<PAGE> 1
F I N A N C I A L
H O R I Z O N S
INVESTMENT TRUST
1995
ANNUAL
REPORT
TO
SHAREHOLDERS
October 31, 1995
<PAGE> 2
CONTENTS
3 MESSAGE TO SHAREHOLDERS
- -------------------------------------------------------------------------------
4 FUND HIGHLIGHTS
- -------------------------------------------------------------------------------
6 STATEMENTS OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
7 STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
8 STATEMENTS OF CHANGES IN NET ASSETS
GROWTH FUND
MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
9 STATEMENTS OF CHANGES IN NET ASSETS
GOVERNMENT BOND FUND
CASH RESERVE FUND
- -------------------------------------------------------------------------------
10 STATEMENT OF INVESTMENTS
GROWTH FUND
- -------------------------------------------------------------------------------
11 STATEMENT OF INVESTMENTS
MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
12 STATEMENTS OF INVESTMENTS
GOVERNMENT BOND FUND
CASH RESERVE FUND
- -------------------------------------------------------------------------------
13 FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
14 NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
15 INDEPENDENT AUDITORS' REPORT
- -------------------------------------------------------------------------------
This report is for the information of
shareholders of the Financial Horizons
Investment Trust's Mutual Funds. It may be
used as sales literature only when preceded
or accompanied by a current prospectus which
gives further details about the Funds.
2
<PAGE> 3
Message to Shareholders
December 1995
In 1995, the stock and bond markets surged and reached many record highs.
The U.S. economy reached a very satisfactory higher plateau during this period
and will likely settle down to a normal state of affairs. For the rest of 1995
and for 1996, we expect the U.S. will enjoy the second part of a long-lasting
expansion characterized by moderate growth and low inflation with short-term
interest rates having more room to fall. These factors--along with the overall
positive business climate--suggest ongoing good performance for financial
assets.
This report features detailed information on each Financial Horizons fund
and comments from your funds' portfolio managers. The Financial Horizons Growth
Fund rose 21.6% for the 12 months ended October 31, 1995, assuming all dividends
were reinvested. The investment objective of this Fund is to seek long-term
capital appreciation. The average annual return over the past five years is
18.2%.
Financial Horizons' Municipal Bond and Government Bond Funds are appropriate
for investors seeking as high a level of income as is consistent with the
preservation of capital. The Municipal Bond Fund had a total return of 14.5% for
the 12 months ended October 31, 1995, assuming all dividends were reinvested,
while the Government Bond Fund rose 16.7% for the same period.
To help you execute transactions on your Financial Horizons funds, you may
fax a wide variety of shareholder service requests to us at 1-614-249-8705 or
simply call our toll-free shareholder service number at 1-800-848-0920. Your
account representative will be happy to help you with new account instructions,
address changes, investment or redemption requests.
We appreciate your confidence, and thank you for choosing the funds of the
Financial Horizons Investment Trust.
Peter F. Frenzer, Chairman
3
<PAGE> 4
FINANCIAL HORIZONS INVESTMENT TRUST
FUND HIGHLIGHTS
Financial Horizons Growth Fund
For the year ended October 31, 1995, the Financial Horizons Growth Fund had a
total return of 21.6%. The S&P 500 Index* returned 26.4% during the same period.
The same sectors have influenced the Fund's performance fairly consistently this
year. Technology stocks, while they have recently declined from their peaks,
have still provided strong year-to-date performance. Financial stocks too have
had strong year-to-date gains. The Growth Fund has benefited from its holdings
in both sectors. In addition, several individual small cap stocks, such as
Advance Ross (3.6% of portfolio), American Business Information (2.4%), and
National Dentex (3.1%), have had strong appreciation, and the Fund had
significant enough weightings in them to show a noticeable benefit to
performance.
The strategy of the Fund continues to be one of taking advantage of the
liquidity its size gives it in buying and selling smaller cap stocks. So far,
this year has seen numerous opportunities to realize profits in overvalued
stocks, and to redeploy the assets in more promising issues. As a result, net
investment income was slightly negative for the fiscal year, but the Fund
recognized strong capital gains for this period.
John M. Schaffner, MBA, CFA
Portfolio Manager
The investment objective of the Growth Fund is to provide long-term capital
appreciation.
AVERAGE ANNUAL TOTAL RETURN+
<TABLE>
<CAPTION>
1 yr 5 yr. Life
<S> <C> <C> <C>
w/o sc 21.57% 18.16% 11.07%
------------------------------------------------------------------
w/sc 16.57% 17.95% 11.07%
==================================================================
</TABLE>
RETURN ON A $10,000 INVESTMENT
[Graph, described below, shows the value of Growth Fund ($20,568) compared to
S&P 500 ($25,812).]
Comparison of a $10,000 investment in the Growth Fund over a 10-year period
ended October 31, 1995, and the S&P 500.*
*The S&P 500 is a broad, unmanaged index of securities, and unlike Fund returns,
does not reflect any fees or expenses. Past performance is not predictive of
future performance. The investment return and principal value will fluctuate.
When redeemed, shares may be worth more or less than the original investment.
+For the periods ended 10/31/95. Without sales charge returns (w/o sc) do not
reflect the effects of sales charges. With sales charge returns (w/sc) assume
the applicable contingent deferred sales charge on withdrawals (declines from
5% in the first year to 0% after 6 years). This has the most dramatic effect on
1-year returns. These results include reinvestment of all dividends and
capital gains distributions. The life of the funds is 6.8 years.
Financial Horizons Municipal Bond Fund
The municipal market has improved substantially over the past 12 months. The
Bond Buyer 11 Index rallied by moving from 6.72% to 5.67%. The Lehman Brothers
Municipal Bond Index* has traded up 14.8% while the Fund was up 14.5%.
In fiscal 1995, we have emphasized high credit quality, shorter average
maturities, and higher average coupons. Our average coupon has increased from
5.87% to 6.16%, and average credit quality was maintained above a "Aa." As part
of repositioning into a more defensive portfolio and to improve future
performance, sales have generated net capital losses. The loss carry-forward
created by these trades should enable the Fund to offset future capital gains as
later sales are completed at a profit.
Diminished inflation expectations have played a significant role in the current
market rally. Lower inflation has driven the nominal level of interest rates
down; however, the market is keeping a close eye on developments in Congress
over the proposed flat tax and deficit reductions.
We feel well positioned in the current market. We continue to search for value
through a disciplined program of swaps. Our overall strategy continues to
emphasize a longer-term approach which should serve well for future Fund
performance in various market scenarios.
J. Randall Baney, MBA
Portfolio Manager
The investment objective of the Municipal Bond Fund is to provide as high a
level of municipal income as is consistent with the preservation of capital.
AVERAGE ANNUAL TOTAL RETURN+
<TABLE>
<CAPTION>
1 yr. 5 yr. Life
<S> <C> <C> <C>
w/o sc 14.50% 7.75% 7.38%
------------------------------------------------------------------
w/sc 9.50% 7.45% 7.38%
==================================================================
</TABLE>
Return on a $10,000 Investment
$17,682
$16,309
[Graph, described below, shows the value of Municipal Bond Fund ($16,309)
compared to Lehman Brothers Municipal Bond Index ($17,682).]
Comparison of a $10,000 investment in the Municipal Bond Fund over a 10-year
period ended October 31, 1995, and the Lehman Brothers Municipal Bond Index.*
*The Lehman Brothers Municipal Bond Index represents an unmanaged group of
bonds that are not adjusted for expenses and include bonds of lower quality than
those purchased by our Funds. Past performance is not predictive of future
performance. The investment return and principal value will fluctuate. When
redeemed, shares may be worth more or less than the original investment.
4
<PAGE> 5
Financial Horizons Government Bond Fund
Total return on the Government Bond Fund was 16.7% for the year ended October
31, 1995 compared to 15.4% for the Merrill Lynch Government Master Index.*
During 1995 those bond market investors who stayed invested during a difficult
prior year have been rewarded for their patience. Long-term interest rates
dropped by approximately 160 basis points during the twelve-month period ended
October 31, 1995, resulting in significantly higher prices for bonds and bond
funds. The Government Bond Fund participated in this rally by maintaining market
exposure as interest rates peaked and then declined during the year.
The rally in the fixed-income markets has been due to the confluence of several
factors. The most notable of these is the perception of an improving fiscal
policy in the United States and a Federal Reserve that is given credit for
engineering an economy that has continued to expand without igniting inflation
concerns. Continued reports of subdued inflation have been interpreted both as
signs of successful Federal Reserve policy and as indications of continued value
in the bond market.
The Government Bond Fund continues to be invested in sectors of the government,
agency, and mortgage-backed markets perceived to be undervalued. Approximately
one-third of portfolio assets is invested in the Collateralized Mortgage
Obligation (CMO) market. The yield on these conservatively-structured
investments continues to make them attractive portfolio holdings.
Wayne T. Frisbee, CFA
Portfolio Manager
The investment objective of the Government Bond Fund is to provide as high a
level of income as is consistent with the preservation of capital.
AVERAGE ANNUAL TOTAL RETURN+
<TABLE>
<CAPTION>
1 yr. 5 yr. Life
<S> <C> <C> <C>
w/o sc 16.68% 9.68% 9.77%
-----------------------------------------------------------------
w/sc 11.68% 9.40% 9.77%
=================================================================
</TABLE>
RETURN ON A $10,000 INVESTMENT
[Graph, described below, shows the value of Government Bond Fund ($18,976)
compared to Merrill Lynch Government Master Index ($18,879).]
Comparison of a $10,000 investment in the Government Bond Fund over a 10-year
period ended October 31, 1995, and the Merrill Lynch Government Master Index.*
*The Merrill Lynch Government Master Index is an index of unmanaged bonds which
unlike Fund returns, do not reflect any fees or expenses. Past performance is
not predictive of future performance. The investment return and principal value
will fluctuate. When redeemed, shares may be worth more or less than the
original investment.
+For the periods ended 10/31/95. Without sales charge returns (w/o sc) do not
reflect the effects of sales charges. With sales charge returns (w/sc) assume
the applicable contingent deferred sales charge on withdrawals (declines from
5% in the first year to 0% after 6 years). This has the most dramatic effect on
1-year returns. These results include reinvestment of all dividends and capital
gains distributions. The life of the funds is 6.8 years.
Financial Horizons Cash Reserve Fund
Short-term interest rates rose during the first half of 1995. The Federal
Reserve increased rates due to both an expanding economy and concern about
inflation. By early July, expansion and inflation concerns had diminished. As a
result, the Federal Reserve lowered the Fed Funds rate to 5.75% from 6.00%. In
the near future, the Federal Reserve may decide to lower rates again if economic
indicators point to a slowing economy.
Total return on the Cash Reserve Fund is 5.41% for the year ended October 31,
1995. The 30 day current yield was 5.20%, while the effective yield was 5.32%,
on October 31, 1995.
The Fund continues to invest in only the highest rated money market securities.
An internal credit review is completed on every company that the Fund invests
in.
Karen G. Mader, MA
Senior Securities Portfolio Manager
The investment objective of the Cash Reserve Fund is to seek as high a level of
current income as is consistent with the preservation of capital and liquidity
through investments in a portfolio of money market instruments with a maturity
of 397 days or less.
AVERAGE ANNUAL TOTAL RETURN+
<TABLE>
<CAPTION>
1 yr. 5 yr. Life
<S> <C> <C> <C>
w/o sc 5.41% 3.76% 4.69%
=================================================================
</TABLE>
RETURN ON A $10,000 INVESTMENT
[Graph, described below, shows the value of Cash Reserve Fund ($13,703) compared
to Consumer Price Index ($12,749).]
Comparison of a $10,000 investment in the Cash Reserve Fund over a 10-year
period ended October 31, 1995, and the Consumer Price Index.*
An investment in the Cash Reserve Fund is neither insured nor guaranteed by the
U.S. Government and there can be no assurance that it will be able to maintain
a stable net asset value of $1.00 a share.
*The Consumer Price Index is a broad index reflecting price changes in a market
basket of consumer goods, and, unlike the Fund, does not reflect any fees or
expenses. Past performance is not predictive of future performance.
5
<PAGE> 6
FINANCIAL HORIZONS INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<CAPTION>
MUNICIPAL GOVERNMENT CASH
GROWTH BOND BOND RESERVE
FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments in securities, at value
(cost $5,916,116, $25,203,813,
$66,050,630, and $4,143,039,
respectively) $ 7,609,291 25,638,318 69,093,935 4,143,039
Cash 18,482 -- -- 11,865
Accrued interest and dividends
receivable 2,288 445,612 495,711 --
Receivable for Fund shares sold 166 -- -- --
Receivable for investment securities sold -- 1,264,511 60,989 --
-------------------------------------------------------
Total Assets 7,630,227 27,348,441 69,650,635 4,154,904
-------------------------------------------------------
Liabilities
Payable for investment securities purchased -- 975,843 -- --
Net payable for Fund shares redeemed 21,066 28,235 191,458 716
Demand loan payable to bank (note 3) -- 453,685 -- --
Sales charge payable 3,785 8,888 34,188 --
Accrued management fees (note 2) 4,249 13,853 37,034 1,407
Accrued distribution fees (note 2) 3,271 10,656 -- --
Accrued transfer agent fees (note 2) 957 1,275 (1,845) 83
Payable for dividends accrued -- 40,163 167,485 1,527
Other accrued expenses 3,238 9,927 32,442 939
-------------------------------------------------------
Total Liabilities 36,566 1,542,525 460,762 4,672
-------------------------------------------------------
NET ASSETS $ 7,593,661 25,805,916 69,189,873 4,150,232
=======================================================
Represented by:
Capital Shares, $1 par value
outstanding 417,898 2,397,968 6,248,879 4,150,235
Capital paid in excess of par value 4,668,069 24,179,670 61,946,129 --
Net unrealized appreciation 1,693,175 434,505 3,043,305 --
Accumulated undistributed net
realized gain (loss) 821,167 (1,200,475) (2,048,440) (3)
Accumulated (distributions in
excess of) undistributed net -------------------------------------------------------
investment income (6,648) (5,752) -- --
-------------------------------------------------------
NET ASSETS $ 7,593,661 25,805,916 69,189,873 4,150,232
=======================================================
Shares outstanding (unlimited
number of shares authorized) 417,898 2,397,968 6,248,879 4,150,235
=======================================================
Net assets per share $ 18.17 10.76 11.07 1.00
=======================================================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
FINANCIAL HORIZONS INVESTMENT TRUST
STATEMENTS OF OPERATIONS
Year ended October 31, 1995
<TABLE>
<CAPTION>
MUNICIPAL GOVERNMENT CASH
GROWTH BOND BOND RESERVE
FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 78,212 -- -- --
Interest 24,107 1,622,251 4,856,159 245,688
Other income (note 2) -- -- 181,387 --
----------------------------------------------------------
102,319 1,622,251 5,037,546 245,688
Expenses (note 2): ----------------------------------------------------------
Distribution fees 54,102 197,313 516,795 --
Investment management fees 46,886 171,005 447,894 16,571
Transfer agent fees 12,323 16,662 51,384 1,104
Professional services 2,103 8,105 21,569 1,223
Registration fees 1,843 3,126 6,066 1,079
Shareholders' reports 2,858 4,932 17,477 370
Custodian fees 2,435 13,500 15,000 5,476
Trustees' fees and expenses 1,012 3,750 9,826 588
Other 436 1,724 3,798 317
----------------------------------------------------------
Total expenses before waived expenses 123,998 420,117 1,089,809 26,728
----------------------------------------------------------
Total waived expenses (18,033) (65,771) (476,865) --
----------------------------------------------------------
Net expenses 105,965 354,346 612,944 26,728
----------------------------------------------------------
Net investment income (loss) (3,646) 1,267,905 4,424,602 218,960
----------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realizeed gain (loss) on investments
(note 3) 821,167 (809,772) 500,983 (3)
-----------------------------------------------------------
Net change in unrealized appreciation
(depreciation) 607,704 3,105,091 5,712,175 --
-----------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 1,428,871 2,295,319 6,213,158 (3)
-----------------------------------------------------------
Net increase in net assets
resulting from operations $ 1,425,225 3,563,224 10,637,760 218,957
===========================================================
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
FINANCIAL HORIZONS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Years ended October 31, 1995 and 1994
<TABLE>
<CAPTION>
GROWTH MUNICIPAL BOND
FUND FUND
1995 1994 1995 1994
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income (loss) $ (3,646) 12,740 1,267,905 1,286,380
Net realized gain (loss) on investments 821,167 112,756 (809,772) (390,703)
Net change in unrealized appreciation
(depreciation) of investments 607,704 305,197 3,105,091 (4,008,495)
-------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 1,425,225 430,693 3,563,224 (3,112,818)
-------------------------------------------------------------------
Distributions to shareholders from:
Net investment income -- (14,818) (1,266,974) (1,280,971)
In excess of net investment income (5,505) -- -- --
Net realized gain from investment
transactions (65,310) -- -- (636,382)
-------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (70,815) (14,818) (1,266,974) (1,917,353)
-------------------------------------------------------------------
Capital share transactions:
Net proceeds from sale of shares 520,132 1,664,390 437,772 7,416,729
Net asset value of shares issued to
shareholders from reinvestment of
dividends and distributions 69,603 14,530 827,461 1,268,408
Cost of shares redeemed (1,137,884) (471,909) (4,168,004) (3,070,429)
-------------------------------------------------------------------
Increase (decrease) in net assets derived
from capital share transactions (548,149) 1,207,011 (2,902,771) 5,614,708
-------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 806,261 1,622,886 (606,521) 584,537
NET ASSETS - BEGINNING OF YEAR 6,787,400 5,164,514 26,412,437 25,827,900
-------------------------------------------------------------------
NET ASSETS - END OF YEAR $ 7,593,661 6,787,400 25,805,916 26,412,437
===================================================================
Undistributed net realized gain (loss) on
investments included in net assets
at end of period (note 1) $ 821,167 65,310 (1,200,475) (390,703)
===================================================================
Undistributed (distributions in excess of)
net investment income included in net
assets at end of period (note 1) $ (6,648) 2,503 (5,752) (6,683)
===================================================================
Shares sold 32,495 116,704 42,427 660,497
Shares issued to shareholders from reinvest-
ment of dividends and distributions 4,761 1,038 80,208 115,125
Shares redeemed (68,472) (33,208) (403,632) (294,362)
-------------------------------------------------------------------
Net increase (decrease) in number
of shares (31,216) 84,534 (280,997) 481,260
===================================================================
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
FINANCIAL HORIZONS INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Years ended October 31, 1995 and 1994
<TABLE>
<CAPTION>
GOVERNMENT BOND CASH RESERVE
FUND FUND
1995 1994 1995 1994
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 4,424,602 4,233,446 218,960 105,988
Net realized gain (loss) on investments 500,983 (2,549,423) (3) 36
Net change in unrealized appreciation
or depreciation of investments 5,712,175 (5,537,920) -- --
--------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 10,637,760 (3,853,897) 218,957 106,024
--------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (4,454,858) (4,215,913) (218,917) (106,031)
Net realized gain from investment
transactions -- (675,985) (35) --
Paid in capital (14,227) -- -- --
--------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (4,469,085) (4,891,898) (218,952) (106,031)
--------------------------------------------------------------------
Capital share transactions:
Net proceeds from sale of shares 1,055,320 3,986,976 890,988 1,829,645
Net asset value of shares issued to
shareholders from reinvestment of
dividends and distributions 2,526,566 2,648,228 213,199 84,108
Cost of shares redeemed (10,778,823) (12,273,612) (903,863) (751,467)
--------------------------------------------------------------------
Increase (decrease) in net assets derived
from capital share transactions (7,196,937) (5,638,408) 200,324 1,162,286
--------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (1,028,262) (14,384,203) 200,329 1,162,279
NET ASSETS - BEGINNING OF YEAR 70,218,135 84,602,338 3,949,903 2,787,624
--------------------------------------------------------------------
NET ASSETS - END OF YEAR $ 69,189,873 70,218,135 4,150,232 3,949,903
====================================================================
Undistributed net realized gain (loss) on
investments included in net assets
at end of period (note 1) $ (2,048,440) (2,549,423) (3) 35
====================================================================
Undistributed net investment income
included in net assets at end
of period (note 1) $ -- 30,256 -- (43)
====================================================================
Shares sold 100,153 362,791 890,988 1,829,645
Shares issued to shareholders from reinvest-
ment of dividends and distributions 239,877 246,966 213,199 84,108
Shares redeemed (1,029,256) (1,155,210) (903,863) (751,467
--------------------------------------------------------------------
Net increase (decrease) in number
of shares (689,226) (545,453) 200,324 1,162,286
====================================================================
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 10
FINANCIAL HORIZONS INVESTMENT TRUST
GROWTH FUND
Statement of Investments October 31, 1995
<TABLE>
<CAPTION>
COMMON STOCKS (92.0%) Shares Value (Note 1)
------ --------------
<S> <C> <C>
Airlines (1.3%)
Skywest Inc. 6,000 $ 102,750
----------
Business Service (6.4%)
American Business Information* 10,500 183,750
Healthcare Services Group, Inc. * 6,000 52,500
Olsten Corp. (The) 4,400 169,400
TRO Learning, Inc.* 10,000 78,750
----------
484,400
----------
Chemicals (1.9%)
Loctite Corp. 1,000 47,250
Sigma-Aldrich Corporation 2,000 95,000
----------
142,250
----------
Computer Equipment (0.9%)
American Power Conversion Corp.* 7,000 71,750
----------
Computer Services and Software (4.0%)
CFI Proservices, Inc.* 10,000 136,250
SPSS, Inc.* 10,000 168,750
----------
305,000
----------
Consumer Products (3.1%)
National Picture & Frame Co.* 16,000 136,000
Newell Co. 4,000 96,500
----------
232,500
----------
Contract Manufacturing (3.0%)
Dovatron International, Inc.* 4,000 123,000
Electronic Fab Tech Corporation* 5,000 22,813
Triple S Plastics, Inc.* 9,000 83,250
----------
229,063
----------
Dental (4.0%)
Dentsply International Inc. 2,000 69,000
National Dentex Corp.* 13,000 234,000
----------
303,000
----------
Distribution (1.3%)
Bergen Brunswig Corp., Class A 4,725 98,044
----------
Drugs (4.4%)
Allergan Inc. 4,000 117,500
Schering-Plough Corporation 4,000 214,500
----------
332,000
----------
Education (2.0%)
DeVry Incorporated* 7,000 155,750
----------
Electronics (5.8%)
Intel Corp. 4,000 279,500
Woodhead Industries, Inc. 11,100 158,175
----------
437,675
----------
Engineering & Construction (1.5%)
Fluor Corporation 2,000 113,000
----------
Financial Services (10.8%)
Bear Stearns Companies, Inc. 3,472 69,006
Gainsco, Inc. 18,231 157,242
Merrill Lynch & Co., Inc. 5,000 277,500
Morgan Stanley Group, Inc. 1,000 87,000
Silicon Valley Bancshares* 8,400 161,700
Standard Financial, Inc.* 5,000 68,750
----------
821,198
----------
Food & Beverages (1.1%)
Grand Metropolitan Plc ADR 1,500 41,250
Grand Metropolitan Plc 5,800 40,085
----------
81,335
----------
Food -- Grain & Agriculture (2.8%)
Archer Daniels Midland Co. 13,387 215,865
----------
Healthcare Services (3.7%)
Columbia HCA/Healthcare Corp. 4,000 196,500
United American HealthCare Corp. * 7,500 82,500
----------
279,000
----------
Machinery & Capital Goods (5.6%)
Duriron, Inc. 3,000 80,250
Emerson Electric Company 1,000 71,250
Kaman Corporation 9,200 98,900
Zebra Technologies Corporation* 3,000 178,500
----------
428,900
----------
Medical Products (1.1%)
Biomet, Inc.* 5,000 83,125
----------
Oil & Gas (2.6%)
Amoco Corporation 1,300 83,038
Royal Dutch Petroleum Company 500 61,436
Texaco, Inc. 800 54,500
----------
198,974
----------
Pollution Control (0.9%)
WMX Technologies, Inc. 2,500 70,313
----------
Printing & Publishing (5.2%)
Merrill Corporation 6,000 96,000
New England Business Service, Inc. 6,000 115,500
Reader's Digest Assoc., Inc., Class B 2,800 129,500
Varitronic Systems Inc.* 6,000 54,000
----------
395,000
----------
Restaurants (3.5%)
Bob Evans Farms Inc. 5,000 90,000
Wendy's International, Inc. 8,500 174,900
----------
264,900
----------
Retail (7.0%)
Advance Ross Corp.* 10,000 275,000
Cash America International, Inc. 6,000 30,750
Franklin Quest Co.* 3,000 71,625
Smart & Final Inc. 5,000 93,750
Tractor Supply Co.* 4,000 63,000
----------
534,125
----------
Telecommunications (7.1%)
AT & T Corporation 2,200 140,800
MCI Communications Corporation 9,800 244,388
Sprint Corporation 4,000 154,000
----------
539,188
----------
Tire & Rubber (1.0%)
Cooper Tire & Rubber Company 3,000 69,375
----------
Total common stocks 6,988,480
----------
(cost $5,295,305)
U.S. GOVERNMENT OBLIGATIONS (7.2%)
U.S. Treasury Bills Principal
----------
5.06% through 5.30%, due 11/16/95
through 03/7/96
(cost $548,811) $ 555,000 548,811
----------
REPURCHASE AGREEMENT (1.0%)
Merrill Lynch & Co., Inc.,
5.45%, due 11/06/95, Collateralized by
$589,677 FHLMC CMO, 6.7625%,
due 07/15/23 and $190
FHLMC #309710, 10.50%, due
11/01/18, value $74,657
(cost $72,000) 72,000 72,000
----------
Total investments
(cost $5,916,116) $7,609,291
----------
</TABLE>
* Denotes a non-income producing security.
Cost also represents cost for Federal income tax purposes.
Portfolio holding percentages represent market value as a percent of net assets.
See accompanying notes to financial statements.
10
<PAGE> 11
FINANCIAL HORIZONS INVESTMENT TRUST
MUNICIPAL BOND FUND
Statement of Investments October 31, 1995
<TABLE>
<CAPTION>
LONG-TERM MUNICIPAL SECURITIES - (99.4%) Principal Value (Note 1)
--------- --------------
<S> <C> <C>
Alabama (4.4%)
Birmingham, Alabama General
Obligation Refunding Bonds,
Series 1992-B,
6.25%, 2016 $ 1,100,000 1,138,500
-----------
Florida (7.3%)
Florida State Full Faith and Credit State
Board of Education Public Education
Capital Outlay Bonds, Series 1992-D,
5.20%, 2014 1,000,000 951,250
Orlando Florida Utilities Commission
Water and Electric Subordinated Revenue
Refunding Bonds, Series 1993-A,
5.25%, 2014 1,000,000 941,250
-----------
1,892,500
-----------
Massachusetts (8.3%)
Massachusetts State Housing Finance
Agency Residential Development
Bonds, Series 1992-D
6.80%, 2012 1,000,000 1,061,250
Massachusetts State General Obligation
Bonds Consolidated Loan of 1992,
Series-B, 6.50%, 2013 1,000,000 1,068,750
-----------
2,130,000
-----------
Nevada (3.8%)
Nevada State General Obligation,
Nevada Municipal Bond Bank Project,
Numbers 49 & 50,
5.50%, 2016 1,000,000 970,000
-----------
New Jersey (5.2%)
New Jersey Turnpike Authority Turnpike
Revenue Bonds, Series 1991-C,
6.50%, 2016 1,225,000 1,345,969
-----------
New York (4.0%)
New York Local Government Assistance
Corporation, Series 1993-E
Refunding Bonds,
6.00%, 2014 1,000,000 1,041,250
-----------
North Carolina (13.6%)
Charlotte-Mecklenburg Hospital
Authority, North Carolina Health Care
System Revenue Bonds, Series 1992,
6.25%, 2020 1,250,000 1,278,125
North Carolina Eastern Municipal Power
Agency Power System Revenue Bonds,
Refunding, Series 1993-B,
6.25%, 2012 1,250,000 1,260,938
North Carolina Medical Care Commission
Hospital Revenue Refunding, Presbyterian
Health Services Project,
5.50%, 2020 1,000,000 961,250
-----------
3,500,313
-----------
Pennsylvania (8.7%)
Pennsylvania Housing Finance Agency
Rental Housing Refunding Bonds,
Issue 1992, 6.40%, 2012 1,250,000 1,271,875
Pennsylvania Turnpike Commission
Turnpike Revenue Bonds, Series 1992-O,
5.50%, 2017 1,000,000 967,500
-----------
2,239,375
-----------
South Carolina (3.9%)
South Carolina State Housing Finance &
Development Authority Homeownership
Mortgage Purchase Bonds,
1994 Series-A, 6.375%, 2016 1,000,000 1,015,000
-----------
Tennessee (4.1%)
Nashville & Davidson County, Tennessee
General Obligation Multi-Purpose
Improvement Bonds, Series 1994,
6.125%, 2014 1,030,000 1,071,200
-----------
Texas (18.1%)
Harris County, Texas Tax and Revenue
Certificates of Obligation, Series 1994,
6.10%, 2013 1,000,000 1,036,250
Houston, Texas Water and Sewer System
Revenue Junior Lien Refunding Bonds,
Series 1991-C,
6.375%, 2017 1,160,000 1,212,200
University of Texas System Revenue
Financing System Refunding Bonds,
Series 1991-B, 6.75%, 2013 1,250,000 1,348,437
Weatherford, Texas Independent School District
Unlimited Tax School Building and
Refunding Bonds, Series 1994,
6.50%, 2015 1,000,000 1,065,000
-----------
4,661,887
-----------
Utah (3.9%)
Utah Housing Finance Agency Multi-
Family Housing Revenue Refunding Bonds,
(Cottonwood Apartments Project),
Issue 1995, 6.30%, 2015 1,000,000 1,011,250
-----------
Virginia (10.1%)
Richmond, Virginia General Obligation
Public Improvement Refunding Bonds,
Series 1991-B,
6.25%, 2018 1,000,000 1,017,500
Virginia Housing Development Authority
Commonwealth Mortgage Bonds, Series
1992-C, Subseries C-7,
6.30%, 2015 900,000 916,875
Virginia Housing Development Authority
Multi-Family Housing Bonds,
Series 1991-F, 7.10%, 2013 140,000 148,575
Virginia Housing Development Authority
Commonwealth Mortgage Bonds,
Series 1990-B, Subseries B-4,
6.85%, 2017 500,000 516,875
-----------
2,599,825
-----------
Washington (4.0%)
King County Washington Limited Tax
General Obligation Various Purpose and
Refunding Bonds, Series 1993-A
6.00%, 2012 1,000,000 1,021,249
-----------
Total long-term municipal securities
(cost $25,203,813) $25,638,318
-----------
</TABLE>
Cost also represents cost for Federal income tax purposes.
Portfolio holding percentages represent market value as a percentage of net
Portfolio holding percentages represent market value as a percentage of net
assets.
See accompanying notes to financial statements.
11
<PAGE> 12
FINANCIAL HORIZONS INVESTMENT TRUST
GOVERNMENT BOND FUND
Statement of Investments October 31, 1995
<TABLE>
<CAPTION>
MORTGAGE BACKED SECURITIES (34.9%)
Principal Value (Note 1)
--------- --------------
<S> <C> <C>
FHLMC (REMIC) Series 1313-G,
7.25%, 2007 $ 2,000,000 2,043,878
FHLMC (REMIC) Series 1344-D,
6.00%, 2007 3,000,000 2,818,107
FHLMC (REMIC) Series 31-E,
7.55%, 2020 1,289,219 1,317,890
FHLMC (REMIC) Series 190-D,
9.20%, 2021 900,000 936,674
FHLMC (REMIC) Series 1143-Z,
7.50%, 2021 2,636,511 2,672,049
FNMA (REMIC) Series 1989-86,
8.75%, 2019 553,985 577,252
FNMA (REMIC) Series 1990-16D,
9.00%, 2020 4,000,000 4,226,836
FNMA (REMIC) Series 1990-7B,
8.50%, 2020 2,000,000 2,081,678
FNMA (REMIC) Series 1991-68E,
8.35%, 2003 1,000,000 1,019,919
FNMA (REMIC) Series 1991-73A,
8.00%, 2021 1,200,000 1,236,791
FNMA (REMIC) Series 1992-126VB,
8.00%, 2002 4,000,000 4,187,316
FNMA (REMIC) Series 1993-203PJ,
6.50%, 2023 1,000,000 994,369
-----------
Total mortgage backed securities
(cost $23,201,285) 24,112,759
-----------
U.S. GOVERNMENT AND AGENCY LONG-TERM
OBLIGATIONS (62.7%)
Federal Home Loan Banks,
7.08%, 2000 4,000,000 4,024,584
Federal Home Loan Banks,
6.36%, 2001 8,560,000 8,652,388
Federal Home Loan Mortgage Corp.,
6.31%, 2004 4,000,000 3,908,760
Federal Home Loan Mortgage Corp.,
7.98%, 2004 5,890,000 6,059,756
Federal National Mortgage Association,
6.90%, 2004 5,000,000 5,011,965
Federal National Mortgage Association,
7.05%, 2000 1,520,000 1,536,201
Resolution Funding STRIPS,
0.00%, 2006 15,000,000 7,800,885
Resolution Funding STRIPS,
0.00%, 2008 3,000,000 1,357,257
Resolution Funding STRIPS,
0.00%, 2013 10,000,000 3,103,190
Resolution Funding STRIPS,
0.00%, 2020 10,000,000 1,912,190
Total U.S. government and
agency long-term obligations
(cost $41,235,345) 43,367,176
-----------
REPURCHASE AGREEMENT (2.3%)
Prudential Securities
5.75% due 11/1/95, Collateralized by
$1,765,000 U.S. Treasury Bond, due 10/17/96,
market value - $1,676,503
(cost $1,614,000) 1,614,000
-----------
Total investments
(cost $ 66,050,630) $69,093,935
-----------
</TABLE>
FINANCIAL HORIZONS INVESTMENT TRUST
CASH RESERVE FUND
Statement of Investments October 31, 1995
<TABLE>
<CAPTION>
CANADIAN GOVERNMENT OBLIGATIONS (7.5%)
Principal Value (Note 1)
--------- --------------
<S> <C> <C>
Canadian Wheat Board
5.62%, due 12/08/95 $ 160,000 159,076
Export Development Corp.
5.62%, due 12/08/95 152,000 151,833
----------
Total Canadian government obligations
(cost $310,909) 310,909
----------
COMMERCIAL PAPER (89.1%)
Auto/Finance (3.8%)
Ford Motor Credit Co.
5.70%, due 12/04/95 160,000 159,164
----------
Banks (14.5%)
CoreStates Capital Corp.
5.67%, due 01/17/96 160,000 158,060
Morgan (J.P.) & Company, Inc.
5.70%, due 11/20/95 160,000 159,519
National City Credit Corp.
5.67%, due 12/19/95 150,000 148,866
Norwest Corp.
5.65%, due 11/17/95 135,000 134,661
----------
601,106
----------
Broker/Dealers (14.9%)
Bear Stearns Companies, Inc.
5.76%, due 11/16/95 143,000 142,657
Dean Witter Discover & Co.
5.68%, due 01/26/96 160,000 157,829
Merrill Lynch & Co., Inc.
5.72%, due 11/22/95 153,000 152,490
Smith Barney, Inc.
5.71%, due 11/28/95 165,000 164,293
----------
617,269
----------
Captive Borrowing Conduit (2.7%)
Prudential Funding Corp.
5.74%, due 11/20/95 114,000 113,655
----------
Consumer/Sales Finance (9.6%)
American Express Credit Corp.
5.67%, due 12/08/95 156,000 155,091
Associates Corp. of North America
5.60%, due 01/05/96 125,000 123,736
Beneficial Corp.
5.73%, due 11/08/95 118,000 117,868
----------
396,695
----------
Corporate Credit Unions (2.6%)
U.S. Central Credit Union
5.65%, due 01/19/96 108,000 106,661
----------
Diversified Finance (7.6%)
General Electric Capital Corp.
5.57%, due 02/21/96 160,000 157,227
Transamerica Finance Group Inc.
5.67%, due 11/13/95 160,000 159,697
----------
316,924
----------
Financial Service/Utility (3.6%)
National Rural Utilities Cooperative Finance Corp.
5.70%, due 11/09/95 150,000 149,810
----------
Foods and Beverages (3.1%)
Campbell Soup Co.
5.67%, due 01/10/96 127,000 125,600
----------
Insurance (3.2%)
American General Corp.
5.66%, due 12/14/95 132,000 131,107
----------
Insurance-Life (3.7%)
MetLife Funding, Inc.
5.71%, due 11/17/95 155,000 154,607
----------
Lease Financing (3.8%)
PHH Corporation
5.72%, due 12/04/95 160,000 159,161
----------
Office Equipment and Supply (2.4%)
5.675%, due 12/01/95 100,000 99,527
----------
Oil & Gas (3.9%)
Chevron Oil Finance
5.75%, due 11/06/95 160,000 159,872
----------
Paper and Forest Products (3.8%)
Sonoco Products Co.
5.60%, due 12/15/95 160,000 158,905
----------
Pharmaceuticals/Health Care (2.3%)
Schering Corp.
5.57%, due 04/16/96 100,000 97,416
----------
Retail Trade (3.6%)
Wal-Mart Stores Inc.
5.68%, due 11/14/95 150,000 149,692
----------
Total commercial paper
(cost $3,697,171) 3,697,171
----------
U.S. GOVERNMENT OBLIGATIONS (3.2%)
Federal National Mortgage Association
5.59%, due 11/03/95
(cost $134,959) 135,000 134,959
----------
Total investments
(cost $4,143,039) $4,143,039
----------
</TABLE>
Cost also represents cost for Federal income tax purposes.
Portfolio holding percentages represent market value as a percentage of net
assets.
See accompanying notes to financial statements.
12
<PAGE> 13
FINANCIAL HORIZONS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
Selected data for each share of capital stock outstanding throughout the years
ended October 31.
<TABLE>
<CAPTION>
GROWTH FUND MUNICIPAL BOND FUND
1995 1994 1993 1992 1991 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
BEGINNING OF PERIOD $15.11 14.17 12.46 11.99 8.65 9.86 11.75 10.64 10.61 10.00
Net investment income (loss)and (.01) .03 .08 .22 .17 .50 .49 .56 .61 .65
Net realized gain (loss
unrealized appreciation
(depreciation) 3.23 .95 1.73 .43 3.72 .90 (1.62) 1.22 .07 .61
-----------------------------------------------------------------------------------
Total From Investment
Operations 3.22 .98 1.81 .65 3.89 1.40 (1.13) 1.78 .68 1.26
-----------------------------------------------------------------------------------
Dividends from net
investment income -- (.04) (.10) (.18) (.30) (.50) (.49) (.56) (.61) (.65)
Distributions in excess of net
investment income (.01) -- -- -- -- -- -- -- -- --
Distributions from net
realized gain from
investment transactions (.15) -- -- -- (.25) -- (.27) (.11) (.04) --
-----------------------------------------------------------------------------------
Total Distributions (.16) (.04) (.10) (.18) (.55) (.50) (.76) (.67) (.65) (.65)
-----------------------------------------------------------------------------------
Net increase (decrease) in
net asset value 3.06 .94 1.71 .47 3.34 .90 (1.89) 1.11 .03 .61
NET ASSET VALUE-
END OF PERIOD $18.17 15.11 14.17 12.46 11.99 10.76 9.86 11.75 10.64 10.61
===================================================================================
Total Return (1 Year) 21.57% 6.92% 14.59% 5.42% 46.67% 14.50% (10.11%) 17.18% 6.56% 13.01%
Net Assets, End of Period (000) $7,594 6,787 5,165 3,095 1,175 25,806 26,412 25,828 14,641 5,632
Ratio of expense to
average net assets 1.47% 1.59% 1.44% 1.27% 1.20% 1.35% 1.27% 1.01% .65% .30%
Ratio of net investment income (loss)
to average net assets (.05%) .21% 0.63% 1.45% 2.01% 4.82% 4.58% 4.81% 5.65% 6.28%
Ratio of expense to
average net assets* 1.72% 1.90% 2.03% 2.02% 1.95% 1.60% 1.57% 1.61% 1.62% 1.69%
Ratio of net investment income (loss)
to average net assets* (.30%) (.82%) 0.05% 0.70% 1.26% 4.57% 4.26% 4.11% 4.68% 4.85%
Portfolio turnover 29.19% 14.14% 12.98% 12.14% 5.68% 60.79% 69.67% 46.95% 57.98% 45.12%
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT BOND FUND CASH RESERVE FUND
- -----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE-
BEGINNING OF PERIOD $ 10.12 11.31 11.00 10.81 10.13 1.00 1.00 1.00 1.00 1.00
Net investment income .68 .58 .63 .89 .90 .05 .03 .02 .03 .05
Net realized gain (loss) and
unrealized appreciation
(depreciation) .95 (1.10) .50 .25 .68 -- -- -- -- --
-------------------------------------------------------------------------------------------------
Total From Investment
Operations 1.63 (.52) 1.13 1.14 1.58 .05 .03 .02 .03 .05
-------------------------------------------------------------------------------------------------
Dividends from net
investment income (.68) (.58) (.66) (.89) (.89) (.05) (.03) (.02) (.03) (.05)
Distributions from net
realized gain from
investment transactions -- (.09) (.16) (.06) (.01) -- -- -- -- --
-------------------------------------------------------------------------------------------------
Total Distributions (.68) (.67) (.82) (.95) (.90) (.05) (.03) (.02) (.03) (.05)
-------------------------------------------------------------------------------------------------
Net increase (decrease) in
net asset value .95 (1.19) .31 .19 .68 -- -- -- -- --
NET ASSET VALUE-
END OF PERIOD $ 11.07 10.12 11.31 11.00 10.81 1.00 1.00 1.00 1.00 1.00
=================================================================================================
Total Return (1 Year) 16.68% (4.75%) 10.76% 10.93% 16.25% 5.41% 3.08% 2.05% 3.07% 5.27%
Net Assets, End of Period (000) $69,190 70,218 84,602 64,249 25,873 4,150 3,950 2,788 2,538 2,416
Ratio of expense to
average net assets .89% 1.28% 1.00% .65% -- .65% .84% 1.17% 1.06% 1.06%
Ratio of net investment income
to average net assets 6.42% 5.42% 5.55% 8.18% 8.22% 5.29% 3.14% 2.04% 3.02% 5.10%
Ratio of expense to
average net assets * 1.58% 1.58% 1.61% 1.66% 1.73% -- 1.06% 2.20% 1.82% 1.81%
Ratio of net investment income
to average net assets * 5.73% 5.12% 4.93% 7.17% 6.49% -- 2.92% .79% 2.28% 4.34%
Portfolio turnover 140.55% 174.40% 143.63% 87.67% 95.32% -- -- -- -- --
</TABLE>
*Ratios calculated as if no expenses were waived.
See accompanying notes to financial statements.
13
<PAGE> 14
FINANCIAL HORIZONS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
1. Summary of Significant Accounting Policies
Financial Horizons Investment Trust (Trust) is a diversified, open-end
investment company organized under the laws of Massachusetts by a
Declaration of Trust dated May 9, 1988. The Trust offers shares in four
separate mutual funds which are registered under the Investment Company Act
of 1940, as amended. On December 19, 1988, the Trust was capitalized
through the sale of capital stock to Nationwide Life Insurance Company in
the amounts of $500,000 in the Growth Fund, $1,000,000 in the Municipal
Bond Fund, $1,000,000 in the Government Bond Fund, and $2,000,000 in the
Cash Reserve Fund, which including the earnings thereon are still invested
in the respective funds.
(a) Security Valuation
(1) Growth Fund, Municipal Bond Fund and Government Bond Fund: Securities
traded on a national securities exchange are valued at closing prices.
Listed securities for which no sale was reported on the valuation date
are valued at quoted bid prices. Short-term notes and bank certificates
of deposit are valued at amortized cost, which approximates market.
(2) Cash Reserve Fund: Securities are valued at amortized cost, which
approximates market value, in accordance with Rule 2a-7 of the
Investment Company Act of 1940, as amended.
(b) Security Transactions and Investment Income
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date; interest income, including pro rata and
constant yield amortization of premium and discount where applicable, is
recorded on an accrual basis.
(c) Federal Income Taxes
The Trust's policy is to comply with the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute all its taxable income to shareholders.
As of October 31, 1995, the Municipal and Government Bond Funds had net
capital loss carry forwards of $1,200,475 and $2,048,440, respectively,
which will expire in 7 to 8 years.
(d) Dividends to Shareholders
(1) Growth Fund:
Dividends are recorded on the ex-dividend date.
(2) Municipal Bond Fund, Government Bond Fund, and Cash Reserve Fund:
Dividends are declared daily and paid monthly net investment income.
Distributable net realized capital gains are declared and distributed at least
annually for all funds.
Dividends and distributions to shareholders are determined in accordance with
federal income tax regulations which may differ from generally accepted
accounting principles. These "book/tax" differences are considered either
permanent or temporary in nature. In accordance with AICPA Statement of Position
93-2, permanent differences are reclassified within the capital accounts based
on their nature for federal income tax purposes; temporary differences do not
require reclassification. Dividends and distributions that exceed net investment
income and net realized gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income and net
realized gains. To the extent distributions exceed current and accumulated
earnings and profits for federal income tax purposes, they are reported as
distributions of paid-in capital.
(e) Expenses
Direct expenses of a fund are allocated to that fund. General expenses of
the Trust are allocated to the funds based upon each fund's relative
average net assets.
2. Transactions with Affiliates
As investment manager for the Funds, Nationwide Financial Services, Inc.
(NFS), an affiliated company, receives an annual fee of .65% based on the
average daily net assets of the Funds. Total annual expenses of each Fund
will not exceed the limits prescribed by any state in which the Fund's
shares are offered for sale. Such limitation did not affect management fees
charged during the periods covered by the financial statements.
NFS also receives fees for distribution pursuant to a Rule 12b-1
Distribution Plan approved by the Board of Trustees. These fees are based
on average daily net assets of the Funds at an annual rate of .75%. NFS
waived distribution fees for the Growth, Municipal Bond, and Government
Bond Funds of $18,033, $65,771, and $476,865 respectively, representing
$.049, $.026, and $.073 per average share outstanding, during the year
ended October 31, 1995.
NFS also receives fees as principal underwriter from contingent deferred
sales charges (CDSC) ranging from 5% to 1%, changed from 6% maximum on
March 1, 1994, imposed on redemptions which cause the current value of an
account to fall below the total purchase payments made during the past six
years. During the year ended October 31, 1995, NFS received fees of
$28,961, $97,848, $75,240, and $10,596 on the Growth, Municipal Bond,
Government Bond, and Cash Reserve Funds, respectively. Additionally, the
Government Bond Fund retained fees (CDSC) of $181,387 pursuant to NASD
guidelines which limit sales charges payable to underwriters. These fees
are reported as "other income."
A subsidiary of NFS (Nationwide Investors Services, Inc.) acts as transfer
and dividend disbursing agent for the Funds.
3. Bank Loans
The Trust has an unsecured bank line of credit of $1,250,000. Borrowings
under this arrangement bear interest at the Federal Funds rate plus .50%.
As of October 31, 1995, the Municipal Bond Fund was paying interest at
6.31% per year on its outstanding borrowings. No compensating balances are
required.
4. Investment Transactions
Purchases and sales of investment securities (excluding short-term
securities), and purchases and sales of U.S. Government Obligations for the
year ended October 31, 1995 are summarized as follows:
<TABLE>
<CAPTION>
U.S. GOVT.
SECURITIES OBLIGATIONS
PURCHASES SALES PURCHASES SALES
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth Fund $ 1,968,808 2,318,346 1,496,301 1,601,432
Municipal Bond Fund 15,833,041 18,795,771 -- --
Government Bond Fund -- 1,232,576 93,339,389 97,442,768
Cash Reserve Fund -- -- 814,876 1,150,000
</TABLE>
Realized gains and losses have been computed on the first-in, first-out basis.
Included in net unrealized appreciation (depreciation) at October 31, 1995 are
the following components:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED UNREALIZED
GAINS LOSSES APPRECIATION
(DEPRECIATION)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Fund $1,920,737 (227,562) 1,693,175
Municipal Bond Fund 544,781 (110,276) 434,505
Government Bond Fund 3,089,329 (46,024) 3,043,305
</TABLE>
14
<PAGE> 15
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees of The Financial Horizons Investment
Trust:
We have audited the accompanying statements of assets and liabilities, including
the statements of investments, of The Financial Horizons Investment
Trust--Growth Fund, Municipal Bond Fund, Government Bond Fund, and Cash Reserve
Fund--as of October 31, 1995, and the related statements of operations,
statements of changes in net assets and financial highlights for each of the
periods indicated herein. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We condicted 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 and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
October 31, 1995 by confirmation with the custodian and other appropriate audit
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds comprising The Financial Horizons Investment Trust
as of October 31, 1995, the results of their operations, the changes in their
net assets and the financial highlights for each of the periods indicated
herein, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
December 8, 1995
15
<PAGE> 16
FINANCIAL HORIZONS INVESTMENT TRUST
TRUSTEES
Peter F. Frenzer
Chairman
Columbus, Ohio
John C. Bryant
Wilmington, Ohio
Robert M. Duncan
Columbus, Ohio
Thomas J. Kerr, IV
Evanston, Illinois
D. Richard McFerson
Columbus, Ohio
OFFICERS
James F. Laird, Jr.
Treasurer
Rae I. Mercer
Secretary
Katherine E. Laverentz
Assistant Treasurer
William M. Wright
Assistant Treasurer
Peter Neckermann
Assistant Treasurer
Harry A. Schermer
Assistant Treasurer
Craig A. Carver
Assistant Treasurer
William G. Goslee
Assistant Treasurer
TOLL-FREE TELEPHONE ASSISTANCE
1-800-848-0920
TRANSFER AGENT
Nationwide Investors Services, Inc.
Box 1492
One Nationwide Plaza
Columbus, Ohio 43216
CUSTODIAN
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
LEGAL COUNSEL
Druen, Rath & Dietrich
One Nationwide Plaza
Columbus, Ohio 43216
AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
NATIONAL DISTRIBUTOR AND INVESTMENT ADVISOR
Nationwide Financial Services, Inc.
One Nationwide Plaza
Columbus, Ohio 43216
Financial Horizons and its logo are service marks of Nationwide(R) Life
Insurance Company.
Financial Horizons Investment Trust
Box 182008
One Nationwide Plaza
Columbus, Ohio 43218
October 1995
Annual Report
BULK RATE
U.S. POSTAGE
PAID
COLUMBUS, OHIO
PERMIT NO. 492
16
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