Wayne Hummer(R)
Money Market Fund
Photo of: DAVID P. POITRAS
ANNUAL FINANCIAL STATEMENTS
March 31,2000
DEAR FELLOW SHAREHOLDER:
We are pleased to present the annual financial statements of the Wayne Hummer
Money Market Fund (the "Fund") for the year ended March 31, 2000.
Last year, the Federal Reserve Bank began lifting short-term interest rates in
reaction to strong economic growth and the attendant fears of rising inflation.
The first hike came in June 1999, and was followed by four additional hikes by
March 21, 2000. Because interest rate levels are reflected generally in money
market instrument returns, the Fund's yield was higher as a result.
The seven-day-average yield on the Fund's portfolio for the period ended March
31, 2000, was 5.29%; if dividends were reinvested the effective yield was 5.41%.
Since these figures represent historical data, future yields may be higher or
lower. Net assets under management at the end of the year totaled $361,186,629,
a 2.9% increase during the fiscal year.
Consistent with the Fund's investment objective of seeking to maximize current
income to the extent consistent with preservation of capital and maintenance of
liquidity, we continue to follow a conservative approach to portfolio
management, investing exclusively in those short-term, fixed-
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income securities that present the Fund with minimal credit risk. In other
words, all investments are of the highest credit quality.
A large percentage of the Fund's portfolio is invested in commercial paper -
about 72% as of March 31, 2000. Commercial paper offers superior yields and
high-credit quality, thus the heavy portfolio weighting. We allocate the balance
of the portfolio to short-term corporate and bank notes and U. S. government and
government agency securities.
Also, we generally maintain an average portfolio maturity between 30 and 60
days, with the objective of providing a prudent balance of liquidity and yield.
More complete details about the portfolio are presented on the following pages.
We appreciate your continued support of the Fund and ask that you call or write
us if you have any questions about the Fund or your account.
Sincerely,
/s/ David P. Poitras,
David P. Poitras,
Portfolio Manager
April 28, 2000
An investment in the Fund is not a deposit or obligation of or guaranteed or
insured by the U.S. Government, any bank, the Federal Deposit Insurance
Corporation, or any other agency. There can be no assurance that the Fund will
be able to maintain a stable net asset value of $1.00 per share.
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AUTOMATIC INVESTING
This graph illustrates investing $50, $200, and $500 a month at a hypothetical
annual fixed investment return of 5% over a period of 20 years.
Line Chart:
$50 per month $200 per month $500 per month
$20,637 $82,548 $206,371
0 0 0 0
5 3414 13658 34145
10 7796 31186 77964
15 13420 53680 134200
20 20637 82548 206371
Even people with modest income can build significant invested assets over time.
Wayne Hummer Money Market Fund provides an easy way for you to start
accumulating wealth. The Systematic Investment Plan allows you to invest a set
amount every month. You can have as little as $100 transferred from your
paycheck, government check or from a bank, savings and loan or credit union
account every month. Then just sit and watch your investment grow. Contact the
Fund or your Investment Executive for complete details.
This illustration does not reflect an actual investment in the Wayne Hummer
Money Market Fund. The value of your original investment and your return may
vary.
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FUND OVERVIEW
Established in 1982, the primary objective of the Wayne Hummer Money Market Fund
(the "Fund") is to maximize current income while preserving capital and
maintaining liquidity. The Fund is an excellent vehicle for short-term cash
management and for investors who need stability of principal. The Fund seeks to
maintain a stable $1.00 net asset value per share at all times, although there
is no guarantee that we will be able to do so.
The Fund's prospectus contains detailed information about permissible
investments.
SERVICES AVAILABLE TO SHAREHOLDERS
SOCIAL SECURITY DIRECT DEPOSIT PLAN
Instead of receiving a monthly check or sending it to your bank, you may use the
Wayne Hummer Money Market Fund to directly deposit your social security
benefits. You can easily access the money you need, while the rest continues to
earn dividends. Contact your Wayne Hummer Investment Executive for complete
details.
PAYROLL DIRECT DEPOSIT PLAN
You may authorize your employer to deduct a specified amount from your payroll
check to purchase additional shares of the Fund. Complete details are available
from the Fund or your Wayne Hummer Investment Executive.
SYSTEMATIC INVESTMENT PLAN
What better way to start early and save regularly than with a Systematic
Investment Plan. You may have subsequent purchases invested automatically each
month. Your financial institution can send money from your bank account to the
Fund. Request an application with full details from your Investment Executive or
call the Fund directly.
IRA OR RETIREMENT PLANS
Shares of the Wayne Hummer Money Market Fund are a suitable addition to your IRA
or pension plan. Contact your Wayne Hummer Investment Executive for complete
details on the expanded options available for retirement planning, including the
Roth IRA.
CHECKWRITING PRIVILEGES
After completing a request for checkwriting privileges, you may write checks in
any amount from $500 to $250,000. Your full investment in the Fund will continue
to earn dividends until your check is presented to our bank for collection. A
checkwriting authorization card will be sent to you upon request.
INTERNET ADDRESS: WWW.WHUMMER.COM
Those who enjoy using the computer to access information will find the
prospectus and current rates for the Fund, along with information on the other
Wayne Hummer Funds, on our website. Other services available through Wayne
Hummer Investments LLC are also on-line.
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STATEMENT OF ASSETS AND LIABILITIES
YEAR ENDED MARCH 31, 2000
ASSETS
Investments, at amortized cost $358,004,362
Cash 196,126
Interest receivable 1,343,405
Receivable for Fund Shares sold 6,349,731
Prepaid expenses 104,615
Insurance deposit 18,775
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Total assets 366,017,014
LIABILITIES AND NET ASSETS
Payable for Fund Shares redeemed 4,369,085
Dividends payable 252,542
Due to Wayne Hummer Management Company 150,209
Accounts payable 58,549
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Total liabilities 4,830,385
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Net assets applicable to Shares outstanding,
equivalent to $1.00 per Share $361,186,629
================================================================================
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2000
INTEREST INCOME $19,061,825
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EXPENSES
Management fee 1,746,900
Transfer agent fees 178,800
Shareholder service agent fees 153,000
Professional fees 146,919
Printing costs 73,652
Custodian fees 63,300
Registration costs 53,165
Trustee fees 37,250
Portfolio accounting fees 27,743
Insurance costs 11,750
Other 8,900
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Total expenses 2,501,379
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Net increase in net assets resulting from operations $16,560,446
================================================================================
See accompanying notes to financial statements.
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STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MARCH 31, 2000 1999
OPERATIONS
Net investment income $16,560,446 $14,908,912
Dividends to Shareholders from net
investment income (16,560,446) (14,908,912)
CAPITAL SHARE TRANSACTIONS (DOLLAR AMOUNTS
AND NUMBER OF SHARES ARE THE SAME):
Proceeds from Shares sold 921,160,340 823,747,509
Shares issued upon reinvestment of dividends 16,214,534 14,412,717
--------------------------------------------------------------------------------
937,374,874 838,160,226
Less payments for Shares redeemed (927,161,702) (786,095,100)
--------------------------------------------------------------------------------
Increase due to Capital Share transactions 10,213,172 52,065,126
--------------------------------------------------------------------------------
NET ASSETS
Beginning of year 350,973,457 298,908,331
--------------------------------------------------------------------------------
End of year $361,186,629 $350,973,457
================================================================================
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
YEAR ENDED MARCH 31, 2000 1999 1998 1997 1996
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.05 0.04 0.04 0.04 0.05
Less dividends from net
investment income (0.05) (0.04) (0.04) (0.04) (0.05)
--------------------------------------------------------------------------------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
Total return 4.85% 4.82% 5.07% 4.80% 5.18%
RATIOS AND SUPPLEMENTARY DATA
Net assets, end of year ($000's) 361,187 350,973 298,908 238,238 226,273
Ratio of total expenses to average
net assets 0.72% 0.71% 0.72% 0.74% 0.79%
Ratio of net investment income to
average net assets 4.74% 4.70% 4.96% 4.70% 5.04%
================================================================================
See accompanying notes to financial statements.
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PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
VALUE
COMMERCIAL PAPER (72.1%)
BANKING (4.0%)
Bank One Corporation
5.97%, 5/22/00 $1,983,453
Banc One Financial Corporation
6.10% - 6.23%, 5/30/00 - 5/31/00 12,474,759
--------------------------------------------------------------------------------
14,458,212
BROKERAGE (4.6%)
Merrill Lynch & Co., Inc.
5.97% - 6.26%, 4/25/00 - 6/08/00 16,461,406
--------------------------------------------------------------------------------
BUSINESS FINANCE (14.5%)
Ford Motor Credit Company
5.98% - 6.22%, 5/05/00 - 6/21/00 11,377,313
General Electric Capital Corp.
5.86% - 6.25%, 4/12/00 - 6/22/00 15,632,062
General Motors Acceptance Corp.
6.21% - 6.22%, 6/5/00 - 7/11/00 13,945,383
IBM Credit Corporation
6.05%, 5/19/00 4,960,533
National Rural Utilities
Cooperative Finance Corp.
6/7/00 - 8/3/00 6,348,617
--------------------------------------------------------------------------------
52,263,908
CHEMICALS (4.5%)
DuPont (E.I.) de Nemours & Co.
5.74% - 6.28%, 4/13/00 - 10/03/00 16,092,130
--------------------------------------------------------------------------------
ELECTRIC AND GAS UTILITIES (6.5%)
Florida Power Corp.
5.81% - 6.18%, 4/05/00 - 4/26/00 6,983,018
IPALCO Enterprises, Inc.
5.87% - 5.96%, 4/3/00 - 4/24/00 12,978,301
Laclede Gas Company
5.92%, 4/06/00 3,597,085
--------------------------------------------------------------------------------
23,558,404
FOOD AND BEVERAGE (4.7%)
Dean Foods Company
5.96% - 6.11%, 4/26/00 - 5/25/00 16,896,690
--------------------------------------------------------------------------------
OIL AND GAS (4.7%)
Chevron Transport Corp.
5.98% - 6.26%, 4/19/00 - 8/22/00 16,797,844
--------------------------------------------------------------------------------
PERSONAL FINANCE (2.7%)
American General Finance Corp.
5.96%, 4/27/00 9,957,750
--------------------------------------------------------------------------------
VALUE
RETAIL AND ENTERTAINMENT (6.9%)
Wal-Mart Stores, Inc.
6.00% - 6.02%, 4/11/00 - 4/18/00 $12,017,844
Walt Disney Company
5.85% - 6.22%, 4/7/00 - 7/10/00 13,051,032
--------------------------------------------------------------------------------
25,068,876
TELECOMMUNICATIONS (16.4%)
AT&T Corporation
5.89% - 6.04%, 4/13/00 - 4/14/00 7,434,791
Bell Atlantic Financial Services
5.94% - 6.21%, 4/10/00 - 5/30/00 17,184,051
BellSouth Telecommunications, Inc.
6.11% - 6.17%, 5/2/00 - 5/26/00 17,571,402
SBC Communications Inc.
5.97% - 6.18%. 5/9/00 - 6/2/00 17,243,359
--------------------------------------------------------------------------------
59,433,603
MISCELLANEOUS (2.6%)
General Dynamics Corp.
6.25%, 6/19/00 6,906,604
International Business
Machines Corporation
5.98%, 5/18/00 2,580,143
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9,486,747
TOTAL COMMERCIAL PAPER 260,475,570
CORPORATE AND BANK NOTES (17.2%)
BANKING (3.9%)
Bank One Corporation
6.36%, 8/15/00 1,058,266
Bank One NA Illinois
6.02%, 4/20/00 1,998,873
Citigroup Inc.
6.24%, 6/15/00 799,766
Wells Fargo Company (a)
6.26%, 4/28/00 1,000,000
Wells Fargo Company
6.03%, 4/10/00 8,998,214
--------------------------------------------------------------------------------
13,855,119
BUSINESS FINANCE (2.8%)
Ford Motor Credit Company
6.46% - 6.53%, 10/06/00 - 10/10/00 5,454,755
General Electric Capital Corp.
6.01%, 4/15/00 1,000,315
General Motors Acceptance Corp.
6.33%, 7/24/00 1,706,107
National Rural Utilities
Cooperative Finance
6.51%, 12/01/00 1,996,348
--------------------------------------------------------------------------------
10,157,525
<PAGE>
VALUE
PERSONAL FINANCE (4.2%)
American General Finance Corp.
5.89% - 6.37%, 4/15/00 - 7/01/00 $1,899,599
Associates Corp. of North America
5.73% - 6.79%, 6/15/00 - 1/15/01 12,137,975
Commercial Credit Corporation
6.05%, 4/15/00 1,193,968
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15,231,542
OTHER (6.3%)
Colgate-Palmolive Co.
6.04%, 4/17/00 1,999,616
Duke Power Co.
6.32%, 6/01/00 3,503,720
Illinois Tool Works Inc.
6.44%, 9/15/00 5,699,866
International Business
Machines Corporation
6.12% - 6.26%, 6/15/00 - 8/07/00 4,499,960
Pitney Bowes Credit Corp.
5.95%, 9/29/00 2,000,000
Wal-Mart Stores, Inc.
6.48%, 7/15/00 5,035,278
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22,738,440
TOTAL CORPORATE AND
BANK NOTES 61,982,626
U.S. GOVERNMENT AND AGENCY
ISSUES (9.8%)
MORTGAGE-BACKED SECURITIES (2.6%)
Federal Home Loan
Mortgage Corp.
5.94% - 6.44%, 5/1/00 - 12/01/00 1,826,775
Federal National Mortgage Association
5.40% - 6.79%, 4/01/00 - 1/01/01 7,623,185
--------------------------------------------------------------------------------
9,449,960
VALUE
OTHER (7.2%)
Federal Farm Credit Banks
5.93% - 6.27%, 5/24/00 - 9/01/00 $4,999,846
Federal Home Loan Banks
6.00% - 6.04%, 7/14/00 - 9/01/00 1,888,729
Federal Home Loan Mortgage Corp.
5.79% - 6.50%, 4/26/00 - 1/12/01 10,217,684
Federal Home Loan Mortgage Corp. (a)
6.39%, 4/04/00 2,000,000
Federal National Mortgage Association
5.75% - 6.40%, 4/20/00 - 1/29/01 6,989,947
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26,096,206
TOTAL U.S. GOVERNMENT AND
AGENCY ISSUES 35,546,166
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TOTAL INVESTMENTS (99.1%) 358,004,362
CASH AND OTHER ASSESTS
LESS LIABILITIES (0.9%) 3,182,267
--------------------------------------------------------------------------------
NET ASSETS (100.0%) $361,186,629
================================================================================
NOTE TO PORTFOLIO OF INVESTMENTS:
(a) Short-term variable rate security. The rate shown is the current rate at
March 31, 2000. The date shown represents the next interest rate change date.
(b) Interest rates represent annualized yield to date of maturity.
(c) For each security, cost (for financial reporting and federal income tax
purposes) and carrying value are the same. Likewise, carrying value approximates
principal amounts.
(d) The average weighted maturity of the portfolio is 58 days at March 31, 2000.
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION:
On July 30, 1999, the Wayne Hummer Money Fund Trust was reorganized as the Wayne
Hummer Money Market Fund, a separate portfolio of Wayne Hummer Investment Trust
(the "Trust"), solely to change its form of legal entity. The Trust is an
open-end management company organized as a Massachusetts business trust. The
Trust consists of four investment portfolios, the Wayne Hummer CorePortfolio
Fund, the Wayne Hummer Growth Fund, the Wayne Hummer Income Fund and the Wayne
Hummer Money Market Fund, each operating as a separate mutual fund. Presented
herein are the financial statements of the Wayne Hummer Money Market Fund (the
"Fund"). The predecessor Fund commenced investment operations on April 2, 1982.
The Fund may issue an unlimited number of full and fractional units of
beneficial interest ("Shares") without par value. The investment objective of
the Fund is to maximize current income to the extent consistent with
preservation of capital and maintenance of liquidity.
1. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Investments are stated at value. The Fund utilizes the amortized cost method to
determine value. In the event that a deviation of 1/2 of 1% or more exists
between a Portfolio's $1.00 per Share net asset value and the net asset value as
calculated by valuing the Portfolio securities based upon market quotations, if
available, or otherwise based upon a matrix system approved by the Board of
Trustees, or if there is any other deviation which the Fund believes would
result in a material dilution to Shareholders or purchasers, the Board of
Trustees of the Fund promptly will consider what action should be taken.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the trade date. Investment income is
recorded on the accrual basis and includes amortization of premium and discount
on investments.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles may require management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. In those cases, actual results may differ from estimates.
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 by dividing the
value of net assets (total assets less liabilities) by the total number of
Shares outstanding. Dividends are declared daily and distributed monthly in the
form of additional Shares at net asset value unless the Shareholder elects to
have dividends paid in cash, in which case they are credited monthly to the
Shareholder's brokerage account with Wayne Hummer Investments LLC.
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"), and a Distribution Agreement and a Shareholder Service Agreement with
Wayne Hummer Investments LLC ("Distributor and Shareholder Service Agent"). The
shareholders of the Investment Adviser are the Voting Members of the Distributor
and Shareholder Service Agent. For advisory
<PAGE>
and management services and facilities furnished, the Fund pays fees on a
declining annual basis ranging from .50 of 1% on the first $500 million of
average daily net assets to .275 of 1% of average daily net assets in excess of
$2.5 billion. 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 1% of average daily net assets on an annual basis.
During the year ended March 31, 2000, the Fund incurred management fees of
$1,746,900.
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. The
Fund reimburses the Shareholder Service Agent for the approximate cost of
processing Fund Share transactions and maintaining Shareholder accounts.
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, 2000, the Fund made no direct payments to its
officers and incurred trustee fees for its unaffiliated trustees of $37,250.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES--
WAYNE HUMMER MONEY MARKET FUND
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Wayne Hummer Money Market Fund as of March 31,
2000, 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 1996. 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 auditing standards generally
accepted in the United States. 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, 2000, 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 Money Market Fund as of March 31, 2000, 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 1996, in conformity with accounting principles generally accepted in the
United States.
/s/ Ernst & Young LLP
Chicago, Illinois
April 28, 2000
<PAGE>
BOARD OF TRUSTEES
Steven R. Becker
Chairman
Charles V. Doherty
Joel D. Gingiss
Patrick B. Long
David P. Poitras
James J. Riebandt
Eustace K. Shaw
START INVESTING TODAY...
For further information on any of the funds or fund services or to discuss which
Fund may be appropriate for your investment needs, please contact your Wayne
Hummer Investment Executive.
CHICAGO Toll-free: 800-621-4477 Local: 312-431-1700
300 South Wacker Drive
Chicago, Illinois 60606-6607
APPLETON Toll-free: 800-678-0833 Local: 920-734-1474
200 East Washington Street Appleton, Wisconsin 54911-5468
INTERNET www.whummer.com
This brochure must be preceded or accompanied by a current prospectus of the
Wayne Hummer Investment Trust.
LOGO: Wayne Hummer(R)
Investments LLC
300 South Wacker Drive
Chicago, Illinois 60606-6607
First Class
U.S. Postage
PAID
South Suburban, IL
Permit #3600
<PAGE>
Wayne Hummer(R)
Growth Fund
ANNUAL FINANCIAL STATEMENTS
March 31, 2000
Photo of: THOMAS J. ROWLAND
DEAR FELLOW SHAREHOLDER:
The Wayne Hummer Growth Fund (the "Fund")
completed its sixteenth complete fiscal year, which ended March 31, 2000. The
report contains a chart which compares a hypothetical $10,000 investment in the
Fund for the past ten years with a like amount invested in "the market", as well
as management's discussion and analysis of the Fund's performance during the
fiscal year. As proxies for "the market" we again present both the Standard &
Poor's Composite Stock Price Index (the S&P 500) and the Russell Mid-Cap Index.
For the fiscal year ended March 31, 2000, the value of a fund share increased
$10.17 to $46.83 from $36.66 on March 31, 1999. In addition, distributions of
income and capital gains of $4.06 were made to shareholders during the year. If
these distributions were reinvested, the total return to shareholders was 41.3%.
During this same period the total return of the S&P 500 was 17.9% and the
Russell Midcap Index was 30.8%, as the mid-cap sector of the market performed
better than the stocks of large market capitalization companies over this
period. The value of an initial $10,000 investment in the Growth Fund on
December 31, 1983 was $98,525 on March 31, 2000, compared to $69,714 one year
ago, on March 31, 1999.
<PAGE>
The big market stories of the past year have revolved around the Internet and
the amazing rise of the technology laden Nasdaq 100 Index. Except for the most
recently concluded quarter, which saw a broadening of the stocks participating
in its advance, the market over this past year has continued to be characterized
by narrow leadership in a concentrated list of stocks, notably in the technology
sector.
We've written in the past of the persistence of divergent market trends in which
technology and Internet stocks, and, more particularly, those of very large
companies and recent IPOs, have accounted for the lion's share of investment
gains in this market. The exasperation of more traditional value-oriented
investors can be seen in the recent action of Julian Robertson, head of Tiger
Management LLC and frequent guest of Louis Rukeyser on Wall Street Week.
Robertson decided to close down his six Tiger funds despite a successful, until
the past two years, track record with the funds since 1980. Robertson says, "In
an irrational market, where earnings and price considerations take a back seat
to mouse clicks and momentum, such logic (of value investing), as we have
learned, does not count for much".
The relatively newer descriptive jargon to capture the essence of the apparent
new order of the market includes terminology for stocks such as "new era", "new
economy", "old old industrials", "new old industrials", "new new industrials"
and other such monikers. The end game is an attempt to distinguish those
participants on the leading edge of the information revolution from those
perceived to be, in varying degrees, lagging behind. Increasing market
volatility of late, seen in shifts between growth and value and between new and
old economy stocks, is reflective of an attempt to reconcile the valuation gulfs
among these disparate groups.
Your Fund embodies characteristics of both growth and value investment styles.
The key elements of your Fund's relative performance over the past year mirrored
those of the market. Each quarter of the past year saw fewer of your Fund's
issues performing better than its benchmark index (the Russel Mid-Cap Index).
Also, the technology stocks in the Fund were the key factor in its superior
return for the fiscal year. The importance of technology stocks in the Fund has
expanded as their percentage of total net assets has more than doubled in the
past year, to over 37% from 16%. This was due principally to appreciation of
positions that had been held for the entire year, rather than to added
commitment of funds to this sector. In fact, the Fund was a net seller in this
sector by a wide margin.
For the past several years an emphasis has been placed on identifying and
acquiring promising investments that would generally be characterized as
mid-capitalization stocks. The technology stocks that accounted for much of the
Fund' success
<PAGE>
in the past year, notably Qualcomm, Sun Microsystems and Applied Materials, are
now large capitalization stocks. When initially acquired for the Fund, however,
these stocks appropriately satisfied our definition of mid-cap stocks.
Fund management feels no particular compunction to eliminate successful
investments simply because they have appreciated so significantly as to no
longer be categorized as mid-cap issues. However, when seeking out new
investment opportunities, we continue to favor the medium size companies for the
Fund. While the average size of the companies in the Fund has grown
significantly, the commitment to mid-cap stocks is reflected in the median
market capitalization of $3.3 billion. This is little changed from a year ago
when it was $3.5 billion.
We believe that the Russell Mid-Cap Index (median market cap of $2.2 billion)
continues to closely represent the significant characteristics of the Fund.
Economic sector representation in the Russell Midcap Index reflects the
portfolio emphasis of the Fund in a number of important respects. Like the Fund,
the Russell has seen an increase in its technology allocation. It also better
captures the Fund's greater commitment to manufacturing firms, exemplified by
ownership in Midwest companies, as well as to financial stocks. The Russell
Mid-Cap also includes a mix of larger companies, with over 25% of its weight in
the over $10 billion market-cap category.
We hope that the relative performance trend of the Fund during the past year
continues. The fundamentals of the U.S. economy continue to be excellent.
Expectations for corporate profit growth this year, as seen in an unusually
strong upward trend of earnings revisions in the first calendar quarter, portend
healthy prospects for the stock market. Once market participants' sense the end
of the string of Federal Reserve Board rate increases, the market should be on a
solid footing for a more balanced advance.
As always, we are pleased to be a part of your long-term investment planning.
Sincerely,
/s/ Thomas J. Rowland, CFA
Thomas J. Rowland, CFA
President
Wayne Hummer Investment Trust
April 28, 2000
*Past performance is no guarantee of future results. Total returns are based on
changes in net asset value. The S&P 500 & Russell Mid-Cap are unmanaged
portfolios and bear no expenses.
<PAGE>
PORTFOLIO HIGHLIGHTS
TOP 10 STOCK HOLDINGS AS OF 3/31/00:
(% OF TOTAL NET ASSETS)
1. QUALCOMM Incorporated 12.1%
2. Sun Microsystems, Inc. 9.3
3. Applied Materials, Inc. 8.1
4. ADC Telecommunications, Inc. 5.8
5. Northern Trust Corporation 5.1
6. Interpublic Group of Companies, Inc. 4.7
7. Illinois Tool Works, Inc. 3.0
8. Cardinal Health, Inc. 2.5
9. Avery Dennison Corporation 2.3
10. Consolidated Papers, Inc. 2.3
Portfolio holdings are subject to change and may not represent future portfolio
composition.
<PAGE>
PERFORMANCE COMPARISON
WAYNE HUMMER GROWTH FUND VS. S&P 500 INDEX AND RUSSELL MID-CAP INDEX
Growth of $10,000 Investment for a 10 year period ended March 31, 2000.
Line Chart:
Growth Fund Russell Mid-Cap S&P 500
Mar 90 10000 10000 10000
10355.2 10370.3 10614
9110.87 8314.2 9159.88
10207.4 9207.26 9972.36
Mar 91 11509.9 11092.5 11428.3
11706.5 11155.5 11378
12160 11982.1 11991.3
13154.1 13034.4 12996.2
Mar 92 13252.7 13237.4 12671.3
13157.7 13209.3 12898.1
13949.2 13723.5 13317.3
14517 15164.2 13992.5
Mar 93 14570.6 15988.6 14596.7
14382.9 16240.7 14656.5
14444.5 17110 15031.7
15036.5 17332.9 15482.7
Mar 94 14470.7 16820.5 14892.8
14296.6 16456.7 14943.4
14947.7 17392.8 15678.6
14899.1 16970.2 15675.5
Mar 95 16358.2 18736.5 17200.7
16778.6 20304.3 18824.5
17406.1 22104.5 20322.9
18597.1 22817 21544.3
Mar 96 19000.6 24190 22700.5
19347.3 24871.7 23706.1
19699.8 25650.7 24436.2
20806.5 27151.8 26479.1
Mar 97 21207.4 26929.4 27188.8
24291.4 30581.4 31927.8
26512 34642 34322.3
27086.9 35027.6 35312.2
Mar 98 29812.1 38813.2 40238.2
29822.5 38225.5 41566.1
26159.4 32559.8 37430.3
31840.9 38561.9 45399.2
Mar 99 31711.1 38379.2 47660.1
35541 42550.9 51020.1
33468 38895.7 47836.5
43993.3 45597 54949.7
Mar 00 44816.2 50194.8 56208.1
AVERAGE ANNUAL TOTAL RETURN
WAYNE HUMMER GROWTH FUND
Period At net asset value Maximum 2% Sales Charge
1 Year 41.33% 38.49%
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5 Years 22.33% 21.84%
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10 Years 16.42% 16.18%
--------------------------------------------------------------------------------
BENCHMARK COMPARISON
Period S&P 500 Index Russell Mid-Cap Index
1 Year 17.94% 30.77%
--------------------------------------------------------------------------------
5 Years 26.75% 21.78%
--------------------------------------------------------------------------------
10 Years 18.82% 17.50%
--------------------------------------------------------------------------------
The graph compares an initial investment of $10,000 invested in the Wayne Hummer
Growth Fund, adjusted for the maximum sales charge of 2%, with the S&P 500 and
Russell Mid-Cap Indices. The S&P 500 & Russell Mid-Cap are unmanaged and all
returns include reinvestment of dividends and capital gain distributions. Past
performance does not guarantee future results. 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.
<PAGE>
FUND OVERVIEW
Established December 30, 1983, the investment objective of the Wayne Hummer
Growth Fund (the "Fund") is to achieve long-term growth and current income is a
secondary objective. An emphasis has been placed on identifying promising
investments that would generally be characterized as mid-capitalization stocks.
The Fund's prospectus contains detailed information about permissible
investments.
SERVICES AVAILABLE TO SHAREHOLDERS
PAYROLL DIRECT DEPOSIT PLAN
You may authorize your employer to deduct a specified amount from your payroll
check to purchase additional shares of the Fund. Complete details are available
from the Fund or your Wayne Hummer Investment Executive.
SYSTEMATIC INVESTMENT PLAN
What better way to start early and save regularly than with a Systematic
Investment Plan. You may have subsequent purchases invested automatically each
month. Your bank can send money from your bank account to the Fund. Request an
application with full details from your Investment Executive or call the Fund
directly.
SOCIAL SECURITY DIRECT DEPOSIT PLAN
Instead of receiving a monthly check or sending it to your bank, you may use the
Wayne Hummer Growth Fund to directly deposit your social security benefits. You
will have to recognize a capital gain or loss each time you redeem from the
Fund. Contact your Wayne Hummer Investment Executive for complete details.
IRA OR RETIREMENT PLANS
Shares of the Wayne Hummer Growth Fund are a suitable addition to your IRA or
pension plan. Contact your Wayne Hummer Investment Executive for complete
details on the expanded options available for retirement planning, including the
Roth IRA.
INTERNET ADDRESS: WWW.WHUMMER.COM
Those who enjoy using the computer to access information will find the
prospectus and current prices for Fund Shares, along with information on the
other Wayne Hummer Funds, on our website. Other services available through Wayne
Hummer Investments LLC are also on-line.
TAXABLE TRANSACTIONS FOR NON-RETIREMENT ACCOUNTS
Each time you sell shares of the Fund, you must calculate the gain or loss
attributed to that transactions. The Fund can provide you with the average cost
basis of the shares sold if you opened the account after January 1, 1991. If you
have not been getting an average cost statement and you have been calculating
the cost basis on your account using the average cost method, you can provide
the Fund with you most recent calculation. We will update our system so that any
future redemptions will generate an Average Cost Statement that will be mailed
to you in February. Contact the Fund or your Investment Executive for more
information.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
YEAR ENDED MARCH 31, 2000
ASSETS
Investments, at value (Cost: $76,462,566) $184,824,710
Cash 79,663
Receivable for investments sold 1,597,759
Receivable for Fund Shares sold 56,729
Dividends receivable 123,450
Prepaid expenses 32,784
Insurance deposit 3,846
--------------------------------------------------------------------------------
Total assets 186,718,941
LIABILITIES AND NET ASSETS
Payable for investments purchased 854,484
Payable for Fund Shares redeemed 51,776
Due to Wayne Hummer Management Company 109,860
Accounts payable 37,888
--------------------------------------------------------------------------------
Total liabilities 1,054,008
--------------------------------------------------------------------------------
Net assets applicable to 3,965,027 Shares outstanding,
no par value, equivalent to $46.83 per Share $185,664,933
================================================================================
ANALYSIS OF NET ASSETS
Paid-in capital $69,245,362
Net unrealized appreciation of investments 108,362,144
Undistributed net realized gain on sales of investments 8,021,083
Undistributed net investment income 36,344
--------------------------------------------------------------------------------
Net assets applicable to Shares outstanding $185,664,933
================================================================================
THE PRICING OF SHARES
Net asset value and redemption price per Share
($185,664,933 / 3,965,027 Shares outstanding) $46.83
--------------------------------------------------------------------------------
Maximum offering price per Share (net asset value,
plus 2.02% of net asset value or 2% of offering price)* $47.79
================================================================================
* Sales charge of 2% was effective August 1, 1999 for new accounts.
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2000
INVESTMENT INCOME:
Dividends $1,514,804
Interest 203,717
--------------------------------------------------------------------------------
Total investment income 1,718,521
EXPENSES:
Management fee 1,162,674
Professional fees 130,334
Transfer agent fees 54,950
Printing costs 46,266
Custodian fees 24,700
Trustee fees 24,700
Portfolio accounting fees 23,380
Registration costs 13,000
Other 9,960
--------------------------------------------------------------------------------
Total expenses 1,489,964
--------------------------------------------------------------------------------
Net investment income 228,557
Net realized gain on sales of investments 17,348,361
Change in net unrealized appreciation 37,667,702
--------------------------------------------------------------------------------
Net gain on investments 55,016,063
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations $55,244,620
================================================================================
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MARCH 31, 2000 1999
OPERATIONS:
Net investment income $228,557 $553,925
Net realized gain on sale of investments 17,348,361 8,564,539
Change in net unrealized appreciation 37,667,702 (862,439)
--------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 55,244,620 8,256,025
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (279,121) (607,453)
Net realized gain on investments (15,091,239) (5,823,502)
--------------------------------------------------------------------------------
Total dividends to Shareholders (15,370,360) (6,430,955)
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares sold 9,071,553 10,389,176
Shares issued upon reinvestment
of dividends 14,720,172 6,216,025
--------------------------------------------------------------------------------
23,791,725 16,605,201
Less payments for Shares redeemed 17,494,746 19,679,491
--------------------------------------------------------------------------------
Increase (decrease) from Capital
Share transactions 6,296,979 (3,074,290)
--------------------------------------------------------------------------------
Total increase (decrease) in net assets 46,171,239 (1,249,220)
NET ASSETS
Beginning of year 139,493,694 140,742,914
--------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $36,344 and $86,908 at March 31, 2000
and 1999, respectively) $185,664,933 $139,493,694
================================================================================
See accompanying notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
YEAR ENDED MARCH 31, 2000 1999 1998 1997 1996
NET ASSET VALUE, BEGINNING OF YEAR $36.66 $36.10 $28.03 $26.37 $23.43
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.06 0.14 0.19 0.26 0.32
Net realized and unrealized gain
on investments 14.17 2.09 10.57 2.69 3.41
--------------------------------------------------------------------------------
Total from investment operations 14.23 2.23 10.76 2.95 3.73
LESS DISTRIBUTIONS:
Dividends from net investment income (0.07) (0.16) (0.20) (0.29) (0.31)
Distributions from net realized gain
on investments (3.99) (1.51) (2.49) (1.00) (0.48)
--------------------------------------------------------------------------------
Total distributions (4.06) (1.67) (2.69) (1.29) (0.79)
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $46.83 $36.66 $36.10 $28.03 $26.37
================================================================================
TOTAL RETURN (a) 41.33% 6.37% 40.57% 11.61% 16.15%
RATIOS AND SUPPLEMENTARY DATA
Net assets, end of year ($000's) 185,665 139,494 140,743 104,214 102,608
Ratio of expenses to average net assets 0.95% 0.94% 0.96% 0.99% 1.06%
Ratio of net investment income to
average net assets 0.15% 0.41% 0.58% 0.97% 1.29%
Portfolio turnover rate 10% 12% 7% 9% 6%
NOTE TO FINANCIAL HIGHTLIGHTS:
a.) Excludes 2% sales charge which went into effect August 1, 1999.
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS
NUMBER OF SHARES VALUE
COMMON STOCKS (98.1%)
BASIC MATERIALS (4.4%)
Consolidated Papers, Inc. 110,000 $4,228,125
RPM, Inc. 125,000 1,375,000
Sonoco Products Company 110,000 2,585,000
--------------------------------------------------------------------------------
8,188,125
CONSUMER CYCLICAL (14.5%)
Autoliv, Inc. 40,920 1,227,600
H&R Block, Inc. 60,000 2,685,000
Borders Group, Inc. (b) 90,000 1,546,875
Cintas Corporation 52,500 2,057,344
DeVry, Inc. (b) 25,000 762,500
The Gap, Inc. 75,000 3,735,937
Interpublic Group of
Companies, Inc. 185,000 8,741,250
LA-Z-Boy Incorporated 110,000 1,691,250
Office Depot, Inc. (b) 150,000 1,734,375
Royal Caribbean Cruises Ltd. 100,000 2,800,000
--------------------------------------------------------------------------------
26,982,131
ENERGY (1.2%)
Burlington Resources, Inc. 60,000 2,220,000
--------------------------------------------------------------------------------
COMMUNICATION SERVICES (1.2%)
Western Wireless Corporation
Class A (b) 50,000 2,290,625
--------------------------------------------------------------------------------
CAPITAL GOODS (12.4%)
Avery Dennison Corporation 70,000 4,274,375
Bacou USA, Inc. (b) 65,000 1,015,625
Emerson Electric Co. 50,000 2,643,750
Fastenal Company 70,000 3,351,250
Illinois Tool Works, Inc. 100,000 5,525,000
Pall Corporation 120,000 2,692,500
Regal-Beloit Corporation 100,000 1,750,000
STERIS Corporation (b) 60,000 615,000
Thomas & Betts Corporation 40,000 1,130,000
--------------------------------------------------------------------------------
22,997,500
NUMBER OF SHARES VALUE
HEALTH CARE AND
PHARMACEUTICALS (11.5%)
Abbott Laboratories 50,000 $1,759,375
C. R. Bard, Inc. 60,000 2,321,250
Cardinal Health, Inc. 100,000 4,587,500
Manor Care, Inc. (b) 40,000 540,000
Health Management
Associates, Inc. (b) 120,000 1,710,000
Patterson Dental
Company (b) 75,000 2,868,750
Sybron International
Corporation (b) 75,000 2,175,000
Watson Pharmaceuticals, Inc. (b) 35,000 1,389,063
Wesley Jessen
VisionCare, Inc. (b) 110,000 3,953,125
--------------------------------------------------------------------------------
21,304,063
FINANCIAL (10.0%)
AON Corporation 67,500 2,176,875
Cincinnati Financial
Corporation 90,000 3,386,250
Northern Trust Corporation 140,000 9,458,750
Ohio Casualty Corporation 80,000 1,430,000
Old Republic International
Corporation 150,000 2,062,500
--------------------------------------------------------------------------------
18,514,375
CONSUMER STAPLES (5.5%)
CVS Corporation 100,000 3,756,250
McCormick & Company,
Incorporated 100,000 3,225,000
PepsiCo, Inc. 60,000 2,073,750
Smucker (The J.M.)
Company Class B 80,000 1,145,000
--------------------------------------------------------------------------------
10,200,000
<PAGE>
NUMBER OF SHARES VALUE
TECHNOLOGY (37.4%)
ADC
Telecommunications, Inc. (b) 200,000 $10,775,000
Applied Materials, Inc. (b) 160,000 15,080,000
Kronos, Inc. (b) 60,000 1,777,500
Photronics, Inc. (b) 60,000 2,118,750
QUALCOMM
Incorporated (b) 150,000 22,396,875
Sun Microsystems, Inc. (b) 184,000 17,241,375
--------------------------------------------------------------------------------
69,389,500
TOTAL COMMON STOCKS
(Cost: $73,724,175) 182,086,319
SHORT-TERM INVESTMENTS (1.4%)
United States Treasury Bills,
5.31% - 5.80%,
04/06/00-05/11/00
(Cost: $2,738,391) 2,738,391
--------------------------------------------------------------------------------
VALUE
TOTAL INVESTMENTS
(Cost: $76,462,566) (99.5%) $184,824,710
CASH AND OTHER ASSESTS
LESS LIABILITIES (0.5%) 840,223
--------------------------------------------------------------------------------
NET ASSETS (100.0%) $185,664,933
================================================================================
NOTE TO PORTFOLIO OF INVESTMENTS:
(a) Interest rates on short-term investments represent annualized yield to date
of maturity.
(b) Non-income producing security.
(c) Based on the cost of investments of $76,462,566 for federal income tax
purposes at March 31, 2000, the aggregate gross unrealized appreciation was
$113,972,409, the aggregate gross unrealized depreciation was $5,610,265
and the net unrealized appreciation of investments was $108,362,144.
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION:
Wayne Hummer Investment Trust (the "Trust"), is an open-end investment company
organized as a Massachusetts business trust. The Trust consists of four
investment portfolios, Wayne Hummer CorePortfolio Fund, Wayne Hummer Growth
Fund, Wayne Hummer Income Fund and Wayne Hummer Money Market Fund, each
operating as a separate mutual fund. Presented herein are the financial
statements of the Wayne Hummer Growth Fund (the "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. The
investment objective of the Fund is to achieve long-term capital growth.
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 closing 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
<PAGE>
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 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.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles may require management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. In those cases, actual results may differ from estimates.
2. FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS
Prior to August 1, 1999, the Fund Shares were sold and redeemed on a
continuous basis at net asset value. Effective August 1, 1999, the Fund Shares
are sold subject to a 2% sales charge for new accounts opened after this date.
Net asset value per Share is determined on each day the New York Stock Exchange
is open as of the close of regular trading on the Exchange 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 24, 2000, an ordinary income dividend of
$0.01 per Share and a long-term capital gain dividend of $2.03 per Share were
declared, payable April 26, 2000, to Shareholders of record on April 24, 2000.
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"). 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,
exceeds 1.50% of the average daily net assets of the Fund. During the year ended
March 31, 2000, the Fund incurred management fees of $1,162,674.
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.
The shareholders of the Investment Adviser are the Voting Members of
Wayne Hummer Investments LLC ("WHI LLC").
WHI LLC serves as Shareholder Service Agent without compensation from the Fund.
WHI LLC also serves as Distributor and received commissions of $27,740 from the
sale of Fund Shares during the year ended March 31, 2000, all of which were paid
to brokers affiliated with the Distributor.
<PAGE>
Certain trustees of the Fund are also officers or directors of the Investment
Adviser or Voting Members of WHI LLC. During the year ended March 31, 2000, the
Fund made no direct payments to its officers and incurred trustee fees for its
unaffiliated trustees of $24,700.
5. INVESTMENT TRANSACTIONS
Investment transactions (excluding money market instruments) are as follows:
YEAR ENDED MARCH 31, 2000
Purchases $15,997,325
--------------------------------------------------------------------------------
Proceeds from sales $26,012,048
--------------------------------------------------------------------------------
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:
YEAR ENDED MARCH 31, 2000 1999
Shares sold 224,355 298,220
Shares issued upon
reinvestment of dividends 376,093 174,372
--------------------------------------------------------------------------------
600,448 472,592
Shares redeemed (440,343) (566,280)
--------------------------------------------------------------------------------
Net increase (decrease)
in Shares outstanding 160,105 (93,688)
================================================================================
7. FEDERAL TAX STATUS OF 1999 DIVIDENDS
The income dividend and short-term capital gain distributions are 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
U.S. Treasury Department regulations. An amount equal to 100% of ordinary income
dividends paid during 1999 qualifies for the dividends-received deduction
available to corporations as provided by the Internal Revenue Code.
<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, 2000,
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 1996. 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 auditing standards generally
accepted in the United States. 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, 2000, 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 Growth Fund as of March 31, 2000, 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
1996, in conformity with accounting principles generally accepted in the United
States.
/s/ Ernst & Young LLP
Chicago, Illinois
April 28, 2000
<PAGE>
BOARD OF TRUSTEES
Steven R. Becker
Chairman
Charles V. Doherty
Joel D. Gingiss
Patrick B. Long
David P. Poitras
James J. Riebandt
Eustace K. Shaw
START INVESTING TODAY...
For further information on any of the funds or fund services or to discuss which
Fund may be appropriate for your investment needs, please contact your Wayne
Hummer Investment Executive.
CHICAGO Toll-free: 800-621-4477 Local: 312-431-1700
300 South Wacker Drive
Chicago, Illinois 60606-6607
APPLETON Toll-free: 800-678-0833 Local: 920-734-1474
200 East Washington Street Appleton, Wisconsin 54911-5468
INTERNET www.whummer.com
This brochure must be preceded or accompanied by a current prospectus of the
Wayne Hummer Investment Trust.
LOGO: Wayne Hummer (r)
Investments LLC
300 South Wacker Drive
Chicago, Illinois 60606-6607
First Class
U.S. Postage
PAID
South Suburban, IL
Permit #3600
<PAGE>
Wayne Hummer(R)
Income Fund
ANNUAL FINANCIAL STATEMENTS
March 31, 2000
Photo of: DAVID P. POITRAS
DEAR FELLOW SHAREHOLDER:
With great pleasure, we present you with the audited financial reports of the
Wayne Hummer Income Fund for the year ended March 31, 2000.
OVERVIEW
While 1999 was one of the worst on record for the bond markets, the first
quarter of 2000 was one of the best first quarters ever.
Last year, the Federal Reserve Bank began lifting short-term interest rates in
reaction to strong economic growth and the attendant fears of rising inflation.
The first hike came in June 1999, and was followed by four additional hikes by
March 21, 2000. The Fed's base lending rate, the Federal Funds Rate, now stands
at 6%, 125 basis points, or 1.25%, higher than just ten months ago. Bond prices
responded by falling sharply.
In mid January 2000, the U.S. Treasury department announced plans to buy back
$30 billion of outstanding debt, the first buyback in 70 years. The announcement
set the tone for the rest of the quarter. Investors reacted to the dwindling
supply of long-term securities by pushing bond prices dramatically higher.
Long-term treasury bonds rose some 7 points, or $70 per $1,000 face value. The
rally reduced long-term treasury yields by over 60 basis points.
<PAGE>
PERFORMANCE & STRATEGY
For the 6-month and 1-year periods ended March 31, 2000, the Wayne Hummer Income
Fund produced total returns1 (dividend income plus or minus changes in the
Fund's share price) of 1.79% and 2.03%, respectively. The Merrill Lynch
Corporate and Government Index of 1-9.99 year Maturities--the index to which we
compare the Fund's performance--posted similar total returns of 1.59% and 2.14%
over the same time periods.
The value of all fixed income investments, including the Wayne Hummer Income
Fund portfolio, is inversely tied to changes in interest rates. Last year, as
interest rates were rising, the Fund struggled under the weight of falling bond
prices. During the first three months of this year, falling interest rates--and
rising bond prices--produced a large and positive impact on the Fund's portfolio
of notes and bonds.
The Fund declared income dividends totaling $0.90 per share over the past 12
months, equivalent to a distribution rate per share of 6.14%2. The SEC yield at
March 31, was 6.69%. Please refer to the following pages for detailed statements
of the Fund's performance, portfolio of investments and financial condition.
PORTFOLIO FOCUS & FUTURE STRATEGY
Last year, when interest rates were rising, we initiated steps to capture the
benefit of higher interest rates. We extended the average life and duration of
the Fund's portfolio, primarily through the purchase of longer-term treasury
notes and bonds. We also added two preferred stock issues to the
portfolio--Harris Preferred Capital and Virginia Power Capital Trust. Our goal
through these changes was to lock in higher interest rates for longer periods of
time.
We are pleased that the bond market rose so smartly over the past few months.
However, several characteristics of the rally give us pause. First, the rally
was swift, sudden and concentrated among the highest quality issuers, mainly
longer-term U.S. treasury issues. Corporate and mortgage-backed securities did
not perform as well as the treasury market. Second, the market rallied in spite
of the Federal Reserve Bank's efforts to raise short-term interest rates.
Longer-term treasury yields fell the most, but even shorter-term rates declined.
Third, the economy has been especially healthy for several years. We view the
situation as one that could easily trigger further interest rate increases by
the Fed. (Often, extended periods of economic growth cause inflation to
accelerate, prompting interest rate increases by the Federal Reserve Bank.)
Our bond market forecast calls for little change over the near term. The bond
market will be hard pressed to rally further in the face of strong economic
<PAGE>
growth and a "tight-minded" Fed. We believe the Fund's portfolio is
appropriately positioned for the market we face today. The portfolio's duration
of 4.3 years is long enough to generate a high level of income, but short enough
to provide reasonable protection should interest rates rise. (Duration is a
measure of sensitivity to interest rate changes. Generally, when interest rates
fall, longer-duration portfolios produce a greater rise in value than
shorter-duration portfolios. On the other hand, when interest rates rise,
shorter-duration portfolios protect value better than longer portfolios.) The
average credit quality of the Fund's portfolio remains relatively high; we have
allocated nearly 20% of the portfolio to U.S. treasury and agency securities and
18% to high-quality agency mortgage-backed securities.
We appreciate your continued support and confidence and ask that you call or
write us if you have any questions about the Fund or your account.
Sincerely,
/s/ David P. Poitras
David P. Poitras
Portfolio Manager
April 28, 2000
1 Total returns exclude 1% sales charge.
2 Distribution rate per share is based upon dividends per share declared during
the period divided by the net asset value per share at March 31, 2000.
<PAGE>
PORTFOLIO HIGHLIGHTS
The investment philosophy of the Fund is to invest primarily in
intermediate-term fixed-income securities.
TOP 10 BOND HOLDINGS AS OF 3/31/00: (% OF TOTAL NET ASSETS)
1. U.S. Treasury Note, 6.13%, 08/15/07
2. Federal Home Loan Mtg. Corp., 8.00%, 03/15/21
3. U.S. Treasury Note, 7.50%, 11/15/16
4. United Air Lines, Inc., 9.76%, 05/27/06
5. Federal Home Loan Mortgage Corp., 7.10%, 04/10/07
6. Target Corp., 5.87%, 08/15/27
7. NYNEX Corporation, 9.55%, 05/01/10
8. Canadian Pacific Ltd., 8.85%, 06/01/22
9. Georgia Pacific Corp., 9.50%, 05/15/22
10. Parker Hannifin Corp., 9.75%, 02/15/21
The top ten holdings comprise 43.7% of total net assets.
PORTFOLIO COMPOSITION AS OF 03/31/00:
(% of Total Net Assets)
Pie Chart:
59% CORPORATE BONDS
19% U.S. GOVERNMENT AND AGENCY BONDS
18% MORTGAGE-BACKED SECURITIES
1% PREFERRED STOCK
3% CASH & OTHER
Portfolio holdings are subject to change and may not represent future portfolio
composition.
<PAGE>
PERFORMANCE COMPARISON
WAYNE HUMMER INCOME FUND VS. MERRILL LYNCH CORPORATE AND
GOVERNMENT INDEX OF 1 TO 9.99 YEAR MATURITIES
Value of $10,000 initial investment from inception to the period ended
March 31, 2000
Line Chart:
Merrill Lynch
Income Fund Corporate and Government
Dec 92 10000 10000
Dec 92 9970.1 10065.2
Dec 92 9936.1 10130.2
Dec 92 10126.1 10280.2
Mar 93 10327.7 10531.1
Jun 93 10630.4 10751.2
Sep 93 10970.1 11004.3
Dec 93 10998.5 11022.5
Mar 94 10783.7 10812
Jun 94 10615.6 10750.9
Sep 94 10644.7 10836.5
Dec 94 10727.2 10831.1
Mar 95 11232 11303.2
Jun 95 11749.8 11867.8
Sep 95 11997 12062.4
Dec 95 12394.1 12490.9
Mar 96 12219.6 12389.2
Jun 96 12288.6 12462.1
Sep 96 12470 12680.8
Dec 96 12828.1 12993.3
Mar 97 12747.9 12986.6
Jun 97 13190.9 13368.1
Sep 97 13616.5 13728.6
Dec 97 13985.7 14024.8
Mar 98 14182.6 14249.4
Jun 98 14453.6 14517.6
Sep 98 14996.4 15157.7
Dec 98 15016.5 15211.8
Mar 99 14855.4 15183.8
Jun 99 14762.3 15123.2
Sep 99 14890.5 15266.9
Dec 99 14848.4 15282.4
Mar 00 15156.6 15509.1
AVERAGE ANNUAL TOTAL RETURN
WAYNE HUMMER INCOME FUND
Period Ended At net Maximum 1%
3/31/00 asset value Sales Charge
1 Year 2.03% 1.03%
--------------------------------------------------------------------------------
5 Years 6.18% 5.96%
--------------------------------------------------------------------------------
12/1/92-3/31/00 5.98% 5.83%
--------------------------------------------------------------------------------
MERRILL LYNCH CORPORATE AND GOVERNMENT INDEX OF 1 TO 9.99 YEARS
Period Ended
3/31/00
1 Year 2.14%
--------------------------------------------------------------------------------
5 Years 6.52%%
--------------------------------------------------------------------------------
12/1/92-3/31/00 6.17%
--------------------------------------------------------------------------------
This graph compares an initial investment of $10,000 invested in Wayne Hummer
Income Fund, adjusted for the maximum sales charge of 1%, with the Merrill Lynch
Intermediate Corporate and Government Index of 1 - 9.99 years. The index is
unmanaged and all returns include reinvestment of dividends and capital gain
distributions. Past performance does not guarantee future results. 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 the original
cost.
<PAGE>
FUND OVERVIEW
Established in 1992, the investment objective of the Wayne Hummer Income Fund
(the "Fund") is to achieve as high a level of current income as is consistent
with prudent investment management. The Fund invests primarily in
intermediate-term corporate and U.S. Government & Agency securities.
The Fund's prospectus contains detailed information about permissible
investments.
SERVICES AVAILABLE TO SHAREHOLDERS
PAYROLL DIRECT DEPOSIT PLAN
You may authorize your employer to deduct a specified amount from your payroll
check to purchase additional shares of the Fund. Complete details are available
from the Fund or your Wayne Hummer Investment Executive.
SYSTEMATIC INVESTMENT PLAN
What better way to start early and save regularly than with a Systematic
Investment Plan. You may have subsequent purchases invested automatically each
month. Your financial institution can send money from your account to the Fund.
Request an application with full details from your Investment Executive or call
the Fund directly.
SOCIAL SECURITY DIRECT DEPOSIT PLAN
Instead of receiving a monthly check or sending it to your bank, you may use the
Wayne Hummer Income Fund to directly deposit your social security benefits. You
can easily access the money you need, while the rest continues to earn
dividends. You will have to recognize a capital gain or loss each time you
redeem from the Fund. Contact your Wayne Hummer Investment Executive for
complete details.
IRA OR RETIREMENT PLANS
Shares of the Wayne Hummer Income Fund are a suitable addition to your IRA or
pension plan. Contact your Wayne Hummer Investment Executive for complete
details on the expanded options available for retirement planning, including the
Roth IRA.
INTERNET ADDRESS: WWW.WHUMMER.COM
Those who enjoy using the computer to access information will find the current
price, performance information and the prospectus, along with information on the
other Wayne Hummer Funds, on our website. Other services available through Wayne
Hummer Investments LLC are also on-line.
TAXABLE TRANSACTIONS FOR NON-RETIREMENT ACCOUNTS
Each time you sell shares of the Fund, you must calculate the gain or loss
attributed to that transaction. The Fund can provide you with the average cost
basis of the shares sold. If you have not been getting an average cost statement
and you have been calculating the cost basis on your account using the average
cost method, you can provide the Fund with you most recent calculation. We will
update our system so that any future redemptions will generate an Average Cost
Statement that will be mailed to you in February. Contact the Fund or your
Investment Executive for more information.
<PAGE>
Statement of Assets and Liabilities
YEAR ENDED MARCH 31, 2000
ASSETS
Investments, at value (Cost: $18,396,914) $17,787,686
Interest receivable 317,488
Receivable for investment sold 346
Receivable for Fund Shares sold 211
Cash 43,323
Prepaid expenses 18,221
--------------------------------------------------------------------------------
Total assets 18,167,275
LIABILITIES AND NET ASSETS
Payable for Fund Shares redeemed 100,015
Dividends payable 8,094
Due to Wayne Hummer Management Company 7,672
Accounts payable 18,579
--------------------------------------------------------------------------------
Total liabilities 134,360
--------------------------------------------------------------------------------
Net assets applicable to 1,230,531 Shares outstanding,
no par value, equivalent to $14.65 per Share $18,032,915
================================================================================
ANALYSIS OF NET ASSETS
Paid-in capital $19,456,215
Net unrealized depreciation of investments (609,228)
Accumulated net realized loss on sales of investments (814,072)
--------------------------------------------------------------------------------
Net assets applicable to Shares outstanding $18,032,915
================================================================================
THE PRICING OF SHARES
Net asset value and redemption price per Share
($18,032,915 / 1,230,531 Shares outstanding) $14.65
================================================================================
Maximum offering price per Share (net asset value, plus 1.01% of net asset
value or 1% of offering price)* $14.80
================================================================================
*Sales charge of 1% was effective August 1, 1999 for new accounts.
--------------------------------------------------------------------------------
<PAGE>
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2000
INVESTMENT INCOME:
Interest $1,304,350
--------------------------------------------------------------------------------
EXPENSES:
Management fee 95,654
Professional fees 32,371
Transfer agent fees 23,086
Portfolio accounting costs 17,313
Printing costs 8,504
Registration costs 7,378
Custodian fees 7,100
Trustee fees 3,200
Other 1,840
--------------------------------------------------------------------------------
Total expenses 196,446
--------------------------------------------------------------------------------
Net investment income 1,107,904
--------------------------------------------------------------------------------
Net realized loss on sales of investments (47,407)
Change in net unrealized depreciation (708,313)
--------------------------------------------------------------------------------
Net realized and unrealized loss on investments (755,720)
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations $352,184
================================================================================
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MARCH 31, 2000 1999
OPERATIONS:
Net investment income $1,107,904 $1,202,094
Net realized gain (loss) on sales of investments (47,407) 119,756
Change in net unrealized appreciation (depreciation) (708,313) (358,228)
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations 352,184 963,622
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (1,086,195) (1,196,917)
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares sold 1,522,907 1,772,995
Shares issued upon reinvestment of dividends 836,426 913,838
--------------------------------------------------------------------------------
2,359,333 2,686,833
Less payments for Shares redeemed 3,919,788 3,429,770
--------------------------------------------------------------------------------
Decrease from Capital Share transactions (1,560,455) (742,937)
--------------------------------------------------------------------------------
Total decrease in net assets (2,294,466) (976,232)
--------------------------------------------------------------------------------
NET ASSETS:
Beginning of year 20,327,381 21,303,613
--------------------------------------------------------------------------------
End of year $18,032,915 $20,327,381
================================================================================
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
YEAR ENDED MARCH 31, 2000 1999 1998 1997 1996
NET ASSET VALUE, BEGINNING OF YEAR $15.21 $15.38 $14.66 $14.95 $14.69
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.90 0.89 0.94 0.92 1.02
Net realized and unrealized gain (loss)
on investments (0.56) (0.17) 0.72 (0.29) 0.26
--------------------------------------------------------------------------------
Total from investment operations 0.34 0.72 1.66 0.63 1.28
LESS DISTRIBUTIONS:
Dividends from net investment income (0.90) (0.89) (0.94) (0.92) (1.02)
Dividends from net realized gain
on investments - - - - -
--------------------------------------------------------------------------------
Total distributions (0.90) (0.89) (0.94) (0.92) (1.02)
--------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $14.65 $15.21 $15.38 $14.66 $14.95
================================================================================
TOTAL RETURN (a) 2.03% 4.74% 11.25% 4.32% 8.79%
RATIOS AND SUPPLEMENTARY DATA
Net assets, end of year (000's) $18,033 $20,327 $21,304 $21,998 $25,398
Ratio of expenses to average
net assets 1.02% 1.01% 1.01% 1.01% 0.91%
Ratio of net investment income to
average net assets 5.78% 5.78% 6.00% 6.25% 6.80%
Portfolio turnover rate 11% 37% 28% 39% 46%
NOTE TO FINANCIAL HIGHLIGHTS:
a.) Excludes 1% sales charge.
--------------------------------------------------------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
PRINCIPAL AMOUNT VALUE
CORPORATE OBLIGATIONS (59.7%)
AUTO & MACHINERY (5.1%)
Johnson Controls, Inc.,
7.70%, due 03/01/15 $410,000 $412,911
Parker-Hannifin Corporation,
9.75%, due 02/15/21 480,000 508,915
--------------------------------------------------------------------------------
921,826
BANKS & FINANCE (7.8%)
Ford Motor Credit Company,
6.13%, due 01/09/06 500,000 469,655
Wells Fargo Company, 7.65%,
due 03/15/05 360,000 364,226
St. Paul Bancorp, Inc., 7.13%,
due 02/15/04 100,000 97,772
Sears Roebuck Acceptance
Corp., 6.75%, due 09/15/05 500,000 479,625
--------------------------------------------------------------------------------
1,411,278
INSURANCE (3.0%)
American General Corp.
7.75% due 04/01/05 285,000 288,853
Continental Corp. 7.25%
due 03/01/03 260,000 255,921
--------------------------------------------------------------------------------
544,774
OIL AND GAS (3.7%)
Northwest Natural Gas
Company, 6.80%, due 05/21/07 200,000 197,730
Devon Energy
Corporation, 10.25%,
due 11/01/05 436,000 475,009
--------------------------------------------------------------------------------
672,739
PAPER & FOREST PRODUCTS (5.5%)
Champion International
Corporation, 6.40%,
due 02/15/26 500,000 473,210
Georgia Pacific Corporation,
9.50%, due 05/15/22 500,000 517,075
--------------------------------------------------------------------------------
990,285
RETAIL (3.6%)
Target Corp.,
5.87%, due 08/15/27 655,000 652,898
--------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
TELECOMMUNICATIONS (4.7%)
Mountain States Telephone
& Telegraph Co., 5.50%,
due 06/01/05 $269,000 $249,218
NYNEX Corporation, 9.55%,
due 05/01/10 556,874 599,575
--------------------------------------------------------------------------------
848,793
TRANSPORTATION (10.4%)
Canadian Pacific Limited,
8.85%, due 06/01/22 500,000 524,225
Union Pacific Corporation,
6.13%, due 01/15/04 500,000 475,315
United Air Lines, Inc., 9.76%,
due 05/27/06 820,858 872,990
--------------------------------------------------------------------------------
1,872,530
OTHER (15.9%)
Browning-Ferris Industries,
Inc., 6.38%, due 01/15/08 500,000 399,940
Crown, Cork & Seal
Company, Inc., 8.38%,
due 01/15/05 400,000 401,948
Eastman Kodak Company,
9.75%, due 10/01/04 428,000 469,015
Inco Ltd., Convertible
Debenture, 7.75%,
due 03/15/16 500,000 429,375
Ingersoll-Rand Company,
6.02%, due 02/15/28 500,000 493,495
Union Carbide Corp., 6.79%,
due 06/01/25 170,000 164,468
Xerox Corporation, 5.88%,
due 06/15/37 500,000 498,985
--------------------------------------------------------------------------------
2,857,226
TOTAL CORPORATE OBLIGATIONS
(Cost: $11,167,576) 10,772,349
MUNICIPALITY-TAXABLE (1.4%)
Virginia State Housing
Development Authority, 7.95%,
due 05/01/13 (Cost: $254,347) 250,000 258,480
--------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES (17.7%)
COLLATERALIZED MORTGAGE OBLIGATIONS (14.8%)
Federal Home Loan Mortgage Corporation (12.0%)
7.50%, due 11/15/08 500,000 500,710
8.50%, due 05/01/17 145,610 149,396
8.00%, due 03/15/21 1,000,000 1,007,690
8.00%, due 04/15/22 500,000 502,935
--------------------------------------------------------------------------------
2,160,731
<PAGE>
PRINCIPAL AMOUNT VALUE
Federal National Mortgage Association (2.8%)
8.00%, due 02/25/07 $500,000 $505,240
FEDERAL NATIONAL MORTGAGE ASSOCIATION (2.3%)
11.25%, due 04/01/01 10,108 10,712
10.75%, due 09/01/15 5,181 5,605
10.50%, due 01/01/16 37,573 40,459
10.50%, due 06/01/19 90,779 97,950
9.00%, due 12/01/19 53,344 54,925
8.50%, due 06/25/21 106,223 108,643
8.00%, due 12/01/22 104,516 104,727
--------------------------------------------------------------------------------
423,021
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (0.6%)
9.00%, due 11/15/01 8,742 9,084
9.00%, due 02/20/27 95,251 97,384
--------------------------------------------------------------------------------
106,468
TOTAL MORTGAGE-BACKED SECURITIES
(Cost: $3,259,994) 3,195,460
U.S. GOVERNMENT AND AGENCY
ISSUES (19.1%)
U.S. Treasury Note, 6.13%,
due 12/31/01 200,000 198,726
Federal Home Loan
Mortgage Corp., 7.10%,
due 04/10/07 750,000 748,313
PRINCIPAL AMOUNT VALUE
U.S. Treasury Note, 6.13%,
due 08/15/07 $1,550,000 $1,535,771
U.S. Treasury Note, 7.50%,
due 11/15/16 840,000 950,712
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AND AGENCY ISSUES
(Cost: $3,590,547) 3,433,522
PREFERRED STOCK (0.7%)
Harris Preferred Capital
Corporation, 7.38% 4,000 81,750
Virginia Power Capital
Trust I, 8.05% 2,000 46,125
--------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost: $124,450) 127,875
--------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost: $18,396,914) (98.6%) 17,787,686
CASH AND OTHER ASSESTS
LESS LIABILITIES (1.4%) 245,229
--------------------------------------------------------------------------------
NET ASSETS (100.0%) $18,032,915
================================================================================
NOTE TO PORTFOLIO OF INVESTMENTS:
(a) Based on the cost of investments of $18,396,914 for federal income tax
purposes at March 31, 2000, the aggregate gross unrealized appreciation was
$46,570, the aggregate gross unrealized depreciation was $655,798 and the net
unrealized depreciation of investments was $609,228.
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION:
Wayne Hummer Investment Trust (the "Trust") is an open-end management company
organized as a Massachusetts business trust. The Trust consists of four
investment portfolios, Wayne Hummer CorePortfolio Fund, Wayne Hummer Growth
Fund, Wayne Hummer Income Fund and Wayne Hummer Money Market Fund, each
operating as a separate mutual fund. Presented herein are the financial
statements of the Wayne Hummer Income Fund (the "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. The
investment objective of the Fund is to achieve as high a level of current income
as is consistent with prudent capital management.
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
<PAGE>
cost (or, if purchased more than 60 days prior to maturity, the market 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.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles might require management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. In those cases, actual results may differ from estimates.
2. FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS
Prior to August 1, 1999, the Fund Shares were sold on a continuous
basis at net asset value. Effective August 1, 1999, the Fund Shares are sold
subject to a 1% sales charge for new accounts opened after this date. 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 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 daily 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 distributions are determined in accordance with income tax regulations
that 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, 2000, amounting to $814,072 is available to offset future
capital gains. If not applied, $594,108 of the loss carry forward expires in
2003, $51,741 expires in 2004, $129,493 expires in 2005 and $38,730 expires in
2006.
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"). 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 Fundordinary operating expenses,
including the fee of the Investment Adviser, exceed 1.50% of the average daily
net assets of the Fund. During the year ended March 31, 2000, the Fund incurred
management fees of $95,654.
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.
The shareholders of the Investment Adviser are the Voting Members of Wayne
Hummer Investments LLC ("WHI LLC"). WHI LLC serves as Shareholder Service Agent
without compensation from the Fund. WHI LLC also serves as Distributor and
received commissions of $5,518 from the sale of Fund Shares during the year
ended March 31, 2000, all of which were paid to brokers affiliated with the
Distributor.
<PAGE>
Certain trustees of the Fund are also officers or directors of the Investment
Adviser or Voting Members of WHI LLC. During the year ended March 31, 2000, the
Fund made no direct payments to its officers and incurred trustee fees for its
unaffiliated trustees of $3,200.
5. INVESTMENT TRANSACTIONS
Investment transactions (excluding money market instruments) are as follows:
YEAR ENDED MARCH 31, 2000
Purchases $2,137,391
--------------------------------------------------------------------------------
Proceeds from sales $2,831,291
--------------------------------------------------------------------------------
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:
YEAR ENDED MARCH 31, 2000 1999
Shares sold 102,410 114,578
Shares issued upon
reinvestment of dividends 56,650 59,060
--------------------------------------------------------------------------------
159,060 173,638
Shares redeemed (265,402) (221,489)
--------------------------------------------------------------------------------
Net decrease in Shares
outstanding (106,342) (47,851)
================================================================================
7. FEDERAL TAX STATUS OF 1999 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.
<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, 2000,
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 1996. 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 auditing standards generally
accepted in the United States. 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, 2000, 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, 2000, 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
1996, in conformity with accounting principles generally accepted in the United
States.
/s/ Ernst & Young LLP
Chicago, Illinois
April 28, 2000
<PAGE>
BOARD OF TRUSTEES
Steven R. Becker
Chairman
Charles V. Doherty
Joel D. Gingiss
Patrick B. Long
David P. Poitras
James J. Riebandt
Eustace K. Shaw
START INVESTING TODAY...
For further information on any of the funds or fund services or to discuss which
Fund may be appropriate for your investment needs, please contact your Wayne
Hummer Investment Executive.
CHICAGO Toll-free: 800-621-4477 Local: 312-431-1700
300 South Wacker Drive
Chicago, Illinois 60606-6607
APPLETON Toll-free: 800-678-0833 Local: 920-734-1474
200 East Washington Street Appleton, Wisconsin 54911-5468
INTERNET www.whummer.com
This brochure must be preceded or accompanied by a current prospectus of the
Wayne Hummer Investment Trust.
LOGO: Wayne Hummer (R)
Investments LLC
300 South Wacker Drive
Chicago, Illinois 60606-6607
First Class
U.S. Postage
PAID
South Suburban, IL
Permit #3600
<PAGE>
Wayne Hummer(R)
CorePortfolio Fund
Photos of: Thomas J. Rowland and David D. Cox
ANNUAL FINANCIAL STATEMENTS
March 31, 2000
DEAR FELLOW SHAREHOLDER,
We are pleased to present our shareholder report for the Wayne Hummer
CorePortfolio Fund (the "Fund") for the fiscal year ended March 31, 2000.
For the period of August 2, 1999 (commencement of Fund operations) through March
31, 2000, the net asset value of a Fund Share, with reinvested dividends,
increased 17.4%, which compared with an increase of 13.8% for the S&P 500
Index(R) (the "S&P 500"). Along with the performance results, we also display a
listing of the holdings of the Fund, as well as a chart showing the allocation
of the portfolio among the broad sectors of the economy.
Two significant factors in your Fund's positive performance, relative to the S&P
500, were the large capitalization focus and exposure to the technology sector.
Generally, larger companies performed better than the smaller companies in the
S&P 500, and your Fund had a greater percentage of its net assets invested in
larger companies than the S&P 500. Exposure to the technology sector was a must
for performance during the fiscal year. The technology sector of the S&P 500
increased 60% during the Fund's fiscal year, making up the bulk of the S&P 500's
<PAGE>
13.8% return. Your Fund's 35% weighting in the technology sector, by design,
virtually mirrored that of the S&P 500, but the return of your Fund's technology
holdings exceeded that of the technology sector of the S&P 500. In addition,
your Fund's financial, consumer cyclical, and capital good sectors, which in
total represented 29% of net assets, each registered returns that exceeded those
of the respective sectors of the S&P 500.
After the world's ripple-free traversal of the Y2K gulf to the new millennium,
the stock market has booked increasingly turbulent passage as this year has
begun to unfold. The lion's share of this volatility has been in the technology
sector, with concerns about valuations, due to rising short-term interest rates,
being the primary culprit. We feel that it is the Federal Reserve's hope that a
tightened monetary policy (through higher short-term interest rates) will have a
dampening effect on the speculative market psychology of leveraged momentum
investors and day traders. The sooner that speculative imbalances are out of the
market, the more likely that credit tightening ceases, before becoming a factor
in inducing a recession. Once market participants' sense the end of the string
of Fed rate increases, the market should be on solid footing for a more balanced
advance.
This recent volatility in the market underscores, in our minds, the valuable
role that your Fund plays in offering a portfolio diversified among all of the
major S&P economic sectors, and the importance of maintaining a long-term
outlook. We continue to adhere to these key principles in the management of your
Fund. We feel the fundamentals of the U.S. economy remain strong, and expect
continued corporate profit growth. This should promote healthy prospects for the
market going forward.
We appreciate your continued confidence, and are pleased to be part of your
long-term investment planning.
Sincerely,
/s/Thomas J. Rowland, CFA /s/David D. Cox
Thomas J. Rowland, CFA David D. Cox
President and Portfolio Manager Portfolio Manager
Wayne Hummer Investment Trust
April 28, 2000
"Standard& Poor's(R)" and "S&P" 500(R)" are trademarks of The McGraw Hill
Companies, Inc. and have been licensed for use by Wayne Hummer Management
Company. The Wayne Hummer CorePortfolio Fund is not sponsored, endorsed, sold or
promoted by Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in the Wayne Hummer CorePortfolio Fund.
<PAGE>
PERFORMANCE COMPARISON
WAYNE HUMMER COREPORTFOLIO FUND VS. S&P 500 INDEX
Growth of $10,000 investment made at inception date (August 2, 1999) through
March 31, 2000.
Line Chart:
S&P 500 Core Portfolio Fund
Aug 2 99 10000 10000
Aug 99 9955.21 9850
Sep 99 9682.28 9520
Oct 99 10295 10420
Nov 99 10504.3 10540
Dec 99 11122.9 11195.6
Jan 00 10564.1 10855.2
Feb 00 10364.4 10344.5
Mar 00 11378.1 11506.1
Wayne Hummer CorePortfolio Fund
Period At net asset value Maximum 2% Sales Charge
1/1/00 - 3/31/00 2.77% 0.72%
--------------------------------------------------------------------------------
Since Inception
(08/02/99 - 03/31/00) 17.41% 15.06%
--------------------------------------------------------------------------------
Benchmark Comparison
Period S&P 500 Index
1/1/00 - 3/31/00 2.29%
--------------------------------------------------------------------------------
Since Fund inception date
08/02/99 - 3/31/00 13.78%
--------------------------------------------------------------------------------
The graph compares an initial investment of $10,000 invested in the Wayne Hummer
CorePortfolio Fund at inception date (8/2/99), adjusted for the maximum sales
charge of 2%, with the S&P 500 Index. The S&P 500 Index is unmanaged and all
returns include reinvestment of dividends and capital gain distributions. Past
performance does not guarantee future results. 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.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
PERIOD ENDED MARCH 31, 2000
ASSETS
Investments, at value (Cost: $23,288,669) $26,898,376
Cash 64,285
Receivable for Fund Shares sold 17,985
Dividends receivable 19,990
Prepaid expenses 1,192
Expenses reimbursable in excess of expense limitation 912
--------------------------------------------------------------------------------
Total assets 27,002,740
LIABILITIES AND NET ASSETS
Payable for Fund Shares redeemed 350
Due to Wayne Hummer Management Company 8,622
Accounts payable 11,185
--------------------------------------------------------------------------------
Total liabilities 20,157
--------------------------------------------------------------------------------
Net assets applicable to 2,347,996 Shares outstanding,
no par value, equivalent to $11.49 per Share $26,982,583
================================================================================
ANALYSIS OF NET ASSETS
Paid-in capital $23,520,650
Net unrealized appreciation of investments 3,609,707
Undistributed net realized loss on sales of investments (156,976)
Undistributed net investment income 9,202
--------------------------------------------------------------------------------
Net assets applicable to Shares outstanding $26,982,583
================================================================================
THE PRICING OF SHARES
Net asset value and redemption price per Share
($26,982,583 / 2,347,996 Shares outstanding) $11.49
================================================================================
Maximum offering price per Share (net asset value,
plus 2.02% of net asset value or 2% of offering price) $11.72
================================================================================
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
FOR THE PERIOD AUGUST 2, 1999 - MARCH 31, 2000
INVESTMENT INCOME
Dividends $138,005
Interest 622
--------------------------------------------------------------------------------
Total investment income 138,627
EXPENSES
Management fee 52,748
Custodian fees 14,460
Professional fees 10,200
Transfer agent fees 9,811
Printing costs 8,000
Portfolio accounting fees 3,938
Registration costs 2,500
Trustee fees 2,000
Other 1,500
--------------------------------------------------------------------------------
Total expenses 105,157
Less reimbursement of expenses in excess of the
expense limitation (6,254)
--------------------------------------------------------------------------------
Net expenses 98,903
--------------------------------------------------------------------------------
Net investment income 39,724
--------------------------------------------------------------------------------
Net realized loss on sales of investments (156,976)
Change in net unrealized appreciation 3,609,707
--------------------------------------------------------------------------------
Net gain on investments 3,452,731
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations $3,492,455
================================================================================
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD AUGUST 2, 1999 - MARCH 31, 2000
OPERATIONS
Net investment income $39,724
Net realized loss on sale of investments (156,976)
Change in net unrealized appreciation 3,609,707
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations 3,492,455
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (30,522)
Net realized gain on investments -
--------------------------------------------------------------------------------
Total dividends to Shareholders (30,522)
CAPITAL SHARE TRANSACTIONS
Proceeds from Shares sold 24,852,139
Shares issued upon reinvestment of dividends 30,266
--------------------------------------------------------------------------------
24,882,405
Less payments for Shares redeemed 1,361,755
--------------------------------------------------------------------------------
Increase from Capital Share transactions 23,520,650
--------------------------------------------------------------------------------
Total increase in net assets 26,982,583
NET ASSETS
Beginning of period -
--------------------------------------------------------------------------------
End of period (including undistributed net
investment income of $9,202) $26,982,583
================================================================================
See accompanying notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
AUGUST 2, 1999 - MARCH 31, 2000
NET ASSET VALUE, BEGINNING OF PERIOD $9.80
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02
Net realized and unrealized gains
on investments 1.69
--------------------------------------------------------------------------------
Total from investment operations 1.71
LESS DISTRIBUTIONS:
Dividends from net investment income (0.02)
Distributions from net realized gain on investments -
--------------------------------------------------------------------------------
Total distributions (0.02)
Net asset value, end of period $11.49
Total Return (c) 17.41%
RATIOS AND SUPPLEMENTARY DATA
Net assets, end of period ($000's) 26,983
Ratio of expenses to average net assets (b) 0.75%
Ratio of net investment income to average net assets (b) 0.30%
Portfolio turnover rate 28%
NOTES TO FINANCIAL HIGHLIGHTS
a.) During the fiscal period ended March 31, 2000, expense in excess of the
expense limitation were reimbursable from the Investment Adviser. Absent
the expense limitation, the ratio of expenses to average net assets would
have increased, and the ratio of net investment income to average net
assets would have decreased by 0.04%.
b.) Ratios have been determined on an annualized basis.
c.) Excludes 2% sales charge.
See accompanying notes to financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
NUMBER OF SHARES VALUE
COMMON STOCKS (98.2%)
BASIC MATERIALS 2.3%
Alcoa Inc. 2,870 $201,617
Du Pont (E.I.) de Nemours
and Company 8,201 433,628
--------------------------------------------------------------------------------
635,245
CAPITAL GOODS 8.4%
General Electric Company 12,477 1,936,274
Tyco International Ltd. 6,385 318,452
--------------------------------------------------------------------------------
2,254,726
COMMUNICATION SERVICES 7.5%
AT&T Corporation 20,101 1,130,681
SBC Communications Inc. 21,438 900,396
--------------------------------------------------------------------------------
2,031,077
CONSUMER CYCLICALS 7.6%
Home Depot, Inc. 11,829 762,971
Wal-Mart Stores, Inc. 22,980 1,275,390
--------------------------------------------------------------------------------
2,038,361
CONSUMER STAPLES 8.8%
Coca-Cola Company 18,373 862,383
Procter and Gamble Company 9,840 553,500
Time Warner Inc. 9,584 958,400
--------------------------------------------------------------------------------
2,374,283
ENERGY 5.0%
Exxon Mobil Corporation 11,962 930,793
Royal Dutch Petroleum
Company (ADR) 7,443 428,438
--------------------------------------------------------------------------------
1,359,231
FINANCIAL 13.1%
American International
Group, Inc. 11,971 1,310,824
Bank of America Corporation 13,176 690,917
Citigroup Inc. 25,843 1,532,813
--------------------------------------------------------------------------------
3,534,554
HEALTHCARE 7.3%
Johnson & Johnson 11,342 794,649
Merck & Co., Inc. 18,780 1,166,707
--------------------------------------------------------------------------------
1,961,356
NUMBER OF SHARES VALUE
TECHNOLOGY 34.5%
Cisco Systems, Inc. (b) 40,628 $3,141,052
Intel Corporation 20,607 2,718,836
Microsoft Corporation (b) 32,430 3,445,687
--------------------------------------------------------------------------------
9,305,575
TRANSPORTATION 0.6%
Burlington Northern Santa Fe
Corporation 3,533 78,168
FedEx Corporation (b) 2,315 90,285
--------------------------------------------------------------------------------
168,453
UTILITIES 3.1%
Duke Energy Corporation 4,244 222,810
Enron Corporation 8,186 612,927
--------------------------------------------------------------------------------
835,737
TOTAL COMMON STOCK
(Cost: $22,888,891) 26,498,598
SHORT-TERM INVESTMENTS (1.5%)
United States Treasury Bill
4.06%, 04/06/00 (Cost: $399,778) 399,778
--------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost: $23,288,669) (99.7%) 26,898,376
CASH AND OTHER ASSETS,
LESS LIABILITIES (0.3%) 84,207
--------------------------------------------------------------------------------
NET ASSETS (100.0%) $26,982,583
================================================================================
NOTES TO PORTFOLIO OF INVESTMENTS:
(a) Interest rates on short-term investments represent annualized yield to date
of maturity.
(b) Non-income producing security.
(c) Based on the cost of investments of $23,288,669 for federal income tax
purposes at March 31, 2000, the aggregate gross unrealized appreciation was
$5,084,005, the aggregate gross unrealized depreciation was $1,474,298 and
the net unrealized appreciation of investments was $3,609,707.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION:
Wayne Hummer Investment Trust (the "Trust") is an open-end investment company
organized as a Massachusetts business trust. The Trust consists of four
investment portfolios, Wayne Hummer CorePortfolio Fund, Wayne Hummer Growth
Fund, Wayne Hummer Income Fund and Wayne Hummer Money Market Fund, each
operating as a separate mutual fund. Presented herein are the financial
statements of the Wayne Hummer CorePortfolio Fund (the "Fund"). The Fund
commenced investment operations on August 2, 1999 and may issue an unlimited
number of full and fractional units of beneficial interest (Shares) without par
value. The investment objective of the Fund is to achieve long-term capital
growth by investing in a passively-managed portfolio of large-cap stocks.
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 closing 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 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.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles may require management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. In those cases, actual results may differ from estimates.
2. FUND SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS
Net asset value per Share is determined on each day the New York Stock Exchange
is open as of the close of trading on the Exchange 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 24, 2000, an ordinary income dividend of $0.005
per Share was declared, payable April 26, 2000 to Shareholders of record on
April 24, 2000.
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
<PAGE>
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"). For advisory and management services and facilities furnished, the
Fund pays fees of .40 of 1% of average daily net assets. 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, exceeds 0.75%
of the average daily net assets of the Fund. The Adviser is entitled to
reimbursement from the Fund of any fees waived during the first five years of
operations pursuant to an Expense Limitation Agreement if such reimbursements do
not cause the Fund to exceed expense limitations. During the eight-month period
ended March 31, 2000, the Fund incurred management fees of $52,748 and the
Investment Adviser was obligated to reimburse the Fund for excess expenses of
$6,254.
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. The
Investment Adviser has agreed to waive its fees attributed to the Fund until
July 31, 2000.
The shareholders of the Investment Adviser are the Voting Members of Wayne
Hummer Investments LLC ("WHI LLC"). WHI LLC serves as Shareholder Service Agent
without compensation from the Fund. WHI LLC also serves as Distributor and
received commissions of $412,574 from the sale of Fund Shares during the period
ended March 31, 2000, all of which were paid to brokers affiliated with the
Distributor.
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 eight-month period ended March 31, 2000, the Fund made no direct
payments to its officers and incurred trustee fees for its unaffiliated trustees
of $2,000.
5. INVESTMENT TRANSACTIONS
Investment transactions (excluding money market instruments) are as follows:
FOR THE PERIOD AUGUST 2, 1999 - MARCH 31, 2000
Purchases $28,152,750
--------------------------------------------------------------------------------
Proceeds from sales $5,106,883
--------------------------------------------------------------------------------
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:
FOR THE PERIOD AUGUST 2, 1999 - MARCH 31, 2000
Shares sold 2,472,721
Shares issued upon
reinvestment of dividends 2,823
--------------------------------------------------------------------------------
2,475,544
Shares redeemed (127,548)
--------------------------------------------------------------------------------
Net increase in Shares
outstanding 2,347,996
<PAGE>
REPORT OF INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES--
WAYNE HUMMER COREPORTFOLIO FUND
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Wayne Hummer CorePortfolio Fund as of March 31,
2000, and the related statements of operations and changes in net assets, and
financial highlights for the period August 2, 1999 (commencement of operations)
to March 31, 2000. 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 auditing standards generally
accepted in the United States. 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 31,2000, 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 CorePortfolio Fund as of March 31, 2000, the results of its operations,
changes in its net assets and financial highlights for the period August 2, 1999
to March 31, 2000, in conformity with accounting principles generally accepted
in the United States.
/s/ Ernst & Young LLP
Chicago, Illinois
April 28, 2000
<PAGE>
BOARD OF TRUSTEES
Steven R. Becker
Chairman
Charles V. Doherty
Joel D. Gingiss
Patrick B. Long
David P. Poitras
James J. Riebandt
Eustace K. Shaw
START INVESTING TODAY...
For further information on any of the funds or fund services or to discuss which
Fund may be appropriate for your investment needs, please contact your Wayne
Hummer Investment Executive.
CHICAGO Toll-free: 800-621-4477 Local: 312-431-1700
300 South Wacker Drive
Chicago, Illinois 60606-6607
APPLETON Toll-free: 800-678-0833 Local: 920-734-1474
200 East Washington Street Appleton, Wisconsin 54911-5468
INTERNET www.whummer.com
This brochure must be preceded or accompanied by a current prospectus of the
Wayne Hummer Investment Trust.
LOGO: Wayne Hummer(r) Investments LLC
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