PROSPECTUS
Carillon Capital Fund
of
Carillon Investment Trust
Carillon Capital Fund (the "Fund") is an investment portfolio of
Carillon Investment Trust (the "Trust"). The Fund is a
diversified, open-end management investment company, commonly
known as a "mutual fund".
The Fund's investment objective is to seek 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 stocks, investment-grade debt, junk bonds and money
market instruments.
As a result of the market risk inherent in any investment, there
is no assurance that the Fund will realize its investment
objective. Investments in the Fund are neither insured nor
guaranteed by the U.S. Government or any other entity or person.
-----------------------
The Securities and Exchange Commission has not approved or
disapproved the Fund's securities and has not determined that
this Prospectus is complete or accurate. It is a crime for
anyone to tell you otherwise.
February 28, 1999
<PAGE>
TABLE OF CONTENTS
Page
RISK/RETURN SUMMARY -- OBJECTIVE, PRINCIPAL
STRATEGIES, AND RISKS ................................. 3
RISK/RETURN SUMMARY: FUND PERFORMANCE ................. 5
RISK/RETURN SUMMARY: FEE TABLE ........................ 6
THE FUND'S OBJECTIVE .................................... 7
PRINCIPAL RISKS TO INVESTORS ............................ 9
MANAGEMENT OF THE TRUST .................................13
SHAREHOLDER INFORMATION .................................14
DIVIDENDS AND DISTRIBUTIONS .............................18
TAXES ..................................................18
PREPARING FOR YEAR 2000 .................................19
FINANCIAL HIGHLIGHTS ....................................20
<PAGE>
RISK/RETURN SUMMARY -- OBJECTIVE, PRINCIPAL STRATEGIES, AND
RISKS
Fund's Investment To provide the highest total return through
Objective: 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. We cannot change this objective
without shareholder approval.
Principal The Fund invests in a mixture of stocks,
Investment investment grade bonds, high-yield bonds
Strategies: (commonly known as "junk bonds"), foreign
equity and debt securities, and money market
instruments. The investment adviser will
select investments based on its perception
of an investment's fundamental value, the
historical returns of stocks, bonds and the
money market, and other market factors.
The Fund buys securities the investment
adviser believes have a reasonable chance of
capital appreciation, and/or the investment
adviser believes will provide a reasonable
amount of income relative to investment
risk. The Fund favors smaller
capitalization, historically profitable
stocks that are temporarily out of favor.
The Fund holds securities until the
investment adviser believes that the risk
and return, or the fundamentals of the
security, have materially changed. The Fund
will sell a security when the investment
adviser believes that the security has met
its overall investment objective, its
fundamentals have materially changed, or it
no longer fits in the Fund's overall
portfolio.
The Fund's debt holdings will primarily
consist of "investment grade" corporate
bonds rated BBB or higher by Standard &
Poor's, or Baa or higher by Moody's. The
investment adviser may invest up to 25% of
the Fund's assets in junk bonds. Junk bonds
typically carry a higher yield, but also
tend to have a higher risk of default.
The Fund does not guarantee any asset
allocation; it may at any time be 100%
invested in stocks, debt securities or the
money market. However, a typical
distribution under historic market
conditions tends toward 63% stocks, 30% debt
and 7% money market. The investment adviser
will consider the following factors in
making its allocation decisions:
- its perception of the relative value
between stocks, bonds and the money
market;
- its perception of the risks and returns
between asset classes at any point in
time;
- prudent asset diversification; and
- monetary policy, equity momentum and
market cycles.
The investment adviser will not invest more
than 35% of the Fund's assets in foreign
securities. It will not invest more than
20% of the Fund's assets in what it
considers to be a major foreign country, or
more than 5% of the Fund's assets in an
emerging market country.
Principal Risks The net asset value of Fund shares rises or
to Investors: falls along with changes in the market
values of the securities owned by the Fund.
These values can be affected by general
risks that affect any investment in a free
market, such as changes in the economy as a
whole, changes in interest rates, or changes
in the market's perception of securities
that the Fund holds. You may lose money.
Market changes may be rapid, unpredictable
and unrelated to particular issuers. The
Fund's investment adviser may fail to
identify stocks or bonds that produce
capital growth. The investment adviser may
not properly ascertain the appropriate mix
of securities for any particular economic
cycle.
Junk bonds can be especially sensitive to
changes in interest rates and other economic
factors. Issuers of junk bonds may default
on interest or principal payments, or may go
bankrupt.
Foreign securities involve additional risks,
such as political, economic or regulatory
factors in foreign countries that affect the
securities or their issuers. Many of the
foreign markets in which the Fund invests
are less liquid, more volatile, and less
subject to governmental supervision than the
U.S. markets. The Fund's foreign
investments can also be affected by changes
in foreign currency markets.
Who May Want Risk-oriented investors who are willing to
To Invest: accept investment risk in the pursuit of a
higher level of total return, who have a
longer time horizon, and who are willing to
risk volatility over the short term. By
itself, the Fund is not a balanced
investment program.
Who Should Not Investors who seek a regular and stable
Invest: income to meet current expenses, or any
investor who requires stability of
principal.
<PAGE>
RISK/RETURN SUMMARY: FUND PERFORMANCE
The chart and table below show how an investment in the Fund has
varied over time. The returns shown assume that any dividends
and distributions have been reinvested in the Fund.
The table compares the Fund's annual performance over the
periods shown with the S&P 500 Stock Index, a widely known
unmanaged index of stock performance. Although past performance
does not necessarily indicate how the Fund will perform in the
future, this information can give you some indication of the
risk of your investment in the Fund.
Year-By-Year Returns(1) as of 12/31 Each Year
[The bar chart displayed here shows the Total Returns for the
calendar years as follows:
26.48%, 1989
-0.58%, 1990
26.46%, 1991
7.85%, 1992
14.11%, 1993
1.37%, 1994
14.85%, 1995
14.97%, 1996
6.69%, 1997
-6.19%, 1998 ]
- -----------
(1) The bar chart does not reflect sales loads. If it did,
returns would be lower than those shown.
Best Quarter: First Quarter 1991 13.57%
Worst Quarter: Third Quarter 1990 -9.82%
Average Annual Total Returns as of December 31, 1998
Average Annual Total Returns as of December 31, 1998
[CAPTION]
<TABLE>
One Five Ten Life of
Year Years Years Fund<F2>
<S> <C> <C> <C> <C>
Carillon Capital Fund -6.19% 6.02% 9.17% 9.19%
S&P 500 28.58% 24.03% 19.17% 18.30%
<FN>
<F2> The Fund commenced operations on February 23, 1988.
</FN>
</TABLE>
The table shows the Fund's performance over various periods of
time as compared to the S&P 500 Stock Index. This should
provide you with a basis to compare the Fund's performance with
that of the market.
RISK/RETURN SUMMARY: FEE TABLE
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund.
Shareholder Fees (paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)................... 5.00%
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
Management Fees ....................................... 0.75%
Other Expenses ........................................ 0.36%
Total Annual Fund Operating Expenses .................. 1.11%
Example
This example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual
funds.
The Example assumes that you invest $10,000 in the Fund for the
time periods indicated and then redeem all your shares at the
end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's
operating expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs
would be:
1 Year 3 Years 5 Years 10 Years
---------------------------------------------------------
Expenses $158 $387 $634 $1,339
THE FUND'S OBJECTIVE
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.
There can be no assurance that the Fund's investment objective
will be realized.
How the Fund Pursues its Objective
The investment adviser will invest the Fund's assets in stocks,
bonds, and money market instruments. The Fund is a "total
return" fund, meaning that the investment adviser considers both
growth and income.
The investment adviser will decide on the proportion of Fund
assets to invest in different kinds of securities based on its
analyses of fundamental value; historical long term returns
among equity, debt and the money market; and other market
influencing factors. There are no percentage limitations on the
class of securities in which the Fund may invest. The Fund may
be invested entirely in stocks, entirely in bonds, entirely in
the money market, or in any combination of these securities at
the sole discretion of the investment adviser, subject only to
the investment objective and the policies adopted by the Board
of Trustees.
The investment adviser will consider, over both the short and
the long term, the following aspects of an investment:
- corporate profitability;
- short and long-term interest rates;
- stock price-to-earnings ratios for the market as a whole,
and for individual stocks; and
- inflation rates.
Unless otherwise specified, the Fund's investment policies and
restrictions are not fundamental policies and may be changed
without shareholder approval.
Equity Securities
The investment adviser will consider a combination of several
themes in order to diversify the Fund's equity investment
exposure. Most of the Fund's stock investments 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 securities of companies judged to represent better
fundamental value than those of similar domestic
companies; or
-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 U.S. Government debt and corporate debt. The Fund's
corporate debt investments will primarily be in "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 that the investment adviser considers to have
equivalent credit quality.
Up to 25% of the Fund's assets may be invested in debt
securities that are below investment grade, commonly known as
"junk bonds." Junk bonds have a higher yield than investment
grade bonds, but they are a riskier investment. They are
considered to have speculative characteristics, and are subject
to greater market fluctuations and risk of loss of income and
principal than lower yielding fixed-income securities.
As of January 31, 1999, the Fund held long-term debt securities
rated as follows:
<TABLE>
<CAPTION>
Moody's/Standard & Poor's % of Long-Term Debt
<S> <C>
Aaa/AAA 45.0%
Aa/AA 0.0%
A/A 16.5%
Baa/BBB 21.3%
Less than investment grade 17.2%
</TABLE>
The investment adviser anticipates that average maturity of the
Fund's long-term debt securities will not exceed 15 years. The
precise term to maturity will depend upon general market and
economic conditions.
Foreign Securities
The investment adviser may invest up to 35% of the Fund's assets
in foreign securities. These include equity and debt securities
of corporate issuers whose principal stock or bond exchange
listing is outside of the United States, American Depositary
Receipts ("ADRs") that hold such securities, and bonds issued by
foreign governments or foreign government agencies.
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 of securities of issuers in any single
country. The Fund may invest up to 20% of its assets in any
single "major foreign country," and up to 5% of its assets in
any single "other foreign country," otherwise known as an
"emerging market." The Fund may invest up to 35% of its net
assets in emerging market countries collectively. For the
purposes of this document a "major foreign country" is defined
as Canada, The United Kingdom, Germany, France, Italy,
Switzerland, Netherlands, Spain, Belgium, Mexico, Argentina,
Chile, Brazil, Australia, Japan, Singapore, New Zealand, Hong
Kong, Sweden and Norway.
Money Market Investments
The Fund may at any time be 100% invested in money market
instruments. Typically, however, the Fund will invest on a
limited basis in these instruments. The investment adviser may
temporarily increase the Fund's investment in the money market
as a holding place for cash pending investment or distribution.
In response to adverse market, economic or political conditions,
the investment adviser may invest Fund assets in money market
and short-term debt securities as a temporary defensive
position. If the Fund takes such a position, it may not be
achieving its investment goal.
PRINCIPAL RISKS TO INVESTORS
Stock Market Risks
Investors could lose money in the Fund's equity investments, or
the Fund's performance could fall below other possible
investments, if any of the following occurs:
- The U.S. or foreign stock markets go down
- Smaller capitalization, historically profitable, lower
price earnings stocks which the Fund favors, are
temporarily out of favor
- An adverse event such as a negative press report about a
company's earnings in the Fund's portfolio depresses the
value of the company's stock
- The investment adviser's judgment about the value or
potential appreciation of a particular stock proves to be
incorrect
- Issuers pay lower dividends than expected, or pay no
dividends at all
- Industry groups favored by fund management may experience
adverse economic conditions
Debt Risks
Investors could lose money in the Fund's debt investments, or
the Fund's performance could fall below other possible
investments, if any of the following occurs:
- Interest rates go up causing the market values of debt
securities in the Fund to fall (market risk)
- The issuer of a debt security in the Fund faces economic
problems and it defaults on its obligation to pay
principal or interest, has its credit rating downgraded,
or is perceived by the market to be less creditworthy
(credit risk)
- As a result of declining interest rates, the issuer of a
security exercises its right to prepay principal forcing
the Fund to reinvest in lower-yielding securities ("call
risk")
- As a result of rising interest rates the issuer of a
security exercises its right to pay principal later than
scheduled which will lock in a below-market interest rate
and reduce the value of the security ("extension risk")
- The investment adviser's judgment about the value or
potential appreciation of a particular bond proves to be
incorrect ("manager's/selection risk")
Junk Bond Risks
Besides the Debt Risks listed above, there are particular risks
associated with junk bonds. Junk bonds generally include any
bonds rated Ba or below by Moody's, or rated BB or below by
Standard & Poor's, or unrated bonds which the Fund's investment
adviser considers to be of equivalent quality. The Fund may
invest up to 25% of the total value of its portfolio in junk
bonds at or below these ratings. Generally, the lower the
rating, the higher the interest rate, but the higher the risk as
well.
Junk bonds are speculative and have only an adequate capacity to
pay principal and interest. Junk bonds can be very sensitive to
changes in interest rates, the economy, and corporate
developments. Issuers of junk bonds may default on payments of
interest or principal, and the Fund may lose money on such
investments. Even if no issuer defaults, the Fund can still
lose money on junk bond investments because of changes in market
prices.
Junk bonds tend to be less liquid and may be more difficult to
value or sell. There may be little trading in the secondary
market for particular bonds, which may adversely affect the
Fund's ability to value precisely or dispose of such bonds.
Adverse publicity and investor perceptions, whether or not based
on fundamental analysis, may decrease the values and liquidity
of junk bonds, especially in a thin market.
Junk bonds may contain redemption or call provisions. If an
issuer were to exercise 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. If the Fund were to experience unexpected net
redemptions due to fund specific or market related events, it
could be forced to dispose of investments, thereby decreasing
the asset base upon which expenses could be spread and possibly
reducing the Fund's rate of return.
Foreign Market Risks
Investing in foreign securities, and particularly those of
emerging markets, also involves risk. Investors could lose
money on their investments, or the Fund may not perform as well
as other investments, because of the following risks:
- Currency fluctuations may negatively impact the Fund's
portfolio even if the foreign stock has not declined in
local currency value
- Balances of payments, other economic and financial
conditions, government intervention and other factors
could affect a foreign obligor's ability to make timely
payments on its external debt obligations
- In a changing market, the Fund may be delayed in selling,
or may not be able to sell, securities in desired amounts
at prices it considers reasonable
- Stock prices in countries selected by the Fund may decline
- The government of a country selected by the Fund may
impose restrictions on currency conversion or trading
- Relationships among a country selected for investment by
the Fund, and other countries, could change and negatively
impact stock or currency values
It may be harder to obtain public information about a foreign
security or issuer than in the U.S. Unfavorable political,
economic or regulatory factors, including foreign taxation, may
affect an issuer's ability to repay principal, interest or
dividends. In addition, many emerging market countries have
experienced substantial rates of inflation for many years, which
may adversely effect the economies and securities markets of
those countries. If a foreign issuer defaulted on its
obligation, it could be difficult to obtain or to enforce a
legal judgment against the issuer.
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.
Euro Conversion
On January 1, 1999, certain participating countries in the
European Economic Monetary Union adopted the "Euro" as their
official currency. Other EU member countries may convert to the
Euro at a later date. As of January 1, 1999, governments in
participating countries issued new debt and redenominate
existing debt in Euros; corporations may choose to issue stocks
or bonds in Euros or national currency. The new European
Central Bank (the "ECB") will assume responsibility for a
uniform monetary policy in participating countries. Euro
conversion risks that could affect the Funds' foreign
investments include: (1) the readiness of Euro payment,
clearing, and other operational systems; (2) the legal treatment
of debt instruments and financial contracts in existing national
currencies rather than the Euro; (3) exchange-rate fluctuations
between the Euro and non-Euro currencies during the transition
period of January 1, 1999 through December 31, 2001 and beyond;
(4) potential U.S. tax issues with respect to Fund securities;
and (5) the ECB's abilities to manage monetary policies among
the participating countries.
Money Market Risks
Because interest rates on money market instruments fluctuate in
response to economic factors, rates on the Fund's short-term
investments will vary, rising or falling with short-term
interest rates generally. Yields from short-term securities may
be lower than yields from longer-term securities. Also, the
value of the Fund's securities varies inversely with interest
rates, the amount of outstanding debt and other factors. This
means that the value of the Fund's investments increases as
short-term interest rates fall and decreases as short-term
interest rates rise.
The Fund's Money Market investments may be unprofitable in a
time of sustained high inflation. There is uncertainty in every
investment. Therefore, you may lose money because of the Fund's
Money Market investments.
Asset Allocation Risk
In order to meet the Fund's investment objectives, the
investment adviser must determine the proper mix of equity, debt
and money market securities. It may not properly ascertain the
appropriate mix of securities for any particular economic cycle.
Also, the timing of movements from one type of security to
another could have a negative effect on the Fund's overall
objective.
Portfolio Turnover
For the year ended October 31, 1998, the annual portfolio
turnover rate was 75.5%. Portfolio turnover means the rate at
which the securities held by the Fund are replaced. The higher
the rate, the higher the transactional and brokerage costs,
unless the securities traded can be bought and sold without the
Fund paying commission.
The investment adviser manages the Fund to achieve its
investment objective of highest total return. The impact of
federal and state income taxation is one factor, but by no means
a predominant factor, in the Fund's investment activity, since
the Fund's total return is greatly influenced by timely asset
sales which usually generate tax consequences. See "Taxes,"
page 17.
MANAGEMENT OF THE TRUST
Investment Adviser
Carillon Advisers, Inc. (the "Adviser") serves as the Trust's
investment adviser under an Investment Advisory Agreement
("Agreement") originally dated December 30, 1987.
The 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. The Adviser is a wholly-owned subsidiary of
The Union Central Life Insurance Company ("Union Central"), a
mutual life insurance company organized in 1867 under the laws
of Ohio.
The Agreement provides that, subject to the control and
direction of the Board of Trustees, the Adviser will manage the
investment and reinvestment of the assets of the Fund in
accordance with its investment objectives and policies. In
addition, the Adviser agrees to formulate and implement a
continuing program for the management of the Fund's assets. The
Agreement requires the Adviser to make and execute all
investment decisions, and to place orders for the purchase and
sale of securities with or through such brokers, dealers or
issuers as it may select.
The Agreement also requires the Adviser to furnish or to provide
to the Fund any necessary office space, equipment and personnel,
clerical services, and other necessary office expenses, and to
provide the services of individuals who perform executive and
administrative functions for the Fund. In order to fulfill
these obligations, the Adviser has entered into an
Administration Agreement with Carillon Investments, Inc. to
furnish such services for which the 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.
Gary R. Rodmaker is primarily responsible for the day to day
management of the Fund's portfolio. Mr. Rodmaker is the
Corporate Bond Portfolio Manager of the Adviser and has been
affiliated with the Adviser and Union Central since 1989.
Advisory Fee
Pursuant to the Agreement between the Fund and the Adviser, the
Fund pays the 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. For the fiscal
year ended October 31, 1998, the Fund paid the Adviser an
aggregate fee equal to .75% of the Fund's average net assets.
SHAREHOLDER INFORMATION
Pricing of Fund Shares
The net asset value of the Fund's shares is determined once
daily, Monday through Friday at 4:00 p.m. Eastern Time, on days
there are purchases or redemptions of Fund shares. The net
asset value will not be determined when the New York Stock
Exchange is closed (for example, on national holidays), or on
any day on which changes in the value of the portfolio
securities of the Fund are immaterial. The net asset value is
calculated 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 the Fund's
outstanding shares. Expenses, including the advisory fee
payable to the Adviser, are charged to the Fund daily.
Securities held by the Fund are valued at market price.
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
at the amortized cost method.
Sometimes foreign securities markets are open on days when U.S.
markets are closed. Because the Fund holds foreign securities,
there may be days when the net asset value of Fund shares
changes even when the shares are not priced, and Fund
shareholders cannot purchase or redeem shares.
Purchase of Fund Shares
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 the transfer agent receives an order to
purchase, plus a sales charge. Shares are sold directly by the
Fund's underwriter, Carillon Investments, Inc. P.O. Box 40409,
Cincinnati, Ohio 45240. You can also submit an application and
purchase order to a broker-dealer which has a selling agreement
with Carillon Investments, Inc. Your initial investment must be
at least $500 and subsequent investments must be at least $50.
You can make subsequent purchases of shares by wire, by check,
by automatic deductions from your checking account, or by
sending money directly to the Fund's transfer agent.
Sales Charges
A sales charge is deducted from investments in the Fund
shares--essentially, the term "offering price" includes a
front-end sales load. The amount of the 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 of
Offering Net
Amount 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, If your total investment were $5,000, $250 would be
deducted and the net amount invested would be $4,750. This $250
would be 5% of the purchase payment and 5.26% of the net amount
invested.
Reduced Sales Charge
You can purchase Fund shares 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 in order to
qualify for reduced sales charges.
(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.
If your have a question about purchasing shares, contact the
Distributor or your broker.
Redemption of Shares
You can dispose of Fund shares and receive cash for them by
sending a written request for redemption to: Firstar Mutual
Fund Services, LLC, P.O. Box 701, Milwaukee, Wisconsin
53201-0701. You can also redeem shares by telephoning Firstar at
1-888-259-7565, or by telegraph, if you picked this option on
your shareholder's application form.
If Firstar receives a written request for redemption in "good
order" as described below, it will, acting as transfer agent for
the Fund, send you a check equal to the amount of the net asset
value of the redeemed shares next determined after it receives
the request. If Firstar receives the request before 4:00 p.m.
Eastern Time, it will redeem the shares at the net asset value
per share determined at 4:00 p.m. Eastern Time on that day. If
it receives a request after 4:00 p.m. Eastern Time, Firstar will
execute the request at the net asset value determined at 4:00
p.m. Eastern Time on the next trading day.
Firstar will normally send the check immediately after
redemption. However, the Fund 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 if you redeem shares shortly after buying them, where a
sales charge was deducted from the investment. If you paid for
shares by check (including certified or cashier's checks), then
Firstar would not disburse proceeds from the redemption request
them until the check cleared, which may take up to 15 days after
it had received the check paying for them.
A written redemption request is considered to be 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,
the Distributor, or by a member firm of the New York, American,
Boston, Midwest, Pacific or Philadelphia Stock Exchanges.
If you request it on the original application for a Fund
account, Firstar will honor telephone or telegraphic
instructions for redemption 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 bank must be a
member of the Federal Reserve System. A charge of $12.00 is
imposed for Fed wires. Firstar sets this charge, and may change
it.
(b) Telephone redemption requests must be for less than
$10,000 and will be mailed only to the account address appearing
on our records. Redemptions will be priced at the next cal-
culated net asset value after the transfer agent receives the
request. You may request redemption by phone by calling the
transfer agent at 1-800-338-1579 between 9:00 a.m. and 8:00 p.m.
Eastern Time, on Monday through Friday (except 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.
The transfer agent may require other supporting legal documents
from corporations or other organizations, fiduciaries or persons
other than the shareholders of record making the request for
redemption.
We have 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, you may
withdraw your request for redemption, or you may receive payment
based upon the net asset value next determined after the
suspension is lifted.
Because of the high cost of maintaining small accounts, we 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 we so elect, we will notify the shareholder in
writing that an account has a value of less than $500, and will
allow 30 days for the shareholder 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 you are unable to place an order or
request a redemption via the telephone or telegraph, you should
make a written request instead.
DIVIDENDS AND DISTRIBUTIONS
The investment adviser intends to distribute quarterly
substantially all of the Fund's 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). The Fund will
distribute all net realized capital gains, if any, at least once
a year. We will automatically reinvest all dividends and
capital gains distributions in additional shares at net asset
value unless you request them to be paid in cash.
TAXES
The Fund intends to elect and qualify as a regulated investment
company under the Internal Revenue Code. As a regulated
investment company, it will not be subject to federal income tax
on net investment income and capital gains, if any, that it
distributes to its shareholders.
Fund distributions are taxable to you as ordinary income (unless
your investment is in an IRA or other tax-advantage account) to
the extent they are attributable to the Fund's net investment
income, certain net realized foreign exchange gains, and net
short-term capital gains. They are taxable to you as long-term
capital gain (at the federal rate of 20%) to the extent they are
attributable to the Fund's excess of net long-term capital gains
over net short-term capital losses. The tax status of any
distribution is the same regardless of how long you have been a
shareholder of the Fund and whether you elect to reinvest the
distributions in additional fund shares or to take them as cash.
Certain distributions paid by the Fund in January of a given
year may be taxable to shareholders as if they were received on
the prior December 31. The tax status of dividends and
distributions for each calendar year will be detailed in your
annual tax statement from the Fund.
Any sale or exchange or redemption of Fund shares may generate
tax liability (unless your investment is in an IRA or other tax-
advantaged account). You will generally recognize taxable gain
or loss on a sale, exchange or redemption of your shares base
upon the difference between your tax basis in the shares and the
amount you receive for them. Any loss recognized on shares held
for six months or less will be treated as long-term capital loss
to the extent of any capital gain dividends that were received
with respect to the shares.
There are certain tax requirements that all Funds must follow in
order to qualify as regulated investment companies and to
minimize federal taxation. In its efforts to adhere to these
requirements, the Funds are required to make certain
distributions to shareholders and may have to limit their
investment activities in some types of instruments.
The Trust will be required to withhold 31% of any reportable
income payments made to shareholder (which may include
dividends, capital gain distributions, and share redemption
proceeds) if the shareholder has not provided an accurate
taxpayer identification number to the Fund in the manner
provided by IRS regulations.
This tax discussion is for general information only. In addition
to federal income taxes, you may be subject to state, local or
foreign taxes on payments received from the Fund. More
information is provided in the Statement of Additional
Information. You should also consult your own tax adviser for
information regarding all tax consequences applicable to your
investments in the Fund.
PREPARING FOR YEAR 2000
Like all financial services providers, the Adviser and the
Distributor use systems that may be affected by Year 2000
transition issues. The Fund also relies on service providers,
including the Fund's custodian, transfer agent, and dividend
disbursing agent, that may be affected. The Adviser and
Distributor have advised the Fund that they have developed, and
are in the process of implementing, a Year 2000 transition plan.
The Fund's Management is in the process of confirming that the
service providers to the Fund are also engaged in similar
transition plans. While the Adviser and Distributor have made
representations to Management that each party is implementing a
Year 2000 transition plan, the resources that are being devoted
to this effort are substantial and it is difficult to predict
with precision whether the amount of resources ultimately
devoted, or the outcome of these efforts, will have any negative
impact on their operations. However, as of the date of this
Prospectus, it is not anticipated that shareholders will
experience negative effects on their investment, or on the
services provided in connection therewith, as a result of Year
2000 transition implementation. The Adviser and Distributor
have advised Management that they currently anticipate that
their systems will be Year 2000 compliant on or about June 30,
1999, but there can be no assurance that they will be
successful, or that interaction with other service providers
will not impair the Adviser's or Distributor's services at that
time. Also, the Fund's performance could be hurt if a computer
system failure at a company or governmental unit, in the United
States or particularly overseas, affected the price of
securities that the Fund owns.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you
understand the Fund's financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends
and distributions).
The financial statements for the year ended October 31, 1998
have been audited by Deloitte & Touche LLP, whose unqualified
report thereon is included in the Statement of Additional
Information, which is available upon request. The financial
statements for the years ended October 31, 1997, October 31,
1996 and October 31, 1995 have been audited by Deloitte & Touche
LLP, whose reports thereon expressed unqualified opinions on
those statements. The financial statements for the year ended
October 31, 1994 have been audited by another independent
accountant, whose report expressed an unqualified opinion on
those statements.
You should read the financial highlights in conjunction with the
financial statements and notes 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,
1998 1997 1996 1995 1994
------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period $13.42 $13.75 $12.70 $13.01 $13.00
------- ------- ------- ------- -------
Investment Activities:
Net investment income .57 .51 .60 .52 .35
Net realized and
unrealized gains (losses) (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 gains (1.03) (1.07) (.12) (1.05) (.18)
------- ------- ------- ------- -------
Total Distributions (1.62) (1.59) (.72) (1.56) (.50)
------- ------- ------- ------- -------
Net Asset Value:
End of Period $10.86 $13.42 $13.75 $12.70 $13.01
======= ======= ======= ======= =======
Total Return<F1> (7.77%) 9.94% 14.38% 10.88% 4.56%
------- ------- ------- ------- -------
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands) $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>
<PAGE>
Carillon Investment Trust
IMPORTANT -- Please mail completed forms to:
Carillon Investments, Inc.
P.O. Box 40409, Cincinnati, Ohio 45240
Supplemental Application
For Special Investment and
Withdrawal Options
___ IRA Plan
___ Regular Fund Account
_______________________________________________________________
ACCOUNT REGISTRATION. Please supply the following information
exactly as it appears on the Fund's records.
_______________________________________________________________
Fund Name
_______________________________________________________________
Individual
_______________________________________________________________
Joint Investor
_______________________________________________________________
Street Address City, State. Zip Code
_______________________________________________________________
Telephone Number Social Security or Tax l.D Number
Citizen of ___ U.S. ___ Other
AUTOMATIC INVESTMENT PLAN ___ YES ___ NO
- ---------------------------------------------------------------
I(We) hereby authorize Firstar Trust Company to draw a check on
my(our) personal checking account on the 15th of each month in
order to purchase shares in the Fund indicated at the top of
this application.
Amount of each check (minimum $100) $_________
NOTE: A Bank Authorization Form (below) and a voided, unsigned,
personal check must accompany the Automatic Investment Plan
Application.
Cll 334 2-96
DO NOT DETACH
CARILLON INVESTMENT TRUST AUTOMATIC INVESTMENT PLAN
- --------------------------------------------------------------
BANK AUTHORIZATION
______________________________________________________________
Bank Name Bank Account Number
______________________________________________________________
Bank Address
I(WE) authorize you, the above named bank, to debit my(our)
account for amounts drawn by Firstar Trust Company, acting as my
agent. I(We) agree that your rights in respect to each
withdrawal shall be the same as if it were a check drawn upon
you and signed by me(us). This authority shall remain in effect
until I(we) revoke it in writing and you receive it. I(We) agree
that you shall incur no liability when honoring any such check.
I(We) further agree that you will incur no liability to me(us)
if you dishonor any such withdrawal. This will be so even though
such dishonor results in the forfeiture of investment.
____________________________________________________________
Account Holder's Name
____________________________________________________________
Joint Account Holder's Name
X___________________________________________________________
Account Holder's Signature Date
X____________________________________________________________
Joint Account Holder's Signature Date
Cll 334 2-94 (OVER)
<PAGE>
SYSTEMATIC WITHDRAWAL PLAN ___ YES ___ NO
- -------------------------------------------------------
Requires $7,500 minimum account balance.
I (We) hereby authorize Firstar Trust Company to redeem the
necessary number of shares from my (our) Carillon account on the
designated dates in order to make the following periodic
payments:
___ Monthly on the 28th day
___ Quarterly on the 28th day of January, April, July and
October
Amount of each check ($100 minimum) $_________
Please make checks payable to:
____________________________
Recipient
____________________________
Street Address
____________________________
City, State, Zip Code
____________________________
Account Number (it applicable)
If by wire ($7.50 charge per wire):
____________________________
Bank Name
____________________________
Bank Address
____________________________
Account Name
____________________________
Account Number
NOTE: If recipient of checks is not the registered shareholder,
signature(s) below must be guaranteed. A corporation (or
partnership) must also submit a "Corporate Resolution" (or
"Certification of Partnership") indicating the names and titles
of Officers authorized to act on its behalf.
AGREEMENT AND SIGNATURES
- ---------------------------------------------------------------
The investor(s) certify and agree that the certifications,
authorizations, directions and restrictions contained herein
will continue until Firstar Trust Company receives written
notice of any change or revocation. Any change in these
instructions must be in writing and all signatures guaranteed*
(if applicable).
______________________________________________
Date
X______________________________________________
Signature
X______________________________________________
Signature
_______________________________________________
Signature Guarantee (if applicable)
______________________________________________
Signature Guarantee (if applicable)
_____________
* Acceptable signature guarantors: (1) a commercial bank which
is a member of the Federal Deposit Insurance Corporation; (2) a
trust company; (3) a member firm of a U.S. stock exchange; or
(4) a foreign branch of any of the foregoing. A notary public or
a savings and loan association is NOT an acceptable guarantor
INDEMNIFICATION AGREEMENT
- -------------------------------------------------------------
To: Bank Named on the Reverse
In consideration of your compliance with the request and
authorization of the depositor(s) named on the reverse, Firstar
Trust Company hereby agrees:
1. To indemnify and hold you harmless from any loss you may
incur because of the payment by you and of any check drawn by
Firstar Trust Company, Agent, to its own order on the account of
such depositor(s) and received by you in the regular course of
business for payment, or arising out of the dishonor by you of
any check, provided there are sufficient funds in such account
to pay the same upon presentation.
2. To defend at its own expense any action which might be
brought by any depositor or any other persons because of your
actions taken pursuant to the above mentioned request or in any
manner arising by reason of your participation in connection
with such request.
Firstar Trust Company
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
<PAGE>
(page 1)
APPLICATION--CARILLON INVESTMENT TRUST ("CIT")
P.O. Box 40409, Cincinnati, Ohio 45240
- ------------------------------------------------------------------
(This page consists of two columns. First column is as follows:)
Return the completed application to: Carillon Investments, Inc.
P.O. Box 40409 Cincinnati, Ohio 45240 Make checks payable
to Carillon Investment Trust. Do not use for IRAs--special forms
will be provided. For pension plan purchases, back of form must
be completed.
1. Account Registration-- Please print or type
___ Investor's Name
___________________________________________________
First Name Middle Initial Last Name
___________________ ____________________________________
Date of Birth Social Security Number (Tax Identification
Number)
___ Joint Investor's Name ____________________________________
Unless otherwise indicated joint tenants will have the right of
survivorship.
___________________ _____________________________________
Date of Birth Social Security Number
___ Custodian ________________________________ as custodian for
Name of Custodian
_______________________________________________ under the
Name of Minor
________________________________ Uniform Gift to Minors Act.
Minor's State of Residence
______________________ _____________________________
Minor's Date of Birth Social Security Number
___ Trustee ___________________________________________
Name of Co-Trustee _____________________________________
Name of Trust __________________________________________
__________ _____________________________
Date Tax Identification Number
___ Other (___ Corporation ___ Association ___ Partnership)
____________________________________________________________
Resolution papers must be completed and attached to establish
your account.
Citizen of: ___ United States or _________________
Specify Country
<PAGE>
2. Address for All Reports and Statements
Street ___________________________________________________
City _______________________ State ______ Zip Code ______
__________________________________ ____________________
Area Code Home Telephone Number Area Code Business
Telephone Number
3. Investment by Check or Bank Wire--$500 minimum
$_______________ Capital Fund (02)
___ BY CHECK: The enclosed check(s) payable to Carillon
Investment Trust total $____________
___ BANK WIRE
I wired $_________ from ________________________ on
(Name of Bank)
_________________ Bank Account No. ____________
(date)
4. Right of Accumulation and Combined Accounts
___ My spouse or children under age 21 own shares of The Capital
Fund and these should be combined for determining sales charges.
Account Numbers involved:
5. Letter of Intent
___ I(We) wish to take advantage of the Letter of Intent
provisions of the CIT Prospectus and will execute the Letter of
Intent printed on the back of this Application (or separately)
in furtherance thereof.
__________________________________________________________
For Transfer Agent Use Only
CO __________ FD _____________ ACCT _____________________
IDENT ________________________________ TYPE ____________
OWN __________ STATE ________ ZIP _______ MAIL ________
CMSN __________ SS CD ____________ SS#__________________
CERT _________ DLR ________ BRNCH _________ REP__________
DIV ______________ FREQ __________ MSTR ACCT ___________
ALIEN RT ________ FED EX _______ EMP_____ NOTICE CD _____
- ---------------------------------------------------------------
CIT 2417 2-97
(second column of application follows:)
6. Automatic Investments--$100 minimum
___ I(We) intend to make automatic monthly investments from
my(our) checking account and have included with this Application
the necessary papers.
7. Telephone Redemptions
Shareholders may redeem amounts of $1,000 or more by bank wire
provided your bank is a member of the Federal Reserve System, or
amounts under $10,000 by mail upon telephone request
Complete appropriate section if you wish to establish this
service.
___ I(We) hereby authorize Firstar Trust Company ("Bank"), to
honor any telephone requests to have amounts of $1,000 or more
withdrawn from my(our) CIT account and wired to my(our) bank
account designated below. I(We) understand and agree that the
Bank will not redeem any shares until it is reasonably assured
that payment has been collected for previously purchased shares.
I(We) hereby agree that neither the Fund nor the Bank will be
liable for any loss, liability, cost, or expense for acting upon
such instructions.
________________________________________________________
Name on Account
________________________________________________________
Joint Account Holder
________________________________________________________
Bank Name (Include Branch)
________________________________________________________
Bank Account Number
________________________________________________________
Bank Street Address
________________________________________________________
City, State, Zip Code
For "Other" forms of registration the name on the bank account
must be the same as the name in which the account is registered
in Section 1 of this Application.
Bank is authorized to honor telephone or telegraphic
instructions from any person to redeem shares from my(our)
account(s) in an amount not to exceed $10,000 and mail the
amount payable to me(us) to the address on the Fund's Records.
Neither CIT, the Bank, Carillon Investments, Inc., or any
employee or agent thereof, shall have any liability to me(us)
for acting upon any instruction relating to the Telephone
Redemption privilege elected above regardless of the authority
or absence thereof of the person giving the instructions and
l(We) will indemnify and hold harmless CIT, the Bank, Carillon
Investments Inc., and any employee or agent thereof, from and
against all losses, claims expenses and liabilities that may
arise out of or be in any way connected with a transaction
arising out of use of either option whether or not properly
authorized or directed.
8. Distribution Option
Shareholders may elect to have dividend and capital gain
distributions paid on a periodic basis If no such election is
made, all distributions will be reinvested in additional shares
of the Fund.
___ Pay all dividend distributions to me(us) at my(our) address
of record.
___ Pay all capital gain distributions to me(us) at my(our)
address of record.
(See the "Dividends and Distributions" section of the current
Prospectus for frequency of distributions.)
9. Signature
l(We) am(are) of legal age and have received and read the
appropriate current CIT Prospectus and agree to its terms. Under
penalties of perjury, I certify (1) that the Taxpayer Number
above is correct, and (2) that the account owner is not subject
to backup withholding because (a) the account owner has not been
notified by the IRS that the account owner is subject to backup
withholding as a result of a failure to report all interest or
dividends, or (b) the IRS has notified the account owner that he
account owner is no longer subject to backup withholding. [Cross
out (2) if it is not correct.]
_____________________________________________________
Investor's Signature Date
_____________________________________________________
Joint Investor's Signature Date
For Broker-Dealer Use Only
DLR ______________________ NO ___________
BR________________________ NO ___________
RR________________________ NO ___________
NAV Purchase Approved __________
Date ______________
<PAGE>
(Reverse side of application)
LETTER OF INTENT
Carillon Investments, Inc.
P.O. Box 40409
Cincinnati, Ohio 45240
RE: Letter of Intention
Carillon Investment Trust
Gentlemen:
This is to advise that the undersigned, the undersigned's spouse
and their minor children ("Investor") intend, during the
13-month period indicated below, to purchase shares of Carillon
Investment Trust having a total public offering price of:
$______________
Subject to the conditions specified, each purchase will be made
at the public offering price applicable to a single transaction
of the dollar amount indicated above, as described in the
Prospectus.
The Investor makes no commitment to purchase additional shares,
but if total purchases within 13 months do not aggregate the sum
specified, Investor will pay the increased amount of the sales
charge prescribed in the terms of escrow. It is understood that
a portion of the shares purchased hereunder will be held in
escrow in the form of shares registered in Investor's name(s).
These shares will be held by the escrow agent and will be
subject to the terms of escrow.
To ensure that quantity discounts are received on future
purchases, Investor's dealer must inform Carillon Investments,
Inc. that this Letter is in effect at the time of the first
purchase after this Letter has been signed. Investor understands
that this Letter is not a binding obligation on his part to
purchase, or on Carillon Investments, Inc. to sell, the full
amount indicated above.
TERMS OF ESCROW
Firstar Trust Company ("Bank"), shall be the escrow agent for
Carillon Investments, Inc. Any reference to the "escrow agent"
in this Letter of Intention is understood to mean the Bank.
1. To assure compliance with the provisions of the Investment
Company Act of 1940, out of the initial purchase (or subsequent
purchases if necessary), 5% of the dollar amount to be purchased
will be held in escrow in the form of shares (computed to the
nearest full share at the applicable public offering price)
registered in the Investor's name. These shares will be held by
the escrow agent and be subject to the terms of escrow.
2. When the minimum investment specified in this Letter of
Intention has been completed, the escrowed shares will be
released for deposit to Investor's account.
3. If total purchases under this Letter are less than the amount
specified above, Investor will remit to the Bank any difference
between the sales charge paid based on the amount specified and
the sales charge based on the amount actually purchased. If
Investor does not pay such difference in sales charge within 20
days after written request by the Bank, the escrow agent will
redeem an appropriate number of the escrowed shares in order to
realize such difference.
4. In signing this Letter of Intention, Investor hereby
irrevocably constitutes and appoints the escrow agent his
attorney to surrender for redemption any or all escrowed shares
with full power of substitution in the premises.
Dated ____________________________________________
Investor _________________________________________
Expiration Date __________________________________
Investor _________________________________________
PENSION PLANS
Plan documents must accompany Application.
This Application is for a contract to be issued pursuant to the
provisions of the Internal Revenue Code, and is meant to fund a:
___ Qualified Corporate Pension or Profit-Sharing Plan
(See Section 401)
___ Qualified Self-Employed Retirement Plan (HR-10)
___ Tax-Deferred Annuity (See Section 403(b))
___ Government Deferred Compensation Plan (See Section 457)
<PAGE>
CARILLON
CAPITAL
FUND
Carillon
Investment Trust
1876 Waycross Road
Cincinnati, Ohio 45240
PROSPECTUS
Investors who want more information about the Fund can obtain a
statement of additional information ("SAI") that provides more
detailed information on a number of topics and is made a part of
this prospectus. The Fund's annual and semi-annual shareholder
reports also provide more information about the Fund's
investments. The Fund's annual shareholder report also provides
a discussion of the market conditions and investment strategies
that particularly impacted the Fund's performance over the past
fiscal year.
All of these documents are available free of charge upon
request. To obtain copies or to ask other questions about the
Fund, do one of the following:
Call 1-888-259-7565, or write:
Firstar Mutual Fund Services,
LLC
P.O. Box 701
Milwaukee, Wisconsin
53201-0701
Call collect, 1-800-9991840, or write:
Carillon Investment Trust
P.O. Box 40409
Cincinnati, OH 45240
or, access the SEC's website at http://www.sec.gov.
Investors may, for a duplicating fee, get text-only copies of
the above documents from the SEC Public Reference Room by
calling 1-800-SEC-0330 or by writing to the SEC Public Reference
Room, Washington, D.C. 20549-6009. Investors can also review
and copy these documents at the SEC's Public Reference Room.
Investment Co. Act File No. 811-5293
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
CARILLON CAPITAL FUND
OF
CARILLON INVESTMENT TRUST
February 28, 1999
This Statement of Additional Information ("SAI") is not a
prospectus. This SAI expands upon the Prospectus for Carillon
Capital Fund. Investors should read this SAI in conjunction
with the Prospectus, dated February 28, 1999, and the 1998
shareholder annual report, which is incorporated by reference
into this SAI. To obtain a free copy of the prospectus or the
shareholder report, do one of the following:
Call 1-888-259-7565, or write:
Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
or access the SEC's website at http://www.sec.gov.
Call collect, 1-800-999-1840, or write:
Carillon Investment Trust
P.O. Box 40409
Cincinnati, OH 45240
CIT-444 (2/99)
<PAGE>
TABLE OF CONTENTS
Page
INVESTMENT OBJECTIVE, POLICIES AND RISKS................... 3
Fixed Income Securities and Investment Techniques.......... 3
Foreign Securities: Investments and Investment Techniques. 8
Investment Restrictions....................................10
MANAGEMENT OF THE TRUST....................................12
Trustees and Officers......................................12
Compensation Table........................................ 15
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES........16
INVESTMENT ADVISORY AND OTHER SERVICES.....................17
Investment Adviser.........................................17
Principal Underwriter......................................20
Brokerage Allocation.......................................20
CAPITAL STOCK AND OTHER SECURITIES.........................21
Shareholder Voting.........................................21
Shareholder Liability......................................22
Redemptions................................................22
PURCHASE, REDEMPTION AND PRICING OF SHARES.................22
Initial Purchases of Shares................................22
Shareholder Accounts.......................................23
Subsequent Purchases of Shares.............................23
Determination of Offering Price............................23
TAXES......................................................24
DISTRIBUTION OF SHARES.....................................25
PERFORMANCE................................................26
ADDITIONAL INFORMATION.....................................27
APPENDIX...................................................28
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RISKS
Carillon Investment 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").
That registration does mean that the SEC supervises investments
or investment policy. The Declaration of Trust permits the
Trustees to issue an unlimited number of shares and to divide
shares into an unlimited number of portfolios, all without
shareholder approval.
The Trust operates 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 (the "Fund"), the
Carillon Growth Stock Fund and the Carillon U.S. Government
Securities Fund. On February 22, 1989, The Union Central Life
Insurance Company ("Union Central"), the sole shareholder of the
Carillon Growth Stock Fund and the Carillon U.S. Government
Securities Fund, voted to dissolve these funds. Consequently,
the Trust is now composed only of the Carillon Capital Fund,
whose shares are currently being sold.
The Fund is a diversified, open-end management investment
company, also known as a "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.
The Fund's investment objective is 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 pursues its objective by
investments in stocks, bonds, and money market instruments. The
Fund is a "total return" fund, meaning that the investment
adviser considers both growth and income.
The principal investment strategies of the Fund are listed in
the Fund's prospectus. The Fund's other types of investments
and investment techniques, and discussions of their principal
risks to investors, are listed below. More detailed information
about those investments and investment techniques follows the
list.
Fixed Income Securities and Investment Techniques
-Repurchase Agreements
-U.S. Government Obligations
-Government Agency Securities
-Certificates of Deposit
-Time Deposits
-Bankers' Acceptances
-Commercial Paper
-Corporate Debt Securities
-GNMA Certificates
-FNMA and FHLMC Mortgage-Backed Obligations
-Mortgage-Related Securities
Investments in Foreign Securities
-American Depositary Receipts
-Foreign Currency Transactions
-Investment Limits by Country
-Foreign Markets
-Foreign Debt Securities
Fixed Income Securities and Investment Techniques
The Fund's investment adviser usually invests most of the Fund's
assets in stocks and bonds.
The investment adviser may, however, invest up to 100% of the
Fund's assets in money market securities as a temporary
defensive measure, during unusual or adverse market conditions.
The securities described below are 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 during that 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, such proceedings might delay or prevent
the Fund 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 that the Fund's investment adviser has
determined will present minimal credit risk.
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, the
investment adviser 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 credit rating agencies typically do not rate master demand
notes, if they are 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.
Foreign Securities: Investments and Investment Techniques
American Depositary Receipts
American Depositary Receipts ("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.
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.
<PAGE>
Foreign Currency 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. 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.
By entering into a forward contract, 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 on it. The Fund's
inability 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.
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.
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 1933 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 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.
Unless otherwise specified, the Fund's investment objectives,
policies and restrictions are not fundamental policies and may
be changed without shareholder approval.
MANAGEMENT OF THE TRUST
Trustees and Officers
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.
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>
<CAPTION>
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 65)
Theodore H. Emmerich* Trustee Consultant; former Partner,
1201 Edgecliff Pl. Ernst & Whinney, Accountants
Cincinnati, Ohio 45206
(72)
James M. Ewell* Trustee Retired Senior Vice President and
9000 Indian Ridge Road Director, The Procter and Gamble
Cincinnati, Ohio 45243 Company
(83)
Richard H. Finan* Trustee Attorney at Law; President of the
11137 Main Street Ohio State Senate
Cincinnati, Ohio 45241
(64)
Jean Patrice Harrington, Trustee Former Interim President,
S.C.* Cincinnati State Technical and
3217 Whitfield Ave. Community College; Former Executive
Cincinnati, Ohio 45220 Director, Cincinnati Youth
(76) Collaborative; President Emeritus
(formerly, President), College of
Mount St. Joseph
John H. Jacobs** Trustee, President and Chief Operating
(52) President and Officer, Union Central; Director,
Chief the Adviser; Director, Carillon
Executive Investments, Inc.; prior to July
Officer 1998, Officer and employee, Union
Central
Charles W. McMahon* Trustee Retired Senior Vice President and
Cincinnati, Ohio 45239 Director, Union Central
2031 W. Galbraith Rd., #E
(79)
Harry Rossi** Trustee Director Emeritus, Union Central;
8548 Wyoming Club Drive Director, the Adviser; Director,
Cincinnati, Ohio 45215 Carillon Investments, Inc.; former
(79) Chairman, President and Chief
Executive Officer, Union Central
Stephen R. Hatcher Senior Vice Executive Vice President and Chief
(56) President Financial Officer, Union Central;
prior to June, 1995, Officer and
employee, Union lCentral
John F. Labmeier Vice President Vice President, Associate
(50) and Secretary General Counsel and Assistant
Secretary, Union Central; Vice
President and Secretary, Carillon
Investments, Inc.; Secretary, the
Adviser
Thomas G. Knipper Controller Treasurer, the Adviser; prior to
(41) and Treasurer July, 1995, Treasurer of The
Gateway Trust and Vice President
and Controller of Gateway Advisers,
Inc.
John M. Lucas Assistant Counsel and Assistant to the
(48) Secretary Secretary, Union Central
</TABLE>
- ----------------
*Trustees identified with an asterisk are members of the Audit
Committee. The Audit Committee reviews the scope and results of
the Fund's annual audits with the Fund's independent accountant.
**Messrs. 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 1.5% 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 $300
plus actual out-of-pocket expense by the Trust for each meeting
of the Board of Trustees attended, $200 for each meeting of the
Board of Trustees held by telephone conference, and $550 per
calendar quarter ($2,200 annually). Trustees who are members of
the Audit Committee are compensated at the rate of $200 per
Audit Committee meeting. The total of such fees incurred by the
Trust for the year ended October 31, 1998 was $23,420. The Fund
does not provide any pension or retirement benefits for its
officers or trustees.
Compensation Table
<TABLE>
<CAPTION>
Total
Aggregate Compensation From
Name of Person, Compensation Fund and Fund Complex*
Position From Fund<F1> Paid to Trustees
<S> <C> <C>
George M. Callard, M.D. 3,500 13,325
Trustee
George L. Clucas N/A N/A
Trustee
Theodore H. Emmerich 3,600 13,525
Trustee
James M. Ewell 3,700 13,725
Trustee
Richard H. Finan 3,700 13,725
Trustee
Jean Patrice
Harrington, S.C. 3,800 13,925
Trustee
John H. Jacobs N/A N/A
Trustee
Charles W. McMahon 3,500 13,325
Trustee
Harry Rossi N/A N/A
Trustee
<FN>
<F1> No compensation was deferred for any Trustee or Officer under a deferred
compensation plan.
</FN>
</TABLE>
*Each of the Trustees also serves as a director of Carillon
Fund, Inc.
Purchases of the Fund shares by Carillon Investments, Inc.
(which is the Fund's principal underwriter), its directors,
officers and employees, or those of its 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 such
directors, officers and employees also will not be subject to
the sales charge.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Union Central, an insurance company organized under the laws of
Ohio, provided the initial capital for the Fund by purchasing
one million shares. Union Central is free to redeem its
investment at any time, subject to retaining at least $100,000
in the Fund. The principal business address of Union Central is
1876 Waycross Road, Cincinnati, Ohio 45240 (P.O. Box 40888,
Cincinnati, Ohio 45240).
In addition to Union Central's own investment, shares of the
Fund are sold to the trustees of certain Union Central employee
benefit plans to fund retirement benefits for Union Central's
employees. As of January 31, 1999, Union Central and Union
Central's plan trustees owned 65% and 27%, respectively, of Fund
shares, and, consequently, Union Central 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.
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).
As of December 31, 1998, Dudley S. Taft, 8000 Spooky Hollow Rd.,
Cincinnati, OH 45242, beneficially owned 5.7% of the outstanding
shares of the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
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.
(the "Adviser"), whose principal business address is 1876
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 Union Central, a mutual insurance company
organized in 1867 under the laws of Ohio. The following
officers of the Trust also are affiliated with and serve as the
following executive officers of the Adviser: John H. Jacobs,
President and Chief Executive Officer; Thomas G. Knipper,
Treasurer; and John F. Labmeier, Secretary.
The Agreement was approved by shareholders on February 22, 1989
and approved for continuance each year thereafter by the Board
of Trustees. The Agreement was last continued by the Board of
Trustees on December 16, 1998. 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 1940 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
decides whether 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, the 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. For the year ended October 31,
1998, expenses ($390,864) as a percentage of average net assets
($35,100,567) equaled 1.11%.
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 the Adviser for the fiscal
years ended October 31, 1998, October 31, 1997 and October 31,
1996 amounted to $263,254, $337,641 and $311,413, respectively.
Administration
The Adviser is responsible for providing certain administrative
functions to the Trust and has entered into an Administration
Agreement with the Fund's principal underwriter, Carillon
Investments, under which Carillon Investments furnishes
substantially all of such services for an annual fee of .20% of
the Trust's average net assets. The Adviser pays the fee, not
the Trust. Under the Administration Agreement, Carillon
Investments 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.
Service Agreement
Under a Service Agreement between the Adviser and Union Central,
Union Central has agreed to make available to the Adviser the
services of certain employees of Union Central 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 Union Central
for all the costs allocable to the time spent on the affairs of
the Adviser by the employees provided by Union Central. In per-
forming 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. Union Central 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 Union Central
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.
Other Clients of the Adviser
The Agreement in no way restricts the Adviser from acting as
investment manager or adviser to others. The Adviser may
recommend securities purchases to both the Trust and to other
clients, including registered investment companies, for which it
acts as an adviser. Because of different investment objectives
or other factors, one or more of the Adviser's clients may buy a
particular security 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, the Adviser will transact such
securities 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.
Principal Underwriter
Carillon Investments, Inc., 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.
Carillon Investments is a wholly-owned subsidiary of Union
Central. Pursuant to a Distribution Agreement with the Trust,
Carillon Investments 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.
Carillon Investments also pays for the printing and distribution
of prospectuses, sales literature and advertising costs in
connection with the offering of Fund shares.
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, 1998, October 31, 1997 and
October 31, 1996, the Fund paid $44,249, $38,940 and $30,346,
respectively, in brokerage commissions. Of the brokerage
commissions paid during the year ended October 31, 1998, 34% was
paid to brokers furnishing statistical data or research
information. No commissions were paid to affiliates of the
Trust.
As of October 31, 1998, the Fund owned shares of common stock of
Jeffries Group, Incorporated, a broker with whom the Fund
regularly does business. The value of the Fund's aggregate
holdings of Jeffries Group, Incorporated as of that date was
$330,000.
CAPITAL STOCK AND OTHER SECURITIES
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.
Union Central initially invested $10 million in the Fund. Union
Central is free to redeem its investment at any time subject to
retaining at least $100,000 in the Fund.
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.
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.
PURCHASE, REDEMPTION AND PRICING OF SHARES
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 the transfer agent receives an order to
purchase, plus a sales charge.
Initial Purchases of Shares
If you haven't bought Fund shares before, you need to fill out
and submit an application and a purchase order to: Carillon
Investments, Inc. P.O. Box 40409, Cincinnati, Ohio 45240. You
can also submit an application and purchase order to a broker-
dealer which has a selling agreement with Carillon Investments
(a "Participating Broker"). You can get application forms with
this prospectus, or from a Participating Broker, or from
Carillon Investments. If you've bought Fund shares, you can
make subsequent purchases through a Participating Broker,
Carillon Investments, by mail or through an automatic deduction
from your checking account.
The Participating Brokers and Carillon Investments are
responsible for the prompt forwarding of orders to the transfer
agent. If the transfer agent receives the purchase order 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.
Your 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.
The Fund will assess a $15 service charge for all returned
checks due to insufficient funds or closed accounts.
Shareholder Accounts
We will automatically establish an account for you when you
initially purchase shares. If you buy or receive any more
shares, we will credit them directly to your account. We will
not issue share certificates.
Subsequent Purchases of Shares
You need to make certain elections on the application form for
the purchase of Fund shares if you want to make subsequent
purchases by bank wire ($500 minimum), by check, or by automatic
monthly deductions ($100 minimum) from your checking account.
Checks that are made payable to someone other than the
registered account owner and endorsed over to the Fund (i.e.,
third party checks) will not be accepted. If you make the
appropriate election, your bank can wire money to the transfer
agent to purchase Fund shares. Your bank must be a member of
the Federal Reserve System. Your bank will likely impose a fee
for this service. Of course, you may send subsequent payments
directly to the transfer agent: Firstar Mutual Fund Services,
LLC, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. Whenever
you place an order, you must give your account number.
Determination of Offering Price
As of October 31, 1998, the offering price per share was
calculated as follows: the net asset value per share of $10.86,
plus the maximum sales charge of 5%, equals the offering price
per share of $11.43. Selling broker-dealers receive a
reallowance of a portion of the sales load from Carillon
Investments.
Calculation of Net Asset Value
The net asset value of the Fund's 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.
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. If the Fund fails to qualify as a regulated
investment company, the Fund will be subject to federal, and
possibly state, corporate taxes on its taxable income and gains
and distributions to its shareholders will constitute ordinary
dividend income to the extent of the Fund's available earnings
and profits.
In order to qualify as a regulated investment company, the Fund
must: (a) distribute to its shareholders at least 90% of its
investment company taxable income; (b) 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; 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 the Fund's 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), or of two or more issuers which the Fund controls
and which are in the same or similar trades or businesses or
related trades or businesses. 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 comply with the diversification and other
requirements of Subchapter M of the Code, the Fund may not be
able to buy or sell certain securities at certain times, so the
investments utilized (and the time at which such investments are
purchased and sold) may be different from what the Fund might
otherwise believe to be desirable.
The Fund may be subject to a nondeductible 4% excise tax,
determined with regard to undistributed amounts of its
investment income and capital gains.
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.
DISTRIBUTION OF SHARES
Carillon Investments, Inc., located at 1876 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, Carillon
Investments 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, Carillon Investments conducts its
affairs in accordance with the Conduct Rules of the National
Association of Securities Dealers, Inc. ("NASD").
Carillon Investments sells Fund shares primarily through its own
registered representatives. Carillon Investments may, however,
authorize the sale of shares by firms that are registered
broker-dealers and are members of the NASD.
Carillon Investments 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. Carillon Investments received $0, $582 and
$241, respectively, in aggregate commissions from the sale of
Trust shares for the years ended October 31, 1998, October 31,
1997 and October 31, 1996. Of these amounts, Carillon
Investments retained $0, $116 and $48 for the respective
periods.
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. 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.
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, where: P = a hypothetical initial payment of
$1000; T = average annual total return; n = number of years; and
ERV = ending redeemable value of a hypothetical $1000 payment
made at the beginning of the 1, 5 or 10 year periods at the end
of the 1, 5 or 10 year periods (or fractional portion thereof).
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, 1998
The average total returns for the Fund from inception to date
periods ended October 31, 1998 are as follows.
<TABLE>
<CAPTION>
Average Annual Total Return*
Period Ended October 31, 1998
Inception Since
Date 1 Year 5 Years Inception
---------------------------------------
<S> <C> <C> <C> <C>
Carillon Capital Fund 2/28/88 -12.4% 5.1% 8.7%
</TABLE>
*Based upon the maximum sales charge of 5%, and assuming
reinvestment of all dividends and distributions
ADDITIONAL INFORMATION
Firstar Mutual Fund Services, LLC, 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 Mutual Fund Services, LLC determines the net
asset value of the Trust's shares on a daily basis and performs
certain other duties.
The financial statements of the Fund have been audited by
Deloitte & Touche LLP, 1700 Courthouse Plaza NE, Dayton, Ohio
45402, independent auditors. The financial statements are
incorporated by reference into this Statement of Additional
Information in reliance upon the report of Deloitte & Touche LLP,
given upon their authority as experts in auditing and
accounting.
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 1933 and the 1940
Act, to which reference is hereby made.
<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.
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>
CARILLON CAPITAL FUND
OF
CARILLON INVESTMENT TRUST
FINANCIAL STATEMENTS
October 31, 1998
<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
<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.
