net
Year value Net Total from from net value at end expenses income to
ended beginning investment investment investment Total end Total of period to average average
Mar. 31 of period income operations income distributions of period return (thousands) net assets net assets
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $1.000 $0.037 $0.037 $(0.037) $(0.037) $1.000 3.80% $ 64,541 1.16% 3.70%
1994 1.000 0.021 0.021 (0.021) (0.021) 1.000 2.08 78,090 1.11 2.08
1993 1.000 0.024 0.024 (0.024) (0.024) 1.000 2.44 88,911 1.06 2.44
1992 1.000 0.044 0.044 (0.044) (0.044) 1.000 4.44 117,170 1.06 4.41
1991 1.000 0.067 0.067 (0.067) (0.067) 1.000 6.96 153,206 1.05 6.69
1990 1.000 0.080 0.080 (0.080) (0.080) 1.000 8.28 173,438 1.04 7.99
1989 1.000 0.072 0.072 (0.072) (0.072) 1.000 7.48 171,144 1.01 7.21
1988 1.000 0.060 0.060 (0.060) (0.060) 1.000 6.19 184,255 1.01 6.01
1987 1.000 0.054 0.054 (0.054) (0.054) 1.000 5.57 192,953 1.06 5.45
1986 1.000 0.071 0.071 (0.071) (0.071) 1.000 7.37 232,389 0.97 7.14
</TABLE>
Investment Objective
The investment objective of the Trust is to obtain the highest
possible current income, consistent with the relative safety of
U.S. Government securities and with providing liquidity and price
stability to shareholders' investments in the Trust.
Considerations of relative safety, liquidity and price stability
limit the Trust's investments to shorter-term U.S. Government
securities which may not yield as high a level of current income
as is normally available from longer-term or lower-rated
securities. The Trust's investment objective may be changed
without shareholder approval; however, shareholders will receive
prior written notice of any material change. There is no
assurance that the Trust's investment objective will be achieved.
Investment Policies
The Trust's fundamental investment policies, which may not be
changed without a shareholder vote, limit its investments to
securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. The Trust expects that a
substantial portion of its assets will be invested in repurchase
agreements collateralized by U.S. Government securities. The
Trust intends normally to hold portfolio securities to maturity;
historically, securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities have involved
little risk to principal and interest if held to maturity.
<PAGE>
The Trust will limit purchases of investments to securities
having a maximum effective maturity of 13 months or less. The
Trust will not purchase any investment which would, at the time
of purchase, cause the average effective maturity of the Trust to
exceed 90 days. As used in this Prospectus, the term "effective
maturity" means either the actual time between purchase and the
stated maturity date of the investment, the time between its
scheduled interest rate adjustment dates, or the time between its
purchase settlement and its future resale arranged at the time of
purchase under fixed terms. The Trust's Portfolio will be managed
in conformity with regulations of the Securities and Exchange
Commission applicable to funds seeking to maintain a constant
share price of $1.00. The Trust will not invest more than 10
percent of its total assets in securities which cannot be
liquidated in seven days. The Trust normally expects to hold
investments to maturity, except to the extent liquidity
requirements indicate otherwise.
U.S. Government Securities. U.S. Government securities include a
variety of securities which are issued or guaranteed by the U.S.
Treasury, various agencies of the federal government and various
instrumentalities which have been established or sponsored by the
U.S. Government, and certain interests in the foregoing types of
securities. Treasury securities include notes, bills and bonds.
Obligations of the Government National Mortgage Association, the
Federal Home Loan Banks, the Federal Farm Credit System, the
Federal Home Loan Mortgage Corporation, the Federal National
Mortgage Association, the Small Business Administration and the
Student Loan Marketing Association are also considered U.S.
Government securities. Except for Treasury securities, these
obligations may or may not be backed by the "full faith and
credit" of the United States.
Some federal agencies have authority to borrow from the U.S.
Treasury while others do not. In the case of securities not
backed by the full faith and credit of the United States, the
investor must look principally to the agency issuing or
guaranteeing the obligation for ultimate repayment, and may not
be able to assert a claim against the United States itself in the
event the agency or instrumentality does not meet its
commitments.
Specialized Investment Techniques
To achieve its investment objective, the Trust may use certain
specialized investment techniques, including investment in
specialized kinds of government agency securities, investment in
"floating rate" government securities, use of repurchase
agreement transactions, investment in matched purchase/sale
transactions and investments purchased for forward delivery.
These techniques may involve certain risks, some of which are
summarized below, and discussed further in the Statement of
Additional Information.
Certain specialized government agency securities may provide
higher yields than are available from more common types of
government-backed investments. However, such specialized
investments may be available from a few sources, in limited
amounts, or only in very large denominations; they may also
require special capabilities in portfolio servicing and in legal
matters relating to government guarantees. Such securities may
have limited marketability, which might make it difficult for the
Trust to dispose of them advantageously; accordingly, the Trust
intends normally to hold such securities to maturity or pursuant
to repurchase agreements.
"Floating rate" government agency securities pay an interest rate
which is adjusted (i.e., "floats") at regular intervals in a
fixed relationship to a published interest rate such as the
"prime" rate of a given bank. Such securities may offer higher
yields than are available from short-term securities and may be
less susceptible to market value fluctuations than securities of
longer stated maturities which do not float. The stated
maturities of floating rate securities, which could be as long as
30 years, may limit their investment flexibility. Such securities
may be available only in large denominations, may require
specialized servicing and accounting capabilities, and may have
limited marketability, which might make it difficult for the
Trust to dispose of them advantageously.
<PAGE>
Repurchase agreements involve the sale of securities to the Trust
by a financial institution or securities dealer, simultaneous
with an agreement by that institution to repurchase the same
securities at the same price, plus interest, at a later date. The
Trust will limit repurchase agreement transactions to those
financial institutions and securities dealers who are deemed
creditworthy pursuant to guidelines adopted by the Trust's Board
of Trustees. The Adviser will follow a procedure designed to
ensure that all repurchase agreements acquired by the Trust are
always at least 100 percent collateralized as to principal and
interest. When investing in repurchase agreements, the Trust
relies on the other party to complete the transaction on the
scheduled date by repurchasing the securities. Should the other
party fail to do so, the Trust would end up holding securities it
did not intend to own. Were it to sell such securities, the Trust
might incur a loss. In the event of insolvency or bankruptcy of
the other party to a repurchase agreement, the Trust could
encounter difficulties and might incur losses upon the exercise
of its rights under the repurchase agreement.
Investment Considerations
The Trust's investment policies may involve certain risks. For
example, the market value of the fixed income securities in which
the Trust invests will tend to decline as prevailing interest
rates rise and increase as prevailing interest rates fall. The
magnitude of this change increases with the maturity of portfolio
securities. The Trust may invest in "floating rate" government
agency securities, in repurchase agreements, in matched
purchase/sale transactions and in investments purchased for
forward delivery, all of which may involve certain risks; see
"Specialized Investment Techniques" above and in the Statement of
Additional Information.
Management of the Trust
The Trustees. Under the terms of the Declaration of Trust, which
is governed by the laws of the Commonwealth of Massachusetts, the
Trustees are ultimately responsible for the conduct of the
Trust's affairs. They serve indefinite terms of unlimited
duration and they appoint their own successors, provided that
always at least two-thirds of the Trustees have been elected by
shareholders. The Declaration of Trust provides that a Trustee
may be removed at any special meeting of shareholders by a vote
of two-thirds of the Trust's outstanding shares.
The Adviser. Bankers Finance Investment Management Corp.
administers approximately $275 million in assets and manages the
GIT family of mutual funds, which includes stock, bond and money
market portfolios. The Adviser is also responsible for the day-
to-day administration of the Trust's activities. The Adviser's
sole stockholders are A. Bruce Cleveland, currently a Trustee,
and Michael D. Goth. The Adviser is a successor to a corporation
founded in 1975. The Adviser has the same address as the Trust.
Compensation. For its services under its Investment Advisory
Agreement with the Trust, the Adviser receives a fee, payable
monthly, calculated as 1/2 percent per annum of the average daily
net assets of the Trust. The Adviser may, in turn, compensate
certain financial organizations for services resulting in
shareholder purchases of Trust shares.
Distributor. GIT Investment Services, Inc. of the same address as
the Trust acts as the Trust's Distributor. The Distributor is
wholly owned by A. Bruce Cleveland.
Services Agreement. Under a separate Services Agreement with the
Trust, the Adviser provides operational and other support
services for which it is reimbursed at cost.
Transfer and Dividend Paying Agent. The Trust acts as its own
transfer agent and dividend paying agent.
Expenses. The Trust is responsible for all of its expenses not
assumed by the Adviser, including the costs of the following:
shareholder services; legal, custodian and audit fees; trade
association memberships;
accounting; certain Trustees' fees and expenses; fees for
registering the Trust's shares; the preparation of prospectuses,
proxy materials and reports to shareholders; and the expense of holding
shareholder meetings. For the fiscal year ending March 31, 1995, the expenses
<PAGE>
paid by the Trust, including advisory fees and reimbursable
expenses paid to the Adviser, were $798,546.
The Trust and Its Shares
Under the terms of the Declaration of Trust, the Trustees may
issue an unlimited number of whole and fractional shares of
beneficial interest without par value for each series of shares
they have authorized. All shares issued will be fully paid and
nonassessable and will have no preemptive or conversion rights.
Under Massachusetts law, the shareholders, under certain
circumstances, may be held personally liable for the Trust's
obligations. The Declaration of Trust, however, provides
indemnification out of Trust property of any shareholder held
personally liable for obligations of the Trust.
Only one series of the Trust's shares is currently authorized.
Each share has one vote and fractional shares have fractional
votes. Except as otherwise required by applicable regulations,
any matter submitted to a shareholder vote will be voted upon by
all shareholders without regard to series or class. For matters
where the interests of separate series or classes are not
identical, the question will be voted on separately by each
affected series or class. Voting is not cumulative.
The Trust does not intend to have regular shareholder meetings.
Shareholder inquiries can be made to the offices of the Trust at
the address on the cover of this Prospectus.
Dividends
The Trust's net income is declared as dividends each business
day. Dividends are paid in the form of additional shares credited
to investor accounts at the end of each calendar month, unless a
shareholder elects in writing to receive a monthly dividend
payment by check or direct deposit. Any net realized capital
gains will be distributed at least annually.
Performance Information
From time to time, the Trust advertises its yield and effective
yield. Both figures are based on historical data and are not intended to
indicate future performance.
For advertising purposes, the yield is calculated according to a
standard formula prescribed by the Securities and Exchange
Commission. This formula divides the net income earned on one
share during a given seven-day period by the initial value of
that share (normally $1.00), and expresses the result as an
annualized percentage.
The Trust's "effective yield" is calculated in a similar manner,
except that the net income earned during a seven-day period is
assumed to be reinvested at the same rate over a full year. This
calculation results in a slightly higher yield figure which shows
the effect of compounding.
The Trust may also cite the ranking or performance of its
Portfolio as reported in the public media or by independent
performance measurement firms. Further information on the methods
used to calculate the Trust's yield may be found in the Trust's
Statement of Additional Information.
Taxes
For federal income tax purposes, the Trust intends to maintain
its status under Subchapter M of the Internal Revenue Code (the
"Code") as a regulated investment company by distributing to
shareholders 100% of its net income and net capital gains, if
any, by the end of its fiscal year. The Code also requires the
Trust to distribute at least 98% of undistributed net income and
capital gains realized from the sale of investments by calendar
year-end in order to avoid a 4% excise tax. The capital gain
distribution is determined as of October 31 each year. Capital
gain distributions, if any, are taxable to the shareholder. The
Trust will send shareholders an annual notice of dividends and
other distributions paid during the year.
<PAGE>
Investors who fail to provide a valid social security or tax
identification number may be subject to federal withholding at a
rate of 31% of dividends and capital gain distributions.
Investors are advised to retain all statements received from the
Trust and to maintain accurate records of their investments.
At the state and local level, dividend income and capital gains
are generally considered taxable income. Interest on certain
U.S. Government securities held by the Trust would be exempt from
state and local income taxes if held directly by the shareholder.
Because tax laws vary from state to state, shareholders should
consult their tax advisers concerning the impact of mutual fund
ownership in their own tax jurisdictions.
Net Asset Value
The net asset value per share of the Trust is calculated as of 1
p.m., Washington, DC time, each day the New York Stock Exchange
is open for trading. Net asset value per share is determined by
adding the value of all securities and other assets, subtracting
liabilities and dividing the result by the total number of the
Trust's outstanding shares. The Trust's securities are valued
according to the "amortized cost" method, which is intended to
stabilize the share price at $1.00.
How to Purchase and Redeem Shares
Account Transactions
Transactions into or out of the Trust are entered in the
investor's account and recorded in shares. The number of shares
in the account is maintained to an accuracy of 1/1000th of a
share. Unless an investor specifically requests in writing,
certificates will not be issued to represent shares in the Trust.
The Trust will provide a subaccounting report for institutions
needing to maintain separate information on accounts under their
supervision.
Telephone Transactions
The option to initiate inter-fund exchanges and redemptions and
to obtain account balance information by telephone is available
automatically to all shareholders. The Trust will employ
reasonable security procedures to confirm that instructions
communicated by telephone are genuine; if it does not, it may be
liable for losses due to unauthorized or fraudulent transactions.
These procedures can include, among other things, requiring one
or more forms of personal identification prior to acting upon
telephone instructions, providing written confirmations and
recording all telephone transactions. Certain transactions,
including account registration or address changes, must be
authorized in writing.
Purchasing Shares
Shareholder purchases are priced at the net asset value per share
next determined after the purchase order is received by the Trust
in proper form and funds are received by the Trust's Custodian.
This is normally one or two business days after an investment is
received at the Trust.
New Accounts. A minimum of $2,500 is required to open an account.
Each investor is given an account with a balance denominated in
shares. When a new account is opened by telephone for funds wired
to the Trust, the investor will be required to submit a signed
application promptly thereafter. Payment of redemption proceeds
is not permitted until a signed application is on file with the
Trust.
New accounts may be opened by completing an application and
forwarding it with a check for the initial investment to:
Government Investors Trust
1655 Fort Myer Drive, Suite 1000
Arlington, VA 22209-3108
<PAGE>
Subsequent investments. Subsequent investments may be made in any
amount, but the Trust reserves the right to return investments of
less than $50.00. See "Redeeming Shares" for an explanation of
the Trust's policies regarding the 10-day hold on invested
checks.
Subsequent investments should be sent to:
Government Investors Trust
P.O. Box 640393
Cincinnati, OH 45264-0393
Please include an investment deposit slip or an indication of the
account to be credited. Checks should be endorsed or payable to
Government Investors Trust.
In Person. Accounts may be opened and subsequent deposits made
at any office of the Trust.
By Wire. Federal Funds wires should be sent to
Star Bank, N.A., Cinti/Trust, ABA No. 0420-0001-3, for credit as
follows:
Government Investors Trust
Account No. 48038-8883
(Investor name and account number)
Please call before or shortly after funds are wired to ensure
proper credit. The Trust must be notified by 1 p.m., Washington,
DC time to credit the shareholder's account the same day. There
is a charge of $6.00 for processing incoming wires of less than
$2,500.
By Inter-Fund Exchange. Investors may redeem shares from one GIT
account and concurrently invest the proceeds in another GIT
account by telephone when the account registration and tax
identification number remain the same. There is no charge for
this service. When a new account is opened by exchange, a new
account application is required if the account registration or
tax identification number will differ from that on the
application for the original account. Exchanges may only be made
into funds that are registered or otherwise permitted to be sold
in the investor's state of residence.
By Automatic Monthly Investment. Regular monthly investments in
any fixed amount of $100 or more can be made automatically by
Electronic Funds Transfer from accounts at banks or savings and
loan associations which have the required transfer capabilities.
The investor can change the amount of this automatic investment
or discontinue the service at any time by writing to the Trust.
Redeeming Shares
Redemptions are processed on any day the New York Stock Exchange
is open and are effected at the net asset value per share next
determined after the redemption request is received in proper
form. Redemptions may be made by wire transfer, by mail, in
person or pursuant to standing instructions. The Trust does not
distribute currency or coin.
To protect your account, the Trust requires signature guarantees
before certain redemptions or registration changes are considered
in good order. Signature guarantees help the Trust ensure the
identity of the authorized account owner or owners before the
Trust releases redemption proceeds or recognizes a new person to
request such redemptions. Signature guarantees are required for any
account transfers or delivery of redemption proceeds to a person
other than the shareholder of record (i) at an address other than
the shareholder's address of record or (ii) by wire to a bank
account other than the shareholder's previously designated bank
account that receives wire transfers. The Trust recognizes
signature guarantees from banks with FDIC insurance, certain
credit unions, trust companies, and members of a domestic stock
exchange. A guarantee from a notary public is not an acceptable
signature guarantee.
By Wire. Wire transfers permit funds to be credited to a
shareholder's bank account, usually the same day. Wires may only
be sent to the bank account previously designated in writing.
Other wires and wires to third parties are normally not
permitted.
<PAGE>
Redemptions of $10,000 or more will be paid by wire to U.S.
domestic banks without charge. Wires for lesser amounts will be
paid after deducting a $10 service charge. Wires to foreign banks
require a service charge of $30, or the cost of the wire if
greater.
Wire requests received after 12:30 p.m., Washington, DC time will
normally be processed the next business day. Wires can be
arranged by calling the telephone numbers on the cover of this
Prospectus.
By Mail. Upon written or telephone request, redemptions may be
sent to the shareholder of record by official check of the Trust.
Redemption requests received by mail are normally processed
within one business day.
In Person. Redemptions may be requested in person at any office
of the Trust. Payment of proceeds of same-day redemptions in
excess of $10,000 are not permitted.
By Check. An investor who has requested checkwriting privileges
and submitted a signature card may write checks in any amount
payable to any party. Checks of $500 or more are processed free
of charge. There is a charge of $0.15 for checks written for
under $500. An initial supply of preprinted checks will be sent
free of charge. The cost of check reorders and of printing
special checks will be charged to the investor's account.
A confirmation statement showing the amount and number of each
check written is sent to the investor quarterly. The Trust does
not return canceled checks, but will provide copies of
specifically requested checks. A fee of $1.00 per copy is charged
for more than one check copy per year.
Uncollected Funds. To protect shareholders against loss or
dilution resulting from deposit items that are returned unpaid,
the delivery of the proceeds of any redemption of shares may be
delayed 10 days or more until it can be determined that the check
or other deposit item (including an Automatic Monthly Investment)
used for purchase of the shares has cleared. Shares will remain
invested until that time. Such deposit items are considered
"uncollected," unless the Trust has determined that they have
been actually paid by the bank on which they were drawn.
Shares purchased by cash, federal funds wire or U.S. Treasury
check are considered collected when received. All deposit items
earn dividends from the day of credit to a shareholder's account,
even while not collected.
Stop Payments. The Trust will honor stop payment requests on
unpaid checks written by shareholders for a fee of $5.00. Oral
stop payment requests are effective for 14 calendar days, at
which time they will be canceled unless confirmed in writing.
Written stop payment orders are effective for six months and may
be extended by written request for another six months.
There is a charge of $28.00 or the cost of stop payment, if
greater, for stop payment requests on "official checks" issued by
the Trust on behalf of shareholders. Certain documents may be
needed before such a request can be processed.
Periodic Redemptions. Investors may request automatic monthly
redemptions of a fixed or readily determinable sum, or of the
actual dividends earned during the past month. Such payments will
be sent to the investor or to any other single payee authorized
in writing by the account holder, including direct deposit to the
investor's bank account. There is no charge for this service, but
the Trust reserves the right to impose a charge, or to impose a
minimum amount for periodic redemptions.
Transaction Charges
In addition to charges described elsewhere in this Prospectus, an
account will be charged (by redemption of shares) $3.00 per month
for any account whose balance is below $1,000.
Investors who own shares in the Trust with an account balance
that falls below this amount should carefully consider the impact
of the $3.00 charge on their investment. The charge may be
greater than the investment return and may deplete a
shareholder's account over time. The Trust will contact each
investor prior to charging the account and inform the investor of
the option to increase the account balance or close the account
within 30 days to avoid a fee.
<PAGE>
Accounts will be charged (by redemption of shares) $10.00 for
invested items returned for any reason. The Trust charges $5.00
to process each bearer bond coupon deposited.
The Trust reserves the right to impose additional charges, upon
30 days' written notice, to cover the costs of unusual
transactions. Services for which charges could be imposed
include, but are not limited to, processing items sent for
special collection, transfers to accounts at the Trust's
custodial bank and issuance of multiple share certificates.
Retirement Plans
IRAs. Individual Retirement Accounts ("IRAs") may be opened with
a reduced minimum investment of $500. Even though they may be
nondeductible or partially deductible, IRA contributions up to
the allowable annual limits may be made, and the earnings on such
contributions will accumulate tax-free until distribution. The
Trust currently charges an annual fee of $12 for an investor's
IRA, which may be invested in an unlimited number of GIT mutual
funds. A separate application is required for IRA accounts.
Keogh Plans. The Trust also offers Keogh (or H.R. 10) plans for
self-employed individuals and their employees, which enable them
to obtain tax-sheltered retirement benefits similar to those
available to employees covered by qualified retirement plans.
Currently the Trust charges an annual maintenance fee of $15 for
Keogh accounts.
The Trust also sponsors SEP IRAs, SARSEPs, 401(k) and 403(b)
plans. Further information on the retirement plans available
through the Trust, including applicable minimum investments, may
be obtained by calling the Trust's shareholder service
department.
Closing an Account
An investor who wishes to close an account should request that
the account be closed by calling or writing the Trust, rather than by
redeeming the amount believed to be the account balance. When an account
is closed, shares will be redeemed at the next determined net asset value.
The Trust reserves the right to involuntarily redeem accounts
with balances of less than $1,000 due to prior shareholder
redemptions. Prior to closing any such account, the investor will
be given 30 days written notice, during which time the investor
may increase his or her balance to avoid having the account
closed.
<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
GIT Equity Trust
Special Growth Portfolio
Select Growth Portfolio
Equity Income Portfolio
Worldwide Growth Portfolio
GIT Income Trust
Maximum Income Portfolio
Government Portfolio
GIT Tax-Free Trust
Arizona Portfolio
Maryland Portfolio
Missouri Portfolio
Virginia Portfolio
National Portfolio
Money Market Portfolio
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. This prospectus does not constitute an
offering by the distributor in any jurisdiction in which such
offering may not be lawfully made.
GIT
GIT Investment Funds
1655 Fort Myer Drive
Arlington Virginia 22209
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
Dated July 31, 1995
For use with Prospectus dated July 31, 1995
GOVERNMENT INVESTORS TRUST
1655 Fort Myer Drive
Arlington, VA 22209-3108
(800) 336-3063
(703) 528-6500
This Statement of Additional Information is not a Prospectus.
This Statement of Additional Information should be read in
conjunction with the Prospectus of Government Investors Trust
bearing the date indicated above (the "Prospectus"). A copy of
the Prospectus may be obtained from the Trust at the address and
telephone numbers shown.
Table of Contents
Introductory Information
("About Government Investors Trust") 2
Supplemental Investment Policies
("Investment Objective" and "Investment Policies") 2
Investment Limitations
("Investment Policies") 3
The Investment Adviser
("Management of the Trust") 4
Organization of the Trust
("The Trust and Its Shares") 5
Trustees and Officers
("Management of the Trust") 6
Administrative and Other Expenses
("Management of the Trust") 7
Portfolio Transactions
("Management of the Trust") 7
Share Purchases
("How to Purchase and Redeem Shares") 8
Share Redemptions
("How to Purchase and Redeem Shares") 9
Retirement Plans
("How to Purchase and Redeem Shares") 10
Declaration of Dividends
("Dividends") 10
Determination of Net Asset Value
("Net Asset Value") 10
Additional Tax Matters
("Taxes") 11
Yield Calculations
("Performance Information") 11
Custodians and Special Custodians 12
Legal Matters and Independent Auditors
("Financial Highlights") 12
Additional Information 12
Financial Statements and Report of Independent Auditors
("Financial Highlights") 13
Note: The items appearing in parentheses above are cross references to sections
in the Prospectus which correspond to the sections of this Statement of
Additional Information.
<PAGE>
Statement of Additional Information Page 2
Government Investors Trust July 31, 1995
Introductory Information
Government Investors Trust (the "Trust") is an open-end
diversified management investment company which invests solely in
U.S. Government securities. It may use a variety of investment
techniques with the objective of providing as high a yield as is
available from U.S. Government securities and the investment
quality associated with these securities (see "Supplemental
Investment Policies").
Supplemental Investment Policies
The Trust seeks to achieve its investment objective through
investment in securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and in
participation interests in and repurchase agreements based on
such securities. The investment objective of the Trust is
described in the Prospectus (see "Investment Objective").
Reference should also be made to the Prospectus for general
information concerning the Trust's investment policies (see
"Investment Policies"). Unless described herein or in the
Prospectus, the Trust will not invest in "derivative" securities.
Specialized Investment Techniques. In order to achieve its
investment objective, the Trust may use, when the Adviser deems
appropriate, certain specialized investment techniques. Such
specialized investment techniques principally include those
identified in the Prospectus (see "Investment Policies"), which
are described more fully below:
1. Investments in Specialized Kinds of Government Agency
Securities. These agency securities often provide higher yields
than are available from more common types of Government-backed
investments. However, such specialized investments may only be
available from a few sources, in limited amounts, or only in very
large denominations; they may also require specialized capability
in portfolio servicing and in legal matters related to Government
guarantees. While frequently offering attractive yields, the
limited-activity markets of many of these securities means that
if the Trust were forced to liquidate any of them it might not be
able to do so advantageously; accordingly, the Trust intends to
normally hold such securities to maturity or pursuant to
repurchase agreements.
2. Investment in "Floating Rate" Government Agency Securities.
These Government agency securities may offer particular
advantages towards the achievement of the objectives of the Trust
by providing for an interest rate which is adjusted (i.e.,
"floats") at regular intervals according to some published
interest rate. Such securities frequently offer higher yields
than are available on short-term securities but less risk of
market value fluctuations than securities of longer maturities
which do not float. Interest rates, and thus income to the Trust,
on these securities will normally float downward when interest
rates are falling and float upward when their reference rates of
interest rise. Generally, such investments float in relation to
the "prime" interest rate of New York or other money center banks
and often are adjusted upward or downward quarterly, although
some such securities float in relationship to other published
interest rates or at more or less frequent intervals. These
floating rate securities may have stated maturities of up to 30
years, although 10-year stated maturities are more typical.
Floating rate securities may be comparable in some respects to
short-term securities, but their longer stated maturities reduce
investment flexibility, making them less attractive than short-
term securities to some investors.
3. Repurchase Agreement Transactions. A repurchase agreement
involves the acquisition of securities from a financial
institution, such as a bank or securities dealer, with the right
to resell the same securities to the financial institution on a
future date at a fixed price. Repurchase agreements are a highly
flexible medium of investment in that they may be for very short
periods, including, frequently, maturities of only one day. Under
the Investment Company Act of 1940 repurchase agreements are
considered loans and the securities involved may be viewed as
collateral. It is the Trust's policy to limit the financial
institutions with which it engages in repurchase agreements to
banks, savings and loan associations and securities dealers
meeting financial responsibility standards prescribed in
guidelines adopted by the Trustees.
When investing in repurchase agreements, the Trust could be
subject to the risk that the other party may not complete the
scheduled repurchase and the Trust would then be left holding
securities it did not expect to retain. If those securities
decline in price to a value less than the amount due at the
scheduled time of repurchase, then the Trust could suffer a loss
of principal or interest. The Adviser will follow procedures
designed to assure that repurchase agreements acquired by the
Trust are always at least 100% collateralized as to principal and
interest. It is the Trust's policy to require delivery of
repurchase agreement collateral to its Custodian or (in the case
of book-entry securities held by the Federal Reserve System) that
such collateral is registered in the Custodian's name or in
negotiable form. In the event of insolvency or bankruptcy of the
other party to a repurchase agreement, the Trust could encounter
restrictions on the exercise of its rights under the repurchase
agreement.
To the extent the Trust requires cash to meet redemption requests
and determines that it would not be advantageous to sell
portfolio securities to meet those requests, then it may sell its
portfolio securities to another investor with a simultaneous
agreement to repurchase them. Such a transaction is commonly
called a "reverse repurchase agreement." It would have the
practical effect of constituting a loan to the Trust, the
proceeds of which would be used to meet cash requirements from
redemption requests. During the period of any reverse repurchase
agreement, the Trust would recognize fluctuations in value of the
underlying securities to the same extent as if those securities
were held by the Trust outright. If the Trust engages in reverse
repurchase agreement transactions, it will maintain in a
segregated account designated Government securities which are
liquid or mature prior to the scheduled repurchase and cash
sufficient in aggregate value to provide adequate funds for
completion of the repurchase. It is the Trust's current operating
policy not to engage in reverse repurchase agreements except for
purposes of meeting redemption requests. The Trust will not enter
into any reverse repurchase agreement, if as a result, reverse
repurchase agreements in the aggregate would exceed 10% of the
Trust's total assets.
<PAGE>
Statement of Additional Information Page 3
Government Investors Trust July 31, 1995
4. Investment in Matched Purchase/Sale Transactions. The Trust
may invest by means of matched purchase/sale transactions
containing two elements: the purchase of U.S. Government
securities and a simultaneous sale of those securities by means
of a future delivery contract at a fixed price for later delivery
to a different institution (securities dealer, bank, etc.).
During the interval between the actual dates they are bought and
sold, the securities will be held by a custodian of the Trust.
The transactions are thus self-liquidating and produce a known
yield, similar to a repurchase agreement; this yield is comprised
of the interest earned on the securities while they are held plus
the price differential between the purchase and sale. The sale
price may be more or less than the price at which the securities
could otherwise be sold on the day delivery is due. These
arbitrage transactions may be attractive if market conditions
create opportunities for higher yields than on repurchase
agreements. It is contrary to the Trust's policies for it to hold
a future delivery contract for the sale of securities which it
does not own. Established markets are available for future delivery contracts,
including financial futures exchanges and the over-the-counter market.
5. Investments Purchased for Forward Delivery. Institutional
investors such as the Trust often enter into commitments to take
delivery of securities at a future time under specified terms of
purchase. Such transactions sometimes appear advantageous because
they may provide an opportunity to acquire an investment
otherwise unavailable, or with more attractive terms than are
currently available or anticipated for the future. Such
transactions, however, can involve a risk that the yields
available in the market when the delivery takes place may
actually be higher than those obtained in the transaction itself,
and a risk that the investor's available cash may be less than
projected, possibly necessitating a disadvantageous resale of the
securities purchased or of other portfolio securities at a loss
to the Trust. Securities purchased for forward delivery do not
accrue interest until they are delivered. The Trust intends to
enter into forward delivery transactions when it deems them
advisable, but to reduce its exposure to price instability
through changes in interest rates before the transactions are
completed, it has a policy that these commitments will only be
undertaken in connection with securities having maturities of one
year or less.
U.S. Government Securities. As used in the Prospectus and in this
Statement of Additional Information, the term "U.S. Government
securities" refers to a variety of securities which are issued or
guaranteed by the United States Treasury, by various agencies of
the United States Government, and by various instrumentalities
which have been established or sponsored by the United States
Government, and to certain interests in the foregoing types of
U.S. Government securities. Except for U.S. Treasury securities,
these obligations, even those which are guaranteed by federal
agencies or instrumentalities, may or may not be backed by the
"full faith and credit" of the United States. In the case of
securities not backed by the full faith and credit of the United
States, the investor must look principally to the agency issuing
or guaranteeing the obligation for ultimate repayment, and may
not be able to assert a claim against the United States itself in
the event the agency or instrumentality does not meet its
commitments.
Treasury securities include Treasury bills, Treasury notes and
Treasury bonds. Some of the Government agencies which issue or
guarantee securities are the Department of Housing and Urban
Development, the Department of Health and Human Services, the
Government National Mortgage Association, the Farmers Home
Administration, the Department of Transportation, the Department
of Energy, the Department of the Interior, the Department of
Commerce, the Department of Defense and the Small Business
Administration. Other Government agencies and instrumentalities
which issue or guarantee securities include the Export-Import
Bank, the Federal Farm Credit System, the Federal Home Loan
Banks, the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation and the Student Loan Marketing
Association. International development organizations which
operate under sponsorship of the U.S. Government and which issue
or guarantee securities (although the Trust does not presently
intend to hold such securities in its portfolio) include the
Inter-American Development Bank, the Asian Development Bank and
the International Bank for Reconstruction and Development.
When used herein, the term "U.S. Government securities" includes
securities issued or guaranteed by any of the foregoing entities
or by any other agency or instrumentality established or
sponsored by the United States Government, and participation
interests (with unaffiliated persons) in and instruments
evidencing deposit or safekeeping for any of the foregoing.
Participation interests are pro-rata interests in U.S. Government
securities held by others; instruments evidencing deposit or
safekeeping are documentary receipts for such original securities
held in custody by others.
Maturities. As used in this Statement of Additional Information
and in the Prospectus, the term "effective maturity" means either
the actual stated maturity of the investment, the time between
its scheduled interest rate adjustment dates (for variable rate
securities), or the time between its purchase settlement and
scheduled future resale settlement pursuant to a resale or
optional resale under fixed terms arranged in connection with the
purchase, whichever period is shorter. A "stated maturity" means
the time scheduled for final repayment of the entire principal
amount of the investment under its terms. "Short-term" means a
maturity of one year or less, while "long-term" means a longer
maturity.
Investment Limitations
The Trust has adopted as fundamental policies the following
limitations on its investment activities, which may not be
changed without a majority vote of the Trust's shareholders as
defined in the Investment Company Act of 1940 (see "Organization
of the Trust").
1. Permissible Investments. Subject to the investment policies
from time to time adopted by the Trustees, The Trust may purchase
U.S. Treasury bills, notes, bonds, or other debt obligations
issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities (including international membership
development banks and negotiable certificates of deposit the
<PAGE>
Statement of Additional Information Page 4
Government Investors Trust July 31, 1995
principal amount of which is insured by the Federal Deposit
Insurance Corporation or participation interests (with
unaffiliated persons) therein, or instruments evidencing deposit
or safekeeping of U.S. Government securities (see "Supplemental
Investment Policies"); but any of these securities may be subject
to repurchase agreements with financial institutions or
securities dealers or may be purchased from any person, under
terms and arrangements determined by the Trust, for future
delivery. Any of these securities may have limited markets and
may be purchased with restrictions on transfer imposed by the
Government agency or instrumentality involved or for other
reasons, to the extent the Trustees permit; however, the Trust
may not invest in securities for which there is no readily
available market, if at the time of acquisition more than 15% of
the Trust's net assets would be invested in such securities.
2. Borrowing and Lending. The Trust may not obtain bank loans,
except for extraordinary or emergency purposes. The Trust may
enter into reverse repurchase agreements in amounts not exceeding
25% of its total assets (including the proceeds of the reverse
repurchase transactions) for purposes of purchasing other
securities. The Trust may not obtain loans or enter into reverse
repurchase agreements in total amounts exceeding one-third of
such total assets for any purpose, including the meeting of cash
withdrawal requests or for extraordinary purposes. The Trust may
not mortgage, pledge or hypothecate any assets to secure bank
loans, except in amounts not exceeding 15% of its net assets
taken at cost, and only for extraordinary or emergency purposes.
The Trust may loan its portfolio securities in an amount not in
excess of one-third of the value of the Trust's gross assets,
provided collateral satisfactory to the Trustees is continuously
maintained in amounts not less than the value of the securities
loaned.
3. Other Activities. The Trust may not act as an underwriter,
make short sales (or maintain a short position), or write put or
call options or combinations thereof. Nor may the Trust purchase
securities on margin (except for customary credit used in
transaction clearance), invest in commodities or in real estate,
or acquire shares of other investment companies, except that the
foregoing prohibition against investment in "commodities" by the
Trust does not preclude the use of financial futures contracts to
make purchases or sales of U.S. Government securities, provided
the transactions would otherwise be permitted under the Trust's
investment policies.
The Trust may not knowingly take any investment action which has
the effect of eliminating its tax exemption under Sub-Chapter M
of the Internal Revenue Code (see "Additional Tax Matters").
Notwithstanding the fundamental policies described above, as a
matter of operating policy, in order to comply with certain applicable State
restrictions, the Trust will not pledge, mortgage or hypothecate in excess
of 10% of its net assets at market value. The Trust has adopted the
additional restriction, notwithstanding Paragraph 1 above, that it will not
invest more than 10% of its net assets at the time of purchase in illiquid
assets and securities for which there is no readily available
market (which include fully insured certificates of deposit,
unless the Trustees determine they are readily marketable) and in
repurchase agreements and matched purchase/sale transactions that
cannot be terminated within seven days. Matched purchase/sales
generally involve the purchase of liquid securities coupled with
a sale for future delivery. Future delivery contracts traded on
an organized exchange (such as the Chicago Board of Trade or the
International Monetary Market) are considered liquid, while such
contracts executed in the over-the-counter market may be
illiquid, if a readily available futures market has not
developed. Liquidity of a matched purchase/sale transaction
requires liquidity of both of its parts; the securities purchased
and the future delivery sale contract. The sale contract may be
liquid by the existence of a readily available market for it or
by a contractual provision permitting delivery at any time within
seven days.
The Investment Adviser
Bankers Finance Investment Management Corp., 1655 Fort Myer
Drive, Arlington, Virginia 22209-3108, is the investment adviser
to the Trust and is called the "Adviser" throughout this
Statement of Additional Information and the Prospectus. The
Adviser is responsible for the investment management of the Trust
and has the authority to handle all of the Trust's portfolio
transactions, to select the methods and firms with which such
transactions are executed, to oversee the Trust's operations, and
otherwise to administer the affairs of the Trust as it deems
advisable. In the execution of these responsibilities, the
Adviser is subject to the investment policies and limitations of
the Trust described in the Prospectus and this Statement of
Additional Information, to the terms of the Declaration of Trust
and the Trust's By-Laws, and to written directions given from
time to time by the Trustees.
This Investment Advisory Agreement is subject to annual review
and approval by the Trustees, including a majority of those who
are not "interested persons," as defined in the Investment
Company Act of 1940. The Investment Advisory Agreement was
approved by shareholders at the Trust's first annual meeting.
The Investment Advisory Agreement may be terminated at any time,
without penalty, by the Trustees or by the vote of a majority of
the outstanding voting securities, or by the Adviser, upon sixty
days' written notice to the other party. The Investment Advisory
Agreement may not be assigned by the Adviser, and will
automatically terminate upon any assignment.
Background of the Adviser. The Adviser was formed in January 1979
for the purpose of providing investment management services to
the Trust. The Adviser also serves as the investment adviser to
GIT Income Trust, GIT Equity Trust and GIT Tax-Free Trust. The
Adviser is a former subsidiary of and successor to Bankers
Finance Corporation, which was formed in 1975.
Management. A. Bruce Cleveland is President of the Adviser; he
and Michael D. Goth are its sole stockholders. Mr. Cleveland is
also Chairman of the Trustees, President and Treasurer of the
Trust. Mr. Cleveland holds the same positions with GIT Income
Trust, GIT Equity Trust and GIT Tax-Free Trust.
<PAGE>
Statement of Additional Information Page 5
Government Investors Trust July 31, 1995
Advisory Fee and Expense Limitations. For its services under the
Investment Advisory Agreement, the Adviser receives a fee,
payable monthly, calculated as 1/2 percent per annum of the
average daily net assets of the Trust's portfolio during the
month. Such fees do not decrease as net assets increase. The
Adviser may waive or reduce such fee during any period. The
Adviser may also reduce such fee on a permanent basis, without
any requirement for consent by the Trust or its shareholders,
under such terms as it may determine, by written notice thereof
to the Trust.
The Adviser has agreed to reimburse the Trust for all of its
expenses, excluding securities transaction commissions and
expenses, taxes, interest and extra-ordinary and non-recurring
expenses, which exceed during any fiscal year one and one-half
percent of the Trust's daily average net assets up to $40 million
and one percent of the amount, if any, by which such assets
exceed $40 million. In addition, the Adviser has also agreed to
reimburse the Trust for all of its expenses (including any
management fees paid to the Adviser), but excluding securities
transaction commissions and expenses, taxes, interest, share
distribution expenses, and other extraordinary and non-recurring
expenses, which during any fiscal year exceed the applicable
expense limitation in any State or other jurisdiction in which
the Trust, during the fiscal year, becomes subject to regulation
by qualification or sale of its shares. As of the date of this
Statement of Additional Information, the Trust believes this
applicable annual expense limitation to be equivalent to two and
one-half percent of the Trust's aggregate daily average net
assets up to $30 million; two percent of an amount of such net
assets exceeding $30 million, but not exceeding $100 million; and
one and one-half percent of the amount, if any, by which such net
assets exceed $100 million.
In addition, the Adviser has agreed, in any event, to be
responsible for the fees and expenses of the Trustees and
officers of the Trust who are affiliated with the Adviser, the
rent expenses of the Trust's principal executive office premises,
and its various promotional expenses (including the distribution
of Prospectuses to potential shareholders). Other than investment
management and the related expenses, and the foregoing items, the
Adviser is not obligated to provide or pay for any other services
to the Trust, although it may elect to do so.
The Investment Advisory Agreement permits sharing of the
Adviser's fee with other persons, subject to the prior approval
of such arrangements by the Trustees, including a majority of
those who are not interested persons of the Trust. Under
regulations of the Securities and Exchange Commission such
arrangements are permissible in connection with the distribution
of investment company shares, if the payments of the shared fee
amounts are made out of the investment adviser's own resources.
Prior to its implementation the Trustees will approve any
arrangement to share the Adviser's fees and will satisfy
themselves that such payments are made from the Adviser's own
resources. During the fiscal years ending March 31, 1993, 1994
and 1995, the Adviser received advisory fees of $506,333,
$410,098 and $342,725 respectively from the Trust.
Organization of the Trust
The Declaration of Trust, dated February 14, 1979, has been filed
with the Secretary of State of the Commonwealth of Massachusetts
and the Clerk of the City of Boston, Massachusetts. The
Prospectus contains general information concerning the Trust's
form of organization and its shares (see "The Trust and Its
Shares"), including the series of shares currently authorized.
Shares and Classes of Shares. The Trustees may authorize at any
time the creation of additional series of shares (the proceeds of
which would be invested in separate, independently managed
portfolios) and additional classes of shares within any series
(which would be used to distinguish among the rights of different
categories of shareholders, as might be required by future
regulations or other unforeseen circumstances) with such
preferences, privileges, limitations, and voting and dividend
rights as the Trustees may determine. All consideration received
by the Trust for shares of any additional series or class, and
all assets in which such consideration is invested, would belong
to that series or class (but classes may represent proportionate
undivided interests in a series), and would be subject to the
liabilities related thereto. The Investment Company Act of 1940
would require the Trust to submit for the approval of the
shareholders of any such additional series or class any adoption
of an investment advisory contract or any changes in the Trust's
fundamental investment policies related to the series or class.
The Trustees may divide or combine the shares into a greater or
lesser number of shares without thereby changing the
proportionate interests in the Trust. Upon any liquidation of the
Trust, the shareholders are entitled to share pro-rata in the
liquidation proceeds available for distribution.
Voting Rights. The voting rights of shareholders are not
cumulative, so that holders of more than 50 percent of the shares
voting can, if they choose, elect all Trustees being selected,
while the holders of the remaining shares would be unable to
elect any Trustees. As of June 26, 1995, no person was known to
the Trust to own beneficially or of record 5% or more of its
shares.
Because there is not a requirement for annual elections of
Trustees, the Trust does not anticipate having regular annual
shareholder meetings. Shareholder meetings will be called as
necessary to consider questions requiring a shareholder vote. The
selection of the Trust's independent auditors will be submitted
to a vote of ratification by the shareholders at any annual
meetings held by the Trust. Any change in the Declaration of
Trust, in the Investment Advisory Agreement (except for
reductions of the Adviser's fee), in the Services Agreement, or
in the fundamental investment limitations of the Trust must be
approved by a majority of the shareholders before it can become
effective. A "majority" is constituted by either 50 percent of
all shares of the Trust or 67 percent of the shares voted at an
annual meeting or special meeting of shareholders at which at
least 50 percent of the shares are present or represented by
proxy.
The Declaration of Trust provides that two-thirds of the holders
of record of the Trust's shares may remove a Trustee from
<PAGE>
Statement of Additional Information Page 6
Government Investors Trust July 31, 1995
office by votes cast in person or by proxy at a meeting called
for the purpose. A Trustee may also be removed from office
provided two-thirds of the holders of record of the Trust's
shares file declarations in writing with the Trust's Custodian.
Shareholder Liability. Under Massachusetts law, the shareholders
of an entity such as the Trust may, under certain circumstances,
be held personally liable for its obligations. The Declaration of
Trust contains an express disclaimer of shareholder liability for
acts or obligations of the Trust and requires that notice of such
disclaimer be given in each agreement, obligation or instrument,
entered into or executed by the Trust or the Trustees. The
Declaration of Trust provides for indemnification out of the
Trust property of any shareholder held personally liable for the
obligations of the Trust. The Declaration of Trust also provides
that the Trust shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of
the Trust and satisfy any judgment thereof. The risk of a
shareholder incurring financial loss on account of status as a
shareholder is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
Liability of Trustees and Others. The Declaration of Trust
provides that the officers and Trustees of the Trust will not be
liable for any neglect, wrongdoing, errors of judgment, or
mistakes of fact or law, except that they shall not be protected
from liability arising out of willful misfeasance, bad faith,
gross negligence, or reckless disregard of their duties to the
Trust. Similar protection is provided to the Adviser under the
terms of the Investment Advisory Agreement and the Services
Agreement. In addition, protection from personal liability for
the obligations of the Trust itself, similar to that provided to
shareholders, is provided to all Trustees, officers, employees
and agents of the Trust.
Trustees and Officers
The Board of Trustees and executive officers of the Trust and
their principal occupations during the past five years are shown
below:
A. Bruce Cleveland <F1>
1655 Fort Myer Drive, Arlington, VA 22209-3108
Trustee, Chairman of Trustees, President and Treasurer
Founder and President of GIT Investment Funds and Bankers Finance
Corporation, and President of its successor, Bankers Finance
Investment Management Corp.; President of Presidential Savings
Bank, FSB; President of GIT Investment Services, Inc.; President
of USA International Foods, Inc.; formerly Special Assistant for
SBIC Industry Development, U.S. Small Business Administration and
member of the Corporate Finance Dept. of the investment firm of
Drexel, Burnham & Co., Inc. A graduate of Harvard College and
Harvard Business School.
Thomas S. Kleppe <F2>
7100 Darby Road, Bethesda, MD 20037
Trustee
Private Investor; formerly Visiting Professor at the University
of Wyoming, Secretary of the U.S. Department of the Interior;
Administrator of the U.S. Small Business Administration; U.S.
Congressman from North Dakota; Vice President and Director of
Dain, Kalman & Quail, investment bankers; and President of Gold
Seal Co., manufacturers of household cleaning products. Attended
Valley City State College of North Dakota.
John D. Reilly <F2>
5335 Wisconsin Avenue, NW Washington, DC 20015
Trustee
President of Reilly Investment Corporation(Formerly Chairman,
President, CEO, and Executive Director) of Reilly Mortgage
Group, Inc., McLean, Va., a commercial mortgage banking company
which he founded in 1976. A graduate of the University of Notre
Dame and Harvard Business School.
Smith T. Wood<F2>
9014 Old Dominion Drive, McLean, VA 22102
Trustee
President of Seneca Corporation, providers of computer support
services. An adjunct professor at Georgetown University and
director of Allied Capital Corporation II and FaxGuard Systems
Corporation. Formerly an executive of Barrister Information
Systems Corp., Barrister Micro Systems Corp. and Chelsea Systems,
Inc. A graduate of Massachusetts Institute of Technology and
Harvard Business School.
Charles J. Tennes
1655 Fort Myer Drive, Arlington, VA 22209
Secretary
Secretary of GIT Investment Funds, Executive Vice President of
Bankers Finance Investment Management Corp. and GIT Investment
Services, Inc.; Director of Presidential Savings Bank, FSB and
Presidential Service Corporation; formerly Vice President of
Ferris & Company, Inc. (now Ferris, Baker Watts). A Certified
Financial Planner and graduate of the University of Washington.
[FN]
<F1>
Trustees deemed to be "interested persons" of the Trust as the
term is defined in the Investment Company Act of 1940. Only those
persons named in the table of Trustees and officers who are not
interested persons of the Trust are eligible to be compensated by
the Trust under the terms of the Investment Advisory Agreement.
The compensation of each Trustee who may be compensated by the
Trust has been fixed at $6,000 per year, to be pro-rated
according to the number of regularly scheduled meetings each
year. Four Trustees' meetings are currently scheduled to take
place each year. In addition to such compensation, those Trustees
who may be compensated by the Trust shall be reimbursed for any
out-of-pocket expenses incurred by them in connection with the
affairs of the Trust. Each such compensated Trustee currently
receives annual compensation from the Trust and from the other
investment companies managed by the Adviser (see "The Investment Adviser"),
totalling $18,000. There is currently a vacancy on the Board of Trustees.
During the last fiscal year of the Trust, the Trustees were compensated as
follows:
<TABLE>
<CAPTION>
Total
Pension or compensation
retirement from
benefits Estimated Trust
Aggregate accrued as annual and fund
compensation part of benefits complex
from portfolio upon paid to
Name of Trustee Trust expense retirement Trustees<F3>
<C> <C> <C> <C> <C>
A. Bruce Cleveland 0 0 0 0
Thomas S. Kleppe $6,000 0 0 $18,000
John D. Reilly 6,000 0 0 18,000
Smith T. Wood 6,000 0 0 18,000
</TABLE>
[FN]
<F3>
Fund complex is comprised of four trusts with a total of 13 funds and/or
series.
[/FN]
<PAGE>
Statement of Additional Information Page 7
Government Investors Trust July 31, 1995
<F2>
Member of the Audit Committee of the Trust. The Audit Committee
is responsible for reviewing the results of each audit of the
Trust by its independent auditors and for recommending the
selection of independent auditors for the coming year.
[/FN]
Under the Declaration of Trust, the Trustees are entitled to be
indemnified by the Trust to the fullest extent permitted by law
against all liabilities and expenses reasonably incurred by them
in connection with any claim, suit or judgment or other liability
or obligation of any kind in which they become involved by virtue
of their service as Trustees of the Trust, except liabilities
incurred by reason of their willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of their office. As of June 26, 1995, the Trustees and
officers of the Trust directly or indirectly owned as a group
less than one percent of the outstanding shares of the Trust.
Administrative and Other Expenses
Except for certain expenses assumed by the Adviser (see "The
Investment Adviser"), the Trust is responsible for payment from
its assets of all of its expenses. These expenses can include any
of the business or other expenses of organizing, maintaining and
operating the Trust. Certain expense items which may represent
significant costs to the Trust include the payment of the
Adviser's fee; the expense of shareholder accounting, customer
services, and calculation of net asset value; the fees of the
Custodian, of the Trust's independent accountants, and of legal
counsel to the Trust; the expense of registering the Trust and
its shares, of printing and distributing prospectuses and
periodic financial reports to current shareholders, and of trade
association membership; the expense of preparing shareholder
reports, proxy materials and of holding shareholder meetings of
the Trust. The Trust is also responsible for any extraordinary or
non-recurring expenses it may incur.
Services Agreement. The Trust does not have any officers or
employees who are paid directly by the Trust. The Trust has
entered into a Services Agreement with the Adviser for the
provision of operational and other services required by the
Trust. Such services may include the functions of shareholder
servicing agent and transfer agent, bookkeeping and portfolio
accounting services, the handling of telephone inquiries, cash
withdrawals and other customer service functions including
monitoring wire transfers, and providing to the Trust appropriate
supplies, equipment and ancillary services necessary to the
conduct of its affairs. The Trust is registered with the
Securities and Exchange Commission as the transfer agent for its
shares and acts as its own dividend-paying agent; while transfer
agent personnel and facilities are included among those provided
to the Trust under the Services Agreement, the Trust itself is
solely responsible for its transfer agent and dividend payment
functions and for the supervision of those functions by its
officers.
All such services provided to the Trust by the Adviser are
rendered at cost. The term "cost" includes both direct
expenditures and the related overhead costs, such as
depreciation, employee supervision, rent and the like;
reimbursements to the Adviser pursuant to the Services Agreement
are in addition to and independent of payments made pursuant to
the Investment Advisory Agreement. The Trust believes that
contracting for the previously described services may permit them
to be provided on a relatively efficient basis, whereby many
separate specialized functions are performed by personnel and
equipment not required to be devoted full time to serving the
Trust. Accordingly, certain of the "costs" attributable to
services provided to the Trust may require allocation of
expenses, such as employee salaries, occupancy expense, telephone
service, computer service and equipment costs, depreciation,
interest, and supervisory expenses. To the extent that costs must
be allocated between the Trust and other activities of the
Adviser, such allocations may be made on the basis of reasonable
approximations calculated by the Adviser and periodically
reviewed by the Trustees.
Distribution Agreement. GIT Investment Services, Inc. acts as the
Trust's Distributor pursuant to a Distribution Agreement, dated
February 11, 1983, without compensation under such Agreement.
This Agreement has an initial term of two years and may
thereafter continue in effect only if approved annually by the
Trustees, including a majority of those who are not "interested
persons," as defined in the Investment Company Act of 1940. The
Agreement provides for distribution of the Trust's shares without
a sales charge to the investor. The Distributor may act as the
Trust's agent for any sales of its shares, but the Trust may also
sell its shares directly to any person. The Distributor makes the
Trust's shares continuously available to the general public in
those States where it has qualified to do so, but has assumed no
obligation to purchase any of the Trust's shares. The Distributor
is wholly owned by the A. Bruce Cleveland (see
"The Investment Adviser").
Portfolio Transactions
Decisions as to the purchase and sale of securities, and
decisions as to the execution of these transactions, including
selection of market, broker or dealer and the negotiation of
commissions are to be made by the Adviser, subject to review by
the officers and Trustees.
In general, in the purchase and sale of portfolio securities the
Trust seeks to obtain prompt and reliable execution of orders at
the most favorable prices or yields. In determining the best
price and execution, the Adviser may take into account a dealer's
operational and financial capabilities, the type of transaction
involved, the dealer's general relationship with the Adviser, and
any statistical, research or other services provided by the
dealer to the Adviser. To the extent such non-price factors are
taken into account the execution price paid may be increased, but
only in reasonable relation to the benefit of such non-price
factors to the Trust as determined in good faith by the Adviser.
Brokers or dealers who execute portfolio transactions for the
Trust may also sell its shares; however, any such sales will not
be either a qualifying or disqualifying factor in the selection
of brokers or dealers. During its three most recent fiscal years,
the Trust did not pay any brokerage commissions.
The Trust expects that most portfolio transactions will be made
directly with a dealer acting as a principal thus, not involving
<PAGE>
Statement of Additional Information Page 8
Government Investors Trust July 31, 1995
the payment of commissions; however, any purchases from an
underwriter or selling group could involve payments of fees and
concessions to the underwriting or selling group. The Trust also
reserves the right to purchase portfolio securities through an
affiliated broker, when deemed in the Trust's best interests by
the Adviser, provided that: (1) the transaction is in the
ordinary course of the broker's business; (2) the transaction
does not involve a purchase from another broker or dealer; (3)
compensation to the broker in connection with the transaction is
not in excess of one percent of the cost of the securities
purchased; and (4) the terms to the Trust for purchasing the
securities, including the cost of any commissions, are not less
favorable to the Trust than terms concurrently available from
other sources. Any compensation paid in connection with such a
purchase will be in addition to fees payable to the Adviser under
the Investment Advisory Agreement. The Trust does not anticipate
that any such purchases through affiliates will represent a
significant portion of its total activity; no such transactions
took place during the Trust's three most recent fiscal years.
Although the Trust intends normally to hold its investments to
maturity, the short maturities of these investments are expected
to result in a relatively high rate of portfolio turnover. The
actual turnover rate will not be a limiting factor in the Trust's
decisions as to purchases and sales of portfolio securities.
Reference should be made to the Prospectus for actual rates of
portfolio turnover.
Share Purchases
The Prospectus describes the basic procedures for investing in
the Trust (see "How to Purchase and Redeem Shares"). The
following information concerning other investment procedures is
presented to supplement the information contained in the
Prospectus.
Shareholder Service Policies. The Trust's policies concerning
shareholder services are subject to change from time to time. The
Trust reserves the right to change the minimum account size below
which an account is subject to a monthly service charge or to
involuntary closing by the Trust. The Trust may also institute a
minimum amount for subsequent investments, by 30 days' written
notice to its shareholders. The Trust further reserves the right,
after 30 days' written notice to shareholders, to impose special
service charges for services that are not regularly afforded to
shareholders; such service charges may include fees for stop
payment orders and returned checks. The Trust's standard service
charges are also subject to adjustment from time to time.
Those who invest through a securities broker may be charged a
commission for the handling of the transaction, if the broker so
elects; however, any investor is free to deal directly with the
Trust in any transaction.
Share Certificates. Share certificates will not be issued unless
an investor specifically requests certificates in a signed
instruction. Share certificates will never be issued until
payment for the shares has become "collected funds," as described
in the Prospectus (see "How to Purchase and Redeem Shares").
In the event share certificates are issued, the certificate must
be returned to the Trust properly endorsed before any redemption
request can be honored. The Trust may further require that the
shareholder's signature be guaranteed by a bank insured by the
Federal Deposit Insurance Corporation or by a member firm of the
New York Stock Exchange. The Trust reserves the right to decline
to open any account for which the issuance of share certificates
is or has been requested, if it deems such action would be in the
Trust's best interests.
Subaccounting Services. The Trust offers subaccounting services
to institutions. The Trustees reserve the right to determine from
time to time guidelines to govern the level of subaccounting
service that can be provided institutions in differing
circumstances. Normally, the Trust's minimum initial investment
to open an account will not apply to subaccounts; however, the
Trust reserves the right to impose the same minimum initial
investment requirement that would apply to regular accounts, if
it deems that the cost of carrying a particular subaccount or
group of subaccounts is otherwise likely to be excessive. The
Trust may provide and charge for subaccounting services which it
determines exceed those services which can be provided without
charge; the availability and cost of such additional services
will be determined in each case by negotiation between the Trust
and the parties requesting the additional services. The Trust is
not currently aware of any such services for which a charge will
be imposed.
Crediting of Investments. In order to obtain the highest yields
available within the limitations of its investment policies, the
Trust has a policy of being as fully invested as reasonably
practicable at all times (although it may retain uninvested cash
if deemed appropriate (see "Supplemental Investment Policies").
All items submitted to the Trust for investment are accepted only
when submitted in proper form. They are credited to shareholder
accounts one or two business days following receipt. Normally,
items received by the Trust prior to 1 p.m. Washington, DC time
will be converted into shares of the Trust at the net asset value
determined at the end of the business day. Items received by the
Trust after 1 p.m. Washington, DC time will be converted into
shares of the Trust at the net asset value determined at the end
of the second business day after receipt. Funds received by wire
are normally converted into shares in the Trust at the net asset
value next determined, provided the Trust is notified of the wire
by 1.pm. Washington, DC time. If the Trust is not notified by
such time, the investment by wire will be converted into shares
of the Trust at the net asset value determined at the end of the
next business day.
After investments have been converted into shares in the Trust,
they begin to accrue dividends immediately. The Trust reserves
the right to delay credit for investments if it determines to do
so for operational reasons or if local banking practice makes
earlier crediting impractical; however, no such delay will affect
the net asset value per share used to determine the number of
shares purchased.
Checks drawn on foreign banks will not be considered received in
federal funds until the Trust has actual receipt of
<PAGE>
Statement of Additional Information Page 9
Government Investors Trust July 31, 1995
payment in immediately available U.S. dollars after submission of
the check for collection; collection of such checks through the
international banking system may require 30 days or more.
The Trust reserves the right to reject any investment for any
reason and may at any time suspend all new investment in the
Trust. The Trust may also, at its discretion or at the instance
of the Adviser, decline funds wired for credit until such funds
are actually received by the Trust. Under present federal
regulatory guidelines, the Adviser may be responsible for any
losses resulting from changes in the Trust's net asset values
which are a result of failure to receive funds from an investor to whom
recognition for investment was given in advance of receipt of payment.
If shares are purchased to be paid for by wire and the wire is
not received or if shares are purchased by check which, after
deposit, is returned unpaid or proves uncollectible, the share
purchase may be canceled immediately or the purchased shares may
be immediately redeemed. The investor who gave notice of the
intended wire or submitted the check will be held fully
responsible for any losses so incurred by the Trust, the Adviser
or the Distributor. As a condition of the Trust's public offering
(which the investor will be deemed to have agreed by submitting
an order for the purchase of the Trust's shares) the Distributor
shall have the investor's power of attorney coupled with an
interest, authorizing the Distributor to redeem sufficient shares
from any fund of the investor for which it acts as a principal
underwriter or distributor, or to liquidate sufficient other
assets held in any brokerage account of the investor with the
Distributor, and to apply the proceeds thereof to the payment of
any amounts due to the Trust from the investor arising from any
such losses. Any such redemptions or liquidations will be limited
to the amount of the actual loss incurred by the Trust at the
time the share purchase is canceled and will be preceded by
notice to the investor and an opportunity for the investor to
make restitution of the amount of the loss. The Trust will retain
any profits resulting from such cancellations or redemptions and,
if the purchase payment was by a check actually received, will
absorb any such losses unless they prove recoverable.
Share Redemptions
The value of shares redeemed to meet withdrawal requests will be
determined according to the share net asset value next calculated
after the request has been received in proper form. (See
"Determination of Net Asset Value.") Thus, any such request
received in proper form prior to 1 p.m. Washington, DC time on a
business day will reflect the net asset value calculated at that
time; later withdrawal requests will be processed to reflect the
share net asset value figure calculated on the next day the
calculation is made. Net asset value is calculated each day the
New York Stock Exchange is open for trading.
Net asset value determinations will apply as of the day the
redemption order is submitted in proper form. A withdrawal
request may not be deemed to be in proper form unless a signed
account application has been properly submitted to the Trust by
the investor or such an application is submitted with the
withdrawal request; a shareholder draft check drawn against an
account will not be considered in proper form unless sufficient
collected funds (as described above) are available in the account
on the day the check is presented for payment. The "day of
withdrawal" for share redemptions refers to the day on which
corresponding funds are paid out by the Trust, whether by wire
transfer, exchange between accounts, official check prepared, or
debit of the investor's account to cover shareholder checks
presented for payment.
Investors should be aware that it is possible, if the Trust does
not succeed in avoiding realized or unrealized losses within its
portfolio (see "Determination of Net Asset Value"), that amounts
available for withdrawal could be less than the amount originally
invested. All withdrawals will be effected by the redemption of
the appropriate number of whole and fractional shares having a
net asset value equal to the amount withdrawn.
The Trust will use its best efforts to handle withdrawals within
the times previously given. It may, however, for any reason
suspend the right of redemption or postpone payment for shares in
the Trust for any period up to seven days. The Trust's sole
responsibility with regard to withdrawals shall be to process,
within the aforementioned time period, redemption requests in
proper form. Neither the Trust, its affiliates, nor the Custodian
can accept responsibility for any act or event which has the
effect of delaying or preventing timely transfers of payment to
or from shareholders. By law, payment for shares in the Trust may
be suspended or delayed for more than seven days only during a
period when the New York Stock Exchange is closed, other than
customary weekend and holiday closings; when trading on such
Exchange is restricted, as determined by the Securities and
Exchange Commission; or during any period when the Securities and
Exchange Commission has by order permitted such suspension.
Unless the shareholder's current address is on file with the
Trust on the original account application or by subsequent
written notice signed by the authorized signers on the account,
the Trust may require signed written instructions to process
withdrawals and account closings. In response to verbal requests,
however, withdrawal proceeds will normally be mailed to the
investor at the address shown on the Trust's records, provided an
original signed application has been received. When an account is
closed, the Trust reserves the right to make payment by check of
any final dividends declared to the date of redemption to close
the account, but not yet paid, on the same day such dividends are
paid to other shareholders, rather than at the time the account
is closed.
Funds exchanged between investor accounts will earn dividends
from the account being credited, beginning with the day the
exchange is made. Same-day exchanges can only be made in
circumstances that would permit same-day wire withdrawals from
the account being debited. All exchanges will be effected at the
net asset values per share of the respective accounts next
determined after the exchange request is received in proper form.
If an exchange is to be made between investor accounts that are
not held in the same name and tax identification number or do not
have the same mailing address or signatories, the Trust may
require any transfer between them to be made by making a
withdrawal
<PAGE>
Statement of Additional Information Page 10
Government Investors Trust July 31, 1995
from one account and a corresponding investment in the
other, using the same procedures that would apply to any other
withdrawal or investment.
The Trust reserves the right, when it deems such action necessary
to protect the interests of its shareholders, to refuse to honor
withdrawal requests made by anyone or anyone purporting to act
with the authority of another person or on behalf of a
corporation or other legal entity whose identity has not been
established to the Trust's satisfaction. Each such individual
must provide a corporate resolution or other appropriate evidence
of his authority or identity satisfactory to the Trust. The Trust
reserves the right to refuse any third party redemption requests.
If, in the opinion of the Trustees, extraordinary conditions
exist which make cash payments undesirable, payments for any
shares redeemed may be made in whole or in part in securities and
other property of the Trust. The Trust has elected, however,
pursuant to rules of the Securities and Exchange Commission, to
permit any shareholder of record to make redemptions wholly in
cash to the extent the shareholder's redemptions in any 90-day
period do not exceed the lesser of 1% of the aggregate net assets
of the Trust or $250,000. Any property of the Trust distributed
to shareholders will be valued at its net asset value. In
disposing of any such property received from the Trust, an
investor might incur commission costs or other transaction costs;
there is no assurance that an investor attempting to dispose of
any such property would actually receive the full net asset value
for it. Except as described herein, however, the Trust intends to
pay for all share redemptions in cash.
Retirement Plans
General information on retirement plans offered by the Trust is
provided in the Prospectus (see "How to Purchase and Redeem
Shares"). Additional information concerning these retirement
plans is provided below.
IRAs. The minimum initial contribution for an IRA plan with the
Trust is $500. Spousal IRAs are accepted by creating two
accounts, one for each spouse. For IRAs opened in connection with
a payroll deduction or SEP plan, the Trust may waive the initial
investment minimum on a case-by-case basis.
The Trust's annual account maintenance fee is deducted from the
account at the end of each year or at the time of the account's
closing unless prepaid by the shareholder.
Other Retirement Plans or Retirement Plan Accounts. The Trust
does not intend to impose any monthly minimum balance charge with
respect to retirement plan accounts. The Trust offers prototype
Keogh, SEP IRA, SARSEP, 401(k) and 403(b) retirement plans. The
Trust may waive the initial investment minimum for prototype or
other retirement plan accounts on a case by case basis.
Declaration of Dividends
Substantially all of the Trust's accumulated net income is
declared as dividends each business day. Calculation of
accumulated net income for the Trust's portfolio is made just
prior to calculation of the portfolio's net asset value (see
"Determination of Net Asset Value"). The amount of such net
income reflects the interest income (plus any discount earned
less premium amortized), less expenses accrued through the day of
calculation, to the extent not previously reflected in declared
dividends.
In order to facilitate its objective of stabilizing the price of
its shares at $1.00, the Trust intends normally to reflect any
portfolio realized gains and losses and unrealized appreciation
and depreciation, to the extent the Trust deems the amounts
material, in daily dividends, rather than in share prices.
Dividends are payable to shareholders of record at the time they
are determined. Dividends are paid in the form of additional
shares credited to the respective investor account at the end of
each calendar month (or normally when the account is closed, if
sooner), unless the shareholder makes a written election to
receive dividends in cash.
Notice of payment of dividends will be mailed to each shareholder
quarterly; for tax purposes each shareholder will also receive an
annual summary of dividends paid by the Trust and the extent, if
any, to which they constitute capital gains dividends (see
"Additional Tax Matters"). Any investor purchasing shares in an
account of the Trust as of a particular net asset value
determination at 1 p.m. Washington, DC time on a given day will
be considered a shareholder of record for the corresponding
dividend declaration made that day; but an investor withdrawing
as of such determination will not be considered a shareholder of
record with respect to the shares withdrawn. A "business day" is
any day the New York Stock Exchange is open for trading.
Net realized capital gains, if any, will be distributed to
shareholders at least annually as capital gains dividends.
Determination of Net Asset Value
The net asset value of the Trust is calculated each day the New
York Stock Exchange is open for trading. The net asset value is
not calculated on New Year's Day, the observance of Washington's
Birthday, Good Friday, the observance of Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and
other days the New York Stock Exchange is closed for trading. The
net asset value calculation is made as of a specific time of day,
as described in the Prospectus.
The net asset value per share is determined by adding the value
of all its securities and other assets, subtracting its
liabilities and dividing the result by the total number of
outstanding shares. These calculations are performed by the Trust
and for its account, pursuant to the Services Agreement (see
"Administrative and Other Expenses"). The Trust does not charge a
"sales load", and accordingly its shares are both offered and
redeemed at net asset value.
The Trust's securities are valued at their amortized cost,
pursuant to regulations of the Securities and Exchange Commission
("SEC") intended to permit the price of the Trust's shares to be
<PAGE>
Statement of Additional Information Page 11
Government Investors Trust July 31, 1995
stabilized at $1.00. These regulations require the Trust to limit
its investments to securities that the Trustees determine
represent minimal credit risks, to limit its maturities to those
appropriate to its objective of maintaining a stable share price,
and in any event to the maturity restrictions provided in the Trust's
investment policies described in the Prospectus.
These regulations also require the Trust to periodically compute
the market values of its portfolio securities. If for any reason,
including a change in market interest rates, the market value
computation differs by more than 1/2 of 1 percent from the $1.00
per share price, the Trustees are required to meet and consider
steps to restore the market price to $1.00 per share. Such steps
could include adjusting dividends, selling portfolio securities
before maturity to realize capital gains or losses, shortening
the portfolio's maturity, or redeeming shares in kind. Such steps
could result in dilution of shareholders' interests.
In determining market values for this purpose, the Trustees may
authorize reliance upon an independent pricing service or other
valuation technique, which may price securities with reference to
market transactions in comparable securities and to historical
relationships among the prices of comparable securities; such
prices may also reflect an allowance for the impact upon prices
of the larger transactions typical of trading by institutions.
Should the SEC change its rules governing the "amortized cost"
valuation method, the Trust reserves the right to use the "penny
rounding" method of valuation pursuant to the terms of the
Trust's exemptive order issued by the SEC.
Additional Tax Matters
Federal Income Tax. To qualify as a "regulated investment
company" and avoid Trust-level federal income tax under the
Internal Revenue Code (the "Code"), the Trust must, among other
things, in each taxable year distribute 100% of its net income
and net capital gains in the fiscal year in which it is earned.
The Code also requires the distribution of at least 98% of
undistributed net income for the calendar year and capital gains
determined as of October 31 each year before the calendar year-
end. Taxable income not distributed as required is subject to a
4% excise tax. The Trust intends to distribute all taxable income
to the extent it is realized to avoid imposition of the excise
tax.
The Trust must also derive at least 90% of its gross income from
dividends, interest, gains from the sale or disposition of
securities, and certain other types of income, and derive less
than 30% of its gross income from the sale or disposition of
securities held for less than three months. Should it fail to
qualify as a "regulated investment company" under the Code, the
Trust would be taxed as a corporation with no allowable deduction
for the distribution of dividends.
Shareholders of the Trust, however, will be subject to
federal income tax on any ordinary net income and net capital
gains realized by the Trust and distributed to shareholders as
regular or capital gains dividends, whether distributed in cash
or in the form of additional shares. Generally, dividends
declared by the Trust during October, November or December of any
calendar year and paid to shareholders before February 1 of the
following year will be treated for tax purposes as received in
the year the dividend was declared. No portion of the dividends
paid by the Trust to its shareholders is expected to be subject
to the dividends received deduction for corporations (70% of
dividends received).
Shareholders who fail to comply with the interest and dividends
"back-up" withholding provisions of the Code (by filing Form
W-9 or its equivalent, when required) or who have been
determined by the Internal Revenue Service to have failed to
properly report dividend or interest income may be subject to a
31% withholding requirement on transactions with the Trust.
For tax purposes, the Trust will send shareholders an annual
notice of dividends paid during the prior year. Investors are
advised to retain all statements received from the Trust to
maintain accurate records of their investment. Shareholders of
the Trust will be subject to federal income tax on the net
capital gains, if any, realized by each portfolio and distributed
to shareholders as capital gains dividends.
The Trust reserves the right to involuntarily redeem any of its
shares if, in its judgment, ownership of the Trust's shares has
or may become concentrated as to make the Trust a personal holding company
under the Code.
Yield Calculations
For advertising and certain other purposes, the Trust's yield is
calculated according to a standard formula prescribed by the
Securities and Exchange Commission. The yield is calculated by
dividing the net income (including the benefit of any expenses
waived or reimbursed by the Adviser) earned on one share during a
given seven-day period, exclusive of any capital changes, by the
initial value of that share (normally $1.00), and expressing the
result (called the "base period return") as an annualized
percentage. The base period return is annualized by multiplying
it by 365 and dividing the product by seven.
The Trust's "effective yield" is calculated in a similar manner,
except that the net income earned during a seven-day period is
assumed to be reinvested at the same rate over a full year,
thereby generating additional earnings from compounding. The
effective yield is computed by adding one to the base period
return, raising the result to the power equal to 365 divided by
seven, and subtracting one from the result, which is then
expressed as a percentage.
The Trust's standardized yield for the seven-day period ending
June 21, 1995 was 4.80% and its annual effective yield for the
same period was 4.92%.
Performance Comparisons. From time to time, in advertisements or
in reports to shareholders and others, the Trust may compare the
performance of its portfolio to that of recognized market indices
or may cite the ranking or performance of its portfolio as
reported in recognized national periodicals, financial
newsletters, reference
<PAGE>
Statement of Additional Information Page 12
Government Investors Trust July 31, 1995
publications, radio and television news broadcasts, or by
independent performance measurement firms.
The Trust may also compare the performance of its portfolios to
that of other funds managed by the same Advisor. It may compare
its performance to that of other types of investments,
substantiated by representative indices and statistics for those
investments.
Market indices which may be used include those compiled by major
securities firms, such as Solomon Brothers, Shearson Lehman
Hutton, the First Boston Corporation, and Merrill Lynch; other
indices compiled by securities rating or valuation services, such
as Ryan Financial Corporation and Standard and Poor's
Corporation, may also be used. Periodicals which report market
averages and indices, performance information, and/or rankings
may include: The Wall Street Journal, Investors Daily, The New
York Times, The Washington Post, Barron's, Financial World
Magazine, Forbes Magazine, Money Magazine, Kiplinger's Personal
Finance, and the Bank Rate Monitor. Independent performance
measurement firms include Lipper Analytical Services, Inc., Frank
Russel Company, SCI and CDA Investment Technologies.
In addition, a variety of newsletters and reference publications
provide information on the performance of mutual funds, such as
the Donoghue's Money Fund Report, No-Load Fund Investor,
Wiesenberger Investment Companies Service, the Mutual Fund Source
Book, the Mutual Fund Directory, the Switch Fund Advisory, Mutual
Fund Investing, the Mutual Fund Observer, Morningstar, and the
Bond Fund Survey. Financial news is broadcast by the Financial
News Network, Cable News Network, Public Broadcasting System, and
the three major television networks, NBC, CBS and ABC, as well as
by numerous independent radio and television stations.
When the Trust uses Lipper Analytical Services, Inc. in making
performance comparisons in advertisements or in reports to
shareholders or others, the performance of the Trust will be
compared to mutual funds categorized as "U.S. Government Money
Market Funds". If this category should be changed by Lipper
Analytical Services, Inc., comparisons will be made thereafter
based on the revised category.
Average Maturities. The Trust also calculates average maturity
information for its portfolio. The "average maturity" of the
portfolio on any day is determined by multiplying the number of
days then remaining to the effective maturity (see "Supplemental
Investment Policies") of each investment in the portfolio by the
value of that investment, summing the results of these
calculations, and dividing the total by the aggregate value of
the portfolio that day (determined as of 1:00 p.m.). Thus, the
average maturity represents a dollar-weighted average of the
effective maturities of the portfolio investments. The "mean
average maturity" of the portfolio over some period, such as
seven days, a month or a year, represents the arithmatic mean
(i.e., simple average) of the daily average maturity figures for
the portfolio during the respective period.
It should be noted that the Trust's yield is not fixed. In fact
the yield tends to fluctuate daily and so annualized rates of
return should not be considered representations of what an
investment may earn in any future period. Actual dividends will
tend to reflect changes in money market interest rates, and will
also depend upon the level of the Trust's expenses, any realized
or unrealized investment gains and losses, and the relative
results of the Trust's investment policies. Thus, at any point in
time future yields may be either higher or lower than past yields
and there is no assurance that any historical yield level will
continue.
Custodians and Special Custodians
Star Bank, N.A., 425 Walnut Steet, Cincinnati, OH 45202, is
Custodian for the cash and securities of the Trust. The Custodian
maintains custody of the Trust's cash and securities, handles its
securities settlements and performs transaction processing for
cash receipts and disbursements in connection with the purchase
and sale of the Trust's shares.
From time to time, the Trust may appoint as Special Custodians,
certain banks, trust companies, and firms which are members of
the New York Stock Exchange and trade for their own account in
the types of securities purchased by the Trust. Such Special
Custodians will be used by the Trust only for the purpose of
providing custody and safekeeping services of relatively short
duration for designated types of securities which, in the opinion
of the Trustees or of the Adviser, would most suitably be held by
such Special Custodians rather than by the Custodian. In the
event any such Special Custodian is used, it shall serve the
Trust only in accordance with a written agreement with the Trust
meeting the requirements of the Securities and Exchange
Commission for custodians and approved and reviewed at least
annually by the Trustees, and, if a securities dealer, only if it
delivers to the Custodian its receipt for the safekeeping of each
lot of securities involved prior to payment by the Trust for such
securities.
The Trust may also maintain deposit accounts for the handling of
cash balances of relatively short duration with various banks, as
the Trustees or officers of the Trust deem appropriate, to the
extent permitted by the Investment Company Act of 1940.
Legal Matters and Independent Auditors
Sullivan & Worcester, Washington, DC, serves as legal counsel to
the Trust.
Ernst & Young LLP, 1225 Connecticut Avenue, NW, Washington, DC
20036, serve as independent auditors to the Trust.
From time to time the Trust may be or become involved in
litigation in the ordinary conduct of its business. Material
items of litigation having consequences of possible or
unspecified damages, if any, are disclosed in the notes to the
Trust's financial statements (see "Financial Statements and
Report of Independent Auditors").
Additional Information
The Trust issues semi-annual and annual reports to its
shareholders and may issue other reports, such as quarterly
reports, as it deems appropriate; the annual reports are audited
by the Trust's independent auditors.
<PAGE>
Statement of Additional Information Page 13
Government Investors Trust July 31, 1995
Statements contained in this Statement of Additional Information
and in the Prospectus as to the contents of contracts and other
documents are not necessarily complete. Investors should refer to
the documents themselves for definitive information as to their
detailed provisions. The Trust will supply copies of its
Declaration of Trust and By-Laws to interested persons upon
request.
The Trust and shares in the Trust have been registered with the
Securities and Exchange Commission in Washington, DC, by the
filing of a Registration Statement. The Registration Statement
contains certain information not included in the Prospectus or
not included in this Statement of Additional Information and is
available for public inspection and copying at the offices of
such Commission.
Financial Statements and Report of Independent Auditors
Audited Financial Statements for the Trust, together with the
Report of Ernst & Young LLP, Independent Auditors for the fiscal
year ended March 31, 1995, appear in the Trust's Annual Report to
shareholders for the fiscal year ended March 31, 1995, which is
incorporated herein by reference. Excluded from such
incorporation by reference is the Trust's letter to shareholders
appearing in such Report. Such Report has been filed with the
Securities and Exchange Commission. Copies of such Report are
available upon request at no charge by writing or calling the
Trust at the address and telephone number shown on the cover page
above.
<PAGE>
Part C
July 31, 1995
Government Investors Trust
Cross Reference Sheet Page 1
Pursuant to Rule 495(a)
24(a) Financial Statements
Included in Part A: Financial Highlights
Included in Part B: Filed with the Securities and Exchange
Commission pursuant to Section 30 of the Investment Company
Act of 1940 on June 9, 1995, and incorporated herein by
reference is the Trust's Annual Report to Shareholders for the
fiscal year ended March 31, 1995.
Included in such Annual Report to Shareholders are: Statement
of Assets and Liabilities, Statement of Operations, Statement
of Changes in Net Assets, Financial Highlights, Portfolio of
Investments, Notes to Financial Statements and Report of Ernst
& Young LLP, Independent Auditors.
Included in Part C: Consent of Independent Auditors
24(b) Exhibits
Exhibit No. Description of Exhibit
1 Declaration of Trust*
2 By-Laws*
3 Not Applicable
4 Specimen Share Certificate*
5 Investment Advisory Agreement*
6 Distribution Agreement*
7 Not Applicable
8 Custodian Agreement with Fee Schedule*
9 Services Agreement*
10 Consent of Counsel*
11 Consent of Independent Auditors (Filed Herewith)
12 Not Applicable
13 Agreements Relating to Initial Capital*
14 Not Applicable
15 Plan of Distribution and Share Sales Agreement*
16 Computation of Performance Data*
17 Power of Attorney*
* Previously filed by Government Investors Trust.
25. Persons Controlled by or Under Common Control with Registrant.
None
<PAGE>
26. Number of Holders of Securities.
The number of holders of record of securities of the
Registrant as of July 3, 1995 is as follows:
Title of Class Number of Holders of Record
Shares of Beneficial Interest 3,819
27. Indemnification
Previously Filed
28. Business and Other Connections of Investment Adviser
Name Position with Other Business
Adviser
A. Bruce Cleveland President and President and Director of
Director Presidential Savings Bank
FSB, and Presidential
Service Corporation, 4600
East-West Highway,
Bethesda, MD 20814;
President and Director of
Seneca Mortgage Corp.,
6101 Executive Blvd,
Rockville, MD 20852;
President and Director of
GIT Investment Services,
Inc., of the same address
as the Trust; President
and Director of USA
International Foods, Inc.
of the same address as the
Trust; and Director of
Biospherics Inc., 12051
Indian Creek Court,
Beltsville, MD 21403
Edward J. Karpowicz Treasurer Treasurer of Bankers
Finance Corporation and GIT
Investment Services, Inc.,
both of the same address as
the Trust.
Charles J. Tennes Executive Director of Presidential
Vice President Savings Bank, FSB, and
Presidential Service
Corporation, 4600 East-West
Highway, Bethesda, MD
20814; Executive Vice
President of GIT Investment
Services, Inc. of the same
address as the Trust.
<PAGE>
W. Richard Mason Secretary Secretary of Presidential
Savings Bank, FSB and
Presidential Service
Corporation, 4600 East-West
Highway, Bethesda, MD
20814; Secretary of Bankers
Finance Corporation, GIT
Investment Services, Inc.,
and USA International
Foods, Inc. of the same
address as the Trust.
Julia M. Nelson Vice President Vice President of GIT
Investment Services, Inc.,
of the same address as the
Trust
<PAGE>
29. Principal Underwriters
(a) GIT Investment Services, Inc., the principal underwriter
of the Trust, also acts as principal underwriter to GIT Equity Trust,
GIT Tax-Free Trust and GIT Income Trust.
(b)
Name and Principal Position and Offices Position and Offices
Business Address with Underwriters with Registrant
A. Bruce Cleveland Chairman, President Chairman, President
1655 Ft. Myer Dr. and Treasurer
Arlington, VA 22209
W. Richard Mason Secretary Asst. Secretary
1655 Ft. Myer Dr.
Arlington, VA 22209
Charles J. Tennes Executive Vice Secretary
1655 Ft. Myer Dr. President
Arlington, VA 22209
Edward J. Karpowicz Treasurer None
1655 Ft. Myer Dr.
Arlington, VA 22209
Julia W. Nelson Vice President None
1655 Ft. Myer Dr.
Arlington, VA 22209
<PAGE>
(c) Not Applicable
30. Location of Accounts and Records
The books, records and accounts of the Registrant will be
maintained at 1655 Ft. Myer Drive, Arlington, VA 22209, at
which address are located the offices of the Registrant and
of Bankers Finance Investment Management Corp. Additional
records and documents relating to the affairs of the
Registrant are maintained by the Star Bank, N.A. of
Cincinnati, OH, the Registrant's Custodian, at the
Custodian's offices located at 425 Walnut Street,
Cincinnati, OH 45202. Pursuant to the Custodian Agreement
(see Article IX, Section 12), such materials will remain the
property of the Registrant and will be available for
inspection by the Registrant's officers and other duly
authorized persons.
31. Management Services
Previously Filed
32. Undertakings
(a) Not Applicable
(b) Not Applicable
(c) The Registrant shall furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest
Annual Report to shareholders upon such person's request and
without charge.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant has
duly caused this Post-Effective Amendment to the
Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the County of
Arlington, Commonwealth of Virginia, on the 28 day of July,
1995.
Government Investors Trust
By: (signature)
A. Bruce Cleveland
President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment to the Registration Statement
has been signed below by the following persons in the
capacities and on the date indicated.
(Signature), Trustee, President 7/28/95
A. Bruce Cleveland and Treasurer
(Principal Executive
Officer, Principal
Financial Officer)
Trustee
John D. Reilly <F1> (Date)
Trustee
Thomas S. Kleppe <F1> (Date)
Trustee
Smith T. Wood <F1> (Date)
(Signature), [FN]<F1>Attorney-In-Fact[/FN] 7/28/95
John A. Dudley, Esquire
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000310407
<NAME> GOVERNMENT INVESTORS TRUST
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> APR-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 61,957,993
<INVESTMENTS-AT-VALUE> 61,957,993
<RECEIVABLES> 2,969,806
<ASSETS-OTHER> 479
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 64,928,278
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 387,165
<TOTAL-LIABILITIES> 387,165
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 64,541,201
<SHARES-COMMON-STOCK> 64,541,201
<SHARES-COMMON-PRIOR> 78,089,871
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (88)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 64,541,113
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,346,001
<OTHER-INCOME> 0
<EXPENSES-NET> 798,546
<NET-INVESTMENT-INCOME> 2,547,455
<REALIZED-GAINS-CURRENT> (101)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> (101)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,547,455
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 210,702,717
<NUMBER-OF-SHARES-REDEEMED> 226,699,339
<SHARES-REINVESTED> 2,447,951
<NET-CHANGE-IN-ASSETS> (13,548,671)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 14
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 342,725
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 798,546
<AVERAGE-NET-ASSETS> 68,930,553
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.037
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.037
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.158
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
Consent of Ernst & Young LLP, Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Legal Matters
and Independent Auditors" and "Financial Statements and
Report of Independent Auditors" in the Statement of
Additional Information and to the incorporation by reference
in this Post-Effective Amendment Number 18 to Registration Statement
Number 2-63713 (Form N-1A) of our report dated May 5, 1995, on the
financial statements and financial highlights of Government Investors Trust
for the year ended March 31, 1995, included in the 1995 Annual Report to
Shareholders.
(signature)
Ernst and Young, LLP
Washington, DC
July 24, 1995
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,
(signature)
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>
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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
GIT Equity Trust
Special Growth Portfolio
Select Growth Portfolio
Equity Income Portfolio
Worldwide Growth Portfolio
GIT Income Trust
Maximum Income Portfolio
Government Portfolio
GIT Tax-Free Trust
Arizona Portfolio
Maryland Portfolio
Missouri Portfolio
Virginia Portfolio
National Portfolio
Money Market Portfolio
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
