--------------------------------------------------------------------------------
Income
Total Return
Semi-Annual
Report
March 31, 2000
(Unaudited)
[GRAPHIC]
[LOGO] Countrywide
------------------
Investments
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
--------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
================================================================================
Letter from the President ............................................. 3
Statements of Assets and Liabilities .................................. 4-5
Statements of Operations .............................................. 6-7
Statements of Changes in Net Assets ................................... 8-10
Financial Highlights .................................................. 11-17
Notes to Financial Statements ......................................... 18-22
Portfolios of Investments:
Short Term Government Income Fund ............................. 23
Institutional Government Income Fund .......................... 24-25
Money Market Fund ............................................. 26-27
Intermediate Bond Fund ........................................ 28
Intermediate Term Government Income Fund ...................... 29
Adjustable Rate U.S. Government Securities Fund ............... 30
Notes to Portfolios of Investments .................................... 31
Results of Special Meeting of Shareholders ............................ 32
2 - Countrywide Investments
<PAGE>
LETTER FROM THE PRESIDENT
================================================================================
[PHOTO OMITTED]
Dear Fellow Shareholders:
We are pleased to present Countrywide Investment Trust's Semi-Annual report for
the six months ended March 31, 2000. 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 offered by
the Countrywide Family of Funds.
The U.S. economy remains strong, despite numerous credit tightening steps by the
Federal Reserve since last summer. We attribute this to record employment,
modest inflation, increased industrial spending and unwavering consumer
confidence. Markets have been extremely volatile so far in 2000, reminding
investors that what goes up can go down just as quickly.
In the bond market, short-term interest rates continued to move higher pressured
by actual and expected Federal Reserve actions. At the same time the Treasury's
decision to retire long-term bonds, a repurchase with little historical
precedent, caused much of the yield decline. This makes it difficult to discern
investors' inflationary expectations and, therefore, the value priced into
long-term Treasuries. Since bonds typically are priced relative to Treasury
securities, the supply disruption resulting from Treasury repurchases caused
spreads to widen in other bond sectors. In addition, some political concerns
regarding agency securities have widened these spreads. Uncertainty about the
durability of the expansion and potential leveraged buyouts also impacted
spreads. Nevertheless, we see opportunities in such a market, especially in
mortgage-backed securities, select high yield issues and municipal bonds.
On May 1, 2000 the Countrywide Family of Funds became part of the Touchstone
Family of Funds*, with the expanded fund family retaining the Touchstone name. A
reorganization of the Countrywide Intermediate Bond Fund into the Touchstone
Bond Fund was completed. In addition, the Board of Trustees of the Countrywide
Funds exercised its authority to terminate the public offering of shares of the
Adjustable Rate U.S. Government Securities Fund and redeem all outstanding
shares of the Fund. In making this decision, the Board of Trustees determined
that failure to do so might have adverse consequences to the Fund's
shareholders.
Touchstone shareholders can now meet their financial goals with a broader range
of choices. In addition to the funds mentioned above, Touchstone taxable money
market and bond funds include the High Yield Fund and the Bond Fund. Touchstone
also offers U.S. and international equity funds, and tax-free bond funds and
money market funds. Founded in 1994 and headquartered in Cincinnati, the
Touchstone Family of Funds is part of The Western-Southern Enterprise,(R) a
group of financial services companies whose heritage dates to 1888 and whose
assets owned or under management exceed $26 billion.
We remain 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 offering
continued service to you in the future.
Sincerely,
/s/ Robert H. Leshner
Robert H. Leshner
President
*The Touchstone Family of Funds is distributed by Touchstone Securities, Inc.#
#A registered broker-dealer and member of the NASD/SIPC.
Countrywide Investments - 3
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2000 (UNAUDITED)
==========================================================================================
SHORT TERM INSTITUTIONAL MONEY
GOVERNMENT GOVERNMENT MARKET
(000'S) INCOME FUND INCOME FUND FUND
------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C>
Investment securities:
At acquisition cost ................... $ 31,107 $ 26,725 $ 28,353
=======================================
At amortized cost ..................... $ 31,043 $ 26,732 $ 28,345
=======================================
At market value (Note 2) .............. $ 31,043 $ 26,732 $ 28,345
Repurchase agreements (Note 2) ................ 113,602 21,293 --
Cash .......................................... 208 20 --
Interest receivable ........................... 470 427 246
Organization costs, net (Note 2) .............. -- -- 3
Receivable from affiliates (Note 4) ........... -- -- 12
Other assets .................................. 16 6 14
---------------------------------------
TOTAL ASSETS .................................. 145,339 48,478 28,620
---------------------------------------
LIABILITIES
Bank overdraft ................................ -- -- 43
Dividends payable ............................. 6 23 7
Payable to affiliates (Note 4) ................ 91 8 13
Other accrued expenses and liabilities ........ 21 5 9
---------------------------------------
TOTAL LIABILITIES ............................. 118 36 72
---------------------------------------
NET ASSETS .................................... $ 145,221 $ 48,442 $ 28,548
=======================================
NET ASSETS CONSIST OF:
Paid-in capital ............................... $ 145,221 $ 48,464 $ 28,559
Accumulated net realized losses from
security transactions ................. -- (22) (11)
---------------------------------------
NET ASSETS .................................... $ 145,221 $ 48,442 $ 28,548
=======================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) (Note 5) ................ 145,221 48,464 28,559
=======================================
Net asset value, offering price and redemption
price per share (Note 2) .............. $ 1.00 $ 1.00 $ 1.00
=======================================
</TABLE>
See accompanying notes to financial statements.
4 - Countrywide Investments
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2000 (UNAUDITED)
==========================================================================================
ADJUSTABLE
INTERMEDIATE RATE U.S.
INTERMEDIATE TERM GOVERNMENT
BOND GOVERNMENT SECURITIES
(000'S) FUND INCOME FUND FUND
------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C>
Investment securities:
At acquisition cost ................... $ 4,314 $ 37,219 $ 4,989
=======================================
At amortized cost ..................... $ 4,314 $ 37,107 $ 4,989
=======================================
At market value (Note 2) .............. $ 4,157 $ 36,232 $ 4,992
Cash .......................................... 2 14 5
Interest and principal paydowns receivable .... 57 473 20
Receivable for securities sold ................ -- -- 647
Receivable for capital shares sold ............ 1 117 1
Receivable from affiliates (Note 4) ........... 5 -- 13
Organization costs, net (Note 2) .............. 3 -- --
Other assets .................................. 10 14 1
---------------------------------------
TOTAL ASSETS .................................. 4,235 36,850 5,679
---------------------------------------
LIABILITIES
Dividends payable ............................. 7 25 3
Payable for capital shares redeemed ........... 2 45 87
Payable to affiliates (Note 4) ................ -- 20 --
Other accrued expenses and liabilities ........ 7 10 6
---------------------------------------
TOTAL LIABILITIES ............................. 16 100 96
---------------------------------------
NET ASSETS .................................... $ 4,219 $ 36,750 $ 5,583
=======================================
NET ASSETS CONSIST OF:
Paid-in capital ............................... $ 5,182 $ 40,412 $ 6,942
Accumulated net realized losses from
security transactions ................. (806) (2,787) (1,362)
Net unrealized appreciation (depreciation)
on investments ........................ (157) (875) 3
---------------------------------------
NET ASSETS .................................... $ 4,219 $ 36,750 $ 5,583
=======================================
PRICING OF CLASS A SHARES
Net assets attributable to Class A shares ..... $ 4,217 $ 36,750 $ 5,583
=======================================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) (Note 5) ................ 459 3,612 582
=======================================
Net asset value and redemption price per share
(Note 2) .............................. $ 9.18 $ 10.18 $ 9.60
=======================================
Maximum offering price per share (Note 2) ..... $ 9.64 $ 10.69 $ 9.80
=======================================
PRICING OF CLASS C SHARES
Net assets attributable to Class C shares $ 2
==========
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) (Note 5) 1
==========
Net asset value and redemption price per share
(Note 2) $ 9.19
==========
Maximum offering price per share (Note 2) $ 9.31
==========
See accompanying notes to financial statements.
</TABLE>
Countrywide Investments - 5
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
==========================================================================================
SHORT TERM INSTITUTIONAL MONEY
GOVERNMENT GOVERNMENT MARKET
(000'S) INCOME FUND INCOME FUND FUND
------------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest income ............................... $ 3,200 $ 1,415 $ 778
---------------------------------------
EXPENSES
Investment advisory fees (Note 4) ............. 277 49 66
Transfer agent fees (Note 4) .................. 89 9 23
Distribution expenses (Note 4) ................ 74 3 9
Postage and supplies .......................... 33 6 16
Accounting services fees (Note 4) ............. 18 13 12
Custodian fees ................................ 23 11 10
Registration fees ............................. 15 3 6
Professional fees ............................. 7 5 7
Standard & Poor's rating expense .............. 3 3 --
Trustees' fees and expenses ................... 4 4 4
Reports to shareholders ....................... 7 1 3
Amortization of organization costs (Note 2) ... -- -- 3
Other expenses ................................ 8 4 --
---------------------------------------
TOTAL EXPENSES ................................ 558 111 159
Fees waived by the Adviser (Note 4) ........... -- (12) (74)
---------------------------------------
NET EXPENSES .................................. 558 99 85
---------------------------------------
NET INVESTMENT INCOME ......................... 2,642 1,316 693
---------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS .... $ 2,642 $ 1,316 $ 693
=======================================
</TABLE>
See accompanying notes to financial statements.
6 - Countrywide Investments
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
==========================================================================================
ADJUSTABLE
INTERMEDIATE RATE U.S.
INTERMEDIATE TERM GOVERNMENT
BOND GOVERNMENT SECURITIES
(000'S) FUND INCOME FUND FUND
------------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest income ............................... $ 204 $ 1,323 $ 260
---------------------------------------
EXPENSES
Investment advisory fees (Note 4) ............. 15 97 21
Accounting services fees (Note 4) ............. 12 12 15
Distribution expenses, Class A (Note 4) ....... 2 14 2
Transfer agent fees, Class A (Note 4) ......... 6 18 6
Professional fees ............................. 6 8 6
Registration fees, Common ..................... 4 8 13
Registration fees, Class A .................... 2 -- --
Postage and supplies .......................... 3 13 6
Trustees' fees and expenses ................... 4 4 4
Custodian fees ................................ 6 9 7
Reports to shareholders ....................... 2 3 2
Standard & Poor's rating expense .............. -- -- 2
Amortization of organization costs (Note 2) ... 3 -- --
Other expenses ................................ 1 6 --
---------------------------------------
TOTAL EXPENSES ................................ 66 192 84
Fees waived and/or common expenses reimbursed
by the Adviser (Note 4) ............... (37) -- (53)
Class A expenses reimbursed by the Adviser
(Note 4) .............................. (1) -- --
---------------------------------------
NET EXPENSES .................................. 28 192 31
---------------------------------------
NET INVESTMENT INCOME ......................... 176 1,131 229
---------------------------------------
REALIZED AND UNREALIZED LOSSES
ON INVESTMENTS
Net realized losses from security transactions (376) (433) (49)
Net change in unrealized appreciation/
depreciation on investments ........... 203 (201) (10)
---------------------------------------
NET REALIZED AND UNREALIZED LOSSES
ON INVESTMENTS ........................ (173) (634) (59)
---------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ....................... $ 3 $ 497 $ 170
=======================================
</TABLE>
See accompanying notes to financial statements.
Countrywide Investments - 7
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
==========================================================================================
SHORT TERM INSTITUTIONAL
GOVERNMENT GOVERNMENT
INCOME FUND INCOME FUND
------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
MARCH 31, ENDED MARCH 31, ENDED
2000 SEPT. 30, 2000 SEPT. 30,
(000'S) (UNAUDITED) 1999 (UNAUDITED) 1999
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income ............ $ 2,642 $ 4,364 $ 1,316 $ 2,134
----------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
>From net investment income ....... (2,642) (4,364) (1,316) (2,134)
----------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS (NOTE 5)
Proceeds from shares sold ........ 395,808 354,333 58,429 83,427
Reinvested distributions ......... 2,545 4,260 1,166 1,889
Payments for shares redeemed ..... (363,192) (351,014) (61,001) (80,265)
----------------------------------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS ....... 35,161 7,579 (1,406) 5,051
----------------------------------------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ............ 35,161 7,579 (1,406) 5,051
NET ASSETS
Beginning of period .............. 110,060 102,481 49,848 44,797
----------------------------------------------------
End of period .................... $ 145,221 $ 110,060 $ 48,442 $ 49,848
====================================================
</TABLE>
See accompanying notes to financial statements.
8 - Countrywide Investments
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
==========================================================================================
MONEY INTERMEDIATE
MARKET BOND
FUND FUND
------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
MARCH 31, ENDED MARCH 31, ENDED
2000 SEPT. 30, 2000 SEPT. 30,
(000'S) (UNAUDITED) 1999 (UNAUDITED) 1999
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income ............ $ 693 $ 1,272 $ 176 $ 928
Net realized losses from
security transactions .... -- (5) (376) (223)
Net change in unrealized
appreciation/depreciation
on investments ........... -- -- 203 (1,386)
----------------------------------------------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS 693 1,267 3 (681)
----------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
>From net investment income, Class A (693) (1,272) (176) (932)
>From net realized gains, Class A . -- -- -- (138)
----------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (693) (1,272) (176) (1,070)
----------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS (NOTE 5)
CLASS A
Proceeds from shares sold ........ 36,555 68,597 106 7,494
Reinvested distributions ......... 663 781 125 711
Payments for shares redeemed ..... (31,868) (64,667) (7,528) (18,485)
----------------------------------------------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM CLASS A SHARE
TRANSACTIONS ............. 5,350 4,711 (7,297) (10,280)
----------------------------------------------------
CLASS C
Proceeds from shares sold ........ -- -- 2 --
Reinvested distributions ......... -- -- -- --
Payments for shares redeemed ..... -- -- -- --
----------------------------------------------------
NET INCREASE IN NET ASSETS FROM
CLASS C SHARE TRANSACTIONS -- -- 2 --
----------------------------------------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ............ 5,350 4,706 (7,468) (4,093)
----------------------------------------------------
NET ASSETS
Beginning of period .............. 23,198 18,492 11,687 23,718
----------------------------------------------------
End of period .................... $ 28,548 $ 23,198 $ 4,219 $ 11,687
====================================================
</TABLE>
See accompanying notes to financial statements.
Countrywide Investments - 9
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
==========================================================================================
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
2000 SEPT. 30, 2000 SEPT. 30,
(000'S) (UNAUDITED) 1999 (UNAUDITED) 1999
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income ............ $ 1,131 $ 2,585 $ 229 $ 510
Net realized gains (losses) from
security transactions .... (433) 390 (49) (3)
Net change in unrealized
appreciation/depreciation
on investments ........... (201) (3,884) (10) (22)
----------------------------------------------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS 497 (909) 170 485
----------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
>From net investment income ....... (1,131) (2,585) (229) (510)
----------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS (NOTE 5)
Proceeds from shares sold ........ 4,670 12,477 2,402 4,152
Reinvested distributions ......... 986 2,271 208 467
Payments for shares redeemed ..... (13,332) (17,362) (5,628) (6,550)
----------------------------------------------------
NET DECREASE IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (7,676) (2,614) (3,018) (1,931)
----------------------------------------------------
TOTAL DECREASE IN NET ASSETS ..... (8,310) (6,108) (3,077) (1,956)
NET ASSETS
Beginning of period .............. 45,060 51,168 8,660 10,616
----------------------------------------------------
End of period .................... $ 36,750 $ 45,060 $ 5,583 $ 8,660
====================================================
</TABLE>
See accompanying notes to financial statements.
10 - Countrywide Investments
<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,
2000 ----------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------
<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 ................ 0.022 0.040 0.046 0.044 0.044 0.046
---------------------------------------------------------------------------------
Dividends from net investment income . (0.022) (0.040) (0.046) (0.044) (0.044) (0.046)
---------------------------------------------------------------------------------
Net asset value at end of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=================================================================================
Total return ......................... 4.53%(B) 4.02% 4.74% 4.53% 4.51% 4.69%
=================================================================================
Net assets at end of period (000's) .. $145,221 $110,060 $102,481 $ 96,797 $ 91,439 $ 87,141
=================================================================================
Ratio of net expenses to
average net assets(A) ........ 0.95%(B) 0.95% 0.91% 0.97% 0.99% 0.99%
Ratio of net investment income to
average net assets ........... 4.50%(B) 3.95% 4.63% 4.43% 4.42% 4.59%
</TABLE>
(A) Absent fee waivers by the Adviser, the ratio of expenses to average net
assets would have been 0.94% for the year ended September 30, 1998.
(B) Annualized.
See accompanying notes to financial statements.
Countrywide Investments - 11
<PAGE>
INSTITUTIONAL GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
============================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, YEARS ENDED SEPTEMBER 30,
2000 -----------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------
<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 ................ 0.027 0.047 0.052 0.051 0.051 0.053
------------------------------------------------------------------
Dividends from net investment income . (0.027) (0.047) (0.052) (0.051) (0.051) (0.053)
------------------------------------------------------------------
Net asset value at end of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==================================================================
Total return ......................... 5.38%(B) 4.78% 5.30% 5.17% 5.18% 5.42%
==================================================================
Net assets at end of period (000's) .. $ 48,442 $ 49,848 $ 44,797 $ 61,248 $ 39,382 $ 36,009
==================================================================
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 ........... 5.33%(B) 4.68% 5.17% 5.07% 5.06% 5.30%
</TABLE>
(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, 2000,
0.47%, 0.45%, 0.45%, 0.49%, and 0.42% for the years ended September 30,
1999, 1998, 1997, 1996 and 1995, respectively (Note 4).
(B) Annualized.
See accompanying notes to financial statements.
12 - Countrywide Investments
<PAGE>
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
==================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
------------------------------------------------------------------------------------------------------------------
SIX MONTHS ONE
ENDED YEAR YEAR MONTH YEAR PERIOD
MARCH 31, ENDED ENDED ENDED ENDED ENDED
2000 SEPT. 30, SEPT. 30, SEPT. 30, AUG. 31, AUG. 31,
(UNAUDITED) 1999 1998 1997(A) 1997 1996(B)
------------------------------------------------------------------------------------------------------------------
<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 0.046 0.050 0.004 0.050 0.046(C)
---------------------------------------------------------------------
Dividends from net investment income . (0.026) (0.046) (0.050) (0.004) (0.050) (0.046)
---------------------------------------------------------------------
Net asset value at end of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=====================================================================
Total return ......................... 5.33%(E) 4.74% 5.07% 4.99%(E) 5.14% 4.70%
=====================================================================
Net assets at end of period (000's) .. $ 28,548 $ 23,198 $ 18,492 $ 73,821 $ 94,569 $ 76,363
=====================================================================
Ratio of net expenses to
average net assets(D) ........ 0.65%(E) 0.65% 0.79% 0.80%(E) 0.65% 0.65%(E)
Ratio of net investment income to
average net assets ........... 5.29%(E) 4.63% 4.95% 4.99%(E) 5.03% 4.94%(E)
</TABLE>
(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.
(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 1.21%(E) for the six months ended March
31, 2000, 1.11%, 0.79% and 0.99%(E) for the periods ended September 30,
1999 and August 31, 1997 and 1996, respectively (Note 4).
(E) Annualized.
See accompanying notes to financial statements.
Countrywide Investments - 13
<PAGE>
INTERMEDIATE BOND FUND -- CLASS A
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
==========================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
--------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ONE
ENDED YEAR YEAR MONTH YEAR PERIOD
MARCH 31, ENDED ENDED ENDED ENDED ENDED
2000 SEPT. 30, SEPT. 30, SEPT. 30, AUG. 31, AUG. 31,
(UNAUDITED) 1999 1998 1997(A) 1997 1996(B)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period .. $ 9.45 $ 10.50 $ 10.09 $ 10.00 $ 9.75 $ 10.00
--------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ........... 0.27 0.59 0.62 0.05 0.62 0.57)(C)
Net realized and unrealized gains
(losses) on investments ...... (0.27) (0.97) 0.41 0.09 0.28 (0.25)(C)
--------------------------------------------------------------------------
Total from investment operations ........ -- (0.38) 1.03 0.14 0.90 0.32
--------------------------------------------------------------------------
Less distributions:
Dividends from net investment
income ....................... (0.27) (0.59) (0.62) (0.05) (0.62) (0.57)
Distributions from net realized
gains ........................ -- (0.08) -- -- (0.03) --
--------------------------------------------------------------------------
Total distributions ..................... (0.27) (0.67) (0.62) (0.05) (0.65) (0.57)
--------------------------------------------------------------------------
Net asset value at end of period ........ $ 9.18 $ 9.45 $ 10.50 $ 10.09 $ 10.00 $ 9.75
==========================================================================
Total return(D) ......................... (0.01%)(F) (3.71%) 10.54% 1.41% 9.48% 3.23%
==========================================================================
Net assets at end of period (000's) ..... $ 4,217 $ 11,687 $ 23,718 $ 15,671 $ 15,114 $ 13,357
==========================================================================
Ratio of net expenses to
average net assets(E) ........... 0.96%(F) 0.95% 0.95% 0.95%(F) 0.85% 0.68%(F)
Ratio of net investment income to
average net assets .............. 6.02%(F) 5.96% 6.08% 6.18%(F) 6.26% 6.31%(F)
Portfolio turnover rate ................. 33%(F) 92% 63% 0% 41% 12%
</TABLE>
(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.
(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 2.27%(F) for the six months ended March
31, 2000, 1.27%, 0.98%, 1.38%(F), 1.53% and 2.04%(F) for the periods ended
September 30, 1999, 1998 and 1997, and August 31, 1997 and 1996,
respectively (Note 4).
(F) Annualized.
See accompanying notes to financial statements.
14 - Countrywide Investments
<PAGE>
INTERMEDIATE BOND FUND -- CLASS C
FINANCIAL HIGHLIGHTS
================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
--------------------------------------------------------------------------------
PERIOD
ENDED
MARCH 31,
2000(A)
(UNAUDITED)
--------------------------------------------------------------------------------
Net asset value at beginning of period .......................... $ 9.19
--------
Income from investment operations:
Net investment income ................................... 0.02
Net realized and unrealized gains on investments ........ --
--------
Total from investment operations ................................ 0.02
--------
Less distributions:
Dividends from net investment income .................... (0.02)
--------
Net asset value at end of period ................................ $ 9.19
========
Total return(B) ................................................. 0.16%
========
Net assets at end of period (000's) ............................. $ 2
========
Ratio of net expenses to average net assets ..................... 1.40%(C)
Ratio of net investment income to average net assets ............ 5.42%(C)
Portfolio turnover rate ......................................... 33%(C)
(A) Represents the period from the initial public offering (March 20, 2000)
through March 31, 2000.
(B) Total return shown excludes the effect of applicable sales loads and is not
annualized.
(C) Annualized.
See accompanying notes to financial statements.
Countrywide Investments - 15
<PAGE>
INTERMEDIATE TERM GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
====================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
--------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, YEARS ENDED SEPTEMBER 30,
2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period .. $ 10.34 $ 11.15 $ 10.67 $ 10.49 $ 10.73 $ 10.14
-----------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ........... 0.30 0.60 0.61 0.61 0.61 0.64
Net realized and unrealized gains
(losses) on investments ....... (0.16) (0.81) 0.48 0.18 (0.24) 0.59
-----------------------------------------------------------------------
Total from investment operations ........ 0.14 (0.21) 1.09 0.79 0.37 1.23
-----------------------------------------------------------------------
Dividends from net investment income .... (0.30) (0.60) (0.61) (0.61) (0.61) (0.64)
-----------------------------------------------------------------------
Net asset value at end of period ........ $ 10.18 $ 10.34 $ 11.15 $ 10.67 $ 10.49 $ 10.73
=======================================================================
Total return(A) ......................... 2.73%(B) (1.93%) 10.54% 7.74% 3.55% 12.52%
=======================================================================
Net assets at end of period (000's) ..... $ 36,750 $ 45,060 $ 51,168 $ 53,033 $ 56,095 $ 56,969
=======================================================================
Ratio of net 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 ............. 5.89%(B) 5.59% 5.64% 5.78% 5.75% 6.17%
Portfolio turnover rate ................. 21%(B) 58% 29% 49% 70% 58%
</TABLE>
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Annualized.
See accompanying notes to financial statements.
16 - Countrywide Investments
<PAGE>
ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
====================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
--------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, YEARS ENDED SEPTEMBER 30,
2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period .. $ 9.68 $ 9.69 $ 9.85 $ 9.81 $ 9.78 $ 9.82
-----------------------------------------------------------------------
Income from investment operations:
Net investment income ........... 0.26 0.50 0.53 0.57 0.57 0.55
Net realized and unrealized gains
(losses) on investments ...... (0.08) (0.01) (0.16) 0.04 0.03 (0.04)
-----------------------------------------------------------------------
Total from investment operations ........ 0.18 0.49 0.37 0.61 0.60 0.51
-----------------------------------------------------------------------
Dividends from net investment income .... (0.26) (0.50) (0.53) (0.57) (0.57) (0.55)
-----------------------------------------------------------------------
Net asset value at end of period ........ $ 9.60 $ 9.68 $ 9.69 $ 9.85 $ 9.81 $ 9.78
=======================================================================
Total return(A) ......................... 3.81%(C) 5.22% 3.88% 6.34% 6.32% 5.33%
=======================================================================
Net assets at end of period (000's) ..... $ 5,583 $ 8,660 $ 10,616 $ 23,202 $ 11,732 $ 20,752
=======================================================================
Ratio of net expenses to
average net assets(B) ........... 0.75%(C) 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to
average net assets .............. 5.47%(C) 5.22% 5.47% 5.73% 5.91% 5.57%
Portfolio turnover rate ................. 121%(C) 42% 45% 58% 44% 115%
</TABLE>
(A) Total returns shown exclude the effect of applicable sales loads.
(B) Absent fee waivers and/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 2.01%(C) for the six
months ended March 31, 2000 and 1.80%, 1.37%, 1.47%, 1.46% and 1.21% for
the years ended September 30, 1999, 1998, 1997, 1996 and 1995, respectively
(Note 4).
(C) Annualized.
See accompanying notes to financial statements.
Countrywide Investments - 17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 (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 (individually, a Fund
and, 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 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 U.S. 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 having an effective maturity of twenty years or less with a
dollar-weighted effective 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
adjustable rate mortgage securities or other securities collateralized by or
representing an interest in mortgages which have interest rates that reset at
periodic intervals. The Fund invests in mortgage-related securities only if they
are issued or guaranteed by the United States Government, its agencies or
instrumentalities.
Effective August 1, 1999, the Intermediate Bond Fund was authorized to offer two
classes of shares: Class A shares (sold subject to a maximum 4.75% front-end
sales load and a distribution fee of up to 0.35% of average daily net assets)
and Class C shares (sold subject to a 1.25% front-end sales load, a 1%
contingent deferred sales load for a one-year period and a distribution fee of
up to 1% of average daily net assets). Each Class A and Class C share of the
Fund represents identical interests in the Fund's investment portfolio and has
the same rights, except that (i) Class C shares bear the expenses of higher
distribution fees, which will cause Class C shares to have a higher expense
ratio and to pay lower dividends than those related to Class A shares; (ii)
certain other class specific expenses will be borne solely by the class to which
such expenses are attributable; and (iii) each class has exclusive voting rights
with respect to matters relating to its own distribution arrangements.
18 - Countrywide Investments
<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 approved 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 class of shares of the
Intermediate Bond Fund is calculated daily by dividing the total value of the
Fund's assets attributable to that class, less liabilities attributable to that
class, by the number of shares of that class outstanding. The net asset value
per share of the Short Term Government Income Fund, Institutional Government
Income Fund, Money Market Fund, Intermediate Term Government Income Fund and the
Adjustable Rate U.S. Government Securities 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, Money Market Fund and the Adjustable Rate
U.S. Government Securities Fund is equal to the net asset value per share. The
maximum offering price per share of Class A shares of the Intermediate Bond Fund
and shares of the Intermediate Term Government Income Fund is equal to the net
asset value per share plus a sales load equal to 4.99% of the net asset value
(or 4.75% of the offering price).
The redemption price per share of a Fund, or of each class of shares of a Fund,
is equal to the net asset value per share. However, Class C shares of the
Intermediate Bond Fund are subject to a contingent deferred sales load of 1.00%
of the original purchase price if redeemed within a one-year period from the
date of purchase.
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.
Allocations between classes -- Investment income earned, realized capital gains
and losses, and unrealized appreciation and depreciation for the Intermediate
Bond Fund are allocated daily to each class of shares based upon its
proportionate share of total net assets of the Fund. Class specific expenses are
charged directly to the class incurring the expense. Common expenses which are
not attributable to a specific class are allocated daily to each class of shares
based upon its proportionate share of total net assets of the Fund.
Security transactions -- Security transactions are accounted for on the trade
date. Securities sold are determined 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
Countrywide Investments - 19
<PAGE>
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.
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.
As of September 30, 1999, the Institutional Government Income Fund, Money Market
Fund, Intermediate Term Government Income Fund and Adjustable Rate U.S.
Government Securities Fund had capital loss carryforwards for federal income tax
purposes of $22,343, $6,403, $2,354,472 and $1,309,556, respectively. In
addition, the Money Market Fund, Intermediate Bond Fund and Adjustable Rate U.S.
Government Securities Fund elected to defer until its subsequent tax year
$4,941, $429,852 and $3,127, respectively, of capital losses incurred after
October 31, 1998. These capital loss carryforwards and "post-October" losses may
be utilized in current and future years to offset net realized capital gains, if
any, prior to distributing such gains to shareholders.
The following information is based upon the federal income tax cost of portfolio
investments as of March 31, 2000:
--------------------------------------------------------------------------------
ADJUSTABLE
INTERMEDIATE RATE U.S.
INTERMEDIATE TERM GOVERNMENT
BOND GOVERNMENT SECURITIES
(000's) FUND INCOME FUND FUND
--------------------------------------------------------------------------------
Gross unrealized appreciation .............. $ -- $ 78 $ 3
Gross unrealized depreciation .............. (157) (953) --
----------------------------------
Net unrealized appreciation (depreciation) . $ (157) $ (875) $ 3
==================================
Federal income tax cost .................... $ 4,314 $ 37,107 $ 4,989
==================================
--------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) were as follows for
the six months ended March 31, 2000:
--------------------------------------------------------------------------------
ADJUSTABLE
INTERMEDIATE RATE U.S.
INTERMEDIATE TERM GOVERNMENT
BOND GOVERNMENT SECURITIES
(000's) FUND INCOME FUND FUND
--------------------------------------------------------------------------------
Purchases of investment securities ......... $ 984 $ 3,800 $ 464
==================================
Proceeds from sales and maturities of
investment securities .............. $ 7,663 $ 13,908 $ 1,576
==================================
--------------------------------------------------------------------------------
4. TRANSACTIONS WITH AFFILIATES
The President and certain other officers of the Trust are also officers of
Countrywide Financial Services, Inc., or its subsidiaries which include
Countrywide Investments, Inc. (the Adviser), the Trust's investment adviser and
principal underwriter, and Countrywide Fund Services, Inc. (CFS), the Trust's
administrator, transfer agent and
20 - Countrywide Investments
<PAGE>
accounting services agent. Countrywide Financial Services, Inc. is a
wholly-owned subsidiary of Fort Washington Investment Advisors, Inc., which is a
wholly-owned subsidiary of The Western and Southern Life Insurance Company.
MANAGEMENT AGREEMENT
Each Fund's investments are managed 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, 2000, the Adviser waived $12,227 of its advisory fees for the
Institutional Government Income Fund; waived $65,576 of its advisory fees and
reimbursed other operating expenses of $8,098 for the Money Market Fund; waived
$14,778 of its advisory fees, reimbursed common expenses of $22,987 and
reimbursed $1,003 of Class A expenses for the Intermediate Bond Fund; and waived
its advisory fees of $20,999 and reimbursed other operating expenses of $31,563
for the Adjustable Rate U.S. Government Securities Fund.
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 or for each class of
shares of a Fund, as applicable. In addition, each Fund pays CFS 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 net asset levels, of $3,000 from the Short Term Government
Income Fund, $2,000 from each of the Institutional Government Income Fund, Money
Market Fund, Intermediate Bond Fund and Intermediate Term Government Income Fund
and $2,500 from the Adjustable Rate U.S. Government Securities Fund. In
addition, each Fund pays CFS 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 $167 and $1,142
from underwriting and broker commissions on the sale of shares of the
Intermediate Bond Fund and Intermediate Term Government Income Fund,
respectively, for the six months ended March 31, 2000.
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 average daily net assets attributable to such shares,
except for the Institutional Government Income Fund and Class C shares of the
Intermediate Bond Fund for which the annual limitation is 0.10% and 1.00% of
average daily net assets, respectively.
Countrywide Investments - 21
<PAGE>
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:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
INTERMEDIATE BOND FUND INTERMEDIATE TERM
GOVERNMENT
CLASS A CLASS C INCOME FUND
----------------------------------------------------------------------------------------
SIX MONTHS PERIOD SIX MONTHS
ENDED YEAR ENDED ENDED YEAR
MARCH 31, ENDED MARCH 31, MARCH 31, ENDED
2000 SEPT. 30, 2000(A) 2000 SEPT. 30,
(000's) (UNAUDITED) 1999 (UNAUDITED) (UNAUDITED) 1999
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares sold ..................... 11 750 1 459 1,170
Shares reinvested ............... 13 72 -- 97 213
Shares redeemed ................. (801) (1,844) -- (1,301) (1,614)
----------------------------------------------------
Net increase (decrease) in shares
outstanding ............. (777) (1,022) 1 (745) (231)
Shares outstanding, beginning
of period ............... 1,236 2,258 -- 4,357 4,588
----------------------------------------------------
Shares outstanding, end of period 459 1,236 1 3,612 4,357
====================================================
----------------------------------------------------------------------------------------
</TABLE>
(A) Represents the period from the initial public offering (March 20, 2000)
through March 31, 2000.
--------------------------------------------------------------------------------
ADJUSTABLE RATE
U.S. GOVERNMENT
SECURITIES FUND
--------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
MARCH 31, ENDED
2000 SEPT. 30,
(000's) (UNAUDITED) 1999
--------------------------------------------------------------------------------
Shares sold ............................................. 249 429
Shares reinvested ....................................... 22 48
Shares redeemed ......................................... (584) (677)
-----------------
Net decrease in shares outstanding ...................... (313) (200)
Shares outstanding, beginning of period ................. 895 1,095
-----------------
Shares outstanding, end of period ....................... 582 895
=================
--------------------------------------------------------------------------------
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.
22 - Countrywide Investments
<PAGE>
SHORT TERM GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000 (UNAUDITED)
================================================================================
PAR MARKET
VALUE VALUE
(000's) U.S. TREASURY OBLIGATIONS-- 21.4% (000's)
--------------------------------------------------------------------------------
$ 5,000 U.S. Treasury Notes, 6.375%, 5/15/00 ............. $ 5,006
3,000 U.S. Treasury Notes, 5.50%, 5/31/00 .............. 2,999
4,000 U.S. Treasury Notes, 5.875%, 6/30/00 ............. 4,005
4,000 U.S. Treasury Notes, 6.125%, 7/31/00 ............. 4,008
5,000 U.S. Treasury Notes, 6.00%, 8/15/00 .............. 5,005
4,000 U.S. Treasury Notes, 6.25%, 8/31/00 .............. 4,008
4,000 U.S. Treasury Notes, 5.75%, 11/15/00 ............. 3,988
2,000 U.S. Treasury Notes, 7.750%, 2/15/01 ............. 2,024
---------- ----------
$ 31,000 TOTAL U.S. TREASURY OBLIGATIONS
========== (Amortized Cost $31,043) ...................... $ 31,043
----------
--------------------------------------------------------------------------------
FACE MARKET
AMOUNT VALUE
(000's) REPURCHASE AGREEMENTS (NOTE A)-- 78.2% (000's)
--------------------------------------------------------------------------------
$ 23,000 Morgan Stanley Dean Witter, Inc., 6.13%, dated
3/31/00, due 4/3/00, repurchase proceeds $23,012 $ 23,000
11,000 Morgan Stanley Dean Witter, Inc., 6.09%, dated
3/27/00, due 4/3/00, repurchase proceeds $11,013 11,000
31,000 Prudential Securities, Inc., 6.08%, dated 3/31/00,
due 4/3/00, repurchase proceeds $31,016 ....... 31,000
23,000 Nesbitt Burns Securities, Inc., 6.08%, dated
3/31/00, due 4/3/00, repurchase proceeds $20,012 23,000
17,000 BancOne, Inc., 6.07%, dated 3/31/00, due 4/3/00,
repurchase proceeds $17,009 .................. 17,000
8,602 Nesbitt Burns Securities, Inc., 6.05%, dated
---------- 3/31/00, due 4/3/00, repurchase proceeds $8,606 8,602
----------
$ 113,602 TOTAL REPURCHASE AGREEMENTS
========== (Cost $113,602) $ 113,602
----------
TOTAL INVESTMENT SECURITIES AND REPURCHASE
AGREEMENTS-- 99.6% ............................ $ 144,645
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.4% ..... 576
----------
NET ASSETS-- 100.0% .............................. $ 145,221
==========
See accompanying notes to portfolios of investments and notes to financial
statements.
Countrywide Investments - 23
<PAGE>
INSTITUTIONAL GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000 (UNAUDITED)
================================================================================
PAR MARKET
VALUE VALUE
(000's) INVESTMENT SECURITIES-- 55.1% (000's)
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY ISSUES-- 50.0%
$ 165 FHLB, 5.00%, 4/5/00 .............................. $ 165
250 FNMA Medium Term Notes, 6.56%, 4/10/00 ........... 250
150 FNMA, 9.05%, 4/10/00 ............................. 150
1,000 FHLB Floating Rate Notes, 6.375%, 4/14/00 (Note B) 1,000
235 FHLB, 5.00%, 4/14/00 ............................. 235
200 FNMA Medium Term Notes, 5.52%, 4/17/00 ........... 200
285 FFCB, 4.75%, 4/20/00 ............................. 285
480 FHLB, 4.97%, 4/20/00 ............................. 480
370 FHLB, 7.01%, 4/20/00 ............................. 370
1,300 FNMA Medium Term Notes, 5.58%, 4/24/00 ........... 1,300
200 FHLB, 6.84%, 4/25/00 ............................. 200
500 FHLB, 5.01%, 4/28/00 ............................. 500
171 FFCB, 6.88%, 5/1/00 .............................. 171
500 FHLB, 5.93%, 5/12/00 ............................. 500
265 FHLMC, 6.395%, 5/16/00 ........................... 265
150 FNMA Medium Term Notes, 6.41%, 5/16/00 ........... 150
200 FHLB, 5.125%, 5/19/00 ............................ 200
400 FNMA Medium Term Notes, 5.72%, 5/22/00 ........... 400
500 FNMA Medium Term Notes, 6.41%, 5/22/00 ........... 500
400 FHLB, 5.26%, 5/26/00 ............................. 399
390 FHLB, 5.625%, 6/2/00 ............................. 390
494 FNMA Medium Term Notes, 6.20%, 6/6/00 ............ 494
215 FHLB, 5.415%, 6/14/00 ............................ 215
200 FNMA Medium Term Notes, 6.25%, 6/16/00 ........... 200
125 FHLB, 6.28%, 6/20/00 ............................. 125
500 FFCB, 6.67%, 6/26/00 ............................. 501
1,000 SLMA Floating Rate Notes, 6.547%, 6/30/00 (Note B) 1,000
300 FNMA Medium Term Notes, 5.75%, 7/7/00 ............ 300
800 FHLB, 5.89%, 7/24/00 ............................. 800
950 FNMA Medium Term Notes, 5.56%, 7/24/00 ........... 948
160 FNMA Medium Term Notes, 5.50%, 7/26/00 ........... 160
700 SLMA Floating Rate Notes, 6.385%, 7/27/00 (Note B) 700
600 FHLB, 5.71%, 8/9/00 .............................. 599
1,000 SLMA Floating Rate Notes, 6.585%, 8/10/00 (Note B) 1,000
400 FNMA Medium Term Notes, 6.33%, 8/11/00 ........... 400
870 FNMA Medium Term Notes, 6.36%, 8/16/00 ........... 870
125 FHLB, 5.465%, 8/18/00 ............................ 125
200 FHLB, 5.56%, 8/24/00 ............................. 199
150 FHLB, 6.455%, 9/5/00 ............................. 150
150 FNMA, 9.20%, 9/11/00 ............................. 152
275 FNMA Medium Term Notes, 5.97%, 10/2/00 ........... 274
350 FNMA Medium Term Notes, 6.29%, 10/4/00 ........... 350
200 FHLB, 5.835%, 10/16/00 ........................... 199
110 FNMA Medium Term Notes, 6.05%, 10/20/00 .......... 110
600 Tennessee Valley Authority, 6.00%, 11/1/00 ....... 599
500 FNMA Medium Term Notes, 5.90%, 11/20/00 .......... 498
1,000 FHLMC, 5.99%, 12/6/00 ............................ 996
24 - Countrywide Investments
<PAGE>
INSTITUTIONAL GOVERNMENT INCOME FUND (CONTINUED)
================================================================================
PAR MARKET
VALUE VALUE
(000's) INVESTMENT SECURITIES-- 55.1% (000's)
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY ISSUES-- 50.0% (CONTINUED)
$ 1,500 FNMA, 8.25%, 12/18/00 ............................ $ 1,519
660 SLMA, 4.80%, 12/18/00 ............................ 653
1,000 FNMA Medium Term Notes, 5.42%, 1/23/01 ........... 992
1,000 FNMA Medium Term Notes, 5.60%, 2/2/01 ............ 994
---------- ----------
$ 24,245 TOTAL U.S. GOVERNMENT AGENCY ISSUES
---------- (Amortized Cost $24,232) $ 24,232
----------
VARIABLE RATE DEMAND NOTE (NOTE C)-- 5.1%
$ 2,500 Illinois Student Loan Assistance Commission,
---------- Student Loan Rev., Ser. C, 6.10%, 12/1/22,
Guarantor SLMA
(Amortized Cost $2,500) ....................... $ 2,500
----------
$ 26,745 TOTAL INVESTMENT SECURITIES
========== (Amortized Cost $26,732) ...................... $ 26,732
----------
--------------------------------------------------------------------------------
FACE MARKET
VALUE VALUE
(000's) (000's)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS (NOTE A)-- 44.0%
$ 5,000 Morgan Stanley Dean Witter, Inc. 6.11%, dated
3/27/00, due 4/3/00, repurchase proceeds $5,006 $ 5,000
6,000 Morgan Stanley Dean Witter, Inc., 6.13%, dated
3/31/00, due 4/3/00, repurchase proceeds $6,003 6,000
5,293 Nesbitt Burns Securities, Inc., 6.05%, dated
3/31/00, due 4/3/00, repurchase proceeds $5,296 5,293
5,000 Prudential Securities, Inc., 6.08%, dated 3/31/00,
---------- due 4/3/00, repurchase proceeds $5,003 ........ 5,000
----------
$ 21,293 TOTAL REPURCHASE AGREEMENTS
========== (Cost $21,293) ................................ $ 21,293
----------
TOTAL INVESTMENT SECURITIES AND REPURCHASE
AGREEMENTS-- 99.1% ............................ $ 48,025
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.9% ..... 417
----------
NET ASSETS-- 100.0% .............................. $ 48,442
==========
See accompanying notes to portfolios of investments and notes to financial
statements.
Countrywide Investments - 25
<PAGE>
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000 (UNAUDITED)
================================================================================
PAR MARKET
VALUE VALUE
(000's) INVESTMENT SECURITIES-- 99.3% (000's)
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (NOTE C)-- 66.2%
$ 500 Brownsburg, IN, EDR (Zanetis Ent.), 6.40%, 6/1/03 $ 500
855 HDR Power Systems, Inc., 6.40%, 6/1/03 ........... 855
1,120 Tell-Schipper Properties, 6.40%, 10/1/03 ......... 1,120
1,380 Nassau Co., NY, IDA Rev., 6.15%, 5/17/05 ......... 1,380
601 Illinois Development Finance Auth. IDR
(Landcomp Corp.), 6.20%, 7/1/05 ............... 601
610 Monroe Co., NY, IDA Rev., Ser. B, 6.28%, 6/1/08 .. 610
765 Diamond Development Group, Inc., Ser. 1996,
6.40%, 9/1/08 ................................. 765
1,165 North Greenbush, NY, IDA Rev. (Virogenetics Corp.),
6.40%, 11/1/08 ................................ 1,165
780 Vista Funding Corp., 6.20%, 9/1/11 ............... 780
1,000 Columbia Ridge Orchards LLC, Ser. 1998,
6.10%, 6/1/13 ................................. 1,000
850 St. Louis Park, MN, Ser. B, 6.20%, 2/1/18 ........ 850
700 Washington St. HFA Rev., Ser. B, 6.20%, 11/1/21 .. 700
1,600 Westwood Baptist Church, OH, 6.25%, 5/1/24 ....... 1,600
1,200 Waukesha, WI, Health Systems Rev., 6.15%, 8/15/26 1,200
420 Ontario, CA, Rev. (Mission Oaks), 6.31%, 10/1/26 . 420
1,500 ABAG Fin. Auth. for Nonprofit Corp., CA, COP,
Ser. D, 6.25%, 10/1/27 ........................ 1,500
1,300 Illinois HFA Rev., Ser. 1998B (Elmhurst Memorial),
6.30%, 1/1/28 ................................. 1,300
1,190 Washington St. HFA Rev. (Summer Ridge), Ser. B,
6.15%, 12/1/29 ................................ 1,190
380 Bexar Co., TX, HFA Rev. (Mitchell Village),
Ser. A-2, 6.20%, 2/15/30 ...................... 380
975 Corp. Grove Mgmt. LLC, Ser. 1998, 6.20%, 12/1/48 . 975
---------- ----------
$ 18,891 TOTAL VARIABLE RATE DEMAND NOTES
---------- (Amortized Cost $18,891) ...................... $ 18,891
----------
FIXED RATE REVENUE BONDS-- 4.8%
$ 315 New Britain, CT, GO, 5.32%, 5/1/00 ............... $ 315
200 Jefferson Co., AL, Sewer Rev., 6.46%, 2/1/01 ..... 200
525 New Jersey Sports and Exposition Auth.,
Ser. B, 7.00%, 3/1/01 ......................... 525
330 Hamilton, OH, Garage Improvement Rev.,
---------- Ser. 2000, 7.22%, 3/21/01 ..................... 331
----------
$ 1,370 TOTAL FIXED RATE REVENUE BONDS
---------- (Amortized Cost $1,371) ....................... $ 1,371
----------
CORPORATE NOTES-- 24.7%
$ 100 Florida Power & Light, 5.375%, 4/1/00 ............ $ 100
245 GMAC, 6.625%, 4/24/00 ............................ 245
515 Gannett Co., 5.85%, 5/1/00 ....................... 515
210 Security Pacific Corp., 6.00%, 5/1/00 ............ 210
300 Bankers Trust Corp., 5.85%, 5/11/00 .............. 300
330 American General Finance Corp., 6.78%, 5/15/00 ... 330
150 Duke Energy Corp., 7.00%, 6/1/00 ................. 150
600 International Lease Finance Corp., 6.625%, 6/1/00 600
315 Mellon Financial Co., 6.30%, 6/1/00 .............. 315
175 Pacific Gas & Electric, 6.625%, 6/1/00 ........... 175
150 Wal-Mart Stores, Inc., 5.85%, 6/1/00 ............. 150
100 GMAC, 7.50%, 6/9/00 .............................. 100
500 American General Finance Corp., 6.375%, 6/15/00 .. 500
262 Citigroup, Inc., 6.125%, 6/15/00 ................. 262
100 Household Finance Corp., 6.00%, 6/15/00 .......... 100
26 - Countrywide Investments
<PAGE>
MONEY MARKET FUND (CONTINUED)
================================================================================
PAR MARKET
VALUE VALUE
(000's) INVESTMENT SECURITIES-- 99.3% (CONTINUED) (000's)
--------------------------------------------------------------------------------
$ 350 Beneficial Corp., 6.45%, 6/19/00 ................. $ 350
100 Merrill Lynch & Co., 6.47%, 6/27/00 .............. 100
150 Bear Stearns & Co., Inc., 6.50%, 7/5/00 .......... 150
500 Bear Stearns & Co., Inc., 6.75%, 8/15/00 ......... 501
285 Chrysler Financial Co. LLC, 6.625%, 8/15/00 ...... 285
185 Ford Motor Credit Co., 6.85%, 8/15/00 ............ 185
255 Morgan Stanley, Dean Witter, Discover & Co.,
6.75%, 8/15/00 ................................ 255
300 GMAC, 6.10%, 9/15/00 ............................. 299
300 Penske Truck Leasing Co., 6.57%, 9/19/00 ......... 300
190 Ford Motor Credit Co., 6.375%, 10/6/00 ........... 190
100 Merrill Lynch & Co., 6.375%, 10/17/00 ............ 100
124 Norwest Corp., 5.625%, 2/5/01 .................... 123
150 First Interstate, 10.875%, 4/15/01 ............... 155
---------- ----------
$ 7,041 TOTAL CORPORATE NOTES
---------- (Amortized Cost $7,045) ....................... $ 7,045
----------
COMMERCIAL PAPER-- 3.6%
$ 1,038 GMFC, 4/3/00,
---------- (Amortized Cost $1,038) ....................... $ 1,038
----------
$ 28,340 TOTAL INVESTMENT SECURITIES-- 99.3%
========== (Amortized Cost $28,345) ...................... $ 28,345
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.7% ..... 202
----------
NET ASSETS-- 100.0% .............................. $ 28,547
==========
See accompanying notes to portfolios of investments and notes to financial
statements.
Countrywide Investments - 27
<PAGE>
INTERMEDIATE BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000 (UNAUDITED)
================================================================================
PAR MARKET
VALUE VALUE
(000's) INVESTMENT SECURITIES-- 98.5% (000's)
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY ISSUES-- 23.3%
$ 1,000 FHLMC, 6.25%, 10/15/02
---------- (Amortized Cost $984) ......................... $ 984
----------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES-- 41.9%
$ 905 FNMA #313386, 7.00%, 3/1/12 ...................... $ 889
965 FHLMC #C21763, 6.00%, 2/1/29 ..................... 880
---------- ----------
$ 1,870 TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES
---------- (Amortized Cost $1,850) ....................... $ 1,769
----------
CORPORATE BONDS-- 30.9%
$ 380 Bankers Trust Corp., 7.25%, 1/15/03 .............. $ 377
500 AT&T Corp., 5.625%, 3/15/04 ...................... 472
66 Kaiser Permanente, 9.55%, 7/15/05 ................ 71
50 Berkley (W.R.) Corp., 9.875%, 5/15/08 ............ 55
10 Union Camp Corp., 8.625%, 4/15/16 ................ 10
35 Kraft, Inc., 8.50%, 2/15/17 ...................... 36
150 Deere & Co., 8.95%, 6/15/19 ...................... 157
120 Jersey Central Power & Light Co., 9.20%, 7/1/21 .. 124
---------- ----------
$ 1,311 TOTAL CORPORATE BONDS
---------- (Amortized Cost $1,378) ....................... $ 1,302
----------
COMMERCIAL PAPER-- 2.4%
$ 102 Cooperative Assoc. Trac, 6.30%, 4/3/00
---------- (Amortized Cost $102) ......................... $ 102
----------
$ 4,283 TOTAL INVESTMENT SECURITIES-- 98.5%
========== (Amortized Cost $4,314) ....................... $ 4,157
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.5% ..... 62
----------
NET ASSETS-- 100.0% .............................. $ 4,219
==========
See accompanying notes to portfolios of investments and notes to financial
statements.
28 - Countrywide Investments
<PAGE>
INTERMEDIATE TERM GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000 (UNAUDITED)
================================================================================
PAR MARKET
VALUE VALUE
(000's) INVESTMENT SECURITIES-- 98.6% (000's)
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS-- 16.7%
$ 1,000 U.S. Treasury Notes, 7.75%, 2/15/01 .............. $ 1,011
2,000 U.S. Treasury Notes, 7.50%, 11/15/01 ............. 2,030
2,000 U.S. Treasury Notes, 5.875%, 11/15/04 ............ 1,964
1,000 U.S. Treasury Bonds, 7.50%, 11/15/16 ............. 1,132
---------- ----------
$ 6,000 TOTAL U.S. TREASURY OBLIGATIONS
---------- (Amortized Cost $6,113) ....................... $ 6,137
----------
U.S. GOVERNMENT AGENCY ISSUES-- 54.5%
$ 2,565 FHLB Discount Note, 04/3/00 ...................... $ 2,565
1,000 SLMA Medium Term Notes, 7.50%, 7/2/01 ............ 1,006
2,000 FHLB Notes, 7.31%, 7/6/01 ........................ 2,009
2,000 FHLB Medium Term Notes, 8.43%, 8/1/01 ............ 2,036
2,000 FNMA Notes, 7.55%, 4/22/02 ....................... 2,021
1,400 FNMA Notes, 6.26%, 1/24/06 ....................... 1,339
2,500 FNMA Notes, 6.21%, 1/26/06 ....................... 2,386
2,000 FNMA Notes, 6.06%, 2/3/06 ........................ 1,898
1,000 FHLMC Notes, 6.345%, 2/15/06 ..................... 959
1,000 FNMA Notes, 6.50%, 4/29/09 ....................... 934
1,000 FNMA Notes, 6.375%, 6/15/09 ...................... 945
2,000 FNMA Notes, 6.96%, 9/5/12 ........................ 1,932
---------- ----------
$ 20,465 TOTAL U.S. GOVERNMENT AGENCY ISSUES
---------- (Amortized Cost $20,377) ...................... $ 20,030
----------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES-- 27.4%
$ 2,673 FNMA #381464, 6.11%, 4/1/09 ...................... $ 2,475
1,449 GNMA #1995-6 Class B, 7.15%, 07/20/21 ............ 1,446
1,788 GNMA #455136, 7.00%, 6/15/28 ..................... 1,732
1,862 FHLMC #C19286, 6.00%, 12/1/28 .................... 1,699
2,873 GNMA #482725, 6.50%, 3/15/29 ..................... 2,713
---------- ----------
$ 10,645 TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES
---------- (Amortized Cost $10,617) ...................... $ 10,065
----------
$ 37,110 TOTAL INVESTMENT SECURITIES-- 98.6%
========== (Amortized Cost $37,107) ...................... $ 36,232
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.4% ..... 518
----------
NET ASSETS-- 100.0% .............................. $ 36,750
==========
See accompanying notes to portfolios of investments and notes to financial
statements.
Countrywide Investments - 29
<PAGE>
ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000 (UNAUDITED)
================================================================================
PAR MARKET
VALUE VALUE
(000's) INVESTMENT SECURITIES-- 89.5% (000's)
--------------------------------------------------------------------------------
ADJUSTABLE RATE U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES (NOTE D)-- 5.1%
$ 280 GNMA #8913, 6.75%, 7/20/26
---------- (Amortized Cost $281) ......................... $ 282
----------
U.S. GOVERNMENT AGENCY ISSUES-- 84.4%
$ 4,710 FHLMC Discount Notes, 4/3/00
---------- (Amortized Cost $4,708) ....................... $ 4,710
----------
$ 4,990 TOTAL INVESTMENT SECURITIES-- 89.5%
========== (Amortized Cost $4,989) ....................... $ 4,992
OTHER ASSETS IN EXCESS OF LIABILITIES -- 10.5% ... 591
----------
NET ASSETS-- 100.0% .............................. $ 5,583
==========
See accompanying notes to portfolios of investments and notes to financial
statements.
30 - Countrywide Investments
<PAGE>
NOTES TO PORTFOLIO OF INVESTMENTS
MARCH 31, 2000 (UNAUDITED)
================================================================================
A. REPURCHASE AGREEMENTS
Repurchase agreements are fully collateralized by U.S. Government obligations.
B. FLOATING RATE NOTES
A floating rate note is a security whose terms provide for the periodic
readjustment of its interest rate whenever a specified interest rate index
changes and which, at any time, can reasonably be expected to have a market
value that approximates its par value. The interest rates shown represent the
effective rates as of the report date. The dates shown represent the scheduled
maturity dates.
C. VARIABLE RATE DEMAND NOTES
A variable rate demand note is a security payable on demand at par whose terms
provide for the periodic readjustment of its interest rate on set dates and
which, at any time, can reasonably be expected to have a market value that
approximates its par value. The interest rates shown represent the effective
rates as of the report date. The dates shown represent the scheduled maturity
dates.
D. ADJUSTABLE RATE U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES
Adjustable rate U.S. Government agency mortgage-backed securities are
mortgage-related securities created from pools of adjustable rate mortgages
which are issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities. Such adjustable rate mortgage
securities have interest rates that reset at periodic intervals based on a
specified interest rate index. The interest rates shown represent the effective
rates as of the report date. The dates shown represent the scheduled maturity
date.
PORTFOLIO ABBREVIATIONS:
EDR - Economic Development Revenue
FFCB - Federal Farm Credit Bank
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
GO - General Obligation
HFA - Housing Finance Authority
IDA - Industrial Development Authority
IDR - Industrial Development Revenue
SLMA - Student Loan Marketing Association
Countrywide Investments - 31
<PAGE>
RESULTS OF SPECIAL MEETING OF SHAREHOLDERS
APRIL 19, 2000
================================================================================
On April 19, 2000, a Special Meeting of Shareholders of Countrywide Investment
Trust (the Trust) was held (1) to approve or disapprove new investment advisory
agreements with Touchstone Advisors, Inc. to become effective May 1, 2000, (2)
to approve or disapprove new sub-advisory agreements with Fort Washington
Investment Advisors, Inc. to become effective May 1, 2000. (3) to ratify or
reject the selection of Ernst & Young LLP as the Trust's independent public
accountants for the fiscal year ending September 30, 2000. The total number of
shares of the Trust present by proxy represented 63.1% of the shares entitled to
vote at the meeting. Each of the matters submitted to shareholders was approved.
The results of the voting for or against the approval of the new investment
advisory agreements by each Fund was as follows:
--------------------------------------------------------------------------------
NUMBER OF SHARES
------------------------------------------
FOR AGAINST ABSTAIN
--------------------------------------------------------------------------------
Short Term Government Income Fund 70,438,194 403,577 700,003
Institutional Government Income Fund 42,710,010 78,486 68,137
Money Market Fund 14,043,813 417,858 610,055
Intermediate Bond Fund 297,392 5,661 4,547
Intermediate Term
Government Income Fund 1,815,607 21,358 26,110
--------------------------------------------------------------------------------
The results of the voting for or against the approval of the new sub-advisory
agreements by each Fund was as follows:
--------------------------------------------------------------------------------
NUMBER OF SHARES
------------------------------------------
FOR AGAINST ABSTAIN
--------------------------------------------------------------------------------
Short Term Government Income Fund 70,405,549 417,457 718,768
Institutional Government Income Fund 42,711,423 78,486 66,724
Money Market Fund 13,683,842 771,183 616,701
Intermediate Bond Fund 297,392 5,661 4,547
Intermediate Term
Government Income Fund 1,808,876 22,032 32,167
--------------------------------------------------------------------------------
The results of the voting for or against the ratification of Ernst Young LLP as
independent public accountants by each Fund was as follows:
--------------------------------------------------------------------------------
NUMBER OF SHARES
------------------------------------------
FOR AGAINST ABSTAIN
--------------------------------------------------------------------------------
Short Term Government Income Fund 70,853,399 178,093 510,281
Institutional Government Income Fund 42,783,369 6,494 66,770
Money Market Fund 14,338,307 112,942 620,476
Intermediate Bond Fund 300,403 2,246 4,951
Intermediate Term
Government Income Fund 1,822,369 18,936 21,771
--------------------------------------------------------------------------------
32 - Countrywide Investments
<PAGE>
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Countrywide Investments - 33
<PAGE>
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34 - Countrywide Investments
<PAGE>
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<PAGE>
COUNTRYWIDE INVESTMENT TRUST
---------------------------------------
312 Walnut St., 21st Floor
Cincinnati, Ohio 45202-4094
www.countrywideinvestments.com
Nationwide: (Toll Free) 800-543-8721
Cincinnati: 629-2000
SHAREHOLDER SERVICES
---------------------------------------
Nationwide: (Toll Free) 800-543-0407
Cincinnati: 629-2050
BOARD OF TRUSTEES
---------------------------------------
William O. Coleman
Phillip R. Cox
H. Jerome Lerner
Robert H. Leshner
Jill T. McGruder
Oscar P. Robertson
Nelson Schwab, Jr.
Robert E. Stautberg
Joseph S. Stern, Jr.
INVESTMENT ADVISER/MANAGER
---------------------------------------
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.
[GRAPHIC OMITTED]
