<PAGE>
Allmerica Financial Annual Report
DECEMBER 31, 1999
Allmerica Investment Trust
. Money Market Fund
AIT
[LOGO OF ALLMERICA FINANCIAL]
<PAGE>
Table of Contents
<TABLE>
<S> <C>
General Information.....................................2
A Letter from the Chairman..............................3
Bond & Money Market Overview............................4
Money Market Fund.......................................6
Financials............................................F-1
</TABLE>
For further information, see the accompanying annual report.
See Client Notices on page F-13.
1
<PAGE>
General Information
Officers of First Allmerica Financial Life Insurance
Company (FAFLIC) and Allmerica Financial Life
Insurance and Annuity Company (AFLIAC)
John F. O'Brien, President, CEO (FAFLIC) and
Chairman of the Board (AFLIAC)
Richard M. Reilly, President and CEO (AFLIAC)
Edward J. Parry, III, Vice President, CFO and Treasurer
Abigail M. Armstrong, Secretary and Counsel
Investment Manager
Allmerica Financial Investment Management Services, Inc.
440 Lincoln Street, Worcester, MA 01653
General Distributor
Allmerica Investments, Inc.
440 Lincoln Street, Worcester, MA 01653
Independent Accountants
PricewaterhouseCoopers LLP
160 Federal Street, Boston, MA 02110
Administrator and Custodian
Investors Bank & Trust Company
200 Clarendon Street, Boston, MA 02116
Legal Counsel
Ropes & Gray
One International Place, Boston, MA 02110
Officers of Allmerica Investment Trust (AIT)
Richard M. Reilly, President
Paul T. Kane, Treasurer
George M. Boyd, Secretary
Board of Trustees of AIT
John F. O'Brien, Chairman
P. Kevin Condron1
Cynthia A. Hargadon1
Gordon Holmes1
John P. Kavanaugh
Bruce E. Langton1
Attiat F. Ott1
Richard M. Reilly
Ranne P. Warner1
1Independent Trustees
Investment Sub-Adviser
Allmerica Asset Management, Inc.
440 Lincoln Street, Worcester, MA 01653
Money Market Fund
2
<PAGE>
A Letter from the Chairman
[PHOTO]
Dear Client:
Investors were subjected to a range of emotions during 1999. Entering the year,
most market analysts were predicting a swift slow-down in GDP growth based on
the global weakness seen during 1998 in Latin America, Europe and Asia. Contrary
to this outlook, economic statistics released early in the year presented
evidence that the U.S. economy remained strong. In fact, economic growth
exceeded 5% in several quarters. Unemployment reached record-low levels, and
high levels of consumer confidence led to strong spending and record low savings
rates.
Internationally, markets were also quite strong. Many emerging markets took
strong steps to restructure their economies and their stock markets rebounded
sharply. European growth continued to be solid and the continent successfully
completed its first year under the new Euro currency. This common currency led
to greater transparency in costs between countries and led to a number of large
corporate mergers and the promise of greater efficiency in years to come.
With strong growth in the U.S. and few economic problems internationally,
investors began to worry about the risk of greater inflation. The Federal
Reserve raised interest rates three times for a total of 0.75% as it took steps
to slow the economy before inflation became an issue. The effect of these
actions and worries caused the bond market to turn in its second worst
performance since 1973.
Money market investors were somewhat protected from rising interest rates as the
short-term nature of their investments quickly adapted to the new and higher
level of interest rates. In 1999, money market funds met their goal of providing
a safe haven for conservative investors.
The Allmerica Investment Trust (AIT) Money Market Fund focuses on three primary
goals: preservation of capital, maintenance of liquidity and attractive current
income. The Fund's manager continued to deliver on these objectives and produce
highly competitive returns. We appreciate your continued confidence in the AIT
Money Market Fund and look forward to serving more of your financial needs
through Allmerica's broad array of insurance and retirement products.
On behalf of the Board of Trustees,
/s/ John F. O'Brien
John F. O'Brien
Chairman of the Board
Allmerica Financial Life Insurance and Annuity Company
3
<PAGE>
Bond & Money Market Overview
1995: U.S. bond market enjoys its third best performance in 30 years, thanks to
strong total returns from 30-year U.S. Treasuries and corporate issues.
1996: Outlook for Federal Reserve policy affects U.S. bond market.
Long-predicted interest rate cuts, which would have fueled this market, never
occur.
1997: Low inflation and declining interest rates fuel the bond market, which
enjoys its best returns since 1995.
1998: During 1998, bond investments produced widely divergent results as a
series of dramatic swings either left them highly in favor or badly battered.
1999: Inflation concerns and a booming U.S. Economy prompt the Federal Reserve
to hike interest rates. Fixed Income markets close the second half with their
worst-performing year ever with the Lehman Aggregate Bond Index returning
- -0.83%.
[TIMELINE]
1999 JAN
[GRAPHIC]
The new European currency is introduced. Over the course of the year, the euro
loses almost 18% of its value against the U.S. dollar.
FEB
A rally of agency, corporate, and mortgage-backed bonds encourages investors to
take advantage of bond yield premiums.
MAR
APR
[GRAPHIC]
Japan shows signs of economic recovery along with other foreign countries such
as Brazil and Mexico, marking the first time in two years in which some foreign
markets outperform the U.S. bond market.
MAY
As a group, foreign markets underperform the U.S. bond market, the major culprit
being Europe, where a backup in interest rates is significant.
On the whole, 1999 was disappointing for fixed-income investors. In fact, it was
the second worse performance year ever for the fixed-income markets, as measured
by the total -0.83%. return of the Lehman Aggregate Bond Index.
A handful of universal themes dominated the markets during the year, namely
successive Federal Reserve interest rate hikes, a steepening yield curve,
volatile corporate bond performance, and rising mortgage rates.
1999 began with investors feeling fairly optimistic about the coming year. The
Federal Reserve had acted in the fall of 1998 to avert a global liquidity
meltdown with three easings that lowered short-term rates to 4.75%. The U.S.
economy seemed to be healthy, with expectations for 1999 GDP in the 3.0% range
and subdued inflation running at about a 2% annual rate.
On the international front, Asia and Latin America continued their recovery from
the problems of 1998. Early in the year, Brazil announced a somewhat unexpected
devaluation of its currency, the real. Global markets braced for a round of
panic selling and other negative ripple effects which never materialized.
Against this backdrop, the first quarter of 1999 progressed with no major
disturbances. Inflation stayed at bay and corporate spread tightening reflected
the positive fundamentals of strong earnings growth.
Beginning in the second quarter, however, the picture began to change. The U.S.
economy grew faster than initially projected and the unemployment rate fell
below 4.2%. Investors began to fear that inflation was imminent. In June, the
Federal Reserve responded by raising the Fed Funds interest rate from 4.75% to
5.00%.
July and August saw spread sectors widen dramatically. Corporate treasurers
pushed corporate and asset-backed bonds into the market hoping
4
<PAGE>
Bond & Money Market Overview
to avert a fourth-quarter liquidity trap, which they believed likely as Y2K
fears would drive buyers from the market. Ironically, these efforts became a
self-fulfilling prophesy as treasurers ended up creating their own
mini-liquidity crisis by all trying to issue bonds simultaneously. By August,
there was a second Fed rate hike from 5.00% to 5.25%.
Despite these first two rate increases, the U.S. economy continued to gather
speed in the third and fourth quarters. The nation's third-quarter GDP, for
instance, came in at 5.7%, well above experts' original predictions. Market
participants once again began to worry about a resurgence of inflation. In
response, the Fed raised short-term interest rates for a third and final time in
November to 5.50%.
Investment grade corporate bonds had a good showing at the end of 1999, but
their overall performance was volatile. All excess returns were attributable to
the first and fourth quarters only.
The high yield market finished 1999 on a positive note after poor performance in
the second and third quarters. The market's return for the year was a modest
2.39%, as measured by the Lehman High Yield Corporate Index. The demand side of
the market shifted significantly in 1999, as mutual fund inflows dropped
dramatically to $1.1 billion, down from $15 billion in 1998. Collateralized bond
obligations, structured transactions involving the purchase of high yield debt,
did offset these lower inflows. The market's estimated 4% default rate was the
highest since 1991.
The past year also saw a steepening yield curve as the 30-year Treasury bond,
which began the year at 5.10% on January 1, and ended at 6.49% on December 31.
The mortgage-backed securities market showed strong excess returns for the year,
owing primarily to positive supply/demand factors, an improved prepay
environment, narrowing swap spreads, and lower interest rate volatility. In
particular, Fannie Mae and Freddie Mac assets grew nearly 30% over 1999.
Looking ahead, it is likely that economic growth and strengthening will continue
into 2000, albeit at a slower rate than that of 1999. All signs point to
probable Fed interest rate increases in the new year, with little inflation on
the horizon.
[TIMELINE]
The new European currency is introduced. Over the course of the year, the euro
loses almost 18% of its value against the U.S. dollar.
JUL
[GRAPHIC]
AUG
[GRAPHIC]
Inflation worries resurface as the U.S. economy continues to grow and the
nations unemployment figure approaches an almost 30-year low. The Fed responds
by raising interest rates another 0.25%.
SEPT
OCT
Investment grade corporate bonds and the high yield market begin their strong
fourth-quarter performance.
NOV
[GRAPHIC]
With the booming U.S. economy showing no signs of a slowdown, the Fed announces
its third rate hike of 0.25%. The fixed-income markets end the year down with
the Lehman Aggregate Bond Index posting a dismal total return of -0.83%.
DEC
5
<PAGE>
Money Market Fund
For the period ended December 31, 1999, the Money Market Fund returned 5.19%,
out performing its benchmark, the IBC/ Donoghue First Tier Money Market Index,
which returned 4.57%.
During the first quarter of 1999, inflation remained in check. The second
quarter featured stronger than expected growth and an unemployment rate below
4.2%. The Federal Reserve responded in June by increasing interest rates. In
July and August, spread sectors widened dramatically as corporate treasurers
pushed corporate and asset-backed issues into the market in an attempt to avoid
potential Y2K-induced fourth quarter liquidity problems. August brought another
Fed rate hike, with a third and final rate hike occurring in November prompted
by inflation fears amidst a booming economy and GDP at a robust 5.7%. During the
fourth quarter, the Fed provided ample liquidity to the banking system in order
to prepare for potential Y2K cash demands.
The yield curve steepened as the 30 year Treasury bond rose from 5.10% on
January 1, to 6.49% at the close of the year. This increase resulted in the
second worst performance year ever for the fixed income markets, as measured by
the total return of the Lehman Aggregate Bond Index.
During 1999, the Fund maintained a top quartile ranking as measured by the IBC
fund peer group. One of the primary strategies that enhanced performance was the
gradual increase in floating rate note positions. These positions were
advantageous as they quickly reset to higher interest rates as the market
anticipated and reacted to changes in monetary policy.
The Fund manager believes that Fed policy and market interest rates will remain
biased to the upside until economic growth shows signs of moderation. Based on
this outlook, the portfolio will maintain a core holding of longer dated
corporate notes and commercial paper. These positions are coupled with
government agency securities and repurchase agreements to maximize liquidity.
Investment Sub-Adviser
Allmerica Asset Management, Inc.
About the Fund
Strives to maximize current income for investors while preserving
capital and liquidity.
Portfolio Composition
As of December 31, 1999, the sector allocation of net assets was:
[GRAPH]
Corporate Notes 48%
Commercial Paper 37%
Certificates of Deposit 12%
Other 3%
Average Annual Total Returns
<TABLE>
<CAPTION>
Years ended December 31, 1999 1 Year 5 Years 10 Years
<S> <C> <C> <C>
Money Market Fund 5.19% 5.47% 5.23%
IBC/Donoghue First Tier
Money Market Index 4.57% 4.97% 4.79%
Lipper Money Market Funds Average 4.49% 4.95% 4.80%
</TABLE>
Average Yield as of December 31, 1999
Money Market Fund 7-Day Yield 5.57%
Growth of a $10,000 Investment Since 1989
[GRAPH]
Money Market Fund Money Market Index
12/31/89 10,000 10,000
12/31/90 10,805 10,781
12/31/91 11,466 11,393
12/31/92 11,893 11,772
12/31/93 12,250 12,081
12/31/94 12,732 12,528
12/31/95 13,475 13,209
12/31/96 14,196 13,854
12/31/97 14,970 14,548
12/31/98 15,788 15,269
12/31/99 16,607 15,967
The Money Market Fund is a portfolio of the Allmerica Investment Trust.
Portfolio composition will vary over time. The Fund is neither insured nor
guaranteed the Federal Deposit Insurance Corporation or any other Government
Agency. Although the Fund seeks to maintain a net asset value of $1.00 per
share, it is possible to lose money by investing in the Fund. Past performance
is no guarantee of future results. Investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. IBC/Donoghue is an independent firm
that tracks 2a-7 regulated money market funds on a yield, shareholder, asset
size and portfolio allocation basis. The Lipper Money Market Funds Average is
the average investment performance of 337 funds within the Money Market
category. Performance numbers are net of all fund operating expenses, but do not
include insurance charges. If performance information included the effect of
these additional charges, it would have been lower.
6
<PAGE>
Financials
<PAGE>
This page left blank intentionally.
<PAGE>
Money Market Fund
PORTFOLIO OF INVESTMENTS . December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
<C> <S> <C>
- ------------------------------------------------------------------
CORPORATE NOTES - 47.6%
Banking - 12.5%
$4,000,000 Bankers Trust Corp.
9.50%, 06/14/00 $4,058,769
1,500,000 Bayerische Landesbank NY
6.25%, 03/15/00 1,500,205
6,000,000 Chase Manhattan Corp. MTN
4.96%, 01/20/00* 6,000,048
10,000,000 Comerica Bank
6.53%, 09/25/00* 9,998,077
5,000,000 First National Bank of Chicago, Euro MTN
7.00%, 05/08/00 5,027,230
9,000,000 First Union National Bank, MTN
6.27%, 09/27/00* 8,994,991
2,750,000 Fleet Boston Financial Corp., MTN
6.38%, 08/11/00 2,751,470
7,000,000 Key Bank National Association, MTN
5.13%, 03/22/00 6,999,321
2,000,000 KeyCorp
6.30%, 04/20/00 2,000,852
2,000,000 Norwest Financial, Inc.
6.88%, 06/15/00 2,009,553
15,000,000 Wilmington Trust Corp.
6.02%, 10/01/00 14,993,533
----------
64,334,049
----------
Securities Broker - 11.6%
1,575,000 Bear Stearns Cos., Inc., MTN
6.50%, 06/15/00 1,580,975
5,000,000 Bear Stearns Cos., Inc., MTN
5.00%, 02/02/00* 5,000,000
2,000,000 Donaldson, Lufkin & Jenrette, Inc., MTN
6.31%, 05/26/00 2,003,276
1,300,000 Goldman Sachs and Co. (A)
5.56%, 01/11/01 1,289,258
4,000,000 Goldman Sachs and Co. (A)
5.04%, 02/07/00* 4,000,000
7,000,000 Lehman Brothers Holdings, Inc., MTN
7.29%, 09/25/00 7,037,945
4,236,000 Merrill Lynch & Co., Inc., MTN
6.47%, 02/15/00* 4,238,121
675,000 Merrill Lynch & Co., Inc., MTN
6.70%, 08/01/00 677,556
14,000,000 Morgan Stanley Dean Witter & Co., MTN
6.08%, 02/14/00* 14,000,000
10,000,000 Paine Webber Group, Inc., MTN
6.64%, 12/12/00* 10,000,000
6,750,000 Paine Webber Group, Inc., MTN
7.00%, 03/01/00 6,764,318
2,000,000 Paine Webber Group, Inc., MTN
7.00%, 03/01/00 2,001,946
1,000,000 Salomon Smith Barney Holdings, Inc.
6.63%, 01/30/00 1,002,772
----------
59,596,167
----------
</TABLE>
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
<C> <S> <C>
- ----------------------------------------------------------------------------
Financial Services - 9.2%
$1,000,000 Abbey National Treasury Service PLC
5.13%, 05/04/00 $ 996,329
1,000,000 Beneficial Corp., MTN
5.09%, 01/10/00* 1,000,025
1,000,000 Countrywide Funding Corp.
7.31%, 08/28/00 1,006,733
7,000,000 Heller Financial, Inc.
6.49%, 09/18/00* 6,995,170
10,000,000 Heller Financial, Inc.
5.90%, 08/07/00 9,996,833
23,000,000 Homeside Lending, Inc., MTN
6.27%, 08/16/00* 23,002,865
2,000,000 Household Finance Corp.
6.37%, 06/30/00 2,002,796
2,000,000 Household Finance Corp.
6.75%, 06/01/00 2,008,733
----------
47,009,484
----------
Telephone Systems - 3.1%
11,885,000 GTE Corp.
6.16%, 06/12/00* 11,880,251
2,356,000 GTE Corp.
9.38%, 12/01/00 2,419,519
1,500,000 Nynex Capital Funding Corp.
9.40%, 06/01/00 1,522,393
----------
15,822,163
----------
Electric Utilities - 2.9%
15,000,000 National Rural Utilities Cooperative Finance Corp.
6.14%, 06/26/00* 15,000,091
----------
Automotive - 2.3%
6,000,000 American Honda Finance Corp. (A)
5.00%, 01/20/00* 5,999,876
6,000,000 American Honda Finance Corp. (A)
5.78%, 08/02/00* 5,999,314
----------
11,999,190
----------
Aerospace & Defense - 1.9%
10,000,000 Textron Financial Corp. (A)
5.92%, 05/12/00* 10,000,000
----------
Heavy Machinery - 1.7%
4,000,000 Caterpillar Financial Services Corp., MTN
6.28%, 05/01/00 4,010,484
4,500,000 John Deere Capital Corp.
5.68%, 04/10/00 4,502,473
----------
8,512,957
----------
Retailers - 0.9%
3,700,000 Sears Roebuck Acceptance, MTN
5.88%, 05/08/00 3,697,381
1,000,000 Wal-Mart Stores, Inc.
5.85%, 06/01/00 1,000,760
----------
4,698,141
----------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------
F-1
<PAGE>
Money Market Fund
PORTFOLIO OF INVESTMENTS, Continued . December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
<C> <S> <C>
- ----------------------------------------------------------------
Commercial Services - 0.6%
$3,000,000 International Lease Finance Corp.
6.63%, 06/01/00 $ 3,013,592
-----------
Transportation - 0.6%
3,000,000 Richmond County Development Authority
5.65%, 06/01/00 2,997,934
-----------
Computers & Information - 0.3%
1,500,000 International Business Machines Corp.
5.79%, 03/20/00* 1,498,932
-----------
Total Corporate Notes 244,482,700
-----------
(Cost $244,482,700)
COMMERCIAL PAPER (B) - 37.3%
Financial Services - 10.5%
1,212,000 Associates Financial Services
5.95%, 01/27/00 1,190,566
5,000,000 Fairway Finance Corp. (A)
5.84%, 03/09/00 4,858,056
14,000,000 Finova Capital Corp.
5.08%, 02/25/00* 14,000,000
5,000,000 Franklin Resources, Inc. (A)
6.75%, 02/14/00 4,949,375
6,000,000 Pegasus Four Ltd. (A)
6.20%, 01/12/00 5,915,267
5,536,000 Swiss Re Financial Products
5.80%, 02/15/00 5,494,973
10,000,000 Tulip Funding Corp. (A)
6.18%, 01/26/00 9,847,217
1,820,000 Variable Funding Capital (A)
6.60%, 01/10/00 1,811,325
3,000,000 Westways Funding I (A)
6.17%, 01/31/00 2,954,239
2,684,000 Westways Funding V (A)
6.20%, 01/12/00 2,645,634
-----------
53,666,652
-----------
Securities Broker - 9.4%
11,000,000 Bear Stearns Cos., Inc.
5.28%, 03/30/00* 11,000,000
15,000,000 Donaldson, Lufkin & Jenrette, Inc.
6.20%, 02/29/00 14,839,833
11,550,000 Goldman Sachs and Co. (A)
6.60%, 12/21/00 11,550,000
2,500,000 Lehman Brothers Holdings, Inc.
5.75%, 03/27/00 2,405,365
5,000,000 Lehman Brothers Holdings, Inc.
5.58%, 02/14/00 4,831,825
4,000,000 Morgan Stanley Dean Witter & Co.
5.43%, 01/31/00 3,878,127
-----------
48,505,150
-----------
</TABLE>
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
<C> <S> <C>
- ------------------------------------------------------------------------
Education - 3.8%
$7,000,000 Arizona Student Loan
7.05%, 01/05/00 $ 6,990,404
5,000,000 Massachusetts College of Pharmacy
5.85%, 06/08/00 4,870,000
7,830,000 Massachusetts College of Pharmacy
5.85%, 06/06/00 7,627,692
-----------
19,488,096
-----------
Commercial Services - 3.5%
8,500,000 Block Financial Corp. (A)
6.17%, 01/31/00 8,380,542
10,000,000 Block Financial Corp. (A)
6.15%, 01/31/00 9,856,500
-----------
18,237,042
-----------
Chemicals - 2.9%
15,000,000 Akzo Nobel, Inc.
5.80%, 03/13/00 14,690,775
-----------
Oil & Gas - 1.9%
10,000,000 Equilon Enterprises, LLC
5.74%, 01/24/00 9,760,833
-----------
Automotive - 1.7%
1,630,000 Enterprise Funding Corp. (A)
5.95%, 01/18/00 1,614,644
1,546,000 Enterprise Funding Corp. (A)
5.95%, 01/27/00 1,529,136
5,575,000 Enterprise Funding Corp. (A)
6.20%, 02/11/00 5,519,312
-----------
8,663,092
-----------
Forest Products & Paper - 1.7%
4,500,000 Jefferson Smurfit Financial
6.80%, 01/21/00 4,480,450
1,000,000 Jefferson Smurfit Financial
6.95%, 01/18/00 996,139
1,200,000 Jefferson Smurfit Financial
6.80%, 01/24/00 1,193,880
2,000,000 Jefferson Smurfit Financial
6.80%, 01/28/00 1,988,289
-----------
8,658,758
-----------
Industrial - 1.0%
5,000,000 Invensys, Plc (A)
5.65%, 02/07/00 4,970,181
-----------
Electric Utilities - 0.9%
5,000,000 Florida Power & Light Group Capital, Inc. (A)
5.45%, 01/31/00 4,848,611
-----------
Total Commercial Paper 191,489,190
-----------
(Cost $191,489,190)
</TABLE>
See Notes to Financial Statements.
------------------------------------------------------
F-2
<PAGE>
Money Market Fund
PORTFOLIO OF INVESTMENTS, Continued . December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
<C> <S> <C>
- ---------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - 12.1%
$15,000,000 Abbey National Treasury Service PLC
6.31%, 01/31/00 $15,005,661
5,000,000 Bankers Trust Corp.
6.16%, 04/10/00* 4,999,702
10,000,000 Barclays Bank, Plc, Yankee CD
4.89%, 05/12/00* 9,997,879
10,000,000 CIC Floating Rate CD
5.82%, 08/02/00* 9,998,857
3,000,000 Commerzbank, AG, Yankee CD
4.99%, 01/25/00 2,999,978
8,000,000 European American Bank
5.28%, 05/12/00 7,999,166
10,000,000 National Bank Canada NY
6.10%, 11/22/00 9,994,035
1,215,000 Toronto Dominion Bank NY
5.18%, 02/29/00 1,213,994
-----------
Total Certificates of Deposit 62,209,272
-----------
(Cost $62,209,272)
U.S. GOVERNMENT AGENCY OBLIGATIONS (B) - 3.6%
Federal Home Loan Bank - 2.7%
900,000 4.85%, 01/27/00 899,590
8,000,000 5.19%, 03/24/00* 8,000,670
5,000,000 5.22%, 03/17/00 5,000,000
-----------
13,900,260
-----------
Fannie Mae - 0.9%
5,000,000 5.62%, 09/01/00 4,785,347
-----------
Total U.S. Government Agency Obligations 18,685,607
-----------
(Cost $18,685,607)
<CAPTION>
Shares
------
<C> <S> <C>
INVESTMENT COMPANIES - 3.4%
17,438,366 Scudder Institutional Money Market Fund 17,438,366
3,830 SSgA Prime Money Market Fund 3,830
-----------
Total Investment Companies 17,442,196
-----------
(Cost $17,442,196)
</TABLE>
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
<C> <S> <C>
- ------------------------------------------------------------------------------
ASSET BACKED AND MORTGAGE BACKED SECURITIES - 1.7%
$1,514,163 Fidelity Equipment Lease Trust, Series 1999-1,
Class A1 (A), CMO
5.16%, 06/16/00 $ 1,514,163
1,839,743 Fidelity Equipment Lease Trust, Series 1999-2,
Class A1 (A), CMO
6.13%, 12/15/00 1,839,743
5,000,000 SMM Trust, 1999-C (A)
6.42%, 01/26/00* 5,000,000
------------
Total Asset Backed and Mortgage Backed Securities 8,353,906
------------
(Cost $8,353,906)
MUNICIPAL OBLIGATIONS - 0.2%
1,000,000 New Jersey State Municipal
6.38%, 08/01/00 1,004,020
------------
Total Municipal Obligations 1,004,020
------------
(Cost $1,004,020)
Total Investments - 105.9% 543,666,891
------------
(Cost $543,666,891)
Net Other Assets and Liabilities - (5.9)% (30,061,012)
------------
Total Net Assets - 100.0% $513,605,879
============
</TABLE>
- ------------------
* Variable rate security. The rate shown reflects rate in effect at
December 31, 1999.
(A) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold, in transactions exempt from
registration, to qualified institutional buyers. At December 31, 1999,
these securities amounted to $116,892,393 or 22.76% of net assets.
(B) Effective yield at time of purchase
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
See Notes to Financial Statements.
- --------------------------------------------
F-3
<PAGE>
Money Market Fund
PORTFOLIO OF INVESTMENTS, Continued . December 31, 1999
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (SEE NOTE 2)
At December 31, 1999, the aggregate cost on investment securities for tax pur-
poses was $543,666,891.
At December 31, 1999, the Portfolio had a capital loss carryforwards which
expire as follows: $347 in 2002; $144 in 2003; $35,977 in 2004; $8,154 in 2005;
$52,338 in 2006.
OTHER INFORMATION
The composition of ratings of both long-term and short-term debt holdings as a
percentage of total value of investments in securities is as follows:
<TABLE>
<CAPTION>
Moody's Ratings
(Unaudited)
<S> <C>
Aaa 96.79%
NR (Not Rated) 3.21
------
100.00%
======
</TABLE>
See Notes to Financial Statements.
------------------------------------------------------
F-4
<PAGE>
Allmerica Investment Trust
STATEMENTS OF ASSETS AND LIABILITIES (in 000's) . December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money
Market
Fund
- ---------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments:
Investments at cost................................................. $ 543,667
---------
Total investments at value.......................................... 543,667
Cash and foreign currency*........................................... 3
Interest and dividend receivables.................................... 5,495
---------
Total Assets........................................................ 549,165
---------
LIABILITIES:
Payable for investments purchased.................................... 22,164
Payable for shares repurchased....................................... 13,257
Advisory fee payable................................................. 100
Accrued expenses and other payables.................................. 38
---------
Total Liabilities................................................... 35,559
---------
NET ASSETS........................................................... $ 513,606
=========
NET ASSETS consist of
Paid-in capital...................................................... $ 513,703
Accumulated (distribution in excess of) net realized gain (loss) on
investments sold, foreign currency transactions and futures
contracts........................................................... (97)
---------
TOTAL NET ASSETS..................................................... $ 513,606
=========
Shares of beneficial interest outstanding
(unlimited authorization, no par value) (in 000's)................... 513,705
NET ASSET VALUE,
Offering and redemption price per share
(Net Assets/Shares Outstanding)...................................... $ 1.000
=========
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------
F-5
<PAGE>
Allmerica Investment Trust
STATEMENTS OF OPERATIONS (in 000's) . For the Year Ended December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money
Market
Fund
- ---------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Interest............................................................. $ 22,442
Dividends............................................................ 269
---------
Total investment income.............................................. 22,711
---------
EXPENSES
Investment advisory fees............................................. 1,020
Custodian and Fund accounting fees................................... 112
Legal fees........................................................... 6
Audit fees........................................................... 18
Trustees' fees and expenses.......................................... 8
Reports to shareholders.............................................. 66
Miscellaneous........................................................ 2
---------
Total expense........................................................ 1,232
---------
NET INVESTMENT INCOME (LOSS).......................................... 21,479
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments sold......................... --
---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... $ 21,479
=========
</TABLE>
See Notes to Financial Statements.
------------------------------------------------------
F-6
<PAGE>
Allmerica Investment Trust
STATEMENTS OF CHANGES IN NET ASSETS (in 000's)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Money Market Fund
- -------------------------------------------------------------------------------
Years Ended December
31,
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSETS at beginning of year........................ $ 336,253 $ 260,619
--------- ---------
Increase (decrease) in net assets
resulting from operations:
Net investment income (loss).......................... 21,479 14,920
Net realized gain (loss) on investments sold and
foreign currency transactions........................ -- (52)
--------- ---------
Net increase in net assets resulting from operations.. 21,479 14,868
--------- ---------
Distributions to shareholders from:
Net investment income................................. (21,479) (14,920)
Distribution in excess of net investment income....... -- (2)
--------- ---------
Total distributions.................................. (21,479) (14,922)
--------- ---------
Capital share transactions:
Net proceeds from sales of shares..................... 1,057,803 327,728
Issued to shareholders in reinvestment of
distributions........................................ 21,479 14,922
Cost of shares repurchased............................ (901,929) (266,962)
--------- ---------
Net increase from capital share transactions......... 177,353 75,688
--------- ---------
Total increase (decrease) in net assets.............. 177,353 75,634
--------- ---------
NET ASSETS at the end of year.......................... $ 513,606 $ 336,253
========= =========
OTHER INFORMATION:
Share transactions:
Sold.................................................. 1,057,803 327,728
Issued to shareholders in reinvestment of
distributions........................................ 21,479 14,922
Repurchased........................................... (901,929) (266,962)
--------- ---------
Net increase in shares outstanding................... 177,353 75,688
========= =========
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------
F-7
<PAGE>
Allmerica Investment Trust
FINANCIAL HIGHLIGHTS - For a Share Outstanding Throughout Each Period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
------------------------------------------------------- ---------------------------------------------------
Net Realized
Net and Distributions
Asset Net Unrealized Dividends from Net
Value Investment Gain (Loss) Total from from Net Realized Distributions
Year Ended Beginning Income on Investment Investment Capital in Return of Total
December 31, of Year (Loss) Investments Operations Income Gains Excess Capital Distributions
- ------------ --------- ---------- ------------ ---------- ---------- ------------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market
Fund
1999 $1.000 $0.051 -- $0.051 $(0.051) -- -- -- $(0.051)
1998 1.000 0.054 -- 0.054 (0.054) -- -- -- (0.054)
1997 1.000 0.053 -- 0.053 (0.053) -- -- -- (0.053)
1996 1.000 0.052 -- 0.052 (0.052) -- -- -- (0.052)
1995 1.000 0.057 -- 0.057 (0.057) -- -- -- (0.057)
<CAPTION>
Net
Increase
(Decrease)
in
Year Ended Net Asset
December 31, Value
- ------------ ----------
<S> <C>
Money Market
Fund
1999 --
1998 --
1997 --
1996 --
1995 --
</TABLE>
- ------------------------------------
(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.
See Notes to Financial Statements.
------------------------------------------------------
F-8
<PAGE>
Allmerica Investment Trust
<TABLE>
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------------
Ratios To Average Net Assets
------------------------------------------------
Net Assets
Net Asset End of Net Operating Management Portfolio
Value End Total Year Investment Expenses Fee Turnover
of Year Return (000's) Income (Loss) (A) (B) (C) Gross Net Rate
- --------- ------ ---------- ------------- ---- ---- ---- ----- ---- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$1.000 5.19% $513,606 5.09% 0.29% 0.29% 0.29% 0.24% 0.24% N/A
1.000 5.51% 336,253 5.36% 0.32% 0.32% 0.32% 0.26% 0.26% N/A
1.000 5.47% 260,620 5.33% 0.35% 0.35% 0.35% 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
</TABLE>
- --------------------------------------------
F-9
<PAGE>
Allmerica Investment Trust
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
Allmerica Investment Trust (the "Trust") is registered under the Investment
Company Act of 1940 ("the 1940 Act"), as amended, as an open-end, diversified
management investment company established as a Massachusetts business trust.
The Trust is intended to serve as an investment medium for (i) variable life
insurance policies and variable annuity contracts offered by insurance compa-
nies, (ii) certain qualified pension and retirement plans, as permitted by
Treasury Regulations; and (iii) life insurance companies and advisers to the
Portfolios and their affiliates. The Trust is comprised of fourteen managed
investment portfolios. The accompanying financial statements and financial
highlights are those of the Money Market Fund (the "Portfolio").
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions at
the date of the financial statements. Actual results could differ from those
estimates.
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements:
Security Valuation: Securities of the Portfolio are valued utilizing the amor-
tized cost valuation method, permitted in accordance with Rule 2a-7 under the
1940 Act. This method involves valuing a portfolio security initially at its
cost and thereafter assuming a constant amortization to maturity of any dis-
count or premium.
Federal Income Taxes: The Trust treats each Portfolio as a separate entity for
Federal income tax purposes. The Portfolio intends to continue to qualify as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, the Portfolio will not be subject to
Federal income taxes to the extent it distributes all of its taxable income and
net realized gains, if any, for its tax year ending December 31, 1999. In addi-
tion, by distributing during each calendar year substantially all of its net
investment income, capital gains and certain other amounts, if any, the Portfo-
lio will not be subject to Federal excise tax. Therefore, no Federal income tax
provision is required. Withholding taxes on foreign dividend income and gains
have been paid or provided for in accordance with the applicable country's tax
rules and rates.
Distributions to Shareholders: Dividends from net investment income are
declared and reinvested daily for the Portfolio. The Portfolio declares and
distribute all net realized capital gains, if any, at least annually. Distribu-
tions to shareholders are recorded on ex-dividend date.
Expenses: The Trust accounts separately for assets, liabilities and operations
of each Portfolio. Expenses directly attributed to a Portfolio are charged to
the Portfolio, while expenses which are attributable to more than one Portfolio
of the Trust are allocated among the respective Portfolios.
------------------------------------------------------
F-10
<PAGE>
Allmerica Investment Trust
NOTES TO FINANCIAL STATEMENTS, Continued
- --------------------------------------------------------------------------------
3. INVESTMENT ADVISORY, ADMINISTRATION, AND OTHER RELATED PARTY TRANSACTIONS.
Allmerica Financial Investment Management Services, Inc. (the "Manager"), a
wholly-owned subsidiary of First Allmerica Financial Life Insurance Company
("First Allmerica"), serves as investment advisor and administrator to the
Trust. Under the terms of the management agreement, the Portfolios pay a man-
agement fee, calculated daily and payable monthly, at an annual rate based upon
the following fee schedules:
<TABLE>
<CAPTION>
Percentage of Average Daily Net
Assets
First Next Over
Portfolio $50,000,000 $200,000,000 $250,000,000
- ---------------------------------------------------
<S> <C> <C> <C>
Money Market 0.35% 0.25% 0.20%
</TABLE>
The Manager has entered into Sub-Adviser Agreements for the management of the
investments of the Portfolio. The Manager is solely responsible for the payment
of all fees to the Sub-Advisers. The Sub-Adviser for the Portfolio is Allmerica
Asset Management, Inc.
Effective April 1, 1999, IBT provides portfolio accounting and custody services
to the Trust and receives fees and reimbursement of certain out-of-pocket
expenses for its services from the Trust. The Manager has entered into an
Administrative Services Agreement with IBT, whereby IBT performs certain admin-
istrative services for the Portfolio and is entitled to receive an administra-
tive fee and certain out-of-pocket expenses. The Manager is solely responsible
for the payment of the administrative fee to IBT. Prior to April 1, 1999, First
Data Investor Services Group, Inc. performed fund administration and fund
accounting services for the Trust, and custodian services were performed by
Bankers Trust Company. The Trust pays no salaries or compensation to any of its
officers. 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 Trustees, and receive quarterly meeting and retainer fees for
their services. Such amounts are paid by the Trust.
4. REIMBURSEMENT OF EXPENSES AND WAIVER OF FEES
In the event normal operating expenses of the Portfolio, excluding taxes,
interest, broker commissions, and extraordinary expenses, but including the
advisory fee, exceed 0.60% of average net assets, the Manager will voluntarily
reimburse fees and any expenses in excess of the expense limitations. Expense
limitations may be removed or revised at any time after the Portfolio's first
fiscal year of operations without prior notice to existing shareholders.
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an unlimited
number of shares of beneficial interest for the Portfolios, each without a par
value.
- --------------------------------------------
F-11
<PAGE>
Allmerica Investment Trust
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of Allmerica Investment Trust
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all mate-
rial respects, the financial position of the Money Market Fund (one of the
funds constituting the Allmerica Investment Trust, hereafter referred to as the
"Trust") at December 31, 1999, the results of its operations, the changes in
its net assets and the financial highlights for the periods indicated, in con-
formity with accounting principles generally accepted in the United States.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and signifi-
cant estimates made by management, and evaluating the overall financial state-
ment presentation. We believe that our audits, which included confirmation of
securities at December 31, 1999 by correspondence with the custodian and bro-
kers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 14, 2000
------------------------------------------------------
F-12
<PAGE>
Allmerica Investment Trust
REGULATORY DISCLOSURES
- --------------------------------------------------------------------------------
The performance data quoted represents past performance and the investment
return and principal value of an investment will fluctuate so that an invest-
or's shares, when redeemed, may be worth more or less than their original cost.
An investment in the Money Market Fund is not insured or guaranteed by the Fed-
eral Deposit Insurance Corporation or any other government agency. Although the
Portfolio seeks to preserve the value of your investment at a stable net asset
value of $1.00 per share, it is possible to lose money by investing in the
Portfolio.
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Portfolio and are not authorized
for distribution to prospective investors in The Fulcrum FundSM Variable Annu-
ity of Allmerica Financial Life Insurance and Annuity Company or First
Allmerica Financial Life Insurance Company unless accompanied or preceded by
effective prospectuses for The Fulcrum FundSM Variable Annuity, Allmerica
Financial Life Insurance and Annuity Company or First Allmerica Financial Life
Insurance Company and Allmerica Investment Trust, which include important
information related to charges and expenses.
CLIENT NOTICES
- --------------------------------------------------------------------------------
This report includes financial statements for Allmerica Investment Trust. It
does not include financial statements for the separate accounts that correspond
to The Fulcrum FundSM Variable Annuity contracts. Separate account financial
statements are not provided.
- --------------------------------------------
F-13
<PAGE>
[LOGO OF ALLMERICA FINANCIAL]
First Allmerica Financial Life Insurance Company .
Allmerica Financial Life Insurance and Annuity Company
(licensed in all states except NY) . Allmerica Trust Company, N.A.
Allmerica Investments, Inc. . Allmerica Investment Management Company, Inc.
The Hanover Insurance Company . AMGRO, Inc.
Allmerica Financial Alliance Insurance Company
Allmerica Asset Management, Inc. . Allmerica Financial Benefit Insurance Company
Sterling Risk Management Services, Inc.
Citizens Corporation . Citizens Insurance Company of America
. Citizens Management Inc.
440 Lincoln Street, Worcester, Massachusetts 01653
11371 (12/99)
