ALLMERICA INVESTMENT TRUST
MONEY MARKET FUND
440 Lincoln Street
Worcester, Massachusetts 01653
(508) 855-1000
Money Market Fund (the "Fund") is a separate portfolio of
Allmerica Investment Trust (the "Trust"), a professionally-
managed, open-end investment company designed to provide an
underlying investment vehicle for insurance-related accounts. Only
one of the separate portfolios of the Trust, the Fund, is offered
by this Prospectus.
Currently, shares of the Fund may only be purchased by the
separate accounts ("Separate Accounts") established by First
Allmerica Financial Life Insurance Company ("First Allmerica") or
Allmerica Financial Life Insurance and Annuity Company ("Allmerica
Life"), a subsidiary of First Allmerica, for the purpose of
funding variable annuity contracts or variable life insurance
policies. The prospectus of the specific insurance product you
have chosen should be read in conjunction with this Prospectus.
This Prospectus sets forth concisely the information about
the Fund that a prospective investor ought to know before
investing. Certain additional information contained in the
Statement of Additional Information dated April 29, 1996 ("SAI"),
which has been filed with the Securities and Exchange Commission
(the "SEC"), is incorporated herein by reference and is available
upon request without charge from the Trust, 440 Lincoln Street,
Worcester, MA 01653, (508) 855-1000.
Investment in the Fund is neither insured nor guaranteed by
the U.S. Government. There can be no assurance that the Fund will
be able to maintain a stable net asset value of $1.00 per share.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DATED APRIL 29, 1996
AS SUPPLEMENTED NOVEMBER 25, 1996
TABLE OF CONTENTS
FINANCIAL HIGHLIGHTS
3
HOW IS THE FUND MANAGED?
5
WHAT ARE THE INVESTMENT OBJECTIVE AND POLICIES?
5
MANAGEMENT FEES AND EXPENSES
6
HOW ARE SHARES VALUED?
7
TAXES AND DISTRIBUTIONS TO SHAREHOLDERS
7
SALE AND REDEMPTION OF SHARES
7
HOW IS PERFORMANCE DETERMINED?
8
ORGANIZATION AND CAPITALIZATION OF THE TRUST
8
INVESTMENT RESTRICTIONS
9
CERTAIN INVESTMENT STRATEGIES AND POLICIES
9
APPENDIX
1
1
FINANCIAL HIGHLIGHTS
The following financial highlights for the six months ended
June 30, 1996 are derived from the Fund's unaudited financial
statements dated June 30, 1996. All other data presented are
derived from the Fund's financial statements audited by Price
Waterhouse LLP, the independent accountants of the Trust. This
information should be read in conjunction with the financial
statements and notes thereto which appear in the Trust's Annual
Report for the year ended December 31, 1995 ("Annual Report"), and
which are incorporated by reference in the SAI. Further
information about the performance of the Fund and the Trust is
contained in the Annual Report which may be obtained without
charge from the Trust, 440 Lincoln Street, Worcester, MA 01653,
(508) 855-1000.
ALLMERICA INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout Each Year
Money Market Fund
Period ended
June 30, 1996 Years Ended December 31,
(unaudited) 1995 1994 1993 1992 1991
Net Asset Value,
Beginning of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Income from Investment Operations:
Net investment income 0.026 0.057 0.039 0.030 (A) 0.037 0.060
Net realized and unrealized
gain (loss) on investments
Total from Investment
Operations 0.026 0.057 0.039 0.030 0.037 0.060
Less Distributions:
Dividends from net
investment income (0.026) (0.057) (0.039) (0.030) (0.037) (0.060)
Total Distributions (0.026) (0.057) (0.039) (0.030) (0.037) (0.060)
Net increase (decrease)
in net asset value
Net Asset Value,
End of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Total Return (B) 2.62%* 5.84% 5.93% 3.00% 3.78% 6.22%
Ratios/Supplemental Data:
Net Assets,
End of period (000's) $178,984 $155,211 $95,991 $71,052 $64,506 $39,909
Ratios to average net assets:
Net investment income 5.20% 5.68% 3.94% 2.95% 3.65% 5.98%
Operating expenses 0.33%* 0.36% 0.45% 0.42%(A) 0.44% 0.43%
Gross management fee 0.28%* 0.29% 0.31% 0.32% N/A N/A
Net management fee 0.28%* 0.29% 0.31% 0.31% N/A N/A
Notes to Financial Statements
Annualized
* Not annualized
** Unaudited
(A) Net investment income per share and the operating expense ratios
before reimbursement of fees by the
investment adviser for the years ended December 31, 1993, 1988, 1987,
and 1986 were $0.030 and 0.43%, $0.084**
and 0.71%, $0.076** and 0.75%, and $0.116**and 1.20%, respectively.
(B) Total Return does not reflect fees charged at the Separate
Account level. Refer to the prospectus of
the specific insurance product for such fee information.
ALLMERICA INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout Each Year
Money Market Fund
Years Ended December 31,
1990 1989 1988 1987 1986
Net Asset Value,
Beginning of period $1.000 $1.000 $1.000 $1.000 $1.000
Income from
Investment Operation:
Net investment income 0.078 0.086 0.071 (A) 0.061 (A) 0.058 (A)
Net realized and unrealized
gain (loss) on investments
Total from Investment
Operations 0.078 0.086 0.071 0.061 0.058
Less Distributions:
Dividends from net
investment income (0.078) (0.086) (0.071) (0.061) (0.058)
Total Distributions (0.078) (0.086) (0.071) (0.061) (0.058)
Net increase (decrease)
in net asset value
Net Asset Value,
End of period $1.000 $1.000 $1.000 $1.000 $1.000
Total Return (B) 8.17% 9.07% 7.3%** 6.2%** 6.1%**
Ratios/Supplemental Data:
Net Assets,
End of period (000's) $28,330 $12,060 $7,156 $4,726 $833
Ratios to average net assets:
Net investment income 8.22% 8.62% 7.13% 6.14% 5.87%
Operating expenses 0.42% 0.58% 0.60%(A) 0.60%(A) 0.60%(A)
Gross management fee N/A N/A N/A N/A N/A
Net management fee N/A N/A N/A N/A N/A
Notes to Financial Statements
Annualized
* Not annualized
** Unaudited
(A) Net investment income per share and the operating expense ratios
before reimbursement of fees by the investment adviser for the years
ended December 31, 1993, 1988, 1987, and 1986 were $0.030 and 0.43%,
$0.084** and 0.71%, $0.076** and 0.75%, and $0.116**and 1.20%,
respectively.
(B) Total Return does not reflect fees charged at the Separate
Account level. Refer to the prospectus of the specific insurance
product for such fee information.
HOW IS THE FUND MANAGED?
The overall responsibility for the supervision of the
affairs of the Trust vests in the Board of Trustees of the Trust
which meets on a quarterly basis. Allmerica Investment Management
Company, Inc. (the "Manager") is responsible for the management of
the Trust's day-to-day business affairs and has general
responsibility for the management of the investments of the Fund.
The Manager, at its expense, has contracted with Allmerica Asset
Management, Inc. ("AAM" or the "Sub-Adviser") to manage the
investments of the Fund, subject to the requirements of the
Investment Company Act of 1940, as amended (the "1940 Act").
The Manager is a wholly-owned subsidiary of First Allmerica,
a life insurance company, which was organized in Massachusetts in
1844. The Manager, organized August 19, 1985, also serves as
manager of Allmerica Funds, an open-end investment company. The
Manager and First Allmerica are located at 440 Lincoln Street,
Worcester, Massachusetts 01653.
The Sub-Adviser, which has been selected on the basis of
various factors including management experience, investment
techniques, and staffing, is authorized to engage in portfolio
transactions on behalf of the Fund subject to such general or
specific instructions as may be given by the Trustees and/or the
Manager. The terms of the Sub-Adviser Agreement cannot be changed
without the approval of a majority interest of the shareholders of
the Fund. The Sub-Adviser has been selected by the Manager and the
Trustees in consultation with Rogers, Casey & Associates ("Rogers,
Casey"), a leading pension consulting firm. The cost of such
consultation is borne by the Manager.
Rogers, Casey provides consulting services to pension plans
representing over $150 billion in total assets and, in its
consulting capacity, monitors the investment performance of over
1,000 investment advisers. From time to time, specific clients of
Rogers, Casey and the Sub-Adviser will be named in sales
materials. At times, Rogers, Casey assists in the development of
asset allocation strategies which may be used by shareholders in
the diversification of their portfolio across different asset
classes.
Ongoing performance of the Sub-Adviser is reviewed and
evaluated by a committee whose members may include senior officers
of First Allmerica, its affiliate or the Manager and an
independent consultant. Combined, the committee has over 150 years
of investment experience. Historical performance data for the Fund
is set forth in the "Financial Highlights" table on page 4. The
Manager alone is responsible for the payment of all fees to the
Sub-Adviser.
The Manager also has entered into an Administrative Services
Agreement with First Data Investor Services Group, Inc. ("FDISG"),
a wholly-owned subsidiary of First Data Corporation, whereby FDISG
performs administrative services for the Fund and is entitled to
receive an administrative fee and certain out-of-pocket expenses.
The Manager is solely responsible for the payment of the
administrative fee to FDISG.
WHAT ARE THE INVESTMENT OBJECTIVE AND POLICIES?
Investment Objective: The Fund seeks to obtain maximum
current income consistent with preservation of capital and
liquidity. There is no assurance that the Fund will achieve its
investment objective.
Sub-Adviser: AAM, a wholly-owned subsidiary of First
Allmerica, was incorporated in 1993 and is located at 440 Lincoln
Street, Worcester, Massachusetts 01653. As of October 15, 1996,
AAM had approximately $10.85 billion in assets under management.
AAM serves as investment adviser to First Allmerica's General
Account and to a number of affiliated insurance companies and
other affiliated accounts and as adviser to Allmerica Securities
Trust, a diversified, closed-end management investment company.
The Fund's investment objective is fundamental and may not
be changed without shareholder approval. Unless otherwise
indicated, the Fund's investment policies are not fundamental and
may be changed without shareholder approval.
Investment Policies: The Fund seeks to achieve its objective by
investing in the following high quality money market instruments:
(a) Obligations issued or guaranteed by the United States
Government, its agencies or instrumentalities;
(b) Commercial paper which meets the ratings requirements
as set forth in the paragraph below;
(c) Obligations of banks or savings and loan associations
(such as bankers acceptances and certificates of deposit,
including dollar-denominated obligations of foreign branches of
U.S. banks ("Eurodollars") and U.S. branches of foreign banks if
such U.S. branches are subject to state banking requirements and
Federal Reserve reporting requirements) which at the date of the
investment have deposits of at least $1 billion as of their most
recently published financial statements;
(d) Repurchase agreements with respect to obligations
described under (a) above (such obligations subject to repurchase
agreement may bear maturities of more than one year); and
(e) Cash and cash equivalents.
The Fund will not purchase any security unless (i) the
security has received the highest quality rating by at least two
nationally-recognized statistical rating organizations ("NRSROs")
or by one NRSRO if only one has rated the security, or (ii) the
security is unrated and in the opinion of AAM as Sub-Adviser, in
accordance with guidelines adopted by the Trustees, is of a
quality comparable with the highest rating of an NRSRO. These
standards must be satisfied at the time an investment is made. If
the quality of the investment later declines, the Fund may
continue to hold the investment, but the Trustees will evaluate
whether the security continues to present minimal credit risks.
See the Appendix for an explanation of NRSRO ratings published by
Moody's Investor Services, Inc. and Standard & Poor's Rating
Service.
The Fund will limit its portfolio investments to securities
with a remaining maturity of 397 days as of the time of purchase,
in accordance with the Trustees' guidelines. The portfolio will be
managed to maintain a dollar weighted maturity of 90 days or less.
In order to maximize the yield on its assets, the Fund intends to
be as fully invested at all times as is reasonably practicable.
There is always the risk that the issuer of an instrument
may be unable to make payment upon maturity.
MANAGEMENT FEES AND EXPENSES
Under its Management Agreement with the Trust, the Manager
is obligated to perform certain administrative and management
services for the Trust; furnishes to the Trust all necessary
office space, facilities, and equipment; and pays the
compensation, if any, of officers and Trustees who are affiliated
with the Manager. Other than the expenses specifically assumed by
the Manager under the Management Agreement, all expenses incurred
in the operation of the Trust are borne by the Trust, including:
fees and expenses associated with the registration and
qualification of the Trust's shares under the Securities Act of
1933; other fees payable to the SEC; independent accountant fees;
legal and custodial fees; association membership dues; taxes;
interest; insurance premiums; brokerage commissions; fees and
expenses of the Trustees who are not affiliated with the Manager;
expenses for proxies, prospectuses, and reports to shareholders;
Fund recordkeeping expenses; and other expenses. The Manager has
voluntarily agreed to absorb any charges and expenses associated
with Fund recordkeeping that exceed 0.10% of the Fund's average
net assets.
For services to the Fund, the Manager receives fees computed
daily at an annual rate based on the average daily net asset value
of the Fund in accordance with the following schedule:
Assets
First $50 Million 0.35%
Next $200 Million 0.25%
Over $250 Million 0.20%
The Manager alone is responsible for the payment of all fees
to the Sub-Adviser. The Manager pays the Sub-Adviser fees
computed daily at an annual rate of 0.10% based on the average
daily net asset value of the Fund. For the fiscal year ended
December 31, 1995, the Fund paid the Manager gross fees before
reimbursement at a rate of 0.29% of the Fund's average daily net
assets.
The voluntary expense limitation which the Manager has
declared for the Fund and the operating expenses incurred for the
fiscal year ended December 31, 1995 for the Fund were 0.60% and
0.36%, respectively.
The Manager will reimburse voluntarily its fees and any
expenses above the expense limitation. The expense limitation is
voluntary and may be removed at any time without prior notice to
existing shareholders. The Manager reserves the right to recover
from the Fund any fees, within a current fiscal year period, which
were reimbursed in that same year to the extent that total annual
expenses did not exceed the applicable expense limitation.
Non-recurring and extraordinary expenses are generally excluded in
the determination of expense ratios of the Fund for purposes of
determining any required expense reimbursement. Quotations of
yield or total return for any period when an expense limitation is
in effect will be greater than if the limitation had not been in
effect.
HOW ARE SHARES VALUED?
The net asset value of the shares of the Fund is determined
once daily as of the close of the New York Stock Exchange (the
"Exchange") on each day on which the Exchange is open for trading.
All securities of the Fund are valued at amortized cost.
TAXES AND DISTRIBUTIONS TO SHAREHOLDERS
It is the policy of the Trust to comply with the provisions
of the Internal Revenue Code applicable to regulated investment
companies so that the Trust will not be subject to federal income
tax on any net income and any capital gains to the extent they are
distributed or are deemed to have been distributed to
shareholders. Dividends out of net investment income will be
declared and paid daily. Distributions of net capital gains for
the year, if any, are made annually. All dividends and capital
gain distributions are applied to purchase additional Fund shares
at net asset value as of the payment date. Fund shares are held
by the Separate Accounts and any distributions are reinvested
automatically by the Separate Accounts. Tax consequences to
investors in the Separate Accounts which are invested in the Fund
are described in the prospectuses for such accounts.
SALE AND REDEMPTION OF SHARES
Shares of the Fund are sold in a continuous offering and
currently may be purchased only by Separate Accounts of First
Allmerica or its subsidiaries. The Separate Accounts are the
funding mechanisms for variable annuity contracts. Shares of the
Fund are sold at net asset value as next computed after receipt of
the purchase order without the addition of any selling commission
or "sales load." The Distributor, Allmerica Investments, Inc., at
its expense, may provide promotional incentives to dealers that
sell variable annuity contracts for which the Fund serves as an
investment vehicle.
Shares of the Fund currently are being issued also under
separate prospectuses to Separate Accounts of Allmerica Life,
First Allmerica, and subsidiaries of First Allmerica which issue
variable or group annuity policies or variable life insurance
policies (''mixed funding''). Although neither Allmerica Life nor
the Trust currently foresees any disadvantage, it is conceivable
that in the future such mixed funding may be disadvantageous for
variable or group annuity policyowners or variable life insurance
policyowners ("Policyowners"). The Trustees of the Trust intend
to monitor events in order to identify any conflicts that may
arise between such Policyowners and to determine what action, if
any, should be taken in response thereto. If the Trustees were to
conclude that separate funds should be established for variable
annuity and variable life separate accounts, Allmerica Life will
pay the attendant expenses.
The Trust redeems shares of the Fund at net asset value as
next computed after receipt of a request for redemption in proper
order. No fee is charged by the Trust on redemption. The
variable contracts funded through the Separate Accounts are sold
subject to certain fees and charges, which may include sales and
redemption charges, as described in the prospectuses for such
Separate Accounts.
Redemption payments will be paid within seven days after
receipt by the Trust of a written request, except that the right
of redemption may be suspended or payments postponed whenever
permitted by applicable law and regulations.
HOW IS PERFORMANCE DETERMINED?
The Fund's performance may be quoted in advertising. The
Fund's performance may be compared with the performance of other
investments or relevant indices. All performance information is
based on historical results and is not intended to indicate future
performance.
For the Fund, "yield" represents an annualization of the
change in value of an investment (excluding any capital changes)
in the Fund for a specific seven-day period; "effective yield"
compounds that yield for a year and is, for that reason, greater
than the Fund's yield.
Total return is based on the overall dollar or percentage
change in value of a hypothetical investment in the Fund assuming
all dividends and capital gain distributions are reinvested.
Cumulative total return reflects the Fund's performance over a
stated period of time. Average annual total return reflects the
hypothetical, annually-compounded return that would have produced
the same cumulative return if the Fund's performance had been
constant over the entire period. Because average annual returns
tend to smooth out variations in the Fund's return, they are not
the same as actual year-by-year results.
Yields and total returns quoted for the Fund include the
effect of deducting the Fund's expenses, but may not include
charges and expenses attributable to a particular insurance
product. Since shares of the Fund can be purchased only through a
variable annuity contract or variable life contract, you should
carefully review the prospectus for the Separate Accounts for
information on relevant charges and expenses. Including these
charges in the quotations of the Fund's yield and total return
would have the effect of decreasing performance. Performance
information for the Fund must always be accompanied by, and be
reviewed with, performance information for the Separate Accounts
which invest in the Fund.
ORGANIZATION AND CAPITALIZATION OF THE TRUST
The Trust was established as a Massachusetts business trust
under the laws of Massachusetts by an Agreement and Declaration of
Trust dated October 11, 1984 (the "Trust Declaration"). A copy of
the Trust Declaration is on file with the Secretary of the
Commonwealth of Massachusetts.
The Trust has an unlimited authorized number of shares of
beneficial interest which may be divided into an unlimited number
of series of such shares, and which are divided presently into
twelve series of shares, one series underlying the Fund. The
Trust's shares are entitled to one vote per share (with
proportional voting for fractional shares). The rights
accompanying Fund shares are legally vested in the Separate
Accounts. As a matter of policy, however, holders of variable
life insurance or variable annuity contracts funded through the
Separate Accounts have the right to instruct the Separate Accounts
as to voting Fund shares on all matters to be voted on by Fund
shareholders. Voting rights of the participants in the Separate
Accounts are set forth more fully in the prospectuses or offering
circular relating to those Accounts. See "Organization of the
Trust" in the SAI for the definition of a "majority vote" of
shareholders.
The Trust is not required to hold annual meetings of
shareholders. The Trustees or shareholders holding at least 10%
of the outstanding shares may call special meetings of
shareholders.
Fund Recordkeeping Agent
FDISG, a wholly-owned subsidiary of First Data Corporation,
calculates net asset value per share and maintains general
accounting records for the Fund. FDISG is entitled to receive an
annual Fund recordkeeping fee based on Fund assets and certain
out-of-pocket expenses.
Custodian
Bankers Trust Company, 130 Liberty Street, New York, New
York 10006, is the custodian of the securities and other assets of
the Fund.
INVESTMENT RESTRICTIONS
The following is a description of certain investment
restrictions which are fundamental and may not be changed with
respect to the Fund without shareholder approval. For a
description of certain other investment restrictions, reference
should be made to the SAI.
1. The Fund will not concentrate its investments in
particular industries, including debt obligations of foreign
governments, but it may invest up to 25% of the value of its total
assets in a particular industry. The restriction does not apply to
investments in obligations issued or guaranteed by the United
States of America, its agencies or instrumentalities, or to
investments by the Fund in securities issued or guaranteed by
domestic branches of U.S. banks.
2. The Fund will not invest more than 5% of the value of
its total assets in the securities of any one issuer (other than
securities issued by or guaranteed as to principal or interest by
the United States Government or any agency or instrumentality
thereof) or acquire more than 10% of the voting securities of any
one issuer.
These limitations apply as of the time of purchase. If
through market action the percentage limitations are exceeded, the
Fund will not be required to reduce the amount of its holding in
such investments.
CERTAIN INVESTMENT STRATEGIES AND POLICIES
Repurchase Agreements
The Fund may invest in repurchase agreements, under which
the Fund acquires ownership of a security (ordinarily U.S.
Government securities) but the seller agrees, at the time of sale,
to purchase the security at a mutually agreed upon time and price.
Should any seller of a repurchase agreement fail to repurchase the
underlying security, or should any seller become insolvent or
involved in a bankruptcy proceeding, the Fund could incur costs
and losses. Repurchase Agreements maturing in more than seven days
are subject to the 15% limit on illiquid securities.
"When-Issued" Securities
The Fund may purchase securities on a when-issued or delayed
delivery basis. Delivery and payment normally take place 15 to 45
days after the commitment to purchase. No income accrues on
when-issued securities prior to delivery. Purchase of when-issued
securities involves the risk that yields available in the market
when delivery occurs may be higher than those available when the
when-issued order is placed, resulting in a decline in the market
value of the security. There is also the risk that under some
circumstances the purchase of when-issued securities may act to
leverage the Fund.
Lending of Securities
For the purpose of realizing additional income, the Fund may
lend portfolio securities to broker-dealers or financial
institutions amounting to not more than 30% of its total assets
taken at current value. While any such loan is outstanding, the
Fund will continue to receive amounts equal to the interest or
dividends paid by the issuer on the securities, as well as
interest (less any rebates to be paid to the borrower) on the
investment of the collateral or a fee from the borrower. The Fund
will have the right to call each loan and obtain the securities.
Lending portfolio securities involves certain risks, including
possible delays in receiving additional collateral or in the
recovery of the securities or possible loss of rights in the
collateral should the borrower fail financially. Loans will be
made in accordance with guidelines established by the Board of
Trustees.
APPENDIX
Description of Moody's Investors Service, Inc. ("Moody's")
and Standard & Poor's Ratings Service ("S&P"), a division of
McGraw-Hill Companies, Inc., commercial paper ratings:
Commercial Paper Ratings
Moody's employs three designations, all judged to be
investment grade, to indicate the relative repayment capacity of
rated issuers. The highest designations is as follows:
Issuers rated Prime-1 (or related supporting
institutions) have a superior capacity for repayment of short-term
promissory obligations. Prime-1 repayment capacity will normally
be evidenced by the following characteristics:
- Leading market positions in well-established
industries.
- High rates of return on funds employed.
- Conservative capitalization structures with
moderate reliance on debt and ample asset protection.
- Broad margins in earnings coverage of fixed
financial charges and high internal cash generation.
- Well-established access to a range of
financial markets and assured sources of alternate liquidity.
S&P commercial paper ratings are graded into several
categories, ranging from "A-1" for the highest quality obligations
to "D" for the lowest. The highest rating category is as follows:
A-1 - This highest category indicates that the degree of
safety regarding timely payment is strong. Those issues determined
to possess extremely strong safety characteristics are denoted
with a plus (+) sign designation.
4
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