(On the upper third left corner of the cover page is a graphic
square containing a gray and white drawing of a portion of a
face, specifically, the right eye, three-quarters of a nose and
mouth.)
- ---------------------------------------------------------
(The following appears under this line at the right margin:
Carillon
Capital
Fund
of
Carillon
Investment
Trust
Annual
Report
October 31, 1997
<PAGE>
Carillon Investment Trust - Carillon Capital Fund
ANNUAL REPORT - A MESSAGE FROM THE PRESIDENT
October 31, 1997
FINANCIAL MARKETS
Stock prices in the United States moved sharply higher during
most of the twelve months ending October 31, 1997. The Dow
Jones Industrial Average traveled from just under 6000 to as
high as almost 8300 before concerns over Southeast Asian
financial market turmoil and lowered economic growth forecasts
spread concern around the world for many stock markets,
including the U.S. The stock market's advance was fueled by many
of the same factors that had driven the market higher during the
two previous years -- high levels of corporate profitability,
continued economic growth, moderate inflation, low interest
rates, and strong cash flows into equity mutual funds.
Sectors that led the stock market advance included computer
related, financial, transportation, telecommunications, and oil
and gas drilling and equipment shares. Sectors losing value
during the period related to gold and precious metals,
biotechnology, and footwear. Through the end of July the market
also favored large multinational companies, but switched more
toward smaller domestic stocks during the last few months.
Fixed income yields spent several months moving higher early in
the year, topping out in mid-April. Over the next six months,
long-term treasury yields fell as much as a full percent into
the low 6 percent range. Extremely low levels of reported
inflation, an easing of retail sales, and the belief that the
Asian market activity would both slow the economy and also
restrain the Federal Reserve from raising interest rates kept
bonds rallying and yields falling right through the end of the
period.
ASSET ALLOCATION
Under normal conditions, the Carillon Capital Fund will be
structured approximately 63 percent, 30 percent, and 7 percent
in stocks, bonds, and money market instruments, respectively.
However, when market conditions change, the Fund repositions its
asset mix to take advantage of investment opportunities or to
reduce risk. The following table highlights the allocation of
fund assets at October 31, 1997, six months ago, one year ago,
and at a long term normal portfolio allocation.
<TABLE>
<CAPTION>
Carillon Capital Fund Asset Allocation
10/31/97 4/30/97 10/31/96 Normal
<S> <C> <C> <C> <C>
Stocks 37% 35% 37% 63%
Bonds 37% 43% 45% 30%
Money Market 26% 22% 18% 7%
Total 100% 100% 100% 100%
</TABLE>
The Capital Fund remains conservatively positioned having kept
its stock exposure below 40 percent during the entire year and
reducing its bond exposure in favor of increased levels of money
market investments. The strong rally in the bond market leaves
this market at elevated levels. The allocation to money market
investments is well above normal because of the extended nature
of stock market prices from a long-term perspective and our wish
to have funds available to use when the lower stock prices we
envision do occur.
Investment Philosophy and Performance
The Capital Fund has been managed since its inception with
several underlying investment beliefs. All of these philosophies
have hurt the short-term performance of the fund, as the
Carillon Capital Fund performed poorly during this fiscal year.
We are very disappointed with our relative performance and
determined to improve it. Each investment belief listed below is
founded on analyzing many years of investment history and
theory. We strongly believe they are still valid.
- - THE U.S. STOCK MARKET IS SELLING AT ITS HIGHEST COMBINED LEVEL
OF EARNINGS, DIVIDENDS, BOOK VALUES, REPLACEMENT VALUES,
SALES, AND PERCENTAGE OF GROSS DOMESTIC PRODUCT IN THIS
CENTURY. This includes October, 1929. The Capital Portfolio's
philosophy as an asset allocation fund is to own fewer stocks
when they are so richly valued and more stocks when valuations
are historically lower. Therefore, the fund has owned less
than a normal allocation to U.S. stocks during 1997. This has
negatively impacted fund performance.
- - SMALLER STOCKS REPRESENT BETTER RELATIVE VALUE THAN LARGER
CAPITALIZATION STOCKS. Smaller stocks have historically
outperformed larger stocks because of better growth and
profitability. Currently, despite selling for lower multiples
of current earnings, smaller stocks are still projected to
grow faster into the future. Therefore, the fund has owned a
large percentage of smaller stocks. Smaller stocks advanced
far less than larger stocks during the first seven months of
1997. This negatively impacted fund performance.
DIVERSIFICATION IS AN IMPORTANT INVESTMENT PRINCIPLE.
In theory, effective diversification reduces risk without
sacrificing much return over the long run. Diversification
in the Capital Fund includes owning international stocks,
precious metal stocks, real estate related issues, and bonds,
as well as traditional U.S. stocks. These market sectors have
not kept pace with the strong U.S. general stock market.
Precious metal stocks, in particular, have been extremely
weak due to lower gold prices during 1997. These investments
have negatively impacted fund performance to a small degree.
- - BUYING STOCKS IN MARKETS THAT ARE WELL BELOW THEIR HIGHS AND
WHICH SELL AT HISTORICALLY LOW LEVELS OF EARNING DIVIDENDS,
BOOK VALUES, REPLACEMENT VALUES, AND PERCENTAGE OF GROSS
DOMESTIC PRODUCT WILL PRODUCE THE BEST LONG-TERM RESULTS. The
Capital Fund has begun investing in beaten-up markets such as
Malaysia, South Korea, and Singapore that we believe represent
excellent opportunities to own good companies at great prices.
These markets are becoming cheap, but continue to go lower.
These investments have negatively impacted fund performance to
a small degree.
Obviously we are not pleased with the full year's performance,
but the relative performance over the 3 months ending in October
was considerably improved. We are making changes with individual
securities and purchase and sale activity has picked up.
However, we do not feel major changes would be beneficial. Well-
founded investment strategies always look the most foolish just
before they are successful. Owning lots of U.S. stocks in the
1970's look just as unrewarding as not owning lots of large
stocks now in the 1990s. In order for investment strategies to
show their merit, a full investment cycle should be experienced.
While we have not participated nearly as well as I would like in
the current market upswing, I have no intention of fully
participating in the eventual downswing. I have great confidence
that our underlying investment beliefs will carry us through the
uncertain period ahead, experiencing relative performance with
which we and our investors will be pleased.
Individual stock performance during the period highly varied
with gains of more than 50 percent registered by FPIC Insurance
Group, Strattec Security, ICN Pharmaceuticals, Griffon
Corporation, and BWAY, while losses occurred in Korea Fund, GT
Bicycles, and several precious metal related investments.
(Appearing here is a line graph which compares Carillon Capital
Fuind with the S&P 500 Stock Index, Lipper Flexible Fund
Average, Lehman Brothers U.S. Treasury Composite and Consumer
Price Index, annually, for the period beginning February 29,
1988 through October, 1997 and covers a range from $5,000 to
$60,000 in $5,000 increments. The following is found at the top
left of the graph:
<TABLE>
<CAPTION>
Carillon Capital Fund Average Annual Total Return
Including 5% Sales Load
1 Year 5 Year Inception
<C> <C> <C>
4.5% 9.7% 10.5%
</TABLE>
Past performance is no guarantee of future results.
Performance comparisons assume the reinvestment of income
dividends and capital gain distributions. The Carillon Capital
Fund results reflect an initial 5 percent sales load and all
mutual fund expenses. See the prospectus for situations which
qualify for no sales load fees, such as qualified plan
investments. None of the other comparative indices shown on this
graph are reduced by a sales load; and the comparisons, other
than the Lipper Flexible Fund Average, reflect no expenses. The
Capital Fund is categorized as a "Flexible Fund" by Lipper and
invests its assets among stocks, bonds, and money market
instruments which makes comparisons with a single stock or bond
index not totally comparative.
The Fund's total return of 9.9 percent over the past year has
been very weak when compared to the average flexible fund
benchmark. Relative performance has been held back by our
defensive stance toward the financial markets and the inability
of smaller stocks to keep pace with larger stocks. Over a full
market cycle, I believe our approach will provide competitive
returns with a good degree of price stability. The Fund
currently has an overall three-star rating from Morningstar,
Inc.* indicating an average risk-adjusted performance under the
Morningstar rating system.
OUTLOOK
Stock prices continue to be very richly valued, despite the
recent sell-off in the market that has brought the Dow Jones
Industrial Average back to the 7600 level. Valuations are
expensive whether one looks at prices in relation to earnings,
book values, dividends, sales, Gross Domestic Product,
replacement value of assets, or any other meaningful measure.
Overvaluation does not mean stock prices cannot go higher, but
means that longer-term risks are well above-average in relation
to potential rewards. If the conditions of strong earnings, low
inflation, low interest rates, and excellent money flows in the
market continue, the advance will have some life still in it.
We still believe that corporate America will eventually
experience profit problems that will cause a sharp reduction in
stock prices rather than a stock decline being precipitated by
higher interest rates. The cause of the profitability reduction
from extremely high current levels is not knowable at this time,
but a list of possible reasons includes: higher labor costs;
competition from Asian companies with low labor costs,
competitive currencies, excess capacity; a strong need to
export; high consumer debt levels; higher energy prices from
Middle East problems; costs from the Year 2000 computer fix; and
a declining stock market affecting consumer confidence.
Our primary concern in the current market environment is to be
able to limit losses in a decline and subsequently be able to
invest wisely in anticipation of a future longer-term advance.
The Fund remains in a defensive position from an asset
allocation standpoint. Individual stock activity recently
centers on higher quality foreign names in markets where prices
have already retreated to more reasonable historical levels. We
believe this, along with our diversification in Real Estate
Investment Trusts and fixed income securities, will reward
investors with greater protection from the inevitable slowdown
in domestic stock performance.
We appreciate the confidence you have placed in the Carillon
Capital Fund and we look forward to providing you with better
relative performance than we have recently experienced.
Sincerely,
/s/ George L. Clucas
George L. Clucas, President
November 30, 1997
_____________
*Morningstar, Inc. ratings are updated each month. The composite
rating is calculated using a weighted average of the longer-term
ratings. These ratings are based on each period's risk-adjusted
average annual total returns. Ten percent of the funds in a
category receive five stars, the next 22.5% receive four stars,
the next 35% receive three stars, the next 22.5% receive two
stars, and the remaining 10% receive one star. The Capital
Fund's three-year rating is 3 stars; five-year rating is 3
stars; and the average historical rating (77 months) is 3.4
stars.
This report has been prepared for the information of
shareholders and is not authorized for distribution to
prospective purchasers of the fund unless it is preceded by an
effective prospectus for Carillon Investment Trust.<PAGE>
<PAGE>
<PAGE>
Carillon Capital Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1997
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments in securities, at value $46,690,536
(cost $43,333,917)
Receivables:
Securities sold 446,003
Interest and dividends 273,788
Prepaid expenses and other 1,886
-----------
47,412,213
-----------
LIABILITIES
Investment securities purchased 225,550
Investment advisory fees 30,628
Professional fees 11,074
Portfolio accounting and custody fees 4,782
Trustees fees 487
Printing expenses 2,855
Transfer agency fees 1,280
Bank overdraft 16,194
Other expenses 2,216
-----------
295,066
-----------
NET ASSETS
Paid-in capital 39,849,396
Accumulated undistributed
net investment income 221,155
Accumulated undistributed
net realized gain 3,689,977
Unrealized appreciation, net 3,356,619
-----------
$47,117,147
===========
Shares outstanding (without par value,
unlimited authorization) 3,512,104
Net asset value and redemption price per share $13.42
===========
Offering price per share
(Net asset value per share/.95)* $14.12
===========
</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, 1997
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME
Interest $ 1,827,411
Dividends (net of foreign withholding
taxes of $7,124) 399,795
----------
2,227,206
----------
EXPENSES
Investment advisory fees 337,641
Portfolio accounting fees 28,937
Trustee's fees and expenses 17,606
Custodial fees and expenses 13,362
Registration and filing fees 11,270
Professional fees 19,395
Transfer agent fees 9,811
Other 11,791
----------
449,813
----------
NET INVESTMENT INCOME 1,777,393
----------
REALIZED AND UNREALIZED GAIN/LOSS
Net realized gain on investments 3,633,883
Net change in unrealized
appreciation/(depreciation) of investments (1,139,598)
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 2,494,285
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 4,271,678
===========
</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,
1997 1996
<S> <C> <C>
OPERATIONS
Net investment income $ 1,777,393 $ 1,871,475
Net realized gain on investments 3,633,883 3,323,005
Net change in unrealized
appreciation/(depreciation)
of investments (1,139,598) 445,916
----------- -----------
4,271,678 5,640,396
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (1,751,289) (1,913,442)
Net realized gain on investments 3,334,642) (440,569)
----------- -----------
(5,085,931) (2,354,011)
----------- -----------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 905,934 950,895
Issued in reinvestment
of dividends 5,085,587 2,353,855
Payments from shares redeemed (931,167) (10,364,075)
----------- -----------
5,060,354 (7,059,325)
----------- -----------
NET INCREASE/(DECREASE)
IN NET ASSETS 4,246,101 (3,772,940)
NET ASSETS
Beginning of year 42,871,046 46,643,986
----------- -----------
End of year $47,117,147 $42,871,046
=========== ===========
Undistributed
Net Investment Income $ 221,155 $ 223,040
=========== ===========
FUND SHARE TRANSACTIONS:
Sold 68,350 71,179
Issued in reinvestment
of dividends 394,234 181,443
Redeemed (69,520) (807,197)
----------- -----------
NET INCREASE/(DECREASE)
FROM FUND SHARE TRANSACTIONS 393,064 (554,575)
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
<PAGE>
Carillon Capital Fund
Schedule of Investments
OCTOBER 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS -35.77%
BANKING AND FINANCIAL SERVICES - 8.76%
Banco BHIF ADR 22,000 $ 380,875
Banco Frances Rio PLA-SP ADR 4,000 100,752
BlackRock Strategic Term Trust 25,000 207,813
Chile Fund 9,000 202,500
Deutsche Bank AG Sponsored ADR 5,370 351,936
Fahnestock Viner Holdings Incorporated 19,000 362,188
FPIC Insurance Group Incorporated* 15,000 446,250
Hyperion 1999 Term Turst 100,000 681,250
Income Opportunity Fund 1999 30,000 283,125
Income Opportunity Fund 2000 26,000 245,375
Korea Fund Incorporated 15,960 130,672
New Germany Fund 23,312 348,223
Templeton Global Income
Fund Incorporated 29,000 217,500
Washington Federal Incorporated 5,800 171,100
-----------
4,129,559
-----------
CAPITAL GOODS - 2.00%
AGCO Corporation 10,000 290,000
Lindsay Manufacturing Company 15,057 653,097
-----------
943,097
-----------
CONSUMER CYCLICAL - 3.78%
CPAC Incorporated 35,000 358,750
Griffon Corporation* 18,000 284,625
NCI Building Systems Incorporated 11,000 400,813
Strattec Security Corporation* 14,000 381,500
Winsloew Furniture Incorporated* 25,000 353,906
-----------
1,779,594
-----------
CONSUMER NON-DURABLE - 2.71%
Complete Management Incorporated 18,000 312,750
GT Bicycles Incorporated* 20,000 136,250
ICN Pharmaceuticals, Incorporated 6,800 327,250
Nam Tai Electronics* 12,000 245,625
Vtech Holdings Limited* 13,000 253,962
-----------
1,275,837
-----------
ENERGY - 3.48%
Cross Timbers Oil Company 7,500 200,156
Domain Energy Corporation* 2,150 37,088
Giant Industries Incorporated 19,000 340,813
KCS Energy Incorporated 18,500 486,781
YPF SA Sponsored ADR 18,000 576,000
-----------
1,640,838
-----------
MANUFACTURING - 5.93%
AEP Industries, Incorporated* 11,169 357,408
BWAY Corporation * 16,500 316,594
Carbide Graphite Group Incorporated* 18,000 641,250
Coeur D Alene Mines* 15,000 155,625
De Beers Cons. Mines ADR 8,000 192,000
Northwest Pipe Company* 18,400 446,200
Royal Oak Mines Incorporated* 45,000 106,875
York Group, Incorporated 18,000 418,500
Zeigler Coal Holding Company 9,100 162,663
-----------
2,797,115
-----------
REAL ESTATE - 6.21%
Associated Estates Realty Corporation 20,000 458,750
City Developments Limited ADR 25,000 104,892
Evans Withycombe Residential 10,000 252,500
Merry Land & Investment Company 18,000 392,625
Mid-America Apartment Communities
Incorporated 12,000 339,000
Pacific Gulf Properties 14,500 328,063
Trinet Corporate Realty Trust 10,000 361,875
United Dominion Realty Trust 25,000 346,875
Winston Hotels, Incorporated 25,000 340,625
-----------
2,925,205
-----------
SERVICE - .67%
Devon Group Incorporated* 8,000 314,000
-----------
TECHNOLOGY - 1.70%
AFC Cable Systems Incorporated* 10,625 301,484
Axiohm Technology* 1,730 28,761
Cabbies Corporation* 5,000 121,250
Vertex Communications Corporation* 13,900 350,106
-----------
801,601
-----------
TRANSPORTATION - .53%
Northwest Airlines Corporation* 5,500 247,500
-----------
Total Common Stock (cost $14,000,612) 16,854,346
-----------
PREFERRED STOCK - .60%
Freeport McMoRan Copper & Gold Series 10,000 281,250
-----------
Total Preferred Stock (cost $347,887)
FOREIGN STOCK - .92%
NORWAY - .48%
Petrolia Drilling ASA* 50,000 224,981
-----------
MALAYSIA - .44%
Bumi Armada Berhad* 150,000 206,866
-----------
Total Foreign Stock (cost $481,405) 431,847
-----------
U.S. TREASURY OBLIGATIONS - 16.37%
<CAPTION>
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
U.S. TREASURY NOTES - 16.37%
5.750% due 12/31/98
$ 500,000 $ 500,781
6.375% due 01/15/99 1,000,000 1,008,750
6.250% due 02/15/03 500,000 510,469
5.750% due 08/15/03 750,000 747,891
5.875% due 02/15/04 1,200,000 1,204,875
7.250% due 05/15/04 800,000 860,750
7.875% due 11/15/04 1,800,000 2,005,875
7.500% due 02/15/05 800,000 875,750
-----------
Total U.S. Treasury Notes
(cost $7,411,112) 7,715,141
-----------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 12.11%
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 3.87%
1422 FA (6.080% due 11/15/07)<F1> $ 500,000 $ 490,876
1662 H (6.250% due 01/15/09) 265,102 262,697
1559 VP (5.500 % due 02/15/20) 510,000 499,367
1631 SB (5.985% due 12/15/23)<F1> 755,000 569,971
-----------
1,822,911
-----------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 8.24%
Remic 93-12 ED (7.500% due 02/25/06) 1,000,000 1,042,745
Remic 92-18 HC (7.500% due 03/25/07) 400,000 414,680
Remic 93-163 PN (7.000% due 07/25/07) 250,000 257,866
Remic 92-119 E (8.000% due 07/25/20) 500,000 514,834
Remic 92-112 E (8.000% due 12/25/20) 780,000 808,863
Remic 93-127 FA
(5.390% due 10/25/21)<F1> 500,000 483,056
Remic 92-66 F
(6.188% due 05/25/22)<F1> 360,967 362,372
-----------
3,884,416
-----------
Total Collateralized Mortgage
Obligations (cost $5,613,229) 5,707,327
-----------
MORTGAGE BACKED SECURITIES - 6.04%
FEDERAL HOME LOAN
MORTGAGE CORPORATION - 1.73%
7.500% due 06/01/07 37,654 38,185
8.250% due 03/01/12 105,585 109,083
8.500% due 03/01/16 158,728 166,427
7.500% due 07/01/17 59,910 61,273
11.000% due 04/01/19 124,814 140,590
10.500% due 05/01/19 114,807 125,929
11.000% due 11/01/19 153,449 172,845
-----------
814,332
-----------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 3.72%
9.500% due 09/01/05 21,186 22,203
6.000% due 12/01/08 282,057 278,213
5.500% due 01/01/09 296,880 287,264
6.000% due 03/01/09 219,796 216,800
5.500% due 04/01/09 204,212 197,242
7.000% due 03/01/26 460,067 461,893
6.500% due 02/01/26 293,526 288,643
-----------
1,752,258
-----------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - .59%
10.250% due 04/15/16 21,166 22,992
9.000% due 11/15/16 89,216 96,857
9.500% due 05/15/18 46,889 50,742
9.000% due 12/15/19 100,890 109,335
-----------
279,926
-----------
Total Mortgage-Backed Securities
(cost $2,670,710) 2,846,516
-----------
CORPORATE BONDS AND NOTES - 2.01%
TECHNOLOGY - .78 %
Lowen Group International Incorporated
(8.250% due 04/15/03) 350,000 $ 367,731
-----------
UTILITIES - 1.23%
New Orleans Public Service
Incorporated (8.670% due 04/01/05) 300,000 304,391
TCI Communications Incorporated
(8.650% due 9/15/04) 250,000 273,787
-----------
578,178
-----------
Total Corporate Bonds (cost $900,762) 945,909
SHORT-TERM INVESTMENTS - 25.27%
VARIABLE RATE
DEMAND NOTES<F2> - 25.27%
American Family
Financial Services, Incorporated
(5.155% due 11/05/97) $ 2,225,178 $ 2,225,178
General Mills, Incorporated
( 5.155% due 11/04/97) 560,684 560,684
Johnson Controls Incorporated
(5.185% due 11/04/97) 2,604,105 2,604,105
Pitney Bowes Credit Corporation
(5.164% due 11/04/97) 2,313,621 2,313,621
Sara Lee Corporation
(5.144% due 11/04/97) 1,747,761 1,747,761
Warner Lambert Company
(5.136% due 11/05/97) 1,887,108 1,887,108
Wisconsin Electric Power Corporation
(5.205% due 11/05/97) 569,743 569,743
-----------
11,908,200
-----------
Total Short-Term Investments
(cost $11,908,200)
TOTAL INVESTMENTS - 99.09%
(cost $43,333,917) 46,690,536<F3>
-----------
OTHER ASSETS AND LIABILITIES - .91% 426,611
-----------
TOTAL NET ASSETS - 100.00% $47,117,147
===========
- --------------
*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, 1997.
<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, 1997
<F3> Gross unrealized appreciation and depreciation of
securities at October 31, 1997 for financial reporting purposes
was $4,322,865 and $966,246 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, 1997
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 such
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. During the year ended October 31, 1997, the
Distributor received commission of $116.
OTHER - At October 31, 1997, The Union Central Life Insurance
Company (Union Central) owned 1,177,610 shares of the Fund and
certain Union Central employee benefit plans owned 1,626,439
shares of the Fund. Together these interests represent 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, 1997, excluding short-term securities, follow:
<TABLE>
<CAPTION>
Cost of Proceeds
Purchases from Sales
--------- ----------
<S> <C> <C>
Common Stocks $12,136,773 $12,317,029
U.S. Government Securities 3,213,023 3,024,567
Corporate Bonds 398,904 2,913,729
----------- -----------
$15,748,700 $18,255,325
=========== ===========
</TABLE>
NOTE 4 - FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding
throughout the year.
<TABLE>
Year ended October 31,
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of year $13.75 $12.70 $13.01 $13.00 $12.45
------ ------ ------ ------ ------
Investment Operations:
Net investment income .51 .60 .52 .35 .42
Net realized
and unrealized gain .75 1.17 .73 .16 1.27
------ ------ ------ ------ ------
Total from
Investment Operations 1.26 1.77 1.25 .51 1.69
------ ------ ------ ------ ------
Distributions:
Net investment income (.52) (.60) (.51) (.32) (.42)
Net realized gain (1.07) (.12) (1.05) (.18) (.72)
------ ------ ------ ------ ------
Total Distributions (1.59) (.72) (1.56) (.50) (1.14)
Net Asset Value,
End of year $13.42 $13.75 $12.70 $13.01 $13.00
====== ====== ====== ====== ======
Total Return<F1> 9.94% 14.38% 10.88% 4.56% 14.50%
Ratios/Supplemental Data:
Net Assets,
End of year (000's) $47,117 $42,871 $46,644 $41,849 $33,863
Ratio of Expenses to
Average Net Assets 1.00% 1.02% 1.01% 1.05% 1.11%
Ratio of Net Investment
Income to Average Net Assets 3.95% 4.52% 4.44% 3.89% 3.35%
Portfolio Turnover Rate 45.40% 47.43% 42.07% 53.20% 43.35%
Average Commission
Rate Paid<F2> $ .0529 $ .0631
<FN>
<F1> Assumes sales load is not imposed on either initial investment or
reinvestment of distributions.
<F2> 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, 1997, the Fund made total
distributions of $1.59 per share, of which $.52 per share is
from investment income and $1.07 per share is from net realized
gains. Of the $.52 per share, 13% qualified for the dividends-
received deduction for corporations.
<PAGE>
Carillon Capital Fund
Independent Auditor's Report
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, 1997, the related statement of
operations and the statements of changes in net assets for the
periods presented, and the financial highlights for the three
years in the period 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 incudes 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, 1997, 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, such financial statements present fairly, in all
material respects, the financial position of Carillon Capital
Fund as of October 31, 1997, the results of its operations and
the statements of changes in its net assets for the periods
presented, and the financial highlights for the three years in
the period then ended, in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Dayton, Ohio
December 5, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000820432
<NAME> CARILLON INVESTMENT TRUST
<SERIES>
<NUMBER> 1
<NAME> CARILLON CAPITAL FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 43,333,917
<INVESTMENTS-AT-VALUE> 46,690,536
<RECEIVABLES> 719,791
<ASSETS-OTHER> 1,886
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 47,412,213
<PAYABLE-FOR-SECURITIES> 225,550
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 69,516
<TOTAL-LIABILITIES> 295,066
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 39,849,396
<SHARES-COMMON-STOCK> 3,512,104
<SHARES-COMMON-PRIOR> 3,432,788
<ACCUMULATED-NII-CURRENT> 221,155
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,689,977
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,356,619
<NET-ASSETS> 47,117,147
<DIVIDEND-INCOME> 399,795
<INTEREST-INCOME> 1,827,411
<OTHER-INCOME> 0
<EXPENSES-NET> 449,813
<NET-INVESTMENT-INCOME> 1,777,393
<REALIZED-GAINS-CURRENT> 3,633,883
<APPREC-INCREASE-CURRENT> (1,139,598)
<NET-CHANGE-FROM-OPS> 4,271,678
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,751,289)
<DISTRIBUTIONS-OF-GAINS> (3,334,642)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 68,350
<NUMBER-OF-SHARES-REDEEMED> 69,520
<SHARES-REINVESTED> 394,234
<NET-CHANGE-IN-ASSETS> 4,246,101
<ACCUMULATED-NII-PRIOR> 225,993
<ACCUMULATED-GAINS-PRIOR> 1,870,570
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 337,641
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 449,813
<AVERAGE-NET-ASSETS> 45,030,575
<PER-SHARE-NAV-BEGIN> 13.75
<PER-SHARE-NII> .51
<PER-SHARE-GAIN-APPREC> .75
<PER-SHARE-DIVIDEND> (.52)
<PER-SHARE-DISTRIBUTIONS> (1.07)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.42
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
