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[INVESTORS TRUST LOGO]
FAMILY OF FUNDS
SEMI-ANNUAL REPORT
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April 30, 1996
[PHOTO]
Dear Valued Shareholder:
I am pleased to present the first combined semi-annual report for the Investors
Trust Mutual Funds. Production of the combined report is an extension of our
efforts to reduce expenses for the Funds. This report includes market and
portfolio commentaries, financial statements, and financial highlights for each
of the Investors Trust Mutual Funds for the six month period ending April 30,
1996:
Investors Trust Adjustable Rate Fund - Investors Trust Government Fund -
Investors Trust Tax Free Fund
Investors Trust Value Fund - Investors Trust Growth Fund
In the past, I have written to you about the importance of diversification as an
investment strategy. Historically, diversification has been a valuable
investment strategy, as spreading investments across a variety of investment
objectives may smooth the impact of market fluctuations over time. Many
financial markets are subject to a large degree of fluctuation. As one sector
may be experiencing a relatively weak performance, another sector may be
experiencing strong performance. The Investors Trust Mutual Funds offer a
selection of fixed income and equity funds that allow you to diversify within
one family, and enable exchanges between Funds without fees (although such
exchanges are taxable events).
I encourage you to periodically review your investment portfolio to ensure that
your allocation meets your investment and personal income objectives. The
investment professionals who represent the Investors Trust Mutual Funds are
always available to assist you with this analysis. Additionally, we now offer
tools via the Internet to help people evaluate their financial needs. The GNA
website can be found at http://www.ge.com/gec/gna.
If you have questions about this report, please contact your investment
representative, or call Investors Trust Services at 1-800-656-6626 and press #2.
Thank you for investing with Investors Trust.
Sincerely,
Patrick E. Welch
The Investors Trust Family of Funds is offered by GNA Distributors, Inc.
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2 Investors Trust Mutual Funds
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Chairman's Message......................................................... 1
Table of Contents.......................................................... 2
Listing of Trustees and Officers........................................... 3
Adviser's Market Review.................................................... 5
Sub-Adviser Commentaries and Performance Graphs
Adjustable Rate Fund..................................................... 7
Government Fund.......................................................... 9
Tax Free Fund............................................................ 11
Value Fund............................................................... 13
Growth Fund.............................................................. 15
Investment Portfolios
Adjustable Rate Fund..................................................... 17
Government Fund.......................................................... 20
Tax Free Fund............................................................ 24
Value Fund............................................................... 33
Growth Fund.............................................................. 38
Financial Statements and Notes............................................. 43
</TABLE>
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Investors Trust Mutual Funds 3
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INVESTORS TRUST MUTUAL FUNDS
ADJUSTABLE RATE FUND - GOVERNMENT FUND - TAX FREE FUND - VALUE FUND - GROWTH
FUND
Semi-Annual Report
<TABLE>
<CAPTION>
<S> <C> <C>
TRUSTEES AND OFFICERS SUB-ADVISERS ADVISOR
PATRICK E. WELCH GNA CAPITAL
Trustee, Chairman of MANAGEMENT, INC.
the Board, ADJUSTABLE RATE FUND Seattle, Washington
President and CEO STANDISH, AYER & WOOD, INC.
PIERCE T. LINDBERG Boston, Massachusetts DISTRIBUTOR
Trustee GNA DISTRIBUTORS, INC.
EDWARD R. MCMILLAN GOVERNMENT FUND Seattle, Washington
Trustee BLACKROCK FINANCIAL
DOUGLAS H. PEDERSEN MANAGEMENT, INC. COUNSEL
Trustee New York, New York GOODWIN, PROCTER & HOAR
GEOFFREY S. STIFF Boston, Massachusetts
Senior Vice President TAX FREE FUND
and Treasurer BROWN BROTHERS HARRIMAN CUSTODIAN & TRANSFER
CHARLES A. KAMINSKI & CO. AGENT
Senior Vice President New York, New York STATE STREET BANK AND TRUST
VICTOR C. MOSES COMPANY
Senior Vice President VALUE FUND Boston, Massachusetts
THOMAS W. CASEY DUFF & PHELPS INVESTMENT
Vice President and MANAGEMENT CO. INDEPENDENT ACCOUNTANTS
Controller Chicago, Illinois COOPERS & LYBRAND L.L.P.
SCOTT A. CURTIS Boston, Massachusetts
Vice President GROWTH FUND
EDWARD J. WILES, JR. VALUE LINE, INC.
Vice President and Secretary New York, New York
KARRI J. HARRINGTON
Assistant Secretary
</TABLE>
This report is prepared for the shareholders of the Investors Trust Funds. It
is not authorized for use as an offer of sale or a solicitation of an offer to
buy shares of the Funds unless accompanied or preceded by the Trust's current
prospectus.
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4 Investors Trust Mutual Funds
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Investors Trust Mutual Funds 5
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FINANCIAL MARKET REVIEW
GNA CAPITAL MANAGEMENT, INC., ADVISER
During the six month period ended April 30, 1996, the financial
markets turned in what could be termed a "Jekyll and Hyde"
performance. From November through mid-February, the dominant
themes seemed to be declining economic growth, confidence in
declining inflation, and confidence in a gradually easing Federal
Reserve monetary policy. At one point, there was even fear that
the economy might fall into recession. But in mid-February, there
was a significant reversal in market psychology. This reversal
was driven by a series of economic announcements that showed
surprising strength in the economy and rising commodity prices.
From mid-February through April, the dominant themes were
increasing economic growth, a fear of increasing inflation, and
uncertainty about what Federal Reserve monetary policy was going
to be, including a fear that the Fed might raise interest rates
to slow the economy. As of this writing, available numbers
demonstrate year-over-year economic growth in the Gross Domestic
Product (GDP) at +1.80%, and year-over-year inflation Consumer
Price Index (CPI) at +2.90%, with both economic growth and
inflation on a gradually increasing trend.
Driven by these forces, interest rates declined gradually into
the new year, and then intermediate-term and long-term yields
rose sharply from mid-February through the end of April, ending
the period at higher levels than they began. And corporate
profits, while still growing, are growing at a much slower rate
than a year ago. In this environment, the bond market, as
measured by the Lehman Brothers Aggregate Bond Index, had a total
return of +0.53%, and the stock market, as measured by the
Standard & Poor's 500 Stock Index, returned +13.76%. To put these
six month returns in perspective, the bond market return was
below average, and the stock market return was well above
average.
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6 Investors Trust Mutual Funds
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Investors Trust Adjustable Rate Fund 7
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FROM THE ADJUSTABLE RATE FUND SUB-ADVISER
STANDISH, AYER & WOOD, INC.
PORTFOLIO MANAGER: LORI DRISCOLL
The bond market rally during the fourth quarter of 1995 carried
forward into early 1996, but was quickly reversed in mid-
February. Fundamentally, this year's rise in rates since mid-
February was spurred by an unexpected rebound in economic
activity. The bond market now appears to be discounting a tighter
Federal Reserve monetary policy, despite uncertainty surrounding
the sustainability of this rebound. Foreign selling of treasuries
also played a significant role in the bond market's downward
price (rising yield) trend. Despite volatile interest rates,
adjustable rate mortgages (ARMs) produced very favorable returns
relative to Treasuries over the last six months. The ARMs sector
continues to benefit from a positive supply/demand situation. ARM
supply remains low, with most borrowers opting for low fixed-rate
mortgages. Barring a further rise in rates, which would exhibit
coupon adjustment, investors continue to buy ARMs attracted in
their yield advantage Treasuries. In this environment, the
unmanaged Lehman Brothers ARM; Index had a total return of
+2.87%.
The Fund has maintained its bias toward GNMA ARMs, which tend to
have a slightly greater yield spread advantage over Treasuries
than similar conventional (FNMA and FHLMC) ARMs. Additionally,
over the past several months the Fund has purchased some-fixed,
rate pass-through certificates. Given the fixed-rate mortgage
sector's lagging performance during last year's rally, we viewed
the sector as relatively cheap to Treasuries, and
opportunistically purchased selected issues. For the six month
period, the Fund's total return was +1.97%/+1.59% for class A/B
shares respectively. In comparison, the Morningstar Government
Bond--ARM category of 60+ funds had an average total return of
+1.85%.
The Fund primarily invests in relatively short duration assets
which generally have smaller price changes than longer duration
securities as interest rates move. Smaller relative price
movements have enhanced the Fund's ability to maintain a
relatively stable NAV. Our efforts to maximize the Fund's yield
advantage has also benefited returns and cushioned the impact of
price volatility. The use of adjustable rate securities whose
income adjusts to current market levels will also contribute to
the Fund's relative price stability. In today's volatile interest
rate environment, continued focus on short duration assets with
attractive incremental yield over Treasuries, particularly ARMs,
will likely enable the Fund to maintain its relative price
stability.
Standish's investment decisions incorporate both a "top down"
and a "bottom up" approach. First, we look to enhance returns by
evaluating broad sectors such as mortgage-
<PAGE>
8 Investors Trust Adjustable Rate Fund
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backed securities, corporate bonds, asset-backed securities and
Treasuries. Next, we look for the cheapest securities within the
sectors we find attractive. Often this approach leads us to
inefficiently priced sectors of the market, where we hope to find
"cheap" securities. We invest primarily in securities which offer
incremental yield spread over Treasuries. We believe that over
the long term, the added yield advantage will benefit portfolio
returns relative to their benchmark indices.
[Performance Graph Appears Here]
Performance of a $10,000 investment
since inception of the Investors Trust
Adjustable Rate Fund (9/93)
<TABLE>
<CAPTION>
__________________________________________________________________________
MONTH ITARA ITARB LBARMI MGBARM
<S> <C> <C> <C> <C>
__________________________________________________________________________
Aug 1993 $10,000 $10,000 $10,000 $10,000
__________________________________________________________________________
Sep 1993 $10,014 $9,997 $10,001 $10,017
__________________________________________________________________________
Oct 1993 $10,026 $10,003 $10,005 $10,035
__________________________________________________________________________
Nov 1993 $10,009 $9,981 $9,978 $10,033
__________________________________________________________________________
Dec 1993 $10,072 $10,052 $10,053 $10,061
__________________________________________________________________________
Jan 1994 $10,083 $10,057 $10,120 $10,099
__________________________________________________________________________
Feb 1994 $10,021 $10,006 $10,088 $10,089
__________________________________________________________________________
Mar 1994 $9,926 $9,889 $10,008 $10,050
__________________________________________________________________________
Apr 1994 $9,850 $9,807 $9,955 $10,012
__________________________________________________________________________
May 1994 $9,804 $9,756 $9,947 $9,982
__________________________________________________________________________
Jun 1994 $9,791 $9,736 $9,969 $9,982
__________________________________________________________________________
Jul 1994 $9,906 $9,844 $10,030 $10,018
__________________________________________________________________________
Aug 1994 $9,926 $9,858 $10,079 $10,015
__________________________________________________________________________
Sep 1994 $9,917 $9,843 $10,038 $9,978
__________________________________________________________________________
Oct 1994 $9,876 $9,796 $10,030 $9,941
__________________________________________________________________________
Nov 1994 $9,821 $9,735 $10,001 $9,854
__________________________________________________________________________
Dec 1994 $9,863 $9,771 $10,054 $9,762
__________________________________________________________________________
Jan 1995 $9,987 $9,888 $10,220 $9,763
__________________________________________________________________________
Feb 1995 $10,127 $10,021 $10,426 $9,842
__________________________________________________________________________
Mar 1995 $10,252 $10,138 $10,476 $9,900
__________________________________________________________________________
Apr 1995 $10,326 $10,205 $10,587 $9,943
__________________________________________________________________________
May 1995 $10,518 $10,387 $10,758 $10,042
__________________________________________________________________________
Jun 1995 $10,560 $10,423 $10,803 $10,029
__________________________________________________________________________
Jul 1995 $10,554 $10,410 $10,841 $10,042
__________________________________________________________________________
Aug 1995 $10,642 $10,490 $10,908 $10,093
__________________________________________________________________________
Sep 1995 $10,714 $10,555 $10,985 $10,104
__________________________________________________________________________
Oct 1995 $10,785 $10,618 $11,053 $10,060
__________________________________________________________________________
Nov 1995 $10,864 $10,689 $11,147 $10,124
__________________________________________________________________________
Dec 1995 $10,929 $10,746 $11,232 $10,156
__________________________________________________________________________
Jan 1996 $11,026 $10,835 $11,310 $10,215
__________________________________________________________________________
Feb 1996 $11,005 $10,802 $11,335 $10,209
__________________________________________________________________________
Mar 1996 $10,982 $10,773 $11,356 $10,222
__________________________________________________________________________
Apr 1996 $11,014 $10,781 $11,370 $10,246
__________________________________________________________________________
</TABLE>
Lehman Brothers ARM Index (ending value: $11,370)
Investors Trust Adjustable Rate Fund-A Shares (ending value: $11,014)
Investors Trust Adjustable Rate Fund-B Shares (ending value: $10,781)
Morningstar Govt. Bond-ARM Fund Average (ending value: $10,246)
Past performance is not indicative of future results. Investment returns and
principal will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
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Investors Trust Government Fund 9
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FROM THE GOVERNMENT FUND SUB-ADVISER
BLACKROCK FINANCIAL MANAGEMENT, INC.
PORTFOLIO MANAGERS: KEITH ANDERSON AND E.G. FISHER
The semi-annual period between October 31, 1995, and April 30,
1996, witnessed two profoundly different market environments. The
Treasury market rally of 1995 continued through the middle of
February 1996, as market demand for fixed income securities
remained strong due to moderate economic growth, low absolute
levels of inflation and two reductions of the Fed Funds target
rate. Investor sentiment toward the fixed income markets reversed
during mid-February, as data indicating accelerating economic
growth, in addition to a sharp rise in commodity prices,
rekindled inflationary concerns. Reflective of the two market
environments, the 5-year Treasury yield began the period at
5.81%, declined to 5.13% in mid-February, and then rose to 6.41%
at the end of the period, for a net rise of 60 basis points
during the period. In this environment, the unmanaged Lehman
Brothers Government Bond Index had a total return of +0.03%, as
bond price declines roughly offset coupon interest income.
Over the past six months, we maintained the portfolio's exposure
to the mortgage sector at two-thirds of the assets, focusing on
15-year and 30-year discount coupon mortgage pass-through
certificates. These discount coupons appear to offer the best
value, as higher coupons have become relatively expensive due to
strong technicals and the market's bearish sentiment.
Additionally, the adjustable rate mortgage (ARM) sector also
represents attractive values, particularly seasoned GNMA ARMs,
which are expected to perform well as prepayment rates should
slow in response to the higher interest rate environment. For the
period, the Fund's total return was +0.25%/-0.24% for class A/B
shares respectively. In comparison, the Morningstar Government
Bond--General category of 300+ funds had an average total return
of +0.15%. The Fund's NAV (net asset value) movement reflected
the swing in interest rates described above. The NAV of the
Fund's A and B shares were $8.70/$8.71, respectively on October
31, 1995 and declined to $8.40/$8.40 at the end of the period as
a result of rising interest rates.
Our controlled duration investment philosophy is centered on a
relative value approach to fixed income investing, which
emphasizes three fundamental principles: (i) duration targeting,
(ii) relative value sector rotation and security selection, and
(iii) a rigorous quantitative approach to the valuation of
securities and portfolios. We believe that long-term value is
added through a rigorous quantitative approach to the valuation
of securities and portfolios rather than interest rate
speculation. So to manage interest rate risk, we maintain the
portfolio's duration within a narrow band around a pre-set
duration target. For the Government Fund, the duration target is
4.25 years, with a band of 4.00 - 4.50 years and all portfolio
investment decisions are made using a relative value approach
encompassing both fundamental and technical analysis. We seek to
identify and invest in sectors and securities which are poised
for outperformance, while de-emphasizing sectors and securities
which do not appear to compensate investors for downside risk.
Quantitative analytics and risk management systems form the
foundation upon which BlackRock's investment
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10 Investors Trust Government Fund
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professionals evaluate securities and manage portfolio exposures
relative to their benchmarks. Our proprietary quantitative tools
are among the most sophisticated in the asset management
industry, and allow us to measure the Fund's exposures and re-
evaluate securities on a daily basis. Constant evaluation is
particularly important for the Fund, as mortgage securities are
subject to frequent duration adjustments because of their
intrinsic sensitivity to interest rate fluctuations.
[PERFORMANCE GRAPH APPEARS HERE]
Performance of a $10,000 investment
since inception of the Investors Trust
Government Fund A Shares (9/93)
PLOT POINTS FOR PERFORMANCE GRAPH:
<TABLE>
<CAPTION>
MORNINGSTAR
INVESTORS TRUST LEHMAN BROTHERS GOVERNMENT BOND
GOVERNMENT BOND GOVERNMENT BOND GENERAL FUND
MONTH FUND A INDEX AVERAGE
<S> <C> <C> <C>
Aug 1993 $10,000 $10,000 $10,000
Sep 1993 $9,903 $10,038 $10,025
Oct 1993 $9,940 $10,076 $10,051
Nov 1993 $9,847 $9,965 $9,969
Dec 1993 $9,910 $10,004 $10,013
Jan 1994 $10,084 $10,141 $10,115
Feb 1994 $9,853 $9,926 $9,955
Mar 1994 $9,609 $9,703 $9,761
Apr 1994 $9,480 $9,626 $9,673
May 1994 $9,220 $9,614 $9,652
Jun 1994 $9,162 $9,592 $9,629
Jul 1994 $9,305 $9,768 $9,757
Aug 1994 $9,248 $9,770 $9,765
Sep 1994 $9,084 $9,632 $9,654
Oct 1994 $9,029 $9,626 $9,639
Nov 1994 $8,980 $9,608 $9,607
Dec 1994 $9,060 $9,667 $9,657
Jan 1995 $9,187 $9,847 $9,805
Feb 1995 $9,321 $10,058 $9,995
Mar 1995 $9,365 $10,122 $10,046
Apr 1995 $9,470 $10,254 $10,155
May 1995 $9,780 $10,668 $10,470
Jun 1995 $9,842 $10,750 $10,528
Jul 1995 $9,806 $10,710 $10,503
Aug 1995 $9,904 $10,835 $10,610
Sep 1995 $9,979 $10,939 $10,695
Oct 1995 $10,091 $11,106 $10,821
Nov 1995 $10,225 $11,279 $10,959
Dec 1995 $10,350 $11,439 $11,089
Jan 1996 $10,440 $11,509 $11,150
Feb 1996 $10,255 $11,274 $10,971
Mar 1996 $10,167 $11,180 $10,896
Apr 1996 $10,128 $11,109 $10,837
</TABLE>
Lehman Brothers Government Bond Index (ending value: $11,109)
Morningstar Government Bond - General Fund Average (ending value: $10,837)
Investors Trust Government Fund - A shares (ending value: $10,128)
[PERFORMANCE GRAPH APPEARS HERE]
Performance of a $10,000 investment since inception
of the Investors Trust Government Fund B Shares (4/87)
PLOT POINTS FOR PERFORMANCE GRAPH:
<TABLE>
<CAPTION>
MORNINGSTAR
INVESTORS TRUST LEHMAN BROTHERS GOVERNMENT BOND
GOVERNMENT BOND GOVERNMENT BOND GENERAL FUND
MONTH FUND B INDEX AVERAGE
<S> <C> <C> <C>
Mar 1987 $10,000 $10,000 $10,000
Apr 1987 $10,014 $9,754 $9,730
May 1987 $9,946 $9,712 $9,689
Jun 1987 $10,064 $9,826 $9,805
Jul 1987 $10,010 $9,805 $9,805
Aug 1987 $9,920 $9,750 $9,753
Sep 1987 $9,654 $9,561 $9,556
Oct 1987 $10,130 $9,933 $9,839
Nov 1987 $10,202 $9,982 $9,913
Dec 1987 $10,338 $10,100 $10,023
Jan 1988 $10,668 $10,431 $10,323
Feb 1988 $10,805 $10,542 $10,431
Mar 1988 $10,746 $10,434 $10,350
Apr 1988 $10,708 $10,378 $10,316
May 1988 $10,614 $10,305 $10,263
Jun 1988 $10,890 $10,532 $10,454
Jul 1988 $10,851 $10,461 $10,424
Aug 1988 $10,859 $10,482 $10,433
Sep 1988 $11,060 $10,710 $10,617
Oct 1988 $11,240 $10,899 $10,770
Nov 1988 $11,142 $10,770 $10,686
Dec 1988 $11,066 $10,811 $10,688
Jan 1989 $11,223 $10,948 $10,804
Feb 1989 $11,156 $10,860 $10,754
Mar 1989 $11,161 $10,926 $10,788
Apr 1989 $11,383 $11,160 $10,966
May 1989 $11,654 $11,423 $11,189
Jun 1989 $11,928 $11,805 $11,463
Jul 1989 $12,120 $12,054 $11,648
Aug 1989 $12,025 $11,851 $11,519
Sep 1989 $12,078 $11,902 $11,569
Oct 1989 $12,318 $12,210 $11,803
Nov 1989 $12,447 $12,329 $11,907
Dec 1989 $12,518 $12,350 $11,954
Jan 1990 $12,441 $12,174 $11,823
Feb 1990 $12,486 $12,199 $11,863
Mar 1990 $12,532 $12,196 $11,877
Apr 1990 $12,541 $12,089 $11,783
May 1990 $12,759 $12,426 $12,073
Jun 1990 $12,932 $12,623 $12,241
Jul 1990 $13,136 $12,784 $12,402
Aug 1990 $13,055 $12,607 $12,274
Sep 1990 $13,149 $12,728 $12,367
Oct 1990 $13,248 $12,935 $12,517
Nov 1990 $13,469 $13,222 $12,767
Dec 1990 $13,651 $13,427 $12,958
Jan 1991 $13,827 $13,571 $13,087
Feb 1991 $13,941 $13,648 $13,158
Mar 1991 $14,012 $13,718 $13,218
Apr 1991 $14,133 $13,869 $13,347
May 1991 $14,215 $13,923 $13,414
Jun 1991 $14,220 $13,903 $13,399
Jul 1991 $14,406 $14,069 $13,569
Aug 1991 $14,694 $14,395 $13,842
Sep 1991 $14,952 $14,697 $14,100
Oct 1991 $15,113 $14,827 $14,237
Nov 1991 $15,210 $14,975 $14,358
Dec 1991 $15,538 $15,486 $14,778
Jan 1992 $15,433 $15,244 $14,560
Feb 1992 $15,510 $15,304 $14,626
Mar 1992 $15,394 $15,215 $14,552
Apr 1992 $15,441 $15,311 $14,648
May 1992 $15,698 $15,594 $14,879
Jun 1992 $15,905 $15,817 $15,072
Jul 1992 $16,229 $16,215 $15,340
Aug 1992 $16,360 $16,366 $15,476
Sep 1992 $16,474 $16,597 $15,640
Oct 1992 $16,283 $16,358 $15,446
Nov 1992 $16,251 $16,330 $15,429
Dec 1992 $16,437 $16,605 $15,645
Jan 1993 $16,702 $16,958 $15,901
Feb 1993 $16,912 $17,297 $16,134
Mar 1993 $16,969 $17,354 $16,185
Apr 1993 $17,119 $17,488 $16,284
May 1993 $17,138 $17,469 $16,275
Jun 1993 $17,495 $17,857 $16,534
Jul 1993 $17,549 $17,966 $16,607
Aug 1993 $17,825 $18,366 $16,865
Sep 1993 $17,754 $18,436 $16,908
Oct 1993 $17,826 $18,506 $16,951
Nov 1993 $17,630 $18,302 $16,813
Dec 1993 $17,732 $18,374 $16,887
Jan 1994 $18,014 $18,626 $17,059
Feb 1994 $17,590 $18,231 $16,790
Mar 1994 $17,160 $17,821 $16,463
Apr 1994 $16,918 $17,680 $16,313
May 1994 $16,442 $17,657 $16,278
Jun 1994 $16,328 $17,616 $16,239
Jul 1994 $16,572 $17,940 $16,454
Aug 1994 $16,461 $17,944 $16,469
Sep 1994 $16,158 $17,691 $16,281
Oct 1994 $16,047 $17,678 $16,257
Nov 1994 $15,969 $17,647 $16,201
Dec 1994 $16,100 $17,754 $16,286
Jan 1995 $16,296 $18,085 $16,537
Feb 1995 $16,563 $18,473 $16,857
Mar 1995 $16,631 $18,590 $16,942
Apr 1995 $16,807 $18,833 $17,126
May 1995 $17,346 $19,592 $17,658
Jun 1995 $17,445 $19,743 $17,756
Jul 1995 $17,370 $19,670 $17,713
Aug 1995 $17,534 $19,900 $17,893
Sep 1995 $17,655 $20,091 $18,037
Oct 1995 $17,843 $20,397 $18,250
Nov 1995 $18,068 $20,715 $18,482
Dec 1995 $18,279 $21,009 $18,701
Jan 1996 $18,405 $21,137 $18,805
Feb 1996 $18,089 $20,706 $18,502
Mar 1996 $17,902 $20,534 $18,376
Apr 1996 $17,801 $20,403 $18,277
</TABLE>
Lehman Brothers Government Bond Index (ending value: $20,403)
Morningstar Government Bond - General Fund Average (ending value: $18,277)
Investors Trust Government Fund - B shares (ending value: $17,801)
Past performance is not indicative of future results. Investment returns and
principal will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
<PAGE>
Investors Trust Tax Free Fund 11
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FROM THE TAX FREE FUND SUB-ADVISER
BROWN BROTHERS HARRIMAN & CO.
PORTFOLIO MANAGER: BARBARA BRINKLEY
Municipal bond prices rallied strongly late in 1995 and into
mid-February, 1996, spurred by anemic economic growth, reductions
in the Fed Funds rate, and expected Federal budget
reconciliation. However, in the first quarter, as government
budget negotiations turned ugly, and blizzard conditions wreaked
havoc on economic activity and reporting, the municipal market
grew tenuous and discouraged. Municipal bond yield movements
reflected this changing market psychology. The 10-year AA-rated
general obligation municipal bond yield began the period at
4.83%, declined to 4.50% in mid-February, and then rose to 5.11%
at the end of the period, for a net rise of 0.28% during the
period. In addition, the universe of outstanding municipal bonds
continued to shrink for the eighth quarter in a row, and some of
the uncertainty produced by various tax reform proposals was
reduced, at least for the moment. In this environment, the
unmanaged Lehman Brothers 10-year General Obligation Municipal
Bond Index had a total return of +1.06%, as coupon interest
income exceeded bond price declines.
During this six month period, we increased the Fund's duration
(exposure to interest rate risk) from 6.2 years in November to an
April high of 6.5 years (108% of duration neutrality). The
portfolio's credit quality averaged high AA, with more than 65%
of the portfolio fully backed by U. S. Government securities held
in escrow by a bond trustee. We broadened our geographic
diversification and concentrated our holdings in the 10-20 year
maturity range, using call-protected premium coupon bonds. As
assets grew, we added to many of our existing positions, thereby
improving marketability and minimizing operating costs. We
managed our sales transactions so as to incur no net capital
gains tax liability. For the period, the Fund's total return was
+1.37% / +1.37% for class A / B shares respectively. In
comparison, the Morningstar Municipal Bond--National category of
400+ funds had an average total return of +0.86%.
Our active fixed income portfolio management style is
characterized by several elements. To control interest rate risk,
we use a duration target of 6.00 years for this Fund. To allow
the flexibility to add value through interest rate anticipation,
yet control interest rate bets, we vary the portfolio's duration
within a band of 85%--125% of the duration target, based on our
outlook for rates. We emphasize high credit quality in security
selection and seek issues with an improving credit outlook and
price appreciation potential. We emphasize after-tax income by
deferring capital gains taxes through low turnover, by avoiding
bonds subject to the Alternative Minimum Tax, and by buying non-
callable premium coupon bonds, which lock in higher tax-free
yields and are more defensive. And finally, we do not use any
derivatives.
<PAGE>
12 Investors Trust Tax Free Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[Performance Graph Appears Here]
Performance of a $10,000 investment since inception
of the Investors Trust Tax Free Fund (9/93)
TAX FREE
MONTH ITTFA ITTFB LB10GOI MMBN
- -------- ------- ------- ------- -------
Aug 1993 $10,000 $10,000 $10,000 $10,000
- -------- ------- ------- ------- -------
Sep 1993 $10,030 $10,034 $10,125 $10,112
- -------- ------- ------- ------- -------
Oct 1993 $10,054 $10,043 $10,138 $10,128
- -------- ------- ------- ------- -------
Nov 1993 $ 9,971 $ 9,954 $10,065 $10,044
- -------- ------- ------- ------- -------
Dec 1993 $10,162 $10,147 $10,278 $10,226
- -------- ------- ------- ------- -------
Jan 1994 $10,283 $10,261 $10,408 $10,334
- -------- ------- ------- ------- -------
Feb 1994 $10,011 $ 9,983 $10,081 $10,094
- -------- ------- ------- ------- -------
Mar 1994 $9,725 $9,683 $9,710 $9,726
- -------- ------- ------- ------- -------
Apr 1994 $9,712 $9,673 $9,830 $9,763
- -------- ------- ------- ------- -------
May 1994 $9,835 $9,789 $9,908 $9,841
- -------- ------- ------- ------- -------
Jun 1994 $9,795 $9,743 $9,854 $9,795
- -------- ------- ------- ------- -------
Jul 1994 $9,965 $9,907 $10,012 $9,945
- -------- ------- ------- ------- -------
Aug 1994 $9,998 $9,940 $10,061 $9,973
- -------- ------- ------- ------- -------
Sep 1994 $9,884 $9,827 $9,918 $9,840
- -------- ------- ------- ------- -------
Oct 1994 $9,753 $9,697 $9,788 $9,689
- -------- ------- ------- ------- -------
Nov 1994 $9,620 $9,565 $9,597 $9,520
- -------- ------- ------- ------- -------
Dec 1994 $9,793 $9,737 $9,755 $9,711
- -------- ------- ------- ------- -------
Jan 1995 $10,032 $9,974 $9,998 $9,949
- -------- ------- ------- ------- -------
Feb 1995 $10,296 $10,236 $10,288 $10,202
- -------- ------- ------- ------- -------
Mar 1995 $10,427 $10,366 $10,447 $10,289
- -------- ------- ------- ------- -------
Apr 1995 $10,432 $10,371 $10,453 $10,299
- -------- ------- ------- ------- -------
May 1995 $10,742 $10,679 $10,784 $10,575
- -------- ------- ------- ------- -------
Jun 1995 $10,614 $10,561 $10,710 $10,495
- -------- ------- ------- ------- -------
Jul 1995 $10,659 $10,597 $10,863 $10,569
- -------- ------- ------- ------- -------
Aug 1995 $10,809 $10,746 $11,012 $10,673
- -------- ------- ------- ------- -------
Sep 1995 $10,814 $10,760 $11,088 $10,731
- -------- ------- ------- ------- -------
Oct 1995 $10,946 $10,892 $11,205 $10,870
- -------- ------- ------- ------- -------
Nov 1995 $11,126 $11,061 $11,357 $11,042
- -------- ------- ------- ------- -------
Dec 1995 $11,289 $11,223 $11,427 $11,148
- -------- ------- ------- ------- -------
Jan 1996 $11,344 $11,277 $11,567 $11,212
- -------- ------- ------- ------- -------
Feb 1996 $11,339 $11,272 $11,521 $11,148
- -------- ------- ------- ------- -------
Mar 1996 $11,111 $11,045 $11,373 $11,000
- -------- ------- ------- ------- -------
Apr 1996 $11,096 $11,041 $11,325 $10,963
- -------- ------- ------- ------- -------
Lehman Brothers 10-Year General Obligation Municipal Bond Index (ending
value: $11,325)
Investors Trust Tax Free Fund - A shares (ending value: $11,096)
Investors Trust Tax Free Fund - B shares (ending value: $11,041)
Morningstar Municipal Bond - National Fund Average (ending value: $10,963)
Past performance is not indicative of future results. Investment returns and
principal will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
<PAGE>
Investors Trust Value Fund 13
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FROM THE VALUE FUND SUB-ADVISER
DUFF & PHELPS INVESTMENT MANAGEMENT
PORTFOLIO MANAGER: CARL FAUST
For the six month period ended April 30, 1996, the unmanaged S&P
500 Index total return was +13.76%. The market was driven
primarily by two factors--indications of a strengthening domestic
economy, and substantial cash inflows into equity mutual funds.
The economy has proven to be more resilient than many had
anticipated, removing the risk of recession which many equity
investors had feared even just a few months ago. The result has
been continued strong growth in corporate profits. While profit
growth has slowed from that of the past couple of years, it is
still strong enough to push equity prices higher. The other main
support for the market has been the strong cash inflows into
equity mutual funds which has increased the demand for stocks and
pushed prices higher.
For the same six month period, the Fund's total return was
+11.24% / +10.88% for class A / B shares respectively. In
comparison, the Morningstar Equity-Income category of 100+ funds
had an average total return of +12.77%. Investors appeared to
shift into more high quality stocks as the economy slowed, which
helped the Value Fund's performance due to its high quality
focus. While the movement was inconsistent and at times sporadic,
we believe its momentum will gain over the next year. Some of the
top performing stocks this period were Halliburton, Proctor &
Gamble, General Electric, and Ford, while some of the bottom
performers were Compaq Computer, AT&T, Intel and Electronic Data
Systems.
We changed the structure of the Fund over the past few months to
reflect our expectations for stronger economic growth in 1996
than we previously anticipated. We added more economic
sensitivity to the Fund. This consisted of expanding our
weighting in the cyclical sector and the technology sector, both
of which tend to benefit with increased economic activity. Within
the cyclical sector, we see some very attractive values in
retail, metals and autos. Recent purchases made to capture these
attractive valuations include Safeway and J. C. Penney (retail),
ALCOA and Nucor (metals), and Chrysler (autos). In the technology
sector, we believe that increasing corporate competitive pressure
should result in continued strength in technology spending by
business. This, coupled with stronger economic growth, presents
an opportunity to purchase companies with strong products and
market positions at compelling valuation levels. Recent purchases
in this area include Cisco Systems, Oracle and Motorola.
Relative to our investment style, we strive to construct a
portfolio of high quality companies that have superior growth
characteristics and at the same time sell at reasonable
<PAGE>
14 Investors Trust Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
valuation levels. Our portfolios tend to be characterized by a
below market price/earnings ratio, an above market earnings
growth outlook, a relatively good dividend yield, an above market
dividend growth outlook, and constrained sector/industry
weightings to control risk. We tend to focus on larger
capitalized companies with established records and market share
positions, superior financial statements, and an ability to
consistently grow earnings and dividends throughout an economic
cycle. History has proven that the high quality sector of the
market performs well over long periods of time. We believe that
combining superior growth with attractive valuation within the
high quality sector of the market gives investors with a long-
term horizon an excellent opportunity to outperform the market.
[PERFORMANCE GRAPH APPEARS HERE]
Performance of a $10,000 investment since inception
of the Investors Trust Value Fund (9/93)
<TABLE>
<CAPTION>
MONTH ITVA ITVB S&P500 MEI
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Aug 1993 $10,000 $10,000 $10,000 $10,000
Sep 1993 $10,040 $10,067 $9,926 $10,005
Oct 1993 $10,173 $10,187 $10,128 $10,112
Nov 1993 $10,093 $10,107 $10,032 $9,952
Dec 1993 $10,141 $10,147 $10,156 $10,116
Jan 1994 $10,208 $10,200 $10,496 $10,391
Feb 1994 $9,967 $9,960 $10,213 $10,136
Mar 1994 $9,574 $9,556 $9,768 $9,740
Apr 1994 $9,722 $9,690 $9,895 $9,850
May 1994 $9,789 $9,757 $10,057 $9,938
Jun 1994 $9,595 $9,561 $9,808 $9,787
Jul 1994 $9,837 $9,789 $10,133 $10,041
Aug 1994 $10,093 $10,044 $10,545 $10,363
Sep 1994 $9,925 $9,873 $10,291 $10,180
Oct 1994 $10,141 $10,075 $10,527 $10,245
Nov 1994 $9,831 $9,766 $10,140 $9,870
Dec 1994 $9,972 $9,902 $10,288 $9,955
Jan 1995 $10,231 $10,145 $10,556 $10,152
Feb 1995 $10,557 $10,469 $10,966 $10,474
Mar 1995 $10,731 $10,626 $11,290 $10,707
Apr 1995 $11,073 $10,964 $11,619 $10,941
May 1995 $11,414 $11,289 $12,078 $11,276
Jun 1995 $11,517 $11,383 $12,361 $11,395
Jul 1995 $11,832 $11,695 $12,773 $11,682
Aug 1995 $11,778 $11,641 $12,808 $11,792
Sep 1995 $12,289 $12,140 $13,344 $12,184
Oct 1995 $12,316 $12,140 $13,297 $12,063
Nov 1995 $12,715 $12,534 $13,883 $12,576
Dec 1995 $12,919 $12,724 $14,139 $12,888
Jan 1996 $13,309 $13,095 $14,626 $13,190
Feb 1996 $13,462 $13,232 $14,766 $13,299
Mar 1996 $13,491 $13,268 $14,908 $13,471
Apr 1996 $13,700 $13,460 $15,127 $13,603
</TABLE>
Standard & Poor's 500 Stock Index (ending value: $15,127)
Investors Trust Value Fund - A shares (ending value: $13,700)
Morningstar Equity Income Fund Average (ending value: $13,603)
Investors Trust Value Fund - B shares (ending value: $13,460)
Past performance is not indicative of future results. Investment returns and
principal will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
<PAGE>
Investors Trust Growth Fund 15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FROM THE GROWTH FUND SUB-ADVISER
VALUE LINE, INC.
ALAN HOFFMAN, SENIOR PORTFOLIO MANAGER
After a quick run up from November to early February and
reaching record highs on the major indices, the stock market has
recently fluctuated in a broad trading range demonstrating its
volatility both in downward and upward directions. In general, no
sector has emerged as a market leader due to the uncertain and
contradictory nature of recent economic data. In this
environment, the total return for the unmanaged NASDAQ Composite
Index of smaller companies was +15.20%, the total return for the
unmanaged Dow Jones Industrial Average was +18.41%, and the total
return for the unmanaged S&P 500 Index was +13.76%.
For the six month period, the Fund had a total return of +8.35%
/ +7.94% for class A / B shares, respectively. In comparison, the
Morningstar Growth fund category of 800+ funds had an average
total return of +13.79%. The Fund's returns for this period were
behind the market benchmarks in part because of our exposure to
technology stocks. Our economic sector distribution, however, has
not changed much. The Fund also holds somewhat more cash than
normal, as a cushion against market volatility and as a source of
funds for new purchases.
Though the near-term outlook is more cloudy than it was a year
ago, we are still bullish on technology stocks, including
computer hardware and software, semiconductors, precision
instruments, and telecommunications equipment. We remain
convinced that technological development will be critical to
expanding business productivity, and that innovation in this area
will continue to change the way we live and work. Most of these
stocks have sold off severely since late summer, providing quite
a few good values. We plan to stay with the higher quality names.
In managing the Fund, we use a "growth equity" approach to the
investment marketplace, whereby we seek stocks of companies that
have earnings that are growing more rapidly than the general
economy. One fundamental tool we use to identify those stocks is
the "Value Line Timeliness Ranking System", a proprietary
quantitative model that segments the 1,700 stocks under regular
Value Line review into five discrete groups. Group 1 and 2 stocks
are those most likely to outperform the year-ahead market, while
the Group 4 and 5 stocks are expected to underperform. Stocks in
Group 3 are neutral. We construct portfolios using stocks in
Groups 1 and 2, and sell if a holding drops to Group 3 or lower.
<PAGE>
16 Investors Trust Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[Performance Graph Appears Here]
Performance of a $10,000 investment since inception
of the Investors Trust Growth Fund (9/93)
<TABLE>
<CAPTION>
- --------------------------------------------------
MONTH ITGROA ITGROB S&P500 MG
- --------------------------------------------------
<S> <C> <C> <C> <C>
Aug 1993 $10,000 $10,000 $10,000 $10,000
- --------------------------------------------------
Sep 1993 $10,400 $10,412 $9,926 $10,105
- --------------------------------------------------
Oct 1993 $10,212 $10,212 $10,128 $10,232
- --------------------------------------------------
Nov 1993 $10,047 $10,047 $10,032 $10,033
- --------------------------------------------------
Dec 1993 $10,435 $10,424 $10,156 $10,333
- --------------------------------------------------
Jan 1994 $10,788 $10,765 $10,496 $10,651
- --------------------------------------------------
Feb 1994 $10,659 $10,624 $10,213 $10,492
- --------------------------------------------------
Mar 1994 $9,847 $9,824 $9,768 $9,997
- --------------------------------------------------
Apr 1994 $9,847 $9,800 $9,895 $10,042
- --------------------------------------------------
May 1994 $9,812 $9,765 $10,057 $10,067
- --------------------------------------------------
Jun 1994 $9,447 $9,400 $9,808 $9,723
- --------------------------------------------------
Jul 1994 $9,657 $9,610 $10,133 $9,983
- --------------------------------------------------
Aug 1994 $10,394 $10,323 $10,545 $10,462
- --------------------------------------------------
Sep 1994 $10,251 $10,180 $10,291 $10,278
- --------------------------------------------------
Oct 1994 $10,465 $10,382 $10,527 $10,432
- --------------------------------------------------
Nov 1994 $10,180 $10,097 $10,140 $10,036
- --------------------------------------------------
Dec 1994 $10,322 $10,228 $10,288 $10,140
- --------------------------------------------------
Jan 1995 $10,394 $10,299 $10,556 $10,205
- --------------------------------------------------
Feb 1995 $10,857 $10,739 $10,966 $10,593
- --------------------------------------------------
Mar 1995 $11,106 $10,976 $11,290 $10,887
- --------------------------------------------------
Apr 1995 $11,273 $11,143 $11,619 $11,104
- --------------------------------------------------
May 1995 $11,581 $11,439 $12,078 $11,412
- --------------------------------------------------
Jun 1995 $12,377 $12,212 $12,361 $11,904
- --------------------------------------------------
Jul 1995 $13,244 $13,055 $12,773 $12,493
- --------------------------------------------------
Aug 1995 $13,292 $13,103 $12,808 $12,597
- --------------------------------------------------
Sep 1995 $13,743 $13,542 $13,344 $12,942
- --------------------------------------------------
Oct 1995 $13,518 $13,316 $13,297 $12,732
- --------------------------------------------------
Nov 1995 $13,874 $13,649 $13,883 $13,199
- --------------------------------------------------
Dec 1995 $13,589 $13,364 $14,139 $13,262
- --------------------------------------------------
Jan 1996 $13,945 $13,708 $14,626 $13,526
- --------------------------------------------------
Feb 1996 $14,337 $14,077 $14,766 $13,849
- --------------------------------------------------
Mar 1996 $14,278 $14,017 $14,908 $13,998
- --------------------------------------------------
Apr 1996 $14,646 $14,374 $15,127 $14,488
- --------------------------------------------------
</TABLE>
Standard & Poor's 500 Stock Index (ending value: $15,127)
Investors Trust Growth Fund - A shares (ending value: $14,646)
Morningstar Growth Fund Average (ending value: $14,488)
Investors Trust Growth Fund - B shares (ending value: $14,374)
Past performance is not indicative of future results. Investment returns and
principal will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
<PAGE>
Investors Trust Adjustable Rate Fund 17
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- ----------
<S> <C> <C> <C>
LONG-TERM GOVERNMENT SECURITIES 85.6
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (a)(b)-
4.9
9.000%, with various maturity dates to January
15, 2099
(Cost $364,158)............................ 342,503 362,111
----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
ADJUSTABLE RATE MORTGAGES (a)(b)-56.1
5.000%, with various maturity dates to October
20, 2025..................................... 940,744 922,649
5.500%, with various maturity dates to August
20, 2025..................................... 905,329 901,430
6.000%, with various maturity dates to
September 20, 2024........................... 937,095 942,415
6.500%, with various maturity dates to October
20, 2024..................................... 71,513 71,938
7.000%, with various maturity dates to May 20,
2024......................................... 265,509 268,640
7.250%, with various maturity dates to August
20, 2024..................................... 998,402 1,010,182
----------
Total Government National Mortgage Association
Adjustable Rate Mortgages
(Cost $4,028,832).......................... 4,117,254
----------
FEDERAL HOME LOAN MORTGAGE CORPORATION
ADJUSTABLE RATE MORTGAGES (a)(b)-16.5
6.230%, with a maturity date of June 1, 2024.. 223,752 227,704
6.851%, with a maturity date of January 1,
2023......................................... 126,629 127,460
7.826%, with a maturity date of January 1,
2024......................................... 136,891 138,501
7.858%, with a maturity date of October 1,
2022......................................... 82,448 84,277
7.893%, with a maturity date of August 1,
2023......................................... 232,499 237,912
7.947%, with a maturity date of January 1,
2023......................................... 119,982 123,262
7.982%, with a maturity date of August 1,
2023......................................... 267,425 274,279
----------
Total Federal Home Loan Mortgage Corporation
Adjustable Rate Mortgages
(Cost $1,208,305).......................... 1,213,395
----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
ADJUSTABLE RATE MORTGAGE (a)(b)-4.1
7.737%, with a maturity date of May 1, 2021
(Cost $292,754)............................ 295,711 300,055
----------
FEDERAL DEPOSIT INSURANCE CORPORATION REAL
ESTATE
MORTGAGE INVESTMENT CONDUIT [REMIC] (a)(b)-0.1
6.300%, with a maturity date of September 25,
2025
(Cost $4,132).............................. 4,134 4,128
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
18 Investors Trust Adjustable Rate Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- ----------
<S> <C> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION (a)(b)-
3.2
7.500%, with various maturity dates to Septem-
ber 1, 2000
(Cost $239,087)............................ 234,471 236,155
----------
UNITED STATES TREASURY NOTE-0.7
7.500%, with a maturity date of November 15,
2001
(Cost $48,780)............................. 45,000 47,102
----------
Total Long-Term Government Securities
(Cost $6,186,048).......................... 6,280,200
----------
COLLATERALIZED MORTGAGE OBLIGATIONS 8.7
THE MONEY STORE HOME EQUITY TRUST (a)(b)(c)-1.9
6.850%, with a maturity date of June 15, 2019. 140,000 138,359
----------
RESOLUTION TRUST CORPORATION MORTGAGE PASS-
THROUGHS (a)(b)(c)-6.8
8.000%, with a maturity date of September 25,
2021......................................... 289,889 290,797
9.000%, with a maturity date of September 25,
2028......................................... 207,835 210,173
----------
500,970
----------
Total Collateralized Mortgage Obligations
(Cost $642,899)............................ 639,329
----------
ASSET-BACKED SECURITIES 4.0
Citibank Credit Card Master Trust, 5.790%,
February 7, 2003 (Certificate Series 1996 1
Class A)..................................... 225,000 163,265
Household Finance Corporation, 5.690%, May 5,
2004......................................... 23,648 23,648
Household Finance Corporation, 5.730%, May 20,
2008
(1993-1 Class A2)............................ 109,433 109,672
----------
Total Asset-Backed Securities
(Cost $304,034)............................ 296,585
----------
STRUCTURED NOTE 0.7
Ford Motor Credit Medium Term Note, 5.745%,
with a maturity date of July 12, 1996
(Cost $50,000)............................. 50,000 49,500
----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Adjustable Rate Fund 19
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- ---------- ----------
<S> <C> <C> <C>
MONEY MARKET MUTUAL FUNDS 3.7
The Seven Seas Series Money Market Fund
[Class A]................................... 137,162 137,162
The Seven Seas Series US Government Money
Market Fund................................. 137,354 137,354
----------
Total Money Market Mutual Funds
(Cost $274,516)........................... 274,516
----- ----------
SUMMARY
Total investments
(Cost $7,457,497) (d)..................... 102.7 7,540,130
Other assets and liabilities, net............ (2.7) (201,201)
----- ----------
NET ASSETS..................................... 100.0 $7,338,929
===== ==========
</TABLE>
- --------
NOTES:
(a) The investments in mortgage-backed securities are interests in separate
pools of mortgages. All such issues which have similar coupon rates have
been aggregated for financial statement presentation purposes.
(b) Effective maturities for all securities may be shorter than indicated due
to prepayments.
(c) Risks associated with Collateralized Mortgage Obligations ("CMO's")--The
net asset value of the Fund is sensitive to interest rate fluctuations
associated with CMO's. CMO's are obligations collateralized by a portfolio
of mortgages or mortgage-related securities. Payments of principal and
interest on the mortgages are passed through to the holder of the CMO's on
the same schedule as they are received, although certain classes of CMO's
have priority over others with respect to the receipt of prepayments on
the mortgages. Therefore, an investment in CMO's may be subject to a
greater or lesser risk of prepayments than other types of mortgage-related
securities.
(d) See Note 3 for cost for federal income tax purposes and related gross
unrealized appreciation (depreciation).
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
20 Investors Trust Government Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ------------ ------------
<S> <C> <C> <C>
LONG-TERM GOVERNMENT SECURITIES 98.9
FEDERAL HOME LOAN MORTGAGE CORPORATION
(a)(b)-24.4
5.500%, with a maturity date of December
1, 2008.................................. 4,565,837 4,260,473
6.500%, with various maturity dates to
April 1, 2026............................ 170,215,916 163,348,413
7.500%, with various maturity dates to
December 1, 2010......................... 57,054,454 57,466,842
9.000%, with a maturity date of December
1, 2014.................................. 4,319,583 4,494,483
10.000%, with various maturity dates to
December 1, 2020......................... 866,642 941,609
10.500%, with various maturity dates to
August 1, 2019........................... 358,434 388,576
12.000%, with a maturity date of August 1,
2014..................................... 6,749 7,340
12.500%, with various maturity dates to
September 1, 2014........................ 131,412 152,068
13.000%, with a maturity date of January
1, 2013.................................. 47,237 52,735
------------
Total Federal Home Loan Mortgage
Corporation
(Cost $237,101,312).................... 231,112,539
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
ADJUSTABLE RATE MORTGAGES (a)(b)-11.3
6.500%, with various maturity dates to
May 20, 2025............................. 104,605,750 105,874,638
7.500%, with various maturity dates to
June 20, 2025............................ 733,208 743,290
------------
Total Government National Mortgage
Association
Adjustable Rate Mortgages
(Cost $105,278,402).................... 106,617,928
------------
UNITED STATES TREASURY BONDS-8.2
11.625%, with a maturity date of November
15, 2002
(Cost $79,214,643)..................... 61,500,000 77,912,505
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
REAL ESTATE MORTGAGE INVESTMENT CONDUITS
[REMIC] (b)(c)-1.8
8.400%, with a maturity date of August
25, 2019
[Series 1989-54 Class E]................. 10,800,000 11,053,044
9.500%, with a maturity date of December
25, 2018
[Series 1988-30 Class D]................. 5,911,135 6,206,692
------------
Total Federal National Mortgage
Association
Real Estate Mortgage Investment Conduits
[REMIC]
(Cost $17,049,841)..................... 17,259,736
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Government Fund 21
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ------------ ------------
<S> <C> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION
ADJUSTABLE RATE MORTGAGES (a)(b)-3.0
6.750%, with various maturity dates to
February 1, 2022......................... 3,142,791 3,142,572
7.490%, with a maturity date of January
1, 2025.................................. 24,235,856 24,970,445
------------
Total Federal National Mortgage
Association
Adjustable Rate Mortgages
(Cost $28,017,902)..................... 28,113,017
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(a)(b)-4.5
3.500%, with a maturity date of October
25, 2021................................. 14,200,000 10,980,576
7.000%, with various maturity dates to
October 1, 2010.......................... 11,723 11,594
9.000%, with various maturity dates to
July 1, 2021............................. 3,404,230 3,580,898
10.000%, with various maturity dates to
June 1, 2025............................. 25,326,658 27,930,362
------------
Total Federal National Mortgage
Association
(Cost $41,824,886)..................... 42,503,430
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION MEDIUM
TERM NOTES-12.8
10.450%, with a maturity date of October
13, 2015................................. 10,000,000 13,321,900
11.875%, with a maturity date of May 19,
2000..................................... 40,000,000 47,414,800
12.000%, with a maturity date of November
13, 2000 (f)............................. 50,000,000 60,445,500
------------
Total Federal National Mortgage
Association
Medium Term Notes
(Cost $120,542,600).................... 121,182,200
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(a)(b)-21.0
6.000%, with a maturity date of December
20, 2099 (d)............................. 17,000,000 16,915,000
7.000%, with various maturity dates to
April 15, 2026........................... 118,788,018 114,389,605
7.500%, with various maturity dates to
December 15, 2025........................ 4,227 4,180
8.000%, with various maturity dates to
March 15, 2026........................... 61,313,773 62,233,135
8.500%, with various maturity dates to
April 15, 2025........................... 851,153 881,280
9.000%, with a maturity date of May 15,
2013..................................... 251,247 267,154
9.500%, with various maturity dates to
December 15, 2017........................ 3,541,266 3,850,855
10.500%, with various maturity dates to
December 15, 2019........................ 112,506 124,052
12.500%, with a maturity date of April 15,
2015..................................... 16,230 18,943
------------
Total Government National Mortgage
Association
(Cost $203,020,021).................... 198,684,204
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
22 Investors Trust Government Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- ------------
<S> <C> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION
MULTICLASS MORTGAGE
PARTICIPATION CERTIFICATE (b)(c)-0.6
9.500%, with a maturity date of January
15, 2019
[Series 38 Class C]
(Cost $5,744,976)....................... 5,615,719 5,729,774
------------
FINANCING CORPORATION-4.3
9.650%, with a maturity date of November
2, 2018................................... 2,020,000 2,519,950
10.700%, with a maturity date of October 6,
2017...................................... 28,165,000 38,159,069
------------
Total Financing Corporation
(Cost $37,252,781)...................... 40,679,019
------------
UNITED STATES TREASURY NOTES-1.8
5.000%, with a maturity date of February
15, 1999 (e).............................. 7,360,000 7,140,378
6.375%, with a maturity date of March 31,
2001 (e).................................. 10,000,000 9,981,200
------------
Total United States Treasury Notes
(Cost $17,203,665)...................... 17,121,578
------------
SMALL BUSINESS ADMINISTRATION NOTES (b)-3.9
6.950%, with a maturity date of September
1, 2015................................... 11,962,968 11,637,725
7.350%, with a maturity date of August 1,
2005...................................... 12,580,000 12,424,715
8.100%, with a maturity date of March 1,
2015...................................... 9,758,156 9,977,714
8.500%, with a maturity date of January 1,
2015...................................... 2,392,283 2,534,325
------------
Total Small Business Administration Notes
(Cost $37,372,189)...................... 36,574,479
------------
MULTIFAMILY PROJECT SECURITIES (b)-0.8
8.750%, with a maturity date of June 25,
2035...................................... 4,200,008 4,335,197
9.250%, with a maturity date of March 1,
2037...................................... 3,051,900 3,215,940
------------
Total Multifamily Project Securities
(Cost $7,422,884)......................... 7,551,137
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION
ADJUSTABLE RATE MORTGAGE (a)(b)-0.5
7.386%, with a maturity date of April 1,
2029
(Cost $4,388,448)......................... 4,290,570 4,403,197
------------
Total Long-Term Government Securities
(Cost $941,434,550)....................... 935,444,743
------------
SHORT TERM 2.9
FEDERAL HOME LOAN BANK DISCOUNT NOTE (a)(b)-
2.9
5.300%, with a maturity date of May 1,
1996
(Cost $27,200,000)........................ 27,200,000 27,200,000
------------
Total Short Term
(Cost $27,200,000)........................ 27,200,000
------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Government Fund 23
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET MARKET
ASSETS VALUE ($)
-------- ---------
<S> <C> <C>
SUMMARY
Total investments
(Cost $968,634,550) (g)......................... 101.8 962,644,743
Other assets and liabilities, net...................... (1.8) (16,980,953)
----- ------------
NET ASSETS............................................... 100.0 $945,663,790
===== ============
</TABLE>
- --------
NOTES:
(a) The investments in mortgage-backed securities are interests in separate
pools of mortgages. All such issues which have similar coupon rates, have
been aggregated for financial statement presentation purposes.
(b) Effective maturities for all securities may be shorter than indicated due
to prepayments.
(c) Risks associated with Collateralized Mortgage Obligations ("CMO's")--The
net asset value of the Fund is sensitive to interest rate fluctuations
associated with CMO's. CMO's are obligations collateralized by a portfolio
of mortgages or mortgage-related securities. Payments of principal and
interest on the mortgages are passed through to the holder of the CMO's on
the same schedule as they are received, although certain classes of CMO's
have priority over others with respect to the receipt of prepayments on
the mortgages. Therefore, an investment in CMO's may be subject to a
greater or lesser risk of prepayments than other types of mortgage-related
securities.
(d) To be announced ("TBA" Forward Commitment Transactions) security (Note 2).
(e) Segregated as collateral for TBA Securities (Note 2).
(f) Collateral for open futures and options contracts (Note 3).
(g) See Note 3 for cost for federal income tax purposes and related gross
unrealized appreciation (depreciation).
(h) At April 30, 1996, open futures contracts purchased were as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION FACE APPRECIATION
PURCHASED DESCRIPTION DATE AMOUNT (DEPRECIATION)
--------- -------------------------------------------- ---------- ---------- --------------
<S> <C> <C> <C> <C>
3,372 U.S. Treasury Bond Futures May 96 $4,471,466 $(8,635,625)
896 U.S. Treasury Bond Futures Aug 96 111,508 84,006
----- ---------- -----------
4,268 $4,582,974 $(8,551,619)
===== ========== -----------
At April 30, 1996, open futures contracts sold were as follows:
<CAPTION>
SOLD
----
<S> <C> <C> <C> <C>
1,222 U.S. Treasury Bond Futures May 96 $1,327,970 1,995,981
========== -----------
Unrealized depreciation on futures contracts $(6,555,638)
===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
24 Investors Trust Tax Free Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- -----------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL INVESTMENTS
ALABAMA 0.3
Birmingham Alabama North Medical Clinic Board
Revenue,
6.625%, April 1, 2000*...................... 75,000 79,463
-----------
ALASKA 0.1
North Slope Borough Alaska, 10.000%, June 30,
2001* (b)................................... 30,000 36,982
-----------
ARIZONA 0.8
Maricopa County Arizona, 6.250%, July 1, 2002
(b)......................................... 175,000 189,368
-----------
ARKANSAS 2.7
Arkansas Housing Development Agency, 8.375%,
July 1, 2010*............................... 240,000 285,312
Arkansas Housing Development Agency, 8.375%,
July 1, 2011*............................... 200,000 254,056
Pulaski County Arkansas Hospital Revenue,
9.250%, March 1, 2010*...................... 105,000 131,560
-----------
670,928
-----------
CALIFORNIA 4.8
California State, 8.750%, May 1, 2004........ 110,000 136,671
Sacramento California Municipal Utility
District Electric Revenue,
9.000%, April 1, 2013 [Series M]*........... 620,000 799,360
San Diego California Hospital Revenue,
8.875%, February 1, 2011*................... 210,000 259,228
-----------
1,195,259
-----------
COLORADO 3.4
Colorado Springs Utilities Revenue,
8.500%, November 15, 2011*.................. 100,000 120,793
Denver Colorado City and County Single-Family
Mortgage Revenue, 7.000%, August 1, 2010*
[Series 1978A].............................. 475,000 514,031
Loveland Colorado, 8.875%, November 1, 2005*. 165,000 201,872
-----------
836,696
-----------
CONNECTICUT 4.6
Connecticut State Health and Educational
Facility Authority,
7.000%, July 1, 2012*....................... 675,000 733,684
Connecticut State Housing Finance Authority,
6.050%, May 15, 2014........................ 410,000 409,988
-----------
1,143,672
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Tax Free Fund 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- -----------
<S> <C> <C> <C>
DELAWARE 0.9
Delaware Transportation Authority
Transportation Systems Revenue, 6.100%, July
1, 2002..................................... 110,000 117,610
Georgetown Delaware, 6.800%, June 1, 2021**
(b)......................................... 100,000 109,473
-----------
227,083
-----------
FLORIDA 7.0
Broward County Florida, 6.200%, January 1,
2007 [Series C]............................. 25,000 26,530
Dade County Florida Health Facilities
Authority Hospital Revenue, 6.400%, May 1,
2001* (b)................................... 100,000 107,778
Florida State, Broward County, 10.000%, July
1, 2014..................................... 235,000 343,539
Florida State, Broward County Expressway
Authority,
6.500%, July 1, 2003 [Series A]............. 675,000 691,450
Florida State, Jacksonville Transportation
Authority,
5.900%, July 1, 2004........................ 200,000 211,804
Gainesville Florida Utilities Systems
Revenue,
8.125%, October 1, 2014*.................... 175,000 207,860
Jacksonville Florida Electric Authority
Revenue,
6.500%, October 1, 2003 [Series 10]......... 135,000 147,329
-----------
1,736,290
-----------
GEORGIA 2.3
Clarke County Georgia Hospital Authority
Revenue,
9.875%, January 1, 2006* (b)................ 80,000 104,310
Columbus Georgia Medical Center Hospital
Authority Revenue,
7.750%, July 1, 2010*....................... 285,000 327,035
Gwinnett County Georgia Water and Sewage
Authority Water Revenue, 9.600%, October 1,
2004*....................................... 115,000 143,419
-----------
574,764
-----------
HAWAII 0.9
Honolulu Hawaii City and County, 7.250%, July
1, 2002..................................... 200,000 225,766
-----------
IDAHO 2.3
Idaho Falls Idaho Electric Revenue, 10.375%,
April 1, 2013**............................. 405,000 573,719
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
26 Investors Trust Tax Free Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- -----------
<S> <C> <C> <C>
ILLINOIS 6.5
Chicago Illinois Motor Fuel Tax Revenue,
6.500%, January 1, 2016** (b)............... 20,000 21,518
Chicago Illinois Public Building Revenue,
7.500%, January 1, 2002* (b)................ 500,000 546,815
Chicago Illinois Wastewater Transmission
Revenue,
6.300%, January 1, 2012** (b)............... 20,000 21,889
Chicago Illinois Wastewater Transmission
Revenue,
7.200%, November 15, 2019** (b)............. 90,000 99,421
Des Plaines Illinois Hospital Facility
Revenue,
10.750%, January 1, 2014**.................. 115,000 149,802
Illinois State, 6.750%, April 1, 2005**...... 50,000 52,360
Illinois State Sales Tax Revenue,
6.000%, June 15, 2003 [Series S]............ 195,000 206,435
Schaumburg Illinois, 6.000%, December 1,
2005........................................ 430,000 451,887
Waukegan Illinois Water and Sewer Revenue,
7.500%, May 1, 2006*........................ 50,000 57,949
-----------
1,608,076
-----------
INDIANA 3.6
Highland Indiana School Building Corporation,
7.000%, July 15, 2008**..................... 400,000 449,976
Indiana Transportation Finance Authority
Highway Revenue,
6.900%, June 1, 2000 [Series A]............. 300,000 323,109
Indiana University Revenue, 10.125%, July 1,
2010 [Series N]**........................... 35,000 43,428
Wawasee Community School Corporation Indiana
Participation Certificates, 7.650%, April 1,
2007**...................................... 55,000 60,736
-----------
877,249
-----------
IOWA 4.4
Muscatine Iowa Electric Revenue, 9.700%,
January 1, 2013*............................ 815,000 1,086,941
-----------
KENTUCKY 1.4
Kentucky State Turnpike Authority Economic
Development,
5.625%, July 1, 2010 (b).................... 355,000 357,606
-----------
LOUISIANA 2.8
Jefferson Parish Louisiana Hospital Service,
7.250%, January 1, 2009*.................... 625,000 683,662
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Tax Free Fund 27
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- -----------
<S> <C> <C> <C>
MAINE 0.8
Maine Municipal Bond Bank,
7.100%, November 1, 2007 [Series D]**....... 10,000 10,992
Maine Municipal Bond Bank,
7.200%, November 1, 2020 [Series B]**....... 65,000 72,732
Maine Municipal Bond Bank Sewer and Water
Revenue,
7.200%, November 1, 2013 [Series A]**....... 100,000 113,151
-----------
196,875
-----------
MASSACHUSETTS 4.4
Massachusetts Bay Transportation Authority
Massachusetts,
7.250%, March 1, 2003 [Series A](b)......... 100,000 110,446
Massachusetts State, 6.750%, August 1, 2009
[Series C].................................. 250,000 273,460
Massachusetts State Port Authority Revenue,
13.000%, July 1, 2013*...................... 425,000 698,734
-----------
1,082,640
-----------
MICHIGAN 2.3
Michigan State Hospital Finance Authority
Revenue,
7.125%, May 1, 2009*........................ 335,000 365,361
Michigan State Hospital Finance Authority
Revenue,
9.000%, May 1, 2008*........................ 170,000 213,744
-----------
579,105
-----------
MINNESOTA 1.4
Rochester Minnesota Health Care Facilities
Revenue,
6.250%, November 15, 2014................... 300,000 310,413
Western Minnesota Municipal Power Agency,
Minnesota Power Supply, 10.250%, January 1,
2015 [Series A]** (b)....................... 25,000 28,573
-----------
338,986
-----------
MISSISSIPPI 1.0
Mississippi State, 6.200%, February 1, 2008*. 225,000 235,323
-----------
MISSOURI 0.1
Lees Summit Missouri Water and Sewer Revenue,
10.000%, July 1, 2014 [Series 1984 A]** (b). 20,000 23,994
-----------
NEVADA 0.7
Clark County Nevada School District, 8.250%,
May 1, 2000................................. 150,000 169,751
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
28 Investors Trust Tax Free Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- -----------
<S> <C> <C> <C>
NEW HAMPSHIRE 0.1
New Hampshire Municipal Bond Bank State
Guaranteed,
6.800%, January 15, 2009 [Series B]**....... 25,000 27,317
-----------
NEW JERSEY 1.3
Atlantic County New Jersey Improvement
Authority Lease Revenue, 7.400%, March 1,
2012* (b)................................... 170,000 199,980
New Jersey Economic Development Authority
Market,
7.000%, July 1, 2004 (b).................... 100,000 113,629
-----------
313,609
-----------
NEW MEXICO 2.7
Farmington New Mexico Power Revenue,
9.875%, January 1, 2013**................... 400,000 531,944
Farmington New Mexico Utility Systems
Revenue,
9.875%, January 1, 2008* (b)................ 100,000 128,990
-----------
660,934
-----------
NEW YORK 7.4
New York City, 6.000%, August 1, 2006* (b)... 300,000 311,427
New York State, 7.100%, March 1, 2004........ 50,000 55,226
New York State Dormitory Authority Revenue,
7.375%, July 1, 2016*....................... 315,000 368,389
New York State Dormitory Authority Revenue,
7.500%, May 15, 2011........................ 165,000 187,876
New York State Environmental Facilities
Corporation,
6.800%, November 15, 2010................... 200,000 221,970
New York State Housing Finance Agency,
6.400%, November 1, 2003 [Series A]*........ 175,000 184,851
New York State Local Government Assistance,
6.750%, April 1, 2002 [Series A]............ 45,000 49,400
New York State Local Government Assistance,
7.250%, April 1, 2007....................... 350,000 390,075
New York State Local Government Assistance
Corporation,
6.000%, April 1, 2005 [Series C]............ 50,000 52,534
-----------
1,821,748
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Tax Free Fund 29
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- -----------
<S> <C> <C> <C>
NORTH CAROLINA 1.8
North Carolina Municipal Power Agency Number
One Catawba,
10.500%, January 1, 2010*................... 325,000 449,728
-----------
OHIO 2.2
Columbus Ohio, 5.250%, September 15, 2011.... 270,000 262,494
Columbus Ohio, 6.000%, July 1, 2008 [Series
2].......................................... 50,000 51,789
Ohio State Water Development Authority
Revenue,
7.000%, December 1, 2009* (b)............... 200,000 219,112
-----------
533,395
-----------
PENNSYLVANIA 4.8
Allegheny County Pennsylvania Hospital
Development Authority,
7.375%, July 1, 2012 [Series N]*............ 150,000 170,922
Pennsylvania Intergovernmental Cooperative
Authority,
6.800%, June 15, 2012**..................... 50,000 55,350
Pennsylvania State Turnpike Commission
Turnpike Revenue,
7.150%, December 1, 2011 [Series J]**....... 25,000 28,347
Philadelphia Pennsylvania Hospitals and
Higher Education Facilities, 6.500%,
February 15, 2021 [Series A]**.............. 325,000 357,906
Philadelphia Pennsylvania Hospitals Authority
Revenue,
9.875%,July 1, 2010**....................... 170,000 228,574
Philadelphia Pennsylvania Regional Port
Authority Lease Revenue,
7.150%, August 1, 2020** (b)................ 30,000 32,943
Pittsburgh Pennsylvania Water and Sewer
Authority, Water and Sewer, 7.250%,
September 1, 2014*.......................... 275,000 308,052
-----------
1,182,094
-----------
PUERTO RICO 0.5
Puerto Rico Commonwealth Aqueduct and Sewer
Authority Revenue, 10.250%, July 1, 2009*... 80,000 111,626
-----------
RHODE ISLAND 3.2
Convention Center Authority Rhode Island
Revenue,
6.300%, May 15, 2004 [Series A]** (b)....... 45,000 48,910
Convention Center Authority Rhode Island
Revenue,
6.700%, May 15, 2020 [Series A]** (b)....... 625,000 690,881
Rhode Island Depositors Economic Protection,
7.100%, August 1, 2018 [Series A]** (b)..... 35,000 39,401
-----------
779,192
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
30 Investors Trust Tax Free Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- -----------
<S> <C> <C> <C>
SOUTH CAROLINA 3.0
South Carolina State Public Service Authority
Revenue,
6.500%, July 1, 2024 [Series D]** (b)....... 195,000 215,637
Spartanburg South Carolina Waterworks
Revenue,
6.000%, June 1, 2005........................ 500,000 525,875
-----------
741,512
-----------
TENNESSEE 0.3
Metropolitan Government Nashville and
Davidson,
9.600%, July 1, 2005 [Series N]*............ 65,000 86,259
-----------
TEXAS 4.1
Arlington Texas Independent School District,
5.900%, February 15, 2003................... 350,000 367,759
Austin Texas Utility Systems Revenue,
7.250%, November 15, 2003................... 50,000 54,021
Austin Texas Utility Systems Revenue,
9.500%, May 15, 2015 [Series A]**........... 65,000 76,571
Austin Texas Utility Systems Revenue,
10.750%, May 15, 2015**..................... 30,000 36,599
Austin Texas Utility Systems Revenue,
11.125%, November 15, 2009**................ 35,000 42,351
Gulf Coast Waste Disposal Authority Texas,
8.375%, June 1, 2005*....................... 100,000 121,779
Houston Texas Water Systems Revenue,
7.300%, December 1, 2006*................... 100,000 117,657
Lamar University Texas Revenue, 7.000%, April
1, 2006*.................................... 35,000 40,125
San Antonio Texas Water Revenue, 7.125%, May
1, 2016**(b)................................ 25,000 27,226
Texas A&M University Revenue, 9.400%, June 1,
2004*....................................... 40,000 51,524
Texas A&M University Revenue, 9.400%, June 1,
2006*....................................... 55,000 73,257
-----------
1,008,869
-----------
UTAH 1.2
Intermountain Power Agency Utah Power Supply,
7.200%, July 1, 2011 [Series A]**........... 10,000 10,976
Utah State Municipal Finance Cooperative
Local Government Revenue, 7.000%, June 1,
2016**(b)................................... 250,000 277,705
-----------
288,681
-----------
VIRGINIA 0.5
Richmond Virginia Metropolitan Authority
Expressway Revenue,
7.000%, October 15, 2013*(b)................ 115,000 126,085
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Tax Free Fund 31
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET PRINCIPAL MARKET
ASSETS AMOUNT ($) VALUE ($)
-------- ---------- -----------
<S> <C> <C> <C>
WASHINGTON 4.4
Seattle Washington Municipality Metropolitan
Seattle,
6.875%, January 1, 2031 [Series T]**(b)..... 40,000 43,800
Snohomish County Washington Public Utility
District Number 001, 6.375%, January 1,
2005*....................................... 20,000 21,796
Washington State, 6.100%, February 1, 2005
[Series A].................................. 200,000 211,240
Washington State Public Power Supply Systems
Nuclear,
5.300%, July 1, 2009 [Series C]............. 750,000 708,607
Washington State Public Power Supply Systems
Nuclear,
7.200%, July 1, 2002 [Series B]............. 100,000 108,846
-----------
1,094,289
-----------
WEST VIRGINIA 0.7
Wood County West Virginia Building Commission
Revenue,
6.625%, January 1, 2006* (b)................ 165,000 175,050
----- -----------
Total Long-Term Municipal Investments
(Cost $24,272,094)...................... 97.7 24,130,586
-----------
SHORT-TERM MUNICIPAL INVESTMENTS
New York City, 4.150%, (a) May 1, 1996....... 100,000 100,000
New York City, 4.150%, (a) May 1, 1996....... 100,000 100,000
New York City, 4.150%, (a) May 1, 1996....... 100,000 100,000
----- -----------
Total Short-Term Municipal Investments
(Cost $300,000)......................... 1.2 300,000
-----------
SUMMARY
Total investments
(Cost $24,572,094) (c).................. 98.9 24,430,586
Other assets and liabilities, net............ 1.1 269,433
----- -----------
NET ASSETS..................................... 100.0 $24,700,019
===== ===========
</TABLE>
- --------
NOTES:
* Escrowed to maturity: Bonds which are collateralized by U.S. Treasury
securities which are held in escrow by a trustee and used to pay principal
and interest on bonds so designed.
** Prerefunded: Bonds which are collateralized by U.S. Treasury securities
which are held in escrow and are used to pay principal and interest on the
tax-exempt issue and to retire the bonds at the earliest refunding date.
(a) Coupon rate is reset daily.
(b) The security is insured by FGIC, MBIA or AMBAC.
(c) See Note 3 for cost for federal income tax purposes and related gross
unrealized appreciation (depreciation).
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
32 Investors Trust Tax Free Fund
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
OTHER INFORMATION:
The composition of long-term municipal investments as a percentage of net
assets, is as follows:
<TABLE>
<CAPTION>
S&P/MOODY'S RATING % OF NET ASSETS
------------------ ---------------
<S> <C>
AAA or Aaa 66.3%
AA or Aa 18.3%
A 9.1%
BBB or Baa 0.8%
Unrated securities of comparable
investment quality as above 3.2%
The Fund had insurance concentrations of 5% or greater as of April 30, 1996
(as a percentage of net assets) as follows:
MBIA 9.3%
AMBAC 6.5%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Value Fund 33
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- --------- -----------
<S> <C> <C> <C>
COMMON STOCKS
BASIC INDUSTRIES 11.9
ALUMINUM-1.4%
Aluminum Company of America.................... 6,300 392,963
-----------
CHEMICALS-5.6%
Air Products & Chemical, Incorporated.......... 7,400 422,725
DuPont (EI) deNemours & Company................ 4,000 321,500
Morton International, Incorporated............. 7,500 265,312
PPG Industries, Incorporated................... 10,400 526,500
-----------
1,536,037
-----------
PAPER-2.8%
Alco Standard Corporation...................... 6,000 347,250
Kimberly Clark Corporation..................... 5,900 428,488
-----------
775,738
-----------
PLASTICS-1.2%
Illinois Tool Works, Incorporated.............. 4,700 316,075
-----------
STEEL-0.9%
Nucor Corporation.............................. 4,100 230,625
-----------
3,251,438
-----------
CAPITAL GOODS 5.6
AGRICULTURAL MACHINERY-0.9%
Deere & Company................................ 6,700 260,463
-----------
ELECTRICAL EQUIPMENT-3.6%
Emerson Electric Company....................... 3,700 309,412
General Electric Company....................... 8,900 689,750
-----------
999,162
-----------
POLLUTION CONTROL-1.1%
Pall Corporation............................... 10,300 288,400
-----------
1,548,025
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
34 Investors Trust Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- --------- -----------
<S> <C> <C> <C>
CONSUMER BASICS 21.7
DRUGS & HEALTH CARE-10.1%
American Home Products Corporation............ 6,100 643,550
Columbia/HCA Healthcare Corporation........... 6,500 345,313
Johnson & Johnson............................. 6,500 601,250
Pfizer, Incorporated.......................... 9,500 654,312
Schering Plough Corporation................... 9,100 522,112
-----------
2,766,537
-----------
FOOD & BEVERAGES-6.1%
Campbell Soup Company......................... 5,000 312,500
Coca-Cola Company............................. 3,700 301,550
CPC International, Incorporated............... 7,900 546,088
PepsiCo, Incorporated......................... 8,300 527,050
-----------
1,687,188
-----------
HOUSEHOLD PRODUCTS-1.7%
Procter & Gamble Company...................... 5,500 464,750
-----------
RETAIL GROCERY-3.8%
Albertson's, Incorporated..................... 14,200 546,700
Safeway, Incorporated (a)..................... 14,600 492,750
-----------
1,039,450
-----------
5,957,925
-----------
CONSUMER DURABLE GOODS 4.7
AUTOMOBILES-3.3%
Chrysler Corporation.......................... 4,100 257,275
Ford Motor Company............................ 18,200 652,925
-----------
910,200
-----------
HOUSEHOLD APPLIANCES & HOME FURNISHINGS-1.4%
Whirlpool Corporation......................... 6,200 372,775
-----------
1,282,975
-----------
CONSUMER NON-DURABLE GOODS 6.2
PHOTOGRAPHY-1.3%
Eastman Kodak Company......................... 4,500 344,250
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Value Fund 35
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- --------- -----------
<S> <C> <C> <C>
RETAIL TRADE-4.9%
May Department Stores Company.................. 10,600 540,600
Penney (J.C.) Company, Incorporated............ 5,500 272,250
Walgreen Company............................... 17,000 544,000
-----------
1,356,850
-----------
1,701,100
-----------
CONSUMER SERVICES 2.1
HOTELS & RESTAURANTS-1.1%
McDonald's Corporation......................... 6,400 306,400
-----------
LEISURE TIME-1.0%
Disney (Walt) Company.......................... 4,200 260,400
-----------
566,800
-----------
ENERGY 5.8
INTERNATIONAL OIL-4.7%
Exxon Corporation.............................. 9,300 790,500
Mobil Corporation.............................. 2,200 253,000
Royal Dutch Petroleum Company.................. 1,700 243,525
-----------
1,287,025
-----------
PETROLEUM SERVICES-1.1%
Halliburton Company............................ 5,400 309,825
-----------
1,596,850
-----------
FINANCE 14.4
BANKS-6.9%
First Chicago Corporation...................... 6,784 279,840
MBNA Corporation............................... 10,650 302,194
Morgan (J.P.) & Company, Incorporated.......... 8,200 689,825
National City Corporation...................... 17,200 634,250
-----------
1,906,109
-----------
FINANCIAL SERVICES-6.2%
American Express Company....................... 18,200 882,700
Chase Manhattan Corporation.................... 6,000 413,250
Federal National Mortgage Association.......... 12,800 392,000
-----------
1,687,950
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
36 Investors Trust Value Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- --------- -----------
<S> <C> <C> <C>
INSURANCE-1.3%
American International Group, Incorporated..... 4,000 365,500
-----------
3,959,559
-----------
GENERAL BUSINESS 4.4
BUSINESS SERVICES-2.2%
General Motors Corporation [Class E]........... 10,600 597,575
-----------
COMMUNICATION SERVICES-1.3%
SBC Communications, Incorporated............... 7,200 360,000
-----------
NEWSPAPERS-0.9%
Gannett Company, Incorporated.................. 3,800 259,825
-----------
1,217,400
-----------
SHELTER 1.2
CONSTRUCTION MATERIALS-1.2%
Masco Corporation.............................. 12,300 335,175
-----------
TECHNOLOGY 14.6
AEROSPACE-2.4%
Boeing Company................................. 3,200 262,800
Raytheon Company............................... 7,700 389,813
-----------
652,613
-----------
COMPUTERS & BUSINESS EQUIPMENT-5.8%
Cisco Systems, Incorporated (a)................ 8,100 420,187
Compaq Computer Corporation (a)................ 6,600 307,725
Hewlett Packard Company........................ 4,600 487,025
Pitney Bowes, Incorporated..................... 7,900 385,125
-----------
1,600,062
-----------
ELECTRONICS-3.4%
Intel Corporation.............................. 8,600 582,650
Motorola, Incorporated......................... 5,800 355,250
-----------
937,900
-----------
SOFTWARE-3.0%
Microsoft Corporation (a)...................... 4,000 453,000
Oracle Systems Corporation (a)................. 10,950 369,562
-----------
822,562
-----------
4,013,137
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Value Fund 37
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- --------- -----------
<S> <C> <C> <C>
UTILITIES 5.5
ELECTRIC UTILITIES-1.5%
Southern Company............................. 18,800 413,600
-----------
TELEPHONE-4.0%
Ameritech Corporation........................ 7,800 455,325
AT&T Corporation............................. 4,000 245,000
Bell Atlantic Corporation.................... 6,000 390,000
-----------
1,090,325
-----------
1,503,925
----- -----------
Total Common Stocks
(Cost $23,348,719).................. 98.1 26,934,309
-----------
MONEY MARKET MUTUAL FUNDS 2.5
The Seven Seas Series Money Market Fund
[Class A]................................... 680,448 680,448
The Seven Seas Series US Government Money
Market Fund................................. 1,848 1,848
-----------
Total Money Market Mutual Funds
(Cost $682,296)..................... 682,296
----- -----------
SUMMARY
Total investments
(Cost $24,031,015) (b).............. 100.6 27,616,605
Other assets and liabilities, net............ (0.6) (160,779)
----- -----------
NET ASSETS..................................... 100.0 $27,455,826
===== ===========
</TABLE>
- --------
NOTES:
(a) Non-income producing security.
(b) See Note 3 for cost for federal income tax purposes and related gross
unrealized appreciation (depreciation).
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
38 Investors Trust Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- --------- -----------
<S> <C> <C> <C>
COMMON STOCKS
BASIC INDUSTRIES 8.6
CHEMICALS-6.5%
Airgas, Incorporated (a)....................... 20,000 430,000
Cabot Corporation.............................. 8,000 214,000
IMC Global, Incorporated....................... 7,000 258,125
Millipore Corporation.......................... 8,000 335,000
Praxair, Incorporated.......................... 9,000 347,625
Union Carbide Corporation...................... 6,400 291,200
-----------
1,875,950
-----------
CONTAINERS & GLASS-1.2%
Sealed Air Corporation (a)..................... 9,600 339,600
-----------
PAPER-0.9%
Alco Standard Corporation...................... 4,400 254,650
-----------
2,470,200
-----------
CAPITAL GOODS 4.9
AGRICULTURAL MACHINERY-1.0%
Deere & Company................................ 7,200 279,900
-----------
CONSTRUCTION & MINING EQUIPMENT-1.0%
Dover Corporation.............................. 5,900 303,850
-----------
INDUSTRIAL MACHINERY-2.9%
Applied Materials, Incorporated (a)............ 6,000 240,000
Idex Corporation (a)........................... 6,000 235,500
Thermo Electron Corporation (a)................ 6,000 369,750
-----------
845,250
-----------
1,429,000
-----------
CONGLOMERATES 1.7
Danaher Corporation............................ 6,800 267,750
Premark International, Incorporated............ 4,200 215,775
-----------
483,525
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Growth Fund 39
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- --------- -----------
<S> <C> <C> <C>
CONSUMER BASICS 18.2
DRUGS & HEALTH CARE-16.2%
Amgen, Incorporated (a)....................... 4,000 230,000
Genzyme Corporation (a)....................... 6,000 337,500
HBO & Company................................. 2,600 308,750
Healthcare Compare Corporation (a)............ 6,500 306,312
Invacare Corporation.......................... 14,000 364,000
Johnson & Johnson............................. 3,200 296,000
Medtronic, Incorporated....................... 8,000 425,000
Merck & Company, Incorporated................. 4,000 242,000
Omnicare, Incorporated........................ 5,100 306,000
Pfizer, Incorporated.......................... 5,600 385,700
Schering Plough Corporation................... 6,000 344,250
St. Jude Medical, Incorporated (a)............ 6,000 219,000
Stryker Corporation (a)....................... 4,000 193,500
Summit Technology, Incorporated (a)........... 18,000 321,750
United Healthcare Corporation................. 7,000 409,500
-----------
4,689,262
-----------
FOOD & BEVERAGES-1.0%
Coca-Cola Company............................. 3,400 277,100
-----------
RETAIL GROCERY-1.0%
Casey's General Stores, Incorporated.......... 13,200 284,625
-----------
5,250,987
-----------
CONSUMER DURABLE GOODS 3.1
HOUSEHOLD APPLIANCES & HOME FURNISHINGS-1.2%
Black & Decker Corporation.................... 8,800 354,200
-----------
MOBILE HOMES-1.9%
Clayton Homes, Incorporated................... 15,500 286,750
Oakwood Homes Corporation..................... 5,700 254,363
-----------
541,113
-----------
895,313
-----------
CONSUMER NON-DURABLE GOODS 5.4
COSMETICS & TOILETRIES-1.1%
Gillette Company.............................. 6,000 324,000
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
40 Investors Trust Growth Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- --------- -----------
<S> <C> <C> <C>
RETAIL TRADE-4.3%
Dollar General Corporation..................... 11,338 299,029
Home Depot, Incorporated....................... 5,000 236,875
Kohl's Corporation (a)......................... 11,200 385,000
Petsmart, Incorporated (a)..................... 6,800 301,750
-----------
1,222,654
-----------
1,546,654
-----------
CONSUMER SERVICES 3.1
HOTELS & RESTAURANTS-2.1%
La Quinta Inns, Incorporated................... 13,200 386,100
McDonald's Corporation......................... 4,900 234,588
-----------
620,688
-----------
LEISURE TIME-1.0%
Disney (Walt) Company.......................... 4,600 285,200
-----------
905,888
-----------
FINANCE 12.9
BANKS-5.8%
Bank of Boston Corporation..................... 6,000 290,250
Citicorp....................................... 3,500 275,362
Fifth Third Bancorp............................ 4,500 248,625
Norwest Corporation............................ 7,400 267,325
Star Banc Corporation.......................... 5,400 355,725
Zions Bancorporation........................... 3,200 238,400
-----------
1,675,687
-----------
FINANCIAL SERVICES-3.3%
American Express Company....................... 8,000 388,000
Finova Group, Incorporated..................... 4,500 249,750
Green Tree Financial Corporation............... 9,000 303,750
-----------
941,500
-----------
INSURANCE-3.8%
AFLAC, Incorporated............................ 11,100 344,100
American International Group, Incorporated..... 2,400 219,300
MGIC Investment Corporation.................... 3,800 206,150
SunAmerica, Incorporated....................... 6,000 327,000
-----------
1,096,550
-----------
3,713,737
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Growth Fund 41
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- --------- -----------
<S> <C> <C> <C>
GENERAL BUSINESS 9.4
BUSINESS SERVICES-4.9%
CUC International, Incorporated (a)............ 12,000 394,500
First Data Corporation......................... 3,000 228,000
FIserv, Incorporated (a)....................... 7,400 225,700
Olsten Corporation............................. 6,900 209,588
Omnicom Group.................................. 8,000 347,000
-----------
1,404,788
-----------
COMMUNICATION SERVICES-2.1%
Andrew Corporation (a)......................... 6,750 324,000
Loral Space & Communications................... 5,000 71,875
Qualcomm, Incorporated (a)..................... 5,300 205,375
-----------
601,250
-----------
OFFICE FURNISHINGS & SUPPLIES-2.4%
Danka Business Systems......................... 9,400 451,200
Staples, Incorporated (a)...................... 13,500 256,500
-----------
707,700
-----------
2,713,738
-----------
TECHNOLOGY 20.3
AEROSPACE-2.1%
McDonnell Douglas Corporation.................. 3,300 318,450
Sun Microsystems, Incorporated (a)............. 5,400 292,950
-----------
611,400
-----------
COMPUTERS & BUSINESS EQUIPMENT-8.0%
3Com Corporation (a)........................... 6,000 276,750
Cabletron Systems, Incorporated (a)............ 4,000 301,500
Ceridian Corporation (a)....................... 8,000 382,000
Cisco Systems, Incorporated (a)................ 5,600 290,500
Dell Computer Corporation (a).................. 6,000 275,250
EMC Massachusetts Corporation (a).............. 13,500 276,750
Hewlett Packard Company........................ 2,800 296,450
International Business Machines................ 1,900 204,250
-----------
2,303,450
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
42 Investors Trust Growth Fund
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED), CONTINUED
<TABLE>
<CAPTION>
% OF NET NUMBER MARKET
ASSETS OF SHARES VALUE ($)
-------- --------- -----------
<S> <C> <C> <C>
ELECTRONICS-5.1%
ADC Telecommunications, Incorporated (a)..... 8,000 336,000
Avnet, Incorporated.......................... 6,000 316,500
Intel Corporation............................ 4,000 271,000
Tellabs, Incorporated (a).................... 4,000 221,000
Texas Industries, Incorporated............... 5,000 320,000
-----------
1,464,500
-----------
SOFTWARE-5.1%
America Online, Incorporated (a)............. 5,000 320,000
Computer Associates International,
Incorporated................................ 4,500 330,187
Microsoft Corporation (a).................... 2,500 283,125
Oracle Systems Corporation (a)............... 9,000 303,750
Parametric Technology Corporation (a)........ 6,000 241,500
-----------
1,478,562
-----------
5,857,912
----- -----------
Total Common Stocks
(Cost $19,012,980)........................ 87.6 25,266,954
-----------
MONEY MARKET MUTUAL FUNDS 7.9
The Seven Seas Series Money Market Fund
[Class A]................................... 1,145,122 1,145,122
The Seven Seas Series US Government Money
Market Fund................................. 1,145,117 1,145,117
-----------
Total Money Market Mutual Funds
(Cost $2,290,239)......................... 2,290,239
-----------
<CAPTION>
PRINCIPAL
AMOUNT($)
---------
<S> <C> <C> <C>
REPURCHASE AGREEMENT 5.0
With State Street Bank and Trust Company at
4.00%, dated 4/30/96, due 5/1/96
(collateralized by U.S. Treasury Bill 5.16%,
1/9/97 valued at $1,464,876)
(Cost $1,433,000)......................... 1,433,000 1,433,000
----- -----------
SUMMARY
Total investments
(Cost $22,736,219) (b).................... 100.5 28,990,193
Other assets and liabilities, net............ (0.5) (140,957)
----- -----------
NET ASSETS..................................... 100.0 $28,849,236
===== ===========
</TABLE>
- --------
NOTES:
(a) Non-income producing securities.
(b) See Note 3 for cost for federal income tax purposes and related gross
unrealized appreciation (depreciation).
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Mutual Funds 43
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSABLE
RATE GOVERNMENT TAX FREE VALUE GROWTH
FUND FUND FUND FUND FUND
---------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at market
value (identified cost
$7,457,497,
$968,634,550,
$24,572,094,
$24,031,015 and
$22,736,219,
respectively) (Notes 2
and 3)................. $7,540,130 $ 962,644,743 $24,430,586 $27,616,605 $28,990,193
Cash.................... 98 28,174 60,626 129 688
Receivables:
Fund shares sold...... -- 36,399 45,012 271,199 213,292
Dividends............. -- -- -- 44,667 5,277
Interest.............. 49,125 7,847,894 504,381 2,741 7,126
Investments sold...... -- 13,388 -- -- --
Adviser (Note 4)...... 15,333 44,077 68,653 29,020 32,890
Deferred organization
costs (Note 2)......... 29,183 -- 29,183 29,183 29,183
Prepaid expenses........ 11,884 18,023 12,463 12,488 13,028
---------- -------------- ----------- ----------- -----------
Total assets............ 7,645,753 970,632,698 25,150,904 28,006,032 29,291,677
---------- -------------- ----------- ----------- -----------
LIABILITIES
Payables:
Fund shares redeemed.. -- 2,744,583 24,691 39,490 29,952
Investments purchased. 211,813 17,713,433 279,330 377,560 275,362
Dividends............. 10,182 1,460,038 30,001 -- --
Daily variation margin
on open futures
contracts
(Notes 2 and 3)...... -- 176,807 -- -- --
Accrued distribution
fee (Note 4)......... 14,671 1,946,834 30,480 42,645 43,599
Accrued management fee
(Note 4)............. 2,414 486,363 11,496 16,327 17,864
Other accrued expenses
and payables......... 67,744 440,850 74,887 74,184 75,664
---------- -------------- ----------- ----------- -----------
Total liabilities....... 306,824 24,968,908 450,885 550,206 442,441
---------- -------------- ----------- ----------- -----------
NET ASSETS.............. $7,338,929 $ 945,663,790 $24,700,019 $27,455,826 $28,849,236
========== ============== =========== =========== ===========
</TABLE>
(CONTINUED)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
44 Investors Trust Mutual Funds
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES, CONTINUED
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSABLE
RATE GOVERNMENT TAX FREE VALUE GROWTH
FUND FUND FUND FUND FUND
---------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSETS CONSIST OF
(Note 2):
Undistributed
(accumulated
distributions in
excess of) net
investment income
(loss)............... $ (7,992) $ (8,980,801) $ (10,044) $ 6,651 $ (74,703)
Accumulated net
realized gains
(losses)............. (186,397) (185,450,125) (165,562) 1,201,308 (221,566)
Unrealized
appreciation
(depreciation) on
investments (Note 3). 82,633 (5,989,807) (141,508) 3,585,590 6,253,974
Unrealized
(depreciation) on
futures contracts
(Note 3)............. -- (6,555,638) -- -- --
Shares of beneficial
interest............. 7,450,685 1,152,640,161 25,017,133 22,662,277 22,891,531
---------- -------------- ----------- ----------- -----------
NET ASSETS.............. $7,338,929 $ 945,663,790 $24,700,019 $27,455,826 $28,849,236
========== ============== =========== =========== ===========
CLASS A:
NET ASSETS.............. $5,565,477 $ 25,861,882 $15,900,534 $ 5,082,452 $ 7,203,608
========== ============== =========== =========== ===========
Outstanding shares of
beneficial interest (No
par value)............. 876,912 3,079,500 1,421,832 517,470 584,129
Net asset value and
redemption price per
share.................. $ 6.35 $ 8.40 $ 11.18 $ 9.82 $ 12.33
Maximum offering price
per share (100/95.5 of
net asset value per
share)................. $ 6.65 $ 8.80 $ 11.71 $ 10.28 $ 12.91
CLASS B:
NET ASSETS.............. $1,773,452 $ 919,801,908 $ 8,799,485 $22,373,374 $21,645,628
========== ============== =========== =========== ===========
Outstanding shares of
beneficial interest (No
par value)............. 279,328 109,441,002 785,939 2,282,146 1,789,349
Net asset value and
offering price per
share (Note 4)......... $ 6.35 $ 8.40 $ 11.20 $ 9.80 $ 12.10
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
Investors Trust Mutual Funds 45
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTABLE
RATE GOVERNMENT TAX FREE VALUE GROWTH
FUND FUND FUND FUND FUND
---------- ----------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest................ $226,555 $38,676,612 $621,902 $ 20,134 $ 78,642
Dividends............... -- -- -- 246,475 71,668
-------- ----------- -------- ---------- ----------
Total Income............ 226,555 38,676,612 621,902 266,609 150,310
-------- ----------- -------- ---------- ----------
EXPENSES:
Management fee (Note
4)................... 14,776 3,216,475 71,332 88,503 95,020
Distribution fees--
Class B (Note 4)..... 7,008 3,865,250 32,175 65,757 64,607
Shareholder servicing
fees (Note 4):
Class A............. 6,898 33,251 20,306 5,770 8,150
Class B............. 2,337 1,288,370 10,746 21,933 21,543
Transfer agent fee.... 33,698 495,540 34,942 39,856 40,948
Custodian fee......... 37,884 130,030 47,682 45,074 46,318
Amortization of
organization costs
(Note 2)............. 6,193 -- 6,193 6,193 6,193
Registration fees..... 11,890 9,880 11,890 11,890 11,890
Shareholder reports... 84 5,199 147 382 458
Professional fees..... 6,764 28,360 7,492 5,308 5,460
Insurance............. 364 50,778 910 728 546
Trustees' fees and
expenses............. -- 8,796 182 182 182
Other................. 1,578 187,887 2,214 4,709 5,240
-------- ----------- -------- ---------- ----------
Total expenses before
reimbursement from
Adviser................ 129,474 9,319,816 246,211 296,285 306,555
Reimbursement of
expenses from Adviser
(Note 4)............... (87,375) -- (246,211) (81,016) (81,542)
-------- ----------- -------- ---------- ----------
Expenses, net........... 42,099 9,319,816 -- 215,269 225,013
-------- ----------- -------- ---------- ----------
Net investment income
(loss)................. 184,456 29,356,796 621,902 51,340 (74,703)
-------- ----------- -------- ---------- ----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss)
from:
Investment
transactions (Notes 2
and 3)............... (11,276) 10,849,930 10,803 1,201,295 (20,059)
Option contracts...... -- (1,606,786) -- -- --
Futures contracts..... -- 1,669,417 -- -- --
Net increase (decrease)
in unrealized
appreciation
(depreciation) during
the period from:
Investment
transactions......... (34,921) (31,960,693) (317,810) 972,561 2,029,231
Option contracts...... -- (346,868) -- -- --
Futures contracts..... -- (7,218,283) -- -- --
-------- ----------- -------- ---------- ----------
Net realized and
unrealized gain (loss)
on investments......... (46,197) (28,613,283) (307,007) 2,173,856 2,009,172
-------- ----------- -------- ---------- ----------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. $138,259 $ 743,513 $314,895 $2,225,196 $1,934,469
======== =========== ======== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
46
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ADJUSTABLE RATE FUND
-------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
-------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss).................. $184,456 $348,384
Net realized gain (loss) from:
Investment transactions....................... (11,276) (114,498)
Option contracts.............................. -- --
Futures contacts.............................. -- --
Net increase (decrease) in unrealized
appreciation (depreciation) during the period
from:
Investment transactions....................... (34,921) 399,103
Option contracts.............................. -- --
Futures contracts............................. -- --
-------- --------
Net increase in net assets resulting from
operations.................................... 138,259 632,989
-------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 2):
Net investment income
Class A....................................... (143,108) (255,493)
Class B....................................... (41,454) (86,152)
Distributions in excess of net investment
income
Class A....................................... -- --
Class B....................................... -- --
Net realized gains
Class A....................................... -- --
Class B....................................... -- --
Tax return of capital
Class A....................................... -- --
Class B....................................... -- --
-------- --------
Total distributions to shareholders........... (184,562) (341,645)
-------- --------
Increase (decrease) in net assets from
operations and net of distributions.......... (46,303) 291,344
-------- --------
</TABLE>
<PAGE>
Investors Trust Mutual Funds 47
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT FUND TAX FREE FUND VALUE FUND GROWTH FUND
- -------------------------------- ------------------------------- ------------------------------- -------------------------------
SIX MONTH SIX MONTH SIX MONTH SIX MONTH
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
APRIL 30, 1996 YEAR ENDED APRIL 30, 1996 YEAR ENDED APRIL 30, 1996 YEAR ENDED APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995 (UNAUDITED) OCTOBER 31, 1995 (UNAUDITED) OCTOBER 31, 1995 (UNAUDITED) OCTOBER 31, 1995
- -------------- ---------------- -------------- ---------------- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 29,356,796 $72,865,401 $621,902 $1,059,944 $ 51,340 $ 164,706 $ (74,703) $ (58,950)
10,849,930 (91,789,975) 10,803 (176,365) 1,201,295 259,945 (20,059) 342,457
(1,606,786) 3,752,499 -- -- -- -- -- --
1,669,417 (19,046,779) -- -- -- -- -- --
(31,960,693) 162,482,101 (317,810) 1,523,607 972,561 2,455,927 2,029,231 3,431,356
(346,868) (103,818) -- -- -- -- -- --
(7,218,283) (521,730) -- -- -- -- -- --
------------ ----------- -------- ---------- ---------- ---------- ---------- ----------
743,513 127,637,699 314,895 2,407,186 2,225,196 2,880,578 1,934,469 3,714,863
------------ ----------- -------- ---------- ---------- ---------- ---------- ----------
(837,035) (1,526,928) (393,240) (757,133) (26,059) (66,092) -- --
(28,519,761) (70,538,669) (207,841) (302,811) (38,333) (128,160) -- --
(167,507) -- -- (5,654) -- -- -- --
(6,653,137) -- -- (1,064) -- -- -- --
-- -- -- -- (35,365) -- -- --
-- -- -- -- (131,342) -- -- --
-- (350,222) -- -- -- -- -- --
-- (15,756,626) -- -- -- -- -- --
------------ ----------- -------- ---------- ---------- ---------- ---------- ----------
(36,177,440) (88,172,445) (601,081) (1,066,662) (231,099) (194,252) -- --
------------ ----------- -------- ---------- ---------- ---------- ---------- ----------
(35,433,927) 39,465,254 (286,186) 1,340,524 1,994,097 2,686,326 1,934,469 3,714,863
------------ ----------- -------- ---------- ---------- ---------- ---------- ----------
</TABLE>
(CONTINUED)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
48
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
<TABLE>
<CAPTION>
ADJUSTABLE RATE FUND
-------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
-------------- ----------------
<S> <C> <C>
SHARE TRANSACTIONS:
Proceeds from sale of shares
Class A....................................... $ 22,308 $ 92,790
Class B....................................... 208,497 621,653
Reinvestment of distributions
Class A....................................... 140,952 255,434
Class B....................................... 37,755 75,951
Cost of shares redeemed
Class A....................................... (34,781) (155,685)
Class B....................................... (323,826) (1,331,051)
---------- ----------
Net increase (decrease) in net assets
resulting from share transactions............ 50,905 (440,908)
---------- ----------
INCREASE (DECREASE) IN NET ASSETS.............. 4,602 (149,564)
Net assets at beginning of period.............. 7,334,327 7,483,891
---------- ----------
NET ASSETS AT END OF PERIOD.................... $7,338,929 $7,334,327
========== ==========
Undistributed (accumulated distributions in
excess of) net investment income (loss) at end
of period..................................... $ (7,992) $ (7,886)
========== ==========
FUND SHARE INFORMATION:
Shares sold
Class A....................................... 3,505 14,962
Class B....................................... 32,502 100,668
Shares issued upon reinvestment of
distributions
Class A....................................... 22,011 40,886
Class B....................................... 5,894 12,183
Shares redeemed
Class A....................................... (5,454) (24,589)
Class B....................................... (50,551) (214,247)
---------- ----------
Increase (decrease) in Fund shares
outstanding.................................. 7,907 (70,137)
========== ==========
</TABLE>
<PAGE>
Investors Trust Mutual Funds 49
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT FUND TAX FREE FUND VALUE FUND GROWTH FUND
- --------------------------------- ------------------------------- ------------------------------- -------------------------------
SIX MONTH SIX MONTH SIX MONTH SIX MONTH
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
APRIL 30, 1996 YEAR ENDED APRIL 30, 1996 YEAR ENDED APRIL 30, 1996 YEAR ENDED APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995 (UNAUDITED) OCTOBER 31, 1995 (UNAUDITED) OCTOBER 31, 1995 (UNAUDITED) OCTOBER 31, 1995
- -------------- ---------------- -------------- ---------------- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 4,409,444 $ 8,609,994 $ 236,207 $ 880,743 $ 620,512 $ 672,875 $ 907,171 $ 808,948
7,160,348 27,416,014 1,899,614 3,589,195 8,030,215 6,719,785 8,044,216 8,349,943
442,868 756,378 11,209 29,828 61,163 65,700 -- --
18,031,142 44,126,875 156,941 235,800 162,033 122,526 -- --
(4,952,505) (4,698,858) (194,848) (139,636) (104,751) (554,145) (225,806) (252,247)
(183,135,857) (250,379,643) (815,892) (1,516,243) (1,840,276) (2,417,639) (2,108,001) (2,363,580)
- -------------- -------------- ----------- ----------- ----------- ----------- ----------- -----------
(158,044,560) (174,169,240) 1,293,231 3,079,687 6,928,896 4,609,102 6,617,580 6,543,064
- -------------- -------------- ----------- ----------- ----------- ----------- ----------- -----------
(193,478,487) (134,703,986) 1,007,045 4,420,211 8,922,993 7,295,428 8,552,049 10,257,927
1,139,142,277 1,273,846,263 23,692,974 19,272,763 18,532,833 11,237,405 20,297,187 10,039,260
- -------------- -------------- ----------- ----------- ----------- ----------- ----------- -----------
$ 945,663,790 $1,139,142,277 $24,700,019 $23,692,974 $27,455,826 $18,532,833 $28,849,236 $20,297,187
============== ============== =========== =========== =========== =========== =========== ===========
$ (8,980,801) $ (2,160,157) $ (10,044) $ (30,865) $ 6,651 $ 19,703 $ (74,703) $ --
============== ============== =========== =========== =========== =========== =========== ===========
512,337 1,000,291 20,841 78,630 65,600 81,551 77,656 76,934
824,659 3,226,626 166,350 324,101 841,461 836,647 695,159 851,970
51,145 88,729 984 2,699 6,597 8,245 -- --
2,079,571 5,183,091 13,763 21,419 17,596 15,288 -- --
(573,148) (549,320) (17,120) (12,988) (10,974) (68,803) (19,305) (25,720)
(21,145,866) (29,418,333) (71,432) (139,086) (194,360) (297,365) (182,657) (245,024)
- -------------- -------------- ----------- ----------- ----------- ----------- ----------- -----------
(18,251,302) (20,468,916) 113,386 274,775 725,920 575,563 570,853 658,160
============== ============== =========== =========== =========== =========== =========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
50
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------ ---------------------------------------------------------
NET ASSET NET NET REALIZED TOTAL IN EXCESS NET
VALUE AT INVESTMENT AND UNREALIZED FROM NET OF NET REALIZED TAX
BEGINNING INCOME GAINS(LOSSES) INVESTMENT INVESTMENT INVESTMENT OF CAPITAL RETURN TOTAL
PERIOD ENDED OF PERIOD (LOSS) ON INVESTMENTS OPERATIONS INCOME INCOME GAINS OF CAPITAL DISTRIBUTIONS
------------ --------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADJUSTABLE RATE FUND
Class A Apr-30-96 (a) $6.39 $.16 $(.04) $.12 $(.16) $-- $-- $-- $(.16)
Oct-31-95 6.14 .31 .24 .55 (.30) -- -- -- (.30)
Oct-31-94 6.49 .25 (.35) (.10) (.23) (.01) -- (.01) (.25)
Oct-31-93 (b) 6.50 .03 (.01) .02 (.03) -- -- -- (.03)
--------------------------------------------------------------------------------------------------------------------------
Class B Apr-30-96 (a) 6.39 .14 (.04) .10 (.14) -- -- -- (.14)
Oct-31-95 6.14 .26 .24 .50 (.25) -- -- -- (.25)
Oct-31-94 6.48 .21 (.34) (.13) (.19) (.01) -- (.01) (.21)
Oct-31-93 (b) 6.50 .02 (.02) -- (.02) -- -- -- (.02)
- -------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT FUND
Class A Apr-30-96 (a) 8.70 .28 (.25) .03 (.28) (.05) -- -- (.33)
Oct-31-95 8.43 .58 .38 .96 (.58) -- -- (.11) (.69)
Oct-31-94 10.14 .70 (1.60) (.90) (.70) (.03) (.08) -- (.81)
Oct-31-93 (b) 10.32 .12 (.18) (.06) (.12) -- -- -- (.12)
--------------------------------------------------------------------------------------------------------------------------
Class B Apr-30-96 (a) 8.71 .23 (.25) (.02) (.23) (.06) -- -- (.29)
Oct-31-95 8.42 .51 .41 .92 (.52) -- -- (.11) (.63)
Oct-31-94 10.14 .60 (1.58) (.98) (.60) -- (.03) (.11) (.74)
Oct-31-93 9.95 .71 .20 .91 (.71) (.01) -- -- (.72)
Oct-31-92 9.98 .73 .03 .76 (.73) -- (.06) -- (.79)
Oct-31-91 9.54 .72 .56 1.28 (.72) -- (.11) (.01) (.84)
- -------------------------------------------------------------------------------------------------------------------------------
TAX FREE FUND
Class A Apr-30-96 (a) 11.31 .29 (.14) .15 (.28) -- -- -- (.28)
Oct-31-95 10.59 .55 .73 1.28 (.55) (.01) -- -- (.56)
Oct-31-94 11.48 .45 (.78) (.33) (.45) (.11) -- -- (.56)
Oct-31-93 (b) 11.50 .05 .01 .06 (.05) (.02) -- (.01) (.08)
--------------------------------------------------------------------------------------------------------------------------
Class B Apr-30-96 (a) 11.32 .29 (.13) .16 (.28) -- -- -- (.28)
Oct-31-95 10.60 .55 .73 1.28 (.55) (.01) -- -- (.56)
Oct-31-94 11.48 .43 (.82) (.39) (.43) (.06) -- -- (.49)
Oct-31-93 (b) 11.50 .06 (.01) .05 (.03) (.03) -- (.01) (.07)
- -------------------------------------------------------------------------------------------------------------------------------
VALUE FUND
Class A Apr-30-96 (a) 8.95 .05 .87 .92 (.05) (.07) -- -- (.12)
Oct-31-95 7.51 .14 1.45 1.59 (.14) (.01) -- -- (.15)
Oct-31-94 7.63 .13 (.16) (.03) (.09) -- -- -- (.09)
Oct-31-93 (b) 7.50 .01 .12 .13 -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
Class B Apr-30-96 (a) 8.93 .02 .87 .89 (.02) (.07) -- -- (.09)
Oct-31-95 7.50 .07 1.45 1.52 (.07) (.02) -- -- (.09)
Oct-31-94 7.64 .08 (.17) (.09) (.05) -- -- -- (.05)
Oct-31-93 (b) 7.50 (.01) .15 .14 -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
GROWTH FUND
Class A Apr-30-96 (a) 11.38 -- .95 .95 -- -- -- -- --
Oct-31-95 8.81 .01 2.56 2.57 -- -- -- -- --
Oct-31-94 8.69 (.01) .21 .20 (.08) -- -- -- (.08)
Oct-31-93 (b) 8.50 -- .19 .19 -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
Class B Apr-30-96 (a) 11.21 (.04) .93 .89 -- -- -- -- --
Oct-31-95 8.74 (.05) 2.52 2.47 -- -- -- -- --
Oct-31-94 8.70 (.04) .16 .12 (.08) -- -- -- (.08)
Oct-31-93 (b) 8.50 -- .20 .20 -- -- -- -- --
</TABLE>
- --------
(a) For the six month period ended April 30, 1996 (unaudited).
(b) For the period September 8, 1993 (commencement of operations) to October
31, 1993.
(c) Annualized.
<PAGE>
Investors Trust Mutual Funds 51
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------------------
RATIO TO AVERAGE
DAILY NET ASSETS(%)(C)
----------------------------
NET INCREASE NET ASSET INVESTMENT
(DECREASE) VALUE AT INCOME NET ASSETS, REIMBURSEMENT AVERAGE
IN NET ASSET END TOTAL NET GROSS (LOSS), PORTFOLIO END OF PERIOD FOR EXPENSES COMMISSION
VALUE OF PERIOD RETURN(%)(D) EXPENSES EXPENSES NET TURNOVER(%) (MILLIONS) FROM ADVISOR RATE(E)
- ------------ --------- ------------ -------- -------- ---------- ----------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$(.04) $$6.35 1.97 0.95 3.32 5.19 45.87 $ 5.6 $0.075 N/A
.25 6.39 9.20 0.95 2.96 4.91 53.07 5.5 0.126 N/A
(.35) 6.14 (1.49) 0.95 2.86 4.04 115.55 5.1 0.120 N/A
(.01) 6.49 0.26 0.98 3.24 2.78 0.34 5.1 0.003 N/A
- --------------------------------------------------------------------------------------------------------------------
(.04) 6.35 1.59 1.70 4.07 4.44 45.87 1.8 0.076 N/A
.25 6.39 8.39 1.70 3.71 4.18 53.07 1.8 0.124 N/A
(.34) 6.14 (2.07) 1.70 3.51 3.48 115.55 2.4 0.108 N/A
(.02) 6.48 0.03 1.61 3.58 2.57 0.34 0.1 0.003 N/A
- --------------------------------------------------------------------------------------------------------------------
(.30) 8.40 0.25 1.04 1.04 6.31 213.58 25.9 N/A N/A
.27 8.70 11.77 1.01 1.01 6.78 315.71 27.0 N/A N/A
(1.71) 8.43 (9.17) 0.99 0.99 7.09 128.82 22.0 N/A N/A
(.18) 10.14 (0.60) 0.95 0.95 6.81 75.96 1.0 N/A N/A
- --------------------------------------------------------------------------------------------------------------------
(.31) 8.40 (0.24) 1.78 1.78 5.54 213.58 919.8 N/A N/A
.29 8.71 11.19 1.76 1.76 6.08 315.71 1,112.0 N/A N/A
(1.72) 8.42 (9.98) 1.76 1.76 6.45 128.82 1,252.0 N/A N/A
.19 10.14 9.48 1.73 1.73 6.96 75.96 1,343.0 N/A N/A
(.03) 9.95 7.74 1.64 1.64 7.08 101.31 786.0 N/A N/A
.44 9.98 14.08 1.81 1.81 7.11 111.97 213.0 N/A N/A
- --------------------------------------------------------------------------------------------------------------------
(.13) 11.18 1.37 -- 1.74 5.05 2.34 15.9 0.099 N/A
.72 11.31 12.24 -- 1.81 5.01 24.95 16.0 0.199 N/A
(.89) 10.59 (2.99) 0.77 1.62 4.08 -- 14.3 0.094 N/A
(.02) 11.48 0.54 1.15 2.09 2.73 -- 15.1 0.002 N/A
- --------------------------------------------------------------------------------------------------------------------
(.12) 11.20 1.37 -- 2.49 5.05 2.34 8.8 0.143 N/A
.72 11.32 12.33 -- 2.56 5.01 24.95 7.7 0.287 N/A
(.88) 10.60 (3.45) 1.14 2.30 3.75 -- 5.0 0.122 N/A
(.02) 11.48 0.43 1.84 2.48 2.27 -- 1.2 0.003 N/A
- --------------------------------------------------------------------------------------------------------------------
.80 9.75 11.24 1.35 2.08 1.07 38.43 5.1 0.032 $0.050
1.44 8.95 21.45 1.35 2.43 1.71 27.41 4.1 0.086 N/A
(.12) 7.51 (0.32) 1.35 3.55 1.92 14.53 3.2 0.165 N/A
.13 7.63 1.73 1.42 6.37 0.73 6.04 2.2 0.008 N/A
- --------------------------------------------------------------------------------------------------------------------
.80 9.73 10.88 2.10 2.83 0.30 38.43 22.4 0.037 $0.050
1.43 8.93 20.50 2.10 3.18 0.94 27.41 14.4 0.083 N/A
(.14) 7.50 (1.10) 2.10 4.02 1.09 14.53 8.0 0.163 N/A
.14 7.64 1.87 2.04 6.38 (1.07) 6.04 0.5 0.002 N/A
- --------------------------------------------------------------------------------------------------------------------
.95 12.33 8.35 1.35 2.04 (0.08) 22.36 7.2 0.038 $0.050
2.57 11.38 29.17 1.35 2.44 0.10 73.74 6.0 0.100 N/A
.12 8.81 2.48 1.34 3.53 (0.11) 100.41 4.2 0.182 N/A
.19 8.69 2.24 1.39 4.83 (0.30) 46.31 3.3 0.006 N/A
- --------------------------------------------------------------------------------------------------------------------
.89 12.10 7.94 2.10 2.79 (0.84) 22.36 21.6 0.033 $0.050
2.47 11.21 28.26 2.10 3.19 (0.66) 73.74 14.3 0.082 N/A
.04 8.74 1.67 2.09 4.06 (0.82) 100.41 5.8 0.176 N/A
.20 8.70 2.35 1.86 5.04 (1.38) 46.31 0.6 0.001 N/A
</TABLE>
- --------
(d) A contingent deferred sales charge of 5% the first year, declining by 1%
per year for five years, was not reflected in total return calculations.
Periods less than one year are not annualized.
(e) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of security
trades on which commissions are charged.
<PAGE>
52 Investors Trust Mutual Funds
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. ORGANIZATION. Investors Trust (the "Trust") is organized as a Massachusetts
Business Trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The Trust
is a series of funds, currently comprised of five investment portfolios (the
"Funds"), four of which commenced operations as of September 8, 1993 the
Adjustable Rate Fund, the Tax Free Fund, the Value Fund and the Growth Fund,
and one, the Government Fund, which commenced operations as of April 22, 1987.
Under the Trust's Multiple Class Distribution System (the "Multiple Class
Arrangement"), the Funds currently offer to the general public two classes of
shares of beneficial interest, no par value, which may be purchased at a price
equal to the next determined net asset value per share plus a sales charge
which, at the election of the purchaser, may be imposed (i) at the time of
purchase (Class A shares) or (ii) on a deferred basis (Class B shares).
Class B shares, including a pro rata portion of the shares received as
distributions with respect to such shares, will automatically convert to Class
A shares of the Funds at the end of eight years following the issuance of the
Class B shares. The date of issuance for purposes of conversion of shares in
the Government Fund which were held on September 7, 1993 shall be the original
date of acquisition of such shares.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of the Funds' financial
statements in accordance with generally accepted accounting principles,
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. The
following is a summary of significant accounting policies followed
consistently by the Funds.
Securities Valuation. Securities (including options) listed or traded on an
exchange or quoted on NASDAQ are valued at their last sale prices prior to the
time when assets are valued. Lacking any sales on that day, securities are
valued at the mean between the current closing bid and asked prices. Other
securities for which market quotations are readily available are valued at the
last bid price quoted prior to the time when assets are valued ("market
value"). Certain securities, (including most tax-exempt debt obligations) are
valued primarily utilizing such pricing services as may be deemed appropriate.
The pricing services utilize information with respect to market transactions,
quotations from dealers and various relationships among securities in
determining value and may provide prices determined as of times prior to the
close of the New York Stock Exchange. Investments in certain long-term debt
securities not traded in an organized market are valued primarily based on
market quotations provided by recognized dealers of such securities. Other
securities for which market quotations are not readily available, such as
restricted securities, or where pricing occurs during periods of market
disruption, are valued in good faith by or under the authority of the Trustees
of the Trust. Short-term investments maturing within 60 days are valued at
original cost plus accreted discount or accrued interest, which approximates
market value.
Securities Transactions and Related Investment Income. Sales and purchases
are accounted for as of trade date. Realized securities gains or losses are
determined using the identified cost method for both financial and
<PAGE>
Investors Trust Mutual Funds 53
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
tax reporting purposes. Dividend income is recorded on the ex-dividend date.
Interest income is accrued pro rata to maturity. Original issue discount is
accreted for financial and tax accounting purposes.
Futures Contracts. Each of the Funds may purchase and sell futures contracts,
subject to certain limitations. The Government Fund uses interest rate futures
contracts as a hedge against changes in interest rates. Upon entering into a
futures contract, each Fund is required to deposit with a broker an amount
("initial margin") equal to a certain percentage of the face amount of the
futures contract. Subsequent payments ("variation margin") are made or
received by the Fund each day, dependent on the daily fluctuations in the
value of the unrealized gains and losses by the Fund. If the Fund enters into
a closing transaction, the Fund will realize, for book purposes, a gain or
loss equal to the difference between the value of the futures contract to sell
and the futures contract to buy. The Fund may be subject to risk upon entering
into futures contracts resulting from the imperfect correlation of prices
between the futures and securities markets.
Options on Futures Contracts. Each Fund may purchase and sell listed call and
put options on futures contracts. The Government Fund uses options on interest
rate futures contracts as a hedge against changes in interest rates. Options
are valued in accordance with the security valuations policies described
above. Transactions in options on futures contracts involve similar risks to
those on futures contracts.
Securities Purchased on a When-Issued Basis. Each Fund may enter into firm
commitment agreements ("TBA" or "when-issued" purchases) for the purchase of
securities at an agreed-upon price on a specified future date. A Fund will not
enter into such agreements for the purpose of investment leverage.
Liability for the purchase price and all the rights and risks of ownership of
the securities accrue to a Fund at the time it becomes obligated to purchase
the securities, although delivery and payment occur at a later date, generally
within 45 days (but not to exceed 120 days) of the date of the commitment to
purchase. Accordingly, if the market price of the security should decline, the
effect of the agreement would be to obligate the Fund to purchase the security
at the price above the current market price on the date of delivery and
payment. During the time the Fund is obligated to purchase such securities, it
will maintain with the Custodian a segregated account with U.S. government
securities or cash or cash equivalents (or a receivable for investment sold in
connection therewith) of an aggregate current value sufficient to make payment
for the securities.
Repurchase Agreements. Each Fund may enter into repurchase agreements in
order to generate additional income. Each repurchase agreement entered into by
a Fund will provide that the value of the collateral underlying the repurchase
agreement will always be at least 102% of the repurchase price, including
accrued interest, except for repurchase agreements entered into with a
broker/dealer or bank whose unsecured debt is rated AAA or whose commercial
paper is rated A-1+ by Standard and Poor's in which case the value of the
collateral will always be at least 100% of the repurchase price, including
accrued interest. A Fund will not enter into a repurchase agreement having
more than seven days remaining to maturity if, as a result, such agreements,
together with any other securities which are not readily marketable, would
exceed 10% of the net assets of the Fund. In addition, not more than one-third
of the current market value of the Fund's total assets shall constitute
secured "loans" by the Fund under repurchase agreements.
<PAGE>
54 Investors Trust Mutual Funds
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
Federal Income Taxes. As a Massachusetts Business Trust, each Fund is a
separate corporate taxpayer and determines its net investment income and
capital gains (or losses) and the amounts to be distributed to the Fund's
shareholders without regard to the income and capital gains (or losses) of the
other Funds. It is the intent of the Funds to comply with the requirements of
the Internal Revenue Code which are applicable to regulated investment
companies and to distribute substantially all of their taxable income to their
shareholders. Accordingly, the Funds paid no federal taxes and no federal
income or excise tax provisions were required. Distributions in excess of
taxable income on an annual basis are deemed to be a return of capital. For
Federal income tax purposes, any futures contracts or options on futures
contracts which remain open at fiscal year-end are marked-to-market and the
resultant net gain or loss is included in Federal taxable income. As of
October 31, 1995, the Funds had net tax basis capital loss carryforwards which
may be applied against taxable gains until their expiration dates as follows:
<TABLE>
<CAPTION>
EXPIRATION
DATES
FUND AMOUNT (OCTOBER 31,)
---- ------------ -------------
<S> <C> <C>
Adjustable Rate Fund $ 72,067 2002
103,054 2003
Government Fund................................ 87,661,793 2002
107,491,620 2003
Tax Free Fund.................................. 176,365 2003
Growth Fund.................................... 201,507 2002
</TABLE>
Distribution of Income and Gains. The Government and Tax Free Funds will
declare a distribution each day in an amount based on periodic projections of
their future net investment income and will pay such distributions monthly.
Consequently, the amount of each daily distribution may differ from actual net
investment income. Net investment income for the Adjustable Rate Fund is
declared as dividends to shareholders of record as of the close of business
each day and is paid to shareholders monthly. Distributions of net investment
income are declared and paid, quarterly for the Value Fund and annually for
the Growth Fund. During any particular year, net realized gains from
investment transactions in excess of any available capital loss carryforwards,
would be taxable to the Funds if not distributed and, therefore, will be
declared and paid to their shareholders annually.
Capital Accounts. The Funds report the undistributed net investment income
(accumulated net investment loss) and accumulated net realized gain (loss)
accounts on a basis approximating amounts available for future tax
distributions (or to offset future taxable realized gains when a capital loss
carryforward is available). Accordingly, the Funds may periodically make
reclassifications among certain capital accounts without impacting the net
asset values of the Funds.
Deferred Organizational and Registration Costs. Costs incurred by a Fund in
connection with its organization and registration of shares have been deferred
and are being amortized on a straight-line basis over a period 60 months from
commencement of investment operations. Costs incurred for subsequent
registration of shares will be amortized on a straight-line basis over the
lesser of the duration of the registration period or 12 months.
<PAGE>
Investors Trust Mutual Funds 55
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
Expenses. Expenses such as management fees, distribution fees, custodian
fees, transfer agent fees, and registration fees are charged directly to each
Fund, while indirect expenses, such as shareholder reports, professional fees,
trustee fees and expenses, and insurance are allocated among the Funds
principally based on their relative average net assets. Portfolio-level
expenses are allocated to each class of shares based upon the relative
percentage of current net assets of dividend-eligible shares. All expenses
that are directly attributable to a specific class of shares, such as legal
expenses and Trustees' fees incurred as a result of issues relating solely to
one class and distribution fees, are allocated to that class.
3. PURCHASES AND SALES OF SECURITIES. The cost of purchases and the proceeds
from sales and paydowns of investments other than U.S. Government and agency
securities, short term investments and options, for the six months ended April
30, 1996, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
---- ----------- ----------
<S> <C> <C>
Adjustable Rate Fund............................... $ 782,855 $ --
Tax Free Fund...................................... 2,303,582 562,627
Value Fund......................................... 15,361,951 8,382,786
Growth Fund........................................ 10,330,288 4,766,278
</TABLE>
No paydowns of investments other than U.S. Government and agency securities,
short term investments and options, were received during the six months ended
April 30, 1996.
The cost of purchases and the proceeds from sales and paydowns of long-term
U.S. Government and agency securities, for the six months ended April 30,
1996, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES PAYDOWNS
---- -------------- -------------- -----------
<S> <C> <C> <C>
Adjustable Rate Fund............ $ 3,212,792 $ 2,748,861 $ 590,918
Government Fund................. 2,271,850,766 2,432,339,218 39,598,524
Value Fund...................... 16,212 -- --
</TABLE>
At April 30, 1996, the security pledged to cover margin requirements for open
futures contracts on United States Treasury Bonds for the Government Fund was
as follows:
<TABLE>
<CAPTION>
MARKET
DESCRIPTION FACE VALUE VALUE
- ----------- ---------- ----------
<S> <C> <C>
Federal National Mortgage Association Medium Term Note,
12.000%, 11/13/00....................................... $2,500,000 $3,022,275
========== ==========
</TABLE>
<PAGE>
56 Investors Trust Mutual Funds
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
Transactions in options purchased on U.S. Treasury bond futures for the
Government Fund were as follows:
<TABLE>
<CAPTION>
FACE VALUE NET
COVERED BY PREMIUMS
PURCHASED OPTIONS PAID
----------------- -----------
<S> <C> <C>
Outstanding at October 31,1995................... $ 31,008,000 $ 766,632
Purchased........................................ 262,962,000 3,044,413
Terminated in closing purchase transactions...... (262,962,000) (3,044,413)
Expired.......................................... (31,008,000) (766,632)
------------- -----------
Outstanding at April 30,1996..................... $ -- $ --
============= ===========
</TABLE>
Aggregate gross unrealized appreciation (depreciation) of investments for
each Fund at April 30, 1996 was as follows:
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
FUND APPRECIATION (DEPRECIATION) (DEPRECIATION)
- ---- ------------ -------------- --------------
<S> <C> <C> <C>
Adjustable Rate Fund................. $ 133,073 $ (50,440) $ 82,633
Government Fund...................... 8,344,555 (14,334,362) (5,989,807)
Tax Free Fund........................ 128,525 (270,033) (141,508)
Value Fund........................... 3,832,885 (247,295) 3,585,590
Growth Fund.......................... 6,629,623 (375,649) 6,253,974
</TABLE>
The aggregate cost of each Fund's investments was the same for book and
federal income tax purposes at April 30, 1996.
4. MANAGEMENT, DISTRIBUTION AND TRUSTEES' FEES. Under Advisory agreements
between the Funds and GNA Capital Management, Inc. ("the Adviser"), each of
the Funds agree to pay the Adviser a fee based on its average daily net assets
as follows:
Adjustable Rate Fund. The Adviser's fee is calculated at an annual rate of
.40% of the average daily net assets.
Government Fund. The Adviser's fee is calculated based upon the Fund's
average daily net assets, equal to an annual rate of .65% of the first $500
million, .60% of the next $250 million, .55% of the next $500 million, .50% of
the next $250 million and .45% of average daily net assets over $1.5 billion.
For the six months ended April 31, 1996, the Adviser's fee was equivalent to
an annual effective rate of .61% of the Fund's average daily net assets.
Tax Free Fund. The Adviser's fee is calculated based upon the Fund's average
daily net assets, equal to an annual rate of .60% of the first $20 million,
.50% of the next $80 million and .45% of average daily net assets in excess of
$100 million. For the six months ended April 31, 1996, the Adviser's fee was
equivalent to an annual effective rate of .58% of the Fund's average daily net
assets.
<PAGE>
Investors Trust Mutual Funds 57
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
Value Fund. The Adviser's fee is calculated based upon the Fund's average
daily net assets, equal to an annual rate of .80% of the first $100 million
and .70% of average daily net assets in excess of $100 million.
Growth Fund. The Adviser's fee is calculated based upon the Fund's average
daily net assets, equal to an annual rate of .80% of the first $100 million
and .70% of average daily net assets in excess of $100 million.
The Adviser has agreed to reimburse the Classes of the following Funds, for
expenses incurred by the Classes to the extent that such expenses exceed the
following percentages of average daily net assets during the six months ended
April 30, 1996:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B
---- ------- -------
<S> <C> <C>
Adjustable Rate Fund....................................... 0.95% 1.70%
Value Fund................................................. 1.35% 2.10%
Growth Fund................................................ 1.35% 2.10%
</TABLE>
The Adviser did not reimburse any expenses of the Government Fund, but
reimbursed all of the expenses of the Tax Free Fund during the six months
ended April 30, 1996.
The expense reimbursement may be extended or modified by the Adviser. The
reimbursement for expenses by the Adviser is being offset by the payables to
the Adviser monthly. Any amount due from the Adviser in excess of the amounts
due to the Adviser is settled in cash within 15 days following month end.
The Funds' Advisory agreements also provides that if, in any fiscal year, the
total of certain specified expenses of any of the Funds exceed the expense
limitations applicable to the Funds imposed by the securities regulations of
any state in which they are then registered to sell shares, the Adviser will
waive all or a portion of its management fee equal to such excess. The Adviser
is only required to reimburse the Funds for any expenses which exceed state
expense limitations up to the amount of management fees paid or payable by the
Funds during such fiscal year.
The Adviser has retained the following portfolio managers (Sub-Advisers) for
the Funds. These Sub-Advisers are responsible for the actual investment
management of the Fund's assets (including the placement of brokerage orders),
under the general supervision of the Adviser and the Board of Trustees.
<TABLE>
<CAPTION>
FUND SUB-ADVISER
---- -----------
<S> <C>
Adjustable Rate Fund............. Standish, Ayer & Wood, Inc.
Government Fund.................. BlackRock Financial Management, Inc.
Tax Free Fund.................... Brown Brothers Harriman & Co.
Value Fund....................... Duff & Phelps Investment Management, Inc.
Growth Fund...................... Value Line, Inc.
</TABLE>
GNA Distributors, Inc. (the "Distributor") receives monthly distribution fees
from the Funds calculated at the annual rate of .75% of the average daily net
assets of Class B shares pursuant to Rule 12b-1 of the
<PAGE>
58 Investors Trust Mutual Funds
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
Investment Company Act of 1940, as amended. Shareholder servicing fees are
also imposed on both Class A and Class B shares of the Funds equal to
specified costs incurred by the Distributor, but in no event to exceed .25% of
the average daily net assets of each of the Funds with respect to each class.
The shareholder servicing fees are in addition to the .75% distribution fees
imposed on Class B. The Distributor has agreed that the .75% of average daily
net assets on Class B shares will only be assessed on any shareholder's shares
for a limited period of time. Once Class B shares automatically convert to
Class A shares of the Funds, after eight years, such shareholders will be
subject only to the shareholder servicing fee of .25% maximum applicable to
Class A shares under the 12b-1 Plan.
With respect to Class B shares of the Funds, a contingent deferred sales
charge ("withdrawal fee") of 5% the first year, declining by 1% per year for
five years, is imposed on any redemption which reduces the current value of
the account to an amount which is lower than the dollar amount of all payments
during the preceding five years. Withdrawal fees are paid to and retained by
the Distributor. These fees permit the Distributor to recover its sales-
related expenses (such as the 4% of the purchase price paid to dealers who
sell Class B shares of the Funds, printing fees, and marketing and advertising
expenses). In the event the Distributor is not fully reimbursed for such
expenses incurred in any fiscal year of the Funds, the Distributor shall be
entitled to carryforward such expenses to subsequent fiscal years for
submission to the Funds for payment, subject always to the .75% of Class B net
assets annual maximum expenditure allowed by the Funds' Plan. The cumulative
reimbursable amount is increased by an interest factor which is intended to
replicate the Distributor's cost of funds for financing advances made under
the Plan. The Trustees or a majority of the Funds' shareholders have the
right, however, to terminate the Plan and all payments thereunder at any time.
The Funds will not be obligated to reimburse the Distributor for carryover
expenses subsequent to the Plan's termination or noncontinuance. The total
amounts of carryover expenses outstanding since inception of the Plan as of
April 30, 1996, for which the Distributor intends to seek repayment are as
follows:
<TABLE>
<CAPTION>
FUND AMOUNTS
---- -----------
<S> <C>
Adjustable Rate Fund........................................... $ 3,049
Government Fund................................................ 32,420,727
Tax Free Fund.................................................. 364,851
Value Fund..................................................... 766,133
Growth Fund.................................................... 702,856
</TABLE>
Each Fund pays each Trustee not affiliated with the Adviser its proportionate
share of: (1) an annual fee of $4,000; and (2) a fee of $500 for each meeting
of the Board of Trustees attended plus all reasonable expenses associated with
attendance at such meetings. The proportionate rate is allocated among the
Funds principally based on their relative net assets. No remuneration is paid
by the Funds to any Trustee or officer of the Funds who is affiliated with the
Adviser.
<PAGE>
Investors Trust Mutual Funds 59
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
5. SHARES OF BENEFICIAL INTEREST. At April 30, 1996 GNA Corporation, the
parent company of the Funds' Adviser, owned the following number of Class A
shares and a nominal amount of Class B shares of the Funds:
<TABLE>
<CAPTION>
CLASS A
FUND SHARES
---- -------
<S> <C>
Adjustable Rate Fund............................................... 864,677
Value Fund......................................................... 279,030
Growth Fund........................................................ 356,355
</TABLE>
At April 30, 1996, Employers Reinsurance Corporation, a wholly-owned
financial subsidiary of General Electric Capital Services Corporation, owned
1,304,348 Class A shares of the Tax Free Fund.
<PAGE>
[INVESTORS TRUST LOGO]
FAMILY OF FUNDS
SEMI-ANNUAL REPORT
------------------
April 30, 1996
ADJUSTABLE RATE FUND
GOVERNMENT FUND
TAX FREE FUND
VALUE FUND
GROWTH FUND
The Investors Trust Family of Funds
is offered by GNA Distributors, Inc.
[GNA LOGO]
A GE Capital Services Company
Two Union Square . P.O. Box 490
Seattle, Washington 98111-0490
