EXECUTIVE
INVESTORS
TRUST
BLUE CHIP FUND
HIGH YIELD FUND
INSURED TAX EXEMPT FUND
SEMI-
ANNUAL
REPORT
June 30, 1996
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EXECUTIVE INVESTORS TRUST
95 WALL STREET
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EIHY-107
Portfolio Manager's Letter
EXECUTIVE INVESTORS BLUE CHIP FUND
Dear Investor:
As 1996 began, most investors expected the U.S. economy to continue to
slow or even enter a recession. Instead the economy accelerated
throughout the first half of the year. After growing at an annualized
rate of only .5% in the fourth quarter of 1995, the economy expanded
at a 2.2% pace during the first quarter of this year and at an
estimated 3.5%-4.0% during the second quarter. Concern that faster
growth would lead to higher inflation contributed to a sharp rise in
interest rates with the yield on long-term U.S. Treasury bonds
increasing from 5.95% to 6.87%. Despite higher interest rates the
stock market continued to rally with the broad stock market averages
hitting record highs during the second quarter.
The economy was driven by the consumer in the first six months of
1996. Despite early bleak economic forecasts and the continued fear of
job losses due to corporate mergers, acquisitions and downsizing,
consumers continued to spend. On a seasonally adjusted annual basis,
auto sales were at peak levels with a strong outlook for the remainder
of the year. In spite of higher interest rates, sales of new and
existing homes remained strong. The retail sector of the economy was
the strongest sector in the first half of the year, despite concerns
over increasing rates of personal bankruptcies and credit card
delinquencies. Sales at retail stores on all levels, specialty,
department and chain, grew at robust rates. The impact of consumer
spending was evident in the performance of retail and consumer
cyclical stocks in the first half of the year.
The Dow Jones Industrial Average outperformed the broader indices for
the first six months of 1996, reflecting investor preferences for
consistent proven earnings capabilities. For the first half of the
year the top performing sector was Specialty Retail, followed by the
Oil and Gas Drilling and Shoe Retail sectors, respectively. Overall,
the top twenty performers for the first six months of the year in the
S&P 500 were dominated by the retail sectors.
While the investment strategy of your Fund is sector neutral with a
broad representation of securities, stock selection remains the key to
good performance. For the first six months of 1996, stocks selected as
holdings for your Fund in the retail sector included Talbots, The Gap,
Sears, Home Depot, Price/Costco and Wal-Mart. The Fund also has a
solid position in Nike, the world's dominant athletic shoe
manufacturer. In the Oil and Gas Drilling sector the Fund held
positions in Schlumberger, Dresser and Halliburton. The substantial
returns generated by consumer oriented and oil and gas drilling stocks
were somewhat offset by the lackluster performance of utilities and
telecommunication stocks, specifically the Regional Bell Companies.
For the first six months of 1996, the Executive Investors Blue Chip
Fund was up on a net asset value basis 9.4% compared to the Lipper
Growth and Income Funds Average of 9.2%. During this period, dividends
from net investment income amounted to 11 cents per share.
The recent bull market in stocks has lasted 69 months, the second
longest bull market in the history of the U.S. stock market. While
investors have enjoyed these gains, it is important to remember that
the stock market tends to be cyclical with periods when stock prices
generally rise and periods when stock prices generally decline. As
well, certain sectors of the market, such as technology stocks, can be
more volatile than the general market, creating greater opportunities
but also greater risks. Investors should be aware of these risks and
recognize that successful investing generally requires a long-term
commitment to the market.
Looking forward, inflation shows few signs of accelerating, despite
the market's concern. In addition, the pace of economic growth is
likely to slow during the second half of the year. A combination of
stable inflation and moderate growth should provide a comfortable
environment for investors throughout the remainder of 1996.
As always, we appreciate the opportunity to serve your investment
needs.
Sincerely,
Patricia D. Poitra
Director of Equities
and Portfolio Manager
July 8, 1996
Portfolio Manager's Letter
EXECUTIVE INVESTORS HIGH YIELD FUND
Dear Investor:
As 1996 began, most investors expected the U.S. economy to continue to
slow or even enter a recession. Instead the economy accelerated
throughout the first half of the year. After growing at an annualized
rate of only .5% in the fourth quarter of 1995, the economy expanded
at a 2.2% pace during the first quarter of this year and at an
estimated 3.5%-4% during the second quarter. Concern that faster
growth would lead to higher inflation contributed to a sharp rise in
interest rates, with the yield on long-term U.S. Treasury bonds
increasing from 5.95% to 6.87%. Despite higher interest rates the
stock market continued to rally, with the broad stock market averages
hitting record highs during the second quarter.
During this period, the high yield market generally did not track the
upward move in interest rates and benefitted from some of the factors
that drove the equity markets. While stirrings of economic strength
drove interest rates higher, this same strength also raised earnings
prospects and valuations of junk bond issuers, affording these
companies greater financial flexibility. These positive factors led
the high yield market to accept a narrower yield premium over
comparable treasuries, which is another way of saying that high yield
bonds performed better than Treasury bonds. In the first half of 1996,
the average total return for high current yield bond funds as tracked
by Lipper Analytical Services, Inc. was 4.8%, while ten year Treasury
notes returned -5%. Within the high yield category, returns were
inverse to credit quality. Issuers in the lowest rating categories
have the most to gain from economic strength and improved financial
flexibility and thus performed the best. Conversely, the stronger
companies tended to be hurt by their greater interest rate
sensitivity. These attributes caused large cash inflows into the
market from new classes of investors. This made possible a relatively
smooth funding of $40.8 billion, approximately twice the amount
financed in the first half of 1995.
For the six months ended June 30, 1996, the Fund's total return on a
net asset value basis was 4.9% and dividends from net investment
income were 33.9 cents per share. Our credit objective of investing in
companies with stable to improving prospects paradoxically hurt rather
than helped the Fund in the market conditions of 1996. Helping returns
were generally good security selections in which some companies
outperformed and none defaulted. The Fund did enjoy some rebounds in
which bonds held through credit difficulties emerged from those
problems as we had expected. Holdings of bonds with interest rate
sensitivity such as zero coupon structures hampered the Fund but were
at slightly less than market weighting. The Fund had light involvement
in two industries that did very well in the marketplace; gaming and
retailing, since these are industries with extraordinary swings in
investor sentiment which the Fund seeks to avoid. Media/Cable TV, a
large industry sector held by the Fund, suffered from heavy issuance
and aggressive structuring and pricing, but we believe continues to
offer good value.
We continue to emphasize finding and holding fundamental values,
companies which have achieved stability and are likely to benefit from
credit improvement despite leveraged balance sheets. Through market
cycles, we are confident that this strategy will produce strong
returns.
Investors who buy bond funds -- whether for income or total return --
should be aware that the value of their investment fluctuates as
interest rates change. For example, a 100 basis point (or 1%) increase
in yield on a ten year bond results in roughly a 7% decrease in that
bond's price. In each of the last four years and the first half of
1996, ten year Treasury bond yields have moved more than 100 basis
points. In addition, the value of a fund can fluctuate based on
changes in the credit quality of the bonds which it holds. In
particular, high yield funds invest in lower-rated debt obligations
which are more sensitive than higher-rated investments to adverse
economic changes or individual corporate developments, and thus can be
subject to a higher incidence of default. Investors should be aware of
these risks and recognize that successful investing generally requires
a long-term commitment to the market.
Looking forward, inflation shows few signs of accelerating despite the
market's concern. In addition, the pace of economic growth is likely
to slow during the second half of the year. A combination of stable
inflation and moderate growth should provide a comfortable environment
for investors throughout the remainder of 1996.
As always, we appreciate the opportunity to serve your investment
needs.
Sincerely,
George V. Ganter
Vice President
and Portfolio Manager
July 8, 1996
Portfolio Manager's Letter
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
Dear Investor:
As 1996 began, most investors expected the U.S. economy to continue to
slow or even enter a recession. Instead the economy accelerated
throughout the first half of the year. After growing at an annualized
rate of only .5% in the fourth quarter of 1995, the economy expanded
at a 2.2% pace during the first quarter of this year and at an
estimated 3.5%-4% during the second quarter. Concern that faster
growth would lead to higher inflation contributed to a sharp rise in
interest rates with the yield on long-term U.S. Treasury bonds
increasing from 5.95% to 6.87%. Despite higher interest rates the
stock market continued to rally with the broad stock market averages
hitting record highs during the second quarter.
Faster economic growth, expectations of inflation, and the failure of
Congress and the President to agree on a balanced budget plan
contributed to a 50 basis point (.5%) increase in long-term municipal
bond yields during the first half of 1996. In comparison, long-term
Treasury bond yields rose almost 1% over the same time period. The
relatively strong performance of the municipal bond market was
attributable to two factors. First, municipal bonds began the year at
attractive levels relative to taxable bonds because of concern over
tax reform. As those concerns diminished, demand for tax-exempt bonds
increased. Second, rising yields increased demand for municipal bonds
as investors took advantage of the highest tax-exempt interest rates
available since August 1995.
During the first half of 1996 Executive Investors Insured Tax Exempt
Fund had a total return on a net asset value basis of -1.1% which
compared favorably to an average return of -1.8% for insured municipal
bond funds according to Lipper Analytical Services, Inc. The
Fund distributed dividends from net investment income of 33.1 cents
per share. Management of the Fund focused on reducing interest rate
exposure to protect the Fund's investments as the market declined. The
Fund accomplished this by reducing the average maturity of its
holdings. As in the past, the Fund improved call protection where
possible, particularly by purchasing noncallable bonds.
Investors who buy bond funds -- whether for income or total return --
should be aware that the value of their investment fluctuates as
interest rates change. For example, a 100 basis point (or 1%) increase
in yield on a ten year bond results in roughly a 7% decrease in that
bond's price. In each of the last four years and the first half of
1996, ten year Treasury bond yields have moved more than 100 basis
points. In addition, while the Fund's municipal bonds are insured as
to timely payment of principal and interest, this insurance does not
protect the bonds against changes in market value. Investors should be
aware of these risks and recognize that successful investing generally
requires a long-term commitment to the market.
Looking forward, inflation shows few signs of accelerating, despite
the market's concern. In addition, the pace of economic growth is
likely to slow during the second half of the year. A combination of
stable inflation and moderate growth should provide a comfortable
environment for investors throughout the remainder of 1996.
As always, we appreciate the opportunity to serve your investment
needs.
Sincerely,
Clark D. Wagner
Chief Investment Officer
and Portfolio Manager
July 8, 1996
<TABLE>
<CAPTION>
Portfolio of Investments
EXECUTIVE INVESTORS BLUE CHIP FUND
June 30, 1996
- ------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCKS--92.9%
Basic Industry--6.1%
100 AlliedSignal, Inc. $ 5,713 $ 35
100 *Alumax, Inc. 3,037 18
100 Aluminum Company of America 5,737 35
150 Avery Dennison Corporation 8,231 50
200 Barrick Gold Corporation 5,425 33
100 Dow Chemical Company 7,600 46
100 Du Pont (E.I.) de Nemours & Company 7,913 48
100 Freeport McMoRan Copper & Gold, Inc. - Class "B" 3,187 19
200 IMC Global, Inc. 7,525 46
100 Mead Corporation 5,187 31
130 Minnesota Mining & Manufacturing Company 8,970 54
500 Monsanto Company 16,250 98
150 Morton International, Inc. 5,587 34
100 Nucor Corporation 5,063 31
100 Sigma-Aldrich Corporation 5,350 32
- ------------------------------------------------------------------------------------------------------------------
100,775 610
- ------------------------------------------------------------------------------------------------------------------
Capital Goods--9.8%
100 Boeing Company 8,713 53
100 Caterpillar, Inc. 6,775 41
100 Danaher Corporation 4,350 26
50 Eaton Corporation 2,931 18
100 Emerson Electric Company 9,037 55
200 Fluor Corporation 13,075 79
500 General Electric Company 43,250 262
100 General Signal Corporation 3,787 23
200 Harnischfeger Corporation 6,650 40
75 Ingersoll-Rand Company 3,281 20
200 Laidlaw, Inc. - Class "B" 2,025 12
100 Lockheed Martin Corporation 8,400 51
400 Loral Space & Communications 5,450 33
200 Raytheon Company 10,325 62
200 *Tyco International Ltd. 8,150 49
100 United Technologies Corporation 11,500 70
100 *Varity Corporation 4,813 29
300 WMX Technologies, Inc. 9,825 59
- ------------------------------------------------------------------------------------------------------------------
162,337 982
- ------------------------------------------------------------------------------------------------------------------
Consumer Durables--2.0%
200 Corning, Inc. 7,675 46
300 Ford Motor Company 9,713 59
200 General Motors Corporation 10,475 63
150 Masco Corporation 4,537 27
- ------------------------------------------------------------------------------------------------------------------
32,400 195
- ------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--20.1%
250 Abbott Laboratories 10,875 66
200 American Home Products Corporation 12,025 73
150 Anheuser-Busch Cos., Inc. 11,250 68
150 Bristol-Myers Squibb Company 13,500 82
800 Coca-Cola Company 39,100 236
150 Columbia/HCA Healthcare Corporation 8,006 48
200 CPC International, Inc. 14,400 87
100 Eastman Kodak Company 7,775 47
200 Eli Lilly & Company 13,000 79
100 General Mills, Inc. 5,450 33
200 Gillette Company 12,475 75
150 Heinz (H.J.) Company 4,556 28
400 Johnson & Johnson 19,800 119
100 Kellogg Company 7,325 44
100 Kimberly-Clark Corporation 7,725 47
300 Merck & Company, Inc. 19,387 117
300 Newell Company 9,187 56
100 Nike, Inc.- Class "B" 10,275 62
600 PepsiCo, Inc. 21,225 128
300 Philip Morris Cos., Inc. 31,200 189
200 Procter & Gamble Company 18,125 109
100 Schering-Plough Corporation 6,275 38
200 *Tenet Healthcare Corporation 4,275 26
100 Unilever N.V. 14,513 88
100 United Healthcare Corporation 5,050 31
100 Warner-Lambert Company 5,500 33
- ------------------------------------------------------------------------------------------------------------------
332,274 2,009
- ------------------------------------------------------------------------------------------------------------------
Consumer Services--10.1%
500 *Federated Department Stores, Inc. 17,063 103
150 Home Depot, Inc. 8,100 49
300 *Infinity Broadcasting Corporation 9,000 54
100 ITT Corporation 6,625 40
100 ITT Hartford Group, Inc. 5,325 32
100 *Kroger Company 3,950 24
150 Marriott International, Inc. 8,063 49
200 McDonald's Corporation 9,350 57
200 McGraw-Hill Companies, Inc. 9,150 55
300 *Price/Costco, Inc. 6,487 39
100 Sears, Roebuck and Company 4,863 29
300 Talbots, Inc. 9,713 59
200 *Tele-Communications, Inc., Liberty Media Group - Class "A" 5,300 32
300 *Tele-Communications, Inc., TCI Group - Class "A" 5,437 33
200 Tribune Co 14,525 88
100 *Viacom, Inc. - Class "B" 3,887 24
150 *Vons Companies, Inc. 5,606 34
500 Wal-Mart Stores, Inc. 12,687 77
100 Walgreen Company 3,350 20
200 Walt Disney Company 12,575 76
300 *Woolworth Corporation 6,750 41
- ------------------------------------------------------------------------------------------------------------------
167,806 1,015
- ------------------------------------------------------------------------------------------------------------------
Energy--10.1%
150 Amoco Corporation 10,856 66
200 Baker Hughes, Inc. 6,575 40
200 Chevron Corporation 11,800 71
200 Dresser Industries, Inc. 5,900 36
200 Enron Corporation 8,175 49
200 Exxon Corporation 17,375 105
100 Halliburton Company 5,550 34
50 Kerr-McGee Corporation 3,044 18
200 Mobil Corporation 22,425 135
225 Royal Dutch Petroleum Company 34,594 209
200 Schlumberger, Ltd. 16,850 102
200 Sonat, Inc. 9,000 54
100 Texaco, Inc. 8,387 51
200 Unocal Corporation 6,750 41
- ------------------------------------------------------------------------------------------------------------------
167,281 1,011
- ------------------------------------------------------------------------------------------------------------------
Financial--12.7%
150 American Express Company 6,694 40
150 American International Group, Inc. 14,794 90
100 American Re Corporation 4,487 27
342 Banc One Corporation 11,628 70
200 Bank of Boston Corporation 9,900 60
150 BankAmerica Corporation 11,363 69
300 Charles Schwab Corporation 7,350 44
100 Chase Manhattan Corporation 7,063 43
200 Chubb Corporation 9,975 60
200 Citicorp 16,525 100
100 Dean Witter Discover & Company 5,725 35
500 Federal National Mortgage Association 16,750 101
200 First Union Corporation 12,175 74
100 General Re Corporation 15,225 92
700 Hibernia Corporation - Class "A" 7,613 46
100 Merrill Lynch & Company, Inc. 6,513 40
150 NationsBank Corporation 12,394 75
300 Norwest Corporation 10,463 63
200 Salomon, Inc. 8,800 53
100 Torchmark Corporation 4,375 26
600 USF&G Corporation 9,825 60
- ------------------------------------------------------------------------------------------------------------------
209,637 1,268
- ------------------------------------------------------------------------------------------------------------------
Food Wholesalers--.4%
6 Earthgrains Company 197 1
200 Sysco Corporation 6,850 42
- ------------------------------------------------------------------------------------------------------------------
7,047 43
- ------------------------------------------------------------------------------------------------------------------
Health Care/Miscellaneous--1.2%
800 *Cardiovascular Dynamics, Inc. 9,800 59
200 *Nellcor Puritan Bennett Inc. 9,700 59
- ------------------------------------------------------------------------------------------------------------------
19,500 118
- ------------------------------------------------------------------------------------------------------------------
Technology--13.9%
400 A T & T Corp. 24,800 150
200 *Adaptec, Inc. 9,475 57
200 *Airtouch Communications, Inc. 5,650 34
200 *Cisco Systems, Inc. 11,325 69
100 Computer Associates International, Inc. 7,125 43
200 First Data Corporation 15,925 96
200 Hewlett-Packard Company 19,925 120
200 Intel Corporation 14,687 89
200 International Business Machines Corporation 19,800 120
200 MCI Communications Corporation 5,125 31
200 *Microsoft Corporation 24,025 145
100 Motorola, Inc. 6,288 38
200 *National Semiconductor Corporation 3,100 19
375 *Oracle Corporation 14,789 89
300 *Seagate Technology, Inc. 13,500 82
105 Vishay Intertechnology, Inc. 2,481 15
600 Xerox Corporation 32,100 194
- ------------------------------------------------------------------------------------------------------------------
230,120 1,391
- ------------------------------------------------------------------------------------------------------------------
Transportation--.9%
100 *AMR Corporation 9,100 55
200 Ryder System, Inc. 5,625 34
- ------------------------------------------------------------------------------------------------------------------
14,725 89
- ------------------------------------------------------------------------------------------------------------------
Utilities--5.6%
100 Bell Atlantic Corporation 6,375 38
200 BellSouth Corporation 8,475 51
200 Carolina Power & Light Company 7,600 46
400 CINergy Corporation 12,800 77
200 Duke Power Company 10,250 62
250 FPL Group, Inc. 11,500 70
300 GTE Corporation 13,425 81
100 NYNEX Corporation 4,750 29
200 PacifiCorp 4,450 27
100 SBC Communications, Inc. 4,925 30
200 Texas Utilities Company 8,550 52
- ------------------------------------------------------------------------------------------------------------------
93,100 563
- ------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $1,171,916) 1,537,002 9,294
==================================================================================================================
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS--.9%
Consumer Services--.9%
$ 20M Bell Sports Corp., 4 1/4%, 11/15/2000 (cost $15,961) $ 15,050 $ 91
- ------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--1.5%
25M U.S. Treasury Bill, 4.985%, 9/12/1996 (cost $24,370) 24,731 150
- ------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $1,212,247) 95.3% 1,576,783 9,535
Other Assets, Less Liabilities 4.7 77,024 465
- ------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $ 1,653,807 $ 10,000
==================================================================================================================
* Non-income producing
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Portfolio of Investments
EXECUTIVE INVESTORS HIGH YIELD FUND
June 30, 1996
- ------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE BONDS--91.1%
Aerospace/Defense--2.0%
$ 200M Howmet Corp., 10%, 2003 (Note 4) $ 211,000 $ 132
100M Moog, Inc., 10%, 2006 (Note 4) 101,000 63
- ------------------------------------------------------------------------------------------------------------------
312,000 195
- ------------------------------------------------------------------------------------------------------------------
Apparel/Textiles--2.4%
400M Westpoint Stevens, Inc., 9 3/8%, 2005 388,000 242
- ------------------------------------------------------------------------------------------------------------------
Automotive--3.3%
150M Lear Seating, Inc., 11 1/4%, 2000 156,000 97
350M SPX Corp., 11 3/4%, 2002 371,438 232
- ------------------------------------------------------------------------------------------------------------------
527,438 329
- ------------------------------------------------------------------------------------------------------------------
Chemicals--5.8%
300M Harris Chemical North America, Inc., 10 1/4%, 2001 300,750 188
400M Rexene Corp., 11 3/4%, 2004 416,000 259
200M Synthetic Industries, Inc., 12 3/4%, 2002 212,500 133
- ------------------------------------------------------------------------------------------------------------------
929,250 580
- ------------------------------------------------------------------------------------------------------------------
Conglomerates--1.8%
500M Semi-Tech Corp., 0%-11 1/2%, 2003 290,000 181
- ------------------------------------------------------------------------------------------------------------------
Consumer Products--1.9%
300M Herff Jones, Inc., 11%, 2005 310,500 194
- ------------------------------------------------------------------------------------------------------------------
Durable Goods Manufacturing--1.3%
200M Fairfield Manufacturing, Inc., 11 3/8%, 2001 203,000 127
- ------------------------------------------------------------------------------------------------------------------
Electrical Equipment--2.8%
350M Essex Group, Inc., 10%, 2003 353,500 220
100M Thermadyne Industries, Inc., 10 3/4%, 2003 98,750 62
- ------------------------------------------------------------------------------------------------------------------
452,250 282
- ------------------------------------------------------------------------------------------------------------------
Energy--8.1%
300M Falcon Drilling Co., Inc., 12 1/2%, 2005 334,500 209
400M Giant Industries, Inc., 9 3/4%, 2003 395,500 247
250M Maxus Energy Corp., 11 1/2%, 2015 261,250 163
300M United Meridian Corp., 10 3/8%, 2005 311,250 194
- ------------------------------------------------------------------------------------------------------------------
1,302,500 813
- ------------------------------------------------------------------------------------------------------------------
Financial Services--2.1%
200M Olympic Financial, Ltd., 13%, 2000 217,500 136
100M Terra Nova Holdings, PLC, 10 3/4%, 2005 112,000 70
- ------------------------------------------------------------------------------------------------------------------
329,500 206
- ------------------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--3.0%
180M Fleming Co., Inc., 10 5/8%, 2001 163,350 102
300M Van de Kamps, Inc., 12%, 2005 320,250 200
- ------------------------------------------------------------------------------------------------------------------
483,600 302
- ------------------------------------------------------------------------------------------------------------------
Food Services--1.6%
300M Flagstar Corp., 10 3/4%, 2001 262,500 164
- ------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--3.5%
220M Casino America, Inc., 11 1/2%, 2001 230,450 144
250M Grand Casinos, Inc., 10 1/8%, 2003 257,500 160
159M SHRP Capital Corp., 11%, 2001 66,990 42
- ------------------------------------------------------------------------------------------------------------------
554,940 346
- ------------------------------------------------------------------------------------------------------------------
Healthcare--7.3%
200M Dade International, Inc., 11 1/8%, 2006 (Note 4) 206,500 129
300M Mediq/PRN Life Support Services, Inc., 11 1/8%, 1999 322,500 201
300M Ornda Healthcorp., 12 1/4%, 2002 325,500 203
300M Tenet Healthcare Corp., 10 1/8%, 2005 318,750 199
- ------------------------------------------------------------------------------------------------------------------
1,173,250 732
- ------------------------------------------------------------------------------------------------------------------
Media/Cable Television--13.3%
500M Bell Cablemedia, PLC, 0%-11.95%, 2004 356,250 222
650M Echostar Communications Corp., 0%-12 7/8%, 2004 479,375 299
300M Garden State Newspapers, Inc., 12%, 2004 316,500 197
250M Lamar Advertising, Inc., 11%, 2003 256,562 160
400M Outdoor Systems, Inc., 10 3/4%, 2003 416,000 260
300M Rogers Cablesystems, Inc., 10%, 2005 298,500 186
- ------------------------------------------------------------------------------------------------------------------
2,123,187 1,324
- ------------------------------------------------------------------------------------------------------------------
Mining/Metals--9.5%
274M Carbide/Graphite Group, Inc., 11 1/2%, 2003 293,180 183
200M Gulf States Steel Inc., 13 1/2%, 2003 177,000 110
240M UCAR Global Enterprises, Inc., 12%, 2005 272,400 170
400M WCI Steel, Inc., 10 1/2%, 2002 408,000 255
400M Wheeling-Pittsburgh Steel Corp., 9 3/8%, 2003 372,000 232
- ------------------------------------------------------------------------------------------------------------------
1,522,580 950
- ------------------------------------------------------------------------------------------------------------------
Miscellaneous--2.0%
300M Monarch Marking Systems, Inc., 12 1/2%, 2003 318,000 198
- ------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--9.6%
300M Gaylord Container Corp., 11 1/2%, 2001 309,000 193
200M Rainy River Forest Products Co., Inc., 10 3/4%, 2001 210,500 131
350M Riverwood International, 10 1/4%, 2006 349,125 218
350M S.D. Warren Co., Inc., 12%, 2004 372,750 233
300M Stone Container Corp., 9 7/8%, 2001 292,500 182
- ------------------------------------------------------------------------------------------------------------------
1,533,875 957
- ------------------------------------------------------------------------------------------------------------------
Real Estate/Construction--.9%
150M Continental Homes Holding Corp., 10%, 2006 143,250 89
- ------------------------------------------------------------------------------------------------------------------
Retail-Food/Drug--1.1%
200M Penn Traffic Company, 10 1/4%, 2002 181,750 113
- ------------------------------------------------------------------------------------------------------------------
Telecommunications--3.9%
450M American Communication Services, Inc., 0%-13%, 2005 (Note 4) 252,000 157
250M CAI Wireless Systems, Inc., 12 1/4%, 2002 261,875 163
200M Intercel, Inc., 0%-12%, 2006 109,250 68
- ------------------------------------------------------------------------------------------------------------------
623,125 388
- ------------------------------------------------------------------------------------------------------------------
Transportation--3.9%
300M Moran Transportation Co., 11 3/4%, 2004 300,750 188
350M Trism, Inc., 10 3/4%, 2000 330,312 206
- ------------------------------------------------------------------------------------------------------------------
631,062 394
- ------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $14,646,862) 14,595,557 9,106
- ------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--.5%
Financial Services--.1%
1,000 *Olympic Financial, Ltd. 23,000 14
- ------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--.0%
2,000 *Goldriver Hotel & Casino Corp., Series "B" -- --
45 *SHRP Capital Corp. 225 --
- ------------------------------------------------------------------------------------------------------------------
225 --
- ------------------------------------------------------------------------------------------------------------------
Media/Cable Television--.4%
2,203 *Echostar Communications Corp., "Class A" 62,235 39
- ------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $13,616) 85,460 53
- ------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--5.6%
Financial Services--2.0%
3,000 California Federal Bank, 10 5/8%, Series "B" 327,750 205
- ------------------------------------------------------------------------------------------------------------------
Media/Cable Television--1.6%
223 PanAmSat Capital Corp., 12 3/4% 256,159 160
- ------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--2.0%
9,000 S.D. Warren Co., Inc., 14% 319,500 199
- ------------------------------------------------------------------------------------------------------------------
Total Value of Preferred Stocks (cost $776,072) 903,409 564
- ------------------------------------------------------------------------------------------------------------------
WARRANTS--.5%
Gaming/Lodging--.0%
717 *Casino America, Inc. (expiring 11/15/96) 90 --
200 *Goldriver Finance Corp., Liquidating Trust 1,400 1
1,800 *President Riverboat Casinos, Inc. (expiring 9/23/96)(Note 4) 1,800 1
- ------------------------------------------------------------------------------------------------------------------
3,290 2
- ------------------------------------------------------------------------------------------------------------------
Mining/Metals--.0%
200 *Gulf State Steel Acquisition Corp. (expiring 4/1/03)(Note 4) 100 --
- ------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--.2%
9,000 *S.D. Warren Co., Inc. (expiring 12/15/06)(Note 4) 27,000 17
- ------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--.0%
100 *Payless Cashways, Inc. (expiring 11/1/96) 10 --
- ------------------------------------------------------------------------------------------------------------------
Telecommunications--.3%
450 *American Communication Services, Inc. (expiring 11/1/05)(Note 4) 47,250 29
- ------------------------------------------------------------------------------------------------------------------
Total Value of Warrants (cost $8,950) 77,650 48
- ------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $15,445,500) 97.7% 15,662,076 9,771
Other Assets, Less Liabilities 2.3 367,657 229
- ------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $16,029,733 $10,000
==================================================================================================================
* Non-income producing
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
June 30, 1996
- ------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--100.5%
Arizona--3.4%
250M Maricopa County, Arizona Dev. Auth. Hosp. Facs. Rev.
(Samaritan Health Services Series "A") 7%, 12/1/2016 $ 288,750 $ 195
200M Maricopa County, Arizona Sch. Dist. No. 80 (Chandler) 6 1/4%, 7/1/2011 213,250 144
- ------------------------------------------------------------------------------------------------------------------
502,000 339
- ------------------------------------------------------------------------------------------------------------------
California--12.4%
250M Fresno, California Sewer Revenue 6 1/4%, 9/1/2014 266,562 180
Los Angeles County, Calif. Transportation Comm. Sales Tax Revenue:
100M 6 3/4%, 7/1/2001 * 110,625 75
100M 6.9%, 7/1/2001 * 111,250 75
250M San Francisco, Calif. City & County Parking Auth. 7%, 6/1/2017 277,188 187
500M San Francisco, Calif. City & County Redev. Agcy. 6 3/4%, 7/1/2015 541,250 365
250M San Jose, Redev. Agcy. Tax Allocation 6%, 8/1/2015 258,437 174
250M Santa Ana, Calif. Finance Authority 6 1/4%, 7/1/2015 266,875 180
- ------------------------------------------------------------------------------------------------------------------
1,832,187 1,236
- ------------------------------------------------------------------------------------------------------------------
Colorado--2.6%
350M Roaring Fork, Colorado General Obligation 6.6%, 6/15/2004 * 388,500 262
- ------------------------------------------------------------------------------------------------------------------
Connecticut--4.5%
Connecticut State Special Tax Obligation Revenue:
400M 6.1%, 10/1/2011 413,500 279
250M 5.7%, 6/1/2012 249,375 168
- ------------------------------------------------------------------------------------------------------------------
662,875 447
- ------------------------------------------------------------------------------------------------------------------
Florida--1.7%
250M Tampa, Fla. Sports Auth. Sales Tax Rev. (Tampa Bay Arena) 5 3/4%, 10/1/2020 251,250 170
- ------------------------------------------------------------------------------------------------------------------
Georgia--.7%
100M Cherokee County, Ga. Water & Sewer Auth. Rev. 7.1%, 8/1/2000 * 110,625 75
- ------------------------------------------------------------------------------------------------------------------
Illinois--13.9%
500M Chicago, Illinois Board of Education Chicago School Reform
6 1/4%, 12/1/2012 526,250 355
Chicago, Illinois General Obligation:
500M 6%, 1/1/2010 513,125 346
285M 5 1/8%, 1/1/2015 258,638 175
100M Du Paige Water Commission, Illinois Water Rev. 6 7/8%, 5/1/1997 * 104,371 70
500M Illinois Dev. Fin. Auth. Rev. (Rockford School 205) 6.55%, 2/1/2009 541,250 365
100M Will County School District General Obligation 7.1%, 12/1/2009 114,875 78
- ------------------------------------------------------------------------------------------------------------------
2,058,509 1,389
- ------------------------------------------------------------------------------------------------------------------
Indiana--.9%
130M Delaware Cnty. Hosp. Auth. (Ball Memorial Hosp.) 6 5/8%, 8/1/2006 139,912 94
- ------------------------------------------------------------------------------------------------------------------
Iowa--3.4%
500M Iowa Finance Auth. Rev. Correctional Facility Program 5 3/4%, 6/15/2016 503,750 340
- ------------------------------------------------------------------------------------------------------------------
Maine--1.8%
250M Maine Municipal Bond Bank 6 1/2%, 11/1/2014 265,313 179
- ------------------------------------------------------------------------------------------------------------------
Massachusetts--3.4%
500M Mass. Bay Transn. Auth. Gen. Transn. Sys. Series "A" 5.8%, 3/1/2013 506,250 342
- ------------------------------------------------------------------------------------------------------------------
Michigan--1.8%
1,000M Howell, Michigan Public Schools General Obligation Zero Cpn. 5/1/2006 * 271,250 183
- ------------------------------------------------------------------------------------------------------------------
Missouri--5.2%
200M Liberty, Missouri Sewer System Rev. 6.15%, 2/1/2015 207,500 140
500M Missouri State Health & Educational Facilities Authority
(BJC Health Systems Series "A") 6 3/4%, 5/15/2010 559,375 377
- ------------------------------------------------------------------------------------------------------------------
766,875 517
- ------------------------------------------------------------------------------------------------------------------
Nevada--.6%
80M Reno Hosp. Rev. (St. Mary's Hospital) 7 3/4%, 1/1/2000 * 89,100 60
- ------------------------------------------------------------------------------------------------------------------
New Jersey--3.5%
485M New Jersey Housing & Mortgage Fin. Rev. 6.55%, 10/1/2010 514,100 347
- ------------------------------------------------------------------------------------------------------------------
New York--5.2%
290M New York City Municipal Water Fin. Auth. 5 7/8%, 6/15/2012 300,875 203
500M New York State Dorm. Auth. Revs. Mental Hlth. Svcs. Facs.
5 1/4%, 8/15/2016 465,625 314
- ------------------------------------------------------------------------------------------------------------------
766,500 517
- ------------------------------------------------------------------------------------------------------------------
Oklahoma--3.6%
500M Grand River Dam Authority Revenue 6 1/4%, 6/1/2011 540,625 365
- ------------------------------------------------------------------------------------------------------------------
Pennsylvania--14.5%
500M Bensalem Township, Pa. School District General Obligation
5 7/8%, 7/15/2016 (When issued) 502,500 339
200M Jeannette, Pa. School District General Obligation 6.65%, 6/15/2001 * 216,000 146
400M Pennsylvania State Ind. Dev. Auth. 5 1/2%, 1/1/2014 386,500 261
350M Philadelphia, Pennsylvania Water & Wastewater Revenue
6 1/4%, 8/1/2012 372,750 251
665M Sub Lancaster, Pennsylvania Sewer Authority Revenue 5.9%, 6/15/2012
(When issued) 666,663 450
- ------------------------------------------------------------------------------------------------------------------
2,144,413 1,447
- ------------------------------------------------------------------------------------------------------------------
Puerto Rico--6.9%
425M Puerto Rico Commonwealth Hwy. & Transn. Auth. Hwy. Rev.
6 1/4%, 7/1/2014 457,406 308
545M Puerto Rico Indl. Tourist Edl. Med. & Env. Ctl. Facs. 6 1/4%, 7/1/2016 567,481 383
- ------------------------------------------------------------------------------------------------------------------
1,024,887 691
- ------------------------------------------------------------------------------------------------------------------
Rhode Island--1.5%
200M Rhode Island Convention Center Authority Series "A" 6.7%, 5/15/2001 * 219,500 148
- ------------------------------------------------------------------------------------------------------------------
Texas--9.0%
505M Austin, Texas Utility System Rev. 6%, 11/15/2013 525,200 354
500M Harris County General Obligation 6 1/2%, 8/15/2013 547,500 369
250M Houston, Texas Water Conveyance System Cert. of Part. 6 1/4%, 12/15/2012 267,500 181
- ------------------------------------------------------------------------------------------------------------------
1,340,200 904
- ------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $14,204,942) 14,898,621 10,052
- ------------------------------------------------------------------------------------------------------------------
SHORT-TERM TAX EXEMPT INVESTMENTS--6.1%
New Jersey--2.0%
300M New Jersey Health Care Facs. (Carrier Foundation)
Adjustable Rate Note 3.35%* * 300,000 202
- ------------------------------------------------------------------------------------------------------------------
New York--.7%
100M New York State Energy Resh. & Dev. Auth. (Niagara Mohawk Power)
Adjustable Rate Note 3.70%* * 100,000 68
- ------------------------------------------------------------------------------------------------------------------
Ohio--3.4%
500M Ohio State Air Quality Dev. Auth. Rev. Adjustable Rate Note 3.75%** 500,000 337
- ------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term Tax Exempt Investments (cost $900,000) 900,000 607
- ------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $15,104,942) 106.6% 15,798,621 10,659
Excess of Liabilities Over Other Assets (6.6) (976,512) (659)
- ------------------------------------------------------------------------------------------------------------------
Net Assets 100% $14,822,109 $10,000
==================================================================================================================
* Municipal Bonds which have been prerefunded are shown maturing at the prerefunded call date.
** Interest rates on Adjustable Rate Notes are determined and reset daily by the issuer.
Interest rate shown is the rate in effect at June 30, 1996.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
EXECUTIVE INVESTORS TRUST
June 30, 1996
- ------------------------------------------------------------------------------------------------------------------------
EXECUTIVE INVESTORS
------------------------------------------------------------
BLUE CHIP HIGH YIELD INSURED TAX
FUND FUND EXEMPT FUND
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in securities:
At identified cost $ 1,212,247 $ 15,445,500 $ 15,104,942
============= ============= =============
At value (Note 1A) $ 1,576,783 $ 15,662,076 $ 15,798,621
Cash 69,402 124,583 238,723
Receivables:
Interest and dividends 1,967 340,707 236,634
Trust shares sold -- 53,176 143
Investment securities sold 14,261 -- --
Other assets 4 4,966 17
------------- ------------- -------------
Total Assets 1,662,417 16,185,508 16,274,138
------------- ------------- -------------
Liabilities
Payables:
Investment securities purchased -- -- 1,152,660
Dividends payable July 15, 1996 5,126 119,154 59,792
Trust shares redeemed -- -- 212,774
Accrued expenses 3,141 27,989 23,720
Accrued advisory fee 343 8,632 3,083
------------- ------------- -------------
Total Liabilities 8,610 155,775 1,452,029
------------- ------------- -------------
Net Assets $ 1,653,807 $ 16,029,733 $ 14,822,109
============= ============= =============
Net Assets Consist of:
Capital paid in $ 1,221,989 $ 20,724,354 $ 14,166,984
Undistributed net investment income 2,426 148,382 1,631
Accumulated net realized gain (loss) on
investment transactions 64,856 (5,059,579) (40,185)
Net unrealized appreciation in value of investments 364,536 216,576 693,679
------------- ------------- -------------
Total $ 1,653,807 $ 16,029,733 $ 14,822,109
============= ============= =============
Shares of Beneficial Interest Outstanding 93,207 2,102,886 1,094,192
============= ============= =============
Net asset value and redemption price per share
(Net assets divided by trust shares outstanding) $17.74 $7.62 $13.55
====== ====== ======
Maximum offering price per share
(Net asset value/.9525)* $18.62 $8.00 $14.23
====== ====== ======
* On purchases of $100,000 or more, the sales charge is reduced.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
EXECUTIVE INVESTORS TRUST
Six Months Ended June 30, 1996
- ------------------------------------------------------------------------------------------------------------------------
EXECUTIVE INVESTORS
-----------------------------------------------------
BLUE CHIP HIGH YIELD INSURED TAX
FUND FUND EXEMPT FUND
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
Income:
Interest $ 810 $ 804,042 $ 405,300
Dividends (Note 1E) 14,848 30,410 --
Consent fees -- 10,855 --
---------- ---------- ----------
Total income 15,658 845,307 405,300
---------- ---------- ----------
Expenses (Notes 1E and 3):
Advisory fee 7,732 79,668 72,561
Distribution plan expenses 3,865 39,834 36,281
Shareholder servicing costs 1,285 9,200 3,812
Professional fees 3,235 5,050 5,845
Custodian fees 1,402 2,311 1,782
Reports and notices to shareholders 584 1,133 532
Other expenses 657 86 2,330
---------- ---------- ----------
Total expenses 18,760 137,282 123,143
Less: Expenses waived or assumed (11,826) (47,801) (66,940)
Custodian fees paid indirectly (1,134) (1,142) (1,782)
---------- ---------- ----------
Net expenses 5,800 88,339 54,421
---------- ---------- ----------
Net investment income 9,858 756,968 350,879
---------- ---------- ----------
Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized gain (loss) on investments 64,856 (104,111) (40,185)
Net unrealized appreciation (depreciation) of investments 66,461 107,848 (477,047)
---------- ---------- ----------
Net gain (loss) on investments 131,317 3,737 (517,232)
---------- ---------- ----------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 141,175 $ 760,705 $ (166,353)
========== ========== ==========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
EXECUTIVE INVESTORS TRUST
- ------------------------------------------------------------------------------------------------
EXECUTIVE INVESTORS
- ------------------------------------------------------------------------------------------------
BLUE CHIP FUND
----------------------------
1/1/96 to
6/30/96 1995
---------- ----------
<S> <C> <C>
Increase (Decrease) in Net
Assets from Operations
Net investment income $ 9,858 $ 24,113
Net realized gain (loss) on
investments 64,856 61,724
Net unrealized appreciation
(depreciation) of investments 66,461 282,537
---------- ----------
Net increase (decrease) in net
assets resulting from operations 141,175 368,374
Distributions to Shareholders from:
Net investment income (10,063) (23,522)
Net realized gains -- (61,724)
---------- ----------
Total Distributions (10,063) (85,246)
---------- ----------
Trust Share Transactions(a)
Proceeds from shares sold 161,554 209,332
Value of distributions
reinvested 4,603 79,327
Cost of shares redeemed (69,970) (186,017)
---------- ----------
Net increase (decrease) from
trust share transactions 96,187 102,642
---------- ----------
Net increase in net assets 227,299 385,770
Net Assets
Beginning of period 1,426,508 1,040,738
---------- ----------
End of period+ $ 1,653,807 $ 1,426,508
========== ==========
Includes undistributed net
investment income of $ 2,426 $ 2,631
========== ==========
Trust Shares Issued and
Redeemed
Sold 9,613 13,332
Issued for distributions
reinvested 267 4,767
Redeemed (4,082) (12,330)
---------- ----------
Net increase (decrease) in
trust shares 5,798 5,769
========== ==========
<CAPTION>
- ------------------------------------------------------------------------------------------------
EXECUTIVE INVESTORS
- ------------------------------------------------------------------------------------------------
HIGH YIELD FUND
----------------------------
1/1/96 to
6/30/96 1995
---------- ----------
<S> <C> <C>
Increase (Decrease) in Net
Assets from Operations
Net investment income $ 756,968 $ 1,473,593
Net realized gain (loss) on
investments (104,111) (264,699)
Net unrealized appreciation
(depreciation) of investments 107,848 1,510,599
---------- ----------
Net increase (decrease) in net
assets resulting from operations 760,705 2,719,493
---------- ----------
Distributions to Shareholders from:
Net investment income (703,689) (1,414,951)
Net realized gains -- --
---------- ----------
Total Distributions (703,689) (1,414,951)
---------- ----------
Trust Share Transactions(a)
Proceeds from shares sold 1,084,087 1,793,924
Value of distributions
reinvested 241,238 578,661
Cost of shares redeemed (1,025,054) (3,146,609)
---------- ----------
Net increase (decrease) from
trust share transactions 300,271 (774,024)
---------- ----------
Net increase in net assets 357,287 530,518
Net Assets
Beginning of period 15,672,446 15,141,928
---------- ----------
End of period+ $ 16,029,733 $ 15,672,446
========== ==========
Includes undistributed net
investment income of $ 148,382 $ 95,103
========== ==========
Trust Shares Issued and
Redeemed
Sold 141,086 244,106
Issued for distributions
reinvested 31,334 78,556
Redeemed (133,090) (429,347)
---------- ----------
Net increase (decrease) in
trust shares 39,330 (106,685)
========== ==========
<CAPTION>
- ------------------------------------------------------------------------------------------------
EXECUTIVE INVESTORS
- ------------------------------------------------------------------------------------------------
INSURED
TAX EXEMPT FUND
----------------------------
1/1/96 to
6/30/96 1995
---------- ----------
<S> <C> <C>
Increase (Decrease) in Net
Assets from Operations
Net investment income $ 350,879 $ 636,876
Net realized gain (loss) on
investments (40,185) 288,360
Net unrealized appreciation
(depreciation) of investments (477,047) 1,271,346
---------- ----------
Net increase (decrease) in net
assets resulting from operations (166,353) 2,196,582
---------- ----------
Distributions to Shareholders from:
Net investment income (351,201) (638,733)
Net realized gains -- (260,877)
---------- ----------
Total Distributions (351,201) (899,610)
---------- ----------
Trust Share Transactions(a)
Proceeds from shares sold 2,770,336 2,766,768
Value of distributions
reinvested 170,969 538,422
Cost of shares redeemed (944,132) (1,622,298)
---------- ----------
Net increase (decrease) from
trust share transactions 1,997,173 1,682,892
---------- ----------
Net increase in net assets 1,479,619 2,979,864
Net Assets
Beginning of period 13,342,490 10,362,626
---------- ----------
End of period+ $ 14,822,109 $ 13,342,490
========== ==========
Includes undistributed net
investment income of $ 1,631 $ 1,953
========== ==========
Trust Shares Issued and
Redeemed
Sold 200,421 201,812
Issued for distributions
reinvested 12,487 39,073
Redeemed (68,967) (117,810)
---------- ----------
Net increase (decrease) in
trust shares 143,941 123,075
========== ==========
See notes to financial statements
</TABLE>
Notes to Financial Statements
Executive Investors Trust
1. Significant Accounting Policies--The Trust, a Massachusetts
business trust, is registered under the Investment Company Act of 1940
(the "1940 Act") as a diversified, open-end management investment
company. The Trust consists of unlimited shares of beneficial interest
of the Blue Chip Fund, the High Yield Fund and the Insured Tax Exempt
Fund, and accounts separately for the assets, liabilities and
operations of each Fund. The objective of each Fund is as follows:
Blue Chip Fund seeks high total investment return consistent with the
preservation of capital.
High Yield Fund primarily seeks high current income and secondarily
seeks capital appreciation.
Insured Tax Exempt Fund seeks to provide a high level of interest
income which is exempt from federal income tax.
A. Security Valuation--Except as provided below, a security listed or
traded on an exchange or the NASDAQ National Market System is valued
at its last sale price on the exchange or system where the security is
principally traded, and lacking any sales, the security is valued at
the mean between the closing bid and asked prices. Each security
traded in the over-the-counter market (including securities listed on
exchanges whose primary market is believed to be over-the-counter) is
valued at the mean between the last bid and asked prices based upon
quotes furnished by a market maker for such securities. Securities for
which market quotations are not readily available are valued on a
consistent basis at fair value as determined in good faith by or under
the direction of the Trust's officers in a manner specifically
authorized by the trustees.
Securities in the High Yield Fund may also be priced by a pricing
service which uses quotations obtained from investment dealers or
brokers and other available information in determining values.
The municipal bonds in which the Insured Tax Exempt Fund invests are
traded primarily in the over-the-counter markets. Such securities are
valued daily on the basis of valuations provided by a pricing service
approved by the trustees. The pricing service considers security type,
rating, market condition and yield data, as well as market quotations
and prices provided by market makers in determining value. "When
Issued Securities" are reflected in the assets of the Fund as of the
date the securities are purchased.
The municipal bonds held by the Insured Tax Exempt Fund are insured as
to payment of principal and interest by the issuer or under insurance
policies written by independent insurance companies. It is the
intention of the Fund to retain any insured securities which are in
default or in significant risk of default and to place a value on the
defaulted securities equal to the value of similar securities which
are not in default. The Fund may invest up to 20% of its assets in
portfolio securities not covered by the insurance feature.
B. Federal Income Taxes--No provision has been made for federal income
taxes on net income or capital gains since it is the policy of the
Trust to continue to comply with the special provisions of the
Internal Revenue Code applicable to investment companies and to make
sufficient distributions of income and capital gains (in excess of any
available capital loss carryovers) to relieve it from all, or
substantially all, federal income taxes. At June 30, 1996, the High
Yield Fund had capital loss carryovers of $4,862,452 of which
$3,364,392 expires in 1998, $1,286,892 expires in 1999 and $211,168
expires in 2003.
C. Expense Allocation--Expenses directly charged or attributable to a
Fund are paid from the assets of that Fund. General expenses of the
Trust are allocated among and charged to the assets of each Fund on a
fair and equitable basis, which may be based on the relative assets of
each Fund or the nature of the services performed and relative
applicability to each Fund.
D. Distributions to Shareholders-- Dividends from net investment
income to shareholders of the High Yield Fund and the Insured Tax
Exempt Fund are declared daily and paid monthly. Dividends from net
investment income of the Blue Chip Fund are declared and paid
quarterly. Distributions from net realized capital gains are declared
and paid annually.
Income dividends and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for capital loss carryforwards and post October
losses.
E. Other--Security transactions are accounted for on the date the
securities are purchased or sold. Cost is determined, and gains and
losses are based, on the identified cost basis for both financial
statement and federal income tax purposes. Interest income and
estimated expenses are accrued daily. Dividend income is recorded on
the ex-dividend date. Shares of stock received in lieu of cash
dividends on certain preferred stock holdings are recognized as
dividend income and recorded at the market value of the shares
received. During the six months ended June 30, 1996, the High Yield
Fund recognized $14,473 of dividend income from these taxable "pay in
kind" distributions. The Fund's custodian has provided credits in the
amount of $4,058 against custodian charges based on the uninvested
cash balances of the Funds.
2. Security Transactions--For the six months ended June 30, 1996,
purchases and sales of securities other than United States Treasury
bills and short-term notes, were as follows:
<TABLE>
<CAPTION>
BLUE CHIP HIGH YIELD INSURED TAX
FUND FUND EXEMPT FUND
------------ ------------- --------------
<S> <C> <C> <C>
Cost of purchases $423,108 $1,379,651 $8,298,248
======== ========== ==========
Proceeds of sales $330,019 $1,164,948 $5,678,589
======== ========== ==========
At June 30, 1996, aggregate cost and net unrealized appreciation of securities for
federal income tax purposes were as follows:
BLUE CHIP HIGH YIELD INSURED TAX
FUND FUND EXEMPT FUND
------------ ------------ --------------
Aggregate cost $1,212,247 $15,445,500 $15,104,942
========== =========== ===========
Unrealized appreciation $ 378,254 $ 693,264 $ 718,347
Unrealized depreciation 13,718 476,688 24,668
---------- ----------- -----------
Net unrealized appreciation. $ 364,536 $ 216,576 $ 693,679
========== =========== ===========
</TABLE>
3. Advisory Fee and Other Transactions With Affiliates--Certain
officers and trustees of the Trust are officers and directors of its
investment adviser, Executive Investors Management Company, Inc.
("EIMCO"), its underwriter, Executive Investors Corporation ("EIC"),
its transfer agent, Administrative Data Management Corp. ("ADM")
and/or First Financial Savings Bank, S.L.A. ("FFS"), custodian of the
Trust's Individual Retirement Accounts. Officers and trustees received
no remuneration from the Trust for serving in such capacities. Their
remuneration (together with certain other expenses of the Trust) is
paid by EIMCO or First Investors Corporation ("FIC"), an affiliated
dealer.
The Investment Advisory Agreement provides as compensation to EIMCO an
annual fee, payable monthly, at the rate of 1% on the first $200
million of each Fund's average daily net assets, .75% on the next $300
million, declining by .03% on each $250 million thereafter, down to
.66% on average daily net assets over $1 billion. The total advisory
fees earned by EIMCO from all Funds was $159,961 of which $100,054 was
waived. In addition, expenses of $10,517 were assumed by EIMCO.
Pursuant to certain state regulations, EIMCO has agreed to reimburse
each Fund if and to the extent that each Fund's aggregate operating
expenses, including the advisory fee but generally excluding interest,
taxes, brokerage commissions and extraordinary expenses, exceed any
limitation on expenses applicable to the Fund in those states (unless
waivers of such limitation have been obtained). The amount of any such
reimbursement is limited to the yearly advisory fee. For the six
months ended June 30, 1996, no reimbursement was required pursuant to
these provisions.
For the six months ended June 30, 1996, EIC, as underwriter of the
Trust, received $10,935 in commissions after allowing $1,569 to FIC
and $58,420 to other dealers. Shareholder servicing costs consist of
$12,282 in transfer agent fees and out of pocket expenses paid to ADM
and $2,015 in custodian fees paid to FFS.
Pursuant to a Distribution Plan adopted under Rule 12b-1 of the 1940
Act, each Fund pays a fee equal to .50% of its average net assets on
an annualized basis each fiscal year, payable quarterly. The fee
consists of a distribution fee and a service fee. The service fee is
payable to the underwriter or other securities dealers for the ongoing
servicing of their clients who are shareholders of the Funds. Total
12b-1 fees accrued to EIC amounted to $79,980 (of which $15,996 was
waived).
4. Rule 144A Securities--Under rule 144A, certain restricted
securities are exempt from the registration requirements of the
Securities Act of 1933 and may be resold to qualified institutional
investors. At June 30, 1996, the High Yield Fund held eight 144A
securities with an aggregate value of $846,650 representing 5.3% of
the High Yield Fund's net assets. These securities are valued as set
forth in Note 1A.
<TABLE>
<CAPTION>
Financial Highlights
Executive Investors Trust
The following table sets forth operating performance data for a share of benefical interest outstanding,
total return, ratios to average net assets and other supplemental data for each period indicated.
- ------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
- ------------------------------------------------------------------------------------------------------------------
Income from Investment Operations Less Distributions from
---------------------------------------- --------------------------
Net Realized
Net Asset and
Value Unrealized
------------ Net Gain (Loss) Total from Net Net
Beginning Investment on Investment Investment Realized
of Period Income Investments Operations Income Gains
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BLUE CHIP FUND
1991 $ 10.91 $ .31 $ 2.68 $ 2.99 $ .30 $ .11
1992 13.49 .25 .30 .55 .26 --
1993 13.78 .23 .88 1.11 .23 .59
1994 14.07 .24 (.41) (.17) .22 .93
1995 12.75 .30 4.30 4.60 .29 .74
1/1/96 to 6/30/96 16.32 .11 1.42 1.53 .11 --
HIGH YIELD FUND
1991 5.89 .82 1.17 1.99 .78 --
1992 7.10 .80 .29 1.09 .76 --
1993 7.43 .72 .50 1.22 .76 --
1994 7.89 .70 (.87) (.17) .74 --
1995 6.98 .70 .58 1.28 .67 --
1/1/96 to 6/30/96 7.59 .36 .01 .37 .34 --
INSURED TAX EXEMPT FUND
1991 11.71 .78 .72 1.50 .78 .04
1992 12.39 .74 .59 1.33 .72 .17
1993 12.83 .71 1.27 1.98 .72 .32
1994 13.77 .68 (1.23) (.55) .69 --
1995 12.53 .72 1.80 2.52 .73 .28
1/1/96 to 6/30/96 14.04 .33 (.49) (.16) .33 --
<CAPTION>
- --------------------------------------------------------------------------------------
PER SHARE DATA
- --------------------------------------------------------------------------------------
Net Asset
Value
-------------- Total Net Assets
Total End of Return** End of Period
Distributions Period (%) (in thousands)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BLUE CHIP FUND
1991 $ .41 $ 13.49 27.65 $ 677
1992 .26 13.78 4.13 786
1993 .82 14.07 8.13 956
1994 1.15 12.75 (1.21) 1,041
1995 1.03 16.32 36.30 1,427
1/1/96 to 6/30/96 .11 17.74 9.38 1,654
HIGH YIELD FUND
1991 .78 7.10 35.38 11,071
1992 .76 7.43 16.89 10,491
1993 .76 7.89 17.04 14,231
1994 .74 6.98 (2.32) 15,142
1995 .67 7.59 19.08 15,672
1/1/96 to 6/30/96 .34 7.62 4.91 16,030
INSURED TAX EXEMPT FUND
1991 .82 12.39 13.20 4,369
1992 .89 12.83 11.03 5,875
1993 1.04 13.77 15.74 9,447
1994 .69 12.53 (3.95) 10,363
1995 1.01 14.04 20.53 13,342
1/1/96 to 6/30/96 .33 13.55 (1.13) 14,822
<CAPTION>
- ----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------
Ratio to Average Net Assets
Before Expenses
Ratio to Average Net Assets++ Waived or Assumed
----------------------------- -----------------------
Net Net Portfolio
Investment Investment Turnover
Expenses Income Expenses Income Rate
(%) (%) (%) (%) (%)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BLUE CHIP FUND
1991 .03 2.58 3.72 (1.11) 31
1992 .41 1.95 2.55 (.19) 50
1993 .50 1.63 2.30 (.17) 47
1994 .50 1.82 2.54 (.22) 89
1995 .50 1.99 2.20 .29 33
1/1/96 to 6/30/96 .75+ 1.27+ 2.43+ (.25)+ 22
HIGH YIELD FUND
1991 .95 12.22 2.17 11.00 40
1992 1.29 10.72 2.10 9.90 83
1993 1.34 9.49 1.95 8.88 89
1994 1.33 9.45 1.88 8.90 53
1995 1.35 9.52 1.90 8.97 69
1/1/96 to 6/30/96 1.12+ 9.50+ 1.72+ 8.90+ 7
INSURED TAX EXEMPT FUND
1991 .12 6.23 2.41 3.94 112
1992 .47 5.88 1.89 4.47 131
1993 .50 5.29 1.68 4.11 97
1994 .50 5.39 1.80 4.09 215
1995 .50 5.35 1.74 4.11 147
1/1/96 to 6/30/96 .75+ 4.84+ 1.70+ 3.91+ 41
* Calculated without sales charges
+ Annualized
++ Some or all expenses have been waived or assumed.
See notes to financial statements
</TABLE>
Independent Auditor's Report
To the Shareholders and Trustees of
Executive Investors Trust
We have audited the accompanying statement of assets and liabilities,
including the portfolios of investments, of Executive Investors Blue
Chip Fund, Executive Investors High Yield Fund and Executive Investors
Insured Tax Exempt Fund (comprising Executive Investors Trust), as of
June 30, 1996, the related statement of operations for the six months
then ended, the statement of changes in net assets for the six months
ended June 30, 1996 and the year ended December 31, 1995 and the
financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility
of the Trust's management. Our responsibility is to express an opinion
on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of June
30, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Executive Investors Blue Chip Fund, Executive
Investors High Yield Fund and Executive Investors Insured Tax Exempt
Fund as of June 30, 1996, and the results of their operations, changes
in their net assets and the financial highlights for each of the
respective periods presented, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
July 31, 1996
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EXECUTIVE INVESTORS TRUST
Trustees
- ------------------------------------
James J. Coy
Roger L. Grayson
Glenn O. Head
Kathryn S. Head
Rex R. Reed
Herbert Rubinstein
James M. Srygley
John T. Sullivan
Robert F. Wentworth
Officers
- ------------------------------------
Glenn O. Head
President
George V. Ganter
Vice President
Patricia D. Poitra
Vice President
Clark D. Wagner
Vice President
Concetta Durso
Vice President and Secretary
Joseph I. Benedek
Treasurer
Carol Lerner Brown
Assistant Secretary
Gregory R. Kingston
Assistant Treasurer
Mark S. Spencer
Assistant Treasurer
EXECUTIVE INVESTORS TRUST
Shareholder Information
- ------------------------------------
Investment Adviser
Executive Investors
Management Company, Inc.
95 Wall Street
New York, NY 10005
Underwriter
Executive Investors Corporation
95 Wall Street
New York, NY 10005
Custodian
The Bank of New York
48 Wall Street
New York, NY 10286
Transfer Agent
Administrative Data
Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102
It is the Trust's practice to mail only one copy of its annual and
semi-annual reports to any address at which more than one shareholder
with the same last name has indicated that mail is to be delivered.
Additional copies of the reports will be mailed if requested by any
shareholder in writing or by calling 800-423-4026. The Trust will
ensure that separate reports are sent to any shareholder who
subsequently changes his or her mailing address.
This report is authorized for distribution only to existing
shareholders, and, if given to prospective shareholders, must be
accompanied or preceded by the Trust's prospectus.
