SEMI-ANNUAL REPORT
MARCH 31, 1998
(UNAUDITED)
SHORT TERM GOVERNMENT
INCOME FUND
INSTITUTIONAL GOVERNMENT
INCOME FUND
MONEY MARKET
FUND
INTERMEDIATE
BOND FUND
INTERMEDIATE TERM
GOVERNMENT
INCOME FUND
ADJUSTABLE RATE
U.S. GOVERNMENT
SECURITIES FUND
Countrywide Investments
COUNTRYWIDE INVESTMENT TRUST
312 Walnut St., 21st Floor
Cincinnati, Ohio 45202-4094
Nationwide: (Toll Free) 800-543-8721
Cincinnati: 629-2000
Rate Line: 579-0999
Shareholder Services
Nationwide: (Toll Free) 800-543-0407
Cincinnati: 629-2050
BOARD OF TRUSTEES
Angelo R. Mozilo, Chairman
Robert H. Leshner, President
Donald L. Bogdon, M.D.
H. Jerome Lerner
Fred A. Rappoport
Oscar P. Robertson
John F. Seymour, Jr.
Sebastiano Sterpa
INVESTMENT ADVISER
Countrywide Investments, Inc.
312 Walnut St., 21st Floor
Cincinnati, Ohio 45202-4094
TRANSFER AGENT
Countrywide Fund Services, Inc.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
This report is authorized for distribution only when it is accompanied or
preceded by a current prospectus of Countrywide Investment Trust.
<PAGE>
LETTER FROM THE CHAIRMAN
================================================================================
Dear Shareholders:
Nearly 30 years ago David Loeb and I envisioned a full-service mortgage company
that would provide homeownership opportunities to people across the country.
Since our inception in 1969, Countrywide Credit Industries, Inc. has
strategically broadened its scope to offer a complete line of finance-related
products, and today, Countrywide is widely recognized as a highly skilled
provider of diversified products and services.
There are currently 17 funds offered through the Countrywide Family of Funds,
comprised of an innovative financial product line designed to meet the diverse
needs of our investors. As we continue to add new funds, shareholders will be
provided with an even broader range of investment choices. Our merger and
acquisition team at Countrywide Investments continually seeks out new
opportunities to grow the financial portfolio. By anticipating the needs of our
investors, Countrywide Investments also works diligently to provide numerous
shareholder services.
As the nation's largest independent residential mortgage lender and servicer,
Countrywide delivers the dream of homeownership to more than 1.8 million
customers. With 430 offices nationwide and more than 8,500 employees,
Countrywide remains focused on steady growth. The diverse line of Countrywide
funds is an important strategy which augments our mortgage lending and servicing
operations.
Countrywide is committed to the needs of our investors. We will continue to
search for and offer financial products and services that will grow shareholder
value. We look forward to the developing financial opportunities as we approach
the turn of the century.
Sincerely,
/s/ Angelo R. Mozilo
Angelo R. Mozilo
Chairman & Chief Executive Officer
<PAGE>
LETTER FROM THE PRESIDENT
================================================================================
Dear Fellow Shareholders:
We are pleased to present Countrywide Investment Trust's unaudited semi-annual
report for the six months ended March 31, 1998. This report provides financial
data and performance information for the Short Term Government Income Fund,
Institutional Government Income Fund, Money Market Fund, Intermediate Bond Fund,
Intermediate Term Government Income Fund and Adjustable Rate U.S. Government
Securities Fund. These Funds represent the six taxable money market and bond
products currently offered among the 17 mutual funds which comprise the
Countrywide Family of Funds.
Financial markets performed well during most of 1997 and into 1998, thanks to a
growing U.S. economy and low inflation. Personal income, spending and saving
continued to increase, while consumer confidence remained near an all-time high.
The housing market, spurred by lower interest rates, experienced record
strength. Inflation stayed under control with the Consumer Price Index up just
1.4% in the past year. Global competition, combined with declining wholesale
costs led by oil and raw materials, kept consumer prices in check.
The bond market rallied sharply in the fourth quarter of 1997 due in part to the
Asian financial crisis as investors sought refuge in U.S. Treasury securities
during a "flight to quality." Declining inflation and the prospect of a balanced
budget also helped to fuel this impressive rally which began back in May 1997.
By December, the yield on the 30-year U.S. Treasury bond fell below 6.0%, and
has since traded in a relatively narrow range between 5.8% and 6.0%. Short and
intermediate-term yields also fell during this period based on belief that
market conditions would eventually lead the Federal Reserve Board to lower
interest rates.
Total returns for Countrywide's taxable bond funds for the twelve months ended
March 31, 1998, excluding the impact of applicable sales loads, were 11.71% for
the Intermediate Bond Fund, 9.37% for the Intermediate Term Government Income
Fund and 5.54% for the Adjustable Rate U.S. Government Securities Fund.
Countrywide's taxable money market funds continue to offer competitive yields
for investors seeking high current income consistent with liquidity and
stability of principal.
Corporate earnings, the direction of interest rates, the pace of the economy and
the crisis in Asia are likely to be key factors that will impact the financial
markets in the year ahead. While many of these factors remain favorably
positioned, some uncertainty still exists given the strength and persistency of
the economy's performance. We believe, however, that as long as economic
fundamentals remain in place, namely, sustainable growth and moderate inflation,
investors will continue to provide support for the bond market.
Countrywide Investments remains committed to providing products and services
that help investors meet their financial goals. Our success has been built on
the confidence investors have extended to us. We thank you for your support and
look forward to continued service to you in the future.
Sincerely,
/s/ Robert H. Leshner
Robert H. Leshner
President
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 1998 (Unaudited)
====================================================================================================================================
Short Term Institutional Money
Government Government Market
Income Fund Income Fund Fund
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investment securities:
At acquisition cost.................................. $ 31,077,554 $ 31,575,624 $ 53,044,308
============== =============== ===============
At amortized cost.................................... $ 31,013,743 $ 31,636,899 $ 52,945,572
============== =============== ===============
At market value (Note 2) ............................ $ 31,013,743 $ 31,636,899 $ 52,945,572
Repurchase agreements (Note 2).......................... 61,404,000 22,700,000 16,116,000
Cash ................................................... -- 49,267 3,010
Interest receivable..................................... 541,321 239,568 662,852
Organization costs, net (Note 2)........................ -- -- 15,876
Other assets............................................ 13,593 11,250 5,626
-------------- --------------- ---------------
TOTAL ASSETS......................................... 92,972,657 54,636,984 69,748,936
-------------- --------------- ---------------
LIABILITIES
Bank overdraft.......................................... 685,602 -- --
Dividends payable....................................... 4,573 40,412 231,371
Payable for securities purchased........................ -- -- 2,752,900
Payable to affiliates (Note 4).......................... 56,133 8,244 42,937
Other accrued expenses and liabilities.................. 6,887 4,400 5,322
-------------- --------------- ---------------
TOTAL LIABILITIES ................................... 753,195 53,056 3,032,530
-------------- --------------- ---------------
NET ASSETS ............................................ $ 92,219,462 $ 54,583,928 $ 66,716,406
============== =============== ===============
Net assets consist of:
Paid-in capital......................................... $ 92,219,462 $ 54,605,692 $ 66,720,142
Undistributed net investment income..................... -- -- 24
Accumulated net realized losses from security transactions -- ( 21,764) (3,760)
-------------- --------------- ---------------
Net assets ............................................. $ 92,219,462 $ 54,583,928 $ 66,716,406
============== =============== ===============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) (Note 5) . 92,219,462 54,605,692 66,720,142
============== =============== ===============
Net asset value, offering price and redemption price
per share (Note 2) .................................. $ 1.00 $ 1.00 $ 1.00
============== =============== ===============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 1998 (Unaudited)
====================================================================================================================================
Adjustable
Intermediate Rate U.S.
Intermediate Term Government
Bond Government Securities
Fund Income Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment securities:
At acquisition cost.................................. $ 22,678,103 $ 46,866,844 $ 12,471,911
============== =============== ===============
At amortized cost ................................... $ 22,678,103 $ 46,640,754 $ 12,472,067
============== =============== ===============
At market value (Note 2) ............................ $ 22,962,303 $ 48,047,123 $ 12,583,829
Cash ................................................... -- 1,370 3,622
Interest receivable .................................... 432,398 774,512 89,432
Receivable for capital shares sold...................... 1,383 6,681 1,262
Receivable for principal paydowns....................... -- -- 52,345
Organization costs, net (Note 2)........................ 15,876 -- --
Other assets............................................ 1,350 5,096 11,035
-------------- --------------- ---------------
TOTAL ASSETS ........................................ 23,413,310 48,834,782 12,741,525
-------------- --------------- ---------------
LIABILITIES
Bank overdraft.......................................... 28,218 -- --
Dividends payable ...................................... 70,262 25,036 3,951
Payable for capital shares redeemed .................... 1,983 62,963 42,726
Payable to affiliates (Note 4) ......................... 17,175 36,597 1,141
Other accrued expenses and liabilities.................. 5,150 7,303 5,050
-------------- --------------- ---------------
TOTAL LIABILITIES ................................... 122,788 131,899 52,868
-------------- --------------- ---------------
NET ASSETS ............................................ $ 23,290,522 $ 48,702,883 $ 12,688,657
============== =============== ===============
Net assets consist of:
Paid-in capital ........................................ $ 23,064,682 $ 50,110,455 $ 13,855,746
Undistributed net investment income..................... 2,194 -- --
Accumulated net realized losses from security transactions (60,554) (2,813,941) (1,278,851)
Net unrealized appreciation on investments ............. 284,200 1,406,369 111,762
-------------- --------------- ---------------
Net assets ............................................. $ 23,290,522 $ 48,702,883 $ 12,688,657
============== =============== ===============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) (Note 5).. 2,287,941 4,533,908 1,296,710
============== =============== ===============
Net asset value and redemption price per share (Note 2). $ 10.18 $ 10.74 $ 9.79
============== =============== ===============
Maximum offering price per share (Note 2)............... $ 10.39 $ 10.96 $ 9.99
============== =============== ===============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS For the Six Months Ended March 31, 1998 (Unaudited)
====================================================================================================================================
Short Term Institutional Money
Government Government Market
Income Fund Income Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income ..................................... $ 2,615,744 $ 1,587,599 $ 2,043,269
-------------- --------------- ---------------
EXPENSES
Investment advisory fees (Note 4) ................... 224,773 57,053 172,944
Transfer agent fees (Note 4) ........................ 92,994 9,902 6,000
Distribution expenses (Note 4)....................... 4,036 3,319 45,832
Postage and supplies................................. 34,469 8,829 6,738
Accounting services fees (Note 4).................... 16,500 16,500 16,500
Registration fees.................................... 23,940 6,704 11,657
Professional fees ................................... 8,748 6,648 6,452
Custodian fees ...................................... 9,749 8,115 3,949
Insurance expense.................................... 3,780 2,676 3,288
Standard & Poor's rating expense..................... 3,889 3,889 --
Trustees' fees and expenses ......................... 2,498 2,498 2,498
Reports to shareholders ............................. 6,102 671 411
Amortization of organization costs (Note 2).......... -- -- 3,178
Pricing expense...................................... 375 503 767
Other expenses ...................................... 2,042 1,132 2,218
-------------- --------------- ---------------
TOTAL EXPENSES..................................... 433,895 128,439 282,432
Fees waived by the Adviser (Note 4) ................. ( 21,569) ( 14,333 ) --
-------------- --------------- ---------------
NET EXPENSES....................................... 412,326 114,106 282,432
-------------- --------------- ---------------
NET INVESTMENT INCOME .................................. 2,203,418 1,473,493 1,760,837
-------------- --------------- ---------------
NET REALIZED GAINS FROM SECURITY
TRANSACTIONS ....................................... -- -- --
-------------- --------------- ---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ............ $ 2,203,418 $ 1,473,493 $ 1,760,837
============== =============== ===============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS For the Six Months Ended March 31, 1998 (Unaudited)
====================================================================================================================================
Adjustable
Intermediate Rate U.S.
Intermediate Term Government
Bond Government Securities
Fund Income Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest ............................................ $ 705,394 $ 1,711,872 $ 547,274
Dividends............................................ 3,036 -- --
-------------- --------------- ---------------
TOTAL INVESTMENT INCOME............................ 708,430 1,711,872 547,274
-------------- --------------- ---------------
EXPENSES
Investment advisory fees (Note 4).................... 50,501 127,274 43,688
Accounting services fees (Note 4).................... 14,250 17,250 17,250
Distribution expenses (Note 4)....................... 8,366 33,012 7,022
Transfer agent fees (Note 4)......................... 5,700 21,494 6,914
Registration fees.................................... 3,210 12,380 10,951
Postage and supplies................................. 2,313 16,512 7,096
Professional fees.................................... 6,452 9,648 7,398
Standard & Poor's rating expense..................... -- -- 9,222
Custodian fees....................................... 1,895 4,346 4,902
Pricing expense...................................... 3,302 1,855 2,671
Trustees' fees and expenses.......................... 2,498 2,498 2,498
Insurance expense.................................... 972 2,412 1,057
Amortization of organization costs (Note 2).......... 3,178 -- --
Reports to shareholders.............................. 139 2,184 730
Other expenses....................................... 381 1,754 392
-------------- --------------- ---------------
TOTAL EXPENSES..................................... 103,157 252,619 121,791
Fees waived and/or expenses reimbursed by the Adviser(Note 4) (7,205) -- (56,259)
-------------- --------------- ---------------
NET EXPENSES....................................... 95,952 252,619 65,532
-------------- --------------- ---------------
NET INVESTMENT INCOME .................................. 612,478 1,459,253 481,742
-------------- --------------- ---------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gains (losses) from security transactions (4,161) 87,644 (28,196)
Net change in unrealized appreciation/depreciation
on investments 66,720 251,920 (75,859)
-------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS ..................................... 62,559 339,564 (104,055)
-------------- --------------- ---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ............ $ 675,037 $ 1,798,817 $ 377,687
============== =============== ===============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended March 31, 1998 and September 30, 1997
====================================================================================================================================
Short Term Institutional
Government Government
Income Fund Income Fund
Six Months Six Months
Ended Year Ended Year
March 31, Ended March 31, Ended
1998 Sept. 30, 1998 Sept. 30,
(Unaudited) 1997 (Unaudited) 1997
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income....................... $ 2,203,418 $ 4,454,318 $ 1,473,493 $ 2,536,827
Net realized gains from security transactions -- -- -- 3,138
------------ -------------- ------------- -------------
Net increase in net assets from operations..... 2,203,418 4,454,318 1,473,493 2,539,965
------------ -------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ................. (2,203,418) (4,454,318) (1,473,493) (2,536,827)
From net realized gains from security transactions -- (2,970) -- --
------------ -------------- ------------- -------------
Decrease in net assets from distributions
to shareholders ............................ (2,203,418) (4,457,288) (1,473,493) (2,536,827)
------------ -------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5):
Proceeds from shares sold .................. 145,297,493 346,277,774 129,378,606 214,201,022
Net asset value of shares issued in
reinvestment of distributions to shareholders 2,142,130 4,308,683 1,198,091 2,319,214
Payments for shares redeemed................ (152,016,843) (345,226,289) (137,240,655) (194,657,552)
------------ -------------- ------------- -------------
Net increase (decrease) in net assets
from capital share transactions............. (4,577,220) 5,360,168 (6,663,958) 21,862,684
------------ -------------- ------------- -------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ............................ (4,577,220) 5,357,198 (6,663,958) 21,865,822
NET ASSETS:
Beginning of period......................... 96,796,682 91,439,484 61,247,886 39,382,064
------------ -------------- ------------- -------------
End of period............................... $ 92,219,462 $ 96,796,682 $54,583,928 $61,247,886
============ ============== ============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended March 31, 1998, September 30, 1997 and August 31, 1997
====================================================================================================================================
Money Market Fund Intermediate Bond Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended One Month Year Ended One Month Year
March 31, Ended Ended March 31, Ended Ended
1998 Sept. 30, Aug. 31, 1998 Sept. 30, Aug. 31,
(Unaudited) 1997(A) 1997 (Unaudited) 1997(A) 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income ................ $1,760,837 $351,005 $ 4,774,454 $ 612,478 $ 77,377 $ 958,606
Net realized gains (losses) from
security transactions -- (1,198) (2,536) (4,161) (5,759) 14,511
Net change in unrealized appreciation/
depreciation on investments.............. -- -- -- 66,720 129,865 420,446
---------- ---------- ------------ --------- --------- ---------
Net increase in net assets from operations 1,760,837 349,807 4,771,918 675,037 201,483 1,393,563
---------- ---------- ------------ --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ........... (1,760,813) (351,499) (4,773,960) (610,284) (77,377) (958,606)
From net realized gains .............. -- -- (2,520) -- -- (49,752)
---------- ---------- --------- --------- --------- ---------
Decrease in net assets from distributions
to shareholders (1,760,813) (351,499) (4,776,480) (610,284) (77,377) (1,008,358)
---------- ---------- --------- --------- --------- ---------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5):
Proceeds from shares sold ............ 188,799,672 25,255,346 570,122,610 15,962,280 929,562 5,244,400
Net asset value of shares issued in
reinvestment of distributions to
shareholders 275,932 46,897 424,478 152,318 919 19,314
Payments for shares redeemed ........... (196,180,221 (46,048,621) (552,336,304) (8,559,660) (497,633) (3,891,934)
---------- ---------- ------------- ------------ --------- ---------
Net increase (decrease) in net assets
from capital share transactions (7,104,617) (20,746,378) 18,210,784 7,554,938 432,848 1,371,780
---------- ---------- ------------- ----------- --------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS (7,104,593) (20,748,070) 18,206,222 7,619,691 556,954 1,756,985
NET ASSETS:
Beginning of period................... 73,820,999 94,569,069 76,362,847 15,670,831 15,113,877 13,356,892
---------- ---------- -------------- ---------- ----------- ----------
End of period......................... $66,716,406 $73,820,999 $94,569,069 $23,290,522 $15,670,831 $15,113,877
=========== ========== ============== =========== =========== ==========
UNDISTRIBUTED NET INVESTMENT INCOME ..... $ 24 $ -- $ 494 $ 2,194 $ -- $ --
========== ========== =========== ========== =========== ===========
(A) Effective as of the close of business on August 29, 1997, the Money Market
Fund and Intermediate Bond Fund were reorganized and the fiscal year-end of
each Fund, subsequent to August 31, 1997, was changed to September 30 (Note
6).
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended March 31, 1998 and September 30, 1997
====================================================================================================================================
Intermediate Term Adjustable Rate
Government U.S. Government
Income Fund Securities Fund
Six Months Year Six Months Year
Ended Ended Ended Ended
March 31, 1998 Sept. 30, March 31, 1998 Sept. 30,
(Unaudited) 1997 (Unaudited) 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income ...................... $ 1,459,253 $ 3,195,242 $ 481,742 $ 908,235
Net realized gains (losses) from
security transactions 87,644 (2,293) (28,196) (1,505)
Net change in unrealized appreciation/depreciation
on investments............................ 251,920 943,745 (75,859) 63,020
------------ -------------- ------------- -------------
Net increase in net assets from operations .... 1,798,817 4,136,694 377,687 969,750
------------ -------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income, Class A ........ (1,459,253) (3,155,630) (481,742) (868,844)
From net investment income, Class C ........ -- (39,612) -- (39,391)
------------ -------------- ------------- -------------
Decrease in net assets from distributions
to shareholders ............................ (1,459,253) (3,195,242) (481,742) (908,235)
------------ -------------- ------------- -------------
FROM CAPITAL SHARE
TRANSACTIONS (NOTE 5):
CLASS A
Proceeds from shares sold .................. 7,842,583 9,148,045 6,532,831 28,836,779
Net asset value of shares issued in
reinvestment of distributions to shareholders 1,277,574 2,829,303 431,932 822,109
Payments for shares redeemed ............... (13,789,628) (15,967,680) (17,373,778) (18,246,926)
------------ -------------- ------------- -------------
Net increase (decrease) in net assets
from Class A share transactions ............ (4,669,471) (3,990,332) (10,409,015) 11,411,962
------------ -------------- ------------- -------------
CLASS C
Proceeds from shares sold .................. -- 138,577 -- 760,526
Net asset value of shares issued in
reinvestment of distributions to shareholders -- 38,348 -- 30,868
Payments for shares redeemed................ -- (961,198) -- (1,423,589)
------------ -------------- ------------- -------------
Net decrease in net assets
from Class C share transactions ............ -- (784,273) -- (632,195)
------------ -------------- ------------- -------------
Net increase (decrease) in net assets
from capital share transactions............. (4,669,471) (4,774,605) (10,409,015) 10,779,767
------------ -------------- ------------- -------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ............................. (4,329,907) (3,833,153) (10,513,070) 10,841,282
NET ASSETS:
Beginning of period......................... 53,032,790 56,865,943 23,201,727 12,360,445
------------ -------------- ------------- -------------
End of period............................... $ 48,702,883 $ 53,032,790 $12,688,657 $23,201,727
============ ============== ============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SHORT TERM GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS
====================================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
====================================================================================================================================
Six Months
Ended
March 31, Years Ended September 30,
1998
(Unaudited) 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- --------- --------- --------- ---------
Net investment income ................... 0.023 0.044 0.044 0.046 0.027 0.022
---------- ---------- --------- --------- --------- ---------
Dividends from net investment income..... (0.023) (0.044) (0.044) (0.046) (0.027) (0.022)
---------- ---------- --------- --------- --------- ---------
Net asset value at end of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========= ========= ========= =========
Total return ............................ 4.72%(B) 4.53% 4.51% 4.69% 2.72% 2.24%
========== ========== ========= ========= ========= =========
Net assets at end of period (000's) ..... $ 92,219 $ 96,797 $ 91,439 $ 87,141 $89,708 $96,962
---------- ---------- --------- --------- --------- ---------
Ratio of net expenses to average net
assets(A) 0.87%(B) 0.97% 0.99% 0.99% 0.99% 0.99%
Ratio of net investment income to average
net assets 4.67%(B) 4.43% 4.42% 4.59% 2.69% 2.22%
- ------------------------------------------------------------------------------------------------------------------------------------
(A) Absent fee waivers by the Adviser, the ratio of expenses to average net
assets would have been 0.92%(B) for the six months ended March 31, 1998 (Note
4).
(B) Annualized.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSTITUTIONAL GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS
====================================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
====================================================================================================================================
Six Months
Ended
March 31, Years Ended September 30,
1998
(Unaudited) 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- --------- --------- --------- ---------
Net investment income.................... 0.026 0.051 0.051 0.053 0.034 0.029
---------- ---------- --------- --------- --------- ---------
Dividends from net investment income..... (0.026) (0.051) (0.051) (0.053) (0.034) (0.029)
---------- ---------- --------- --------- --------- ---------
Net asset value at end of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========= ========= ========= =========
Total return............................. 5.22%(B) 5.17% 5.18% 5.42% 3.43% 2.96%
========== ========== ========= ========= ========= =========
Net assets at end of period (000's) ..... $ 54,584 $ 61,248 $ 39,382 $ 36,009 $41,769 $34,610
========== ========== ========= ========= ========= =========
Ratio of net expenses to average net
assets(A) 0.40%(B) 0.40% 0.40% 0.40% 0.40% 0.40%
Ratio of net investment income to average
net assets 5.17%(B) 5.07% 5.06% 5.30% 3.41% 2.92%
- ------------------------------------------------------------------------------------------------------------------------------------
(A) Absent fee waivers by the Adviser, the ratios of expenses to average net
assets would have been 0.45%(B) for the six months ended March 31, 1998 and
0.45%, 0.49%, 0.42%, 0.42% and 0.48% for the years ended September 30, 1997,
1996, 1995, 1994 and 1993, respectively (Note 4).
(B) Annualized.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
====================================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
====================================================================================================================================
Six Months
Ended One Month Year Period
March 31, Ended Ended Ended
1998 Sept. 30 August 31, August 31,
(Unaudited) 1997(A) 1997 1996(B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ -------------- ------------- -------------
Net investment income.......................... 0.025 0.004 0.050 0.046 (C)
------------ -------------- ------------- -------------
Dividends from net investment income........... (0.025) (0.004) (0.050) (0.046)
------------ -------------- ------------- -------------
Net asset value at end of period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============== ============= =============
Total return .................................. 4.99%(E) 4.99%(E) 5.14% 4.70%
============ ============== ============= =============
Net assets at end of period (000's)............ $ 66,716 $ 73,821 $ 94,569 $ 76,363
============ ============== ============= =============
Ratio of net expenses to average net assets(D) 0.79%(E) 0.80%(E) 0.65% 0.65%(E)
Ratio of net investment income to average net assets 4.94%(E) 4.99%(E) 5.03% 4.94%(E)
- ------------------------------------------------------------------------------------------------------------------------------------
(A) Effective as of the close of business on August 29, 1997, the Fund was
reorganized and its fiscal year-end, subsequent to August 31, 1997, was
changed to September 30 (Note 6).
(B) Represents the period from the commencement of operations (September 29,
1995) through August 31, 1996.
(C) Calculated using weighted average shares
outstanding during the period.
(D) Absent fee waivers and/or expense reimbursements, the ratios of expenses to
average net assets would have been 0.79% and 0.99%(E) for the periods ended
August 31, 1997 and 1996, respectively.
(E) Annualized.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
FINANCIAL HIGHLIGHTS
====================================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
====================================================================================================================================
Six Months
Ended One Month Year Period
March 31, Ended Ended Ended
1998 Sept. 30, August 31, August 31,
(Unaudited) 1997(A) 1997 1996(B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period......... $ 10.09 $ 10.00 $ 9.75 $ 10.00
------------ -------------- ------------- -------------
Income from investment operations:
Net investment income....................... 0.31 0.05 0.62 0.57 (C)
Net realized and unrealized gains (losses)
on investments............................ 0.09 0.09 0.28 (0.25)(C)
------------ -------------- ------------- -------------
Total from investment operations............... 0.40 0.14 0.90 0.32
------------ -------------- ------------- -------------
Less distributions:
Dividends from net investment income........ (0.31) (0.05) (0.62) (0.57)
Distributions from net realized gains....... -- -- (0.03) --
------------ -------------- ------------- -------------
Total distributions............................ (0.31) (0.05) (0.65) (0.57)
------------ -------------- ------------- -------------
Net asset value at end of period............... $ 10.18 $ 10.09 $ 10.00 $ 9.75
============ ============== ============= =============
Total return(D) ............................... 7.96%(F) 1.41% 9.48% 3.23%
============ ============== ============= =============
Net assets at end of period (000's)............ $ 23,291 $ 15,671 $ 15,114 $ 13,357
============ ============== ============= =============
Ratio of net expenses to average net assets(E) 0.95%(F) 0.95%(F) 0.85% 0.68%(F)
Ratio of net investment income to average net assets 6.05%(F) 6.18%(F) 6.26% 6.31%(F)
Portfolio turnover rate........................ 100%(F) 0% 41% 12%
- ------------------------------------------------------------------------------------------------------------------------------------
(A) Effective as of the close of business on August 29, 1997, the Fund was
reorganized and its fiscal year-end, subsequent to August 31, 1997, was
changed to September 30 (Note 6).
(B) Represents the period from the commencement of operations (October 3, 1995)
through August 31, 1996.
(C) Calculated using weighted average shares
outstanding during the period.
(D) Total returns shown exclude the effect of applicable sales loads.
(E) Absent fee waivers and/or expense reimbursements, the ratios of expenses to
average net assets would have been 1.02%(F), 1.38%(F), 1.53% and 2.04%(F) for
the periods ended March 31, 1998, September 30, 1997, August 31, 1997 and
August 31,1996, respectively (Note 4).
(F) Annualized.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE TERM GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS
====================================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
====================================================================================================================================
Six Months
Ended
March 31, Years Ended September 30,
1998
(Unaudited) 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period... $ 10.67 $ 10.49 $ 10.73 $ 10.14 $ 11.59 $ 11.10
---------- ---------- --------- --------- --------- ---------
Income from investment operations:
Net investment income................. 0.31 0.61 0.61 0.64 0.56 0.60
Net realized and unrealized gains
(losses)
on investments...................... 0.07 0.18 ( 0.24 ) 0.59 ( 1.32 ) 0.49
---------- ---------- --------- --------- --------- ---------
Total from investment operations......... 0.38 0.79 0.37 1.23 ( 0.76 ) 1.09
---------- ---------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income.. ( 0.31) ( 0.61) ( 0.61 ) ( 0.64 ) ( 0.56 ) ( 0.60 )
Distributions from net realized gains. -- -- -- -- ( 0.13 ) --
---------- ---------- --------- --------- --------- ---------
Total distributions...................... ( 0.31) ( 0.61) ( 0.61 ) ( 0.64 ) ( 0.69 ) ( 0.60 )
---------- ---------- --------- --------- --------- ---------
Net asset value at end of period......... $ 10.74 $ 10.67 $ 10.49 $ 10.73 $ 10.14 $ 11.59
========== ========== ========= ========= ========= =========
Total return(A) ......................... 7.14%(B) 7.74% 3.55% 12.52% ( 6.76%) 10.15%
========== ========== ========= ========= ========= =========
Net assets at end of period (000's)...... $ 48,703 $ 53,033 $ 56,095 $ 56,969 $64,395 $89,666
========== ========== ========= ========= ========= =========
Ratio of expenses to average net assets.. 0.99%(B) 0.99% 0.99% 0.99% 0.99% 0.99%
Ratio of net investment income to
average net assets 5.72%(B) 5.78% 5.75% 6.17% 5.17% 5.31%
Portfolio turnover rate.................. 38%(B) 49% 70% 58% 236% 255%
- ------------------------------------------------------------------------------------------------------------------------------------
(A) Total returns shown exclude the effect of applicable sales loads.
(B)Annualized.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND
FINANCIAL HIGHLIGHTS
====================================================================================================================================
Per Share Data for a Share Outstanding Throughout Each Period
====================================================================================================================================
Six Months
Ended Period
March 31, Years Ended September 30, Ended
1998 Sept. 30,
(Unaudited) 1997 1996 1995 1994 1993(A)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period .. $ 9.85 $ 9.81 $ 9.78 $ 9.82 $ 10.01 $ 10.00
---------- ---------- --------- --------- --------- ---------
Income from investment operations:
Net investment income ................ 0.27 0.57 0.57 0.55 0.39 0.28
Net realized and unrealized gains (losses)
on investments ..................... ( 0.06) 0.04 0.03 ( 0.04 ) ( 0.18 ) 0.01
---------- ---------- --------- --------- --------- ---------
Total from investment operations ........ 0.21 0.61 0.60 0.51 0.21 0.29
---------- ---------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income.. ( 0.27) ( 0.57) ( 0.57 ) ( 0.55 ) ( 0.39 ) ( 0.28 )
Distributions from net realized gains. -- -- -- -- ( 0.01 ) -
---------- ---------- --------- --------- --------- ---------
Total distributions ..................... ( 0.27) ( 0.57) ( 0.57 ) ( 0.55 ) ( 0.40 ) ( 0.28 )
---------- ---------- --------- --------- --------- ---------
Net asset value at end of period ........ $ 9.79 $ 9.85 $ 9.81 $ 9.78 $ 9.82 $ 10.01
========== ========== ========= ========= ========= =========
Total return(B) ......................... 4.35%(D) 6.34% 6.32% 5.33% 2.09% 4.56%(D)
========== ========== ========= ========= ========= =========
Net assets at end of period (000's) ..... $ 12,689 $ 23,202 $ 11,732 $ 20,752 $37,572 $24,400
========== ========== ========= ========= ========= =========
Ratio net of expenses to average net assets(C) 0.75%(D) 0.75% 0.75% 0.75% 0.68% 0.22%(D)
Ratio of net investment income to
average net assets 5.53%(D) 5.73% 5.91% 5.57% 3.91% 4.17%(D)
Portfolio turnover rate ................. 41%(D) 58% 44% 115% 81% 170%(D)
- ------------------------------------------------------------------------------------------------------------------------------------
(A) Represents the period from the initial public offering of shares (February
10, 1993) through September 30, 1993.
(B) Total returns shown exclude the effect
of applicable sales loads.
(C) Absent fee waivers and/or expense reimbursements
by the Adviser, the ratios of expenses to average net assets would have been
1.40% (D) for the six months ended March 31, 1998 and 1.47%, 1.46%, 1.21%, 0.78%
and 1.18%(D) for the periods ended September 30, 1997, 1996, 1995, 1994 and
1993, respectively (Note 4).
(D) Annualized.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
March 31, 1998 (Unaudited)
================================================================================
1. Organization
The Short Term Government Income Fund, Institutional Government Income Fund,
Money Market Fund, Intermediate Bond Fund, Intermediate Term Government Income
Fund and Adjustable Rate U.S. Government Securities Fund (collectively, the
Funds) are each a series of Countrywide Investment Trust (the Trust). The Trust
is registered under the Investment Company Act of 1940 as an open-end management
investment company. The Trust was organized as a Massachusetts business trust
under a Declaration of Trust dated December 7, 1980. The Declaration of Trust,
as amended, permits the Trustees to issue an unlimited number of shares of each
Fund. The Money Market Fund and Intermediate Bond Fund were originally organized
as series of Trans Adviser Funds, Inc. (Note 6).
The Short Term Government Income Fund seeks high current income, consistent with
protection of capital, by investing primarily in short-term obligations issued
or guaranteed as to principal and interest by the U.S. Government, its agencies
or instrumentalities and backed by the "full faith and credit" of the United
States.
The Institutional Government Income Fund seeks high current income, consistent
with protection of capital, by investing primarily in short-term obligations
issued or guaranteed as to principal and interest by the United States
Government, its agencies or instrumentalities. The Fund is designed primarily
for institutions as an economical and convenient means for the investment of
short-term funds.
The Money Market Fund seeks high current income, consistent with liquidity and
stability of principal. The Fund invests primarily in high-quality U.S.
dollar-denominated money market instruments.
The Intermediate Bond Fund seeks to provide as high a level of current income as
is consistent with the preservation of capital. The Fund invests in marketable
corporate debt securities, U.S. Government securities, mortgage-related
securities, other asset-backed securities and cash or money market instruments.
The maturity composition of the Fund's portfolio of fixed-income securities is
adjusted in response to market conditions and expectations.
The Intermediate Term Government Income Fund seeks high current income,
consistent with protection of capital, by investing primarily in U.S. Government
obligations maturing within twenty years or less with a dollar-weighted average
portfolio maturity under normal market conditions of between three and ten
years. To the extent consistent with the Fund's primary objective, capital
appreciation is a secondary objective.
The Adjustable Rate U.S. Government Securities Fund seeks high current income,
consistent with lower volatility of principal, by investing primarily in
mortgage-related securities created from pools of adjustable rate mortgages
which are issued or guaranteed by the United States Government, its agencies or
instrumentalities. It is anticipated that by investing primarily in
mortgage-rated securities which have adjustable rates of interest, the Fund will
achieve a less volatile net asset value than is characteristic of investments in
mortgage-related securities paying fixed rates of interest.
Prior to September 22, 1997, the Intermediate Term Government Income Fund and
Adjustable Rate U.S. Government Securities Fund offered two classes of shares:
Class A shares (sold subject to a maximum front-end sales load of 2% and a
distribution fee of up to 0.35% of average daily net assets) and Class C shares
(sold subject to a maximum contingent deferred sales load of 1% if redeemed
within a one-year period from purchase and a distribution fee of up to 1% of
average daily net assets). On September 22, 1997, all outstanding Class C shares
were redeemed pursuant to a mandatory redemption program authorized by the Board
of Trustees.
<PAGE>
2. Significant Accounting Policies
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- Investment securities in the Short Term Government
Income Fund, Institutional Government Income Fund and Money Market Fund are
valued on the amortized cost basis, which approximates market value. This
involves initially valuing a security at its original cost and thereafter
assuming a constant amortization to maturity of any discount or premium. This
method of valuation is expected to enable these Funds to maintain a constant net
asset value per share. Investment securities in the Intermediate Bond Fund,
Intermediate Term Government Income Fund and Adjustable Rate U.S. Government
Securities Fund for which market quotations are readily available are valued at
their most recent bid prices as obtained from one or more of the major market
makers for such securities by an independent pricing service. Securities for
which market quotations are not readily available are valued at their fair
values as determined in good faith in accordance with consistently applied
procedures established by and under the general supervision of the Board of
Trustees.
Repurchase agreements -- Repurchase agreements, which are collateralized by U.S.
Government obligations, are valued at cost which, together with accrued
interest, approximates market. Collateral for repurchase agreements is held in
safekeeping in the customer-only account of the Funds' custodian, at the Federal
Reserve Bank of Cleveland. At the time each Fund enters into a repurchase
agreement, the seller agrees that the value of the underlying securities,
including accrued interest, will at all times be equal to or exceed the face
amount of the repurchase agreement.
Share valuation-- The net asset value per share of each Fund is calculated
daily by dividing the total value of a Fund's assets, less liabilities, by
the number of shares outstanding.
The offering price per share of the Short Term Government Income Fund,
Institutional Government Income Fund and Money Market Fund is equal to the net
asset value per share. The maximum offering price per share of the Intermediate
Bond Fund, Intermediate Term Government Income Fund and Adjustable Rate U.S.
Government Securities Fund is equal to the net asset value per share plus a
sales load equal to 2.04% of the net asset value (or 2% of the offering price).
The redemption price per share of each Fund is equal to the net asset value per
share.
Investment income -- Interest income is accrued as earned. Discounts and
premiums on securities purchased are amortized in accordance with income tax
regulations which approximate generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment income
are declared daily and paid on the last business day of each month to
shareholders of each Fund. With respect to each Fund, net realized short-term
capital gains, if any, may be distributed throughout the year and net realized
long-term capital gains, if any, are distributed at least once each year. Income
dividends and capital gain distributions are determined in accordance with
income tax regulations.
Security transactions -- Security transactions are accounted for on the trade
date. Securities sold are valued on a specific identification basis.
Organization costs -- Costs incurred by the Money Market Fund and Intermediate
Bond Fund in connection with their organization and registration of shares, net
of certain expenses, have been capitalized and are being amortized on a
straight-line basis over a five year period beginning with each Fund's
commencement of operations.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
<PAGE>
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
<TABLE>
<CAPTION>
The following information is based upon the federal income tax cost of portfolio
investments as of March 31, 1998:
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Adjustable
Intermediate Rate U.S.
Intermediate Term Government
Bond Government Securities
Fund Income Fund Fund
Gross unrealized appreciation........................... $ 342,488 $ 1,414,056 $ 134,847
Gross unrealized depreciation........................... (106,045) ( 7,687) ( 23,085)
-------------- --------------- ---------------
Net unrealized appreciation............................. $ 236,443 $ 1,406,369 $ 111,762
============== =============== ===============
Federal income tax cost................................. $ 22,725,860 $ 46,640,754 $ 12,472,067
============== =============== ===============
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
With respect to the Intermediate Bond Fund, the difference between the federal
income tax cost of portfolio investments and the amortized cost shown on the
Fund's Statement of Assets and Liabilities is due to certain timing differences
in the recognition of capital losses under generally accepted accounting
principles and income tax regulations.
As of September 30, 1997, the Institutional Government Income Fund, Money Market
Fund, Intermediate Bond Fund, Intermediate Term Government Income Fund and
Adjustable Rate U.S. Government Securities Fund had capital loss carryforwards
for federal income tax purposes of $21,764, $3,760, $8,636, $2,736,367, and
$1,250,655, respectively. In addition, the Intermediate Term Government Income
Fund elected to defer until its subsequent tax year $165,218 of capital losses
incurred after October 31, 1996. These capital loss carryforwards and
"post-October" losses may be utilized in the current and future years to offset
net realized capital gains prior to distributing such gains to shareholders.
<TABLE>
<CAPTION>
3. Investment Transactions
Investment transactions (excluding short-term investments) were as follows for
the six months ended March 31, 1998:
- ------------------------------------------------------------------------------------------------------------------------------------
Adjustable
Intermediate Rate U.S.
Intermediate Term Government
Bond Government Securities
Fund Income Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Purchases of investment securities...................... $ 16,542,479 $ 9,125,526 $ 2,984,171
============== =============== ===============
Proceeds from sales and maturities of investment securities$ 9,347,885 $ 14,124,039 $ 7,495,730
============== =============== ===============
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4. Transactions with Affiliates
The Chairman and the President of the Trust are also officers of Countrywide
Financial Services, Inc., whose subsidiaries include Countrywide Investments,
Inc. (the Adviser), the Trust's investment adviser and principal underwriter,
and Countrywide Fund Services, Inc. (CFS), the Trust's transfer agent,
shareholder service agent and accounting services agent. Countrywide Financial
Services, Inc. is a wholly-owned subsidiary of Countrywide Credit Industries,
Inc., a New York Stock Exchange listed company principally engaged in the
business of residential mortgage lending.
<PAGE>
MANAGEMENT AGREEMENT
Each Fund's investments are supervised by the Adviser under the terms of a
Management Agreement. Under the Management Agreement, the Short Term Government
Income Fund, Money Market Fund, Intermediate Bond Fund, Intermediate Term
Government Income Fund and Adjustable Rate U.S. Government Securities Fund each
pay the Adviser a fee, which is computed and accrued daily and paid monthly, at
an annual rate of 0.50% of its respective average daily net assets up to $50
million; 0.45% of such net assets from $50 million to $150 million; 0.40% of
such net assets from $150 million to $250 million; and 0.375% of such net assets
in excess of $250 million. The Institutional Government Income Fund pays the
Adviser a fee, which is computed and accrued daily and paid monthly, at an
annual rate of 0.20% of its average daily net assets.
In order to voluntarily reduce operating expenses during the six months ended
March 31, 1998, the Adviser waived $21,569 of its advisory fees for the Short
Term Government Income Fund; waived $14,333 of its advisory fees for the
Institutional Government Income Fund; waived $7,205 of its advisory fees for the
Intermediate Bond Fund; and waived its entire advisory fee of $43,688 and
reimbursed $12,571 of other operating expenses for the Adjustable Rate U.S.
Government Securities Fund.
The Adviser has agreed, until at least August 31, 1999, to waive fees and
reimburse expenses to the extent necessary to limit total operating expenses of
the Money Market Fund and Intermediate Bond Fund to 0.80% and 0.95%,
respectively, of each Fund's average daily net assets.
TRANSFER AGENT AND SHAREHOLDER SERVICE AGREEMENT
Under the terms of the Transfer, Dividend Disbursing, Shareholder Service and
Plan Agency Agreement between the Trust and CFS, CFS maintains the records of
each shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of each Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. For these services, CFS receives a monthly fee at an annual
rate of $25 per shareholder account from each of the Short Term Government
Income Fund, Institutional Government Income Fund and Money Market Fund and $21
per shareholder account from each of the Intermediate Bond Fund, Intermediate
Term Government Income Fund and Adjustable Rate U.S. Government Securities Fund,
subject to a $1,000 minimum monthly fee for each Fund. In addition, each Fund
pays out-of-pocket expenses including, but not limited to, postage and supplies.
ACCOUNTING SERVICES AGREEMENT
Under the terms of the Accounting Services Agreement between the Trust and CFS,
CFS calculates the daily net asset value per share and maintains the financial
books and records of each Fund. For these services, CFS receives a monthly fee,
based on current asset levels, of $2,500 per month from each Fund, except for
the Intermediate Bond Fund for which the current monthly fee is $2,000. In
addition, each Fund pays certain out-of-pocket expenses incurred by CFS in
obtaining valuations of such Fund's portfolio securities.
UNDERWRITING AGREEMENT
The Adviser is the Funds' principal underwriter and, as such, acts as exclusive
agent for distribution of the Funds' shares. Under the terms of the Underwriting
Agreement between the Trust and the Adviser, the Adviser earned $23, $3,213 and
$955 from underwriting and broker commissions on the sale of shares of the
Intermediate Bond Fund, Intermediate Term Government Income Fund and Adjustable
Rate U.S. Government Securities Fund, respectively, for the six months ended
March 31, 1998.
PLANS OF DISTRIBUTION
The Trust has a Plan of Distribution under which shares of each Fund may
directly incur or reimburse the Adviser for expenses related to the distribution
and promotion of shares. The annual limitation for payment of such expenses
under the Plan is 0.35% of each Fund's average daily net assets, except for the
Institutional Government Income Fund for which the annual limitation is 0.10% of
its average daily net assets.
<PAGE>
<TABLE>
<CAPTION>
5. Capital Share Transactions
Proceeds from shares sold and payments for shares redeemed as shown in the
Statements of Changes in Net Assets are the result of the following capital
share transactions for the periods shown:
- ------------------------------------------------------------------------------------------------------------------------------------
Intermediate Bond Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended One Month Year
March 31, Ended Ended
1998 Sept. 30, Aug. 31,
(Unaudited) 1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares sold............................................. 1,558,646 92,013 542,916
Shares issued in reinvestment of distributions to shareholders 14,921 91 1,951
Shares redeemed......................................... ( 839,278) ( 49,574 ) ( 404,063 )
-------------- --------------- ---------------
Net increase in shares outstanding...................... 734,289 42,530 140,804
Shares outstanding, beginning of period................. 1,553,652 1,511,122 1,370,318
-------------- --------------- ---------------
Shares outstanding, end of period....................... 2,287,941 1,553,652 1,511,122
============== =============== ===============
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Intermediate Term Adjustable Rate
Government U.S. Government
Income Fund Securities Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended Year Ended Year
March 31, Ended March 31, Ended
1998 Sept. 30, 1998 Sept. 30,
(Unaudited) 1997 (Unaudited) 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold.................................... 729,468 864,111 665,186 2,931,702
Shares issued in reinvestment of distributions
to shareholders............................. 118,841 267,417 44,034 83,540
Shares redeemed................................ ( 1,284,361) ( 1,509,918) ( 1,768,180 ) ( 1,855,152 )
------------ -------------- ------------- -------------
Net increase (decrease) in shares outstanding.. ( 436,052) ( 378,390) ( 1,058,960 ) 1,160,090
Shares outstanding, beginning of period........ 4,969,960 5,348,350 2,355,670 1,195,580
------------ -------------- ------------- -------------
Shares outstanding, end of period.............. 4,533,908 4,969,960 1,296,710 2,355,670
============ ============== ============= =============
CLASS C
Shares sold.................................... -- 13,106 -- 77,399
Shares issued in reinvestment of distributions
to shareholders............................. -- 3,625 -- 3,139
Shares redeemed................................ -- ( 90,249) -- ( 144,655 )
------------ -------------- ------------- -------------
Net decrease in shares outstanding............. -- ( 73,518) -- ( 64,117 )
Shares outstanding, beginning of period........ -- 73,518 -- 64,117
------------ -------------- ------------- -------------
Shares outstanding, end of period.............. -- -- -- --
============ ============== ============= =============
- ------------------------------------------------------------------------------------------------------------------------------------
Share transactions for the Short Term Government Income Fund, Institutional
Government Income Fund and Money Market Fund are identical to the dollar value
of those transactions as shown in the Statements of Changes in Net Assets.
</TABLE>
6. Agreement and Plan of Reorganization
The Money Market Fund and Intermediate Bond Fund were originally organized as
series of Trans Adviser Funds, Inc. (Trans Adviser), an open-end management
investment company incorporated under the laws of the State of Maryland.
Pursuant to an Agreement and Plan of Reorganization dated May 31, 1997, each
Fund, on August 29, 1997, succeeded to the assets and liabilities of a series of
Trans Adviser with the same name (the Predecessor Fund). The investment
objective, policies and restrictions of each Fund and its Predecessor Fund are
substantially identical.
For federal income tax purposes, the reorganization of the Money Market Fund and
Intermediate Bond Fund qualifies as a tax-free reorganization with no tax
consequences to either Fund, its Predecessor Fund or their shareholders. In
connection with the reorganization, the fiscal year-end of each Fund, subsequent
to August 31, 1997, has been changed from August 31 to September 30.
<PAGE>
<TABLE>
<CAPTION>
SHORT TERM GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
March 31, 1998 (Unaudited)
====================================================================================================================================
Par Market
Value U.S. TREASURY OBLIGATIONS-- 33.6% Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 3,000,000 U.S. Treasury Notes, 5.875%, 4/30/98....................................... $ 3,000,724
5,000,000 U.S. Treasury Notes, 6.125%, 5/15/98....................................... 5,002,762
4,000,000 U.S. Treasury Notes, 5.375%, 5/31/98....................................... 3,998,781
3,000,000 U.S. Treasury Notes, 6.25%, 6/30/98........................................ 3,005,112
3,000,000 U.S. Treasury Notes, 8.25%, 7/15/98........................................ 3,021,071
3,000,000 U.S. Treasury Notes, 5.875%, 8/15/98....................................... 3,002,094
3,000,000 U.S. Treasury Notes, 6.125%, 8/31/98....................................... 3,005,978
2,000,000 U.S. Treasury Notes, 4.75%, 10/31/98....................................... 1,989,571
5,000,000 U.S. Treasury Notes, 5.125%, 11/30/98...................................... 4,987,650
- --------------- ---------------
$ 31,000,000 TOTAL U.S. TREASURY OBLIGATIONS
===============
(Amortized Cost $31,013,743).............................................. $ 31,013,743
---------------
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount REPURCHASE AGREEMENTS(A)-- 66.6% Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 3,604,000 Dean Witter Reynolds, Inc., 5.40%, dated 3/31/98, due 4/1/98,
repurchase proceeds $3,604,541.......................................... $ 3,604,000
6,000,000 Merrill Lynch, Pierce, Fenner & Smith, Inc., 5.75%, dated 3/31/98, due 4/1/98,
repurchase proceeds $6,000,958.......................................... 6,000,000
21,500,000 Nesbitt Burns Securities, Inc., 5.90%, dated 3/31/98, due 4/1/98,
repurchase proceeds $21,503,524......................................... 21,500,000
21,500,000 Prudential Securities, Inc., 5.87%, dated 3/31/98, due 4/1/98,
repurchase proceeds $21,503,506......................................... 21,500,000
8,800,000 Bankers Trust Securities Corp., 5.50%, dated 3/26/98, due 4/2/98,
repurchase proceeds $8,809,411.......................................... 8,800,000
- --------------- ---------------
$ 61,404,000 TOTAL REPURCHASE AGREEMENTS ............................................... $ 61,404,000
=============== ---------------
TOTAL INVESTMENT SECURITIES AND REPURCHASE AGREEMENTS-- 100.2% ........... $ 92,417,743
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.2%) ............................ ( 198,281 )
---------------
NET ASSETS-- 100.0% ....................................................... $ 92,219,462
===============
(A) Repurchase agreements are fully collateralized by U.S. Government
obligations.
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
INSTITUTIONAL GOVERNMENT INCOME FUND PORTFOLIO OF INVESTMENTS
March 31, 1998 (Unaudited)
====================================================================================================================================
Par Market
Value INVESTMENT SECURITIES-- 57.9% Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY ISSUES -- 50.5%
$ 250,000 FNMA, 5.35%, 4/1/98........................................................ $ 250,000
2,000,000 FHLMC Discount Notes, 4/2/98............................................... 1,999,697
655,000 FHLB Discount Notes, 4/3/98................................................ 654,802
1,000,000 FFCB, 7.07%, 4/15/98....................................................... 1,000,461
4,500,000 FFCB Discount Notes, 4/17/98............................................... 4,489,231
1,500,000 FNMA, 6.00%, 4/17/98....................................................... 1,500,200
2,500,000 FNMA Discount Notes, 4/22/98............................................... 2,491,979
350,000 FMNA, 8.15%, 5/11/98....................................................... 351,028
365,000 FHLMC Discount Notes, 5/12/98.............................................. 362,734
850,000 FNMA, 5.61%, 5/14/98....................................................... 849,814
3,000,000 Federal Agricultural Mortgage Discount Notes, 5/19/98...................... 2,978,080
2,000,000 FHLB Discount Notes, 5/20/98............................................... 1,984,946
300,000 FHLB, 5.84%, 6/22/98....................................................... 299,987
100,000 FNMA, 5.41%, 6/25/98....................................................... 99,918
1,600,000 FNMA, 5.75%, 6/30/98....................................................... 1,600,294
1,500,000 FNMA, 5.24%, 7/15/98....................................................... 1,498,258
500,000 FNMA, 5.39%, 8/5/98........................................................ 499,321
370,000 FNMA, 7.85%, 9/10/98....................................................... 373,301
400,000 FNMA, 4.875%, 10/15/98..................................................... 398,515
1,000,000 FNMA, 5.42%, 11/2/98....................................................... 997,296
300,000 FNMA, 5.05%, 11/10/98...................................................... 299,090
400,000 FNMA, 5.30%, 12/10/98...................................................... 399,282
500,000 FHLB, 5.74%, 12/23/98...................................................... 500,269
200,000 FHLMC Discount Notes, 1/25/99.............................................. 199,575
1,000,000 FHLB, 5.23%, 2/3/99........................................................ 996,680
500,000 FNMA, 5.20%, 2/18/99....................................................... 498,553
- --------------- ---------------
$ 27,640,000 TOTAL U.S. GOVERNMENT AGENCY ISSUES
- ---------------
(Amortized Cost $27,573,311) .............................................. $ 27,573,311
---------------
VARIABLE RATE DEMAND NOTES -- 3.6%
$ 2,000,000 Harris Co., TX, HFC MFH Rev. (Sandalwood Apts.), 5.66%, 4/15/98, Guarantor FNMA
- ---------------
(Amortized Cost $2,000,000)................................................ $ 2,000,000
---------------
COMMERCIAL PAPER -- 3.8%
$ 2,075,000 Kirksville College of Osteopathic Medicine, Inc., 5/7/98, Guarantor SLMA
- ---------------
(Amortized Cost $2,063,588)................................................ $ 2,063,588
---------------
$ 31,715,000 TOTAL INVESTMENT SECURITIES
===============
(Amortized Cost $31,636,899)............................................... $ 31,636,899
---------------
INSTITUTIONAL GOVERNMENT INCOME FUND (continued)
====================================================================================================================================
Face Market
Amount REPURCHASE AGREEMENTS(A)-- 41.6% Value
- ------------------------------------------------------------------------------------------------------------------------------------
$ 300,000 Dean Witter Reynolds, Inc., 5.40%, dated 3/31/98, due 4/1/98,
repurchase proceeds $300,045............................................ $ 300,000
5,000,000 Nesbitt Burns Securities, Inc., 5.90%, dated 3/31/98, due 4/1/98,
repurchase proceeds $5,000,819.......................................... 5,000,000
12,500,000 Prudential Securities, Inc., 5.87%, dated 3/31/98, due 4/1/98,
repurchase proceeds $12,502,038......................................... 12,500,000
4,900,000 Bankers Trust Securities Corp., 5.50%, dated 3/26/98, due 4/2/98,
repurchase proceeds $4,905,240.......................................... 4,900,000
- --------------- ---------------
$ 22,700,000 TOTAL REPURCHASE AGREEMENTS ............................................... $ 22,700,000
- --------------- ---------------
TOTAL INVESTMENT SECURITIES AND REPURCHASE AGREEMENTS-- 99.5% ............. $ 54,336,899
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.5% .............................. 247,029
---------------
NET ASSETS-- 100.0% ....................................................... $ 54,583,928
===============
(A) Repurchase agreements are fully collateralized by U.S. Government
obligations.
FFCB - Federal Farm Credit Bank
HFC - Housing Finance Corporation
FHLB - Federal Home Loan Bank
MFH - Multi-Family Housing
FHLMC - Federal Home Loan Mortgage Corporation
SLMA - Student Loan Marketing Association
FNMA - Federal National Mortgage Association
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
March 31, 1998 (Unaudited)
====================================================================================================================================
Par Market
Value INVESTMENT SECURITIES-- 79.3% Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY ISSUES -- 0.7%
$ 500,000 FNMA, 5.55%, 10/5/98 (Amortized Cost $499,317) ........................... $ 499,317
- --------------- ---------------
VARIABLE RATE DEMAND NOTES -- 45.8%
$ 3,000,000 Abag Finance Auth. for Nonprofit Corp., CA, 6.20%, 4/1/98.................. $ 3,000,000
3,390,000 Rural Electric Cooperative Grantor Trust, 5.73%, 4/1/98.................... 3,390,000
2,015,000 Westminster, CO, EDR (Westminster Plaza), 5.85%, 4/1/98.................... 2,015,000
3,000,000 Asset Partners, Inc., 5.75%, 4/2/98........................................ 3,000,000
380,000 Aurora, Kane & Du Page Cos., IL, IDR (A&B Holdings), 5.70%, 4/2/98......... 380,000
1,800,000 Berkley Square, 5.68%, 4/2/98.............................................. 1,800,000
2,300,000 Bexar Co., TX, HFC MFH Rev. (Shallow Creek Apts.), 5.66%, 4/2/98........... 2,300,000
1,950,000 Kite Rubloff Logansport, 5.75%, 4/2/98..................................... 1,950,000
1,700,000 McCreary Co., KY, IBR (Le Sportsac, Inc.), 5.95%, 4/2/98................... 1,700,000
1,000,000 Oak Crest Homes, Inc., 5.68%, 4/2/98....................................... 1,000,000
3,000,000 Sharp, 5.68%, 4/2/98....................................................... 3,000,000
2,000,000 Stark Co., OH, IDR (Shearers Food, Inc.), 5.66%, 4/2/98.................... 2,000,000
1,185,000 Washington St. HFC MFH Rev. (Rosecreek Apts.), 5.75%, 4/2/98............... 1,185,000
1,840,000 Washington St. HFC MFH Rev. (Twin Ponds Apts.), 5.75%, 4/2/98.............. 1,840,000
2,000,000 Harris Co., TX, HFC MFH Rev. (Sandalwood Apts.), 5.66%, 4/15/98............ 2,000,000
- --------------- ---------------
$ 30,560,000 TOTAL VARIABLE RATE DEMAND NOTES
- ---------------
(Amortized Cost $30,560,000) ............................................ $ 30,560,000
---------------
FIXED RATE MUNICIPAL NOTES -- 1.6%
$ 1,050,000 Menomonee Falls, WI, BANS, 5.80%, 6/1/98 (Amortized Cost $1,050,000)....... $ 1,050,000
- --------------- ---------------
CORPORATE NOTES -- 31.2%
$ 500,000 Bear Stearns & Co., 9.125%, 4/15/98........................................ $ 500,595
1,704,000 Sears Roebuck & Co., 9.25%, 4/15/98........................................ 1,706,175
500,000 Sears Roebuck & Co., 9.26%, 4/15/98........................................ 500,628
250,000 Travelers, Inc., 5.75%, 4/15/98............................................ 249,974
500,000 Chrysler Financial Corp., 7.05%, 4/29/98................................... 500,374
370,000 Ford Capital, 9.125%, 5/1/98............................................... 370,946
540,000 General Electric Capital Corp., 8.37%, 5/8/98.............................. 541,302
500,000 Commercial Credit Co., 5.50%, 5/15/98...................................... 499,856
300,000 Northern Trust Co., 9.00%, 5/15/98......................................... 301,164
230,000 Phillip Morris Co., Inc., 8.70%, 5/29/98................................... 230,943
1,502,000 BellSouth Corp., 5.25%, 6/8/98............................................. 1,500,050
700,000 General Motors Acceptance Corp., 6.30%, 6/11/98............................ 700,400
970,000 Chrysler Financial Corp., 6.50%, 6/15/98................................... 971,096
500,000 Transamerica Financial Corp., 7.17%, 6/29/98............................... 501,307
550,000 International Lease Finance Corp., 5.75%, 7/1/98........................... 549,973
200,000 Associates Corp. of North America, 8.95%, 7/16/98.......................... 201,648
350,000 General Motors Acceptance Corp., 5.95%, 7/16/98............................ 349,958
325,000 Chrysler Financial Corp., 6.36%, 7/20/98................................... 325,347
MONEY MARKET FUND (continued)
====================================================================================================================================
Par Market
Value INVESTMENT SECURITIES-- 79.3% Value
- ------------------------------------------------------------------------------------------------------------------------------------
$ 1,495,000 Toyota Motor Credit Corp., 6.375%, 8/5/98.................................. $ 1,496,884
300,000 American General Finance Corp., 8.50%, 8/15/98............................. 302,622
100,000 Associates Corp. of North America, 6.375%, 8/15/98......................... 100,175
350,000 Ford Capital, 9.00%, 8/15/98............................................... 354,158
150,000 Associates Corp. of North America, 5.25%, 9/1/98........................... 149,506
2,000,000 Manitoba Province, 9.50%, 9/15/98.......................................... 2,031,118
1,105,000 NationsBank Corp., 5.125%, 9/15/98......................................... 1,656,774
1,000,000 General Motors Acceptance Corp., 6.375%, 9/17/98........................... 1,001,497
200,000 Consolidated Natural Gas Co., 5.875%, 10/1/98.............................. 199,846
500,000 Key Bank, 6.00%, 10/07/98.................................................. 500,729
500,000 Chrysler Financial Corp., 5.375%, 10/15/98................................. 499,055
500,000 Beta Finance Corp., Inc., 6.00%, 10/27/98.................................. 500,527
500,000 Associates Corp. of North America, 5.75%, 11/15/98......................... 499,812
200,000 Caterpillar Financial Services, Inc., 5.47%, 12/15/98...................... 199,606
100,000 Southern California Edison, 5.60%, 12/15/98................................ 99,874
100,000 Associates Corp. of North America, 5.57%, 12/31/98......................... 99,830
110,000 Ford Motor Credit Co., 5.625%, 1/15/99..................................... 109,831
525,000 General Motors Acceptance Corp., 7.75%, 1/15/99............................ 532,675
- --------------- ---------------
$ 20,226,000 TOTAL CORPORATE NOTES
- ---------------
(Amortized Cost $20,836,255) ............................................ $ 20,836,255
---------------
$ 52,336,000 TOTAL INVESTMENT SECURITIES
===============
(Amortized Cost $52,945,572)............................................... $ 52,945,572
---------------
====================================================================================================================================
Face Market
Amount REPURCHASE AGREEMENTS(A)-- 24.2% Value
- ------------------------------------------------------------------------------------------------------------------------------------
$ 2,116,000 Dean Witter Reynolds, Inc., 5.40%, dated 3/31/98, due 4/1/98,
repurchase proceeds $2,116,317.......................................... $ 2,116,000
14,000,000 Nesbitt Burns Securities, Inc., 5.90%, dated 3/31/98, due 4/1/98,
repurchase proceeds $14,002,294 ....................................... 14,000,000
- --------------- ---------------
$ 16,116,000 TOTAL REPURCHASE AGREEMENTS ............................................. $ 16,116,000
- --------------- ---------------
- ---------------
TOTAL INVESTMENT SECURITIES AND REPURCHASE AGREEMENTS-- 103.5% .......... $ 69,061,572
LIABILITIES IN EXCESS OF OTHER ASSETS-- (3.5%) ............................ ( 2,345,166 )
--------------
NET ASSETS-- 100.0% ..................................................... $ 66,716,406
===============
(A) Repurchase agreements are fully collateralized by U.S. Government
obligations.
BANS - Bond Anticipation Notes
IBR - Industrial Bond Revenue
EDR - Economic Development Revenue
IDR - Industrial Development Revenue
FNMA - Federal National Mortgage Association
MFH - Multi-Family Housing
HFC - Housing Finance Corporation
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1998 (Unaudited)
====================================================================================================================================
Par Market
Value FIXED RATE OBLIGATIONS-- 97.5% Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 11.2%
$ 1,000,000 U.S. Treasury Notes, 7.50%, 11/15/01....................................... $ 1,058,750
1,500,000 U.S. Treasury Notes, 6.50%, 8/15/05........................................ 1,567,032
- --------------- ---------------
$ 2,500,000 TOTAL U.S. TREASURY OBLIGATIONS
- ---------------
(Amortized Cost $2,532,422) ............................................... $ 2,625,782
---------------
U.S. GOVERNMENT AGENCY ISSUES -- 12.1%
$ 265,000 TVA, 6.875%, 1/15/02....................................................... $ 270,485
50,000 TVA, 6.875%, 8/1/02........................................................ 51,230
150,000 FNMA, 6.17%, 12/2/03....................................................... 148,237
2,000,000 FHLMC, 7.93%, 1/20/05...................................................... 2,222,988
80,132 SBA, 8.45%, 1/1/07......................................................... 83,123
30,000 TVA, 8.05%, 7/15/24........................................................ 30,827
- --------------- ---------------
$ 2,575,132 TOTAL U.S. GOVERNMENT AGENCY ISSUES
- ---------------
(Amortized Cost $2,773,919) ............................................... $ 2,806,890
---------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES -- 8.1%
$ 196,140 FHLMC #1072-G, 7.00%, 5/15/06.............................................. $ 198,770
800,000 FHLMC #1720-E, 7.50%, 12/15/09............................................. 815,854
837,786 FNMA #50811, 7.50%, 12/1/12................................................ 867,192
- --------------- ---------------
$ 1,833,926 TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES
- ---------------
(Amortized Cost $1,882,648) ............................................... $ 1,881,816
---------------
CORPORATE BONDS -- 66.1%
$ 150,000 Consumers Energy Co., 6.875%, 5/1/98....................................... $ 149,947
250,000 British Petroleum America, Inc., 6.50%, 12/15/99........................... 251,707
169,000 Associates Corp. of North America, 6.00%, 3/15/00.......................... 168,952
175,000 Pacific Gas & Electric Co., 6.625%, 6/1/00................................. 175,161
172,000 Ford Motor Credit Co., 6.85%, 8/15/00...................................... 175,197
415,000 Bear Stearns Co., Inc. 6.25%, 12/1/00...................................... 416,142
250,000 International Business Machines Credit Corp., 6.20%, 3/19/01............... 249,142
350,000 Florida Residential Property & Casualty Co., 7.25%, 7/1/02................. 361,380
259,000 May Department Stores Co., 9.875%, 12/1/02................................. 297,262
380,000 Bankers Trust Corp., 7.25%, 1/15/03........................................ 393,330
160,000 Ford Motor Credit Co., 7.50%, 1/15/03...................................... 168,387
68,000 U.S. Leasing International, Inc., 6.625%, 5/15/03.......................... 69,178
1,067,000 Kroger Co., 8.50%, 6/15/03................................................. 1,111,886
200,000 V.F. Corp., 7.60%, 4/1/04.................................................. 207,054
215,000 Chase Manhattan Corp., 8.00%, 5/15/04...................................... 219,277
250,000 Citicorp, 8.625%, 11/1/04.................................................. 259,187
200,000 Michigan Bell Telephone Co., 6.375%, 2/1/05................................ 199,756
66,000 Kaiser Permanente, 9.55%, 7/15/05.......................................... 78,009
400,000 Anheuser-Busch Co., Inc., 7.00%, 9/1/05.................................... 408,776
510,000 Honeywell, Inc., 8.625%, 4/15/06........................................... 585,070
1,000,000 Monsanto Co., 8.13%, 12/15/06.............................................. 1,094,190
INTERMEDIATE BOND FUND (continued)
====================================================================================================================================
Par Market
Value FIXED RATE OBLIGATIONS-- 97.5% Value
- ------------------------------------------------------------------------------------------------------------------------------------
$ 500,000 Union Oil of California Corp., 6.70%, 10/15/07............................. $ 511,132
50,000 Berkley (W.R.) Corp., 9.875%, 5/15/08...................................... 61,967
407,000 Lehman Brothers Holdings, Inc., 7.40%, 11/24/10............................ 412,573
700,000 General Electric Capital Corp., 7.00%, 6/26/12............................. 702,914
850,000 Merrill Lynch & Co., 7.19%, 8/7/12......................................... 851,355
268,000 Super Value Stores, 8.875%, 4/1/16......................................... 282,456
35,000 Union Camp Corp., 8.625%, 4/15/16.......................................... 37,109
107,000 Anheuser-Busch Co., Inc. 8.625%, 12/1/16................................... 111,308
46,000 Kraft, Inc., 8.50%, 2/15/17................................................ 47,339
260,000 Dayton Hudson Corp., 9.875%, 6/1/17........................................ 273,445
130,000 General Electric Capital Corp., 6.66%, 5/1/18.............................. 131,796
150,000 Deere & Co., 8.95%, 6/15/19................................................ 179,032
439,000 Pennsylvania Power & Light Co., 9.25%, 10/1/19............................. 481,899
115,000 Rohm & Haas Co., 9.80%, 4/15/20............................................ 150,759
165,000 Questar Pipeline Co., 9.375%, 6/1/21....................................... 184,312
120,000 Jersey Central Power & Light Co., 9.20%, 7/1/21............................ 135,002
500,000 AT&T Corp., 8.125%, 1/15/22................................................ 536,444
675,000 Shopko Stores, Inc., 9.25%, 3/15/22........................................ 813,044
300,000 Inco, Ltd., 9.60%, 6/15/22................................................. 338,702
765,000 Alabama Power Co., 8.30%, 7/1/22........................................... 802,858
85,000 Southwestern Public Service Co., 8.20%, 12/1/22............................ 93,493
130,000 Union Electric Co., 8.00%, 12/15/22........................................ 138,780
315,000 Wisconsin Electric Power Co., 7.75%, 1/15/23............................... 331,866
58,000 Georgia Power Co., 7.95%, 2/1/23........................................... 60,725
711,000 Loews Corp., 7.00%, 10/15/23............................................... 691,640
- --------------- ---------------
$ 14,587,000 TOTAL CORPORATE BONDS
- ---------------
(Amortized Cost $15,239,114)............................................... $ 15,400,940
---------------
$ 21,496,058 TOTAL FIXED RATE OBLIGATIONS
===============
(Amortized Cost $22,428,103) .............................................. $ 22,715,428
---------------
====================================================================================================================================
Market
Shares PREFERRED STOCK -- 1.1% Value
- ------------------------------------------------------------------------------------------------------------------------------------
10,000 First Industrial Realty Trust, Inc., 7.95% (Cost $250,000)................. $ 246,875
---------------
TOTAL INVESTMENT SECURITIES -- 98.6% .......................................
(Amortized Cost $22,678,103)............................................... $ 22,962,303
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.4% .............................. 328,219
---------------
NET ASSETS-- 100.0% ....................................................... $ 23,290,522
===============
FHLMC - Federal Home Loan Mortgage Corporation SBA - Small Business Administration
FNMA - Federal National Mortgage Association TVA - Tennessee Valley Authority
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE TERM GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
March 31, 1998 (Unaudited)
====================================================================================================================================
Par Market
Value INVESTMENT SECURITIES-- 98.7% Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 17.7%
$ 1,000,000 U.S. Treasury Notes, 7.75%, 2/15/01........................................ $ 1,055,000
1,000,000 U.S. Treasury Notes, 8.00%, 5/15/01........................................ 1,065,938
3,000,000 U.S. Treasury Notes, 7.875%, 8/15/01....................................... 3,199,689
2,000,000 U.S. Treasury Notes, 7.50%, 11/15/01....................................... 2,117,500
1,000,000 U.S. Treasury Bonds, 7.50%, 11/15/16....................................... 1,165,938
- --------------- ---------------
$ 8,000,000 TOTAL U.S. TREASURY OBLIGATIONS
- ---------------
(Amortized Cost $8,213,763)................................................ $ 8,604,065
---------------
U.S. GOVERNMENT AGENCY ISSUES -- 81.0%
$ 535,000 FHLMC Discount Notes, 4/1/98............................................... $ 535,000
3,000,000 FNMA, 6.74%, 5/7/01........................................................ 3,031,473
1,000,000 SLMA Medium Term Notes, 7.50%, 7/2/01...................................... 1,048,364
3,000,000 FHLB, 7.31%, 7/6/01........................................................ 3,129,678
2,000,000 FHLB Medium Term Notes, 8.43%, 8/1/01...................................... 2,155,936
1,400,000 FHLB, 6.25%, 9/27/01....................................................... 1,417,455
2,000,000 FNMA, 7.55%, 4/22/02....................................................... 2,117,884
1,500,000 FNMA, 7.03%, 6/4/02........................................................ 1,520,036
1,000,000 FHLMC, 6.07%, 2/5/03....................................................... 989,258
2,000,000 FHLMC, 6.80%, 7/9/04....................................................... 2,045,526
2,000,000 FHLMC, 8.53%, 11/18/04..................................................... 2,085,548
2,000,000 FHLMC, 7.65%, 5/10/05...................................................... 2,057,646
2,000,000 FNMA Medium Term Notes, 6.85%, 8/22/05..................................... 2,108,586
2,000,000 FNMA, 6.77%, 9/1/05........................................................ 2,099,310
1,400,000 FNMA, 6.26%, 1/24/06....................................................... 1,391,421
2,500,000 FNMA, 6.21%, 1/26/06....................................................... 2,479,205
2,000,000 FNMA, 6.06%, 2/3/06........................................................ 1,987,822
1,000,000 FHLMC, 6.345%, 2/15/06..................................................... 996,374
2,000,000 FNMA, 6.90%, 12/26/06...................................................... 2,056,406
2,000,000 FNMA, 6.64%, 7/2/07........................................................ 2,092,748
2,000,000 FNMA, 6.96%, 9/5/12........................................................ 2,097,382
- --------------- ---------------
$ 38,335,000 TOTAL U.S. GOVERNMENT AGENCY ISSUES
- ---------------
(Amortized Cost $38,426,991)............................................... $ 39,443,058
---------------
$ 46,335,000 TOTAL INVESTMENT SECURITIES
===============
(Amortized Cost $46,640,754)............................................... $ 48,047,123
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.3% .............................. 655,760
---------------
NET ASSETS-- 100.0% ....................................................... $ 48,702,883
===============
FHLB - Federal Home Loan Bank FNMA - Federal National Mortgage Association
FHLMC - Federal Home Loan Mortgage Corporation SLMA - Student Loan Marketing Association
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
March 31, 1998 (Unaudited)
====================================================================================================================================
Par Market
Value INVESTMENT SECURITIES-- 99.2% Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ADJUSTABLE RATE U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES -- 91.3%
$ 412,498 FNMA #70373, 7.38%, 1/1/16 ............................................... $ 423,796
1,035,453 FNMA #70119, 7.71%, 11/1/17................................................ 1,074,831
1,274,372 FNMA #113680, 7.32%, 3/1/18................................................ 1,311,750
1,174,306 FNMA #70907, 7.36%, 3/1/18................................................. 1,220,609
1,090,949 FHLMC #605793, 7.35%, 5/1/18............................................... 1,123,154
1,219,947 FNMA #70614, 7.33%, 10/1/18................................................ 1,246,700
384,578 FHLMC #405958, 7.55%, 3/1/19............................................... 398,422
372,159 FNMA #70635, 7.08%, 6/1/20................................................. 383,763
1,616,715 FHLMC #846013, 7.80%, 6/2/22............................................... 1,686,396
956,619 FNMA #70176, 7.38%, 8/1/27................................................. 988,551
1,677,008 FNMA #70243, 7.31%, 3/1/28................................................. 1,730,857
- --------------- ---------------
$ 11,214,604 TOTAL ADJUSTABLE RATE U.S. GOVERNMENT AGENCY
- ---------------
MORTGAGE-BACKED SECURITIES
(Amortized Cost $11,477,067) ............................................. $ 11,588,829
---------------
U.S. GOVERNMENT AGENCY ISSUES -- 7.9%
$ 995,000 FHLMC Discount Notes, 4/1/98 (Amortized Cost $995,000) .................... $ 995,000
- --------------- ---------------
$ 12,209,604 TOTAL INVESTMENT SECURITIES
===============
(Amortized Cost $12,472,067) ............................................. $ 12,583,829
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.8% .............................. 104,828
---------------
NET ASSETS-- 100.0% ..................................................... $ 12,688,657
===============
FHLMC - Federal Home Loan Mortgage Corporation
FHLB - Federal National Mortgage Association
See accompanying notes to financial statements.
</TABLE>
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<CIK> 0000066117
<NAME> COUNTRYWIDE INVESTMENT TRUST
<SERIES>
<NUMBER> 6
<NAME> ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND
<S> <C>
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 12,688,657
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 547,274
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<EXPENSES-NET> 65,532
<NET-INVESTMENT-INCOME> 481,742
<REALIZED-GAINS-CURRENT> (28,196)
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<PER-SHARE-NAV-BEGIN> 9.85
<PER-SHARE-NII> .27
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<CIK> 0000066117
<NAME> COUNTRYWIDE INVESTMENT TRUST
<SERIES>
<NUMBER> 4
<NAME> INSTITUTIONAL GOVERNMENT INCOME FUND
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<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
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<INVESTMENTS-AT-VALUE> 54,336,899
<RECEIVABLES> 239,568
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<SHARES-COMMON-PRIOR> 61,269,650
<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> (21,764)
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 54,583,928
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,587,599
<OTHER-INCOME> 0
<EXPENSES-NET> 114,106
<NET-INVESTMENT-INCOME> 1,473,493
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<NUMBER-OF-SHARES-SOLD> 129,378,606
<NUMBER-OF-SHARES-REDEEMED> 137,240,655
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<NET-CHANGE-IN-ASSETS> (6,663,958)
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<GROSS-EXPENSE> 128,439
<AVERAGE-NET-ASSETS> 57,194,040
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .026
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<PER-SHARE-DIVIDEND> .026
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</TABLE>
<TABLE> <S> <C>
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<CIK> 0000066117
<NAME> COUNTRYWIDE INVESTMENT TRUST
<SERIES>
<NUMBER> 9
<NAME> INTERMEDIATE BOND FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
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<PERIOD-END> MAR-31-1998
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<OTHER-ITEMS-LIABILITIES> 122,788
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<PAID-IN-CAPITAL-COMMON> 23,064,682
<SHARES-COMMON-STOCK> 2,287,941
<SHARES-COMMON-PRIOR> 1,553,652
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (60,554)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 284,200
<NET-ASSETS> 23,290,522
<DIVIDEND-INCOME> 3,036
<INTEREST-INCOME> 705,394
<OTHER-INCOME> 0
<EXPENSES-NET> 95,952
<NET-INVESTMENT-INCOME> 612,478
<REALIZED-GAINS-CURRENT> (4,161)
<APPREC-INCREASE-CURRENT> 66,720
<NET-CHANGE-FROM-OPS> 675,037
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<DISTRIBUTIONS-OF-INCOME> 610,284
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 1,558,646
<NUMBER-OF-SHARES-REDEEMED> 839,278
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<ACCUMULATED-GAINS-PRIOR> (56,393)
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<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 103,157
<AVERAGE-NET-ASSETS> 20,303,451
<PER-SHARE-NAV-BEGIN> 10.09
<PER-SHARE-NII> .31
<PER-SHARE-GAIN-APPREC> .09
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<PER-SHARE-NAV-END> 10.18
<EXPENSE-RATIO> .95
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<CIK> 0000066117
<NAME> COUNTRYWIDE INVESTMENT TRUST
<SERIES>
<NUMBER> 3
<NAME> INTERMEDIATE TERM GOVERNMENT INCOME FUND
<S> <C>
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<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
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<GROSS-EXPENSE> 252,619
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<PER-SHARE-NII> .31
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000066117
<NAME> COUNTRYWIDE INVESTMENT TRUST
<SERIES>
<NUMBER> 8
<NAME> MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
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<PERIOD-END> MAR-31-1998
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<CIK> 0000066117
<NAME> COUNTRYWIDE INVESTMENT TRUST
<SERIES>
<NUMBER> 1
<NAME> SHORT TERM GOVERNMENT INCOME FUND
<S> <C>
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