Registration Nos. 33-16665
811-5293
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 11 X
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 13 X
CARILLON INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
1876 Waycross Road, Cincinnati, Ohio 45240
(Address of Principal Executive Offices)
(513) 595-2600
(Registrant's Telephone Number)
John F. Labmeier, Esq.
Carillon Investment Trust
1876 Waycross Road
Cincinnati, Ohio 45240
(Name and Address of Agent for Service)
Copy to:
Routier and Johnson, P.C.
1700 K Street, N.W. Suite 1003
Washington, D.C. 20006
Pursuant to Rule 24f-2 under the Investment Company Act of
1940, the Registrant has registered an indefinite amount of
securities under the Securities Act of 1933. A Rule 24f-2
Notice for Registrant's fiscal year ended October 31, 1996 was
filed on December 30, 1996.
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule
485
X on May 9, 1997 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(1) of Rule
485
on (date) pursuant to paragraph (a)(1) of Rule 485
75 days after filing pursuant to paragraph (a)(2) of Rule
485
on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
<PAGE>
CARILLON INVESTMENT TRUST
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
HEADINGS IN PROSPECTUS
OR STATEMENT OF ADDITIONAL
FORM N-1A ITEMS INFORMATION
- --------------------------------------------------------------------------
<S> <C>
PART A
1. Cover Page ............................... Cover (Prospectus)
2. Synopsis ................................. Fund Expenses
3. Condensed Financial Information........... Financial Highlights
4. General Description of Registrant......... The Trust; The Fund;
Investment Objectives and
Policies
5. Management of the Fund.................... Management of the Trust;
Custodian, Transfer and
Dividend Disbursing Agent
6. Capital Stock and Other Securities........ Shareholder Voting;
Shareholder Liability;
Dividends and Distributions;
Taxes; Shareholder Inquiries
7. Purchase of Securities Being Offered...... Purchase of Fund Shares
8. Redemption or Repurchase.................. Redemption of Shares
9. Pending Legal Proceedings................. *
PART B
10.Cover Page................................ Cover Page (Statement of
Additional Information)
11.Table of Contents......................... Table of Contents
12.General Information and History........... The Trust
13.Investment Objectives..................... Investment Policies;
Investment Restrictions;
Portfolio Turnover
14.Management of the Fund.................... Management of the Trust
15.Control Persons and Principal Holders
of Securities ............................ The Trust
16.Investment Advisory and Other Services.... Investment Adviser;
Distribution of Shares;
Custodian, Transfer and
Dividend Disbursing Agent
17.Brokerage Allocation...................... Investment Adviser
18.Capital Stock and Other Securities........ The Trust
19.Purchase, Redemption and Pricing of....... Purchase and Redemption of
Securities Being Offered Shares
20.Tax Status ............................... Taxes
21.Underwriters ............................. Distribution of Shares
22.Calculation of Performance Data........... Performance
23.Financial Statements...................... Independent Auditors
</TABLE>
PART C
Information required to be included in Part C is set forth
under the appropriate Item, so numbered, in Part C of this
Registration Statement.
* Omitted from the Prospectus or Statement of Additional
Information because the Item is inapplicable.
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE>
PROSPECTUS
Carillon Capital Fund
of
Carillon Investment Trust
Carillon Capital Fund (the "Fund") is an investment
portfolio of Carillon Investment Trust (the "Trust"), 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,
which in the sole determination of the investment adviser, would
be of above average quality when compared to other portfolios.
The Fund's investments will include equity securities, debt
instruments and money market instruments. In purchasing debt
securities, the Fund will primarily invest in debt securities
rated in one of the four highest rating categories as determined
by a nationally recognized rating service, or, if unrated, of
equivalent quality as determined by the investment adviser. The
Fund may, however, invest up to 25% of the total value of the
debt securities it holds in high-yield (high-risk) bonds or the
equivalent thereof in unrated securities. High-yield (high-risk)
bonds typically are subject to greater market fluctuations and
risk of loss of income and principal due to default by the
issuer than are investments in lower yielding, higher-rated
bonds.
As a result of the market risk inherent in any investment,
there is no assurance that the investment objective of the Fund
will be realized. Investments in the Fund are neither insured
nor guaranteed by the U.S. Government or any other entity or
person.
A sales charge is deducted from the amount invested. This
sales charge ranges from 5% for investments of less than $50,000
to .5% for investments of $2,500,000 or more. (See "Sales
Charge," page 10.) Fund shares are suitable for purchase by
pension plan and IRA custodians, as well as the public
generally.
------------------------------
This Prospectus sets forth concisely the information that a
prospective investor should know before investing in the Fund,
and it should be read and kept for future reference. A Statement
of Additional Information dated May 9, 1997 that contains
further information about the Fund, has been filed with the
Securities and Exchange Commission and is incorporated by
reference into this Prospectus. A copy of the Statement of
Additional Information may be obtained without charge by calling
the Fund at (513) 595-2600, or by writing the Fund at P.O. Box
40409, Cincinnati, Ohio 45240.
----------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Dated May 9, 1997
<PAGE>
FUND EXPENSES
Shareholder Transaction Expenses (as a percentage of the
offering price)
Maximum Sales Load Imposed on Purchase...... 5.00%
Maximum Deferred Sales Load................. 0.00%
Annual Fund Operating Expenses (as a percentage of average net
assets)
Advisory Fees .............................. 0.75%
Other Expenses.............................. 0.27%
Total Fund Operating Expenses............... 1.02%
EXAMPLE -- The table below shows the expenses a shareholder
would pay on a $1,000 investment assuming a 5% annual return.
1 Year 3 Years 5 Years 10 Years
-------------------------------------------
Expenses $60 $81 $104 $169
The 5% annual return is a standardized rate prescribed for
the purpose of this example and does not represent the past or
future return of the Fund.
The purpose of the preceding table is to assist investors in
understanding the various costs and expenses an investor in the
Fund would bear. All expenses are borne directly or indirectly
by shareholders. The expense figures for the 3-year, 5-year and
10-year periods represent the cumulative expenses for those
periods. (For more information about Fund expenses, see
"Management of the Trust," page 8, and "Purchase of Fund
Shares," page 9.)
The example should not be considered a representation of
past or future expenses and the actual expenses may be greater
or lesser than those shown.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial information in the table which follows,
insofar as it pertains to each of the five years in the period
ended October 31, 1996, has been audited in conjunction with the
annual audit of the financial statements of the Fund. The
financial statements for the year ended October 31, 1996, have
been audited by Deloitte & Touche LLP, whose unqualified report
thereon is included in the Statement of Additional Information.
The financial statements for the year ended October 31, 1995
have been audited by Deloitte & Touche LLP. The financial
statements for the three years ended October 31, 1994, have been
audited by another independent accountant, whose reports
expressed unqualified opinions on those statements. The
financial highlights should be read in conjunction with the
financial statements and notes thereto included in the Statement
of Additional Information. Further information about the
performance of the Fund is contained in the Trust's annual
report to shareholders which may be obtained without charge.
<TABLE>
<CAPTION>
Year ended October 31,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period $12.70 $13.01 $13.00 $12.45 $12.48
Investment Activities:
Net investment income .60 .52 .35 .42 .45
Net realized and unrealized
gains (losses) 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 gains (.12) (1.05) (.18) (.72) (.53)
------ ------ ------ ------ ------
Total Distributions (.72) (1.56) (.50) (1.14) (.98)
Net Asset Value,
End of period $13.75 $12.70 $13.01 $13.00 $12.45
====== ====== ====== ====== ======
Total Return <F2> 14.38% 10.88% 4.56% 14.50% 8.15%
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $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 <F4> $.0631
<CAPTION>
Period
Ended
1991 1990 1989 10/31/88<F1>
---- ---- ---- --------
<S> <C> <C> <C> <C>
Net asset value:
Beginning of period $ 9.79 $11.84 $11.17 $10.45
Investment Activities:
Net investment income .46 .60 .54 .30
Net realized and unrealized
gains (losses) 2.71 (1.44) 1.07 .70
------ ------ ------ ------
Total from
Investment Operations 3.17 (.84) 1.61 1.00
Distributions:
Net investment income (.48) (.52) (.62) (.28)
Net realized gains (.00) (.69) (.32) --
------ ------ ------ ------
Total Distributions (.48) (1.21) (.94) (.28)
Net Asset Value,
End of period $12.48 $9.79 $11.84 $11.17
====== ====== ====== ======
Total Return<F2> 32.99% (8.00%) 14.33% 9.68%
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $27,385 $20,022 $22,203 $29,807
Ratio of Expenses
to Average Net Assets 1.19% 1.27% 1.44% 1.34%<F3>
Ratio of Net Investment
Income to Average Net Assets 4.03% 5.12% 4.88% 4.35%<F3>
Portfolio Turnover Rate 42.07% 101.07% 92.32% 40.03%<F3>
- -------------
<FN>
<F1> Period from February 23, 1988 (the effective date of registration under
the Securities Act of 1933) through October 31, 1988.
<F2> Assumes sales load is not imposed on either initial investment or
reinvestment of distributions.
<F3> Annualized
<F4> 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>
<PAGE>
PERFORMANCE
From time to time the Fund may advertise "total return." This
calculation is based on historical earnings and is not intended
to indicate future performance. Investment return and the
principal value of an investment may fluctuate. Shares of the
Fund, when redeemed, may be worth more or less than their
original cost. All charges shown under "Fund Expenses" are
reflected in the calculation. Total return is computed by finding
the average annual rate of return that would equate the initial
amount invested to the ending redeemable value. The calculation
of total return assumes the reinvestment of all dividends and
distributions and the deduction of the maximum sales load from
the initial investment.
THE TRUST
The Trust was established under Massachusetts law pursuant to
a Declaration of Trust dated December 8, 1986, as an
unincorporated business trust, a form of organization that is
commonly called a Massachusetts business trust. The Trust is
registered with the Securities and Exchange Commission as a
diversified, open-end management investment company under the
Investment Company Act of 1940 ("1940 Act"). Such registration
does not involve the supervision of investments or investment
policy. The Declaration of Trust permits the Trustees to issue an
unlimited number of shares and to divide such shares into an
unlimited number of portfolios, all without shareholder approval.
THE FUND
The Fund is the only portfolio of the Trust currently being
offered. The Fund is analogous to a diversified, open-end
management investment company (mutual fund). Each share of the
Fund has an equal proportionate interest in the net assets and
net liabilities of the Fund. Each shareholder of the Fund is
entitled to a pro rata share of all dividends and distributions
arising from the net income and capital gains on its investments.
The shares of the Fund are continually offered for sale to the
public at net asset value subject to the imposition of a sales
charge.
INVESTMENT OBJECTIVES AND POLICIES
The Fund has investment objectives which it pursues through
its investment policies. The investment objectives of the Fund
(described on the cover of this Prospectus) are fundamental
policies and may not be changed without approval of a majority of
shareholders. There can be no assurance that the investment
objectives of the Fund will be realized.
The Fund seeks to obtain the highest total return through a
combination of income and capital appreciation consistent with
the reasonable risks associated with an investment portfolio, the
securities of which are selected by the investment adviser as
representing securities that it believes are of above-average
quality as compared to other portfolios.
The Fund invests in equity, debt and money market securities.
The Fund may borrow for temporary or emergency purposes up to 10%
of the value of its assets.
There are no percentage limitations on the class of
securities in which the Fund may invest. The Fund may invest
entirely in equity securities, entirely in debt, entirely in
money market instruments, or in any combination of these types of
securities at the sole discretion of the investment adviser,
subject only to the investment objectives of the Fund and the
policies adopted by the Board of Trustees. The investment adviser
determines the proportion of Fund assets invested in equity, debt
and money market securities based on fundamental value analysis;
analysis of historical long term returns among equity, debt and
money market investments; and other market influencing factors.
The fundamental value analysis considers the adviser's outlook
over both the near and long-term, for corporate profitability,
short and long-term interest rates, stock price earnings ratios
for the market in total and individual stocks and inflation
rates. When the investment climate as indicated by the
fundamental factors is near historical relationships, the
portfolio will be structured approximately 63% in equity, 30% in
debt and 7% in money market securities. In addition, market
influencing factors relating to monetary policy, equity momentum,
market sentiment, economic influences and market cycles are taken
into consideration in making the asset allocation decision.
Deviations from historical fundamental market relationships
on either a current or anticipated basis, along with the
influences of market factors, may result under most foreseeable
circumstances in changes as much as 40%, plus or minus, in the
percentages allocated to equity, debt or money market securities
within the Fund's portfolio.
Equity Securities
In its equity investments, the Fund emphasizes a combination
of several themes in order to diversify its investment exposure.
Most stocks purchased by the Fund display one or more of the
following criteria:
* Low price earnings ratios in relation to their return on
equity.
* High asset values in relation to stock price.
* Foreign of companies judged to represent better
fundamental value than those of similar domestic companies.
* A high level of dividend payment providing a yield that
is competitive with debt investments.
Debt Securities
The Fund may invest in rated or unrated debt securities,
including obligations of the U.S. Government and its agencies and
corporate debt obligations. The Fund's corporate debt security
investments will consist primarily of "investment grade"
corporate bonds; that is, bonds rated BBB or higher by Standard &
Poor's or Baa or higher by Moody's or that are unrated but
considered by the investment adviser to be of equivalent credit
quality. Up to 25% of the Fund's fixed-income assets, however,
may be invested in debt securities that are below investment
grade as defined above. Non-investment grade (high-risk) debt
securities are considered to have speculative characteristics.
These investments are subject to greater market fluctuations and
risk of loss of income and principal than are investments in
lower yielding fixed-income securities.
High-yield (high-risk) bonds generally include any bonds
rated Ba or below by Moody's or BB or below by Standard & Poor's
or, if unrated, considered equivalent thereof by the Fund's
investment adviser. Bonds rated Ba or BB or below are considered
speculative. The Fund may invest up to 25% of the value of its
debt portfolio in bonds so rated (or unrated but considered of
equivalent quality). Bonds rated Ca or C are described by the
rating agencies as "speculative in a high degree; often in
default or [having] other marked shortcomings." Bonds rated C or
D generally are in default or arrears and are described as having
extremely poor prospects of attaining any real investment
standings. As of January 31, 1997, the Fund held long-term debt
securities rated as follows:
Moody's/Standard & Poor's % of Long-Term Debt
Aaa/AAA............................................ 85.8%
Aa/AA.............................................. 5.2%
A/A................................................ 2.6%
Baa/BBB ........................................... 1.7%
Less than investment grade......................... 4.7%
See the Appendix for a description of corporate bond ratings.
For a more complete discussion of the risk factors associated
with high-yield bonds, see the discussion below under "Principal
Risk Factors," and "Certain Risk Factors Relating to High-Yield,
High-Risk Bonds" in the Statement of Additional Information.
The adviser anticipates that average maturity will not exceed
15 years, with the precise term to maturity dependent upon
general market and economic conditions.<PAGE>
<PAGE>
Investment in Foreign Securities
The Fund may invest in foreign securities that are suitable for
the Fund's investment objectives and policies. Foreign
securities investments are limited to 35% of the Fund's net
assets. The term "foreign securities" refers to equity and debt
securities of corporate issuers whose principal stock or bond
exchange listing is outside of the United States, to American
Depositary Receipts ("ADRs") that hold such securities, and to
debt securities issued by foreign governments or foreign
government agencies.
Investing in foreign securities involves risks which are not
ordinarily associated with investing in domestic securities.
These risks include political or economic instability in the
foreign country, diplomatic developments that could adversely
affect the value of the foreign security, foreign government
taxes, the costs incurred by the Fund in converting among various
currencies, fluctuation in currency exchange rates and the
possibility of imposition of currency controls, expropriation or
nationalization measures or withholding dividends at the source.
In the event of a default on any foreign obligation, it may be
difficult legally to obtain or to enforce a judgment against the
issuer.
Currency exchange rates are determined by forces of supply and
demand. These forces are affected by international balance of
payments, other economic and financial conditions, government
intervention and other factors. The ability of a foreign obligor
to make timely payments on its external debt obligations will be
strongly influenced by the country's balance of payments,
including export performance, its access to international credits
and investments, fluctuations in interest rates and the extent of
its foreign reserves.
There may be less publicly available information about a foreign
issuer than about a domestic issuer. Foreign issuers are subject
to accounting and reporting requirements which are generally less
extensive than those applicable to domestic issuers. Securities
of foreign issuers are generally less liquid and more volatile
than those of comparable domestic issuers. There is frequently
less governmental regulation of exchanges, broker-dealers and
issuers and brokerage costs may be higher than in the
United States.
Foreign securities other than ADRs typically will be traded on
the applicable country's principal stock or bond exchange but may
also be traded on regional exchanges or over-the-counter.
Foreign markets, especially emerging markets, may have different
clearance and settlement procedures, and in certain markets there
have been times when settlements have been unable to keep pace
with the volume of securities transactions, making it difficult
to conduct such transactions.
A country whose exports are concentrated in a few commodities or
whose economy depends on certain strategic imports could be
vulnerable to fluctuations in international prices of these
commodities or imports. To the extent that a country receives
payment for its exports in currencies other than dollars, its
ability to make debt payments denominated in dollars could be
adversely affected.
ADRs are receipts, typically issued by a U.S. bank or trust
company, evidencing ownership of the underlying foreign
securities. ADRs are denominated in U.S. dollars and trade in
the U.S. securities markets. ADRs are subject to certain of the
same risks as direct investment in foreign securities, including
the risk that changes in the value of the currency in which the
security underlying an ADR is denominated relative to the U.S.
dollar may adversely affect the value of the ADR.
Foreign securities purchased by the Fund may include securities
issued by companies located in countries not considered to be
major industrialized nations. Such countries are subject to more
economic, political and business risk than major industrialized
nations, and the securities they issue are expected to be more
volatile and more uncertain as to payments of interest and
principal. The secondary market for such securities is expected
to be less liquid than for securities of major industrialized
nations.
To limit the risks of investing in any one country, the Fund
limits not only its total purchases of foreign securities, but
also its purchases for any single country. For "major
countries," the applicable limit is 20% of net assets; for other
countries, the applicable limit is 5% of net assets. "Major
countries" currently include: The United Kingdom, Germany,
France, Italy, Switzerland, Netherlands, Spain, Belgium, Canada,
Mexico, Argentina, Chile, Brazil, Australia, Japan, Singapore,
New Zealand, Hong Kong, Sweden and Norway.
Foreign Currency Transactions
The Fund may also engage in forward foreign currency contracts
("forward contracts") in connection with the purchase or sale of
a specific security. A forward contract involves an obligation
to purchase or sell a specific foreign currency at a future date,
which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are traded in the interbank
market conducted directly between currency traders (usually large
commercial banks) and their customers. A forward contract
generally has no margin or other deposit requirement.
The Fund will not enter into forward contracts for longer-term
hedging purposes. The possibility of changes in currency
exchange rates will be incorporated into the long-term investment
considerations when purchasing the investment and subsequent
considerations for possible sale of the investment.
Money Market Instruments
The Fund may at any time be 100% invested in money market
instruments although it likely will invest in these securities
only temporarily pending investment in equity and debt
securities, or on a limited basis. The securities described below
are considered money market instruments if their remaining
maturities are less than 13 months.
Repurchase Agreements. A repurchase agreement is a
transaction where a Fund buys a security at one price and
simultaneously agrees to sell that same security back to the
original owner at a higher price. The investment adviser, on
behalf of the Board of Trustees, reviews the credit worthiness of
the other party to the agreement and must find it satisfactory
before engaging in a repurchase agreement. Thereafter, the
investment adviser, on behalf of the Board of Trustees, monitors
the borrower to ensure that adequate credit standards continue to
be met. It is the policy of the Fund to require that repurchase
agreements be fully collateralized at all times. A majority of
repurchase agreements mature in seven days or less. In the event
of the default or bankruptcy of the other party, the Fund could
experience delays in recovering its money, may realize only a
partial recovery or even no recovery, and may also incur
disposition costs.
U.S. Government Obligations. Securities issued and guaranteed
as to principal and interest by the U.S. Government include a
variety of Treasury securities that differ only in their interest
rates, maturities and times of issuance. At issuance, Treasury
bills have a maturity of one year or less; Treasury notes have
maturities of one to seven years; and Treasury bonds generally
have a maturity of greater than five years.
Government Agency Securities. Government agency securities
that are permissible investments consist of securities either
issued or guaranteed by agencies or instrumentalities of the U.S.
Government. Agencies of the U.S. Government that issue or
guarantee obligations include, among others, Export-Import Banks
of the United States, Farmers Home Administration, Federal
Housing Administration, Government National Mortgage Association,
Maritime Administration, Small Business Administration and The
Tennessee Valley Authority. Obligations of instrumentalities of
the U.S. Government include securities issued or guaranteed by,
among others, the Federal National Mortgage Association, Federal
Home Loan Banks, Federal Home Loan Mortgage Corporation, Federal
Intermediate Credit Banks, Banks for Cooperatives and the U.S.
Postal Service. Some of these securities, such as those
guaranteed by the Government National Mortgage Association, are
supported by the full faith and credit of the U.S. Treasury;
others, such as those issued by The Tennessee Valley Authority,
are supported by the right of the issuer to borrow from the
Treasury; while still others, such as those issued by the Federal
Land Banks, are supported only by the credit of the
instrumentality.
Certificates of Deposit. Certificates of deposit are
generally short-term, interest-bearing negotiable certificates
issued by banks or savings and loan associations against funds
deposited in the issuing institution.
Time Deposits. Time deposits are deposits in a bank or other
financial institution for a specified period of time at a fixed
interest rate for which no negotiable certificate is received.
Bankers' Acceptances. Bankers' acceptances are time drafts
drawn on commercial banks by borrowers usually in connection with
international commercial transactions (to finance the import,
export, transfer or storage of goods). The borrower is liable for
payment as well as the bank that unconditionally guarantees to
pay the draft at its face amount on the maturity date. Most
acceptances have maturities of six months or less and are traded
in secondary markets prior to maturity.
Commercial Paper. Commercial paper consists of unsecured
promissory notes issued by corporations to finance short-term
credit needs. Commercial paper is issued in bearer form with
maturities generally not exceeding nine months. Commercial paper
obligations may include variable amount master demand notes.
<PAGE>
Variable amount master demand notes are obligations that permit
the investment of fluctuating amounts by the Fund at varying
rates of interest pursuant to direct arrangements between the
Fund, as lender, and the borrower. These notes permit daily
changes in the amounts borrowed. The Fund has the right to
increase the amount under the note at any time up to the full
amount provided by the note agreement, or to decrease the amount,
and the borrower may prepay up to the full amount of the note
without penalty. Because variable amount master demand notes are
direct lending arrangements between the lender and borrower, it
is not generally contemplated that such instruments will be
traded, and there is no secondary market for these notes,
although they are redeemable (and thus immediately repayable by
the borrower) at face value, plus accrued interest, at any time.
In connection with master demand note arrangements, Carillon
Advisers, Inc. will monitor on an ongoing basis the earning
power, cash flow, and other liquidity ratios of the issuer, and
the borrower's ability to pay principal and interest on demand.
While master demand notes, as such, are not typically rated by
credit rating agencies, if not so rated the Fund may invest in
them only if at the time of an investment the issuer meets the
criteria for other commercial paper issuers. Because master
demand notes are immediately repayable by the borrower on demand,
they are considered by the Fund to have a maturity of one
business day.
Corporate Debt Securities. Corporate debt securities with a
remaining maturity of less than one year tend to become extremely
liquid and are traded as money market securities. Such issues
with between one and two years remaining to maturity tend to have
greater liquidity and considerably less market value fluctuations
than longer-term issues.
Other Information
In addition to the investment policies described above, the
Fund's investments are subject to further restrictions described
in the Statement of Additional Information. Unless otherwise
specified, the Fund's investment objectives, policies and
restrictions are not fundamental policies and may be changed
without shareholder approval.
PRINCIPAL RISK FACTORS
The Fund's investment objectives involve the assumption of
reasonable risks which include financial and market risks and
current income volatility. Financial risk refers to the ability
of an issuer of a debt security to pay principal and interest on
that security and to the earnings stability and overall financial
soundness of an issuer of an equity security. Market risk refers
to the fluctuation in the price of the security because of
changes in conditions in the securities markets in general and,
with respect to debt securities, changes in the overall level of
interest rates. Current income volatility refers to the degree
and rapidity with which changes in the overall level of interest
rates become reflected in the level of current income of the
Fund.
The Fund is subject to varying degrees of financial and
market risks and current income volatility because it invests in
a variety of investments at the adviser's discretion. The market
value of debt securities is affected by changes in general market
interest rates. If interest rates fall, the market value of these
securities tends to rise; but if interest rates rise, their value
tends to fall. Market risk affects all debt securities, but
lower-rated and unrated securities may be subject to a greater
market risk than higher-rated (lower-yield) securities. Equity
securities are subject to potentially wide variations in value
because of activity in the primary markets on which such
securities are traded. Lower-rated securities are generally
subject to greater financial risk than higher-rated securities as
there is a greater probability that issuers of lower-rated
securities will not be able to pay the principal and interest due
on such securities, especially during periods of adverse economic
conditions.
Bonds rated below the four highest grades used by Standard &
Poor's or Moody's are frequently referred to as "junk" bonds,
reflecting the greater market and investment risks associated
with such bonds. Such risks relate not only to the greater
financial weakness of the issuers of such securities but also to
other factors including: (i) the sensitivity of such securities
to interest rates and economic changes (high-yield, high-risk
bonds are very sensitive to adverse economic and corporate
developments; their yields will fluctuate over time and either an
economic downturn or rising interest rates could create financial
stress on the issuers of such bonds, possibly resulting in their
defaulting on their obligations); (ii) the payment expectations
of holders of such securities (high-yield, high-risk bonds may
contain redemption or call provisions which if exercised in a
period of lower interest rates would result in their being
replaced by lower yielding securities); (iii) the liquidity of
such securities (there may be little trading in certain high-
yield, high-risk bonds which may make it more difficult to
dispose of the securities and more difficult to determine their
fair value). See "Certain Risk Factors Relating to High-Yield,
High-Risk Bonds" in the Statement of Additional Information for a
further discussion of the risks summarized above.
The Fund is subject to the further risk that in order to meet
its objectives, the adviser must determine the proper mix of
equity, debt and money market securities. Moreover, the timing of
movements from one type of security to another could have a
negative effect on the Fund's overall objective. Inherent in the
fact that the adviser has great latitude with respect to the
Fund's portfolio composition is the risk that it may not properly
ascertain the appropriate mix of securities for any particular
economic cycle.
For the risks involved in investing in foreign securities, see
"Investment in Foreign Securities" on page 6.
MANAGEMENT OF THE TRUST
Trustees
The Board of Trustees is responsible for supervising the
business affairs and investments of the Fund that are managed on
a daily basis by the Fund's investment adviser. The role of the
Trustees is not to approve specific investments, but to exercise
a control and review function.
Investment Adviser
Carillon Advisers, Inc. ("Adviser") serves as the Trust's
investment adviser under an Investment Advisory Agreement
("Agreement") originally dated December 30, 1987. Adviser, whose
principal business address is 1876 Waycross Road, Cincinnati,
Ohio 45240 (P.O. Box 40407, Cincinnati, Ohio 45240), was
incorporated under the laws of Ohio on August 18, 1986, as
successor to the advisory business of Carillon Investments, Inc.
Adviser is a wholly-owned subsidiary of The Union Central Life
Insurance Company ("UC"), a mutual life insurance company
organized in 1867 under the laws of Ohio. Adviser is also the
investment adviser of The Manhattan Life Insurance Company (with
invested assets of approximately $438 million as of December 31,
1996), which is 100% owned by UC. Adviser is also the investment
adviser of Carillon Fund, Inc., a registered open-end management
investment company. It is also the investment sub-adviser of
Summit Investment Trust, a registered open-end management
investment company with $34.5 million in net assets at December
31, 1996. George L. Clucas has been primarily responsible for
the day-to-day management of the Fund's portfolio since 1988.
Mr. Clucas is Trustee, President and Chief Executive Officer of
the Fund, and President and Chief Executive Officer of the
Adviser. He has been affiliated with the Adviser and UC since
1987.
The Agreement provides that, subject to the control and
direction of the Board of Trustees, Adviser will manage the
investment and reinvestment of the assets of the Fund in
accordance with its investment objectives and policies. In
addition, Adviser agrees to formulate and implement a continuing
program for the management of the Fund's assets. Adviser's
obligations include the making and execution of all investment
decisions, and the placement of orders for the purchase and sale
of securities with or through such brokers, dealers or issuers as
Adviser may select.
Adviser is also required by the Agreement to furnish or
provide to the Fund any necessary office space, equipment and
personnel, clerical services, and other necessary office
expenses, and provide the services of individuals who perform
executive and administrative functions for the Fund. In order to
fulfill these obligations, Adviser has entered into an
Administration Agreement with Carillon Investments, Inc. to
furnish such services for which Adviser pays Carillon
Investments, Inc. an annual fee equal to .20% of the Fund's
average net assets. This fee does not increase the obligation of
the Fund in any way.
<PAGE>
<PAGE>
Advisory Fee
Pursuant to the Agreement between the Fund and Adviser, the
Fund pays Adviser, as full compensation for all facilities and
services furnished, a fee based on its average net assets. The
fee, accrued daily and paid monthly, is computed at the 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
current value of the net assets of the Fund. The initial advisory
fee is higher than that charged most other funds, but management
believes it to be standard with regard to other comparable funds.
Because the fee is reduced (first reduction at $50,000,000), it
precisely recognizes "economies of size" and the fixed costs
associated with managing any fund. It gives early recognition to
the value of an increase in net assets.
Service Agreement
Under a Service Agreement between the Adviser and UC, UC has
agreed to make available to the Adviser the services of certain
employees of UC on a part-time basis for the purpose of better
enabling the Adviser to fulfill its obligations to the Trust
under the Agreement. Pursuant to the Service Agreement, the
Adviser shall reimburse UC for all the costs allocable to the
time spent on the affairs of the Adviser by the employees
provided by UC. In performing their services for the Adviser
pursuant to the Service Agreement, the specified employees shall
report and be solely responsible to the officers and directors of
the Adviser or persons designated by them. UC shall have no
responsibility for the investment recommendations or decisions of
the Adviser. The obligation of performance under the Agreement is
solely that of the Adviser and UC undertakes no obligation in
respect thereto except as otherwise expressly provided in the
Service Agreement. The Service Agreement was approved by the
shareholders at a meeting held on March 20, 1992.
Expenses
The Fund incurs expenses that are accrued daily and deducted
from total income before dividends are paid. These expenses
include: the fee of Adviser, taxes, legal, transfer and dividend
disbursing agent, bookkeeping, custodian and auditing fees, and
other expenses relating to the Trust's operations that are not
expressly assumed by Adviser under its Investment Advisory
Agreement with the Trust. For the year ended October 31, 1996,
expenses ($420,613) as a percentage of average net assets
($41,397,347) equalled 1.02%. (See "Fund Expenses," page 2.)
It is estimated that the Fund will have an annual portfolio
turnover rate of 75%. For the year ended October 31, 1996, the
actual portfolio turnover rate was 47.43%. Portfolio turnover
refers to the rate at which the securities held by the Fund are
replaced. The higher the rate, the higher the transactional and
brokerage costs associated with the turnover, unless the
securities traded can be bought and sold without corresponding
commission costs.
PURCHASE OF FUND SHARES
Principal Underwriter
Carillon Investments, Inc. ("Distributor"), whose address is
1876 Waycross Road, Cincinnati, Ohio 45240 (P.O. Box 40409,
Cincinnati, Ohio 45240), serves as the principal underwriter for
shares of the Trust. Distributor is a wholly-owned subsidiary of
UC. Pursuant to a Distribution Agreement with the Trust,
Distributor is obligated to pay certain expenses in connection
with the offering of shares, including sales commissions to its
representatives and fees to other broker-dealers offering the
Fund shares. Broker-dealers typically receive 90% of the sales
charge. The staff of the Securities and Exchange Commission is of
the opinion that broker-dealers receiving 90% or more of the
sales charge are considered underwriters under the Securities Act
of 1933. Distributor also pays for the printing and distribution
of prospectuses, sales literature and advertising costs in
connection with the offering of Fund shares.
How Shares May Be Purchased
The Trust continuously offers the shares of the Fund at the
public offering price which is the net asset value per share next
computed after receipt by the transfer agent of an order to
purchase, plus a sales charge. An application form for the
purchase of Fund shares is included with this Prospectus or can
be obtained from Distributor or from a broker-dealer which has
entered into a selling agreement with Distributor. The initial
purchase order must be placed through the Distributor or one of
these brokers; subsequent purchases may be made through the
broker or Distributor, by mail or through an automatic deduction
from the shareholder's checking account. The broker-dealers and
the Distributor are responsible for the prompt forwarding of
orders to the transfer agent. If the purchase order is received
by the transfer agent before 4:00 p.m., Eastern Time, on a
trading day, the shares will be purchased at the net asset value
per share determined at 4:00 p.m., Eastern Time, on that day.
Purchase orders received after 4:00 p.m., Eastern Time, will be
executed at the net asset value determined at 4:00 p.m., Eastern
Time, on the next trading day. The initial investment must be at
least $500 and subsequent investments must be at least $50. The
Trust has the unqualified right not to accept a specific order
for the purchase of shares. A $15 service charge will be
assessed for all returned checks due to insufficient funds or
closed accounts.
The application form for the purchase of Fund shares requires
certain elections to be made by the shareholder if he/she
anticipates making subsequent purchases by bank wire ($500
minimum), by check or by automatic monthly deductions ($100
minimum) from his/her checking account. Third party checks for
investment into mutual fund accounts will no longer be accepted;
this refers to checks that are made payable to someone other than
the registered account owner and endorsed over to a particular
mutual fund. If the appropriate election is made, money can be
wired to the transfer agent by the shareholder's bank for the
purchase of Fund shares. The shareholder's bank must be a member
of the Federal Reserve System. It is likely that the
shareholder's bank will impose a fee for this privilege. Of
course, the shareholder may send subsequent payments directly to
the transfer agent: Firstar Trust Company, Mutual Fund Services,
P.O. Box 701, Milwaukee, Wisconsin 53201-0701. Whenever placing
an order, the shareholder must give his/her account number. (See
"Note" page 13.)
If there is a question concerning the purchase of shares,
contact the Distributor or your broker.
Sales Charge
A sales charge is deducted from investments in the Fund
shares. The amount of sales charge varies with the total amount
invested. The following is a table of sales charges applied
against investment in shares.
<TABLE>
<CAPTION>
Percent of Percent
Amouont Offering of Net
Invested Price Investment
<S> <C> <C>
Less than $50,000 5% 5.26%
$50,000 but less than $150,000 4% 4.17%
$150,000 but less than $500,000 3% 3.09%
$500,000 but less than $1,500,000 2% 2.04%
$1,500,000 but less than $2,500,000 1% 1.01%
$2,500,000 or more .5% .50%
</TABLE>
For example, from the total investment (public offering
price) of $5,000, $250 would be deducted and the net amount
invested would be $4,750. This $250 represents 5% of the purchase
payment and 5.26% of the net amount invested.
Reduced Sales Charge
Shares of the Fund may be purchased at a reduced sales charge
under certain circumstances briefly described here. Complete
procedural details are given in the Statement of Additional
Information.
(a) LETTER OF INTENT: Shareholders who sign a Letter of Intent
will be permitted to aggregate their current investment in the
Trust with the subsequent investments they intend to make over
the next 13-month period in shares of the Fund.
(b) RIGHT OF ACCUMULATION AND COMBINED ACCOUNTS: If notified to
do so by the shareholder at the time a purchase is made, the Fund
takes into account the current net asset value of shares owned by
the shareholder in addition to the dollar amount of his or her
new investment in determining the sales charge. The Fund also
will consider, if notified to do so, the current net asset value
of shares owned, or the aggregate dollar amount of new investment
in Fund shares being made by the shareholder's spouse and/or
children under the age of 21.
Purchases of Fund shares for qualified retirement plans under
section 401(a) of the Internal Revenue Code ("Code"), plans
adopted by public school systems and certain tax-exempt
organizations under section 403(b) of the Code, Individual
Retirement Arrangements purchased by or on behalf of individuals
pursuant to section 408 of the Code, and government deferred
compensation plans pursuant to section 457 of the Code will not
be subject to the sales charge.
Purchases of the Fund shares by Distributor, or companies
affiliated with Distributor, and by directors, officers and
employees of Distributor or affiliated companies will not be
subject to the sales charge. Fund shares purchased by the spouse
and/or children under the age of 21 of the directors, officers
and employees of the Distributor or such affiliated companies
also will not be subject to the sales charge.
Determining Net Asset Value
The net asset value of the shares of the Fund is determined
once daily, Monday through Friday at 4:00 p.m., Eastern Time, on
days there are purchases or redemptions of Fund shares, except
when the New York Stock Exchange is closed (currently New Year's
Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day), and any day
on which changes in the value of the portfolio securities of the
Fund will not materially affect the current net asset value of
its shares. Such determination is made by adding the values of
all securities and other assets of the Fund, subtracting
liabilities and expenses, and dividing the resulting figure by
the number of shares of the Fund outstanding. Expenses, including
the advisory fee payable to Adviser, are accrued daily.
Securities held by the Fund, except for money market
instruments maturing in 60 days or less, are valued as follows:
(a) securities traded on stock 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 the securities are being valued, or, lacking any
sales, at the last bid prices: (b) securities traded only in the
over-the counter market that are not part of the NASDAQ National
Market System are valued at the last bid prices quoted by brokers
that make markets in the securities at the close of trading on
the New York Stock Exchange; and (c) securities and assets for
which market quotations are not readily available are valued at
fair value as determined in good faith by, or under procedures
adopted by, the Board of Trustees. Money market instruments
maturing in 60 days or less are valued pursuant to the amortized
cost method.
Shareholder Accounts
When shares are initially purchased, an account is
automatically established for the shareholder. Any shares that
are subsequently purchased or received as a distribution will be
credited directly to the shareholder's account. No certificates
are issued.
REDEMPTION OF SHARES
Fund shares can be disposed of and cash received by sending a
written request for redemption to Firstar Trust Company, Mutual
Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701, or
by telephone or telegraphic request to Firstar at 1-800-338-1579
if this option was elected on the shareholder's application form.
<PAGE>
Upon receipt of a written request for redemption in "good
order" as described below, a check will be forwarded by Firstar,
as transfer agent for the Trust, equal to the amount of the net
asset value of the redeemed shares next determined after the
redemption request has been received. If the request for
redemption is received by Firstar before 4:00 p.m., Eastern Time,
the shares will be redeemed at the net asset value per share
determined at 4:00 p.m., Eastern Time, on that day. Requests for
redemption received by the transfer agent after 4:00 p.m.,
Eastern Time, will be executed at the net asset value determined
at 4:00 p.m., Eastern Time, on the next trading day.
The check normally will be forwarded immediately after
redemption. However, the Trust reserves the right to take up to
seven days to make payment. The proceeds of the redemption may be
more or less than the original cost. This is particularly true
when redemption is sought shortly after investment where a sales
charge was deducted from the investment. If the shares to be
redeemed were paid for by check (including certified or cashier's
checks), to allow clearance, the proceeds from the redemption
request will not be disbursed until 15 days after the receipt of
such payment.
A written redemption request will be considered to be
received in "good order" only if:
1. The number of shares to be redeemed and the shareholder
account number is indicated in writing;
2. The written request is signed by the registered owner and by
any co-owner of the account in exactly the same name or names
used in establishing the account; and
3. The signatures on the written redemption request for amounts
in excess of $10,000 are guaranteed by a national bank, a state
bank (not including a savings bank), a trust company,
Distributor, or by a member firm of the New York, American,
Boston, Midwest, Pacific or Philadelphia Stock Exchanges.
If requested on the original application for a Fund account,
telephone or telegraphic instructions for redemption will be
honored with the following restrictions: (a) Requests for
redemption to be paid by Fed wire must be in an amount of at
least $1,000 and will be sent only to the bank and account stated
in the application. The shareholder's bank must be a member of
the Federal Reserve System. A charge of $12.00 is imposed for Fed
wires. This charge is set and may be changed by Firstar. (b)
Telephone redemption requests must be less than $10,000 and will
be mailed only to the account address appearing on the Fund's
records. Redemptions will be priced at the next calculated net
asset value after receipt of the request by the transfer agent.
(See "Determining Net Asset Value," page 11.)
Telephone redemption requests may be made by calling the
transfer agent at 1-800-338-1579 between the hours of 9:00 a.m.
and 8:00 p.m., Eastern Time, on Monday through Friday (excepting
holidays). The transfer agent will need to know the shareholder's
name, account number, and either the number of shares or the
dollar amount to be redeemed.
Other supporting legal documents may be required from
corporations or other organizations, fiduciaries or persons other
than the shareholders of record making the request for
redemption.
The Trust has the right to suspend redemption or payment at
times when the New York Stock Exchange is closed (other than
customary weekend or holiday closings) or during periods of
emergency or other periods as permitted by the Securities and
Exchange Commission. In the case of any such suspension, the
request for redemption may be withdrawn, or payment may be
received based upon the net asset value next determined after the
suspension is lifted.
Because of the high cost of maintaining small accounts, the
Trust may elect to close any account which, due to redemptions,
has a current value of less than $500 by redeeming all of the
shares in the account and mailing the proceeds to the shareholder
of record. If the Trust so elects, the shareholder will be
notified in writing that an account has a value of less than $500
and will be allowed 30 days in which to make an additional
investment in order to avoid having the account closed.
Note
Shareholders are advised that during periods of drastic
economic or market changes, telephone and telegraphic procedures
may be difficult to implement. If a shareholder is unable to
place an order or request a redemption via the telephone or
telegraph, he should make a written request instead.
SHAREHOLDER VOTING
Under the Declaration of Trust, no annual and regular
meetings of shareholders are required. Shareholder meetings
ordinarily will not be held unless required by the Investment
Company Act of 1940. The Board of Trustees is a self-perpetuating
body and the Trustees will continue in their positions until they
resign, die, or are removed by a written agreement signed by at
least two-thirds of the remaining Trustees, by vote of the
shareholders of the Trust voting not less than two-thirds of the
shares then outstanding, cast in person or by proxy at any
meeting called for that purpose, or by a written declaration
signed by shareholders voting not less than two-thirds of the
shares then outstanding and filed with the Trust's custodian.
On any matter submitted to shareholders, shares of the Fund
entitle their holders to one vote per share (with proportionate
voting for fractional shares). When issued, the Fund's shares are
fully paid and nonassessable, have no preemptive or subscription
rights, and are fully transferable. There are no conversion
rights. Shares do not have cumulative voting rights, which means
that in situations in which shareholders elect Trustees, holders
of more than 50% of the shares voting for the election of
Trustees can elect 100% of the Trustees of the Trust and the
holders of less than 50% of the shares voting for the election of
Trustees will not be able to elect any Trustees. UC initially
invested $10 million in the Fund. UC is free to redeem its
investment at any time subject to retaining at least $100,000 in
the Fund.
In addition to UC's own investment, shares of the Fund are
sold to the trustees of certain UC employee benefit plans to fund
retirement benefits for UC's employees. As of January 31, 1997,
UC and UC's plan trustees owned 33.67% and 44.65%, respectively,
of Fund shares, and consequently, UC has voting control of the
Trust.
SHAREHOLDER LIABILITY
Under Massachusetts law, the shareholders of the Trust could,
under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Declaration of Trust
disclaims shareholder liability for acts or obligations of the
Trust and indicates that notice of such disclaimer can be given
in each agreement, obligation or instrument entered into or
executed by the Board of Trustees or a Trustee. The Declaration
of Trust provides for indemnification from the Trust property for
all losses and expenses of any shareholder held personally liable
for the obligations of the Trust. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be
unable to meet its obligations.
DIVIDENDS AND DISTRIBUTIONS
It is the intention of the Fund to distribute quarterly
substantially all of its net investment income, if any. For
dividend purposes, net investment income of the Fund consists of
all dividends or interest earned by the Fund less expenses
(including the investment advisory fee). All net realized capital
gains, if any, of the Fund are distributed periodically, no less
frequently than annually. All dividends and capital gains
distributions are automatically reinvested in additional shares
at net asset value unless the shareholder requests such dividends
and distributions be paid in cash.
<PAGE>
TAXES
Under the Internal Revenue Code, the Fund intends to elect
and qualify as a regulated investment company. As a regulated
investment company, the Fund will not be subject to federal
income tax on net investment income and capital gains, if any,
that it distributes to its shareholders if at least 90% of its
net investment income and net short-term capital gains for the
taxable year is distributed, but will be subject to tax at
regular corporate rates on any income or gains that are not
distributed.
Payments of dividends to shareholders that are not out of net
long-term capital gains and that do not exceed the current or
accumulated income of the Fund are taxable as ordinary income in
the tax year of the shareholder in which the dividend is paid,
whether paid in cash or reinvested in shares. A portion of the
dividends paid by the Fund will be eligible for the 70%
dividends-received deduction allowed to corporations. The portion
generally will be equal to the proportion that the Fund's
dividends from U.S. corporations bear to the Fund's gross income.
A 4% nondeductible excise tax will be imposed to the extent
the Fund does not distribute at least 98% of its ordinary income
earned during the calendar year and 98% of its net capital gains
(both long- and short-term) earned during its taxable year by the
end of the calendar year. For purposes of the 4% excise tax,
dividends and distributions will be treated as paid when actually
distributed, except that dividends declared in December payable
to shareholders of record on a specified date in December, and
paid before February 1 of the following year, will be treated as
having been (i) paid on the record date, and (ii) received by
each shareholder on such date. Under this rule, therefore, a
shareholder may be taxed in one year on dividends or
distributions actually received in January of the following year.
The Fund will send written notices to its shareholders
regarding the tax status of all distributions made during each
taxable year.
The Trust will be required to withhold 31% of any reportable
income payments made to a shareholder if the shareholder has not
provided an accurate taxpayer identification number, in a manner
as provided by the IRS, to the Trust or the IRS notifies the
Trust that a shareholder has not reported all interest and
dividend income required to be shown on the shareholder's federal
income tax return.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
Firstar Trust Company, Mutual Fund Services, P.O. Box 701,
Milwaukee, Wisconsin 53201-0701, acts as Custodian of the Trust's
assets, and is its bookkeeping, transfer and dividend disbursing
agent.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to P.O. Box 701,
Milwaukee, Wisconsin 53201-0701, or may be made by calling
1-800-338-1579.
STATEMENT OF ADDITIONAL INFORMATION
A copy of the Statement of Additional Information that
provides more detailed information about the Trust is available
upon request. The Table of Contents of this Statement follows.
<PAGE>
TABLE OF CONTENTS
STATEMENT OF ADDITIONAL INFORMATION
Page
The Trust................................................ 2
Investment Policies...................................... 3
Money Market Instruments and Investment Techniques..... 3
Investments in Foreign Securities...................... 7
Investment Restrictions.................................. 8
Portfolio Turnover....................................... 11
Management of the Trust.................................. 11
Compensation Table..................................... 13
Investment Adviser....................................... 13
Approval of the Agreement.............................. 13
Responsibilities of the Adviser........................ 14
Trust Expenses......................................... 14
Advisory Fee........................................... 15
Administration......................................... 15
Brokerage Allocation................................... 16
Other Clients of the Adviser........................... 16
Determination of Net Asset Value......................... 17
Performance.............................................. 18
Distribution of Shares................................... 19
Purchase and Redemption of Shares........................ 19
Sales Charge........................................... 19
Qualifying for a Reduced Sales Charge.................. 19
Redemptions............................................ 20
Taxes.................................................... 20
Custodian, Transfer and Dividend Disbursing Agent........ 21
Additional Information................................... 21
Independent Auditors..................................... 22
<PAGE>
APPENDIX
CORPORATE BOND RATINGS
Moody's Investors Services, Inc.
Aaa--Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt-edge." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements may
change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be high quality by
all standards. Together with the Aaa group they comprise what
are generally known as high-grade bonds. They are rated lower
than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger
than in Aaa securities.
A--Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium-grade
obligations. Factors giving security to principal and interest
are considered adequate but elements may be present which suggest
a susceptibility to impairment sometime in the future.
Baa--Bonds which are rated Baa are considered as medium-grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.
Ba--Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal
payment or of maintenance of other terms of the contract over any
long period of time may be small.
Caa--Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of
danger with respect to principal or interest.
Ca--Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.
Standard & Poor's Corporation
AAA--This is the highest rating assigned by Standard & Poor's
to a debt obligation and indicates an extremely strong capacity
to pay principal and interest.
AA--Bonds rated AA also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very
strong, and in the majority of instances they differ from AAA
issues only in a small degree.
A--Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to the
adverse of changes in circumstances and economic conditions.
<PAGE>
BBB--Bonds rated BBB are regarded as having adequate capacity
to pay principal and interest. Whereas they normally exhibit
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to
pay principal and interest for bonds in this category than for
bonds in the A category.
BB-B-CCC-CC--Bonds rated BB, B, CCC, and CC are regarded, on
balance, as predominately speculative with the respect to the
issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of
speculation. While such bonds will likely have some quality and
protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
COMMERCIAL PAPER RATINGS
Moody's Investors Services, Inc.
A Prime rating is the highest commercial paper rating
assigned by Moody's Investors Services, Inc. Issuers rated Prime
are further referred to by use of numbers 1, 2 and 3 to denote
relative strength within this highest classification. Among the
factors considered by Moody's in assigning ratings for an issuer
are the following: (1) management; (2) economic evaluation of
the industry and an appraisal of speculative type risks which may
be inherent in certain areas; (3) competition and customer
acceptance of products; (4) liquidity; (5) amount and quality of
long-term debt; (6) ten-year earnings trends; (7) financial
strength of a parent company and its relationship with the
issuer; and (8) recognition by management of obligations which
may be present or may arise as a result of public interest
questions and preparations to meet such obligations.
Standard & Poor's Corporation
Commercial paper rated A by Standard & Poor's Corporation has
the following characteristics: Liquidity ratios are better than
the industry average. Long-term senior debt rating is "A" or
better. In some cases, BBB credits may be acceptable. The
issuer has access to at least two additional channels of
borrowing. Basic earnings and cash flow have an upward trend
with allowance made for unusual circumstances. Typically, the
issuer's industry is well established, the issuer has a strong
position within its industry and the reliability and quality of
management is unquestioned. Issuers rated A are further referred
to by use of numbers 1, 2 and 3 to denote relative strength
within this classification.
<PAGE>
TABLE OF CONTENTS
Page
Fund Expenses........................ 2
Financial Highlights................. 3
Performance.......................... 4
The Trust............................ 4
The Fund............................. 4
Investment Objectives and Policies... 4
Equity Securities.................. 5
Debt Securities.................... 5
Investment in Foreign Securities... 6
Foreign Currency Transactions...... 7
Money Market Instruments........... 7
Other Information.................. 8
Principal Risk Factors............... 8
Management of the Trust.............. 9
Trustees........................... 9
Investment Adviser................. 9
Advisory Fee....................... 10
Service Agreement.................. 10
Expenses .......................... 10
Purchase of Fund Shares.............. 11
Principal Underwriter.............. 11
How Shares May Be Purchased........ 11
Sales Charge....................... 12
Reduced Sales Charge............... 12
Determining Net Asset Value........ 12
Shareholder Accounts............... 13
Redemption of Shares................. 13
Shareholder Voting................... 14
Shareholder Liability................ 15
Dividends and Distributions.......... 15
Taxes................................ 15
Custodian, Transfer and
Dividend Disbursing Agent.......... 16
Shareholder Inquiries................ 16
Statement of Additional Information.. 16
Table of Contents of Statement
of Additional Information.......... 17
Appendix
Corporate Bond Ratings............. 18
Commercial Paper Ratings........... 19
<PAGE>
CARILLON
CAPITAL
FUND
Carillon
Investment Trust
1876 Waycross Road
Cincinnati, Ohio 45240
- ---------------------------------------------------------
PROSPECTUS
- --------------------------
INVESTMENT ADVISER
Carillon Advisers, Inc.
1876 Waycross Road
Cincinnati, Ohio 45240
DISTRIBUTOR
Carillon Investments, Inc.
1876 Waycross Road
Cincinnati, Ohio 45240
Dated May 9, 1997
CIT 432 5-97
<PAGE>
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
CARILLON INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
May 9, 1997
This Statement of Additional Information is not a
prospectus. Much of the information contained in this Statement
of Additional Information expands upon subjects discussed in the
Prospectus for Carillon Capital Fund. Accordingly, this
Statement should be read in conjunction with the Prospectus,
dated May 9, 1997, that may be obtained by calling the Trust at
(513) 595-2600, or writing the Trust at P.O. Box 40409,
Cincinnati, Ohio 45240.
TABLE OF CONTENTS
Page
The Trust.................................................. 2
Investment Policies........................................ 3
Money Market Instruments and Investment Techniques.... 3
Investments in Foreign Securities..................... 7
Investment Restrictions.................................... 8
Portfolio Turnover......................................... 11
Management of the Trust.................................... 11
Compensation Table.................................... 13
Investment Adviser......................................... 13
Approval of the Agreement............................. 13
Responsibilities of the Adviser....................... 14
Trust Expenses........................................ 14
Advisory Fee.......................................... 15
Administration........................................ 15
Brokerage Allocation.................................. 16
Other Clients of the Adviser.......................... 16
Determination of Net Asset Value........................... 17
Performance................................................ 18
Distribution of Shares..................................... 19
Purchase and Redemption of Shares.......................... 19
Sales Charge.......................................... 19
Qualifying for a Reduced Sales Charge................. 19
Redemptions........................................... 20
Taxes...................................................... 20
Custodian, Transfer and Dividend Disbursing Agent.......... 21
Additional Information..................................... 21
Independent Auditors....................................... 22
CIT 444 5-97
<PAGE>
THE TRUST
Carillon Investment Trust ("Trust") is registered with the
Securities and Exchange Commission under the Investment Company
Act of 1940 ("1940 Act") as a diversified, open-end management
investment company. The Trust was organized on December 8,
1986, pursuant to a Declaration of Trust under the laws of the
Commonwealth of Massachusetts, as a voluntary association known
as a "Massachusetts business trust." It operated as a "series
company," as that term is used in Rule 18f-2 under the 1940 Act.
The Trust originally had three series: the Carillon Capital
Fund ("Fund"), the Carillon Growth Stock Fund ("Growth Fund")
and the Carillon U.S. Government Securities Fund ("U.S.
Securities Fund"). On February 22, 1989, The Union Central Life
Insurance Company ("UC"), the sole shareholder of the Growth
Fund and the U.S. Securities Fund, voted to dissolve these
funds. Consequently, the Trust is now composed only of Carillon
Capital Fund, whose shares are currently being sold.
UC, an insurance company organized under the laws of Ohio,
provided the initial capital for the Fund by purchasing one
million shares. UC is free to redeem its investment at any
time, subject to retaining at least $100,000 in the Fund. The
principal business address of UC is 1876 Waycross Road,
Cincinnati, Ohio 45240 (P.O. Box 40888, Cincinnati, Ohio
45240).
In addition to UC's own investment, shares of the Fund are
sold to the trustees of certain UC employee benefit plans to
fund retirement benefits for UC's employees. As of January 31,
1997, UC and UC's plan trustees owned 33.67% and 44.65%,
respectively, of Fund shares, and, consequently, UC has voting
control of the Trust.
As described under "Shareholder Voting" in the Prospectus
for the Fund, the Declaration of Trust provides that no annual
or regular meetings of shareholders are required. In addition,
after the Trustees were initially elected by shareholders, the
Trustees became a self-perpetuating body. Thus, there
ordinarily will be no shareholder meetings unless otherwise
required by the 1940 Act.
The 1940 Act specifically requires that a shareholder
meeting be held for the purpose of electing Trustees if at any
time less than a majority of the Trustees has been elected by
the shareholders of the Trust. The shareholders also have the
power to remove a Trustee by the affirmative vote of the holders
of not less than two-thirds of the shares outstanding and
entitled to vote either by a declaration in writing filed with
the custodian or by votes cast in person or by proxy at a
meeting called for the purpose of removal. The Trustees will
promptly call such a meeting when requested to do so by the
record holders of not less than 10 percent of the outstanding
shares.
Ten or more shareholders who have been shareholders for at
least six months preceding the date of application and who hold
in the aggregate either shares having a net asset value of at
least $25,000 or at least one percent of the outstanding shares,
whichever is less, may apply in writing to the Trustees stating
that they wish to communicate with other shareholders to obtain
signatures in order to request a meeting to remove a Trustee.
This application must be accompanied by the proposed
communication and form of the request that they wish to
transmit. <PAGE>
The Trustees will, within five business days after receipt of
such application, either: (1) afford to the applicants access
to a list of the names and addresses of all shareholders; or (2)
inform such applicants as to the approximate number of
shareholders of record and the approximate cost of mailing to
them the proposed communication and request, and upon tender by
the applicants of the amount so determined, undertake to mail
such communications to shareholders of record.
The phrase "a majority of the outstanding voting
securities" of the Fund (or of the Trust) means the vote of the
lesser of: (1) 67% of the shares of the Fund (or the Trust)
present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy; or (2)
more than 50% of the outstanding shares of the Fund (or the
Trust).
INVESTMENT POLICIES
The following specific policies supplement the "Investment
Objectives and Policies" set forth in the Prospectus for the
Fund.
Money Market Instruments and Investment Techniques
The Fund may at any time be 100% invested in money market
instruments, subject only to its objective of highest total
return. These securities will only be considered money market
instruments if their remaining maturities are less than 13
months.
Repurchase Agreements A repurchase agreement is an instrument
under which the purchaser (i.e., the Fund) acquires ownership of
the obligation (the underlying security) and the seller (the
"issuer" of the repurchase agreement) agrees, at the time of
sale, to repurchase the obligation at a mutually agreed upon
time and price, thereby determining the yield during the
purchaser's holding period. This results in a fixed rate of
return insulated from market fluctuations during such period.
The underlying securities will only consist of securities in
which the Fund may otherwise invest. Repurchase agreements
usually are for short periods, normally under one week, and are
considered to be loans under the 1940 Act. Repurchase
agreements will be fully collateralized at all times and
interest on the underlying security will not be taken into
account for valuation purposes. Securities underlying
repurchase agreements will be held by the Trust's custodian.
If the issuer of the repurchase agreement defaults and does
not repurchase the underlying security, the Fund might incur a
loss if the value of the underlying security declines, and the
Fund might incur disposition costs in liquidating the underlying
security. In addition, if the issuer becomes involved in
bankruptcy proceedings, the Fund may be delayed or prevented
from obtaining the underlying security for its own purposes. In
order to minimize any such risk, the Fund will only engage in
repurchase agreements with recognized securities dealers and
banks determined to present minimal credit risk by Carillon
Advisers, Inc. on behalf of the Board of Trustees.
U.S. Government Obligations Securities issued and guaranteed
as to principal and interest by the U.S. Government include a
variety of Treasury securities that differ only in their
interest rates, maturities and times of issuance. At issuance,
Treasury bills have a maturity of one year or less; Treasury
notes have maturities of one to seven years; and Treasury bonds
generally have a maturity of greater than five years.
Government Agency Securities Government agency securities that
are permissible investments consist of securities either issued
or guaranteed by agencies or instrumentalities of the U.S.
Government. Agencies of the U.S. Government that issue or
guarantee obligations include, among others, Export-Import Banks
of the United States, Farmers Home Administration, Federal
Housing Administration, Government National Mortgage Association
("GNMA"), Maritime Administration, Small Business Administration
and The Tennessee Valley Authority. Obligations of
instrumentalities of the U.S. Government include securities
issued or guaranteed by, among others, the Federal National
Mortgage Association ("FNMA"), Federal Home Loan Banks, Federal
Home Loan Mortgage Corporation ("FHLMC"), Federal Intermediate
Credit Banks, Banks for Cooperatives, and the U.S. Postal
Service. Some of these securities, such as those guaranteed by
the Government National Mortgage Association, are supported by
the full faith and credit of the U.S. Treasury; others, such as
those issued by The Tennessee Valley Authority, are supported by
the right of the issuer to borrow from the Treasury; while still
others, such as those issued by the Federal Land Banks, are
supported only by the credit of the instrumentality. The Fund's
primary usage of these types of securities will be GNMA
certificates and FNMA and FHLMC mortgage-backed obligations
which are discussed in more detail below.
Certificates of Deposit Certificates of deposit are generally
short-term, interest-bearing negotiable certificates issued by
banks or savings and loan associations against funds deposited
in the issuing institution.
Time Deposits Time deposits are deposits in a bank or other
financial institution for a specified period of time at a fixed
interest rate for which no negotiable certificate is received.
Bankers' Acceptances Bankers' acceptances are time drafts
drawn on commercial banks by borrowers usually in connection
with international commercial transactions (to finance the
import, export, transfer or storage of goods). The borrower is
liable for payment as well as the bank that unconditionally
guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less
and are traded in secondary markets prior to maturity.
Commercial Paper Commercial paper consists of unsecured
promissory notes issued by corporations to finance short-term
credit needs. Commercial paper is issued in bearer form with
maturities generally not exceeding nine months. Commercial
paper obligations may include variable amount master demand
notes. Variable amount master demand notes are obligations that
permit the investment of fluctuating amounts by the Fund at
varying rates of interest pursuant to direct arrangements
between the Fund, as lender, and the borrower. These notes
permit daily changes in the amounts borrowed. The Fund has the
right to increase the amount under the note at any time up to
the full amount provided by the note agreement, or to decrease
the amount, and the borrower may prepay up to the full amount of
the note without penalty. Because variable amount master demand
notes are direct lending arrangements between the lender and the
borrower, it is not generally contemplated that such instruments
will be traded, and there is no secondary market for these
notes, although they are redeemable (and thus immediately
repayable by the borrower) at face value, plus accrued interest,
at any time. In connection with master demand note
arrangements, Carillon Advisers, Inc. will monitor on an ongoing
basis the earning power, cash flow and other liquidity ratios of
the issuer, and the borrower's ability to pay principal and
interest on demand. While master demand notes, as such, are not
typically rated by credit rating agencies, if not so rated the
Fund may invest in them only if at the time of an investment the
issuer meets the criteria for all other commercial paper
issuers. Because master demand notes are immediately repayable
by the borrower on demand, they are considered by the Fund to
have a maturity of one business day.
Corporate Debt Securities Corporate debt securities with a
remaining maturity of less than one year tend to become
extremely liquid and are traded as money market securities.
Such issues with between one and two years remaining to maturity
tend to have greater liquidity and considerably less market
value fluctuations than longer-term issues.
GNMA Certificates GNMA certificates are mortgage-backed
securities representing part ownership of a pool of mortgage
loans on which timely payment of interest and principal is
guaranteed by the full faith and credit of the U.S. government.
GNMA certificates differ from typical bonds because principal is
repaid monthly over the term of the loan rather than returned in
a lump sum at maturity. Because both interest and principal
payments (including prepayments) on the underlying mortgage
loans are passed through to the holder of the certificate, GNMA
certificates are called "pass-through" securities.
Although the mortgage loans in the pool have maturities of
up to 30 years, the actual average life of the GNMA certificates
typically will be substantially less because the mortgages are
subject to normal principal amortization and may be prepaid
prior to maturity. Prepayment rates vary widely and may be
affected by changes in market interest rates. In periods of
falling interest rates, the rate of prepayment tends to
increase, thereby shortening the actual average life of the GNMA
certificates. Conversely, when interest rates are rising, the
rate of prepayment tends to decrease, thereby lengthening the
actual average life of the GNMA certificates. Accordingly, it is
not possible to predict accurately the average life of a
particular pool. Reinvestment of prepayments may occur at higher
or lower rates that the original yield on the certificates. Due
to the prepayment feature and the need to reinvest prepayments
of principal at current rates, GNMA certificates can be less
effective than typical bonds of similar maturities at "locking-
in" yields during periods of declining interest rates, although
they may have comparable risks of decline in value during
periods of rising interest rates.
FNMA and FHLMC Mortgage-Backed Obligations The Federal
National Mortgage Association ("FNMA"), a federally chartered
and privately owned corporation, issues pass-through securities
representing an interest in a pool of conventional mortgage
loans. FNMA guarantees the timely payment of principal and
interest but this guarantee is not backed by the full faith and
credit of the U.S. government. The Federal Home Loan Mortgage
Corporation ("FHLMC"), a corporate instrumentality of the United
States, issues participation certificates that represent an
interest in a pool of conventional mortgage loans. FHLMC
guarantees the timely payment of interest and the ultimate
collection of principal and maintains reserves to protect
holders against losses due to default, but the certificates are
not backed by the full faith and credit of the U.S. government.
As is the case with GNMA certificates, the actual maturity of
and realized yield on particular FNMA and FHLMC pass-through
securities will vary based on the prepayment experience of the
underlying pool of mortgages.
Mortgage-Related Securities The Fund may invest in
collateralized mortgage obligations ("CMOs") or mortgage-backed
bonds issued by financial institutions such as commercial banks,
savings and loan associations, mortgage banks and securities
broker-dealers (or affiliates of such institutions established
to issue these securities). CMOs are obligations fully
collateralized directly or indirectly by a pool of mortgages on
which payments of principal and interest are dedicated to
payment of principal and interest on the CMOs. Payments on the
underlying mortgages (both interest and principal) are passed
through to the holders, although not necessarily on a pro rata
basis, on the same schedule as they are received. Mortgage-
backed bonds are general obligations of the issuer fully
collateralized directly or indirectly by a pool of mortgages.
The mortgages serve as collateral for the issuer's payment
obligations on the bonds, but interest and principal payments on
the mortgages are not passed through either directly (as with
GNMA certificates and FNMA and FHLMC pass-through securities) or
on a modified basis (as with CMOs). Accordingly, a change in the
rate of prepayments on the pool of mortgages could change the
effective maturity of a CMO but not that of a mortgage-backed
bond (although, like many bonds, mortgage-backed bonds may be
callable by the issuer prior to maturity).
The Fund may also invest in a variety of more risky CMOs,
including interest only ("IOs"), principal only ("POs"), inverse
floaters, or a combination of these securities. Stripped
mortgage-backed securities ("SMBS") are usually structured with
several classes that receive different proportions of the
interest and principal distributions from a pool of mortgage
assets. A common type of SMBS will have one class receiving all
of the interest from the mortgage assets (an IO), while the
other class will receive all of the principal (a PO). However,
in some instances, one class will receive some of the interest
and most of the principal while the other class will receive
most of the interest and the remainder of the principal. If the
underlying mortgage assets experience greater-than-anticipated
or less-than-anticipated prepayments of principal, the Fund may
fail to fully recoup its initial investment or obtain its
initially assumed yield on some of these securities. The market
value of the class consisting entirely of principal payments
generally is unusually volatile in response to changes in
interest rates. The yields on classes of SMBS that have more
uncertain timing of cash flows are generally higher than
prevailing market yields on other mortgage-backed securities
because there is a greater risk that the initial investment will
not be fully recouped or received as planned over time.
The Fund may invest in another CMO class known as leveraged
inverse floating rate debt instruments ("inverse floaters"). The
interest rate on an inverse floater resets in the opposite
direction from the market rate of interest to which the inverse
floater is indexed. An inverse floater may be considered to be
leveraged to the extent that its interest rate varies by a
magnitude that exceeds the magnitude of the change in the index
rate of interest. The higher degree of leverage inherent in
inverse floaters is associated with greater volatility in their
market values. Accordingly, the duration of an inverse floater
may exceed its stated final maturity.
Certain CMOs may be deemed to be illiquid securities for
purposes of the Fund's 10% limitation on investments in such
securities. The investment adviser limits investments in more
risky CMOs to no more than 5% of its total assets.
Certain Risk Factors Relating to High-Yield (High-Risk) Bonds
The Fund may, to a limited extent, invest in high-yield (high
- -risk) bonds. That is, up to a maximum of 25% of the total value
of the Fund's portfolio of debt securities may be invested in
high-yield bonds or unrated bonds equivalent thereto. These
bonds present certain risks which are discussed below.
Sensitivity to Interest Rates and Economic Changes High-yield
bonds are very sensitive to adverse economic changes and
corporate developments. During an economic downturn or
substantial period of rising interest rates, highly leveraged
issuers may experience financial stress that would adversely
affect their ability to service their principal and interest
payment obligations, to meet projected business goals, and to
obtain additional financing. If the issuer of a bond defaulted
on its obligations to pay interest or principal or entered into
bankruptcy proceedings, the Fund may incur losses or expenses in
seeking recovery of amounts owed to it. In addition, periods of
economic uncertainty and changes can be expected to result in
increased volatility of market prices of high-yield bonds and
the Fund's net asset value.
Payment Expectations High-yield bonds may contain redemption
or call provisions. If an issuer exercised these provisions in
a declining interest rate market, the Fund might have to replace
the security with a lower yielding security, resulting in a
decreased return for investors. Conversely, a high-yield bond's
value will decrease in a rising interest rate market, as will
the value of the Fund's assets. If the Fund experiences
unexpected net redemptions, this may force it to sell high-yield
bonds without regard to their investment merits, thereby
decreasing the asset base upon which expenses can be spread and
possibly reducing the Fund's rate of return.
Liquidity and Valuation There may be little trading in the
secondary market for particular bonds, which may affect
adversely the Fund's ability to value accurately or dispose of
such bonds. Adverse publicity and investor perceptions, whether
or not based on fundamental analysis, may decrease the values
and liquidity of high-yield bonds, especially in a thin market.
Investments in Foreign Securities
American Depositary Receipts. American Depositary Receipts
("ADRs") may be issued in sponsored or unsponsored programs. In
sponsored programs, the issuer makes arrangements to have its
securities traded in the form of ADRs; in unsponsored programs,
the issuer may not be directly involved in the creation of the
program. Although the regulatory requirements with respect to
sponsored and unsponsored programs are generally similar, the
issuers of unsponsored ADRs are not obligated to disclose
material information in the United States and, therefore, such
information may not be reflected in the market value of the
ADRs.
Foreign Exchange. If a foreign country cannot generate
sufficient earnings from foreign trade to service its external
debt, it may need to depend on continuing loans and aid from
foreign governments, commercial banks, multilateral
organizations, and inflows of foreign investment. The cost of
servicing external debt will also generally be adversely
affected by rising international interest rates because many
external debt obligations bear interest at rates which are
adjusted based upon international interest rates. The ability to
service external debt will also depend on the level of the
relevant government's international currency reserves and its
access to foreign currencies. Currency devaluations may affect
the ability of an obligor to obtain sufficient foreign
currencies to service its external debt.
Foreign Currency Exchange Transactions. The Fund may engage in
foreign currency exchange transactions on a spot (i.e., cash)
basis at the spot rate prevailing in the foreign exchange
currency market, or on a forward basis to "lock in" the U.S.
dollar price of the security. By entering into a forward
contract for the purchase or sale, for a fixed amount of U.S.
dollars, of the amount of foreign currency involved in the
underlying transactions, the Fund attempts to protect itself
against possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the applicable foreign
currency during the period between the date on which the
security is purchased or sold and the date on which related
payments are made or received.
The Fund will not enter into forward contracts for
longer-term hedging purposes. The possibility of changes in
currency exchange rates will be incorporated into the long-term
investment considerations when purchasing the investment and
subsequent considerations for possible sale of the investment.
Foreign Markets. Delays in settlement which may occur in
connection with transactions involving foreign securities could
result in temporary periods when a portion of the assets of the
Fund is uninvested and no return is earned thereon. The
inability of the Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive
investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result in losses to
the Fund due to subsequent declines in values of the portfolio
securities or, if the Fund has entered into a contract to sell
the security, possible liability to the purchaser. Certain
foreign markets, especially emerging markets, may require
governmental approval for the repatriation of investment income,
capital or the proceeds of sales of securities by foreign
investors. The Fund could be adversely affected by delays in, or
a refusal to grant, any required governmental approval for
repatriation of capital, as well as by the application to the
Fund of any restrictions on investments.
Foreign Debt Securities. Investing in foreign debt securities
will expose the Fund to the direct or indirect consequences of
political, social or economic changes in the industrialized
developing and emerging countries that issue the securities. The
ability and willingness of obligor or the governmental
authorities that control repayment of their external debt to pay
principal and interest on such debt when due may depend on
general economic and political conditions within the relevant
country. Additional country-related factors unique to foreign
issuers which may influence the ability or willingness to
service debt include, but are not limited to, a country's cash
flow situation, the availability of sufficient foreign exchange
on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, and its government's
relationships with the International Monetary Fund, the World
Bank and other international agencies.
INVESTMENT RESTRICTIONS
The Trust has adopted the following fundamental
restrictions relating to the investment of assets of the Fund
and other investment activities. These are fundamental policies
and may not be changed without the approval of holders of the
majority of the outstanding voting shares of the Fund. The
Trust's fundamental investment restrictions provide that the
Fund is not allowed to:
(1) Issue senior securities [except that the Fund may borrow
money as described in restriction (9) below].
(2) With respect to 75% of the value of its total assets,
invest more than 5% of its total assets in securities (other
than securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities) of any one issuer.
(3) Purchase more than either: (i) 10% in principal amount
of the outstanding debt securities of an issuer, or (ii) 10% of
the outstanding voting securities of an issuer.
(4) Invest more than 25% of its total assets in the
securities of issuers primarily engaged in the same industry.
For purposes of this restriction, gas, gas transmission,
electric, water, and telephone utilities each will be
considered separate industries. This restriction does not
apply to obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
(5) Purchase or sell commodities, commodity contracts or
real estate, except that the Fund may purchase securities of
issuers which invest or deal in any of the above, and except
that the Fund may invest in securities that are secured by real
estate. This restriction does not apply to obligations issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities nor to futures contracts.
(6) Purchase any securities on margin (except that the
Trust may obtain such short-term credit as may be necessary for
the clearance of purchases and sales of portfolio securities)
or make short sales of securities or maintain a short position.
(7) Make loans, except through the purchase of obligations
in private placements or by entering into repurchase agreements
(the purchase of publicly traded obligations not being
considered
the making of a loan).
(8) Lend its securities.
(9) Borrow amounts in excess of 10% of its total assets,
taken at market value at the time of the borrowing, and then
only from banks as a temporary measure for extraordinary or
emergency purposes, or to meet redemption requests that might
otherwise require the untimely disposition of securities, and
not for investment or leveraging. Securities will not be
purchased while borrowings are outstanding.
(10) Mortgage, pledge, hypothecate or in any manner
transfer, as security for indebtedness, any securities owned or
held by the Fund. This restriction shall not apply to
borrowings permitted by restriction number (9) above.
(11) Underwrite securities of other issuers except insofar
as the Trust may be deemed an underwriter under the Securities
Act of l933 in the sale of restricted securities.
(12) Invest in companies for the purpose of exercising
control.
(13) The Fund is limited to investing no more than 10% of
its assets in illiquid securities (including restricted
securities and repurchase agreements maturing in more than
seven days) or in the securities of issuers which together with
any predecessors have a record of less than three years
continuous operation.
The Trust, in regard to the Fund, has also adopted the
following additional investment restrictions that are not
fundamental and may be changed by the Board of Trustees without
shareholder approval. Under these restrictions, the Fund may
not:
(1) Participate on a joint (or a joint and several) basis
in
any trading account in securities (but this does not prohibit
the
"bunching" of orders for the sale or purchase of securities of
the Fund with other accounts advised or sponsored by the
adviser
or any of its affiliates to reduce brokerage commissions or
otherwise to achieve best overall execution).
(2) Purchase or retain the securities of any issuer, if, to
the knowledge of the Trust, officers and Trustees of the Trust,
the adviser or any affiliate thereof each owning beneficially
more than .5% of one of the securities of such issuer, own in
the aggregate more than 5% of the securities of such issuer.
(3) Purchase or sell interests in oil, gas, or other
mineral exploration or development programs, or real estate
mortgage loans, except that the Fund may purchase securities of
issuers which invest or deal in any of the above, and except
that the Fund may invest in securities that are secured by real
estate mortgages. This restriction does not apply to
obligations or other securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
(4) Purchase securities of other investment companies with
an aggregate value in excess of 5% of the Fund's total assets,
except in connection with a merger, consolidation, acquisition
or reorganization, or by purchase in the open market of
securities of closed-end investment companies where no
underwriter or dealer's commission or profit, other than
customary broker's commission, is involved, and only if
immediately thereafter not more than 10% of the Fund's total
assets, taken at market value, would be invested in such
securities.
If a percentage restriction (for either fundamental or
nonfundamental policies) is adhered to at the time of
investment, a later increase or decrease in percentage beyond
the specified limit resulting from a change in values of
portfolio securities or amount of net assets shall not be
considered a violation.
PORTFOLIO TURNOVER
Portfolio turnover is calculated by dividing the lesser of
purchases or sales of portfolio securities during the fiscal
year by the monthly average of the value of the Fund's
securities (excluding from the computation all securities,
including options, with maturities at the time of acquisition of
one year or less). A high rate of portfolio turnover generally
involves correspondingly greater brokerage commission expenses
that must be borne directly by the Fund. Turnover rates may
vary greatly from year to year as well as within a particular
year and may also be affected by cash requirements for
redemptions of Fund shares and by requirements that enable the
Fund to receive certain favorable tax treatments. Portfolio
turnover rates, of course, depend in large part on the level of
purchases and redemptions of shares of the Fund. However,
because rate of portfolio turnover is not a limiting factor,
particular holdings may be sold at any time, if investment
judgment or the Fund operations make a sale advisable. It is
estimated that the annual portfolio turnover rate for the Fund
will be 75%. For the years ended October 31, 1996, October 31,
1995 and October 31, 1994, the actual portfolio turnover rates
were 47%, 42% and 53%, respectively.
MANAGEMENT OF THE TRUST
Trustees and Officers
The Trustees and executive officers of the Trust and their
principal occupations for the last five years are set forth
below. Unless otherwise noted, the address of each executive
officer and Trustee is 1876 Waycross Road, Cincinnati, Ohio
45240.
<TABLE>
Name, Address Position(s) with Principal Occupation(s)
and Age the Trust During Past Five Years
- ------------- ---------------- -----------------------
<S> <C> <C>
George M. Callard, M.D.* Trustee Professor of Clinical Surgery,
3021 Erie Avenue University of Cincinnati
Cincinnati, Ohio 45208
(Age 63)
George L. Clucas** Trustee, Senior Vice President, UC;
(53) President and Director,President and Chief
Chief Executive Executive Officer, Carillon
Officer Advisers, Inc.("Adviser");
Director, Carillon
Investments, Inc. ("CII")
Theodore H. Emmerich* Trustee Consultant; former Partner,
1201 Edgecliff Pl. Ernst & Whinney, Accountants
Cincinnati, Ohio 45206
(70)
James M. Ewell* Trustee Retired Senior Vice President and
9000 Indian Ridge Road Director, The Procter and Gamble
Cincinnati, Ohio 45243 Company
(81)
Richard H. Finan* Trustee Attorney at Law; President of the
11137 Main Street Ohio State Senate
Cincinnati, Ohio 45241
(62)
Jean Patrice Harrington, Trustee Interim President, Cincinnati
State
S.C.* Technical and Community College;
3217 Whitfield Ave. Former Executive Director,
Cincinnati, Ohio 45220 Cincinnati Youth Collaborative;
(71) President Emeritus (formerly,
President), College of Mount St.
Joseph
John H. Jacobs** Trustee Executive Vice President, UC;
prior
(50) to December, 1992, Officer and
employee, UC
Charles W. McMahon* Trustee Retired Senior Vice President and
Cincinnati, Ohio 45239 Director, UC
2031 W. Galbraith Rd., #E
(77)
Harry Rossi** Trustee Director Emeritus, UC; Director,
8548 Wyoming Club Drive Adviser; former Chairman,
President
Cincinnati, Ohio 45215 and Chief Executive Officer, UC
(77)
Stephen R. Hatcher Senior Vice Executive Vice President and Chief
(54) President Financial Officer, UC; prior to
June, 1995, Officer and employee,
UC
John F. Labmeier Vice President Second Vice President, Associate
(48) and Secretary General Counsel and Assistant
Secretary, UC; Vice President
and Secretary, CII; Secretary,
Adviser
Thomas G. Knipper Controller Assistant Controller, UC;
(39) prior to July, 1995, Treasurer
of The Gateway Trust and Vice
President and Controller of
Gateway Advisers, Inc.; prior
to April, 1992, Senior Manager
of Deloitte & Touche.
PJ Barker Assistant Investment Accounting Manager,
(27) Controller UC; prior to June, 1993, Senior
Staff Accountant, Arthur
Andersen LLP.
Joseph A. Tucker Treasurer Assistant to the Treasurer,
(62) UC; prior to October, 1992,
Officer and employee, UC
John M. Lucas Assistant Assistant to the Secretary,
(46) Secretary UC; prior to October, 1992,
Officer and employee, UC
</TABLE>
- ----------------
*Trustees identified with an asterisk are members of the Audit
Committee.
**Messrs. Clucas, Jacobs and Rossi are considered to be
"interested persons" of the Fund as defined in the Investment
Company Act of 1940 because of their affiliation with the
Adviser.
As of the date of this Statement of Additional information,
Officers and Trustees collectively owned less than 1% of the
outstanding shares of the Fund. Trustees who are not officers
or employees of the Adviser or any of its affiliates are paid a
fee of $250 plus actual out-of-pocket expense by the Trust for
each meeting of the Board of Trustees attended and $500 per
calendar quarter ($2,000 annually). Trustees who are members of
the Audit Committee are compensated at the rate of $150 per
Audit Committee meeting. The total of such fees incurred by the
Trust for the year ended October 31, 1996 was $21,474.
<PAGE>
Compensation Table
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Total
Pension or Compensation
Retirement From
Benefits Esitmated Registrant
Aggregate Accrued Annual and Fund
Name of Compensation As Part Benefits Complex*
Person, From of Fund Upon Paid to
Position Registrant Expenses Retirement Trustees
- -------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C>
George M. Callard, 3,300 N/A N/A 10,600
M.D.
Trustee
George L. Clucas N/A N/A N/A N/A
Trustee
Theodore H. Emmerich 3,300 N/A N/A 10,800
Trustee
James M. Ewell 3,300 N/A N/A 10,600
Trustee
Richard H. Finan 3,300 N/A N/A 10,600
Trustee
Jean Patrice
Harrington, S.C. 3,300 N/A N/A 10,600
Trustee
John H. Jacobs N/A N/A N/A N/A
Trustee
Charles W. McMahon 3,300 N/A N/A 10,600
Trustee
Harry Rossi N/A N/A N/A N/A
Trustee
</TABLE>
*Each of the Trustees also serves as a director of Carillon
Fund, Inc.
INVESTMENT ADVISER
Approval of the Agreement
The Trust has entered into an Investment Advisory Agreement
("Agreement") on behalf of the Fund with Carillon Advisers, Inc.
("Adviser"), whose principal business address is l876 Waycross
Road, Cincinnati, Ohio 45240 (P.O. Box 40407, Cincinnati, Ohio
45240). The Adviser was incorporated under the laws of Ohio on
August 18, l986, and is a wholly-owned subsidiary of UC, a
mutual insurance company organized in 1867 under the laws of
Ohio. Executive officers and directors of the Adviser who are
affiliated with the Trust are George L. Clucas, President and
Chief Executive Officer; Thomas G. Knipper, Treasurer; and John
F. Labmeier, Secretary.
The Agreement was approved by shareholders on February 22,
l989 and approved for continuance each year thereafter by the
Board of Trustees. The Agreement was last continued by the
Board of Trustees on December 11, 1996. The Agreement will
continue in effect from year to year if approved annually by the
Trustees or by a majority of the outstanding shares of the Fund.
In either case, continuance of the Agreement must be approved by
a majority of the Trustees who are not parties to the Agreement
or interested persons (as defined by the l940 Act) of any such
party. The Agreement is not assignable and may be terminated
without penalty by the Fund or the Adviser on 60 days' notice to
the other party.
If the question of continuance of the Agreement (or
adoption of any new agreement) is presented to shareholders,
continuance (or adoption) shall be effective only if approved by
a majority vote of the outstanding voting securities.
Responsibilities of the Adviser
Pursuant to the Agreement, the Trust has retained the
Adviser to manage the investment of the Fund's assets, including
the placing of orders for the purchase and sale of the portfolio
securities of the Fund. The Adviser is at all times subject to
the direction and supervision of the Trustees of the Trust.
The Adviser continuously furnishes an investment program
for the Fund, is responsible for the actual management of the
Fund and has responsibility for making decisions to buy, sell or
hold any particular security. The Adviser obtains and evaluates
such information and advice relating to the economy, securities
markets and specific securities as it considers necessary or
useful to continuously manage the assets of the Fund in a manner
consistent with its investment objectives, policies and
restrictions. The Adviser considers analyses from various
sources, makes necessary investment decisions and effects
transactions accordingly.
The Agreement provides that the Adviser shall not be liable
to the Trust or to any shareholder for any error of judgment or
mistake of law or for any loss suffered by the Trust or by any
shareholder in connection with matters to which the Agreement
relates, except a loss resulting from willful misfeasance, bad
faith, gross negligence, or reckless disregard on the part of
the Adviser in the performance of its duties thereunder.
Trust Expenses
Under the advisory Agreement, Adviser is required to
furnish at its own expense or to pay the expenses of the Trust
for the following: office space and all necessary office
facilities and equipment; necessary executive and other
personnel for managing the affairs of the Trust, including
personnel for the performance of clerical, accounting and other
office functions (exclusive of those relating to and to be
performed under contracts for custodial, bookkeeping, transfer
and dividend-disbursing agency services by a bank or other
service supplier selected to perform such services); all
information and services, other than services of counsel,
required in connection with the preparation of registration
statements and prospectuses, including amendments and revisions
thereto; and all annual, semiannual and periodic reports,
notices and proxy solicitation material furnished to
shareholders of the Trust or regulatory authorities (excluding
any costs of printing or mailing such items).
The Fund pays all other expenses incurred in its operation
and for the general administration of the Fund. Expenses other
than the Adviser's fee that are borne directly include, but are
not limited to, brokerage commissions, dealer markups, expenses
incurred in the acquisition of Fund securities, transfer taxes,
transaction expenses of the custodian, pricing services used by
the Fund, custodian, dividend disbursing agent, transfer agent,
bookkeeping services, pricing, shareholders' and Trustees'
meetings, Trustees' fees, registration fees and costs, fees and
expenses of legal counsel not including employees of the
Adviser, or any affiliate of the Adviser, independent
accountants, membership dues of industry associations, postage,
insurance premiums including fidelity bond, and all other costs
properly payable by the Fund.
The Agreement also provides that the expense limitations
required by State Blue Sky Laws shall be observed where
applicable. The Adviser is required to reimburse certain
additional expenses that exceed any State expense limitation.
Presently, the expense limitation requirement is 2.5% of the
first $30 million of average net assets, 2.0% of the next $70
million average net assets and 1.5% of the remaining average net
assets.
Advisory Fee
As full compensation for the services and facilities
furnished to the Fund and expenses of the Trust assumed by the
Adviser, the Fund pays the Adviser a monthly fee based on the
average net assets of the Fund. This fee is computed at the
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.
There is no assurance the Fund will reach a net asset level
high enough to realize a reduction in the rate of the advisory
fee. The advisory fees the Fund paid to Adviser for the years
ended October 31, 1996, October 31, 1995 and October 31, 1994
amounted to $311,413, $327,862 and $281,657, respectively.
Administration
The Adviser is responsible for providing certain
administrative functions to the Trust and has entered into an
Administration Agreement with Carillon Investments, Inc. ("CII")
under which CII furnishes substantially all of such services for
an annual fee of .20% of the Trust's average net assets. The
fee is borne by the Adviser, not the Trust. Under the
Administration Agreement, CII is obligated to provide persons
for clerical, accounting, bookkeeping, administrative and other
similar services, to supply office space, stationery and office
supplies, and to prepare tax returns, reports to stockholders,
and filings with the Securities and Exchange Commission and
state securities authorities.
Brokerage Allocation
The Adviser is primarily responsible for the investment
decisions of the Fund, including decisions to buy and sell
securities, the selection of brokers and dealers to effect the
transactions, the placing of investment transactions, and the
negotiation of brokerage commissions. The Fund has no
obligation to deal with any dealer or group of dealers in the
execution of transactions in portfolio securities. In placing
orders, it is the policy of the Trust to obtain the most
favorable net results, taking into account various factors,
including price, dealer spread or commission, if any, size of
the transaction, and difficulty of execution. While the Adviser
generally seeks reasonably competitive spreads or commissions,
the Fund will not necessarily be paying the lowest spread or
commission available.
If the securities in which the Fund invests are traded
primarily in the over-the-counter market, where possible, the
Adviser will deal directly with the dealers who make a market in
the securities involved, unless better prices and execution are
available elsewhere. Such dealers usually act as principals for
their own account. On occasion, securities may be purchased
directly from the issuer. Bonds and money market instruments
are generally traded on a net basis and do not normally involve
either brokerage commissions or transfer taxes. The cost of the
securities transactions consists primarily of brokerage
commissions or dealer or underwriter spreads.
While the Adviser seeks to obtain the most favorable net
results in effecting transactions in the Fund securities,
dealers who provide supplemental investment research to the
Adviser may receive orders for transactions by the Trust. Such
supplemental research service ordinarily consists of assessments
and analyses of the business or prospects of a company,
industry, or economic sector. If, in the judgment of the
Adviser, the Trust will benefit by such supplemental research
services, the Adviser is authorized to pay commissions to
brokers or dealers furnishing such services that might be in
excess of commissions that another broker or dealer may charge
for the same transaction. Information so received will be in
addition to and not in lieu of the services required to be
performed by the Adviser under the Agreement. The expenses of
the Adviser will not necessarily be reduced as a result of the
receipt of such supplemental information. In some cases, the
Adviser may use such supplemental research in providing
investment advice to its other advisory accounts.
During the years ended October 31, 1996, October 31, 1995
and October 31, 1994, the Fund paid $30,346, $27,280 and 26,640,
respectively, in brokerage commissions. Of the brokerage
commissions paid during the year ended October 31, 1996, 43% was
paid to brokers furnishing statistical data or research
information. These commissions were for transactions
aggregating 100% of the Fund's total transactions during the
same time period. No commissions were paid to affiliates of the
Trust.
Other Clients of the Adviser
The Agreement in no way restricts the Adviser from acting
as investment manager or adviser to others. Securities
recommended for purchase for the Trust may also be recommended
to other clients, including registered investment companies, for
which the Adviser acts as an adviser. Because of different
investment objectives or other factors, a particular security
may be bought by one or more of the Adviser's clients, when one
or more other clients are selling the same security. If
purchases or sales of securities for the Fund or other clients
of the Adviser arise for consideration at or about the same
time, transactions in such securities will be made for the Fund
and other clients in a manner deemed equitable to all. To the
extent that transactions on behalf of more than one client of
the Adviser during the same period may increase the demand for
securities being purchased or the supply of securities being
sold, there may be an adverse effect on price.
On occasion when the Adviser deems the purchase or sale of
a security to be in the best interest of the Fund as well as
other clients, it may, to the extent permitted by applicable
laws and regulations, but will not be obligated to, aggregate
the securities to be sold or purchased for the Fund with those
to be sold or purchased for other accounts in order to obtain
more favorable execution and lower brokerage commissions. In
that event, allocation of the securities purchased or sold, as
well as the expenses incurred in the transaction, will be made
by the Adviser in the manner it considers to be equitable and
consistent with its fiduciary obligations to the Trust and to
such other entities. In some cases this procedure may adversely
affect the size of the position obtainable for the Fund.
DETERMINATION OF NET ASSET VALUE
As described in the Prospectus for the Fund, the net asset
value of its shares is determined once daily, Monday through
Friday, at the close of business of the New York Stock Exchange
(presently 4:00 PM Eastern Time) when there are purchases or
redemptions of its shares, except: (i) when the New York Stock
Exchange is closed (currently New Year's Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day); and (ii) any day on which
changes in the value of the Fund securities will not materially
affect the current net asset value of its shares. Net asset
value is determined by dividing the Fund's total net assets by
the number of shares outstanding at the time of calculation.
Total net assets are determined by adding the total current
value of portfolio securities, cash, receivables and other
assets and subtracting liabilities.
Securities held by the Fund, except for money market
instruments maturing in 60 days or less, will be valued as
follows: (a) securities traded on stock 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 the securities are being valued, or,
lacking any sales, at the last bid prices; (b) securities traded
only in the over-the-counter market that are not part of the
NASDAQ National Market System are valued at the last bid prices
quoted by brokers that make markets in the securities at the
close of trading on the New York Stock Exchange; and (c)
securities and assets for which market quotations are not
readily available are valued at fair value as determined in good
faith by, or under procedures adopted by, the Board of Trustees.
Money market instruments with a remaining maturity of 60
days or less held by the Fund are valued on an amortized cost
basis. Under this method of valuation, the instrument is
initially valued at cost (or in the case of instruments
initially valued at market value, at the market value on the day
before its remaining maturity is such that it qualified for
amortized cost valuation); thereafter, the Fund assumes a
constant proportionate amortization in value until maturity of
any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. While
this method provides certainty in valuation, it may result in
periods during which value, as determined by amortized cost, is
higher or lower than the price that would be received upon sale
of the instrument.
<PAGE>
PERFORMANCE
From time to time the Fund may advertise its "average total
return." These figures will be based on historical earnings and
are not intended to indicate future performance.
TOTAL RETURN - The total return quotation is based upon a
hypothetical $1,000 invested at the public offering price made
at the beginning of 1, 5 or 10 year periods (or fractional
portion thereof). In general, the total return is computed by
finding the average annual compounded rates of return over the
1-, 5-, and 10-year periods or from the effective date if the
Fund has been in effect less than the stated periods, that
would equate the initial amount invested to the ending
redeemable value. The formula for determining the total return
is P(1+T) (to the nth power) =ERV.
Recurring charges, if any, are prorated among investors. The
flat fee is divided by the average account value per $1,000 per
investor in order to equate the flat fee to a $1,000 account
size basis.
Performance information for the Fund may be compared, in reports
and promotional literature, to: (i) the Standard & Poor's 500
Stock Index ("S&P 500"), or other indices measuring performance
of a pertinent group of securities so that investors may compare
the Fund's results with those of a group of securities widely
regarded by investors as representative of the securities
markets in general; (ii) other investment products tracked by
Lipper Analytical Services, a widely used independent research
firm which ranks mutual funds and other investment companies by
overall performance, investment objectives, and assets, or
tracked by other ratings services, companies, publications, or
persons such as Morningstar who rank investment products on
overall performance or other criteria; (iii) Lehman Brothers
U.S. Treasury Composite; and (iv) the Consumer Price Index
(measure for inflation) to assess the real rate of return from
an investment in the Fund. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect
deductions for administrative and management costs and expenses.
Performance Through October 31, 1996
The average total return for the Fund from inception to date
periods ended October 31, 1996 are as follows.
<TABLE>
<CAPTION>
Average Annual Total Return*
Period Ended October 31, 1996
Inception Since
Date 1 Year 5 Years Inception
----------------------------------------
<S> <C> <C> <C> <C>
Carillon Capital Fund 2/28/88 8.67% 9.34% 10.56%
</TABLE>
*Based upon the maximum sales charge of 5%
<PAGE>
DISTRIBUTION OF SHARES
Distributor
Carillon Investments, Inc. ("CII"), located at l876
Waycross Road, Cincinnati, Ohio 45240 (P.O. Box 40409,
Cincinnati, Ohio 45240), serves as the principal underwriter of
Fund shares. Pursuant to a Distribution Agreement with the
Trust, CII agrees to use its best efforts to promote, offer for
sale and sell the shares of the Fund to the public on a
continuous basis whenever and wherever it is legally authorized
to do so. In so doing, CII conducts its affairs in accordance
with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. ("NASD").
CII sells Fund shares primarily through its own registered
representatives. CII may, however, authorize the sale of shares
by firms that are registered broker-dealers and are members of
the NASD.
CII receives no compensation on redemption or repurchase of
Fund shares and receives no brokerage commissions or
compensation other than the sales load and administration fee
from the Adviser. CII received $241, $1,576 and $174,
respectively, in aggregate commissions from the sale of Trust
shares for the years ended October 31, 1996, October 31, 1995
and October 31, 1994. Of these amounts, CII retained $48, $315
and $35 for the respective periods.
PURCHASE AND REDEMPTION OF SHARES
Sales Charge
Application forms for the purchase of Fund shares can be
obtained from CII or from a broker-dealer that has entered into
a dealer agreement with CII. Shares are sold at the next
computed net asset value with the imposition of a sales load
ranging from 5% on investments of less than $50,000 to .5% for
investments over $2,500,000.
Qualifying for a Reduced Sales Charge
As the chart shown in the Prospectus for the Fund
indicates, the percentage sales charge decreases at various
break points as the amount of an investment is increased. Even
though an investment, considered alone, does not qualify for a
reduced sales charge, it may qualify for a reduced charge when
made as part of one or both of the following investment
programs:
(a) LETTER OF INTENT: An investor may qualify for a
reduced sales charge by executing a Letter of Intent indicating
the total amount to be invested in Fund shares within the 13-
month period following the date of the Letter. The sales
charge made in connection with each investment during the 13-
month period will be at the rate applicable to the total amount
that has been indicated will be invested during the period.
However, a number of shares sufficient to pay the larger sales
charge will be escrowed until the Letter of Intent is
completed.
An existing shareholder should sign a Letter of Intent only
if the amount intended to be invested qualifies for a reduced
sales charge.
Although an investor is not under any legal obligation to
make the investments specified in a Letter of Intent, there is
a provision for a price adjustment in the event that the amount
invested differs from that specified in the Letter. Sufficient
shares would be held in escrow during the period covered by the
Letter to make up any difference in sales price based upon the
amount actually invested. But even if the Letter is not
completed, the sales charge applicable to the investments made
while the Letter is in effect will not be higher than that
which would apply if the Letter had been for the amount
actually invested. The Letter of Intent form is part of the
Investment Application.
(b) RIGHT OF ACCUMULATION AND COMBINED ACCOUNTS: To
determine whether or not a reduced sales charge applies to an
investment, the Fund, when notified to do so by the investor at
the time a purchase is made, takes into account not only the
money then being invested in Fund shares, but also the current
net asset value of all shares already owned by the investor,
his or her spouse and any minor children for whom the investor
or spouse is the custodian.
As an example, assume that an investor already owns Fund
shares with a total net asset value of $40,000 and now wishes
to invest $10,000 more. The reduced sales charge of 4% will
apply to the $10,000 investment.
The aggregate amount invested at one time by the investor,
his or her spouse, and for the accounts of any minor children
for which the investor or spouse is the custodian may be
considered a single purchase for the purpose of computing the
sales charge.
A trustee or other fiduciary may likewise aggregate the amounts
invested on behalf of the beneficiaries under a single trust
estate or a single fiduciary account. Such persons are
required to notify the Trust of the shareholder accounts being
combined at the time of investment in order to take advantage
of this reduced sales charge privilege.
Redemptions
The Trust is required to redeem all full and fractional
shares of the Fund at the net asset value per share. Payment
for shares redeemed will generally be made within seven days
after receipt of a proper notice of redemption. The right to
redeem shares or to receive payment with respect to any
redemption may only be suspended for any period during which:
(a) trading on the New York Stock Exchange is restricted as
determined by the Securities and Exchange Commission or such
exchange is closed for other than weekends and holidays; (b) an
emergency exists, as determined by the Securities and Exchange
Commission, as a result of which disposal of portfolio
securities or determination of the net asset value is not
reasonably practicable; or (c) the Securities and Exchange
Commission by order permits postponement for the protection of
shareholders.
<PAGE>
TAXES
Under the Internal Revenue Code ("Code"), the Fund is a
separate entity for purposes of the "regulated investment
company" provisions of Subchapter M of the Code. The Fund has
elected to be treated as a regulated investment company and, as
such, it will be relieved of federal income tax liability on the
amounts it distributes. In order to qualify as a regulated
investment company, the Fund must: (a) derive at least 90
percent of its annual gross income from dividends, interest,
gains from the sale of securities or other income derived with
respect to investing in securities; (b) derive less than 30
percent of its gross income from gains realized on the sale or
other disposition of securities held for less than three months;
and (c) diversify its holdings so that, at the end of each
fiscal quarter: (i) at least 50% of the market value of its
assets is represented by cash, government securities and other
securities limited in respect of any one issuer to 5% of assets
and to not more than 10% of the voting securities of such
issuer; and (ii) not more than 25% of the value of its assets is
invested in the securities of any one issuer (other than U.S.
Government securities).
It is expected, although it is not wholly clear, that any
net gain realized from closing out options on U.S. Treasury
securities or options on futures contracts for such securities
will be considered gain from the sale of securities and,
therefore, will be qualifying income for purposes of the 90
percent requirement. In order to meet this qualification
requirement, the Fund may be required to defer disposing of
certain options, futures contracts and underlying securities
beyond the time when it might otherwise be advantageous to do
so. These requirements may also limit the Fund's ability to:
(a) sell investments held for less than three months; (b) effect
closing transactions on options written less than three months
previously; (c) write options for a period of less than three
months; (d) write options on securities held for less than six
months; and (e) write options on futures contracts to the extent
they are considered commodities and not securities.
The Code imposes a 4% nondeductible excise tax on a
regulated investment company to the extent such company does not
distribute at least 98% of its ordinary income and 98% of its
capital gains (both long-term and short-term) each year by the
end of such year. Dividends and distributions will be treated
as paid when actually distributed, except that dividends
declared in December payable to shareholders of record on a
specified date in December, and paid before February 1 of the
following year, will be treated as having been (i) paid by the
Fund on the record date and (ii) received by each shareholder on
that date.
The above discussion is informational only and is not to be
considered tax advice. Participants are urged to consult a
competent tax adviser before taking any action which could have
tax consequences.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
Firstar Trust Company, Mutual Fund Services, P.O. Box 701,
Milwaukee, WI 53201-0701, is the custodian and transfer and
dividend disbursing agent for the Trust. Pursuant to its
agreement with the Fund, Firstar Trust Company determines the
net asset value of the Trust's shares on a daily basis and
performs certain other duties.
<PAGE>
ADDITIONAL INFORMATION
This Statement of Additional Information and the Prospectus
for the Fund do not contain all the information set forth in the
registration statement and exhibits relating thereto, that the
Trust has filed with the Securities and Exchange Commission,
Washington, D.C., under the Securities Act of l933 and the l940
Act, to which reference is hereby made.
INDEPENDENT AUDITORS
The financial statements of the Fund have been audited by
Deloitte & Touche LLP, 1700 Courthouse Plaza NE, Dayton, Ohio
45402, independent auditors, whose report follows. The
financial statements are included in this Statement of
Additional Information in reliance upon the report of Deloitte &
Touche LLP, given upon their authority as experts in auditing
and accounting.
<PAGE>
CARILLON CAPITAL FUND
OF
CARILLON INVESTMENT TRUST
FINANCIAL STATEMENTS
October 31, 1996
<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 evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statement 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
<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>
PART C
OTHER INFORMATION
<PAGE>
CARILLON INVESTMENT TRUST
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Part B hereof are the following financial
statements of Registrant:
Report of Independent Accountants, December 2, 1996
Statement of Assets and Liabilities, October 31, 1996
Statement of Operations for the year ended October 31,
1996
Statement of Changes in Net Assets for the two years
ended October 31, 1996
Schedule of Investments, October 31, 1996
Notes to Financial Statements
(b) Exhibits
(1) (a) Declaration of Trust and Amendment No. 1 -
previously filed (initial filing on August
21, 1987)
(b) Amendment No. 2 - previously filed (Pre-
Effective Amendment No. 1 - December 30,
1987)
(c) Amendment No. 3 - previously filed (Post-
Effective Amendment No. 3 - February 28,
1990)
(2) By-Laws - previously filed (initial filing on
August 21, 1987)
(3) Not Applicable
(4) Not Applicable
(5) (a) Investment Advisory Agreement - previously
filed (Pre-Effective Amendment No. 1 -
December 30, 1987)
(b) Administration Agreement - previously
filed (initial filing on August 21, 1987)
(c) Amendment to Administration Agreement -
previously filed (Post-Effective Amendment
No. 3 - February 28, 1990)
<PAGE>
(6) (a) Distribution Agreement - previously filed
(Pre-Effective Amendment No. 1 - December
30, 1987)
(b) Amendment to Distribution Agreement -
previously filed (Post-Effective Amendment
No. 2 - February 28, 1989)
(7) Not Applicable
(8) (a) Custodian Agreement - previously filed
(Post-Effective Amendment No. 3 - February
28, 1990)
(b) Portfolio Accounting Agreement - previously
filed (Post-Effective Amendment No. 3 -
February 28, 1990)
(9) Transfer Agency Agreement - previously filed
(Post-Effective Amendment No. 3 - February 28,
1990)
(10) Opinion and Consent of Counsel - previously
filed (Pre-Effective Amendment No. 2 - February
12, 1988)
(11) Consent of Deloitte & Touche LLP - filed
herewith
(12) Not Applicable
(13) Form of Contribution Agreement - previously
filed (Pre-Effective Amendment No. 1 - December
30, 1987)
(14) IRA Disclosure Statement - previously filed
(Pre-Effective Amendment No. 1 - December 30,
1987)
(15) Not Applicable
(16) Performance Computations - filed herewith
(17) (a) Application Form - previously filed (Post-
Effective Amendment No. 6 - February 28,
1993)
(b) Supplemental Application - previously filed
(Post-Effective Amendment No. 7 - February
25, 1994)
(18) Powers of Attorney - previously filed (Pre-
Effective Amendment No. 1 - December 30, 1987;
Post-Effective Amendment No. 4 - February
28, 1991; Post-Effective Amendment No. 6 -
February 28, 1993)
Item 25. Persons Controlled by or Under Common Control with
Registrant
At January 31, 1997, approximately 78% of Registrant's shares
were owned by The Union Central Life Insurance Company ("UC").
Set forth below is a chart showing the entities controlled by or
affiliated with UC, the jurisdictions in which such entities are
organized, and the percentage of voting securities owned by the
person immediately controlling each such entity.
THE UNION CENTRAL LIFE INSURANCE COMPANY,
its Subsidiaries and Affiliates
I. The Union Central Life Insurance Company (Ohio)
A. Carillon Investments, Inc. (Ohio) - 100% owned
B. Carillon Marketing Agency, Inc. (Delaware) - 100% owned
a. Carillon Marketing Agency of Alabama, Inc. (Alabama) -
100% owned
b. Carillon Marketing Agency of Idaho, Inc. (Idaho) -
100% owned
c. Carillon Marketing Agency of Kentucky, Inc. (Kentucky)
- 100% owned
d. Carillon Marketing Agency of Maine, Inc. (Maine) -
100% owned
e. Carillon Insurance Agency of Massachusetts, Inc.
(Massachusetts) - 100% owned
f. Carillon Marketing Agency of New Mexico, Inc. (New
Mexico) - 100% owned
g. Carillon Marketing Agency of Ohio, Inc. (Ohio) -
100% owned
h. Carillon Marketing Agency of Pennsylvania, Inc.
(Pennsylvania) - 100% owned
i. Carillon Marketing Agency of Texas, Inc. (Texas) -
100% owned
C. Carillon Advisers, Inc. (Ohio) - 100% owned
a. First Summit Capital Management (Ohio)- 51% owned
D. The Manhattan Life Insurance Company (New York) - 100%
owned
E. Family Enterprise Institute, Inc. (Delaware) - 100% owned
II. Mutual Funds of the Carillon Group
A. Carillon Fund, Inc.* (Maryland)
B. Carillon Investment Trust** (Massachusetts)
* At January 31, 1997, The Union Central Life Insurance Company
owned 100% of the outstanding shares of Carillon Fund, Inc.
** At January 31, 1997, The Union Central Life Insurance
Company owned 78% of the outstanding shares of the Trust.
III. Summit Investment Trust (Massachusetts) - a mutual fund
whose investment adviser is First Summit Capital Management
Item 26. Number of Holders of Securities
<TABLE>
<CAPTION>
Title of Class Number of Record
Holders as of December 31, 1996
-------------- -------------------------------
<S> <C>
Carillon Capital Fund 40
</TABLE>
***
Item 28. Business and other Connections of Investment Adviser
Information regarding the principal officers and directors of
Carillon Advisers, Inc. ("CAI") and their business, profession
or employment of a substantial nature during the last two years
is set forth below. The address of all the persons listed below
is 1876 Waycross Road, Cincinnati, Ohio 45240.
<TABLE>
<CAPTION>
Name and Position with Principal Occupation(s)
Address the Adviser During Past Two Years
- ------- ------------- ---------------------
<S> <C> <C>
Harry Rossi Director Director Emeritus, The Union Central
Life Insurance Company ("UC");
Director, Carillon Group of
Mutual Funds; prior thereto,
Director, UC
Larry R. Pike Director Chairman, President and Chief
Executive Officer, UC
George L. Clucas Director, Senior Vice President, UC;
President Director, President and Chief
and Chief Executive Officer, Carillon Group
Executive of Mutual Funds
Officer
Steven R. Vice President Vice President, UC
Sutermeister
D. Stephen Cole Vice President Vice President, UC
Thomas G. Knipper Treasurer Assistant Controller, UC;
Controller, Carillon Group of
Mutual Funds; prior thereto,
Treasurer of The Gateway Trust
and Vice President and
Controller of Gateway
Advisers, Inc.
John F. Labmeier Secretary Second Vice President, Associate
General Counsel and Assistant
Secretary, UC; Vice President
and Secretary, Carillon Group of
Mutual Funds and Carillon
Investments, Inc.
</TABLE>
Item 29. Principal Underwriters
(a) The principal underwriter of Registrant is Carillon Investments,
Inc. Carillon Investments, Inc. also acts as principal underwriter for
the Carillon Account and Carillon Life Account of UC.
(b) The officers and directors of Carillon Investments, Inc. and
their positions, if any, with Registrant are shown below. The business
address of each is 1876 Waycross Road, Cincinnati, Ohio 45240.
<TABLE>
<CAPTION>
Name and Position with
Carillon Investments, Inc. Position with Registrant
- ------------------------- ------------------------
<S> <C>
George L. Clucas Trustee, President and Chief
Director Executive Officer
Charles W. Grover None
Director
John H. Jacobs Trustee
Director
Elizabeth G. Monsell None
Director and President
Larry R. Pike None
Director
Lothar A. Vasholz None
Director
Kevin W. O'Toole None
Vice President
Connie Grosser None
Treasurer
John F. Labmeier Vice President and Secretary
Vice President and Secretary
Patricia M. Heim None
Compliance Officer
John M. Lucas Assistant Secretary
Assistant Secretary
</TABLE>
(c) Carillon Investments, Inc. received $241 in aggregate
commissions from the sale of Trust shares for the year ended
October 31, 1996. Of this amount, Carillon Investments, Inc.
retained $48.
Item 30. Location of Accounts and Records
Firstar Trust Company (formerly known as First Wisconsin Trust
Company), Mutual Fund Services, P.O. Box 701, Milwaukee, WI
53201-0701, acts as custodian of the Registrant's assets and is
its bookkeeping, transfer and dividend disbursing agent. It
maintains books, records and accounts of the Registrant required
to be maintained pursuant to Section 31(a) of the Investment
Company Act of 1940 and the rules promulgated thereunder.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of its latest annual report
to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant, Carillon
Investment Trust, certifies that it meets all of the
requirements for effectiveness of this Post-effective Amendment
to the Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Post-effective
Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
City of Cincinnati, State of Ohio on the 9th day of May, 1997.
CARILLON INVESTMENT TRUST
(SEAL)
Attest: /s/ John F. Labmeier By: /s/ George L. Clucas
George L. Clucas, President
Pursuant to the requirements of the Securities Act of 1933,
this Post-effective Amendment to the Registration Statement has
been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ George L. Clucas President 5-9-97
George L. Clucas and Trustee
(Principal
Executive
Officer)
/s/ Thomas G. Knipper Controller 5-9-97
Thomas G. Knipper (Principal
Financial
and Accounting
Officer)
* /s/ George M. Callard, M.D. Trustee 5-9-97
George M. Callard, M.D.
* /s/ Theodore H Emmerich Trustee 5-9-97
Theodore H. Emmerich
* /s/ James M. Ewell Trustee 5-9-97
James M. Ewell
* /s/ Richard H. Finan Trustee 5-9-97
Richard H. Finan
* /s/ Jean Patrice Harrington, S.C. Trustee 5-9-97
Jean Patrice Harrington, S.C.
* /s/ John H. Jacobs Trustee 5-9-97
John H. Jacobs
* /s/ Charles W. McMahon Trustee 5-9-97
Charles W. McMahon
* /s/ Harry Rossi Trustee 5-9-97
Harry Rossi
</TABLE>
*By /s/ John F. Labmeier, pursuant to Power of Attorney previously filed.
<PAGE>
TABLE OF EXHIBITS
(11) Consent of Deloitte & Touche LLP
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 11 to
Registration Statement under the Securities Act of 1933 filed
under Registration Statement No. 33-16665, of our report dated
December 2, 1996 on the financial statements of the Carillon
Capital Fund of Carillon Investment Trust, appearing in the
Statement of Additional Information, which is part of such
Registration Statement and to the reference to us as experts,
under the caption "Independent Auditors" in the Statement of
Additional Information.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Dayton, Ohio
May 6, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 37,833,996
<INVESTMENTS-AT-VALUE> 42,330,213
<RECEIVABLES> 582,447
<ASSETS-OTHER> 6,921
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 42,919,581
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48,535
<TOTAL-LIABILITIES> 48,585
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34,789,042
<SHARES-COMMON-STOCK> 3,119,040
<SHARES-COMMON-PRIOR> 3,673,615
<ACCUMULATED-NII-CURRENT> 223,040
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,362,747
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,496,217
<NET-ASSETS> 42,871,046
<DIVIDEND-INCOME> 472,304
<INTEREST-INCOME> 1,819,784
<OTHER-INCOME> 0
<EXPENSES-NET> 420,613
<NET-INVESTMENT-INCOME> 1,871,475
<REALIZED-GAINS-CURRENT> 3,323,005
<APPREC-INCREASE-CURRENT> 445,916
<NET-CHANGE-FROM-OPS> 5,640,396
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,913,442
<DISTRIBUTIONS-OF-GAINS> 440,569
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 71,179
<NUMBER-OF-SHARES-REDEEMED> 807,197
<SHARES-REINVESTED> 181,443
<NET-CHANGE-IN-ASSETS> (3,772,940)
<ACCUMULATED-NII-PRIOR> 279,832
<ACCUMULATED-GAINS-PRIOR> 465,486
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 311,413
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 420,613
<AVERAGE-NET-ASSETS> 41,397,347
<PER-SHARE-NAV-BEGIN> 12.70
<PER-SHARE-NII> .60
<PER-SHARE-GAIN-APPREC> 1.17
<PER-SHARE-DIVIDEND> (.60)
<PER-SHARE-DISTRIBUTIONS> (.12)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.75
<EXPENSE-RATIO> 1.02
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
