Carillon
Capital
Fund
of
Carillon
Investment
Trust
Annual
Report
October 31, 1998
<PAGE>
CARILLON INVESTMENT TRUST - CARILLON CAPITAL FUND
Annual Report - A Message from the President
November 30, 1998
FINANCIAL MARKETS
The United States stock market experienced a volatile period
over the twelve months ending October 31, 1998. Despite the
turmoil, major stock averages, such as the Dow Jones Industrial
Average, continued their upward trend and ended well above year
ago levels. However, the broader market of smaller stocks had a
difficult year, ending about 10 percent below year ago levels
and well off the April 1998 highs. Global economic problems
were the market's main concern, with troubles spreading from
Asia to Russia and Latin America. During the sharp late summer
decline, worries were related to a global credit crunch.
Companies with anything but the highest grade credits were
unable to borrow money at a reasonable rate.
The U.S. economy's performance, which had been described as
almost perfect (steady growth and low inflation), came under
question as global recessionary concerns, lack of liquidity,
and problems within the financial system surfaced. In addition,
the strong corporate profits picture, which had helped to move
stocks higher, weakened considerably as third quarter profits
recorded their first year-over-year decline in several years.
Large capitalization stocks led the market's advance over the
last year. However, during this period the valuation
differences with smaller capitalization stocks reached record
proportions. Small stocks are recording current financial
results in line with or better than larger companies and have
less exposure to volatile foreign markets. Therefore, the
larger stocks outperformance seemed more an effort at
maintaining ample investor liquidity rather than pursuing long-
term value.
Fixed Income markets witnessed a similar flight to liquidity
and quality as interest rates on long-term U.S. government
bonds fell as much as a full percentage point over the period,
while many corporate bond issues saw interest rates actually
rise. Slowing world economic growth, tame inflation rates, and
an accommodative Federal Reserve Board should keep at least
government interest rates at historically low levels for a
while longer. The Fed's three quarter-point reductions in the
Federal Funds rate indicate their willingness to combat the
economic slowdown and market liquidity problems with prompt
action.
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, as market conditions deviate from historical norms,
the Fund repositions its asset mix toward the apparently more
attractive asset class. The following table highlights the
allocation of fund assets at October 31, 1998, five months ago,
twelve months ago, and at a long term normal portfolio
allocation.
<TABLE>
<CAPTION>
Asset Category 10/31/98 5/31/98 10/31/97 Normal
- -------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stocks 45% 36% 37% 63%
Bonds 34% 40% 37% 30%
Cash 21% 24% 26% 7%
--- --- --- ---
100% 100% 100% 100%
</TABLE>
The Capital Fund is managed with a long-term asset allocation
philosophy. The asset allocation decision of investments among
stocks, bonds and money market investments is made with a model
that incorporates long-term historical relationships of the
basic drivers of stock market valuations corporate profits,
interest rates, inflation rates, and price earnings ratios. In
addition, the model analyzes over 100 different market-
influencing factors including monetary, economic, technical,
and global indicators because of their potential for moving
markets away from fundamental value over intermediate time
periods. Bonds and money market investments are also analyzed
from a long-term valuation and technical perspective to help
determine their weightings within the Portfolio.
The Fund's asset allocation to stocks did increase during the
1998 sell-off and reached as much as a 50% allocation, before
higher stock prices and higher interest rates indicated a
reduction in the stock position was appropriate in late
October. The Capital Fund's asset allocation model remains
conservatively positioned due to the level of U.S. stock prices
in relation to earnings, dividends, book values, replacement
values, and percentage of Gross Domestic Product. The Fund's
philosophy is to own fewer stocks when they are so richly
valued and more stocks when valuations are lower.
The bond and money market allocations are above normal,
particularly money market due to the higher than normal real
interest rates (actual interest rates minus inflation rates)
available from fixed income investments and the underweighting
of stocks because of valuation concerns.
PERFORMANCE
(The following graph compares performance for the period
February 29, 1988 through October 31, 1998 for the following:
S&P 500 Stock Index, Lipper Flexible Fund Average, Carillon
Capital Fund, Lehman Brothers U.S. Treasury Composite and
Consumer Price Index. At the top right of the graph the
following table appears:
<TABLE>
<CAPTION>
Carillon Capital Fund Average Annual Total Return
Including 5% Sales Load
1-Year 5-Year 10-Year Inception
<C> <C> <C> <C>
-12.4% 5.1% 8.4% 8.7%
</TABLE>
Past performance is not predictive of future performance.
Performance comparisons assume the reinvestment of income
dividends and capital gain distributions. The Carillon Capital
Fund results reflect an initial 5 percent sales load and all
mutual fund expenses. See the prospectus for situations which
qualify for no sales load fees, such as qualified plan
investments. None of the other comparative indices shown on
this graph 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 performance over the past year has been
disappointing. The Fund did not own enough stocks and owned
smaller capitalization stocks that did not keep up with the
major stock indices.
Individual stock security selection for the fund is
accomplished with an earnings growth discount model that
analyzes companies for a combination of high profitability,
consistent performance, excellent growth, good quality,
relative value, and the likelihood that a recognition of value
will take place in the market. This approach has moved the
fund's stock selection into smaller capitalization issues over
the last several years. Fund management strongly believes that
smaller stocks currently represent better relative value than
larger capitalization stocks. Smaller stocks have historically
outperformed larger stocks because of better growth and
profitability. We believe they will outperform again,
especially since smaller stocks are selling for lower multiples
of current earnings and are projected to grow earnings faster
into the future. Therefore, the fund has owned a large
percentage of smaller cap stocks. Unfortunately, they have
advanced far less than larger stocks during the last year.
The Capital Fund's management also believes diversification is
an important investment principle. In theory, effective
diversification enhances the long-term risk/reward
characteristics of a portfolio by counterbalancing risks of
individual securities. Stock diversification in the Capital
Fund currently includes owning international stocks, and real
estate related issues, as well as traditional U.S. stocks.
These investments have negatively impacted fund performance
this year, since larger U.S. stocks have outpaced almost all
market sectors.
OUTLOOK
I strongly believe that the Fund's holdings of smaller
capitalization, international stocks, and real estate related
equities represent excellent long-term value in a generally
richly valued market. While I am unsure of the short-term
direction of stocks and bonds, I believe the combination of a
conservative asset allocation to stocks and holdings of stocks
with much lower price-to-earnings ratios than the average will
perform relatively well in comparison to more traditional
larger capitalization portfolios.
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.
Therefore, money market investments will be held in higher
quantities than normal until more attractive valuations appear.
Despite the Autumn rebound in U.S. stock prices, I remain
concerned about the strength of world economies, the global
banking system, and especially the high profitability of U.S.
corporations. The lower profits I foresee in 1999 will make it
difficult for stock prices to make significant advances without
an improvement in economic conditions.
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 Clucas
George L. Clucas, President
November 30, 1998
This report has been prepared for the information of
shareholders and is not authorized for distribution to
prospective purchasers of the fund uncless it is preceded or
accompanied by an effective prospectus for Carillon Investment
Trust.
<PAGE>
CARILLON CAPITAL FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
October 31, 1998
<S> <C>
ASSETS
Investments in securities, at value
(cost $22,029,772) $21,374,642
Cash 15,320
Receivable for investment securities sold 1,074,061
Interest and dividends receivable 138,838
Prepaid expenses 1,993
-----------
22,604,854
-----------
LIABILITIES
Investment advisory fees 13,830
Professional fees 17,873
Portfolio accounting and custody fees 10,431
Printing expenses 2,135
Transfer agency fees 3,786
Trustees' fees and expenses 1,804
Other 1,765
-----------
51,624
-----------
NET ASSETS
Paid-in capital 21,591,776
Accumulated undistributed net investment income 115,884
Accumulated undistributed net realized gain 1,500,700
Unrealized depreciation, net (655,130)
-----------
$22,553,230
===========
Shares outstanding
(without par value, unlimited authorization) 2,076,386
===========
Net asset value and redemption price per share $ 10.86
===========
Offering price per share
(Net asset value per share/.95)* $ 11.43
===========
</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
<TABLE>
<CAPTION>
For the Year Ended October 31, 1998
<S> <C>
INVESTMENT INCOME
Interest $ 1,387,182
Dividends
(net foreign withholding taxes of $18,582) 415,322
-----------
1,802,504
-----------
EXPENSES
Investment advisory fees 263,254
Portfolio accounting fees 33,415
Trustees' fees and expenses 23,420
Professional fees 20,759
Custodian fees and expenses 15,345
Transfer agency fees 14,393
Registration and filing fees 11,777
Other 8,501
-----------
390,864
-----------
NET INVESTMENT INCOME 1,411,640
-----------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
Net realized gain on investments 1,486,735
Net change in unrealized appreciation/
(depreciation) of investments (4,011,749)
-----------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS (2,525,014)
-----------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(1,113,374)
===========
</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,
------------------------------
1998 1997
---- ----
<S> <C> <C>
OPERATIONS
Net investment income $ 1,411,640 $ 1,777,393
Net realized gain on investments 1,486,735 3,633,883
Net change in unrealized
appreciation/(depreciation)
of investments (4,011,749) (1,139,598)
----------- -----------
(1,113,374) 4,271,678
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (1,587,079) (1,751,289)
Net realized gain on investments (3,605,844) (3,334,642)
----------- -----------
(5,192,923) (5,085,931)
----------- -----------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 15,451 905,934
Issued in reinvestment of dividends 5,192,603 5,085,587
Payments for shares redeemed (23,465,674) (931,167)
----------- -----------
(18,257,620) 5,060,354
----------- -----------
Net increase/(decrease) in net assets (24,563,917) 4,246,101
NET ASSETS
Beginning of year 47,117,147 42,871,046
----------- -----------
End of year $22,553,230 $47,117,147
=========== ===========
Undistributed Net Investment Income $ 115,884 $ 221,155
=========== ===========
FUND SHARE TRANSACTIONS:
Sold 1,283 68,350
Issued in reinvestment of dividends 429,389 394,234
Redeemed (1,866,390) (69,520)
----------- ----------
Net increase/(decrease) from
fund share transactions (1,435,718) 393,064
=========== ==========
</TABLE>
The accompanying notes are an integral part of the
financial statements.
<PAGE>
Carillon Capital Fund
Schedule of Investments
<TABLE>
<CAPTION>
OCTOBER 31, 1998
COMMON STOCKS - 48.35%
SHARES VALUE
------ -----
<S> <C> <C>
BANKING AND FINANCIAL SERVICES - 11.87%
AFP Provida S.A. ADR 12,000 $ 170,250
Charter One Financial, Incorporated 9,000 246,937
Duff & Phelps Credit Rating Company 5,000 236,875
First Bell Bancorp, Incorporated* 15,000 217,500
Hyperion 1999 Term Trust 100,000 725,000
Income Opportunity Fund 1999 30,000 288,750
Income Opportunity Fund 2000 26,000 251,875
Jefferies Group, Incorporated* 11,000 330,000
Templeton Global Income Fund 29,000 210,250
-----------
2,677,437
-----------
CAPITAL GOODS - 2.54%
Encore Wire Corporation* 22,000 244,750
Lindsay Manufacturing Company 7,585 123,256
LSI Industries* 10,000 205,000
-----------
573,006
-----------
CONSUMER CYCLICAL - 5.88%
Footstar, Incorporated* 8,400 219,450
Maxwell Shoe Company, Incorporated* 16,000 188,000
National RV Holdings, Incorporated* 10,000 226,250
Nautica Enterprises, Incorporated* 7,000 144,813
Newmark Homes Corporation* 20,000 162,500
Toll Brothers* 6,000 139,125
Travis Boats & Motors, Incorporated* 15,000 246,562
-----------
1,326,700
-----------
CONSUMER NON-DURABLE - 6.23%
Anchor Gaming* 6,000 305,250
Charoen Pok Feedmill ADR* 21,025 91,551
ICN Pharmaceuticals, Incorporated 12,200 285,175
Invacare Corporation* 9,000 202,500
Richfood Holdings, Incorporated* 10,000 177,500
Schlotzsky's, Incorporated* 20,000 193,750
Scientific Games Holdings Corporation* 9,000 149,063
-----------
1,404,789
-----------
ENERGY - 4.80%
Basin Exploration, Incorporated* 11,000 176,000
Callon Petroleum Company* 10,000 123,750
Giant Industries, Incorporated 9,500 111,031
Marine Drilling Company, Incorporated* 14,000 156,625
Miller Exploration Company* 21,000 115,500
Offshore Logistics, Incorporated* 14,000 210,438
OYO Geospace Corporation* 6,000 92,250
Stone Energy Corporation* 3,000 96,375
-----------
1,081,969
-----------
MANUFACTURING - 2.85%
CompX International, Incorporated* 10,000 192,500
Lindberg Corporation 10,300 131,325
Omniquip International, Incorporated* 16,000 214,000
Zindart Limited ADR* 13,000 104,000
-----------
641,825
-----------
REAL ESTATE - 10.60%
Cornerstone Realty Income Trust, Incorporated 18,000 $ 193,500
Equity Residential Properties Trust 4,770 200,340
FelCor Lodging Trust, Incorporated 7,300 172,006
Healthcare Realty Trust 9,000 210,938
Mills Corporation 7,000 151,812
Pacific Gulf Properties 10,000 198,125
Parkway Properties, Incorporated 7,000 199,500
Prime Retail, Incorporated 12,000 116,250
Storage USA, Incorporated 7,000 213,062
Trinet Corporate Realty Trust, Incorporated 8,200 235,750
United Dominion Realty Trust, Incorporated 13,000 144,625
United Investor Realty Trust, Incorporated 20,000 147,500
Winston Hotels, Incorporated 24,300 208,069
-----------
2,391,477
-----------
TECHNOLOGY - 2.51%
SPSS, Incorporated* 11,000 210,375
Vertex Communications Corporation* 7,000 112,875
Vtech Holdings Limited ADR 6,500 243,777
-----------
567,027
-----------
TRANSPORTATION - 1.07%
Gulfmark Offshore, Incorporated* 9,000 163,125
Midwest Express Holdings* 2,500 79,063
-----------
242,188
-----------
Total Common Stock (cost $11,037,016) 10,906,418
-----------
FOREIGN COMMON STOCK - 3.34%
HONG KONG - 2.69%
Glorious Sun Enterprises Limited 1,138,000 198,340
Smartone Telecommunications* 87,000 247,101
Techtronic Industries 849,400 160,103
-----------
605,544
-----------
MALAYSIA - .65%
Bumi Armada Berhad* 150,000 44,476
Road Builder Holdings BHD 248,000 102,308
-----------
146,784
-----------
Total Foreign Common Stock (cost $1,092,012) 752,328
-----------
WARANTS AND RIGHTS - 0.02%
TECHNOLOGY - 0.02%
Nam Tai Electronics, Incorporated 4,001 4,751
-----------
Total Warrants and Rights (cost $12,117) 4,751
-----------
<CAPTION>
PRINCIPAL VALUE
--------- -----
<S> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - 8.60%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.80%
1662 H (6.250% due 01/15/09) $122,888 124,142
1559 VP (5.500 % due 02/15/20) 510,000 506,797
-----------
630,939
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 5.80%
Remic 93-12 ED (7.500% due 02/25/06) 1,000,000 1,051,315
Remic 93-163 PN (7.000% due 07/25/07) 250,000 257,200
-----------
1,308,515
-----------
Total Collateralized Mortgage Obligations
(cost $1,865,291) 1,939,454
-----------
MORTGAGE-BACKED SECURITIES - 5.40%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.61%
7.500% due 06/01/07 31,618 $ 31,885
8.250% due 03/01/12 86,862 89,729
8.500% due 03/01/16 94,726 98,747
7.500% due 07/01/17 34,445 35,208
11.000% due 04/01/19 73,611 78,873
10.500% due 05/01/19 86,051 91,183
11.000% due 11/01/19 151,753 162,601
-----------
588,226
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 1.90%
9.500% due 09/01/05 15,762 16,398
5.500% due 01/01/09 251,970 249,842
5.500% due 04/01/09 164,098 162,617
-----------
428,857
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - .89%
9.000% due 11/15/16 79,354 84,923
9.500% due 05/15/18 36,217 39,207
9.000% due 12/15/19 71,605 76,491
-----------
200,621
-----------
Total Mortgage-Backed Securities (cost $1,155,403) 1,217,704
-----------
CORPORATE BONDS AND NOTES - 13.51%
BANKING & FINANCIAL SERVICE - 3.24%
Hutchison Whampoa (6.950% due 08/01/07) 500,000 462,914
Indah Kiat Sr Notes (10.000% due 07/01/07) 500,000 268,750
-----------
731,664
-----------
MISCELLANEOUS - 7.72%
Enersis (6.600% due 12/01/26) 500,000 452,855
Gulf Canada Resources (8.350% due 08/01/06) 500,000 511,298
Lowen Group International Incorporated
(8.250% due 04/15/03) 350,000 273,000
TE Products Pipeline (7.510% due 01/15/28) 500,000 503,510
-----------
1,740,663
-----------
UTILITIES - 2.55%
Pohang Iron & Steel (7.125% due 11/01/06) 750,000 574,823
-----------
Total Corporate Bonds and Notes
(cost $3,361,096) 3,047,150
-----------
SHORT-TERM INVESTMENTS - 15.55%
VARIABLE RATE DEMAND NOTES <F1> - 15.55%
American Family Financial Services
(4.751% due 11/04/98) 222,308 222,308
Firstar Bank (4.974% due 11/03/98) 1,050,246 1,050,246
General Mills Incorporated (4.829% due 11/03/98) 477,283 477,283
Pitney Bowes Credit Corporation
(4.829% due 11/03/98) 1,002,256 1,002,256
Sara Lee (4.824% due 11/03/98) 522,909 522,909
Warner Lambert (4.752% due 11/04/98) 184,524 184,524
Wisconsin Electric Power Corporation
(4.751% due 11/03/98) 47,311 47,311
-----------
3,506,837
-----------
Total Short-Term Investments (cost $3,506,837) 3,506,837
-----------
TOTAL INVESTMENTS - 94.77%
(cost $22,029,772) <F2> 21,374,642
-----------
OTHER ASSETS AND LIABILITIES - 5.23% 1,178,588
-----------
TOTAL NET ASSETS - 100.00% $22,553,230
===========
- ------------
*Non-income producing
(ADR) American Depository Receipt
<FN>
<F1> 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, 1998.
<F2> Represents cost for income tax purposes, which is substantially the
same for financial reporting purposes. Gross unrealized appreciation and
depreciation of securities as of October 31,1998 was $1,062,054 and
($1,717,184), respectively.
</FN>
</TABLE>
The accompanying notes are an integral part of the
financial statements.
<PAGE>
CARILLON CAPITAL FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1998
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 are 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 than $50,000 to .5% on investments in excess
of $2,500,000.
OTHER - At October 31, 1998, The Union Central Life Insurance
Company (Union Central) owned 1,342,183 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. On April 30, 1998, a pension plan
affiliated with Union Central redeemed 1,797,340 shares,
representing its entire holding in the Fund.
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, 1998, excluding short-term securities, follow:
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
----------------- -------------------
<S> <C> <C>
Common Stocks $ 14,699,258 $ 17,755,990
U.S. Government Securities 997,438 14,759,800
Corporate Bonds 3,961,453 1,566,768
------------ ------------
$ 19,658,149 $ 34,082,558
============ ============
</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
------------------------------------------
1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of year $13.42 $13.75 $12.70 $13.01 $13.00
------ ------ ------ ------ ------
Investment Operations:
Net investment income .57 .51 .60 .52 .35
Net realized and
unrealized gain/(loss) (1.51) .75 1.17 .73 .16
------ ------ ------ ------ ------
Total from Investment
Operations (.94) 1.26 1.77 1.25 .51
------ ------ ------ ------ ------
Distributions:
Net investment income (.59) (.52) (.60) (.51) (.32)
Net realized gain (1.03) (1.07) (.12) (1.05) (.18)
------ ------ ------ ------ ------
Total Distributions (1.62) (1.59) (.72) (1.56) (.50)
------ ------ ------ ------ ------
Net Asset Value,
End of year $10.86 $13.42 $13.75 $12.70 $13.01
====== ====== ====== ====== ======
Total Return <FN1> (7.77%) 9.94% 14.38% 10.88% 4.56%
Ratios/Supplemental Data:
Net Assets,
End of period (000's) $22,553 $47,117 $42,871 $46,644 $41,849
Ratio of expenses to
average net assets 1.11% 1.00% 1.02% 1.01% 1.05%
Ratio of net investment
income to average
net assets 4.02% 3.95% 4.52% 4.44% 3.89%
Portfolio turnover rate 75.47% 45.40% 47.43% 42.07% 53.20%
<FN>
<F1> Assumes sales load is not imposed on either initial investment or
reinvestment of distributions.
</FN>
</TABLE>
FEDERAL INCOME TAX INFORMATION (unaudited)
During the year ended October 31, 1998 the Fund made total
distributions of $1.62 per share, of which $.59 per share is
from investment income and $1.03 per share is from net realized
gains. Of the $.59 per share, 16% qualified for the dividends
received deduction for corporations.
<PAGE>
CARILLON CAPITAL FUND
Report of Independent Auditors
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, 1998, and the related statement
of operations and the statements of changes in net assets for
the period presented, and the financial highlights for each of
the four years in the period ended October 31, 1998. 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 year ended October 31, 1994 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, 1998, by correspondence with the custodian and
brokers. An audit also incudes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements as of October 31, 1998,
present fairly, in all material respects, the financial position
of Carillon Capital Fund as of October 31, 1998, the results of
its operations, the changes in its net assets, and the financial
highlights for the respective stated periods, in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Dayton, Ohio
December 7, 1998
<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-31-1998
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 22,029,772
<INVESTMENTS-AT-VALUE> 21,374,642
<RECEIVABLES> 1,212,899
<ASSETS-OTHER> 17,313
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,604,854
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 51,624
<TOTAL-LIABILITIES> 51,624
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 21,591,776
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 115,884
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,500,700
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (655,130)
<NET-ASSETS> 22,553,230
<DIVIDEND-INCOME> 415,322
<INTEREST-INCOME> 1,387,182
<OTHER-INCOME> 0
<EXPENSES-NET> 390,864
<NET-INVESTMENT-INCOME> 1,411,640
<REALIZED-GAINS-CURRENT> 1,486,735
<APPREC-INCREASE-CURRENT> (4,011,749)
<NET-CHANGE-FROM-OPS> (1,113,374)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,587,079
<DISTRIBUTIONS-OF-GAINS> 3,605,844
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,283
<NUMBER-OF-SHARES-REDEEMED> 1,866,390
<SHARES-REINVESTED> 429,389
<NET-CHANGE-IN-ASSETS> (24,563,917)
<ACCUMULATED-NII-PRIOR> 221,155
<ACCUMULATED-GAINS-PRIOR> 3,689,977
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 263,254
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 390,864
<AVERAGE-NET-ASSETS> 35,100,567
<PER-SHARE-NAV-BEGIN> 13.42
<PER-SHARE-NII> 0.57
<PER-SHARE-GAIN-APPREC> (1.51)
<PER-SHARE-DIVIDEND> 0.59
<PER-SHARE-DISTRIBUTIONS> 1.03
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.86
<EXPENSE-RATIO> 0.011
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
