Carillon Investment Trust - Carillon Capital Fund
ANNUAL REPORT - A MESSAGE FROM THE PRESIDENT
October 31, 1996
Economy and Financial Markets
The United States stock market produced another year of strong
returns during the Carillon Capital Fund's fiscal year that
ended October 31, 1996. The stock market advance was aided by
high corporate profitability, moderate inflation, strong
consumer cash flows into mutual funds, and a reasonable level of
interest rates.
Fixed income markets had a much quieter year as interest rates
edged up during the period. Therefore, the return from most
fixed income investments was slightly less than the interest
income received. These returns have paled in comparison to the
stock market, but have provided real rates of return (above the
inflation rate) for bond market investors, due to a moderate and
steady rate of inflation.
The U.S. economy has produced average growth during the period
while experiencing some degree of ups and downs. After a slower
pace of growth during much of calendar year 1995, the U.S.
economy produced stronger results, especially in the second
quarter of 1996. With the economy in its fifth year of recovery
and a lack of many signs of business excess, most economists are
anticipating continued moderate economic growth.
Asset Allocation
Under normal conditions, the Carillon Capital Fund will be
structured approximately 63 percent, 30 percent, and 7 percent
in stocks, bonds, and money market instruments, respectively.
However, when market conditions change, the Fund repositions its
asset mix to take advantage of investment opportunities. The
following table highlights the allocation of Fund assets at
October, 1996, six months ago, one year ago, and at a long-term
normal portfolio allocation.
<TABLE>
<CAPTION>
Carillon Capital Fund Asset Allocation
10/31/96 4/30/96 10/31/95 Long-Term
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Stocks 37% 42% 38% 63%
Bonds 45% 43% 42% 30%
Money Market 18% 15% 20% 7%
-------------------------------------
Total 100% 100% 100% 100%
</TABLE>
The Capital Fund remains conservatively positioned. The Fund
increased its exposure to common stocks during early 1996 in
reaction to advancing corporate earnings and improved market
technical factors. However, the Fund then reduced its stock
position back below 40 percent in favor of bond purchases
because the higher interest rate environment and higher stock
prices made bonds appear more attractive than stocks in our
valuation models. As interest rates decreased later in the
year, the bond position has recently been reduced from a high of
almost 50 percent this summer. The money market position has
decreased, but remains well above normal because of the extended
nature of stock market prices from a long-term perspective.
(A line graph is portrayed here tracking The S&P 500, Carillon
Cpital Fund, Lipper Flexble Fun Avera, Lehman Brothers U.S. Trea
and Consumer Price Index for the period February 29, 1988
through October 31, 1996.)
Performance
Performance comparisons assume the reinvestment of income
dividends and capital gain distributions. The Carillon Capital
Fund results reflect an initial 5 percent sales load and all
mutual fund expenses. See the prospectus for situations which
qualify for no sales load fees, such as qualified plan
investments. None of the other comparative indices shown on
this graph is reduced by a sales load; and the comparisons,
other than the Lipper Flexible Fund Average, reflect no
expenses. The Capital Fund is categorized as a "Flexible Fund"
by Lipper and invests its assets among stocks, bonds, and money
market instruments which makes comparisons with a single stock
or bond index not totally comparative.
The Fund's total return of 14.4 percent over the past year has
been good, but we have performed slightly below our average
flexible fund benchmark. Relative performance has been held
back over the last several years by our defensive stance toward
the financial markets, but has benefitted from good individual
security selection. Over a full market cycle, I believe our
approach will provide competitive returns with a good degree of
price stability. The Fund currently has an overall four-star
rating from Morningstar, Inc.*
Individual stock performance was strong within the fund during
this fiscal year. Energy-related positions were the major
contributor to the performance as stocks such as Swift Energy,
Global Industries, Plains Resources, Stone Energy and Giant
Industries produced gains from 50 percent to almost 200 percent.
In addition, a number of long-time holdings including
AEP Industries, Lindsay Manufacturing and Helen of Troy were
excellent performing stocks this year. Our lesser performing
issues were foreign stocks and precious metals holdings that did
not participate with the booming domestic stock market, but
provide some balance to the overall portfolio.
Outlook
From a historical basis, I continue to believe that the stock
market is very overvalued. Whether you look at stock prices in
relation to book value, dividend yields, earnings, GDP, labor
costs, or the replacement value of assets, it has not been since
the late 1920s and the late 1960s that we have seen these kinds
of overall valuation levels. However, no bear market ever
starts just because the valuation parameters are out of balance.
It is certainly a necessity, but not the cause. There needs to
be a sharp object somewhere to deflate prices. Right now
everything is running very smoothly for equity markets with
strong earnings, low inflation, good money flows and a
reasonable level of interest rates. If these conditions
continue, the advance may have some life still left in it.
Overvaluation does not mean stocks cannot go higher, but means
longer-term risks are well above-average in relation to
potential rewards. Our fund is trying to look at asset
allocation from a longer-term viewpoint, as we do not believe
short-term timing can be accomplished effectively. Therefore,
we will not fully participate in a continued major stock advance
from these already extended levels, but we also do not plan to
fully participate in a major decline. Our primary concern in a
market environment such as this one is to be able to limit
losses in a decline and subsequently be able to invest wisely in
anticipation of a longer-term advance.
Our perception is that corporate earnings will eventually
trigger the decline in stock values. Real returns on equity,
(the current return minus the rate of inflation) are at
unsustainably high levels. They invite additional capital if
demand remains strong leading to increased competition, or to
vicious price cutting if we do see demand recede. Therefore, we
think stock prices will go through a major correction sometime
over the next five years, though we are very unsure about the
timing.
The Fund remains in a defensive position from both an asset
allocation standpoint and from the nature of its individual
stock and bond holdings. We have concentrated the Fund's
individual stock holdings in undervalued growth stocks and more
defensive sectors such as the Real Estate Investment Trusts,
energy-related companies, precious metal-related stocks, and
selected foreign issues. We believe that this diversification
and caution will reward investors with greater protection from
the inevitable slowdown in domestic stock performance.
We appreciate the confidence you have placed in Carillon Capital
Fund and look forward to the challenge of effective, long-term
investment management.
Sincerely,
/s/ George Clucas
George L. Clucas, President
December 2, 1996
- -------------------
* Morningstar, Inc. ratings are updated each month. The
composite rating is calculated using a weighted average of the
three-year (three stars are shown here) and the five-year (four
stars are shown here) ratings. These ratings are based on each
period's risk-adjusted average annual total returns. Ten
percent of the funds in a category receive five stars, the next
22.5% receive four stars, the next 35% receive three stars, and
the remaining 32.5% receive either two or one star.
(This report has been prepared for the information of
shareholders and is not authorized for distribution to
prospective purchasers of the Fund unless it is preceded or
accompanied by an effective propsectus for Carillon Investment
Trust.)
<PAGE>
CARILLON CAPITAL FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
October 31, 1996
<S> <C>
ASSETS
Investments in securities, at value $42,330,213
(cost $37,833,996)
Receivables:
Securities sold 271,475
Interest and dividends 310,972
Prepaid expenses and other 6,921
-----------
42,919,581
-----------
LIABILITIES
Investment advisory fees 27,145
Professional fees 11,198
Portfolio accounting and custody fees 4,446
Trustees fees and expenses 2,949
Printing expenses 1,867
Transfer agency fees 930
-----------
48,535
-----------
NET ASSETS
Paid-in capital 34,789,042
Accumulated undistributed net investment income 223,040
Accumulated undistributed net realized gain 3,362,747
Unrealized appreciation, net 4,496,217
-----------
$42,871,046
===========
Shares outstanding
(without par value, unlimited authorization)* 3,119,040
Net asset value and redemption price per share
Offering price per share $13.75
===========
(Net asset value per share/.95) $14.47
===========
</TABLE>
- -------------------
*A sales charge of 5% is imposed on investments of less than
$50,000. Reduced sales charges apply for investments in excess
of this amount.
The accompanying notes are an integral part of the financial
statements.
<PAGE>
CARILLON CAPITAL FUND
STATEMENT OF OPERATIONS
For the Year Ended
October 31, 1996
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME
Interest $1,819,784
Dividends (net of foreign withholding
taxes of $10,904) 472,304
----------
2,292,088
----------
EXPENSES
Investment advisory fees 311,413
Portfolio accounting fees 34,726
Trustee's fees and expenses 21,474
Custodial fees and expenses 12,553
Registration and filing fees 12,110
Transfer agent fees 10,778
Professional fees 10,488
Other 7,071
----------
420,613
----------
NET INVESTMENT INCOME 1,871,475
----------
REALIZED AND UNREALIZED GAIN
Net realized gain on investments 3,323,005
Net change in unrealized
appreciation/(depreciation) of investments 445,916
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 3,768,921
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $5,640,396
==========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
<PAGE>
CARILLON CAPITAL FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the year ended October 31,
-----------------------------
1996 1995
---- ----
<S> <C> <C>
OPERATIONS
Net investment income $ 1,871,475 $ 1,941,424
Net realized gain on investments 3,323,005 495,485
Net change in unrealized appreciation/
(depreciation) of investments 445,916 2,094,445
----------- -----------
5,640,396 4,531,354
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (1,913,442) (1,797,101)
Net realized gain on investments (440,569) (3,369,426)
----------- -----------
(2,354,011) (5,166,527)
----------- -----------
FUND SHARE TRANSACTIONS
Sold 950,895 1,012,125
Issued in reinvestment of dividends 2,353,855 5,166,372
Redeemed (10,364,075) (748,468)
----------- -----------
(7,059,325) 5,430,029
----------- -----------
NET INCREASE/DECREASE IN NET ASSETS (3,772,940) 4,794,856
NET ASSETS
Beginning of year 46,643,986 41,849,130
End of year $42,871,046 $46,643,986
=========== ===========
Undistributed Net Investment Income $ 223,040 $ 279,832
=========== ===========
FUND SHARE TRANSACTIONS:
Sold 71,179 81,022
Issued in reinvestment of dividends 181,443 438,699
Redeemed (807,197) (61,626)
----------- -----------
NET INCREASE/(DECREASE) FROM FUND
SHARE TRANSACTIONS (554,575) 458,095
=========== ===========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
<PAGE>
CARILLON CAPITAL FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1996
COMMON STOCKS -35.58%
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
BANKING AND FINANCIAL SERVICE - 8.13%
Banco BHIF ADR* 13,000 234,000
Banco Latinoamericano
de Exportaciones ADR 10,000 522,500
BlackRock Strategic Term Trust 25,000 190,625
Charter One Financial Incorporated 10,500 456,094
Deutsche Bank AG Sponsored ADR 8,370 387,966
FPIC Insurance Group Incorporated* 15,000 202,500
Gainsco Incorporated 21,000 202,125
New Germany Fund Incorporated 20,636 283,745
RLI Corporation 9,520 262,990
Standard Federal Bancorporation 10,000 535,000
Templeton Global Income
Fund Incorporated 29,000 206,625
----------
3,484,170
----------
CAPITAL GOODS - 2.01%
Lindsay Manufacturing Company 20,038 861,633
----------
CONSUMER CYCLICAL - 2.44%
Chromcraft Revington Incorporated* 7,000 180,250
Griffon Corporation 18,000 171,000
Helen of Troy Limited, Bermuda* 26,000 474,500
Strattec Security Corporation* 14,000 218,750
1,044,500
----------
CONSUMER NON-DURABLE - .64%
GT Bicycles Incorporated* 20,000 275,000
----------
ENERGY - 4.00%
Giant Industries Incorporated* 19,000 292,125
Global Industries Limited 1,000 18,000
Holly Corporation 12,000 298,500
Plains Resources Incorporated* 20,000 280,000
Repsol SA Sponsored ADR 10,000 326,250
Stone Energy Corporation* 7,000 147,000
Swift Energy Company* 7,000 171,500
YPF SA Sponsored ADR 8,000 182,000
----------
1,715,375
----------
MANUFACTURING - 8.10%
ABT Building Products Corporation* 11,000 231,000
AEP Industries, Incorporated* 17,169 826,258
Bayer AG Sponsored ADR 13,000 491,579
BWAY Corporation * 11,000 198,000
Carbide Graphite Group Incorporated* 12,000 195,750
Falcon Products, Incorporated 22,000 310,750
Pohang Iron & Steel Limited
Sponsored ADR 9,000 186,750
Royal Oak Mines Incorporated* 45,000 168,750
Santa Fe Pacific Gold Corporation 15,000 178,125
TVX Gold Incorporated* 33,000 247,500
Vaal Reefs Exploration & Mining
Limited ADR 30,900 237,544
York Group, Incorporated 12,000 201,000
----------
3,473,006
----------
REAL ESTATE - 7.96%
Associated Estates Realty Corporation 20,000 410,000
CBL & Associates Properties Incorporated 16,000 378,000
Horsham Corporation 24,000 414,000
Hospitality Properties Trust 12,000 312,000
IRT Property Company 25,000 240,625
LTC Properties Incorporated 14,000 238,000
Merry Land & Investment Company 18,000 378,000
Mid-America Apartment Communities
Incorporated 18,000 456,750
Shurgard Storage Centers Incorporated,
Class A 10,400 273,000
Winston Hotels, Incorporated 25,000 312,500
----------
3,412,875
----------
TECHNOLOGY - 2.30%
DH Technology Incorporated* 30,240 703,080
Recoton Corporation* 20,000 285,000
988,080
----------
Total Common Stock (cost $11,097,540) 15,254,639
----------
PREFERRED STOCK - .77%
Freeport McMoRan Copper & Gold Series 10,000 328,750
----------
Total Preferred Stock (cost $347,888)
U.S. TREASURY OBLIGATIONS - 15.48%
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
U.S. TREASURY NOTES - 15.48%
6.375% due 01/15/99 $1,300,000 $1,315,030
6.250% due 02/15/03 500,000 501,718
5.875% due 02/15/04 1,200,000 1,171,874
7.250% due 05/15/04 1,300,000 1,373,125
7.875% due 11/15/04 900,000 987,609
7.500% due 02/15/05 1,200,000 1,289,108
----------
6,638,464
----------
Total U.S. Treasury Notes
(cost $6,486,902)
<CAPTION>
COLLATERALIZED MORTGAGE OBLIGATIONS - 14.56%
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 4.24%
1422 FA (6.160% due 11/15/07)<F1> 500,000 476,045
1662 H (6.250% due 01/15/09) 347,367 341,014
77 F (8.500% due 06/15/17) 53,885 53,703
1559 VP (5.500 % due 02/15/20) 510,000 489,641
1631 SB (6.527% due 12/15/23)<F1> 755,000 456,201
----------
1,816,604
----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 9.21%
Remic 93-12 ED (7.500% due 02/25/06) 1,000,000 1,030,080
Remic 92-18 HC (7.500% due 03/25/07) 400,000 408,484
Remic 93-163 PN (7.000% due 07/25/07) 250,000 251,672
Remic 92-119 E (8.000% due 07/25/20) 500,000 516,465
Remic 92-112 E (8.000% due 12/25/20) 780,000 806,341
Remic 93-127 FA (5.790% due 10/25/21)<F1> 500,000 484,000
Remic 92-66 F (5.906% due 05/25/22)<F1> 446,524 449,632
----------
3,946,674
----------
PRIVATE SECTOR - 1.11%
Merrill Lynch Mortgage Investors 92-FB
(6.500% due 09/15/17)<F1> 500,000 478,850
----------
Total Collateralized Mortgage
Obligations (cost $6,298,716) 6,242,128
----------
MORTGAGE BACKED SECURITIES - 7.69%
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 2.26%
7.500% due 06/01/07 54,015 54,546
8.250% due 03/01/12 122,127 126,199
8.500% due 03/01/16 170,994 177,673
7.500% due 07/01/17 110,018 110,558
11.000% due 04/01/19 159,897 178,183
10.500% due 05/01/19 135,095 148,774
11.000% due 11/01/19 154,917 172,633
----------
968,566
----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 4.63%
9.500% due 09/01/05 26,547 28,090
6.000% due 12/01/08 322,300 313,601
5.500% due 01/01/09 332,498 316,930
6.000% due 03/01/09 250,759 243,991
5.500% due 04/01/09 326,516 310,141
6.500%due 02/01/26 300,713 287,839
7.000% due 03/01/26 492,386 483,464
----------
1,984,056
----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - .80%
10.250% due 04/15/16 21,514 23,437
9.000% due 11/15/16 103,865 111,306
9.500% due 05/15/18 67,876 73,200
9.000% due 12/15/19 126,795 135,249
----------
343,192
----------
Total Mortgage-Backed Securities
(cost $3,133,114) 3,295,814
----------
<CAPTION>
CORPORATE BONDS AND NOTES - 6.81%
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
BANKING & FINANCIAL SERVICE - 1.21%
Boatmen Bankshares Incorporated
(9.250% due 11/01/01) 240,000 266,864
Penn Central Corporation
(9.750% due 08/01/99) 120,000 127,200
Reliance Financial Services Corporation
(9.480% due 11/01/00)<F1> 125,000 126,563
----------
520,627
----------
CAPITAL GOODS - .61%
Toll Corporation (10.500% due 03/15/02) 250,000 260,000
----------
ENERGY - .62%
Rowan Companies Incorporated
(11.875% due 12/01/01) 250,000 265,938
----------
REAL ESTATE - .59%
Pacific Gulf Properties Incorporated
(8.375% due 02/15/01) 250,000 252,188
----------
SERVICE - .60%
Circus Circus Enterprises Incorporated
(10.625% due 06/15/97) 250,000 257,047
----------
TECHNOLOGY - .82%
Lowen Group International Incorporated
(8.250% due 04/15/03) 350,000 352,751
----------
UTILITIES - 2.36%
Connecticut Light & Power Company
(7.625% due 04/01/97) 291,000 291,207
New Orleans Public Service Incorporated
(8.670% due 04/01/05) 300,000 310,487
TCI Communications Incorporated
(8.650% due 9/15/04) 250,000 250,935
United Telecommunications Incorporated
(9.750% due 04/01/00) 144,000 157,958
----------
1,010,587
----------
Total Corporate Bonds (cost $2,818,556) 2,919,138
----------
<CAPTION>
SHORT-TERM INVESTMENTS - 17.85%
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
COMMERCIAL PAPER - 4.65%
Lockheed Martin Corporation
(5.360% due 12/11/96) 1,000,000 994,044
White Consolidated Industries
Incorporated (5.450% due 11/07/96) 1,000,000 999,092
----------
1,993,136
----------
VARIABLE RATE DEMAND NOTES<F2> - 13.20%
American Family Financial Services
(5.024% due 11/06/96) 1,836,436 1,836,436
Johnson Controls Incorporated
(5.044% due 11/06/96) 2,093,677 2,093,677
Pitney Bowes Credit Corporation
(5.023% due 11/06/96) 77,433 77,433
Wisconsin Electric Power Corporation
(5.064% due 11/06/96) 1,650,598 1,650,598
----------
5,658,144
----------
Total Short-Term Investments
(cost $7,651,280) 7,651,280
----------
TOTAL INVESTMENTS - 98.74%
(cost $37,833,996) 42,330,213<F3>
----------
OTHER ASSETS AND LIABILITIES - 1.26% 540,833
----------
TOTAL NET ASSETS - 100.00% 42,871,046
==========
- -----------
*Non-income producing
(ADR) American Depository Receipt
<FN>
<F1> Interest rates vary periodically based on current market
rates. Rates shown are as of October 31, 1996.
<F2> Interest rates vary periodically based on current market
rates. The maturity shown for each variable rate demand note is
the later of the next scheduled interest rate adjustment date or
the date on which principal can be recovered through demand.
Information shown is as of October 31, 1996
<F3> Gross unrealized appreciation and depreciation of
securities at October 31, 1996 for financial reporting purposes
was $5,132,936 and $636,719 respectively; tax amounts were
substantially the same.
</FN>
</TABLE>
The accompanying notes are an integral part of the
financial statements.
<PAGE>
CARILLON CAPITAL FUND
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------
October 31, 1996
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Carillon Capital Fund (the Fund) is a series of Carillon
Investment Trust (the Trust) registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund seeks to provide the
highest total return through a combination of income and capital
appreciation consistent with the reasonable risks associated
with an investment portfolio of above average quality by
investing in equity securities, debt instruments, and money
market instruments.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Securities valuation - Securities traded on securities exchanges
(including securities traded in both the over-the-counter market
and on an exchange), or listed on the NASDAQ National Market
System, are valued at the last sales price as of the close of
the New York Stock Exchange on the day of valuation, or if there
were no reported sales on that date, the last bid price.
Securities traded only in the over-the-counter market are valued
at the last bid price, as of the close of trading on the New
York Stock Exchange, quoted by brokers that make markets in the
securities. Other securities for which market quotations are
not readily available are valued at fair value as determined in
good faith under procedures adopted by the Board of Trustees.
Money market instruments with a remaining maturity of 60 days or
less are valued at amortized cost which approximates market.
Securities transactions and investment income - Securities
transactions are recorded on the trade date (the date the order
to buy or sell is executed). Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual
basis. All accretion of discounts is recognized currently under
the effective interest method. Amortization of premiums is
recognized currently under the straight-line method. Gains and
losses on sales of investments are calculated on the identified
cost basis for financial reporting and tax purposes. The cost
of investments is substantially the same for financial reporting
and tax purposes.
Federal taxes - It is the intent of the Fund to comply with the
requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute substantially
all of its net investment income and any net realized capital
gains. Therefore, no provision for income or excise taxes has
been recorded.
Dividends and capital gains distributions - Dividends from net
investment income are declared and paid quarterly by the Fund.
Net realized capital gains are distributed periodically, no less
frequently than annually. Dividends from net investment income
and capital gains distributions are recorded on the ex-dividend
date. All dividends and distributions are automatically
reinvested in additional shares of the Fund at the net asset
value per share unless the shareholder requests such dividends
and distributions be paid in cash.
The amount of dividends and distributions are determined in
accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in
nature, such amounts are reclassified within the capital
accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification. Dividends and
distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not
for tax purposes are reported as dividends in excess of net
investment income or distributions in excess of net realized
capital gains. To the extent they exceed net investment income
and net realized capital gains for tax purposes, they are
reported as distributions of paid-in-capital.
NOTE 2 - TRANSACTIONS WITH AFFILIATES
Investment advisory fees - The Fund pays investment advisory
fees to Carillon Advisers, Inc. (the Adviser) under terms of an
Investment Advisory Agreement. Certain officers and directors
of the Adviser are affiliated with the Fund. The Fund pays the
Adviser, as full compensation for all services and facilities
furnished, a monthly fee computed on a daily basis, at an annual
rate of .75% of the first $50,000,000, .65% of the next
$100,000,000, and .50% of all amounts over $150,000,000 of the
net assets of the Fund.
The Investment Advisory Agreement provides that if, in any
calendar quarter, the total of all ordinary business expenses
applicable to the Trust should exceed the expense limitations as
required by any applicable state law, the Adviser will reimburse
the Trust for such excess. No such reimbursements were required
for the periods presented in the financial statements.
In addition to providing investment advisory services, the
Adviser is responsible for providing certain administrative
functions to the Fund. The Adviser has entered into an
Administration Agreement with Carillon Investments, Inc. (the
Distributor) under which the Distributor furnishes substantially
all of such services for an annual fee of .20% of the Fund's
average net assets. The fee is borne by the Adviser, not the
Fund.
Distribution agreement - The Distributor serves as the principal
underwriter of the shares of the Trust pursuant to a
Distribution Agreement with the Trust. Under the terms of this
agreement, the Distributor will pay all expenses related to
selling and distributing the Trust's shares, including
preparing, printing and mailing sales materials. The
Distributor receives a percentage of the offering price of fund
shares sold to unaffiliated parties ranging from 5% on
investment of less that $50,000 to .5% on investments in excess
of $2,500,000.
Other - At October 31, 1996, The Union Central Life Insurance
Company (Union Central) owned 2,431,694 shares of the Fund and
therefore is a controlling person of the Fund and is able to
cast a deciding vote on matters submitted to a vote of the
Fund's shareholders.
Union Central owns all of the outstanding stock of Carillon
Investments, Inc. and Carillon Advisers, Inc.
Each trustee who is not affiliated with the Adviser receives
fees from the Trust for services as a trustee.
NOTE 3 - SUMMARY OF PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of securities for the year ended October
31, 1996, excluding short-term securities, follow:
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
<S> <C> <C>
Common Stocks $ 7,854,968 $ 13,851,113
U.S. Government Securities 7,136,417 7,226,027
Corporate Bonds 1,580,966 1,863,482
------------ ------------
$ 16,572,351 $ 22,940,622
============ ============
</TABLE>
NOTE 4 - FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding
throughout the year.
<TABLE>
<CAPTION>
Year ended October 31,
----------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of year $ 12.70 $ 13.01 $ 13.00 $ 12.45 $ 12.48
------- ------- ------- ------- -------
Investment Operations:
Net investment income .60 .52 .35 .42 .45
Net realized and
unrealized gain 1.17 .73 .16 1.27 .50
------- ------- ------- ------- -------
Total from Investment
Operations 1.77 1.25 .51 1.69 .95
------- ------- ------- ------- -------
Distributions:
Net investment income (.60) (.51) (.32) (.42) (.45)
Net realized gain (.12) 1.05) (.18) (.72) .53)
------- ------- ------- ------- -------
Total Distributions (.72) (1.56) (.50) (1.14) (.98)
Net Asset Value,
End of year $ 13.75 $ 12.70 $ 13.01 $ 13.00 $ 12.45
======= ======= ======= ======= =======
Total Return(1) 14.38% 10.88% 4.56% 14.50% 8.15%
======= ======= ======= ======= =======
Ratios/Supplemental Data:
- ------------------------
Net Assets,
End of year (000's) $42,871 $46,644 $41,849 $33,863 $29,807
Ratio of Expenses to
Average Net Assets 1.02% 1.01% 1.05% 1.11% 1.10%
Ratio of Net Investment
Income to Average
Net Assets 4.52% 4.44% 3.89% 3.35% 3.61%
Portfolio Turnover Rate 47.43% 42.07% 53.20% 43.35% 48.03%
Average Commission Rate
Paid (2) .0631
<FN>
(1) Assumes sales load is not imposed on either initial investment or
reinvestment of distributions.
(2) Represents the dollar amount of commissions paid on Portfolio
transactions divided by the total number of shares purchased and sold for
which commissions were charged. Disclosure not required for periods prior to
fiscal 1996.
</FN>
</TABLE>
FEDERAL INCOME TAX INFORMATION (unaudited)
During the year ended October 31, 1996, the Fund made total
distributions of $.72 per share, of which $.60 per share is from
investment income and $.12 per share is from net realized gains.
Of the $.60 per share, 9% qualified for the dividends-received
deduction for corporations.
<PAGE>
To the Board of Trustees and Shareholders of
Carillon Capital Fund of Carillon Investment Trust
We have audited the accompanying statement of assets and
liabilities of Carillon Capital Fund, including the schedule of
investments, as of October 31, 1996, and the related statement
of operations for the year then ended, and the statements of
changes in net assets and financial highlights for the two years
then ended. These financial statements and financial highlights
("financial statements") are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements based on our audits. The financial
highlights for the other years presented were audited by other
auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosure in the financial statements. Our
procedures included confirmation of securities owned as of
October 31, 1996, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as brokers. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements as of October 31, 1996,
present fairly, in all material respects, the financial position
of Carillon Capital Fund as of October 31, 1996, the results of
its operations for the year then ended, and the changes in its
net assets and the financial highlights for the two years then
ended, in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
Dayton, Ohio
December 2, 1996
