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Two Union Square o P.O. Box 490
Seattle, Washington 98111-0490
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FAMILY OF FUNDS
SEMI-ANNUAL REPORT
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April 30, 1997
ADJUSTABLE RATE FUND
GOVERNMENT FUND
TAX FREE FUND
VALUE FUND
GROWTH FUND
The Investors Trust Family of Funds
is offered by GNA Distributors, Inc.
<PAGE>
[LOGO]
FAMILY OF FUNDS
SEMI-ANNUAL REPORT
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April 30, 1997
Dear Valued Shareholder:
I am pleased to present this semi-annual report, which includes financial market
reviews, performance reviews, portfolio commentaries, and the financial
highlights of each of the Investors Trust Mutual Funds for the six month period
ending April 30, 1997.
In addition, I am also pleased to report that on May 16, 1997, the Investors
Trust Board of Trustees unanimously approved an Agreement and Plan of
Reorganization regarding the proposed combination of the Investors Trust Funds
with similar GE Funds (the "Agreement"). Pursuant to the Agreement and subject
to shareholder approval, each Investors Trust Fund will transfer substantially
all of its assets to a GE Fund having generally similar investment objectives
and policies in exchange for shares of that GE Fund.
Later this summer you will receive a combined proxy/prospectus which addresses
the details of the proposed merger and its benefits to shareholders. Please read
the documents carefully and return your completed and signed proxy form in the
envelope provided. A shareholders meeting to vote on the proposal has been
tentatively scheduled for mid-September in Seattle.
If you have questions regarding the information contained in this semi-annual
report, please contact your investment representative or call Investors Trust
Services at 1-800-656-6626 and press 2 on your phone at the prompt. From July
14, 1997, the hours of operation for Investors Trust Services will be 8:00 am -
6:00 pm (eastern).
Thank you for investing with Investors Trust Mutual Funds.
Sincerely,
/s/ Geoffrey S. Stiff
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Geoffrey S. Stiff
President
The Investors Trust Family of Funds is offered by GNA Distributors, Inc.
<PAGE>
2 Investors Trust Mutual Funds
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TABLE OF CONTENTS
Page
----
Letter from the President................................................ 1
Table of Contents........................................................ 2
Listing of Trustees and Officers......................................... 3
Financial Market Review.................................................. 5
Sub-Adviser Commentaries and Performance Graphs
Adjustable Rate Fund................................................... 6
Government Fund........................................................ 8
Tax Free Fund.......................................................... 11
Value Fund............................................................. 14
Growth Fund............................................................ 17
Notes to Performance..................................................... 20
Investment Portfolios
Adjustable Rate Fund................................................... 21
Government Fund........................................................ 25
Tax Free Fund.......................................................... 30
Value Fund............................................................. 38
Growth Fund............................................................ 42
Financial Statements..................................................... 47
Financial Highlights..................................................... 54
Notes to Financial Statements............................................ 56
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<PAGE>
Investors Trust Mutual Funds 3
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INVESTORS TRUST MUTUAL FUNDS
ADJUSTABLE RATE FUND o GOVERNMENT FUND o TAX FREE FUND o VALUE FUND o GROWTH
FUND
Semi-Annual Report
TRUSTEES AND OFFICERS
EDWARD R. MCMILLAN
Trustee, Chairman of
the Board
PIERCE T. LINDBERG
Trustee
DOUGLAS H. PEDERSEN
Trustee
GEOFFREY S. STIFF
President and CEO
CHARLES A. KAMINSKI
Senior Vice President
VICTOR C. MOSES
Senior Vice President
THOMAS W. CASEY
Vice President
and Treasurer
STEPHEN N. DEVOS
Vice President
and Controller
EDWARD J. WILES, JR.
Vice President
and Secretary
SCOTT A. CURTIS
Vice President
KARRI J. HARRINGTON
Assistant Secretary
SUB-ADVISERS
ADJUSTABLE RATE FUND
STANDISH, AYER & WOOD, INC.
Boston, Massachusetts
GOVERNMENT FUND
BLACKROCK FINANCIAL
MANAGEMENT, INC.
New York, New York
TAX FREE FUND
BROWN BROTHERS HARRIMAN
& CO.
New York, New York
VALUE FUND
DUFF & PHELPS INVESTMENT
MANAGEMENT CO.
Chicago, Illinois
GROWTH FUND
VALUE LINE, INC.
New York, New York
ADVISER
GNA CAPITAL
MANAGEMENT, INC.
Seattle, Washington
DISTRIBUTOR
GNA DISTRIBUTORS, INC.
Seattle, Washington
COUNSEL
GOODWIN, PROCTER & HOAR
Boston, Massachusetts
CUSTODIAN & TRANSFER AGENT
STATE STREET BANK AND TRUST
COMPANY
Boston, Massachusetts
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
This report is prepared for the shareholders of the Investors Trust Mutual
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.
<PAGE>
4 Investors Trust Mutual Funds
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(This Page Intentionally Left Blank)
<PAGE>
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, 1997, financial market
participants were presented with conflicting economic signals, but
signals which on balance pointed to increasing economic growth.
Annualized quarterly GDP growth rates were +2.1%, +3.8%, and +5.6% for
the third quarter of 1996 through the first quarter of 1997,
respectively. As often happens during a period of increasing economic
growth, fears of future inflation increased, and this caused intermediate
and long-term interest rates to rise. In late March, the Federal Reserve
increased short-term interest rates by .25% in what was viewed as a
pre-emptive strike against future inflation. Meanwhile, through it all,
inflation, as measured by the change in the Consumer Price Index, rose
somewhat and then declined, ending the period at a year-over-year rate of
+2.5%, down from a comparable level of +3.0% in October, 1996. With fears
of future inflation aroused, but with actual, backward-looking inflation
seemingly under control, market participants are left to ponder what, if
any, monetary policy actions the Federal Reserve will take during the
remainder of 1997.
As mentioned above, intermediate and long-term interest rates rose over
the last six months. Specifically, the 5-year Treasury yield rose from
6.07% to 6.57%, up .50%, and the 30-year yield rose from 6.64% to 6.95%,
up .31%. Bond prices, which move in the opposite direction of yield
changes, declined. In this environment, the bond market, as measured by
the Lehman Brothers Aggregate Bond Index, had a total return of +1.7%, as
bond price declines somewhat offset coupon income for the six month
period.
In the equity market, stock prices were propelled higher by increasing
corporate profits. Major market indexes moved to record highs
periodically throughout the period, although interrupted by a roughly 10%
correction from mid-March through mid-April. In this environment, the
stock market, as measured by the S&P 500 Stock Index, had a total return
of +14.7%, well above the long-term average for the six month period.
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6 Investors Trust Adjustable Rate Fund
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FROM THE ADJUSTABLE RATE FUND SUB-ADVISER
Standish, Ayer & Wood, Inc.
Portfolio Manager: Lori Driscoll
Q. What happened in the market during the past six months?
A. Interest rates have trended upward over the latest six month period.
Rising concern over inflationary pressures due to a strengthening economy
led up to the Fed's 25 basis point rate hike in March. The Fed's move
appeared to be a pre-emptive strike against inflation. The current
economic picture supports moderate growth, although considerable
uncertainty remains regarding the timing and magnitude of future Fed
moves. In general, strong consumer spending and job growth in today's
tight labor market are likely to result in upward inflationary pressure.
As this is yet to play out, interest rates have fluctuated in about a
0.50% range.
Q. What happened in the Fund during the past six month period?
A. As interest rates have drifted moderately higher, mortgage assets,
ranging from adjustable rate mortgages ("ARMs"), fixed rate pass-throughs
and asset-backed securities,
PERFORMANCE OF A $10,000 INVESTMENT SINCE INCEPTION (9/8/93) OF THE INVESTORS
TRUST ADJUSTABLE RATE FUND
[Graph here]
<TABLE>
<CAPTION>
Investors Trust Investors Trust
Adjustable Rate Adjustable Rate Lehman Brothers Morningstar Govt.
Fund-A Shares Fund-B Shares ARM Index Bond-ARM Fund Average
(ending value: $11,798) (ending value: $11,520) (ending value: $12,239) (ending value: $10,994)
<S> <C>
8/93 10,000 10,000 10,000 10,000
9/93 10,014 9,997 10,001 10,020
10/93 10,026 10,003 10,005 10,039
11/93 10,009 9,981 9,978 10,036
12/93 10,072 10,052 10,053 10,063
1/94 10,083 10,057 10,120 10,099
2/94 10,021 10,006 10,088 10,089
3/94 9,926 9,889 10,008 10,051
4/94 9,850 9,807 9,955 10,018
5/94 9,804 9,756 9,947 9,998
6/94 9,791 9,736 9,969 10,002
7/94 9,906 9,844 10,030 10,037
8/94 9,926 9,858 10,079 10,033
9/94 9,917 9,843 10,038 9,999
10/94 9,876 9,796 10,030 9,961
11/94 9,821 9,735 10,001 9,884
12/94 9,863 9,771 10,054 9,803
1/95 9,987 9,888 10,220 9,816
2/95 10,127 10,021 10,426 9,906
3/95 10,252 10,138 10,476 9,968
4/95 10,326 10,205 10,587 10,017
5/95 10,518 10,387 10,758 10,118
6/95 10,560 10,423 10,803 10,107
7/95 10,554 10,410 10,841 10,123
8/95 10,642 10,490 10,908 10,174
9/95 10,714 10,555 10,985 10,176
10/95 10,785 10,618 11,053 10,145
11/95 10,864 10,689 11,147 10,210
12/95 10,929 10,746 11,232 10,246
1/96 11,026 10,835 11,310 10,305
2/96 11,005 10,802 11,335 10,306
3/96 10,982 10,773 11,356 10,324
4/96 11,014 10,781 11,370 10,352
5/96 11,048 10,823 11,403 10,384
6/96 11,119 10,886 11,484 10,442
7/96 11,152 10,924 11,541 10,482
8/96 11,220 10,966 11,610 10,529
9/96 11,308 11,046 11,699 10,602
10/96 11,429 11,157 11,833 10,690
11/96 11,518 11,246 11,946 10,764
12/96 11,541 11,268 11,984 10,783
1/97 11,611 11,354 12,054 10,855
2/97 11,667 11,409 12,122 10,904
3/97 11,705 11,429 12,145 10,921
4/97 11,798 11,520 12,239 10,994
Past performance is not indicative of future results. See Notes to Performance (page 20).
</TABLE>
Average Annual Total Return %
for the period ended April 30, 1997
Since
1 yr 3 yr Inception
---- ---- ---------
Class A 7.12% 6.15% 4.59%
Class B 6.72% 5.49% 3.93%
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<PAGE>
Investors Trust Adjustable Rate Fund 7
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have benefited from declining prepayment risk and a tightening spread
environment. Additionally, declining market volatility has reduced the
value of embedded options; thereby decreasing the sector's overall call
risk. With increased demand for spread product and low supply, mortgage
assets performed well in the latest six months. The Fund's dominant
position is in the ARM sector which posted strong return performance
relative to similar duration Treasuries.
Q. What is your current market outlook?
A. While economic growth was strong in the first quarter of 1997, it is
likely to moderate in the coming months. However, high employment,
housing activity, retail sales and consumer confidence continue to push
economic growth ahead. Despite continued positive inflation news, the
economic picture supports our bias toward moderately higher interest
rates. In addition, the risk for growth to be stronger than expected
appears more likely than a substantial weakening in the economy.
Therefore, we are more defensive in our outlook and we expect that
current economic conditions will warrant another Fed hike before year
end.
Q. How have you positioned the Fund to benefit from your market outlook?
A. Reflecting our more defensive posture, the Fund's duration relative
to the ARM Index is neutral. We are also concerned with potential spread
widening as a result of cap risk if rates rise significantly. As a
result, we have reduced our position in GNMA ARMs in favor of both fixed
rate pass-throughs and asset-backeds. However, if bond yields continue to
trade in a moderate range, spread product, in general, should perform
well.
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<PAGE>
8 Investors Trust Government Fund
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FROM THE GOVERNMENT FUND SUB-ADVISER
BlackRock Financial Management, Inc.
Portfolio Managers: Keith Anderson and Andrew Phillips
Q. What happened in the market during the past six months?
A. Stronger economic data and accompanying inflation fears caused U.S.
Treasury yields to rise for the majority of the six month period between
November 1, 1996 and April 30, 1997.
After reaching their lowest levels since March of 1996, Treasury
yields began rising in December after Federal Reserve Chairman Alan
Greenspan's mention of "irrational exuberance" in the financial markets.
Data indicating continued economic strength characterized the first four
months of 1997. Although inflationary measures such as commodity,
producer and consumer prices remained relatively stable, labor markets
continued to strengthen. For example, over 700,000 new jobs were created
in the first quarter. Therefore, although inflation was largely
nonexistent, the combination of a robust economy, tight labor markets and
strong consumer confidence led the Federal Reserve to raise the Federal
funds rate by 25 basis points (.25%) at their March 25 monetary policy
meeting to subdue this growth and pre-emptively fight inflation. Hints of
moderating economic growth during April proved to be a more accommodating
environment for bonds, as Treasury yields fell towards month-end in
response to a strong dollar, rising stock market and optimism for a
balanced-budget agreement.
For the six month period, the yield of the 5-year Treasury note rose
0.50% to end April at 6.57%. However, the 5-year's yield reached a high
of 6.85% in mid-April before falling the last two weeks of the month as
the likelihood decreased for another interest rate hike by the Federal
Reserve at their May meeting. Over the six month period, spread product
(bonds that offer yield spreads over Treasuries) outperformed Treasuries.
In particular, mortgage-backed securities ("MBS") posted good relative
performance primarily due to low interest rate volatility and subdued
refinancing concerns. Over the period, the MBS market as measured by the
Lehman Mortgage Index returned 2.63% versus the Treasury market's return
(measured by the Merrill Lynch 5-7 year Treasury Index) of 1.04%.
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Investors Trust Government Fund 9
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Q. What happened in the Fund during the past six month period?
A. The Fund significantly reduced its U.S. Treasury holdings during the
past six months and reallocated those assets into high credit quality
bonds which offer higher yields than Treasuries. Specifically, the Fund's
weightings in Small Business Administration ("SBA") and Federal Housing
Authority ("FHA") Loans were increased. These asset classes offer
attractive yield spreads over comparable maturity Treasury securities
while typically providing more stable cash flows than residential MBS.
The Fund continues to emphasize seasoned, or older, mortgage pass-through
securities versus newly issued pass-throughs because seasoned securities
are expected to provide more prepayment stability (and therefore more
stable cash flows) over time.
PERFORMANCE OF A $10,000 INVESTMENT SINCE INCEPTION (9/8/93) OF THE INVESTORS
TRUST GOVERNMENT FUND A SHARES
[GRAPH]
<TABLE>
<CAPTION>
Investors Trust Lehman Brothers Morningstar Government
Government Fund-A Shares Government Bond Index Bond-General Fund Average
(ending value: $10,782) (ending value: $11,828) (ending value: $11,446)
<S> <C>
8/93 10,000 10,000 10,000
9/93 9,903 10,038 10,024
10/93 9,940 10,076 10,044
11/93 9,847 9,965 9,962
12/93 9,910 10,004 10,005
1/94 10,084 10,141 10,108
2/94 9,853 9,926 9,948
3/94 9,609 9,703 9,754
4/94 9,480 9,626 9,667
5/94 9,220 9,614 9,646
6/94 9,162 9,592 9,622
7/94 9,305 9,768 9,751
8/94 9,248 9,770 9,759
9/94 9,084 9,632 9,648
10/94 9,029 9,626 9,634
11/94 8,980 9,608 9,604
12/94 9,060 9,667 9,655
1/95 9,187 9,847 9,805
2/95 9,321 10,058 9,997
3/95 9,365 10,122 10,046
4/95 9,470 10,254 10,156
5/95 9,780 10,668 10,473
6/95 9,842 10,750 10,530
7/95 9,806 10,710 10,504
8/95 9,904 10,835 10,612
9/95 9,979 10,939 10,699
10/95 10,091 11,106 10,826
11/95 10,225 11,279 10,965
12/95 10,350 11,439 11,095
1/96 10,440 11,509 11,155
2/96 10,255 11,274 10,974
3/96 10,167 11,180 10,901
4/96 10,128 11,109 10,842
5/96 10,083 11,090 10,817
6/96 10,189 11,233 10,927
7/96 10,213 11,261 10,952
8/96 10,186 11,236 10,937
9/96 10,369 11,423 11,094
10/96 10,592 11,674 11,297
11/96 10,764 11,877 11,462
12/96 10,663 11,756 11,372
1/97 10,699 11,769 11,399
2/97 10,730 11,786 11,418
3/97 10,618 11,661 11,306
4/97 10,782 11,828 11,446
Past Performance is not indicative of future results. See Notes to Performance (page 20).
</TABLE>
Average Annual Total Return %
for the period ended April 30, 1997
Since
1 yr 3 yr Inception
---- ---- ---------
Class A 6.42% 4.33% 2.04%
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<PAGE>
10 Investors Trust Government Fund
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PERFORMANCE OF A $10,000 INVESTMENT SINCE INCEPTION (4/22/87) OF THE INVESTORS
TRUST GOVERMENT FUND B SHARES
[GRAPH]
<TABLE>
<CAPTION>
Investors Trust Government Lehman Brothers Morningstar Government
Fund-B Shares Government Bond Index Bond-General Fund Average
(ending value: $18,822) (ending value: $21,724) (ending value: $19,288)
<S> <C>
3/87 10,000 10,000 10,000
4/87 10,014 9,754 9,730
5/87 9,946 9,712 9,691
6/87 10,064 9,826 9,807
7/87 10,010 9,805 9,806
8/87 9,920 9,750 9,754
9/87 9,654 9,561 9,559
10/87 10,130 9,933 9,841
11/87 10,202 9,982 9,914
12/87 10,338 10,100 10,024
1/88 10,668 10,431 10,315
2/88 10,805 10,542 10,421
3/88 10,746 10,434 10,343
4/88 10,708 10,378 10,310
5/88 10,614 10,305 10,259
6/88 10,890 10,532 10,448
7/88 10,851 10,461 10,417
8/88 10,859 10,482 10,427
9/88 11,060 10,710 10,611
10/88 11,240 10,899 10,763
11/88 11,142 10,770 10,679
12/88 11,066 10,811 10,682
1/89 11,223 10,948 10,797
2/89 11,156 10,860 10,750
3/89 11,161 10,926 10,786
4/89 11,383 11,160 10,961
5/89 11,654 11,423 11,182
6/89 11,928 11,805 11,455
7/89 12,120 12,054 11,637
8/89 12,025 11,851 11,511
9/89 12,078 11,902 11,561
10/89 12,318 12,210 11,792
11/89 12,447 12,329 11,894
12/89 12,518 12,350 11,942
1/90 12,441 12,174 11,812
2/90 12,486 12,199 11,852
3/90 12,538 12,196 11,867
4/90 12,451 12,089 11,773
5/90 12,759 12,426 12,063
6/90 12,932 12,623 12,230
7/90 13,136 12,784 12,390
8/90 13,055 12,607 12,258
9/90 13,149 12,728 12,350
10/90 13,248 12,935 12,495
11/90 13,469 13,222 12,747
12/90 13,651 13,427 12,938
1/91 13,827 13,571 13,068
2/91 13,941 13,648 13,139
3/91 14,012 13,718 13,198
4/91 14,133 13,869 13,328
5/91 14,215 13,923 13,394
6/91 14,220 13,903 13,378
7/91 14,406 14,069 13,547
8/91 14,694 14,395 13,819
9/91 14,952 14,697 14,077
10/91 15,113 14,827 14,217
11/91 15,210 14,975 14,336
12/91 15,538 15,486 14,755
1/92 15,433 15,244 14,543
2/92 15,510 15,304 14,609
3/92 15,394 15,215 14,538
4/92 15,441 15,311 14,635
5/92 15,698 15,594 14,866
6/92 15,905 15,817 15,058
7/92 16,229 16,215 15,324
8/92 16,360 16,366 15,461
9/92 16,474 16,597 15,626
10/92 16,283 16,358 15,433
11/92 16,251 16,330 15,418
12/92 16,437 16,605 15,633
1/93 16,702 16,958 15,889
2/93 16,912 17,297 16,121
3/93 16,969 17,354 16,173
4/93 17,119 17,488 16,273
5/93 17,138 17,469 16,264
6/93 17,495 17,857 16,522
7/93 17,549 17,966 16,595
8/93 17,825 18,366 16,852
9/93 17,754 18,436 16,893
10/93 17,826 18,506 16,925
11/93 17,630 18,302 16,788
12/93 17,732 18,374 16,860
1/94 18,014 18,626 17,033
2/94 17,590 18,231 16,765
3/94 17,160 17,821 16,437
4/94 16,918 17,680 16,290
5/94 16,442 17,657 16,255
6/94 16,328 17,616 16,215
7/94 16,572 17,940 16,431
8/94 16,461 17,944 16,445
9/94 16,518 17,691 16,259
10/94 16,047 17,678 16,235
11/94 15,969 17,647 16,184
12/94 16,100 17,754 16,270
1/95 16,296 18,085 16,523
2/95 16,563 18,473 16,846
3/95 16,631 18,590 16,930
4/95 16,807 18,833 17,115
5/95 17,346 19,592 17,648
6/95 17,445 19,743 17,746
7/95 17,370 19,670 17,701
8/95 17,534 19,900 17,883
9/95 17,655 20,091 18,029
10/95 17,843 20,397 18,244
11/95 18,068 20,715 18,477
12/95 18,279 21,009 18,698
1/96 18,405 21,137 18,799
2/96 18,089 20,706 18,493
3/96 17,902 20,534 18,370
4/96 17,801 20,403 18,271
5/96 17,730 20,368 18,228
6/96 17,905 20,631 18,414
7/96 17,935 20,682 18,456
8/96 17,876 20,367 18,430
9/96 18,162 20,979 18,695
10/96 18,563 21,441 19,037
11/96 18,830 21,814 19,316
12/96 18,663 21,591 19,164
1/97 18,714 21,615 19,209
2/97 18,758 21,645 19,241
3/97 18,548 21,416 19,052
4/97 18,822 21,724 19,288
Past performance is not indicative of future results. See Notes to Performance (page 20).
</TABLE>
Average Annual Total Return %
for the period ended April 30, 1997
Since
1 yr 3 yr Inception
---- ---- ---------
Class B 5.70% 3.61% 6.51%
Q. What is your current market outlook?
A. BlackRock expects that both production and consumption will
continue to be strong in the coming months. However, the combined
effects of higher interest rates and already rising consumer debt
should lead to more moderate economic growth later in 1997.
Despite inflation remaining relatively low, the potential for
future inflation exists. Therefore, BlackRock currently maintains
a cautious fundamental outlook for bonds. An additional 25 to 50
basis points of interest rate increases by the Fed may still be
necessary to temper economic growth to a more sustainable rate,
although BlackRock does not believe that 1997 will be a repeat of
the dramatic rise in short term interest rates that the market
witnessed in 1994.
Q. How have you positioned the Fund to benefit from your market
outlook?
A. As discussed above, the Fund's allocation to U.S. Treasury
securities has been reduced in light of BlackRock's expectation
for higher domestic bond yields in the near future. Accordingly,
the Fund is substantially invested in mortgages and other spread
product (SBA and FHA Project Loans, for example), which we believe
will provide higher total returns than Treasuries while providing
a higher level of income. The Fund's long-standing bias towards
seasoned mortgage pass-throughs remains intact, as market
participants have begun to value the relative prepayment stability
of these bonds compared to newly issued pass-throughs.
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<PAGE>
Investors Trust Tax Free Fund 11
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FROM THE TAX FREE FUND SUB-ADVISER
Brown Brothers Harriman & Co.
Portfolio Manger: Barbara Brinkley
Q. What happened in the market during the past six months?
A. In November, municipal prices embarked on a heady rally as investors
focused on signs of weaker than expected U.S. economic activity;
subdued,--and possibly overstated,--inflation; a rising U.S. dollar; and
an enhanced prospect for deficit reduction. Yields fell by 0.15%-0.20%
before Federal Reserve Chairman Greenspan sobered expectations in early
December, and profit-taking set in. Amid strong export demand and
construction activity, the U.S. economy rebounded. Rising liquidity
fueled domestic demand, while tightening labor markets increased the
upward pressure on prices. On March 25, the Federal Reserve raised the
funds rate by 0.25% to 5.50%, after keeping monetary policy stable over
the preceding 14 months. Municipal yields, which had been creeping
higher, jumped an additional 0.25%-0.35% following the Fed's rate hike.
Financing volume picked up as issuers hurried to market to lock in their
financing.
For the period, municipal rates rose on overnight maturities
by 0.50%, on 5 year maturities by 0.40%, and on 15 year and longer
maturities by 0.10%. The 0-30 year yield curve flattened by 0.28%.
In the period, municipals outperformed comparable maturity taxable
bonds, such as Treasuries and corporates, and municipals with
higher coupons outperformed those with lower coupons.
Q. What happened in the Fund during the past six month period?
A. During the last six months, we have taken on a moderately
defensive posture as yields initially fell, then rose. The Fund's
duration (sensitivity to changes in the level of interest rates)
has been reduced accordingly. On December 5, 1996, we shifted from
a moderately bullish stance to a neutral posture, feeling that
interest rates had little room to fall further. On March 5, 1997,
we were prompted by Greenspan's comments during his Humphrey-
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<PAGE>
12 Investors Trust Tax Free Fund
- --------------------------------------------------------------------------------
Hawkins testimony to become more cautious. Anticipating that rates
would shift upward, we reduced our exposure and increased our
liquidity by selling some intermediate maturities carrying lower
(5.25%-6.10%) coupons and redeploying their proceeds into
overnight and cash-equivalent maturities. We managed these sales
transactions so as to avoid incurring net capital gains tax
liability, and continue to maintain a high credit quality and high
average coupon.
PERFORMANCE OF A $10,000 INVESTMENT SINCE INCEPTION (9/8/93) OF
THE INVESTORS TRUST TAX FREE FUND
[GRAPH]
<TABLE>
<CAPTION>
Investors Trust Tax Free Investors Trust Government Lehman Brothers Morningstar Government
Fund-A Shares Fund-B Shares Government Bond Index Bond-General Fund Average
(ending value:$11,884) (ending value: $18,823) (ending value: $12,045) (ending value: $11,587)
<S> <C>
8/93 10,000 10,000 10,000 10,000
9/93 10,030 10,034 10,125 10,112
10/93 10,054 10,043 10,138 10,132
11/93 9,971 9,954 10,065 10,048
12/93 10,162 10,147 10,278 10,231
1/94 10,283 10,261 10,408 10,338
2/94 10,011 9,983 10,081 10,099
3/94 9,725 9,683 9,710 9,729
4/94 9,712 9,673 9,830 9,767
5/94 9,835 9,789 9,908 9,845
6/94 9,795 9,743 9,854 9,799
7/94 9,965 9,907 10,012 9,949
8/94 9,998 9,940 10,061 9,976
9/94 9,884 9,827 9,918 9,844
10/94 9,753 9,697 9,788 9,693
11/94 9,620 9,565 9,594 9,522
12/94 9,793 9,737 9,755 9,715
1/95 10,032 9,974 9,998 9,953
2/95 10,296 10,236 10,288 10,206
3/95 10,427 10,366 10,447 10,294
4/95 10,432 10,371 10,453 10,305
5/95 10,742 10,679 10,784 10,581
6/95 10,614 10,561 10,710 10,502
7/95 10,659 10,597 10,863 10,576
8/95 10,809 10,746 11,012 10,681
9/95 10,814 10,760 11,088 10,739
10/95 10,946 10,892 11,205 10,876
11/95 11,126 11,061 11,357 11,049
12/95 11,289 11,223 11,427 11,154
1/96 11,344 11,277 11,557 11,219
2/96 11,339 11,272 11,521 11,156
3/96 11,111 11,045 11,373 11,005
4/96 11,096 11,041 11,325 10,968
5/96 11,146 11,080 11,282 10,974
6/96 11,211 11,155 11,387 11,062
7/96 11,379 11,312 11,508 11,154
8/96 11,406 11,338 11,505 11,154
9/96 11,512 11,454 11,626 11,285
10/96 11,621 11,562 11,775 11,397
11/96 11,779 11,709 12,026 11,576
12/96 11,746 11,676 11,972 11,540
1/97 11,814 11,754 12,011 11,548
2/97 11,951 11,890 12,131 11,640
3/97 11,837 11,766 11,966 11,509
4/97 11,884 11,823 12,045 11,587
Past Performance is not indicative of future results. See Notes to Performance (page 20).
</TABLE>
Average Annual Total Return %
for the period ended April 30, 1997
Since
1 yr 3 yr Inception
Class A 7.07% 6.95% 4.83%
Class B 7.06% 6.91% 4.69%
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Tax Free Fund 13
- --------------------------------------------------------------------------------
Q. What is your current market outlook?
A. Secular (Long-term) themes remain supportive for bonds
-- Fiscal Policy is restraining on a global basis
-- Inflation is declining throughout the industrialized world
-- Real interest rates remain high
Cyclical (Short-term) themes are more mixed
-- Economic activity in the U.S. is showing remarkable
resilience. Real GDP growth surged 5.6% in the first
quarter of 1997, outpacing the fourth quarter of 1996's
already robust 3.8% rate. Strong employment and income
growth and a rising stock market have stimulated housing
and consumer spending; moderate but still positive
corporate earnings growth continues to support capital
spending. We expect GDP growth in the second quarter to be
above 3%.
For now, broader inflation measures remain stable.
However, the absence of slack in the economy could put
further upward pressure on prices unless the Fed is
successful in slowing economic activity. The Fed,
concerned about rising labor costs and continued
above-trend growth, has tightened pre-emptively in order
to keep inflation in check. We believe the Fed will
tighten by an additional 25-50 basis points by the end of
the summer to slow economic activity and to insure
continued low rates of inflation.
Q. How have you positioned the Fund to benefit from your market
outlook?
A. The Fund is now positioned with a duration that is moderately
shorter than the portfolio's "neutral point" so as to benefit from
the somewhat higher interest rate environment we anticipate in the
coming quarter. The portfolio's duration is 5.7 years, or 95% of
duration neutrality, which is 6 years. Portfolio issues are
concentrated in 7-20 year maturities so as to lock in the high tax
free yields of the steepest part of the yield curve and to benefit
from "rolling down the yield curve" and from lower yields over
time. At the same time, cash equivalent securities now constitute
over 8% of the Fund. These will benefit from the higher interest
rates and flatter yield curve we anticipate and provide liquidity
to lock in the expected higher interest rates. Our average coupon
is over 7%. We prefer call-protected premium coupons for their
greater tax-free yields to maturity, and their more defensive
characteristics. Further, they avoid the unfavorable tax effects
of market discount bonds. Our average credit quality is Aa+, with
over 65% of the portfolio backed by U.S. Treasury securities held
in escrow. Our high credit quality and broad geographical
diversification are designed to protect against "event risk" that
could arise from a local economic/political development or from a
natural disaster. We have no derivatives, Section 144A (restricted
securities), or alternative minimum tax bonds in the Fund's
portfolio. Our investment philosophy is to take measured interest
rate exposure using liquid, open-market debt of high quality
issuers.
- --------------------------------------------------------------------------------
<PAGE>
14 Investors Trust Value Fund
- --------------------------------------------------------------------------------
FROM THE VALUE FUND SUB-ADVISER
Duff & Phelps Investment Management, Co.
Portfolio Manager: Jeffrey E. Simmons
Q. What happened in the market during the past six months?
A. The stock market experienced a strong six month showing with
the S&P 500 up 14.7%. It is evident that the larger, high quality
companies continued to drive the market over the past six months,
with the S&P 400 mid cap index returning only 6.8% and the Russell
2000 small cap index returning just 1.5%. Indeed, the narrowness
of the market is shown by the fact that the twenty largest
companies (ranked by market values as of 4/30/97) in the S&P 500
accounted for 51% of the index's return for the six month period.
The interest rate increase in March added to the volatility
of the markets and further heightened the uncertainty surrounding
possible future moves by the Federal Reserve Bank. This
environment has market participants continuing to focus on higher
quality, larger capitalization issues with solid fundamentals.
Q. What happened in the Fund during the past six month period?
A. The Value Fund's focus on large, high quality consistent
companies benefited performance over the past six months, as these
companies continued to perform well.
The best and worst performing stocks held throughout the six
months were:
<TABLE>
<CAPTION>
Best Worst
- ---------------------------- ------------------------------
<S> <C> <C> <C>
Microsoft +77.1% Cisco Systems -16.4%
American Express +40.9% PPG Industries -3.5%
Intel +39.5% Chase Manhattan +8.8%
Exxon +29.9% American Home Products +9.3%
Campbell Soup +28.9% Kimberly Clark +10.9%
</TABLE>
Q. What is your current market outlook?
A. Economic data indicates first quarter 1997 GDP growth of 5.6%
was well above the Fed's non-inflationary target of 2-2.5%. Even
if this trend continues into the second quarter, it is not
sustainable. There are increasing indications of a tightening
labor market and wage costs continue to be a major watch signal
for the Federal Reserve, but we do not believe wage costs will
increase enough to be inflationary. We continue to feel that
worker productivity will be strong and inflationary pressures will
remain moderate. We are projecting a stable inflationary
environment with the CPI remaining in the mid 2% range. The
Federal Reserve may increase rates again in the near term, which
would put short-term pressure on the markets, but in the longer
term, any pre-emptive moves should not be so severe as to push the
economy into a recession.
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Value Fund 15
- --------------------------------------------------------------------------------
In our judgment, as this is written, the stock market is
currently fairly valued relative to the fixed income markets. We
expect the uncertainty surrounding interest rates and slowing
corporate profit growth will continue to favor high quality,
liquid companies with consistent earnings and dividends for the
remainder of 1997.
PERFORMANCE OF A $10,000 INVESTMENT SINCE INCEPTION (9/8/93) OF
THE INVESTORS TRUST TAX FREE FUND
[GRAPH]
<TABLE>
<CAPTION>
Investors Trust Value Investors Trust Value Standard & Poor's 500 Morningstar Equity
Fund-A Shares Fund-B Shares Stock Index Income Fund Average
(ending value:$17,469) (ending value: $17,040) (ending value: $18,922) (ending value: $16,060)
<S> <C>
8/93 10,000 10,000 10,000 10,000
9/93 10,040 10,067 9,926 10,009
10/93 10,173 10,187 10,128 10,122
11/93 10,093 10,107 10,032 9,964
12/93 10,141 10,147 10,156 10,138
1/94 10,208 10,200 10,496 10,420
2/94 9,967 9,960 10,213 10,161
3/94 9,574 9,556 9,768 9,762
4/94 9,722 9,960 9,895 9,875
5/94 9,789 9,757 10,057 9,968
6/94 9,595 9,561 9,808 9,815
7/94 9,837 9,789 10,133 10,070
8/94 10,093 10,044 10,545 10,383
9/94 9,925 9,873 10,291 10,193
10/94 10,141 10,075 10,527 10,258
11/94 9,831 9,766 10,140 9,871
12/94 9,972 9,902 10,288 9,958
1/95 10,231 10,145 10,556 10,148
2/95 10,557 10,469 10,966 10,473
3/95 10,731 10,626 11,290 10,717
4/95 11,073 10,964 11,619 10,959
5/95 11,414 11,289 12,078 11,292
6/95 11,517 11,383 12,361 11,418
7/95 11,832 11,695 12,773 11,712
8/95 11,778 11,641 12,808 11,821
9/95 12,289 12,140 13,344 12,217
10/95 12,316 12,140 13,297 12,091
11/95 12,715 12,534 13,883 12,618
12/95 12,919 12,724 14,139 12,922
1/96 13,309 13,095 14,626 13,228
2/96 13,462 13,232 14,766 13,344
3/96 13,491 13,268 14,908 13,524
4/96 13,700 13,460 15,127 13,660
5/96 14,021 13,763 15,517 13,867
6/96 13,986 13,732 15,581 13,905
7/96 13,454 13,196 14,888 13,412
8/96 13,720 13,457 15,203 13,759
9/96 14,770 14,462 16,058 14,285
10/96 15,162 14,847 16,498 14,610
11/96 16,239 15,893 17,750 15,420
12/96 15,843 15,491 17,402 15,354
1/97 16,953 16,563 18,483 15,891
2/97 17,059 16,667 18,632 16,091
3/97 16,253 15,863 17,857 15,609
4/97 17,469 17,040 18,922 16,060
Past Performance is not indicative of future results. See Notes to Performance (page 20).
</TABLE>
Average Annual Total Return %
for the period ended April 30, 1997
Since
1 yr 3 yr Inception
Class A 27.52% 21.58% 16.52%
Class B 26.59% 20.70% 15.72%
Q. How have you positioned the Fund to benefit from your market
outlook?
A. We have an overweighting in the defensive sector, emphasizing
consistent companies in the drug and household products
industries. We like the drug industry because with an aging
population we have a high degree of confidence in the ability of
these types of companies to produce solid earnings growth in an
uncertain environment (Eli Lilly, Pfizer, Bristol Myers). Our
overweighting in the household product industry is an outgrowth of
the international growth potential and strong profit growth of
these dominant name brand players (Procter & Gamble, Gillette,
Kimberly Clark). As these companies became more aggressive with
international volume growth the result has been consistent double
digit earnings and dividend growth for shareholders.
- --------------------------------------------------------------------------------
<PAGE>
16 Investors Trust Value Fund
- --------------------------------------------------------------------------------
We continue to be underweight in the interest-sensitive
sector. This is mainly due to our lack of representation in the
electric and gas utility industries. We have been under
represented in these industries for a long time, with the
uncertainty of future earnings surrounding deregulation and other
looming legislative concerns. However within the
interest-sensitive sector we remain attracted to American Express,
Chase Manhattan, Banc One, and National City. With compelling
valuations and improving business situations we feel these
fundamentals continue to warrant positions.
We are underweighted in the energy sector due to our outlook
for falling oil prices. Within the technology sector we are
underweighted relative to the S&P 500, but we continue to hold
significant positions in the high quality market leaders such as
Intel, Microsoft and Compaq.
Going forward, we anticipate the companies we own in the
Value Fund will benefit from the financial markets uncertainty
surrounding future interest rates and slowing corporate profit
growth. This environment is ideal, and we believe sustainable, for
companies that are in the Value Fund; that is high quality,
blue-chip companies with consistent earnings and dividend growth.
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Growth Fund 17
- --------------------------------------------------------------------------------
FROM THE GROWTH FUND SUB-ADVISER
Value Line, Inc.
Portfolio Manager: Alan Hoffman
Q. What happened in the market during the past six months?
A. The past six month span has seen the U.S. equity market
proceed down two very different paths, a process that actually
started late last summer. On the one hand, the large, "household
name" stocks, like those that comprise the Dow Jones Industrial
Average and the Standard & Poor's 500 Composite Index, have
generally gone straight up, setting a string of new records for
the underlying indexes. Conversely, the secondary,
more-speculative stocks, especially many of those in the
technology area, have lagged the broad market by a good margin.
There are two principal components of that underperformance.
First, the stocks of some fine companies (especially in retailing
and financial services) have just not exhibited the upward price
momentum of several of the "household name" stocks. And second, a
number of technology issues have been savagely sold off when
earnings reports failed to exceed analysts' expectations, even
when earnings shortfalls were relatively minor.
Q. What happened in the Fund during the past six month period?
A. As a growth vehicle, our Fund is overweighted in the
speculative names, especially, again, in technology stocks. That
portfolio orientation has resulted in a fairly sharp degree of
underperformance relative to the popular benchmarks. To counter
the negative volatility that has unfolded over the last few
months, we have moved into stocks in entirely new economic
- --------------------------------------------------------------------------------
<PAGE>
18 Investors Trust Growth Fund
- --------------------------------------------------------------------------------
sectors--oilfield services is a prominent example--but those moves
were executed at points that were unfavorable in terms of
subsequent stock price developments.
PERFORMANCE OF A $10,000 INVESTMENT SINCE INCEPTION (9/8/93) OF
THE INVESTORS TRUST GROWTH FUND
[GRAPH]
<TABLE>
<CAPTION>
Investors Trust Growth Investors Trust Growth Standard & Poor's 500 Morningstar Growth
Fund-A Shares Fund-B Shares Stock Index Fund Average
(ending value:$16,357) (ending value: $15,942) (ending value: $18,922) (ending value: $16,090)
<S> <C>
8/93 10,000 10,000 10,000 10,000
9/93 10,400 10,412 9,926 10,112
10/93 10,212 10,212 10,128 10,238
11/93 10,047 10,047 10,032 10,036
12/93 10,435 10,424 10,156 10,342
1/94 10,788 10,765 10,496 10,663
2/94 10,659 10,624 10,213 10,509
3/94 9,847 9,824 9,768 10,011
4/94 9,847 9,800 9,895 10,057
5/94 9,812 9,765 10,057 10,079
6/94 9,447 9,400 9,808 9,731
7/94 9,657 9,610 10,133 9,987
8/94 10,394 10,323 10,545 10,471
9/94 10,251 10,180 10,291 10,293
10/94 10,465 10,382 10,527 10,447
11/94 10,180 10,097 10,140 10,047
12/94 10,322 10,228 10,288 10,154
1/95 10,394 10,299 10,556 10,215
2/95 10,857 10,739 10,966 10,607
3/95 11,106 10,976 11,290 10,904
4/95 11,273 11,143 11,619 11,117
5/95 11,581 11,439 12,078 11,426
6/95 12,377 12,212 12,361 11,921
7/95 13,244 13,055 12,773 12,516
8/95 13,292 13,103 12,808 12,625
9/95 13,743 13,542 13,344 12,968
10/95 13,518 13,316 13,297 12,748
11/95 13,874 13,649 13,883 13,223
12/95 13,589 13,364 14,139 13,295
1/96 13,945 13,708 14,626 13,560
2/96 14,337 14,077 14,766 13,883
3/96 14,278 14,017 14,908 14,034
4/96 14,646 14,374 15,127 14,525
5/96 15,169 14,872 15,517 14,903
6/96 14,551 14,267 15,581 14,675
7/96 13,815 13,530 14,888 13,789
8/96 14,539 14,243 15,203 14,320
9/96 15,715 15,383 16,058 15,119
10/96 15,632 15,288 16,498 15,191
11/96 16,570 16,191 17,750 16,059
12/96 16,000 15,633 17,402 15,887
1/97 16,689 16,286 18,483 16,620
2/97 16,214 15,811 18,632 16,356
3/97 15,430 15,051 17,857 15,599
4/97 16,357 15,942 18,922 16,090
Past Performance is not indicative of future results. See Notes to Performance (page 20).
</TABLE>
Average Annual Total Return %
for the period ended April 30, 1997
Since
1 yr 3 yr Inception
Class A 11.68% 18.43% 14.43%
Class B 10.91% 17.61% 13.63%
Q. What is your current market outlook?
A. In the relatively near term--say, through the third quarter
of 1997--we have a cautious outlook on U.S. equities. Financial
market participants are clearly focused on underlying economic
fundamentals, the Federal Reserve Board's interpretation of those
fundamentals,
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Growth Fund 19
- --------------------------------------------------------------------------------
and what all of that means for interest rates. We think that that
translates into equity prices moving within a broad trading range,
defined roughly as 6300 to 7300 on the Dow Jones Industrials. In
other words, we don't foresee an immediate major correction in
stock prices, but we also don't see the impetus that will drive
them much higher.
Longer term, we remain as bullish as ever. We think the
economy will continue to exhibit moderate growth, in an
environment of relatively low and stable rates of interest and
inflation, for an extended period into the future. That climate is
ideal for growth investing.
Q. How have you positioned the Fund to benefit from your market
outlook?
A. In order to cushion the near-term volatility, we have
introduced incremental diversification into the portfolio: there
are currently about 80 stocks among our holdings, the vast
majority of which each account for less than 2% of net assets. We
also hold somewhat more cash than normal. However, to capture the
longer-term growth implicit in the Fund's mandate, we remain
overweighted in the technology, financial-services, and
health-care stocks that we believe will be the engines of growth
in the U.S. economy as it enters the third millennium.
- --------------------------------------------------------------------------------
<PAGE>
20 Investors Trust Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO PERFORMANCE
Total returns are historical and assume changes in share price and
reinvestment of dividends and capital gains. Investment returns and principal
values will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than the original cost.
The total returns of classes A and B shown do not include the reduction of the
maximum applicable sales charges (4.50% for Class A shares; 5.00% for Class B
shares). If total returns included the effects of these charges, the performance
figures for each class would have been lower. Additionally, the Adviser has
agreed to waive or limit certain expenses as described in detail in the Funds'
Prospectuses. Had the Adviser not absorbed a portion of expenses, total returns
would have been lower.
The Lehman Brothers ARM Index, the Lehman Brothers Government Bond Index, the
Lehman Brothers 10-Year General Obligation Municipal Bond Index and the S&P 500
Stock Index are unmanaged indices and do not reflect the actual cost of
investing in the instruments that comprise each index. The results shown for the
foregoing indices assume reinvestment of net dividends.
The views expressed in this report reflect those of the Adviser and
Sub-Advisers only through April 30, 1997, the end of the period of this report.
The Adviser's and Sub-Advisers' views are subject to change at any time based on
market and other conditions.
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Adjustable Rate Fund 21
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ---------- ----------
<S> <C> <C> <C>
LONG-TERM GOVERNMENT AGENCY SECURITIES 82.5
Federal Home Loan Mortgage Corporation
Adjustable Rate Mortgages (b)(d)-16.9
5.695%, with a maturity date of November 1, 2026.................. 96,902 98,417
6.907%, with a maturity date of April 1, 2026..................... 123,925 126,462
7.341%, with a maturity date of June 1, 2024...................... 159,727 164,519
7.654%, with a maturity date of January 1, 2023................... 96,915 100,307
7.770%, with a maturity date of October 1, 2022................... 65,165 67,222
7.818%, with a maturity date of August 1, 2023.................... 176,663 183,399
7.851%, with a maturity date of January 1, 2023................... 124,196 126,331
7.882%, with a maturity date of January 1, 2024................... 99,216 101,665
7.985%, with a maturity date of August 1, 2023.................... 211,992 220,737
----------
Total Federal Home Loan Mortgage Corporation
Adjustable Rate Mortgages
(Cost $1,173,763).......................................... 1,189,059
----------
Federal National Mortgage Association
Adjustable Rate Mortgages (b)(d)-6.4
4.804%, with a maturity date of April 1, 2026..................... 240,524 242,066
6.953%, with a maturity date of May 1, 2021....................... 205,037 210,708
----------
Total Federal National Mortgage Association
Adjustable Rate Mortgages
(Cost $439,452)............................................ 452,774
----------
Government National Mortgage Association
Adjustable Rate Mortgages (a)(b)(d)-52.8
6.000%, with various maturity dates to October 20, 2025........... 884,110 891,646
6.500%, with various maturity dates to August 20, 2025............ 1,134,516 1,154,522
6.875%, with various maturity dates to October 20, 2024........... 58,856 60,228
7.000%, with various maturity dates to September 20, 2024......... 536,757 549,761
7.125%, with various maturity dates to August 20, 2024............ 1,033,077 1,062,182
----------
Total Government National Mortgage Association
Adjustable Rate Mortgages
(Cost $3,564,931)............................................ 3,718,339
----------
Government National Mortgage Association (a)(b)-4.3
9.000%, with various maturity dates to October 15, 2016
(Cost $299,939)............................................ 282,129 300,416
----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
22 Investors Trust Adjustable Rate Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ---------- ----------
Federal Home Loan Mortgage Corporation
<S> <C> <C> <C>
Real Estate Mortgage Investment Conduits [REMIC] (b)(c)--2.1
6.250%, with a maturity date of September 15, 2018
[Series 1714 Class E]
(Cost $148,810)............................................ 150,000 147,609
----------
Total Long-Term Government Agency Securities
(Cost $5,626,895).......................................... 5,808,197
----------
NON-AGENCY MORTGAGES 4.8
Resolution Trust Corporation Mortgage Pass-Throughs (b)(c)-4.8
8.000%, with a maturity date of September 25, 2021
[Series 92-M4 Class A1].................................... 166,712 167,701
9.000%, with a maturity date of September 25, 2028
[Series 91-6 Class C1]..................................... 167,426 171,245
----------
Total Resolution Trust Corporation Mortgage Pass-Throughs
(Cost $338,006)............................................ 338,946
----------
Total Non-Agency Mortgages
(Cost $338,006)............................................ 338,946
----------
ASSET-BACKED SECURITIES 7.8
AFC Home Equity Loan Trust, 8.000%, December 25, 2024
[Series 94-3 Class 1A]..................................... 120,527 122,190
Citibank Credit Card Master Trust, Zero Coupon February 7, 2003
[Series 96-1 Class A]...................................... 225,000 174,726
Old Stone Credit Corporation Home Equity Loan Trust,
6.300%, September 25, 2007 [Series 92-3 Class A2]............... 111,625 110,788
The Money Store Home Equity Trust, 6.850%, June 15, 2019
[Series 96-A Class A5] (b)(c).............................. 140,000 139,146
----------
Total Asset-Backed Securities
(Cost $552,997)............................................ 546,850
----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Adjustable Rate Fund 23
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ---------- ----------
SHORT-TERM INVESTMENTS 4.2
<S> <C> <C> <C>
Commercial Paper-1.4
General Electric Capital Corporation
5.550%, with a maturity date of May 1, 1997
(Cost $100,000)............................................ 100,000 100,000
----------
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares
---------
<S> <C> <C> <C>
Money Market Mutual Funds-2.8
SSgA Money Market Fund [Class A]..................................... 177,806 177,806
SSgA US Government Money Market Fund................................. 19,558 19,558
----------
Total Money Market Mutual Funds
(Cost $197,364)............................................... 197,364
Total Short-Term Investments
(Cost $297,364)............................................... 297,364
-------- ----------
Summary
Total investments
(Cost $6,815,262) (e)......................................... 99.3 6,991,357
Other assets and liabilities, net.................................... 0.7 46,431
-------- ----------
Net assets................................................................ 100.0 $7,037,788
-------- ----------
-------- ----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
24 Investors Trust Adjustable Rate Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
- ------------
NOTES:
(a) The investments in mortgage-backed securities are interests in separate
pools of mortgages. All such issues which have the same 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 ("CMOs")--The
net asset value of the Fund is sensitive to interest rate fluctuations.
CMOs 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 CMOs as they are
received, but certain classes of CMOs have priority over others with
respect to the receipt of prepayments on the mortgages. Therefore, an
investment in a CMO may be subject to a greater or lesser risk of
prepayment than other types of mortgage-related securities and this
uncertainty results in greater price volatility.
(d) Risks associated with Adjustable Rate Mortgage securities ("ARMs")--Most
ARMs are subject to limits on coupon changes ("caps" and "floors"). Coupon
caps/floors limit the amount the coupon can adjust on coupon reset dates,
or over the life of the loan. If interest rates change quickly, an
adjustable rate mortgage's coupon adjustment may be constrained by its
periodic or lifetime limit. For example, if rates rise quickly, since the
coupon rate cannot reset to equal the market rates, or at least cannot do
so immediately, an investment in an ARM may be subject to a decline in
price, despite the fact that ARM securities are often represented to have
less price risk than fixed rate securities. Until, and if, the ARM's coupon
rate can adjust to equal current market rates, it will be subject to price
variations, despite being an "adjustable rate" security. This exposure is
called "cap risk". Conversely, an ARM may benefit from the floor on its
rate adjustments if market rates drop below the minimum rate the ARM may
pay.
(e) See Note 3 in the Notes to Financial Statements 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 Government Fund 25
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ----------- ------------
<S> <C> <C> <C>
LONG-TERM GOVERNMENT AND AGENCY SECURITIES 96.9
Federal Home Loan Mortgage Corporation (a)(b)-24.6
5.500%, with a maturity date of December 1, 2008.............. 4,094,536 3,838,628
6.500%, with various maturity dates to February 1, 2027....... 62,644,547 60,462,082
7.000%, with various maturity dates to February 1, 2027....... 1,446,030 1,403,994
7.500%, with various maturity dates to September 1, 2026...... 86,862,533 87,352,041
9.000%, with a maturity date of December 1, 2014.............. 3,460,726 3,616,424
10.000%, with various maturity dates to June 1, 2020........... 26,495 27,834
------------
Total Federal Home Loan Mortgage Corporation
(Cost $158,664,460)..................................... 156,701,003
------------
United States Treasury Bonds-4.7
6.625%, with a maturity date of February 15, 2027............. 13,500,000 12,953,655
11.875%, with a maturity date of November 15, 2003............. 13,500,000 17,182,935
------------
Total United States Treasury Bonds
(Cost $30,447,102)...................................... 30,136,590
------------
Federal National Mortgage Association
Real Estate Mortgage Investment Conduits [REMIC] (b)(c)-4.0
3.500%, with a maturity date of October 25, 2021
[Series 96-14 Class M]....................................... 14,200,000 11,302,312
5.000%, with a maturity date of January 25, 2023
[Series 93-210 Class A]...................................... 3,237,060 2,834,301
8.400%, with a maturity date of August 25, 2019
[Series 89-54 Class E]....................................... 10,800,000 11,090,196
------------
Total Federal National Mortgage Association
Real Estate Mortgage Investment Conduits [REMIC]
(Cost $25,148,122)...................................... 25,226,809
------------
Federal National Mortgage Association (a)(b)-4.5
6.500%, with various maturity dates to February 1, 2026....... 1,738,340 1,647,551
7.000%, with various maturity dates to February 1, 2027....... 24,643,934 23,890,689
9.000%, with various maturity dates to July 1, 2021........... 2,833,733 2,999,348
------------
Total Federal National Mortgage Association
(Cost $28,621,025)...................................... 28,537,588
------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
26 Investors Trust Government Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ----------- ------------
Federal National Mortgage Association Medium Term Notes-18.4
<S> <C> <C> <C>
10.450%, with a maturity date of October 13, 2015.............. 10,000,000 13,251,600
11.875%, with a maturity date of May 19, 2000.................. 40,000,000 45,762,400
12.000%, with a maturity date of November 13, 2000 (f)......... 50,000,000 58,343,500
------------
Total Federal National Mortgage Association
Medium Term Notes
(Cost $120,542,600)..................................... 117,357,500
------------
Government National Mortgage Association (a)(b)-15.7
6.500%, with various maturity dates to April 15, 2024......... 20,118,832 19,073,532
7.000%, with various maturity dates to April 15, 2026......... 34,821,733 33,765,490
7.500%, with a maturity date of May 15, 2027 (e).............. 6,120,000 6,066,450
8.000%, with various maturity dates to March 15, 2026......... 36,471,763 37,148,081
8.500%, with various maturity dates to March 15, 2023......... 756,890 786,281
9.000%, with a maturity date of May 15, 2013.................. 244,280 259,758
9.500%, with various maturity dates to December 15, 2017...... 2,755,607 2,986,976
------------
Total Government National Mortgage Association
(Cost $100,206,062)..................................... 100,086,568
------------
Federal Home Loan Mortgage Corporation
Multiclass Mortgage Participation Certificates (b)(c)-0.7
4.500%, with a maturity date of November 15, 2020
[Series 1262 Class H]................................... 2,000,000 1,673,740
9.500%, with a maturity date of January 15, 2019
[Series 38 Class C]..................................... 2,340,771 2,371,482
------------
Total Federal Home Loan Mortgage Corporation
Multiclass Mortgage Participation Certificates (b)(c)
(Cost $4,026,282)....................................... 4,045,222
------------
Financing Corporation-6.4
9.650%, with a maturity date of November 2, 2018.............. 2,020,000 2,531,626
10.700%, with a maturity date of October 6, 2017............... 28,165,000 38,366,081
------------
Total Financing Corporation
(Cost $37,252,781)...................................... 40,897,707
------------
Small Business Administration Loans (b)-8.6
6.950%, with a maturity date of November 1, 2016
[Series 96-20 Class K].................................. 7,000,000 6,888,398
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Government Fund 27
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ----------- ------------
7.150%, with a maturity date of March 1, 2017
[Series 97-20 Class C].................................. 5,000,000 4,991,146
<S> <C> <C> <C>
7.350%, with a maturity date of August 1, 2005
[Series 95-P10 Class C1]................................ 12,502,866 12,465,748
7.550%, with a maturity date of June 1, 2016
[Series 96-20 Class F].................................. 8,264,440 8,372,156
7.600%, with a maturity date of May 1, 2016
[Series 96-20 Class E].................................. 3,944,617 4,007,407
7.700%, with a maturity date of July 1, 2016
[Series 96-20 Class G].................................. 5,915,036 6,038,349
8.100%, with a maturity date of March 1, 2015
[Series 95-20 Class C].................................. 9,293,088 9,641,497
8.150%, with a maturity date of February 1, 2015
[Series 95-20 Class B].................................. 1,947,580 2,034,225
------------
Total Small Business Administration Loans
(Cost $54,460,683)...................................... 54,438,926
------------
Federal Housing Administration Project Loans (i)-8.4
Construction Loan Certificates--"CLC"s
Elton Home, 9.250%, March 1, 2037.............................. 3,051,950 3,262,248
Messenger House Care, 8.500%, July 31, 2021.................... 7,475,200 7,704,128
Northfield Commons, 7.900%, September 1, 2037.................. 7,719,100 7,753,358
Pine Creek, 8.500%, July 31, 2036.............................. 2,768,000 2,866,610
University Park, 7.875%, January 1, 2038....................... 7,224,340 7,219,825
Willow Creek, 8.000%, July 1, 2037............................. 5,680,346 5,753,128
------------
34,559,297
------------
Permanent Loan Certificates--"PLC"s
Hudson Apartments, 8.200%, October 1, 2021..................... 2,254,072 2,306,903
Lakeland Nursing, 7.875%, December 1, 2034..................... 6,905,788 6,946,794
Shelby Manor, 8.750%, June 25, 2035............................ 4,187,229 4,382,198
Village Green, 8.250%, September 1, 2034....................... 5,261,211 5,396,850
------------
19,032,745
------------
Total Federal Housing Administration Project Loans
(Cost $52,446,558)...................................... 53,592,042
------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
28 Investors Trust Government Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ----------- ------------
New York City Mortgage Loan Trust (d)-0.9
<S> <C> <C> <C>
6.750%, with a maturity date of June 25, 2006
(Cost $5,890,309)....................................... 6,080,496 5,951,285
------------
Total Long-Term Government and Agency Securities
(Cost $617,705,984)..................................... 616,971,240
------------
SHORT TERM INVESTMENTS 3.6
Federal Home Loan Bank Discount Note-3.6
5.280%, with a maturity date of May 1, 1997
(Cost $22,680,000)...................................... 22,680,000 22,680,000
------------
Total Short Term Investments
(Cost $22,680,000)...................................... 22,680,000
-------- ------------
Summary
Total investments (Cost $640,385,984) (g)...................... 100.5 639,651,240
Other assets and liabilities, net.............................. (0.5) (3,049,636)
-------- ------------
Net assets.......................................................... 100.0 $636,601,604
-------- ------------
-------- ------------
</TABLE>
- ------------
NOTES:
(a) The investments in mortgage-backed securities are interests in separate
pools of mortgages. All such issues which have the same 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 ("CMOs")--The net
asset value of the Fund is sensitive to interest rate fluctuations. CMOs
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 CMOs as they are
received, but certain classes of CMOs have priority over others with
respect to the receipt of prepayments on the mortgages. Therefore, an
investment in a CMO may be subject to a greater or lesser risk of
prepayment than other types of mortgage-related securities and this
uncertainty results in greater price volatility.
(d) 144A Securities--These securities are private placement securities and can
be considered restricted since resale of such securities are only allowed
to certain qualified institutional buyers. Because the disposition of these
securities are restricted, such securities could possibly become illiquid
in particular circumstances.
(e) To be announced ("TBA" Forward Commitment Transactions) securities (Note
2).
(f) Collateral for open futures contracts (Note 3).
(g) See Note 3 in the Notes to Financial Statements 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 Government Fund 29
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
(h) At April 30, 1997, open futures contracts purchased were as follows:
<TABLE>
<CAPTION>
Contracts Expiration Market Unrealized
Purchased Description Date Value Depreciation
--------- ---------------------------------------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
251 U.S. Treasury Note and Bond Futures June 97 $26,918,531 $ (155,280)
----------- ------------
----------- ------------
</TABLE>
(i) Federal Housing Administration ("FHA") project loans--These securities are
pass-throughs or participation certificates backed by the U.S. Department
of Housing and Urban Development ("HUD"). Although HUD insures the project
loan collateral, it does not guarantee timely payment of principal and
interest on the securities. Project loans held by the Fund are structured
as Construction Loan Certificates/Permanent Loan Certificates
("CLCs/PLCs"). The Fund purchases a project loan by committing to fund
construction costs on a monthly basis until the project is built (CLCs).
When construction is completed, the Fund's cumulative monthly construction
financing payments are rolled into permanent mortgages on the buildings
(PLCs).
As of April 30, 1997, the Fund had committed to fund construction costs as
follows:
<TABLE>
<CAPTION>
Principal Market
Description Amount Value
- ------------------------------------------------------------------- ---------- ----------
<S> <C> <C> <C>
Elton Home, 9.250%, March 1, 2037............................. $ 165,898 $ 169,371
Messenger House Care, 8.500%, July 31, 2021................... 2,191,356 2,211,055
Northfield Commons, 7.900%, September 1, 2037................. 1,093,312 1,109,558
Pine Creek, 8.500%, July 31, 2036............................. 790,512 796,796
University Park, 7.875%, January 1, 2038...................... 3,524,314 3,498,047
Willow Creek, 8.000%, July 1, 2037............................ 910,040 933,816
----------
$8,718,643
----------
----------
</TABLE>
These costs are stated in the Statement of Assets and Liabilities as
Project Loans Payable.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
30 Investors Trust Tax Free Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
LONG-TERM MUNICIPAL INVESTMENTS 89.3
Alabama-0.3
Birmingham Alabama North Medical Clinic Board Revenue,
6.625%, April 1, 2000*.......................................... 75,000 79,060
-----------
Alaska-0.1
North Slope Borough Alaska, 10.000%, June 30, 2001* (b)........... 30,000 35,745
-----------
Arizona-0.7
Maricopa County Arizona, 6.250%, July 1, 2002 (b)................. 175,000 186,153
-----------
Arkansas-3.1
Arkansas Housing Development Agency,
8.375%, July 1, 2010*........................................... 270,000 331,460
Arkansas Housing Development Agency,
8.375%, July 1, 2011*........................................... 235,000 301,406
Pulaski County Arkansas Hospital Revenue,
9.250%, March 1, 2010*.......................................... 105,000.. 134,504
-----------
767,370
-----------
California-4.9
California State, 8.750%, May 1, 2004............................. 110,000 133,938
Sacramento California Municipal Utility District Electric Revenue,
9.000%, April 1, 2013 [Series M]*............................... 620,000 816,620
San Diego California Hospital Revenue,
8.875%, February 1, 2011*....................................... 210,000 267,891
-----------
1,218,449
-----------
Colorado-3.5
Colorado Springs Utilities Revenue,
8.500%, November 15, 2011*...................................... 100,000 125,867
Denver Colorado City and County Single-Family Mortgage Revenue,
7.000%, August 1, 2010 [Series 1978A]*.......................... 490,000 553,915
Loveland Colorado, 8.875%, November 1, 2005*...................... 165,000 202,066
-----------
881,848
-----------
Connecticut-4.9
Connecticut State Health and Educational Facility Authority,
7.000%, July 1, 2012*........................................... 725,000 816,778
Connecticut State Housing Finance Authority,
6.050%, May 15, 2014............................................ 410,000 414,596
-----------
1,231,374
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Tax Free Fund 31
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ---------- -----------
Delaware-0.9
<S> <C> <C> <C>
Delaware Transportation Authority Transportation Systems Revenue,
6.100%, July 1, 2002............................................ 110,000 116,006
Georgetown Delaware, 6.800%, June 1, 2001** (b)................... 100,000 107,604
-----------
223,610
-----------
Florida-6.1
Broward County Florida General Obligation,
6.200%, January 1, 2007 [Series C].............................. 25,000 26,478
Dade County Florida Health Facilities Authority Hospital Revenue,
6.400%, May 1, 2001* (b)........................................ 100,000 106,025
Florida State, Department of General Services, Broward County
Expressway Revenue, 6.500%, July 1, 2003 [Series A]............. 675,000 690,066
Florida State, Turnpike-Department of Transportation,
Broward County Expressway, 10.000%, July 1, 2014................ 235,000 347,734
Gainesville Florida Utilities Systems Revenue,
8.125%, October 1, 2014*........................................ 175,000 219,426
Jacksonville Florida Electric Authority Revenue,
6.500%, October 1, 2003 [Series 10]............................. 135,000 146,768
-----------
1,536,497
-----------
Georgia-2.3
Clarke County Georgia Hospital Authority Revenue,
9.875%, January 1, 2006* (b).................................... 80,000 103,513
Columbus Georgia Medical Center Hospital Authority Revenue,
7.750%, July 1, 2010*........................................... 285,000 341,011
Gwinnett County Georgia Water and Sewage Authority Water Revenue,
9.600%, October 1, 2004*........................................ 115,000 143,296
-----------
587,820
-----------
Hawaii-0.9
Honolulu Hawaii City and County,
7.250%, July 1, 2002 [Series A]................................. 200,000 221,168
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
32 Investors Trust Tax Free Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ---------- -----------
Idaho-3.1
<S> <C> <C> <C>
Idaho Falls Idaho Electric Revenue,
10.375%, April 1, 2007**........................................ 560,000 783,938
-----------
Illinois-1.0
Chicago Illinois Motor Fuel Tax Revenue,
6.500%, January 1, 2001** (b)................................... 20,000 21,192
Chicago Illinois Wastewater Transmission Revenue,
6.300%, January 1, 2003** (b)................................... 20,000 21,663
Des Plaines Illinois Hospital Facility Revenue,
10.750%, July 1, 2002**......................................... 115,000 145,139
Waukegan Illinois Water and Sewer Revenue,
7.500%, May 1, 2006*............................................ 50,000 58,145
-----------
246,139
-----------
Indiana-0.2
Indiana University Revenue,
10.125%, July 1, 2010 [Series N]**.............................. 35,000 41,948
-----------
Iowa-4.4
Muscatine Iowa Electric Revenue,
9.700%, January 1, 2013*........................................ 815,000 1,107,854
-----------
Louisiana-2.7
Jefferson Parish Louisiana Hospital Service,
7.250%, January 1, 2009*........................................ 600,000 677,100
-----------
Maine-0.8
Maine Municipal Bond Bank, 7.100%, November 1, 1999 [Series D]**.. 10,000 10,788
Maine Municipal Bond Bank, 7.200%, November 1, 2000 [Series B]**.. 65,000 71,341
Maine Municipal Bond Bank Sewer and Water Revenue,
7.200%, November 1, 2001 [Series A]**........................... 100,000 111,145
-----------
193,274
-----------
Massachusetts-4.8
Massachusetts Bay Transportation Authority,
7.250%, March 1, 2003 [Series A] (b)............................ 100,000 108,302
Massachusetts State, 6.750%, August 1, 2009 [Series C] (b)........ 250,000 271,608
Massachusetts State Port Authority Revenue,
13.000%, July 1, 2013*.......................................... 500,000 833,895
-----------
1,213,805
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Tax Free Fund 33
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
Michigan-2.7
Michigan State Hospital Finance Authority Revenue,
7.125%, May 1, 2009*............................................ 380,000 429,940
Michigan State Hospital Finance Authority Revenue,
9.000%, May 1, 2008*............................................ 195,000 250,257
-----------
680,197
-----------
Minnesota-1.3
Rochester Minnesota Health Care Facilities Revenue,
6.250%, November 15, 2014....................................... 300,000 314,292
-----------
Mississipi-1.3
Mississippi State, 6.200%, February 1, 2008*...................... 300,000 327,831
-----------
Missouri--0.1
Lees Summit Missouri Water and Sewer Revenue,
10.000%, July 1, 2000 [Series 1984-A]** (b)..................... 20,000 23,098
-----------
New Hampshire-0.1
New Hampshire Municipal Bond Bank State Guaranteed,
6.800%, January 15, 2000 [Series B]**........................... 25,000 26,812
-----------
New Jersey-1.5
Atlantic County New Jersey Improvement Authority Lease Revenue,
7.400%, March 1, 2012 [Series A]* (b)........................... 225,000 267,417
New Jersey Economic Development Authority Market,
7.000%, July 1, 2004 [Series A] (b)............................. 100,000 111,154
-----------
378,571
-----------
New Mexico-2.6
Farmington New Mexico Power Revenue,
9.875%, July 1, 2005**.......................................... 400,000 527,332
Farmington New Mexico Utility Systems Revenue,
9.875%, January 1, 2008*(b)..................................... 100,000 131,531
-----------
658,863
-----------
New York-9.7
Erie County New York Water Authority Water Revenue,
6.000%, December 1, 2008 [Series A]* (b)........................ 400,000 423,988
New York City, 6.000%, August 1, 2006 [Series D]* (b)............. 300,000 303,645
New York State, 7.100%, March 1, 2001**........................... 50,000 55,018
New York State Dormitory Authority Revenue,
7.375%, July 1, 2016*........................................... 470,000 559,803
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
34 Investors Trust Tax Free Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
New York State Dormitory Authority Revenue,
7.500%, May 15, 2011............................................ 165,000 190,133
New York State Environmental Facilities Corporation,
6.800%, November 15, 2010....................................... 200,000 222,836
New York State Housing Finance Agency,
6.400%, November 1, 2003 [Series A]*............................ 175,000 184,852
New York State Local Government Assistance,
6.750%, April 1, 2002 [Series A]................................ 45,000 48,905
New York State Local Government Assistance,
7.250%, April 1, 2007 [Series B]**.............................. 350,000 387,957
New York State Local Government Assistance Corporation,
6.000%, April 1, 2005 [Series C]................................ 50,000 52,505
-----------
2,429,642
-----------
North Carolina-5.0
North Carolina Municipal Power Agency Number One Catawba,
10.500%, January 1, 2010*....................................... 915,000 1,256,460
-----------
Ohio-1.1
Columbus Ohio, 6.000%, July 1, 2008 [Series 2].................... 50,000 52,978
Ohio State Water Development Authority Revenue,
7.000%, December 1, 2009 [Series I]* (b)........................ 200,000 228,174
-----------
281,152
-----------
Pennsylvania-7.1
Allegheny County Pennsylvania Hospital Development Authority,
7.375%, July 1, 2012 [Series N]*................................ 150,000 175,103
Pennsylvania Intergovernmental Cooperative Authority,
6.800%, June 15, 2002**......................................... 50,000 54,374
Pennsylvania State Turnpike Commission Turnpike Revenue,
7.150%, December 1, 2001 [Series J]** (b)....................... 25,000 27,848
Philadelphia Pennsylvania Hospitals and Higher Education
Facilities, 6.500%, February 15, 2002 [Series A]**.............. 325,000 352,384
Philadelphia Pennsylvania Hospitals Authority Revenue,
9.875%, July 1, 2005**.......................................... 480,000 631,666
Philadelphia Pennsylvania Regional Port Authority Lease Revenue,
7.150%, August 1, 2000** (b).................................... 30,000 32,237
Pittsburgh Pennsylvania Water and Sewer Authority, Water and
Sewer, 7.250%, September 1, 2014*............................... 425,000 499,651
-----------
1,773,263
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Tax Free Fund 35
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
Puerto Rico-1.9
Puerto Rico Commonwealth Aqueduct and Sewer Authority
Revenue, 10.250%, July 1, 2009*................................. 340,000 466,432
-----------
Rhode Island-0.3
Convention Center Authority Rhode Island Revenue,
6.300%, May 15, 2001 [Series A]** (b)........................... 45,000 48,281
Rhode Island Depositors Economic Protection,
7.100%, August 1, 2001 [Series A]** (b)......................... 35,000 38,703
-----------
86,984
-----------
South Carolina-2.9
South Carolina State Public Service Authority Revenue,
6.500%, July 1, 2002 [Series D]** (b)........................... 195,000 212,583
Spartanburg South Carolina Waterworks Revenue,
6.000%, June 1, 2005............................................ 500,000 524,470
-----------
737,053
-----------
Tennessee-0.3
Metropolitan Government Nashville and Davidson,
9.600%, July 1, 2005 [Series N]*................................ 65,000 84,549
-----------
Texas-3.5
Arlington Texas Independent School District,
5.900%, February 15, 2003....................................... 350,000 363,699
Austin Texas Utility Systems Revenue,
7.250%, November 15, 2003....................................... 50,000 52,666
Austin Texas Utility Systems Revenue,
10.750%, May 15, 2000**......................................... 30,000 35,087
Gulf Coast Waste Disposal Authority Texas,
8.375%, June 1, 2005*........................................... 100,000 121,148
Houston Texas Water Systems Revenue,
7.300%, December 1, 2006*....................................... 100,000 116,926
Lamar University Texas Revenue, 7.000%, April 1, 2006*............ 35,000 39,851
San Antonio Texas Water Revenue, 7.125%, May 1, 1999** (b)........ 25,000 26,636
Texas A&M University Revenue, 9.400%, June 1, 2004*............... 40,000 50,412
Texas A&M University Revenue, 9.400%, June 1, 2006*............... 55,000 72,061
-----------
878,486
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
36 Investors Trust Tax Free Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Principal Market
Assets Amount ($) Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
Utah-1.1
Intermountain Power Agency Utah Power Supply,
7.200%, July 1, 1999 [Series A]**............................... 10,000 10,742
Utah State Municipal Finance Cooperative Local Government Revenue,
7.000%, June 1, 2001** (b)...................................... 250,000 272,720
-----------
283,462
-----------
Virginia-0.5
Richmond Virginia Metropolitan Authority Expressway Revenue,
7.000%, October 15, 2013* (b)................................... 115,000 126,778
-----------
Washington-0.7
Municipality of Metropolitan Seattle Sewer Revenue,
6.875%, January 1, 2000 [Series T]** (b)........................ 40,000 42,977
Snohomish County Washington Public Utility District
Number 001, 6.375%, January 1, 2005*............................ 20,000 21,286
Washington State Public Power Supply Systems Nuclear,
7.200%, July 1, 2002 [Series B]................................. 100,000 107,151
-----------
171,414
-----------
West Virginia-0.9
Wood County West Virginia Building Commission Revenue,
6.625%, January 1, 2006* (b).................................... 215,000 230,729
-----------
Total Long-Term Municipal Investments
(Cost $22,210,933)......................................... 22,449,220
-----------
SHORT-TERM MUNICIPAL INVESTMENTS 8.8
Los Angeles Regional Airports Improvement Corporation,
3.950%, (a) May 1, 1997......................................... 700,000 700,000
Massachusetts State, 3.850%, (a) May 1, 1997 [Series B]........... 1,000,000 1,000,000
New York City, 4.000%, (a) May 1, 1997............................ 400,000 400,000
New York City, 4.000%, (a) May 1, 1997............................ 100,000 100,000
-----------
Total Short-Term Municipal Investments
(Cost $2,200,000).......................................... 2,200,000
-------- -----------
Summary
Total investments
(Cost $24,410,933) (c)..................................... 98.1 24,649,220
Other assets and liabilities, net................................. 1.9 488,478
-------- -----------
Net assets............................................................. 100.0 $25,137,698
-------- -----------
-------- -----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Tax Free Fund 37
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
- ------------
NOTES:
* Escrowed to maturity: Bonds which are collateralized by U.S. Treasury
securities which are held in escrow by a trustee and used to pay principal
and interest on such bonds.
** Pre-refunded: Bonds which are collateralized by U.S. Treasury securities
which are held in escrow and are used to pay principal and interest on the
tax-exempt issue and to retire the bonds at the earliest refunding date.
(a) Coupon rate is reset daily.
(b) The security is insured by FGIC, MBIA, or AMBAC.
(c) See Note 3 in the Notes to Financial Statements for cost for federal
income tax purposes and related unrealized appreciation (depreciation).
Other Information:
The composition of long-term municipal investments as a percentage of net
assets, is as follows:
<TABLE>
<CAPTION>
S&P/Moody's Rating % of Net Assets
- --------------------------------- ---------------
<S> <C>
AAA or Aaa 63.5%
AA or Aa 11.7%
A 13.9%
BBB or Baa 3.0%
Unrated securities of comparable
investment quality as above 6.0%
</TABLE>
The Fund had insurance concentrations of 5% or greater as of April 30, 1997
(as a percentage of net assets) as follows:
<TABLE>
<S> <C>
AMBAC 8.3%
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
38 Investors Trust Value Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
% of Net Number Market
Assets of Shares Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
COMMON STOCKS 99.6
Basic Industries-7.1
Diversified-1.3%
Corning, Incorporated.......................................... 13,000 627,250
-----------
Chemicals-5.8%
DuPont (EI) deNemours & Company................................ 18,800 1,995,150
PPG Industries, Incorporated................................... 14,800 804,750
-----------
2,799,900
-----------
3,427,150
-----------
Capital Goods-8.1
Electrical Equipment-8.1%
Emerson Electric Company....................................... 35,600 1,806,700
General Electric Company....................................... 18,900 2,095,537
-----------
3,902,237
-----------
Conglomerates-3.9
Minnesota Mining & Manufacturing Company....................... 21,300 1,853,100
-----------
Consumer Basics-28.6
Drugs & Health Care-14.1%
American Home Products Corporation............................. 29,400 1,947,750
Bristol Myers Squibb Company................................... 23,600 1,545,800
Eli Lilly & Company............................................ 22,500 1,977,187
Pfizer, Incorporated........................................... 13,700 1,315,200
-----------
6,785,937
-----------
Food & Beverages-2.9%
Campbell Soup Company.......................................... 10,800 552,150
PepsiCo, Incorporated.......................................... 23,800 830,025
-----------
1,382,175
-----------
Household Products-9.6%
Colgate Palmolive Company...................................... 13,300 1,476,300
Kimberly Clark Corporation..................................... 38,800 1,988,500
Procter & Gamble Company....................................... 8,900 1,119,175
-----------
4,583,975
-----------
Tobacco-2.0%
Philip Morris Companies, Incorporated.......................... 25,000 984,375
-----------
13,736,462
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Value Fund 39
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Number Market
Assets of Shares Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
Consumer Non-Durable Goods-8.5
Cosmetics & Toiletries-5.7%
Avon Products, Incorporated.................................... 32,200 1,984,325
Gillette Company............................................... 9,000 765,000
-----------
2,749,325
-----------
Retail Trade-2.8%
Dayton Hudson Corporation...................................... 17,500 787,500
Walgreen Company............................................... 11,900 547,400
-----------
1,334,900
-----------
4,084,225
-----------
Consumer Services-0.8
Air Travel-0.8%
AMR Corporation (a)............................................ 4,000 372,500
-----------
Energy-7.0
International Oil-6.0%
Exxon Corporation.............................................. 28,000 1,585,500
Mobil Corporation.............................................. 9,700 1,261,000
-----------
2,846,500
-----------
Petroleum Services-1.0%
Halliburton Company............................................ 6,900 487,313
-----------
3,333,813
-----------
Finance-12.6
Banks-9.7%
Banc One Corporation........................................... 35,000 1,483,125
Chase Manhattan Corporation.................................... 13,400 1,241,175
National City Corporation...................................... 39,700 1,935,375
-----------
4,659,675
-----------
Financial Services-2.0%
American Express Company....................................... 14,300 942,012
-----------
Insurance-0.9%
American International Group, Incorporated..................... 3,500 449,750
-----------
6,051,437
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
40 Investors Trust Value Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Number Market
Assets of Shares Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
General Business-0.9
Newspapers-0.9%
Gannett Company, Incorporated.................................. 4,800 418,800
-----------
Shelter-2.9
Construction Materials-2.9%
Masco Corporation.............................................. 37,000 1,396,750
-----------
Technology-13.5
Computers & Business Equipment-6.3%
Cisco Systems, Incorporated (a)................................ 9,100 470,925
Compaq Computer Corporation (a)................................ 6,100 520,787
Pitney Bowes, Incorporated..................................... 32,000 2,048,000
-----------
3,039,712
-----------
Electronics-4.5%
Intel Corporation.............................................. 14,100 2,159,063
-----------
Software-2.7%
Microsoft Corporation (a)...................................... 10,600 1,287,900
-----------
6,486,675
-----------
Utilities-5.7
Telephone-5.7%
Ameritech Corporation.......................................... 28,100 1,717,613
Bell Atlantic Corporation...................................... 15,000 1,007,670
-----------
2,725,283
-----------
Total Common Stocks
(Cost $38,636,983)...................................... 47,788,432
-----------
MONEY MARKET MUTUAL FUNDS 0.3
SSgA Money Market Fund [Class A]............................... 151,394 151,394
SSgA US Government Money Market Fund........................... 115 115
-----------
Total Money Market Mutual Funds
(Cost $151,509)......................................... 151,509
-------- -----------
Summary
Total investments
(Cost $38,788,492) (b).................................. 99.9 47,939,941
Other assets and liabilities, net.............................. 0.1 24,189
-------- -----------
Net assets.......................................................... 100.0 $47,964,130
-------- -----------
-------- -----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Value Fund 41
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
- ------------
NOTES:
(a) Non-income producing security.
(b) See Note 3 in the Notes to Financial Statements for cost for federal income
tax purposes and related gross unrealized appreciation (depreciation).
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
42 Investors Trust Growth Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
% of Net Number Market
Assets of Shares Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
COMMON STOCKS 95.2
Basic Industries-5.5
Chemicals-2.4%
Monsanto Company............................................... 10,000 427,500
Praxair, Incorporated.......................................... 9,000 464,625
-----------
892,125
-----------
Containers & Glass-2.2%
Coca-Cola Enterprises, Incorporated............................ 6,100 368,288
Sealed Air Corporation (a)..................................... 9,600 444,000
-----------
812,288
-----------
Paper & Forest Products-0.9%
Albany International Corporation............................... 16,000 322,000
-----------
2,026,413
-----------
Capital Goods-0.9
Agricultural Machinery-0.9%
Deere & Company................................................ 7,200 331,200
-----------
Conglomerates-1.7
Danaher Corporation............................................ 13,600 613,700
-----------
Consumer Basics-15.8
Drugs & Health Care-14.6%
Amgen, Incorporated............................................ 8,000 471,000
Boston Scientific Corporation (a).............................. 6,300 303,975
Guidant Corporation............................................ 5,600 382,200
HBO & Company.................................................. 5,200 278,200
Johnson & Johnson.............................................. 6,400 392,000
Medtronic, Incorporated........................................ 8,000 554,000
Merck & Company, Incorporated.................................. 4,000 362,000
Omnicare, Incorporated......................................... 10,200 248,625
Oxford Health Plans, Incorporated (a).......................... 15,900 1,047,413
Pfizer, Incorporated........................................... 5,600 537,600
Schering Plough Corporation.................................... 6,000 480,000
U.S. Surgical Corporation...................................... 8,700 297,975
-----------
5,354,988
-----------
Food & Beverages-1.2%
Coca-Cola Company.............................................. 6,800 432,650
-----------
5,787,638
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Growth Fund 43
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Number Market
Assets of Shares Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
Consumer Durable Goods-2.3
Automobiles-2.3%
Harley Davidson, Incorporated.................................. 12,200 481,900
Lear Corporation (a)........................................... 10,400 371,800
-----------
853,700
-----------
Consumer Non-Durable Goods-11.3
Apparel & Textiles-2.1%
Nike, Incorporated............................................. 6,000 337,500
Wolverine World Wide, Incorporated............................. 10,600 426,650
-----------
764,150
-----------
Cosmetics & Toiletries-1.4%
Gillette Company............................................... 6,000 510,000
-----------
Retail Trade-7.8%
CompUSA, Incorporated (a)...................................... 16,000 308,000
Dollar General Corporation..................................... 14,171 448,158
Gap, Incorporated.............................................. 10,800 344,250
Home Depot, Incorporated....................................... 7,500 435,000
Kohl's Corporation (a)......................................... 11,200 547,400
Petsmart, Incorporated (a)..................................... 25,000 420,312
Tiffany & Company.............................................. 9,100 360,588
-----------
2,863,708
-----------
4,137,858
-----------
Consumer Services-1.4
Hotels & Restaurants-1.4%
McDonald's Corporation......................................... 9,800 525,525
-----------
Energy-6.0
Domestic Oil-0.9%
Louisiana Land & Exploration Company........................... 6,500 325,000
-----------
Gas Exploration-1.1%
BJ Services Company (a)........................................ 8,200 386,425
-----------
Petroleum Services-4.0%
Smith International, Incorporated (a).......................... 12,200 577,975
Transocean Offshore, Incorporated.............................. 9,000 545,625
Western Atlas, Incorporated (a)................................ 5,600 347,200
-----------
1,470,800
-----------
2,182,225
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
44 Investors Trust Growth Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Number Market
Assets of Shares Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
Finance-18.9
Banks-9.3%
BankBoston Corporation......................................... 6,000 436,500
Citicorp....................................................... 3,500 394,187
Fifth Third Bancorp............................................ 9,000 671,625
Norwest Corporation............................................ 8,400 418,950
Star Banc Corporation.......................................... 16,200 688,500
Zions Bancorporation........................................... 6,400 809,600
-----------
3,419,362
-----------
Financial Services-6.4%
American Express Company....................................... 6,100 401,837
CUC International, Incorporated (a)............................ 18,000 380,250
Finova Group, Incorporated..................................... 9,000 617,625
Franklin Resources, Incorporated............................... 6,500 384,313
Green Tree Financial Corporation............................... 9,000 266,625
The Money Store, Incorporated.................................. 13,400 289,775
-----------
2,340,425
-----------
Insurance-3.2%
MGIC Investment Corporation.................................... 7,600 617,500
SunAmerica, Incorporated....................................... 12,000 552,000
-----------
1,169,500
-----------
6,929,287
-----------
General Business-6.1
Business Services-4.6%
First Data Corporation......................................... 9,000 310,500
FIserv, Incorporated (a)....................................... 14,800 558,700
Omnicom Group.................................................. 8,000 424,000
Robert Half International, Incorporated (a).................... 10,300 404,275
-----------
1,697,475
-----------
Communication Services-0.8%
Ascend Communications, Incorporated (a)........................ 4,400 201,300
Loral Space & Communications (a)............................... 5,000 73,125
-----------
274,425
-----------
Office Furnishings & Supplies-0.7%
Staples, Incorporated (a)...................................... 13,500 243,000
-----------
2,214,900
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Growth Fund 45
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Number Market
Assets of Shares Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
Technology-22.3
Aerospace-1.1%
McDonnell Douglas Corporation.................................. 6,600 391,875
-----------
Computers & Business Equipment-7.5%
Cisco Systems, Incorporated (a)................................ 5,600 289,800
Dell Computer Corporation (a).................................. 12,000 1,004,250
EMC Corporation Massachusetts (a).............................. 13,500 491,062
Gateway 2000, Incorporated (a)................................. 6,400 351,200
Hewlett Packard Company........................................ 5,600 294,000
Sun Microsystems, Incorporated (a)............................. 10,800 311,175
-----------
2,741,487
-----------
Electronics-3.6%
Adaptec, Incorporated (a)...................................... 10,400 384,800
Intel Corporation.............................................. 4,000 612,500
Newbridge Networks Corporation (a)............................. 10,000 317,500
-----------
1,314,800
-----------
Software-7.0%
BMC Software, Incorporated (a)................................. 8,000 346,000
Computer Associates International, Incorporated................ 6,750 351,000
McAfee Associates, Incorporated (a)............................ 8,700 485,025
Microsoft Corporation (a)...................................... 5,000 607,500
Oracle Systems Corporation (a)................................. 9,000 357,750
Parametric Technology Corporation (a).......................... 9,000 407,250
-----------
2,554,525
-----------
Telecommunication Equipment-3.1%
ADC Telecommunications, Incorporated (a)....................... 16,000 418,000
Andrew Corporation (a)......................................... 10,125 250,594
Tellabs, Incorporated (a)...................................... 12,000 478,500
-----------
1,147,094
-----------
8,149,781
-----------
Transportation-0.8
Railroads & Equipment-0.8%
Wisconsin Central Transportation Corporation (a)............... 9,000 294,750
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
46 Investors Trust Growth Fund
- --------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
% of Net Number Market
Assets of Shares Value ($)
-------- ---------- -----------
<S> <C> <C> <C>
Utilities-2.2
Electric-1.3%
AES Corporation (a)............................................ 7,100 463,275
-----------
Telephone-0.9%
Cincinnati Bell, Incorporated.................................. 6,000 336,000
-----------
799,275
-----------
Total Common Stocks
(Cost $24,966,735)...................................... 34,846,252
-----------
MONEY MARKET MUTUAL FUNDS 5.0
SSgA Money Market Fund [Class A]............................... 1,145,415 1,145,415
SSgA US Government Money Market Fund........................... 707,934 707,934
-----------
Total Money Market Mutual Funds
(Cost $1,853,349)....................................... 1,853,349
-------- -----------
Summary
Total investments
(Cost $26,820,084) (b).................................. 100.2 36,699,601
Other assets and liabilities, net.............................. (0.2) (83,051)
-------- -----------
Net assets.......................................................... 100.0 $36,616,550
-------- -----------
-------- -----------
</TABLE>
- ------------
NOTES:
(a) Non-income producing security.
(b) See Note 3 in the Notes to Financial Statements 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 47
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Adjustable
Rate Government Tax Free Value Growth
Fund Fund Fund Fund Fund
---------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Assets
Investments at market value
(identified cost $6,815,262,
$640,385,984, $24,410,933,
$38,788,492 and $26,820,084,
respectively) (Notes 2 and 3)....... $6,991,357 $639,651,240 $24,649,220 $47,939,941 $36,699,601
Cash.................................. 55 26,740 77,561 24 3
Receivables:
Fund shares sold................. -- 16,552 3,000 59,435 747
Dividends........................ 599 -- -- 59,631 17,722
Interest......................... 43,522 10,090,934 470,217 -- --
Investments sold................. -- 5,883,743 -- 1,027,507 --
Adviser (Note 4)................. 10,334 -- 35,729 -- 3,188
Deferred organization costs
(Note 2)............................ 16,730 -- 16,730 16,730 16,730
Prepaid expenses...................... 11,120 7,281 11,835 9,969 8,583
---------- ------------ ----------- ----------- -----------
Total assets.......................... 7,073,717 655,676,490 25,264,292 49,113,237 36,746,574
---------- ------------ ----------- ----------- -----------
Liabilities
Payables:
Fund shares redeemed............. -- 1,492,820 -- 46,716 47,673
Investments purchased............ -- 6,070,506 38,700 1,007,670 --
Project loans payable............ -- 8,718,643 -- -- --
Dividends........................ 9,676 994,454 31,021 -- --
Adviser (Note 4)................. -- -- -- 1,129 --
Daily variation margin on open
futures contracts (Notes 2
and 3)........................... -- 93,188 -- -- --
Accrued distribution fee and
shareholder service fee
(Note 4)......................... 4,518 799,972 21,317 35,212 30,298
Accrued management fee
(Note 4)......................... 2,318 335,273 11,686 29,514 23,154
Other accrued expenses................ 19,417 570,030 23,870 28,866 28,899
---------- ------------ ----------- ----------- -----------
Total liabilities..................... 35,929 19,074,886 126,594 1,149,107 130,024
---------- ------------ ----------- ----------- -----------
Net assets............................ $7,037,788 $636,601,604 $25,137,698 $47,964,130 $36,616,550
---------- ------------ ----------- ----------- -----------
---------- ------------ ----------- ----------- -----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
48 Investors Trust Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1997 (unaudited), continued
<TABLE>
<CAPTION>
Adjustable
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)......... $ 1,880 $ (1,667,053) $ 167,433 $ (27,903) $ (190,177)
Accumulated net realized gains
(losses)......................... (201,217) (201,178,464) (231,717) 1,814,670 68,076
Unrealized appreciation
(depreciation) on:
Investments (Note 3)............. 176,095 (734,744) 238,287 9,151,449 9,879,517
Futures contracts (Note 3)....... -- (155,280) -- -- --
Shares of beneficial interest......... 7,061,030 840,337,145 24,963,695 37,025,914 26,859,134
---------- ------------ ----------- ----------- -----------
Net assets............................ $7,037,788 $636,601,604 $25,137,698 $47,964,130 $36,616,550
---------- ------------ ----------- ----------- -----------
---------- ------------ ----------- ----------- -----------
Class A:
Net Assets............................ $5,905,774 $ 28,546,905 $16,100,337 $ 6,982,166 $ 8,629,890
---------- ------------ ----------- ----------- -----------
---------- ------------ ----------- ----------- -----------
Outstanding shares of beneficial
interest (No par value).......... 918,888 3,422,003 1,411,919 607,753 626,643
Net asset value and redemption price
per share........................ $ 6.43 $ 8.34 $ 11.40 $ 11.49 $ 13.77
Maximum offering price per share
(100/95.5 of net asset value per
share)........................... $ 6.73 $ 8.73 $ 11.94 $ 12.03 $ 14.42
Class B:
Net Assets............................ $1,132,014 $608,054,699 $ 9,037,361 $40,981,964 $27,986,660
---------- ------------ ----------- ----------- -----------
---------- ------------ ----------- ----------- -----------
Outstanding shares of beneficial
interest (No par value).......... 176,126 72,800,685 791,433 3,583,038 2,085,680
Net asset value, offering and
redemption price per share
(Note 4)....................... $ 6.43 $ 8.35 $ 11.42 $ 11.44 $ 13.42
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investors Trust Mutual Funds 49
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the six month period ended April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Adjustable Government Tax Free Value Growth
Rate Fund Fund Fund Fund Fund
---------- ------------ --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Investment income:
Interest....................................... $226,512 $ 27,462,174 $ 683,602 $ -- $ 2,167
Dividends...................................... 3,680 -- -- 427,204 159,673
---------- ------------ --------- ---------- ----------
Total Income................................... 230,192 27,462,174 683,602 427,204 161,840
---------- ------------ --------- ---------- ----------
Expenses:
Management fee (Note 4).................... 13,871 2,227,655 72,926 173,416 146,304
Distribution fee-Class B (Note 4).......... -- 2,525,189 34,237 138,663 105,268
Shareholder servicing fees (Note 4):
Class A................................. 4,391 17,634 14,825 2,230 4,082
Class B................................. 882 413,037 8,408 12,930 13,467
Transfer agent fee......................... 23,098 458,275 25,667 38,408 38,698
Custodian fee.............................. 37,607 184,427 45,320 37,672 36,956
Amortization of organization costs
(Note 2)................................ 6,199 -- 6,199 6,199 6,199
Registration fees.......................... 9,042 12,077 9,688 10,619 10,567
Shareholder reports........................ 1,439 93,629 2,872 6,430 7,414
Professional fees.......................... 552 68,056 1,920 2,513 2,413
Insurance.................................. 198 23,474 667 832 861
Trustees' fees and expenses................ 66 8,027 229 300 289
Other...................................... 289 121,647 1,672 3,193 3,144
---------- ------------ --------- ---------- ----------
Total expenses before reimbursement from
Adviser...................................... 97,634 6,153,127 224,630 433,405 375,662
Reimbursement of expenses from Adviser
(Note 4)..................................... (64,708) -- (224,630) (1,969) (23,645)
---------- ------------ --------- ---------- ----------
Expenses, net.................................. 32,926 6,153,127 -- 431,436 352,017
---------- ------------ --------- ---------- ----------
Net investment income (loss)................... 197,266 21,309,047 683,602 (4,232) (190,177)
---------- ------------ --------- ---------- ----------
Realized and unrealized gain (loss) on
investments
Net realized gain (loss) from:
Investment transactions
(Notes 2 and 3)......................... 204 (950,766) (55,544) 1,826,916 512,995
Option contracts........................... -- 497,790 -- -- --
Futures contracts.......................... -- (408,335) -- -- --
Net increase (decrease) in unrealized
appreciation (depreciation) during the
period from:
Investment transactions.................... 26,773 (10,723,010) (53,814) 4,106,332 1,217,901
Option contracts........................... -- (94,744) -- -- --
Futures contracts.......................... -- 727,318 -- -- --
---------- ------------ --------- ---------- ----------
Net realized and unrealized gain (loss) on
investments.................................. 26,977 (10,951,747) (109,358) 5,933,248 1,730,896
---------- ------------ --------- ---------- ----------
Net increase in net assets resulting from
operations................................... $224,243 $ 10,357,300 $ 574,244 $5,929,016 $1,540,719
---------- ------------ --------- ---------- ----------
---------- ------------ --------- ---------- ----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
50
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Adjustable Rate Fund
----------------------------------
Six Month
Period Ended
April 30, 1997 Year Ended
(Unaudited) October 31, 1996
-------------- ----------------
<S> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss)..................................................... $ 197,266 $ 378,092
Net realized gain (loss) from:
Investment transactions........................................................ 204 (12,778)
Option contracts............................................................... -- --
Futures contracts.............................................................. -- --
Net increase (decrease) in unrealized appreciation (depreciation) during the
period from:
Investment transactions........................................................ 26,773 31,768
Option contracts............................................................... -- --
Futures contracts.............................................................. -- --
-------------- ----------------
Net increase in net assets resulting from operations.............................. 224,243 397,082
-------------- ----------------
Distributions to shareholders from (Note 2):
Class A
Net investment income.......................................................... (167,111) (298,845)
Distributions in excess of net investment income............................... -- --
Net realized gains............................................................. -- --
Tax return of capital.......................................................... -- --
-------------- ----------------
Distributions to Class A shareholders.......................................... (167,111) (298,845)
-------------- ----------------
Class B
Net investment income.......................................................... (34,053) (79,247)
Distributions in excess of net investment income............................... -- --
Net realized gains............................................................. -- --
Tax return of capital.......................................................... -- --
-------------- ----------------
Distributions to Class B shareholders............................................ (34,053) (79,247)
-------------- ----------------
Total distributions to shareholders.............................................. (201,164) (378,092)
-------------- ----------------
Increase (decrease) in net assets resulting from operations,
net of distributions to shareholders............................................ 23,079 18,990
-------------- ----------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Mutual Funds 51
- --------------------------------------------------------------------------------
<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, 1997 Year Ended April 30, 1997 Year Ended April 30, 1997 Year Ended April 30, 1997
(Unaudited) October 31, 1996 (Unaudited) October 31, 1996 (Unaudited) October 31, 1996 (Unaudited)
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
$ 21,309,047 $ 55,213,311 $ 683,602 $ 1,347,773 $ (4,232) $ 102,618 $ (190,177)
(950,766) 5,292,635 (55,544) 192 1,826,916 3,192,415 512,995
497,790 (1,289,801) -- -- -- -- --
(408,335) (7,988,014) -- -- -- -- --
(10,723,010) (15,982,620) (53,814) 115,799 4,106,332 2,432,088 1,217,901
(94,744) (252,124) -- -- -- -- --
727,318 (1,545,243) -- -- -- -- --
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
10,357,300 33,448,144 574,244 1,463,764 5,929,016 5,727,121 1,540,719
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
(1,005,197) (1,692,150) (392,336) (789,946) (21,440) (42,207) --
-- -- -- -- -- (2,142) --
-- -- -- -- (475,283) (35,364) --
-- (258,257) -- -- -- -- --
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
(1,005,197) (1,950,407) (392,336) (789,946) (496,723) (79,713) --
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
(20,690,236) (52,573,700) (222,304) (428,491) (2,231) (80,140) --
-- -- -- -- -- (4,066) --
-- -- -- -- (2,729,341) (131,342) --
-- (8,023,827) -- -- -- -- --
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
(20,690,236) (60,597,527) (222,304) (428,491) (2,731,572) (215,548) --
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
(21,695,433) (62,547,934) (614,640) (1,218,437) (3,228,295) (295,261) --
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
)
(11,338,133 (29,099,790) (40,396) 245,327 2,700,721 5,431,860 1,540,719
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
Year Ended
October 31, 1996
- ----------------
$ (153,238)
(243,412)
--
--
4,436,873
--
--
- ----------------
4,040,223
- ----------------
--
--
--
--
- ----------------
--
- ----------------
--
--
--
--
- ----------------
--
- ----------------
--
- ----------------
4,040,223
- ----------------
(continued)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
52
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS, continued
</TABLE>
<TABLE>
<CAPTION>
Adjustable Rate Fund
---------------------------------
Six Month
Period Ended
April 30, 1997 Year Ended
(Unaudited) October 31, 1996
-------------- ----------------
<S> <C> <C>
Share transactions:
Class A
Proceeds from sale of shares..................................................... $ 6,768 $ 27,226
Reinvestment of distributions.................................................... 166,576 295,536
Cost of shares redeemed.......................................................... (2,988) (96,085)
-------------- ----------------
Net increase (decrease) in net assets resulting
from share transactions........................................................ 170,356 226,677
-------------- ----------------
Class B
Proceeds from sale of shares..................................................... 269,522 389,371
Reinvestment of distributions.................................................... 29,054 71,484
Cost of shares redeemed.......................................................... (539,549) (955,523)
-------------- ----------------
Net increase (decrease) in net assets resulting
from share transactions........................................................ (240,973) (494,668)
-------------- ----------------
Total net increase (decrease) in net assets
resulting from share transactions................................................ (70,617) (267,991)
-------------- ----------------
Increase (decrease) in net assets................................................... (47,538) (249,001)
Net assets at beginning of period................................................... 7,085,326 7,334,327
-------------- ----------------
Net assets at end of period......................................................... $7,037,788 $7,085,326
-------------- ----------------
-------------- ----------------
Undistributed (accumulated distributions in excess of)
net investment income (loss) at end of period..................................... $ 1,880 $ 5,778
-------------- ----------------
-------------- ----------------
Fund Share Information:
Class A
Shares sold...................................................................... 1,054 4,278
Shares issued upon reinvestment of distributions................................. 25,939 46,300
Shares redeemed.................................................................. (465) (15,068)
-------------- ----------------
Increase (decrease) in Fund shares outstanding................................... 26,528 35,510
-------------- ----------------
-------------- ----------------
Class B
Shares sold...................................................................... 41,952 60,938
Shares issued upon reinvestment of distributions................................. 4,523 11,196
Shares redeemed.................................................................. (83,902) (150,064)
-------------- ----------------
Increase (decrease) in Fund shares outstanding................................... (37,427) (77,930)
-------------- ----------------
-------------- ----------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Mutual Funds 53
- --------------------------------------------------------------------------------
<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, 1997 Year Ended April 30, 1997 Year Ended April 30, 1997 Year Ended April 30, 1997
(Unaudited) October 31, 1996 (Unaudited) October 31, 1996 (Unaudited) October 31, 1996 (Unaudited)
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,650,654 $ 11,137,901 $ 36,648 $ 309,165 $ 488,767 $ 1,029,337 $ 458,647
514,630 902,225 15,269 23,330 496,574 79,393 --
(5,224,724) (9,198,287) (93,442) (351,480) (235,399) (319,837) (433,171)
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
)
(59,440 2,841,839 (41,525) (18,985) 749,942 788,893 25,476
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
1,028,780 9,242,327 671,703 2,631,898 6,097,391 18,661,475 2,639,041
10,880,444 31,218,929 157,299 317,971 2,619,315 204,072 434
(140,215,602) (377,040,027) (962,467) (1,516,101) (3,354,282) (4,468,090) (3,427,129)
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
(128,306,378) (336,578,771) (133,465) 1,433,768 5,362,424 14,397,457 (787,654)
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
(128,365,818) (333,736,932) (174,990) 1,414,783 6,112,366 15,186,350 (762,178)
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
(139,703,951) (362,836,722) (215,386) 1,660,110 8,813,087 20,618,210 778,541
776,305,555 1,139,142,277 25,353,084 23,692,974 39,151,043 18,532,833 35,838,009
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
$ 636,601,604 $ 776,305,555 $ 25,137,698 $ 25,353,084 $ 47,964,130 $ 39,151,043 $ 36,616,550
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
$ (1,667,053) $ (1,280,667) $ 167,433 $ 98,471 $ (27,903) -- $ (190,177)
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
550,797 1,317,620 3,199 27,357 43,639 106,358 33,561
61,157 106,174 1,335 2,058 46,980 8,436 --
(620,603) (1,082,308) (8,220) (30,937) (21,469) (32,438) (31,792)
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
(8,649) 341,486 (3,686) (1,522) 69,150 82,356 1,769
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
122,446 1,073,669 58,631 231,317 551,320 1,904,118 197,566
1,290,909 3,657,994 13,720 28,018 248,004 21,842 32
(16,648,496) (44,378,475) (84,026) (133,485) (304,651) (455,044) (258,269)
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
(15,235,141) (39,646,812) (11,675) 125,850 494,673 1,470,916 (60,671)
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
- -------------- ---------------- -------------- ---------------- -------------- ---------------- --------------
Year Ended
October 31, 1996
- ----------------
$ 1,707,031
--
(528,656)
- ----------------
1,178,375
- ----------------
14,887,732
--
(4,565,508)
- ----------------
10,322,224
- ----------------
11,500,599
- ----------------
15,540,822
20,297,187
- ----------------
$ 35,838,009
- ----------------
- ----------------
--
- ----------------
- ----------------
142,429
--
(43,333)
- ----------------
99,096
- ----------------
- ----------------
1,254,875
--
(385,371)
- ----------------
869,504
- ----------------
- ----------------
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
54
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The Financial Highlights set forth below include selected data for a share
outstanding throughout each period and other performance information derived
from the financial statements.
</TABLE>
<TABLE>
<CAPTION>
Distributions to
Income From Investment Operations Shareholders
-------------------------------------------- -------------------------
Net Asset Net Net Realized Total In excess
Value at Investment and Unrealized from Net of Net
Period Beginning Income Gains (Losses) Investment Investment Investment
Ended of Period (Loss) on Investments Operations Income Income
-------------- --------- ---------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Adjustable Rate Fund
Class A Apr-30-97(a) $ 6.41 $ 0.18 $ 0.02 $ 0.20 $(0.18) $--
Oct-31-96 6.39 0.33 0.03 0.36 (0.34) --
Oct-31-95 6.14 0.31 0.24 0.55 (0.30) --
Oct-31-94 6.49 0.25 (0.35) (0.10) (0.23) (0.01)
Oct-31-93(b) 6.50 0.03 (0.01) 0.02 (0.03) --
----------------------------------------------------------------------------------------------------------
Class B Apr-30-97(a) 6.41 0.18 0.02 0.20 (0.18) --
Oct-31-96 6.39 0.28 0.03 0.31 (0.29) --
Oct-31-95 6.14 0.26 0.24 0.50 (0.25) --
Oct-31-94 6.48 0.21 (0.34) (0.13) (0.19) (0.01)
Oct-31-93(b) 6.50 0.02 (0.02) -- (0.02) --
- -----------------------------------------------------------------------------------------------------------------------------------
Government Fund
Class A Apr-30-97(a) 8.48 0.28 (0.13) 0.15 (0.29) --
Oct-31-96 8.70 0.62 (0.22) 0.40 (0.54) --
Oct-31-95 8.43 0.58 0.38 0.96 (0.58) --
Oct-31-94 10.14 0.70 (1.60) (0.90) (0.70) --
Oct-31-93(b) 10.32 0.12 (0.18) (0.06) (0.12) --
----------------------------------------------------------------------------------------------------------
Class B Apr-30-97(a) 8.49 0.25 (0.13) 0.12 (0.26) --
Oct-31-96 8.71 0.55 (0.22) 0.33 (0.48) --
Oct-31-95 8.42 0.51 0.41 0.92 (0.52) --
Oct-31-94 10.14 0.60 (1.58) (0.98) (0.60) --
Oct-31-93 9.95 0.71 0.20 0.91 (0.71) (0.01)
Oct-31-92 9.98 0.73 0.03 0.76 (0.73) --
- -----------------------------------------------------------------------------------------------------------------------------------
Tax Free Fund
Class A Apr-30-97(a) 11.42 0.31 (0.05) 0.26 (0.28) --
Oct-31-96 11.31 0.62 0.05 0.67 (0.56) --
Oct-31-95 10.59 0.55 0.73 1.28 (0.55) (0.01)
Oct-31-94 11.48 0.45 (0.78) (0.33) (0.45) (0.11)
Oct-31-93(b) 11.50 0.05 0.01 0.06 (0.05) (0.02)
----------------------------------------------------------------------------------------------------------
Class B Apr-30-97(a) 11.44 0.31 (0.05) 0.26 (0.28) --
Oct-31-96 11.32 0.62 0.06 0.68 (0.56) --
Oct-31-95 10.60 0.55 0.73 1.28 (0.55) (0.01)
Oct-31-94 11.48 0.43 (0.82) (0.39) (0.43) (0.06)
Oct-31-93(b) 11.50 0.06 (0.01) 0.05 (0.03) (0.03)
- -----------------------------------------------------------------------------------------------------------------------------------
Value Fund
Class A Apr-30-97(a) 10.83 0.04 1.53 1.57 (0.04) --
Oct-31-96 8.95 0.05 1.99 2.04 (0.09) --
Oct-31-95 7.51 0.14 1.45 1.59 (0.15) --
Oct-31-94 7.63 0.13 (0.16) (0.03) (0.09) --
Oct-31-93(b) 7.50 0.01 0.12 0.13 -- --
----------------------------------------------------------------------------------------------------------
Class B Apr-30-97(a) 10.79 (0.01) 1.53 1.52 -- --
Oct-31-96 8.93 0.04 1.93 1.97 (0.04) --
Oct-31-95 7.50 0.07 1.45 1.52 (0.09) --
Oct-31-94 7.64 0.08 (0.17) (0.09) (0.05) --
Oct-31-93(b) 7.50 (0.01) 0.15 0.14 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Growth Fund
Class A Apr-30-97(a) 13.16 (0.03) 0.64 0.61 -- --
Oct-31-96(f) 11.38 0.00 1.78 1.78 -- --
Oct-31-95 8.81 0.01 2.56 2.57 -- --
Oct-31-94 8.69 (0.01) 0.21 0.20 -- --
Oct-31-93(b) 8.50 -- 0.19 0.19 -- --
----------------------------------------------------------------------------------------------------------
Class B Apr-30-97(a) 12.87 (0.08) 0.63 0.55 -- --
Oct-31-96(f) 11.21 (0.09) 1.75 1.66 -- --
Oct-31-95 8.74 (0.05) 2.52 2.47 -- --
Oct-31-94 8.70 (0.04) 0.16 0.12 -- --
Oct-31-93(b) 8.50 -- 0.20 0.20 -- --
<CAPTION>
Net In excess of
Realized Net Realized Tax
Capital Capital Return Total
Gains Gains of Capital Distributions
-------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Adjustable Rate Fund
Class A $-- $-- $-- $ (0.18)
-- -- -- (0.34)
-- -- -- (0.30)
-- -- (0.01) (0.25)
-- -- -- (0.03)
Class B -- -- -- (0.18)
-- -- -- (0.29)
-- -- -- (0.25)
-- -- (0.01) (0.21)
-- -- -- (0.02)
- ---------------------
Government Fund
Class A -- -- -- (0.29)
-- -- (0.08) (0.62)
-- -- (0.11) (0.69)
(0.03) -- (0.08) (0.81)
-- -- -- (0.12)
Class B -- -- -- (0.26)
-- -- (0.07) (0.55)
-- -- (0.11) (0.63)
(0.03) -- (0.11) (0.74)
-- -- -- (0.72)
(0.06) -- -- (0.79)
- ---------------------
Tax Free Fund
Class A -- -- -- (0.28)
-- -- -- (0.56)
-- -- -- (0.56)
-- -- -- (0.56)
-- -- (0.01) (0.08)
Class B -- -- -- (0.28)
-- -- -- (0.56)
-- -- -- (0.56)
-- -- -- (0.49)
-- -- (0.01) (0.07)
- ---------------------
Value Fund
Class A (0.87) -- -- (0.91)
(0.07) -- -- (0.16)
-- -- -- (0.15)
-- -- -- (0.09)
-- -- -- --
Class B (0.87) -- -- (0.87)
(0.07) -- -- (0.11)
-- -- -- (0.09)
-- -- -- (0.05)
-- -- -- --
- ---------------------
Growth Fund
Class A -- -- -- --
-- -- -- --
-- -- -- --
-- (0.08) -- (0.08)
-- -- -- --
Class B -- -- -- --
-- -- -- --
-- -- -- --
-- (0.08) -- (0.08)
-- -- -- --
</TABLE>
- ------------
(a) For the six month period ended April 30, 1997 (unaudited).
(b) For the period September 8, 1993 (commencement of operations) to October 31,
1993.
(c) Annualized.
(d) Total returns are historical and assume changes in share price and
reinvestment of dividends and capital gains. The maximum applicable sales
charge on Class A shares of each Fund was not reflected in total return
calculations. A contingent deferred sales charge on Class B shares of each
Fund of 5% the first year, declining by 1% per year for five years, was not
reflected in total return calculations. Additionally, the Adviser has agreed
to waive or limit certain expenses as described in detail in the Funds'
Prospectuses. Had the Adviser not absorbed a portion of expenses, total
return would have been lower. Periods less than one year are not annualized.
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Mutual Funds 55
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios and Supplemental Data
------------------------------------------------------------------------
Ratios to average
daily net assets (%) (c)
Net Increase Net Asset -------------------------------------
(Decrease) Value at Investment Net Assets,
in Net Asset End Total Net Gross Income Portfolio end of period
Value of Period Return (%) (d) Expenses Expenses (Loss), Net Turnover (%) (millions)
- ------------ --------- -------------- -------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0.02 $ 6.43 3.23 0.95 2.82 5.69 7.78 $ 5.9
0.02 6.41 5.81 0.95 2.55 5.35 39.49 5.7
0.25 6.39 9.20 0.95 2.96 4.91 53.07 5.5
(0.35) 6.14 (1.49) 0.95 2.86 4.04 115.55 5.1
(0.01) 6.49 0.26 0.98 3.24 2.78 0.34 5.1
- --------------------------------------------------------------------------------------------------------------------------
0.02 6.43 3.23 0.95 2.81 5.68 7.78 1.1
0.02 6.41 5.02 1.70 3.51 4.58 39.49 1.4
0.25 6.39 8.39 1.70 3.71 4.18 53.07 1.8
(0.34) 6.14 (2.07) 1.70 3.51 3.48 115.55 2.4
(0.02) 6.48 0.03 1.61 3.58 2.57 0.34 0.1
- --------------------------------------------------------------------------------------------------------------------------
(0.14) 8.34 1.79 1.03 1.03 6.81 67.58 28.5
(0.22) 8.48 4.80 0.90 0.90 6.59 334.41 29.1
0.27 8.70 11.77 1.01 1.01 6.78 315.71 27.0
(1.71) 8.43 (9.17) 0.99 0.99 7.09 128.82 22.0
(0.18) 10.14 (0.60) 0.95 0.95 6.81 75.96 1.0
- --------------------------------------------------------------------------------------------------------------------------
(0.14) 8.35 1.40 1.78 1.78 6.04 67.58 608.1
(0.22) 8.49 4.00 1.69 1.69 5.77 334.41 747.2
0.29 8.71 11.19 1.76 1.76 6.08 315.71 1,112.0
(1.72) 8.42 (9.98) 1.76 1.76 6.45 128.82 1,252.0
0.19 10.14 9.48 1.73 1.73 6.96 75.96 1,343.0
(0.03) 9.95 7.74 1.64 1.64 7.08 101.31 786.0
- --------------------------------------------------------------------------------------------------------------------------
(0.02) 11.40 2.26 -- 1.51 5.42 8.62 16.1
0.11 11.42 6.13 -- 1.52 5.42 5.76 16.2
0.72 11.31 12.24 -- 1.81 5.01 24.95 16.0
(0.89) 10.59 (2.99) 0.77 1.62 4.08 -- 14.3
(0.02) 11.48 0.54 1.15 2.09 2.73 -- 15.1
- --------------------------------------------------------------------------------------------------------------------------
(0.02) 11.42 2.26 -- 2.26 5.42 8.62 9.0
0.12 11.44 6.12 -- 2.26 5.43 5.76 9.2
0.72 11.32 12.33 -- 2.56 5.01 24.95 7.7
(0.88) 10.60 (3.45) 1.14 2.30 3.75 -- 5.0
(0.02) 11.48 0.43 1.84 2.48 2.27 -- 1.2
- --------------------------------------------------------------------------------------------------------------------------
0.66 11.49 15.22 1.35 1.36 0.62 33.45 7.0
1.88 10.83 23.10 1.35 1.73 1.03 100.02 5.8
1.44 8.95 21.45 1.35 2.43 1.71 27.41 4.1
(0.12) 7.51 (0.32) 1.35 3.55 1.92 14.53 3.2
0.13 7.63 1.73 1.42 6.37 0.73 6.04 2.2
- --------------------------------------------------------------------------------------------------------------------------
0.65 11.44 14.77 2.10 2.11 (0.13) 33.45 41.0
1.86 10.79 22.30 2.10 2.40 0.23 100.02 33.3
1.43 8.93 20.50 2.10 3.18 0.94 27.41 14.4
(0.14) 7.50 (1.10) 2.10 4.02 1.09 14.53 8.0
0.14 7.64 1.87 2.04 6.38 (1.07) 6.04 0.5
- --------------------------------------------------------------------------------------------------------------------------
0.61 13.77 4.64 1.35 1.48 (0.47) 26.95 8.6
1.78 13.16 15.64 1.35 1.70 0.03 40.89 8.2
2.57 11.38 29.17 1.35 2.44 0.10 73.74 6.0
0.12 8.81 2.48 1.34 3.53 (0.11) 100.41 4.2
0.19 8.69 2.24 1.39 4.83 (0.30) 46.31 3.3
- --------------------------------------------------------------------------------------------------------------------------
0.55 13.42 4.27 2.10 2.23 (1.21) 26.95 28.0
1.66 12.87 14.81 2.10 2.41 (0.73) 40.89 27.6
2.47 11.21 28.26 2.10 3.19 (0.66) 73.74 14.3
0.04 8.74 1.67 2.09 4.06 (0.82) 100.41 5.8
0.20 8.70 2.35 1.86 5.04 (1.38) 46.31 0.6
Reimbursement Average
of expenses Commission
from Adviser Rate (e)
- ------------- ----------
$0.059 N/A
0.098 N/A
0.126 N/A
0.120 N/A
0.003 N/A
0.060 N/A
0.109 N/A
0.124 N/A
0.108 N/A
0.003 N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
0.086 N/A
0.172 N/A
0.199 N/A
0.094 N/A
0.002 N/A
0.129 N/A
0.257 N/A
0.287 N/A
0.122 N/A
0.003 N/A
0.001 $0.050
0.018 0.050
0.086 N/A
0.165 N/A
0.008 N/A
0.001 0.050
0.050 0.050
0.083 N/A
0.163 N/A
0.002 N/A
0.009 0.050
0.043 0.050
0.100 N/A
0.182 N/A
0.006 N/A
0.009 0.050
0.037 0.050
0.082 N/A
0.176 N/A
0.001 N/A
- ------------
(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.
(f) Per share amounts were calculated under a methodology using the monthly
average of shares outstanding during the period.
- --------------------------------------------------------------------------------
<PAGE>
56 Investors Trust Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
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
mean of the bid and asked quotations 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 tax
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Mutual Funds 57
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited), continued
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. All premiums on securities
in the Tax Free Fund are amortized 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
segregate with the Custodian U.S. government securities, 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
- --------------------------------------------------------------------------------
<PAGE>
58 Investors Trust Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited), continued
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.
Federal Income Taxes. As a Massachusetts Business Trust, each Fund is a
separate 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. 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, 1996, the Funds had net tax basis capital loss carryforwards which
may be applied against taxable gains until their expiration dates as follows:
</TABLE>
<TABLE>
<CAPTION>
Expiration
Dates
Fund Amount October 31,
- ----------------------------------------------------- ------------ -----------
<S> <C> <C>
Adjustable Rate Fund................................. $ 72,067 2002
114,498 2003
14,856 2004
Government Fund...................................... 87,661,793 2002
107,525,597 2003
1,748,819 2004
Tax Free Fund........................................ 176,173 2003
Growth Fund.......................................... 201,507 2002
243,412 2004
</TABLE>
Distribution of Income and Gains. The Government and Tax Free Funds currently
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. Distributions from net short-term realized gains are declared and paid,
annually. 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).
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Mutual Funds 59
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited), continued
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.
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, 1997 were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales Paydowns
- ----------------------------------- ------------ ------------ -----------
<S> <C> <C> <C>
Adjustable Rate Fund............... $ 244,318 $ 161,165 $ 101,323
Tax Free Fund...................... 2,095,076 4,277,602 --
Value Fund......................... 17,316,645 14,461,773 --
Growth Fund........................ 9,276,280 10,180,696 --
</TABLE>
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, 1997,
were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales Paydowns
- ----------------------------------- ------------ ------------ -----------
<S> <C> <C> <C>
Adjustable Rate Fund............... $ 532,031 $ 367,164 $ 431,051
Government Fund.................... 478,901,520 621,903,553 17,208,937
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
60 Investors Trust Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited), continued
Transactions in options written on U.S. Treasury bond futures for the
Government Fund were as follows:
<TABLE>
<CAPTION>
Number of Net
contracts of premiums
Written Options received
--------------- --------
<S> <C> <C>
Outstanding at October 31, 1996..................... 186 $210,994
Exercised........................................... (186) (210,994)
--------------- --------
Outstanding at April 30, 1997....................... -- $ --
--------------- --------
--------------- --------
</TABLE>
At April 30, 1997 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>
Description Face value Market value
- ------------------------------------------------------ ---------- ------------
<S> <C> <C>
Federal National Mortgage Association Medium Term
Note, 12.000%, 11/13/00............................. $2,500,000 $2,917,175
---------- ------------
---------- ------------
</TABLE>
Aggregate gross unrealized appreciation (depreciation) of investments for each
Fund at April 30, 1997 was as follows:
<TABLE>
<CAPTION>
Net
Gross Gross Unrealized
Unrealized Unrealized Appreciation
Fund Appreciation (Depreciation) (Depreciation)
- ---------------------------------- ------------ -------------- --------------
<S> <C> <C> <C>
Adjustable Rate Fund.............. $ 194,074 $ (17,979) $ 176,095
Government Fund................... 8,449,607 (9,184,351) (734,744)
Tax Free Fund..................... 315,849 (77,562) 238,287
Value Fund........................ 9,311,143 (159,694) 9,151,449
Growth Fund....................... 10,537,244 (657,727) 9,879,517
</TABLE>
The aggregate cost of each Fund's investments was substantially the same for
book and federal income tax purposes at April 30, 1997.
4. Management, Distribution and Trustees' Fees. Under Advisory agreements
between the Funds and GNA Capital Management, Inc. (the "Adviser"), each Fund
agrees 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
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Mutual Funds 61
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited), continued
$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 30, 1997, the Adviser's fee
was equivalent to an annual effective rate of .63% 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 30, 1997, the Adviser's fee was
equivalent to an annual effective rate of .58% of the Fund's average daily net
assets.
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, 1997:
<TABLE>
<CAPTION>
Fund Class A Class B
- --------------------------------------------------------------- ------- -------
<S> <C> <C>
Adjustable Rate Fund........................................... 0.95% 0.95%
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, 1997.
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 Adviser has retained the following portfolio managers (the "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 Co.
Growth Fund.......................... Value Line, Inc.
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
62 Investors Trust Mutual Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited), continued
GNA Distributors, Inc. (the "Distributor") receives monthly distribution fees
from the Funds (except from the Adjustable Rate Fund as noted below) calculated
at the annual rate of .75% of the average daily net assets of Class B shares
pursuant to Rule 12b-1 of the Investment Company Act of 1940, as amended. In
accordance with the Distribution Agreement, the aggregate of all payments
received by the Distributor did not exceed, at any time, the aggregate of all
expenses incurred by the Distributor that were related to sales. 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.
For the six months ended April 30, 1997, the Adjustable Rate Fund was not
charged any distribution fee by the Distributor since there was no carry forward
of distribution expenses as at November 1, 1996 for the Fund and no expenses
were incurred during the six month period.
With respect to Class B shares, 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 Fund, 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 Fund, the Distributor shall be entitled to carryforward
such expenses to subsequent fiscal years for submission to the Fund for payment,
subject always to the .75% of Class B net assets annual maximum expenditure
allowed by the Fund's 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 Fund's shareholders have the right, however, to terminate the Plan and all
payments thereunder at any time. The Fund 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 30,1997 for which the Distributor intends to
seek repayment from the Funds are as follows:
<TABLE>
<CAPTION>
Fund Amount
- --------------------------------------------------------------------- -----------
<S> <C>
Adjustable Rate Fund................................................. $ --
Government Fund...................................................... 24,294,289
Tax Free Fund........................................................ 332,829
Value Fund........................................................... 642,100
Growth Fund.......................................................... 612,377
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
Investors Trust Mutual Funds 63
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited), continued
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.
5. Shares of Beneficial Interest. At April 30, 1997, 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..................................................... 914,590
Value Fund............................................................... 304,092
Growth Fund.............................................................. 356,355
</TABLE>
At April 30, 1997, Employers Reinsurance Corporation, a wholly-owned financial
subsidiary of General Electric Capital Services Corporation, an affiliate of GNA
Corporation, owned 1,304,348 Class A shares of the Tax Free Fund.
6. Subsequent Event. On May 16, 1997, the Board of Trustees of Investors Trust
unanimously approved an Agreement and Plan of Reorganization (the "Agreement")
relating to the proposed combination of each series of Investors Trust (each an
"Investors Trust Fund") with a series of GE Funds (each a "GE Fund"). GNA
Capital Management, Inc., the investment adviser to each of the Investors Trust
Funds, and GE Investment Management Incorporated ("GEIM"), the investment
adviser to each of the GE Funds, are both indirect wholly owned subsidiaries of
General Electric Company.
Pursuant to the Agreement, each Investors Trust Fund will transfer
substantially all of its assets to a GE Fund having generally similar investment
objectives and policies in exchange for shares of the GE Fund and the assumption
by the GE Fund of certain liabilities of the Investors Trust Fund. Following the
exchange, the Investors Trust Fund will distribute the shares of the GE Fund to
its shareholders pro rata, in liquidation of the Investors Trust Fund. The
effectiveness of these transactions as to each Investors Trust Fund is subject
to the satisfaction of a number of conditions, including approval by
shareholders of each class of such Fund. It is currently anticipated that these
matters will be submitted for a vote at a meeting of shareholders to be held in
mid-September 1997.
On May 16, 1997, GNA Capital Management, Inc. notified the Board of Trustees
that effective June 22, 1997, it will decrease the level of reimbursement for
the Tax Free Fund. The decreased reimbursement will limit the "Total Fund
Operating Expenses" of the Fund so that the expenses will not exceed 1.15% for
Class A shares and 1.90% for Class B shares. Additionally, effective June 22,
1997, the actual net investment income for the Tax Free Fund will be declared
daily as dividends.
- --------------------------------------------------------------------------------
