Semi-Annual Financial Statements
(Unaudited)
September 30, 1995
Wayne Hummer Income Fund
Fellow Shareholder:
I am pleased to present the semi-annual financial statements for the Wayne
Hummer Income Fund for the period ended September 30, 1995.
Since our last report to shareholders the bond markets have rallied
dramatically. As a result, intermediate and long-term interest rates have
fallen sharply. For example, 5-year treasury notes, which were yielding over
7% at March 31, 1995, yield just 6% today. Ten-year treasuries were yielding
more than 7.15% six months ago. Today, the same notes yield about one
percentage point less -- just 6.17%.
Lower interest rates have impacted the Fund's portfolio of notes and bonds.
Many of the Fund's holdings are higher in value as a result. For the six-month
period ended September 30, 1995, the Fund's total return (dividends reinvested
plus the change in share price) was 6.79%. During the same period, the Merrill
Lynch Domestic Master Index* posted a return of 8.20%. We have selected this
index for a benchmark comparison because it provides a good approximation of
the bond market's overall performance. During the six-month period, the Fund
paid $0.5057 in income dividends.
For the one-year period ended September 30, 1995, the total return of the Fund
was 12.68%. During that same time period, the Merrill Lynch Domestic Master
Index had a total return of 14.11%.
Although we were not expecting such a dramatic rally, the Fund's nominal
performance over the recent 6-month and 1-year periods has been good. While
the Fund's performance has lagged that of its benchmark index, we are pleased
with the result. The Fund's primary objective is to provide a high level of
current income consistent with prudent investment management. As a result, we
strive to protect principal value while providing a relatively high dividend
yield.
We typically position the Fund's portfolio in a somewhat defensive fashion.
Usually, the Fund's average maturity is shorter than that of the benchmark
index. Also, the Fund's portfolio has been heavily invested in high coupon
securities. These types of issues--which often have call features prior to the
stated maturity dates--provide a high level of income and often experience
less price volatility than noncallable bonds. Additionally, many of the Fund's
security holdings are subject to sinking funds. Sinking funds require an
issuer to periodically redeem a portion of its outstanding debt. The sinking
fund bonds often provide a relatively high level of income and at the same
time experience less price volatility than other types of debt.
<PAGE>
Due to our defensive investment strategies, we expect the performance of the
Wayne Hummer Income Fund to lag relative to the performance of its benchmark
index during periods of falling interest rates, such as we have experienced
over the past several months. However, when interest rates rise we expect the
performance of the Fund to be superior to that of its index.
At September 30, 1995, the SEC yield of the Fund was 6.35%. The net asset
value per share was $15.17. The credit quality of the Fund's portfolio remains
relatively high--approximately 27% of the portfolio is invested in U.S.
Government and U.S. Government Agency securities. The average maturity of the
portfolio at September 30, 1995 was 5.01 years. The average duration, which
measures price volatility due to interest rate changes, was 3.7 years.
Going forward, we do not expect dramatic changes in interest rates. If rates
do rise, we may lengthen the portfolio slightly to lock in higher levels of
income. As always, we will continue to pursue a conservative investment
strategy--keeping overall credit quality relatively high and portfolio
duration moderate.
We appreciate the trust you have placed in us as we manage your funds.
Sincerely,
David Poitras
Vice President and Portfolio Manager
October 12, 1995
*The Merrill Lynch Domestic Master Index is an unmanaged index of fixed rate
coupon bearing government, investment grade corporate and mortgage
pass-through securities.
<PAGE>
<TABLE>
A Chart compares the values of an initial $10,000 investment.
Wayne Hummer Income Fund vs Merrill Lynch Domestic Master Index
<CAPTION>
Wayne Hummer Merril Lynch Domestic
Income Value Master Value
Date Fund
<S> <C> <C>
11/30/92 $10,000 $10,000
12/31/92 $10,035 $10,149
1/31/93 $10,190 $10,342
2/28/93 $10,395 $10,521
3/31/93 $10,431 $10,572
4/30/93 $10,487 $10,649
5/31/93 $10,529 $10,658
6/30/93 $10,737 $10,855
7/31/93 $10,833 $10,918
8/31/93 $11,049 $11,113
9/30/93 $11,080 $11,155
10/31/93 $11,150 $11,198
11/30/93 $11,047 $11,105
12/31/93 $11,044 $11,166
1/31/94 $11,285 $11,314
2/28/94 $11,084 $11,109
3/31/94 $10,892 $10,857
4/30/94 $10,782 $10,761
5/31/94 $10,743 $10,763
6/30/94 $10,722 $10,742
7/31/94 $10,936 $10,940
8/31/94 $10,932 $10,957
9/30/94 $10,751 $10,803
10/31/94 $10,733 $10,793
11/30/94 $10,722 $10,768
12/31/94 $10,835 $10,851
1/31/95 $10,999 $11,062
2/28/95 $11,231 $11,317
3/31/95 $11,344 $11,393
4/30/95 $11,434 $11,551
5/31/95 $11,775 $12,004
6/30/95 $11,865 $12,094
7/31/95 $11,878 $12,068
8/31/95 $11,979 $12,209
9/30/95 $12,115 $12,327
</TABLE>
<PAGE>
<TABLE>
Wayne Hummer Income Fund
<CAPTION>
Total Return
Period Ended Growth of Cum. Avg.
9/30/95 $10,000 Annual
- -----------------------------------------------------------------------
<S> <C> <C> <C>
1 Year $11,268 12.68% 12.68%
12/1/92 - $12,115 21.15% 7.01%
9/30/95
Merrill Lynch Domestic Master
<CAPTION>
Total Return
Period Ended Growth of Cum. Avg.
9/30/95 $10,000 Annual
- -----------------------------------------------------------------------
<S> <C> <C> <C>
1 Year $11,411 14.11% 14.11%
12/1/92 - $12,327 23.27% 7.67%
9/30/95
<FN>
Note: Performance data quoted herein represents past performance. Actual
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
September 30, 1995
<CAPTION>
Principal
Amount Value
---------- ----------
<S> <C> <C>
CORPORATE OBLIGATIONS (70.0%)
Airlines (4.4%)
United Air Lines, Inc., 9.76%,
due 05/27/06 $ 987,725 $1,126,451
Banks and Finance (3.3%)
Citicorp, 9.375%, due 03/01/16 825,000 867,331
Brokerage (3.8%)
Merrill Lynch & Co., Inc.,
6.25%, due 05/19/03 (b) 500,000 477,187
7.00% due 04/27/08 500,000 498,715
----------
975,902
Food & Beverage (1.2%)
Anheuser-Busch Companies, Inc.
10.00%, due 07/01/18 280,000 299,886
Insurance (3.1%)
Old Republic International Corporation,
10.00%, due 02/01/18 745,000 792,330
Machinery (6.6%)
Caterpillar Inc., 9.75%, due 06/01/19 1,000,000 1,129,150
Parker-Hannifin Corporation,
9.75%, due 02/15/21 480,000 566,971
----------
1,696,121
Oil & Gas (5.2%)
The Coastal Corporation
10.00%, due 02/01/01 700,000 790,797
8.125%, due 09/15/02 525,000 552,468
----------
1,343,265
Paper and Forest Products (7.5%)
Boise Cascade Corporation,
9.875%, due 02/15/01 1,000,000 1,079,050
Georgia Pacific Corporation
9.75%, due 01/15/18 415,000 435,335
9.50%, due 02/15/18 407,000 427,301
----------
1,941,686
<PAGE>
Rail (5.5%)
Burlington Northern Railroad Co., Inc.,
9.00%, due 04/01/16 824,000 864,615
Canadian Pacific Limited, 8.85%,
due 06/01/22 500,000 554,775
----------
1,419,390
Retail (6.6%)
Dayton Hudson Corporation
9.50%, due 10/15/16 209,000 219,717
9.25%, due 11/15/16 354,000 372,656
9.875%, due 06/01/17 393,000 418,584
May Department Stores Company,
9.875%, due 06/01/17 655,000 697,660
----------
1,708,617
Telecommunications (3.2%)
NYNEX Corporation, 9.55%, due 05/01/10 730,039 834,771
Utilities (13.1%)
Commonwealth Edison Company
8.125% due 01/15/07 500,000 514,530
8.875%, due 10/01/21 485,000 510,632
Consolidated Natural Gas Company,
8.625%, due 12/01/11 1,250,000 1,326,863
Texas Utilities Company, 9.45%,
due 01/05/01 1,000,000 1,032,852
----------
3,384,877
<PAGE>
<CAPTION>
Principal
Amount Value
---------- ----------
<S> <C> <C>
Miscellaneous (6.5%)
CBI Industries, Inc., 6.25%,
due 06/30/00 $ 500,000 $ 491,680
Eastman Kodak, 9.75%, due 10/01/04 300,000 364,944
Inco Ltd., Convertible Debenture,
7.75%, due 03/15/16 500,000 532,500
HCA-Hospital Corporation of America,
11.25%, due 12/01/15 285,000 306,019
-----------
1,695,143
-----------
TOTAL CORPORATE OBLIGATIONS (Cost: $17,907,073) 18,085,770
MUNICIPALITY - TAXABLE (1.1%)
Virginia State Housing Development,
7.95%, due 05/01/13 (Cost: $254,195) 250,000 274,765
MORTGAGE-BACKED SECURITIES (24.1%)
Collateralized Mortgage Obligations (16.4%)
Federal Home Loan Mortgage Corporation (13.5%)
8.50%, due 05/15/04 250,000 254,130
8.50%, due 06/15/05 750,000 770,610
7.50%, due 11/15/08 500,000 523,475
7.50%, due 02/15/20 400,000 403,932
8.00%, due 03/15/21 1,000,000 1,028,380
8.00%, due 04/15/22 500,000 521,200
-----------
3,501,727
Federal National Mortgage Association (2.9%)
8.00%, due 02/25/07 500,000 534,820
8.50%, due 06/25/21 200,000 209,344
-----------
744,164
<PAGE>
Federal National Mortgage Association (4.3%)
11.25%, due 04/01/01 144,328 153,606
10.75%, due 09/01/15 165,661 181,379
10.50%, due 01/01/16 104,530 113,900
10.50%, due 06/01/19 306,719 336,888
9.00%, due 12/01/19 108,877 113,624
8.00%, due 12/01/22 217,012 221,994
-----------
1,121,391
Government National Mortgage Association (3.1%)
9.00%, due 11/15/01 224,326 234,926
8.50%, due 09/20/16 78,344 80,808
8.00%, due 01/20/17 70,276 71,641
8.50%, due 05/15/17 182,513 189,776
9.00%, due 05/15/18 205,347 215,622
-----------
792,773
Federal Home Loan Mortgage Corporation (0.3%)
8.75%, due 10/01/08 86,205 88,907
-----------
TOTAL MORTGAGE-BACKED SECURITIES (Cost: $6,206,931) 6,248,962
U.S. TREASURY NOTES (2.8%)
6.50%, due 05/15/05 (Cost: $708,620) 700,000 716,058
-----------
TOTAL INVESTMENTS (Cost: $25,076,819) (98.0%) 25,325,555
CASH AND OTHER ASSETS, LESS LIABILITIES (2.0%) 509,262
-----------
NET ASSETS (100.0%) $25,834,817
===========
<FN>
Note to Portfolio of Investments:
(a) Based on the cost of investments of $25,076,819 for federal income tax
purposes at September 30, 1995, the aggregate gross unrealized appreciation
was $307,681, the aggregate gross unrealized depreciation was $58,945 and the
net unrealized appreciation of investments was $248,736.
(b) Floating rate security. Rate shown is the interest rate at September 30,
1995. The next interest rate change date is November 19,1995.
</TABLE>
<PAGE>
<TABLE>
Wayne Hummer Income Fund
Statement of Assets and Liabilities
<CAPTION>
September 30,
1995 March 31,
(Unaudited) 1995
<S> <C> <C>
Assets
Investments, at value (Cost: $25,076,819 and $26,516,202, respectively) $25,325,555 $25,830,784
Other assets:
Cash 25,866 95,837
Interest receivable 532,665 483,683
Receivable for securities sold 581 464
Deferred organizational costs (net of accumulated amortization of
$34,000 and $28,000, respectively) 26,000 32,000
Prepaid expenses 131 2,001
------------ ------------
Total assets 25,910,798 26,444,769
Liabilities and Net Assets
Organizational costs payable 29,000 35,000
Dividends payable 9,430 5,547
Due to Wayne Hummer Management Company 10,785 11,135
Accounts payable 26,766 40,880
------------ ------------
Total liabilities 75,981 92,562
------------ ------------
Net assets applicable to 1,702,914 and 1,794,131 Shares outstanding,
no par value, equivalent to $15.17 and $14.69 per Share, respectively $25,834,817 $26,352,207
============ ============
Analysis of Net Assets
Excess of amounts received from issuance of Shares over amounts paid
on redemptions of Shares on account of capital $26,550,997 $27,918,149
Unrealized appreciation (depreciation) of investments 248,736 (685,418)
Accumulated net realized loss on sales of investments (964,916) (880,524)
------------ ------------
Net assets applicable to Shares outstanding $25,834,817 $26,352,207
============ ============
The Pricing of Shares
Net asset value, offering and redemption price per Share
($25,834,817 divided by 1,702,914 Shares outstanding and $26,352,207
divided by 1,794,131 Shares outstanding) $ 15.17 $ 14.69
============ ============
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
<CAPTION>
Six months ended
September 30, Year ended
1995 March 31,
(Unaudited) 1995
<S> <C> <C>
Investment income - interest $1,039,761 $2,181,578
Expenses:
Management fee 66,607 141,795
Custodian fees 4,500 33,300
Transfer agent fees 14,600 30,689
Professional fees 10,500 18,300
Amortization of organization costs 6,000 12,000
Portfolio accounting fees 10,933 4,307
Printing and reporting fees 4,106 3,700
Trustee fees 2,044 3,500
Other 1,039 19,596
---------- ----------
Total expenses 120,329 267,187
---------- ----------
Net investment income 919,432 1,914,391
---------- ----------
Net realized loss on sales of investments (97,749) (895,348)
Net change in unrealized depreciation 934,154 (100,111)
---------- ----------
Net gain (loss) on investments 836,405 (995,459)
---------- ----------
Net increase in net assets resulting from operations $1,755,837 $ 918,932
========== ==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets
<CAPTION>
Six months ended
September 30, Year ended
1995 March 31,
(Unaudited) 1995
<S> <C> <C>
Operations:
Net investment income $ 919,432 $ 1,914,391
Net realized loss on sales of investments (97,749) (895,348)
Net change in unrealized appreciation/depreciation 934,154 (100,111)
----------- -----------
Net increase in net assets resulting from operations 1,755,837 918,932
Dividends to Shareholders from:
Net investment income (906,075) (1,899,567)
Net realized gain on investments -- (7,233)
----------- -----------
Total dividends to Shareholders (906,075) (1,906,800)
Capital Share transactions:
Proceeds from Shares sold 1,782,908 5,097,922
Shares issued upon reinvestment of dividends 684,144 1,501,837
----------- -----------
2,467,052 6,599,759
Less payments for Shares redeemed 3,834,204 12,911,490
----------- -----------
Decrease from Capital Share transactions (1,367,152) (6,311,731)
----------- -----------
Total decrease in net assets (517,390) (7,299,599)
Net assets:
Beginning of period 26,352,207 33,651,806
----------- -----------
End of period $25,834,817 $26,352,207
=========== ===========
</TABLE>
<PAGE>
<TABLE>
Financial Highlights
(For a Share outstanding throughout each period)
<CAPTION>
Six months ended
September 30, Year ended
1995 March 31,
(Unaudited) 1995
<S> <C> <C>
Net asset value, beginning of period $ 14.69 $ 15.10
Income from investment operations:
Net investment income 0.52 0.99
Net realized and unrealized gains (losses) on securities 0.47 (0.42)
-------- --------
Total from investment operations 0.99 0.57
Less distributions:
Dividends from net investment income (0.51) (0.98)
Distributions from net realized gains on securities -- --(b)
-------- --------
Total distributions (0.51) (0.98)
-------- --------
Net asset value, end of period $ 15.17 $ 14.69
======== ========
Total Return 6.79% 4.16%
Ratios and Supplementary Data
Net assets, end of period (000's) $25,835 $26,352
Ratio of expenses to average net assets 0.91%(a) 0.94%
Ratio of net investment income to average net assets 6.94%(a) 6.70%
Portfolio turnover rate 47%(a) 32%
<FN>
Notes to Financial Highlights:
(a) Determined on an annualized basis.
(b) Less than $.01 per share.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
Organization:
Wayne Hummer Investment Trust (the "Trust"), formerly named Wayne Hummer
Growth Fund Trust, is organized as an unincorporated business trust under the
laws of Massachusetts. The Trust consists of two investment portfolios, the
Wayne Hummer Income Fund (the "Fund") and the Wayne Hummer Growth Fund, each
operating as a separate mutual fund. The Fund commenced investment operations
on December 1, 1992, and may issue an unlimited number of full and fractional
units of beneficial interest (Shares) without par value.
1. Significant Accounting Policies Security Valuation
Fixed income securities are valued by using market quotations, or independent
pricing services that use prices provided by market makers or estimates of
market values obtained from yield data relating to instruments or securities
with similar characteristics. Other securities for which no market quotations
are available are valued at fair value as determined in good faith by the
Board of Trustees. Debt securities having a remaining maturity of less than 60
days are valued at cost (or, if purchased more than 60 days prior to maturity,
the value on the 61st day prior to maturity) adjusted for amortization of
premiums and accretion of discounts.
Security Transactions and Investment Income
Security transactions are accounted for on the trade date. Interest income is
determined on an accrual basis, adjusted for amortization of premiums and
accretion of discounts. Realized gains and losses from security transactions
are reported on an identified cost basis.
Deferred Organizational Costs
Certain organizational costs are reimbursable by the Fund to Wayne Hummer
Management Company, the Fund's Investment Adviser. The costs are being
amortized on the straight-line method and repaid quarterly over a five-year
period.
2. Fund Share Valuation and Dividends to Shareholders
Fund Shares are sold and redeemed on a continuous basis at net asset value.
Net asset value per Share is determined on each day the New York Stock
Exchange is open for trading as of the close of trading on the Exchange and at
3:00 p.m. Chicago time on each other day during which there is a sufficient
degree of trading in securities of the Fund's portfolio so as to affect
materially the net asset value of the Shares by dividing the value of net
assets (total assets less liabilities) by the total number of Shares
outstanding.
Dividends from net investment income are declared and distributed monthly.
Capital gains dividends, if any, are paid at least annually. Dividends will be
reinvested in additional Shares unless a Shareholder requests payment in
cash.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting
principles. These differences primarily relate to differing treatments for
mortgage-backed securities.
<PAGE>
3. Federal Income Taxes
It is the Fund's policy to comply with the special provisions of the Internal
Revenue Code available to investment companies and, in the manner provided
therein, to distribute all of its taxable income, as well as any net realized
gain on sales of investments. Such provisions were complied with and therefore
no federal income tax provision is required.
The accumulated net realized loss on sales of investment for federal income
tax purposes at March 31, 1995, amounting to $880,524, is available to offset
future capital gains. If not applied, the loss carry forward is taxable in
2003.
4. Transactions with Affiliates
The Fund has an Investment Advisory and Management Agreement with Wayne Hummer
Management Company ("Investment Adviser"). The shareholders of the Investment
Adviser are the general partners of Wayne Hummer & Co. ("Distributor and
Shareholder Service Agent"). For advisory and management services and
facilities furnished, the Fund pays fees of .50 of 1% of the first $100
million of average daily net assets, .40 of 1% of the next $150 million and
.30 of 1% of the average daily net assets in excess of $250 million. The
Investment Adviser is obligated to reimburse the Fund to the extent that the
Fund's ordinary operating expenses, including the fee of the Investment
Adviser, exceed the lesser of (1) 1.50% of the average daily net assets of the
Fund or (2) the expense limitations applicable to the Fund imposed by any
state in which the Fund's Shares are sold. During the period ended September
30, 1995 and the year ended March 31, 1995, the Fund incurred management fees
of $66,607 and $141,795, respectively.
For portfolio accounting services, the Fund pays the Investment Adviser a fee
based on the level of average daily net assets plus out-of-pocket expenses.
Wayne Hummer & Co. serves as Distributor and Shareholder Service Agent without
compensation from the Fund.
Certain trustees of the Fund are also officers or directors of the Investment
Adviser or partners of the Distributor and Shareholder Service Agent. During
the period ended September 30, 1995 and the year ended March 31, 1995, the
Fund made no direct payments to its officers and incurred trustee fees for its
unaffiliated trustees of $2,044 and $3,500, respectively.
<PAGE>
<TABLE>
5. Investment Transactions
Investment transactions (excluding money market instruments) are as follows:
<CAPTION>
Six months ended Year ended
September 30, 1995 March 31, 1995
<S> <C> <C>
Purchases $6,181,301 $ 8,426,138
Proceeds from sales and maturities $6,008,209 $12,624,299
6. Fund Share Transactions
Proceeds and payments on Fund Shares as shown in the Statement of Changes in Net
Assets are in respect of the following number of shares:
<CAPTION>
Six months ended Year ended
September 30, 1995 March 31, 1995
<S> <C> <C>
Shares sold 118,406 348,438
Shares issued upon reinvestment of dividends 45,509 103,071
-------- --------
163,915 451,509
Shares redeemed (255,132) (886,403)
-------- --------
Net decrease in Shares outstanding (91,217) (434,894)
======== ========
</TABLE>
<PAGE>
Board of Trustees
Philip M. Burno
Chairman
Steven R. Becker
Charles V. Doherty
Joel D. Gingiss
Patrick B. Long
Eustace K. Shaw
This brochure must be preceded or accompanied by a current prospectus of the
Wayne Hummer Investment Trust
Wayne Hummer & Co.
Serving Investors Since 1931
300 South Wacker
Chicago, Illinois
60606
1.800.621.4477 (toll-free)
(312) 431.1700 (local)
200 E. Washington Street
Appleton, Wisconsin
54911
1.800.678.0833 (toll-free)
(414) 734.1474 (local)
