PIC Institutional GROWTH FUND
Annual Report
October 31, 1995
<PAGE>
PIC Institutional GROWTH FUND
President's Message
The following is an interview with the members of the investment team at
Provident Investment Counsel regarding the PIC Growth Portfolio (the
"portfolio").
Question: How did the PIC Institutional Growth Fund perform relative to
overall markets for the fiscal year ended October 31, 1995?
Answer: The Standard and Poors 500 Index, a broad measure of the market's
overall performance, rose 23.11 for the fiscal year, while the Fund rose 21.79.
Other indices measuring the markets overall performance such as the Dow Jones
Industrial Average and New York Stock Exchange Composite Index posted returns of
21.68 and 19.68, respectively.
Question: The broad market reached record levels early in 1995 and has
continued to advance for most of the year. What were some of the factors
attributable to this rise?
Answer: The year 1994 ended with uncertainty and weak financial markets due to
an economic transition that had taken place during the year which included the
Federal Reserve Board of Governors raising interest rates six times. During the
first quarter of 1995 investors gained confidence that the economy was beginning
to slow in reaction to the rate increases. The market's advance began despite a
weak dollar and an economic crisis in Mexico with the hopes of a domestic soft
landing for the economy.
Question: What are some of the sectors that have helped the overall markets
and the Fund's performance?
Answer: The technology sector has provided leadership most of the year supported
by high rates of revenue and earnings growth, along with visibility for future
sustainable growth. Companies in fields such as telecommunications, specialty
finance, consumer services, health care and health technology also added to the
market and the Fund's performance.
Question: Will these sectors continue to lead the market going forward?
Answer: We believe selected stocks in these sectors that have sustainable
revenue and earnings growth rates will be rewarded going forward. We have begun
to see a greater disparity in performance of individual issues in strong
segments of the market such as technology. As always at PIC we are focusing on
those issues that continue to show revenue and earnings growth along with
visibility for future sustainable earnings growth.
Question: What is the outlook for the near future for the market and the Fund?
Answer: During the third quarter we saw some sluggish earnings reports from a
number of economically sensitive companies that would seem to reflect a slow but
steady domestic outlook for the economy. We are seeing a rotation in the market
toward companies with consistently growing revenues and earnings rather than a
reliance on upside earnings surprises. The reasonable level of inflation
currently along with the potential for near term reductions in interest rates
appears positive for the Fund's holdings and growth stocks in general. Our
research process will remain focused on companies with strong financial
characteristics to maintain emphasis on growth and quality. The financial
characteristics of the portfolio as of October 31, 1995 are displayed on the
following page:
<PAGE>
PIC Institutional GROWTH FUND
President's Message, continued
[graphical material omitted]
<PAGE>
<TABLE>
<CAPTION>
PIC Institutional GROWTH FUND
Statement of Assets and Liabilities as of October 31, 1995
ASSETS
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<S> <C>
Investment in PIC Growth Portfolio, at value $ 131,157,026
Deferred organization costs 14,537
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Total assets 131,171,563
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LIABILITIES
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Accrued expenses 32,141
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NET ASSETS
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Applicable to 9,205,021 shares of beneficial interest outstanding $131,139,422
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NET ASSET VALUE PER SHARE $ 14.25
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SOURCE OF NET ASSETS
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Paid-in capital $103,502,656
Accumulated net realized loss on investments (1,678,601)
Accumulated net investment loss (358,054)
Net unrealized appreciation of investments 29,673,421
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Net assets $131,139,422
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</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PIC Institutional GROWTH FUND
Statement of Operations Year ended October 31, 1995
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INVESTMENT INCOME
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<S> <C>
Net investment income from Portfolio $ 84,150
====================================================================================================================================
Expenses:
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Administration fees (Note 3) 234,071
Reports to shareholders 4,997
Registration fees 12,997
Trustees' fees 10,841
Auditing fee 12,001
Legal fee 12,548
Transfer agent's fee 19,501
Custody and accounting services fee 6,000
Amortization of organization costs 10,001
Miscellaneous 7,205
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Total expenses 330,162
Less, reimbursement/waiver by Provident Investment Counsel, Inc. (Note 3) (56,326)
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Net expenses 273,836
====================================================================================================================================
Net investment loss (189,686)
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NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
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Net realized gain on investments 715,922
Change in net unrealized appreciation of investments 22,079,471
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Net gain on investments 22,795,393
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $22,605,707
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</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PIC Institutional GROWTH FUND
Statement of Changes in Net Assets
INCREASE IN NET ASSETS
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Year Year
ended ended
From operations: October 31, 1995 October 31, 1994
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<S> <C> <C>
Net investment loss $ (189,686) $ (127,914)
Net realized gain (loss) on investments 715,922 (750,631)
Change in unrealized appreciation of investments 22,079,471 2,380,258
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Net increase in net assets resulting from operations 22,605,707 1,501,713
====================================================================================================================================
Transactions in shares of beneficial interest:
Purchases of 2,058,233 and 2,867,533 shares, respectively 25,480,815 32,110,253
Redemptions of 1,593,166 and 1,786,339 shares, respectively (19,229,741) (20,189,362)
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Net increase in net assets resulting from share transactions 6,251,074 11,920,891
====================================================================================================================================
Total increase in net assets 28,856,781 13,422,604
====================================================================================================================================
NET ASSETS:
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Beginning of year 102,282,641 88,860,037
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End of year $131,139,422 $102,282,641
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</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PIC Institutional GROWTH FUND
Financial Highlights
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
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Year Year Year June 11, 1992*
ended ended ended through
October 31, 1995 October 31,1994 October 31, 1993 October 31, 1992
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<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.70 $ 11.60 $ 10.81 $ 10.00
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Income from investment operations:
Net investment income (.02) .00 .00 .01
Net realized and unrealized gain on investments 2.57 .10 .80 .80
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Total from investment operations 2.55 .10 .80 .81
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Less distributions:
Return of capital .00 .00 (.01) .00
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Net asset value, end of period $ 14.25 $ 11.70 $ 11.60 $10.81
====================================================================================================================================
Total return 21.79% 0.86% 7.40% 20.88%++
====================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (millions) $131.1 $102.3 $ 88.9 $ 5.7
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Ratios to average net assets:+**
Expenses 1.25% 1.25% 1.25% 1.25%++
Net investment income (.17%) N/A N/A .25%++
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<FN>
*Commencement of operations.
+Net of expense reimbursements.
**Includes the Fund's shares of expenses, net of fee waivers and expense
reimbursements, allocated from PP. IP. C Growth Portfolio. If the fee waivers
and expense reimbursements, with respect to the Fund and PP. IP. C Growth
Portfolio, had not been made, the ratio of expenses to average net assets would
have been 1.30%, 1.53%, 1.54% and 4.12%, respectively.
++Annualized.
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
PIC Institutional GROWTH FUND
Notes to Financial Statements, October 31, 1995
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1 -- ORGANIZATION
- --------------------------------------------------------------------------------
PIC Institutional Growth Fund (the "Fund") is one of six series of
PIC Investment Trust (the "Trust"). The Trust was organized on December
11, 1991 as a Delaware business trust, with an unlimited number of shares of
beneficial interest of $.01 par value, and is registered under the Investment
Company Act of 1940 as an open-end, diversified management investment company.
The Fund invests substantially all of its assets in the PIC Growth
Portfolio (the "Portfolio"), a separate registered management investment company
having the same investment objective as the Fund. At October 31, 1995, the Fund
owned 57.06% of the total net assets of the Portfolio. The financial statements
of the Portfolio are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements.
- --------------------------------------------------------------------------------
2 -- SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. Investment Valuation. The Fund reflects its investment in the Portfolio
at its proportionate interest in the value of the Portfolio's net assets.
Valuation of securities by the Portfolio is discussed at Note 2A of the
Portfolio's Notes to Financial Statements.
B. Investment Income and Dividends to Shareholders. The Fund earns income,
net of the expenses of the Portfolio, daily on its investment in the Portfolio.
All net investment income and realized and unrealized gains or losses on
investments of the Portfolio are allocated pro rata among the Fund and the other
Holders of Interests in the Portfolio. Dividends, if any, are paid annually to
shareholders of the Fund and recorded on the ex-dividend date.
C. Federal Income Taxes. The Fund intends to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no federal
income tax provision is required.
D. Deferred Organization Expense. Organization costs of the Fund are being
amortized on a straight line basis over a period of sixty months. During the
amortization period the proceeds of any redemption of the original shares by the
holder thereof will be reduced by a pro rata portion of any then unamortized
organization costs based on the ratio of shares redeemed to the total initial
shares outstanding prior to the redemption.
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3 -- TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
The Trust has entered into administration agreements with Provident
Investment Counsel, Inc. ("PIC") and Investment Company Administration
Corporation ("ICAC"), pursuant to which agreements certain employees of these
entities serve as officers and/or trustees of the Trust and the Portfolio. PIC
and ICAC also provide management services necessary for the operations of the
Trust and the Portfolio and furnish office facilities. PIC receives a fee for
its services to the Fund at the rate of 0.20% of the average daily net assets of
the Fund; for the year ended October 31, 1995, PIC received a fee of $162,744
and waived the balance of the fee amounting to $56,326. PIC has voluntarily
agreed to reimburse the Fund to the extent necessary so that the expenses of the
Fund, including those expenses allocated from the Portfolio, do not exceed 1.25%
of the Fund's average net assets. ICAC receives an annual fee for its services
at the rate of $15,000.
First Fund Distributors, Inc. (an affiliate of ICAC), a registered
broker-dealer, acts as the principal underwriter for the Trust in connection
with the offering of its shares, but receives no compensation for its services.
<PAGE>
PIC Institutional GROWTH FUND
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
4 -- INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
Additions and reductions in the Fund's investment in the Portfolio, for the year
ended October 31, 1995, aggregated $25,489,342 and $19,491,594, respectively.
<PAGE>
PIC Institutional GROWTH FUND
Independent Auditor's Report
To the Board of Trustees of
PIC Investment Trust
and the Shareholders of
PIC Institutional Growth Fund
We have audited the accompanying statement of assets and liabilities of
PIC Institutional Growth Fund (a series of PIC Investment Trust) as of
October 31, 1995, the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the three years in the
period then ended and for the period June 11, 1992 (commencement of operations)
to October 31, 1992. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
PIC Institutional Growth Fund as of October 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
McGladrey & Pullen, LLP
New York, New York
November 22, 1995
<PAGE>
<TABLE>
<CAPTION>
PIC GROWTH PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES - 97.6% Shares Value Percent of
Net Assets
Aerospace - 1.7%
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<S> <C> <C> <C>
Boeing Company 58,500 $ 3,839,062 1.7%
Boeing Company manufactures commercial and military aircraft.
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Auto Parts - 1.1%
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Autozone, Inc.* 103,100 2,551,725 1.1%
Autozone is a leading specialty retailer of automotive parts and accessories,
focusing on Do-It-Yourself consumers.
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Biotechnology - 0.7%
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Amgen, Inc. 33,000 1,584,000 0.7%
Amgen develops, manufactures and markets drugs based on advanced cellular and
molecular biology. The company's two principal drugs
are Epogen, which promotes the production of white blood cells, and Nuepogen,
which stimulates the production of certain white blood cells.
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Building Products - 0.0%
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Home Depot, Inc. 466 17,359 0.0%
Home Depot operates over 230 retail Do-It-Yourself warehouse building supply
stores in 21 states.
Lowe's Companies, Inc. 500 13,500 0.0%
Lowe's is a specialty retailer of products and services for the home improvement
and home construction markets.
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Total Building Products 30,859
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Business and Financial Services - 6.3%
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Alco Standard Corporation 25,900 2,292,150 1.0% The largest independent copier
distribution network in North America and the largest distributor of printing
paper. Ceridian Corporation* 25,100 1,091,850 0.5% Ceridian Corporation is an
information services company providing payroll and humanb resource services to
large corporations. Their Arbitron division is the dominant provider of radio
rating services and CDI provides electronic solutions to defense markets. First
Data Corporation 168,848 11,165,090 4.9% First Data Corporation provides high
quality, high volume information processing and related services.
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Total Business and Financial Services 14,549,090
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Chemicals - 0.8%
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Air Products & Chemicals, Inc. 36,600 1,889,475 0.8%
Air Products & Chemicals is an international supplier of industrial gases and
specialty chemicals.
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Computer Services - 2.2%
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Automatic Data Processing, Inc. 17,200 1,229,800 0.5%
Automatic Data Processing provides computerized transaction processing, data
communications, information recordkeeping and payroll
services.
Computer Sciences Corp.* 36,100 2,414,187 1.1%
Computer Sciences Corp is a large independent provider of information technology
consulting.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC GROWTH PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value Percent of
Net Assets
Computer Services, continued
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<S> <C> <C> <C>
Paychex, Inc. 32,550 $ 1,411,856 0.6%
Provides computerized payroll-accounting services, salary deposit services,
automatic-payroll-tax payments, return-filing services,
and human resource products and services to more than 186,000 small and medium
sized businesses nationwide.
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Total Computer Services 5,055,843
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Computer Software - 9.1%
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Computer Associates International, Inc. 101,700 5,593,500 2.4%
Computer Associates manufactures software that enables computers to run more
efficiently. The company develops, markets and services
over 300 products for a wide range of mainframes, mini-computers and micro-
computers.
Microsoft Corporation* 75,888 7,588,800 3.3%
Microsoft developes and markets systems and applications software for business
and home use.
Oracle Systems Corp.* 176,900 7,717,263 3.4%
Oracle Systems is the world's largest maker of database management systems
(DBMS), software that allows users to create, retrieve,
and manipulate data in computer-based files. Main products support ORACLE, a
relational DBMS, which allows people to manipulate data by using an industry
standard language SQL.
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Total Computer Software 20,899,563
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Consumer Durables - 0.9%
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American Standard Company, Inc., DE 74,100 1,982,175 0.9%
American Standard Company is a global manufacturer of brand name products such
as air conditioning, plumbing and braking and control systems.
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Cosmetics - 1.2%
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The Gillette Company 55,520 2,685,780 1.2% Gillette produces and manufactures
razors and razor blades, cosmetics, stationery products, small appliances and
oral care products.
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Credit and Finance - 3.7%
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First USA Inc. 59,300 2,727,800 1.2%
First USA is one of the largest issuers of credit cards and processors of
credit card transactions for merchants with a total of
nearly $13 billion in loans outstanding.
MBNA Corporation 153,860 5,673,588 2.5%
MBNA is the fourth largest credit card issuer and processor in the United
States.
Mercury Finance Company 600 11,550 0.0%
A consumer finance company which provides short-term installment loans directly
to consumers, purchases installment sales contracts from dealers and sells
credit insurance.
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Total Credit and Finance 8,412,938
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Discount Chains - 0.9%
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Wal-Mart Stores, Inc. 94,200 2,037,075 0.9%
Wal-Mart operates an expanding chain of modern retail discount stores and
warehouse membership-only clubs.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC GROWTH PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value Percent of
Net Assets
Diversified - 1.2%
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<S> <C> <C> <C>
Tyco International Ltd. 45,500 $ 2,764,125 1.2%
Tyco International is a diversified manufacturing company. TYC produces fire
protection systems, pipes, fittings, and other flow
control equipment.
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Drugs - 1.2%
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Merck & Company, Inc. 28,100 1,615,750 0.7%
Merck is the world's largest pharmaceutical company and the largest U.S.
pharmacy benefits management company.
R P Scherer Corp., DE 26,400 1,174,800 0.5%
R.P. Scherer develops drug delivery systems and manufactures soft gel capsules.
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Total Drugs 2,790,550
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Electronic Components/Semiconductors - 12.4%
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Analog Devices, Inc.* 94,500 3,413,812 1.5%
Analog Devices designs, manufactures and sells high performance linear and mixed
signal integrated circuits used in analog and
digital signal processing applications.
Applied Materials, Inc. 99,000 4,962,375 2.2%
Applied Materials develops, manufactures, sells and services semiconductor
wafer fabrication equipment to the semiconductor wafer
industry.
Cirrus Logic Corporation 47,700 2,009,362 0.9%
Cirrus Logic is a semiconductor company focused primarily on the markets
for graphics chips, wireless communications and mass
storage.
Intel Corp. 135,500 9,468,063 4.1%
Intel is the world's leading manufacturer of microprocessors, memory chips,
controllers and peripherals.
LSI Logic Corporation 62,900 2,964,163 1.3%
LSI Logic Corporation manufactures application-specified integrated circuits and
provides related design and technology services.
SGS-Thomson Microelectronics N.V.* 48,700 2,203,675 1.0%
SGS Thomson Microelect designs, develops, manufactures and markets a broad
range of semiconductor integrated circuits and discrete
devices used in a wide variety of microelectronic applications.
Xilinx, Inc. 78,100 3,592,600 1.6%
Xilinx is the world's largest supplier of programmable logic devices.
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Total Electronic Components/Semiconductors 28,614,050
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Electronics - 6.3%
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Molex, Inc., Class A 36,718 1,129,079 0.5%
Molex manufactures electronic connectors and interconnection systems, ribbon
cable, switches and application tooling.
Motorola, Inc. 103,100 6,765,938 2.9%
Motorola manufactures cellular telephone, paging and specialized mobile
radio equipment. Motorola is also a major supplier of
semiconductors, circuits, controls and related data communications equipment.
Texas Instruments, Inc. 98,100 6,695,325 2.9%
Texas Instruments manufactures semiconductor integrated circuits and
sub-assemblies, defense electronics and digital products.
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Total Electronics 14,590,342
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC GROWTH PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value Percent of
Net Assets
Entertainment - 4.8%
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<S> <C> <C> <C>
British Sky Broadcasting Group, PLC Sponsored ADR 100,500 $ 3,592,875 1.6%
British Sky Broadcasting is the leading pay television broadcasting service in
the United Kingdom with over 4.2 million subscribers.
Capital Cities/ABC, Inc. 30,300 3,594,337 1.6%
Capital Cities conducts business through five operating groups: ABC
Television Network Group, Broadcast Group, Publishing Group,
Cable and International Broadcast Group, and Multimedia Group.
Hospitality Franchise System, Inc.* 61,600 3,773,000 1.6%
Hospitality Francise is the world's largest hotel franchiser with four
nationally recognized brand names including Days Inn, Ramada, Howard Johnson and
Super 8.
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Total Entertainment 10,960,212
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Food & Restaurants - 0.0%
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McDonalds Corporation 500 20,500 0.0%
Mc Donalds Corporation operates 3,856 fast-food restaurants and franchises 9,237
restaurants in 65 countries.
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Funeral Services - 1.6%
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Loewen Group, Inc. 92,100 3,688,317 1.6%
Loewen Group is the second largest funeral service corporation in North America.
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Health Maintenance Organizations - 1.1%
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United HealthCare Corporation 47,200 2,507,500 1.1% United HealthCare owns and
manages health maintenance organizations in 23 states and offers reinsurance
coverage to HMO's and others.
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Insurance - 3.3%
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American International Group, Inc. 31,500 2,657,812 1.2%
AIG is the leading United States-based international insurance company and the
nation's largest underwriter of specialty commercial
and industrial coverages. American International Group writes property,
casualty, marine, life and financial service insurance in
130 companies.
MGIC Investment Corp. 65,900 3,748,063 1.6%
MGIC provides private mortgage insurance coverage to thrifts, mortgage
bankers and brokers, commercial bankers and other lending
institutions.
PMI Group, Inc. 24,900 1,195,200 0.5%
PMI Group provides private mortgage insurance coverage to thrifts, mortgage
bankers and brokers, commercial banks, and lending
institutions.
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Total Insurance 7,601,075
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Mainframes - 2.1%
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Hewlett Packard Co. 53,100 4,918,388 2.1%
Hewlett-Packard manufactures computers, calculators, electronic test and
measurement analysis instruments.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC GROWTH PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value Percent of
Net Assets
Medical Instruments - 3.7%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Medtronic, Inc. 112,200 $ 6,479,550 2.8%
Medtronic manufacturers pacemakers, heart valves, neurological stimulation
devices, therapeutic catheters and blood oxygenators. MDT
markets its products through hospitals, doctors, and other medical institutions
throughout the world.
St. Jude Medical, Inc.* 37,000 1,970,250 0.9%
St. Jude Medical manufactures and markets biomedical devices for cardiovascular
and vascular applications.
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Total Medical Instruments 8,449,800
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Medical Services - 1.2%
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Cardinal Health, Inc. 55,900 2,871,862 1.2%
Cardinal Health Incorporated is a leading wholesale drug distributor in the
United States.
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Mortgage and Related Services - 3.7%
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Federal Home Loan Mortgage Association 13,600 941,800 0.4%
Federal Home Loan Mortgage buys and holds mortgages from lenders through the
United States and sells guaranteed mortgage-backed
securities.
Federal National Mortgage Association 45,340 4,755,032 2.1%
Federal National Mortgage provides supplemental assistance to the secondary
market in guaranteed and insured home mortgages.
Finova Group Inc. 62,400 2,823,600 1.2%
Finova Group provides collateralized financing in focused niche markets.
- ------------------------------------------------------------------------------------------------------------------------------------
Total Mortgage and Related Services 8,520,432
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Natural Gas Products and Pipelines - 1.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Enron Corp. 124,710 4,286,906 1.9%
Enron is an integrated natural gas company engaged in the gathering,
transportation and wholesale marketing of natural gas
throughout the United States and internationally.
- ------------------------------------------------------------------------------------------------------------------------------------
Networking - 4.8%
- ------------------------------------------------------------------------------------------------------------------------------------
3Com Corporation 93,100 4,375,700 1.9%
3Com Corporation is a leading networking products vendor with 50% of sales
in systems (hubs, routers and switches) and 50% in
network adapter cards.
Cabletron Systems, Inc.* 44,050 3,463,431 1.5%
Cabletron manufactures local area network products and provides design and
support services for local area network systems.
U.S. Robotics, Inc. 34,600 3,200,500 1.4%
U.S. Robotics is the dominant provider of communications access products
including high speed modems and LAN/WAN hubs for dial up
connectivity.
- ------------------------------------------------------------------------------------------------------------------------------------
Total Networking 11,039,631
- ------------------------------------------------------------------------------------------------------------------------------------
Office Equipment/Supplies - 1.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Office Depot, Inc.* 152,347 4,360,933 1.9% Office Depot operates the largest
chain of office product warehouse stores with locations throughout the United
States.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC GROWTH PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value Percent of
Net Assets
Outpatient - Home Care - 1.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Healthsouth Corporation 84,500 $ 2,207,563 1.0% Healthsouth is the nation's
largest provider of outpatient and rehabilitative health care services.
Healthsouth provides these services through outpatient and inpatient
rehabilitation facilities, outpatient surgery centers and medical centers.
- ------------------------------------------------------------------------------------------------------------------------------------
Pharmaceuticals - 0.8%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pfizer, Inc. 32,400 1,858,950 0.8%
Pfizer is a major producer of pharmacuticals, hospital products, animal health
lines, consumer products and specialty chemicals and
minerals.
- ------------------------------------------------------------------------------------------------------------------------------------
Specialty Chains - 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
CUC International, Inc. 34,000 1,177,250 0.5%
CUC, a consumer services company, provides over 29 million members with access
to discount prices, product comparison information,
and convenient purchasing for home shopping, travel, insurance, auto, and dining
services.
- ------------------------------------------------------------------------------------------------------------------------------------
Technology - 4.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Cisco Systems, Inc.* 82,800 6,417,000 2.8%
Cisco Systems is the leading supplier of multimedia and multinetworking
products including routers, bridges, terminal servers and
network management products.
Informix Corporation 118,600 3,454,225 1.5%
Informix is a leading provider of relational database management software,
including application development tools and graphical-
and character-based productivity software, for use on most significant desktop
platforms.
- ------------------------------------------------------------------------------------------------------------------------------------
Total Technology 9,871,225
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone Communications - 10.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Andrew Corporation 57,750 2,439,937 1.1%
Andrew Corporation is an international supplier of communications equipment and
services to commercial and government markets.
Ericsson, (L.M.) Telephone Company, ADR 414,800 8,859,869 3.9%
Ericsson is one of the world's leading telecommunications equipment suppliers
and the preeminent supplier in the cellular equipment
market.
Frontier Corporation 79,400 2,143,800 0.9%
Frontier Corporation is a telecommunications services provider with 70% of
revenues in long distance (mostly small and mid sized
commerical accounts) and 30% in local and cellular in 22 markets including
Rochester. Frontier merged with ALC Communications on
August 16, 1995, creating the fifth largest long distance carrier after AT%T,
MCI Communications, Sprint and Worldcom.
Glenayre Technologies, Inc. 33,300 2,139,525 0.9%
Glenayre Technologies is a leading worldwide manufacturer of
infrastructure equipment for paging and other wireless
telecommunications markets.
Nokia Corporation Sponsored ADR 160,600 8,953,450 3.9% Nokia Corporation
supplies advanced telecommunications infrastructure systems and equipment for
use in mixed and mobile phone networks. Nokia is also a leading supplier of
color televisions, computer monitors and car speakers.
- ------------------------------------------------------------------------------------------------------------------------------------
Total Telephone Communications 24,536,581
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC GROWTH PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value Percent of
Net Assets
Transportation Services - 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fritz Companies, Inc.* 35,400 $ 1,239,000 0.5%
Fritz Companies provides global integrated logistics information services and
outsourcing to companies involved in the worldwide movement of goods.
- ------------------------------------------------------------------------------------------------------------------------------------
Total Equity Securities (Cost $167,900,394) 224,392,777 97.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements - 2.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Government Securities, Inc., 5.56%, due 11/1/95
(Collateralized by $5,654,065 U.S. Treasury Note, 7.5%,
due 1/31/97) (Cost $5,487,800) 5,487,800 5,487,800 2.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost $173,388,194) 229,880,577 100.0%
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS - 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Cash 70
Dividends and interest receivables 108,793
Deferred organization costs 15,009
Prepaid expenses 2,395
Other assets 23,317
- ------------------------------------------------------------------------------------------------------------------------------------
Total Other Assets 149,584 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES - (0.1%)
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued expenses 187,913
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 187,913 (0.1%)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $229,842,248 100.0%
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*Non-income producing security.
</FN>
</TABLE>
The above descriptions of portfolio companies are furnished by management
solely for the general information of investors. See Notes to Financial
Statements.
<PAGE>
<TABLE>
<CAPTION>
PIC GROWTH PORTFOLIO
Statement of Operations Year ended October 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
Income:
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Dividends $ 1,477,752
Interest 591,826
- ------------------------------------------------------------------------------------------------------------------------------------
Total income 2,069,578
====================================================================================================================================
Expenses:
- ------------------------------------------------------------------------------------------------------------------------------------
Investment advisory fee (Note 3) 1,536,297
Administration fee (Note 3) 192,037
Accounting services fee 83,208
Custody fee 45,736
Auditing fees 20,999
Trustees' fees 20,067
Legal fees 4,997
Insurance 8,262
Amortization of organization costs 9,997
Miscellaneous 20,600
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 1,942,200
Less, reimbursement/waiver from Advisor (Note 3) (21,828)
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,920,372
====================================================================================================================================
Net investment income 149,206
====================================================================================================================================
NET REALIZED & UNREALIZED GAIN ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain from security transactions 3,599,901
Change in net unrealized appreciation of investments 36,436,183
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain on investments 40,036,084
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $40,185,290
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PIC GROWTH PORTFOLIO
Statement of Changes in Net Assets
INCREASE IN NET ASSETS:
- ------------------------------------------------------------------------------------------------------------------------------------
Year Year
ended ended
From operations: October 31, 1995 October 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment income $ 149,206 $ 161,976
Net realized gain (loss) on investments 3,599,901 (1,976,871)
Change in unrealized appreciation of investments 36,436,183 4,623,699
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 40,185,290 2,808,804
====================================================================================================================================
Transactions in Interests:
Contributions by Holders 37,495,575 40,261,285
Withdrawals by Holders (25,350,557) (26,569,240)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from transactions in interests 12,145,018 13,692,045
====================================================================================================================================
Total increase in net assets 52,330,308 16,500,849
====================================================================================================================================
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of year 177,511,940 161,011,091
- ------------------------------------------------------------------------------------------------------------------------------------
End of year $229,842,248 $177,511,940
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
PIC GROWTH PORTFOLIO
Notes to Financial Statements October 31, 1995
1 -- ORGANIZATION
- --------------------------------------------------------------------------------
PP. IP. C Growth Portfolio (the "Portfolio") was organized on December 11,
1991 as a trust under the laws of the State of New York. The beneficial
interests in the Portfolio are divided into an unlimited number of
non-transferable Interests, par value $.01 each. The Portfolio is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company.
2 -- SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
The following is a summary of significant accounting policies consistently
followed by the Portfolio. These policies are in conformity with generally
accepted accounting principles.
A. Valuation of Securities. Equity securities listed on a national securities
exchange or traded on the NASDAQ system are valued at their last sale
price. Other equity securities and debt securities for which market
quotations are readily available are valued at the mean between their bid
and asked price, except that debt securities maturing within 60 days are
valued on an amortized cost basis. Securities for which market quotations
are not readily available are valued at fair value as determined in good
faith by the Board of Trustees.
B. Federal Income Taxes. The Portfolio intends to comply with the
requirements of the Internal Revenue Code applicable to it. Therefore, no
federal income tax provision is required.
C. Deferred Organization Expense. Organization costs of the Portfolio are
being amortized on a straight line basis over a period of sixty months.
During the amortization period the proceeds of any redemption of the
original Interests in the Portfolio by any Holder thereof will be reduced
by a pro rata portion of any then unamortized organization costs based on
the ratio of Interests redeemed to the total initial Interests outstanding
prior to the redemption.
D. Other. Securities transactions are recorded on the trade date basis.
Realized gains and losses from securities transactions are reported on an
identified cost basis. Interest is recorded as accrued, and dividend income is
recorded on the ex-dividend date.
3 -- TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
The Portfolio has entered into an investment advisory agreement with
Provident Investment Counsel, Inc. ("PIC") and an administration agreement with
Investment Company Administration Corporation ("ICAC"), pursuant to which
agreements certain employees of these entities serve as officers and/or trustees
of the Portfolio. PIC and ICAC also provide management services necessary for
the operations of the Portfolio and furnish office facilities.
PIC receives a fee for its services to the Portfolio at the rate of 0.80%
of the average daily net assets of the Portfolio. PIC has voluntarily agreed to
limit the total expenses of the Portfolio to an annual rate of 1.00% of the
Portfolio's average net assets. During the year ended October 31, 1995, PIC
received $1,514,469 in fees from the Portfolio, after deducting the
reimbursement of $21,828. ICAC receives an annual fee for its services at the
rate of 0.10% of average daily net assets of the Portfolio. Fees paid to ICAC
pursuant to the agreement totalled $192,037 for the year ended October 31, 1995.
<PAGE>
PIC GROWTH PORTFOLIO
Notes to Financial Statements, continued
4 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
During the year ended October 31, 1995, purchases and sales of investment
securities, other than short-term obligations, were $123,203,935 and
$100,818,900, respectively. The cost of securities for federal income tax
purposes was $173,416,242. The aggregate gross unrealized appreciation and
depreciation of portfolio securities, based on cost for federal income tax
purposes, was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $59,589,667
Unrealized depreciation (3,125,332)
- --------------------------------------------------------------------------------
Net unrealized appreciation $56,464,335
================================================================================
</TABLE>
5 - SELECTED RATIO DATA
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
Year Year Year
ended ended ended
October 31, 1995 October 31, 1994 October 31, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
<S> <C> <C> <C>
Operating expenses* 1.00% 1.00% 1.00%
Net investment income* 0.08% 0.10% 0.17%
Portfolio turnover rate 54.89% 68.26% 43.20%
<FN>
++Annualized.
*Net of expense reimbursements equivalent to 0.01%, 0.01% and 0.09% of average
net assets, respectively.
</FN>
</TABLE>
<PAGE>
PIC GROWTH PORTFOLIO
Independent Auditor's Report
To the Board of Trustees of
and the Holders of Interest in,
PIC Growth Portfolio
We have audited the accompanying statement of assets and liabilities of
PIC Growth Portfolio as of October 31, 1995, the related statement of
operations for the year then ended and the statement of changes in net assets
for each of the two years in the period then ended. These financial statements
are the responsibility of the Portfolio's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1995 by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of PIC Growth Portfolio as of
October 31, 1995, the results of its operations, the changes in its net assets
for the periods indicated, in conformity with generally accepted accounting
principles.
McGladrey & Pullen, LLP
New York, New York
November 22, 1995
<PAGE>
PIC Institutional GROWTH FUND
Trustees and Officers
TRUSTEES AND OFFICERS - PIC INVESTMENT TRUST
- --------------------------------------------------------------------------------
Jeffrey J. Miller, Trustee and President
Jettie M. Edwards, Trustee
Bernard J. Johnson, Trustee
Jeffrey D. Lovell, Trustee
Wayne H. Smith, Trustee
Thad M. Brown, Vice President, Secretary and Treasurer
TRUSTEES AND OFFICERS - PIC GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Jeffrey J. Miller, Trustee and President
Richard N. Frank, Trustee
James Clayburn LaForce, Trustee
Angelo R. Mozilo, Trustee
Bernard J. Johnson, Trustee Emeritus
Thad M. Brown, Vice President, Secretary and Treasurer
LEGAL COUNSEL - PIC INVESTMENT TRUST
- --------------------------------------------------------------------------------
Shereff, Friedman, Hoffman & Goodman
LEGAL COUNSEL - PIC GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Heller, Ehrman, White & McAuliffe
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
McGladrey & Pullen, LLP
This report is intended for the information of shareholders of PIC
Institutional Growth Fund and should not be used as sales literature unless
preceded or accompanied by a current prospectus.
