- --------------------------------------------------------------------------------
QUAKER ENHANCED
STOCK MARKET FUND
- --------------------------------------------------------------------------------
a series of the Quaker Investment Trust
SEMI-ANNUAL REPORT 1997
FOR THE PERIOD ENDED DECEMBER 31
FUND SPONSOR
Quaker Funds, Inc.
1288 Valley Forge Road
Post Office Box 987
Valley Forge, Pennsylvania 19482
1-800-220-8888
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER ENHANCED STOCK MARKET FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 91.21%
Advertising - 0.92%
Gannett Company, Inc. ....................................................... 100 $ 6,181
Tribune Company ............................................................. 100 6,225
-------
12,406
-------
Aerospace & Defense - 3.73%
AlliedSignal Inc. ........................................................... 200 7,787
General Dynamics Corporation ................................................ 100 8,675
General Motors Corporation-Class H .......................................... 100 3,693
(a) Litton Industries, Inc. ..................................................... 100 5,750
Parker Hannifin Corporation ................................................. 200 9,175
Thiokol Corporation ......................................................... 100 8,125
United Technologies Corporation ............................................. 100 7,281
-------
50,486
-------
Agriculture - 0.86%
Deere & Company ............................................................. 200 11,650
-------
Auto & Trucks - 2.96%
Chrysler Corporation ........................................................ 100 3,518
Ford Motor Company .......................................................... 400 19,450
General Motors Corporation .................................................. 200 12,125
(a) Navistar International Corporation .......................................... 200 4,963
-------
40,056
-------
Auto & Trucks - Original Equipment - 0.25%
Arvin Industries, Inc. ...................................................... 100 3,331
-------
Beverages - 1.78%
The Coca-Cola Company ....................................................... 200 13,337
Coca-Cola Enterprises Inc. .................................................. 100 3,556
PepsiCo, Inc. ............................................................... 200 7,250
-------
24,143
-------
Building Materials - 1.13%
Masco Corporation ........................................................... 100 5,087
Vulcan Materials Company .................................................... 100 10,212
-------
15,299
-------
Brewery - 0.25%
Adolph Coors Company ........................................................ 100 3,325
-------
Chemicals - 3.87%
The Clorox Company .......................................................... 200 15,875
The Dow Chemical Company .................................................... 100 10,150
E.I. du Pont de Nemours and Company ......................................... 200 12,012
Georgia Gulf Corporation .................................................... 100 3,063
(Continued)
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER ENHANCED STOCK MARKET FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Chemicals - (Continued)
The Lubrizol Corporation ...................................................... 100 $ 3,688
Lyondell Petrochemical Company ................................................ 200 5,300
Millenium Chemicals Inc. ...................................................... 100 2,350
-------
52,438
-------
Commercial Services - 0.21%
Ogden Corporation ............................................................. 100 2,818
-------
Computers - 3.04%
Compaq Computer Corporation ................................................... 100 5,650
Dell Computer Corporation ..................................................... 100 8,400
International Business Machines ............................................... 200 20,912
(a) Storage Technology Corporation ................................................ 100 6,194
-------
41,156
-------
Computer Software & Services - 2.69%
Computer Associates International, Inc. ....................................... 200 10,600
(a) Microsoft Corporation ......................................................... 200 25,850
-------
36,450
-------
Cosmetics & Personal Care - 0.47%
Alberto-Culver Company ........................................................ 200 6,412
-------
Electronics - 2.71%
General Electric Company ...................................................... 500 36,687
-------
Electronics - Semiconductor - 1.36%
Intel Corporation ............................................................. 200 14,050
(a) SCI Systems, Inc. ............................................................. 100 4,356
-------
18,406
-------
Entertainment - 0.93%
(a) GTECH Holdings Corporation .................................................... 100 3,193
King World Productions, Inc. .................................................. 100 5,775
Meredith Corporation .......................................................... 100 3,568
-------
12,536
-------
Financial - Banks, Money Center - 5.94%
Chase Manhattan Corporation ................................................... 100 10,950
Citicorp ...................................................................... 200 25,287
Comerica, Inc. ................................................................ 100 9,025
First Chicago NBD Corporation ................................................. 200 16,700
First Union Corporation ....................................................... 100 5,125
Norwest Corporation ........................................................... 200 7,713
State Street Corporation ...................................................... 100 5,819
-------
80,619
-------
(Continued)
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER ENHANCED STOCK MARKET FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Financial - Savings/Loans/Thrift - 1.22%
Golden West Financial Corporation ............................................... 100 $ 9,781
H.F. Ahmanson & Company ......................................................... 100 6,694
-------
16,475
-------
Financial - Securities Brokers - 3.00%
A.G. Edwards, Inc. .............................................................. 100 3,975
Bear Stearns Companies, Inc. .................................................... 100 4,750
Donaldson, Lufkin & Jenrette, Inc. .............................................. 100 7,950
Merrill Lynch & Co. ............................................................. 200 14,588
Morgan Stanley, Dean Witter, Discover and Co. ................................... 100 5,913
Paine Webber Group Inc. ......................................................... 100 3,456
-------
40,632
-------
Financial Services - 3.21%
American Express Company ........................................................ 100 8,925
Comdisco, Inc. .................................................................. 100 3,344
Fannie Mae ...................................................................... 400 22,825
Freddie Mac ..................................................................... 200 8,388
-------
43,482
-------
Food - Processing - 0.13%
(a) Ralcorp Holdings, Inc. .......................................................... 100 1,694
-------
Food - Wholesale - 1.79%
Quaker Oats Company ............................................................. 300 15,825
SUPERVALU INC ................................................................... 200 8,375
-------
24,200
-------
Homebuilders - 0.63%
Centex Corporation .............................................................. 100 6,294
Kaufman & Broad Home Corporation ................................................ 100 2,244
-------
8,538
-------
Household Products & Housewares - 2.92%
Ethan Allen Interiors Inc. ...................................................... 100 3,856
Maytag Corporation .............................................................. 100 3,731
The Procter & Gamble Company .................................................... 400 31,925
-------
39,512
-------
Insurance - Life & Health - 1.19%
Jefferson-Pilot Corporation ..................................................... 100 7,788
ReliaStar Financial Corporation ................................................. 100 4,119
SunAmerica, Inc. ................................................................ 100 4,275
-------
16,182
-------
(Continued)
</TABLE>
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<TABLE>
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QUAKER ENHANCED STOCK MARKET FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Insurance - Multiline - 4.48%
Allstate Corporation .......................................................... 300 $27,263
American International Group, Inc. ............................................ 200 21,750
Old Republic International Corporation ........................................ 200 7,438
Torchmark Corporation ......................................................... 100 4,219
-------
60,670
-------
Machine - Construction & Mining - 1.37%
Caterpillar Inc. .............................................................. 300 14,569
Ingersoll-Rand Company ........................................................ 100 4,050
-------
18,619
-------
Machine - Diversified - 2.28%
Aeroquip-Vickers Inc. ......................................................... 100 4,906
Cooper Industries, Inc. ....................................................... 200 9,800
Dover Corporation ............................................................. 200 7,225
Eaton Corporation ............................................................. 100 8,925
-------
30,856
-------
Metal Fabrication & Hardware - 0.25%
The Timken Company ............................................................ 100 3,438
-------
Miscellaneous - Distribution & Wholesale - 0.46%
Unilever NV ................................................................... 100 6,244
-------
Miscellaneous - Manufacturing - 0.37%
National Service Industries, Inc. ............................................. 100 4,956
-------
Office & Business Equipment - 1.75%
Pitney-Bowes, Inc. ............................................................ 100 8,994
Xerox Corporation ............................................................. 200 14,775
-------
23,769
-------
Oil & Gas - Equipment & Services - 1.54%
Halliburton Company ........................................................... 100 5,188
(a) Key Energy Group, Inc. ........................................................ 100 2,169
Schlumberger Limited .......................................................... 100 8,050
Tidewater, Inc. ............................................................... 100 5,513
-------
20,920
-------
Oil & Gas - Exploration - 2.88%
(a) Cabot Oil & Gas Corporation ................................................... 100 1,944
Cliffs Drilling Company ....................................................... 100 4,988
Columbia Gas System, Inc. ..................................................... 100 7,856
Mobil Corporation ............................................................. 300 21,656
(a) Oryx Energy Company ........................................................... 100 2,550
-------
38,994
-------
(Continued)
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER ENHANCED STOCK MARKET FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Oil & Gas - International - 3.68%
Atlantic Richfield Company .................................................. 200 $ 16,025
Exxon Corporation ........................................................... 100 6,119
Helmerich & Payne, Inc. ..................................................... 100 6,788
Penzoil Company ............................................................. 100 6,681
Texaco Inc. ................................................................. 200 10,875
USX-Marathon Group .......................................................... 100 3,375
--------
49,863
--------
Pharmaceuticals - 8.39%
Bristol-Myers Squibb Company ................................................ 500 47,250
Eli Lilly & Company ......................................................... 300 20,888
Merck & Co., Inc. ........................................................... 100 10,625
Pfizer Inc. ................................................................. 300 22,425
Schering-Plough Corporation ................................................. 200 12,425
--------
113,613
--------
Publishing - Printing - 0.82%
The McGraw-Hill Companies, Inc. ............................................. 100 7,400
(a) Valassis Communications, Inc. ............................................... 100 3,700
--------
11,100
--------
Retail - Apparel - 1.71%
Burlington Coat Factory Warehouse Co. ....................................... 200 3,288
Kellwood Company ............................................................ 100 3,000
Liz Claiborne, Inc. ......................................................... 100 4,181
The TJX Companies, Inc. ..................................................... 100 3,438
VF Corporation .............................................................. 200 9,300
--------
23,207
--------
Retail - Department Stores - 1.37%
Dayton Hudson Corporation ................................................... 100 6,750
Wal-Mart Stores, Inc. ....................................................... 300 11,831
--------
18,581
--------
Retail - Grocery - 1.39%
Albertson's, Inc. ........................................................... 400 18,900
--------
Retail - Specialty Line - 0.79%
(a) Best Buy Co., Inc. .......................................................... 100 3,687
Tandy Corporation ........................................................... 100 3,856
(a) Toys "R" Us, Inc. ........................................................... 100 3,144
--------
10,687
--------
Telecommunications - 0.30%
Alltel Corporation .......................................................... 100 4,106
--------
(Continued)
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER ENHANCED STOCK MARKET FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Telecommunications Equipment - 0.61%
(a) AirTouch Communications, Inc. ............................................... 200 $ 8,313
----------
Tobacco Products - 1.00%
Philip Morris Companies Inc. ................................................ 300 13,575
----------
Transportation - Air - 2.22%
(a) AMR Corporation ............................................................. 100 12,850
(a) Northwest Airlines Corp. .................................................... 100 4,788
(a) US Airways Group Inc. ....................................................... 200 12,500
----------
30,138
----------
Transportation - Rail - 1.39%
Burlington Northern Santa Fe Corporation .................................... 100 9,294
Kansas City Southern Industries, Inc. ....................................... 200 6,350
(a) USFreightways Corporation ................................................... 100 3,250
----------
18,894
----------
Utilities - Telecommunications - 4.97%
Ameritech Corporation ....................................................... 200 16,100
A T & T Corporation ......................................................... 500 30,656
BellSouth Corporation ....................................................... 100 5,631
GTE Corporation ............................................................. 200 10,450
U S WEST Communications Group ............................................... 100 4,513
----------
67,350
----------
Total Common Stocks (Cost $1,158,453) ....................................... 1,235,726
----------
INVESTMENT COMPANIES - 8.15%
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares ................................... 68,587 68,587
Evergreen Money Market Treasury Institutional Treasury Money
Market Fund Institutional Service Shares ................................... 41,955 41,955
----------
Total Investment Companies (Cost $110,542) ................................. 110,542
----------
Total Value of Investments (Cost $1,268,995 (b)) ........................................ 99.36% $1,346,268
Other Assets Less Liabilities ........................................................... 0.64% 8,607
---------- ----------
Net Assets ....................................................................... 100.00% $1,354,875
========== ==========
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER ENHANCED STOCK MARKET FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax purposes is the same. Unrealized appreciation (depreciation)
of investments for financial reporting and federal income tax purposes is as follows:
Unrealized appreciation ............................................................. $ 95,311
Unrealized depreciation ............................................................. (18,038)
--------
Net unrealized appreciation ......................................................... $ 77,273
========
See accompanying notes to financial statements
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER ENHANCED STOCK MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
(Unaudited)
ASSETS
Investments, at value (cost $1,268,995) ........................................................... $1,346,268
Income receivable ................................................................................. 1,701
Deferred organization expenses, net (note 4) ...................................................... 25,883
Other asset ....................................................................................... 293
----------
Total assets ................................................................................. 1,374,145
----------
LIABILITIES
Accrued expenses .................................................................................. 7,837
Due to fund sponsor (note 3) ...................................................................... 8,791
Disbursements in excess of cash on demand deposit ................................................. 2,642
----------
Total liabilities ............................................................................ 19,270
----------
NET ASSETS
(applicable to 111,589 shares outstanding; unlimited
shares of $0.01 par value beneficial interest authorized) ....................................... $1,354,875
==========
NET ASSET VALUE, REDEMPTION AND MAXIMUM OFFERING PRICE
PER SHARE
($1,354,875 / 111,589 shares) ..................................................................... $ 12.14
==========
NET ASSETS CONSIST OF
Paid-in capital ................................................................................... $1,250,411
Undistributed net investment income ............................................................... 15
Undistributed net realized gain on investments .................................................... 27,176
Net unrealized appreciation on investments ........................................................ 77,273
----------
$1,354,875
==========
See accompanying notes to financial statements
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER ENHANCED STOCK MARKET FUND
STATEMENT OF OPERATIONS
Period ended December 31, 1997
(Unaudited)
INVESTMENT INCOME
Income
Dividends ..................................................................................... $ 8,475
Interest ...................................................................................... 906
---------
Total income ............................................................................. 9,381
---------
Expenses
Investment advisory fees (note 2) ............................................................. 2,674
Fund administration fees (note 2) ............................................................. 936
Shareholder servicing fees (note 3) ........................................................... 1,070
Custody fees .................................................................................. 3,238
Registration and filing administration fees (note 2) .......................................... 769
Fund accounting fees (note 2) ................................................................. 12,000
Audit fees .................................................................................... 2,500
Legal fees .................................................................................... 921
Securities pricing fees ....................................................................... 4,161
Shareholder recordkeeping fees ................................................................ 3,000
Shareholder servicing expenses ................................................................ 737
Registration and filing expenses .............................................................. 320
Printing expenses ............................................................................. 108
Amortization of deferred organization expenses (note 4) ....................................... 3,406
Trustee fees and meeting expenses ............................................................. 44
Other operating expenses ...................................................................... 610
---------
Total expenses ........................................................................... 36,494
---------
Less:
Expense reimbursements (note 3) .................................................... (27,386)
Investment advisory fees waived (note 2) ........................................... (2,674)
Shareholder servicing fees waived (note 3) ......................................... (1,070)
---------
Net expenses ............................................................................. 5,364
---------
Net investment income .............................................................. 4,017
---------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ..................................................... 122,279
Decrease in unrealized appreciation on investments ................................................. (18,991)
---------
Net realized and unrealized gain on investments ............................................... 103,288
---------
Net increase in net assets resulting from operations ..................................... $ 107,305
=========
See accompanying notes to financial statements
</TABLE>
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<TABLE>
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QUAKER ENHANCED STOCK MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1996
(commencement
Period ended of operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income ............................................................... $ 4,017 $ 3,607
Net realized gain (loss) from investment transactions ............................... 122,279 (3,149)
Increase (decrease) in unrealized appreciation on investments ....................... (18,991) 96,264
------- ------
Net increase in net assets resulting from operations .............................. 107,305 96,722
------- ------
Distributions to shareholders from
Net investment income ............................................................... (4,067) (3,542)
Net realized gain from investment transactions ...................................... (91,954) 0
------- ------
Decrease in net assets resulting from distributions ............................... (96,021) (3,542)
------- ------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ................ 561,017 689,394
------- -------
Total increase in net assets .................................................... 572,301 782,574
NET ASSETS
Beginning of period ................................................................... 782,574 0
------- -------
End of period (including undistributed net investment income .......................... $ 1,354,875 $ 782,574
of $15 as of December 31, 1997 and $65 as of ========== =========
June 30, 1997)
(a) A summary of capital share activity follows:
- ------------------------------------------------------------------------------------------------------------------------------------
For the period from November 25, 1996
Period ended (commencement of operations) to
December 31, 1997 June 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value
Shares sold ........................................ 37,781 $ 468,657 67,743 $ 707,083
Shares issued for reinvestment of
distributions ................................... 7,682 92,775 301 3,442
------ ------- ------ -------
45,463 561,432 68,044 710,525
Shares redeemed .................................... (34) (415) (1,884) (21,131)
------ ------- ------ -------
Net increase .................................... 45,429 $ 561,017 66,160 $ 689,394
====== ======= ====== =========
See accompanying notes to financial statements
</TABLE>
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<TABLE>
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QUAKER ENHANCED STOCK MARKET FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1996
(commencement
Period ended of operations)
` December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ............................................. $11.83 $10.00
------ ------
Income from investment operations
Net investment income ........................................................ 0.04 0.07
Net realized and unrealized gain on investments .............................. 1.25 1.83
---- ----
Total from investment operations .......................................... 1.29 1.90
---- ----
Distributions to shareholders from
Net investment income ........................................................ (0.04) (0.07)
Net realized gain from investment transactions ............................... (0.94) 0.00
----- ----
Total distributions ....................................................... (0.98) (0.07)
----- -----
Net asset value, end of period ................................................... $12.14 $11.83
====== ======
Total return (b) ................................................................. 11.11% 19.04%
===== =====
Ratios/supplemental data
Net assets, end of period ...................................................... $1,354,875 $782,574
========== ========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ................................ 6.82 %(a) 16.44%(a)
After expense reimbursements and waived fees ................................. 1.00 %(a) 1.00%(a)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ................................ (5.07)%(a) (14.32)%(a)
After expense reimbursements and waived fees ................................. 0.76 %(a) 1.14 %(a)
Portfolio turnover rate ........................................................ 155.10 % 34.26 %(a)
Average broker commissions per share (c) ....................................... $0.0198 $0.0203
(a) Annualized.
(b) Aggregate total return, not annualized.
(c) Represents total commissions paid on portfolio securities divided by total portfolio shares purchased or sold on which
commissions were charged.
See accompanying notes to financial statements
</TABLE>
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Quaker Enhanced Stock Market Fund (the "Fund") is a diversified series of
shares of beneficial interest of the Quaker Investment Trust (the "Trust"). The
Trust, an open-end investment company, was organized on October 24, 1990 as a
Massachusetts Business Trust and is registered under the Investment Company Act
of 1940, as amended. The investment objective of the Fund is to provide
long-term capital growth by investing primarily in equity securities of domestic
U.S. companies. The Fund began operations on November 25, 1996. The following is
a summary of significant accounting policies followed by the Fund.
A. Security Valuation - The Fund's investments in securities are carried
at value. Securities listed on an exchange or quoted on a national
market system are valued at 4:00 p.m., New York time on the day of
valuation. Other securities traded in the over-the-counter market and
listed securities for which no sale was reported on that date are
valued at the most recent bid price. Securities for which market
quotations are not readily available, if any, are valued by using an
independent pricing service or by following procedures approved by the
Board of Trustees. Short-term investments are valued at cost which
approximates value.
B. Federal Income Taxes - No provision has been made for federal income
taxes or personal holding company taxes since it is the policy of the
Fund to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies and personal holding
companies and to make sufficient distributions of taxable income to
relieve it from substantially all federal income taxes.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and income tax purposes primarily because of
losses incurred subsequent of October 31, which are deferred for income
tax purposes. The character of distributions made during the year from
net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to
the timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or realized
gains were recorded by the Fund.
C. Investment Transactions - Investment transactions are recorded on the
trade date. Realized gains and losses are determined using the specific
identification cost method. Interest income is recorded daily on an
accrual basis. Dividend income is recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares dividends
annually, payable in December, on a date selected by the Trust's
Trustees. In addition, distributions may be made annually in December
out of net realized gains through October 31 of that year.
Distributions to shareholders are recorded on ex-dividend date. The
Fund may make a supplemental distribution subsequent to the end of its
fiscal year ending June 30.
E. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts of
assets, liabilities, expenses and revenues reported in the financial
statements. Actual results could differ from those estimates.
(Continued)
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, Fiduciary Asset Management Company
(the "Advisor") provides the Fund with a continuous program of supervision of
the Fund's assets, including the composition of its portfolio, and furnishes
advice and recommendations with respect to investments, investment policies and
the purchase and sale of securities. As compensation for its services, the
Advisor receives a fee at the annual rate of 0.50% of the Fund's average daily
net assets. The Advisor intends to voluntarily waive all or a portion of its
fee. There can be no assurance that the foregoing voluntary fee waivers will
continue. The Advisor has voluntarily waived its fee amounting to $2,674 ($0.03
per share) for the period ended December 31, 1997.
The Fund's administrator, The Nottingham Company (the "Administrator"), provides
administrative services to and is generally responsible for the overall
management and day-to-day operations of the Fund pursuant to an accounting and
administrative agreement with the Trust. As compensation for its services, the
Administrator receives a fee at the annual rate of 0.175% of the Fund's first
$50 million of average daily net assets, 0.150% of the next $50 million of
average daily net assets, and 0.125% of its average daily net assets in excess
of $100 million. The Administrator also receives a monthly fee of $2,000 for
accounting and recordkeeping services. The administrator also charges the Fund
for certain expenses involved with the daily valuation of portfolio securities.
North Carolina Shareholder Services, LLC (the "Transfer Agent") serves as the
Funds' transfer, dividend paying, and shareholder servicing agent. The Transfer
Agent, subject to the authority of the Board of Trustees, provides transfer
agency services pursuant to an agreement with the Administrator, which has been
approved by the Trust. The Transfer Agent maintains the records of each
shareholder's account, answers shareholder inquiries concerning accounts,
processes purchases and redemptions of Fund shares, acts as dividend and
distribution disbursing agent, and performs other shareholder servicing
functions. The Transfer Agent is compensated for its services by the
Administrator and not directly by the Funds. Each Fund pays a monthly fee for
these services based on the number of shareholders in each Fund, subject to a
monthly minimum fee of $500.
The Fund's Distributor, Quaker Securities, Inc. (the "Distributor") was paid
commissions of $1,366 for purchases and sales of investments, other than
short-term investments for the period ended December 31, 1997.
Certain Trustees and officers of the Trust are also officers of the Advisor, the
Distributor or the Administrator.
NOTE 3 - SERVICE FEES
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act of
1940 (the "Act"), adopted a Shareholder Servicing Agreement (the "Agreement").
Pursuant to this Agreement, Quaker Funds, Inc. (the "Sponsor") will provide
oversight with respect to the Fund's investment advisor, arrange for payment of
investment advisory and
(Continued)
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
administrative fees, coordinate payments under the Fund's Distribution Plan,
develop communications with existing Fund shareholders, assist in responding to
shareholder inquiries, and will provide other shareholder services. As
compensation for the services, Quaker Funds, Inc. receives 0.20% of the Fund's
average daily net assets. The Sponsor intends to voluntarily waive all or a
portion of its fee and reimburse expenses of the Fund to limit total Fund
operating expenses to 1.00% of the average daily net assets of the Fund. There
can be no assurance that the foregoing voluntary fee waivers or reimbursements
will continue. The Sponsor has voluntarily waived its fee amounting to $1,070
and has reimbursed expenses totaling $27,386 for the period ended December 31,
1997.
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
Expenses totaling $33,324 incurred in connection with its organization and the
registration of its shares, which were originally paid by the Fund's Sponsor,
have been assumed by the Fund.
The organization expenses are being amortized using the straight-line method
over a period of sixty months. Investors purchasing shares of the Fund bear such
expenses only as they are amortized against the Fund's investment income.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $1,941,396 and $1,567,041, respectively, for the period ended
December 31, 1997.
NOTE 6 - DISTRIBUTIONS
For federal income tax purposes, the Fund must report distributions from net
realized gain from investment transactions that represent long-term capital gain
to its shareholders. The total $0.94 per share of such distributions for the
period ended December 31, 1997 represents short-term capital gain distributions,
taxable as ordinary income to shareholders for federal income tax purposes.
Shareholders should consult a tax advisor on how to report distributions for
state and local income tax purposes.
<PAGE>
- --------------------------------------------------------------------------------
QUAKER CORE
EQUITY FUND
- --------------------------------------------------------------------------------
a series of the Quaker Investment Trust
SEMI-ANNUAL REPORT 1997
FOR THE PERIOD ENDED DECEMBER 31
FUND SPONSOR
Quaker Funds, Inc.
1288 Valley Forge Road
Post Office Box 987
Valley Forge, Pennsylvania 19482
1-800-220-8888
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 95.13%
Aerospace & Defense - 7.00%
AlliedSignal Inc. ........................................................ 500 $19,469
The Boeing Company ....................................................... 400 19,575
Lockheed Martin Corporation .............................................. 200 19,700
-------
58,744
-------
Beverages - 1.30%
PepsiCo, Inc. ............................................................ 300 10,875
-------
Computers - 3.57%
Compaq Computer Corporation .............................................. 200 11,300
Hewlett-Packard Company .................................................. 300 18,712
-------
30,012
-------
Computer Software & Services - 11.87%
Automatic Data Processing, Inc. .......................................... 200 12,275
(a) Ceridian Corporation ..................................................... 300 13,744
(a) Cisco Systems, Inc. ...................................................... 300 16,725
Computer Associates International, Inc. .................................. 600 31,800
(a) Safeguard Scientifics, Inc. .............................................. 800 25,100
-------
99,644
-------
Cosmetics & Personal Care - 5.40%
Colgate-Palmolive Company ................................................ 400 29,400
Procter & Gamble Company ................................................. 200 15,962
-------
45,362
-------
Electronics - 1.75%
General Electric Company ................................................. 200 14,675
-------
Electronics - Semiconductor - 3.87%
Motorola, Inc. ........................................................... 200 11,438
Intel Corporation ........................................................ 300 21,075
-------
32,513
-------
Engineering & Construction - 0.89%
Fluor Corporation ........................................................ 200 7,475
-------
Entertainment - 1.48%
Time Warner Inc. ......................................................... 200 12,400
-------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Financial Services - 6.93%
Franklin Resources, Inc. ................................................... 200 $17,387
Fannie Mae ................................................................. 300 17,119
Morgan Stanley, Dean Witter, Discover and Co. .............................. 400 23,650
-------
58,156
-------
Financial - Banks, Money Center - 7.19%
Citicorp ................................................................... 100 12,644
J.P. Morgan & Company Incorporated ......................................... 100 11,288
Mellon Bank Corporation .................................................... 300 18,187
NationsBank Corporation .................................................... 300 18,244
-------
60,363
-------
Financial - Securities Brokers - 3.31%
SLM Holding Corporation .................................................... 200 27,825
-------
Food - Processing - 4.84%
Heinz (H.J.) Company ....................................................... 200 10,162
Hershey Foods Corporation .................................................. 200 12,388
Philip Morris Companies Inc. ............................................... 400 18,100
-------
40,650
-------
Insurance - Life & Health - 1.22%
AFLAC Incorporated ......................................................... 200 10,225
-------
Insurance - Multiline - 1.94%
American International Group ............................................... 150 16,312
-------
Medical Supplies - 1.57%
Johnson & Johnson .......................................................... 200 13,175
-------
Medical - Hospital Management & Service - 1.27%
(a) Genesis Health Ventures, Inc. .............................................. 400 10,700
-------
Medical - Biotechnology - 8.31%
Merck & Co., Inc. .......................................................... 200 21,250
Pfizer Inc. ................................................................ 400 29,900
Schering-Plough Corporation ................................................ 300 18,638
-------
69,788
-------
Mining - 1.98%
Potash Corporation of Saskatchewan Inc. .................................... 200 16,600
-------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Office & Business Equipment - 3.21%
Ikon Office Solutions, Inc. ............................................... 300 $ 8,437
Xerox Corporation ......................................................... 250 18,469
--------
26,906
--------
Oil & Gas - Equipment & Services - 2.88%
Schlumberger Limited ...................................................... 300 24,150
--------
Oil & Gas - Exploration - 1.58%
El Paso Natural Gas Company ............................................... 200 13,300
--------
Oil & Gas - International - 1.46%
Exxon Corporation ......................................................... 200 12,238
--------
Restaurants & Food Service - 4.00%
McDonald's Corporation .................................................... 400 19,050
(a) Tricon Global Restaurants, Inc. ........................................... 500 14,531
--------
33,581
--------
Shoes - Leather - 0.93%
Nike, Inc. ................................................................ 200 7,825
--------
Telecommunications Equipment - 4.02%
Lucent Technologies, Inc. ................................................. 200 15,975
Northern Telecom Limited .................................................. 200 17,750
--------
33,725
--------
Wholesale - Special Line - 1.36%
Unisource Worldwide, Inc. ................................................. 800 11,400
--------
Total Common Stocks (Cost $682,693) ....................................... 798,619
--------
INVESTMENT COMPANY - 3.12%
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares
(Cost $26,154) ............................................................ 26,154 26,154
--------
Total Value of Investments (Cost $708,847 (b)) ........................................ 98.25% $824,773
Other Assets Less Liabilities ......................................................... 1.75% 14,726
-------- --------
Net Assets ..................................................................... 100.00% $839,499
======== ========
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax purposes is the same. Unrealized appreciation
(depreciation) of investments for financial reporting and federal income tax purposes is as follows:
Unrealized appreciation ............................................................ $ 135,239
Unrealized depreciation ............................................................ (19,313)
---------
Net unrealized appreciation ........................................................ $ 115,926
=========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER CORE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
(Unaudited)
ASSETS
Investments, at value (cost $708,847) .............................................................. $824,773
Cash ............................................................................................... 6,307
Income receivable .................................................................................. 902
Deferred organization expenses, net (note 4) ....................................................... 25,883
Other asset ........................................................................................ 254
--------
Total assets .................................................................................. 858,119
--------
LIABILITIES
Accrued expenses ................................................................................... 6,387
Due to fund sponsor (note 3) ....................................................................... 12,233
--------
Total liabilities ............................................................................. 18,620
--------
NET ASSETS
(applicable to 66,332 shares outstanding; unlimited
shares of $0.01 par value beneficial interest authorized) ......................................... $839,499
========
NET ASSET VALUE, REDEMPTION, AND OFFERING PRICE PER SHARE
($839,499 / 66,332 shares) ......................................................................... $ 12.66
========
NET ASSETS CONSIST OF
Paid-in capital .................................................................................... $722,685
Undistributed net investment income ................................................................ 103
Undistributed net realized gain on investments ..................................................... 785
Net unrealized appreciation on investments ......................................................... 115,926
--------
$839,499
========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER CORE EQUITY FUND
STATEMENT OF OPERATIONS
December 31, 1997
(Unaudited)
INVESTMENT INCOME
Income
Dividends ...................................................................................... $ 3,926
Interest ....................................................................................... 433
--------
Total income .............................................................................. 4,359
--------
Expenses
Investment advisory fees (note 2) .............................................................. 2,371
Fund administration fees (note 2) .............................................................. 553
Custody fees ................................................................................... 698
Registration and filing administration fees .................................................... 770
Fund accounting fees (note 2) .................................................................. 12,000
Audit fees ..................................................................................... 2,017
Legal fees ..................................................................................... 1,404
Securities pricing fees ........................................................................ 1,137
Shareholder servicing fees (note 3) ............................................................ 790
Shareholder recordkeeping fees (note 2) ........................................................ 3,000
Shareholder servicing expenses ................................................................. 726
Registration and filing expenses ............................................................... 283
Printing expenses .............................................................................. 108
Amortization of deferred organization expenses (note 4) ........................................ 3,406
Trustee fees and meeting expenses .............................................................. 45
Other operating expenses ....................................................................... 483
--------
Total expenses ............................................................................ 29,791
--------
Less:
Expense reimbursements (note 3) ..................................................... (22,374)
Investment advisory fees waived (note 2) ............................................ (2,371)
Shareholder servicing fees waived (note 3) .......................................... (790)
--------
Net expenses .............................................................................. 4,256
--------
Net investment income ............................................................... 103
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ...................................................... 4,786
Increase in unrealized appreciation on investments .................................................. 47,566
--------
Net realized and unrealized gain on investments ................................................ 52,352
--------
Net increase in net assets resulting from operations ...................................... $ 52,455
========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER CORE EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1996
(commencement
Period ended of operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income ........................................................... $ 103 $1,024
Net realized gain (loss) from investment transactions ........................... 4,786 (4,002)
Increase in unrealized appreciation on investments .............................. 47,566 68,360
------ ------
Net increase in net assets resulting from operations ......................... 52,455 65,382
------ ------
Distributions to shareholders from
Net investment income ........................................................... 0 (1,024)
------ ------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ............ 268,519 454,167
------- -------
Total increase in net assets .............................................. 320,974 518,525
NET ASSETS
Beginning of period ................................................................ 518,525 0
------- -------
End of period (including undistributed net investment income ....................... $839,499 $518,525
of $103 at December 31, 1997) ======= =======
(a) A summary of capital share activity follows:
- ------------------------------------------------------------------------------------------------------------------------------------
For the period from November 25
Period ended (commencement of operations)
December 31, 1997 June 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value
--------- -------- ------- -------
Shares sold .............................................. 22,127 $274,310 $45,060 $458,899
Shares issued for reinvestment
of distributions ....................................... 0 0 93 1,024
--------- -------- -------- -------
22,127 274,310 45,153 459,923
Shares redeemed .......................................... (458) (5,791) (490) (5,756)
--------- -------- -------- --------
Net increase ........................................... 21,669 $268,519 44,663 $454,167
========= ======== ======== ========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER CORE EQUITY FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1996
(commencement of
Period ended operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ................................................. $11.61 $10.00
---------- -------------
Income from investment operations
Net investment income .................................................... 0.00 0.04
Net realized and unrealized gain on investments .......................... 1.05 1.61
---------- -------------
Total from investment operations .................................... 1.05 1.65
---------- -------------
Distributions to shareholders from
Net investment income .................................................... 0.00 (0.04)
---------- -------------
Net asset value, end of period ....................................................... $12.66 $11.61
========== =============
Total return (b) ..................................................................... 9.04% 16.50%
========== =============
Ratios/supplemental data
Net assets, end of period ..................................................... $839,499 $518,525
========== =============
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ............................ 9.42% (a) 21.30% (a)
After expense reimbursements and waived fees ............................. 1.35% (a) 1.35% (a)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ............................ (8.05)%(a) (19.47)%(a)
After expense reimbursements and waived fees ............................. 0.04% (a) 0.49
Portfolio turnover rate ....................................................... 6.02% 11.49%
Average broker commissions per share (c) ...................................... $0.1785 $0.2536
(a) Annualized.
(b) Aggregate total return, not annualized.
(c) Represents total commissions paid on portfolio securities divided by total portfolio shares purchased or sold on which
commissions were charged.
See accompanying notes to financial statements
</TABLE>
<PAGE>
QUAKER CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Quaker Core Equity Fund (the "Fund") is a diversified series of shares of
beneficial interest of the Quaker Investment Trust (the "Trust"). The Trust, an
open-end investment company, was organized on October 24, 1990, as a
Massachusetts Business Trust and is registered under the Investment Company Act
of 1940, as amended. The investment objective of the Fund is to provide
shareholders with long-term capital growth by investing primarily in equity
securities of domestic U.S. companies. The Fund began operations on November 25,
1996. The following is a summary of significant accounting policies followed by
the Fund.
A. Security Valuation - The Fund's investments in securities are carried
at value. Securities listed on an exchange or quoted on a national
market system are valued at 4:00 p.m., New York time on the day of
valuation. Other securities traded in the over-the-counter market and
listed securities for which no sale was reported on that date are
valued at the most recent bid price. Securities for which market
quotations are not readily available, if any, are valued by using an
independent pricing service or by following procedures approved by the
Board of Trustees. Short-term investments are valued at cost which
approximates value.
B. Federal Income Taxes - No provision has been made for federal income
taxes or personal holding company taxes since it is the policy of the
Fund to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies and personal holding
companies and to make sufficient distributions of taxable income to
relieve it from substantially all federal income taxes.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and income tax purposes primarily because of
losses incurred subsequent to October 31, which are deferred for income
tax purposes. The character of distributions made during the year from
net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to
the timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or realized
gains were recorded by the Fund.
C. Investment Transactions - Investment transactions are recorded on the
trade date. Realized gains and losses are determined using the specific
identification cost method. Interest income is recorded daily on an
accrual basis. Dividend income is recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares dividends
annually, payable in December, on a date selected by the Trust's
Trustees. In addition, distributions may be made annually in December
out of net realized gains through October 31 of that year.
Distributions to shareholders are recorded on the ex-dividend date. The
Fund may make a supplemental distribution subsequent to the end of its
fiscal year ending June 30.
(Continued)
<PAGE>
QUAKER CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
E. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts of
assets, liabilities, expenses and revenues reported in the financial
statements. Actual results could differ from those estimates.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, West Chester Capital Advisors,
Inc. (the "Advisor") provides the Fund with a continuous program of supervision
of the Fund's assets, including the composition of its portfolio, and furnishes
advice and recommendations with respect to investments, investment policies and
the purchase and sale of securities. As compensation for its services, the
Advisor receives a fee at the annual rate of 0.75% of the Fund's average daily
net assets. The Advisor intends to voluntarily waive all or a portion of its
fee. There can be no assurance that the foregoing voluntary fee waivers will
continue. The Advisor has voluntarily waived its fee amounting to $2,371 ($0.05
per share) for the period ended December 31, 1997.
The Fund's administrator, The Nottingham Company (the "Administrator"), provides
administrative services to and is generally responsible for the overall
management and day-to-day operations of the Fund pursuant to an accounting and
administrative agreement with the Trust. As compensation for its services, the
Administrator receives a fee at the annual rate of 0.175% of the Fund's first
$50 million of average daily net assets, 0.150% of the next $50 million of
average daily net assets, and 0.125% of its average daily net assets in excess
of $100 million. The Administrator also receives a monthly fee of $2,000 for
accounting and recordkeeping services. The Administrator also charges the Fund
for certain expenses involved with the daily valuation of portfolio securities.
NC Shareholder Services, LLC (the "Transfer Agent") has been retained by the
Manager to serve as the Fund's transfer, dividend paying, and shareholder
servicing agent. The Transfer Agent, whose address is 107 North Washington
Street, Post Office Box 4365, Rocky Mount, North Carolina 27803-0365, was
established as a North Carolina limited liability company in 1997. The Transfer
Agent maintains the records of each shareholder's account, answers shareholder
inquiries concerning accounts, processes purchases and redemptions of Fund
shares, acts as dividend and distribution disbursing agent, and performs other
shareholder servicing functions. The Transfer Agent is compensated for its
services by the Manager and not directly by the Fund.
Certain organization expenses totaling $23,333 and $833 were paid to a company
controlled by the Administrator and to an officer of the Fund, respectively, for
the period ended December 31, 1997.
The Fund's Distributor, Quaker Securities, Inc. (the "Distributor") was paid
commissions of $1,105 for purchases and sales of investments, other than
short-term investments for the period ended December 31, 1997.
Certain Trustees and officers of the Trust are also officers of the Advisor, the
Distributor or the Administrator.
(Continued)
<PAGE>
QUAKER CORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 3 - SERVICE FEES
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act of
1940 (the "Act"), adopted a Shareholder Servicing Agreement (the "Agreement").
Pursuant to this Agreement, Quaker Funds, Inc. (the "Sponsor") will provide
oversight with respect to the Fund's investment advisor, arrange for payment of
investment advisory and administrative fees, coordinate payments under the
Fund's Distribution Plan, develop communications with existing Fund
shareholders, assist in responding to shareholder inquiries, and will provide
other shareholder services. As compensation for these services, Quaker Funds,
Inc. receives 0.25% of the Fund's average daily net assets. The Sponsor intends
to voluntarily waive all or a portion of its fee and reimburse expenses of the
Fund to limit total Fund operating expenses to 1.35% of the average daily net
assets of the Fund. There can be no assurance that the foregoing voluntary fee
waivers or reimbursements will continue. The Sponsor has voluntarily waived its
fee amounting to $790 and has reimbursed expenses totaling $22,374 for the
period ended December 31, 1997.
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
Expenses totaling $33,324 incurred in connection with its organization and the
registration of its shares, which were originally paid by the Fund's Sponsor,
have been assumed by the Fund.
The organization expenses are being amortized using the straight-line method
over a period of sixty months. Investors purchasing shares of the Fund bear such
expenses only as they are amortized against the Fund's investment income.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $280,916 and $36,414, respectively, for the period ended December 31,
1997.
<PAGE>
- --------------------------------------------------------------------------------
QUAKER AGGRESSIVE
GROWTH FUND
- --------------------------------------------------------------------------------
a series of the Quaker Investment Trust
SEMI-ANNUAL REPORT 1997
FOR THE PERIOD ENDED DECEMBER 31
FUND SPONSOR
Quaker Funds, Inc.
1288 Valley Forge Road
Post Office Box 987
Valley Forge, Pennsylvania 19482
1-800-220-8888
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER AGGRESSIVE GROWTH FUND
PORTFOLIO OF INVESTMENTS AND OPEN SHORT POSITIONS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 81.79%
Aerospace & Defense - 2.32%
General Motors Corporation Class H ................................... 200 $ 7,387
Raytheon Company Class A ............................................. 112 5,530
(a) Titan Corporation .................................................... 3,000 18,750
--------
31,667
--------
Auto Parts - Original Equipment - 1.58%
(a) IMPCO Technologies, Inc. ............................................. 2,000 21,625
--------
Beverages - 2.30%
PepsiCo, Inc. ........................................................ 500 18,125
The Coca-Cola Company ................................................ 200 13,337
--------
31,462
--------
Broadcast - Radio & Television - 8.69%
A.H. Belo Corporation ................................................ 300 16,837
(a) Cox Communications, Inc. ............................................. 400 16,025
(a) Heftel Broadcasting Corporation ...................................... 300 14,025
(a) Jones Intercable Inc. ................................................ 1,000 17,562
Time Warner Inc. ..................................................... 300 18,600
(a) U S WEST Media Group ................................................. 700 20,212
(a) Young Broadcasting Corporation ....................................... 400 15,500
--------
118,761
--------
Chemicals - 1.54%
Monsanto Company ..................................................... 500 21,000
--------
Computers - 2.15%
(a) Bay Networks, Inc. ................................................... 500 12,750
(a) Computer Sciences Corporation ........................................ 200 16,700
--------
29,450
--------
Computer Software & Services - 4.17%
(a) Compuware Corporation ................................................ 500 16,000
(a) Sterling Software, Inc. .............................................. 300 12,300
(a) The Learning Company, Inc. ........................................... 800 12,850
(a) VideoServer, Inc. .................................................... 1,000 15,875
--------
57,025
--------
Diversified Operations - 1.41%
Viad Corporation ..................................................... 1,000 19,312
--------
Electronics - 2.69%
General Electric Company ............................................. 300 22,012
(a) Lo-Jack Corporation .................................................. 1,000 14,750
--------
36,762
--------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER AGGRESSIVE GROWTH FUND
PORTFOLIO OF INVESTMENTS AND OPEN SHORT POSITIONS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Emerging Technology - 0.97%
(a) IGEN International, Inc. ............................................... 1,000 $ 13,250
--------
Entertainment - 2.29%
Electronic Arts, Inc. .................................................. 400 15,125
Royal Caribbean Cruises, Ltd. .......................................... 300 15,993
--------
31,118
--------
Financial - Banks, Money Center - 1.60%
Banc One Corporation ................................................... 200 10,862
Chase Manhatten Corporation ............................................ 100 10,950
--------
21,812
--------
Financial - Savings/Loans/Thrifts - 0.76%
Sovereign Bancorp, Inc. ................................................ 500 10,375
--------
Financial Services - 1.96%
T. Rowe Price Associates, Inc. ......................................... 200 12,575
(a) Tele-Communications TCI Ventures Group ................................. 500 14,156
--------
26,731
--------
Food - Processing - 10.03%
Kellogg Company ........................................................ 500 24,812
Nabisco Holdings Corporation ........................................... 400 19,400
Ralston-Ralston Purina Group ........................................... 1,000 92,937
--------
137,149
--------
Food - Wholesale - 1.86%
Ralcorp Holdings, Inc. ................................................. 1,500 25,406
--------
Insurance - Multiline - 5.84%
American International Group, Inc. ..................................... 200 21,750
CIGNA Corporation ...................................................... 200 34,624
(a) ESG Re Limited ......................................................... 1,000 23,500
--------
79,874
--------
Insurance - Property & Casualty - 6.62%
Ace, Ltd. .............................................................. 200 19,300
EXEL Limited ........................................................... 200 12,675
Mercury General Corporation ............................................ 300 16,575
Mutual Risk Management Ltd. ............................................ 600 17,962
Progressive Corporation ................................................ 200 23,975
--------
90,487
--------
Machine - Diversified - 1.02%
Flowserve Corporation .................................................. 500 13,968
--------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER AGGRESSIVE GROWTH FUND
PORTFOLIO OF INVESTMENTS AND OPEN SHORT POSITIONS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Medical - Biotechnology - 0.97%
Milennium Pharmaceuticals, Inc. .................................... 700 $ 13,300
---------
Medical Supplies - 4.37%
Beckman Instruments, Inc. .......................................... 300 12,000
Biomet, Inc. ....................................................... 1,200 30,750
(a) Safeskin Corporation ............................................... 300 17,025
---------
59,775
---------
Pharmaceuticals - 5.86%
Elan Corporation plc ............................................... 500 25,593
Eli Lilly and Company .............................................. 300 20,888
Pfizer, Inc. ....................................................... 450 33,637
---------
80,118
---------
Retail - Apparel - 1.26%
The TJX Companies, Inc. ............................................ 500 17,187
---------
Retail - General Merchandise - 2.22%
BJ's Wholesale Club, Inc. .......................................... 500 15,687
Family Dollar Stores, Inc. ......................................... 500 14,656
---------
30,343
---------
Retail - Specialty Line - 1.05%
Office Depot, Inc. ................................................. 600 14,362
---------
Telecommunications Equipment - 1.77%
ANTEC Corporation .................................................. 1,000 15,625
(a) Loral Space & Communications Ltd. .................................. 400 8,575
---------
24,200
---------
Tobacco - 1.62%
UST, Inc. .......................................................... 600 22,162
---------
Utilities - Telecommunications - 2.87%
AT&T Corporation ................................................... 300 18,393
GTE Corporation .................................................... 400 20,900
---------
39,293
---------
Total Common Stocks (Cost $1,087,341) ................................... 1,117,974
---------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER AGGRESSIVE GROWTH FUND
PORTFOLIO OF INVESTMENTS AND OPEN SHORT POSITIONS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANIES - 14.17%
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares ................................. 96,892 $ 96,892
Evergreen Money Market Treasury Institutional Treasury
Money Market Fund Institutional Service Shares ........................... 96,892 96,892
-----------
Total Investment Companies (Cost $193,784) ............................... 193,784
-----------
Total Value of Investments (Cost $1,281,125 (b)) ..................................... $ 1,311,758
===========
OPEN SHORT POSITIONS - (13.07)%
Aetrium Incorporated .......................................................... 500 ($9,000)
(a) Applied Science and Technology, Inc. .......................................... 900 (10,125)
(a) Cisco Systems, Inc. ........................................................... 200 (11,150)
(a) Cohr Inc. ..................................................................... 1,000 (12,750)
(a) Consumer Portfolio Services, Inc. ............................................. 1,000 (9,625)
Innovex, Inc. ................................................................. 500 (11,469)
(a) Insight Enterprises, Inc. ..................................................... 400 (14,700)
(a) Integrated Circuit Systems, Inc. .............................................. 500 (14,250)
Intel Corporation ............................................................. 200 (14,050)
(a) Landstar Systems, Inc. ........................................................ 600 (15,825)
(a) Maverick Tube Corporation ..................................................... 500 (12,656)
(a) SIPEX Corporation ............................................................. 500 (15,125)
(a) Sola International, Inc. ...................................................... 400 (13,000)
Telefonaktiebolaget LM Ericsson ............................................... 400 (14,925)
-----------
Total Open Short Positions (proceeds $170,495 (b)) ....................... ($ 178,650)
===========
Total Value of Investments and Open Short Positions .................................. 82.%9 $ 1,133,108
Other Assets less Liabilities ........................................................ 17.%1 233,869
----------- -----------
Net Assets .................................................................... 100.%0 $ 1,366,977
=========== ===========
(a) Non-income producing investment
(b) Aggregate cost for federal income tax purposes is the same.
Unrealized appreciation (depreciation) of investments for federal
income tax purposes is as follows:
Unrealized appreciation $61,511
Unrealized depreciation (39,033)
-------------
Net unrealized appreciation $22,478
=============
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER AGGRESSIVE GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
(Unaudited)
ASSETS
Investments, at value (cost $1,281,125) ......................................................... $ 1,311,758
Cash ............................................................................................ 68,552
Deposits with brokers for securities sold short ................................................. 115,984
Dividends receivable ............................................................................ 614
Receivable for investments sold ................................................................. 192,624
Deferred organization expenses, net (notes 2 and 4) ............................................. 25,883
Due from fund sponsor (note 3) .................................................................. 36,486
Other asset ..................................................................................... 8,467
-----------
Total assets ............................................................................... 1,760,368
-----------
LIABILITIES
Securities sold short, at value (proceeds $170,495) ............................................. 178,650
Accrued expenses ................................................................................ 7,626
Payable for investment purchases ................................................................ 195,299
Deferred income taxes ........................................................................... 11,816
-----------
Total liabilities .......................................................................... 393,391
-----------
NET ASSETS
(applicable to 130,231 shares outstanding; unlimited
shares of $0.01 par value beneficial interest authorized) ...................................... $ 1,366,977
===========
NET ASSET VALUE, REDEMPTION AND MAXIMUM OFFERING PRICE
PER SHARE
($1,366,977 / 130,231 shares) ................................................................... $ 10.50
===========
NET ASSETS CONSIST OF
Paid-in capital ................................................................................. $ 1,398,473
Undistributed net investment loss ............................................................... (2,236)
Distribution in excess of net realized gain ..................................................... (51,738)
Net unrealized appreciation on investments ...................................................... 22,478
-----------
$ 1,366,977
===========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER AGGRESSIVE GROWTH FUND
STATEMENT OF OPERATIONS
Period ending December 31, 1997
(Unaudited)
INVESTMENT LOSS
Income
Interest ....................................................................................... $ 3,115
Dividends ...................................................................................... 3,404
---------
Total income .............................................................................. 6,519
---------
Expenses
Investment advisory fees (note 2) .............................................................. 4,867
Fund administration fees (note 2) .............................................................. 1,136
Audit fees ..................................................................................... 2,091
Legal fees ..................................................................................... 1,330
Fund accounting fees (note 2) .................................................................. 12,000
Shareholder servicing fees (note 3) ............................................................ 1,622
Custody fees ................................................................................... 4,745
Securities pricing fees ........................................................................ 1,602
Shareholder recordkeeping fees ................................................................. 3,000
Registration and filing administration fees .................................................... 970
Shareholder servicing expenses ................................................................. 996
Registration and filing expenses ............................................................... 2,105
Trustee fees and meeting expenses .............................................................. 45
Printing expenses .............................................................................. 128
Amortization of deferred organization expenses (note 4) ........................................ 3,406
Other operating expenses ....................................................................... 619
---------
Total expenses ............................................................................ 40,662
---------
Less:
Expense reimbursements (note 3) ..................................................... (25,418)
Investment advisory fees waived (note 2) ............................................ (4,867)
Shareholder service fees waived (note 3) ............................................ (1,622)
---------
Net expenses .............................................................................. 8,755
---------
Net investment loss ................................................................. (2,236)
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain from investment transactions before income taxes .................................. 153,326
---------
Income taxes (note 1) .......................................................................... 36,238
Less reimbursement (notes 1 and 3) ............................................................. (36,238)
---------
Net income taxes ............................................................................... 0
---------
Net realized gain from investment transactions ...................................................... 153,326
---------
Decrease in unrealized appreciation on investments .................................................. (30,559)
---------
Net realized and unrealized gain on investments ................................................ 122,767
---------
Net increase in net assets resulting from operations ...................................... $ 120,531
=========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER AGGRESSIVE GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1996
(commencement
Period ended of operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income (loss) ........................................................ $ (2,236) $ 2,939
Net realized gain from investment transactions ...................................... 153,326 6,734
Increase (decrease) in unrealized appreciation on investments ....................... (30,559) 53,037
------- ------
Net increase in net assets resulting from operations ............................. 120,531 62,710
------- ------
Distributions to shareholders from
Net investment income ............................................................... (12) (2,927)
Net realized gain from investment transactions ...................................... (153,326) (6,734)
Distribution in excess of net realized gain ......................................... (51,738) 0
------- ------
Decrease in net assets resulting from distributions .............................. (205,076) (9,661)
-------- ------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ................ 330,566 1,067,907
------- ---------
Total increase in net assets .................................................. 246,021 1,120,956
NET ASSETS
Beginning of period .................................................................... 1,120,956 0
--------- ---------
End of period (including undistributed net investment income of ........................ $ 1,366,977 $ 1,120,956
$12 at June 30, 1997) ========= =========
(a) A summary of capital share activity follows:
- ------------------------------------------------------------------------------------------------------------------------------------
For the period from November 25, 1997
Period ended (commencement of operations) to
December 31, 1997 June 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value
---------- --------- --------- ---------
Shares sold .................................... 11,892 $137,425 101,462 $1,078,209
Shares issued for reinvestment
of distributions ............................. 18,892 205,076 868 9,661
------ ------- --- -----
30,784 342,501 102,330 1,087,870
Shares redeemed ................................ (1,040) (11,935) (1,843) (19,963)
------ ------- ------ -------
Net increase ................................. $29,744 $330,566 100,487 $1,067,907
======= ======= ======= ==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER AGGRESSIVE GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1996
(commencement of
Period ended operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ......................................... $ 11.16 $ 10.00
--------- ---------
Income from investment operations
Net investment income (loss) ........................................... (0.02) 0.04
Net realized and unrealized gain on investmen .......................... 1.20 1.23
---- ----
Total from investment operations .................................... 1.18 1.27
---- ----
Distributions to shareholders from
Net investment income .................................................. 0.00 (0.04)
Net realized gain from investment transaction .......................... (1.38) (0.07)
Distribution in excess of net realized gain ............................ (0.46) 0.00
----- ----
Total distributions ................................................. (1.84) (0.11)
Net asset value, end of period ............................................... $ 10.50 $ 11.16
========= =========
Total return (b) ............................................................. 10.44% 12.68%
===== =====
Ratios/supplemental data
Net assets, end of period ........................................ $1,366,977 $ 1,120,956
========== ============
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ................. 11.81%(a) 13.44%(a)
After expense reimbursements and waived fees .................. 1.35%(a) 1.34%(a)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ................. (10.82)%(a) (9.18)%(a)
After expense reimbursements and waived fees .................. (0.34)%(a) 0.64% (a)
Portfolio turnover rate .......................................... 548.14 % 778.01%
Average broker commissions per share (c) ......................... $0.0589 $0.0603
(a) Annualized.
(b) Aggregate total return, not annualized.
(c) Represents total commissions paid on portfolio securities divided by total portfolio shares purchased or sold on
which commissions were charged.
See accompanying notes to financial statements
</TABLE>
<PAGE>
QUAKER AGGRESSIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Quaker Aggressive Growth Fund (the "Fund") is a diversified series of shares
of beneficial interest of the Quaker Investment Trust (the "Trust"). The Trust,
an open-end investment company, was organized on October 24, 1990, as a
Massachusetts Business Trust and is registered under the Investment Company Act
of 1940, as amended. The investment objective of the Fund is to provide
shareholders with long-term capital growth by investing primarily in equity
securities of domestic U.S. companies. The Fund began operations on November 25,
1996. The following is a summary of significant accounting policies followed by
the Fund.
A. Security Valuation - The Fund's investments in securities are carried
at value. Securities listed on an exchange or quoted on a national
market system are valued at 4:00 p.m., New York time on the day of
valuation. Other securities traded in the over-the-counter market and
listed securities for which no sale was reported on that date are
valued at the most recent bid price. Securities for which market
quotations are not readily available, if any, are valued by using an
independent pricing service or by following procedures approved by the
Board of Trustees. Short-term investments are valued at cost which
approximates value.
B. Federal Income Taxes - The Fund did not comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies
for the tax year ended August 31, 1997. Consequently, a provision for
federal and state income taxes on net built-in realized gains as of
August 31, 1997, has been included in the financial statements. It is
the intent on the Fund to comply with the provisions of the Internal
Revenue Service Code applicable to regulated investment companies in
the future.
Quaker Funds, Inc. (the "Sponsor") has agreed to pay all taxes
associated with the Fund's current year tax status.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and income tax purposes primarily because of
losses incurred subsequent to October 31, which are deferred for income
tax purposes. The character of distributions made during the year from
net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to
the timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or realized
gains were recorded by the Fund.
C. Investment Transactions - Investment transactions are recorded on the
trade date. Realized gains and losses are determined using the specific
identification cost method. Interest income is recorded daily on an
accrual basis. Dividend income is recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares dividends
annually, payable in December, on a date selected by the Trust's
Trustees. In addition, distributions may be made annually in December
out of net realized gains through October 31 of that year.
Distributions to shareholders are recorded on the ex-dividend date. The
Fund may make a supplemental distribution subsequent to its fiscal year
ending June 30.
(Continued)
<PAGE>
QUAKER AGGRESSIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
E. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts of
assets, liabilities, expenses and revenues reported in the financial
statements. Actual results could differ from those estimates.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, DG Capital Management, Inc. (the
"Advisor") provides the Fund with a continuous program of supervision of the
Fund's assets, including the composition of its portfolio, and furnishes advice
and recommendations with respect to investments, investment policies and the
purchase and sale of securities. As compensation for its services, the Advisor
receives a fee at the annual rate of 0.75% of the Fund's average daily net
assets. The Advisor intends to voluntarily waive all or a portion of its fee.
There can be no assurance that the foregoing voluntary fee waivers will
continue. The Advisor has voluntarily waived its fee amounting to $4,867 ($0.04
per share) for the period ended December 31, 1997.
The Fund's administrator, The Nottingham Company (the "Administrator"), provides
administrative services to and is generally responsible for the overall
management and day-to-day operations of the Fund pursuant to an accounting and
administrative agreement with the Trust. As compensation for its services, the
Administrator receives a fee at the annual rate of 0.175% of the Fund's first
$50 million of average daily net assets, 0.150% of the next $50 million of
average daily net assets, and 0.125% of its average daily net assets in excess
of $100 million. The Administrator also receives a monthly fee of $2,000 for
accounting and recordkeeping services. Additionally, the Administrator charges
the Fund for servicing of shareholder accounts and registration of the Fund's
shares. The Administrator also charges the Fund for certain expenses involved
with the daily valuation of portfolio securities.
NC Shareholder Services, LLC (the "Transfer Agent") has been retained by the
Administrator to serve as the Fund's transfer, dividend paying, and shareholder
servicing agent. The Transfer Agent, whose address is 107 North Washington
Street, Post Office Box 4365, Rocky Mount, North Carolina 27803-0365, was
established as a North Carolina limited liability company in 1997. The Transfer
Agent maintains the records of each shareholder's account, answers shareholder
inquiries concerning accounts, processes purchases and redemptions of Fund
shares, acts as dividend and distribution disbursing agent, and performs other
shareholder servicing functions. The Transfer Agent is compensated for its
services by the Administrator and not directly by the Fund
The Fund's distributor, Quaker Securities, Inc. (the "Distributor") was paid
commissions of $24,308 for purchases and sales of investments other than
short-term investments for the period ended December 31, 1997.
Certain Trustees and officers of the Trust are also officers of the Advisor, the
Distributor or the Administrator.
(Continued)
<PAGE>
QUAKER AGGRESSIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 3 - SERVICE FEES
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act of
1940 (the "Act"), adopted a Shareholder Servicing Agreement (the "Agreement").
Pursuant to this Agreement, the Sponsor will provide oversight with respect to
the Fund's investment advisor, arrange for payment of investment advisory and
administrative fees, coordinate payments under the Fund's Distribution Plan,
develop communications with existing Fund shareholders, assist in responding to
shareholder inquiries, and will provide other shareholder services. As
compensation for these services, Quaker Funds, Inc. receives 0.25% of the Fund's
average daily net assets. The Sponsor intends to voluntarily waive all or a
portion of its fee and reimburse expenses of the Fund to limit total Fund
operating expenses to 1.35% of the average daily net assets of the Fund. There
can be no assurance that the foregoing voluntary fee waivers or reimbursements
will continue. The Sponsor has voluntarily waived its fee amounting to $1,622
and has reimbursed expenses and income taxes totaling $61,656 for the period
ended December 31, 1997.
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
Expenses totaling $33,324 incurred in connection with its organization and the
registration of its shares, which were originally paid by the Fund's Sponsor,
have been assumed by the Fund.
The organization expenses are being amortized using the straight-line method
over a period of sixty months. Investors purchasing shares of the Fund bear such
expenses only as they are amortized against the Fund's investment income.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $5,416,965 and $5,538,350, respectively, for the period ended
December 31, 1997.
NOTE 6 - DISTRIBUTIONS TO SHAREHOLDERS
For federal income tax purposes, the Fund must report distributions from net
realized gains from investment transactions that represent long-term capital
gains to its shareholders. The total $1.84 per share distributions for the
period ended December 31, 1997 represents short-term capital gains. Shareholders
should consult a tax advisor on how to report distributions for state and local
income tax purposes.
NOTE 7 - DEFERRED INCOME TAXES
As discussed in note 1, the Fund did not comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies for the tax
year ended August 31, 1997.
(Continued)
<PAGE>
QUAKER AGGRESSIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
Income taxes of $11,816 have been provided for on the Statement of Assets and
Liabilities as of December 31, 1997.
Income tax expense for the six months ended December 31, 1997 are as follows:
Income Taxes - current $45,538
Less deferred income taxes (9,300)
-----------
$36,238
The Fund Sponsor has agreed to pay all taxes associated with the Fund's current
year tax status.
<PAGE>
- --------------------------------------------------------------------------------
QUAKER SMALL-CAP
VALUE FUND
- --------------------------------------------------------------------------------
a series of the Quaker Investment Trust
SEMI-ANNUAL REPORT 1997
FOR THE PERIOD ENDED DECEMBER 31
FUND SPONSOR
Quaker Funds, Inc.
1288 Valley Forge Road
Post Office Box 987
Valley Forge, Pennsylvania 19482
1-800-220-8888
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 98.52%
Aerospace & Defense - 2.61%
AAR Corporation ........................................................ 100 $ 3,875
(a) Litton Industries, Inc. ................................................ 300 17,250
The B.F. Goodrich Company .............................................. 350 14,503
Thiokol Corporation .................................................... 200 16,250
-------
51,878
-------
Auto Parts - Original Equipment - 1.07%
Arvin Industries, Inc. ................................................. 300 9,994
Excel Industries, Inc. ................................................. 200 3,613
The Standard Products Company .......................................... 300 7,687
-------
21,294
-------
Auto & Trucks - 0.75%
(a) Navistar International Corporation ..................................... 600 14,887
-------
Brewery - 0.67%
Adolph Coors Company ................................................... 400 13,300
-------
Building Materials - 1.73%
Lone Star Industries, Inc. ............................................. 200 10,625
Texas Industries, Inc. ................................................. 300 13,500
Vulcan Materials Company ............................................... 100 10,212
-------
34,337
-------
Chemicals - 2.95%
Fuller (H.B.) Company .................................................. 100 4,950
Georgia Gulf Corporation ............................................... 500 15,313
Lyondell Petrochemical Company ......................................... 500 13,250
The Geon Company ....................................................... 500 11,688
The Lubrizol Corporation ............................................... 100 3,688
Wellman, Inc. .......................................................... 500 9,750
-------
58,639
-------
Commercial Services - 1.95%
Chemed Corporation ..................................................... 400 16,575
(a) Leasing Solutions, Inc. ................................................ 600 14,325
(a) Veritas DGC Inc. ....................................................... 200 7,900
-------
38,800
-------
Computers - 1.22%
(a) Applied Magnetics Corporation .......................................... 100 1,100
(a) Data General Corporation ............................................... 200 3,488
(a) HMT Technology Corporation ............................................. 800 10,400
SMART Modular Technologies, Inc. ....................................... 400 9,200
-------
24,188
-------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Computer Software & Services - 1.53%
Comdisco, Inc. ............................................................. 300 $10,031
(a) InterVoice, Inc. ........................................................... 1,200 9,000
(a) Stratus Computer, Inc. ..................................................... 300 11,344
-------
30,375
-------
Electronics - 1.87%
(a) Creative Technology Limited ................................................ 500 11,000
(a) Orbotech, Ltd. ............................................................. 400 12,750
(a) SCI Systems, Inc. .......................................................... 100 4,356
Technitrol, Inc. ........................................................... 200 6,000
(a) Tracor, Inc. ............................................................... 100 3,037
-------
37,143
-------
Electronics - Semiconductor - 0.98%
(a) Marshall Industries ........................................................ 100 3,000
(a) VLSI Technology, Inc. ...................................................... 700 16,537
-------
19,537
-------
Entertainment - 1.62%
(a) Anchor Gaming .............................................................. 100 5,575
(a) Grand Casinos, Inc. ........................................................ 400 5,450
(a) GTECH Holdings Corporation ................................................. 400 12,775
(a) Rio Hotel and Casino, Inc. ................................................. 400 8,400
-------
32,200
-------
Financial - Banks, Commercial - 2.36%
Banco de Galicia y Buenos Aires S.A. de C.V ................................ 700 18,025
(a) Commerce Bancshares, Inc. .................................................. 105 7,114
(a) Pacific Century Financial Corporation ...................................... 200 4,950
The Money Store Inc. ....................................................... 800 16,800
-------
46,889
-------
Financial - Savings/Loans/Thrift - 3.61%
Aames Financial Corporation ................................................ 900 11,644
(a) AMRESCO, INC ............................................................... 300 9,075
(a) ContiFinancial Corporation ................................................. 300 7,556
Dime Bancorp, Inc. ......................................................... 411 12,433
(a) FIRSTPLUS Financial Group, Inc. ............................................ 400 15,350
United Companies Financial Corporation ..................................... 1,000 15,500
-------
71,558
-------
Financial - Securities Brokers - 3.49%
A.G. Edwards, Inc. ......................................................... 450 17,888
Donaldson, Lufkin & Jenrette, Inc. ......................................... 200 15,900
Paine Webber Group Inc. .................................................... 450 15,553
Raymond James Financial, Inc. .............................................. 500 19,844
-------
69,185
-------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Financial Services - 1.66%
(a) AmeriCredit Corporation ................................................ 600 $16,613
Capital One Financial Corporation ...................................... 300 16,256
-------
32,869
-------
Food - Processing - 1.09%
(a) Interstate Bakeries Corporation ........................................ 400 14,950
(a) Smithfield Foods, Inc. ................................................. 200 6,600
-------
21,550
-------
Food - Wholesale - 1.04%
Fleming Companies, Inc. ................................................ 600 8,063
Supervalu Inc. ......................................................... 300 12,562
-------
20,625
-------
Forest Products & Paper - 1.35%
(a) Buckeye Technologies Inc. .............................................. 200 9,250
Chesapeake Corporation ................................................. 100 3,438
Wausau-Mosinee Paper Corporation ....................................... 700 14,087
-------
26,775
-------
Holding Companies - Diversified - 0.96%
(a) Anixter International Inc. ............................................. 700 11,550
(a) Desc S.A. de C.V ....................................................... 200 7,500
-------
19,050
-------
Homebuilders - 3.03%
Centex Corporation ..................................................... 200 12,588
(a) Champion Enterprises, Inc. ............................................. 100 2,056
Continental Homes Holding Corporation .................................. 500 20,125
Del Webb Corporation ................................................... 200 5,200
Pulte Corporation ...................................................... 200 8,362
(a) U.S. Home Corporation .................................................. 300 11,775
-------
60,106
-------
Household Products & Housewares - 0.68%
(a) Furniture Brands International, Inc. ................................... 400 8,200
Haverty Furniture Company, Inc. ........................................ 200 2,700
Stanhome Inc. .......................................................... 100 2,569
-------
13,469
-------
Insurance - Life & Health - 1.32%
John Alden Financial Corporation ....................................... 500 12,000
PennCorp Financial Group, Inc. ......................................... 400 14,275
-------
26,275
-------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Insurance - Multiline - 2.58%
Allmerica Financial Corporation .......................................... 300 $ 14,981
American Financial Group, Inc. ........................................... 300 12,094
American National Insurance Company ...................................... 100 9,300
Old Republic International Corporation ................................... 400 14,875
--------
51,250
--------
Insurance - Property & Casualty - 8.50%
Allied Group, Inc. ....................................................... 500 14,313
Everest Reinsurance Holdings, Inc. ....................................... 300 12,375
Fremont General Corporation .............................................. 200 10,950
LaSalle Re Holdings Ltd. ................................................. 400 14,150
NAC Re Corp. ............................................................. 200 9,762
Ohio Casualty Corporation ................................................ 200 8,925
Orion Capital Corporation ................................................ 300 13,931
Partner Re Ltd. .......................................................... 300 13,912
PXRE Corporation ......................................................... 100 3,319
Reliance Group Holdings, Inc. ............................................ 800 11,300
(a) The First American Financial Corporation ................................. 200 14,775
The PMI Group, Inc. ...................................................... 200 14,462
TIG Holdings, Inc. ....................................................... 400 13,275
W. R. Berkley Corporation ................................................ 300 13,163
--------
168,612
--------
Iron & Steel - 3.05%
(a) AK Steel Holding Corporation ............................................. 600 10,613
(a) Bethlehem Steel Corporation .............................................. 1,400 12,163
Inland Steel Industries, Inc. ............................................ 700 11,988
LTV Corporation .......................................................... 600 5,925
Oregon Steel Mills, Inc. ................................................. 200 4,262
USX-U. S. Steel Group, Inc. .............................................. 500 15,625
--------
60,576
--------
Machine - Construction & Mining - 0.89%
Cummins Engine Company, Inc. ............................................. 300 17,719
--------
Medical - Hospital Management & Service - 5.95%
(a) American HomePatient, Inc. ............................................... 500 11,750
(a) American Oncology Resources, Inc. ........................................ 500 8,000
Integrated Health Services, Inc. ......................................... 406 12,662
(a) Mariner Health Group, Inc. ............................................... 1,000 16,250
(a) NovaCare, Inc. ........................................................... 800 10,500
(a) Paragon Health Network, Inc. ............................................. 774 15,141
(a) PhyCor, Inc. ............................................................. 500 13,500
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Medical - Hospital Management & Service (continued)
(a) Sun Healthcare Group, Inc. ................................................. 700 $ 13,562
(a) Total Renal Care Holdings, Inc. ............................................ 300 8,250
(a) Wellpoint Health Networks Inc. ............................................. 200 8,450
--------
118,065
--------
Medical Supplies - 0.29%
Owens & Minor, Inc. ........................................................ 400 5,800
--------
Metals - Diversified - 0.31%
Cyprus Amax Minerals Company ............................................... 400 6,150
--------
Metal Fabrication & Hardware - 0.74%
Amcast Industrial Corporation .............................................. 200 4,588
Commercial Metals Company .................................................. 100 3,156
The Timken Company ......................................................... 200 6,875
--------
14,619
--------
Miscellaneous - Distribution & Wholesale - 0.78%
(a) CHS Electronics, Inc. ...................................................... 900 15,413
--------
Miscellaneous - Manufacturing - 4.75%
Aeroquip-Vickers Inc. ...................................................... 200 9,813
Handy & Harman ............................................................. 400 13,800
Kellwood Company ........................................................... 400 12,000
(a) Lexmark International Group, Inc. .......................................... 400 15,200
NACCO Industries, Inc. ..................................................... 100 10,719
Trinity Industries, Inc. ................................................... 300 13,387
U.S. Industries, Inc. ...................................................... 150 4,519
Vitro SA ................................................................... 700 9,144
Watts Industries, Inc. ..................................................... 200 5,662
--------
94,244
--------
Oil & Gas - Domestic - 1.84%
Ashland Inc. ............................................................... 300 16,106
Sun Company, Inc. .......................................................... 300 12,619
(a) Tesoro Petroleum Corporation ............................................... 500 7,750
Texaco Inc. ................................................................ 1 54
--------
36,529
--------
Oil & Gas - Equipment & Services - 1.41%
(a) SEACOR SMIT Inc. ........................................................... 300 18,075
Tidewater, Inc. ............................................................ 100 5,512
Weatherford Enterra, Inc. .................................................. 100 4,375
--------
27,962
--------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Oil & Gas - Exploration - 1.37%
(a) Santa Fe Energy Resources, Inc. ........................................ 200 $ 2,250
Snyder Oil Corporation ................................................. 800 14,600
Union Texas Petroleum Holdings, Inc. ................................... 500 10,406
-------
27,256
-------
Packaging & Containers - 0.53%
Ball Corporation ....................................................... 300 10,594
-------
Pharmaceuticals - 1.35%
(a) Herbalife International, Inc. - CL A ................................... 633 13,293
(a) Herbalife International, Inc. - CL B ................................... 267 5,733
ICN Pharmaceuticals, Inc. .............................................. 100 4,900
(a) PharMerica, Inc. ....................................................... 273 2,832
-------
26,758
-------
Publishing - Printing - 1.04%
Bowne & Co, Inc. ....................................................... 400 16,025
(a) Devon Group, Inc. ...................................................... 100 4,600
-------
20,625
-------
Restaurants & Food Service - 2.46%
Darden Restaurants, Inc. ............................................... 1,200 15,000
(a) Foodmaker, Inc. ........................................................ 600 9,038
(a) Ryan's Family Steak Houses, Inc. ....................................... 900 7,706
(a) Showbiz Pizza Time, Inc. ............................................... 500 11,500
(a) Sonic Corporation ...................................................... 200 5,625
-------
48,869
-------
Retail - Apparel - 1.42%
(a) Genesco Inc. ........................................................... 400 5,100
Ross Stores, Inc. ...................................................... 400 14,550
(a) The Dress Barn, Inc. ................................................... 300 8,513
-------
28,163
-------
Retail - Department Stores - 1.33%
(a) Carson Pirie Scott & Co. ............................................... 200 10,025
(a) Mac Frugals Bargains Close-Outs, Inc. .................................. 400 16,450
-------
26,475
-------
Retail - General Merchandise - 2.26%
(a) Best Buy Co., Inc. ..................................................... 400 14,750
Fingerhut Companies, Inc. .............................................. 400 8,550
(a) Service Merchandise Company, Inc. ...................................... 2,900 6,162
(a) Shopko Stores, Inc. .................................................... 700 15,400
-------
44,862
-------
Retail - Specialty Line - 0.14%
(a) Micro Warehouse, Inc. .................................................. 200 2,787
-------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Shoes - Leather - 0.15%
(a) Reebok International Ltd. .................................................. 100 $ 2,881
-------
Telecommunications - 2.20%
Century Telephone Enterprises, Inc. ........................................ 100 4,981
Comsat Corporation ......................................................... 500 12,125
(a) InaCom Corp. ............................................................... 300 8,419
Koor Industries Limited .................................................... 400 8,775
(a) LCI International, Inc. .................................................... 303 9,317
-------
43,617
-------
Telecommunications Equipment - 1.98%
(a) Avid Technology, Inc. ...................................................... 200 5,350
(a) Paging Network, Inc. ....................................................... 600 6,450
Tadiran Ltd. ............................................................... 200 7,075
(a) Teledata Communications Ltd. ............................................... 600 10,950
(a) The Alpine Group, Inc. ..................................................... 500 9,375
-------
39,200
-------
Textiles - 0.70%
(a) Burlington Industries, Inc. ................................................ 1,000 13,813
-------
Tobacco - 1.15%
DiMon, Incorporated ........................................................ 400 10,500
Universal Corporation ...................................................... 300 12,337
-------
22,837
-------
Transportation - Air - 1.53%
(a) Alaska Air Group, Inc. ..................................................... 400 15,500
(a) America West Airlines, Inc. ................................................ 800 14,900
-------
30,400
-------
Transportation - Miscellaneous - 0.32%
Sea Containers, Ltd. ....................................................... 200 6,400
-------
Trucking & Leasing - 0.76%
(a) Yellow Corporation ......................................................... 600 15,075
-------
Utilities - Electric - 5.34%
Commonwealth Energy System ................................................. 200 6,650
(a) FirstEnergy Corp. .......................................................... 367 10,643
Illinova Corporation ....................................................... 500 13,469
Korea Electric Power Corporation ........................................... 1,600 16,100
Long Island Lighting Company ............................................... 200 6,025
New York State Electric & Gas Corporation .................................. 500 17,750
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Utilities - Electric (continued)
Pinnacle West Capital Corporation ........................................... 100 $ 4,237
Public Service Company of New Mexico ........................................ 500 11,844
TNP Enterprises, Inc. ....................................................... 300 9,975
The United Illuminating Company ............................................. 200 9,187
-----------
105,880
-----------
Utilities - Gas - 0.35%
Westcoast Energy Inc. ....................................................... 300 6,900
-----------
Wholesale - Special Line - 1.51%
Bindley Western Industries, Inc. ............................................ 100 3,088
(a) CellStar Corporation ........................................................ 700 13,913
(a) MicroAge, Inc. .............................................................. 500 7,531
(a) Perrigo Company ............................................................. 400 5,350
-----------
29,882
-----------
Total Common Stocks (Cost $1,736,770) ....................................... 1,955,142
-----------
INVESTMENT COMPANY - 3.66%
Evergreen Money Market Treasury Institutional Money .............................. 72,543 72,543
-----------
Market Fund InstMarketnFundeInstitutional Service Shares
(Cost $72,543)
Total Value of Investments (Cost $1,809,313 (b)) ........................................ 102.%8 $ 2,027,685
Liabilities In Excess of Other Assets ................................................... (2.%8) (43,248)
----------- -----------
Net Assets ....................................................................... 100.%0 $ 1,984,437
=========== ===========
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax purposes is the same. Unrealized appreciation
(depreciation) of investments for financial reporting and federal income tax purposes is as follows:
Unrealized appreciation .................................................................. $ 291,987
Unrealized depreciation .................................................................. (73,615)
---------
Net unrealized appreciation ........................................................ $ 218,372
=========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31,1997
(Unaudited)
ASSETS
Investments, at value (cost $1,809,313) ......................................................... $ 2,027,685
Income receivable ............................................................................... 1,331
Receivable for investments sold ................................................................. 63,494
Deferred organization expenses, net (notes 2 and 4) ............................................. 25,883
Other asset ..................................................................................... 563
-----------
Total assets ............................................................................... 2,118,956
-----------
LIABILITIES
Accrued expenses ................................................................................ 7,519
Payable for investment purchases ................................................................ 115,229
Due to fund sponsor (note 3) .................................................................... 11,273
Disbursements in excess of cash on demand deposit ............................................... 498
-----------
Total liabilities .......................................................................... 134,519
-----------
NET ASSETS
(applicable to 159,796 shares outstanding; unlimited
shares of $0.01 par value beneficial interest authorized) ...................................... $ 1,984,437
===========
NET ASSET VALUE, REDEMPTION AND MAXIMUM OFFERING PRICE
PER SHARE
($1,984,437 / 159,796 shares) ................................................................... $ 12.42
===========
NET ASSETS CONSIST OF
Paid-in capital ................................................................................. $ 1,717,234
Distribution in excess of net investment income ................................................. (412)
Undistributed net realized gain on investments .................................................. 49,243
Net unrealized appreciation on investments ...................................................... 218,372
-----------
$1,984,437
==============
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
STATEMENT OF OPERATIONS
Period ended December 31, 1997
(Unaudited)
INVESTMENT LOSS
Income
Dividends ..................................................................................... $ 9,669
Interest ...................................................................................... 1,531
---------
Total income ............................................................................. 11,200
---------
Expenses
Investment advisory fees (note 2) ............................................................. 6,289
Fund administration fees (note 2) ............................................................. 1,468
Custody fees .................................................................................. 895
Registration and filing administration fees ................................................... 920
Fund accounting fees (note 2) ................................................................. 12,000
Audit fees .................................................................................... 2,017
Legal fees .................................................................................... 1,404
Securities pricing fees ....................................................................... 5,818
Shareholder servicing fees (note 3) ........................................................... 2,096
Shareholder recordkeeping fees (note 2) ....................................................... 3,000
Shareholder servicing expenses ................................................................ 890
Registration and filing expenses .............................................................. 1,674
Printing expenses ............................................................................. 139
Amortization of deferred organization expenses (note 4) ....................................... 3,406
Trustee fees and meeting expenses ............................................................. 44
Other operating expenses ...................................................................... 627
---------
Total expenses ........................................................................... 42,687
---------
Less:
Expense reimbursements (note 3) .................................................... (23,005)
Investment advisory fees waived (note 2) ........................................... (6,289)
Shareholder servicing fees waived (note 3) ......................................... (2,096)
---------
Net expenses ............................................................................. 11,297
---------
Net investment loss ................................................................ (97)
---------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ..................................................... 187,406
Increase in unrealized appreciation on investments ................................................. 53,399
---------
Net realized and unrealized gain on investments ............................................... 240,805
---------
Net increase in net assets resulting from operations ..................................... $ 240,708
=========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1996
(commencement
Period ended of operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income (loss) ........................................................ $ (97) $ 1,230
Net realized gain from investment transactions ..................................... 187,406 54,417
Increase in unrealized appreciation on investments .................................. 53,399 164,973
------ -------
Net increase in net assets resulting from operations ............................. 240,708 220,620
------- -------
Distributions to shareholders from
Net investment income ............................................................... (52) (1,081)
Distribution in excess of net investment income ..................................... (412) 0
Net realized gain from investment transactions ...................................... (138,163) (54,417)
-------- -------
Decrease in net assets resulting from distributions .............................. (138,627) (55,498)
-------- -------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ................ 548,883 1,168,351
------- ---------
Total increase in net assets .................................................. 650,964 1,333,473
NET ASSETS
Beginning of period .................................................................... 1,333,473 0
---------- ---------
End of period (including undistributed net investment income ........................... $ 1,984,437 $ 1,333,473
of $149 at June 30, 1997) ========== =========
(a) A summary of capital share activity follows:
- ------------------------------------------------------------------------------------------------------------------------------------
For the period from November 25, 1996
Period ended (commencement of operations) to
December 31, 1997 June 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value
------ ------- -------- ---------
Shares sold .............................................. 36,386 $ 455,278 110,840 $1,112,853
Shares issued for reinvestment
of distributions ....................................... 11,315 138,627 4,820 55,498
------ ------- -------- ---------
47,701 593,905 115,660 1,168,351
Shares redeemed .......................................... (3,565) (45,022) 0 0
------ ------- -------- ----------
Net increase ........................................... 44,136 $ 548,883 115,660 $1,168,351
====== ======= ======== ==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SMALL-CAP VALUE FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1996
(commencement
Period ended of operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ................................................. $ 11.53 $ 10.00
--------- ---------
Income from investment operations
Net investment income .......................................................... 0.00 0.01
Net realized and unrealized gain on investments ................................ 1.93 2.02
---- ----
Total from investment operations ............................................ 1.93 2.03
---- ----
Distributions to shareholders from
Net investment income .......................................................... (0.00) (0.01)
Net realized gain from investment transactions ................................. (1.04) (0.49)
----- ----
Total distributions ......................................................... (1.04) (0.50)
----- -----
Net asset value, end of period ....................................................... $ 12.42 $ 11.53
========= =========
Total return (b) ..................................................................... 17.06% 20.35%
===== =====
Ratios/supplemental data
Net assets, end of period ................................................. $1,984,437 $ 1,333,473
========== ===========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees 5.08 %(a) 10.50% (a)
After expense reimbursements and waived fees 1.35 %(a) 1.31% (a)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees (3.74)%(a) (8.96)%(a)
After expense reimbursements and waived fees (0.02)%(a) 0.22 %(a)
Portfolio turnover rate 64.68 % 90.63 %
Average broker commissions per share (c) $0.0499 $0.0453
(a) Annualized.
(b) Aggregate total return, not annualized.
(c) Represents total commissions paid on portfolio securities divided by total portfolio shares purchased or sold on which
commissions were charged.
See accompanying notes to financial statements
</TABLE>
<PAGE>
QUAKER SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Quaker Small-Cap Value Fund (the "Fund") is a diversified series of shares
of beneficial interest of the Quaker Investment Trust (the "Trust"). The Trust,
an open-end investment company, was organized on October 24, 1990, as a
Massachusetts Business Trust and is registered under the Investment Company Act
of 1940, as amended. The investment objective of the Fund is to provide
shareholders with long-term capital growth by investing primarily in equity
securities of domestic U.S. companies. The Fund began operations on November 25,
1996. The following is a summary of significant accounting policies followed by
the Fund.
A. Security Valuation - The Fund's investments in securities are carried
at value. Securities listed on an exchange or quoted on a national
market system are valued at 4:00 p.m., New York time on the day of
valuation. Other securities traded in the over-the-counter market and
listed securities for which no sale was reported on that date are
valued at the most recent bid price. Securities for which market
quotations are not readily available, if any, are valued by using an
independent pricing service or by following procedures approved by the
Board of Trustees. Short-term investments are valued at cost which
approximates value.
B. Federal Income Taxes - No provision has been made for federal income
taxes or personal holding company taxes since it is the policy of the
Fund to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies and personal holding
companies and to make sufficient distributions of taxable income to
relieve it from substantially all federal income taxes.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and income tax purposes primarily because of
losses incurred subsequent to October 31, which are deferred for income
tax purposes. The character of distributions made during the year from
net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to
the timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or realized
gains were recorded by the Fund.
C. Investment Transactions - Investment transactions are recorded on the
trade date. Realized gains and losses are determined using the specific
identification cost method. Interest income is recorded daily on an
accrual basis. Dividend income is recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares dividends
annually, payable in December, on a date selected by the Trust's
Trustees. In addition, distributions may be made annually in December
out of net realized gains through October 31 of that year.
Distributions to shareholders are recorded on the ex-dividend date. The
Fund may make a supplemental distribution subsequent to the end of its
fiscal year ending June 30.
E. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts of
assets, liabilities, expenses and revenues reported in the financial
statements. Actual results could differ from those estimates.
(Continued)
<PAGE>
QUAKER SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, Aronson + Partners (the "Advisor")
provides the Fund with a continuous program of supervision of the Fund's assets,
including the composition of its portfolio, and furnishes advice and
recommendations with respect to investments, investment policies and the
purchase and sale of securities. As compensation for its services, the Advisor
receives a fee at the annual rate of 0.75% of the Fund's average daily net
assets. The Advisor intends to voluntarily waive all or a portion of its fee.
There can be no assurance that the foregoing voluntary fee waivers will
continue. The Advisor has voluntarily waived its fee amounting to $6,289 for the
period ended December 31, 1997.
The Fund's administrator, The Nottingham Company (the "Administrator"), provides
administrative services to and is generally responsible for the overall
management and day-to-day operations of the Fund pursuant to an accounting and
administrative agreement with the Trust. As compensation for its services, the
Administrator receives a fee at the annual rate of 0.175% of the Fund's first
$50 million of average daily net assets, 0.150% of the next $50 million of
average daily net assets, and 0.125% of its average daily net assets in excess
of $100 million. The Administrator also receives a monthly fee of $2,000 for
accounting and recordkeeping services. Additionally, the Administrator charges
the Fund for servicing of shareholder accounts and registration of the Fund's
shares. The Administrator also charges the Fund for certain expenses involved
with the daily valuation of portfolio securities.
NC Shareholder Services, LLC (the "Transfer Agent") has been retained by the
Manager to serve as the Fund's transfer, dividend paying, and shareholder
servicing agent. The Transfer Agent, whose address is 107 North Washington
Street, Post Office Box 4365, Rocky Mount, North Carolina 27803-0365, was
established as a North Carolina limited liability company in 1997. The Transfer
Agent maintains the records of each shareholder's account, answers shareholder
inquiries concerning accounts, processes purchases and redemptions of Fund
shares, acts as dividend and distribution disbursing agent, and performs other
shareholder servicing functions. The Transfer Agent is compensated for its
services by the Manager and not directly by the Fund.
Certain Trustees and officers of the Trust are also officers of the Advisor, the
Distributor or the Administrator.
NOTE 3 - SERVICE FEES
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act of
1940 (the "Act"), adopted a Shareholder Servicing Agreement (the "Agreement").
Pursuant to this Agreement, Quaker Funds, Inc. (the "Sponsor") will provide
oversight with respect to the Fund's investment advisor, arrange for payment of
investment advisory and administrative fees, coordinate payments under the
Fund's Distribution Plan, develop communications with existing Fund
shareholders, assist in responding to shareholder inquiries, and will provide
other shareholder services. As compensation for these services, Quaker Funds,
Inc. receives 0.25% of the Fund's average daily net assets. The Sponsor intends
to voluntarily waive all or a portion of its fee and reimburse expenses of the
Fund to limit total Fund operating expenses to 1.35% of the average daily net
assets of the Fund. There can be no assurance that the foregoing voluntary fee
waivers or reimbursements will continue. The Sponsor
(Continued)
<PAGE>
QUAKER SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
has voluntarily waived its fee amounting to $2,096 and has reimbursed expenses
totaling $23,005 for the period ended December 31, 1997.
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
Expenses totaling $29,289 incurred in connection with its organization and the
registration of its shares, which were originally paid by the Fund's Sponsor,
have been assumed by the Fund.
The organization expenses are being amortized using the straight-line method
over a period of sixty months. Investors purchasing shares of the Fund bear such
expenses only as they are amortized against the Fund's investment income.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $1,441,741 and $1,040,166 respectively, for the period ended December
31, 1997.
<PAGE>
- --------------------------------------------------------------------------------
QUAKER SECTOR ALLOCATION FUND
- --------------------------------------------------------------------------------
a series of the Quaker Investment Trust
SEMI-ANNUAL REPORT 1997
FOR THE PERIOD ENDED DECEMBER 31
FUND SPONSOR
Quaker Funds, Inc.
1288 Valley Forge Road
Post Office Box 987
Valley Forge, Pennsylvania 19482
1-800-220-8888
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SECTOR ALLOCATION EQUITY FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANIES - 11.17%
Evergreen Money Market Treasury Institutional Money
Market Institutional Service Shares ........................................ 45,147 $ 45,147
Evergreen Money Market Treasury Institutional Treasury
Money Market Institutional Service Shares .................................. 45,146 45,146
--------
Total Investment Companies (Cost $90,293) .................................. 90,293
--------
Total Value of Investments (Cost $90,293 (a)) .......................................... 11.17% $ 90,293
Other Assets Less Liabilities .......................................................... 88.83% 718,246
--------- --------
Net Assets ...................................................................... 100.00% $808,539
========= ========
(a) Aggregate cost for financial reporting and federal income tax purposes is the same. Unrealized appreciation
(depreciation) of investments for financial reporting and federal income tax purposes is as follows:
Unrealized appreciation........................................... $0
Unrealized depreciation........................................... 0
----------------
Net unrealized appreciation $0
================
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SECTOR ALLOCATION EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
(Unaudited)
ASSETS
Investments, at value (cost $90,293) .............................................................. $ 90,293
Cash .............................................................................................. 709,555
Prepaid expenses .................................................................................. 39
Deferred organization expenses, net (note 4) ...................................................... 26,401
---------
Total assets ................................................................................. 826,288
---------
LIABILITIES
Accrued expenses .................................................................................. 2,927
Transaction losses payable ........................................................................ 23
Due to fund sponsor (note 3) ...................................................................... 14,799
---------
Total liabilities ............................................................................ 17,749
---------
NET ASSETS
(applicable to 79,948 shares outstanding; unlimited
shares of $0.01 par value beneficial interest authorized) ........................................ $ 808,539
=========
NET ASSET VALUE, REDEMPTION AND MAXIMUM OFFERING PRICE
PER SHARE
($808,539 / 79,948 shares) ........................................................................ $ 10.11
=========
NET ASSETS CONSIST OF
Paid-in capital ................................................................................... $ 808,548
Distribution in excess of net investment income ................................................... (9)
---------
$ 808,539
=========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SECTOR ALLOCATION EQUITY FUND
STATEMENT OF OPERATIONS
Period ended December 31, 1997
(Unaudited)
INVESTMENT INCOME
Income
Dividends ..................................................................................... $ 7,998
Interest ...................................................................................... 3,620
---------
Total income ............................................................................. 11,618
---------
Expenses
Investment advisory fees (note 2) ............................................................. 5,073
Fund administration fees (note 2) ............................................................. 1,184
Shareholder service fees (note 3) ............................................................. 1,691
Custody fees .................................................................................. 723
Registration and filing administration fees (note 2) .......................................... 883
Fund accounting fees (note 2) ................................................................. 12,000
Audit fees .................................................................................... 100
Legal fees .................................................................................... 535
Securities pricing fees ....................................................................... 550
Shareholder recordkeeping fees ................................................................ 3,000
Other fees .................................................................................... 879
Shareholder servicing expenses ................................................................ 910
Registration and filing expenses .............................................................. 2,007
Printing expenses ............................................................................. 75
Amortization of deferred organization expenses (note 4) ....................................... 2,888
Other operating expenses ...................................................................... 317
---------
Total expenses ........................................................................... 32,815
---------
Less:
Expense reimbursements (note 3) .................................................... (18,145)
Investment advisory fees waived (note 2) ........................................... (5,073)
Shareholder service fees (note 3) .................................................. (1,691)
---------
Net expenses ............................................................................. 7,906
---------
Net investment oincome ............................................................. 3,712
---------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realizedo gain from investment transactions .................................................... 162,607
Decrease in unrealizedo appreciation on investments ................................................ (35,222)
---------
Net realized and unrealized ogain on investments .............................................. 127,385
---------
Net oincrease in net assets resulting from operations .................................... $ 131,097
=========
See accompanying notes to financial statements
<PAGE>
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SECTOR ALLOCATION EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1996
(commencement
Period ended of operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income ................................................................... $3,712 $2,729
Net realized gain from investment transactions .......................................... 162,607 31,441
Increase (decrease) in unrealized appreciation on investments ........................... (35,222) 35,222
------- ------
Net increase in net assets resulting from operations ................................. 131,097 69,392
------- ------
Distributions to shareholders from
Net investment income ................................................................... (3,713) (2,728)
Distributions in excess of net investment income ........................................ (9) 0
Net realized gain from investment transactions .......................................... (162,607) (31,441)
-------- ------
Decrease in net assets resulting from distributions .................................. (166,329) (34,169)
-------- -------
Capital share transactions
Increase (decrease) in net assets resulting from capital share transactions (a) ......... (219,062) 1,027,610
-------- ---------
Total increase (decrease) in net assets ........................................... (254,294) 1,062,833
NET ASSETS
Beginning of period ........................................................................ 1,062,833 0
----------- -----------
End of period (including undistributed net investment income .................................... $808,539 $1,062,833
of $1 at June 30, 1997) =========== ===========
(a) A summary of capital share activity follows:
- ------------------------------------------------------------------------------------------------------------------------------------
For the period from November 25, 1996
Period ended (commencement of operations) to
December 31, 1997 June 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value
---------- ----------- -------- ----------
Shares sold ...................................... 27,790 $301,485 100,067 $993,528
Shares issued for reinvestment
of distributions ............................... 16,183 166,329 3,317 34,082
------ ------- ------- ---------
43,973 467,814 103,384 1,027,610
Shares redeemed .................................. (67,409) (686,876) 0 0
------- ------- ------- ---------
Net increase (decrease) ........................ (23,436) ($219,062) 103,384 $1,027,610
======= ======== ======= =========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER SECTOR ALLOCATION EQUITY FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
November 25, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 26,1997
(commencement of
Period ended operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ............................................... $10.28 $10.00
------------- ---------------
oIncome from investment operations
Net investmento income ................................................. 0.03 0.05
Net realized and unrealizedo gain on investments ....................... 1.08 0.59
------------- ---------------
Total from investment operations .................................. 1.11 0.64
------------- ---------------
Distributions to shareholders from
Net investment income .................................................. (0.03) (0.05)
Net realized gain from investment transactions ......................... (1.25) (0.31)
------------- ---------------
Total distributions ............................................... (1.28) (0.36)
------------- ---------------
Net asset value, end of period ..................................................... $10.11 $10.28
============= ===============
Total return (b) ................................................................... 9.72% 6.51%
============= ===============
Ratios/supplemental data
Net assets, end of period ................................................... $808,539 $1,062,833
============= ===============
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ......................... 4.86% (a) 14.80%(a)
After expense reimbursements and waived fees .......................... 1.17% (a) 1.34%(a)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ......................... (3.13)%(a) (12.61)%(a)
After expense reimbursements and waived fees .......................... 0.56% (a) 0.85% (a)
Portfolio turnover rate .................................................... 120.21% 54.52%
Average broker commissions per share (c) ................................... $0.0241 $0.1215
(a) Annualized
(b) Aggregate total return, not annualized
(c) Represents total commission paid on portfolio securities divided by total portfolio shares purchased or sold on which
commissions were charged.
See accompanying notes to financial statements
</TABLE>
<PAGE>
QUAKER SECTOR ALLOCATION EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Quaker Sector Allocation Fund (the "Fund") is a diversified series of shares
of beneficial interest of the Quaker Investment Trust (the "Trust"). The Trust,
an open-end investment company, was organized on October 24, 1990, as a
Massachusetts Business Trust and is registered under the Investment Company Act
of 1940, as amended. The investment objective of the Fund is to provide
shareholders with long-term capital growth by investing primarily in equity
securities of U. S. companies. The Fund began operations on November 25, 1996.
The following is a summary of significant accounting policies followed by the
Fund.
A. Security Valuation - The Fund's investments in securities are carried
at value. Securities listed on an exchange or quoted on a national
market system are valued at 4:00 p.m., New York time on the day of
valuation. Other securities traded in the over-the-counter market and
listed securities for which no sale was reported on that date are
valued at the most recent bid price. Securities for which market
quotations are not readily available, if any, are valued by using an
independent pricing service or by following procedures approved by the
Board of Trustees. Short-term investments are valued at cost which
approximates value.
B. Federal Income Taxes - No provision has been made for federal income
taxes since it is the policy of the Fund to comply with the provisions
of the Internal Revenue Code applicable to regulated investment
companies and to make sufficient distributions of taxable income to
relieve it from all federal income taxes.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and income tax purposes primarily because of
losses incurred subsequent to October 31, which are deferred for income
tax purposes. The character of distributions made during the year from
net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to
the timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or realized
gains were recorded by the Fund.
C. Investment Transactions - Investment transactions are recorded on the
trade date. Realized gains and losses are determined using the specific
identification cost method. Interest income is recorded daily on an
accrual basis. Dividend income and distributions to shareholders are
recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares dividends
annually, payable in December, on a date selected by the Trust's
Trustees. In addition, distributions may be made annually in December
out of net realized gains through October 31 of that year.
Distributions to shareholders are recorded on the ex-dividend date. The
Fund may make a supplemental distribution subsequent to the end of its
fiscal year ending June 30.
E. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts of
assets, liabilities, expenses and revenues reported in the financial
statements. Actual results could differ from those estimates.
(Continued)
<PAGE>
QUAKER SECTOR ALLOCATION EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, Logan Capital Management, Inc.
(the "Advisor") provides the Fund with a continuous program of supervision of
the Fund's assets, including the composition of its portfolio, and furnishes
advice and recommendations with respect to investments, investment policies and
the purchase and sale of securities. As compensation for its services, the
Advisor receives a fee at the annual rate of 0.75% of the Fund's average daily
net assets.
The Advisor intends to voluntarily waive all or a portion of its fee. There can
be no assurance that the foregoing voluntary fee waivers will continue. The
Advisor has voluntarily waived its fee amounting to $5,073 ($0.04 per share) for
the period ended December 31, 1997.
The Fund's administrator, The Nottingham Company (the "Administrator"), provides
administrative services to and is generally responsible for the overall
management and day-to-day operations of the Fund pursuant to an accounting and
administrative agreement with the Trust. As compensation for its services, the
Administrator receives a fee at the annual rate of 0.175% of the Fund's first
$50 million of average daily net assets, 0.150% of the next $50 million of
average daily net assets, and 0.125% of its average daily net assets in excess
of $100 million. The Administrator also receives a monthly fee of $2,000 for
accounting and recordkeeping services. Additionally, the Administrator charges
the Fund for servicing of shareholder accounts and registration of the Fund's
shares. The Administrator also charges the Fund for certain expenses involved
with the daily valuation of portfolio securities.
North Carolina Shareholder Services, LLC (the "Transfer Agent") serves as the
Fund's transfer, dividend paying, and shareholder servicing agent. The Transfer
Agent maintains the records of each shareholder's account, answers shareholder
inquiries concerning accounts, processes purchases and redemptions of the Fund's
shares, acts as dividend and distribution disbursing agent, and performs other
shareholder servicing functions. The Transfer Agent is compensated for its
services by the Administrator and not directly by the Fund.
Certain Trustees and officers of the Trust are also officers of the Advisor, the
Distributor or the Administrator.
NOTE 3 - SERVICE FEES
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act of
1940 (the "Act"), adopted a Shareholder Servicing Agreement (the "Agreement").
Pursuant to this Agreement, Quaker Funds, Inc. (the "Sponsor") will provide
oversight with respect to the Fund's investment advisor, arrange for payment of
investment advisory and administrative fees, coordinate payments under the
Fund's Distribution Plan, develop communications with existing Fund
shareholders, assist in responding to shareholder inquiries, and will provide
other shareholder services. As compensation for these services, Quaker Funds,
Inc. receives 0.25% of the Fund's average daily net assets. The Sponsor intends
to voluntarily waive all or a portion of its fee and reimburse expenses of the
Fund to limit total Fund operating expenses to 1.35% of the average daily net
assets of the Fund. There can be no assurance that the foregoing voluntary fee
waivers or reimbursements will continue. The Sponsor has voluntarily waived its
fee amounting to $1,691 and has reimbursed expenses totaling $18,145 for the
period ended December 31, 1997.
(Continued)
<PAGE>
QUAKER SECTOR ALLOCATION EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
Expenses totaling $33,324 incurred in connection with its organization and the
registration of its shares have been assumed by the Fund.
The organization expenses are being amortized over a period of sixty months.
Investors purchasing shares of the Fund bear such expenses only as they are
amortized against the Fund's investment income.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $1,222,635 and $2,359,862 respectively, for the period ended December
31, 1997.
<PAGE>
- --------------------------------------------------------------------------------
QUAKER FIXED INCOME FUND
- --------------------------------------------------------------------------------
a series of the Quaker Investment Trust
SEMI-ANNUAL REPORT 1997
FOR THE PERIOD ENDED DECEMBER 31
FUND SPONSOR
Quaker Funds, Inc.
1288 Valley Forge Road
Post Office Box 987
Valley Forge, Pennsylvania 19482
1-800-220-8888
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
(Unaudited)
Interest Maturity Value
Principal Rate Date (note 1)
---------- ---------- --------- --------
U. S. GOVERNMENT OBLIGATIONS - 89.52%
U. S. Treasury Bond .......................................... $270,000 10.375% 11/15/12 $358,763
U. S. Treasury Note .......................................... 420,000 11.125% 08/15/03 526,837
Total U. S. Government Obligations (Cost $861,699) ...... 885,600
--------
Shares
---------
INVESTMENT COMPANIES - 7.63%
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares ............................... 51,476 51,476
Evergreen Money Market Treasury Institutional Treasury
Money Market Fund Institutional Service Shares ......................... 24,037 24,037
--------
Total Investment Companies (Cost $75,513) .............................. 75,513
--------
Total Value of Investments (Cost $937,212 (a)) ..................................... 97.15% $961,113
Other Assets Less Liabilities ...................................................... 2.85% 28,188
-------- --------
Net Assets .................................................................. 100.00% $989,301
======== ========
(a) Aggregate cost for financial reporting and federal income tax purposes is the same. Unrealized appreciation
(depreciation) of investments for financial reporting and federal income tax purposes is as follows:
Unrealized appreciation ............................................................. $23,901
Unrealized depreciation ............................................................. 0
-------
Net unrealized appreciation ................................................... $23,901
=======
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER FIXED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
(Unaudited)
ASSETS
Investments, at value (cost $937,212) ............................................................. $ 961,113
Interest receivable ............................................................................... 21,287
Deferred organization expenses, net (note 4) ...................................................... 25,883
Other asset ....................................................................................... 278
----------
Total assets ................................................................................. 1,008,561
----------
LIABILITIES
Accrued expenses .................................................................................. 6,671
Due to fund sponsor (note 3) ...................................................................... 11,939
Disbursements in excess of cash on demand deposit ................................................. 650
----------
Total liabilities ............................................................................ 19,260
----------
NET ASSETS
(applicable to 96,546 shares outstanding; unlimited
shares of $ 0.01 par value beneficial interest authorized) ....................................... $ 989,301
==========
NET ASSET VALUE, REDEMPTION AND MAXIMUM OFFERING PRICE
PER SHARE
($989,301 / 96,546 shares) ........................................................................ $ 10.25
==========
NET ASSETS CONSIST OF
Paid-in capital ................................................................................... $ 964,671
Undistributed net investment income ............................................................... 32
Undistributed net realized gain on investments .................................................... 697
Net unrealized appreciation on investments ........................................................ 23,901
----------
$ 989,301
==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER FIXED INCOME FUND
STATEMENT OF OPERATIONS
Period ended December 31, 1997
(Unaudited)
INVESTMENT INCOME
Income
Interest ....................................................................................... $ 23,053
--------
Expenses
Investment advisory fees (note 2) .............................................................. 1,841
Fund administration fees (note 2) .............................................................. 716
Shareholder servicing fees (note 3) ............................................................ 614
Custody fees ................................................................................... 557
Registration and filing administration fees (note 2) ........................................... 769
Fund accounting fees (note 2) .................................................................. 12,000
Audit fees ..................................................................................... 2,017
Legal fees ..................................................................................... 1,404
Securities pricing fees ........................................................................ 53
Shareholder recordkeeping fees (note 2) ........................................................ 3,000
Shareholder servicing expenses ................................................................. 661
Registration and filing expenses ............................................................... 302
Printing expenses .............................................................................. 537
Amortization of deferred organization expenses (note 4) ........................................ 3,406
Trustee fees and meeting expenses .............................................................. 44
Other operating expenses ....................................................................... 485
--------
Total expenses ............................................................................ 28,406
--------
Less:
Expense reimbursements (note 3) ..................................................... (22,278)
Investment advisory fees waived (note 2) ............................................ (1,841)
Shareholder servicing fees waived (note 3) .......................................... (614)
--------
Net expenses .............................................................................. 3,673
--------
Net investment income ............................................................... 19,380
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ...................................................... 697
Decrease in unrealized depreciation on investments .................................................. 25,909
--------
Net realized and unrealized gain on investments ................................................ 26,606
--------
Net increase in net assets resulting from operations ...................................... $ 45,986
========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER FIXED INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1997
(commencement
Period ended of operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income ................................................................. $ 19,380 $ 12,277
Net realized gain from investment transactions ........................................ 697 0
Increase (decrease) in unrealized depreciation on investments ......................... 25,909 (2,008)
------ ------
Net increase in net assets resulting from operations ............................... 45,986 10,269
------ ------
Distributions to shareholders from
Net investment income ................................................................. (19,357) (12,268)
------- -------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) .................. 386,742 577,929
------- -------
Total increase in net assets .................................................... 413,371 575,930
NET ASSETS
Beginning of period ...................................................................... 575,930 0
------- -------
End of period (including undistributed net investment income ............................. $ 989,301 $ 575,930
of $32 at December 31, 1997 and $9 at June 30, 1997) ========= =========
(a) A summary of capital share activity follows:
- ------------------------------------------------------------------------------------------------------------------------------------
For the period from November 25,
Period ended (commencement of operations) to
December 31, 1997 June 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value
--------- -------- -------- --------
Shares sold .......................................... 46,473 $470,186 56,957 $565,661
Shares issued for reinvestment
of distributions ................................... 1,907 19,357 1,248 12,268
-------- -------- -------- --------
48,380 489,543 58,205 577,929
Shares redeemed ...................................... (10,039) (102,801) 0 0
-------- -------- -------- --------
Net increase ....................................... 38,341 $386,742 58,205 $577,929
======== ======== ======== ========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
QUAKER FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
November 25, 1996
(commencement
Period emded of operations) to
December 31, June 30,
1997 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period .................................................... $ 9.89 $ 10.00
--------- -----------
Income from investment operations
Net investment income ....................................................... 0.23 0.26
Net realized and unrealized gain (loss) on investments ...................... 0.36 (0.11)
--------- -----------
Total from investment operations ....................................... 0.59 0.15
--------- -----------
Distributions to shareholders from
Net investment income ....................................................... (0.23) (0.26)
--------- -----------
Net asset value, end of period .......................................................... $ 10.25 $ 9.89
========= ===========
Total return (b) ........................................................................ 6.05% 1.57%
========= ===========
Ratios/supplemental data
Net assets, end of period ........................................................ $ 989,301 $ 575,930
========= ===========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ............................... 6.92% (a) 16.56% (a)
After expense reimbursements and waived fees ................................ 0.90% (a) 0.90% (a)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ............................... 1.05% (a) (10.87)%(a)
After expense reimbursements and waived fees ................................ 7.08% (a) 4.79% (a)
Portfolio turnover rate .......................................................... 6.09% 0.00%
(a) Annualized.
(b) Aggregate total return, not annualized.
See accompanying notes to financial statements
</TABLE>
<PAGE>
QUAKER FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Quaker Fixed Income Fund (the "Fund") is a diversified series of shares of
beneficial interest of the Quaker Investment Trust (the "Trust"). The Trust, an
open-end investment company, was organized on October 24, 1990, as a
Massachusetts Business Trust and is registered under the Investment Company Act
of 1940, as amended. The investment objective of the Fund is to generate current
income, preserve capital and maximize total returns through active management of
investment grade income securities. The Fund began operations on November 25,
1996. The following is a summary of significant accounting policies followed by
the Fund.
A. Security Valuation - The Fund's investments in securities are carried
at value. Securities listed on an exchange or quoted on a national
market system are valued at 3:00 p.m., New York time on the day of
valuation. Other securities traded in the over-the-counter market and
listed securities for which no sale was reported on that date are
valued at the most recent bid price. Securities for which market
quotations are not readily available, if any, are valued by using an
independent pricing service or by following procedures approved by the
Board of Trustees. Short-term investments are valued at cost which
approximates value.
B. Federal Income Taxes - No provision has been made for federal income
taxes since it is the policy of the Fund to comply with the provisions
of the Internal Revenue Code applicable to regulated investment
companies and to make sufficient distributions of taxable income to
relieve it from all federal income taxes.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and income tax purposes primarily because of
losses incurred subsequent to October 31, which are deferred for income
tax purposes. The character of distributions made during the year from
net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to
the timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or realized
gains were recorded by the Fund.
C. Investment Transactions - Investment transactions are recorded on the
trade date. Realized gains and losses are determined using the specific
identification cost method. Interest income is recorded daily on an
accrual basis. Dividend income and distributions to shareholders are
recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares dividends
monthly, on a date selected by the Trust's Trustees. In addition,
distributions may be made annually in December out of net realized
gains through October 31 of that year. The Fund may make a supplemental
distribution subsequent to the end of its fiscal year ending June 30.
E. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts of
assets, liabilities, expenses and revenues reported in the financial
statements. Actual results could differ from those estimates.
(Continued)
<PAGE>
QUAKER FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, Fiduciary Asset Management Co.
(the "Advisor") provides the Fund with a continuous program of supervision of
the Fund's assets, including the composition of its portfolio, and furnishes
advice and recommendations with respect to investments, investment policies and
the purchase and sale of securities. As compensation for its services, the
Advisor receives a fee at the annual rate of 0.45% of the Fund's average daily
net assets. The Advisor intends to voluntarily waive all or a portion of its
fee. There can be no assurance that the foregoing voluntary fee waivers will
continue. The Advisor has voluntarily waived its fee amounting to $1,841 ($0.02
per share) for the period ended December 31, 1997.
The Fund's administrator, The Nottingham Company (the "Administrator"), provides
administrative services to and is generally responsible for the overall
management and day-to-day operations of the Fund pursuant to an accounting and
administrative agreement with the Trust. As compensation for its services, the
Administrator receives a fee at the annual rate of 0.175% of the Fund's first
$50 million of average daily net assets, 0.150% of the next $50 million of
average daily net assets, and 0.125% of its average daily net assets in excess
of $100 million. The Administrator also receives a monthly fee of $2,000 for
accounting and recordkeeping services. Additionally, the Administrator charges
the Fund for servicing of shareholder accounts and registration of the Fund's
shares. The Administrator also charges the Fund for certain expenses involved
with the daily valuation of portfolio securities.
North Carolina Shareholder Services, LLC (the "Transfer Agent") serves as the
Fund's transfer, dividend paying, and shareholder servicing agent. The Transfer
Agent maintains the records of each shareholder's account, answers shareholder
inquiries concerning accounts, processes purchases and redemptions of the Fund's
shares, acts as dividend and distribution disbursing agent, and performs other
shareholder servicing functions. The Transfer Agent is compensated for its
services by the Administrator and not directly by the Fund.
Certain Trustees and officers of the Trust are also officers of the Advisor, the
Distributor or the Administrator.
NOTE 3 - SERVICE FEES
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act of
1940 (the "Act"), adopted a Shareholder Servicing Agreement (the "Agreement").
Pursuant to this Agreement, Quaker Funds, Inc. (the "Sponsor") will provide
oversight with respect to the Fund's investment advisor, arrange for payment of
investment advisory and administrative fees, coordinate payments under the
Fund's Distribution Plan, develop communications with existing Fund
shareholders, assist in responding to shareholder inquiries, and will provide
other shareholder services. As compensation for these services, Quaker Funds,
Inc. receives 0.15% of the Fund's average daily net assets. The Sponsor intends
to voluntarily waive all or a portion of its fee and reimburse expenses of the
Fund to limit total Fund operating expenses to 0.90% of the average daily net
assets of the Fund. There can be no assurance that the foregoing voluntary fee
waivers or reimbursements will continue. The Sponsor has voluntarily waived its
fee amounting to $614 and has reimbursed expenses totaling $22,278 for the
period ended December 31, 1997.
(Continued)
<PAGE>
QUAKER FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
(Unaudited)
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
Expenses totaling $33,324 incurred in connection with its organization and the
registration of its shares have been assumed by the Fund.
The organization expenses are being amortized over a period of sixty months.
Investors purchasing shares of the Fund bear such expenses only as they are
amortized against the Fund's investment income.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $407,841 and $43,969 respectively, for the period ended December 31,
1997.
