Wayne Hummer Growth Fund
Annual
Financial Statements
Audited
March 31, 1996
<PAGE>
Wayne Hummer Growth Fund
Dear Fellow Shareholder,
This annual report of the Wayne Hummer Growth Fund (the "Fund") covers the
twelfth complete fiscal year that ended March 31, 1996, and contains a chart
comparing a hypothetical $10,000 investment in the Fund with a similar amount
invested in "the market" as well as management's discussion and analysis of
the Fund's performance during the past fiscal year. As proxies for "the
market" we provide both the Standard & Poor's Composite Stock Price Index (the
"S&P 500") and the Russell Mid-Cap Index. The S&P 500 is widely recognized and
commonly cited in the financial press as a barometer of market activity.
Stocks in the S&P 500 represent a broad distribution by industry group,
comparable to that of stocks traded on the New York Stock Exchange. In fact,
over 93% of the market capitalization of the S&P 500 comes from companies
listed on the New York Stock Exchange. The companies comprising the S&P 500
have a mean market capitalization in excess of $9.1 billion. We believe,
however, that the Russell Mid-Cap Index more closely represents the
significant characteristics of the Fund. The Russell Mid-Cap Index has a
weighted mean market capitalization of $3.3 billion, estimated price/earnings
ratio for 1996 of 17.6, and return on shareholder's equity of 16.6%. The
securities in the Fund's portfolio have a weighted market capitalization (less
the 5 largest companies) of $3.4 billion, weighted P/E of 17.7, and weighted
return on shareholders equity of 16.1%.
For most of the time since the inception of the Fund, its performance has
tracked that of the two indices quite closely, with some of the negative
variation attributable to the Fund's expense ratio which averaged 1.11%
(currently 1.06%) over the past five years.
For the fiscal year ended March 31, 1996, the value of a Fund share increased
to $26.37 from $23.43 at March 31, 1995, or 12.5%. If distributions to
shareholders of income and capital gains were reinvested, the Fund's total
return would be 16.2%. During this same period the total return of the S&P 500
was 32.1% and the Russell Mid Cap Index, 29.1%.
From inception, the Fund has been managed in a manner consistent with a basic
investment principle of Wayne Hummer Management Company: risk aversion.
Independent assessments of the Fund over the years have characterized it as a
relatively low risk fund for all time periods measured. This is reflected in
the Fund's beta (a measurement of risk or volatility) which has consistently
fallen in a range of .75-.95 compared to that of the market (S&P 500) at 1.0.
A lower value connotes less volatility; a higher beta value, greater
volatility. Consequently, the Fund's best relative returns have been in
adverse market years when the Fund outperformed the S&P and Russell indices.
On the other hand, the Fund has tended to trail the indices in strong years,
such as 1995. In addition, the stocks of large market capitalization companies
were the beneficiaries of significant inflows of institutional investment
dollars last year. Middle capitalization companies, which the Fund emphasizes,
generally underperformed the large cap sector. Many stock market research
studies have demonstrated, that over the long term, medium market
capitalization companies (which we define as $300 million to $5 billion) have
outperformed other categories. While the timing of a change in investment
flows to this sector is obviously difficult to predict, the Fund's relative
performance should improve when this does happen.
<PAGE>
During the most recent quarter we added several new investments to our list of
holdings.
o Applied Materials, Inc. produces perhaps the widest variety of
semi-conductor manufacturing equipment in the world. The proliferation of
semiconductor applications, the rapid rate of technological change in both
the semi-conductors themselves and the types of equipment used to fabricate
semi-conductors bode well for the long term growth potential for this
dominant provider.
o Bacou USA Inc. manufactures personal protective equipment--specifically
non-prescription eyewear, frames for prescription protective eyewear and
respirators. Continuing interest on the part of government and industry in
employee health and safety should provide an environment for continued
growth.
o Motorola Inc. is a familiar name to most readers, being a major factor in
cellular phones and their associated infrastructure equipment, as well as
being a major semiconductor manufacturer. The recent telecommunications
legislation and the rapidly expanding wireless telecommunications business
should fuel substantial growth well into the next century.
o Finally, we purchased shares of Qualcomm Inc. which develops, manufactures,
markets and licenses advanced communications systems and products based on
digital wireless technology. The company holds important patents that
should make them important beneficiaries of future trends in digital
wireless communications.
The Fund paid a $0.09 ordinary income dividend and a $0.71 long term gain
distribution today, April 30, 1996. As always, we are pleased to be part of
your long range financial planning.
Sincerely,
Alan W. Bird, CFA
President
April 30, 1996
<PAGE>
PORTFOLIO MANAGERS PROFILES
ALAN W. BIRD, CFA
THOMAS J. ROWLAND, CFA
INVESTING FOR THE LONG-TERM . . .
After working together for almost ten years, Alan Bird and Tom Rowland have
created a unique approach to investing for the Growth Fund. The two
Northwestern MBA graduates believe that the best path to successful investing
is to place special emphasis on a strategy and adhere to it. As more funds
enter the market seeking short-term results, Alan and Tom take the approach of
buying quality companies and hold them for the long term.
As President of the Growth Fund since its inception in 1983, Alan has always
invested in companies that incorporate both "value" and "fundamental"
elements. In addition to owning companies they can easily understand, Alan and
Tom look for loyal customers, low debt, high management ownership, steady
earnings and dividend growth, and a return on equity of at least 15%. Having
both grown up and attended college in the midwest, Alan and Tom also tend to
invest in companies from the midwest region.
Prior to joining Wayne Hummer Investments LLC, Alan worked at several
institutions including Northwestern University's endowment fund and Lincoln
National Investment Management Company. Joining Alan in 1987, Tom brought to
the Fund his experience from working at CNA Financial Corporation as a
portfolio manager/research analyst, and at the Harris Trust & Savings Bank as
a securities trader.
Photographic image of Alan W. Bird and Thomas J. Rowland.
Alan W. Bird, CFA, (left) and Thomas J. Rowland, CFA serve as Portfolio
Managers for the Wayne Hummer Growth Fund.
<PAGE>
<TABLE>
WAYNE HUMMER GROWTH FUND VS. RUSSELL MID-CAP AND THE S&P 500
CHART:
<CAPTION>
Wayne Hummer Russell
Growth Fund S&P 500 Mid-Cap
<C> <C> <C> <C>
1986 10 10 10
10.33083152 10.59 10.615183
9.399454189 9.849759 9.8626302
10.01235697 10.398391 10.156306
1987 12.17103241 12.620527 12.204588
12.52074346 13.254077 12.425887
13.43090975 14.128846 13.158893
10.94120279 10.949856 10.179572
1988 11.44656952 11.573998 11.423045
11.81650683 12.326307 12.251723
11.60841926 12.373147 12.138066
11.70842764 12.750528 12.196325
1989 12.31404018 13.650716 13.106116
13.05893763 14.838328 14.304285
14.17277145 16.427513 15.666883
14.52164421 16.762634 15.398233
1990 14.6386204 16.261431 14.80341
15.47013209 17.259883 15.351557
13.61122099 14.895279 12.307848
15.25083872 16.216491 13.629887
1991 17.19532065 18.584098 16.420644
17.48890516 18.502328 16.514001
18.16653233 19.499604 17.737671
19.64987244 21.13367 19.295313
1992 19.79886693 20.605329 19.595379
19.65703736 20.974164 19.554586
20.8394563 21.655824 21.276005
21.68766726 22.753775 23.510603
1993 21.76784348 23.736283 24.788653
21.48736767 23.833601 25.179532
21.57943382 24.443742 26.52724
22.31712475 25.177054 26.872895
1994 21.61862143 24.217808 26.078392
21.35851038 24.300149 25.515099
22.3312258 25.495716 26.966397
22.2595594 25.490617 26.309766
1995 24.43901712 27.970854 29.048076
25.06638694 30.611302 31.479398
26.00394872 33.047962 34.270362
27.78314559 35.034147 35.374929
1996 28.3859561 36.914219 37.503793
</TABLE>
<PAGE>
<TABLE>
WAYNE HUMMER GROWTH FUND
<CAPTION>
PERIOD GROWTH TOTAL RETURN
ENDED OF CUMU- AVERAGE
3/31/96 $10,000 LATIVE ANNUAL
<S> <C> <C> <C>
1 Year $11,615 16.15% 16.15%
5 Year $16,508 65.08% 10.54%
10 Year $28,386 183.86% 11.00%
Russell Mid-Cap
<CAPTION>
PERIOD GROWTH TOTAL RETURN
ENDED OF CUMU- AVERAGE
3/31/96 $10,000 LATIVE ANNUAL
<S> <C> <C> <C>
1 Year $12,911 29.11% 29.11%
5 Year $22,839 128.39% 17.96%
10 Year $37,504 275.04% 14.13%
S&P 500
<CAPTION>
PERIOD GROWTH TOTAL RETURN
ENDED OF CUMU- AVERAGE
3/31/96 $10,000 LATIVE ANNUAL
<S> <C> <C> <C>
1 Year $13,209 32.09% 32.09%
5 Year $19,815 98.15% 14.66%
10 Year $36,915 269.15% 13.95%
</TABLE>
<PAGE>
<TABLE>
WAYNE HUMMER GROWTH FUND VALUE OF INITIAL $10,000 INVESTMENT
CHART:
<CAPTION>
Net Value of Value of
Asset Reinvested Reinvested
Value Dividends Capital Gains
<S> <C> <C> <C>
1983 $10,000 $ 0 $ 0
$ 9,830 $ 0 $ 0
$ 9,350 $ 58 $ 0
$ 9,980 $ 149 $ 0
1984 $10,170 $ 245 $ 0
$10,670 $ 357 $ 0
$11,120 $ 504 $ 7
$10,530 $ 536 $ 6
1985 $12,250 $ 695 $ 7
$13,850 $ 857 $ 8
$13,880 $ 926 $ 397
$12,570 $ 903 $ 359
1986 $13,330 $1,023 $ 381
$16,140 $1,309 $ 461
$15,840 $1,436 $1,149
$16,930 $1,606 $1,228
1987 $13,220 $1,323 $1,557
$13,790 $1,430 $1,624
$14,190 $1,523 $1,676
$13,900 $1,540 $1,642
1988 $13,740 $1,669 $1,821
$14,450 $1,756 $1,915
$15,130 $1,935 $2,152
$16,360 $2,169 $2,327
1989 $16,410 $2,306 $2,656
$16,540 $2,324 $2,678
$16,960 $2,580 $3,224
$14,860 $2,343 $2,825
1990 $16,000 $2,843 $3,600
$18,040 $3,206 $4,059
$18,130 $3,365 $4,242
$18,740 $3,609 $4,385
1991 $20,020 $4,142 $4,757
$20,170 $4,173 $4,792
$19,840 $4,202 $4,883
$20,950 $4,560 $5,156
1992 $21,640 $4,919 $5,355
$21,720 $4,938 $5,374
$21,380 $4,949 $5,290
$21,400 $5,060 $5,295
1993 $22,060 $5,486 $5,511
$21,230 $5,279 $5,303
$20,910 $5,297 $5,223
$21,790 $5,628 $5,443
1994 $21,340 $5,766 $5,649
$23,430 $6,331 $6,202
23840 6565 6481
24660 6902 6704
1995 25810 7482 7592
26370 7644 7757
WAYNE HUMMER GROWTH FUND
VALUE OF INITIAL $10,000 INVESTMENT
CHART:
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>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
MARCH 31,
ASSETS 1996
------------
<S> <C>
Investments, at value (Cost:$69,427,222)........................................ $103,526,521
Cash............................................................................ 6,136
Dividends receivable............................................................ 158,087
Prepaid expenses................................................................ 8,186
Insurance deposit............................................................... 3,846
------------
Total assets...................................................... 103,702,776
LIABILITIES AND NET ASSETS
Payable for investments purchased............................................... 975,000
Due to Wayne Hummer Management Company.......................................... 69,115
Accounts payable................................................................ 50,451
------------
Total liabilities................................................. 1,094,566
------------
Net assets applicable to 3,891,462 Shares outstanding, no par value,
equivalent to $26.37 per Share.................................................. $102,608,210
============
ANALYSIS OF NET ASSETS
Excess of amounts received from issuance of Shares over amounts paid on
redemptions of Shares on account of capital..................................... $ 65,445,667
Unrealized appreciation of investments.......................................... 34,099,299
Undistributed net realized gain on sales of investments......................... 2,738,109
Undistributed net investment income............................................. 325,135
------------
Net assets applicable to Shares outstanding..................................... $102,608,210
============
THE PRICING OF SHARES
Net asset value, offering and redemption price per Share
($102,608,210 / 3,891,462 Shares outstanding)................................... $ 26.37
============
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
YEAR
ENDED
MARCH 31,
INVESTMENT INCOME: 1996
-----------
<S> <C>
Dividends..................................................................... $ 1,946,535
Interest...................................................................... 357,959
-----------
Total investment income........................................... 2,304,494
EXPENSES:
Management fee................................................................ 785,739
Transfer agent fees........................................................... 71,500
Custodian fees................................................................ 24,100
Registration costs............................................................ 26,138
Audit fees.................................................................... 23,900
Legal fees.................................................................... 25,000
Trustee fees.................................................................. 20,400
Portfolio accounting fees..................................................... 12,099
Other......................................................................... 51,691
-----------
Total expenses.................................................... 1,040,567
-----------
Net investment income........................................................... 1,263,927
-----------
Net realized gain on sales of investments....................................... 4,173,633
Net increase in unrealized appreciation......................................... 9,280,681
-----------
Net gain on investments......................................................... 13,454,314
-----------
Net increase in net assets resulting from operations............................ $14,718,241
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income................................................ $ 1,263,927 $ 1,298,381
Net realized gain on sales of investments............................ 4,173,633 1,299,662
Net increase in unrealized appreciation.............................. 9,280,681 8,553,581
------------ -----------
Net increase in net assets resulting from operations.................. 14,718,241 11,151,624
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income................................................ (1,237,815) (1,276,626)
Net realized gain on investments..................................... (1,872,634) (862,552)
------------ -----------
Total dividends to Shareholders........................................ (3,110,449) (2,139,178)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares sold............................................ 6,451,170 8,456,852
Shares issued upon reinvestment of dividends ........................ 2,991,110 2,062,820
------------ -----------
9,442,280 10,519,672
Less payments for Shares redeemed.................................... 13,211,590 17,153,071
------------ -----------
Decrease from Capital Share transactions............................... (3,769,310) (6,633,399)
Total increase in net assets........................................... 7,838,482 2,379,047
NET ASSETS:
Beginning of year.................................................... 94,769,728 92,390,681
------------- -----------
End of year (including undistributed net investment income of
$325,135 and $299,023 at March 31, 1996 and 1995, respectively)...... $102,608,210 $94,769,728
============ ===========
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
(For a Share outstanding throughout each year)
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995 1994 1993 1992
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ................. $ 23.43 $ 21.23 $ 21.72 $ 20.17 $ 18.04
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............................. 0.32 0.32 0.28 0.28 0.36
Net realized and unrealized gains (losses)
on securities .................................... 3.41 2.40 (0.42) 1.70 2.32
----------- ---------- ---------- ---------- ----------
Total from investment operations ..................... 3.73 2.72 (0.14) 1.98 2.68
LESS DISTRIBUTIONS:
Dividends from net investment income ............... (0.31) (0.31) (0.28) (0.29) (0.39)
Distributions from net realized gains on securities (0.48) (0.21) (0.07) (0.14) (0.16)
----------- ---------- ---------- ---------- ----------
Total distributions .................................. (0.79) (0.52) (0.35) (0.43) (0.55)
----------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD ....................... $ 26.37 $ 23.43 $ 21.23 $ 21.72 $ 20.17
=========== ========== ========== ========== ==========
TOTAL RETURN ......................................... 16.15% 13.04% (0.69%) 9.94% 15.14%
RATIOS AND SUPPLEMENTARY DATA:
Net assets, end of period (000's) .................. $ 102,608 $ 94,770 $ 92,391 $ 93,198 $ 55,837
Ratio of expenses to average net assets ............ 1.06% 1.07% 1.07% 1.12% 1.23%
Ratio of net investment income to average net assets 1.29% 1.44% 1.33% 1.41% 2.01%
Portfolio turnover rate ............................ 6% 3% 2% 1% 3%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
March 31, 1996
<CAPTION>
NUMBER
OF
COMMON STOCKS 94.1% SHARES VALUE
--------- ---------
AUTO & MACHINERY 7.4%
<S> <C> <C>
Echlin Incorporated 35,000 $ 1,268,750
Illinois Tool Works, Inc. 65,000 4,200,625
Regal-Beloit Corporation 100,000 2,100,000
-----------
7,569,375
BANKS 7.7%
First of America Bank Corporation 75,000 3,478,125
Northern Trust Corporation 60,000 3,240,000
UMB Financial Corp. 31,021 1,194,309
-----------
7,912,434
CHEMICAL 11.5%
Avery Dennison Corporation 45,000 2,430,000
Morton International, Inc. 120,000 4,605,000
Nalco Chemical Company 30,000 922,500
RPM, Inc. 100,000 1,550,000
Schulman (A.), Inc. 110,000 2,323,750
-----------
11,831,250
ELECTRICAL/ELECTRONICS 11.3%
AMP Incorporated 50,000 2,068,750
Applied Materials, Inc. (c) 30,000 1,046,250
Emerson Electric Co. 55,000 4,441,250
Motorola, Inc. 25,000 1,325,000
QUALCOMM Incorporated (c) 30,000 1,245,000
Thomas & Betts Corporation 20,000 1,500,000
-----------
11,626,250
FOOD, BEVERAGE & HOUSEHOLD 10.3%
McCormick & Company, Incorporated 100,000 2,200,000
PepsiCo, Inc. 20,000 1,265,000
Rubbermaid Incorporated 100,000 2,837,500
Sara Lee Corporation 80,000 2,610,000
Smucker (The J. M.) Company Class B 80,000 1,650,000
-----------
10,562,500
HEALTH CARE 9.9%
Abbott Laboratories 40,000 1,630,000
AMSCO International, Inc. (c) 50,000 700,000
Bard (C.R.) Inc. 60,000 2,137,500
Caremark International Inc. 36,250 910,781
R. P. Scherer Corporation (c) 85,000 3,729,375
Technol Medical Products (c) 60,000 1,050,937
-----------
10,158,593
<PAGE>
<CAPTION>
NUMBER
OF
SHARES VALUE
--------- ---------
INSURANCE 8.9%
<S> <C> <C>
AON Corporation 30,000 $ 1,552,500
Cincinnati Financial Corporation 49,612 3,144,192
Ohio Casualty Corporation 50,000 1,800,000
Old Republic International Corporation 80,000 2,600,000
-----------
9,096,692
OIL & GAS 2.2%
Burlington Resources, Inc. 60,000 2,227,500
PAPER & FOREST PRODUCTS 7.3%
Albany International Corp. Class A 100,000 2,000,000
Consolidated Papers, Inc. 55,000 3,093,750
Sonoco Products Company 89,250 2,432,063
-----------
7,525,813
PUBLISHING & MEDIA 4.1%
Gannett Co., Inc. 10,000 672,500
Interpublic Group of Companies, Inc. 75,000 3,543,750
-----------
4,216,250
SERVICES 5.0%
H & R Block, Inc. 60,000 2,167,500
Kelly Services, Inc. Class A 93,750 3,002,930
-----------
5,170,430
MISCELLANEOUS 8.5%
Arbor Drugs, Inc. 60,000 1,260,000
Bacou USA, Inc. (c) 65,000 983,125
Boeing Company 30,000 2,598,750
Calgon Carbon Corporation 65,000 788,125
Pall Corporation 120,000 3,075,000
-----------
8,705,000
-----------
Total Common Stocks (Cost: $62,502,788) $96,602,087
</TABLE>
<PAGE>
<TABLE>
SHORT-TERM INVESTMENTS 6.8%
<CAPTION>
DATE PRINCIPAL
COMMERCIAL PAPER 4.2% RATE % (1996) AMOUNT VALUE
------ ------- ------------ --------
<S> <C> <C> <C> <C>
American General Finance Company 5.275 04/03 $778,000 $777,775
General Electric Capital Services, Inc. 5.264 04/03 589,000 588,830
Ford Motor Credit Company 5.290 04/10 793,000 791,967
Prudential Funding Corp. 5.314 04/15 915,000 913,132
Ford Motor Credit Company 5.432 04/22 210,000 209,346
American General Finance Company 5.442 04/22 580,000 578,190
American General Finance Company 5.445 04/25 420,000 418,502
------------
4,277,742
OTHER 2.6%
United States Treasury Bill 5.082 04/04 610,000 609,745
United States Treasury Bill 4.871 05/16 1,219,000 1,211,724
United States Treasury Bill 5.148 06/06 819,000 811,448
Other 5.500 02/28 13,775 13,775
------------
2,646,692
------------
Total Short-Term Investments (Cost: $6,924,434) 6,924,434
------------
TOTAL INVESTMENTS (Cost: $69,427,222) (100.9%) 103,526,521
CASH AND OTHER ASSETS, LESS LIABILITIES ( -0.9%) (918,311)
------------
NET ASSETS (100.0%) $102,608,210
============
<FN>
NOTES TO PORTFOLIO OF INVESTMENTS:
(a) Interest rates on money market instruments represent annualized yield to
date of maturity.
(b) Based on the cost of investments of $69,427,222 for federal income tax
purposes at March 31, 1996, the aggregate gross unrealized appreciation was
$35,298,878, the aggregate gross unrealized depreciation was $1,199,579 and
the net unrealized appreciation of investments was $34,099,299.
(c) Non-income producing security.
</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 Growth Fund (the "Fund") and the Wayne Hummer Income Fund,
each operating as a separate mutual fund. The Fund commenced investment
operations on December 30, 1983, and may issue an unlimited number of full
and fractional units of beneficial interest (Shares) without par value.
1. SIGNIFICANT ACCOUNTING POLICIES SECURITY VALUATION
Investments are stated at value. Each listed and unlisted security for
which last sale information is regularly reported is valued at the last
reported sale price on that day. If there has been no sale on such day, the
last reported sale price prior to that day is utilized if such sale is
between the closing bid and asked price of the current day. If the last
price on a prior day is not between the current day's closing bid and asked
price, then the value of such security is taken to be the mean between the
current day's bid and asked price. Any unlisted security for which last
sale information is not regularly reported and any listed debt security
which has an inactive listed market for which over-the-counter market
quotations are readily available is valued at the highest closing bid price
determined on the basis of reasonable inquiry, except that debt securities
having a remaining maturity of 60 days or less are valued on an amortized
cost basis. Restricted securities and any other securities or other assets
for which market quotations are not readily available are valued by
appraisal at their fair value as determined in good faith under procedures
established by the Board of Trustees.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the trade date. Dividend
income is recorded on the ex-dividend date, and interest income is recorded
on the accrual basis and includes amortization of money market instrument
premium and discount.
<PAGE>
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.
Ordinary income dividends are normally declared and paid in April, July,
October, and December. Capital gains dividends, if any, are paid at least
annually. Dividends will be reinvested in additional Shares unless a
Shareholder requests payment in cash. Dividends payable to Shareholders
are recorded by the Fund on the ex-dividend date. On April 29,1996, an
ordinary income dividend of $.09 per Share and a long-term capital gain
dividend of $.71 per Share were declared, payable April 30, 1996 to
Shareholders of record on April 29, 1996.
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.
4. TRANSACTIONS WITH AFFILIATES
The Fund has an Investment Advisory and Management Agreement and a
Portfolio Accounting Services Agreement with Wayne Hummer Management
Company ("Investment Adviser"). The shareholders of the Investment Adviser
are the Voting Members of Wayne Hummer Investments LLC, formerly Wayne
Hummer & Co., ("Distributor and Shareholder Service Agent"). (Wayne Hummer
& Co., an Illinois limited partnership, was reorganized as a Delaware
limited liability company effective April 1, 1996.) For advisory and
management services and facilities furnished, the Fund pays fees of .80 of
1% on the first $100 million of average daily net assets, .65 of 1% of the
next $150 million of average daily net assets and .50 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 year ended March 31, 1996, the Fund
incurred management fees of $785,739.
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 Investments LLC 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 Voting Members of the Distributor and Shareholder
Service Agent. During the year ended March 31, 1996, the Fund made no
direct payments to its officers and incurred trustee fees for its
unaffiliated trustees of $20,400.
<PAGE>
<TABLE>
5. INVESTMENT TRANSACTIONS
Investment transactions (excluding money market instruments) are as follows:
<CAPTION>
YEAR ENDED
MARCH 31, 1996
--------------
<S> <C>
Purchases $ 5,919,348
Proceeds from sales $13,417,647
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>
YEAR ENDED MARCH 31,
1996 1995
----------- -----------
<S> <C> <C>
Shares sold 260,713 395,513
Shares issued upon reinvestment
of dividends 120,173 96,627
----------- -----------
380,886 492,140
Shares redeemed (534,552) (799,693)
----------- -----------
Net decrease in Shares outstanding (153,666) (307,553)
=========== ===========
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Wayne Hummer Growth Fund
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Wayne Hummer Growth Fund as of
March 31, 1996, and the related statements of operations for the year then
ended and changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the fiscal years since 1992. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of March 31, 1996, by correspondence with the custodian and broker.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Wayne Hummer Growth Fund as of March 31, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the periods then ended, and financial highlights for each of the
fiscal years since 1992, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
April 30, 1996
<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 Investments LLC
300 South Wacker Drive
Chicago, Illinois
60606-6607
1.800.621.4477 (toll-free)
(312) 431.1700 (local)
200 E. Washington Street
Appleton, Wisconsin
54911-5468
1.800.678.0833 (toll-free)
(414) 734.1474 (local)
<PAGE>
WAYNE HUMMER GROWTH FUND
300 South Wacker Drive
Chicago, IL 60606-6607
First Class
U.S. Postage
PAID
Berwyn, IL
Permit No. 150
Wayne Hummer Growth Fund
Annual Financial Statements
March 31, 1996
<PAGE>
Wayne Hummer Income Fund
Annual Financial Statements
Audited
March 31, 1996
<PAGE>
Wayne Hummer Income Fund
Fellow Shareholder:
I am pleased to present the annual financial statements for the Wayne Hummer
Income Fund for the period ended March 31, 1996.
Over the past twelve months, interest rates fell by as much as one full
percentage point. For that period, the total return of the Fund was 8.79%. The
distribution rate per share was 6.82%.* Dividends declared from net investment
income amounted to $1.02 per share. The portfolio's credit quality remains
high with more than 32% of the assets invested in U.S. Government and U.S.
Government Agency securities.
While the Fund's performance was lower than the 10.86% return of the overall
market (as measured by the Merrill Lynch Domestic Master Index),** we are
pleased with the results. As you may recall from previous letters to
shareholders, we typically position the Fund's portfolio in a defensive
posture. Therefore, we expect the Fund's performance to lag that of its
benchmark index when interest rates are falling (and bond prices are rising).
When interest rates are rising, however, we expect the Fund's performance to
be superior to that of the index. We strive to produce a relatively high total
return without incurring too much volatility.
On March 31, the average maturity of the Fund's portfolio, adjusted for call
dates, was 5.9 years. The average duration was 4.37 years. Average duration
serves as a good measure of a portfolio's price volatility due to interest
rate changes. Since duration and volatility are positively related, a high
portfolio duration will generally produce high price volatility as interest
rates change. The Fund's average duration was .7 years shorter than that of
the overall market at March 31. In other words, the Fund's duration is roughly
13% shorter than that of the index. This is consistent with our defensive
portfolio posture.
We believe the Fund is appropriately positioned to protect principal value and
provide a relatively high dividend yield in the months ahead. While we do not
envision dramatic changes in interest rates in the near future, there is a
chance that longer-term interest rates could rise. If that occurs, we plan to
extend the portfolio's average maturity and duration modestly. By doing so, we
hope to enhance the portfolio's performance without meaningfully increasing
its risk.
Included in this report are detailed statements about the Fund and its
financial condition. We hope you find them informative.
We appreciate the privilege of investing your funds.
Sincerely,
David P. Poitras
Vice President and Portfolio Manager
April 26, 1996
*Distribution rate per share is based upon dividends per share declared from
net investment income during the period divided by the net asset value per
share at the end of the period.
**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>
PORTFOLIO MANAGER PROFILE
DAVID P. POITRAS
THE KEY TO SUCCESSFUL INVESTING . . .
Fortunately for shareholders of the Wayne Hummer Income Fund, David Poitras
has been more successful at forecasting interest rates than meteorologists
have been at forecasting Chicago's weather. Although the Windy City has
experienced unpredictable weather this year, David has been able to position
the Fund to create a stable source of income while providing a competitive
yield.
As manager of the Fund since its inception in 1992, David has built a rather
conservative portfolio. He considers capital preservation to be just as
important as total return. The Fund actively seeks out those fixed income
situations where the risk is limited and the probable return is relatively
high. He believes limiting risk and enhancing return is the key to successful
investing.
David joined Wayne Hummer Investments LLC in 1985 after earning his Bachelor
of Science degree in finance from Northern Illinois University. He became a
principal of the firm in 1992, after gaining experience in the bond department
as both a trader and manager. Shortly following, he became Vice President and
Portfolio Manager of the Wayne Hummer Income Fund. Additionally, he is
President and Portfolio Manager of the Wayne Hummer Money Fund Trust.
Photographic image of David P. Poitras.
DAVID P. POITRAS has been Portfolio Manager of the Wayne Hummer Income Fund
since its inception in 1992.
<PAGE>
<TABLE>
WAYNE HUMMER INCOME FUND VS.
MERRILL LYNCH DOMESTIC MASTER INDEX
CHART:
<CAPTION>
WAYNE HUMMER MERRILL LYNCH
INCOME FUND DOMESTIC MASTER INDEX
<S> <C> <C>
12/1/92 $10,000 $10,000
12/31/92 $10,035 $10,149
3/31/93 $10,431 $10,572
6/30/93 $10,737 $10,855
9/30/93 $11,080 $11,155
12/31/93 $11,044 $11,166
3/31/94 $10,892 $10,857
6/30/94 $10,722 $10,742
9/30/94 $10,751 $10,803
12/31/94 $10,835 $10,851
3/31/95 $11,344 $11,393
6/30/95 $11,865 $12,094
9/30/95 $12,115 $12,327
12/31/95 $12,516 $12,860
3/31/96 $12,339 $12,634
<CAPTION>
WAYNE HUMMER INCOME FUND
PERIOD GROWTH TOTAL RETURN
ENDED OF CUMU- AVERAGE
3/31/96 $10,000 LATIVE ANNUAL
<S> <C> <C> <C>
1 Year $10,879 8.79% 8.79%
12/1/92- $12,342 23.42% 6.52%
3/31/96
<CAPTION>
MERRILL LYNCH DOMESTIC MASTER
PERIOD GROWTH TOTAL RETURN
ENDED OF CUMU- AVERAGE
3/31/96 $10,000 LATIVE ANNUAL
<C> <C> <C> <C>
1 Year $11,089 10.89% 10.89%
12/1/92- $12,634 26.34% 7.27%
3/31/96
<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>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
MARCH 31,
ASSETS 1996
<S> <C>
Investments, at value (Cost: $24,234,978)...................................... $24,072,285
Other assets:
Cash.......................................................................... 49,459
Receivable for investments sold............................................... 827,708
Interest receivable........................................................... 497,577
Deferred organizational costs (net of accumulated amortization of $40,000).... 20,000
Prepaid expenses.............................................................. 5,119
-----------
Total assets...................................................... 25,472,148
LIABILITIES AND NET ASSETS
Organizational costs payable.................................................... 23,000
Dividends payable............................................................... 21,956
Due to Wayne Hummer Management Company.......................................... 10,820
Accounts payable................................................................ 17,761
-----------
Total liabilities................................................. 73,537
-----------
Net assets applicable to 1,698,924 Shares outstanding, no par value,
equivalent to $14.95 per Share.................................................. $25,398,611
===========
ANALYSIS OF NET ASSETS
Excess of amounts received from issuance of Shares over amounts paid on
redemptions of Shares on account of capital..................................... $26,493,569
Unrealized depreciation of investments.......................................... (162,693)
Accumulated net realized loss on sales of investments........................... (932,265)
-----------
Net assets applicable to Shares outstanding..................................... $25,398,611
===========
THE PRICING OF SHARES
Net asset value, offering and redemption price per Share
($25,398,611 / 1,698,924 Shares outstanding)................................... $ 14.95
============
<PAGE>
<CAPTION>
STATEMENT OF OPERATIONS
YEAR
ENDED
MARCH 31,
INVESTMENT INCOME: 1996
----------
<S> <C>
Interest...................................................................... $2,025,925
EXPENSES:
Management fee................................................................ 131,344
Transfer agent fees........................................................... 29,700
Professional fees............................................................. 22,689
Portfolio accounting costs.................................................... 19,588
Amortization of organization costs............................................ 12,000
Custodian fees................................................................ 9,900
Printing and reporting fees................................................... 7,354
Trustee fees.................................................................. 3,851
Other......................................................................... 3,498
----------
Total expenses.................................................... 239,924
----------
Net investment income........................................................... 1,786,001
----------
Net realized loss on sales of investments....................................... (63,196)
Net change in unrealized depreciation........................................... 522,725
----------
Net gain on investments......................................................... 459,529
----------
Net increase in net assets resulting from operations............................ $2,245,530
==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
YEAR ENDED MARCH 31,
1996 1995
---- ----
OPERATIONS:
<S> <C> <C>
Net investment income ............................ $ 1,786,001 $ 1,914,391
Net realized loss on sales of investments ........ (63,196) (895,348)
Net change in unrealized depreciation ............ 522,725 (100,111)
------------ ------------
Net increase in net assets resulting from operations 2,245,530 918,932
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ............................ (1,774,546) (1,899,567)
Net realized gain on investments ................. -- (7,233)
------------ ------------
Total dividends to Shareholders .................... (1,774,546) (1,906,800)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares sold ........................ 3,761,780 5,097,922
Shares issued upon reinvestment of dividends ..... 1,319,391 1,501,837
------------ ------------
5,081,171 6,599,759
Less payments for Shares redeemed ................ 6,505,751 12,911,490
------------ ------------
Decrease from Capital Share transactions ........... (1,424,580) (6,311,731)
------------ ------------
Total decrease in net assets ....................... (953,596) (7,299,599)
NET ASSETS:
Beginning of period .............................. 26,352,207 33,651,806
------------ ------------
End of period .................................... $ 25,398,611 $ 26,352,207
============ ============
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
(For a Share outstanding throughout each period)
<CAPTION>
DECEMBER 1, 1992
YEAR ENDED MARCH 31, THROUGH
1996 1995 1994 MARCH 31, 1993 (A)
---- ---- ---- ------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD..................... $14.69 $15.10 $15.41 $15.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................. 1.02 0.99 0.95 0.25
Net realized and unrealized gains (losses) on
securities 0.26 (0.42) (0.26) 0.41
------- ------ ------ ------
Total from investment operations ........................ 1.28 0.57 0.69 0.66
LESS DISTRIBUTIONS:
Dividends from net investment income................... (1.02) (0.98) (0.95) (0.25)
Dividends from net realized gains on securities ....... 0.00 0.00 (d) (0.05) 0.00
------- ------ ------ ------
Total distributions................................ (1.02) (0.98) (1.00) (0.25)
------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................... $14.95 $14.69 $15.10 $15.41
======= ====== ====== ======
TOTAL RETURN............................................. 8.79% 4.16% 4.42% 4.31%
RATIOS AND SUPPLEMENTARY DATA:
Net assets, end of period (000's)...................... $25,398 $26,352 $33,652 $19,135
Ratio of expenses to average net assets................ 0.91% 0.94% 1.13% 1.39% (b)(c)
Ratio of net investment income to average net assets... 6.80% 6.70% 6.14% 5.58% (b)(c)
Portfolio turnover rate................................ 46% 32% 86% 141% (c)
<FN>
NOTES TO FINANCIAL HIGHLIGHTS:
a.) Commencement of operations was December 1, 1992.
b.) During the fiscal period ended March 31, 1993, expenses in excess of the
expense limitation were reimbursable from the Investment Adviser. Absent the
expense limitation, the ratio of expenses to average net would have increased,
and the ratio of net investment income to average net assets would have
increased, and the ratio of net investment income to average net assets would
have decreased by 0.10%.
c.) Determined on an annualized basis.
d.) Less than $.01 per share.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
<CAPTION>
PRINCIPAL
CORPORATE OBLIGATIONS 61.4% AMOUNT VALUE
--------- ---------
AIRLINES 4.1%
<S> <C> <C>
United Air Lines, Inc., 9.76%, due 05/27/06 $960,248 $1,056,734
BANKS AND FINANCE 3.6%
Citicorp, 9.375%, due 03/01/16 506,000 527,449
Norwest Corporation, 7.65%, due 03/15/05 360,000 378,605
---------
906,054
BROKERAGE 3.8%
Merrill Lynch & Co., Inc.,
6.25%, due 05/19/03 (b) 500,000 475,156
7.00%, due 04/27/08 500,000 496,705
---------
971,861
MACHINERY 6.6%
Caterpillar Inc., 9.75%, due 06/01/19 1,000,000 1,123,470
Parker-Hannifin Corporation, 9.75%,
due 02/15/21 480,000 551,722
---------
1,675,192
OIL & GAS 4.7%
The Coastal Corporation
10.25%, due 10/15/04 1,000,000 1,195,770
PAPER AND FOREST PRODUCTS 7.7%
Boise Cascade Corporation, 9.875%,
due 02/15/01 1,000,000 1,089,830
Georgia Pacific Corporation
9.75%, due 01/15/18 415,000 433,775
9.50%, due 02/15/18 407,000 425,746
---------
1,949,351
RETAIL 5.8%
Dayton Hudson Corporation
9.25%, due 11/15/16 354,000 372,780
9.875%, due 06/01/17 393,000 416,588
May Department Stores Company,
9.875%, due 06/01/17 655,000 694,018
---------
1,483,386
TELECOMMUNICATIONS 3.3%
NYNEX Corporation, 9.55%, due 05/01/10 730,039 831,968
UTILITIES 9.2%
Commonwealth Edison Company
8.125%, due 01/15/07 500,000 514,615
8.875%, due 10/01/21 485,000 511,699
Consolidated Natural Gas Company,
8.625%, due 12/01/11 1,250,000 1,317,800
---------
2,344,114
<PAGE>
<CAPTION>
PRINCIPAL
CORPORATE OBLIGATIONS 61.4% AMOUNT VALUE
--------- ---------
MISCELLANEOUS 12.6%
<S> <C> <C>
Anheuser-Busch Companies, Inc., 10.00%,
due 07/01/18 $280,000 298,194
Browning-Ferris Industries, Inc., 6.375%,
due 01/15/08 500,000 476,195
Canadian Pacific Limited, 8.85%, due 06/01/22 500,000 542,620
CBI Industries, Inc., 6.25%, due 06/30/00 500,000 492,140
Champion International, 6.40%, due 02/15/26 500,000 473,145
Eastman Kodak, 9.75%, due 10/01/04 325,000 389,100
Inco Ltd., Convertible Debenture, 7.75%,
due 03/15/16 500,000 522,500
---------
3,193,894
---------
TOTAL CORPORATE OBLIGATIONS (Cost: $15,644,241) 15,608,324
MUNICIPALITY-TAXABLE 1.1%
Virginia State Housing Development, 7.95%,
due 05/01/13 (Cost: $254,089) 250,000 269,930
MORTGAGE-BACKED SECURITIES 21.3%
COLLATERALIZED MORTGAGE OBLIGATIONS 15.6%
Federal Home Loan Mortgage Corporation 12.7%
8.50%, due 06/15/05 750,000 767,625
7.50%, due 11/15/08 500,000 513,290
7.50%, due 02/15/20 400,000 401,856
8.00%, due 03/15/21 1,000,000 1,017,480
8.00%, due 04/15/22 500,000 519,820
---------
3,220,071
Federal National Mortgage Association 2.9%
8.00%, due 02/25/07 500,000 525,870
8.50%, due 06/25/21 200,000 208,480
---------
734,350
FEDERAL NATIONAL MORTGAGE ASSOCIATION 4.3%
11.25%, due 04/01/01 134,100 142,484
10.75%, due 09/01/15 158,524 174,413
10.50%, due 01/01/16 99,761 109,294
10.50%, due 06/01/19 305,542 337,585
9.00%, due 12/01/19 103,103 107,890
8.00%, due 12/01/22 210,033 213,598
---------
1,085,264
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 1.4%
9.00%, due 11/15/01 207,483 219,300
8.50%, due 09/20/16 73,299 75,664
8.00%, due 01/20/17 69,688 70,742
---------
365,706
---------
TOTAL MORTGAGE-BACKED SECURITIES (Cost: $5,387,142) 5,405,391
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
CORPORATE OBLIGATIONS 61.4% AMOUNT VALUE
--------- ---------
U.S. TREASURY OBLIGATIONS 8.5%
<S> <C> <C>
U.S. Treasury Note, 6.50%, due 05/15/05 $1,525,000 $ 1,533,250
U.S. Treasury Strips, 0%, due 02/15/21 3,500,000 623,140
---------
TOTAL U.S TREASURY OBLIGATIONS
(Cost: $2,317,256) 2,156,390
---------
TOTAL LONG-TERM OBLIGATIONS
(Cost: $23,602,727) 23,440,035
U.S. TREASURY BILL 2.5%
5.01%, due 6/27/96 (Cost: $632,251) 640,000 632,251
TOTAL INVESTMENTS (Cost: $24,234,978) ( 94.8%) 24,072,285
CASH AND OTHER ASSETS, LESS LIABILITIES ( 5.2%) 1,326,326
---------
NET ASSETS (100.0%) $25,398,611
=========
<FN>
NOTE TO PORTFOLIO OF INVESTMENTS:
(a) Based on the cost of investments of $24,234,978 for federal income tax
purposes at March 31, 1996, the aggregate gross unrealized appreciation was
$188,566, the aggregate gross unrealized depreciation was $351,259 and the net
unrealized appreciation of investments was $162,693.
(b) Floating rate security. Rate shown is the interest rate at March 31, 1996.
The next interest rate change date is May 19, 1996.
</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.
<PAGE>
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.
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 investments for federal income
tax purposes at March 31, 1996, amounting to $932,265, is available to
offset future capital gains. If not applied, $880,524 of the loss carry
forward expires in 2003 and $51,741 expires in 2004.
4. TRANSACTIONS WITH AFFILIATES
The Fund has an Investment Advisory and Management Agreement and a
Portfolio Accounting Services Agreement with Wayne Hummer Management
Company ("Investment Adviser"). The shareholders of the Investment Adviser
are the Voting Members of Wayne Hummer Investments LLC, formerly Wayne
Hummer & Co., ("Distributor and Shareholder Service Agent"). (Wayne Hummer
& Co., an Illinois limited partnership, was reorganized as a Delaware
limited liability company effective April 1, 1996.) 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 year ended March 31, 1996, the Fund incurred management
fees of $131,344.
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 Investments LLC 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 Voting Members of the Distributor and Shareholder
Service Agent. During the year ended March 31, 1996, the Fund made no
direct payments to its officers and incurred trustee fees for its
unaffiliated trustees of $3,851.
<PAGE>
<TABLE>
5. INVESTMENT TRANSACTIONS
Investment transactions (excluding money market instruments) are as follows:
<CAPTION>
YEAR ENDED
MARCH 31, 1996
-------------
<S> <C>
Purchases $11,705,168
Proceeds from sales $13,000,951
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>
YEAR ENDED MARCH 31,
1996 1995
----------- -----------
<S> <C> <C>
Shares sold 247,976 348,438
Shares issued upon reinvestment
of dividends 87,237 103,071
----------- -----------
335,213 451,509
Shares redeemed (430,420) (886,403)
----------- -----------
Net decrease in Shares outstanding (95,207) (434,894)
=========== ===========
7. FEDERAL TAX STATUS OF 1995 DIVIDENDS
The income dividend is taxable as ordinary income. The dividends paid to
you, whether received in cash or reinvested in Shares, must be included on
your federal income tax return and must be reported by the Fund to the
Internal Revenue Service in accordance with the U.S. Treasury Department
regulations.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Wayne Hummer Income Fund
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Wayne Hummer Income Fund as of
March 31, 1996, and the related statements of operations for the year then
ended and changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the fiscal years since 1993. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of March 31, 1996, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Wayne Hummer Income Fund as of March 31, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the periods then ended, and financial highlights for each of the
fiscal years since 1993, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
April 30, 1996
<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 INVESTMENTS LLC
300 South Wacker Drive
Chicago, Illinois
60606-6607
1.800.621.4477 (toll-free)
(312) 431.1700 (local)
200 E. Washington Street
Appleton, Wisconsin
54911-5468
1.800.678.0833 (toll-free)
(414) 734.1474 (local)
WAYNE HUMMER INCOME FUND
300 South Wacker Drive
Chicago, IL 60606-6607
First Class
U.S. Postage
PAID
Berwyn, IL
Permit No. 150
WAYNE HUMMER INCOME FUND
ANNUAL FINANCIAL STATEMENTS
MARCH 31, 1996
