GIT Equity Trust
Special Growth Portfolio
Select Growth Portfolio
Equity Income Portfolio
1655 Ft. Myer Drive
Arlington, Virginia 22209
703-528-3600
Semi-Annual Report
September 30, 1996
(Unaudited)
Letter to Shareholders
November 15, 1996
Dear Shareholder:
During the six-month period ended September 30, 1996, U.S. equities continued
to generate robust returns. For this period, the S&P 500 (a large company
stock index) produced a 7.7% total return, while the Russell 2000 (an index of
smaller stocks) had a return of 5.5%.
Although these returns suggest a rather quiet six months, the market was
actually quite interesting. The stock market experienced a "mini correction"
during July, erasing much of the gain achieved to that point in 1996. This
correction was caused by the expectation of slower corporate earnings growth
and rising interest rates. As these fears proved unfounded and interest rates
began to fall in August, the market made a dramatic reversal and moved to new
highs.
The Select Growth Portfolio achieved a total return of 9.8% for the six-month
period. Although the fund is well diversified across economic sectors, an
emphasis on financial and technology companies continued to drive investment
results. We like these companies because of their strong fundamental factors,
including high operating margins and return on equity, strong earnings growth,
good balance sheets and relatively low valuations. We still consider these
attributes to be a recipe for continued, long-term success.
Our Equity Income Portfolio returned 5.63% for the six-month period. With many
of the stocks in this portfolio having above average sensitivity to changes in
interest rates, the downward trend in interest rates which began at the end of
the summer has enhanced the fund's returns. In recent months, we have worked
gradually to restructure the portfolio to provide greater growth potential,
while maintaining the fund's strong income component. New acquisitions include
ConAgra, Kimberly-Clark, Schering Plough and Wal Mart Stores.
The small capitalization market in which the Special Growth Portfolio operates
was hit most sharply by the correction in July. The NASDAQ Composite, for
example, dropped over 15% from its peak on June 5 to its trough on July 15,
1996. Nonetheless, Special Growth lost only 0.89% for the six months ended
September 30. We have continued to focus our efforts on finding stocks with
rapid earnings growth. Recent purchases for the portfolio include Leasing
Solutions, Littlefuse, and Sybron International.
We are pleased with the progress that has been made to implement strategies
that will continue to serve you well. We thank you for your continued
confidence in GIT Investment Funds.
Sincerely,
(signature)
Jay R. Sekelsky
Vice President
<PAGE>
Special Growth Portfolio
Portfolio of Investments - September 30, 1996
(Unaudited)
Number
Company of
Description Shares Value
COMMON STOCKS AND EQUIVALENTS:
76.7% of Net Assets
BUILDING AND CONSTRUCTION: 1.1%
*Central Sprinkler
Corporation Manufactures fire sprinklers for
commercial, industrial and
residential properties 9,000 $171,000
COMMERCIAL SERVICES: 1.3%
*Right Management
Consultants Outplacement consulting firm 8,500 200,813
COMPUTERS - SOFTWARE AND SERVICES: 16.3%
American List
Corporation Compiles computerized lists of high
school and college students 17,400 471,975
*CFI Proservices,
Inc. Supplies compliance software 15,350 297,406
*Data Research
Associates, Inc. Provides libraries with automation systems
and electronic-networking
services 27,000 372,938
*Datastream Systems,
Inc. Develops, markets, sells and supports
Microsoft Windows 10,000 305,000
Fair Issac & Company,
Inc. Develops statistical tools and
scoring algorithms 12,000 465,000
Jack Henry &
Associates Develops and installs integrated
computer systems 10,000 315,625
*IKOS Systems,
Inc. Supplies high-performance, mixed-level
hardware and software 15,000 300,937
COSMETICS: 2.4%
Alberto Culver Company,
A Shares Manufactures personal care
products 10,000 366,250
ELECTRONICS - GENERAL: 8.1%
*IFR Systems, Inc.Manufactures communications
test equipment 55,550 867,968
*Littlefuse, Inc. Manufactures fuses and
circuits 10,000 390,000
ELECTRONICS - SEMICONDUCTORS: 6.1%
*Atmel CorporationDesigns, manufactures and markets memory
and logic circuits 9,000 277,313
*Credence Systems
Corporation Designs, manufactures, sells and services
automatic test equipment 14,000 218,750
*KLA Instruments
Corporation Manufactures yield-management and process-
monitoring systems 20,000 453,750
FINANCIAL SERVICES: 4.5%
Advanta Corporation,
A Shares Originates credit cards and
mortgages 10,000 459,375
*Leasing Solutions,
Inc. Leases information equipment 8,200 233,188
HOMEBUILDING: 1.5%
Continental Homes Holding
Corporation Designs and constructs
single-family homes 13,000 232,375
HOME FURNISHINGS: 3.1%
Lancaster Colony
Corporation Manufactures auto parts, specialty foods,
glassware and candles 12,700 481,013
INSURANCE: 12.7%
Allied Group, Inc.Underwrites property and
casualty insurance 11,600 443,700
Frontier Insurance
Group, Inc. Underwrites general liability, workers' compensation
and property insurance 15,400 614,074
SunAmerica, Inc. Diversified insurance and financial
services company 10,000 345,000
*UICI Underwrites life, accident and
health insurance 21,600 560,250
MANUFACTURING: 2.4%
*Koala CorporationManufactures and markets child
protection products 22,000 365,750
MEDICAL SUPPLIES AND SERVICES: 7.3%
*RoTech Medical
Corporation Home healthcare services 25,000 410,938
*Sybron International
Corporation Manufactures laboratory and
dental supplies 18,550 537,950
*Utah Medical
Products, Inc. Manufactures disposable
medical products 16,000 187,000
OIL RELATED: 2.3%
*Input/Output,
Inc. Designs and manufactures 3-dimensional seismic
data acquisition systems 12,200 362,950
PUBLISHING: 4.9%
*Advanced Marketing
Services, Inc. Publisher of general interest
books 25,500 269,859
Banta Corporation Publisher of educational and
general books 21,350 488,381
RETAIL - OFFICE SUPPLIES: 2.0%
*OfficeMax, Inc. Retail office product stores 21,800 305,200
TELECOMMUNICATIONS: 0.6%
*Fastcomm Communications
Corporation Designs, manufactures, markets and services
telecommunications systems 8,000 91,000
TOTAL COMMON STOCKS (Cost $9,725,877)= 11,862,728
REPURCHASE AGREEMENT: 23.0% of Net Assets
With Donaldson, Lufkin & Jenrette Securities Corporation issued 9/30/96 at
5.65%, due 10/1/96, collateralized by $3,621,188 in United States Treasury
Notes due 8/15/97. Proceeds at maturity are $3,552,557.
(Cost $3,552,000)= 3,552,000
TOTAL INVESTMENTS (Cost $13,277,877)= $15,414,728
See Notes to Portfolios of Investments.
<PAGE>
Select Growth Portfolio
Portfolio of Investments - September 30, 1996
(Unaudited)
Number
of
Shares Value
COMMON STOCKS: 93.1% of Net Assets
AUTOMOTIVE: 1.2%
Borg-Warner Automotive, Inc. 2,500 $88,750
BANKING AND FINANCIAL SERVICES: 10.3%
Green Tree Financial Corporation 8,400 329,699
Merrill Lynch & Company, Inc. 1,500 98,438
Norwest Corporation 3,000 122,625
Travelers Group, Inc. 4,800 235,800
CAPITAL GOODS: 2.4%
General Electric Company 2,000 182,000
CHEMICALS: 3.1%
Morton International, Inc. 6,000 238,500
COMPUTERS - HARDWARE AND PERIPHERALS: 9.9%
*Cisco Systems, Inc. 4,000 248,250
*Sun Microsystems, Inc. 4,000 248,250
*U.S. Robotics Corporation 4,000 259,000
COMPUTERS - SOFTWARE AND SERVICES: 6.5%
Computer Associates International, Inc.3,000 179,250
Reynolds & Reynolds Company 7,000 182,875
*SunGard Data Systems, Inc. 3,000 135,750
CONSUMER PRODUCTS: 1.5%
Procter & Gamble Company 1,200 117,000
ELECTRONICS - GENERAL: 1.3%
*Teradyne, Inc. 6,000 99,750
ELECTRONICS - SEMICONDUCTORS: 4.2%
*Applied Materials, Inc. 4,800 132,900
Intel Corporation 2,000 190,875
FOOD PROCESSING: 6.6%
ConAgra, Inc. 5,725 281,956
Dole Food Company 5,200 218,400
INSURANCE: 3.6%
SunAmerica, Inc. 8,000 276,000
HOTELS & MOTELS: 2.5%
La Quinta Inns, Inc. 9,800 191,100
HOUSING AND CONSTRUCTION: 6.5%
Clayton Homes, Inc. 11,912 262,064
Oakwood Homes Corp. 8,400 231,000
MEDICAL SUPPLIES AND SERVICES: 13.4%
ADAC Laboratories 3,500 69,781
Columbia/HCA Healthcare Corporation 4,400 250,250
Olsten Corporation 3,750 93,281
*Safeskin Corporation 4,000 139,000
*St. Jude Medical, Inc. 5,350 216,341
*Sybron International Corporation 8,850 256,650
PHARMACEUTICALS: 6.5%
Millipore Corporation 5,850 231,075
Schering-Plough Corporation 4,250 261,375
RESTAURANTS: 1.9%
McDonald's Corporation 3,000 142,125
RETAIL-DEPARTMENT STORES: 3.5%
Wal-Mart Stores, Inc. 10,150 267,706
RETAIL-SPECIAL LINES: 4.2%
Callaway Golf Company 2,500 85,313
Intimate Brands, Inc. 12,850 234,513
TELECOMMUNICATIONS: 1.3%
AT&T Corporation 1,000 52,250
MCI Communications Corporation 1,900 48,569
TOYS: 2.7%
Mattel, Inc. 8,000 207,000
TOTAL COMMON STOCKS (Cost $5,373,229)= 7,105,461
REPURCHASE AGREEMENT: 5.8% of Net Assets
With Donaldson, Lufkin & Jenrette Securities Corporation issued 9/30/96 at
5.65%, due 10/1/96, collateralized by $453,668 in United States Treasury
Notes due 8/15/97. Proceeds at maturity are $445,070.
(Cost $445,000)= 445,000
TOTAL INVESTMENTS (Cost $5,818,229)= $7,550,461
See Notes to Portfolios of Investments.
<PAGE>
Equity Income Portfolio
Portfolio of Investments - September 30, 1996
(Unaudited)
Number
of
Shares Value
COMMON STOCKS AND EQUIVALENTS:
94.6% of Net Assets
AUTOMOTIVE: 4.7%
Chrysler Corporation 4,700 $134,538
Ford Motor Company 2,700 84,375
BANKING AND FINANCIAL SERVICES: 9.0%
Bank of New York Company. Inc. 4,000 117,500
Federal Home Loan Mortgage
Corporation 1,250 122,344
J.P. Morgan & Company, Incorporated 1,000 88,875
NationsBank Corporation 1,000 86,875
CHEMICALS: 5.0%
Monsanto Company 3,000 109,500
Morton International, Inc. 3,000 119,250
COMPUTERS-SOFTWARE AND SERVICES: 1.8%
American List Corporation 3,000 81,375
FOOD PROCESSING: 2.6%
ConAgra, Inc. 2,450 120,663
FOREST AND PAPER: 3.4%
Kimberly-Clark Corporation 1,800 158,625
LEASING: 2.3%
GATX Corporation 2,300 107,525
MANUFACTURING: 3.0%
Minnesota Mining & Manufacturing
Company 2,000 139,750
MEDICAL SERVICES: 2.0%
Columbia/HCA Healthcare
Corporation 1,600 91,000
NATURAL GAS: 5.5%
Tenneco, Inc. 2,000 100,250
Williams Companies, Inc. 3,046 155,345
OFFICE AND BUSINESS EQUIPMENT: 2.3%
Pitney Bowes, Inc. 2,000 105,250
PETROLEUM: 9.1%
Amoco Corporation 2,000 141,000
Chevron Corporation 2,000 125,250
Royal Dutch Petroleum Company, ADR 1,000 156,124
PHARMACEUTICALS: 8.3%
American Home Products Corporation 2,000 127,500
Pfizer, Inc. 1,400 110,775
Schering-Plough Corporation 2,400 147,600
REAL ESTATE: 4.5%
Hospitality Properties Trust 2,500 66,875
Post Properties, Inc. 1,500 54,938
Sun Communities, Inc. 3,000 85,500
RETAIL-DEPARTMENT STORES: 2.4%
Wal-Mart Stores, Inc. 4,150 109,456
TELECOMMUNICATION: 13.7%
Ameritech Corporation 1,800 94,725
Bell Atlantic Corporation 2,000 119,750
Pacific Telesis Group 2,000 67,250
Royal PTT Nederland NV, ADR 1,000 34,500
SBC Communications, Inc. 2,500 120,313
Sprint Corporation 2,000 77,750
Telecom Corporation of New Zealand
Limited, ADR 1,600 121,200
TRANSPORTATION: 3.8%
CSX Corporation 2,000 101,000
Norfolk Southern Corporation 800 73,100
UTILITIES - ELECTRIC: 5.0%
Baltimore Gas and Electric Company 4,600 120,175
Central & South West Corporation 1,500 39,000
SCANA Corporation 2,800 73,500
UTILITIES - GAS: 6.3%
Brooklyn Union Gas Company 3,000 83,625
Northwest Natural Gas Company 5,250 122,063
Washington Gas Light Company 4,000 88,000
TOTAL COMMON STOCKS AND EQUIVALENTS
(Cost $3,136,105)= 4,384,009
PREFERRED STOCKS: 1.1% of Net Assets
Chase Manhattan Corporation,
9.08% Series D 1,000 25,562
Sears, Roebuck and Co. Depository Shares,
8.88% Series 1ST 1,000 25,063
TOTAL PREFERRED STOCKS (Cost $50,000)= 50,625
REPURCHASE AGREEMENT: 5.9% of Net Assets
With Donaldson, Lufkin & Jenrette Securities Corporation issued 9/30/96 at
5.65%, due 10/1/96 collateralized by $278,318 in United States Treasury
Notes due 8/15/97. Proceeds at maturity are $273,043.
(Cost $273,000)= 273,000
TOTAL INVESTMENTS (Cost $3,459,105)= $4,707,634
Notes to Portfolios of Investments:
ADR American Depository Receipt
* Non-income producing
= Aggregate cost for federal income tax purposes and net unrealized
appreciation of investments are as follows:
Special Select Equity
Growth Growth Income
Portfolio Portfolio Portfolio
Aggregate cost $13,277,877 $5,818,229 $3,459,105
Gross unrealized
appreciation $2,602,361 $1,930,014 $1,267,553
Gross unrealized
depreciation (465,510) (197,782) (19,024)
Net unrealized
appreciation $2,136,851 $1,732,232 $1,248,529
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
Statements of Assets and Liabilities
September 30, 1996
(Unaudited)
Special Select Equity
Growth Growth Income
Portfolio Portfolio Portfolio
ASSETS
Investments, at cost $13,277,877 $5,818,229 $3,459,105
Investments, at value (Notes 1 and 2)
Investment securities $11,862,728 $7,105,461 $4,434,634
Repurchase agreement 3,552,000 445,000 273,000
Total investments 15,414,728 7,550,461 4,707,634
Cash 322 263 868
Receivables
Investment securities sold 368,028 341,490 24,635
Capital shares sold -- 187 --
Share subscriptions 2,995 600 --
Dividends and interest 2,559 2,888 13,015
Other Assets 68 224 27
Total assets 15,788,700 7,896,113 4,746,179
LIABILITIES
Payables
Investment securities purchased309,669 264,712 108,232
Dividends 7 215 3,598
Capital shares redeemed 3,677 -- --
Shares reserved for subscription 2,995 600 --
Other liabilities 47 10 --
Total liabilities 316,395 265,537 111,830
NET ASSETS (Note 5) $15,472,305 $7,630,576 $4,634,349
CAPITAL SHARES OUTSTANDING 1,204,001 346,288 230,226
NET ASSET VALUE PER SHARE $12.851 $22.035 $20.130
Statements of Operations
For the Six Months Ended September 30, 1996
(Unaudited)
Special Select Equity
Growth Growth Income
Portfolio Portfolio Portfolio
INVESTMENT INCOME (Note 1)
Interest income $ 53,302 $ 12,298 $ 7,468
Dividend income (Net of foreign tax of
$0, $0 and $1,317, respectively) 76,810 33,311 81,663
Total investment income 130,112 45,609 89,131
EXPENSES (Notes 3 and 4)
Investment advisory fees 60,287 27,872 16,982
Custodian fees 4,065 1,215 741
Professional fees 9,251 3,426 2,777
Salaries and related expenses 37,252 10,698 6,515
Securities registration and
blue sky expenses 3,116 7,361 7,402
Telephone expense 2,259 788 481
Data processing and office
equipment expenses 11,975 4,660 2,832
Office and miscellaneous
expenses 7,546 3,322 2,026
Depreciation and amortization 1,066 271 165
Reimbursement to previous advisor of
expenses incurred in prior years -- 5,245 2,089
Fees paid indirectly (116) (55) (35)
Total expenses 136,701 64,803 41,975
NET INVESTMENT INCOME (LOSS) (6,589) (19,194) 47,156
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on
investments 2,852,847 256,654 333,767
Net unrealized appreciation (depreciation)
of investments (2,945,543) 136,649 (126,782)
NET GAIN (LOSS) ON INVESTMENTS
(92,696) 393,303 206,985
TOTAL INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $(99,285) $374,109 $254,141
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Special Growth Portfolio Select Growth Portfolio Equity Income Portfolio
Six Months Ended Six Months Ended Six Months Ended
Sept. 30, 1996 Year Ended Sept. 30, 1996 Year Ended Sept. 30, 1996 Year Ended
(Unaudited) March 31, 1996 (Unaudited) March 31, 1996 (Unaudited) Mar 31, 1996
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS
Net investment income (loss) $ (6,589) $ 163,647 $ (19,194) $ (15,167) $ 47,156 $ 85,280
Net realized gain on investments 2,852,847 7,936,809 256,654 370,742 333,767 26,354
Net unrealized appreciation
(depreciation) of investments (2,945,543) (2,310,916) 136,649 1,182,208 (126,782) 851,075
Total increase in net assets
resulting from operations (99,285) 5,789,540 374,109 1,537,783 254,141 962,709
NET EQUALIZATION CREDIT (Note 1) -- -- -- -- (574) 133
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (15,132) (148,514) -- -- (65,048) (66,947)
From net capital gains (6,307,576) (1,629,234) (359,764) -- -- --
CAPITAL SHARE
TRANSACTIONS (Note 7) 4,803,294 (18,510,504) 227,565 1,102,287 6,314 131,112
TOTAL INCREASE (DECREASE)
IN NET ASSETS (1,618,699) (14,498,712) 241,910 2,640,070 194,833 1,027,007
NET ASSETS
Beginning of year 17,091,004 31,589,716 7,388,666 4,748,596 4,439,516 3,412,509
End of year 15,472,305 17,091,004 7,630,576 7,388,666 4,634,349 4,439,516
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
INCLUDED IN NET ASSETS AT THE END
OF YEAR (Note 5) (6,589) 15,132 (19,195) -- -- 18,466
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
Financial Highlights
Selected data for a share outstanding throughout each period:
1992 1993 1994 1995 1996 1996***
Special Growth Portfolio
Net asset value
beginning of
year $18.047 $19.099 $19.970 $21.110 $18.092 $20.488
Net investment
income $ 0.175 $ 0.092 $ 0.171 $ 0.152 $ 0.133 $ 0.000
Net realized &
unrealized
gains
(losses) on
securities $ 1.245 $ 1.031 $ 2.125 $ 0.190 $ 3.621 $(0.767)
Total from
investment
operations $ 1.420 $ 1.123 $ 2.296 $ 0.342 $ 3.754 $(0.767)
Distributions
from net
investment
income $(0.159) $(0.121)$(0.170)$(0.152)$(0.115)$(0.018)
Distributions
from capital
gains $(0.209) $(0.131)$(0.986)$(3.208) $(1.243)$(6.852)
Total
distribu-
tions $(0.368) $(0.252)$(1.156)$(3.360) $(1.358)$(6.870)
Net asset
value end
of year $19.099 $19.970 $21.110 $18.092 $20.488 12.851
Total return 7.92% 5.90% 11.57% 2.27% 21.22% (1.78)%**
Net assets end
of year
(thousands)$58,867 $38,911 $34,931 $31,590 $17,091 $15,472
Ratio of
expenses
to average
net assets 1.39% 1.35% 1.45% 1.30% 1.41% 1.70%**
Ratio of net
investment
income to
average net
assets* 0.95% 0.44% 0.75% 0.76% 0.56% (0.08)%**
Portfolio
turnover 24% 13% 7% 4% 21% 49%
Average
commission
rate paid -- -- -- -- -- $0.0732
Select Growth Portfolio
Net asset value
beginning of
year $18.884 $19.670 $18.486 $17.706 $16.706 $21.990
Net investment
income $ 0.268 $ 0.137 $(0.053) $(0.032) $(0.045) $(0.055)
Net realized &
unrealized
gains
(losses) on
securities $ 0.736 $ 1.410 $(0.318) $ 0.741 $ 5.329 $1.171
Total from
investment
operations $1.004 $ 1.547 $(0.371) $0.709 $5.284 $1.116
Distributions
from net
investment
income $(0.218) $(0.175) $(0.007) -- -- --
Distributions
from capital
gains -- $(2.556) $(0.402) $(1.709) -- $(1.071)
Total
distribu-
tions $(0.218) $(2.731) $(0.409) $(1.709) -- $(1.071)
Net asset
value end
of year $19.670 $18.486 $17.706 $16.706 $21.990 $22.035
Total return 5.28% 8.45% (2.05)% 4.55% 31.63% 19.60%**
Net assets end
of year
(thousands)$5,483 $5,742 $4,760 $4,749 $7,389 $7,631
Ratio of
expenses
to average
net assets* 2.00% 2.00% 2.02% 1.90% 1.79% 1.74%**
Ratio of net
investment
income to
average net
assets 1.44% 0.70% (0.27)% (0.19)% (0.26)% (0.52)%**
Portfolio
turnover 60% 125% 48% 82% 56% 57%
Average
commission
rate paid -- -- -- -- -- $0.0783
Equity Income Portfolio
Net asset value
beginning of
year $14.805 $15.117 $16.814 $15.809 $15.411 $19.330
Net investment
income $ 0.499 $ 0.416 $ 0.382 $ 0.504 $ 0.373 $ 0.202
Net realized &
unrealized
gains
(losses) on
securities $ 0.203 $ 1.961 $(0.543) $ 0.364 $ 3.839 $ 0.880
Total from
investment
operations $ 0.702 $ 2.377 $(0.161) $ 0.868 $ 4.212 $ 1.082
Distributions
from net
investment
income $(0.390) $(0.449) $(0.352) $(0.504)$(0.293) $(0.282)
Distributions
from capital
gains -- $(0.231) $(0.492) $(0.762) -- --
Total
distribu-
tions $(0.390) $(0.680) $(0.844) $(1.266) $(0.293)$(0.282)
Net asset
value end
of year $15.117 $16.814 $15.809 $15.411 $19.330 $20.130
Total return 4.74% 16.11% (1.08)% 6.04% 27.56% 11.26%**
Net assets end
of year
(thousands)$2,838 $3,315 $3,625 $3,413 $4,440 $4,634
Ratio of
expenses
to average
net assets 2.15% 2.19% 2.17% 2.07% 1.92% 1.85%**
Ratio of net
investment
income to
average net
assets* 3.47% 2.58% 2.27% 2.53% 2.13% 2.08%**
Portfolio
turnover 32% 55% 34% 29% 7% 27%
Average
commission
rate paid -- -- -- -- -- $0.0809
* For the year ended March 31, 1996 and thereafter, ratio reflects fees paid
indirectly (Note 3).
** Annualized
*** For the six months ended September 30, 1996 (unaudited). Effective July 31,
1996, the investment advisory services transferred to Bankers Finance Advisors,
LLC from Bankers Finance Investment Management Corp. (See Note 3).
The Notes to Financial Statements are an integral part of these statements.
GIT Equity Trust
Notes to Financial Statements
September 30, 1996
(Unaudited)
1. Summary of Significant Accounting Policies. GIT Equity
Trust (the "Trust") is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940
as an open-end, diversified investment management company.
The Trust offers shares in four separate portfolios which
invest in differing securities. The Special Growth Portfolio
is invested primarily in smaller companies that may offer
rapid growth potential. The Select Growth Portfolio is
invested primarily in established companies that may be
undervalued or may offer good management and significant
growth potential. The Equity Income Portfolio is invested
primarily in relatively stable, high-yielding securities.
The Worldwide Growth Portfolio invests primarily in foreign
equity securities emphasizing companies that are likely to
benefit from the growth of the world's smaller and emerging
capital markets. The Worldwide Growth Portfolio issues
separate semi-annual and annual financial reports to
shareholders.
Securities Valuation: Securities traded on a national
securities exchange are valued at
their closing sale price, if available, and if not available
such securities are valued at the
mean between their bid and asked prices. Other securities,
for which current market
quotations are readily available, are valued at the mean
between their bid and asked prices.
Securities for which current market quotations are not
readily available are valued at their
fair value as determined in good faith by the Trustees.
Investment transactions are
recorded on the trade date. The cost of investments sold is
determined on the identified
cost basis for financial statement and federal income tax
purposes.
Repurchase agreements are valued at amortized cost, which
approximates market value.
Investment Income: Interest and other income (if any) is
accrued as earned. Dividend income is recorded on the ex-
dividend date.
Dividends: Substantially all of the Trust's accumulated net
investment income, if any,
determined as gross investment income less accrued expenses,
is declared as a regular
dividend and distributed to shareholders at least twice
annually at calendar and fiscal year
ends. The Trust intends to declare and pay regular Equity
Income Portfolio dividends
quarterly. Capital gains distributions, if any, are
declared and paid twice annually at
calendar and fiscal year end. Additional distributions may
be made if necessary.
Income Tax: In accordance with the provisions of Subchapter
M of the Internal Revenue Code applicable to regulated
investment companies, all of the taxable income of each
portfolio is distributed to its shareholders, and therefore
no federal income tax provision is required.
As of March 31, 1996, the Equity Income Portfolio had
available for federal income tax
purposes unused capital loss carryovers of $26,296 expiring
March 31, 2004.
Equalization: The Trust uses an accounting practice known
as equalization for the Equity Income Portfolio, by which a
portion of the proceeds from sales and costs of redemption
of capital shares, equivalent on a per share basis to the
amount of undistributed net investment income on the date of
the transaction, is credited or charged to undistributed net
investment income. As a result, undistributed net
investment income per share is unaffected by sales or
redemptions of capital shares.
Share Subscriptions: Shares purchased by check or otherwise
not paid for in immediately available funds are accounted
for as share subscriptions receivable and shares reserved
for subscriptions.
Use of Estimates: The preparation of the 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 and reported amounts of increases and decreases
in net assets from operations during the reporting period.
Actual results could differ from those estimates.
2. Investments in Repurchase Agreements. When the Trust
purchases securities under agreements to resell, the
securities are held for safekeeping by the Trust's custodian
bank as collateral. Should the market value of the
securities purchased under such an agreement decrease below
the principal amount to be received at the termination of
the agreement plus accrued interest, the counterparty is
required to place an equivalent amount of additional
securities in safekeeping with the Trust's custodian bank.
Repurchase agreements may be terminated within seven days.
Pursuant to an Exemptive Order issued by the Securities and
Exchange Commission, the Trust, along with other registered
investment companies having Advisory and Services Agreements
with the same advisor, transfers uninvested cash balances
into a joint trading account. The aggregate balance in this
joint trading account is invested in one or more
consolidated repurchase agreements whose underlying
securities are U.S. Treasury or federal agency obligations.
3. Investment Advisory Fees and Other Transactions with
Affiliates. The Investment Advisor to the Trust, Bankers
Finance Advisors, LLC ("the Advisor"), earns an advisory fee
equal to 0.75% per annum of the average net assets of each
of the Special Growth, Select Growth and Equity Income
Portfolios; the fees are accrued daily and are paid monthly.
The Advisory Agreement between the Trust and the Advisor was
approved at the special meeting of the Trust's shareholders
on July 29, 1996. The Advisor purchased the investment
management assets of Bankers Finance Investment Management
Corp. ("BFIMC"), the Trust's previous investment advisor,
effective July 31, 1996.
The Advisor is responsible for the fees and expenses of
trustees who are affiliated with the Advisor, the rent
expense of the Trust's principal executive office premises
and certain promotional expenses. For the six months ended
September 30, 1996, outside trustee fees were $1,500 for
each portfolio.
4. Other Expenses. With the exception of certain expenses of
the Trust payable by it directly, all operational support
services are provided to the Trust under a services
agreement between the Trust and the Advisor, pursuant to
which such services are provided for amounts not exceeding
the cost to the Advisor. Common expenses incurred by the
Trust, GIT Tax-Free Trust, Government Investors Trust and
GIT Income Trust ("the Trusts") are allocated among the
portfolios based on the ratio of net assets of each
portfolio to the combined net assets of the Trusts. For the
six months ended September 30, 1996, operating expenses of
$76,414 for the Special Growth Portfolio, $36,931 for the
Select Growth Portfolio and $24,993 for the Equity Income
Portfolio have been reimbursed to the Advisor under the
Services Agreement. Included in these amounts are expenses
incurred by the Trust prior to March 31, 1996 then
reimbursed to BFIMC, the previous advisor, between March 31,
1996 and July 31, 1996. As of July 31, 1996, the Advisor has
discontinued the practice of billing expenses incurred in
prior years. To the extent the Trust had incurred expenses
for which BFIMC was not reimbursed as of July 31, 1996, such
expenses from prior years will not be billed to the Trust by
the Advisor.
Fees are reduced under an expense offset arrangement with
the Trust's Custodian. The amount of the expense offset for
the six months ended September 30, 1996 was $116 for the
Special Growth Portfolio, $55 for the Select Growth
Portfolio and $35 for the Equity Income Portfolio.
5. Net Assets. At September 30, 1996, net assets included the following:
Special Growth Select Growth Equity Income
Portfolio Portfolio Portfolio
Net paid in
capital on
shares of
beneficial
interest $10,489,196 $5,660,884 $3,078,349
Undistributed net
investment loss (6,589) (19,194) --
Accumulated net
realized gains 2,852,847 256,654 307,471
Net unrealized
appreciation of
investments 2,136,851 1,732,232 1,248,529
Total net assets $15,472,305 $7,630,576 $4,634,349
6. Investment Transactions. Purchases and sales of
securities other than short-term securities for the six
months ended September 30, 1996, were as follows:
Special Growth Select Growth Equity Income
Portfolio Portfolio Portfolio
Purchases $ 7,019,376 $3,977,671 $1,227,064
Sales 11,670,277 4,159,983 1,170,378
7. Capital Share Transactions. An unlimited number of capital shares,
without par value, are authorized. Transactions in capital shares
were as follows:
<TABLE>
<CAPTION>
Special Growth Portfolio Select Growth Portfolio Equity Income Portfolio
Six Months Ended Six Months Ended Six Months Ended
Sept. 30, 1996 Year Ended Sept. 30, 1996 Year Ended Sept. 30, 1996 Year Ended
(Unaudited) March 31, 1996 (Unaudited) March 31, 1996 (Unaudited) Mar 31, 1996
<S> <C> <C> <C> <C> <C> <C>
In Dollars
Shares sold $ 9,594,899 63,271,505 $743,438 $2,853,388 $346,487 $904,364
Shares issued in reinvestment
of dividends 5,976,647 1,559,202 317,160 -- 55,673 59,319
Total shares issued 15,571,546 64,830,707 1,060,598 2,853,388 402,160 963,683
Shares redeemed (10,768,252) (83,341,211) (833,033) (1,751,101) (395,846) (832,571)
Net increase (decrease) $ 4,803,294 $(18,510,504) $227,565 $1,102,287 $6,314 $131,112
In Shares
Shares sold 740,663 3,260,611 34,663 141,259 18,030 52,804
Shares issued in reinvestment
of dividends 457,279 80,463 14,951 -- 2,820 3,417
Total shares issued 1,197,942 3,341,074 49,614 141,259 20,850 56,221
Shares redeemed (828,138) (4,252,958) (39,334) (89,489) (20,298) (47,985)
Net increase (decrease) 369,804 (911,884) 10,280 51,770 552 8,236
</TABLE>
GIT Equity Trust
Special Information
September 30, 1996
(Unaudited)
A special meeting of the Trust's shareholders was held on July 29, 1996.
The following shares were voted at the meeting:
1. Approval of an advisory agreement with Bankers Finance
Advisors, LLC/Madison Investment Advisors, Inc.
<TABLE>
Shares
Outstanding For Against Abstain
<C> <C> <C> <C>
Special Growth Portfolio 1,221,737 634,903 5,937 30,946
Select Growth Portfolio 353,269 179,970 1,713 30,378
Equity Income Portfolio 233,116 130,030 1,335 8,569
Worldwide Growth Portfolio 309,754 145,524 1,408 14,628
</TABLE>
2. Election of Trustees (2,117,876 shares outstanding)
For Withhold Authority
Frank E. Burgess 1,099,684 96,153
James R. Imhoff, Jr. 1,100,251 95,586
Thomas S. Kleppe 1,099,200 96,640
Lorence D. Wheeler 1,100,757 95,080
3. Ratification of the selection of Ernst & Young LLP as
independent auditors of the Trust for the year ending
March 31, 1997 (2,117,876 shares outstanding):
For: 1,096,238 Against: 6,105 Abstain 82,998
<PAGE>
Telephone Numbers
Shareholder Service
Washington, DC area: 703/528-6500
Toll-free nationwide: 800/336-3063
24-Hour ACCESS
Toll-free nationwide: 800/448-4422
The GIT Family of Mutual Funds
GIT Equity Trust
Special Growth Portfolio
Select Growth Portfolio
Equity Income Portfolio
Worldwide Growth Portfolio
GIT Income Trust
Maximum Income Portfolio
Government Portfolio
GIT Tax-Free Trust
Arizona Portfolio
Maryland Portfolio
Missouri Portfolio
Virginia Portfolio
National Portfolio
Money Market Portfolio
Government Investors Trust
For more complete information on any GIT Investment Fund,
including charges and expenses, request a prospectus by
calling the numbers above. Read it carefully before you
invest or send money.
GIT
GIT Investment Funds
1655 Fort Myer Drive
Arlington Virginia 22209
http://www.gitfunds.com
<PAGE>
GIT Equity Trust
Worldwide Growth Portfolio
1655 Ft. Myer Drive
Arlington, Virginia 22209
703-528-3600
Semi-Annual Report
September 30, 1996
(Unaudited)
Letter to Shareholders
November 15, 1996
Dear Shareholder:
GIT's Worldwide Growth portfolio achieved a total return of 4.17% for
the six-month period ended September 30, 1996. After trailing the
average emerging markets fund through June, the portfolio had a strong
third quarter, for which it placed in the top 7% of the emerging markets
funds tracked by Morningstar, Inc.
Our performance was enhanced during this period by overweight positions
in several stellar markets with low PE ratios and strong corporate
profit growth. The Hungarian stock market, for example, returned 45% for
the six months ended September 30, while Brazil and Poland recorded 29%
and 28%, respectively. We also enjoyed strong gains in Peru and
Columbia, two underfollowed markets with stocks at reasonable
valuations.
Despite these gains, Worldwide Growth's total return was diminished by a
summer correction in Asia. An overweight position in South Korea proved
disappointing, where the export-driven electronics sector was hard hit.
We remain committed to South Korea, however, and we have already seen a
recovery in that country's semiconductor stocks. On the other hand, we
are pleased that we were able to minimize the impact of sharp declines
in Thailand (down 11.45%), whose high valuations caused us to take
smaller positions.
Country allocation proved to be a critical factor for success in the
emerging markets during 1996. Each market has seemed to respond to its
own environment, in contrast with recent years during which the
performance of emerging markets worldwide was highly correlated. To
illustrate this divergence of returns, the Hungarian market has
appreciated over 100% this year, while South Korea and South Africa
declined 20% or more in dollar terms during the same period.
It is a good sign that emerging market economies continue to outpace the
U.S. economy. In 1996, the twenty-four countries in which Worldwide
Growth invests are expected to have average GDP growth of 5.1%, more
than twice that of the U.S. Corporations can increase their earnings
more rapidly in growing economies, and we expect this rapid growth to be
fully reflected in stock prices over the long term. Our strategy is to
continue to give equal emphasis to country allocation and company
fundamentals.
Sincerely,
(signature)
Charles J. Tennes
Vice President
<PAGE>
Worldwide Growth Portfolio
Portfolio of Investments - September 30, 1996
Number
of
Company Description Shares Value
COMMON STOCKS:
ARGENTINA: 5.7%
Banco Frances del Rio
de la Plata S.A., ADR Banking and financial
services 1,500 $39,187
Inversiones y
Representacion S.A.,
Class B Engineering and
construction 20,576 60,090
Telecom Argentina
Stet-France Telecom S.A.
ADR Telecommunications 500 20,187
YPF Sociedad Anonmia,
ADR Oil and gas 2,200 50,325
CHILE: 1.6%
Empresa Nacional
Electricidad S.A.,
ADR Electric utility 2,500 47,187
COLOMBIA: 3.2%
Banco Ganadero S.A.,
ADR Banking and financial
services 2,000 54,250
Banco Industrial
Colombiano, ADR Banking and financial
services 2,200 40,975
CZECH REPUBLIC: 4.5%
Komercni Banka A.S.,
GDR (144A) Banking and financial
services 2,500 70,313
SPT Telekom A.S. Telecommunications 500 61,728
GREECE: 3.7%
Alpha Credit Bank Banking and financial
services 1,066 65,384
Athens Medical Center
S.A. Hospital management
and services 6,000 44,321
HONG KONG/CHINA: 5.0%
Consolidated Electric
Power Asia Ltd. Electric utility 20,000 42,286
First Pacific Company
Ltd. Diversified 45,593 68,982
Sinocan Holdings
Limited Containers 80,000 35,691
INDIA: 1.5%
*The India Fund Inc. Multi-industry 3,000 21,750
*The Morgan Stanley
India Investment
Fund, Inc. Multi-industry 1,500 13,125
Sanghi Polyesters Ltd.,
GDR (144A) Textiles 6,000 10,435
INDONESIA: 3.8%
P.T. Indorama
Synthetics Textiles 15,000 44,745
P.T. Pabrik Kertas
Tjiwi Kimia Forest and paper
products 28,112 27,549
P.T. Semen Cibinong Building materials 15,000 38,768
ISRAEL: 1.8%
ECI Telecommunications Limited
Designs Telecommunications 2,500 52,500
MALAYSIA: 6.4%
Commerce Asset Holdings
Berhad Banking and financial
services 7,000 43,566
O.Y.L. Industries
Berhad Diversified 8,800 89,526
Petronas Gas Berhad Oil and gas 14,000 56,971
MEXICO: 8.2%
Alfa, S.A. de C.V. Manufacturing 6,914 30,678
Cemex, S.A. de C.V.,
Series B Building materials 10,000 41,457
*Desc, S.A. de C.V.,
ADR Diversified 2,500 56,782
*Grupo Financiero
Banamex Accival S.A.
de C.V., Series L Banking and financial
services 11,247 22,941
Tablex S.A. de C.V.,
Series 2 Food processing 20,000 50,331
Transportacion Maritima
Mexicana, S.A. de C.V.,
ADR Marine transportation 5,300 41,738
PANAMA: 1.9%
Banco Latinoamerciano de
Exportaciones, S.A. Banking and financial
services 1,000 56,125
PERU: 3.9%
Compania Goodyear
del Peru Rubber products 10,000 34,448
Telefonica del Peru
S.A., B shares Telecommunications 36,112 81,256
POLAND: 4.8%
Bank Gdanski, GDR
(144A) Banking and financial
services 3,500 55,475
Zaklady Przemyslu Cukierniczego
Jutrzenka S.A. Food processing 4,000 87,572
PORTUGAL: 0.8%
Espirito Santo Financial
Holding S.A., ADR Banking and financial
services 2,000 24,750
SINGAPORE: 3.5%
Sunright Limited Electronics 80,000 69,311
Venture Manufacturing
Ltd. Electronics 20,000 34,940
SOUTH AFRICA: 1.3%
Barlow Limited, ADR Diversified 4,000 38,796
SOUTH KOREA: 4.4%
*Housing & Commercial Bank,
Korea Banking and financial
services 2,250 53,117
Korea Electric Power Corporation,
ADR Electric utility 2,000 37,750
Samsung Electronics
Company Electronics 498 39,068
TAIWAN: 2.7%
*Taiwan Fund, Inc. Multi-industry 3,500 80,938
THAILAND: 3.3%
*Bangkok Bank Public Company
Limited Banking and financial
services 5,800 52,027
Jasmine International Public
Company Limited Telecommunications 10,000 32,261
Singer Thailand Public Company
Limited Home appliances 1,800 13,030
TURKEY: 1.5%
Arcelik A.S. Home appliances 419,000 43,792
TOTAL COMMON STOCKS (Cost $2,183,523)= 2,178,424
PREFERRED STOCKS:
10.9%% of Net Assets
BRAZIL: 10.6%
Compania Siderurgica Paulista,
Series B Steel 45,000 27,484
Petroleo Brasileiro
S.A. Oil and gas 930,000 105,487
Randon Participacoes
S.A. Diversified 50,000,000 23,267
Telecomunicacoes Brasileiras,
S.A., ADR Telecommunications 1,250 98,125
Uniao de Bancos
Brasileiros S.A. Banking and financial
services 2,000,000 58,168
SOUTH KOREA: 0.4%
Samsung Electronics
Company Electronics 294 11,319
TOTAL PREFERRED STOCKS (Cost $341,888)= 323,850
CONVERTIBLE CORPORATE BONDS: 1.6% of Net Assets
PHILIPPINES:1.6%
Bacnotan Consolidated Industries, Inc.,
5.5%, 6/21/04 (144A)
(Cost $50,000)= Building materials 50,000 46,250
REPURCHASE AGREEMENT: 12.4% of Net Assets
With Donaldson, Lufkin & Jenrette Securities Corporation issued 9/30/96
at 5.65%, due 10/1/96 collateralized by $375,168 in United States
Treasury Notes due 8/15/97. Proceeds at maturity are $368,057.76. (Cost
$368,000)= 368,000
TOTAL INVESTMENTS (Cost $2,943,411)= $2,916,524
Notes to the Portfolio of Investments:
* Non-income producing
= Aggregate cost for federal income tax purposes is $2,943,411 at
September 30, 1996, and the net unrealized depreciation is $26,887
comprised of gross unrealized appreciation
of $349,544 and gross unrealized depreciation of $376,431.
ADR American Depository Receipt
GDR Global Depository Receipt
144A Securities exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers.
At September 30, 1996 these securities amounted to $182,473 or 6.2% of
net assets.
See Notes to Portfolio of Investments.
<PAGE>
Worldwide Growth Portfolio
Statement of Assets and Liabilities
September 30, 1996
(Unaudited)
Assets
Investments, at cost $2,943,411
Investments, at value (Notes 1 and 2)
Investment securities 2,548,524
Repurchase agreement 368,000
Total investments 2,916,524
Cash 506
Receivables
Investment securities sold 36,515
Dividends and interest 7,804
Total assets 2,961,349
Liabilities
Total liabilities --
Net Assets (Note 5) $2,961,349
Capital Shares Outstanding 288,253
Net Asset Value Per Share $10.273
Worldwide Growth Portfolio
Statement of Operations
For the Six Months Ended September 30, 1996
(Unaudited)
Investment Income (Note 1)
Interest income $ 8,687
Dividend income (net of foreign tax of $3,341)35,668
Total income 44,355
Expenses (Notes 3 and 4)
Investment advisory fees 15,532
Investment advisory fees waived by advisor (7,831)
Custodian fees 9,358
Professional fees 2,486
Salaries and related expenses 3,898
Securities registration and blue sky expense 7,361
Telephone expense 313
Data processing and office equipment expense 5,364
Office and miscellaneous expenses 1,945
Depreciation and amortization 99
Fees paid indirectly (23)
Total expenses 38,502
Net Investment Income 5,853
Realized and Unrealized Gain (Loss) on Investments
Net realized gain on investments 95,610
Net realized loss on foreign currency
transactions (5,550)
Net unrealized appreciation of investments 23,500
Net unrealized appreciation on foreign
currency transactions 2,800
Net Gain on Investments 116,360
Total Increase in Net Assets Resulting From
Operations $122,213
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
Worldwide Growth Portfolio
Statements of Change in Net Assets
Six Months
Ended 9/30/96 Year Ended
(Unaudited) 3/31/96
Increase in Net Assets Resulting From Operations
Net investment income $ 5,853 $ 14,830
Net realized gain (loss) on investments 95,610 (577,927)
Net realized loss on foreign currency
transactions (5,550) (3,488)
Net unrealized appreciation of
investments 23,500 1,103,450
Net unrealized appreciation (depreciation)
on foreign currency transactions 2,800 (3,053)
Total increase in net assets resulting
from operations 122,213 533,812
Distributions to Shareholders
Net investment income -- (22,834)
Capital Share Transactions (Note 7) (276,573) (714,253)
Total Decrease in Net Assets (154,360) (203,275)
NetAssets
Beginning of period 3,115,709 3,318,984
End of period 2,961,349 3,115,709
Worldwide Growth Portfolio
Financial Highlights
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
Year ended Year ended Year ended Yearod ended*
March 31, 1996# March 31, 1996 March 31, 1995 March 31, 1994
<C> <C> <C> <C>
Net asset value beginning
of period $ 9.862 $8.501 $12.511 $10.000
Net investment income (loss) 0.010 0.044 0.022 (0.035)
Net realized and unrealized
gains (losses) on securities 0.401 1.387 (2.491) 2.546
Total from investment
operations 0.411 1.431 (2.469) 2.511
Distributions from net
investment income -- (0.070) (0.025) --
Distributions from capital
gains -- -- (1.516) --
Total distributions -- (0.070) (1.541) --
Net asset value end of
period $10.273 $ 9.862 $8.501 12.511
Total return 8.34% 16.88% (22.20)% 26.19%**
Net assets at end of
period (thousands) 2,961 3,116 3,319 3,526
Ratio of expenses
to average net assets*** 2.50% 2.38% 2.05% 1.81%**
Ratio of net income
to average net assets*** 0.38% 0.43% 0.21% (0.48)%**
Portfolio turnover rate 35% 78% 65% 83%
Average commission
rate paid $0.008 -- -- --
*For the period from April 16, 1993 (inception) to March 31, 1994
**Annualized
***Had BFIMC not waived advisory fees, the Portfolio's ratios of
expenses and net investment loss to average net assets would have
been 3.01% and (0.13)%, respectively, for the six months ended September
30, 1996; 2.97% and (0.17)%, respectively, for the year ended
March 31, 1996; and 3.05% and (0.79)%, respectively, for the year ended
March 31, 1995. Had BFIMC not waived the advisory fee and
deferred a portion of the operating expenses, the Portfolio's annualized
ratios of expenses and net investment loss to average net assets would
have been 4.24% and (2.92)%, respectively, for the period from inception
to March 31, 1994. Ratio of expenses to average net assets
includes fees paid indirectly for the year ended March 31, 1996 and
thereafter.
#For the six months ended September 30, 1996 (unaudited). Effective July
31, 1996, the investment advisory services transferred to Bankers
Finance Advisors, LLC from Bankers Finance Investment Management Corp.
(See Note 3).
The Notes to Financial Statements are an integral part of these
statements.
<PAGE>
Worldwide Growth Portfolio
Notes to Financial Statements
September 30, 1996
(Unaudited)
1. Summary of Significant Accounting Policies. GIT Equity
Trust (the "Trust") is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940
as an open-end, diversified investment management company.
The Trust offers shares in four separate portfolios which
invest in differing securities. The Worldwide Growth
Portfolio (the "Portfolio") invests primarily in foreign
equity securities, emphasizing companies that are likely to
benefit from the growth of the world's smaller and emerging
capital markets. The Special Growth, Select Growth and
Equity Income Portfolios are managed independently from the
Worldwide Growth Portfolio and issue separate semi-annual
and annual financial reports to shareholders. Securities
Valuation: Securities traded on a securities exchange are
valued at their closing sale price, if available, and if not
available, such securities are valued at the mean between
their bid and asked prices. Other securities, for which
current market quotations are readily available, are valued
at the mean between their bid and asked prices. Securities
for which current market quotations are not readily
available are valued at their fair value as determined in
good faith by the Trustees. Securities whose prices are
quoted in foreign currency are normally translated into U.S.
dollars based on exchange rates at 4 p.m., London, England
time. The portfolio does not isolate that portion of the
results of operations resulting from changes in foreign
exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such
fluctuations are included with net realized and unrealized
gain or loss on investments. Investment transactions are
recorded on the trade date. The cost of investments sold is
determined on the identified cost basis for financial
statement and federal income tax purposes. Repurchase
agreements are valued at amortized cost, which approximates
market value.
Foreign Currency Translations: The books and records of the
Portfolio are maintained in U.S. dollars. Foreign currency
amounts are translated into U.S. dollars on the following
basis:
(I) market value of investment securities, assets and
liabilities at the daily rates of exchange, and (ii)
purchase and sales of investment securities, dividend and
interest income and certain expenses at the rates of
exchange prevailing on the respective dates of such
transactions. The Portfolio does not isolate that portion
of the results of operations resulting from changes in
foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held.
Such fluctuations are included with the net realized and
unrealized gain or loss from investments. Reported net
realized gains or losses from foreign currency transactions
arise from sales and maturities of short-term securities,
sales of foreign currencies, currency gains or losses
realized between the trade and settlement dates on
securities transactions, the difference between the amounts
of dividends, interest, and foreign withholding taxes
recorded on the Portfolio's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net
unrealized gains and losses from foreign currency
transactions arise from changes in the value of assets and
liabilities other than investments in securities at the end
of the fiscal period, resulting from changes in exchange
rates.
Forward Foreign Currency Contracts: The Portfolio may enter
into forward foreign currency contracts in order to hedge
against foreign currency risk. Such contracts have been
used solely to establish a rate of exchange for settlement
of transactions. Forward foreign currency contracts are
valued at the forward rate and are marked-to-market daily.
The change in market value is recorded by the Portfolio as
an unrealized gain or loss. Realized gains or losses are
recognized when contracts settle. Although forward foreign
currency contracts limit the risk of loss due to a decline
in the value of the hedged currency, they also limit any
potential gain that might result should the value of the
currency increase. In addition, the Portfolio could be
exposed to risks if the counter parties to the contracts are
unable to meet the terms of their contracts.
Investment Income: Interest and other income (if any) is
accrued as earned. Dividend income is recorded on the ex-
dividend date, except that if the ex-dividend date has
passed, certain dividends from foreign securities are
recorded as soon as the Portfolio is informed of the ex-
dividend date.
Dividends: Substantially all of the Trust's accumulated net
investment income, determined as gross investment income
less accrued expenses, if any, is declared as a regular
dividend and distributed to shareholders at least twice
annually at calendar and fiscal year end. Capital gains
distributions, if any, are declared and paid twice annually
at calendar and fiscal year end. Additional distributions
may be made if necessary.
Income Tax: In accordance with the provisions of Subchapter
M of the Internal Revenue Code applicable to regulated
investment companies, all of the taxable income of each
portfolio is distributed to its shareholders, and therefore
no federal income tax provision is required.
As of March 31, 1996, the Portfolio had available for
federal income tax purposes unused capital loss carryovers
of $600,026 expiring March 31, 2004.
Share Subscriptions: Shares purchased by check or otherwise
not paid for in immediately available funds are accounted
for as share subscriptions receivable and shares reserved
for subscriptions.
Use of Estimates: The preparation of the 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 and reported amounts of increases and decreases
in net assets from operations during the reporting period.
Actual results could differ from those estimates.
2. Investments in Repurchase Agreements. When the Trust
purchases securities under agreements to resell, the
securities are held for safekeeping by the Trust's custodian
bank as collateral. Should the market value of the
securities purchased under such an agreement decrease below
the principal amount to be received at the termination of
the agreement plus accrued interest, the counterparty is
required to place an equivalent amount of additional
securities in safekeeping with the Trust's custodian bank.
Repurchase agreements may be terminated within seven days.
Pursuant to an Exemptive Order issued by the Securities and
Exchange Commission, the Trust, along with other registered
investment companies having Advisory and Services Agreements
with the same advisor transfers uninvested cash balances
into a joint trading account. The aggregate balance in this
joint trading account is invested in one or more
consolidated repurchase agreements whose underlying
securities are U.S. Treasury or federal agency obligations.
3. Investment Advisory Fees and Other Transactions with
Affiliates. The Investment Advisor to the Trust, Bankers
Finance Advisors, LLC ("the Advisor"), earns an advisory fee
equal to 1.00% per annum of the average net assets of the
Portfolio; the fees are accrued daily and are paid monthly.
The Advisory Agreement between the Trust and the Advisor was
approved at the special meeting of the Trust's shareholders
on July 29, 1996. The Advisor purchased the investment
assets of Bankers Finance Investment Management Corp.
("BFIMC"), the Trust's previous advisor, effective July 31,
1996. For the six months ended September 30, 1996, the
Advisor and BFIMC waived $7,831 of such fee from the
Portfolio.
The Advisor is responsible for the fees and expenses of
trustees who are affiliated with the Advisor, the rent
expense of the Trust's principal executive office premises
and certain promotional expenses. For the six months ended
September 30, 1996, outside trustees fees of $1,500 were
paid by the Portfolio.
4. Other Expenses. With the exception of certain expenses of
the Trust payable by it directly, all support services are
provided to the Trust under a services agreement between the
Trust and the Advisor, pursuant to which such services are
provided for amounts not exceeding the cost to the Advisor.
For the six months ended September 30, 1996, expenses of
$30,801 have been reimbursed to the Advisor and BFIMC under
the services agreement.
5. Net Assets. At September 30, 1996, net assets include the
following:
Net paid in capital on shares of beneficial interest $3,492,601
Undistributed net investment income 303
Accumulated net realized loss on investments (504,416)
Net unrealized depreciation of investments and foreign currency (27,139)
Total net assets $2,961,349
6. Investment Transactions. Purchases and sales of
securities other than
short-term securities for the six months ended September 30,
1996 were
$971,439 and $1,300,164, respectively.
7. Capital Share Transactions. An unlimited number of
capital shares, without par value, are authorized.
Transactions in capital shares were as follows:
Six Months
Ended Sept. Year ended
30, 1996 March 31,
(Unaudited) 1996
In Dollars
Shares sold $161,992 $960,967
Shares issued in reinvestment of dividends -- 18,767
Total shares issued 161,992 979,734
Shares redeemed (438,565) (1,693,987)
Net increase (decrease) $(276,573) $(714,253)
In Shares
Shares sold 16,055 100,911
Shares issued in reinvestment of dividends -- 2,009
Total shares issued 16,055 102,920
Shares redeemed (43,746) (177,403)
Net increase (decrease) (27,691) (74,483)
Worldwide Growth Portfolio
Special Information
September 30,1996
(Unaudited)
A special meeting of the Trust's shareholders was held on July 29, 1996.
The following shares were voted at the meeting:
</TABLE>
<TABLE>
Shares
Outstanding For Against Abstain
<C> <C> <C> <C>
Special Growth Portfolio 1,221,737 634,903 5,937 30,946
Select Growth Portfolio 353,269 179,970 1,713 30,378
Equity Income Portfolio 233,116 130,030 1,335 8,569
Worldwide Growth Portfolio 309,754 145,524 1,408 14,628
</TABLE>
2. Election of Trustees (2,117,876 shares outstanding)
For Withhold Authority
Frank E. Burgess 1,099,684 96,153
James R. Imhoff, Jr. 1,100,251 95,586
Thomas S. Kleppe 1,099,200 96,640
Lorence D. Wheeler 1,100,757 95,080
3. Ratification of the selection of Ernst & Young LLP as
independent auditors of the Trust for the year ending
March 31, 1997 (2,117,876 shares outstanding):
For: 1,096,238 Against: 6,105 Abstain 82,998
<PAGE>
Telephone Numbers
Shareholder Service
Washington, DC area: 703/528-6500
Toll-free nationwide: 800/336-3063
24-Hour ACCESS
Toll-free nationwide: 800/448-4422
The GIT Family of Mutual Funds
GIT Equity Trust
Special Growth Portfolio
Select Growth Portfolio
Equity Income Portfolio
Worldwide Growth Portfolio
GIT Income Trust
Maximum Income Portfolio
Government Portfolio
GIT Tax-Free Trust
Arizona Portfolio
Maryland Portfolio
Missouri Portfolio
Virginia Portfolio
National Portfolio
Money Market Portfolio
Government Investors Trust
For more complete information on any GIT Investment Fund,
including charges and expenses, request a prospectus by
calling the numbers above. Read it carefully before you
invest or send money.
GIT
GIT Investment Funds
1655 Fort Myer Drive
Arlington Virginia 22209
http://www.gitfunds.com
