<PAGE>
As filed with the Securities and Exchange Commission on October 24, 1997
File Nos. 811-4138 and 2-94067
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
----
Post-Effective Amendment No. 34 [ ]
----
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 35
----
ALLMERICA INVESTMENT TRUST
--------------------------
(Name of Registrant)
440 Lincoln Street
WORCESTER, MASSACHUSETTS 01653
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
(508) 855-1000
(Names and Addresses of Agents for Service:)
George M. Boyd, Esq. Gregory D. Sheehan, Esq.
Allmerica Financial Ropes & Gray
440 Lincoln Street One International Place
Worcester, MA 01653 Boston, Massachusetts 02110
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
- ----
on (date) pursuant to paragraph (b)
- ----
60 days after filing pursuant to paragraph (a)(1)
- ----
on (date) pursuant to paragraph (a)(1)
- ----
75 days after filing pursuant to paragraph (a)(2)
- ----
X on January 9, 1998 pursuant to paragraph (a)(2) of rule 485.
- ----
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
- ---- previously filed post-effective amendment.
Pursuant to Reg. Section 270.24f-2 of the Investment Company Act of 1940,
Registrant has registered an indefinite amount of its securities under the
Securities Act of 1933. The Rule 24f-2 Notice for Registrant's fiscal year ended
December 31, 1996 was filed on February 27, 1997.
<PAGE>
ALLMERICA INVESTMENT TRUST
Cross-Reference Sheet
<TABLE>
<CAPTION>
Item No. of Form N-1A Prospectus Caption
- --------------------- ------------------
<S> <C>
1............................ Prospectus Cover Page
2............................ Management Fees and Expenses
3............................ Financial Highlights
4(a)......................... Prospectus Cover Page, Organization
and Capitalization of the Trust, What
are the Investment Objectives and
Policies?
4(b) and (c)................. What are the Investment Objectives and
Policies?, Investment Restrictions,
Certain Investment Strategies and
Policies
5(a)......................... How are the Funds Managed?
5(b)......................... How are the Funds Managed?, Management
Fees and Expenses, What are the
Investment Objectives and Policies?
5(c)......................... Fund Manager Information
5(d) and (e)................. Organization and Capitalization of the
Trust
5(f) ........................ Not Applicable
5(g) ........................ Management Fees and Expenses
5(h) ........................ Not Applicable
6(a) and (b) ................ Organization and Capitalization of the
Trust
6(c) and (d) ................ Not Applicable
6(e)......................... Cover Page, Organization and
Capitalization of the Trust
6(f) and (g)................. Taxes and Distributions to Shareholders
7............................ Sales and Redemption of Shares
7(a) ........................ Not Applicable
7(b) ........................ How are Shares Valued?
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Item No. of Form N-1A Prospectus Caption
- --------------------- ------------------
<S> <C>
7(c)-(g)..................... Not Applicable
8(a)......................... Sales and Redemption of Shares
8(b)-(d)..................... Not Applicable
9............................ Not Applicable
<CAPTION>
Caption in Statement of Additional
----------------------------------
Information
-----------
<S> <C>
10(a) and (b)................ Cover Page
11........................... Table of Contents
12........................... General Information, Organization of
the Trust
13(a)........................ Investment Objectives and Policies
13(b) ....................... Investment Restrictions
13(c) ....................... Investment Objectives and Policies,
Investment Restrictions
13(d)........................ Portfolio Turnover
14(a) and (b)................ Management of Allmerica Investment
Trust
14(c) ....................... Management of Allmerica Investment
Trust
15(a) and (b)................ Control Person and Principal Holder of
Securities
15(c)........................ Not Applicable
16(a) and (b) ............... Investment Management and Other
Services
16(c)-(g).................... Not Applicable
16(h) ....................... Investment Management and Other
Services, Organization of the Trust
16(i) ....................... Not Applicable
17(a)-(c).................... Brokerage Allocation
17(d)........................ Not Applicable
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Item No. of Form N-1A Caption in Statement of Additional
- --------------------- ----------------------------------
Information
-----------
<S> <C>
17(e)........................ Not Applicable
18........................... Not Applicable
19(a) and (b)................ Purchase, Redemption and Pricing of
Securities Being Offered
19(c) ....................... Not Applicable
20 and 21.................... Not Applicable
22........................... Performance
23 .......................... Financial Statements
</TABLE>
5
<PAGE>
PART A:
- ------
The six other Prospectuses of the Registrant, as filed in Post-effective
Amendment No. 33, including any current supplements, are incorporated
herein by reference.
6
<PAGE>
Draft
-----
Allmerica Investment Trust
(Supplement Effective February 1, 1998 to Prospectus dated May 1, 1997)
The following three new investment portfolios are being offered in the attached
Prospectus:
Select Emerging Markets Fund
----------------------------
Investment Objective: The Select Emerging Markets Fund seeks long-term growth
of capital by investing in the world's emerging markets.
Sub-Advisers: Montgomery Asset Management, LLC ("Montgomery"), Morgan Stanley
Asset Management, Inc. ("Morgan Stanley") and Scudder, Stevens & Clark, Inc.
("Scudder") serve as Sub-Advisers to the Select Emerging Markets Fund.
Montgomery, founded in 1990, is a San Francisco based investment management
organization serving both institutional and individual investors. Montgomery's
clients include some of the largest pension funds, foundations and endowments in
the United States. Montgomery is an independent affiliate of Commerzbank AG, the
third largest publicly owned commercial bank in Germany. In addition, Montgomery
acts as investment adviser to The Montgomery Funds, a series of no-load mutual
funds, and serves high net worth clients through a separate Private Asset
Management Group. Montgomery is located at 101 California Street, San Francisco,
California 94111 with additional offices in Walnut Creek, California and Denver,
Colorado. As of September 30, 1997, Montgomery managed almost $10 billion in
assets across a diversified product line.
Morgan Stanley, a wholly - owned subsidiary of Morgan Stanley, Dean Witter,
Discover & Co., was established in 1980 and is located at 1221 Avenue of the
Americas, New York, New York 10020. Morgan Stanley provides investment advisory
services to financial institutions, investment companies, pension plans,
corporations, governmental entities, charitable organizations and individuals.
As of July 30, 1997, the firm had approximately $34.5 billion in assets under
management.
Scudder was founded as a partnership in 1919 and became a privately held
corporation in June 1985. On June 27, 1997, Scudder and The Zurich Group, a
leading international insurance and financial services organization, announced
the signing of a definitive agreement to form a global investment organization.
Under the agreement, Zurich's subsidiary, Zurich Kemper Investment, Inc., a
Chicago-based investment manager with $80 billion in assets under management,
will be folded into Scudder's $120 billion mutual fund and asset management
operation to form Scudder Kemper Investments, Inc. The new firm, headquartered
in New York City, will be the core of Zurich's global investment management
capabilities.
The purpose of using multiple Sub-Advisers is to blend assets and investment
styles in order to reduce volatility and obtain more consistent returns for the
Fund. Each of the Sub-Advisers invests assets allocated to it in its
discretion, subject to overall supervision of Allmerica Investment Management
Company, Inc. (the "Manager"). The Montgomery portfolio managers serve the Fund
as emerging markets generalists, the Morgan Stanley portfolio managers as Asia
specialists and the Scudder portfolio managers as Latin American specialists.
Rogers, Casey Asset Services, Inc. ("RCAS") has been retained by the Manager to
serve as Co-Manager of the Fund. As Co-Manager, RCAS advises the Manager as to
the allocation of Fund assets, assists the Manager in supervising the Fund's
Sub-Advisers and performs certain administrative duties. RogersCasey &
Associates, Inc. ("RogersCasey"), the parent company of RCAS, provides
consulting services to
<PAGE>
the Trust with respect to the selection and evaluation of Sub-Advisers for other
Funds of the Trust. RogersCasey is a wholly-owned subsidiary of BARRA, Inc. (See
"How Are The Funds Managed?"). One of the services that RCAS provides is asset
allocation recommendations that may be utilized, without cost, by broker-dealers
to assist clients in constructing diversified portfolios. The Select Emerging
Markets Fund and certain other Funds of the Trust are among the investment
options that may be recommended by the program. RCAS has no prior experience
managing regulated investment companies. RCAS, which supervises investment
accounts with approximately $1.1 billion in total assets as of September 30,
1997, serves as investment adviser to Eastman Kodak Company, GTE Investment
Management, Hyperion Software and R.J.R. Nabisco. Incorporated in 1989, RCAS is
located at One Parklands Drive, Darien, CT 06820-1460.
Investment Policies: Under normal circumstances, the Fund invests at least
65% of its total assets in equity securities of companies that are domiciled or
primarily doing business in developing countries with emerging markets, which
include (i) countries that have an emerging stock market, as defined by the
International Finance Corporation, and (ii) countries listed in World Bank
publications as developing. Investments are not limited to one or more specific
regions because the Sub-Advisers believe that emerging market investment
opportunities can be found throughout the world. The Fund ordinarily maintains
investments in at least five developing countries.
A company is considered to be domiciled in a developing country if it is
organized under the laws of, or has a principal office in, that country. A
company is considered as primarily doing business in a developing country if the
company derives at least 50% of its (i) gross revenues or profits from either
goods or services produced in the developing country or (ii) sales made in that
country.
The Fund may invest in the following types of equity securities: common stock,
preferred stock, securities convertible into common stock, rights and warrants
to acquire such securities and substantially similar forms of equity with
comparable risk characteristics.
The Fund invests in those emerging markets that the Sub-Advisers believe have
strongly developing economies and potential for long-term future growth. In
selecting securities for investment in the Fund, the Sub-Advisers assess the
general attractiveness of specific countries based on an analysis of various
factors, including political stability, financial practices, economic prospects,
interest rates and inflation, general market valuations and potential currency
movements. Investments are made in those companies that the Sub-Advisers
believe are best positioned and managed to achieve above-average growth.
The Fund may also invest up to 35% of its total assets in debt securities of
government or corporate issuers in emerging markets, equity and debt securities
of issuers in developed countries, including the United States, and cash and
money market instruments. Some or all of the debt securities held by the Fund
may be rated below investment grade. These securities, commonly known as "junk
bonds", involve significant risks as discussed under "Certain Investment
Strategies and Policies-High Yield Securities." Emerging market debt securities
often are rated below investment grade or not rated by U.S. rating agencies.
Pending investment
-2-
<PAGE>
of proceeds from new sales of Fund shares or to meet daily cash needs, the Fund
may hold cash and money market instruments.
The Sub-Advisers may employ a temporary defensive strategy if deemed by them to
be appropriate due to economic or political conditions in emerging markets. When
using a defensive strategy, the Fund may invest up to 100% of its assets in
cash, high-quality debt securities or money market instruments of U.S. or
foreign issuers. In addition, most or all of its investments may be made in the
United States and in U.S. dollars for temporary defensive purposes.
The Fund may invest up to 15% of its net assets in securities which are illiquid
because they are not readily marketable and may engage in the options and
futures strategies and currency hedging techniques described under "Certain
Investment Strategies and Policies-Options and Futures Transactions" and
"Hedging Techniques and Investment Practices." Investing in the Fund entails a
substantial degree of risk. Investors are strongly advised to consider carefully
the special risks involved in investing in emerging markets, which are in
addition to the usual risks of investing in developed countries around the
world. See "Certain Investment Strategies and Policies-Foreign Securities."
Select Value Opportunity Fund (formerly known as "Small-Mid Cap Value Fund")
----------------------------------------------------------------------------
Investment Objective: The Select Value Opportunity Fund seeks long-term growth
of capital by investing primarily in a diversified portfolio of common stocks of
small and mid-size companies, whose securities at the time of purchase are
considered by the Sub-Adviser to be undervalued.
Sub-Adviser: CRM Advisors, LLC ("CRM"), an affiliate of Cramer Rosenthal
McGlynn, Inc. ("Cramer Rosenthal") serves as Sub-Adviser to the Select Value
Opportunity Fund. Founded in 1973, Cramer Rosenthal and its affiliates
currently have over $2.5 billion in assets under management and provide
investment advice to individuals, state and local government agencies, pension
and profit sharing plans, trusts, estates, endowments and other organizations.
The Sub-Adviser provides advisory and sub-advisory services to mutual funds with
approximately $100 million under management. Cramer Rosenthal is wholly owned by
its active investment professionals. The Sub-Adviser is located at 520 Madison
Avenue, New York, New York 10022.
Investment Policies: A stock will be considered to be attractively valued and,
therefore, eligible for investment in the Fund, if it is trading at a price
which the Sub-Adviser believes is reasonable relative to its own past valuation
history as well as compared to a large universe of stocks selected by the Sub-
Adviser, based on one or more of the following comparisons:
1. price relative to cash flow;
2. price relative to earnings;
3. price relative to sales; and
4. price relative to assets as measured by book value.
The Select Value Opportunity Fund generally intends to invest at least 65% of
its total assets in stocks of companies with market capitalization between $200
million and $5 billion at the time of purchase and which are listed on a
national or regional exchange or over-the-counter with prices quoted daily in
-3-
<PAGE>
the financial press. The Fund at times may invest temporarily in preferred
stocks, bonds or other defensive issues. Normally, however, the Fund will
maintain at least 80% of the portfolio in common stocks. There are no
restrictions or guidelines regarding the investment of Fund assets in shares
listed on an exchange or traded over-the-counter. The Fund may invest up to 25%
of its assets in foreign securities (not including its investments in ADRs).
The Select Value Opportunity Fund seeks investment opportunities in companies
whose stocks are trading at attractive valuations relative to the market as a
whole. The most attractive of these companies often exist among those securities
which have been out of favor, where Wall Street coverage is limited, and where
there is a degree of misunderstanding or neglect resulting in low expectations.
Value investing may reduce downside risk while offering potential for capital
appreciation as a company gains favor among other investors and its stock price
rises. The portfolio normally will be diversified among different industry
sectors, but is not an index approach. Stocks are bought as investments and
generally held for the long term, rather than as active trading vehicles.
Small-mid cap companies may present greater opportunities for capital
appreciation, but also may involve greater risk. Smaller cap companies, when
compared with larger cap companies, may be more dependent upon a single product,
have limited financial resources, have fewer securities outstanding, experience
greater price fluctuations, and be somewhat less liquid than securities of
larger companies.
The Fund may invest up to 15% of its assets in securities, which are illiquid
because they are not readily marketable.
For the fiscal year ended December 31, 1996, the portfolio turnover rate for the
Fund was 20%. The portfolio turnover rate for the Fund may vary from year to
year.
Select Strategic Growth Fund
----------------------------
Investment Objective: The Select Strategic Growth Fund seeks long-term growth of
capital by investing primarily in common stocks of established companies.
Sub-Adviser: Cambiar Investors, Inc. ("Cambiar"), 8400 East Prentice Avenue
#460, Englewood, Colorado 80155-3069, serves as Sub-Adviser to the Select
Strategic Growth Fund. Cambiar is a registered investment adviser that began
operations in 1973 and became a wholly-owned subsidiary of United Asset
Management in 1990. Cambiar manages portfolios for major corporate clients,
pension plans and financial institutions. As of October 1, 1997, Cambiar had
approximately $1.3 billion in assets under management.
Investment Policies: Under normal market conditions, the Fund invests at least
65% of its total assets in the common stocks of companies with a market
capitalization of more than $1 billion at the time of investment. In seeking to
achieve its objective, the Fund emphasizes investments in common stocks of well-
known companies that the Sub-Adviser believes have the potential for earnings
growth and capital appreciation.
Among the factors the Sub-Adviser considers in selecting stocks for the Fund
are: (i) the overall
-4-
<PAGE>
outlook for the economy, (ii) trends among the various industry sectors and
(iii) the prospects for individual companies. Many of the stocks in the Fund's
portfolio are expected to pay regular dividends. However, in the evaluation of a
company, greater consideration normally is given to growth potential than to
dividend income. The Sub-Adviser believes that it is more important to evaluate
a company's probable future earnings, dividends, competitive position and
financial strength than simply to seek current dividend income. While emphasis
is placed on a company's prospects for future growth, the Fund seeks stocks
which are attractively priced relative to their anticipated long-term value.
In addition to common stocks, the Fund may purchase preferred stocks, debt
securities and securities convertible into or exchangeable for common stocks if
the Sub-Adviser believes they would help achieve the Fund's objective. The Fund
may invest up to 20% of its assets in foreign securities (not including its
investments in ADRs) and up to 15% of its net assets in securities which are
illiquid because they are not readily marketable. The Fund also may engage in
options and futures strategies. See "Certain Investment Strategies and
Policies."
The Fund at any time may hold a portion of its assets in cash or money market
instruments. When a defensive position is deemed advisable, the Fund may
temporarily invest without limit in high-grade debt securities, securities of
the U.S. Government and its agencies and money market instruments, or retain
cash.
The Fund is not restricted as to portfolio turnover and will make changes in its
portfolio from time to time based on market prices, economic conditions and
other factors. The companies in which the Fund invests may have less growth
potential than smaller companies and may be able to react less quickly to
changes in the marketplace. The Fund generally attempts to avoid speculative
securities. The companies in which the Fund invests typically have a large
number of publicly held shares and a high trading volume, resulting in a high
degree of liquidity. The value of the Fund's investments fluctuates in response
to many factors, including activities of individual companies and general market
and economic conditions. The Sub-Adviser attempts to reduce risk through
diversification of the Fund's portfolio and thorough research. However, there
are risks inherent in the investment in any security, including shares of the
Fund, and there is no guarantee that the Fund's investment strategies will be
successful.
---------------------------
The attached Trust Prospectus is amended as follows to reflect the availability
of the Select Emerging Markets Fund, Select Value Opportunity Fund and Select
Strategic Growth Fund.
The number "seven" is changed to "ten" in the second sentence of the first
paragraph on the cover page of the Prospectus.
-5-
<PAGE>
---------------------------
The following are added as the first, fourth and seventh Funds, respectively,
listed on the cover page:
Select Emerging Markets Fund seeks long-term growth of capital by investing in
the world's emerging markets.
Select Value Opportunity Fund seeks long-term growth of capital by investing
primarily in a diversified portfolio of common stocks of small and mid-size
companies, whose securities at the time of purchase are considered by the Sub-
Adviser to be undervalued.
Select Strategic Growth Fund seeks long-term growth of capital by investing
primarily in common stocks of established companies.
---------------------------
The attached Financial Highlights table replaces the Financial Highlights table
in the Prospectus dated May 1, 1997.
---------------------------
The following is added at the end of the third paragraph under the section
entitled "How are the Funds Managed?":
In addition, RogersCasey Asset Services, Inc. ("RCAS") serves as Co-Manager
for the Select Emerging Markets Fund. RCAS is a wholly-owned subsidiary of
RogersCasey.
---------------------------
The following are added to the list under the fifth paragraph in the section
entitled "How are the Funds Managed?":
Select Emerging Markets Fund Montgomery Asset Management, LLC,
Morgan Stanley Asset Management, Inc.
and Scudder, Stevens & Clark, Inc.
Select Value Opportunity Fund CRM Advisors, LLC*
Select Strategic Growth Fund Cambiar Investors, Inc.
- --------------------------------------------------------------------------------
*CRM Advisors, LLC assumed sub-adviser responsibilities from David L. Babson &
Co., Inc. on January 1, 1997.
-6-
<PAGE>
---------------------------
The information on investment objectives, Sub-Advisers and investment policies
in the first five pages of this Supplement regarding the Select Emerging Markets
Fund, Select Value Opportunity Fund and Select Strategic Growth Fund is included
under the section entitled, "What Are the Investment Objectives and Policies?"
---------------------------
The management and sub-advisory fee tables under "Management Fees and Expenses"
are amended to include the following:
For its services to the Select Emerging Markets Fund, Select Value Opportunity
Fund and Select Strategic Growth Fund, the Manager receives fees computed daily
at an annual rate based on the average daily net asset value of each Fund as set
forth below.
Select Emerging Select Value
Markets Opportunity
Fund Fund
---- ----
Manager Fee 1.50% (i)
Select
Strategic Growth
Fund
----
Manager Fee 0.85%
(i) The Manager's fees for the Select Value Opportunity Fund, computed daily at
an annual rate based on the average daily net assets of the Fund, is based
on the following schedule:
Assets Fee Rate
------ --------
1st $100 Million 1.00%
Next $150 Million 0.85%
Next $250 Million 0.80%
Next $250 Million 0.75%
Over $750 Million 0.70%
The Manager voluntarily has agreed to limit its fees to an annual rate of
0.90% of average daily net assets until further notice.
The Manager is responsible for the payment of fees to RCAS as Co-Manager of
the Select Emerging Markets Fund. The Manager pays RCAS a fee computed daily
at an annual rate based on the average daily net asset value of the Fund as
set forth below:
<TABLE>
<CAPTION>
Assets Fee Rate
------ --------
<S> <C>
First $ 50,000,000 0.25%
Next $ 50,000,000 0.20%
Next $ 50,000,000 0.20%
Over $150,000,000 0.15%
</TABLE>
-7-
<PAGE>
The Manager is responsible for the payment of all fees to the Sub-Advisers
for the Select Emerging Markets Fund, Select Value Opportunity Fund and the
Select Strategic Growth Fund. The Manager pays each Sub-Adviser fees
computed daily at an annual rate based on the average daily net asset value
of each Fund as set forth below. (In the case of the Select Emerging Markets
Fund, each Sub-Adviser is paid only on the assets it manages). In certain
Funds, Sub-Adviser fees vary according to the level of assets in such Funds,
which will reduce the fees paid by the Manager as Fund assets grow but will
not reduce the operating expenses of such Funds.
Select Emerging Select Value
Markets Opportunity
Fund Fund
---- ----
Sub-Adviser Fee (ii) (iii)
Select
Strategic Growth
Fund
----
Sub-Adviser Fee (iv)
(ii) For its services, Montgomery will receive a fee computed daily at an
annual rate based on the portion of the average daily net assets of the
Select Emerging Markets Fund that it manages, as follows:
<TABLE>
<CAPTION>
Assets Rate
------ ----
<S> <C>
First $ 50,000,000 0.90%
Next $ 50,000,000 0.80%
Next $ 50,000,000 0.70%
Over $ 150,000,000 0.70%
</TABLE>
For its services, Morgan Stanley will receive a fee computed daily at an
annual rate based on the portion of the average daily net assets of the
Select Emerging Markets Fund that it manages, as follows:
<TABLE>
<CAPTION>
Assets Rate
------ ----
<S> <C>
First $ 50,000,000 0.80%
Next $ 50,000,000 0.70%
Next $ 50,000,000 0.60%
Over $ 150,000,000 0.60%
</TABLE>
For its services, Scudder will receive a fee computed daily at an annual
rate based on the portion of the average daily net assets of the Select
Emerging Markets Fund that it manages, as follows:
<TABLE>
<CAPTION>
Assets Rate
------ ----
<S> <C>
First $ 50,000,000 0.90%
Next $ 50,000,000 0.70%
Next $ 50,000,000 0.70%
Over $ 150,000,000 0.60%
</TABLE>
(iii) For its services, CRM will receive a fee computed daily at an annual rate
based on the average daily net assets of the Select Value Opportunity
Fund, under the following schedule:
Assets Rate
------ ----
First $100 Million 0.60%
Next $150 Million 0.50%
Next $250 Million 0.40%
Next $250 Million. 0.375%
Over $750 Million 0.35%
(iv) For its services, Cambiar will receive a fee computed daily at an annual
rate based on the average daily net assets of the Select Strategic Growth
Fund, under the following schedule:
<TABLE>
<CAPTION>
Assets Rate
------ ----
<S> <C>
First $ 50,000,000 0.50%
Next $ 50,000,000 0.45%
Next $ 150,000,000 0.40%
Next $ 250,000,000 0.30%
Over $ 500,000,000 0.25%
</TABLE>
<PAGE>
___________________________
The table under "Management Fees and Expenses" listing the gross fees rate that
each Fund paid the Manager for the fiscal year ended December 31, 1996 is
amended to include the following:
Fund Rate
---- ------
Select Value Opportunity Fund 0.85%
___________________________
The table under the section "Management Fees and Expenses" showing the voluntary
expense limitations which the Manager has declared for each Fund and the
operating expenses incurred for the fiscal year ended December 31, 1996 for each
Fund is amended to include the following:
<TABLE>
<CAPTION>
Percent of Average Daily Assets
-------------------------------
Voluntary Expense Operating
Fund Limitations Expenses
---- ----------- ---------
<S> <C> <C>
Select Emerging Markets Fund 2.25% ------
Select Value Opportunity Fund 1.25% 0.95%
Select Strategic Growth Fund 1.20% ------
</TABLE>
___________________________
The following is added to the section entitled "Fund Manager Information":
The following Portfolio Managers are Montgomery's emerging markets
generalists utilized for the Select Emerging Markets Fund:
Bryan L. Sudweeks, Ph.D., CFA, Senior Portfolio Manager and Principal, is a
founding partner of the emerging markets discipline. Prior to joining
Montgomery, Dr. Sudweeks worked at Emerging Markets Investors
Corporation/Emerging Markets Management in Washington, D.C. as Senior Analyst
and Portfolio Manager of investments in Asia, Greece, Jordan and Turkey. He
is responsible for all quantitative modeling as it relates to the investment
process.
Josephine S. Jimnez, CFA, Senior Portfolio Manager and Principal, joined
Montgomery in 1991 and is a founding partner of the emerging markets
discipline. From 1988 to 1991, Ms. Jimnez worked at Emerging Markets
Investors Corporation/Emerging Markets Management in Washington, D.C. as
Senior Analyst and Portfolio Manager in charge of investments in Latin
America, the Philippines and Portugal. She is responsible for strategic
research and qualitative analysis of countries and industries.
Angeline Ee, is the Portfolio Manager and Principal focusing on Southeast
Asian investments. She began her investment career in Asian securities in
1983. Prior to joining Montgomery, Ms. Ee was an Associate Director at AIG
Investment Corp. (Hong Kong), responsible for $110 million invested in
Singapore, Malaysia and Thailand.
-9-
<PAGE>
Frank Chiang is the Portfolio Manager and Principal for North Asian markets.
He began his investment-management career in 1983. Mr. Chiang was formerly
with TCW Asia Ltd., Hong Kong, where he was Managing Director and Portfolio
Manager, responsible for TCW's Asian Equity strategy. While at TCW Asia, Mr.
Chiang co-managed $1.3 billion invested throughout the Asian Pacific region.
Jesus Isidoro Duarte is the Regional Portfolio Manager and Principal for the
Latin American markets, and is the Portfolio Manager for the Montgomery Latin
America Fund. He began his investment career in 1980. Mr. Duarte joined
Montgomery from Latinvest Management Co. in Brazil where he was Director and
Vice President responsible for research and portfolio management for the
firm's Latin American funds.
Vinit Bodas, ACA, CFA, is the Regional Portfolio Manager and Principal for
South Asia and the Middle East. Prior to joining Montgomery, Mr. Bodas was
Vice President at Duff & Phelps in Washington, D.C. where he was responsible
for the evaluation of public and private enterprises in a wide range of
industries.
Jose de Gusmao Fiuza is Regional Portfolio Manager and Principal for
Emerging Europe and Africa. Mr. Fiza began his investment career in 1987 as
an analyst of the Portuguese market at Schroder Securities (U.K.) and at
Carnegie International (U.K. and Portugal).
Stuart Patterson Quint III, CFA, is Regional Portfolio Manager and Principal
responsible for country and company research in Russia and the Latin American
countries of Argentina, Chile and the Andean Pact nations. Prior to joining
Montgomery, Mr. Quint was employed by Sanford C. Bernstein & Company as a
Research Associate for the U.S. financial services industry.
The following Portfolio Managers are Morgan Stanley's Asia specialists
utilized for the Select Emerging Markets Fund:
Ean Wah Chin
Kiat Seng Seah
Joseph Tern
Paul Chan
The following Portfolio Managers are Scudder's Latin America specialists
utilized for the Select Emerging Markets Fund:
Edmund B. Games, Managing Director, is the senior portfolio manager of all
Latin American Equity accounts and is responsible for researching investment
opportunities in Latin America. He joined Scudder's Research Department in
1960.
-10-
<PAGE>
Tara Kenney, Vice President, is primarily responsible for managing Latin
American institutional accounts and researching investment opportunities in
Peru, Columbia and Venezuela. Prior to joining Scudder in 1995, she was
employed for eight years with Bankers Trust's Latin America Group and three
years with Chase Manhattan Bank's Latin American Division.
Paul H. Rogers, Vice President, joined Scudder's Global Equity Group in June,
1995, with responsibility for Latin American equity research. Previously, he
was in Scudder's Emerging Markets/High Yield Investments Group where he
researched Latin American corporate bonds. Prior to joining Scudder in 1994,
he was employed for nine years in the Latin American Group at Chemical Bank.
___________________________
The following individuals have served as fund managers for the Select Value
Opportunity Fund since January 1, 1997:
Ronald H. McGlynn, Chief Executive Officer and President of Cramer Rosenthal,
has been with Cramer Rosenthal since 1973 and CRM since its founding in 1995.
He has 29 years of investment experience and serves as Co-Chief Investment
Officer and Portfolio Manager.
Jay B. Abramson, who is an Executive Vice President, Director of Research, and
Co-Chief Investment Officer, has been with Cramer Rosenthal since 1985 and CRM
since its founding in 1995 and has overall responsibility for investment
research.
___________________________
The following Portfolio Managers are involved in the investment process utilized
for the Select Strategic Growth Fund:
Michael S. Barish, CFA and President, founded Cambiar in 1973 and has thirty-
six years of investment experience. He is a generalist and is responsible for
the consumer goods and healthcare securities.
Darrel J. Hershey, Senior Vice President, joined Cambiar in 1985 and has
twenty-two years of investment experience. Prior to 1985, Mr. Hershey was
employed by Financial Programs for ten years as a portfolio manager. He is
responsible for the technology-hardware securities, consumer services and
transportation securities.
Kathleen M. McCarty, CFA, Senior Vice President, joined Cambiar in 1987.
Prior to 1987, Ms. McCarty was employed by Dain Bosworth as the Vice President
of Research. She is responsible for financial services, communication services
and utilities securities.
Michael J. Gardner, CFA and Vice President, joined Cambiar in 1995. Prior to
1995, Mr. Gardner was employed by Simmons & Co. He is responsible for energy
and capital goods securities.
-11-
<PAGE>
Brian M. Barish, CFA and Vice President, was a Vice President at Lazard
Freres & Co. prior to joining Cambiar in 1997. He is responsible for
technology-software, consumer goods, transportation and international
securities.
___________________________
The section on the committee of fund managers of the Select Growth and Income
Fund is amended to delete Melody L. Prenner Sarnell who has left the Fund's Sub-
Adviser, John A. Levin & Co., Inc.
___________________________
The second sentence under the section entitled, "Taxes and Distributions to
Shareholders" is amended to read, in its entirety, as follows:
Dividends out of net investment income will be declared and paid quarterly in
the case of the Select Growth and Income Fund and Select Income Fund; annually
in the case of the Select Emerging Markets Fund, Select Aggressive Growth Fund,
Select Capital Appreciation Fund, Select Value Opportunity Fund, Select
International Equity Fund, Select Growth Fund and Select Strategic Growth Fund;
and daily in the case of the Money Market Fund.
___________________________
The first and second sentences in the second paragraph under the section
entitled, "Organization and Capitalization of the Trust" are amended to read, in
their entirety, as follows:
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 fourteen series of shares, one series
underlying each Fund. Four of the series are not available under Allmerica
Select and are not included in this Prospectus.
___________________________
The sections under "Certain Investment Strategies and Policies" on Repurchase
Agreements (not Reverse Repurchase Agreements), "When-Issued" Securities,
Lending of Securities, Foreign Securities, Restricted Securities and Investments
in Money Market Securities are applicable to all Funds including the Select
Emerging Markets Fund, Select Value Opportunity Fund and Select Strategic Growth
Fund.
___________________________
The following is included at the end of the first paragraph under "Foreign
Securities" in the section entitled "Certain Investment Strategies and
Policies":
-12-
<PAGE>
The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for a Fund's portfolio securities in such
markets may not be readily available. Many emerging market countries have
experienced high rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain countries with
emerging markets. Emerging markets generally are heavily dependent upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed by the countries with
which they trade. In certain markets there have been times when settlements of
securities transactions have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions.
___________________________
The heading, first sentence of the first paragraph and the second paragraph of
the section on Options and Futures Transactions under "Certain Investment
Strategies and Policies" are amended to read in their entirety, as follows:
Options and Futures Transactions (applicable to each Fund except the Money
Market Fund), Forward Contracts (applicable to the Select Emerging Markets Fund,
Select Capital Appreciation Fund and Select International Equity Fund) and swaps
(applicable to the Select Capital Appreciation Fund)
Through the writing and purchase of put and call options on its securities,
financial indices and foreign currencies, and the purchase and sale of futures
contracts and related options with respect to securities, financial indices and
(in the case of the Select Emerging Markets Fund, Select Capital Appreciation
Fund and Select International Equity Fund) foreign currencies in which it may
invest, each Fund except the Money Market Fund may at times seek to hedge
against fluctuations in net asset value.
Additionally, the Select Emerging Markets Fund, Select Capital Appreciation Fund
and Select International Equity Fund may invest in forward contracts and the
Select Capital Appreciation Fund in Swaps which may expose these Funds to
additional risks and transaction costs.
___________________________
The heading, first and second sentences of the first paragraph, and first
sentence of the second paragraph on High Yield Securities under "Certain
Investment Strategies and Policies" are amended to read in their entirety as
follows:
High Yield Securities (applicable to the Select Emerging Markets Fund, Select
Capital Appreciation Fund, Select Growth Fund, Select Growth and Income Fund and
Select Income Fund)
Corporate debt securities purchased by the Select Emerging Markets Fund, Select
Capital Appreciation Fund, Select Growth Fund, Select Growth and Income Fund and
Select Income
-13-
<PAGE>
Fund will be rated at the time of purchase B or better by Moody's or S&P, or
equivalently rated by another NRSRO, or unrated but believed by the Sub-adviser
to be of comparable quality under the guidelines established for the Funds. The
Select Growth Fund and the Select Growth and Income Fund may not invest more
than 15% of their assets, the Select Income Fund may not invest more than 25% of
its assets and the Select Emerging Markets Fund and Select Capital Appreciation
Fund may not invest more than 35% of their assets at the time of investment in
securities rated below Baa by Moody's or BBB by S&P, or equivalently rated by
another NRSRO, or unrated but believed by the Sub-Adviser to be of comparable
quality.
Periods of economic uncertainty and changes can be expected to result in
increased volatility of market prices of lower-rated securities, commonly known
as "high yield" securities or "junk bonds," and of the asset value of the Select
Emerging Markets Fund, Select Capital Appreciation Fund, Select Growth Fund,
Select Growth and Income Fund and Select Income Fund.
___________________________
The heading and first sentence of the section on Hedging Techniques and
Investment Practices under "Certain Investment Strategies and Policies" are
amended to read in their entirety, as follows:
Hedging Techniques and Investment Practices (applicable to the Select Emerging
Markets Fund, Select Capital Appreciation Fund and Select International Equity
Fund)
The Select Emerging Markets Fund, Select International Equity Fund and the
Select Capital Appreciation Fund may employ certain strategies in order to
manage exchange rate risks.
-14-
<PAGE>
- --------------------------------------------------------------------------------
ALLMERICA INVESTMENT TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - For a Share Outstanding Throughout Each Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
------------------------------------------------------------------------ --------------------------------------------------
Net Realized Net
Net and Distributions Increase
Asset Net Unrealized Dividends from Net (Decrease)
Value Investment Gain (Loss) Total from from Net Realized Distributions in
Year Ended Beginning Income on Investment Investment Capital in Return of Total Net Asset
December 31, of Period /(2)/ Investments Operations Income Gains Excess Capital Distributions Value
- ------------ --------- --------- ----------- ---------- ------ ----- ------ ------- ------------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Select Aggressive
Growth Fund/(1)/
1997/(E)/ $ 2.037 $ (0.005) $ 0.142 $ 0.137 $ -- $ (0.030) $ -- $ -- $ (0.030) $ 0.107
1996 1.848 (0.009) 0.351 0.342 -- (0.153) -- -- (0.153) 0.189
1995 1.397 (0.001) 0.452 0.451 -- -- -- -- -- 0.451
1994 1.431 (0.002) (0.032) (0.034) -- -- -- -- -- (0.034)
1993 1.197 0.001 0.234 0.235 (0.001) -- -- -- (0.001) 0.234
1992 1.000 0.001 0.197 0.198 (0.001) -- -- -- (0.001) 0.197
Select Capital
Appreciation Fund/(1)/
1997/(E)/ 1.485 (0.002) 0.058 0.056 -- -- -- -- -- 0.056
1996 1.369 (0.003) 0.124 0.121 -- (0.005) -- -- (0.005) 0.116
1995 1.000 (0.001) 0.397 0.396 -- (0.027) -- -- (0.027) 0.369
Select Value
Opportunity Fund/(1)/
1997/(E)/ 1.511 0.005 0.191 0.196 -- (0.008) -- -- (0.008) 0.188
1996 1.238 0.011 0.342 0.353 (0.011) (0.069) -- -- (0.080) 0.273
1995 1.089 0.009 0.183 0.192 (0.009) (0.033) (0.001)/(3)/ -- (0.043) 0.149
1994 1.170 0.005 (0.081) (0.076) (0.005) -- -- -- (0.005) (0.081)
1993 1.000 0.002 0.176 0.178 (0.002) (0.006) -- -- (0.008) 0.170
Select International
Equity Fund/(1)/
1997/(E)/ 1.356 0.010 0.104 0.114 (0.005) (0.006) -- -- (0.011) 0.103
1996 1.136 0.011 0.238 0.249 (0.012) (0.003) (0.014)/(4)/ -- (0.029) 0.220
1995 0.963 0.013 0.176 0.189 (0.011) (0.005) -- -- (0.016) 0.173
1994 1.000 0.003 (0.038) (0.035) (0.001) (0.001) -- -- (0.002) (0.037)
Select Growth Fund/(1)/
1997/(E)/ 1.430 0.004 0.262 0.266 -- (0.011) -- -- (0.011) 0.255
1996 1.369 0.005 0.297 0.302 (0.005) (0.236) -- -- (0.241) 0.061
1995 1.099 -- 0.270 0.270 -- -- -- -- -- 0.270
1994 1.119 0.003 (0.020) (0.017) (0.003) -- -- -- (0.003) (0.020)
1993 1.111 0.001 0.008 0.009 (0.001) -- -- -- (0.001) 0.008
1992 1.000 0.001 0.111 0.112 (0.001) -- -- -- (0.001) 0.111
</TABLE>
- ---------------------------
* Annualized
** Not Annualized
(A) Including reimbursements, waivers, and reductions.
(B) Excluding reductions. Certain Portfolios have entered into varying
arrangements with brokers who reduced a portion of the Portfolio's
expenses.
(C) Excluding reimbursements and reductions.
(D) For fiscal years beginning on or after September 1, 1995, a Portfolio is
required to disclose its average commission rate per share for trades for
which commissions are charged. This rate generally does not reflect
mark-ups, mark-downs, or spreads on shares traded on a principal basis.
(E) For the six months ended June 30, 1997. (unaudited)
(1) The Select Aggressive Growth Fund commenced operations on August 21, 1992.
The Select Capital Appreciation Fund commenced operations on April 28,
1995. The Select Value Opportunity Fund (formerly Small-Mid Cap Value
Fund) commenced operations on April 30, 1993 and changed investment sub-
adviser on January 1, 1997. The Select International Equity Fund commenced
operations on May 2, 1994. The Select Growth Fund commenced operations on
August 21, 1992 and changed Investment Sub-Adviser on July 1, 1996.
(2) Net investment income per share before reimbursement of fees by the
investment adviser or reductions were $0.000 in 1993 and $(0.001) in 1992
for Select Aggressive Growth Fund; $(0.001) in 1995 for Select Capital
Appreciation Fund; $0.004 for the six months ended June 30, 1997, $0.010 in
1996, $0.005 in 1994 and $(0.001) for Select New Opportunities Fund
(formerly Small-Mid Cap Fund); $0.010 for the six months ended June 30,
1997, $0.011 in 1996 and $0.002 in 1994 for Select International Equity
Fund; and $0.003 for the six months ended June 30, 1997, $0.005 in 1996,
$0.001 in 1993 and $0.000 in 1992 for Select Growth Fund.
(3) Distributions in excess of net realized capital gains.
(4) Distributions in excess of net investment income.
- --------------------------
Allmerica Investment Trust
<PAGE>
- --------------------------------------------------------------------------------
ALLMERICA INVESTMENT TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental Data
---------------------------------------------------------------------------------------------------------
Ratios To Average Net Assets
-----------------------------------------------------------
Net Asset Net Assets
Value End of Net Portfolio Average
End of Total Period Investment Operating Expenses Management Fee Turnover Commissions
Period Return (000's) Income (A) (B) (C) Gross Net Rate Rate/(D)/
------ ------ ------- ------ --- --- --- ----- --- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$2.144 6.74%** $ 490,500 (0.58)%* 1.10%* 1.10%* 1.10%* 1.00%* 1.00%* 55% $ 0.0595
2.037 18.55% 407,442 (0.53)% 1.08% 1.08% 1.08% 1.00% 1.00% 113% 0.0597
1.848 32.28% 254,872 (0.07)% 1.09% -- 1.09% 1.00% 1.00% 104% --
1.397 (2.31)% 136,573 (0.21)% 1.16% -- 1.16% 1.00% 1.00% 100% --
1.431 19.51% 66,251 0.10% 1.19% -- 1.23% 1.00% 0.96% 76% --
1.197 19.85%** 9,270 0.34%* 1.35%* -- 1.88%* N/A N/A 33% --
1.541 3.77%** 190,547 (0.29)%* 1.15%* 1.15%* 1.15%* 1.00%* 1.00%* 55% 0.0452
1.485 8.80% 142,680 (0.32)% 1.13% 1.13% 1.13% 1.00% 1.00% 98% 0.0414
1.369 39.56%** 41,376 (0.25)%* 1.35%* -- 1.42%* 1.00%* 0.93%* 95% --
1.699 12.98%** 155,648 0.66%* 0.96%* 1.05%* 1.08%* 0.91%* 0.88%* 89% 0.0584
1.511 28.53% 113,969 0.91% 0.95% 0.97% 0.97% 0.85% 0.85% 20% 0.0497
1.238 17.60% 64,575 0.86% 1.01% -- 1.01% 0.85% 0.85% 17% --
1.089 (6.51)% 41,342 0.64% 1.08% -- 1.09% 0.85% 0.84% 4% --
1.170 17.74%** 12,731 0.52%* 1.22%* -- 2.03%* 0.85%* 0.04%* 8% --
1.459 8.43%** 352,299 1.79%* 1.20%* 1.22%* 1.22%* 1.00%* 1.00%* 6% 0.0260
1.356 21.94% 246,877 1.22% 1.20% 1.23% 1.23% 1.00% 1.00% 18% 0.0248
1.136 19.63% 104,312 1.68% 1.24% -- 1.24% 1.00% 1.00% 24% --
0.963 (3.49)%** 40,498 0.87%* 1.50%* -- 1.78%* 1.00%* 0.72%* 19% --
1.685 18.59%** 345,311 0.58%* 0.93%* 0.95%* 0.95%* 0.85%* 0.85%* 49% 0.0450
1.430 22.02% 228,551 0.38% 0.92% 0.93% 0.93% 0.85% 0.85% 159% 0.0457
1.369 24.59% 143,125 0.02% 0.97% -- 0.97% 0.85% 0.85% 51% --
1.099 (1.49)% 88,263 0.37% 1.03% -- 1.03% 0.85% 0.85% 55% --
1.119 0.84% 53,854 0.15% 1.05% -- 1.08% 0.85% 0.82% 65% --
1.111 11.25%** 9,308 0.40%* 1.20%* -- 1.72%* N/A N/A 3% --
</TABLE>
--------------------------
Allmerica Investment Trust
<PAGE>
- --------------------------------------------------------------------------------
ALLMERICA INVESTMENT TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - For a Share Outstanding Throughout Each Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
---------------------------------------------------------------------- -------------------------------------------------
Net Realized Net
Net and Distributions Increase
Asset Net Unrealized Dividends from Net (Decrease)
Value Investment Gain (Loss) Total from from Net Realized Distributions in
Year Ended Beginning Income on Investment Investment Capital in Return of Total Net Asset
December 31, of Period /(2)/ Investments Operations Income Gains Excess Capital Distributions Value
- ------------ --------- ----- ----------- ---------- ------ ----- ------ ------- ------------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Select Growth and
Income Fund/(1)/
1997/(E)/ $1.405 $0.010 $0.183 $0.193 $(0.010) $(0.019) $ -- $-- $ (0.029) $0.164
1996 1.268 0.020 0.246 0.266 (0.020) (0.109) -- -- (0.129) 0.137
1995 1.027 0.019 0.290 0.309 (0.019) (0.049) -- -- (0.068) 0.241
1994 1.069 0.025 (0.018) 0.007 (0.025) (0.017) (0.007)/(3)/ -- (0.049) (0.042)
1993 0.990 0.023 0.079 0.102 (0.023) -- -- -- (0.023) 0.079
1992 1.000 0.008 (0.009) (0.001) (0.008) (0.001) -- -- (0.009) (0.010)
Select Income Fund/(1)/
1997/(E)/ 0.995 0.030 (0.003) 0.027 (0.031) -- -- -- (0.031) (0.004)
1996 1.024 0.061 (0.029) 0.032 (0.061) -- -- -- (0.061) (0.029)
1995 0.930 0.060 0.095 0.155 (0.060) -- (0.001)/(4)/ -- (0.061) 0.094
1994 1.035 0.055 (0.105) (0.050) (0.055) -- -- -- (0.055) (0.105)
1993 0.988 0.052 0.055 0.107 (0.052) (0.008) -- -- (0.060) 0.047
1992 1.000 0.018 (0.012) 0.006 (0.018) -- -- -- (0.018) (0.012)
Money Market
Fund
1997/(E)/ 1.000 0.026 -- 0.026 (0.026) -- -- -- (0.026) --
1996 1.000 0.052 -- 0.052 (0.052) -- -- -- (0.052) --
1995 1.000 0.057 -- 0.057 (0.057) -- -- -- (0.057) --
1994 1.000 0.039 -- 0.039 (0.039) -- -- -- (0.039) --
1993 1.000 0.030 -- 0.030 (0.030) -- -- -- (0.030) --
1992 1.000 0.037 -- 0.037 (0.037) -- -- -- (0.037) --
1991 1.000 0.060 -- 0.060 (0.060) -- -- -- (0.060) --
1990 1.000 0.078 -- 0.078 (0.078) -- -- -- (0.078) --
1989 1.000 0.086 -- 0.086 (0.086) -- -- -- (0.086) --
1988 1.000 0.071 -- 0.071 (0.071) -- -- -- (0.071) --
1987 1.000 0.061 -- 0.061 (0.061) -- -- -- (0.061) --
</TABLE>
- ----------------------------------
* Annualized
** Not Annualized
(A) Including reimbursements and reductions.
(B) Excluding reductions. Certain Portfolios have entered into varying
arrangements with brokers who reduced a portion of the Portfolio's
expenses.
(C) Excluding reimbursements and reductions.
(D) For fiscal years beginning on or after September 1, 1995, a Portfolio is
required to disclose its average commission rate per share for trades for
which commissions are charged. This rate generally does not reflect
mark-ups, mark-downs, or spreads on shares traded on a principal basis.
(E) For the six months ended June 30, 1997. (unaudited)
(1) The Select Growth and Income Fund and Select Income Fund commenced
operations on August 21, 1992.
(2) Net investment income per share before reimbursement of fees by the
investment adviser or reductions were $0.010 for the six months ended
June 30, 1997, $0.019 in 1996, $0.023 in 1993 and $0.005 in 1992 for
Select Growth and Income Fund; $0.060 in 1995, $0.055 in 1994, $0.050 in
1993, and $0.015 in 1992 for Select Income Fund; and $0.030 in 1993,
$0.084(5) in 1988, and $0.076(5) in 1987 for Money Market Fund.
(3) Distributions in excess of net realized capital gains.
(4) Distributions in excess of net investment income.
(5) Unaudited.
- --------------------------
Allmerica Investment Trust
<PAGE>
- --------------------------------------------------------------------------------
ALLMERICA INVESTMENT TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------------------------------
Ratios To Average Net Assets
------------------------------------------------------------
Net Asset Net Assets
Value End of Net Portfolio Average
End of Total Period Investment Operating Expenses Management Fee Turnover Commissions
Period Return (000's) Income (A) (B) (C) Gross Net Rate Rate/(D)/
------ ------ ------- ------ --- --- --- ----- --- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$1.569 13.77%** $389,389 1.38%* 0.80%* 0.83%* 0.83%* 0.75%* 0.75%* 23% $0.0565
1.405 21.26% 295,638 1.44% 0.80% 0.83% 0.83% 0.75% 0.75% 78% 0.0563
1.268 30.32% 191,610 1.69% 0.85% -- 0.85% 0.75% 0.75% 112% --
1.027 0.73% 110,213 2.51% 0.91% -- 0.91% 0.75% 0.75% 107% --
1.069 10.37% 60,518 2.73% 0.99% -- 1.03% 0.75% 0.71% 25% --
0.990 (0.11)%** 7,302 3.20%* 1.10%* -- 2.37%* N/A N/A 4% --
0.991 2.67%** 86,998 6.32%* 0.74%* 0.74%* 0.74%* 0.60%* 0.60%* 58% --
0.995 3.32% 77,498 6.29% 0.74% 0.74% 0.74% 0.60% 0.60% 108% --
1.024 16.96% 60,368 6.24% 0.79% -- 0.80% 0.60% 0.59% 131% --
0.930 (4.82)% 40,784 6.07% 0.83% -- 0.85% 0.60% 0.58% 105% --
1.035 10.95% 25,302 5.91% 0.91% -- 1.08% 0.60% 0.43% 171% --
0.988 0.62%** 5,380 5.38%* 1.00%* -- 1.67%* N/A N/A 119% --
1.000 2.62%** 254,511 5.24%* 0.37%* 0.37%* 0.37%* 0.27%* 0.27%* N/A --
1.000 5.36% 217,256 5.22% 0.34% 0.34% 0.34% 0.28% 0.28% N/A --
1.000 5.84% 155,211 5.68% 0.36% -- 0.36% 0.29% 0.29% N/A --
1.000 3.93% 95,991 3.94% 0.45% -- 0.45% 0.31% 0.31% N/A --
1.000 3.00% 71,052 2.95% 0.42% -- 0.43% 0.32% 0.31% N/A --
1.000 3.78% 64,506 3.65% 0.44% -- 0.44% N/A N/A N/A --
1.000 6.22% 39,909 5.98% 0.43% -- 0.43% N/A N/A N/A --
1.000 8.17% 28,330 8.22% 0.42% -- 0.42% N/A N/A N/A --
1.000 9.07% 12,060 8.62% 0.58% -- 0.58% N/A N/A N/A --
1.000 7.30%/(5)/ 7,156 7.13% 0.60% -- 0.71% N/A N/A N/A --
1.000 6.20%/(5)/ 4,726 6.14% 0.60% -- 0.75% N/A N/A N/A --
</TABLE>
Allmerica Investment Trust
--------------------------
<PAGE>
PROSPECTUS SUPPLEMENT
Allmerica Financial Life Insurance and Annuity Company
Inheiritage Account (Prospectus B)
Allmerica Select Separate Account and
Allmerica Select Separate Account II
First Allmerica Financial Life Insurance Company
Inheiritage Account (Prospectus B)
Allmerica Select Separate Account
Allmerica Investment Trust
(Supplement Effective August 15, 1997 to Prospectuses dated May 1, 1997)
At the Special Meeting of Shareholders of Allmerica Investment Trust ("Trust")
which was held on August 15, 1997, shareholders approved all proposals,
including (1) amendments to the Trust's Management Agreement and certain Sub-
adviser Agreements and (2) amendments to the investment objectives, policies and
restrictions of certain Funds of the Trust. The attached variable insurance
product prospectus and Trust prospectus are hereby amended as follows (all
references are to the Trust prospectus unless otherwise noted):
The second paragraph under "What are the Investment Objectives and Policies?" is
amended to read:
A Fund's investment objective and investment policies are not fundamental
and may be changed without shareholder approval.
---------------
The following is included under "Investment Policies" in the section entitled
"What are the Investment Objectives and Policies?" for the Select Income Fund:
The Fund may invest up to 25% of its assets in lower-rated securities,
commonly known as "junk bonds," which involve risks discussed under
"Certain Investment Strategies and Policies." For more information
concerning the rating categories of corporate debt securities, see the
Appendix to the Prospectus.
---------------
The following is included under "Investment Policies" in the section entitled
"What are the Investment Objectives and Policies?" for the Money Market Fund:
The Fund may invest up to 25% of its assets in U.S. dollar denominated
foreign securities (not including its investments in American Depositary
Receipts).
---------------
The following is included under "Investment Policies" in the section entitled
"What are the Investment Objectives and Policies?" for the Money Market Fund:
The Fund may invest up to 10% of its net assets in securities which are
illiquid because they are not readily marketable.
---------------
<PAGE>
The management and sub-advisory fee tables under "Management Fees and Expenses"
of the Trust prospectus and the management and sub advisory fee sections in the
variable product prospectus are amended to read as follows:
For the services to the Funds, the Manager receives fees computed daily at
an annual rate based on the average daily net asset value of each Fund as
set forth below.
<TABLE>
<CAPTION>
Select Select Capital Select Select
Aggressive Appreciation International Growth
Growth Fund Fund Equity Fund Fund
----------- ---- ----------- ----
<S> <C> <C> <C> <C>
Manager Fee (1) (1) (1) 0.85%
<CAPTION>
Select Growth Select Money
and Income Income Market
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
Manager Fee (1) (2) (3)
</TABLE>
(1) The Manager's fees for the Select Aggressive Growth Fund, Select Capital
Appreciation Fund, Select International Equity Fund, and Select Growth and
Income Fund, computed daily at an annual rate based on the average daily net
assets of each Fund, are based on the following schedule:
<TABLE>
<CAPTION>
Select
Growth
Select and
Select Aggressive Select Capital International Income
Assets Growth Fund Appreciation Fund Equity Fund Fund
------ ----------- ----------------- ----------- ----
<S> <C> <C> <C> <C>
First $100 Million.... 1.00% 1.00% 1.00% 0.75%
$100 to $250 Million.. 0.90% 0.90% 0.90% 0.70%
$250 to $500 Million.. 0.85% 0.85% 0.85% 0.65%
Over $500 Million..... 0.85% 0.85% 0.85% 0.65%
</TABLE>
(2) The Manager's fees for the Select Income Fund, computed daily at an annual
rate based on the average daily net assets of each Fund, are based on the
following schedule:
<TABLE>
<CAPTION>
Select
Income
Assets Fund
------ ----
<S> <C>
First $50 Million....................... 0.60%
$50 to $100 Million..................... 0.55%
Over $100 Million....................... 0.45%
</TABLE>
(3) The Manager's fees for the Money Market Fund, computed daily at an annual
rate based on the average daily net assets of the Fund, are based on the
following schedule:
-2-
<PAGE>
<TABLE>
<CAPTION>
Money
Market
Assets Fund
------ ----
<S> <C>
First $50 Million..................... 0.35%
Next $200 Million..................... 0.25%
Over $250 Million..................... 0.20%
</TABLE>
The Manager is responsible for the payment of all fees to the Sub-Advisers.
The Manager pays each Sub-Adviser fees computed daily at an annual rate based
on the average daily net asset value of each Fund as set forth below. In
certain Funds, Sub-Adviser fees vary according to the level of assets in such
Funds, which will reduce the fees paid by the Manager as Fund assets grow but
will not reduce the operating expenses of such Funds.
<TABLE>
<CAPTION>
Select Select Capital Select Select
Aggressive Appreciation International Growth
Growth Fund Fund Equity Fund Fund
----------- ---- ----------- ----
<S> <C> <C> <C> <C>
Sub-Adviser Fee (4) (4) (5) (6)
<CAPTION>
Select Growth Select Money
and Income Income Market
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
Sub-Adviser Fee (7) 0.20% 0.10%
</TABLE>
(4) For their services, NACM and JCC will receive a fee computed daily at an
annual rate based on the average daily net assets of the Select Aggressive
Growth Fund and Select Capital Appreciation Fund, respectively, under the
following schedule:
<TABLE>
<CAPTION>
Assets Rate
------ ----
<S> <C>
First $100 Million........................ 0.60%
Next $150 Million......................... 0.55%
Next $250 Million......................... 0.50%
Over $500 Million......................... 0.45%
</TABLE>
(5) For its services, BIAM will receive a fee computed daily at an annual rate
based on the average daily net assets of the Select International Equity
Fund, under the following schedule:
<TABLE>
<CAPTION>
Assets Rate
------ ----
<S> <C>
First $50 Million......................... 0.45%
Next $50 Million.......................... 0.40%
Over $100 Million......................... 0.30%
</TABLE>
(6) For its services, Putnam will receive a fee computed daily at an annual rate
based on the average daily net assets of the Select Growth Fund, under the
following schedule:
-3-
<PAGE>
<TABLE>
<CAPTION>
Assets Rate
------ ----
<S> <C>
First $50 Million........................ 0.50%
Next $100 Million........................ 0.45%
Next $100 Million........................ 0.35%
Next $100 Million........................ 0.30%
Over $350 Million........................ 0.25%
</TABLE>
(7) For its services, JAL will receive a fee computed daily at an annual rate
based on the average daily net assets of the Select Growth and Income Fund,
under the following schedule:
<TABLE>
<CAPTION>
Assets Rate
------ ----
<S> <C>
First $100 Million........................ 0.40%
Next $200 Million......................... 0.25%
Over $300 Million......................... 0.30%
</TABLE>
---------------
The section on Foreign Securities under "Certain Investment Strategies and
Policies" is amended to change the heading as follows and insert the following
sentence after the fourth sentence of the first paragraph:
Foreign Securities (applicable to all Funds).
The Money Market Fund may invest only in U.S. dollar denominated foreign
securities.
The heading, first sentence of the first paragraph and the second paragraph of
the section on Options and Futures Transactions under "Certain Investment
Strategies and Policies" are amended to read:
Options and Futures Transactions (applicable to each Fund except the Money
Market Fund), Forward Contracts (applicable to Select Capital Appreciation
Fund and Select International Equity Fund) and swaps (applicable to the
Select Capital Appreciation Fund)
Through the writing and purchase of put and call options on its securities,
financial indices and foreign currencies, and the purchase and sale of futures
contracts and related options with respect to securities, financial indices and
(in the case of the Select Capital Appreciation Fund and Select International
Equity Fund) foreign currencies in which it may invest, each Fund except the
Money Market Fund at times may seek to hedge against fluctuations in net asset
value.
Additionally, the Select Capital Appreciation Fund and Select International
Equity Fund may invest in forward contracts and the Select Capital Appreciation
Fund in Swaps which may expose these Funds to additional risks and transaction
costs.
---------------
-4-
<PAGE>
The parenthetical phrase in the heading for the section on Restricted Securities
under "Certain Investment Strategies and Policies" is deleted and the second
sentence in the section is amended to read:
However, each Fund will not invest more than 15% (10% for the Money Market
Fund) of its net assets in restricted securities (and other securities
deemed to be illiquid) unless the Board of Trustees determines, based upon
a continuing review of the trading markets for the specific restricted
security, that such restricted securities are liquid.
---------------
The heading and first two paragraphs of the section on High Yield Securities
under "Certain Investment Strategies and Policies" are amended to read as
follows. Also, "25%" is added to the percentages listed in the next to last
sentence of the last paragraph in the section.
High Yield Securities (applicable to the Select Capital Appreciation Fund,
Select Growth Fund, Select Growth and Income Fund and Select Income Fund)
Corporate debt securities purchased by the Select Capital Appreciation Fund,
Select Growth Fund, Select Growth and Income Fund and Select Income Fund will be
rated at the time of purchase B or better by Moody's or S&P, or equivalently
rated by another NRSRO, or unrated but believed by the Sub-adviser to be of
comparable quality under the guidelines established for the Funds. The Select
Growth Fund and the Select Growth and Income Fund may not invest more than 15%
of their assets, the Select Income Fund may not invest more than 25% of its
assets and the Select Capital Appreciation Fund may not invest more than 35% of
its assets at the time of investment in securities rated below Baa by Moody's or
BBB by S&P, or equivalently rated by another NRSRO, or unrated but believed by
the Sub-Adviser to be of comparable quality. Securities rated B by Moody's or
S&P (or equivalently by another NRSRO) are below investment grade and are
considered, on balance, to be predominantly speculative with respect to capacity
to pay interest and repay principal and will generally involve more credit risk
than securities in the higher rating categories.
Periods of economic uncertainty and changes can be expected to result in
increased volatility of market prices of lower-rated securities, commonly known
as "high yield" securities or "junk bonds," and of the asset value of the Select
Capital Appreciation Fund, Select Growth Fund, Select Growth and Income Fund and
Select Income Fund. Many issuers of high yield corporate debt securities are
leveraged substantially at times, which may impair their ability to meet debt
service obligations. Also, during an economic downturn or substantial period of
rising interest rates, highly leveraged issuers may experience financial stress.
---------------
The heading and last sentence of the first paragraph of the section on Asset-
Backed Securities and Mortgage-Backed Securities under "Certain Investment
Strategies and Policies" are amended to read as
-5-
<PAGE>
follows:
Asset-Backed Securities and Mortgage-Backed Securities (applicable to
Select Income Fund and Money Market Fund)
A Fund will not invest more than 20% of its total assets in asset-backed
securities.
---------------
The heading for the section on Stripped Mortgage-Backed Securities under
"Certain Investment Strategies and Policies" is amended to read:
Stripped Mortgage-Backed Securities (applicable to Select Income Fund and
Money Market Fund)
---------------
The following is inserted at the end of the section entitled "Certain Investment
Strategies and Policies":
Stand-By Commitments (applicable to Select Income Fund and Money Market
Fund)
Under a stand-by commitment, a dealer agrees to purchase from the Fund, at
the Fund's option, specified securities at a specified price. Stand-by
commitments are exercisable by the Fund at any time before the maturity of
the underlying security, and may be sold, transferred or assigned by the
Fund only with respect to the underlying instruments.
Although stand-by commitments are often available without the payment of
any direct or indirect consideration, if necessary or advisable, the Fund
may pay for a stand-by commitment either separately in cash or by paying a
higher price for securities which are acquired subject to the commitment.
Where the Fund pays any consideration directly or indirectly for a stand-by
commitment, its cost will be reflected as unrealized depreciation for the
period during which the commitment is held by the Fund.
The Fund will enter into stand-by commitments only with banks and broker-
dealers which present minimal credit risks. In evaluating the
creditworthiness of the issuer of a stand-by commitment, the Sub-Adviser
will review periodically the issuer's assets, liabilities, contingent
claims and other relevant financial information.
The Fund will acquire stand-by commitments solely to facilitate liquidity
and does not intend to exercise its rights thereunder for trading purposes.
Stand-by commitments will be valued at zero in determining the Fund's net
asset value.
-6-
<PAGE>
ALLMERICA INVESTMENT TRUST
440 Lincoln Street
Worcester, Massachusetts 01653
(508) 855-1000
Allmerica Investment Trust (the "Trust") is a professionally managed, open-end
investment company designed to provide the underlying investment vehicles for
insurance-related accounts. The investment objectives of the seven separate
portfolios of the Trust (collectively, the "Funds" and individually, the "Fund")
currently offered by this Prospectus are as follows:
SELECT AGGRESSIVE GROWTH FUND seeks above-average capital appreciation by
investing primarily in common stocks of companies which are believed to
have significant potential for capital appreciation.
SELECT CAPITAL APPRECIATION Fund seeks long-term growth of capital in a
manner consistent with the preservation of capital. Realization of income
is not a significant investment consideration and any income realized on
the Fund's investments will be incidental to its primary objective.
SELECT INTERNATIONAL EQUITY Fund seeks maximum long-term total return
(capital appreciation and income) primarily by investing in common stocks
of established non-U.S. companies.
SELECT GROWTH FUND seeks to achieve long-term growth of capital by
investing in a diversified portfolio consisting primarily of common stocks
selected on the basis of their long-term growth potential.
SELECT GROWTH AND INCOME FUND seeks a combination of long-term growth of
capital and current income. The Fund will invest primarily in
dividend-paying common stocks and securities convertible into common
stocks.
SELECT INCOME FUND seeks a high level of current income. The Fund will
invest primarily in investment grade, fixed-income securities.
MONEY MARKET FUND seeks to obtain maximum current income consistent with
preservation of capital and liquidity.
Currently, shares of each Fund may be purchased only by separate accounts
("Separate Accounts") established by First Allmerica Financial Life Insurance
Company ("First Allmerica") or Allmerica Financial Life Insurance and Annuity
Company ("Allmerica Financial Life"), an indirect, wholly-owned subsidiary of
First Allmerica, for the purpose of funding variable annuity contracts and
variable life insurance policies. The prospectus for the Separate Accounts
should be read in conjunction with this Prospectus.
This Prospectus sets forth concisely the information about the Trust that a
prospective investor ought to know before investing. Certain additional
information is contained in the Statement of Additional Information dated May 1,
1997 (the "SAI"), which has been filed with the Securities and Exchange
Commission, is incorporated herein by reference and is available upon request
without charge from Allmerica Investments, Inc. ("Distributor"), 440 Lincoln
Street, Worcester, MA 01653, (508) 855-1000.
Investment in the Funds is neither insured nor guaranteed by the U.S.
Government. There can be no assurance that the Money Market Fund will be able
to maintain a stable net asset value of $1.00 per share.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY
INSTITUTION. SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
("FDIC") OR ANY OTHER GOVERNMENTAL AGENCY, AND ARE SUBJECT TO VARIOUS RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
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 MAY 1, 1997
__________________________
Allmerica Investment Trust
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
FINANCIAL HIGHLIGHTS ....................................................... 3
HOW ARE THE FUNDS MANAGED? ................................................. 8
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES? ........................... 9
Select Aggressive Growth Fund ........................................... 9
Select Capital Appreciation Fund ........................................ 10
Select International Equity Fund ........................................ 11
Select Growth Fund ...................................................... 12
Select Growth and Income Fund ........................................... 13
Select Income Fund ...................................................... 14
Money Market Fund ....................................................... 15
MANAGEMENT FEES AND EXPENSES ............................................... 16
FUND MANAGER INFORMATION ................................................... 19
HOW ARE SHARES VALUED? ..................................................... 20
TAXES AND DISTRIBUTIONS TO SHAREHOLDERS .................................... 21
SALE AND REDEMPTION OF SHARES .............................................. 21
HOW IS PERFORMANCE DETERMINED? ............................................. 22
ORGANIZATION AND CAPITALIZATION OF THE TRUST ............................... 22
INVESTMENT RESTRICTIONS .................................................... 23
CERTAIN INVESTMENT STRATEGIES AND POLICIES ................................. 23
APPENDIX ................................................................... 30
</TABLE>
__________________________
Allmerica Investment Trust 2
<PAGE>
FINANCIAL HIGHLIGHTS
The following Financial Highlights have been audited by Price Waterhouse LLP,
independent accountants of the Trust. This information should be read in
conjunction with the financial statements and notes thereto which appear in the
Policyowner's annual report for the year ended December 31, 1996 ("Annual
Report") and which are incorporated by reference in the Trust's SAI. Further
information about the performance of the Funds is contained in the Annual Report
which may be obtained without charge from the Trust, 440 Lincoln Street,
Worcester, MA 01653, (508) 855-1000.
__________________________
3 Allmerica Investment Trust
<PAGE>
- --------------------------------------------------------------------------------
ALLMERICA INVESTMENT TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - For a Share Outstanding Throughout Each Year
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
---------------------------------------------- ------------------------------------------------
NET REALIZED NET
NET AND DISTRIBUTIONS INCREASE
ASSET UNREALIZED DIVIDENDS FROM NET (DECREASE)
VALUE NET GAIN (LOSS) TOTAL FROM FROM NET REALIZED DISTRIBUTIONS TOTAL IN
YEAR ENDED BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL IN RETURN OF DISTRI- NET ASSET
DECEMBER 31, OF YEAR INCOME(2) INVESTMENTS OPERATIONS INCOME GAINS EXCESS CAPITAL BUTIONS VALUE
- ------------ --------- ---------- ------------ ---------- ---------- ----------- ------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECT AGGRESSIVE
GROWTH FUND(1)
1996 $ 1.848 $ (0.009) $ 0.351 $ 0.342 $ -- $ (0.153) $ -- $ -- $ (0.153) $ 0.189
1995 1.397 (0.001) 0.452 0.451 -- -- -- -- -- 0.451
1994 1.431 (0.002) (0.032) (0.034) -- -- -- -- -- (0.034)
1993 1.197 0.001 0.234 0.235 (0.001) -- -- -- (0.001) 0.234
1992 1.000 0.001 0.197 0.198 (0.001) -- -- -- (0.001) 0.197
SELECT CAPITAL
APPRECIATION FUND(1)
1996 1.369 (0.003) 0.124 0.121 -- (0.005) -- -- (0.005) 0.116
1995 1.000 (0.001) 0.397 0.396 -- (0.027) -- -- (0.027) 0.369
SELECT INTERNATIONAL
EQUITY FUND(1)
1996 1.136 0.011 0.238 0.249 (0.012) (0.003) (0.014)(4) -- (0.029) 0.220
1995 0.963 0.013 0.176 0.189 (0.011) (0.005) -- -- (0.016) 0.173
1994 1.000 0.003 (0.038) (0.035) (0.001) (0.001) -- -- (0.002) (0.037)
SELECT GROWTH FUND(1)
1996 1.369 0.005 0.297 0.302 (0.005) (0.236) -- -- (0.241) 0.061
1995 1.099 -- 0.270 0.270 -- -- -- -- -- 0.270
1994 1.119 0.003 (0.020) (0.017) (0.003) -- -- -- (0.003) (0.020)
1993 1.111 0.001 0.008 0.009 (0.001) -- -- -- (0.001) 0.008
1992 1.000 0.001 0.111 0.112 (0.001) -- -- -- (0.001) 0.111
SELECT GROWTH AND
INCOME FUND(1)
1996 1.268 0.020 0.246 0.266 (0.020) (0.109) -- -- (0.129) 0.137
1995 1.027 0.019 0.290 0.309 (0.019) (0.049) -- -- (0.068) 0.241
1994 1.069 0.025 (0.018) 0.007 (0.025) (0.017) (0.007)(3) -- (0.049) (0.042)
1993 0.990 0.023 0.079 0.102 (0.023) -- -- -- (0.023) 0.079
1992 1.000 0.008 (0.009) (0.001) (0.008) (0.001) -- -- (0.009) (0.010)
</TABLE>
_________________________________________________
* Annualized
** Not Annualized
(A) Including reimbursements and reductions.
(B) Excluding reductions. Certain Portfolios have entered into varying
arrangements with brokers who reduced a portion of the Portfolio's
expenses.
(C) Excluding reimbursements and reductions.
(D) For Fiscal years beginning on or after September 1, 1995, a Portfolio is
required to disclose its average commission rate per share for trades for
which commissions are charged. This rate generally does not reflect mark-
ups, mark-downs, or spreads on shares traded on a principal basis.
(E) 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.
(1) The Select Aggressive Growth Fund and Select Growth and Income Fund
commenced operations on August 21, 1992. The Select Capital Appreciation
Fund commenced operations on April 28, 1995. The Select International
Equity Fund commenced operations on May 2, 1994. The Select Growth Fund
commenced operations on August 21,1992 and changed Investment Sub-Adviser
on July 1, 1996.
(2) Net investment income per share before reimbursement of fees by the
investment adviser or reductions were $0.000 in 1993 and $(0.001) in 1992
for Select Aggressive Growth Fund; $(0.001) in 1995 for Select Capital
Appreciation Fund; $0.011 in 1996 and $0.002 in 1994 for Select
International Equity Fund; and $0.005 in 1996, $0.001 in 1993 and $0.000 in
1992 for Select Growth Fund; and $0.019 in 1996, $0.023 in 1993 and $0.005
in 1992 for Select Growth and Income Fund.
(3) Distributions in Excess of net realized capital gains.
(4) Distributions in Excess of net investment income.
__________________________
Allmerica Investment Trust 4
<PAGE>
- --------------------------------------------------------------------------------
ALLMERICA INVESTMENT TRUST
- --------------------------------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------------
Ratios To Average Net Assets
--------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET NET ASSETS
VALUE END OF NET PORTFOLIO AVERAGE
END OF TOTAL YEAR INVESTMENT OPERATING EXPENSES MANAGEMENT FEE TURNOVER COMMISSIONS
YEAR RETURN(E) (000'S) INCOME (A) (B) (C) GROSS NET RATE RATE(D)
--------- --------- ---------- ---------- ----- ----- ----- ----- ----- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 2.037 18.55% $ 407,442 (0.53)% 1.08% 1.08% 1.08% 1.00% 1.00% 113% $ 0.0597
1.848 32.28% 254,872 (0.07)% 1.09% -- 1.09% 1.00% 1.00% 104% --
1.397 (2.31)% 136,573 (0.21)% 1.16% -- 1.16% 1.00% 1.00% 100% --
1.431 19.51% 66,251 0.10% 1.19% -- 1.23% 1.00% 0.96% 76% --
1.197 19.85%** 9,270 0.34%* 1.35%* -- 1.88%* N/A N/A 33% --
1.485 8.80% 142,680 (0.32)% 1.13% 1.13% 1.13% 1.00% 1.00% 98% 0.0414
1.369 39.56%** 41,376 (0.25)%* 1.35%* -- 1.42%* 1.00%* 0.93%* 95% --
1.356 21.94% 246,877 1.22% 1.20% 1.23% 1.23% 1.00% 1.00% 18% 0.0248
1.136 19.63% 104,312 1.68% 1.24% -- 1.24% 1.00% 1.00% 24% --
0.963 (3.49)%** 40,498 0.87%* 1.50%* -- 1.78%* 1.00%* 0.72%* 19% --
1.430 22.02% 228,551 0.38% 0.92% 0.93% 0.93% 0.85% 0.85% 159% 0.0457
1.369 24.59% 143,125 0.02% 0.97% -- 0.97% 0.85% 0.85% 51% --
1.099 (1.49)% 88,263 0.37% 1.03% -- 1.03% 0.85% 0.85% 55% --
1.119 0.84% 53,854 0.15% 1.05% -- 1.08% 0.85% 0.82% 65% --
1.111 11.25%** 9,308 0.40%* 1.20%* -- 1.72%* N/A N/A 3% --
1.405 21.26% 295,638 1.44% 0.80% 0.83% 0.83% 0.75% 0.75% 78% 0.0563
1.268 30.32% 191,610 1.69% 0.85% -- 0.85% 0.75% 0.75% 112% --
1.027 0.73% 110,213 2.51% 0.91% -- 0.91% 0.75% 0.75% 107% --
1.069 10.37% 60,518 2.73% 0.99% -- 1.03% 0.75% 0.71% 25% --
0.990 (0.11)%** 7,302 3.20%* 1.10%* -- 2.37%* N/A N/A 4% --
</TABLE>
__________________________
5 Allmerica Investment Trust
<PAGE>
- --------------------------------------------------------------------------------
ALLMERICA INVESTMENT TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - For a Share Outstanding Throughout Each Year
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
---------------------------------------------- ------------------------------------------------
NET REALIZED NET
NET AND DISTRIBUTIONS INCREASE
ASSET UNREALIZED DIVIDENDS FROM NET (DECREASE)
VALUE NET GAIN (LOSS) TOTAL FROM FROM NET REALIZED DISTRIBUTIONS TOTAL IN
YEAR ENDED BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL IN RETURN OF DISTRI- NET ASSET
DECEMBER 31, OF YEAR INCOME(2) INVESTMENTS OPERATIONS INCOME GAINS EXCESS CAPITAL BUTIONS VALUE
- ------------ --------- ---------- ------------ ---------- ---------- ----------- ------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECT INCOME FUND(1)
1996 $ 1.024 $ 0.061 $ (0.029) $ 0.032 $ (0.061) $ -- $ -- $ -- $ (0.061) $ (0.029)
1995 0.930 0.060 0.095 0.155 (0.060) -- (0.001)(3) -- (0.061) 0.094
1994 1.035 0.055 (0.105) (0.050) (0.055) -- -- -- (0.055) (0.105)
1993 0.988 0.052 0.055 0.107 (0.052) (0.008) -- -- (0.060) 0.047
1992 1.000 0.018 (0.012) 0.006 (0.018) -- -- -- (0.018) (0.012)
MONEY MARKET
FUND
1996 1.000 0.052 -- 0.052 (0.052) -- -- -- (0.052) --
1995 1.000 0.057 -- 0.057 (0.057) -- -- -- (0.057) --
1994 1.000 0.039 -- 0.039 (0.039) -- -- -- (0.039) --
1993 1.000 0.030 -- 0.030 (0.030) -- -- -- (0.030) --
1992 1.000 0.037 -- 0.037 (0.037) -- -- -- (0.037) --
1991 1.000 0.060 -- 0.060 (0.060) -- -- -- (0.060) --
1990 1.000 0.078 -- 0.078 (0.078) -- -- -- (0.078) --
1989 1.000 0.086 -- 0.086 (0.086) -- -- -- (0.086) --
1988 1.000 0.071 -- 0.071 (0.071) -- -- -- (0.071) --
1987 1.000 0.061 -- 0.061 (0.061) -- -- -- (0.061) --
</TABLE>
____________________________________________
* Annualized
** Not Annualized
(A) Including reimbursements and reductions.
(B) Excluding reductions. Certain Portfolios have entered into varying
arrangements with brokers who reduced a portion of the Portfolio's
expenses.
(C) Excluding reimbursements and reductions.
(D) For fiscal years beginning on or after September 1, 1995, a Portfolio is
required to disclose its average commission rate per share for trades for
which commissions are charged. This rate generally does not reflect mark-
ups, mark-downs, or spreads on shares traded on a principal basis.
(E) 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.
(1) The Select Income Fund commenced operations on August 21, 1992.
(2) Net investment income per share before reimbursement of fees by the
investment adviser or reductions were $0.060 in 1995, $0.055 in 1994,
$0.050 in 1993, and $0.015 in 1992 for Select Income Fund; and $0.030 in
1993, $0.084(4) in 1988, and $0.076(4) in 1987 for Money Market Fund.
(3) Distributions in excess of net investment income.
(4) Unaudited.
__________________________
Allmerica Investment Trust 6
<PAGE>
- --------------------------------------------------------------------------------
ALLMERICA INVESTMENT TRUST
- --------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------
Ratios To Average Net Assets
------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET NET ASSETS
VALUE END OF NET PORTFOLIO AVERAGE
END OF TOTAL YEAR INVESTMENT OPERATING EXPENSES MANAGEMENT FEE TURNOVER COMMISSIONS
YEAR RETURN(E) (000'S) INCOME (A) (B) (C) GROSS NET RATE RATE(D)
---------- --------- ---------- ---------- ----- ----- ----- ----- ----- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.995 3.32% $ 77,498 6.29% 0.74% 0.74% 0.74% 0.60% 0.60% 108% $ --
1.024 16.96% 60,368 6.24% 0.79% -- 0.80% 0.60% 0.59% 131% --
0.930 (4.82)% 40,784 6.07% 0.83% -- 0.85% 0.60% 0.58% 105% --
1.035 10.95% 25,302 5.91% 0.91% -- 1.08% 0.60% 0.43% 171% --
0.988 0.62%** 5,380 5.38%* 1.00%* -- 1.67%* N/A N/A 119% --
1.000 5.36% 217,256 5.22% 0.34% 0.34% 0.34% 0.28% 0.28% N/A --
1.000 5.84% 155,211 5.68% 0.36% -- 0.36% 0.29% 0.29% N/A --
1.000 3.93% 95,991 3.94% 0.45% -- 0.45% 0.31% 0.31% N/A --
1.000 3.00% 71,052 2.95% 0.42% -- 0.43% 0.32% 0.31% N/A --
1.000 3.78% 64,506 3.65% 0.44% -- 0.44% N/A N/A N/A --
1.000 6.22% 39,909 5.98% 0.43% -- 0.43% N/A N/A N/A --
1.000 8.17% 28,330 8.22% 0.42% -- 0.42% N/A N/A N/A --
1.000 9.07% 12,060 8.62% 0.58% -- 0.58% N/A N/A N/A --
1.000 7.30%(4) 7,156 7.13% 0.60% -- 0.71% N/A N/A N/A --
1.000 6.20%(4) 4,726 6.14% 0.60% -- 0.75% N/A N/A N/A --
</TABLE>
__________________________
7 Allmerica Investment Trust
<PAGE>
HOW ARE THE FUNDS 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 Funds. The Manager,
at its expense, has contracted with certain Sub-Advisers to manage the
investments of the Funds subject to the requirements of the Investment Company
Act of 1940, as amended (the "1940").
The Manager is an indirect, wholly-owned subsidiary of Allmerica Financial
Corporation ("AFC"), a Delaware holding company for a group of affiliated
companies, the largest of which is First Allmerica, a life insurance company
organized in Massachusetts in 1844. The Manager, organized August 19, 1985, also
serves as manager of the Allmerica Funds, an open-end investment company. The
Manager and AFC are located at 440 Lincoln Street, Worcester, Massachusetts
01653.
The Manager has entered into Sub-Adviser Agreements for the management of the
investments of each of the Funds. Each 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 applicable Fund subject to such general or specific instructions
as may be given by the Trustees and/or the Manager. The terms of a Sub-Adviser
Agreement cannot be changed materially without the approval of a majority
interest of the shareholders of the affected Fund. The Sub-Advisers have been
selected by the Manager and Trustees in consultation with RogersCasey &
Associates, Inc. ("RogersCasey"), a leading pension consulting firm. RogersCasey
is a wholly-owned subsidiary of BARRA, Inc. The cost of such consultation is
borne by the Manager.
RogersCasey provides consulting services to pension plans representing over
$300 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 RogersCasey and the Sub-Advisers will be named in sales
materials. At times, RogersCasey assists in the development of asset allocation
strategies which may be used by shareholders in the diversification of their
portfolios across different asset classes.
Ongoing performance of the independent Sub-Advisers is monitored and evaluated
by a committee which includes members who are senior officers of First
Allmerica, its affiliates or the Manager and an independent consultant.
Combined, the committee has over 150 years of investment experience. Historical
performance data for all Funds is set forth under "Financial Highlights." The
Manager is responsible for the payment of all fees to the Sub-Advisers. The
Sub-Advisers for each of the Funds are as follows:
<TABLE>
<S> <C>
Select Aggressive Growth Fund Nicholas-Applegate Capital Management, L.P.
Select Capital Appreciation Fund Janus Capital Corporation
Select International Equity Fund Bank of Ireland Asset Management (U.S.) Ltd.
Select Growth Fund Putnam Investment Management, Inc.*
Select Growth and Income Fund John A. Levin & Co., Inc.
Select Income Fund Standish, Ayer & Wood, Inc.
Money Market Fund Allmerica Asset Management, Inc.
</TABLE>
________________________________________
* Putnam Investment Management, Inc. assumed sub-adviser responsibilities
from Provident Investment Counsel on July 1, 1996.
For a sample listing of certain of the Sub-Advisers' clients, see "Investment
Management and Other Services" in the SAI. For more information on each of the
Sub-Advisers, see "What Are the Investment Objectives and Policies?" and "Fund
Manager Information."
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 ser-
__________________________
Allmerica Investment Trust 8
<PAGE>
vices for each of the Funds and is entitled to receive an administrative fee and
certain out-of-pocket expenses. The Manager is responsible for the payment of
the administrative fee to FDISG.
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES?
Each Fund has a separate investment objective and policies designed to meet
different investment and financial needs, as described below. There is no
assurance that a Fund will achieve its investment objective.
A Fund's investment objective is fundamental and may not be changed without
shareholder approval. Unless otherwise indicated, a Fund's investment policies
are not fundamental and may be changed without shareholder approval.
SELECT AGGRESSIVE GROWTH FUND
Investment Objective: The Select Aggressive Growth Fund seeks above-average
capital appreciation by investing primarily in common stocks of companies which
are believed to have significant potential for capital appreciation.
Sub-Adviser: Nicholas-Applegate Capital Management, L.P. ("NACM") serves as
Sub-Adviser to the Select Aggressive Growth Fund. NACM is an investment manager
supervising accounts with assets totaling approximately $32 billion in total
assets as of December 31, 1996. NACM's clients are primarily major corporate
employee benefit funds, public employee retirement plans, foundations and
endowment funds, investment companies, and individuals. Founded in 1984, NACM is
located at 600 West Broadway, Suite 2900, San Diego, California 92101.
Investment Policies: Under normal circumstances, at least 65% of the assets of
the Select Aggressive Growth Fund will be invested in equity securities
consisting of common stocks, securities convertible into common stocks
(including bonds, notes and preferred stocks), and warrants. The Fund's assets
may also be invested in other debt securities and preferred stocks when such
securities are believed appropriate in light of the Fund's investment objective
and market conditions.
The selection of securities is made solely on the basis of their potential for
capital appreciation. Dividend and interest income from portfolio securities, if
any, is incidental to the Fund's investment objective. While investments may be
made in well-known and established companies, a significant portion of the
Fund's investments is expected to be in securities of newer and relatively
unseasoned companies or companies which represent new or changing industries.
At any given point, a substantial portion of the Fund's equity investments may
be in securities which are not listed for trading on national securities
exchanges and which, although publicly traded, may be less liquid than
securities issued by larger, more seasoned companies which trade on national
securities exchanges. Up to 15% of the Fund's assets may be invested in
securities which are illiquid because they are subject to restriction on resale
or for which market quotations are not readily available.
Securities of newer companies may be closely held with only a small portion of
their outstanding securities owned by the general public. Newer companies may
have relatively small revenue, lack depth of management and have a small share
of the market for their products or services; thus, they may be more vulnerable
to changes in economic conditions, market fluctuations and other factors
affecting the profitability or marketability of companies. Due to these and
other factors, the price movement of the securities held by the Fund can be
expected to be more volatile than is the case for the market as a whole, and the
net asset value of a share of the Fund may fluctuate significantly.
Consequently, the Fund should not be considered suitable for investors who are
unable or unwilling to assume the risk of loss inherent in an aggressive growth
portfolio, nor should investment in the Fund be considered a balanced or
complete investment program.
__________________________
9 Allmerica Investment Trust
<PAGE>
When NACM determines that market conditions warrant a temporary, defensive
position, the Fund may invest without limitation in high-grade, fixed-income
securities; U.S. Government securities; or hold assets in cash or cash
equivalents. For hedging purposes, the Fund may engage in the options and
futures strategies described under "Certain Investment Strategies and Policies."
The Fund may also invest up to 25% of its assets in foreign securities (not
including its investments in American Depositary Receipts ("ADRs")).
For the fiscal year ended December 31, 1996, the portfolio turnover rate for
the Fund was 113%. The portfolio turnover rate was the result of the
Sub-Adviser's investment approach which typically results in above-average
portfolio turnover as securities are sold when the Sub-Adviser believes the
reasons for their initial purchase are no longer valid or when it believes that
the sale of a security owned by the Fund and the purchase of another security
can enhance return. A security may be sold to avoid a prospective decline in
market value or purchased in anticipation of a market rise. Portfolio turnover
rates may vary greatly from year to year. A high portfolio turnover rate will
likely result in greater brokerage costs to the Fund.
SELECT CAPITAL APPRECIATION FUND
Investment Objective: The Select Capital Appreciation Fund seeks long-term
growth of capital in a manner consistent with the preservation of capital.
Realization of income is not a significant investment consideration and any
income realized on the Fund's investments will be incidental to its primary
objective.
Sub-Adviser: Janus Capital Corporation ("JCC") serves as Sub-Adviser to the
Select Capital Appreciation Fund. JCC has served as investment adviser to the
Janus Fund since 1969 and currently serves as investment adviser to all of the
Janus retail funds, as well as adviser or sub-adviser to other mutual funds and
individual, corporate, charitable and retirement accounts. Kansas City Southern
Industries, Inc., a publicly-traded holding company whose primary subsidiaries
are engaged in transportation and financial services, owns approximately 83% of
the outstanding stock of JCC. As of December 31, 1996, JCC had approximately $47
billion in total assets under management. JCC is located at 100 Fillmore Street,
Denver, Colorado 80206-4923.
Investment Policies: The Fund invests in common stocks when the Sub-Adviser
believes that the relevant market environment favors profitable investing in
those securities. The Fund pursues its objective normally by investing at least
50% of its equity assets in securities issued by medium-sized companies.
Medium-sized companies are those whose market capitalizations fall within the
range of companies in the S&P MidCap 400 Index (the "MidCap Index"). Companies
whose capitalization falls outside this range after the Fund's initial purchase
continue to be considered medium-sized companies for the purpose of this policy.
As of December 31, 1996, the MidCap Index included companies with
capitalizations between approximately $500 million to $10 billion. The range of
the MidCap Index is expected to change on a regular basis. Subject to the above
policy, the Fund may also invest in smaller or large issuers. Common stock
investments are selected in industries and companies that the Sub-Adviser
believes are experiencing favorable demand for their products and services and
which operate in a favorable competitive environment and regulatory climate. The
Sub-Adviser's analysis and selection process focuses on stocks with earnings
growth potential that may not be recognized by the market. Such securities are
selected solely for their capital growth potential; investment income is not a
consideration. Medium-sized companies may suffer more significant losses as well
as realize more substantial growth than larger issuers; thus, investments in
such companies tend to be more volatile and somewhat speculative.
The selection criteria for domestic issuers apply equally to stocks of foreign
issuers. In addition, factors such as expected levels of inflation; government
policies influencing business conditions; the outlook for currency
relationships; and prospects for relative economic growth among countries,
regions, or geographic areas may warrant greater consideration in selecting
foreign stocks. The Fund may invest without limitation in foreign securities.
The Fund may invest directly in foreign securities denominated in foreign
currency and not publicly traded in the United States. The Fund also may
purchase foreign securities through ADRs, European Depositary Receipts ("EDRs"),
__________________________
Allmerica Investment Trust 10
<PAGE>
Global Depositary Receipts ("GDRs"), and other types of receipts or shares
evidencing ownership of the underlying foreign securities. In addition, the Fund
may invest indirectly in foreign securities through foreign investment funds or
trusts (including passive foreign investment companies). Certain state insurance
regulations may impose additional restrictions on the Fund's holdings of foreign
securities. Investments in foreign securities carry additional risks not present
in domestic securities. See "Certain Investment Strategies and Policies -
Foreign Securities."
Although the Fund normally invests primarily in common stocks, the Fund's cash
position may increase when the Sub-Adviser is unable to locate investment
opportunities with desirable risk/reward characteristics. The Fund also may
invest in preferred stocks, warrants, government securities, corporate bonds and
debentures, high-grade commercial paper, certificates of deposit, other debt
securities, or repurchase agreement or reverse repurchase agreements when the
Sub-Adviser perceives an opportunity for capital growth from such securities or
so that the Fund may receive a return on its idle cash. The Fund also may invest
up to 35% of its assets in such lower-rated securities commonly known as "junk
bonds." Fixed-income securities rated in the fourth highest grade by Moody's
Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Service, a
division of McGraw-Hill Companies, Inc. ("S&P"), (Baa and BBB, respectively) are
investment grade but are considered to have some speculative characteristics.
Lower-rated securities or "junk bonds" (rated Ba/BB or lower) involve the risks
discussed under "Certain Investment Strategies and Policies." When the Fund
invests in such securities, investment income will increase and may constitute a
large portion of the return realized by the Fund and the Fund probably will not
participate in market advances or declines to the extent that it would if it
remained fully invested in common stocks. Up to 15% of the Fund's assets may be
invested in securities which are illiquid because they are subject to
restriction on resale or for which market quotations are not readily available.
The Fund may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the Sub-Adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating a special
situation might include, among others, a new product or process, a technological
breakthrough, a management change or other extraordinary corporate event, or
differences in market supply of and demand for the security. Investment in
special situations may carry an additional risk of loss in the event that the
anticipated development does not occur or does not attract the expected
attention.
For hedging purposes, the Fund may engage in options and futures strategies
and may utilize forward contracts, interest rate swaps, and swap-related
products. See "Certain Investment Strategies and Policies."
For the fiscal year ended December 31, 1996, the portfolio turnover rate for
the Fund was 98%. The portfolio turnover rate for the Fund may vary from year to
year.
SELECT INTERNATIONAL EQUITY FUND
Investment Objective: The Select International Equity Fund seeks maximum
long-term total return (capital appreciation and income) primarily by investing
in common stocks of established non-U.S. companies.
Sub-Adviser: Bank of Ireland Asset Management (U.S.) Limited ("BIAM") serves as
Sub-Adviser for the Select International Equity Fund. BIAM is an indirect
wholly-owned subsidiary of Bank of Ireland. Its main offices are at 26
Fitzwilliam Place, Dublin 2, Ireland. Its U.S. offices are at Two Greenwich
Plaza, Greenwich, CT 06830. Bank of Ireland provides investment management
services through a network of affiliated companies, including BIAM which
represents North American clients. As of December 31, 1996, Bank of Ireland
managed approximately $21 billion in global securities for Irish, United
Kingdom, European, Australian, South African, Canadian, and U.S. clients.
Investment Policies: To achieve its objective, the Select International Equity
Fund will invest primarily in common stocks of established non-U.S. companies.
Under normal market conditions, at least 65% of the Fund's total assets will be
invested in the securities of companies domiciled in at least five foreign
countries, not including the United States. The Fund may also acquire
fixed-income debt securities. It will do so, at the discretion of BIAM,
__________________________
11 Allmerica Investment Trust
<PAGE>
primarily for defensive purposes. The Fund may invest up to 15% of its assets in
securities which are illiquid because they are subject to restriction on resale
or for which market quotations are not readily available.
The Fund's investments may include ADRs which may be sponsored or unsponsored
by the underlying issuer. The Fund may also utilize EDRs, which are similar to
ADRs, in bearer form, designed for use in the European securities market and
GDRs. Investments in foreign securities carry additional risks not present in
domestic securities. See "Certain Investment Strategies and Policies - Foreign
Securities." For hedging purposes, the Fund may engage in the options and
futures strategies described under "Certain Investment Strategies and Policies."
Certain state insurance regulations may impose additional restrictions on the
Fund's holdings of foreign securities.
For the fiscal year ended December 31, 1996, the portfolio turnover rate for
the Fund was 18%. The portfolio turnover rate for the Fund may vary greatly from
year to year.
SELECT GROWTH FUND
Investment Objective: The Select Growth Fund seeks to achieve long-term growth
of capital by investing in a diversified portfolio consisting primarily of
common stocks selected on the basis of their long-term growth potential.
Sub-Adviser: Putnam Investment Management, Inc. ("Putnam"), One Post Office
Square, Boston, Massachusetts 02109, serves as Sub-Adviser to the Select Growth
Fund. Putnam has been an investment manager since 1937. As of December 31, 1996,
Putnam had assets under management of approximately $173 billion. Putnam is a
wholly-owned subsidiary of Putnam Investments, Inc., a holding company which in
turn is wholly owned by Marsh & McLennan Companies, Inc., a publicly-owned
holding company whose principal businesses are international insurance and
reinsurance brokerage, employee benefit consulting, and investment management.
Investment Policies: The Select Growth Fund seeks to attain its objective by
investing in securities of companies that appear to have favorable long-term
growth characteristics. Potential for long-term growth is the determinative
factor in the selection of portfolio securities. Although the Fund may invest in
dividend-paying stocks, the generation of current income is not an objective of
the Fund. Any income that is received is incidental to the Fund's objective of
long-term growth of capital.
When choosing securities for the portfolio, the sub-adviser for the Select
Growth Fund focuses on companies that display strong financial characteristics
and earnings growth potential.
At least 65% of the Fund's assets under normal conditions will consist of
growth-oriented common stocks. The Fund may invest in common stocks of large
well-known companies as well as smaller growth companies, which generally
include companies with a market capitalization of $500 million or less ("smaller
growth companies"). The stocks of smaller growth companies may involve a higher
degree of risk than other types of securities and the price movement of such
securities can be expected to be more volatile than is the case of the market as
a whole. The Fund may hold stocks traded on one or more of the national
exchanges as well as in the over-the-counter markets. Because opportunities for
capital growth may exist not only in new and expanding areas of the economy but
also in mature and cyclical industries, the Fund's portfolio investments are not
limited to any particular type of company or industry. The Fund may also
purchase convertible bonds and preferred stocks, warrants, and debt securities
if the Fund's Sub-Adviser believes they would help achieve the Fund's objective
of long-term growth.
The Fund may invest up to 35% of its assets in both higher-rated and
lower-rated fixed-income securities in seeking its objective of long-term growth
of capital. The dollar average weighted maturity of the Fund's fixed-income
securities will vary depending on, among other things, current market
conditions. The Fund may invest up to 15% of its assets in lower-rated
securities, commonly known as "junk bonds," which involve risks discussed under
"Certain Investment Strategies and Policies." For more information concerning
the rating categories of corporate debt securities, see the Appendix to the
Prospectus.
__________________________
Allmerica Investment Trust 12
<PAGE>
When the Sub-Adviser determines that market conditions warrant a temporary,
defensive position, the Fund may invest without limitation in high-grade,
fixed-income securities, U.S. Government securities, or hold assets in cash or
cash equivalents. To the extent the Fund is so invested it is not achieving its
objective to the same degree as under normal conditions. For hedging purposes,
the Fund may engage in the options and futures strategies described under
"Certain Investment Strategies and Policies."
The Select Growth Fund's objective of seeking long-term growth of capital
means that its assets generally will be subject to greater risk than may be
involved in investing in securities that are not selected for growth potential.
The Fund may invest up to 15% of its assets in securities which are illiquid
because they are subject to restriction on resale or for which market quotations
are not readily available. The Fund may also invest up to 25% of its assets in
foreign securities (not including its investments in ADRs).
For the fiscal year ended December 31, 1996, the portfolio turnover rate for
the Fund was 159%. The Fund experienced such a rate of turnover due to a new
sub-adviser assuming responsibility for the Fund on July 1, 1996 and
subsequently repositioning the portfolio. The portfolio turnover for the Fund
may vary greatly from year to year.
SELECT GROWTH AND INCOME FUND
Investment Objective: The Select Growth and Income Fund seeks a combination of
long-term growth of capital and current income. The Fund will invest primarily
in dividend-paying common stocks and securities convertible into common stocks.
Sub-Adviser: John A. Levin & Co., Inc. ("JAL"), One Rockefeller Place, 25th
Floor, New York, New York 10020, serves as Sub-Adviser to the Select Growth and
Income Fund. JAL was founded as a Delaware corporation in 1982 and is wholly
owned by Baker, Fentress & Company, a non-diversified closed-end management
investment company registered under the 1940 Act. The firm had approximately
$6.5 billion in assets under management as of December 31, 1996. JAL's clients
include U.S. and foreign individuals and their related trust and charitable
organizations, pooled funds for individuals and university endowments, and
pension and profit sharing funds.
Investment Policies: To achieve its objective of long-term growth of capital and
current income, the Select Growth and Income Fund will invest primarily in
dividend-paying common stocks and securities convertible into common stocks. It
may invest in a wide range of equity securities, consisting of both
dividend-paying and non-dividend-paying common stocks, preferred stocks,
securities convertible into common and preferred stocks and warrants. These may
include securities of large well-known companies as well as smaller growth
companies. The securities of smaller growth companies involve certain risks as
described above under the "Select Growth Fund." The Fund may hold securities
traded on one or more of the national exchanges as well as in the
over-the-counter markets. The Fund's portfolio investments are not limited to
any particular type of company or industry. The Fund may purchase individual
stocks not presently paying dividends which offer opportunities for capital
growth or future income provided that the Sub-Adviser believes the overall
portfolio is positioned appropriately to achieve its income objective. To
achieve current income, the Fund may invest up to 35% of its assets in both
higher-rated and lower-rated fixed-income securities, including not more than
15% in lower-rated securities, commonly known as "junk bonds." In certain
circumstances, fixed-income securities may be purchased by the Fund for
long-term growth potential. (However, the Fund expects to have substantially
less than 35% of its assets invested in fixed-income securities in most
circumstances.) Lower-rated fixed-income securities involve risks discussed
under "Certain Investment Strategies and Policies." For more information
concerning the rating categories of corporate debt securities, see the Appendix
to the Prospectus. The dollar average weighted maturity of the Fund's
fixed-income securities will vary depending on, among other things, current
market conditions. Purchases and sales of portfolio securities are made at such
times and in such amounts as deemed advisable in light of market, economic, and
other conditions.
The Fund may invest up to 15% of its assets in securities which are illiquid
because they are subject to restriction on resale or for which market quotations
are not readily available. The Fund may also invest up to 25% of its assets in
foreign securities (not including its investments in ADRs).
__________________________
13 Allmerica Investment Trust
<PAGE>
When the Sub-Adviser determines that market conditions warrant a temporary,
defensive position, the Fund may invest without limitation in high-grade or U.S.
Government securities, or hold assets in cash or cash equivalents. To the extent
the Fund is so invested, it is not achieving its objective to the same degree as
under normal conditions. For hedging purposes, the Fund may engage in the
options and futures strategies described under "Certain Investment Strategies
and Policies." There can be no assurance of growth of capital, of course, and,
because the Fund invests a substantial portion of its assets in common stocks
and other securities which fluctuate in value, there is substantial risk of
market decline. The Fund's Sub-Adviser seeks to minimize this risk through
detailed analyses of financial markets and issuers of equity securities and
through investment in a diversified portfolio of such securities.
For the fiscal year ended December 31, 1996, the portfolio turnover for the
Fund was 78%. The portfolio turnover rate for the Fund may vary greatly from
year to year.
SELECT INCOME FUND
Investment Objective: The Select Income Fund seeks a high level of current
income. The Fund will invest primarily in investment grade, fixed-income
securities.
Sub-Adviser: Standish, Ayer & Wood, Inc. ("SAW") serves as Sub-Adviser to the
Select Income Fund. SAW was founded in 1933 to provide investment management
services to high net worth individuals and institutions. As of December 31,
1996, total client assets exceeded $30 billion. SAW manages fixed-income
portfolios for major corporate and governmental pension plans, financial
institutions, and endowment and foundation funds. Through its affiliate,
Standish International Investment Management Company, L.P., SAW offers
international investment services. SAW is an independent investment counseling
firm owned by its twenty-two directors who are active with the firm. SAW is
located at One Financial Center, Boston, Massachusetts 02111.
Investment Policies: Under normal circumstances, at least 65% of the Select
Income Fund's assets, at the time of investment, will be invested in investment
grade corporate debt securities and securities issued or guaranteed as to
principal or interest by the U.S. Government or its agencies or
instrumentalities. Investment grade corporate debt securities are (a) assigned a
rating within the four highest grades (Baa/BBB or higher) by either Moody's or
S&P, (b) equivalently rated by another nationally recognized statistical rating
organization ("NRSRO"), or (c) unrated securities but determined by the
Sub-Adviser to be of comparable quality. Securities rated in the fourth highest
grade (rated Baa and BBB by Moody's and S&P, respectively) are considered to
have some speculative characteristics. The Fund will not invest in debt
securities rated below investment grade (Ba/BB or lower) by both Moody's and
S&P. For more information concerning the rating categories of corporate debt
securities and commercial paper, see the Appendix to the Prospectus. The types
of securities in which the Fund invests are corporate debt obligations such as
bonds, notes and debentures, and obligations convertible into common stock;
"money market" instruments, such as bankers acceptances, or negotiable
certificates of deposit issued by the 25 largest U.S. banks (in terms of
deposits); commercial paper rated Prime-1 by Moody's or A-1 by S&P; obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities;
asset-backed securities; mortgage-backed securities and stripped mortgage-backed
securities. The Fund may also invest in U.S. dollar obligations of, or
guaranteed by, the government of Canada or a province of Canada or any
instrumentality or political subdivision thereof, and U.S. dollar obligations of
supranational entities such as the World Bank, European Investment Bank, and
African Development Bank. For more information about asset-backed securities and
mortgage-backed securities and stripped mortgage-backed securities, see "Certain
Investment Strategies and Policies."
The Fund's investments in corporate debt securities are not limited to any
particular type of company or industry. The Fund will invest in corporate debt
obligations primarily of companies having a market capitalization of more than
$500 million at the time of investment.
The Fund's dollar average weighted maturity and the mix of permitted portfolio
securities as described above will vary from time to time depending, among other
things, on current market and economic conditions and the comparative yields on
instruments in different sectors, such as corporate and Treasuries, and with
different maturities.
__________________________
Allmerica Investment Trust 14
<PAGE>
The dollar average weighted maturity of the portfolio, excluding money market
instruments, is expected to range between 5 and 20 years under normal market
conditions. The Fund may invest up to 35% of its assets in money market
instruments under normal conditions. Although the Fund does not invest for
short-term trading purposes, portfolio securities may be sold from time to time
without regard to the length of time they have been held. The value of the
Fund's portfolio securities generally will vary inversely with changes in
prevailing interest rates, declining as interest rates rise and increasing as
rates decline. The value will also be affected by other market and economic
factors. There is the risk with corporate debt securities that the issuers may
not be able to meet their obligations on interest and principal payments.
The Fund may invest up to 15% of its assets in securities which are illiquid
because they are subject to restriction on resale or for which market quotations
are not readily available. The Fund may also invest up to 25% of its assets in
foreign securities (not including its investments in ADRs).
Obligations in which the Select Income Fund may invest include debt
obligations of supranational entities. Supranational entities include
international organizations designated or supported by governmental entities to
promote economic reconstruction or development and international banking
institutions and related government agencies. Obligations of supranational
entities may be supported by appropriated but unpaid commitments of their member
countries, and there is no assurance that these commitments will be undertaken
or met in the future. The Fund may not invest more than 25% of its assets in
debt obligations of supranational entities.
For hedging purposes, the Fund may engage in the options and futures
strategies described under "Certain Investment Strategies and Policies."
For the fiscal year ended December 31, 1996, the portfolio turnover rate for
the Fund was 108%. The portfolio turnover rate exceeded 100% due to the need to
make significant changes in the structure of the portfolio's mortgage and
corporate bond holdings. The portfolio turnover rate for the Fund may vary from
year to year. A high portfolio turnover rate may result in greater brokerage
costs to the Fund.
MONEY MARKET FUND
Investment Objective: The Money Market Fund seeks to obtain maximum current
income consistent with preservation of capital and liquidity.
Sub-Adviser: Allmerica Asset Management, Inc. ("AAM") serves as Sub-Adviser to
the Money Market Fund. AAM, an indirect wholly-owned subsidiary of AFC, was
incorporated in 1993 and is located at 440 Lincoln Street, Worcester,
Massachusetts 01653. As of December 31, 1996, AAM had approximately $11 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, as Sub-Adviser to three other series of the
Trust, and as Adviser for Allmerica Securities Trust, a closed-end diversified
investment company.
Investment Policies: The Money Market 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;
__________________________
15 Allmerica Investment Trust
<PAGE>
(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). For more information concerning
repurchase agreements, see "Certain Investment Strategies and
Policies;" and
(e) Cash and cash equivalents.
The Money Market Fund will not purchase any security unless (i) the security
has received the highest or second highest quality rating by at least two 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 to one of the two highest
ratings 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.
The Fund will limit its portfolio investments to securities with a remaining
maturity of 397 days or less as of the time of purchase, in accordance with the
Trustees' guidelines. The portfolio will be managed so as to maintain a
dollar-weighted maturity of 90 days or less. In order to maximize the yield on
its assets, the Money Market 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 (the
"1933 Act"); other fees payable to the Securities and Exchange Commission;
independent accountant, legal, and custodian 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.
For the services to the Funds, the Manager receives fees computed daily at an
annual rate based on the average daily net asset value of each Fund as set forth
below:
<TABLE>
<CAPTION>
Select Select Capital Select Select
Aggressive Growth Appreciation International Growth
Fund Fund Equity Fund Fund
---- ---- ----------- ----
<S> <C> <C> <C> <C>
Manager Fee 1.00% 1.00% 1.00% 0.85%
</TABLE>
<TABLE>
<CAPTION>
Select Growth Select Money
and Income Income Market
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
Manager Fee 0.75% 0.60% (1)
</TABLE>
________________________________________
__________________________
Allmerica Investment Trust 16
<PAGE>
(1) The Manager's fee for the Money Market Fund is computed daily at an
annual rate based on the average daily net asset value as set forth below:
<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $50 Million ................... 0.35%
Next $200 Million ................... 0.25%
Over $250 Million ................... 0.20%
</TABLE>
The Manager is responsible for the payment of all fees to the Sub-Advisers.
The Manager pays each Sub-Adviser fees computed daily at an annual rate based on
the average daily net asset value of each Fund as set forth below. In certain
Funds, Sub-Adviser fees vary according to the level of assets in such Funds,
which will reduce the fees paid by the Manager as Fund assets grow but will not
reduce the operating expenses of such Funds.
<TABLE>
<CAPTION>
Select Select Capital Select Select
Aggressive Growth Appreciation International Growth
Fund Fund Equity Fund Fund
---- ---- ----------- ----
<S> <C> <C> <C> <C>
Sub-Adviser Fee 0.60% (2) (3) (4)
</TABLE>
<TABLE>
<CAPTION>
Select Growth Select Money
and Income Income Market
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
Sub-Adviser Fee (5) 0.20% 0.10%
</TABLE>
(2) For its services, JCC will receive a fee computed daily at an annual
rate based on the average daily net assets of the Select Capital
Appreciation Fund, under the following schedule:
<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $100 Million .................. 0.60%
Over $100 Million ................... 0.55%
</TABLE>
(3) For its services, BIAM will receive a fee computed daily at an annual rate
based on the average daily net assets of the Select International Equity
Fund, under the following schedule:
<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $50 Million ................... 0.45%
Next $50 Million .................... 0.40%
Over $100 Million ................... 0.30%
</TABLE>
(4) For its services, Putnam will receive a fee computed daily at an annual
rate based on the average daily net assets of the Select Growth Fund, under
the following schedule:
<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $50 Million ................... 0.50%
Next $100 Million ................... 0.45%
Next $100 Million ................... 0.35%
Next $100 Million ................... 0.30%
Over $350 Million ................... 0.25%
</TABLE>
__________________________
17 Allmerica Investment Trust
<PAGE>
(5) For its services, JAL will receive a fee computed daily at an annual rate
based on the average daily net assets of the Select Growth and Income Fund,
under the following schedule:
<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $100 Million .................. 0.40%
Next $200 Million ................... 0.25%
Over $300 Million ................... 0.30%
</TABLE>
For the fiscal year ended December 31, 1996, each Fund paid the Manager gross
fees before reimbursement at a rate based on the Fund's average daily net
assets, under the following schedule:
<TABLE>
<CAPTION>
Fund Rate
---- ----
<S> <C>
Select Aggressive Growth Fund ....... 1.00%
Select Capital Appreciation Fund .... 1.00%
Select International Equity Fund .... 1.00%
Select Growth Fund .................. 0.85%
Select Growth and Income Fund ....... 0.75%
Select Income Fund .................. 0.60%
Money Market Fund ................... 0.28%
</TABLE>
The following table shows voluntary expense limitations which the Manager has
declared for each Fund and the operating expenses incurred for the fiscal year
ended December 31, 1996 for each Fund:
<TABLE>
<CAPTION>
Percentage of Average Daily Assets
----------------------------------
Voluntary Expense Operating
Fund Limitations Expenses+
---- ----------- ---------
<S> <C> <C>
Select Aggressive Growth Fund ........ 1.35% 1.08%
Select Capital Appreciation Fund ..... 1.35% 1.13%
Select International Equity Fund ..... 1.50% 1.20%
Select Growth Fund ................... 1.20% 0.92%
Select Growth and Income Fund ........ 1.10% 0.80%
Select Income Fund ................... 1.00% 0.74%
Money Market Fund .................... 0.60% 0.34%
_______________________________________
</TABLE>
+Including reductions such as directed brokerage credits. See "Brokerage
Allocation - Directed Brokerage Program" in the SAI.
The Manager will voluntarily reimburse its fees and any expenses above the
expense limitations. The expense limitations are voluntary and may be removed
any time after the Fund's first fiscal year of operations without prior notice
to existing shareholders. The Manager reserves the right to recover from a 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
generally are excluded in the determination of expense ratios of the Funds 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.
__________________________
Allmerica Investment Trust 18
<PAGE>
FUND MANAGER INFORMATION
The following individuals are responsible primarily for the day-to-day
management of the particular Funds as indicated below:
The following individuals have served as members of a committee of fund
managers for the SELECT AGGRESSIVE GROWTH FUND since March 1994, with the
exception of Mr. Nicholas who has served as a fund manager since the Fund's
inception in August 1992:
Arthur E. Nicholas, Partner and Chief Investment Officer at NACM, is the
co-founder of NACM. Prior to NACM, Mr. Nicholas was Managing Director and
Chief Investment Officer of Pacific Century Advisers. He was also associated
with Security Pacific Bank for over two years and with San Diego Trust &
Savings Bank for ten years.
Lawrence S. Speidell is a Partner and Director of Global/Systematic Portfolio
Management and Research at NACM. Prior to joining NACM in 1994, Mr. Speidell
spent ten years with Batterymarch Financial Management. He was also Senior
Vice President and Portfolio Manager at Putnam Management Company from 1971 to
1983.
John J. Kane, Senior Portfolio Manager, U.S. Systematic at NACM, has
twenty-eight years of economic/investment experience. Prior to joining NACM in
1994, Mr. Kane was employed by ARCO Investment Management Company and General
Electric Company.
Mark W. Stuckelman, Portfolio Manager, U.S. Systematic, joined NACM in 1995.
Prior to joining NACM, he was employed for five years with Wells Fargo Bank's
Investment Management Group, Fidelity Management Trust Co., and BARRA, Inc.
The following individual has served as fund manager for the SELECT CAPITAL
APPRECIATION FUND since the Fund's inception in April 1995:
James P. Goff joined JCC in 1988. He has managed the Janus Enterprise Fund
since 1992 and has co-managed the Janus Venture Fund from December 1993 to
January 1997. Mr. Goff is a Chartered Financial Analyst.
The following portfolio managers are involved in the invutilized for the
SELECT INTERNATIONAL EQUITY FUND:
Christopher Reilly, Chief Investment Officer, joined Bank of Ireland in 1980
and has had overall responsibility for asset management since 1985.
Previously, he worked in the United Kingdom in stockbrokering and investment
management.
Denis Donovan, Director - Portfolio Management, received an MBA from
University College Dublin. Prior to joining Bank of Ireland in 1985, he spent
more than thirteen years in the money market and foreign exchange operations
of the Central Bank of Ireland, the Irish equivalent of the U.S. Federal
Reserve. He has overall responsibility for the portfolio management function
for all of BIAM's client base.
John O'Callaghan is a graduate of Trinity College, Dublin and is a Chartered
Financial Analyst. He joined Bank of Ireland in 1987.
Peter Wood joined Bank of Ireland in 1985 after spending five years with
another leading investment management firm. He is responsible for portfolio
construction.
__________________________
19 Allmerica Investment Trust
<PAGE>
The following individuals have served as members of a committee of fund
managers for the SELECT GROWTH FUND since July 1, 1996:
Carol C. McMullen, Managing Director, has been an investment professional with
Putnam since 1995. Prior to 1995, Ms. McMullen was Senior Vice President of
Baring Asset Management.
Beth Cotner, Senior Vice President, has been with Putnam since 1995. Prior to
1995, Ms. Cotner was Executive Vice President at Kemper Financial Services.
Manual Weiss, Senior Vice President, has been an investment professional with
Putnam since 1987.
The following individuals have served as members of a committee of fund
managers of the SELECT GROWTH AND INCOME FUND since September 1994:
John A. Levin, President, has been with JAL since 1982 and has thirty-two
years of investment experience.
Melody L. Prenner Sarnell, Executive Vice President, has been with JAL since
1984. Prior to joining JAL, Ms. Sarnell was employed by John M. Blewer, Inc.
Jeffrey A. Kigner, Executive Vice President, has been with JAL since 1984.
Prior to 1984, Mr. Kigner was employed by Carlin & Co.
The following individuals have served as members of a committee of fund
managers for the SELECT INCOME FUND since the Fund's inception in August 1992:
Edward H. Ladd, Chairman and Managing Director, joined SAW in 1962 and is the
firm's economist. He also assists clients in establishing investment
strategies. Mr. Ladd is a Director of the Federal Reserve Bank of Boston, New
England Electric System, Greylock Management, and Harvard Management
Corporation and a member of SAW's Executive Committee.
George W. Noyes, President and Managing Director, joined SAW in 1970 and
directs bond policy formulation and manages institutional bond portfolios at
SAW. Mr. Noyes is Vice Chairman of the ICFA Research Foundation and serves on
SAW's Executive Committee.
Dolores S. Driscoll, Managing Director, joined SAW in 1974 and manages
fixed-income portfolios with specific emphasis on mortgage pass-throughs and
original issue discount bonds. Ms. Driscoll also serves on SAW's Executive
Committee.
Richard C. Doll, Manager, joined SAW in 1984 and is a portfolio manager with
research responsibilities in convertible bonds. Prior to joining SAW, Mr. Doll
was a Vice President with the Bank of New England.
Maria D. Furman, Vice President and Director, joined SAW in 1976. She is head
of the tax-exempt area and manages insurance and pension fund accounts. Ms.
Furman currently serves on SAW's Executive Committee.
The following individual has served as fund manager for the MONEY MARKET FUND
since March, 1995:
John C. Donohue, Assistant Vice President of AAM, was a portfolio manager at
CS First Boston Investment Management prior to joining AAM in 1995.
HOW ARE SHARES VALUED?
The net asset value of the shares of each Fund is determined once daily as of
the close of regular trading on the New York Stock Exchange (the "Exchange") on
each day on which the Exchange is open for trading.
__________________________
Allmerica Investment Trust 20
<PAGE>
Equity securities are valued on the basis of their market value if market
quotations are readily available. In other cases, they are valued at their fair
value as determined in good faith by the Trustees, although the actual
calculations may be performed by persons acting pursuant to the direction of the
Trustees. Debt securities (other than short-term obligations) normally are
valued on the basis of valuations formulated by a pricing service which utilizes
data processing methods to determine valuations for normal, institutional-size
trading units of such securities. Such methods include the use of market
transactions for comparable securities and various relationships between
securities which generally are recognized by institutional traders. All
securities of the Money Market Fund are valued at amortized cost. Debt
obligations in the other Funds having a remaining maturity of 60 days or less
are valued at amortized cost when it is determined that amortized cost
approximates fair value. Short-term obligations of the other Funds having a
remaining maturity of more than 60 days are marked to market based upon readily
available market quotations for such obligations or similar securities.
Unlike the Money Market Fund which attempts to maintain a stable net asset
value, the net asset value of the other Funds will fluctuate.
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 quarterly in the case of the Select Growth and Income Fund and Select
Income Fund; annually in the case of the Select Aggressive Growth Fund, Select
Capital Appreciation Fund, Select International Equity Fund, and Select Growth
Fund; and daily in the case of the Money Market Fund. 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 Account. Tax
consequences to investors in the Separate Accounts which are invested in the
Trust are described in the prospectuses for such Accounts.
SALE AND REDEMPTION OF SHARES
Shares of the Funds are sold in a continuous offering and currently may be
purchased only by Allmerica Select Separate Accounts. The Separate Accounts are
the funding mechanisms for variable annuity contracts. The Separate Accounts
invest in shares of one or more of the Funds. Shares of each Fund are sold at
their 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 Funds serve as
investment vehicles.
Shares of the Trust are also currently being issued to Separate Accounts of
Allmerica Financial Life, First Allmerica, and subsidiaries of First Allmerica
which issue variable or group annuity policies or variable premium life
insurance policies ("mixed funding"). Although neither Allmerica Financial 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 premium 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
premium life separate accounts, Allmerica Financial Life would pay the attendant
expenses.
The Trust redeems shares of each Fund at its net asset value as next computed
after receipt of the request for redemption. The redemption price may be more or
less than the shareholder's cost. 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.
__________________________
21 Allmerica Investment Trust
<PAGE>
Redemption payments will be paid within seven days after receipt of the
written request therefor by the Trust, except that the right of redemption may
be suspended or payments postponed whenever permitted by applicable law and
regulations.
HOW IS PERFORMANCE DETERMINED?
Each Fund's performance may be quoted in advertising. A 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 Funds other than the Money Market Fund, "yield" is calculated by dividing
a Fund's annualized net investment income per share during a recent 30-day
period by the net asset value per share on the last day of that period. For the
Money Market 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 returns are based on the overall dollar or percentage change in value of
a hypothetical investment in a 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 FUNDS INCLUDE THE EFFECT OF DEDUCTING
THE FUNDS' EXPENSES, BUT MAY NOT INCLUDE CHARGES AND EXPENSES ATTRIBUTABLE TO A
PARTICULAR INSURANCE PRODUCT. SINCE SHARES OF THE FUNDS CAN BE PURCHASED ONLY
THROUGH A VARIABLE ANNUITY CONTRACT OR VARIABLE LIFE CONTRACT, YOU SHOULD REVIEW
CAREFULLY THE PROSPECTUS FOR THE SEPARATE ACCOUNTS FOR INFORMATION ON RELEVANT
CHARGES AND EXPENSES. INCLUDING THESE CHARGES IN THE QUOTATIONS OF THE FUNDS'
YIELDS AND TOTAL RETURNS WOULD HAVE THE EFFECT OF DECREASING PERFORMANCE.
PERFORMANCE INFORMATION FOR THE FUNDS MUST ALWAYS BE ACCOMPANIED BY, AND BE
REVIEWED WITH, PERFORMANCE INFORMATION FOR THE SEPARATE ACCOUNTS WHICH INVEST IN
THE FUNDS.
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
each Fund. Five of the series are not available under Allmerica Select and are
not included in this Prospectus. The Trust's shares are entitled to one vote per
share (with proportional voting for fractional shares). The rights accompanying
Fund shares are vested legally in the Separate Accounts. As a matter of policy,
however, holders of 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 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.
__________________________
Allmerica Investment Trust 22
<PAGE>
FUND RECORDKEEPING AGENT
FDISG, a wholly-owned subsidiary of First Data Corporation, calculates net
asset value per share and maintains general accounting records for each 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 investment securities and other assets of the Trust.
INVESTMENT RESTRICTIONS
The following is a description of certain investment restrictions which are
fundamental and may not be changed with respect to a Fund without shareholder
approval. For a description of certain other investment restrictions, reference
should be made to the SAI.
1. No Fund will concentrate its investments in particular industries,
including debt obligations of supranational entities and foreign governments,
but a Fund 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 Money Market Fund in securities issued or guaranteed by
domestic branches of U.S. banks.
2. As to 75% of the value of its total assets (100% for the Money
Market Fund), no Fund will 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 issuer. The remaining 25% of assets (other than for the Money
Market Fund) may be invested in the securities of one or more issuers without
regard to such limitations.
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 holdings in such investments.
CERTAIN INVESTMENT STRATEGIES AND POLICIES
REPURCHASE AGREEMENTS (APPLICABLE TO ALL FUNDS) AND REVERSE REPURCHASE
AGREEMENTS (APPLICABLE TO THE SELECT CAPITAL APPRECIATION FUND)
Each 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, a Fund could incur disposition costs and losses.
Repurchase agreements maturing in more than seventy days are subject to the 15%
(10% for the Money Market Fund) limit on illiquid securities.
When the Select Capital Appreciation Fund invests in a reverse repurchase
agreement, it sells a security to another party such as a banker or
broker-dealer in return for cash and agrees to buy the security back at a future
date and price. Reverse repurchase agreement transactions can be considered a
form of borrowing by the Fund. Reverse repurchase agreements may be used to
provide cash to satisfy unusually heavy redemption requests or for other
temporary or emergency purposes without the necessity of selling portfolio
securities or to earn additional income on portfolio securities, such as
treasury bills and notes.
__________________________
23 Allmerica Investment Trust
<PAGE>
"WHEN-ISSUED" SECURITIES (APPLICABLE TO ALL FUNDS)
Each 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 (APPLICABLE TO ALL FUNDS)
For the purpose of realizing additional income, the Funds may lend portfolio
securities to broker-dealers or financial institutions amounting to not more
than 30% of their respective total assets taken at current value. While any such
loan is outstanding, a 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. Each 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.
FOREIGN SECURITIES (APPLICABLE TO EACH FUND EXCEPT THE MONEY MARKET FUND)
Investments in foreign markets involve substantial risks typically not
associated with investing in the U.S. which should be considered carefully by
the investor. Such risks may include political and economic instability,
differing accounting and financial reporting standards, higher commission rates
on foreign portfolio transactions, less readily available public information
regarding issuers, potentially adverse changes in tax and exchange control
regulations, and the potentially for restrictions on the flow of international
capital. Foreign securities also involve currency risks. Accordingly, the
relative strength of the U.S. dollar may be an important factor in the
performance of the Fund, depending on the extent of the Fund's foreign
investments. Some foreign securities exchanges may not be as developed or
efficient as those in the U.S. and securities traded on foreign securities
exchanges generally are subject to greater price volatility. There is also the
possibility of adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, and limitations on the removal of funds
or other assets. Investments in emerging countries involve exposure to economic
structures that are generally less diverse and mature than in the U.S., and to
political systems which may be less stable. In addition, securities of issuers
located in emerging countries may have limited marketability and may be subject
to more abrupt or erratic price fluctuations.
The Funds may buy or sell foreign currencies, options on foreign currencies,
and foreign currency futures contracts and options thereon and, in addition, the
Select Capital Appreciation Fund may invest in foreign currency forward
contracts. Although such instruments may reduce the risk of loss due to a
decline in the value of the currency that is sold, they also limit any possible
gain which might result should the value of the currency increase. Such
instruments will be used primarily to protect a Fund from adverse currency
movements; however, they also involve the risk that anticipated currency
movements will not be accurately predicted, thus adversely affecting a Fund's
total return. See "Options and Futures Transactions."
The Funds' investments may include ADRs. For many foreign securities, there
are U.S. dollar-denominated ADRs which are traded in the United States on
exchanges or over the counter. ADRs represent the right to receive securities of
foreign issuers deposited in a domestic bank or a correspondent bank. An ADR may
be sponsored by the issuer of the underlying foreign security, or it may be
issued in unsponsored form. The holder of a sponsored ADR is likely to receive
more frequent and extensive financial disclosure concerning the foreign issuer
than the holder of an unsponsored ADR and generally will bear lower transaction
charges. Each Fund may invest in both sponsored and unsponsored ADRs. The Select
International Equity Fund and the Select Capital Appreciation Fund also may
utilize EDRs, which are designed for use in European securities markets, and
also may invest in GDRs.
__________________________
Allmerica Investment Trust 24
<PAGE>
Obligations in which the Select Income Fund may invest include debt
obligations of supranational entities. Supranational entities include
international organizations designated or supported by governmental entities to
promote economic reconstruction or development and international banking
institutions and related government agencies. Obligations of supranational
entities may be supported by appropriated but unpaid commitments of their member
countries, and there is no assurance that these commitments will be undertaken
or met in the future. The Fund may not invest more than 25% of its assets in
debt obligations of supranational entities.
OPTIONS AND FUTURES TRANSACTIONS (APPLICABLE TO EACH FUND EXCEPT THE MONEY
MARKET FUND) AND FORWARD CONTRACTS AND SWAPS (APPLICABLE TO THE SELECT CAPITAL
APPRECIATION FUND)
Through the writing and purchase of put and call options on its securities,
financial indices, and foreign currencies, and the purchase and sale of futures
contracts and related options with respect to securities, financial indices and
(in the case of the Select Capital Appreciation Fund) foreign currencies in
which it may invest, each Fund except the Money Market Fund at times may seek to
hedge against fluctuations in net asset value. Each Fund's ability to engage in
options and futures strategies will depend on the availability of liquid markets
in such instruments. It is impossible to predict the amount of trading interest
that may exist in various types of options or futures contracts. Therefore,
there is no assurance that the Funds will be able to utilize these instruments
effectively for the purposes stated above.
Additionally, the Select Capital Appreciation Fund may invest in forward
contracts and swaps which may expose the Fund to additional investment risks and
transaction costs.
Risks inherent in the use of futures, options, forward contracts and swaps
("derivative instruments") include (1) the risk that interest rates, securities
prices, and currency markets will not move in the directions anticipated; (2)
imperfect correlation between the price of derivative instruments and movements
in the prices of the securities, interest rates, or currencies being hedged; (3)
the fact that skills needed to use these strategies are different from those
needed to select portfolio securities; (4) the possible absence of a liquid
secondary market for any particular instrument at any time; and (5) the possible
need to defer closing out certain hedged positions to avoid adverse tax
consequences.
The Fund will purchase futures and options only on exchanges or boards of
trade when there appears to be an active secondary market, but there can be no
assurance that a liquid secondary market will exist for any future or option at
any particular time.
In connection with transactions in futures and related options, the Funds will
be required to deposit as "initial margin" an amount of cash and/or securities.
Thereafter, subsequent payments are made to and from the broker to reflect
changes in the value of the future contract.
A more detailed explanation of futures, options, and other derivative
instruments, and the risks associated with them, is included in the SAI.
RESTRICTED SECURITIES (APPLICABLE TO EACH FUND EXCEPT THE MONEY MARKET
FUND)
The Funds also may purchase fixed-income securities that are not registered
under the 1933 Act ("restricted securities"), but can be offered and sold to
"qualified institutional buyers" under Rule 144A of the 1933 Act. However,
each Fund will not invest more than 15% of its assets in restricted securities
(as defined in its investment restrictions) unless the Board of Trustees
determines, based upon a continuing review of the trading markets for the
specific restricted security, that such restricted securities are liquid. The
Board of Trustees has adopted guidelines and delegated to the Manager the daily
function of determining and monitoring liquidity of restricted securities. The
Board, however, will retain sufficient oversight and be responsible ultimately
for the determinations. Since it is not possible to predict with assurance
exactly how this market for restricted securities sold and offered under Rule
144A will develop, the Board will monitor carefully a Fund's investments in
securities, focusing on such important factors, among others, as valuation,
liquidity and availability of information. This investment practice could have
the effect
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25 Allmerica Investment Trust
<PAGE>
of increasing the level of illiquidity in a Fund to the extent that qualified
institutional buyers become for a time uninterested in purchasing these
restricted securities. As a result, a Fund might not be able to sell these
securities when its Sub-Adviser wishes to do so, or might have to sell them at
less than fair value. In addition, market quotations are less readily available.
Therefore, judgment at times may play a greater role in valuing these securities
than in the case of unrestricted securities.
INVESTMENT IN MONEY MARKET SECURITIES (APPLICABLE TO ALL FUNDS)
Any Fund may hold at least a portion of its assets in cash equivalents or
money market instruments. There is always the risk that the issuer of a money
market instrument may be unable to make payment upon maturity.
The Money Market Fund may hold uninvested cash reserves pending investment
during temporary, defensive periods or if, in the opinion of the Sub-Adviser,
suitable securities are not available for investment. Securities in which the
Money Market Fund may invest may not earn as high a level of current income as
long term, lower quality securities which, however, generally have less
liquidity, greater market risk, and more fluctuation in market value.
Pursuant to an exemptive order granted by the Securities and Exchange
Commission, the Select Capital Appreciation Fund and other funds advised by
Janus Capital may transfer daily uninvested cash balances into one or more joint
trading accounts. Assets in the joint trading accounts are invested in money
market instruments and the proceeds are allocated to the participating funds on
a pro rata basis.
HIGH YIELD SECURITIES (APPLICABLE TO THE SELECT CAPITAL APPRECIATION FUND,
SELECT GROWTH FUND, AND SELECT GROWTH AND INCOME FUND)
Corporate debt securities purchased by the Select Capital Appreciation Fund,
the Select Growth Fund, and the Select Growth and Income Fund will be rated at
the time of purchase B or better by Moody's or S&P, or equivalently rated by
another NRSRO, or unrated but believed by the Sub-Adviser to be of comparable
quality under guidelines established for the Funds. The Select Growth Fund and
the Select Growth and Income Fund may not invest more than 15% of their assets
and the Select Capital Appreciation Fund may not invest more than 35% of its
assets at the time of investment in securities rated below Baa by Moody's or BBB
by S&P, or equivalently rated by another NRSRO, or unrated but believed by the
Sub-Adviser to be of comparable quality. Securities rated B by Moody's or S&P
(or equivalently by another NRSRO) are below investment grade and are
considered, on balance, to be predominantly speculative with respect to capacity
to pay interest and repay principal and generally will involve more credit risk
than securities in the higher rating categories.
Periods of economic uncertainty and changes can be expected to result in
increased volatility of market prices of lower-rated securities, commonly known
as "high yield" securities or "junk bonds," and the asset value of the Select
Capital Appreciation Fund, the Select Growth Fund, and Select Growth and Income
Fund. Many issuers of high yield corporate debt securities are leveraged
substantially at times, which may impair their ability to meet debt service
obligations. Also, during an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial stress.
The lack of a liquid secondary market in certain lower-rated securities may
have an adverse impact on their market price and the ability of a Fund to
dispose of particular issues when necessary to meet its liquidity needs or in
response to a specific economic event such as a deterioration in the
credit-worthiness of the issuer. In addition, a less liquid market may interfere
with the ability of a Fund to value accurately high yield securities and,
consequently, value a Fund's assets. Furthermore, adverse publicity and investor
perceptions may decrease the value and liquidity of high yield securities. It is
reasonable to expect any recession to disrupt severely the market for high yield
fixed-income securities, have an adverse impact on the value of such securities,
and adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon. The market prices of lower-rated securities
are generally less sensitive to interest rate changes than higher-rated
investments, but more sensitive to adverse economic or political changes, or
individual developments specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of price of these
securities.
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Allmerica Investment Trust 26
<PAGE>
The Funds also may invest in unrated debt securities of foreign and domestic
issuers. Unrated debt, while not necessarily of lower quality than rated
securities, may not have as broad a market. Sovereign debt of foreign
governments generally is rated by country. Because these ratings do not take
into account individual factors relevant to each issue and may not be updated
regularly, the Sub-Adviser may treat such securities as unrated debt. Unrated
debt securities and securities with different ratings from more than one agency
will be included in the 15% and 35% limits of the Funds as stated above, unless
such Fund's Sub-Adviser deems such securities to be the equivalent of investment
grade securities. See the Appendix for a description of the bond ratings.
ASSET-BACKED SECURITIES AND MORTGAGE-BACKED SECURITIES (APPLICABLE TO THE SELECT
INCOME FUND)
The Fund may purchase asset-backed securities, which represent a participation
in, or are secured by and payable from, a stream of payments generated by
particular assets, frequently a pool of assets similar to one another. Assets
generating such payments include instruments such as motor vehicle installment
purchase obligations, credit card receivables, and home equity loans. Payment of
principal and interest may be guaranteed for certain amounts and time periods by
a letter of credit issued by a financial institution unaffiliated with the
issuer of the securities. The estimated life of an asset-backed security varies
with the prepayment experience of the underlying debt instruments. The rate of
such prepayments, and hence the life of the asset-backed security, will be
primarily a function of current market rates, although other economic and
demographic factors will be involved. Under certain interest rate and prepayment
rate scenarios, the Fund may fail to recoup fully its investment in asset-backed
securities. The Fund will not invest more than 10% of its total assets in
asset-backed securities.
The Fund also may invest in mortgage-backed securities which are debt
obligations secured by real estate loans and pools of loans on single family
homes, multi-family homes, mobile homes, and in some cases, commercial
properties. The Fund may acquire securities representing an interest in a pool
of mortgage loans that are issued or guaranteed by a U.S. government agency such
as the Government National Mortgage Association ("Ginnie Mae"), the Federal
National Mortgage Association ("Fannie Mae"), and the Federal Home Loan Mortgage
Corporation ("Freddie Mac").
Mortgage-backed securities are in most cases "pass-through" instruments
through which the holder receives a share of all interest and principal payments
from the mortgages underlying the certificate. Because the prepayment
characteristics of the underlying mortgages vary, it is not possible to predict
accurately the average life or realized yields of a particular issue of
pass-through certificates. During periods of declining interest rates,
prepayment of mortgages underlying mortgage-backed securities can be expected to
accelerate. When the mortgage obligations are prepaid, the Fund reinvests the
prepaid amounts in securities, the yield of which reflects interest rates
prevailing at the time. Moreover, prepayment of mortgages that underlie
securities purchased at a premium could result in losses.
The Fund also may invest in multiple class securities issued by U.S.
government agencies and instrumentalities such as Fannie Mae, Freddie Mac, and
Ginnie Mae, including guaranteed collateralized mortgage obligations ("CMOs")
and Real Estate Mortgage Investment Conduit ("REMIC") pass-through or
participation certificates, when consistent with the Fund's investment
objective, policies, and limitations. A CMO is a type of bond secured by an
underlying pool of mortgages or mortgage pass-through certificates that are
structured to direct payment on underlying collateral to different series or
classes of obligations. A REMIC is a CMO that qualifies for special tax
treatment under the Internal Revenue Code and invests in certain mortgages
principally secured by interests in real property and other permitted
investments.
CMOs and guaranteed REMIC pass-through certificates ("REMIC Certificates")
issued by Fannie Mae, Freddie Mac, and Ginnie Mae are types of multiple
pass-through securities. Investors may purchase beneficial interests in REMICs,
which are known as "regular" interests or "residual" interests. The Fund
currently does not intend to purchase residual interests in REMICs. The REMIC
Certificates represent beneficial ownership interests in a REMIC trust,
generally consisting of mortgage loans or Fannie Mae, Freddie Mac, or Ginnie Mae
guaranteed mortgage pass-through certificates. The obligations of Fannie Mae,
Freddie Mac, or Ginnie Mae under their respective guaranty of the REMIC
Certificates are obligations solely of Fannie Mae, Freddie Mac, or Ginnie Mae,
respectively.
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27 Allmerica Investment Trust
<PAGE>
Fannie Mae REMIC Certificates are issued and guaranteed as to timely
distribution of principal and interest by Fannie Mae. In addition, Fannie Mae
will be obligated to distribute the principal balance of each class of REMIC
Certificates in full, whether or not sufficient funds are available otherwise.
For Freddie Mac REMIC Certificates, Freddie Mac guarantees the timely payment
of interest and also guarantees the payment of principal as payments are
required to be made on the underlying mortgage participation certificates
("PCs"). PCs represent undivided interests in specified residential mortgages or
participations therein purchased by Freddie Mac and placed in a PC pool. With
respect to principal payments on PCs, Freddie Mac generally guarantees ultimate
collection of all principal of the related mortgage loans without offset or
deduction. Freddie Mac also guarantees timely payment of principal on certain
PCs referred to as "Gold PCs."
Ginnie Mae REMIC Certificates guarantee the full and timely payment of
interest and principal on each class of securities (in accordance with the terms
of those classes). This Ginnie Mae guarantee is backed by the full faith and
credit of the United States of America.
REMIC Certificates issued by Fannie Mae, Freddie Mac and Ginnie Mae are
treated as U.S. government securities for purposes of investment policies. There
can be no assurance that the United States Government will continue to provide
financial support to Fannie Mae, Freddie Mac, or Ginnie Mae in the future.
STRIPPED MORTGAGE-BACKED SECURITIES (APPLICABLE TO THE SELECT INCOME FUND)
The Fund may invest in stripped mortgage-backed securities ("SMBS"). SMBS are
derivative multiclass mortgage securities. SMBS may be issued by agencies or
instrumentalities of the U.S. Government or by private originators of, or
investors in, mortgage loans, including savings and loan associations, mortgage
banks, commercial banks, investment banks, and special purpose entities of the
foregoing.
SMBS usually are structured with two classes that receive different
proportions of the interest and principal distributions on a pool of mortgage
assets. One type of SMBS will have one class receiving some of the interest and
most of the principal from the mortgage assets, while the other class will
receive most of the interest and the remainder of the principal. In some cases,
one class will receive all of the interest (the interest-only or "IO" class)
while the other class will receive all of the principal (the principal-only or
"PO" class). The yield to maturity on an IO class is extremely sensitive to the
rate of principal payments (including prepayment on the related underlying
mortgage assets), and a rapid rate of principal payments may have a material,
adverse effect on a portfolio yield to maturity from these securities. If the
underlying mortgage assets experience greater than anticipated prepayments of
principal, the Fund may fail to fully recoup fully their initial investment in
these securities even if the security is in one of the highest rating
categories. Certain SMBS may be deemed "illiquid" and subject to the Fund's
limitations on investment in illiquid securities. The market value of the PO
class generally is unusually volatile in response to changes in interest rates.
The yields on a class of SMBS that receives all or most of the interest from
mortgage assets are generally higher than prevailing market yields in other
mortgage-backed securities because their cash flow patterns are more volatile
and there is a greater risk that the initial investment will not be recouped
fully. The Sub-Adviser will seek to manage these risks (and potential benefits)
by investing in a variety of such securities and by using certain hedging
techniques.
HEDGING TECHNIQUES AND INVESTMENT PRACTICES (APPLICABLE TO THE SELECT CAPITAL
APPRECIATION FUND AND SELECT INTERNATIONAL EQUITY FUND)
The Select International Equity Fund and the Select Capital Appreciation Fund
may employ certain strategies in order to manage exchange rate risks. For
example, the Funds may hedge some or all of their investments denominated in a
foreign currency against a decline in the value of that currency. The Funds may
enter into contracts to sell that foreign currency for U.S. dollars (not
exceeding the value of a Fund's assets denominated in or exposed to that
currency) or by participating in options on futures contracts with respect to
such currency ("position hedge"). The Funds also could hedge that position by
selling a second currency, that is expected to perform similarly to the currency
in which portfolio investments are denominated for U.S. dollars ("proxy hedge").
The Funds also may enter
__________________________
Allmerica Investment Trust 28
<PAGE>
into a forward contract to sell the currency in which the security is
denominated for a second currency that is expected to perform better relative to
the U.S. dollar if their Sub-Adviser believes there is a reasonable degree of
correlation between movements in the two currencies ("cross-hedge"). As an
operational policy, the Funds will not commit more than 10% of their assets to
the consummation of cross-hedge contracts and either will cover currency hedging
transactions with liquid portfolio securities denominated in or whose value is
tied to the applicable currency or segregate liquid assets in the amount of such
commitments. In addition, when the Funds anticipate repurchasing securities
denominated in a particular currency, the Funds may enter into a forward
contract to purchase such currency in exchange for the dollar or another
currency ("anticipatory hedge").
These strategies minimize the effect of currency appreciation as well as
depreciation, but do not protect against a decline in the underlying value of
the hedged security. In addition, such strategies may reduce or eliminate the
opportunity to profit from increases in the value of the original currency and
may have an adverse impact on a Fund's performance if their Sub-Adviser's
projection of future exchange rates is inaccurate.
__________________________
29 Allmerica Investment Trust
<PAGE>
APPENDIX
Descriptions of Moody's Investors Service, Inc. ("Moody's") and Standard &
Poor's Ratings Service, a division of McGraw-Hill Companies, Inc. ("S&P")
commercial paper and bond 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 TWO HIGHEST
DESIGNATIONS ARE 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 normally will 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 earning 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.
Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This normally
will be evidenced by many of the characteristics cited above, but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be subject
more to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
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 TWO HIGHEST
RATING CATEGORIES ARE DESCRIBED 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.
A-2 - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
MUNICIPAL OBLIGATIONS
Moody's ratings for state and municipal and other short-term obligations will
be designated Moody's Investment Grade ("MIG"). This distinction is in
recognition of the differences between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower are uppermost in
importance in the short-term borrowing, while various factors of the first
importance in long-term borrowing risk are of lesser importance in the long run.
Symbols used will be as follows:
MIG-1 - This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support, or
demonstrated broad-based access to the market for refinancing.
MIG-2 - This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
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Allmerica Investment Trust 30
<PAGE>
A short-term rating also may be assigned on an issue having a demand feature.
Such ratings will be designated as VMIG to reflect such characteristics as
payment upon periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should be alert to the
fact that the source of payment may be limited to the external liquidity with no
or limited legal recourse to the issuer in the event that demand is not met.
VMIG-1 and VMIG-2 ratings carry the same definitions as MIG-1 and MIG-2,
respectively.
DESCRIPTION OF MOODY'S BOND RATINGS
Aaa - Bonds that are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and generally are referred to as
"gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
Aa - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or fluctuation
of protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A - Bonds that are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present that suggest a susceptibility to impairment some time in the
future.
Baa - Bonds that are rated Baa are considered to be medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment characteristics
and in fact have speculative characteristics as well.
Ba - Bonds that are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds that are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of
other terms of the contract over any long period of time may be small.
Those bonds within the Aa, A, Baa, Ba and B categories that Moody's believes
possess the strongest credit attributes within those categories are designated
by the symbols Aa1, A1, Baa1, Ba1, and B1.
DESCRIPTION OF S&P'S DEBT RATINGS
AAA - Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from AAA issues only in a small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
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Allmerica Investment Trust 31
<PAGE>
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for debt in this category than in higher rated categories.
BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC, C is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. BB indicates the least degree of speculation
and C the highest. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or
major exposures to adverse conditions.
Plus (+) or (-): The ratings from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major
categories.
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Allmerica Investment Trust 32
<PAGE>
PART B:
- ------
7
<PAGE>
Draft
-----
Allmerica Investment Trust
Supplement Effective
February 1, 1998
to
Statement of Additional Information
Dated May 1, 1997
Throughout the Statement of Additional Information, the name "Small-Mid Cap
Value Fund" is changed to "Select Value Opportunity Fund".
---------------------
The second sentence of the second paragraph of the section entitled, "General
Information" is amended to read in its entirety as follows:
It currently is comprised of fourteen different portfolios: Select
Emerging Markets Fund, Select Aggressive Growth Fund, Select Capital
Appreciation Fund, Select Value Opportunity Fund (formerly known as Small-Mid
Cap Value Fund), Select International Equity Fund, Select Growth Fund, Select
Strategic Growth Fund, Growth Fund, Equity Index Fund, Select Growth and Income
Fund, Select Income Fund, Investment Grade Income Fund, Government Bond Fund,
and Money Market Fund (each, a "Fund").
---------------------
The following are added as the first and eighth funds in the section entitled,
"Investment Objectives and Policies":
Select Emerging Markets Fund seeks long-term growth of capital by investing
in the world's emerging markets.
Select Strategic Growth Fund seeks long-term growth of capital by investing
primarily in common stocks of established companies.
---------------------
Investment Restriction No. 7 on Page 6 is amended to read in its entirety as
follows:
7. The Fund will not purchase securities on margin but may obtain such
short-term credits as are necessary for clearance transactions, and (except for
the Money Market Fund) may make margin payments in connection with financial
futures (including securities index futures) contracts, and options on such
future contracts and in the case of the Select Emerging Markets Fund and Select
Capital Appreciation Fund, futures contracts on foreign currencies and related
options. The Fund will not participate on a joint or joint and several basis in
any trading account in securities or effect a short sale of securities.
<PAGE>
---------------------
The section entitled "Investment Techniques-Financial Futures Contracts and
Related Options" is amended to read in its entirety as follows:
Each Fund (other than the Money Market Fund) may invest in transactions in
financial futures contracts and related options for hedging purposes. In
addition, the Select Emerging Markets Fund, Select Capital Appreciation Fund and
Select International Equity Fund may utilize futures contracts on foreign
currencies and related options. Through certain hedging activities involving
such futures contracts and related options, it is possible to reduce the effects
of fluctuations in interest rates and the market prices of securities which may
be quite volatile. Hedging is a means of transferring a risk which an investor
does not desire to assume during an uncertain interest rate or securities market
environment to another investor who is willing to assume that risk.
The Select Emerging Markets Fund, Select Capital Appreciation Fund and Select
International Equity Fund may buy and write options on foreign currencies in a
manner similar to that in which futures or forward contracts on foreign
currencies will be utilized. For example, a decline in the U.S. dollar value of
a foreign currency in which portfolio securities are denominated will reduce the
U.S. dollar value of such securities, even if their value in the foreign
currency remains constant. In order to protect against such diminutions in the
value of portfolio securities, the Select Emerging Markets Fund, Select Capital
Appreciation Fund and Select International Equity Fund may buy put options on
the foreign currency. If the value of the currency declines, the Funds will have
the right to sell such currency for a fixed amount in U.S. dollars and will
offset, in whole or in part, the adverse effect on its portfolio.
Conversely, when a rise in the U.S. dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, the Select Emerging Markets Fund, Select Capital
Appreciation Fund and Select International Equity Fund may buy call options
thereon. The purchase of such options could offset, at least partially, the
effects of the adverse movements in exchange rates. As in the case of other
types of options, however, the benefit to the Funds from purchases of foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, if currency exchange rates do not move in the
direction or to the extent desired, the Select Emerging Markets Fund, Select
Capital Appreciation Fund and Select International Equity Fund could sustain
losses on transactions in foreign currency options that would require such Funds
to forgo a portion or all of the benefits of advantageous changes in those
rates.
The Select Emerging Markets Fund, Select Capital Appreciation Fund and Select
International Equity Fund also may write options on foreign currencies. For
example, to hedge against a potential decline in the U.S. dollar value of
foreign currency denominated securities due to adverse fluctuations in exchange
rates, the Funds could write a call option on the relevant currency instead of
purchasing a put option. If the expected decline
2
<PAGE>
occurs, the option will most likely not be exercised and the diminution in value
of portfolio securities will be offset by the amount of the premium received.
Similarly, instead of purchasing a call option to hedge against a potential
increase in the U.S. dollar cost of securities to be acquired, the Select
Emerging Markets Fund, Select Capital Appreciation Fund and Select International
Equity Fund could write a put option on the relevant currency which, if rates
move in the manner projected, will expire unexercised and allow the Funds to
hedge the increased cost up to the amount of the premium. As in the case of
other types of options, however, the writing of a foreign currency option will
constitute only a partial hedge up to the amount of the premium. If exchange
rates do not move in the expected direction, the option may be exercised and the
Funds would be required to buy or sell the underlying currency at a loss which
may not be offset by the amount of the premium. Through the writing of options
on foreign currencies, the Select Emerging Markets Fund, Select Capital
Appreciation Fund and Select International Equity Fund also may lose all or a
portion of the benefits which might otherwise have been obtained from favorable
movements in exchange rates.
The Select Emerging Markets Fund, Select Capital Appreciation Fund and Select
International Equity Fund may write covered call options on foreign currencies.
A call option written on a foreign currency by the Funds is "covered" if the
Funds own the underlying foreign currency covered by the call or have an
absolute and immediate right to acquire that foreign currency without additional
cash consideration (or for additional cash consideration held in a segregated
account by the Fund's custodian) upon conversion or exchange of other foreign
currency held in their portfolios. A call option also is covered if the Funds
have a call on the same foreign currency and in the same principal amount as the
call written if the exercise price of the call held (i) is equal to or less than
the exercise price of the call written or (ii) is greater than the exercise
price of the call written, if the difference is maintained by the Funds in cash
or other liquid assets in a segregated account with the Funds' custodian.
The Select Emerging Markets Fund, Select Capital Appreciation Fund and Select
International Equity Fund also may write call options on foreign currencies for
cross-hedging purposes that would not be deemed to be covered. A call option on
a foreign currency is for cross-hedging purposes if it is not covered but is
designed to provide a hedge against a decline due to an adverse change in the
exchange rate in the U.S. dollar value of a security that the Funds own or have
the right to acquire and that is denominated in the currency underlying the
option. In such circumstances, the Select Emerging Markets Fund, Select Capital
Appreciation Fund and Select International Equity Fund collateralize the option
by segregating cash or other liquid assets in an amount not less than the value
of the underlying foreign currency in U.S. dollars marked-to-market daily. The
Select Emerging Markets Fund, Select Capital Appreciation Fund and Select
International Equity Fund may invest without limitation in foreign currency
options.
---------------------
3
<PAGE>
The section entitled "Investment Techniques-Forward Contracts on Foreign
Currencies" is amended to read in its entirety as follows:
A forward contract is an agreement between two parties in which one party is
obligated to deliver a stated amount of a stated asset at a specified time in
the future and the other party is obligated to pay a specified invoice amount
for the assets at the time of delivery. The Select Emerging Markets Fund,
Select Capital Appreciation Fund and Select International Equity Fund may enter
into forward contracts to purchase and sell government securities, foreign
currencies, or other financial instruments. Forward contracts generally are
traded in an interbank market conducted directly between traders (usually large
commercial banks) and their customers. Unlike futures contracts which are
standardized contracts, forward contracts can be drawn specifically to meet the
needs of the parties that enter into them. The parties to a forward contract
may agree to offset or terminate the contract before its maturity, or may hold
the contract to maturity and complete the contemplated exchange. The following
discussion summarizes the Select Emerging Markets Fund's, Select Capital
Appreciation Fund's and Select International Equity Fund's principal uses of
forward currency exchange contracts ("forward currency contracts"). The Funds
may enter into a forward currency contract with the stated contract value of up
to the value of the Funds' assets. A forward currency contract is an obligation
to buy or sell an amount of a specified currency for an agreed price (which may
be in U.S. dollars or a foreign currency). The Select Emerging Markets Fund,
Select Capital Appreciation Fund and Select International Equity Fund will
exchange foreign currencies for U.S. dollars and for other foreign currencies in
the normal course of business and may buy and sell currencies through forward
currency contracts in order to fix a price for securities they have agreed to
buy or sell ("transaction hedge"). The Select Emerging Markets Fund, Select
Capital Appreciation Fund and Select International Equity Fund also may hedge
some or all of their investments denominated in foreign currency against a
decline in the value of that currency relative to the U.S. dollar by entering
into forward currency contracts to sell an amount of that currency (or a proxy
currency whose performance is expected to replicate or exceed the performance of
that currency relative to the U.S. dollar) approximating the value of some or
all of their portfolio securities denominated in that currency ("position
hedge") or by participating in options or futures contracts with respect to the
currency. The Funds also may enter into a forward currency contract with respect
to a currency where the Funds are considering the purchase or sale of
investments denominated in that currency but have not yet selected the specific
investments ("anticipatory hedge").
In any of these circumstances, the Select Emerging Markets Fund, Select
Capital Appreciation Fund and Select International Equity Fund may enter
alternatively into a forward currency contract to purchase or sell one foreign
currency for a second currency that is expected to perform more favorably
relative to the U.S. dollar if their Sub-Advisers believe there is a reasonable
degree of correlation between movements in the two currencies ("cross-hedge").
These types of hedges minimize the effect of currency appreciation as well as
depreciation, but do not eliminate fluctuations in the underlying U.S. dollar
equivalent value of the proceeds of or rates of return on such Funds' foreign
currency denominated portfolio securities. The
4
<PAGE>
matching of the increase in value of a forward contract and the decline in the
U.S. dollar equivalent value of the foreign currency denominated asset that is
the subject of the hedge generally will not be precise. Shifting the Funds'
currency exposure from one foreign currency to another removes the Funds'
opportunity to profit from increases in the value of the original currency and
involves a risk of increased losses to the Funds if their Sub-Advisers'
projections of future exchange rates is inaccurate. Proxy hedges and cross-
hedges may result in losses if the currency used to hedge does not perform
similarly to the currency in which hedged securities are denominated. Unforeseen
changes in currency prices may result in poorer overall performance for the
Select Emerging Markets Fund, Select Capital Appreciation Fund and Select
International Equity Fund than if they had not entered into such contracts.
The Select Emerging Markets Fund, Select Capital Appreciation Fund and Select
International Equity Fund will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in or whose value is tied to
the currency underlying the forward contract or the currency being hedged. To
the extent that the Select Emerging Markets Fund, Select Capital Appreciation
Fund and Select International Equity Fund are not able to cover their forward
currency positions with underlying portfolio securities, the Funds' custodian
will segregate cash or liquid assets having a value equal to the aggregate
amount of its commitments under forward contracts entered into with respect to
position hedges, cross-hedges, and anticipatory hedges. If the value of the
securities used to cover a position or the value of segregated assets declines,
the Select Emerging Markets Fund, Select Capital Appreciation Fund and Select
International Equity Fund will find alternative cover or segregate additional
cash or liquid assets on a daily basis so that the value of the covered
segregated assets will be equal to the amount of the Funds' commitments with
respect to such contracts. As an alternative to segregating assets, the Select
Emerging Markets Fund, Select Capital Appreciation Fund and Select International
Equity Fund may buy call options permitting it to buy the amount of foreign
currency being hedged by a forward sale contract or the Funds may buy put
options permitting them to sell the amount of foreign currency subject to a
forward buy contract.
While forward contracts currently are not regulated by the CFTC, the CFTC may
in the future assert authority to regulate forward contracts. In such event, the
Select Emerging Markets Fund's, Select Capital Appreciation Fund's and Select
International Equity Fund's ability to utilize forward contracts may be
restricted. In addition, the Select Emerging Markets Fund, Select Capital
Appreciation Fund and Select International Equity Fund may not always be able to
enter into forward contracts at attractive prices and may be limited in their
ability to use these contracts to hedge portfolio assets.
---------------------
The sections under "Investment Techniques" entitled Securities Lending, Foreign
Securities, When-Issued Securities, Repurchase Agreements (not Reverse
Repurchase Agreements), Writing Covered Options, Purchasing Options, General
Information, Options on Financial Futures, Limitations on Purchase and Sale of
Futures and Related Options, Risks of Transactions in Futures and Risks in
Transactions in Options on Futures are applicable to the Select Emerging Markets
Fund, Select Value Opportunity Fund and Select Strategic Growth Fund and the
section entitled Additional Risks of Options on Foreign Currencies, Forward
Contracts and Foreign Instruments is applicable to the Select Emerging Markets
Fund.
---------------------
5
<PAGE>
The following is included in the section containing the listing of each sub-
adviser's representative clients under "Investment Management and Other
Services" as the first six listings and the 13th listing, respectively:
A listing of Montgomery Asset Management's current representative clients
is as follows:
-Alliance Pharmaceutical Corp. -Koniag, Inc.
-BankAmerica Corporation -Libbey-Owens-Ford Co.
-Canada Trust -Minnesota State Board of Investment
-Chevron Corporation -Northern Trust Company of Connecticut
-Dutch State Mines -Pacific Gas & Electric Company
-Eastman Kodak Company -Reynolds Metals Company
-Electronic Data Systems -Scripps Research Institute
-Frank Russell Trust Company -Stanford Management Company
-GE Investments -Trust Company of Knoxville
-Honeywell, Inc. -Ziff Communications
A listing of Morgan Stanley Asset Management, Inc.'s current representative
clients is as follows:
A listing of Scudder, Stevens & Clark, Inc.'s current representative
clients is as follows:
-Benjamin Moore & Company -New York State Nurses Association
-Chase Manhattan Bank -Perkin-Elmer Corporation
-Colgate-Palmolive Company -Pitney Bowes
-Ethyl Corporation -Schering-Plough Corporation
-Georgetown University -Southern Company Services, Inc.
-Hasbro Corporation -The Freedom Forum
-Hiram Walker & Sons, Inc. -Union Camp Corporation
-Holnam, Inc. -Warner Lambert Company
-Mount Holyoke College -Wesleyan University
-New York City Retirement System -VF Corporation
A listing of Cambiar Investors, Inc.'s current representative clients is as
follows:
-American Hospital Association -Interstate Johnson Lane
6
<PAGE>
-Army Times Publishing Company -Regent University
-AvMed Santa Fe -Schurz Communication Retirement
-Boeing Company Plan
-City Public Service of San Antonio -Sheet Metal Workers Local #20
-Frank Russell Trust Company -Turlock Irrigation District
-Guaranty National Insurance Retirement Plan
Corporation -United Airlines
-Hunter Douglas Retirement Plan -Viking Insurance Company
-Waco Employees Profit Sharing Plan
---------------------
The section entitled, "Financial Statements" is amended in its entirety to read
as follows:
The Trust's Financial Statements and related notes and the report of
the independent accountants contained in the Trust's annual report for the
fiscal year ended December 31, 1996 and the Trust's Financial Statements
(unaudited) and related notes (unaudited) contained in the Trust's semi-annual
report for the period ended June 30, 1997 are incorporated by reference into
this Statement of Additional Information.
7
<PAGE>
Allmerica Investment Trust
Supplement Effective
August 15, 1997
to
Statement of Additional Information
Dated May 1, 1997
The next to last sentence in the second paragraph of the section entitled "More
Information about the Equity Index Fund" on Page 4 is amended to read:
Under normal circumstances, it is expected that the Equity Index Fund will
hold between 300 and 500 different stocks included in the S&P 500.
---------------------
Investment Restriction No. 2 on Page 5 is amended to read:
The Fund will not borrow money, except in accordance with the provisions of
the 1940 Act and for temporary purposes when the aggregate amount borrowed
does not exceed 33-1/3% of the value of the Fund's total assets at the time
such borrowing is made. In general, a borrowing shall be regarded as being
for temporary purposes if it is repaid within 60 days and is not extended
or renewed.
---------------------
The second sentence of Investment Restriction No. 3 on Page 5 is deleted.
---------------------
Investment Restriction No. 5 on Page 6 is amended to read:
The Fund will not engage in the purchase and sale of physical commodities
or contracts relating to physical commodities.
---------------------
The following is added as Investment Restriction No. 11 on Page 6:
The Fund (except the Money Market Fund) may engage in transactions in
financial futures contracts and related options. The Money Market Fund
will not engage in transactions in financial futures or related options.
---------------------
The first two sentences of the section entitled "Investment Techniques - Foreign
Securities" on Page 6 are replaced with the following:
<PAGE>
Each Fund except the Government Bond Fund may purchase foreign securities.
The Money Market Fund may invest only in U.S. dollar denominated foreign
securities.
---------------------
The first sentence of the section entitled "Investment Techniques - Forward
Commitments" on Page 7 is amended to read:
The Select Capital Appreciation Fund, Select Income Fund, Investment Grade
Income Fund, Government Bond Fund and Money Market Fund may enter into
contracts to purchase securities for a fixed price at a specified future
date beyond customary settlement time ("forward commitments").
---------------------
"Small-Mid Cap Fund" is deleted from the first sentence of each of the following
sections under "Investment Techniques" starting on Page 8: Writing Covered
Options, Purchasing Options, Financial Futures Contracts and Related Options and
Options on Financial Futures.
---------------------
The disclosure on hedging strategies used to manage exchange rate risks of
foreign currencies under the sections on Financial Futures Contracts and Related
Options, Forward Contracts on Foreign Currencies and Additional Risks of Options
on Foreign Currencies, Forward Contracts and Foreign Instruments applies to the
Select International Equity Fund.
---------------------
The list of Trustees under "Management of Allmerica Investment Trust" on Page 19
is amended to delete Russell E. Fuller, who has retired, and to include the
following information on Cynthia A. Hargadon, who has been elected to the Board
of Trustees:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Name, Address and Age Position and Offices Present Position and Principal
- --------------------- with Trust Occupations During the Past 5 Years
-------------------- -----------------------------------
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Cynthia A. Hargadon (42) Trustee President, Stable Value Association
1880 Virginia Avenue (investment trade group), and Senior
McLean, VA 72101 Consultant, Johnson Custom Strategies
(investment service firm),
1996-Present; Senior Vice President
and Chief Investment Officer, ICMA
Retirement Corporation (investment
adviser), 1987-1996
- --------------------------------------------------------------------------------------------------
</TABLE>
-2-
<PAGE>
ALLMERICA INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
THIS STATEMENT OF ADDITIONAL INFORMATION ("SAI") IS NOT A PROSPECTUS. IT SHOULD
BE READ IN CONJUNCTION WITH THE APPLICABLE PROSPECTUS OF ALLMERICA INVESTMENT
TRUST DATED MAY 1, 1997. THE APPLICABLE PROSPECTUS MAY BE OBTAINED FROM
ALLMERICA INVESTMENT TRUST, 440 LINCOLN STREET, WORCESTER, MASSACHUSETTS 01653,
(508) 855-1000.
DATED: MAY 1, 1997
--------------------------
Allmerica Investment Trust
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
GENERAL INFORMATION ..................................................... 3
INVESTMENT OBJECTIVES AND POLICIES ...................................... 3
INVESTMENT RESTRICTIONS ................................................. 5
INVESTMENT TECHNIQUES ................................................... 6
PORTFOLIO TURNOVER ...................................................... 15
PERFORMANCE ............................................................. 15
MANAGEMENT OF ALLMERICA INVESTMENT TRUST ................................ 19
CONTROL PERSON AND PRINCIPAL HOLDER OF SECURITIES ....................... 20
INVESTMENT MANAGEMENT AND OTHER SERVICES ................................ 21
BROKERAGE ALLOCATION .................................................... 24
PURCHASE, REDEMPTION, AND PRICING OF SECURITIES BEING OFFERED ........... 25
ORGANIZATION OF THE TRUST ............................................... 26
FINANCIAL STATEMENTS .................................................... 27
</TABLE>
- --------------------------
Allmerica Investment Trust 2
<PAGE>
GENERAL INFORMATION
Allmerica Investment Trust (the "Trust") is an open-end, diversified series
investment company designed to provide the underlying investment vehicle for
various separate investment accounts established by First Allmerica Financial
Life Insurance Company ("First Allmerica") or Allmerica Financial Life Insurance
and Annuity Company ("Allmerica Financial Life"), an indirect, wholly-owned
subsidiary of First Allmerica. Shares of the Trust are not offered to the
general public but solely to such separate investment accounts ("Separate
Accounts").
The Trust is a Massachusetts business trust established on October 11,
1984. It currently is comprised of twelve different portfolios: Select
Aggressive Growth Fund, Select Capital Appreciation Fund, Small-Mid Cap Value
Fund (formerly known as Small Cap Value Fund), Select International Equity Fund,
Select Growth Fund, Growth Fund, Equity Index Fund, Select Growth and Income
Fund, Select Income Fund, Investment Grade Income Fund, Government Bond Fund,
and Money Market Fund (each, a "Fund"). Not all of the Funds are offered to each
Separate Account. The Trustees may create additional funds in the future.
INVESTMENT OBJECTIVES AND POLICIES
Select Aggressive Growth Fund seeks above-average capital appreciation by
investing primarily in common stocks of companies which are believed to have
significant potential for capital appreciation.
Select Capital Appreciation Fund seeks long-term growth of capital in a manner
consistent with the preservation of capital. Realization of income is not a
significant investment consideration and any income realized on the Fund's
investments will be incidental to its primary objective.
Small-Mid Cap Value Fund seeks long-term growth of capital by investing
primarily in a diversified portfolio of common stocks of small and mid-size
companies, whose securities at the time of purchase are considered by the
Sub-Adviser to be undervalued.
Select International Equity Fund seeks maximum long-term total return (capital
appreciation and income) primarily by investing in common stocks of established
non-U.S.companies.
Select Growth Fund seeks to achieve long-term growth of capital by investing in
a diversified portfolio consisting primarily of common stocks selected on the
basis of their long-term growth potential.
Growth Fund seeks to achieve long-term growth of capital through investments
primarily in common stocks and securities convertible into common stocks that
are believed to represent significant underlying value in relation to current
market prices. Realization of current income, if any, is incidental to this
objective.
Equity Index Fund seeks to achieve investment results that correspond to the
aggregate price and yield performance of a representative selection of common
stocks that are publicly traded in the United States.
Select Growth and Income Fund seeks a combination of long-term growth of capital
and current income. The Fund will invest primarily in dividend-paying common
stocks and securities convertible into common stocks.
Select Income Fund seeks a high level of current income. The Fund will invest
primarily in investment grade, fixed-income securities.
Investment Grade Income Fund seeks as high a level of total return, which
includes capital appreciation as well as income, as is consistent with prudent
investment management.
Government Bond Fund seeks high income, preservation of capital, and maintenance
of liquidity primarily through investments in debt instruments issued or
guaranteed by the U.S. Government or its agencies or instrumentalities ("U.S.
Government securities") and in related options, futures, and repurchase
agreements. Under normal conditions, at least 80% of the Fund's assets will be
invested in U.S. Government securities.
Money Market Fund seeks to obtain maximum current income consistent with
preservation of capital and liquidity.
--------------------------
3 Allmerica investment Trust
<PAGE>
A Fund's investment objective and its policies as listed above as well as
those identified in the Prospectus as fundamental may not be changed without the
approval of a majority in interest of the shareholders of that Fund. Except
where otherwise noted, other investment policies and techniques of the Funds are
not deemed fundamental and may be changed by the Trustees. There is no assurance
that a Fund's investment objective will be realized.
For a description of the types of investments each Fund may acquire and
certain investment techniques it may utilize, see "Investment Objectives and
Policies" in the appropriate Prospectus for the underlying Funds of the
applicable Separate Account.
More Information about the Equity Index Fund
The Equity Index Fund will attempt to replicate the investment results of the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") while
minimizing transactional costs and other expenses. Stocks in the S&P 500 are
ranked in accordance with their statistical weighting from highest to lowest.
The method used to select investments for the Equity Index Fund involves
investing in common stocks in approximately the order of their weighting in the
S&P 500, beginning with those having the highest weighting. In addition, the
Equity Index Fund purchases stocks with smaller weighting in order to represent
other sectors of the S&P 500 for diversification purposes.
The Equity Index Fund will invest only in those stocks, and in such amounts,
as its investment adviser determines to be necessary or appropriate for the
Equity Index Fund to approximate the S&P 500. As the size of the Equity Index
Fund increases, the Equity Index Fund may purchase a larger number of stocks
included in the S&P 500, and the percentage of its assets invested in most
stocks included in the S&P 500 will approach the percentage that each such stock
represents in the S&P 500. However, there is no minimum or maximum number of
stocks included in the S&P 500 which the Equity Index Fund will hold. Under
normal circumstances, it is expected that the Equity Index Fund will hold
between 300 and 475 different stocks included in the S&P 500. The Equity Index
Fund may compensate for the omission of a stock that is included in the S&P 500,
or for purchasing stocks in other than the same proportions that they are
represented in the S&P 500, by purchasing stocks which are believed to have
characteristics which correspond to those of the omitted stocks.
The Equity Index Fund may invest in short-term debt securities to maintain
liquidity or pending investment in stocks. Such investments will not be made
for defensive purposes or in anticipation of a general decline in the market
price of stocks in which the Equity Index Fund invests; investors in the Equity
Index Fund bear the risk of general declines in the stock markets. The Equity
Index Fund also may take advantage of tender offers, resulting in higher returns
than are reflected in the performance of the S&P 500. In addition, the Equity
Index Fund may hold warrants, preferred stocks, and debt securities, whether or
not convertible into common stock or with rights attached, if acquired as a
result of in-kind dividend distributions, mergers, acquisitions, or other
corporate activity involving the common stocks held by the Equity Index Fund.
Such investment transactions and securities holdings may result in positive or
negative tracking error.
Although it does not intend presently to do so, the Equity Index Fund at some
time in the future may purchase or sell futures contracts on stocks indexes for
hedging purposes and in order to achieve a fully invested position while
maintaining sufficient liquidity to meet possible net redemptions. The
effectiveness of a strategy of investing in stock index futures contracts will
depend upon the continued availability of futures contracts based on the S&P 500
or which tend to move together with stocks included in the S&P 500. The Equity
Index Fund would not enter into futures contacts on stock indexes for
speculative purposes.
Standard & Poor's Corporation is not in any way affiliated with the Equity
Index Fund or the Trust. "Standard & Poor's," "Standard & Poor's 500," and "500"
are trademarks of Standard & Poor's Corporation.
More Information about the Government Bond Fund
The Government Bond Fund will invest in obligations issued or guaranteed by
the U.S. Government, its agencies and instrumentalities, and options and futures
thereon, as described in the Prospectus. The securities in which the Government
Bond Fund may invest include, but are not limited to, U.S. Treasury bills,
notes, and bonds, and obligations of the following: Banks for Cooperatives, the
Commodity Credit Corporation, the Federal Deposit Insurance Corporation, Federal
Farm Credit Banks, the Federal Financing Bank, Federal National Mortgage
Association, the General Insurance Fund, Government National Mortgage
Association, Government Services Administration (GSA Public Building Trust
Participation Certificates), the Production Credit Association, the Student Loan
Marketing Association, the Tennessee Valley Authority, and the U.S. Postal
Service.
- --------------------------
Allmerica Investment Trust 4
<PAGE>
The Government Bond Fund may invest in mortgage-backed securities
(including pass-through securities) and participation certificates) of the
Government National Mortgage Association ("Ginnie Mae"), the Federal Home Loan
Mortgage Corporation ("Freddie Mac"), and the Federal National Mortgage
Association ("Fannie Mae").
Ginnie Mae certificates are mortgage-backed securities representing part
ownership of a pool of mortgage loans. The mortgage loans are issued by lenders
such as mortgage bankers, commercial banks, and savings and loan associations,
and are either insured by the Federal Housing Administration or guaranteed by
the Veterans Administration. After approval of the pool by Ginnie Mae,
certificates in the pool are offered to investors by securities dealers. Once
the pool has been approved by Ginnie Mae, the timely payment of interest and
principal on the certificates is guaranteed by the full faith and credit of the
U.S. Government. The certificates are "pass through" securities because a pro
rata share of regular interest and principal payments, as well as unscheduled
early prepayments, on the underlying mortgage pool is passed through monthly to
the Fund.
Freddie Mac, a corporate instrumentality of the U.S. Government created by
Congress to increase the availability of mortgage credit for residential
housing, issues participation certificates representing undivided interests in
Freddie Mac's mortgage portfolio. While Freddie Mac guarantees the timely
payment of interest and ultimate collection of the principal of its
participation certificates, the participation certificates are not backed by the
full faith and credit of the U.S. Government. The "pass-through" characteristics
of Freddie Mac participation certificates are similar to Ginnie Mae
certificates, but Freddie Mac certificates differ from Ginnie Mae certificates
in that Freddie Mac mortgages are primarily conventional residential mortgages
rather than mortgages issued or guaranteed by a federal agency or
instrumentality.
Fannie Mae is a federally chartered corporation owned by private
stockholders. Fannie Mae purchases both conventional and federally insured or
guaranteed residential mortgages form various entities, and packages pools of
such mortgages in the form of pass-through certificates. Fannie Mae guarantees
the timely payment of principal and interest. Fannie Mae is authorized to borrow
from the U.S. Treasury to meet its obligations, but the certificates are not
backed by the full faith and credit of the U.S. Government.
The effective maturity of a mortgage-backed security may be shortened by
unscheduled or early payments of principal and interest on the underlying
mortgages, which may affect their effective yield. When the Government Bond Fund
receives the monthly "pass-through" payments (which may include unscheduled
prepayments of principal) it may be able to invest the payments only at a lower
rate of interest. During periods of declining interest rates, such securities
therefore may be less effective as a means of "locking in" attractive long-term
interest rates and may have less potential for appreciation than conventional
bonds with comparable stated maturities.
INVESTMENT RESTRICTIONS
The following is a description of certain restrictions on investments of
the Funds (in addition to those described in the Prospectus). The investment
restrictions numbered 1 through 7 are fundamental and may not be changed without
the approval of a majority in interest of the shareholders of that Fund. The
other investment restrictions are not deemed fundamental and may be changed by
the Trustees. The following investment restrictions apply to each Fund, except
as noted:
1. The Fund will not issue "senior securities" as defined in Section
18(g) of the Investment Company Act of 1940.
2. The fund will not borrow money, except for temporary purposes where
the aggregate amount borrowed does not exceed 5% of the value of the Fund's
total assets at the time such borrowing is made. In general, a borrowing shall
be regarded as being for temporary purposes if it is repaid within 60 days and
is not extended or renewed.
3. The Fund will not act as an underwriter except to the extent that,
in connection with the disposition of portfolio securities, it may be deemed to
be an underwriter under certain federal securities laws. The Fund (except for
the Select Aggressive Growth Fund, Select Capital Appreciation Fund, Small-Mid
Cap Value Fund, Select International Equity Fund, Select Growth Fund, Select
Growth and Income Fund, and Select Income Fund) will not invest in securities
which are restricted as to disposition under federal securities laws.
4. The Fund will not buy or sell real estate or interest in real
estate, although it may purchase and sell (a) securities which are secured by
real estate and (b) securities of companies which invest or deal in real estate.
--------------------------
5 Allmerica Investment Trust
<PAGE>
5. The Fund will not engage in the purchase and sale of commodities or
commodity contracts, except financial futures (including securities index
futures) contracts and related options and in the case of the Select Capital
Appreciation Fund, futures contracts on foreign currencies and related options.
The Money Market Fund will not engage in transactions in financial futures or
related options.
6. The Fund may make loans to other persons only through repurchase
agreements and securities lending. For purposes of this paragraph, the purchase
of an issue of publicly distributed bonds, debentures, or other debt securities,
whether or not the purchase was made upon the original issue of the securities,
is not to be considered the making of a loan by the Fund.
7. The Fund will not purchase securities on margin but may obtain such
short-term credits as are necessary for clearance transactions, and (except for
the Money Market Fund) may make margin payments in connection with financial
futures (including securities index futures) contracts, and options on such
future contracts and in the case of the Select Capital Appreciation Fund,
futures contracts on foreign currencies and related options. The Fund will not
participate on a joint or joint and several basis in any trading account in
securities or effect a short sale of securities.
8. The Fund does not intend to invest in companies for the purpose of
exercising control or management.
9. The Fund may invest in the securities of one or more other investment
companies. No such investment shall be made if as a result thereof the Fund
would own more than 3% of the total outstanding voting stock of any one
investment company, or more than 5% of the Fund's assets would be invested in
any one investment company, or more than a total of 10% of the Fund's assets
would be invested in investment company securities. Purchase of such securities
will be made only in the open market where no commission or profit to a sponsor
or dealer results from such purchase other than the customary broker's
commission or as part of a merger, consolidation, or plan of reorganization.
10. The Fund intends to purchase securities for investment and not to
purchase and sell them for trading purposes, except that the Select Capital
Appreciation Fund and the Government Bond Fund may engage in short term trading
of U.S. Government securities.
INVESTMENT TECHNIQUES
In managing its portfolios of investments, the Trust may make use of the
following investment techniques:
Securities Lending
Each Fund may loan its portfolio securities to broker-dealers pursuant to
agreements requiring that the loans be continuously secured by cash, cash
equivalents or securities issued or guaranteed by the United States government
or its agencies, or any combination of cash, cash equivalents and such
securities as collateral equal at all times to at least the market value of the
securities loaned. Such loans are not made if, as a result, the aggregate of all
outstanding loans would exceed 30% of the value of the Fund's total assets taken
at current value. The Fund continues to receive interest or dividends on the
securities loaned, and simultaneously earns interest on the investment of the
loan collateral in U.S. Treasury securities, certificates of deposit or other
high-grade, short-term obligations or interest-bearing cash equivalents or
receives a fee from the borrower. Although voting rights, or rights to consent,
attendant to securities lent pass to the borrower, such loans may be called
at any time and may be called so that the securitites may be voted by the Fund
if a material event affecting the investment is to occur. There may be risks of
delay in recovery of the securities or even loss of rights in the collateral
should the borrower of the securities fail financially. However, loans are made
only to firms deemed by the Fund's sub-adviser to be of good standing, and when,
in the judgment of the Fund's sub-adviser, the consideration which can be earned
currently from such securities loans justifies the attendant risk.
Foreign Securities
The Select Aggressive Growth Fund, Select Capital Appreciation Fund, Small-Mid
Cap Value Fund, Select International Equity Fund, Select Growth Fund, Growth
Fund, Equity Index Fund, Select Growth and Income Fund, and Select Income Fund
may purchase foreign securities. The Investment Grade Income Fund may not
invest in foreign securities other than
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Allmerica Investment Trust
6
<PAGE>
the obligations of the Government of Canada and political subdivisions thereof.
Securities of foreign issuers, particularly non-governmental issuers, involve
risks which are not associated ordinarily with investing in domestic issuers.
These risks include changes in currency exchange rates and currency exchange
control regulations. In addition, investments in foreign countries could be
affected by other factors generally not thought to be present in the United
States, including the unavailability of financial information or the difficulty
of interpreting financial information prepared under foreign accounting
standards, less liquidity and more volatility in foreign markets, the
possibility of expropriation, the possibility of heavy taxation, the impact of
political, social or diplomatic developments, limitations on the removal of
funds or other assets of a Fund, difficulties in evoking legal process abroad
and enforcing contractual obligations, and the difficulty of assessing economic
trends in foreign countries.
Forward Commitments
The Select Capital Appreciation Fund, Select Income Fund, Investment Grade
Income Fund, and Government Bond Fund may enter into contracts to purchase
securities for a fixed price at a specified future date beyond customary
settlement time ("forward commitments"). If the Funds do so, they will maintain
cash or other liquid obligations having a value in an amount at all times
sufficient to meet the purchase price. Forward commitments involve a risk of
loss if the value of the security to be purchased declines prior to the
settlement date. Although the Funds generally will enter into forward
commitments with the intention of acquiring securities for their portfolio, they
may dispose of a commitment prior to settlement if their Sub-Adviser deems it
appropriate to do so. The Funds may realize short-term gains or losses upon the
sale of forward commitments. The Sub-Adviser will monitor the creditworthiness
of the parties to such forward commitments.
When-Issued Securities
Each Fund from time to time may purchase securities on a "when-issued" basis.
Debt securities and municipal obligations often are issued on this basis. The
yield of such securities is fixed at the time a commitment to purchase is made,
with actual payment and delivery of the security generally taking place 15 to 45
days later. During the period between purchase and settlement, typically no
payment is made by a Fund and no interest accrues to the Fund. The market value
of when-issued securities may be more or less than the purchase price payable at
settlement date. The Fund will establish a segregated account with the Custodian
in which it will maintain cash or liquid securities at least equal to
commitments for when-issued securities.
Repurchase Agreements and Reverse Repurchase Agreements
Each Fund may enter into repurchase agreements. Under a repurchase agreement, a
Fund may purchase an obligation of or guaranteed by the United States
Government, its agents or instrumentalities, with an agreement that the seller
will repurchase the obligation at an agreed upon price and date. The repurchase
price reflects an agreed-upon interest rate which is unrelated to the coupon
rate on the purchased obligation. Repurchase agreements usually are for short
periods, such as under one week, but may be as long as thirty days. No
repurchase agreement will be effected if, as a result, more than 30% of a Fund's
total assets taken at current value will be invested in repurchase agreements.
No more than 15% (10% for the Money Market Fund) of a Fund's total assets taken
at current value will be invested in repurchase agreements extending for more
than seven days and in other securities which are not readily marketable.
If a seller defaults upon the obligation to repurchase, the Funds may incur a
loss if the value of the purchased obligation (collateral) declines, and may
incur disposition costs in liquidating the collateral. If bankruptcy proceedings
are commenced with respect to a seller, realization upon the collateral by the
Funds may be delayed or limited.
Prior to entering into a repurchase agreement, the Fund's Sub-Adviser evaluates
the creditworthiness of entities with which the Fund proposes to enter into the
repurchase agreement. The Trustees have established guidelines and standards of
review for the evaluation of creditworthiness by the Funds' Sub-Advisers and
monitor such Sub-Advisers' actions with respect to repurchase transactions.
The Select Capital Appreciation Fund also may enter into reverse repurchase
agreements. In a reverse repurchase agreement, a fund sells a portfolio security
to another party, such as a bank or broker-dealer, in return for cash and agrees
to repurchase the instrument at a particular price and at a future date. While a
reverse repurchase agreement is outstanding, the Fund will maintain cash and
appropriate liquid assets in a segregated custodial account to cover its
obligation under the reverse repurchase agreement. The Select Capital
Appreciation Fund will enter into reverse repurchase agreements only with
parties that its sub-adviser deems creditworthy.
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7 Allmerica Investment Trust
<PAGE>
Writing Covered Options
Each Fund other than the Small-Mid Cap Value Fund and Money Market Fund may
write call options and put options on securities which the Fund owns as its
Sub-Adviser shall determine to be appropriate and to the extent permitted by
applicable law. A call option gives the purchaser of the option the right to buy
and a writer the obligation to sell the underlying security at the exercise
price at any time prior to the expiration of the option, regardless of the
market price of the security during the option period. A premium is paid to the
writer as the consideration for undertaking the obligations under the option
contract. The writer forgoes the opportunity to profit from an increase in the
market price of the underlying security above the exercise price except insofar
as the premium represents such a profit.
As the writer of a call option, a Fund receives a premium for undertaking the
obligation to sell the underlying security at a fixed price during the option
period if the option is exercised. So long as the Fund remains obligated as the
writer of a call, it forgoes the opportunity to profit from increases in the
market price of the underlying security above the exercise price of the option,
except insofar as the premium represents such a profit, and retains the risk of
loss should the value of the security decline. The Fund also may enter into
"closing purchase transactions" in order to terminate its obligation as the
writer of a call option prior to the expiration of the option. There is no
assurance that a Fund will be able to effect such transactions at any particular
time or at any acceptable price.
The writer of a put option is obligated to purchase specified securities from
the option holder at a specified price at any time before the expiration date of
the option. The purpose of writing such options is to generate additional income
for the Fund, but the Fund accepts the risk that it will be required to purchase
the underlying securities at a price in excess of the securities' market value
at the time of purchase.
Option transactions may increase a Fund's transaction costs and may increase
the portfolio turnover rate, depending on how many options written by the Fund
are exercised in a particular year.
Purchasing Options
Each Fund other than the Small-Mid Cap Value Fund and Money Market Fund may
purchase put and call options to the extent permitted by applicable law. A Fund
will not purchase put or call options if after such purchase more than 5% of its
net assets, as measured by the aggregate of the premiums paid for all such
options held by the Fund, would be so invested. A Fund would also be able to
enter into closing sale transactions in order to realize gains or minimize
losses on exchange traded options purchased by the Fund.
A Fund normally would purchase call options in anticipation of an increase in
the market value of securities. The purchase of a call option entitles the Fund,
in return for the premium paid, to purchase specified securities at a specified
price during the option period. If the value of such securities exceeded the sum
of the exercise price, the premium paid, and transaction costs during the option
period, the Fund would ordinarily realize a gain, if not, the Fund would realize
a loss.
A Fund normally would purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or securities of
the type in which it may invest. The purchase of a put option would entitle the
Fund, in exchange for the premium paid, to sell specified securities at a
specified price during the option period. Gains or losses on the purchase of put
options would tend to be offset by countervailing changes in the value of
underlying portfolio securities. A Fund ordinarily would realize a gain if,
during the option period, the value of the underlying securities decreased below
the exercise price sufficiently to cover the premium and transaction costs;
otherwise, the Fund would realize a loss on the purchase of the put option.
There is no assurance that a liquid secondary market on an options exchange
will exist for a particular option or at a particular time. The hours of trading
for options on options exchanges may not conform to the hours during which the
underlying securities are traded. To the extent that the option markets close
before the markets for the underlying securities, significant price and rate
movements can take place in the underlying securities markets that cannot be
reflected in the option markets. In addition, the purchase of options is a
highly specialized activity which depends in part on the Sub-Adviser's ability
to predict future price fluctuations and the degree of correlation between the
options and securities markets. A Fund pays brokerage commission or spread in
connection with its options transactions as well as for purchases and sales of
the underlying securities.
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Allmerica Investment Trust 8
<PAGE>
Financial Futures Contracts and Related Options
Each Fund (other than the Small-Mid Cap Value Fund and Money Market Fund) may
invest in transactions in financial futures contracts and related options for
hedging purposes. In addition, the Select Capital Appreciation Fund may utilize
futures contracts on foreign currencies and related options. Through certain
hedging activities involving such futures contracts and related options, it is
possible to reduce the effects of fluctuations in interest rates and the market
prices of securities which may be quite volatile. Hedging is a means of
transferring a risk which an investor does not desire to assume during an
uncertain interest rate or securities market environment to another investor who
is willing to assume that risk.
The Select Capital Appreciation Fund may buy and write options on foreign
currencies in a manner similar to that in which futures or forward contracts on
foreign currencies will be utilized. For example, a decline in the U.S. dollar
value of a foreign currency in which portfolio securities are denominated will
reduce the U.S. dollar value of such securities, even if their value in the
foreign currency remains constant. In order to protect against such diminutions
in the value of portfolio securities, the Select Capital Appreciation Fund may
buy put options on the foreign currency. If the value of the currency declines,
the Fund will have the right to sell such currency for a fixed amount in U.S.
dollars and will offset, in whole or in part, the adverse effect on its
portfolio.
Conversely, when a rise in the U.S. dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, the Select Capital Appreciation Fund may buy call
options thereon. The purchase of such options could offset, at least partially,
the effects of the adverse movements in exchange rates. As in the case of other
types of options, however, the benefit to the Fund from purchases of foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, if currency exchange rates do not move in the
direction or to the extent desired, the Select Capital Appreciation Fund could
sustain losses on transactions in foreign currency options that would require
such Fund to forgo a portion or all of the benefits of advantageous changes in
those rates.
The Select Capital Appreciation Fund also may write options on foreign
currencies. For example, to hedge against a potential decline in the U.S. dollar
value of foreign currency denominated securities due to adverse flucuations in
exchange rates, the Fund could write a call option on the relevent currency
instead of purchasing a put option. If the expected decline occurs, the option
will most likely not be exercised and the diminution in value of portfolio
securities will be offset by the amount of the premium received.
Similarly, instead of purchasing a call option to hedge against a potential
increase in the U.S. dollar cost of securities to be acquired, the Select
Capital Appreciation Fund could write a put option on the relevent currency
which, if rates move in the manner projected, will expire unexercised and allow
the Fund to hedge the increased cost of up to the amount of the premium. As in
the case of other types of options, however, the writing of a foreign currency
option will constitute only a partial hedge up to the amount of the premium. If
exchange rates do not move in the expected direction, the option may be
exercised and the Fund would be required to buy or sell the underlying currency
at a loss which may not be offset by the amount of the premium. Through the
writing of options on foreign currencies, the Select Capital Appreciation Fund
also may lose all or a portion of the benefits which might otherwise have been
obtained from favorable movements in exchange rates.
The Select Capital Appreciation Fund may write covered call options on foreign
currencies. A call option written on a foreign currency by the Fund is "covered"
if the Fund owns the underlying foreign currency covered by the call or has an
absolute and immediate right to acquire that foreign currency without additional
cash consideration (or for additional cash consideration held in a segregated
account by the Fund's custodian) upon conversion or exchange of other foreign
currency held in its portfolio. A call option also is covered if the Fund has a
call on the same foreign currency and in the same principal amount as the call
written if the exercise price of the call held (i) is equal to or less than the
exercise price of the call written or (ii) is greater than the exercise price of
the call written, if the difference is maintained by the Fund in cash or other
liquid assets in a segregated account with the Fund's custodian.
The Select Capital Appreciation Fund also may write call options on foreign
currencies for cross-hedging purposes that would not be deemed to be covered. A
call option on a foreign currency is for cross-hedging purposes if it is not
covered but is designed to provide a hedge against a decline due to an adverse
change in the exchange rate in the U.S. dollar value of a security that the
Fund owns or has the right to acquire and that is denominated in the currency
underlying option. In such circumstances, the Select Capital Appreciation Fund
collateralized the option by segregating cash or other liquid
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9 Allmerica Investment Trust
<PAGE>
assets in an amount not less than the value of the underlying foreign currency
in U.S. dollars marked-to-market daily. The Select Capital Appreciation Fund may
invest without limitation in foreign currency options.
General Information
A futures contract on a security is a standardized agreement under which each
party is entitled and obligated either to make or to accept delivery, at a
particular time, of securities having a specified face value and rate of return
on foreign currencies. Currently, futures contracts are available on debt and
equity securities and on certain foreign currencies.
Futures contracts are traded on exchanges that are licensed and regulated by
the Commodity Futures Trading Commission ("CFTC"). A futures contract on an
individual security may be deemed to be a commodities contract. A Fund engaging
in a futures transaction initially will be required to deposit and maintain with
its Custodian, in the name of its brokers, an amount of cash or U.S. Treasury
bills equal to a small percentage (generally less than 5%) of the contract
amount to guarantee performance of its obligations. This amount is known as
"initial margin." Margin in a futures transaction is different from margin in a
securities transaction, in that financial futures initial margin does not
involve the borrowing of funds to finance the transactions. Unlike securities
margin, initial margin in a futures transaction is in the nature of a
performance bond or good faith deposit on the contract which is returned to the
fund upon termination of the financial future, assuming all contractual
obligations have been satisfied. As the price of the underlying security
fluctuates, making the position in the financial futures more or less valuable,
subsequent payments called "maintenance margin" or "variation margin" are made
to and from the broker on a daily basis. This process is called "marking to
market."
The purchase and sale of financial futures is for the purpose of hedging
against changes in securities prices or interest rates. Hedging transaction
serve as a substitute for transactions in the underlying securities and can
effectively reduce investment risk. When prices are expected to rise, a fund,
through the purchase of futures contracts, can attempt to secure better prices
than might be later available in the stock market when it anticipates effecting
purchases.
Similarly, when interest rates are expected to increase, a fund can seek to
offset a decline in the value of its debt securities through the sale of futures
contracts.
Options on Financial Futures
The Funds other than the Small-Mid Cap Value Fund and Money Market Fund may use
options on futures contracts in connection with hedging strategies. The purchase
of put options on futures contracts is a means of hedging the Fund's portfolio
against the risk of declining prices. The purchase of a call option on a futures
contract represents a means of hedging against a market advance when a Fund is
not invested fully. Depending on the pricing of the option compared with either
the futures contract upon which it is based or upon the price of the underlying
securities, the option may or may not be less risky than ownership of the
futures contract or underlying securities.
The writing of a call option on a futures contract may constitute a partial
hedge against declining prices of the securities or currencies which are
deliverable upon exercise of the futures contract. If the futures price at
expiration is below the exercise price, a Fund will retain the full amount of
the option premium, which provides a partial hedge against any decline that may
have occurred in the Fund's holding of securities or currencies.
The writing of a put option on a futures contract is analogous to the purchase
of a futures contract. If the option is exercised, the net cost to the Fund of
the securities or currencies acquired by it will be reduced by the amount of the
option premium received. If, however, market prices have declined, the Fund's
purchase price upon exercise may be greater than the price at which the
securities or currencies might be purchased in the cash market.
Limitations on Purchase and Sale of Futures and Related Options
A Fund generally will engage in transactions in futures contracts or related
options only as a hedge against changes in the values of securities or
currencies held in a Fund's portfolio or which it intends to purchase, or to a
limited extent to enhance return. A Fund may not purchase or sell a futures
contract for non-hedging purposes if immediately thereafter the sum of the
amount of margin deposits and amount of variation margins paid from time to time
on the Fund's existing futures and related options positions and premiums paid
for related options would exceed 5% of the market value of the Fund's
total assets. In instances involving the purchase of futures contracts or call
options thereon or the writing of put options thereon by a Fund, an amount of
cash and cash equivalents, equal to the market value of the futures contracts
and related
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Allmerica Investment Trust 10
<PAGE>
options (less any related margin deposits), will be deposited in a segregated
account with its custodian in the name of the broker to collateralize the
position, and thereby insure that the use of such futures contracts and options
is unleveraged.
The extent to which a Fund may enter into futures and options transactions may
be limited by the Internal Revenue Code's requirements for qualification as a
regulated investment company. Such qualification requires that the Fund limit to
30% the portion of its gross income which is derived from the sale or other
dispositions of investments held (or considered to have been held under the
Internal Revenue rules) for less than three months.
In implementing a Fund's overall risk management strategy, it is possible that
its Sub-Adviser will choose not to engage in any futures transactions or that
appropriate futures contracts or related options may not be available. A Fund
will engage in futures transactions only for appropriate hedging or risk
management purposes. A Fund will not enter into any particular futures
transaction unless its Sub-Adviser determines that the particular transaction
demonstrates an appropriate correlation with the Fund's investment objectives
and portfolio securities.
Risk of Transactions in Futures
The sale and purchase of futures contracts is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions. There are several risks in
connection with the use of financial futures by a Fund as a hedging device.
Successful use of financial futures by a Fund is subject to its Sub-Adviser's
ability to predict movements in the direction of interest rates or securities
prices and to assess other factors affecting markets for securities. For
example, a Fund may hedge against the possibility of an increase in interest
rates which would affect adversely the prices of debt securities held in its
portfolio. If prices of the debt securities increase instead, the Fund may lose
part or all of the benefit of the increased value of the hedged debt securities
because it may have offseting losses in the futures positions. In addition, in
this situation, if the Fund has insufficient cash, it may have to sell
securities to meet the daily maintenance margin requirements. These sales may
be, but will not necessarily be, at increased prices to reflect the rising
market. The Fund may have to sell securities at a time when it may be
disadvantageous to do so.
Another risk arises because of the imperfect correlation between movements in
the price of the financial future and movements in the price of the securities
or currencies which are the subject of the hedge. First of all, the hours of
trading for futures contracts may not conform to the hours during which the
underlying assets are traded. To the extent that the futures markets close
before the markets for the underlying assets, significant price and rate
movements can take place in the underlying asset's market that cannot be
reflected in the futures markets. But even during identical trading hours, the
price of the future may move more than or less than the price of the assets
being hedged. While a hedge will not be fully effective if the price of the
future moves less that the price of the hedged assets, if the price of the
hedged assets has moved in an unfavorable direction, the Fund would be in a
better position than if it had not hedged at all. On the other hand, if the
price of the hedged assets has moved in a favorable direction, this advantage
may be offset partially by the price movement of the futures contract. If the
price of the futures moves more than the price of the asset, the Fund will
experience either a loss or a gain on the futures contract which will not be
completely offset by movements in the prices of the assets which are the subject
of the hedge.
In addition to the possibility that there may be an imperfect correlation at
all, between movements in the futures and the portion of the portfolio being
hedged, the market prices of the futures may be affected by certain other
factors. First, all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting additional margin
deposit requirements, investors may close futures through offseting transaction,
which could distort the normal relationship between securities or currencies and
futures markets. SEcondly, from the point of view of speculators, the deposit
requirements in the futures market are less onerous than margin requirements in
the securities market. Therefore, increased participation by speculators in the
futures market may also cause temporary price or currency distortions. Due to
the possibility of price distortion in the futures market and because of the
imperfect correlation between movements in the prices of securities or
currencies and movements in the prices of futures, a correct forecast of
interest rate trends or market price movements by the Sub-Adviser still may not
result in a successful hedging transaction over a short time frame.
Positions in futures contracts may be closed out only on an exchange or
board of trade which provides a secondary market for such futures. Although the
Funds intend to purchase or sell futures only on exchanges or boards of trade
where there appears to be an active secondary market, there is no assurance that
a liquid secondary market on an exchange or
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11 AllAmerica Investment Trust
<PAGE>
board of trade will exist for any particular contract or at any particular time.
Thus, it may not be possible to close a futures position, and, in the event of
adverse price movements, the Fund would continue to be required to make daily
cash payments of maintenance margin. However, in the event futures have been
used to hedge portfolio positions, such underlying assets will not be sold until
the futures can be terminated. In such circumstances, an increase in the price
of the underlying assets, if any, may offset partially or completely losses on
the future.
Risks of Transactions in Options on Futures
There are several special risks relating to options on futures. First, the
ability to establish and close out positions in options is subject to the
maintenance of a liquid secondary market. A Fund will not purchase options on
futures on any exchange or board of trade unless, in the opinion of its
Sub-Adviser, the market for such options is developed sufficiently so that the
risks in connection with options on futures transactions are not greater than
the risks in connection with futures transactions. Compared with the purchase or
sale of futures, the purchase of call or put options on futures involves less
potential risk to the Fund because the maximum amount at risk is the premium
paid for the options (plus transaction costs). However, there may be
circumstances when the purchase of a call or put option on futures would result
in a loss to the Fund when the purchase or sale of a future would not, such as
when there is no movement in the price of the underlying securities. The writing
of an option on a futures contract involves risks similar to those risks
relating to the sale of futures contracts, as described above under "Risks of
Transactions in Futures."
An option position may be closed out only on an exchange or board of trade
which provides a secondary market for an option of the same series. Although a
Fund generally will purchase only those options for which there appears to be an
active secondary market, there is no assurance that a liquid secondary market
will exist for any particular option or at any particular time. It might not be
possible to effect closing transactions in particular options, with the result
that the Fund would have to exercise its options in order to realize any profit
and would incur transaction costs upon the sale of financial futures pursuant to
the exercise of put options.
Because of the risks and the transaction costs associated with hedging
activities, there can be no assurance that a Fund's portfolio will perform as
well as or better than a comparable fund that does not invest in futures
contracts or related options.
Forward Contracts on Foreign Currencies
A forward contract is an agreement between two parties in which one party is
obligated to deliver a stated amount of a stated asset at a specified time in
the future and the other party is obligated to pay a specified invoice amount
for the assets at the time of delivery. The Select Capital Appreciation Fund may
enter into forward contracts to purchase and sell government securities, foreign
currencies, or other financial instruments. Forward contracts generally are
traded in an interbank market conducted directly between traders (usually large
commercial banks) and their customers. Unlike futures contracts which are
standardized contracts, forward contracts can be drawn specifically to meet the
needs of the parties that enter into them. The parties to a forward contract may
agree to offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated exchange. The following
discussion summarizes the Select Capital Appreciation Fund's principal uses of
forward currency exchange contracts ("forward currency contracts"). The Fund may
enter into a forward currency contract with the stated contract value of up to
the value of the Fund's assets. A forward currency contract is an obligation to
buy or sell an amount of a specified currency for an agreed price (which may be
in U.S. dollars or a foreign currency). The Select Capital Appreciation Fund
will exchange foreign currency for U.S. dollars and for other foreign currencies
in the normal course of business and may buy and sell currencies through forward
currency contracts in order to fix a price for securities it has agreed to buy
or sell ("transaction hedge"). The Select Capital Appreciation Fund also may
hedge some or all of its investments denominated in foreign currency against a
decline in the value of that currency relative to the U.S. dollar by entering
into forward currency contracts to sell an amount of that currency (or a proxy
currency whose performance is expected to replicate or exceed the performance of
that currency relative to the U.S. dollar) approximating the value of some or
all of its portfolio securities denominated in that currency ("position hedge")
or by participating in options or futures contracts with respect to the
currency. The Fund also may enter into a forward currency contract with respect
to a currency where the Fund is considering the purchase or sale of investments
denominated in that currency but has not yet selected the specified investments
("anticipatory hedge").
In any of these circumstances, the Select Capital Appreciation Fund may enter
alternatively into a foreign currency contract to purchase or sell one foreign
currency for a second currency that is expected to perform more favorably
relative to the U.S. dollar if its Sub-Adviser believes there is a reasonable
degree of correlation between movements in the two currencies ("cross-hedge").
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Allmerica Investment Trust 12
<PAGE>
These types of hedges minimize the effect of currency appreciation as well as
depreciation, but do not eliminate fluctuations in the underlying U.S. dollar
equivalent value of the proceeds of or rates of return on such Fund's foreign
currency denominated portfolio securities. The matching of the increase in value
of a forward contract and the decline in the U.S. dollar equivalent value of the
foreign currency demoninated asset that is the subject of the hedge generally
will not be precise. Shifting the Fund's currency exposure from one foreign
currency to another removes the Fund's opportunity to profit from increases in
the value of the original currency and involves a risk of increased losses to
the Fund if its Sub-Adviser's projection of future exchange rates is inaccurate.
Proxy hedges and cross-hedges may result in losses if the currency used to hedge
does not perform similarly to the currency in which hedge securities are
denominated. Unforeseen changes in currency prices may result in poorer overall
performance for the Select Capital Appreciation Fund than if it had not entered
into such contracts.
The Select Capital Appreciation Fund will cover outstanding forward currency
contracts by maintaining liquid portfolio securities denominated in or whose
value is tied to the currency underlying the forward contract or the currency
being hedged. To the extent that the Select Capital Appreciation Fund is not
able to cover its forward currency positions with underlying portfolio
securities, the Fund's custodian will segregate cash or liquid assets having a
value equal to the aggregate amount of its commitments under forward contracts
entered into with respect to position hedges, cross-hedges, and anticipatory
hedges. If the value of the securities used to cover a position or the value of
segregated assets declines, the Select Capital Appreciation Fund will find
alternative cover or segregate additional cash or liquid assets on a daily basis
so that the value of the covered segregated assets will be equal to the amount
of the Fund's commitments with respect to such contracts. As an alternative to
segregating assets, the Select Capital Appreciation Fund may buy call options
permitting it to buy the amount of foreign currency being hedged by a forward
sale contract or the Fund may buy put options permitting it to sell the amount
of foreign currency subject to a forward buy contract.
While forward contracts currently are not regulated by the CFTC, the CFTC may
in the future assert authority to regulate forward contracts. In such event, the
Select Capital Appreciation Fund's ability to utilize forward contracts may be
restricted. In addition, the Select Capital Appreciation Fund may not always be
able to enter into forward contracts at attractive prices and may be limited in
its ability to use these contracts to hedge portfolio assets.
Swap and Swap-Related Products
The Select Capital Appreciation Fund may enter into interest rate swaps, caps,
and floors on either an asset-based or liability-based basis, depending upon
whether it is hedging its assets or its liabilities, and will usually enter into
interest rate swaps on a net basis (i.e., the two payment streams are netted
out with the Fund receiving or paying, as the case may be, only the net amount
of the two payments). Interest rate swaps involve the exchange by the Fund with
another party of their respective commitments to pay or receive interest; for
example, an exchange of floating rate payments for fixed rate payments with
respect to a notional amount of principal. A currency swap is an agreement to
exchange cash flows on a notional amount of two or more currencies based on the
relative value differential among them. An index swap is an agreement to swap
cash flows on a notional amount based on changes in the values of the reference
indices. The purchase of a cap entitles the purchaser to receive payments on a
notional principal amount from the party selling such cap to the extent that a
specified index exceeds a predetermined interest rate or amount. The purchase
of a floor entitles the purchaser to receive payments on a notional principal
amount from the party selling such floor to the extent that a specified index
falls below a predetermined interest rate or amount.
The net amount of the excess, if any, of the Fund's obligations over its
entitlement with respect to each interest rate swap will be calculated on a
daily basis and an amount of cash or other liquid assets having an aggregate net
asset value at least equal to the accrued excess will be maintained in a
segregated account by the Fund's custodian. If the Fund enters into an interest
rate swap on other than a net basis, it will maintain a segregated account in
the full amount accrued on a daily basis of its obligations with respect to the
swap. The Fund will not enter into any interest rate swap, cap, or floor
transaction unless the unsecured senior debt or the claims-paying ability of the
other party thereto is rated in one of the three highest rating categories of at
least one nationally recognized statistical rating organization at the time of
entering into such transaction. The Sub-Adviser will monitor the
creditworthiness of all counterparties on an ongoing basis. If there is a
default by the other party to such a transaction, the Fund will have contractual
remedies pursuant to the agreement related to the transaction.
The swap market has grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Caps and floors are more recent innovations for which
standardized documentation has not yet been
--------------------------
Allmerica Investment Trust
13
<PAGE>
developed and, accordingly, they are less liquid than swaps. To the extent the
Fund sells (i.e., writes) caps and floors, it will segregate cash or high-grade
liquid assets having an aggregate net asset value at least equal to the full
amount on a daily basis of its obligations with respect to any caps or floors.
There is no limit on the amount of interest rate swap transactions that may be
entered into by the Fund. These transactions may in some instances involve the
delivery of securities or other underlying assets to the Fund or its
counterparty to collateralize obligations under the swap. Under the
documentation currently used in those markets, the risk of loss with respect to
interest rates swaps is limited to the net amount of the payments that the Fund
is obligated contractually to make. If the other party to an interest rate swap
that is not collateralized defaults, the Fund would risk the loss of the net
amount of the payments that it contractually is entitled to receive. The Fund
may buy and sell (i.e., write) caps and floors without limitation, subject to
the segregation requirement described above.
Additional Risks of Options on Foreign Currencies, Forward Contracts, and
Foreign Instruments
Unlike transactions entered into by the Funds in futures contracts, options on
foreign currencies and forward contracts are not traded on contract markets
regulated by the CFTC or (with the exception of certain foreign currency
options) by the SEC. To the contrary, such instruments are traded through
financial institutions acting as market-makers, although foreign currency
options also are traded on certain exchanges, such as the Philadelphia Stock
Exchange and the Chicago Board Options Exchange, subject to SEC regulation.
Similarly, options on currencies may be traded over-the-counter. In an
over-the-counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there are no daily
price fluctuation limits, and adverse market movements therefore could continue
to an unlimited extent over a period of time. Although the buyer of an option
cannot lose more than the amount of the premium plus related transaction costs,
this entire amount could be lost. Moreover, an option writer and a buyer or
seller of futures or forward contracts could lose amounts substantially in
excess of any premium received or initial margin or collateral posted due to the
potential additional margin and collateral requirements associated with such
positions.
Options on foreign currencies traded on exchanges are within the jurisdiction
of the SEC, as other securities traded on such exchanges. As a result, many of
the protections provided to traders on organized exchanges will be available
with respect to such transactions. In particular, all foreign currency option
positions entered into on an exchange are cleared and guaranteed by the Office
of the Comptroller of the Currency ("OCC"), thereby reducing the risk of
counterparty default. Further, a liquid secondary market in options traded on an
exchange may be more readily available than in the over-the-counter market,
potentially permitting a Fund to liquidate open positions at a profit prior to
exercise or expiration, or to limit losses in the event of adverse market
movements.
The purchase and sale of exchange-traded foreign currency options, however, is
subject to the risks of the availability of a liquid secondary market described
above, as well as the risks regarding adverse market movements, margining of
options written, the nature of the foreign currency market, possible
intervention by governmental authorities and the effects of other political and
economic events. In addition, exchange-traded options on foreign currencies
involve certain risks not presented by the over-the-counter market. For example,
exercise and settlement of such options must be made exclusively through the OCC
which has established banking relationships in applicable foreign countries for
this purpose. As a result, the OCC, if it determines that foreign government
restrictions or taxes would prevent the orderly settlement of foreign currency
option exercises or would result in undue burdens on the OCC or its clearing
member, may impose special procedures on exercise and settlement, such as
technical changes in the mechanics of delivery, the fixing of dollar settlement
prices, or prohibitions on exercise.
In addition, options on U.S. Government securities, futures contracts, options
on futures contracts, forward contracts, and options on foreign currencies may
be traded on foreign exchanges and over-the-counter in foreign countries. Such
transactions are subject to the risk of governmental actions affecting trading
in or the prices of foreign currencies or securities. The value of such
positions also could be adversely affected by (i) other complex foreign
political and economic factors (ii) lesser availability than in the United
States of data on which to make trading decisions, (iii) delays in a Fund's
ability to act upon economic events occurring in foreign markets during non-
business hours in the United States, (iv) the imposition of different exercise
and settlement terms and procedures and margin requirements from those in the
United States, and (v) low trading volume.
- ---------------------------
Allmerica Investment Trust
14
<PAGE>
PORTFOLIO TURNOVER
The portfolio turnover rate for a Fund is calculated by dividing the lesser
of purchases or sales of portfolio securities by thr Fund for a given year by
the monthly average of the value of the Fund's portfolios securities for that
year. The purchase or sale of all securities whose maturities or expiration
dates at the time of acquisition are less than 12 months and of money market
funds of amounts too small to invest in short-term obligations are not included
in the portfolio turnover rate.
While the rate of portfolio turnover is not a limiting factor when changes
in the portfolio are deemed appropriate, it is anticipated that under normal
circumstances the annual portfolio turnover rate would not exceed 200% with
respect to the Select Capital Appreciation Fund. In any particular year,
however, conditions could result in portfolio activities at a greater rate than
anticipated. In any case, a higher turnover rate does not in and of itself
indicate a variation from the stated investment policy. To a limited extent, the
Select Capital Appreciation Fund may engage in short-term trading. A higher
portfolio turnover rate may involve corresponding greater brokerage commissions
and other transaction costs, which would be borne directly by the Fund, as well
as additional realized gains and/or losses to shareholders. The turnover rates
for the Select Aggressive Growth Fund for the two most recent fiscal years ended
December 31, 1995 and 1996 were 104% and 113%, respectively. The turnover rates
for the Select Capital Appreciation Fund for the period ended December 31, 1995
and the fiscal year ended December 31, 1996 were 98% and 95%, respectively. The
turnover rates for the Small-Mid Cap Value Fund, Select International Equity
Fund, Select Growth Fund, Growth Fund, Equity Index Fund, Select Growth and
Income Fund, Select Income Fund, Investment Grade Income Fund, and Government
Bond Fund for the two most recent fiscal years ended December 31, 1995 and 1996
were 20% and 17%; 18% and 24%; 159% and 51%; 72% and 64%; 12% and 8%; 78% and
112%; 108% and 131%; 108% and 126%; and 112% and 180%, (for explanation, see the
Prospectus), respectively.
PERFORMANCE
The Trust may advertise performance information for the Funds and may compare
performance of the Funds with other investment or relevant indices. The Funds
may also advertise "yield", "total return" and other non-standardized total
return data. For the non-money market funds, "yield," is calculated differently
than for the Money Market Fund. The Money Market Fund may advertise "yield" or
"effective yield," All performance figures are based on historical earnings and
are not intended to indicate future performance. A Fund's share price, yield,
and total return may fluctuate in response to market conditions and other
factors, and the value of Fund shares when redeemed may be more or less than
their original cost.
Yields and total returns quoted for the Funds include the effect of deducting
the Funds' expenses, but may not include charges and expenses attributable to a
particular insurance product. Since shares of the Funds can be purchased only
through a variable annuity or variable life contract, you should review
carefully the prospectus of the insurance product you have chosen for
information on relevant charges and expenses. Including these charges in the
quotations of the Funds' yields and total returns would have the effect of
decreasing performance. Performance information for the insurance product must
always accompany, and be reviewed with, any performance information quoted for
the Funds.
Yields of the Funds Other than the Money Market Fund
The 30-day (or one month) standard yields of the Funds other than the Money
Market Fund are calculated as follows:
YIELD = 2[( a - b + 1)/6/ - 1 )]
------
cd
Where: a = dividends and interest earned by a Fund during the period;
b = expenses accrued for the period (not of reimbursements);
c = average daily number of shares outstanding during the period
entitled to receive dividends; and
d = maximum offering price per share on the last day of the period.
For the purpose of determining net investment income earned during the period
(variable "a" in the formula), dividend income on equity securities held by a
Fund is recognized by accruing 1/360 of the stated dividend rate of the security
each day that the security is in the Fund. Except as noted below, interest
earned on debt obligations held by a Fund is calculated by computing the yield
to maturity of each obligation based on the market value of the obligation
(including actual
--------------------------
15 Allmerica Investment Trust
<PAGE>
accrued interest) at the close of business on the last business day of each
month, or, with respect to obligations purchased during the month, the purchase
price (plus actual accrued interest) and dividing the result by 360 and
multiplying the quotient by the market value of the obligation (including actual
accrued interest) in order to determine the interest income on the obligation
for each day of the subsequent month that the obligation is held by the Fund.
For purposes of this calculation, it is assumed that each month contains 30
days. The maturity of an obligation with a call provision is the next call date
on which the obligation reasonably may be expected to be called or, if none, the
maturity date. With respect to debt obligations purchased at a discount or
premium, the formula generally calls for amortization of the discount or
premium. The amortization schedule will be adjusted monthly to reflect changes
in the market value of such debt obligations. Expenses accrued for the period
(variable "b" in the formula) include all recurring fees charged by a Fund to
all shareholder accounts in proportion to the length of the base period and the
Fund's mean (or median) account size. Undeclared earned income will be
subtracted from the offering price per share (variable "d" in the formula).
Money Market Fund - Yield and Effective Yield
The yield of the Money Market Fund refers to the net income generated by an
investment in the Fund over a stated seven-day period, expressed as an annual
percentage rate. Yield is computed by determining the net change (exclusive of
capital changes) in the value of a hypothetical pre-existing account having a
balance of 1 (one) share at the beginning of a seven-day calendar period,
dividing the net change in account value by the value of the account at the
beginning of the period, and multiplying the return over the seven-day period by
365/7. Thus the income is "annualized:" the amount of income generated by the
investment during the seven-day period is assumed to be generated each week over
a 52-week period and is shown as a percentage of the investment. For purposes
of the calculation, net change in account value reflects the value of additional
shares purchased with dividends from the original share and dividends declared
on both the original share and any additional shares, but does not reflect
realized gains or losses or unrealized appreciation or depreciation.
The effective yield is calculated similarly, but the income earned by an
investment in the Money Market Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of this compounding
effect.
Total Return
The Funds may advertise total return. The total return shows what an
investment in each Fund would have earned over a specific period of time (one,
five, or ten years since commencement of operations, if less) assuming that all
distributions and dividends by the Fund were reinvested, and less all recurring
fees.
From time to time, the Fund may state its total return in advertisements and
investor communications. Total return may be stated for any relevant period as
specified in the advertisement or communication. Any statement of total return
or other performance data on the Fund will be accompanied by information on the
Fund's average annual total return over the most recent four calendar quarters
and the period from the Fund's inception of operations. The Fund also may
advertise aggregate annual total return information over different periods of
time.
A Fund's average annual total return is determined by reference to a
hypothetical $1,000 investment that includes capital appreciation and
depreciation for the stated period, according to the following formula:
P(1+T)n = ERV
Where: P = A hypothetical initial purchase of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of the hypothetical purchase at the
end of the period
Total return quoted in advertising reflects all aspects of the Fund's return,
including the effect of reinvesting dividends and capital gains distributions,
and any change in the Fund's net asset value per share over the period.
Average Annual Returns are calculated by determining the change in value of a
hypothetical investment in the Fund over a stated period, and calculating the
annually compounded percentage rate that would have produced the same result if
the rate of growth or decline in value has been constant over the period.
Average annual returns covering periods of less than one year are calculated by
determining the Fund's total return for the period, extrapolating that return
for a full year, and stating the result as an annual return. Because this method
assumes that performance will remain constant for the entire
- --------------------------
Allmerica Investment Trust 16
<PAGE>
year when in fact it is unlikely that performance will remain constant, average
annual returns for a partial year must be viewed as strictly theoretical
information.
Investors also should be aware that a Fund's performance is not constant over
time, but varies from year to year. Average annual return represents averaged
figures as opposed to the actual performance as the Fund.
A Fund also may quote cumulative total returns which reflect the simple
change in value of an investment over a stated period. Average annual total
returns and cumulative total returns may be quoted as a percentage or as a
dollar amount. They may be calculated for a single investment, for a series of
investments, or for a series of redemptions over any time period. Total returns
may be broken down into their components of income and capital in order to show
their respective contributions to total return. Performance information may be
quoted numerically or in a table, graph, or similar illustration.
Other Performance Information
Performance information for a Fund may be compared with: (1) the S&P 500, Dow
Jones Industrial Average, Lehman Aggregate Bond Index, Russell 2000, Russell
3000, Beta Adjusted Russell 3000, Lehman Government corporate and 90 day
Treasury Bills, Solomon High Yield Bond Index, Bank Rate Monitor, NASDAQ Index,
or other unmanaged indices so that investors may compare a Fund's results with
those of a group of unmanaged securities widely regarded by investors as
representative of the securities markets in general; (2) other registered
investment companies or other investment products tracked (a) by Lipper
Analytical Services; Morningstar, Inc., and IBC/Donoghue, Inc., all widely used
independent research firms which rank mutual funds and other investment
companies by overall performance, investment objectives, and assets, or (b) by
other services, companies, publications, or persons who rank such investment
companies on overall performance or other criteria; (3) or the Consumer Price
Index (a measure for inflation) to assess the real rate of return from an
investment in the Fund. Unmanaged indices may assume the reinvestment of
dividends but generally do not reflect deductions for administrative and
management costs and expenses.
Performance information reflects only the performance of a hypothetical
investment during the particular time period on which the calculations are
based. Performance information should be considered in light of the investment
objectives and policies, characteristics and quality of the Fund, and the market
conditions during the given time period. Yield and total return information may
be useful for reviewing the performance of the Fund and for providing a basis
for comparison with other investment alternatives. However, unlike bank deposits
or other investments which pay a fixed yield for a stated period of time, the
yield and total return do fluctuate.
--------------------------
17 Allmerica Investment Trust
<PAGE>
Performance Information for Period Ended December 31, 1996
Set forth below is average annual total return information for the Select
Aggressive Growth Fund, Select Capital Appreciation Fund, Small-Mid Cap Value
Fund, Select International Equity Fund, Select Growth Fund, Growth Fund, Equity
Index Fund, Select Growth and Income Fund, Select Income Fund, Investment Grade
Income Fund, Government Bond Fund, and Money Market Fund for the 1 year, 5 year,
10 year and/or since inception (the Trust began operations on April 29, 1985)
periods ended December 31, 1996, yields for the Select Income Fund, Investment
Grade Income Fund, and Government Bond Fund for the 30-day period ended December
31, 1996 and yield and effective yield information for the Money Market Fund for
the seven-day period ended December 31, 1996.
Average Annual Total Returns for Periods Ended December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Select Select Capital Small-Mid Select Select
Aggressive Appreciation Cap Value International Growth Growth
Growth Fund Fund Fund Equity Fund Fund Fund
----------- ---- ---- ----------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1-year period 18.55% 8.80% 28.53% 21.94% 22.02% 20.19%
5-year period -- -- -- -- -- 12.80%
10-year period -- -- -- -- -- 14.79%
Since inception 19.77% 28.34% 14.86% 13.68% 12.65% 15.77%
<CAPTION>
Select Select Investment Money
Equity Index Growth and Income Grade Government Market
Fund Income Fund Fund Income Fund Bond Fund Fund
---- ----------- ---- ----------- --------- ----
1-year period 22.30% 21.26% 3.32% 3.56% 3.51% 5.63%
5-year period 14.61% -- -- 7.29% 5.86% 4.38%
10-year period -- -- -- 8.31% -- --
Since inception 17.76% 13.78% 5.91% 9.01% 6.91% 5.90%
</TABLE>
The Growth Fund, Investment Grade Income Fund and the Money Market Fund all
began business operations on April 29, 1985. The Equity Index Fund began
operations on September 28, 1990. The Government Bond Fund began operations on
August 26, 1991. The Select Aggressive Growth Fund, Select Growth Fund, Select
Growth and Income Fund and Select Income Fund began operations on August 21,
1992. The Small-Mid Cap Value Fund began operations on April 30, 1993. The
Select International Equity Fund began operations on May 2, 1994. The Select
Capital Appreciation Fund began operations on April 28, 1995.
Yields for 30-day Periods ended December 31, 1996
(Unaudited)
Select Income Investment Government
Fund Grade Income Fund Bond Fund
---- ----------------- ---------
6.10% 6.25% 5.67%
Yield and Effective Yield for the Money Market Fund
for the Seven-Day Period ended December 31, 1996
(Unaudited)
Yield 5.05%
Effective Yield 5.18%
- --------------------------
Allmerica Investment Trust 18
<PAGE>
MANAGEMENT OF ALLMERICA INVESTMENT TRUST
The Trust is managed by a Board of Trustees. The affairs of the Trust are
conducted in accordance with the Bylaws adopted by the Trustees.
<TABLE>
<CAPTION>
Position and Offices Present Position and Principal
Name Address and Age with the Trust Occupations During the Past 5 Years
- -------------------- -------------- -----------------------------------
<S> <C> <C>
Russell E. Fuller (70) Trustee Chairman, REFCO, Inc. (distributor of tools
730 Main Street and abrasives)
Boylston, Massachusetts
Gordon Holmes (58) Trustee Certified Public Accountant: Tofias,
205 Broadway Fleishman, Shapiro & Co. (Accountants)
Cambridge, Massachusetts 1975-1996
*John P. Kavanaugh (42) Trustee President, AllAmerica Asset Management,
440 Lincoln Street Vice President Inc., Vice President, First AllAmerica and
Worcester, Massachusetts AllAmerica Fiancial Life
Bruce E. Langton (65) Trustee Member, First Allmerica Manager
99 Jordan Lane Evaluation Team; Director, Competitive
Stamford, Connecticut Technologies, Inc. (technology transfer);
Trustee, Bankers Trust institutional mutual
funds; Member, Investment Committee,
TWA Pilots Trust Annuity Plan; Member,
Investment Committee, Unilever United
States - Pension & Thrift plans
*John F. O'Brien (53) Trustee and Director; President and Chief Executive
440 Lincoln Street Chairman of the Board Officer, First AllAmerica; Director and Chair-
Worcester, Massachusetts man of the Board, Allmerica Financial Life
Attiatt F. Ott (61) Trustee Professor of Economics and Director of
950 Main Street the Institute for Economic Studies, Clark
Worcester, Massachusetts University
*Richard M. Reilly (58) Trustee President, Allmerica Financial Life since
440 Lincoln Street and President 1995; Vice President, First Allmerica and
Worcester, Massachusetts President, Allmerica Investment Manage-
ment Company, Inc.
Ranne P. Warner (52) Trustee President, Centros Properties, USA;
7 Water Street Owner; Ranne P. Warner and Company;
Boston, Massachusetts Director, Wainwright Bank & Trust Co.
(commercial bank)
Thomas P. Cunningham (51) Vice President and Investment Product Manager, First
440 Lincoln Street Treasurer Allmerica since March 1996; Vice
Worcester, Massachusetts President, First Data Investor Services
Group, Inc., 1994-1995; Vice President,
Fidelity Investments, 1990-1993
</TABLE>
--------------------------
Allmerica Investment Trust
19
<PAGE>
George Boyd (52) Secretary Counsel, First Allmerica since
440 Lincoln Street January 1997; Director, Mutual
Worcester, Massachusetts Fund Administration - Legal and
Regulatory, Investors Bank &
Trust Company 1995-1996; Vice
President and Counsel, 440
Financial Group and First Data
Investor Services Group
1992-1995.
* Asterisks indicate the Trustees who are "interested persons" of the Trust
as defined in the Investment Company Act of 1940, as amended (the "1940 Act").
The Trustees who are not directors, officers, or employees of the Trust or any
investment adviser are reimbursed for their travel expenses in attending
meetings of the Trust.
Listed below is the compensation paid to each Trustee by the Trust and by all
fourteen funds in the complex for the fiscal year ended December 31, 1996. The
Fund currently does not provide any pension or retirement benefits for its
Trustee or officers.
COMPENSATION TABLE
<TABLE>
<CAPTION>
Total Compensation
from Trust Complex
Aggregate (includes 2 other
Compensation investment companies)
Name of Person and Position from Trust Paid to Trustees
--------------------------- ---------- ----------------
<S> <C> <C>
Russell E. Fuller $8,075.64 $8,500.00
Gordon Holmes $8,544.84 $9,000.00
Bruce E. Langton/*/ $5,729.26 $6,000.00
Attiat F. Ott $8,075.64 $8,500.00
Ranne P. Warner $8,075.64 $8,500.00
John D. Hunt /**/ $1,876.80 $2,000.00
Thomas S. Zocco /***/ $8,544.84 $9,000.00
John P. Kavanaugh 0 0
John F. O'Brien 0 0
Richard M. Reilly 0 0
</TABLE>
* Mr. Langton was appointed Trustee on February 6, 1996.
** Mr. Hunt resigned as Trustee effective February 7, 1996.
*** Mr. Zucco resigned as Trustee effective December 31, 1996.
- ---------------------------------------------------------------
The Trust Declaration provides that the Trust will indemnify its Trustees and
officers liabilities and expenses incurred in connection with litigation in
which they may be involved because of their offices with the Trust, except if it
is determined in the manner specified in the Trust Declaration that they have
not acted in good faith in the reasonable belief that their actions were in the
best interests of the Trust or that such indemnification would relieve any
officer or Trustee of any liability to the Trust or its shareholders by reason
of willful misfeasance, bad faith, gross negligence, or reckless disregard of
his or her duties.
CONTROL PERSON AND PRINCIPAL HOLDER OF SECURITIES
Allmerica Asset Management, Inc. with its principal office at 440 Lincoln
Street, Worcester, Massachusetts 01653, is the Sub-Adviser of certain Funds of
the Trust, Allmerica Investment Management Company, Inc., a wholly-owned
subsidiary of First Allmerica, is the Manager of the Trust. The Separate
Accounts of First Allmerica or its affiliates are the shareholders of the Trust.
In addition, as of the date of this SAI, Allmerica Financial Life, an indirect,
wholly-owned subsidiary of First Allmerica, owned beneficially in excess of 8.7%
of Equity Index Fund, and in excess of 5.3% of Select Capital Appreciation Fund.
- --------------------------
Allmerica Investment Trust
20
<PAGE>
INVESTMENT MANAGEMENT AND OTHER SERVICES
Allmerica Investment Management Company, Inc. (the "Manager") serves as
investment manager of the Trust pursuant to a management agreement between the
Trust and the Manager (the "Management Agreement"). The Manager has entered into
sub-adviser agreements with different investment advisory firms (the
"Sun-Advisers") to manage each of the Funds.
The methods of computing the advisory and sub-advisory fees are set forth in
the Prospectuses under "Management Fees and Expenses."
The total gross fees (before reimbursement) paid to the Manager under the
Management Agreement for each of the last three fiscal years ended December 31,
1996 were as follows:
<TABLE>
<CAPTION>
Fiscal Year 1996 Fiscal Year 1995 Fiscal Year 1994
---------------- ---------------- ----------------
<S> <C> <C> <C>
Select Agressive Growth Fund................ $3,302,349 $1,943,953 $1,048,667
Select Capital Appreciation Fund............ $902,600 $133,723 -0-
Small-Mid Cap Value Fund.................... $726,992 $453,215 $240,122
Select International Equity Fund............ $1,701,942 $672,770 $151,718
Select Growth Fund.......................... $1,508,861 $1,017,303 $610,088
Growth Fund................................. $2,163,374 $1,796,677 $1,600,859
Equity Index Fund........................... $375,619 $234,207 $168,924
Select Growth and Income Fund............... 1,778,832 $1,124,323 $656.966
Select Income Fund.......................... $398,522 $297,434 $201,564
Investment Grade Income Fund................ $596,308 $511,997 $459,770
Government Bond Fund........................ $235,359 $206,197 $296,626
Money Market Fund........................... $510,258 $389,542 $252,544
</TABLE>
The Select Capital Appreciation Fund began business operations on April 28,
1995. The Select International Equity Fund began business operations on May 2,
1994.
The total dollar amounts paid to Nicholas-Applegate Capital Management L.P. as
Sub-Adviser for the Select Aggressive Growth Fund for each of the last three
fiscal years ended December 31, 1996, 1995, and 1994 were $1,986,838, $1,166,372
and $629,200, respectively.
The total dollar amounts paid to Janus Capital Corporation as Sub-Adviser for
the Select Capital Appreciation Fund for the fiscal year ended December 31, 1996
and for the period April 28, 1995 (commencement of operations) through December
31, 1995 were $538,873 and $79,987, respectively.
The total dollar amounts paid to David L. Babson & Co. Inc. ("Babson") as
Sub-Adviser for the Small-Mid Cap Value Fund for each of the last three fiscal
years ended December 31, 1996, 1995, and 1994 were $428,814, $266,597, and
$140,900, respectively. Babson was replaced by CRM Advisors, LLC as Sub-Adviser
for the Small-Mid Cap Value Fund on January 1, 1997.
The total dollar amounts paid to Bank of Ireland Asset Management (U.S.)
Limited as Sub-Adviser for the Select International Equity Fund for each of the
last three fiscal years ended December 31, 1996, 1995, and 1994 were $665,639,
$293,389 and $68,273, respectively.
The total dollar amounts paid to Provident Investment Counsel ("PIC") as
sub-adviser for the Select Growth Fund for the period January 1, 1996 through
June 30, 1996 and the fiscal years ended December 31, 1995 and 1994 were
$372,442, $563,572, and $347,988, respectively. PIC was replaced by Putnam
Investment Management, Inc. ("Putnam") as Sub-Adviser for the Select Growth Fund
on July 1, 1996. The total dollar amount paid to Putnam for the period July 1,
1996 through December 31, 1996 was $432,378.
The total dollar amounts paid to Miller, Anderson & Sherrerd as Sub-Adviser for
the Growth Fund and for advisory services provided to certain other accounts of
First Allmerica, for each of the last three fiscal years ended December 31,
1996, 1995, and 1994 were $2,330,558, $2,307,461, and $2,164,488 respectively.
--------------------------
21 Allmerica Investment Trust
<PAGE>
The total dollar amounts paid to John A. Levin & Co., Inc. ("JAL") as Sub-
Adviser for the Select Growth and Income Fund for the fiscal years ended
December 31, 1996 and 1995 and for the period October 1, 1994 through December
31, 1994 were $684,181, $524,774 and $130,936, respectively. For the period
January 1, 1994 through September 30, 1994, the Fund's previous Sub-Adviser,
Newbold's Asset Management, Inc., was paid $226,287 for the advisory services
provided to the Select Growth and Income Fund and certain other accounts of
First Allmerica.
The total dollar amounts paid to Standish, Ayer & Wood Inc. as Sub-Adviser for
the Select Income Fund for each of the last three fiscal years ended December
31, 1996, 1995, and 1994 were $133,205, $99,145, and $67,188, respectively.
The total dollar amounts paid to Allmerica Asset Management, Inc. as
Sub-Adviser for the Equity Index Fund, Investment Grade Income Fund, Government
Bond Fund and Money Market Fund for each of the last three fiscal years ended
December 31, 1996, 1995 and 1994 were $694,910, $537,745 and $467,804,
respectively.
Each of the Management Agreement and sub-advisory agreements provides that it
may be terminated as to any Fund at any time by a vote of a majority in interest
of the shareholders of such Fund, by the Trustees, or by the investment adviser
to such Fund without payment of any penalty on not more than 60 days' written
notice; provided, however, that the agreement will terminate automatically in
the event of its assignment. Each of the agreements will continue in effect as
to any Fund for a period more than two years from the date of its executor only
so long as such continuance is approved specifically at least annually by the
Trustees or by vote of a majority in interest of the shareholders of such Fund.
In either event, such continuance also must be approved by vote of a majority of
the Trustees who are not parties to the agreement or interested persons of the
Trust, the Manager, or any sub-adviser, cast in person at a meeting called for
the purpose of voting such approval. The terms of each agreement cannot be
changed as to any Fund without the approval of a majority in interest of the
shareholders of that Fund. Under such agreements, any liability of either the
Manager or a sub-adviser is limited to situations involving its willful
misfeasance, bad faith, gross negligence, or reckless disregard of its
obligations and duties.
A listing of Nicholas-Applegate Capital Management, L.P.'s current
representative clients is as follows:
- Champion International Corp. - Southwestern Bell Corporation
- Eastman Kodak - San Francisco City and County
- Johnson & Johnson - Unisys Corporation
- Screen Actors Guild-Producers - University of Notre Dame
- Pension and Health Plan - University of Southern California
A listing of Janus' current representative clients is as follows:
- Honeywell, Inc. - Sears, Roebuck & Co.
- Nissan Motors Corp. - Westinghouse Electric Corp.
A listing of CRM Advisors, LLC's current representative clients is as follows:
- Amherst College Endowment - Indiana University Foundation
- The Carnegie Institute - Maine State Retirement
- Central States Teamsters - National Basketball Association
- Georgia Pacific Corporation Players Pension Plan
- College of Holy Cross - Niagara Mohawk Power Corp.
- University of Illinois Foundation
A listing of Bank of Ireland Asset Management (U.S.) Limited's current
representative clients is as follows:
- CALSTRS - Pfizer Retirement Annuity Plan
- City of Dallas Employees' - Maryland State Retirement System
Retirement Fund
- Loyola Marymount University - Screen Actors Guild - Producers
Endowment Fund Pension Plan
- LTV Steel Corporation Pension Fund - Tuft's University Endowment Fund
- Major League Baseball Players - Worcester County Retirement System
Benefit Plan
- --------------------------
Allmerica Investment Trust 22
<PAGE>
A listing of Putnam Investment Management, Inc.'s current representative clients
is as follows:
- Ameritech Corporation - New York Philharmonic Orchestra
- Bacardi Corporation - Parker-Hannifin Corporation
- Betzdearborn Inc. - Textron, Inc.
- Los Angeles County Employees - The Robert Wood Johnson Foundation
Retirement Association
- Matsushita Electric Corporation of - United Steelworkers of America
America
A listing of Miller Anderson & Sherrerd LLP's current representative clients is
as follows:
- AT&T - International Paper
- Boeing Company - Montgomery Ward
- Federal Reserve - Philip Morris, Inc.
- J. Paul Getty Trust - Smithsonian Institution
- Goldman, Sachs & Company - United Technologies Corporation
A listing of John A. Levin & Co., Inc.'s representative clients is as follows:
- Allied Signal, Inc. - New York City Teachers Retirement
Fund
- Johns Hopkins University - New York Philharmonic Society
- Joseph E. Seagram & Sons, Inc. - Thiokol, Inc.
- Morton International - USAIR
A listing of Standish, Ayer & Wood's current representative clients is as
follows:
- Archdiocese of Boston - New York Public Library
- BankAmerica - Northeastern University
- Harcourt General - NYNEX
- General Cinema - Reinsurance Association
- City of Houston
A listing of AAM's current representative clients is as follows:
- First Allmerica - Worcester County Contributory
Retirement System
- Citizens Insurance - Hannibal Regional Hospital
- Hanover Insurance - Massachusetts Education and
Government Association Workers
Compensation Trust
Under the terms of the Management Agreement, the Trust recognizes the
Manager's control of the name "Allmerica Investment Trust." The Trust agrees
that its right to use that name is non-exclusive and can be terminated by the
Manager at any time.
Services Agreement
Under the terms of a Fund Accounting Services Agreement, First Data Investors
Services Group, Inc. ("FDISG"), a wholly-owned subsidiary of First Data
Corporation located at 440 Computer Drive, Westboro, MA 01581, serves as the
Trust's fund recordkeeping services agent. FDISG provides certain services,
including determination of the net asset value per share of each of the Funds
and maintenance of the accounting records of the Trust. FDISG is entitled to
receive an annual fund recordkeeping fee based on Fund assets and certain
out-of-pocket expenses. The Fund Accounting Services Agreement may be renewed or
amended by the Trustees without a shareholder vote. The Fund Accounting Services
Agreement is terminable by either party on 90 days' written notice. The total
fund recordkeeping fees paid to FDISG for the fiscal year ended December 31,
1996 and for the period April 1, 1995 through December 31, 1995 were $544,206
and $319,658, respectively. Prior to March 31, 1995, fund accounting services
were provided by 440 Financial Group of Worcester, Inc. ("440 Finan-
--------------------------
23 Allmerica Investment Trust
<PAGE>
cial"), a wholly-owned subsidiary of State Mutual Life Assurance Company of
America (now named First Allmerica). For the fiscal years ending December 31,
1994 and for the period January 1, 1995 through March 31, 1995, 440 Financial
received fees for fund accounting and other services of $450,953 and $168,565,
respectively.
Custodian
Bankers Trust Company acts as custodian of the cash and investment securities
of the Trust. As such, it holds in custody the Trust's portfolio securities and
receives and delivers them upon purchases and sales.
BROKERAGE ALLOCATION
In accordance with the Management Agreement and sub-advisory agreements, the
respective Sub-Adviser has the responsibility for the selection of brokers for
the execution of purchases and sales of the securities in a given Fund's
portfolio subject to the direction of the Trustees. The Sub-Advisers place the
Funds' portfolio transactions with brokers and, if applicable, negotiate
commissions.
Broker-dealers may receive brokerage commissions on portfolio transactions of
the Funds. The sub-advisers also may place portfolio transactions with such
broker-dealers acting as principal, in which case no brokerage commissions are
payable but other transaction costs are incurred. The Funds have not dealt nor
do they intend to deal exclusively with any particular broker-dealer or group of
broker-dealers. It is each Fund's policy always to seek best execution. This
means that each Fund's portfolio transactions will be placed where the Fund can
obtain the most favorable combination of price and execution services in
particular transactions or as provided on a continuing basis by a broker-dealer,
and that the Fund will deal directly with a principal market maker in connection
with over-the-counter transactions, except when it is believed that best
execution is obtainable elsewhere. In evaluating the execution services of a
broker-dealer, including the overall reasonableness of its brokerage commissions
paid, consideration is given to the firm's general execution and operational
capabilities and to its reliability, integrity, and financial condition. Subject
to the practice of always seeking best execution, the Funds' securities
transactions may be executed by broker-dealers who also provide research
services (as defined below) to the Funds, the Sub-Advisers, and the other
clients advised by the Sub-Advisers. Examples of such research services include
reports on specific companies or industries, economic and financial data,
performance measurement services, computer databases and pricing and appraisal
services. The sub-advisers may use all, some, or none of such research services
in providing investment advisory services to each of its investment companies
and other clients, including the Funds. To the extent that such services are
used, they tend to reduce the expenses of the Sub-Advisers. In the opinion of
the Sub-Advisers it is impossible to assign an exact dollar value to such
services.
Brokerage and Research Services
The agreements provide that, subject to such policies as the Trustees may
determine, the Sub-Advisers may cause a given Fund to pay a broker-dealer which
provides brokerage and research services an amount of commission for effecting a
securities transaction for that Fund in excess of the amount of commission which
another broker-dealer would have charged for effecting that transaction. As
provided in Section 28(e) of the Securities Exchange Act of 1934, "brokerage and
research services" include advice as to the value of securities; the
advisability of investing in, purchasing, or selling securities; the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers, industries, securities, economic
factors, and trends; portfolio strategy and performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). The Sub-Advisers must determine in good
faith that such greater commission is reasonable in relation to the value of the
brokerage and research services provided by the executing broker-dealer viewed
in terms of that particular transaction or the overall responsibilities of the
sub-advisers to its respective Funds and all other clients. The Sub-Advisers
also may consider sales by broker-dealers of variable and group annuity
contracts and variable life insurance policies that contemplate the Funds as an
investment option as a factor in the selection of broker-dealers to execute
portfolio transactions.
The other investment companies and clients advised by the Sub-Advisers
sometimes invest in securities in which the Funds also invest. A Sub-Adviser
also may invest for its own account in the securities in which the Funds invest.
If the Funds, such other investment companies, and other clients of the
Sub-Advisers desire to buy or sell the same portfolio security at about the same
time, the purchases and sales normally are made as nearly as practicable on a
pro rata basis in proportion to the amounts desired to be purchased or sold by
each. It is recognized that in some cases this practice could have a detrimental
effect on the price or volume of the security as far as the Funds are concerned.
In other cases, however, it is believed that this practice may produce better
executions. It is the opinion of the Trustees that the desirability of retaining
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Allmerica Investment Trust 24
<PAGE>
the Sub-Advisers as investment advisers to their respective Funds outweighs the
disadvantages, if any, which might result from this practice.
Brokerage commissions for the Select Aggressive Growth Fund were $929,338 in
1996, $685,971 in 1995, and $374,677 in 1994. Brokerage commissions for the
Select Capital Appreciation Fund were $240,295 in 1996 and $94,679 in 1995.
Brokerage commissions for the Small-Mid Cap Value Fund were $101,743 in 1996,
$54,538 in 1995, and $66,517 in 1994. Brokerage commissions for the Select
International Equity Fund were $360,263 in 1996, $212,481 in 1995 and $132,407
in 1994. Brokerage commissions for the Select Growth Fund were $450,238 in 1996,
$147,728 in 1995, and $128,621 in 1994. Brokerage commissions for the Growth
Fund were $838,998 in 1996, $577,791 in 1995, and $341,751 in 1994. Brokerage
commissions for the Equity Index Fund were $63,013 in 1996, $28,468 in 1995, and
$15,682 in 1994. Brokerage commissions for the Select Growth and Income Fund
were $561,049 in 1996, $458,046 in 1995, and $370,133 in 1994. Brokerage
commissions for the Select Income Fund were $0 in 1996, $0 in 1995, and $132,407
in 1994. Brokerage commissions for the Government Bond Fund were $0 in 1996,
$16,759 in 1995, and $0 in 1994. The other Funds did not incur brokerage
commissions in any of these years.
Directed Brokerage Program
The Sub-Advisers of certain Funds may consider payments made to a Fund or to
other persons on behalf of the Fund for services provided to the Fund for which
the Fund otherwise would be obligated to buy when such payments are made by
brokers effecting transactions for such Fund. Some Funds have entered into an
agreement with certain brokers whereby the brokers will rebate a portion of
commissions. Such amounts earned by the Funds during 1996 under such agreements
were as follows: Small-Mid Cap Value Fund, $19,715; Select International Equity
Fund, $52,998; Select Growth Fund, $10,405; Growth Fund, $124,205; and Select
Growth and Income Fund, $77,523.
PURCHASE, REDEMPTION, AND PRICING OF SECURITIES BEING OFFERED
As described in the Prospectus, shares of each Fund are sold and redeemed at
their net asset value as next computed after receipt of the purchase or
redemption order. Each purchase is confirmed to the Separate Account in a
written statement of the number of shares purchased and the aggregate number of
shares currently held.
The net asset value per share of each Fund is the total net asset value of that
Fund divided by the number of shares outstanding. The total net asset value of
each Fund is determined by computing the value of the total assets of that Fund
and deducting total liabilities, including accrued liabilities. The net asset
value of the shares of each Fund is determined once daily as of the close of the
New York Stock Exchange on each day on which the Exchange is open for trading,
and no less frequently than once daily on each other day (other than a day
during which no shares of the Fund were tendered for redemption and no order to
purchase or sell such shares was received by the Fund) in which there was a
sufficient degree in trading in the Fund's portfolio securities that the current
net asset value of the Fund's shares might be affected materially by changes in
the value of such portfolio securities.
Debt securities for which market quotations are not readily available are
valued at fair value by using valuation procedures approved in good faith by the
Trustees. As authorized by the Trustees, debt securities (other than short-term
obligations) of the Funds other than the Money Market Fund are valued on the
basis of valuations furnished by a pricing service which utilizes data
processing methods to determine valuations for normal, institutional-size
trading units of such securities. Such methods include the use of market
transactions for comparable securities and various relationships between
securities which generally are recognized by institutional traders. Short-term
obligations having remaining maturities of sixty (60) days or less are valued at
amortized cost.
Short-term debt securities of the Funds other than the Money Market Fund having
a remaining maturity of more than sixty (60) days will be valued using a
"market-to-market" method based upon either the readily available market price
or, if reliable market quotations are not available, upon quotations by dealers
or issuers for securities of a similar type, quality, and maturity.
"Marking-to-market" takes into account unrealized appreciation or depreciation
due to changes in interest rates or other factors which would influence the
current fair value of such securities.
All portfolio securities of the Money Market Fund will be valued by the
amortized cost method. The purpose of this method of calculation is to attempt
to maintain a constant net asset value per share of $1.00. No assurance can be
given that this goal can be attained. Amortized cost is an approximation of
market value determined by increasing systematical-
--------------------------
25 Allmerica Investment Trust
<PAGE>
ly the carrying value of a security acquired at a discount or reducing
systematically the carrying value of a security acquired at a premium, so that
the carrying value is equal to maturity value on the maturity date. It does not
take into consideration unrealized gains or losses. While the amortized cost
method provides certainty and consistency in portfolio valuation, it may result
in valuations of portfolio securities which are higher or lower than the prices
at which the securities could be sold. During such periods, the yield to
investors in a Fund may differ somewhat from that obtained if the Fund were to
use mark-to-market value for its portfolio securities. For example, if the use
of amortized cost resulted in a lower (higher) aggregate portfolio value on a
particular day, a prospective investor in the Fund would obtain a somewhat
higher (lower) yield than would result from marked-to-market valuation, and
existing investors would receive less (more) investment income.
The use of the amortized cost method of valuation by the Money Market Fund is
subject to rules of the Securities and Exchange Commission. Under the rules, the
Fund is required to maintain a dollar weighted average portfolio maturity of 90
days or less and to limit its investments to instruments which (1) its Sub-
Adviser, subject to the guidelines established by the Trustees, determines
present minimal credit risks; (2) have high quality ratings or are deemed
comparable, such that they are "eligible securities" as defined below; and (3)
have remaining maturity of thirteen months (397 days) or less at the time of
purchase, or are subject to a demand feature which reduces the remaining
maturity to thirteen months or less.
The Money Market Fund may purchase only "First or Second Tier eligible
securities" which are defined to include (1) securities which have received the
highest or second highest rating by at least two nationally recognized
statistical rating organizations ("NRSRO") or by only one NRSRO if only one has
rated the security and (2) securities which are unrated, but, in the Sub-
Adviser's opinion, are of comparable quality. The Money Market Fund may purchase
securities which were long-term at issuance but have a remaining maturity of
thirteen months or less at the time of purchase if (a) the issuer has comparable
short-term debt securities outstanding which are eligible securities or (b) the
issuer has no short-term rating and the securities have either no long-term
rating or a long-term rating in one of the two highest categories by an NRSRO.
The above standards must be satisfied at the time an investment is made. If the
quality of the investment later declines, the Fund (a) may dispose of the
security within five business days of the Sub-Adviser becoming aware of the new
rating, or (b) may continue to hold the investment, but the Trustees will
evaluate whether the security continues to present minimal credit risks.
As a part of the overall duty of care they owe to the Fund's shareholders, the
Trustees have established procedures reasonably designed to stabilize the net
asset value per share of the Money Market Fund as computed for the purpose of
distribution and redemption at $1.00 per share taking into account current
market conditions and the Fund's investment objective. At such reasonable
intervals as they deem appropriate in light of current market conditions, the
Trustees will compare the results of calculating the net asset value per share
based on amortized cost with the results based on available indications of
market value. If a difference of more than 1/2 of 1% occurs between the two
methods of valuation, the Trustees will take whatever steps they deem necessary
to minimize any material dilution or other unfair results, such as shortening
the average portfolio maturity or realizing gains or losses.
ORGANIZATIONS OF THE TRUST
The Agreement and Declaration of the Trust ("Trust Declaration") provides that
all persons extending credit to, contracting with, or having any claims against
the Trust or a particular Fund shall look only to the assets of the Trust or
particular Fund for payment under such credit, contract, or claim, and neither
the shareholders, Trustees, nor any of the Trust's officers, employees, or
agents shall be personally liable thereof. Under Massachusetts law, shareholders
could, under certain circumstances, be held liable for the obligations of the
Trust. The Trust Declaration, however, disclaims shareholder liability for acts
or obligations of the Trust and requires that notice of such disclaimer be given
in each agreement, obligation, or instrument entered into or executed by the
Trust or the Trustees. The Trust Declaration provides for indemnification out of
a Fund's property for all loss and expense of any shareholder of that Fund held
liable on account of being or having been a shareholder. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund of which he or she was a shareholder
would be unable to meet its obligations.
Pursuant to the Trust Declaration, a Trustee is liable for his or her own
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of the office of Trustee, but is not liable for
errors of judgment,
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Allmerica Investment Trust 26
<PAGE>
mistakes of fact or law, any act or omission in accordance with the advice of
counsel or other experts with respect to the meaning of the Trust Declaration,
or for failing to follow such advice.
The Trust Declaration provides that, on any matter submitted to a vote of the
shareholders, all shares shall be voted by individual series, except (1) when
required by the 1940 Act, shares shall be voted in the aggregate and not by
individual series, and (2) when the Trustees have determined that the matter
affects only the interests of one or more series, then only the shareholders of
such series shall be entitled to vote thereon. Shares are freely transferable,
are entitled to dividends as declared by the Trustees and, on liquidation of the
Trust, shareholders are entitled to receive their pro rata portion of the net
assets of the Fund of which they hold shares, but not of any other Fund.
Shareholders have no preemptive rights.
In the event that at any time less than a majority of the Trustees then in
office were elected by the shareholders, the Trustees must call a meeting of
shareholders promptly for the purpose of electing Trustees. Shareholders will be
assisted in communicating with other shareholders in connection with removing a
Trustee as if Section 16(c) of the 1940 Act applied to the Trust.
Matters subject to a vote by the shareholders include changes in the
fundamental policies of the Trust as described in the Prospectus and the SAI,
the election or removal of Trustees, and the approval of agreements with
investment advisers. A majority, for the purposes of voting by shareholders
pursuant to the 1940 Act, is 67% or more of the voting securities of an
investment company present at an annual or special meeting of shareholders if
50% of the outstanding voting securities of such company are present or
represented by proxy or more than 50% of the outstanding voting securities of
such company, whichever is less.
Independent Accountants
Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts 02110, serves
as the Fund's independent accountants providing audit and accounting services
including (i) examination of the annual financial statements, (ii) assistance
and consultation with respect to the preparation of filings with the Securities
and Exchange Commission, and (iii) preparation of annual income tax returns.
FINANCIAL STATEMENTS
The Trust's financial statements and related notes and the report of the
independent accountants contained in the Trust's annual report for the fiscal
year ended December 31, 1996 are incorporated by reference into this Statement
of Additional Information.
--------------------------
27 Allmerica Investment Trust
<PAGE>
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Allmerica Investment Trust 28
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements
Part A Financial Highlights Tables
Part B Reference is made to the Allmerica Investment Trust
Financial Statements contained in Allmerica Financial
Retail Services Annual Report for the year ended December
31, 1996, as listed below.
Portfolio of Investments December 31, 1996
Statements of Assets and Liabilities December 31, 1996
Statements of Operations for Year Ended December 31, 1996
Statements of Changes in Net Assets for Years and Periods
Ended December 31, 1996 and December 31, 1995
Financial Highlights Notes to Financial Statements
Report of Independent Accountants
Reference is made to the Allmerica Investment Trust
Financial Statements (unaudited) contained in Allmerica
Financial Retail Services Semi-Annual Report for the six
months ended June 30, 1997, as listed below:
Portfolio of Investments for the six months ended June
30, 1997 (Unaudited)
Statement of Assets and Liabilities for the six months
ended June 30, 1997 (Unaudited)
Statement of Operations for the six months ended June
30, 1997 (Unaudited)
Statement of Changes in Net Assets for the six months
ended June 30, 1997 and the year ended December 31,
1996 (Unaudited)
Financial Highlights (Unaudited for the six months ended
June 30, 1997)
Notes to Financial Statements (Unaudited)
b) Exhibits
Exhibit 1 Agreement and Declaration of Trust, dated October 11, 1984, as
amended May 12, 1992 was filed previously in Post-effective
Amendment No. 20 on May 14, 1992 and is incorporated herein by
reference.
Exhibit 2 Bylaws as amended were filed previously in Post-effective
Amendment No. 20 on May 14, 1992 and are incorporated herein by
reference.
Exhibit 3 None
8
<PAGE>
Exhibit 4 None
Exhibit 5(a) Management Agreement (the "Management Agreement") between
Registrant and Allmerica Investment Management Company, Inc. (the
"Manager") and the Sub-Adviser Agreement between the Manager and
Nicholas-Applegate Capital Management, State Mutual Life
Assurance Company of America ("State Mutual") and Standish, Ayer
& Wood were filed previously in Post-effective Amendment No. 20
on May 14, 1992 and are incorporated herein by reference.
Exhibit 5(b) Statement of Assignment of Assumption of Sub-Adviser Duties by
Allmerica Investment Management Company under Sub-Adviser
Agreement between the Manager and State Mutual dated July 15,
1993 was filed previously in Post-effective Amendment No. 31 and
is incorporated herein by reference.
Exhibit 5(c) Form of Notice (Small-Mid Cap Value Fund) was filed previously in
Post-effective Amendment No. 24 on February 25, 1993 and is
incorporated herein by reference.
Exhibit 5(d) Sub-Adviser Agreement between Manager and Bank of Ireland Asset
Management Limited with respect to the Select International
Equity Fund dated May 1, 1994 was filed previously in Post-
effective Amendment No. 31 on February 27, 1996 and is
incorporated herein by reference.
Exhibit 5(e) Notice with respect to the Management Agreement (the Select
International Equity Fund) was filed previously in Post-effective
Amendment No. 27 on October 27, 1994 and is incorporated herein
by reference.
Exhibit 5(f) Sub-Adviser Agreement between Manager and John A. Levin & Co.
Inc. with respect to the Select Growth and Income Fund dated
September 1, 1994 was filed previously in Post-effective
Amendment No. 27 on October 27, 1994 and is incorporated herein
by reference.
Exhibit 5(g) Sub-Adviser Agreement between Janus Capital Corporation and
Manager with respect to the Select Capital Appreciation Fund
dated April 28, 1995 was filed previously in Post-effective
Amendment No. 31 on February 27, 1996 and is incorporated herein
by reference.
Exhibit 5(h) Notice with respect to the Management Agreement (Select Capital
Appreciation Fund) was filed previously in Post-effective
Amendment No. 29 on April 28, 1995 and is incorporated herein by
reference.
Exhibit 5(i) Sub-Adviser Agreement between Manager and Miller, Anderson &
Sherrerd, LLP with respect to the Growth Fund dated January 3,
1996 was filed previously in Post-effective Amendment No. 31 on
February 27, 1996 and is incorporated herein by reference.
Exhibit 5(j) Sub-Adviser Agreement between Manager and Putnam Investment
Management, Inc. with respect to the Select Growth Fund dated
July 1, 1996 was filed previously in Post-effective Amendment No.
32 and is incorporated herein by reference.
Exhibit 5(k) Sub-Adviser Agreement between Manager and CRM Advisors, LLC with
respect to the Small-Mid Cap Value Fund dated April 1, 1997 was
filed previously in Post-effective Amendment No. 33 and is
incorporated herein by reference.
9
<PAGE>
Exhibit 5(l) Amendment No. 1 to the Management Agreement (Small-Mid Cap Value
Fund) dated April 1, 1997 was filed previously in Post-effective
Amendment No. 33 and is incorporated herein by reference.
Exhibit 5(m) Amendment No. 2 to the Management Agreement dated September 1,
1997 is filed herein.
Exhibit 5(n) Amended Schedule A to the Sub-Adviser Agreement between Manager
and Nicholas-Applegate Capital Management, L.P. with respect to
the Select Aggressive Growth Fund dated September 1, 1997 is
filed herein.
Exhibit 5(o) Amended Schedule A to the Sub-Adviser Agreement between Manager
and Janus Capital Corporation with respect to the Select Capital
Appreciation Fund dated September 1, 1997 is filed herein.
Exhibit 5(p) Form of Co-Management Agreement between Manager and Rogers, Casey
Asset Services, Inc. with respect to the Select Emerging Markets
Fund is filed herein.
Exhibit 5(q) Form of Notice with respect to the Management Agreement is filed
herein.
Exhibit 5(r) Form of Sub-Adviser Agreement between Manager and Montgomery
Asset Management, LLC with respect to the Select Emerging Markets
Fund is filed herein.
Exhibit 5(s) Form of Sub-Adviser Agreement between Manager and Morgan Stanley
Asset Management, Inc. with respect to the Select Emerging
Markets Fund is filed herein.
Exhibit 5(t) Form of Sub-Adviser Agreement between Manager and Scudder,
Stevens & Clark, Inc. with respect to the Select Emerging Markets
Fund is filed herein.
Exhibit 5(u) Form of Sub-Adviser Agreement between Manager and Cambiar
Investors, Inc. with respect to the Select Strategic Growth Fund
is filed herein.
Exhibit 6 None
Exhibit 7 None
Exhibit 8 Custodian Agreement with Bankers Trust Company dated October 25,
1995 was filed previously in Post-effective Amendment No. 31 on
February 27, 1996 and is incorporated herein by reference.
Exhibit 9(a) Form of Fund Accounting Services Agreement (the "Fund Accounting
Services Agreement") was filed previously in Post-effective
Amendment No. 20 on May 14, 1992 and is incorporated herein by
reference.
Exhibit 9(b) Notice with respect to the Fund Accounting Services Agreement
(Small Cap Value Fund) was filed previously in Post-effective
Amendment No. 26 on March 2, 1994 and is incorporated herein by
reference.
Exhibit 9(c) Notice with respect to the Fund Accounting Services Agreement
(Select International Equity Fund) was filed previously in Post-
effective Amendment No. 27 on October 27, 1994 and is
incorporated herein by reference.
10
<PAGE>
Exhibit 9(d) Notice with respect to the Fund Accounting Services Agreement
(the Select Capital Appreciation Fund) was filed previously in
Post-effective Amendment No. 29 on April 28, 1995 and is
incorporated herein by reference.
Exhibit 9(e) Assignment of Contract and Consent to Assignment with respect to
the Fund Accounting Services Agreement was filed previously in
Post-effective Amendment No. 29 on April 28, 1995 and is
incorporated herein by reference.
Exhibit 9(f) Administration Agreement between Manager and The Shareholder
Services Group, Inc. (now known as First Data Investor Services
Group, Inc.) dated March 31, 1995 was filed previously in Post-
effective Amendment No. 31 on February 27, 1996 and is
incorporated herein by reference.
Exhibit 9(g) Form of Notice with respect to the Fund Accounting Services
Agreement (the Select Emerging Markets Fund and Select Strategic
Growth Fund Fund) is filed herein.
Exhibit 10 Opinion and consent of counsel is filed herein.
Exhibit 11 Consent of Independent Accountants is filed herein.
Exhibit 12 None
Exhibit 13 Participation Agreement with SMA Life Assurance Company dated
February 7, 1990 was filed previously in Post-effective Amendment
No. 10 on February 22, 1990 and is incorporated herein by
reference.
Exhibit 14 None
Exhibit 15 None
Exhibit 16 Schedule for Computation of Performance Quotations was filed
previously in Post-effective Amendment No. 31 on February 27,
1996 and is incorporated herein by reference.
Exhibit 18 None
Exhibit 19 Power of Attorney was filed previously in Post-effective
Amendment No. 29 on April 28, 1995 and is incorporated herein by
reference.
Exhibit 27 Financial Data Schedules are filed herein.
Item 25. Persons Under Common Control with Registrant
--------------------------------------------
Registrant was organized by State Mutual Life Assurance Company of America, now
known as First Allmerica Financial Life Insurance Company ("First Allmerica"),
primarily for the purpose of providing a vehicle for the investment of assets
received by various separate investment accounts ("Separate Accounts")
established by First Allmerica and life insurance company subsidiaries of First
Allmerica including Allmerica Life Insurance and Annuity Company ("Allmerica
Financial Life"). The assets in such Separate Accounts are, under state law,
assets of the life insurance companies which have established such accounts.
Thus at any time First Allmerica and its life insurance company subsidiaries
11
<PAGE>
will own such of Registrant's outstanding shares as are purchased with Separate
Account assets; however, where required to do so, First Allmerica and its life
insurance company subsidiaries will vote such shares only in accordance with
instructions received from owners of the contracts pursuant to which sums are
placed in such Separate Accounts.
Item 26. Number of Holders of Securities
-------------------------------
As of the date of this filing, the Registrant has one hundred ninety-nine (199)
shareholders. Ninety-two (92) shareholder accounts of First Allmerica separate
accounts own shares in the respective Funds and one hundred seven (107)
shareholder accounts of Allmerica Financial Life separate accounts own shares in
the respective Funds.
Item 27. Indemnification
---------------
Article VIII of Registrant's Agreement and Declaration Trust, entitled
"Indemnification," is incorporated herein by reference to Exhibit 1 of this
Registration Statement.
Article III, Section 12 of the Bylaws of First Allmerica was filed previously in
Post-effective Amendment No. 31 on February 27, 1996 and is incorporated herein
by reference.
Undertaking Pursuant to Rule 484
- --------------------------------
Article VIII of Registrant's Agreement and Declaration of Trust provides that
each of its Trustees and each Officer ( and his heirs, executors, and
administrators) may be indemnified against all liabilities and expenses arising
out of the defense or disposition of any action, suit, or other proceeding in
which such person may be or may have been involved by reason of being or having
been such a Trustee or Officer, except with respect to any matter as to which
such person shall have been finally adjudicated not to have acted in good faith
in the reasonable belief that such action was in the best interests of
Registrant, and except that no person shall be indemnified against any liability
to Registrant or to its shareholders to which such person otherwise would be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such person's
office.
Insofar as indemnification for liability arising under the 1933 Act may be
permitted to Trustees, Officers and Controlling Persons of Registrant pursuant
to the foregoing provisions, or otherwise, Registrant has been advised that, in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses incurred or paid
by a Trustee, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such Trustee, Officer
or Controlling Person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.
Item 28. Business and Other Connections of Investment Manager and
--------------------------------------------------------
Sub-Advisors
------------
The following Schedule Ds of Form ADV are incorporated by reference: Nicholas-
Applegate Capital Management File No. 801-21442; Allmerica Asset Management,
Inc., File No. 801-44189; Allmerica Investment Management Company, Inc., File
No. 801-26516; Miller, Anderson & Sherrerd, File No. 801-10437; Bank of Ireland
Asset Management Limited, File No. 801-29606; John A. Levin & Co. Inc., File No.
801-18010; Janus Capital Corporation, File No. 801-13991; Putnam Investment
Management,
12
<PAGE>
Inc., File No. 801-7974; CRM Advisors, LLC, File No. 801-49528; Standish, Ayer &
Wood, Inc., File No. 801-584; Rogers, Casey Asset Services, Inc., File No. 801-
35329; Montgomery Asset Management, LLC, File No.801- pending; Morgan Stanley
Asset Management, Inc., File No. 801-15757 Scudder, Stevens & Clark, Inc., File
No. 801-252; and Cambiar Investors, Inc., File No. 801-9538.
Item 29. Principal Underwriters
----------------------
Not applicable
Item 30. Location of Accounts and Records
--------------------------------
Each account, book, or other document required to be maintained by Registrant
pursuant to Section 31(a) of the Investment Company Act of 1940, as amended and
Rules 31a-1 to 31a-3 thereunder are maintained by Registrant at 440 Lincoln
Street, Worcester, Massachusetts 01653 or on behalf of the Registrant by First
Data Investor Services Group, Inc., 53 State Street, Boston, Massachusetts
02109.
Item 31. Management Services
-------------------
Not applicable
Item 32. Undertakings
------------
(a) The Registrant undertakes to furnish, upon request and
without charge, a copy of the Registrant's latest Annual
Report to Shareholders to each person to whom a
Prospectus is delivered.
(b) Registrant hereby undertakes to call a meeting of its
shareholders for the purpose of voting upon the question
of removal of a trustee or trustees of Registrant when
requested in writing to do so by the holders of at least
10% of Registrant's outstanding shares. Registrant
undertakes further, in connection with the meeting, to
comply with the provisions of Section 16(c) of the
Investment Company Act of 1940, as amended, relating to
communications with the shareholders of certain common-
law trusts.
(c) Registrant hereby undertakes to file a post-effective
amendment, using financial statements which need not be
certified, within four to six months from the
commencement of operations of the Select Emerging Markets
Fund and the Select Strategic Growth Fund.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Worcester and Commonwealth
of Massachusetts on the 23rd day of October, 1997.
ALLMERICA INVESTMENT TRUST
-----------------------------
Registrant
By: /s/ Richard M. Reilly
-----------------------------
Richard M. Reilly, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ John F. O'Brien Chairman of the Board and Trustee 10/23/97
- ------------------------------------- --------
John F. O'Brien
/s/ Richard M. Reilly President, Chief Executive Officer 10/23/97
- ------------------------------------- and Trustee ------------
Richard M. Reilly
/s/ Thomas P. Cunningham Treasurer (Principal Accounting Officer) 10/23/97
- ------------------------------------- ------------
Thomas P. Cunningham
Trustee
- ------------------------------------- ------------
Cynthia A. Hargadon
Trustee
- ------------------------------------- ------------
Gordon Holmes
/s/ John P. Kavanaugh Trustee 10/23/97
- ------------------------------------- ------------
John P. Kavanaugh
Trustee
- ------------------------------------- ------------
Bruce E. Langton
Trustee
- ------------------------------------- ------------
Attiat F. Ott
Trustee
- ------------------------------------- ------------
Ranne P. Warner
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Worcester and Commonwealth
of Massachusetts on the 23rd day of October, 1997.
ALLMERICA INVESTMENT TRUST
----------------------------
Registrant
By: /s/ Richard M. Reilly
----------------------------
Richard M. Reilly, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Chairman of the Board and Trustee
- ------------------------------------- ------------
John F. O'Brien
President, Chief Executive Officer
- ------------------------------------- and Trustee ------------
Richard M. Reilly
Treasurer (Principal Accounting Officer)
- ------------------------------------- ------------
Thomas P. Cunningham
/s/ Cynthia A. Hargadon Trustee 10/23/97
- ------------------------------------- ------------
Cynthia A. Hargadon
Trustee
- ------------------------------------- ------------
Gordon Holmes
Trustee
- ------------------------------------- ------------
John P. Kavanaugh
Trustee
- ------------------------------------- ------------
Bruce E. Langton
Trustee
- ------------------------------------- ------------
Attiat F. Ott
Trustee
- ------------------------------------- ------------
Ranne P. Warner
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Worcester and Commonwealth
of Massachusetts on the 23rd day of October, 1997.
ALLMERICA INVESTMENT TRUST
----------------------------
Registrant
By: /s/ Richard M. Reilly
----------------------------
Richard M. Reilly, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Chairman of the Board and Trustee
- ------------------------------------- ------------
John F. O'Brien
President, Chief Executive Officer
- ------------------------------------- and Trustee ------------
Richard M. Reilly
Treasurer (Principal Accounting Officer)
- ------------------------------------- ------------
Thomas P. Cunningham
Trustee
- ------------------------------------- ------------
Cynthia A. Hargadon
/s/ Gordon Holmes Trustee 10/23/97
- ------------------------------------- ------------
Gordon Holmes
Trustee
- ------------------------------------- ------------
John P. Kavanaugh
Trustee
- ------------------------------------- ------------
Bruce E. Langton
Trustee
- ------------------------------------- ------------
Attiat F. Ott
Trustee
- ------------------------------------- ------------
Ranne P. Warner
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Worcester and Commonwealth
of Massachusetts on the 23rd day of October, 1997.
ALLMERICA INVESTMENT TRUST
-----------------------------
Registrant
By: /s/ Richard M. Reilly
-----------------------------
Richard M. Reilly, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Chairman of the Board and Trustee
- ------------------------------------- ------------
John F. O'Brien
President, Chief Executive Officer
- ------------------------------------- and Trustee ------------
Richard M. Reilly
Treasurer (Principal Accounting Officer)
- ------------------------------------- ------------
Thomas P. Cunningham
Trustee
- ------------------------------------- ------------
Cynthia A. Hargadon
Trustee
- ------------------------------------- ------------
Gordon Holmes
Trustee
- ------------------------------------- ------------
John P. Kavanaugh
/s/ Bruce E. Langton Trustee 10/23/97
- ------------------------------------- -------------
Bruce E. Langton
Trustee
- ------------------------------------- ------------
Attiat F. Ott
Trustee
- ------------------------------------- ------------
Ranne P. Warner
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Worcester and Commonwealth
of Massachusetts on the 23rd day of October, 1997.
ALLMERICA INVESTMENT TRUST
-----------------------------
Registrant
By: /s/ Richard M. Reilly
-----------------------------
Richard M. Reilly, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Chairman of the Board and Trustee
- ------------------------------------- ------------
John F. O'Brien
President, Chief Executive Officer
- ------------------------------------- and Trustee ------------
Richard M. Reilly
Treasurer (Principal Accounting Officer)
- ------------------------------------- ------------
Thomas P. Cunningham
Trustee
- ------------------------------------- ------------
Cynthia A. Hargadon
Trustee
- ------------------------------------- ------------
Gordon Holmes
Trustee
- ------------------------------------- ------------
John P. Kavanaugh
Trustee
- ------------------------------------- ------------
Bruce E. Langton
/s/ Attiat F. Ott Trustee 10/23/97
- ------------------------------------- ------------
Attiat F. Ott
Trustee
- ------------------------------------- ------------
Ranne P. Warner
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Worcester and Commonwealth
of Massachusetts on the 23rd day of October, 1997.
ALLMERICA INVESTMENT TRUST
-----------------------------
Registrant
By: /s/ Richard M. Reilly
-----------------------------
Richard M. Reilly, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Chairman of the Board and Trustee
- ------------------------------------- ------------
John F. O'Brien
President, Chief Executive Officer
- ------------------------------------- and Trustee ------------
Richard M. Reilly
Treasurer (Principal Accounting Officer)
- ------------------------------------- ------------
Thomas P. Cunningham
Trustee
- ------------------------------------- ------------
Cynthia A. Hargadon
Trustee
- ------------------------------------- ------------
Gordon Holmes
Trustee
- ------------------------------------- ------------
John P. Kavanaugh
Trustee
- ------------------------------------- ------------
Bruce E. Langton
Trustee
- ------------------------------------- ------------
Attiat F. Ott
/s/ Ranne P. Warner Trustee 10/23/97
- ------------------------------------- ------------
Ranne P. Warner
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description
- ------ -----------
<S> <C>
Exhibit 5(m) Amendment No. 2 to the Management Agreement dated September 1,
1997
Exhibit 5(n) Amended Schedule A to the Sub-Adviser Agreement between Manager
and Nicholas-Applegate Capital Management, L.P. with respect to
the Select Aggressive Growth Fund dated September 1, 1997
Exhibit 5(o) Amended Schedule A to the Sub-Adviser Agreement between Manager
and Janus Capital Corporation with respect to the Select
Capital Appreciation Fund dated September 1, 1997
Exhibit 5(p) Form of Co-Management Agreement between Manager and Rogers,
Casey Asset Services, Inc. with respect to the Select Emerging
Markets Fund
Exhibit 5(q) Form of Notice with respect to the Management Agreement
Exhibit 5(r) Form of Sub-Adviser Agreement between Manager and Montgomery
Asset Management, LLC with respect to the Select Emerging
Markets Fund
Exhibit 5(s) Form of Sub-Adviser Agreement between Manager and Morgan
Stanley Asset Management, Inc. with respect to the Select
Emerging Markets Fund
Exhibit 5(t) Form of Sub-Adviser Agreement between Manager and Scudder,
Stevens & Clark, Inc. with respect to the Select Emerging
Markets Fund
Exhibit 5(u) Form of Sub-Adviser Agreement between Manager and Cambiar
Investors, Inc. with respect to the Select Strategic Growth
Fund
Exhibit 9(g) Form of Notice with respect to the Fund Accounting Services
Agreement (the Select Emerging Markets Fund and Select
Strategic Growth Fund)
Exhibit 10 Opinion and consent of counsel
Exhibit 11 Consent of Independent Accountants
Exhibit 27 Financial Data Schedules
</TABLE>
14
<PAGE>
Exhibit 5(m)
AMENDMENT NO. 2
Amendment No. 2, effective September 1, 1997 (the "Amendment"), with respect to
the Management Agreement between Allmerica Investment Management Company, Inc.
(the "Adviser") and Allmerica Investment Trust (the "Trust") dated July 1, 1992
(the "Agreement"), as supplemented.
The Trust and the Adviser amend the Agreement as it relates to the Select
Aggressive Growth Fund, Select Capital Appreciation Fund, Select International
Equity Fund, Growth Fund, Select Growth and Income Fund, Select Income Fund and
Investment Grade Income Fund, series of the Trust, to provide that the fee paid
to the Adviser will be computed daily at an annual rate based on the average
daily net asset value of each Fund as set forth below:
<TABLE>
<CAPTION>
Select Select Select
Aggressive Capital International Select Growth
Growth Appreciation Equity Growth and
Assets Fund Fund Fund Fund Income Fund
------ ---- ---- ---- ---- -----------
<S> <C> <C> <C> <C> <C>
First $100 Million.............. 1.00% 1.00% 1.00% 0.60% 0.75%
$100 to $250 Million............ 0.90% 0.90% 0.90% 0.60% 0.70%
$250 to $500 Million............ 0.85% 0.85% 0.85% 0.40% 0.65%
Over $500 Million............... 0.85% 0.85% 0.85% 0.35% 0.65%
<CAPTION>
Investment
Select Grade
Assets Income Fund Income Fund
- ------ ----------- -----------
<S> <C> <C>
First $50 Million.............................. 0.60% 0.50%
$50 to $100 Million............................ 0.55% 0.45%
Over $100 Million.............................. 0.45% 0.40%
</TABLE>
This Amendment does not intend to and does not otherwise alter or amend the
Agreement which remains in full force and effect.
Allmerica Investment Trust Allmerica Investment Management
Company, Inc.
By: /s/ Richard M. Reilly By: /s/ Thomas P. Cunningham
----------------------------- ------------------------------
Date: 8/26/97 Date: 8/26/97
--------------------------- ----------------------------
<PAGE>
Exhibit 5(n)
AMENDED SCHEDULE A
------------------
TO THE SUB-ADVISER AGREEMENT BETWEEN
------------------------------------
ALLMERICA INVESTMENT MANAGEMENT COMPANY,
----------------------------------------
INC. (the "Manager") AND NICHOLAS-APPLEGATE CAPITAL
---------------------------------------------------
MANAGEMENT, L.P. (the "Sub-Adviser") DATED AUGUST 21, 1992
----------------------------------------------------------
RELATING TO THE SELECT AGGRESSIVE GROWTH FUND
---------------------------------------------
Effective September 1, 1997
The Manager will pay to the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the Sub-Adviser
pursuant to Section 1, a fee, computed daily at an annual rate based on the
average daily net assets of each Fund (valued in accordance with the current
Registration Statement of the Fund), as set forth below:
<TABLE>
<CAPTION>
Fund Net Assets Fee Rate
---- ------------------ --------
<S> <C> <C>
Select Aggressive Growth Fund First $100,000,000 0.60%
Next $150,000,000 0.55%
Next $250,000,000 0.50%
Over $500,000,000 0.45%
</TABLE>
Such fee will be paid to the Sub-Adviser after the end of each calendar quarter.
Allmerica Investment Management Company, Inc.
By: /s/ Thomas P. Cunningham 8/26/97
-------------------------------------------
Nicholas-Applegate Capital Management
By: /s/ E. Blake Moore, Jr.
-------------------------------------------
Accepted and Agreed to by
Allmerica Investment Trust
By: /s/ Richard M. Reilly 8/26/97
----------------------------------
<PAGE>
Exhibit 5(o)
AMENDED SCHEDULE A
------------------
TO THE SUB-ADVISER AGREEMENT BETWEEN
------------------------------------
ALLMERICA INVESTMENT MANAGEMENT COMPANY,INC. (the "Manager")
------------------------------------------------------------
AND JANUS CAPITAL CORPORATION (the "Sub-Adviser") DATED APRIL 28, 1992
----------------------------------------------------------------------
RELATING TO THE SELECT CAPITAL APPRECIATION FUND
------------------------------------------------
Effective September 1, 1997
The Manager will pay to the Sub-Adviser as full compensation for the
Sub-Adviser's services rendered, a fee, accrued monthly and paid quarterly based
on the average daily net assets of the Fund as set forth below:
<TABLE>
<CAPTION>
Fund Net Assets Fee Rate
---- ------------------ --------
<S> <C> <C>
Select Capital Appreciation Fund First $100,000,000 0.60%
Next $150,000,000 0.55%
Next $250,000,000 0.50%
Over $500,000,000 0.45%
</TABLE>
The average daily net assets of the Fund shall be determined by taking an
average of all of the determinations of net asset value during each month at the
close of business each business day during such month while this Agreement is in
effect.
The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter. If the Sub-Adviser shall serve for any period less than
a full month, the foregoing compensation shall be prorated according to the
proportion which such period bears to a full month.
Allmerica Investment Management Company, Inc.
By: /s/ Thomas P. Cunningham 8/26/97
-------------------------------------------
Janus Capital Corporation
By: /s/ Stephen L. Stieneker
--------------------------
Accepted and Agreed to by
Allmerica Investment Trust
By: /s/ Richard M. Reilly 8/26/97
----------------------------------
<PAGE>
Exhibit 5(p)
Draft
-----
CO-MANAGEMENT AGREEMENT
Co-Management Agreement executed as of January ____, 1998 between Allmerica
Investment Management Company, Inc. (the "Manager") and Rogers, Casey Asset
Services, Inc. (the "Co-Manager").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES TO BE RENDERED BY CO-MANAGER
(a) Subject always to the control of the Trustees of Allmerica Investment
Trust (the "Trust"), a Massachusetts business trust, and the
supervision and direction of the Manager, the Co-Manager, at its
expense, will furnish continuously investment management services for
the following series of shares of the Trust: the SELECT EMERGING
MARKETS FUND (the "Fund") and such other series of shares as the Trust,
the Manager and the Co-Manager may from time to time agree on
(together, the "Funds"). The Co-Manager will assist and advise the
Manager with respect to the:
. selection and retention of one or more sub-advisers (the "Sub-
Advisers") to provide investment advisory services for specified
portions of the Fund's assets;
. allocation of Fund assets to the respective Sub-Advisers;
. supervision of the Sub-Advisers, including, but not limited to,
reviewing with the Sub-Advisers on a regular basis (i) the
investment objectives, policies and restrictions of the Fund and
(ii) the procedures for the placing of orders for the purchase and
sale of portfolio securities for the Fund;
<PAGE>
. daily management of the portfolio securities and investment
operations of the Fund, including, but not limited to, the making
and execution of investment decisions; and
. other duties which the Manager and Co-Manager may agree upon from
time to time.
In the performance of its duties, the Co-Manager will comply with the
provisions of the Agreement and Declaration of Trust and Bylaws of the
Trust and the objectives and policies of the Fund, as set forth in the
current Registration Statement of the Trust filed with the Securities
and Exchange Commission ("SEC") and any applicable federal and state
laws, and will comply with other policies which the Trustees of the
Trust (the "Trustees") or the Manager, as the case may be, may from
time to time determine and which are furnished to the Co-Manager. The
Co-Manager shall make its officers and employees available to the
Manager from time to time at reasonable times to review investment
policies of the Fund and to consult with the Manager regarding the
investment affairs and management of the Fund. In the performance of
its duties hereunder, the Co-Manager is and shall be an independent
contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way or
otherwise be deemed to be an agent of the Trust.
(b) The Co-Manager, at its expense, will furnish (i) all investment and
management facilities, including salaries of personnel necessary for it
to perform the duties set forth in this Agreement, and (ii)
administrative facilities, including clerical personnel and equipment
necessary for the conduct of the investment affairs and management of
the Fund (excluding brokerage expenses and pricing and bookkeeping
services).
(c) The Co-Manager shall take all reasonable actions necessary to ensure
that the Sub-Advisers, in selecting brokers or dealers for the
placement of orders for the
2
<PAGE>
purchase and sale of portfolio investments for the Fund and in placing
such orders, always seek best execution (except to the extent permitted
by law and by policies that may be adopted by the Trustees).
2. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Co-Manager, and in any
person controlled by or under common control with the Co-Manager, and that
the Co-Manager and any person controlled by or under common control with the
Co-Manager may have an interest in the Trust. It is also understood that the
Co-Manager and persons controlled by or under common control with the Co-
Manager have and may have advisory, management service or other contracts
with other organizations and persons, and may have other interests and
businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE CO-MANAGER
The Manager will pay to the Co-Manager as compensation for the Co-Manager's
services rendered a fee, determined as described in Schedule A which is
attached hereto and made a part hereof. Such fee shall be paid by the
Manager and not by the Trust.
4. AMENDMENTS OF THIS AGREEMENT
This Agreement (including Schedule A attached hereto) shall not be amended
as to any Fund unless such amendment is approved at a meeting by the
affirmative vote of a majority of the outstanding voting securities of the
Fund, if such approval is required under the Investment Company Act of 1940,
as amended ("1940 Act"), and by the vote, cast in person at a meeting called
for the purpose of voting on such approval, of a
3
<PAGE>
majority of the Trustees who are not interested persons of the Trust or of
the Manager, the Co-Manager or any Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall be effective as of January 1, 1998, and shall remain in
full force and effect as to each Fund continuously thereafter, until
terminated as provided below:
(a) Unless terminated as herein provided, this Agreement shall remain in
full force and effect for a period of two years and shall continue in
full force and effect for successive periods of one year thereafter,
but only so long as such continuance is specifically approved at least
annually (i) by the Trustees or by the affirmative vote of a majority
of the outstanding voting securities of the Fund, and (ii) by a vote of
a majority of the Trustees who are not interested persons of the Trust
or of the Manager, the Co-Manager or any Sub-Adviser, by vote cast in
person at a meeting called for the purpose of voting on such approval;
provided, however, that if the continuance of this Agreement is
submitted to the shareholders of the Fund for their approval and such
shareholders fail to approve such continuance of this Agreement as
provided herein, the Co-Manager may continue to serve hereunder in a
manner consistent with the 1940 Act and the rules and regulations
thereunder.
(b) This Agreement may be terminated as to any Fund without the payment of
any penalty by the Manager, subject to the approval of the Trustees, by
vote of the Trustees, or by vote of a majority of the outstanding
voting securities of such Fund at any annual or special meeting or by
the Co-Manager, in each case on sixty days' written notice.
(c) This Agreement shall terminate automatically, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Agreement with the Manager shall have terminated for any
reason.
4
<PAGE>
(d) In the event of termination of this Agreement, the Fund will no longer
use the name "Rogers, Casey Asset Services, Inc." or in materials
relating to the Fund except as may be required by the 1940 Act and the
rules and regulations thereunder.
6. CERTAIN DEFINITIONS
For the purposes of this Agreement, "best execution" means placing portfolio
transactions where the Fund can obtain the most favorable combination of
price and execution services in particular transactions or provided on a
continuing basis by a broker or dealer, and to deal directly with a
principal market maker in connection with over-the-counter transactions,
except when it is believed that best execution is obtainable elsewhere.
For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding voting securities" means the affirmative vote, at a duly
called and held meeting of shareholders, (a) of the holders of 67% or more
of the shares of the Fund present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the outstanding
shares of the Fund entitled to vote at such meeting are present in person or
by proxy, or (b) of the holders of more than 50% of the outstanding shares
of the Fund entitled to vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "control", "interested person"
and "assignment" shall have their respective meanings defined in the 1940
Act and rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the SEC under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder.
5
<PAGE>
7. NON-LIABILITY OF CO-MANAGER
The Co-Manager shall be under no liability to the Trust, the Manager, the
Sub-Advisers or the Trust's Shareholders or creditors for any matter or
thing in connection with the performance of any of the Co-Manager's services
hereunder or for any losses sustained or that may be sustained in the
purchase, sale or retention of any investment for the Funds of the Trust
made by it in good faith; provided, however, that nothing herein contained
shall be construed to protect the Co-Manager against any liability to the
Trust by reason of the Co-Manager's own willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties hereunder.
8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Trust's Agreement and Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed by an officer of the Trust as an officer
and not individually and that the obligations of this instrument are not
binding upon any of the Trustees, officers or shareholders individually but
are binding only upon the assets and property of the appropriate Fund.
6
<PAGE>
IN WITNESS WHEREOF, ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC. has caused
this instrument to be signed in duplicate on its behalf by its duly authorized
representative and ROGERS, CASEY ASSET SERVICES, INC. has caused this instrument
to be signed in duplicate on its behalf by its duly authorized representative,
all as of the day and year first above written.
ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC.
By:
-----------------------------------------
Its:
-----------------------------------------
ROGERS, CASEY ASSET SERVICES, INC.
By:
-----------------------------------------
Its:
-----------------------------------------
Accepted and Agreed to as of the day and year first above written:
By:
-----------------------------------------
Its:
-----------------------------------------
7
<PAGE>
SCHEDULE A
----------
The Manager will pay to the Co-Manager as full compensation for the Co-Manager's
services rendered, a fee, computed daily at an annual rate based on the
average daily net assets of the Fund as set forth below.
<TABLE>
<CAPTION>
Assets Rate
------ ----
<S> <C>
First $ 50,000,000 0.25%
Next $ 50,000,000 0.20%
Next $ 50,000,000 0.20%
Over $150,000,000 0.15%
</TABLE>
The fee, which is paid on a quarterly basis, shall be payable within ten (10)
business days after the end of the quarter. The average daily net assets of the
Fund shall be determined by taking an average of all of the determinations of
net asset value during each month at the close of business on each business day
during such month while this Agreement is in effect.
If the Co-Manager shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full year (365 days).
8
<PAGE>
Exhibit 5(q)
FORM OF
NOTICE
Notice, effective January ___, 1998, with respect to the Management Agreement
(the "Agreement") between Allmerica Investment Management Company, Inc. (the
"Adviser") and Allmerica Investment Trust (the "Trust") dated July 1, 1992, as
supplemented.
The Trust and the Adviser give notice that:
(i) two additional series of the Trust, the Select Emerging Markets Fund and
the Select Strategic Growth Fund (the "New Series"), have been established.
Each New Series constitutes a "Fund" for purposes of Section 1 of the
Agreement, and the Adviser will serve as investment adviser for each New
Series under the terms of the Agreement; and
(ii) for purposes of Section 5 of the Agreement, the Trust will pay a monthly
fee to the Adviser, computed daily at an annual rate based on the average
daily net asset value of each of the New Series as set forth below:
Fund Fee Rate
---- --------
Select Emerging Markets Fund 1.50%
Select Strategic Growth Fund 0.85%
This Notice does not intend to and does not otherwise alter or amend the
Agreement which remains in full force and effect.
Allmerica Investment Trust Allmerica Investment Management
Company, Inc.
By: /s/ Richard M. Reilly By: /s/ Thomas P. Cunningham
----------------------------- ------------------------
Date: Date:
---------------------------- -----------------------
<PAGE>
EXHIBIT 5(r)
FORM OF
SUB-ADVISER AGREEMENT
SUB-ADVISER AGREEMENT executed as of January___,1998 between Allmerica
Investment Management Company, Inc. (the "Manager") and Montgomery Asset
Management, LLC (the "Sub-Adviser").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST
(a) Subject always to the control of the Trustees of Allmerica Investment
Trust (the "Trust"), a Massachusetts business trust, the Sub-Adviser, at
its expense, will furnish continuously an investment program for that
portion of the assets of the following series of shares of the Trust
that the Manager or Rogers, Casey Asset Services, Inc. (the "Co-
Manager") from time to time places under the supervision of the Sub-
Adviser: the SELECT EMERGING MARKETS FUND (the "Fund") and such other
series of shares as the Trust, the Manager and the Sub-Adviser may from
time to time agree on (together, the "Funds"). The Sub-Adviser will make
investment decisions on behalf of that portion of the assets of the Fund
that it manages and place all orders for the purchase and sale of
portfolio securities in connection therewith. In the performance of its
duties, the Sub-Adviser will comply with the provisions of the Agreement
and Declaration of Trust and Bylaws of the Trust and the objectives and
policies of the Fund, as set forth in the current Registration Statement
of the Trust filed with the Securities and Exchange Commission ("SEC")
and any applicable federal and state laws, and will comply with other
policies which the Trustees of the Trust (the "Trustees") or the
Manager, as the case may be, may from time to time determine and
<PAGE>
which are furnished to the Sub-Adviser. The Sub-Adviser shall make its
officers and employees available to the Manager from time to time at
reasonable times to review investment policies of the Fund and to
consult with the Manager regarding the investment affairs of the Fund.
In the performance of its duties hereunder, the Sub-Adviser is and shall
be an independent contractor and, unless otherwise expressly provided or
authorized, shall have no authority to act for or represent the Trust in
any way or otherwise be deemed to be an agent of the Trust.
(b) The Sub-Adviser, at its expense, will furnish (i) all investment and
management facilities, including salaries of personnel necessary for it
to perform the duties set forth in this Agreement, and (ii)
administrative facilities, including clerical personnel and equipment
necessary for the conduct of the investment affairs of the Fund
(excluding brokerage expenses and pricing and bookkeeping services).
(c) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investments for the portion of the assets of the Fund that it
manages with issuers, brokers or dealers selected by the Sub-Adviser
which may include brokers or dealers affiliated with the Sub-Adviser. In
the selection of such brokers or dealers and the placing of such orders,
the Sub-Adviser always shall seek best execution (except to the extent
permitted by the next sentence hereof), which is to place portfolio
transactions where the Fund can obtain the most favorable combination of
price and execution services in particular transactions or provided on a
continuing basis by a broker or dealer, and to deal directly with a
principal market maker in connection with over-the-counter transactions,
except when it is believed that best execution is obtainable elsewhere.
Subject to such policies as the Trustees may determine, the Sub-Adviser
shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its
having caused the Trust to pay a broker or dealer that provides
brokerage and research services an amount of commission for effecting a
portfolio investment transaction in excess of the amount of
2
<PAGE>
commission another broker or dealer would have charged for effecting
that transaction, if the Sub-Adviser determines in good faith that such
excess amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser and its affiliates with respect to
the Trust and to other clients of the Sub-Adviser as to which Sub-
Adviser or any affiliate of the Sub-Adviser exercises investment
discretion.
2. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and that
the Sub-Adviser and any person controlled by or under common control with
the Sub-Adviser may have an interest in the Trust. It is also understood
that the Sub-Adviser and persons controlled by or under common control with
the Sub-Adviser have and may have advisory, management service or other
contracts with other organizations and persons, and may have other
interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER
The Manager will pay to the Sub-Adviser as compensation for the Sub-
Adviser's services rendered a fee, determined as described in Schedule A
which is attached hereto and made a part hereof. Such fee shall be paid by
the Manager and not by the Trust.
4. AMENDMENTS OF THIS AGREEMENT
This Agreement (including Schedule A attached hereto) shall not be amended
as to any Fund unless such amendment is approved at a meeting by the
affirmative vote of a majority of the
3
<PAGE>
outstanding voting securities of the Fund, if such approval is required
under the Investment Company Act of 1940, as amended ("1940 Act"), and by
the vote, cast in person at a meeting called for the purpose of voting on
such approval, of a majority of the Trustees who are not interested persons
of the Trust or of the Manager or of the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall be effective as of January 1, 1998, and shall remain
in full force and effect as to each Fund continuously thereafter, until
terminated as provided below:
(a) Unless terminated as herein provided, this Agreement shall remain in
full force and effect for a period of two years and shall continue in
full force and effect for successive periods of one year thereafter,
but only so long as such continuance is specifically approved at least
annually (i) by the Trustees or by the affirmative vote of a majority
of the outstanding voting securities of the Fund, and (ii) by a vote of
a majority of the Trustees who are not interested persons of the Trust
or of the Manager or of any Sub-Adviser, by vote cast in person at a
meeting called for the purpose of voting on such approval; provided,
however, that if the continuance of this Agreement is submitted to the
shareholders of the Fund for their approval and such shareholders fail
to approve such continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner consistent with
the 1940 Act and the rules and regulations thereunder.
(b) This Agreement may be terminated as to any Fund without the payment of
any penalty by the Manager, subject to the approval of the Trustees, by
vote of the Trustees, or by vote of a majority of the outstanding
voting securities of such Fund at any annual or special meeting or by
the Sub-Adviser, in each case on sixty days' written notice.
(c) This Agreement shall terminate automatically, without the payment of
any penalty, in
4
<PAGE>
the event of its assignment or in the event that the Management
Agreement with the Manager shall have terminated for any reason.
(d) In the event of termination of this Agreement, the Fund will no longer
use the name "Montgomery Asset Management, LLC in materials relating
to the Fund except as may be required by the 1940 Act and the rules and
regulations thereunder.
6. CERTAIN DEFINITIONS
For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding voting securities" means the affirmative vote, at a duly
called and held meeting of shareholders, (a) of the holders of 67% or more
of the shares of the Fund present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the outstanding
shares of the Fund entitled to vote at such meeting are present in person
or by proxy, or (b) of the holders of more than 50% of the outstanding
shares of the Fund entitled to vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "control", "interested
person" and "assignment" shall have their respective meanings defined in
the 1940 Act and rules and regulations thereunder, subject, however, to
such exemptions as may be granted by the SEC under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder; and
the term "brokerage and research services" shall have the meaning given in
the Securities Exchange Act of 1934 and the rules and regulations
thereunder.
5
<PAGE>
7. NON-LIABILITY OF SUB-ADVISER
The Sub-Adviser shall be under no liability to the Trust, the Manager or
the Trust's Shareholders or creditors for any matter or thing in
connection with the performance of any of the Sub-Adviser's services
hereunder or for any losses sustained or that may be sustained in the
purchase, sale or retention of any investment for the Funds of the Trust
made by it in good faith; provided, however, that nothing herein contained
shall be construed to protect the Sub-Adviser against any liability to the
Trust by reason of the Sub-Adviser's own willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties hereunder.
8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Trust's Agreement and Declaration of Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed by the Trustees as Trustees and not
individually and that the obligations of this instrument are not binding
upon any of the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the appropriate Fund.
6
<PAGE>
IN WITNESS WHEREOF, ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC. has caused
this instrument to be signed in duplicate on its behalf by its duly authorized
representative and Capital International, Inc. has caused this instrument to be
signed in duplicate on its behalf by its duly authorized representative, all as
of the day and year first above written.
ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC.
By:
--------------------------------------
Its:
--------------------------------------
MONTGOMERY ASSET MANAGEMENT, LLC
By:
--------------------------------------
Its:
--------------------------------------
Accepted and Agreed to as of the day and year first above written:
By:
--------------------------------------
Its:
--------------------------------------
7
<PAGE>
SCHEDULE A
----------
The Manager will pay to the Sub-Adviser as full compensation for the Sub-
Adviser's services rendered, a fee computed daily and paid quarterly at an
annual rate of the average daily net assets of the portion of the assets of the
Fund that the Sub-Adviser from time to time manages as described below:
NET ASSETS FEE RATE
---------- --------
First $50,000,000 0.90%
Next $50,000,000 0.80%
Next $50,000,000 0.70%
Over $150,000,000 0.70%
The average daily net assets of the portion of the assets of the Fund that the
Sub-Adviser from time to time manages shall be determined by taking an average
of all of the determinations of net asset value of the assets managed by the
Sub-Adviser during each month at the close of business on each business day
during such month while this Agreement is in effect.
The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter.
If the Sub-Adviser shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full month.
8
<PAGE>
EXHIBIT 5(s)
FORM OF
SUB-ADVISER AGREEMENT
SUB-ADVISER AGREEMENT executed as of January____, 1998 between Allmerica
Investment Management Company, Inc. (the "Manager") and Morgan Stanley Asset
Management, Inc. (the "Sub-Adviser").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST
(a) Subject always to the control of the Trustees of Allmerica Investment
Trust (the "Trust"), a Massachusetts business trust, the Sub-Adviser, at
its expense, will furnish continuously an investment program for that
portion of the assets of the following series of shares of the Trust
that the Manager or Rogers, Casey Asset Services, Inc. (the "Co-
Manager") from time to time places under the supervision of the Sub-
Adviser: the SELECT EMERGING MARKETS FUND (the "Fund") and such other
series of shares as the Trust, the Manager and the Sub-Adviser may from
time to time agree on (together, the "Funds"). The Sub-Adviser will make
investment decisions on behalf of that portion of the assets of the Fund
that it manages and place all orders for the purchase and sale of
portfolio securities in connection therewith. In the performance of its
duties, the Sub-Adviser will comply with the provisions of the Agreement
and Declaration of Trust and Bylaws of the Trust and the objectives and
policies of the Fund, as set forth in the current Registration Statement
of the Trust filed with the Securities and Exchange Commission ("SEC")
and any applicable federal and state laws, and will comply with other
policies which the Trustees of the Trust (the "Trustees") or the
Manager, as the case may be, may from time to time determine and
<PAGE>
which are furnished to the Sub-Adviser. The Sub-Adviser shall make its
officers and employees available to the Manager from time to time at
reasonable times to review investment policies of the Fund and to
consult with the Manager regarding the investment affairs of the Fund.
In the performance of its duties hereunder, the Sub-Adviser is and shall
be an independent contractor and, unless otherwise expressly provided or
authorized, shall have no authority to act for or represent the Trust in
any way or otherwise be deemed to be an agent of the Trust.
(b) The Sub-Adviser, at its expense, will furnish (i) all investment and
management facilities, including salaries of personnel necessary for it
to perform the duties set forth in this Agreement, and (ii)
administrative facilities, including clerical personnel and equipment
necessary for the conduct of the investment affairs of the Fund
(excluding brokerage expenses and pricing and bookkeeping services).
(c) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investments for the portion of the assets of the Fund that it
manages with issuers, brokers or dealers selected by the Sub-Adviser
which may include brokers or dealers affiliated with the Sub-Adviser. In
the selection of such brokers or dealers and the placing of such orders,
the Sub-Adviser always shall seek best execution (except to the extent
permitted by the next sentence hereof), which is to place portfolio
transactions where the Fund can obtain the most favorable combination of
price and execution services in particular transactions or provided on a
continuing basis by a broker or dealer, and to deal directly with a
principal market maker in connection with over-the-counter transactions,
except when it is believed that best execution is obtainable elsewhere.
Subject to such policies as the Trustees may determine, the Sub-Adviser
shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its
having caused the Trust to pay a broker or dealer that provides
brokerage and research services an amount of commission for effecting a
portfolio investment transaction in excess of the amount of
2
<PAGE>
commission another broker or dealer would have charged for effecting
that transaction, if the Sub-Adviser determines in good faith that such
excess amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser and its affiliates with respect to
the Trust and to other clients of the Sub-Adviser as to which Sub-
Adviser or any affiliate of the Sub-Adviser exercises investment
discretion.
2. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and that
the Sub-Adviser and any person controlled by or under common control with
the Sub-Adviser may have an interest in the Trust. It is also understood
that the Sub-Adviser and persons controlled by or under common control with
the Sub-Adviser have and may have advisory, management service or other
contracts with other organizations and persons, and may have other interests
and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER
The Manager will pay to the Sub-Adviser as compensation for the Sub-
Adviser's services rendered a fee, determined as described in Schedule A
which is attached hereto and made a part hereof. Such fee shall be paid by
the Manager and not by the Trust.
4. AMENDMENTS OF THIS AGREEMENT
This Agreement (including Schedule A attached hereto) shall not be amended
as to any Fund unless such amendment is approved at a meeting by the
affirmative vote of a majority of the
3
<PAGE>
outstanding voting securities of the Fund, if such approval is required
under the Investment Company Act of 1940, as amended ("1940 Act"), and by
the vote, cast in person at a meeting called for the purpose of voting on
such approval, of a majority of the Trustees who are not interested persons
of the Trust or of the Manager or of the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall be effective as of January 1, 1998, and shall remain in
full force and effect as to each Fund continuously thereafter, until
terminated as provided below:
(a) Unless terminated as herein provided, this Agreement shall remain in
full force and effect for a period of two years and shall continue in
full force and effect for successive periods of one year thereafter, but
only so long as such continuance is specifically approved at least
annually (i) by the Trustees or by the affirmative vote of a majority of
the outstanding voting securities of the Fund, and (ii) by a vote of a
majority of the Trustees who are not interested persons of the Trust or
of the Manager or of any Sub-Adviser, by vote cast in person at a
meeting called for the purpose of voting on such approval; provided,
however, that if the continuance of this Agreement is submitted to the
shareholders of the Fund for their approval and such shareholders fail
to approve such continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner consistent with
the 1940 Act and the rules and regulations thereunder.
(b) This Agreement may be terminated as to any Fund without the payment of
any penalty by the Manager, subject to the approval of the Trustees, by
vote of the Trustees, or by vote of a majority of the outstanding voting
securities of such Fund at any annual or special meeting or by the Sub-
Adviser, in each case on sixty days' written notice.
(c) This Agreement shall terminate automatically, without the payment of any
penalty, in
4
<PAGE>
the event of its assignment or in the event that the Management
Agreement with the Manager shall have terminated for any reason.
(d) In the event of termination of this Agreement, the Fund will no longer
use the name "Morgan Stanley Asset Management, Inc." in materials
relating to the Fund except as may be required by the 1940 Act and the
rules and regulations thereunder.
6. CERTAIN DEFINITIONS
For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding voting securities" means the affirmative vote, at a duly
called and held meeting of shareholders, (a) of the holders of 67% or more
of the shares of the Fund present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the outstanding
shares of the Fund entitled to vote at such meeting are present in person or
by proxy, or (b) of the holders of more than 50% of the outstanding shares
of the Fund entitled to vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "control", "interested person"
and "assignment" shall have their respective meanings defined in the 1940
Act and rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the SEC under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder; and
the term "brokerage and research services" shall have the meaning given in
the Securities Exchange Act of 1934 and the rules and regulations
thereunder.
5
<PAGE>
7. NON-LIABILITY OF SUB-ADVISER
The Sub-Adviser shall be under no liability to the Trust, the Manager or the
Trust's Shareholders or creditors for any matter or thing in connection
with the performance of any of the Sub-Adviser's services hereunder or for
any losses sustained or that may be sustained in the purchase, sale or
retention of any investment for the Funds of the Trust made by it in good
faith; provided, however, that nothing herein contained shall be construed
to protect the Sub-Adviser against any liability to the Trust by reason of
the Sub-Adviser's own willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties hereunder.
8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Trust's Agreement and Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed by the Trustees as Trustees and not
individually and that the obligations of this instrument are not binding
upon any of the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the appropriate Fund.
6
<PAGE>
IN WITNESS WHEREOF, ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC. has caused
this instrument to be signed in duplicate on its behalf by its duly authorized
representative and Capital International, Inc. has caused this instrument to be
signed in duplicate on its behalf by its duly authorized representative, all as
of the day and year first above written.
ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC.
By:
--------------------------------------
Its:
--------------------------------------
MORGAN STANLEY ASSET MANAGEMENT, INC.
By:
--------------------------------------
Its:
--------------------------------------
Accepted and Agreed to as of the day and year first above written:
By:
--------------------------------------
Its:
--------------------------------------
7
<PAGE>
SCHEDULE A
----------
The Manager will pay to the Sub-Adviser as full compensation for the Sub-
Adviser's services rendered, a fee computed daily and paid quarterly at an
annual rate of the average daily net assets of the portion of the assets of the
Fund that the Sub-Adviser from time to time manages as described below:
NET ASSETS FEE RATE
---------- --------
First $50,000,000 0.80%
Next $50,000,000 0.70%
Next $50,000,000 0.60%
Over $150,000,000 0.60%
The average daily net assets of the portion of the assets of the Fund that the
Sub-Adviser from time to time manages shall be determined by taking an average
of all of the determinations of net asset value of the assets managed by the
Sub-Adviser during each month at the close of business on each business day
during such month while this Agreement is in effect.
The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter.
If the Sub-Adviser shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full month.
8
<PAGE>
EXHIBIT 5(t)
FORM OF
SUB-ADVISER AGREEMENT
SUB-ADVISER AGREEMENT executed as of January___, 1998 between Allmerica
Investment Management Company, Inc. (the "Manager") and Scudder, Stevens &
Clark, Inc. (the "Sub-Adviser").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST
(a) Subject always to the control of the Trustees of Allmerica Investment
Trust (the "Trust"), a Massachusetts business trust, the Sub-Adviser, at
its expense, will furnish continuously an investment program for that
portion of the assets of the following series of shares of the Trust
that the Manager or Rogers, Casey Asset Services, Inc. (the "Co-
Manager") from time to time places under the supervision of the Sub-
Adviser: the SELECT EMERGING MARKETS FUND (the "Fund") and such other
series of shares as the Trust, the Manager and the Sub-Adviser may from
time to time agree on (together, the "Funds"). The Sub-Adviser will make
investment decisions on behalf of that portion of the assets of the Fund
that it manages and place all orders for the purchase and sale of
portfolio securities in connection therewith. In the performance of its
duties, the Sub-Adviser will comply with the provisions of the Agreement
and Declaration of Trust and Bylaws of the Trust and the objectives and
policies of the Fund, as set forth in the current Registration Statement
of the Trust filed with the Securities and Exchange Commission ("SEC")
and any applicable federal and state laws, and will comply with other
policies which the Trustees of the Trust (the "Trustees") or the
Manager, as the case may be, may from time to time determine and
<PAGE>
which are furnished to the Sub-Adviser. The Sub-Adviser shall make its
officers and employees available to the Manager from time to time at
reasonable times to review investment policies of the Fund and to
consult with the Manager regarding the investment affairs of the Fund.
In the performance of its duties hereunder, the Sub-Adviser is and shall
be an independent contractor and, unless otherwise expressly provided or
authorized, shall have no authority to act for or represent the Trust in
any way or otherwise be deemed to be an agent of the Trust.
(b) The Sub-Adviser, at its expense, will furnish (i) all investment and
management facilities, including salaries of personnel necessary for it
to perform the duties set forth in this Agreement, and (ii)
administrative facilities, including clerical personnel and equipment
necessary for the conduct of the investment affairs of the Fund
(excluding brokerage expenses and pricing and bookkeeping services).
(c) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investments for the portion of the assets of the Fund that it
manages with issuers, brokers or dealers selected by the Sub-Adviser
which may include brokers or dealers affiliated with the Sub-Adviser. In
the selection of such brokers or dealers and the placing of such orders,
the Sub-Adviser always shall seek best execution (except to the extent
permitted by the next sentence hereof), which is to place portfolio
transactions where the Fund can obtain the most favorable combination of
price and execution services in particular transactions or provided on a
continuing basis by a broker or dealer, and to deal directly with a
principal market maker in connection with over-the-counter transactions,
except when it is believed that best execution is obtainable elsewhere.
Subject to such policies as the Trustees may determine, the Sub-Adviser
shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its
having caused the Trust to pay a broker or dealer that provides
brokerage and research services an amount of commission for effecting a
portfolio investment transaction in excess of the amount of
2
<PAGE>
commission another broker or dealer would have charged for effecting
that transaction, if the Sub-Adviser determines in good faith that such
excess amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser and its affiliates with respect to
the Trust and to other clients of the Sub-Adviser as to which Sub-
Adviser or any affiliate of the Sub-Adviser exercises investment
discretion.
2. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and that
the Sub-Adviser and any person controlled by or under common control with
the Sub-Adviser may have an interest in the Trust. It is also understood
that the Sub-Adviser and persons controlled by or under common control with
the Sub-Adviser have and may have advisory, management service or other
contracts with other organizations and persons, and may have other interests
and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER
The Manager will pay to the Sub-Adviser as compensation for the Sub-
Adviser's services rendered a fee, determined as described in Schedule A
which is attached hereto and made a part hereof. Such fee shall be paid by
the Manager and not by the Trust.
4. AMENDMENTS OF THIS AGREEMENT
This Agreement (including Schedule A attached hereto) shall not be amended
as to any Fund unless such amendment is approved at a meeting by the
affirmative vote of a majority of the
3
<PAGE>
outstanding voting securities of the Fund, if such approval is required
under the Investment Company Act of 1940, as amended ("1940 Act"), and by
the vote, cast in person at a meeting called for the purpose of voting on
such approval, of a majority of the Trustees who are not interested persons
of the Trust or of the Manager or of the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall be effective as of January 1, 1998, and shall remain in
full force and effect as to each Fund continuously thereafter, until
terminated as provided below:
(a) Unless terminated as herein provided, this Agreement shall remain in
full force and effect for a period of two years and shall continue in
full force and effect for successive periods of one year thereafter, but
only so long as such continuance is specifically approved at least
annually (i) by the Trustees or by the affirmative vote of a majority of
the outstanding voting securities of the Fund, and (ii) by a vote of a
majority of the Trustees who are not interested persons of the Trust or
of the Manager or of any Sub-Adviser, by vote cast in person at a
meeting called for the purpose of voting on such approval; provided,
however, that if the continuance of this Agreement is submitted to the
shareholders of the Fund for their approval and such shareholders fail
to approve such continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner consistent with
the 1940 Act and the rules and regulations thereunder.
(b) This Agreement may be terminated as to any Fund without the payment of
any penalty by the Manager, subject to the approval of the Trustees, by
vote of the Trustees, or by vote of a majority of the outstanding voting
securities of such Fund at any annual or special meeting or by the Sub-
Adviser, in each case on sixty days' written notice.
4
<PAGE>
(c) This Agreement shall terminate automatically, without the payment of any
penalty, in the event of its assignment or in the event that the
Management Agreement with the Manager shall have terminated for any
reason.
(d) In the event of termination of this Agreement, the Fund will no longer
use the name "Scudder, Stevens & Clark, Inc." in materials relating to
the Fund except as may be required by the 1940 Act and the rules and
regulations thereunder.
6. CERTAIN DEFINITIONS
For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding voting securities" means the affirmative vote, at a duly
called and held meeting of shareholders, (a) of the holders of 67% or more
of the shares of the Fund present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the outstanding
shares of the Fund entitled to vote at such meeting are present in person or
by proxy, or (b) of the holders of more than 50% of the outstanding shares
of the Fund entitled to vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "control", "interested person"
and "assignment" shall have their respective meanings defined in the 1940
Act and rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the SEC under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder; and
the term "brokerage and research services" shall have the meaning given in
the Securities Exchange Act of 1934 and the rules and regulations
thereunder.
5
<PAGE>
7. NON-LIABILITY OF SUB-ADVISER
The Sub-Adviser shall be under no liability to the Trust, the Manager or the
Trust's Shareholders or creditors for any matter or thing in connection
with the performance of any of the Sub-Adviser's services hereunder or for
any losses sustained or that may be sustained in the purchase, sale or
retention of any investment for the Funds of the Trust made by it in good
faith; provided, however, that nothing herein contained shall be construed
to protect the Sub-Adviser against any liability to the Trust by reason of
the Sub-Adviser's own willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties hereunder.
8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Trust's Agreement and Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed by the Trustees as Trustees and not
individually and that the obligations of this instrument are not binding
upon any of the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the appropriate Fund.
6
<PAGE>
IN WITNESS WHEREOF, ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC. has caused
this instrument to be signed in duplicate on its behalf by its duly authorized
representative and Capital International, Inc. has caused this instrument to be
signed in duplicate on its behalf by its duly authorized representative, all as
of the day and year first above written.
ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC.
By:
--------------------------------------
Its:
--------------------------------------
SCUDDER, STEVENS & CLARK, INC.
By:
--------------------------------------
Its:
--------------------------------------
Accepted and Agreed to as of the day and year first above written:
By:
--------------------------------------
Its:
--------------------------------------
7
<PAGE>
SCHEDULE A
----------
The Manager will pay to the Sub-Adviser as full compensation for the Sub-
Adviser's services rendered, a fee computed daily and paid quarterly at an
annual rate of the average daily net assets of the portion of the assets of the
Fund that the Sub-Adviser from time to time manages as described below:
NET ASSETS FEE RATE
---------- --------
First $50,000,000 0.90%
Next $50,000,000 0.70%
Next $50,000,000 0.70%
Over $150,000,000 0.60%
The average daily net assets of the portion of the assets of the Fund that the
Sub-Adviser from time to time manages shall be determined by taking an average
of all of the determinations of net asset value of the assets managed by the
Sub-Adviser during each month at the close of business on each business day
during such month while this Agreement is in effect.
The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter.
If the Sub-Adviser shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full month.
8
<PAGE>
EXHIBIT 5(u)
FORM OF
SUB-ADVISER AGREEMENT
SUB-ADVISER AGREEMENT executed as of January___, 1998 between Allmerica
Investment Management Company, Inc. (the "Manager") and Cambiar Investors, Inc.
(the "Sub-Adviser").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST
(a) Subject always to the control of the Trustees of Allmerica Investment
Trust (the "Trust"), a Massachusetts business trust, the Sub-Adviser,
at its expense, will furnish continuously an investment program for the
following series of shares of the Trust: the SELECT STRATEGIC
GROWTH FUND (the "Fund") and such other series of shares as the Trust,
the Manager and the Sub-Adviser may from time to time agree on
(together, the "Funds"). The Sub-Adviser will make investment decisions
on behalf of the Funds and place all orders for the purchase and sale
of portfolio securities. In the performance of its duties, the Sub-
Adviser will comply with the provisions of the Agreement and
Declaration of Trust and Bylaws of the Trust and the objectives and
policies of the Fund, as set forth in the current Registration
Statement of the Trust filed with the Securities and Exchange
Commission ("SEC") and any applicable federal and state laws, and will
comply with other policies which the Trustees of the Trust (the
"Trustees") or the Manager, as the case may be, may from time to time
determine and which are furnished to the Sub-Adviser. The Sub-Adviser
shall make its officers and employees available to the Manager from
time to time at reasonable times to review investment policies of the
Fund and to consult with the Manager regarding the
<PAGE>
investment affairs of the Fund. In the performance of its duties
hereunder, the Sub-Adviser is and shall be an independent contractor
and, unless otherwise expressly provided or authorized, shall have no
authority to act for or represent the Trust in any way or otherwise be
deemed to be an agent of the Trust.
(b) The Sub-Adviser, at its expense, will furnish (i) all investment and
management facilities, including salaries of personnel necessary for it
to perform the duties set forth in this Agreement, and (ii)
administrative facilities, including clerical personnel and equipment
necessary for the conduct of the investment affairs of the Fund
(excluding brokerage expenses and pricing and bookkeeping services).
(c) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investments for the Fund with issuers, brokers or dealers
selected by the Sub-Adviser which may include brokers or dealers
affiliated with the Sub-Adviser. In the selection of such brokers or
dealers and the placing of such orders, the Sub-Adviser always shall
seek best execution (except to the extent permitted by the next
sentence hereof), which is to place portfolio transactions where the
Fund can obtain the most favorable combination of price and execution
services in particular transactions or provided on a continuing basis
by a broker or dealer, and to deal directly with a principal market
maker in connection with over-the-counter transactions, except when it
is believed that best execution is obtainable elsewhere. Subject to
such policies as the Trustees may determine, the Sub-Adviser shall not
be deemed to have acted unlawfully or to have breached any duty created
by this Agreement or otherwise solely by reason of its having caused
the Trust to pay a broker or dealer that provides brokerage and
research services an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if
the Sub-Adviser determines in good faith that such excess amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of
either that
2
<PAGE>
particular transaction or the overall responsibilities of the Sub-
Adviser and its affiliates with respect to the Trust and to other
clients of the Sub-Adviser as to which Sub-Adviser or any affiliate of
the Sub-Adviser exercises investment discretion.
2. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any
person controlled by or under common control with the Sub-Adviser, and that
the Sub-Adviser and any person controlled by or under common control with
the Sub-Adviser may have an interest in the Trust. It is also understood
that the Sub-Adviser and persons controlled by or under common control with
the Sub-Adviser have and may have advisory, management service or other
contracts with other organizations and persons, and may have other interests
and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER
The Manager will pay to the Sub-Adviser as compensation for the Sub-
Adviser's services rendered a fee, determined as described in Schedule A
which is attached hereto and made a part hereof. Such fee shall be paid by
the Manager and not by the Trust.
4. AMENDMENTS OF THIS AGREEMENT
This Agreement (including Schedule A attached hereto) shall not be amended
as to any Fund unless such amendment is approved at a meeting by the
affirmative vote of a majority of the outstanding voting securities of the
Fund, if such approval is required under the Investment Company Act of 1940,
as amended ("1940 Act"), and by the vote, cast in person at a meeting called
for the purpose of voting on such approval, of a majority of the Trustees
who are not interested persons of the Trust or of the Manager or of the Sub-
Adviser.
3
<PAGE>
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall be effective as of January 1, 1998, and shall remain in
full force and effect as to each Fund continuously thereafter, until
terminated as provided below:
(a) Unless terminated as herein provided, this Agreement shall remain in
full force and effect for a period of two years and shall continue in
full force and effect for successive periods of one year thereafter,
but only so long as such continuance is specifically approved at least
annually (i) by the Trustees or by the affirmative vote of a majority
of the outstanding voting securities of the Fund, and (ii) by a vote of
a majority of the Trustees who are not interested persons of the Trust
or of the Manager or of any Sub-Adviser, by vote cast in person at a
meeting called for the purpose of voting on such approval; provided,
however, that if the continuance of this Agreement is submitted to the
shareholders of the Fund for their approval and such shareholders fail
to approve such continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner consistent with
the 1940 Act and the rules and regulations thereunder.
(b) This Agreement may be terminated as to any Fund without the payment of
any penalty by the Manager, subject to the approval of the Trustees, by
vote of the Trustees, or by vote of a majority of the outstanding
voting securities of such Fund at any annual or special meeting or by
the Sub-Adviser, in each case on sixty days' written notice.
(c) This Agreement shall terminate automatically, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Agreement with the Manager shall have terminated for any
reason.
4
<PAGE>
(d) In the event of termination of this Agreement, the Fund will no longer
use the name "Cambiar Investors, Inc" in materials relating to
the Fund except as may be required by the 1940 Act and the rules and
regulations thereunder.
6. CERTAIN DEFINITIONS
For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding voting securities" means the affirmative vote, at a duly
called and held meeting of shareholders, (a) of the holders of 67% or more
of the shares of the Fund present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the outstanding
shares of the Fund entitled to vote at such meeting are present in person or
by proxy, or (b) of the holders of more than 50% of the outstanding shares
of the Fund entitled to vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "control", "interested person"
and "assignment" shall have their respective meanings defined in the 1940
Act and rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the SEC under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder; and
the term "brokerage and research services" shall have the meaning given in
the Securities Exchange Act of 1934 and the rules and regulations
thereunder.
7. NON-LIABILITY OF SUB-ADVISER
The Sub-Adviser shall be under no liability to the Trust, the Manager or the
Trust's Shareholders or creditors for any matter or thing in connection with
the performance of any of the Sub-Adviser's services hereunder or for any
losses sustained or that may be sustained in the purchase, sale or retention
of any investment for the Funds of the Trust made by it in good faith;
provided, however, that nothing herein contained shall be construed to
protect the
5
<PAGE>
Sub-Adviser against any liability to the Trust by reason of the Sub-
Adviser's own willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties hereunder.
8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Trust's Agreement and Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed by the Trustees as Trustees and not
individually and that the obligations of this instrument are not binding
upon any of the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the appropriate Fund.
6
<PAGE>
IN WITNESS WHEREOF, ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC. has caused
this instrument to be signed in duplicate on its behalf by its duly authorized
representative and Capital International, Inc. has caused this instrument to be
signed in duplicate on its behalf by its duly authorized representative, all as
of the day and year first above written.
ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC.
By:
-----------------------------------------
Its:
-----------------------------------------
CAMBIAR INVESTORS, INC.
By:
-----------------------------------------
Its:
-----------------------------------------
Accepted and Agreed to as of the day and year first above written:
By:
-----------------------------------------
Its:
-----------------------------------------
7
<PAGE>
SCHEDULE A
----------
The Manager will pay to the Sub-Adviser as full compensation for the Sub-
Adviser's services rendered, a fee computed daily and paid quarterly at an
annual rate of the average daily net assets of the Fund as described below:
NET ASSETS FEE RATE
---------- --------
First $50,000,00 0.50%
Next $50,000,00 0.45%
Next $150,000,00 0.40%
Next $250,000,00 0.30%
Over $500,000,00 0.25%
The average daily net assets of the Fund shall be determined by taking an
average of all of the determinations of net asset value during each month at the
close of business on each business day during such month while this Agreement is
in effect.
The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter.
If the Sub-Adviser shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full month.
8
<PAGE>
Exhibit 9(g)
FORM OF
NOTICE
Notice, effective January ___, 1998, with respect to the Fund Accounting
Services Agreement (the "Agreement") between Allmerica Investment Trust (the
"Trust") and First Data Investor Services Group, Inc. ("FDISG"), dated June 22,
1992, as amended.
The Trust hereby gives notice that:
(i) two additional series of the Trust, the Select Emerging Markets Fund and
the Select Strategic Growth Fund (the "New Series"), have been established,
and FDISG will serve as fund accounting services agent for each New Series
under the terms of the Agreement; and
(ii) for purposes of Section 6 of the Agreement, the Trust will pay FDISG as
compensation for its services to the New Series as follows:
<TABLE>
<CAPTION>
Fund Net Assets Annual Per Fund Fee
<S> <C>
Under $50 Million $ 25,000
$50-$200 Million $ 35,000
$200-$500 Million $ 50,000
$500 Million-$1 Billion $ 85,000
Greater than $1 Billion $125,000
</TABLE>
Out of pocket charges for price quotes will be charged at actual cost. Expected
daily prices for Equities and Bonds are $.20 and $.50 per security,
respectively.
This Notice is not intended to, and does not, alter or amend the Agreement,
which remains in full force and effect.
Allmerica Investment Trust
By:
-------------------------------
Dated:
----------------------------
Acknowledged by
First Data Investor Services Group, Inc.
By:
---------------------------------
Dated:
------------------------------
<PAGE>
Exhibit 10
October 24, 1997
Allmerica Investment Trust
440 Lincoln Street
Worcester, MA 01643
Ladies and Gentlemen:
In my capacity as Secretary of Allmerica Investment Trust, I have participated
in the preparation of Amendment No. 35 to its Registration Statement on Form N-
1A under the Investment Company Act of 1940 and Post-effective Amendment No. 34
under the Securities Act of 1933 with respect to the issuance of its shares,
including shares of the Select Emerging Markets Fund and Select Strategic
Growth Fund (the "New Funds"). I am of the opinion that, when sold in accordance
with the terms of the Prospectus and Statement of Additional Information in
effect at the time of sale, the shares of the New Funds will be legally issued,
full paid and non-assessable by the Trust.
In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as in my judgment are necessary or
appropriate. I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement on Form N-1A.
Sincerely,
/s/ George M. Boyd
- ------------------
George M. Boyd
Secretary
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in each of the Prospectuses
and the Statement of Additional Information constituting parts of this Post-
effective Amendment No. 34 to the registration statement on Form N-1A (the
"Registration Statement") of our report dated February 14, 1997, relating to the
financial statements and financial highlights appearing in the December 31, 1996
Annual Report to Shareholders of Allmerica Investment Trust, which are also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the
Prospectuses and under the headings "Independent Accountants" and "Financial
Statements" in the Statement of Additional Information.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
October 24, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> GROWTH FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 542,427,274
<INVESTMENTS-AT-VALUE> 673,208,831
<RECEIVABLES> 5,590,064
<ASSETS-OTHER> 9,330
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 678,806,225
<PAYABLE-FOR-SECURITIES> 10,032,666
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 564,161
<TOTAL-LIABILITIES> 10,596,827
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 473,575,873
<SHARES-COMMON-STOCK> 252,680,861
<SHARES-COMMON-PRIOR> 238,679,339
<ACCUMULATED-NII-CURRENT> 12,537
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 63,841,431
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 130,781,557
<NET-ASSETS> 668,211,398
<DIVIDEND-INCOME> 4,655,628
<INTEREST-INCOME> 1,085,433
<OTHER-INCOME> 0
<EXPENSES-NET> 1,360,588
<NET-INVESTMENT-INCOME> 4,380,473
<REALIZED-GAINS-CURRENT> 64,299,413
<APPREC-INCREASE-CURRENT> 28,291,962
<NET-CHANGE-FROM-OPS> 96,971,868
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,367,936
<DISTRIBUTIONS-OF-GAINS> 17,201,911
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21,739,453
<NUMBER-OF-SHARES-REDEEMED> (7,250,258)
<SHARES-REINVESTED> 21,569,847
<NET-CHANGE-IN-ASSETS> 111,460,793
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 16,743,929
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,263,033
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,448,532
<AVERAGE-NET-ASSETS> 606,285,751
<PER-SHARE-NAV-BEGIN> 2.333
<PER-SHARE-NII> 0.018
<PER-SHARE-GAIN-APPREC> 0.381
<PER-SHARE-DIVIDEND> (0.018)
<PER-SHARE-DISTRIBUTIONS> (0.070)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 2.644
<EXPENSE-RATIO> 0.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> INVESTMENT GRADE INCOME
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 166,804,583
<INVESTMENTS-AT-VALUE> 167,211,097
<RECEIVABLES> 2,243,735
<ASSETS-OTHER> 2,948,690
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 172,403,522
<PAYABLE-FOR-SECURITIES> 2,851,841
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 113,353
<TOTAL-LIABILITIES> 2,965,194
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 156,644,399
<SHARES-COMMON-PRIOR> 145,193,179
<ACCUMULATED-NII-CURRENT> 16,124
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1,522,169
<ACCUM-APPREC-OR-DEPREC> 406,514
<NET-ASSETS> 169,438,328
<DIVIDEND-INCOME> 122,100
<INTEREST-INCOME> 5,779,412
<OTHER-INCOME> 0
<EXPENSES-NET> 422,559
<NET-INVESTMENT-INCOME> 5,478,953
<REALIZED-GAINS-CURRENT> 72,974
<APPREC-INCREASE-CURRENT> (247,198)
<NET-CHANGE-FROM-OPS> 5,304,729
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,506,992
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,679,460
<NUMBER-OF-SHARES-REDEEMED> 7,873,091
<SHARES-REINVESTED> 5,506,992
<NET-CHANGE-IN-ASSETS> 12,111,098
<ACCUMULATED-NII-PRIOR> 44,163
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 1,595,143
<GROSS-ADVISORY-FEES> 325,479
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 422,559
<AVERAGE-NET-ASSETS> 166,100,930
<PER-SHARE-NAV-BEGIN> 1.08
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.04)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.08
<EXPENSE-RATIO> 0.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> MONEY MARKET
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 252,166,899
<INVESTMENTS-AT-VALUE> 252,166,899
<RECEIVABLES> 2,519,304
<ASSETS-OTHER> 78,855
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 254,765,058
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 253,597
<TOTAL-LIABILITIES> 253,597
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 254,554,165
<SHARES-COMMON-PRIOR> 217,292,369
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 42,704
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 254,511,461
<DIVIDEND-INCOME> 145,021
<INTEREST-INCOME> 6,342,349
<OTHER-INCOME> 0
<EXPENSES-NET> 432,896
<NET-INVESTMENT-INCOME> 6,054,474
<REALIZED-GAINS-CURRENT> (6,067)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 6,048,407
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,054,474
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 105,829,327
<NUMBER-OF-SHARES-REDEEMED> 74,622,005
<SHARES-REINVESTED> 6,054,474
<NET-CHANGE-IN-ASSETS> 37,255,729
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 36,637
<GROSS-ADVISORY-FEES> 313,851
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 432,896
<AVERAGE-NET-ASSETS> 233,164,410
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.37
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> EQUITY INDEX
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 159,039,112
<INVESTMENTS-AT-VALUE> 229,239,981
<RECEIVABLES> 433,265
<ASSETS-OTHER> 96,610
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 229,769,856
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 115,178
<TOTAL-LIABILITIES> 115,178
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 155,079,991
<SHARES-COMMON-STOCK> 89,103,832
<SHARES-COMMON-PRIOR> 69,794,201
<ACCUMULATED-NII-CURRENT> 2,495
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,378,648
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 70,193,544
<NET-ASSETS> 229,654,678
<DIVIDEND-INCOME> 1,797,206
<INTEREST-INCOME> 13,715
<OTHER-INCOME> 0
<EXPENSES-NET> 439,472
<NET-INVESTMENT-INCOME> 1,371,449
<REALIZED-GAINS-CURRENT> 4,431,618
<APPREC-INCREASE-CURRENT> 29,485,317
<NET-CHANGE-FROM-OPS> 35,288,384
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,371,768
<DISTRIBUTIONS-OF-GAINS> 354,491
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 45,271,804
<NUMBER-OF-SHARES-REDEEMED> (2,035,171)
<SHARES-REINVESTED> 1,726,259
<NET-CHANGE-IN-ASSETS> 78,525,017
<ACCUMULATED-NII-PRIOR> 2,814
<ACCUMULATED-GAINS-PRIOR> 301,521
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 294,960
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 439,472
<AVERAGE-NET-ASSETS> 189,936,170
<PER-SHARE-NAV-BEGIN> 2.165
<PER-SHARE-NII> 0.016
<PER-SHARE-GAIN-APPREC> 0.416
<PER-SHARE-DIVIDEND> (0.016)
<PER-SHARE-DISTRIBUTIONS> (0.004)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 2.577
<EXPENSE-RATIO> 0.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> GOVERNMENT BOND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 46,418,917
<INVESTMENTS-AT-VALUE> 46,347,167
<RECEIVABLES> 939,849
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1,100,297
<TOTAL-ASSETS> 48,387,313
<PAYABLE-FOR-SECURITIES> 997,050
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 45,648
<TOTAL-LIABILITIES> 1,042,698
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 45,922,898
<SHARES-COMMON-PRIOR> 44,802,426
<ACCUMULATED-NII-CURRENT> 8,532
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 2,642,219
<ACCUM-APPREC-OR-DEPREC> (71,750)
<NET-ASSETS> 47,344,615
<DIVIDEND-INCOME> 21,838
<INTEREST-INCOME> 1,523,854
<OTHER-INCOME> 0
<EXPENSES-NET> 166,718
<NET-INVESTMENT-INCOME> 1,378,974
<REALIZED-GAINS-CURRENT> (64,026)
<APPREC-INCREASE-CURRENT> (147,009)
<NET-CHANGE-FROM-OPS> 1,167,939
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,376,440
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,070,274
<NUMBER-OF-SHARES-REDEEMED> 5,289,529
<SHARES-REINVESTED> 1,376,440
<NET-CHANGE-IN-ASSETS> 948,684
<ACCUMULATED-NII-PRIOR> 5,998
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 2,578,193
<GROSS-ADVISORY-FEES> 115,519
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 166,718
<AVERAGE-NET-ASSETS> 46,590,687
<PER-SHARE-NAV-BEGIN> 1.04
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> (0.01)
<PER-SHARE-DIVIDEND> (0.03)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.03
<EXPENSE-RATIO> 0.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> SELECT GROWTH & INCOME
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 313,566,527
<INVESTMENTS-AT-VALUE> 387,695,686
<RECEIVABLES> 4,235,962
<ASSETS-OTHER> 466,438
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 392,398,086
<PAYABLE-FOR-SECURITIES> 2,713,260
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 295,408
<TOTAL-LIABILITIES> 3,008,668
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 302,646,387
<SHARES-COMMON-STOCK> 248,168,215
<SHARES-COMMON-PRIOR> 210,471,303
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 10,480
<ACCUMULATED-NET-GAINS> 12,624,352
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 74,129,159
<NET-ASSETS> 389,389,418
<DIVIDEND-INCOME> 2,941,291
<INTEREST-INCOME> 682,449
<OTHER-INCOME> 0
<EXPENSES-NET> 1,335,555
<NET-INVESTMENT-INCOME> 2,288,185
<REALIZED-GAINS-CURRENT> 12,703,699
<APPREC-INCREASE-CURRENT> 29,858,541
<NET-CHANGE-FROM-OPS> 44,850,425
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,298,665
<DISTRIBUTIONS-OF-GAINS> 4,662,402
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 51,358,456
<NUMBER-OF-SHARES-REDEEMED> (2,457,450)
<SHARES-REINVESTED> 6,961,067
<NET-CHANGE-IN-ASSETS> 93,751,431
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,583,055
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,247,523
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,377,610
<AVERAGE-NET-ASSETS> 335,428,839
<PER-SHARE-NAV-BEGIN> 1.405
<PER-SHARE-NII> 0.010
<PER-SHARE-GAIN-APPREC> 0.183
<PER-SHARE-DIVIDEND> (0.010)
<PER-SHARE-DISTRIBUTIONS> (0.019)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.569
<EXPENSE-RATIO> 0.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> SELECT GROWTH
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 285,737,350
<INVESTMENTS-AT-VALUE> 347,077,339
<RECEIVABLES> 1,085,962
<ASSETS-OTHER> 682,567
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 348,845,868
<PAYABLE-FOR-SECURITIES> 3,251,031
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 284,294
<TOTAL-LIABILITIES> 3,535,325
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 270,686,168
<SHARES-COMMON-STOCK> 204,874,845
<SHARES-COMMON-PRIOR> 159,809,982
<ACCUMULATED-NII-CURRENT> 809,637
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12,474,749
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 61,339,989
<NET-ASSETS> 345,310,543
<DIVIDEND-INCOME> 1,763,469
<INTEREST-INCOME> 351,535
<OTHER-INCOME> 0
<EXPENSES-NET> 1,305,367
<NET-INVESTMENT-INCOME> 809,637
<REALIZED-GAINS-CURRENT> 12,551,663
<APPREC-INCREASE-CURRENT> 36,419,775
<NET-CHANGE-FROM-OPS> 49,781,075
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 2,196,148
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 69,818,261
<NUMBER-OF-SHARES-REDEEMED> (2,840,044)
<SHARES-REINVESTED> 2,196,148
<NET-CHANGE-IN-ASSETS> 116,759,292
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 2,119,234
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,194,813
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,337,927
<AVERAGE-NET-ASSETS> 283,465,690
<PER-SHARE-NAV-BEGIN> 1.430
<PER-SHARE-NII> 0.004
<PER-SHARE-GAIN-APPREC> 0.262
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.011)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.685
<EXPENSE-RATIO> 0.93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> SELECT AGGRESSIVE GROWTH
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 380,568,995
<INVESTMENTS-AT-VALUE> 491,794,226
<RECEIVABLES> 1,067,793
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 492,862,019
<PAYABLE-FOR-SECURITIES> 1,874,997
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 487,137
<TOTAL-LIABILITIES> 2,362,134
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 380,461,501
<SHARES-COMMON-STOCK> 228,820,840
<SHARES-COMMON-PRIOR> 200,053,471
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1,234,267
<ACCUMULATED-NET-GAINS> 47,240
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 111,225,231
<NET-ASSETS> 490,499,885
<DIVIDEND-INCOME> 823,454
<INTEREST-INCOME> 267,189
<OTHER-INCOME> 0
<EXPENSES-NET> 2,234,910
<NET-INVESTMENT-INCOME> (1,234,267)
<REALIZED-GAINS-CURRENT> 68,995
<APPREC-INCREASE-CURRENT> 33,058,945
<NET-CHANGE-FROM-OPS> 31,893,673
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 6,808,097
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 59,913,564
<NUMBER-OF-SHARES-REDEEMED> (8,749,385)
<SHARES-REINVESTED> 6,808,097
<NET-CHANGE-IN-ASSETS> 83,057,852
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 6,786,522
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,117,634
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,234,910
<AVERAGE-NET-ASSETS> 427,036,702
<PER-SHARE-NAV-BEGIN> 2.037
<PER-SHARE-NII> (0.005)
<PER-SHARE-GAIN-APPREC> 0.142
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.030)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 2.144
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> SELECT INCOME
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 86,498,975
<INVESTMENTS-AT-VALUE> 86,952,378
<RECEIVABLES> 3,584,081
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 90,536,459
<PAYABLE-FOR-SECURITIES> 2,521,465
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,016,842
<TOTAL-LIABILITIES> 3,538,307
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 88,129,221
<SHARES-COMMON-STOCK> 87,814,680
<SHARES-COMMON-PRIOR> 77,869,624
<ACCUMULATED-NII-CURRENT> 7,010
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1,591,482
<ACCUM-APPREC-OR-DEPREC> 453,403
<NET-ASSETS> 86,998,152
<DIVIDEND-INCOME> 40,490
<INTEREST-INCOME> 2,802,970
<OTHER-INCOME> 0
<EXPENSES-NET> 299,378
<NET-INVESTMENT-INCOME> 2,544,082
<REALIZED-GAINS-CURRENT> (147,077)
<APPREC-INCREASE-CURRENT> (160,767)
<NET-CHANGE-FROM-OPS> 2,236,238
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,587,252
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,458,423
<NUMBER-OF-SHARES-REDEEMED> (2,194,852)
<SHARES-REINVESTED> 2,587,252
<NET-CHANGE-IN-ASSETS> 9,499,809
<ACCUMULATED-NII-PRIOR> 50,180
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 1,445,405
<GROSS-ADVISORY-FEES> 241,424
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 200,378
<AVERAGE-NET-ASSETS> 81,141,470
<PER-SHARE-NAV-BEGIN> 0.995
<PER-SHARE-NII> 0.030
<PER-SHARE-GAIN-APPREC> (0.003)
<PER-SHARE-DIVIDEND> (0.031)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0.991
<EXPENSE-RATIO> 0.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 10
<NAME> SMALL MID-CAP VALUE
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 140,739,888
<INVESTMENTS-AT-VALUE> 158,103,838
<RECEIVABLES> 2,682,371
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 160,786,209
<PAYABLE-FOR-SECURITIES> 4,994,640
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 143,072
<TOTAL-LIABILITIES> 5,137,712
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 118,213,556
<SHARES-COMMON-STOCK> 91,597,533
<SHARES-COMMON-PRIOR> 75,448,638
<ACCUMULATED-NII-CURRENT> 428,739
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 19,642,252
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17,363,950
<NET-ASSETS> 155,648,497
<DIVIDEND-INCOME> 887,334
<INTEREST-INCOME> 166,327
<OTHER-INCOME> 0
<EXPENSES-NET> 624,922
<NET-INVESTMENT-INCOME> 428,739
<REALIZED-GAINS-CURRENT> 19,644,759
<APPREC-INCREASE-CURRENT> (2,907,080)
<NET-CHANGE-FROM-OPS> 17,166,418
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 746,935
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,259,618
<NUMBER-OF-SHARES-REDEEMED> (746,116)
<SHARES-REINVESTED> 746,935
<NET-CHANGE-IN-ASSETS> 41,679,920
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 744,428
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 608,835
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 701,263
<AVERAGE-NET-ASSETS> 130,808,385
<PER-SHARE-NAV-BEGIN> 1.511
<PER-SHARE-NII> 0.005
<PER-SHARE-GAIN-APPREC> 0.191
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.008)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.699
<EXPENSE-RATIO> 0.96
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> SELECT INTERNATIONAL EQUITY
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 297,084,239
<INVESTMENTS-AT-VALUE> 351,689,534
<RECEIVABLES> 9,879,416
<ASSETS-OTHER> 27
<OTHER-ITEMS-ASSETS> 413,944
<TOTAL-ASSETS> 361,982,921
<PAYABLE-FOR-SECURITIES> 9,257,603
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 426,718
<TOTAL-LIABILITIES> 9,684,321
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 288,656,613
<SHARES-COMMON-STOCK> 241,468,195
<SHARES-COMMON-PRIOR> 182,088,352
<ACCUMULATED-NII-CURRENT> 1,519,238
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 7,093,747
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 55,029,002
<NET-ASSETS> 352,298,600
<DIVIDEND-INCOME> 4,333,417
<INTEREST-INCOME> 53,611
<OTHER-INCOME> 0
<EXPENSES-NET> 1,760,204
<NET-INVESTMENT-INCOME> 2,262,824
<REALIZED-GAINS-CURRENT> 7,112,791
<APPREC-INCREASE-CURRENT> 16,094,612
<NET-CHANGE-FROM-OPS> 25,834,227
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,288,027
<DISTRIBUTIONS-OF-GAINS> 1,407,289
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 85,705,479
<NUMBER-OF-SHARES-REDEEMED> (6,118,042)
<SHARES-REINVESTED> 2,695,316
<NET-CHANGE-IN-ASSETS> 105,421,664
<ACCUMULATED-NII-PRIOR> 180,441
<ACCUMULATED-GAINS-PRIOR> 1,388,245
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,463,905
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,779,749
<AVERAGE-NET-ASSETS> 295,207,365
<PER-SHARE-NAV-BEGIN> 1.356
<PER-SHARE-NII> 0.010
<PER-SHARE-GAIN-APPREC> 0.104
<PER-SHARE-DIVIDEND> (0.005)
<PER-SHARE-DISTRIBUTIONS> (0.006)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.459
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> SELECT CAPITAL APPRECIATION
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 165,384,753
<INVESTMENTS-AT-VALUE> 193,079,670
<RECEIVABLES> 6,072,160
<ASSETS-OTHER> 3,619
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 199,155,449
<PAYABLE-FOR-SECURITIES> 7,607,564
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,001,123
<TOTAL-LIABILITIES> 8,608,687
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 173,438,158
<SHARES-COMMON-STOCK> 123,656,178
<SHARES-COMMON-PRIOR> 96,106,648
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 155,573
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 10,204,283
<ACCUM-APPREC-OR-DEPREC> 27,468,460
<NET-ASSETS> 190,546,762
<DIVIDEND-INCOME> 525,939
<INTEREST-INCOME> 141,083
<OTHER-INCOME> 0
<EXPENSES-NET> 889,994
<NET-INVESTMENT-INCOME> (222,922)
<REALIZED-GAINS-CURRENT> (7,464,393)
<APPREC-INCREASE-CURRENT> 16,520,980
<NET-CHANGE-FROM-OPS> 8,833,665
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 40,762,590
<NUMBER-OF-SHARES-REDEEMED> (1,729,733)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 47,866,522
<ACCUMULATED-NII-PRIOR> 67,349
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 2,739,890
<GROSS-ADVISORY-FEES> 774,339
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 889,944
<AVERAGE-NET-ASSETS> 156,151,217
<PER-SHARE-NAV-BEGIN> 1,485
<PER-SHARE-NII> (0.002)
<PER-SHARE-GAIN-APPREC> 0.058
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.541
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
