Annual Report October 31, 1999
[PROVIDENT INVESTMENT COUNSEL LOGO]
Provident
Investment Counsel
Funds A and B
Balanced Fund
Growth Fund
Mid Cap Fund
Small Company Growth Fund
Provident Investment Counsel
Investing in growth since 1951
<PAGE>
CONTENTS
3 President's Letter
4 Our Philosophy
4 Performance Update/
Portfolio Review
7 Interview with Provident Managers
9 Performance Comparison
THE FUNDS
14 Statements of Assets and Liabilities
16 Statements of Operations
18 Statements of Changes in Net Assets
22 Financial Highlights
27 Notes to Financial Statements
33 Report of Independent Accountants
THE PORTFOLIOS
34 Statements of Net Assets
63 Statements of Operations
64 Statements of Changes in Net Assets
66 Selected Ratio Data
70 Notes to Financial Statements
73 Report of Independent Accountants
74 Change in Independent Accountant
Items of Interest
- - The Growth style of investment continues to enjoy a leadership role. Our
strong stock selection and sector allocation in the Funds were rewarded by
positive absolute and relative performance the past year.
- - Technology and technology related issues continue to provide the highest
growth rates and as a result have become larger components of the Funds'
portfolio of holdings.
- - Mid Cap Investing: The Best of Both Worlds -- update -- As we suggested in
our last report, an investment in a mid cap stock portfolio combines the
liquidity characteristics of a large cap portfolio with the high-growth
rates of a small company portfolio. The high growth rates of the mid cap
holdings in the Funds have been rewarded with very strong performance over
the last year. We continue to believe that the mid cap sector is under
recognized and the high growth rates found with many stocks in this area
should help continue this positive performance trend for the Funds in the
year 2000.
- - Our website address is:
WWW.PROVNET.COM
2
<PAGE>
Fellow Shareholder,
We are pleased to report very positive results for the fiscal year ending
October 31, 1999 (more detailed information is available on the following
pages). The Small Company Growth Fund continues to lead the way -- more than
doubling the return of the Standard and Poors 500 Index, a broad measure of the
market's overall performance. The Growth and Mid Cap Funds also outperformed the
unmanaged index for the fiscal year.
The underlying fundamentals of our holdings in all of the PIC Funds have
remained very compelling, and our patience through some volatility this year has
been rewarded. Much of the performance of the broad market and the Funds has
been driven by the technology and telecommunications sectors. Accordingly, we
have increased both the size and number of holdings in these areas.
The narrowness of the overall stock market, with a very limited number of
technology and telecommunications stocks dominating returns, causes some to
worry. Historically, such developments have sometimes ushered in unpleasant
declines. However, those declines have most often been accompanied by
unfavorable economic conditions, when either inflation has surged, or the
Federal Reserve has embarked upon a series of extreme tightening measures to
slow an overheated economy. This process usually results in either very slow
economic growth, or in the extreme, a recession. We do not assign a high
probability to either of these scenarios in the near-term. The one area of
concern to us at the beginning of the year, is high stock market valuations,
which makes the market vulnerable, particularly to rising interest rates.
We remain positive in our outlook for growth company shares well into next
year. The very positive tone and continued domestic economic expansion give us
reason to believe the market will broaden some in the months ahead. As with the
stronger-than-expected corporate profits picture for 1999, we see a solid growth
picture moving well into next year. As to Fund strategy, we intend to remain
extremely flexible, and are prepared to take profits in technology and
telecommunications issues in favor of other sectors if we see equal
opportunities present themselves.
Finally, while Y2K and valuation concerns abound, we do not, at this time,
expect any meaningful Y2K disruptions.
We appreciate your continued confidence in Provident Investment Counsel.
Sincerely,
/s/ Douglass B. Allen
Douglass B. Allen
President, PIC Investment Trust
December 7, 1999
3
<PAGE>
Our Philosophy
- - Focused, fundamental research, properly controlled, adds value.
- - Sustainable earnings growth is the most important contributor to long-term
stock appreciation.
- - Emphasis on strong financial characteristics ensures focus on growth and
quality.
- - Investment style consistency is critical to superior long-term investment
results.
[GRAPHIC] EMERGING COMPANY ESTABLISHED GROWTH MATURE COMPANIES
GROWTH GROWTH CURVE
Performance Update/Portfolio Review
Balanced Fund
SECTOR WEIGHTINGS
Technology 56.1%
Retail 10.5
Healthcare/Medical 9.9
Public Utilities 7.4
Financial 5.8
Consumer Durables 4.1
Energy 4.0
Consumber Non-Durables 2.2
Average annualized total returns for the period ending 10/31/99*:
Since Inception
1 Year 3 Year 5 Year 6/11/92
------ ------ ------ -------
A: 12.35% 17.25% 16.58% 13.20%
B: 10.33% 16.87% 16.18% 12.72%
Top 10 Stock Holdings
1. Microsoft Corporation 4.16%
2. Lucent Technologies, Inc. 3.38%
3. Sun Microsystems, Inc. 3.35%
4. MCI Worldcom Incorporated 3.19%
5. Motorola, Inc. 2.40%
6. EMC Corporation 2.31%
7. Tyco International Ltd. 2.31%
8. Cisco Systems, Inc. 2.27%
9. Vitesse Semiconductor Corporation 2.05%
10. Lexmark International Group, Inc. 1.90%
4
<PAGE>
Growth Fund
SECTOR WEIGHTINGS
Technology 52.2%
Retail 11.8
Healthcare/Medical 9.5
Public Utilities 7.7
Financial 6.6
Consumer Durables 4.8
Energy 4.2
Consumber Non-Durables 3.2
Average annualized total returns for the period ending 10/31/99*:
Since Inception
1 Year 3 Year 5 Year 6/11/92
------ ------ ------ -------
A: 23.55% 20.66% 19.48% 15.19%
B: 25.57% 24.11% 21.35% 16.26%
Top 10 Stock Holdings
1. Microsoft Corporation 7.23%
2. MCI Worldcom Incorporated 4.88%
3. Lucent Technologies, Inc. 4.44%
4. Sun Microsystems, Inc. 4.36%
5. Tyco International Ltd. 4.28%
6. EMC Corporation 3.15%
7. Motorola, Inc. 3.08%
8. Cisco Systems, Inc. 3.07%
9. Kohl's Corporation 2.81%
10. Vitesse Semiconductor Corporation 2.69%
Mid Cap Fund
SECTOR WEIGHTINGS
Technology 57.7%
Consumer Non-Durables 10.5
Retail 10.1
Energy 8.1
Consumer Durables 3.6
Public Utilities 3.5
Financial 3.1
Healthcare/Medical 2.4
Unclassified 1.0
Average annualized total returns for the period ending 10/31/99*:
Since Inception
1 Year 3 Year 5 Year 12/31/97
------ ------ ------ --------
A: 42.05% N/A N/A 24.57%
B: 42.94% N/A N/A 25.13%
Top 10 Stock Holdings
1. Conexant Systems, Inc. 2.82%
2. Altera Corporation 2.69%
3. JDS Uniphase Corporation 2.44%
4. Comverse Technology, Inc. 2.38%
5. Insight Communications Company, Inc. 2.27%
6. Chartered Semiconductor Manufacturing Ltd. 2.21%
7. Adelphia Communications Corporation 2.19%
8. Teradyne, Inc. 2.12%
9. VoiceStream Wireless Corporation 2.03%
10. Lexmark International Group, Inc. 1.94%
5
<PAGE>
Small Company Growth Fund
SECTOR WEIGHTINGS
Technology 57.4%
Consumer Non-Durables 13.5
Industrials 9.4
Healthcare/Medical 7.5
Retail 4.9
Energy 2.2
Financial 2.0
Consumer Durables 1.3
Transportation 1.0
Public Utilities 0.8
Average annualized total returns for the period ending 10/31/99*:
Since Inception
1 Year 3 Year 5 Year 9/30/93
------ ------ ------ -------
A: 50.25% 7.41% 17.11% 13.85%
B: 51.88% 8.87% 18.05% 14.53%
Top 10 Stock Holdings
1. Peregrine Systems, Inc. 2.38%
2. Vignette Corporation 2.13%
3. Business Objects S.A. ADS 2.11%
4. The Profit Recovery Group International, Inc. 2.11%
5. NCO Group, Inc. 2.00%
6. Dollar Tree Stores, Inc. 1.94%
7. Emulex Corporation 1.81%
8. Mercury Interactive Corporation 1.80%
9. Check Point Software Technologies, Ltd. 1.68%
10. UnitedGlobalCom, Inc. 1.65%
* Performance results of the Funds for the period prior to the effective date
of their registration statements reflect the total returns of another fund
managed by Provident Investment Counsel. The performance results for this
period have been restated to reflect all applicable fees and expenses of
the Funds. For more information, please refer to the "Performance
Comparison" section of this report.
6
<PAGE>
Interview with Provident Managers
What industry sectors performed positively for the various Funds' equity
holdings?
GROWTH (AND BALANCED)
- Telecommunications
- Technology Services
MID CAP
- Electronic Technology
- Technology Services
- Retail Trade
- Commercial Services
SMALL COMPANY
- Electronic Technology
- Technology Services
- Commercial Services
Q TO WHAT DO YOU ATTRIBUTE THE STRONG RETURNS OF SMALL AND MID CAP STOCKS
DURING THE LAST YEAR?
A For several years now, small cap and mid cap stocks have generally lagged
larger growth equities. However, the portfolio's performance this year is
testament to the market's narrowing of the extreme valuation gap between
large cap and small cap stocks in the 1996-1998 period. These valuations
became more and more compelling as many of the growth issues continued to
deliver strong fundamental results.
Q WHAT WERE THE MAJOR FACTORS CONTRIBUTING TO THE SMALL CAP GROWTH AND MID
CAP FUNDS SIGNIFICANTLY OUTPERFORMING THE COMPARABLE UNMANAGED INDICES OVER
THE LAST YEAR?
A The Funds have significantly outperformed the unmanaged indices through
positive stock selection and weightings in the technology services and
electronic technology sectors. We focused our stock selection in strong
product sectors such as broadband, communications chips, fiber optics
equipment, and web enabling software. Additionally, almost all segments of
the Fund provided a positive contribution. The exceptions were the health
technology and retail trade sectors, which modestly penalized overall
results.
Q WHAT IS THE OUTLOOK FOR SMALL CAP STOCKS IN GENERAL?
A As we move into the final month of the year and into early 2000, we are
confident that the Small Company Growth and Mid Cap Funds will continue to
experience both strong absolute and relative performance. For several years
now, small and mid cap stocks have generally lagged larger growth equities.
The performance of the Funds this year gives us evidence that this extreme
valuation gap is narrowing and will continue to do so.
7
<PAGE>
Interview with Provident Managers, continued
Q THE GROWTH FUND OUTPERFORMED THE BROAD MARKET, AS MEASURED BY THE STANDARD
AND POORS 500 INDEX, BY MORE THAN 5% FOR THE YEAR ENDED OCTOBER 31, 1999.
WHAT WERE THE MAJOR CONTRIBUTORS AND DETRACTORS TO PERFORMANCE DURING THE
YEAR?
A The two most positive sectors for the Fund were telecommunications and
technology services. The Fund also benefited from holdings in hardware
technology concerns. Some of the names in telecommunications included
Worldcom, Alltell and Vodaphone. In technology services and hardware, the
Fund's holdings included America Online, Microsoft, Cisco and Lucent. The
Fund's returns were reduced, relative to the broad market, by our holdings
in healthcare and health technology such as Pfizer, Warner Lambert, and
Elan.
Q WHAT IS THE OUTLOOK FOR THE GROWTH AND BALANCED FUNDS DURING THE REMAINDER
OF 1999 AND 2000?
A We remain very optimistic about the fundamentals of the Funds' holdings. We
think a broadening out of the market to other sectors within both the large
and small capitalization spectrum is likely. So far this year, we have seen
investors move back to growth-oriented small cap stocks where valuations
were historically cheap. We look for investors to broaden their horizons
within the large cap segment of the market, and for the current narrowness
of the market to self-correct. We will continue to make every effort to
check and re-check the fundamentals of the Funds' holdings, and to seek new
opportunities for growth in all areas of the economy. In regard to the
fixed-income component of the Balanced Fund we remain cautious. It appears
the Federal Reserve Board will be on the sidelines temporarily in a neutral
position watching for inflationary signals. In the meantime, we are
maintaining a high quality portfolio and seeking to add value through
security selection and sector allocation, not by attempting to predict the
future direction of interest rates.
8
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Provident Investment Counsel
Mutual Funds
- ----------------------------
Performance Comparison
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
PROVIDENT INVESTMENT COUNSEL BALANCED FUNDS A AND B AND
THE S&P/BARRA (60%) + LEHMAN/GOVT-CORP (40%).
Average Annual Total Return
One Year Five Years Since Inception
-------- ---------- ---------------
A: 12.35% 16.58% 13.20%
B: 10.33% 16.18% 12.72%
<TABLE>
<CAPTION>
06/11/92 10/31/92 04/30/93 10/31/93 04/30/94 10/31/94 04/30/95 10/31/95
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Provident Investment Counsel Balanced Fund A
(With Load) $9,425 $10,198 $10,165 $11,024 $10,364 $10,938 $11,024 $13,055
Provident Investment Counsel Balanced Fund B $10,000 $10,253 $10,173 $11,126 $10,389 $11,039 $11,081 $13,120
S&P/Barra (60%) + Lehman/Govt-Corp (40%) $10,000 $10,452 $10,721 $11,401 $10,967 $11,557 $12,642 $15,247
<CAPTION>
04/30/96 10/31/96 03/31/97 10/31/97 04/30/98 10/31/98 04/30/99 10/31/99
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Provident Investment Counsel Balanced Fund A
(With Load) $13,544 $14,616 $14,704 $17,796 $20,302 $20,961 $24,328 $24,984
Provident Investment Counsel Balanced Fund B $13,565 $14,699 $14,736 $17,889 $20,338 $21,011 $24,309 $24,232
S&P/Barra (60%) + Lehman/Govt-Corp (40%) $16,923 $18,412 $19,372 $22,804 $26,494 $28,182 $31,880 $33,240
</TABLE>
Past performance is not predictive of future performance.
The Funds' performance figures include the maximum applicable sales charge.
Performance results of the Balanced Fund B reflect the total returns of the
Balanced Fund A prior to the effective date of the Balanced Fund B's
registration statement which was 3/31/99. The Balanced Fund A's returns have
been restated to reflect all fees and expenses applicable to the Balanced Fund
B.
9
<PAGE>
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Provident Investment Counsel
Mutual Funds
- ----------------------------
Performance Comparison
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
PROVIDENT INVESTMENT COUNSEL GROWTH FUNDS A AND B,
THE S&P/BARRA GROWTH AND THE RUSSELL 1000 GROWTH INDEXES.
Average Annual Total Return
One Year Five Years Since Inception
-------- ---------- ---------------
A: 23.55% 19.48% 15.19%
B: 25.57% 21.35% 16.26%
<TABLE>
<CAPTION>
06/11/92 10/31/92 04/30/93 10/31/93 04/30/94 10/31/94 04/30/95 10/31/95
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Provident Investment Counsel Growth Fund A
(With Load) $9,425 $10,185 $9,746 $10,928 $10,301 $11,011 $11,005 $13,397
Provident Investment Counsel Growth Fund B $10,000 $10,286 $9,782 $11,087 $10,387 $11,188 $11,139 $13,575
S&P/Barra Growth $10,000 $10,463 $10,408 $11,080 $10,716 $11,686 $12,956 $15,161
Russell 1000 Growth $10,000 $10,643 $10,679 $11,421 $11,087 $12,039 $13,261 $16,559
<CAPTION>
04/30/96 10/31/96 04/30/97 10/31/97 04/30/98 10/31/98 04/30/99 10/31/99
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Provident Investment Counsel Growth Fund A
(With Load) $13,973 $15,263 $15,479 $18,162 $21,544 $21,703 $26,862 $28,450
Provident Investment Counsel Growth Fund B $14,118 $15,489 $16,492 $19,573 $23,147 $23,331 $28,796 $30,464
S&P/Barra Growth $16,891 $18,754 $22,188 $25,189 $31,517 $33,262 $40,771 $43,770
Russell 1000 Growth $17,581 $18,989 $21,458 $24,774 $30,488 $30,877 $38,576 $41,451
</TABLE>
Past performance is not predictive of future performance.
The Funds' performance figures include the maximum applicable sales charge.
Performance results reflect the total returns of the PIC Growth Fund I (included
in another report) managed by Provident Investment Counsel prior to the
effective dates of the Growth Funds A and B's registration statements which were
2/3/97 and 3/31/99, respectively. PIC Growth Fund I's returns have been restated
to reflect all fees and expenses applicable to the Growth Funds A and B.
10
<PAGE>
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Provident Investment Counsel
Mutual Funds
- ----------------------------
Performance Comparison
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
PROVIDENT INVESTMENT COUNSEL MID CAP FUNDS A AND B AND
THE RUSSELL MIDCAP GROWTH INDEX.
Average Annual Total Return
One Year Since Inception
-------- ---------------
A: 42.05% 24.57%
B: 42.94% 25.13%
<TABLE>
<CAPTION>
12/31/97 04/30/98 10/31/98 04/30/99 10/31/99
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Provident Investment Counsel Mid Cap Fund A (With Load) $9,425 $11,262 $9,924 $12,969 $14,957
Provident Investment Counsel Mid Cap Fund B $10,000 $11,422 $9,964 $13,027 $15,081
Russell Mid Cap Growth $10,000 $11,345 $10,005 $12,746 $13,775
</TABLE>
Past performance is not predictive of future performance.
The Funds' performance figures include the maximum applicable sales charge.
Performance results of the Mid Cap Fund B reflect the total returns of the Mid
Cap Fund A prior to the effective date of the Mid Cap Fund B's registration
statement which was 3/31/99. The Mid Cap Fund A's returns have been restated to
reflect all fees and expenses applicable to the Mid Cap Fund B.
11
<PAGE>
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Provident Investment Counsel
Mutual Funds
- ----------------------------
Performance Comparison
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
PROVIDENT INVESTMENT COUNSEL SMALL COMPANY GROWTH FUNDS A AND B
AND THE RUSSELL 2000 GROWTH INDEX.
Average Annual Total Return
One Year Five Years Since Inception
-------- ---------- ---------------
A: 50.25% 17.11% 13.85%
B: 51.88% 18.05% 14.53%
<TABLE>
<CAPTION>
09/30/93 10/31/93 04/30/94 10/31/94 04/30/95 10/31/95 04/30/96
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Provident Investment Counsel Small Company Growth Fund A
(With Load) $9,425 $9,590 $8,911 $9,427 $9,832 $13,586 $17,509
Provident Investment Counsel Small Company Growth Fund B $10,000 $9,668 $8,942 $9,524 $9,909 $13,894 $17,926
Russell 2000 Growth $10,000 $10,289 $9,860 $10,196 $10,721 $12,293 $14,940
<CAPTION>
10/31/96 04/30/97 10/31/97 04/30/98 10/31/98 04/30/99 10/31/99
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Provident Investment Counsel Small Company Growth Fund A
(With Load) $16,758 $13,367 $16,944 $18,635 $13,822 $16,147 $22,034
Provident Investment Counsel Small Company Growth Fund B $17,079 $14,283 $17,845 $19,575 $14,528 $16,951 $22,847
Russell 2000 Growth $13,932 $12,915 $16,879 $18,560 $14,204 $17,860 $18,365
</TABLE>
Past performance is not predictive of future performance.
The Funds' performance figures include the maximum applicable sales charge.
Performance results reflect the total returns of the Small Cap Growth Fund I
(included in another report) managed by Provident Investment Counsel prior to
the effective date of the Small Company Growth Funds A and B's registration
statements which were 2/3/97 and 3/31/99, respectively. The Small Cap Growth
Fund I's returns have been restated to reflect all fees and expenses applicable
to the Small Company Growth Funds A and B.
12
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THIS PAGE INTENTIONALLY LEFT BLANK
13
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Provident Investment Counsel
Mutual Funds
- ----------------------------
Statements of Assets and Liabilities
As of October 31, 1999
<TABLE>
<CAPTION>
Small
Company
Balanced Growth Mid Cap Growth
Fund A Fund A Fund A Fund A
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Investments in Portfolios, at value $32,426,051 $6,885,187 $11,929,588 $ 927,187
Cash -- -- -- 49,208
Receivables:
Fund shares sold 22,467 -- 894,146 --
Investments in Portfolios sold 28,992 29,478 -- --
Prepaid expenses -- -- 8,460 --
----------- ---------- ----------- ----------
Total Assets 32,477,510 6,914,665 12,832,194 976,395
=========== ========== =========== ==========
LIABILITIES
Payables:
Fund shares repurchased 28,992 29,478 -- --
Investments in Portfolios purchased 22,467 -- 894,146 --
Due to Provident Investment
Counsel, Inc. (Note 3) 25,675 41,730 45,137 35,362
Accrued expenses 37,122 22,939 22,204 28,024
Deferred trustees' compensation
(Note 3) 22,346 12,875 7,576 12,875
----------- ---------- ----------- ----------
Total Liabilities 136,602 107,022 969,063 76,261
=========== ========== =========== ==========
NET ASSETS
Applicable to 1,734,395; 379,952; 747,426
and 66,435 shares of beneficial
interest outstanding, respectively $32,340,908 $6,807,643 $11,863,131 $ 900,134
=========== ========== =========== ==========
NET ASSET VALUE
PER SHARE* $ 18.65 $ 17.92 $ 15.87 $ 13.55
----------- ---------- ----------- ----------
Maximum offering price per share
(Net Asset Value divided by 94.25%) $ 19.79 $ 19.01 $ 16.84 $ 14.38
=========== ========== =========== ==========
SOURCE OF NET ASSETS
Paid-in capital $20,705,988 $4,950,080 $ 8,794,581 $ 769,942
Accumulated net investment income
(loss) 42,725 (14,323) (12,461) (13,091)
Accumulated net realized gain (loss)
on investments 7,894,637 520,848 737,903 (217,959)
Net unrealized appreciation of
investments 3,697,558 1,351,038 2,343,108 361,242
----------- ---------- ----------- ----------
Net Assets $32,340,908 $6,807,643 $11,863,131 $ 900,134
=========== ========== =========== ==========
</TABLE>
* Redemption price per share is equal to Net Asset Value less any applicable
sales charge.
See Notes to Financial Statements.
14
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Provident Investment Counsel
Mutual Funds
- ----------------------------
Statements of Assets and Liabilities
As of October 31, 1999
<TABLE>
<CAPTION>
Small
Company
Balanced Growth Mid Cap Growth
Fund B Fund B Fund B Fund B
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investment in Portfolios, at value $ 449,769 $ 984,164 $ 732,515 $ 130,010
Cash 19,794 20,530 20,538 20,834
Receivables:
Fund shares sold 995 42,366 160,548 2,995
Due from Provident Investment
Counsel, Inc. (Note 3) 10,489 3,857 8,004 9,998
----------- ----------- ----------- -----------
Total Assets 481,047 1,050,917 921,605 163,837
=========== =========== =========== ===========
LIABILITIES
Payables:
Investments in Portfolios
purchased 995 42,366 160,548 2,995
Accrued expenses 30,427 25,459 27,921 29,824
Deferred trustees' compensation
(Note 3) 1,392 1,392 1,392 1,392
----------- ----------- ----------- -----------
Total Liabilities 32,814 69,217 189,861 34,211
=========== =========== =========== ===========
NET ASSETS
Applicable to 23,813; 54,377; 46,917
and 9,767 shares of beneficial inter-
est outstanding, respectively $ 448,233 $ 981,700 $ 731,744 $ 129,626
=========== =========== =========== ===========
NET ASSET VALUE
PER SHARE $ 18.82 $ 18.05 $ 15.60 $ 13.27
=========== =========== =========== ===========
SOURCE OF NET ASSETS
Paid-in capital $ 430,763 $ 951,605 $ 697,327 $ 112,985
Accumulated net investment
income (loss) 278 (1,451) (1,052) (608)
Accumulated net realized loss on
investments (11,500) (52,617) (26,795) (2,547)
Net unrealized appreciation of
investments 28,692 84,163 62,264 19,796
----------- ----------- ----------- -----------
Net Assets $ 448,233 $ 981,700 $ 731,744 $ 129,626
=========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
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Provident Investment Counsel
Mutual Funds
- ----------------------------
Statements of Operations
Year ended October 31, 1999
<TABLE>
<CAPTION>
Small
Company
Balanced Growth Mid Cap Growth
Fund A Fund A Fund A Fund A
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Net investment income (loss) from
Portfolios $ 462,246 $ (28,471) $ (44,147) $ (9,040)
============ ============ ============ ============
Expenses:
Administration fees (Note 3) 78,395 26,251 31,589 17,263
Amortization of organization costs -- -- 3,753 --
Audit fee 14,422 8,679 9,058 11,300
Custody and accounting services fees 6,000 6,000 6,000 6,000
Trustees' fees 15,091 11,668 9,068 11,018
Distribution fees (Note 4) 79,244 14,063 20,737 2,828
Legal fees 10,009 1,379 2,000 2,000
Miscellaneous 5,000 549 765 3,342
Registration fees 25,500 1,001 -- 405
Reports to shareholders 9,000 -- 7,400 --
Shareholder servicing 47,547 8,438 12,442 1,697
Transfer agent's fees 25,171 12,532 23,000 16,600
------------ ------------ ------------ ------------
Total expenses 315,379 90,560 125,812 72,453
Less reimbursement/waiver by
Provident Investment Counsel, Inc.
(Note 3) (236,134) (71,370) (84,836) (66,231)
------------ ------------ ------------ ------------
Net expenses 79,245 19,190 40,976 6,222
============ ============ ============ ============
Net investment income (loss) 383,001 (47,661) (85,123) (15,262)
============ ============ ============ ============
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments 10,702,187 584,984 1,080,502 531,825
Net unrealized appreciation
(depreciation) of investments (4,275,882) 721,825 2,285,862 212,208
------------ ------------ ------------ ------------
Net gain on investments 6,426,305 1,306,809 3,366,364 744,033
============ ============ ============ ============
NET INCREASE IN NET
ASSETS RESULTING
FROM OPERATIONS $ 6,809,306 $ 1,259,148 $ 3,281,241 $ 728,771
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
16
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Provident Investment Counsel
Mutual Funds
- ----------------------------
Statements of Operations
March 31, 1999* through October 31, 1999
<TABLE>
<CAPTION>
Small
Company
Balanced Growth Mid Cap Growth
Fund B Fund B Fund B Fund B
-------- -------- -------- --------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Net investment income (loss) from
Portfolios $ 2,460 $ (1,424) $ (281) $ (224)
======== ======== ======== ========
Expenses:
Administration fees (Note 3) 9,029 9,208 8,874 8,809
Organization costs 2,500 2,500 2,500 2,500
Audit fee 10,000 9,000 11,000 10,000
Custody and accounting services fees 3,500 3,500 3,500 3,500
Trustees' fees 2,483 2,483 2,483 2,483
Distribution fees (Note 4) 1,047 1,718 466 221
Legal fees 7,250 6,750 7,250 7,750
Miscellaneous 820 920 2,920 2,920
Registration fees 14,281 8,780 3,780 8,781
Reports to shareholders 1,120 1,920 2,920 1,520
Shareholder servicing 349 573 156 74
Transfer agent's fee 11,020 11,420 13,420 11,920
-------- -------- -------- --------
Total expenses 63,399 58,772 59,269 60,478
Less reimbursement/waiver by
Provident Investment Counsel, Inc.
(Note 3) (61,863) (56,308) (58,498) (60,094)
-------- -------- -------- --------
Net expenses 1,536 2,464 771 384
======== ======== ======== ========
Net investment income (loss) 924 (3,888) (1,052) (608)
======== ======== ======== ========
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized loss on investments (11,500) (52,617) (26,795) (2,547)
Net unrealized appreciation of in-
vestments 28,692 84,163 62,264 19,796
-------- -------- -------- --------
Net gain on investments 17,192 31,546 35,469 17,249
======== ======== ======== ========
NET INCREASE IN NET
ASSETS RESULTING
FROM OPERATIONS $ 18,116 $ 27,658 $ 34,417 $ 16,641
======== ======== ======== ========
</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
17
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Statements of Changes in Net Assets
INCREASE (DECREASE) IN NET ASSETS Balanced Fund A
----------------------------
Year Year
ended ended
October 31, October 31,
From operations: 1999 1998
------------ ------------
Net investment income (loss) $ 383,001 $ 381,122
Net realized gain (loss) on investments 10,702,187 2,840,801
Net unrealized appreciation
(depreciation) of investments (4,275,882) 3,069,593
------------ ------------
Net increase (decrease) in net assets
resulting from operations 6,809,306 6,291,516
============ ============
Distributions to shareholders:
From net investment income (386,588) (360,834)
From net realized gains (2,848,190) (2,299,644)
------------ ------------
Total distributions to shareholders (3,234,778) (2,660,478)
============ ============
Transactions in shares of beneficial interest:
Purchases of 1,201,958; 254,988; 173,227;
101,572; 251,695; 878,218; 77,675 and
317,026 shares, respectively 21,785,746 4,137,359
Reinvestment of 190,209; 178,506; 0; 0; 0; 0; 0
and 0 shares, respectively 3,217,777 2,658,417
Redemptions of 2,139,435; 230,922; 64,497;
18,330; 46,971; 335,516; 327,224 and 202,491
shares, respectively (38,289,659) (3,717,356)
============ ============
Net increase (decrease) in net assets
resulting from share transactions (13,286,136) 3,078,420
============ ============
Total increase (decrease) in net assets (9,711,608) 6,709,458
============ ============
NET ASSETS
Beginning of period 42,052,516 35,343,058
------------ ------------
End of period $ 32,340,908 $ 42,052,516
------------ ------------
* Commencement of operations.
See Notes to Financial Statements.
18
<PAGE>
<TABLE>
<CAPTION>
Small Company
Growth Fund A Mid Cap Fund A Growth Fund A
- --------------------------- ---------------------------- ------------------------------
Year Year Year Dec. 31, 1997* Year Year
ended ended ended through ended ended
October 31, October 31, October 31, October 31, October 31, October 31,
1999 1998 1999 1998 1999 1998
- ----------- ----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ (47,661) $ (21,586) $ (85,123) $ (17,662) $ (15,262) $ (37,919)
584,984 (52,313) 1,080,502 (198,903) 531,825 (692,290)
721,825 552,893 2,285,862 57,246 212,208 94,294
- ----------- ----------- ----------- ------------ ------------ ------------
1,259,148 478,994 3,281,241 (159,319) 728,771 (635,915)
=========== =========== =========== ============ ============ ============
-- -- -- -- -- --
-- -- -- -- -- --
- ----------- ----------- ----------- ------------ ------------ ------------
-- -- -- -- -- --
=========== =========== =========== ============ ============ ============
2,928,492 1,325,178 3,519,247 9,346,293 759,140 2,252,112
-- -- -- -- -- --
(1,087,804) (246,777) (653,348) (3,470,983) (3,274,841) (2,009,167)
=========== =========== =========== ============ ============ ============
1,840,688 1,078,401 2,865,899 5,875,310 (2,515,701) 242,945
=========== =========== =========== ============ ============ ============
3,099,836 1,557,395 6,147,140 5,715,991 (1,786,930) (392,970)
=========== =========== =========== ============ ============ ============
3,707,807 2,150,412 5,715,991 -- 2,687,064 3,080,034
- ----------- ----------- ----------- ------------ ------------ ------------
$ 6,807,643 $ 3,707,807 $11,863,131 $ 5,715,991 $ 900,134 $ 2,687,064
- ----------- ----------- ----------- ------------ ------------ ------------
</TABLE>
19
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Small
Company
Balanced Growth Mid Cap Growth
INCREASE (DECREASE) IN NET ASSETS Fund B Fund B Fund B Fund B
--------- --------- --------- ---------
March 31, March 31, March 31, March 31,
1999* 1999* 1999* 1999*
through through through through
October 31, October 31, October 31, October 31,
From operations: 1999 1999 1999 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net investment income (loss) $ 924 $ (3,888) $ (1,052) $ (608)
Net realized loss on investments (11,500) (52,617) (26,795) (2,547)
Net unrealized appreciation of
investments 28,692 84,163 62,264 19,796
--------- --------- --------- ---------
Net increase in net assets
resulting from operations 18,116 27,658 34,417 16,641
========= ========= ========= =========
Distribution to shareholders:
From net investment income (646) -- -- --
========= ========= ========= =========
Transactions in shares of beneficial
interest:
Purchases of 26,493; 54,492;
48,396 and 9,767 shares,
respectively 480,452 956,124 718,409 112,985
Reinvestment of 3; 0; 0 and 0
shares, respectively 48 -- -- --
Redemptions of 2,683; 115; 1,479
and 0 shares, respectively (49,737) (2,082) (21,082) --
========= ========= ========= =========
Net increase in net assets resulting
from share transactions 430,763 954,042 697,327 112,985
========= ========= ========= =========
Total increase in net assets 448,233 981,700 731,744 129,626
========= ========= ========= =========
NET ASSETS
Beginning of period $ -- $ -- $ -- $ --
--------- --------- --------- ---------
End of period $ 448,233 $ 981,700 $ 731,744 $ 129,626
--------- --------- --------- ---------
</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
20
<PAGE>
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21
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Financial Highlights
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
Balanced Fund A
-------------------------------------------------------
Year Year Year Year Year
ended ended ended ended ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 16.95 $ 15.51 $ 13.91 $ 13.24 $ 11.24
------- ------- ------- ------- -------
Income from investment
operations:
Net investment income (loss) 0.22 0.16 0.16 0.14 0.15
Net realized and unrealized gain
on investments 2.88 2.44 2.64 1.34 2.00
------- ------- ------- ------- -------
Total from investment operations 3.10 2.60 2.80 1.48 2.15
------- ------- ------- ------- -------
Less distributions to shareholders:
From net investment income (0.22) (0.15) (0.16) (0.14) (0.15)
From net realized gains (1.18) (1.01) (1.04) (0.67) --
------- ------- ------- ------- -------
Total distributions to shareholders (1.40) (1.16) (1.20) (0.81) (0.15)
------- ------- ------- ------- -------
Net asset value, end of period $ 18.65 $ 16.95 $ 15.51 $ 13.91 $ 13.24
======= ======= ======= ======= =======
Total return 19.20% 17.85% 21.76% 11.96% 19.35%
======= ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (millions) $ 32.3 $ 42.0 $ 35.3 $ 12.9 $ 12.5
------- ------- ------- ------- -------
Ratios to average net assets:+#
Expenses 1.05% 1.05% 1.05% 1.05% 1.05%
Net investment income 1.21% 0.97% 1.10% 1.05% 1.32%
------- ------- ------- ------- -------
</TABLE>
* Commencement of operations.
** Annualized for periods of less than one year.
# Includes each Fund's share of expenses, net of fee waivers and expense
reimbursements, allocated from the related Portfolio.
^ Not annualized.
+ Net of expense reimbursements and fee waivers. The expense reimbursements and
fee waivers were 0.75%, 0.36%, 0.38%, 0.67% and 1.27%, respectively, in the case
of the Balanced Fund A, 1.27%, 2.71% and 8.62%, respectively, in the case of the
Growth Fund A and 1.02% and 2.04%, respectively, in the case of the Mid Cap Fund
A.
See Notes to Financial Statements.
22
<PAGE>
<TABLE>
<CAPTION>
Growth Fund A Mid Cap Fund A
- ------------------------------------------- ---------------------------
Year Year Feb. 3, 1997* Year Dec. 31, 1997*
ended ended through ended through
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1999 1998 1997 1999 1998
- ---------- -------- ----------- --------- -----------
<S> <C> <C> <C> <C>
$ 13.67 $ 11.44 $ 10.00 $ 10.53 $ 10.00
- ---------- -------- ----------- --------- -----------
(0.12) (0.07) (0.03) (0.11) (0.03)
4.37 2.30 1.47 5.45 0.56
- ---------- -------- ----------- --------- -----------
4.25 2.23 1.44 5.34 0.53
- ---------- -------- ----------- --------- -----------
-- -- -- -- --
-- -- -- -- --
- ---------- -------- ----------- --------- -----------
-- -- -- -- --
- ---------- -------- ----------- --------- -----------
$ 17.92 $ 13.67 $ 11.44 $ 15.87 $ 10.53
- ---------- -------- ----------- --------- -----------
31.09% 19.49% 14.40%^ 50.71% 5.30%^
- ---------- -------- ----------- --------- -----------
$ 6.8 $ 3.7 $ 2.2 $ 11.9 $ 5.7
- ---------- -------- ----------- --------- -----------
1.35% 1.35% 1.35%** 1.39% 1.04%**
(0.85%) (0.68%) (0.62%)** (1.03%) (0.43%)**
- ---------- -------- ----------- --------- -----------
23
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Financial Highlights
For a share outstanding throughout each period.
Small Company
Growth Fund A
-------------------------------------
Year Year Feb. 3, 1997*
ended ended through
Oct. 31, Oct. 31, Oct. 31,
1999 1998 1997
--------- --------- ---------
Net asset value, beginning of
period $ 8.50 $ 10.42 $ 10.00
--------- --------- ---------
Income from investment
operations:
Net investment income (loss) (0.30) (0.12) (0.03)
Net realized and unrealized gain
(loss) on investments 5.35 (1.80) 0.45
--------- --------- ---------
Total from investment operations 5.05 (1.92) 0.42
--------- --------- ---------
Less distributions to shareholders:
From net investment income -- -- --
From net realized gains -- -- --
--------- --------- ---------
Total distributions to shareholders -- -- --
--------- --------- ---------
Net asset value, end of period $ 13.55 $ 8.50 $ 10.42
========= ========= =========
Total return 59.41% (18.43%) 4.20%^
========= ========= =========
Ratios/supplemental data:
Net assets, end of period (millions) $ 0.9 $ 2.7 $ 3.1
--------- --------- ---------
Ratios to average net assets:#+
Expenses 1.55% 1.55% 1.55%**
Net investment loss (1.35%) (1.23%) (1.14%)**
--------- --------- ---------
</TABLE>
* Commencement of operations.
** Annualized for periods of less than one year.
# Includes the Fund's share of expenses, net of fee waivers and expense
reimbursements, allocated from the related Portfolio.
^ Not annualized.
+ Net of expense reimbursements and fee waivers. The expense reimbursements and
fee waivers were 5.85%, 2.77% and 10.00%, respectively.
See Notes to Financial Statements.
24
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
25
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Financial Highlights
For a share outstanding throughout the period
<TABLE>
<CAPTION>
Small
Company
Balanced Growth Mid Cap Growth
Fund B Fund B Fund B Fund B
---------- ----------- ----------- -----------
Mar. 31, Mar. 31, Mar. 31, Mar. 31,
1999* 1999* 1999* 1999*
through through through through
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1999 1999 1999 1999
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.89 $ 17.65 $ 13.03 $ 9.64
---------- ----------- ----------- -----------
Income from investment
operations:
Net investment income (loss) 0.04 (0.07) (0.02) (0.06)
Net realized and unrealized gain
(loss) on investments (0.08) 0.47 2.59 3.69
---------- ----------- ----------- -----------
Total from investment operations (0.04) 0.40 2.57 3.63
---------- ----------- ----------- -----------
Less distributions to shareholders:
From net investment income (0.03) -- -- --
---------- ----------- ----------- -----------
Net asset value, end of period $ 18.82 $ 18.05 $ 15.60 $ 13.27
---------- ----------- ----------- -----------
Total return^ (0.20%) 2.27% 19.72% 37.66%
---------- ----------- ----------- -----------
Ratios/supplemental data:
Net assets, end of period $ 448,233 $ 981,700 $ 731,744 $ 129,626
---------- ----------- ----------- -----------
Ratios to average net assets:#+
Expenses 1.90%** 2.10%** 2.14%** 2.30%**
Net investment income (loss) 0.66%** (1.70%)** (1.69%)** (2.07%)**
---------- ----------- ----------- -----------
</TABLE>
* Commencement of operations.
** Annualized for periods of less than one year.
# Includes each Fund's share of expenses, net of fee waivers and expense
reimbursements, allocated from the related Portfolio.
^ Not annualized.
+ Net of expense reimbursements and fee waivers. The expense reimbursements and
fee waivers of each Fund were 44.33%, 24.58%, 94.15% and 204.11% for the
Balanced Fund B, Growth Fund B, Mid Cap Fund B and Small Company Growth Fund B,
respectively.
See Notes to Financial Statements.
26
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Notes to Financial Statements
1 -- ORGANIZATION
PIC Investment 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 (the "1940 Act") as an open-end, diversified management investment
company. The Trust currently offers eleven separate series: Provident Investment
Counsel Balanced Fund A (formerly known as Provident Investment Counsel Pinnacle
Balanced Fund), Provident Investment Counsel Balanced Fund B, Provident
Investment Counsel Growth Fund I (formerly known as Provident Investment Counsel
Growth Fund), Provident Investment Counsel Growth Fund A (formerly known as
Provident Investment Counsel Pinnacle Growth Fund), Provident Investment Counsel
Growth Fund B, Provident Investment Counsel Small Company Growth Fund I
(formerly known as Provident Investment Counsel Small Company Growth Fund)
Provident Investment Counsel Small Company Growth Fund A (formerly known as
Provident Investment Counsel Pinnacle Small Company Growth Fund), Provident
Investment Counsel Small Company Growth Fund B, Provident Investment Counsel
Small Cap Growth Fund I (formerly known as Provident Investment Counsel Small
Cap Growth Fund), Provident Investment Counsel Mid Cap Fund A (formerly known as
Provident Investment Counsel Pinnacle Mid Cap Fund), and Provident Investment
Counsel Mid Cap Fund B (each a "Fund" and collectively the "Funds" ) Each Fund
invests substantially all of its assets in the respective Portfolio, a separate
registered management investment company having the same investment objective as
the Fund. The financial statements of the Portfolios are included elsewhere in
this report and should be read in conjunction with the Funds' financial
statements. The financial statements of the Provident Investment Counsel Growth
Fund I, Provident Investment Counsel Small Company Growth Fund I and Provident
Investment Counsel Small Cap Growth Fund I are in separate reports.
2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds. These policies are in conformity with generally accepted
accounting principles.
27
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Notes to Financial Statements,
continued
A. Investment Valuation. The Funds reflect their investments in the
respective Portfolio at their proportionate interest in the value of
the Portfolio's net assets. Valuation of securities by the Portfolios
is discussed in Note 2A of the Portfolios' Notes to Financial
Statements.
B. Investment Income and Dividends to Shareholders. The Funds earn
income, net of the expenses of the Portfolios, daily on their
investments in the Portfolios. All net investment income and realized
and unrealized gains or losses on investments of the Portfolios are
allocated pro-rata among the Funds and the other Holders of Interests
in the Portfolios. Dividends, if any, are paid annually to
shareholders of the Funds and recorded on the ex-dividend date.
C. Federal Income Taxes. The Funds intend to comply with the requirements
of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of their taxable income to their
shareholders. Therefore, no federal income tax provisions are
required.
D. Accounting Estimates. In preparing financial statements in conformity
with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements, as well as
the reported amounts of revenues and expenses during the periods
presented. Actual results could differ from those estimates.
3 -- TRANSACTIONS WITH AFFILIATES
The Trust has entered into administration agreements with Provident
Investment Counsel, Inc. ("PIC") and Investment Company Administration LLC
("ICA") pursuant to which agreements certain employees of these entities serve
as officers and/or trustees of the Trust and the Portfolios. PIC and ICA also
provide management services necessary for the operations of the Trust and the
Portfolios and furnish office facilities. PIC receives a fee for its services to
the Funds at the rate of 0.20% of the average daily net assets of the Funds.
28
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Notes to Financial Statements,
continued
PIC has voluntarily agreed to limit the Funds' expenses, including those
expenses allocated from the Portfolios, to the following levels:
Provident Investment Counsel Balanced Fund A 1.05%
Provident Investment Counsel Growth Fund A 1.35%
Provident Investment Counsel Mid Cap Fund A 1.39%
Provident Investment Counsel Small Company
Growth Fund A 1.55%
Provident Investment Counsel Balanced Fund B 1.90%
Provident Investment Counsel Growth Fund B 2.10%
Provident Investment Counsel Mid Cap Fund B 2.14%
Provident Investment Counsel Small Company
Growth Fund B 2.30%
The percentages are based on the Funds' average daily net assets.
Fees waived and expenses reimbursed by PIC for the year ended October 31,
1999 were as follows:
Waived Reimbursed
Fees Expenses
------- --------
Provident Investment Counsel Balanced Fund A $63,395 $172,739
Provident Investment Counsel Growth Fund A 11,251 60,119
Provident Investment Counsel Mid Cap Fund A 16,589 68,247
Provident Investment Counsel Small Company
Growth Fund A 2,263 63,968
Provident Investment Counsel Balanced Fund B 279 61,584
Provident Investment Counsel Growth Fund B 458 55,850
Provident Investment Counsel Mid Cap Fund B 124 58,374
Provident Investment Counsel Small Company
Growth Fund B 59 60,035
ICA receives an annual fee for its services of $15,000 from each of the
Funds.
First Fund Distributors, Inc. (the "Distributor"), a registered
broker-dealer, acts as the principal underwriter for the Trust in connection
with the offering of its shares. The Distributor is an affiliate of ICA. The
Distributor received $10,348 in commissions from sales and redemptions of the
Funds' shares during the year ended October 31, 1999.
29
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Notes to Financial Statements,
continued
On December 19, 1995, the Trust approved a Deferred Compensation Plan for
Trustees (the "Plan"). Trustees are entitled to receive $2,500 per quarter and
$500 per meeting attended, which is allocated among the Funds. Trustees can
elect to receive payment in cash or defer payments provided for in the Plan. If
a trustee elects to defer payment, the Plan provides for the creation of a
deferred payment account (phantom share account). This account accumulates the
deferred fees earned and the value of the account is adjusted at the end of each
quarter to reflect the value which would have been earned if the account had
been invested in designated investments. The Funds recognize as trustee expense
amounts accrued as meetings are held plus the change in the value of the phantom
share account determined on a quarterly basis.
4 -- DISTRIBUTION AND SHAREHOLDER SERVICES PLANS
The Trust, on behalf of the Balanced A, Growth A, Mid Cap A and Small
Company Growth A Funds, has approved a Distribution Plan (the "12b-1 Plan") in
accordance with Rule 12b-1 under the 1940 Act. The 12b-1 Plan provides that each
A Fund will pay a fee to PIC (as the distribution coordinator) at an annual rate
of up to 0.25% of each Fund's average daily net assets as reimbursement for
expenses incurred on distribution related activities. With respect to the
Balanced A and Mid Cap A Funds, reimbursable amounts in excess of the maximum
may be reimbursed in subsequent years, subject to the continuation of the Plan.
There were no unreimbursed expenses as of October 31, 1999.
Additionally, the Trust, on behalf of the Balanced B, Growth B, Mid Cap B
and Small Company Growth B Funds, has approved a Distribution Plan (the "12b-1
Plan") in accordance with Rule 12b-1 under the 1940 Act. The 12b-1 Plan provides
that each B Fund will pay a fee to the Distributor or, at the Distributor's
direction, to a third party at an annual rate of up to 0.75% of each Fund's
average daily net assets as compensation for acting as principal distributor.
Pursuant to a Shareholder Services Plan, each A Fund pays the Advisor a
monthly fee at an annual rate of 0.15% of its average daily net assets as
compensation for the provision of shareholder services.
30
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Notes to Financial Statements,
continued
Additionally, pursuant to the Shareholder Services Plan effective March 31,
1999, each B Fund pays to the Distributor a monthly fee at an annual rate of
0.25% of its average daily net assets as compensation for the provision of
shareholder services.
5 -- INVESTMENT TRANSACTIONS
Additions and reductions in the investments in the respective Portfolios
for the year ended October 31, 1999 were as follows:
Additions Reductions
----------- -----------
Provident Investment Counsel Balanced Fund A $21,934,833 $38,540,247
Provident Investment Counsel Growth Fund A 3,015,053 1,129,775
Provident Investment Counsel Mid Cap Fund A 3,612,959 767,786
Provident Investment Counsel Small Company
Growth Fund A 759,140 3,274,841
Provident Investment Counsel Balanced Fund B 480,452 50,335
Provident Investment Counsel Growth Fund B 956,124 2,082
Provident Investment Counsel Mid Cap Fund B 718,409 21,082
Provident Investment Counsel Small Company
Growth Fund B 112,985 --
As of October 31, 1999 the Funds owned the following percentages of the
Portfolios listed below:
Provident Investment Counsel
Balanced Fund A 98.6% of PIC Balanced Portfolio
Provident Investment Counsel
Growth Fund A 3.8% of PIC Growth Portfolio
Provident Investment Counsel
Mid Cap Fund A 94.2% of PIC Mid Cap Portfolio
Provident Investment Counsel
Small Company Growth Fund A 0.4% of PIC Small Cap Portfolio
Provident Investment Counsel
Balanced Fund B 1.4% of PIC Balanced Portfolio
31
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Notes to Financial Statements,
continued
Provident Investment Counsel
Growth Fund B 0.5% of PIC Growth Portfolio
Provident Investment Counsel
Mid Cap Fund B 5.8% of PIC Mid Cap Portfolio
Provident Investment Counsel
Small Company Growth Fund B 0.1*% of PIC Small Cap Portfolio
* Less than 0.1%.
At October 31, 1999 the Funds had tax basis capital losses as shown below
which may be carried over to offset future capital gains.
Expirations
-----------
Provident Investment Counsel
Small Company Growth Fund A $217,100 October 31, 2006
Provident Investment Counsel
Balanced Fund B 11,200 October 31, 2007
Provident Investment Counsel
Growth Fund B 51,900 October 31, 2007
Provident Investment Counsel
Mid Cap Fund B 26,100 October 31, 2007
Provident Investment Counsel
Small Company Growth Fund B 2,400 October 31, 2007
32
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Report of Independent Accountants
To the Board of Trustees of
PIC Investment Trust
and the Shareholders of:
Provident Investment Counsel Balanced Fund A
Provident Investment Counsel Balanced Fund B
Provident Investment Counsel Growth Fund A
Provident Investment Counsel Growth Fund B
Provident Investment Counsel Mid Cap Fund A
Provident Investment Counsel Mid Cap Fund B
Provident Investment Counsel Small Company Growth Fund A
Provident Investment Counsel Small Company Growth Fund B
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
each of the above named Funds of PIC Investment Trust (the "Trust") at October
31, 1999, and the results of each of their operations, the changes in each of
their net assets and the financial highlights for the year then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards, which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for the opinion expressed
above. The financial statements of the Trust as of October 31, 1998, including
the financial highlights for each of the periods prior to October 31, 1999, were
audited by other independent accountants whose report dated December 3, 1998
expressed an unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
December 3, 1999
33
<PAGE>
P-I-C
- ---------
BALANCED
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES -- 57.13% Shares Value Net Assets
------ ---------- ------
BANKS -- 0.60%
Providian Financial Corporation 1,800 $ 196,200 0.60%
====== ========== ======
BIOTECHNOLOGY -- 1.84%
Amgen Inc.* 4,100 326,975 1.00
Genentech, Inc.* 1,900 276,925 0.84
------ ---------- ------
Total Biotechnology 603,900 1.84
========== ======
BUILDING PRODUCTS -- 2.49%
The Home Depot, Inc. 4,000 302,000 0.92
Lowe's Companies, Inc. 9,400 517,000 1.57
------ ---------- ------
Total Building Products 819,000 2.49
========== ======
COMPUTER SERVICES -- 3.35%
Sun Microsystems, Inc.* 10,400 1,100,450 3.35
====== ========== ======
COMPUTER SOFTWARE -- 6.35%
BMC Software, Inc.* 5,700 365,869 1.11
Microsoft Corporation* 14,772 1,367,333 4.16
VERITAS Software Corporation* 3,300 355,988 1.08
------ ---------- ------
Total Computer Software 2,089,190 6.35
========== ======
CREDIT AND FINANCE -- 1.14%
MBNA Corporation 13,498 372,882 1.14
====== ========== ======
DISCOUNT -- 1.44%
Costco Companies, Inc.* 5,900 473,844 1.44
See Notes to Financial Statements.
34
<PAGE>
P-I-C
- ---------
BALANCED
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------ ---------- ------
DIVERSIFIED -- 2.31%
Tyco International Ltd. 19,000 $ 758,812 2.31%
====== ========== ======
DRUGS -- 2.49%
Pfizer, Inc. 8,600 339,700 1.03
Warner-Lambert Company 6,000 478,875 1.46
------ ---------- ------
Total Drugs 818,575 2.49
========== ======
ELECTRICAL EQUIPMENT/PERIPHERALS -- 5.49%
Dell Computer Corporation* 7,200 288,900 0.88
EMC Corporation* 10,400 759,200 2.31
Lexmark International Group, Inc.* 8,000 624,500 1.90
PMC-Sierra, Inc.* 1,400 131,950 0.40
------ ---------- ------
Total Electronic
Equipment/Peripherals 1,084,550 5.49
========== ======
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 5.26%
Linear Technology Corporation 3,600 251,775 0.76
Solectron Corporation* 5,800 436,450 1.33
Texas Instruments, Incorporated 4,100 367,975 1.12
Vitesse Semiconductor Corporation* 14,700 674,362 2.05
------ ---------- ------
Total Electronic
Components/Semiconductors 1,730,562 5.26
========== ======
ELECTRONICS -- 2.40%
Motorola, Inc. 8,100 789,244 2.40
See Notes to Financial Statements.
35
<PAGE>
P-I-C
- ---------
BALANCED
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------ -------- ------
ENTERTAINMENT AND LEISURE -- 1.25%
AT&T Corp./Liberty Media
Corporation* 4,200 $166,687 0.51%
Clear Channel Communications, Inc.* 800 64,300 0.20
Viacom Inc., Class B* 4,000 179,000 0.54
------ -------- ------
Total Entertainment and Leisure 409,987 1.25
======== ======
INSURANCE -- 1.61%
American International Group, Inc. 5,142 529,305 1.61
====== ======== ======
MEDICAL AND DENTAL PRODUCTS -- 0.65%
MedImmune, Inc.* 1,900 212,800 0.65
====== ======== ======
MEDICAL INSTRUMENTS -- 0.70%
Medtronic, Inc. 6,600 228,525 0.70
====== ======== ======
NATURAL GAS PRODUCTS AND PIPELINES -- 1.02%
Enron Corp. 8,400 335,475 1.02
====== ======== ======
NETWORKING -- 2.27%
Cisco Systems, Inc.* 10,100 747,400 2.27
====== ======== ======
OIL FIELD SERVICES -- 1.28%
Baker Hughes Incorporated 6,000 167,625 0.51
Schlumberger Limited 4,200 254,363 0.77
------ -------- ------
Total Oil Field Services 421,988 1.28
======== ======
SPECIALTY RETAIL -- 2.06%
Bed Bath & Beyond Inc.* 7,800 259,837 0.79
Kohl's Corporation* 5,600 418,950 1.27
------ -------- ------
Total Specialty Retail 678,787 2.06
See Notes to Financial Statements.
36
<PAGE>
P-I-C
- ---------
BALANCED
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
---------- ----------- ------
TELECOMMUNICATIONS -- 5.73%
Lucent Technologies Inc. 17,300 $ 1,111,525 3.38%
Nextel Communications, Inc.* 400 34,475 0.10
Nokia Corporation, ADR 3,200 369,800 1.13
Tellabs, Inc.* 5,800 366,850 1.12
---------- ----------- ------
Total Telecommunications 1,882,650 5.73
=========== ======
TELEPHONE -- 4.20%
ALLTEL Corporation 4,000 333,000 1.01
MCI WorldCom Incorporated* 12,216 1,048,286 3.19
---------- ----------- ------
Total Telephone 1,381,286 4.20
=========== ======
WIRELESS SERVICES -- 1.20%
Vodafone Airtouch Plc ADR 8,250 395,484 1.20
---------- ----------- ------
Total Equity Securities
(Cost $15,004,530) 18,780,896 57.13
=========== ======
FIXED INCOME SECURITIES -- 37.87%
Principal Percentage of
Amount Value Net Assets
---------- ----------- ------
CORPORATE BONDS -- 4.77%
Associates Corporation of North
America, 6.375%, 8/15/2000 $ 425,000 427,089 1.30
Hanson PLC, 7.375%, 1/15/03 375,000 380,625 1.16
Hertz Corporation, 6%, 1/15/03 100,000 97,125 0.29
Household Bank, f.s.b., 61|M/2%, 7/15/03 300,000 299,625 0.91
The Progressive Corporation, 10.125%,
12/15/00 350,000 363,979 1.11
---------- ----------- ------
Total Corporate Bonds 1,568,443 4.77
=========== ======
See Notes to Financial Statements.
37
<PAGE>
P-I-C
- ---------
BALANCED
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Principal Percentage of
FIXED INCOME, continued Amount Value Net Assets
--------- ---------- ------
FINANCE BONDS -- 3.47%
The CIT Group, Inc., 7.125%,
10/15/2004 $400,000 $ 402,500 1.22%
Ford Motor Credit Company,
7.375%, 10/28/2009 350,000 353,500 1.08
Household Finance Corporation,
5.875%, 9/25/04 100,000 94,625 0.29
Paine Webber Group, Inc.,
6.45%, 12/1/2003 300,000 291,000 0.88
--------- ---------- ------
Total Finance Bonds 1,141,625 3.47
========== ======
INDUSTRIAL BONDS -- 6.18%
Chevron Corporation, Notes, 6.625%,
10/1/2004 750,000 750,000 2.28
PDVSA Finance Ltd., 8.75%,
2/15/2004 700,000 686,000 2.09
The Procter & Gamble Company,
6.875%, 9/15/2009 200,000 201,250 0.61
TRW Inc., 6.5%, 6/1/2002 400,000 395,000 1.20
--------- ---------- ------
Total Industrial Bonds 2,032,250 6.18
========== ======
CMOS AND ASSET BACKED -- 0.52%
First Plus Home Loan Trust, 4.938%,
3/10/2008** 14,815 14,822 0.05
First Plus Home Loan Trust, 4.490%,
2/10/2009** 155,908 155,960 0.47
--------- ---------- ------
Total CMOs and Asset Backed 170,782 0.52
========== ======
FOREIGN ISSUES -- 0.77%
Province of Quebec, 7.5%, 9/15/2029 250,000 251,563 0.77
See Notes to Financial Statements.
38
<PAGE>
P-I-C
- ---------
BALANCED
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Principal Percentage of
FIXED INCOME, continued Amount Value Net Assets
---------- ----------- ------
TREASURY OBLIGATIONS -- 22.16%
U. S. Treasury Bonds, 9.0%,
11/15/2018 $ 520,000 $ 660,126 2.01%
U. S. Treasury Notes, 5.50%,
5/15/2009 530,000 508,351 1.55
U. S. Treasury Notes, 6.0%,
8/15/2009 310,000 309,740 0.94
U. S. Treasury Notes, 5.625%,
2/15/2006 5,950,000 5,806,625 17.66
---------- ----------- ------
Total Treasury Obligations 7,284,842 22.16
----------- ------
Total Fixed Income Securities
(Cost $12,499,583) 12,449,505 37.87
=========== ======
Percentage of
MONEY MARKET FUNDS -- 1.08% Shares Value Net Assets
---------- ----------- ------
Temporary Investment Fund Inc. --
Temp Fund 177,695 177,695 0.54
Temporary Investment Fund Inc. --
Temp Cash 177,695 177,695 0.54
---------- ----------- ------
Total Money Market Funds
(Cost $355,390) 355,390 1.08
----------- ------
Total Investments
(Cost $27,859,503) 31,585,791 96.08
=========== ======
See Notes to Financial Statements.
39
<PAGE>
P-I-C
- ---------
BALANCED
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
OTHER ASSETS -- 6.21% Value Net Assets
---------- -------
Receivables:
Investment securities sold 1,822,056
Interest 195,848
Shares of beneficial interests sold 23,462
Other assets 1,207
----------
Total other assets 2,042,573 6.21%
========== =======
TOTAL ASSETS 33,628,364 102.29
---------- -------
LIABILITIES -- (2.29%)
Payables
Investment securities purchased 668,494
Shares of beneficial interests redeemed 28,992
To Advisor (Note 3) 7,821
Deferred Trustees' compensation (Note 3) 15,394
Accrued expenses 31,573
----------
Total liabilities 752,274 (2.29)
========== =======
TOTAL NET ASSETS -- 100.00% 32,876,090 100.00%
---------- -------
* Non-income producing security.
** Adjustable rate security.
See Notes to Financial Statements.
40
<PAGE>
P-I-C
- ---------
GROWTH
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES -- 89.16% Shares Value Net Assets
------- ----------- ------
BANKS -- 2.00%
Providian Financial Corporation 33,500 $ 3,651,500 2.00%
======= =========== ======
BIOTECHNOLOGY -- 2.58%
Amgen Inc.* 31,000 2,472,250 1.36
Genentech, Inc.* 15,300 2,229,975 1.22
------- ----------- ------
Total Biotechnology 4,702,225 2.58
=========== ======
BUILDING PRODUCTS -- 4.31%
The Home Depot, Inc. 39,700 2,997,350 1.65
Lowe's Companies, Inc. 88,300 4,856,500 2.66
------- ----------- ------
Total Building Products 7,853,850 4.31
=========== ======
COMPUTER SERVICES -- 4.36%
Sun Microsystems, Inc.* 75,100 7,946,519 4.36
=========== ======
COMPUTER SOFTWARE -- 10.59%
BMC Software, Inc.* 53,200 3,414,775 1.87
Microsoft Corporation * 142,324 13,173,865 7.23
VERITAS Software Corporation * 25,200 2,718,450 1.49
------- ----------- ------
Total Computer Software 19,307,090 10.59
=========== ======
CREDIT AND FINANCE -- 1.80%
MBNA Corporation 118,816 3,282,292 1.80
======= =========== ======
DISCOUNT -- 1.92%
Costco Companies, Inc.* 43,600 3,501,625 1.92
See Notes to Financial Statements.
41
<PAGE>
P-I-C
- ---------
GROWTH
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------- ----------- ------
DIVERSIFIED -- 4.28%
Tyco International Ltd. 195,560 $ 7,810,177 4.28%
======= =========== ======
DRUGS -- 3.70%
Pfizer, Inc. 62,452 2,466,854 1.35
Warner-Lambert Company 53,600 4,277,950 2.35
------- ----------- ------
Total Drugs 6,744,804 3.70
=========== ======
ELECTRICAL EQUIPMENT/PERIPHERALS -- 7.34%
Dell Computer Corporation* 52,500 2,106,562 1.16
EMC Corporation* 78,700 5,745,100 3.15
Lexmark International Group, Inc.* 58,700 4,582,269 2.51
PMC-Sierra, Inc.* 10,000 942,500 0.52
------- ----------- ------
Total Electrical
Equipment/Peripherals 13,376,431 7.34
=========== ======
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 8.60%
Linear Technology Corporation 54,800 3,832,575 2.10
Solectron Corporation* 55,200 4,153,800 2.28
Texas Instruments, Incorporated 31,000 2,782,250 1.53
Vitesse Semiconductor Corporation* 106,900 4,904,038 2.69
------- ----------- ------
Total Electronic
Components/Semiconductors 15,672,663 8.60
=========== ======
ELECTRONICS -- 3.08%
Motorola, Inc. 57,700 5,622,144 3.08
See Notes to Financial Statements.
42
<PAGE>
P-I-C
- ---------
GROWTH
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------ ---------- ------
ENTERTAINMENT AND LEISURE -- 2.82%
AT&T Corp./Liberty Media
Corporation* 50,000 $1,984,375 1.09%
Clear Channel Communications, Inc.* 22,600 1,816,475 1.00
Viacom Inc., Class B* 30,000 1,342,500 0.73
------ ---------- ------
Total Entertainment and
Leisure 5,143,350 2.82
========== ======
INSURANCE -- 2.12%
American International Group, Inc. 37,590 3,869,421 2.12
====== ========== ======
MEDICAL AND DENTAL PRODUCTS -- 1.07%
MedImmune, Inc.* 17,400 1,948,800 1.07
====== ========== ======
MEDICAL INSTRUMENTS -- 1.09%
Medtronic, Inc. 57,608 1,994,677 1.09
====== ========== ======
NATURAL GAS PRODUCTS AND PIPELINES -- 1.62%
Enron Corp. 74,000 2,955,375 1.62
====== ========== ======
NETWORKING -- 3.07%
Cisco Systems, Inc.* 75,700 5,601,800 3.07
====== ========== ======
OIL FIELD SERVICES -- 2.16%
Baker Hughes Incorporated 51,900 1,449,956 0.79
Schlumberger Limited 41,100 2,489,119 1.37
------ ---------- ------
Total Oil Field Services 3,939,075 2.16
See Notes to Financial Statements.
43
<PAGE>
P-I-C
- ---------
GROWTH
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
--------- ------------ ------
SPECIALTY RETAIL -- 4.24%
Bed Bath & Beyond Inc.* 78,500 $ 2,615,031 1.43%
Kohl's Corporation* 68,358 5,114,033 2.81
--------- ------------ ------
Total Specialty Retail 7,729,064 4.24
============ ======
TELECOMMUNICATIONS -- 7.72%
Lucent Technologies Inc. 125,900 8,089,075 4.44
Nextel Communications, Inc.* 2,900 249,944 0.14
Nokia Corporation ADR 25,700 2,969,956 1.63
Tellabs, Inc.* 43,400 2,745,050 1.51
--------- ------------ ------
Total Telecommunications 14,054,025 7.72
============ ======
TELEPHONE -- 6.84%
ALLTEL Corporation 43,000 3,579,750 1.96
MCI WorldCom Incorporated * 103,650 8,894,466 4.88
--------- ------------ ------
Total Telephone 12,474,216 6.84
============ ======
WIRELESS SERVICES -- 1.85%
Vodafone Airtouch Plc ADR 70,250 3,367,609 1.85
--------- ------------ ------
Total Equity Securities
(Cost $111,127,729) 162,548,732 89.16
============ ======
MONEY MARKET FUNDS -- 4.64%
Temporary Investment Fund Inc. --
Temp Fund 4,230,318 4,230,318 2.32
Temporary Investment Fund Inc. --
Temp Cash 4,230,318 4,230,318 2.32
--------- ------------ ------
Total Money Market Funds
(Cost $8,460,636) 8,460,636 4.64
------------ ------
Total Investments
(Cost $119,588,365) 171,009,368 93.80
============ ======
See Notes to Financial Statements.
44
<PAGE>
P-I-C
- ---------
GROWTH
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
OTHER ASSETS -- 8.18% Value Net Assets
------------ -------
Receivables:
Investment securities sold $ 14,780,237
Shares of beneficial interests sold 52,471
Dividends and Interest 53,055
Other assets 23,317
------------
Total other assets 14,909,080 8.18%
============ =======
TOTAL ASSETS 185,918,448 101.98
------------ -------
LIABILITIES -- (1.98%)
Payables:
Investment securities purchased 3,326,953
Shares of beneficial interests redeemed 76,010
To Advisor (Note 3) 113,970
Accrued expenses 54,062
Deferred Trustees' compensation (Note 3) 42,194
------------
Total Liabilities 3,613,189 (1.98)
============ =======
TOTAL NET ASSETS -- 100.00% $182,305,259 100.00%
------------ -------
* Non-income producing security.
See Notes to Financial Statements.
45
<PAGE>
P-I-C
- ---------
MID CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES -- 89.95% Shares Value Net Assets
----- -------- ------
AUTOMOBILES -- 1.17%
Harley-Davidson, Inc. 2,500 $148,281 1.17%
===== ======== ======
COMPUTER SERVICES -- 1.77%
Amdocs Limited* 8,050 223,891 1.77
===== ======== ======
COMPUTER SOFTWARE -- 4.64%
Electronics for Imaging, Inc.* 5,025 202,570 1.60
Gemstar International Group Limited* 1,650 143,344 1.13
Legato Systems, Inc.* 4,500 241,875 1.91
----- -------- ------
Total Computer Software 587,789 4.64
======== ======
DISCOUNT -- 1.19%
Dollar Tree Stores, Inc.* 3,450 150,291 1.19
===== ======== ======
DIVERSIFIED -- 1.04%
Sealed Air Corporation* 2,375 131,516 1.04
===== ======== ======
ELECTRIC POWER -- 3.26%
Calpine Corporation* 3,700 213,212 1.69
The Montana Power Company 7,000 199,063 1.57
----- -------- ------
Total Electric Power 412,275 3.26
See Notes to Financial Statements.
46
<PAGE>
P-I-C
- ---------
MID CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
----- ---------- ------
ELECTRICAL EQUIPMENT/PERIPHERAL -- 3.49%
Lexmark International Group, Inc.* 3,150 $ 245,897 1.94%
Waters Corporation* 3,700 196,562 1.55
----- ---------- ------
Total Electrical
Equipment/Peripheral 442,459 3.49
========== ======
ELECTRONIC COMPONENTS/SEMICONDUCTOR -- 17.13%
Altera Corporation* 7,000 340,375 2.69
Chartered Semiconductor
Manufacturing Ltd* 8,425 279,605 2.21
Conexant Systems, Inc.* 3,825 357,159 2.82
Jabil Circuit, Inc.* 4,100 214,225 1.69
JDS Uniphase Corporation* 1,850 308,719 2.44
LSI Logic Corporation* 4,600 244,662 1.93
QLogic Corporation* 1,500 156,188 1.23
Teradyne, Inc.* 6,975 268,538 2.12
----- ---------- ------
Total Electronic
Components/Semiconductor 2,169,471 17.13
========== ======
ELECTRONICS -- 1.17%
Maxim Integrated Products, Inc* 1,875 148,008 1.17
========== ======
ENTERTAINMENT & LEISURE -- 8.08%
Adelphia Communications
Corporation* 5,075 277,222 2.19
AMFM Inc.* 3,075 215,250 1.70
Royal Caribbean Cruises Ltd. 3,875 205,617 1.62
SFX Entertainment, Inc.* 4,375 152,851 1.21
UnitedGlobalCom, Inc.* 1,975 171,825 1.36
----- ---------- ------
Total Entertainment & Leisure 1,022,765 8.08
See Notes to Financial Statements.
47
<PAGE>
P-I-C
- ---------
MID CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------ -------- ------
FINANCIAL SERVICES -- 3.70%
Capital One Financial Corporation 2,075 $109,975 0.87%
Concord EFS, Inc.* 6,062 164,053 1.29
Metris Companies Inc. 5,650 194,572 1.54
------ -------- ------
Total Financial Services 468,600 3.70
======== ======
FOOD & RESTAURANTS -- 2.10%
Brinker International, Inc.* 6,300 146,869 1.16
Ruby Tuesday, Inc. 6,250 119,141 0.94
------ -------- ------
Total Food & Restaurants 266,010 2.10
======== ======
INTERNET SERVICES -- 7.57%
Intuit Inc.* 8,025 233,728 1.85
iXL Enterprises, Inc.* 2,950 123,347 0.97
PSINet Inc.* 2,200 79,200 0.62
RealNetworks, Inc.* 1,350 148,078 1.17
VeriSign, Inc.* 1,975 243,912 1.93
Vignette Corporation* 825 130,350 1.03
------ -------- ------
Total Internet Services 958,615 7.57
======== ======
MEDICAL AND DENTAL PRODUCTS -- 1.24%
MedImmune, Inc.* 1,400 156,800 1.24
====== ======== ======
MEDICAL INSTRUMENTS -- 0.90%
Affymetrix, Inc.* 1,300 114,562 0.90
====== ======== ======
MISCELLANEOUS -- 1.78%
The AES Corporation* 4,000 225,750 1.78
See Notes to Financial Statements.
48
<PAGE>
P-I-C
- ---------
MID CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
----- -------- ------
NETWORKING -- 3.32%
Extreme Networks, Inc.* 2,500 $200,781 1.58%
Network Appliance, Inc.* 2,975 220,150 1.74
----- -------- ------
Total Networking 420,931 3.32
-------- ------
OIL AND GAS, U.S. EXPLORATION/PRODUCTION -- 2.82%
Cooper Cameron Corporation* 4,450 172,159 1.36
Nabors Industries, Inc.* 8,125 184,336 1.46
----- -------- ------
Total Oil and Gas, U.S.
Exploration/Production 356,495 2.82
-------- ------
OIL FIELD SERVICES -- 2.67%
Baker Hughes Incorporated 5,200 145,275 1.15
ENSCO International Incorporated 9,975 193,266 1.52
----- -------- ------
Total Oil Field Services 338,541 2.67
-------- ------
PUBLISHING/ADVERTISING -- 1.33%
Outdoor Systems, Inc.* 3,975 168,441 1.33
----- -------- ------
SPECIALTY RETAIL -- 5.79%
Bed Bath & Beyond Inc.* 4,975 165,730 1.31
Tandy Corporation 3,100 195,106 1.54
Tiffany & Co. 2,650 157,675 1.24
Williams-Sonoma, Inc.* 4,000 215,000 1.70
----- -------- ------
Total Specialty Retail 733,511 5.79
See Notes to Financial Statements.
49
<PAGE>
P-I-C
- ---------
MID CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------- ----------- ------
TELECOMMUNICATIONS -- 11.10%
ADC Telecommunications, Inc.* 4,475 $ 213,401 1.69%
Comverse Technology, Inc.* 2,650 300,775 2.38
Crown Castle International Corp.* 9,100 175,175 1.38
Global Telesystems Group, Inc.* 2,900 69,419 0.54
Insight Communications
Company, Inc.* 12,175 287,634 2.27
Lucent Technologies Inc. 2 129 0.00
Metromedia Fiber Network, Inc.* 3,100 102,494 0.81
VoiceStream Wireless Corporation* 2,600 256,750 2.03
------- ----------- ------
Total Telecommunications 1,405,777 11.10
=========== ======
TEXTILES AND SHOES -- 1.02%
Tommy Hilfiger Corporation* 4,550 128,537 1.02
======= =========== ======
WIRELESS SERVICES -- 1.67%
Western Wireless Corporation,
Class A* 4,000 211,500 1.67
------- ----------- ------
Total Equity Securities
(Cost $8,985,075) 11,390,816 89.95
=========== ======
MONEY MARKET FUNDS -- 7.36%
Temporary Investment Fund Inc. --
Temp Fund 466,067 466,067 3.68
Temporary Investment Fund Inc. --
Temp Cash 466,067 466,067 3.68
------- ----------- ------
Total Money Market Funds
(Cost $932,134) 932,134 7.36
----------- ------
Total Investments
(Cost $9,917,209) 12,322,950 97.31
=========== ======
See Notes to Financial Statements.
50
<PAGE>
P-I-C
- ---------
MID CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
OTHER ASSETS -- 11.64% Value Net Assets
----------- -------
Receivables:
Investment securities sold $ 414,308
Dividends and interest 5,396
Shares of beneficial interests sold 1,054,694
-----------
Total other assets 1,474,398 11.64%
=========== =======
TOTAL ASSETS 13,797,348 108.95
----------- -------
LIABILITIES -- (8.95%)
Payables:
Investment securities purchased 1,102,047
To Advisor (Note 3) 1,188
Accrued expenses 25,451
Deferred Trustees' compensation (Note 3) 4,923
-----------
Total liabilities 1,133,609 (8.95)
=========== =======
TOTAL NET ASSETS -- 100.00% $12,663,739 100.00%
----------- -------
* Non-income producing security.
See Notes to Financial Statements.
51
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES -- 95.76% Shares Value Net Assets
------- ---------- ------
AIRLINES -- 0.47%
Ryanair Holdings plc ADS* 28,870 $1,190,887 0.47%
======= ========== ======
APPAREL AND SHOES -- 0.25%
The Children's Place
Retail Stores, Inc.* 1,900 49,519 0.02
Too, Inc.* 37,350 597,600 0.23
------- ---------- ------
Total Apparel and Shoes 647,119 0.25
========== ======
AUTO PARTS -- 0.90%
Gentex Corporation * 133,600 2,296,250 0.90
======= ========== ======
BANKS -- 0.08%
Hamilton Bancorp Inc.* 13,230 210,026 0.08
======= ========== ======
BEVERAGE/FOOD -- 0.46%
Beringer Wine Estates
Holdings, Inc.* 29,600 1,176,600 0.46
======= ========== ======
BIOTECHNOLOGY -- 2.44%
Abgenix, Inc.* 12,900 572,437 0.23
Albany Molecular Research, Inc.* 34,400 855,700 0.34
Alkermes, Inc.* 27,000 953,438 0.37
Invitrogen Corporation * 42,800 1,070,000 0.42
QLT Phototherapeutics Inc.* 65,200 2,762,850 1.08
------- ---------- ------
Total Biotechnology 6,214,425 2.44
See Notes to Financial Statements.
52
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------- ----------- ------
BUSINESS SERVICES -- 8.04%
CoStar Group, Inc.* 26,900 $ 662,412 0.26%
The Corporate Executive Board
Company * 9,500 358,625 0.14
Dendrite International, Inc.* 83,900 2,632,362 1.03
Iron Mountain Incorporated* 16,750 506,688 0.20
NCO Group, Inc.* 120,435 5,103,433 2.00
The Profit Recovery Group
International, Inc.* 130,200 5,362,613 2.11
TeleTech Holdings Inc.* 65,700 932,119 0.37
TMP Worldwide Inc.* 37,120 2,317,680 0.91
United Rentals, Inc.* 38,400 715,200 0.28
Westwood One, Inc.* 40,763 1,880,170 0.74
------- ----------- ------
Total Business Services 20,471,302 8.04
=========== ======
COMPUTER SERVICES -- 6.44%
The BISYS Group, Inc.* 7,100 362,100 0.14
Computer Network Technology
Corporation* 9,700 155,806 0.06
DSP Group, Inc.* 44,700 2,134,425 0.84
Electro Scientific Industries, Inc.* 14,500 783,000 0.31
Globix Corporation* 16,700 601,200 0.24
Jack Henry & Associates, Inc. 25,300 920,287 0.36
MicroStrategy Incorporated* 31,800 3,072,675 1.21
MIPS Technologies, Inc.* 23,000 664,125 0.26
Modem Media . Poppe Tyson, Inc.* 31,700 2,187,300 0.86
National Computer Systems, Inc. 45,900 1,735,594 0.68
NICE Systems Ltd. ADR* 77,550 2,248,950 0.88
Pegasus Systems, Inc.* 33,325 1,424,644 0.56
ShowCase Corporation* 27,800 107,725 0.04
------- ----------- ------
Total Computer Services 16,397,831 6.44
See Notes to Financial Statements.
53
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------- ----------- ------
COMPUTER SOFTWARE -- 15.23%
Bluestone Software, Inc.* 27,700 $ 1,021,437 0.40%
Brio Technology, Inc.* 31,400 761,450 0.30
Business Objects S.A. ADS* 74,700 5,378,400 2.11
Check Point Software
Technologies, Ltd.* 36,900 4,268,869 1.68
Electronics for Imaging, Inc.* 60,900 2,455,031 0.96
Exchange Applications, Inc.* 31,200 850,200 0.33
F5 Networks, Inc.* 10,000 1,387,500 0.54
HNC Software Inc.* 52,600 2,100,712 0.83
Macromedia, Inc.* 44,100 2,841,694 1.12
Mercury Interactive Corporation* 56,400 4,575,450 1.80
Micromuse Inc.* 13,300 1,421,438 0.56
Mission Critical Software, Inc.* 12,700 747,713 0.29
National Instruments Corporation* 39,600 1,190,475 0.47
Peregrine Systems, Inc.* 138,450 6,074,494 2.38
PLX Technology, Inc.* 10,000 160,000 0.06
TriZetto Group, Inc.* 45,000 450,000 0.18
Unigraphics Solutions Inc.* 17,600 379,500 0.15
Verity, Inc.* 39,600 2,727,450 1.07
------- ----------- ------
Total Computer Software 38,791,813 15.23
=========== ======
CONSTRUCTION -- 0.12%
Dycom Industries, Inc.* 9,225 300,389 0.12
======= =========== ======
CREDIT AND FINANCE -- 0.51%
AmeriCredit Corp.* 74,300 1,290,962 0.51
See Notes to Financial Statements.
54
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------- ---------- ------
DISCOUNT -- 2.91%
Dollar Tree Stores, Inc.* 113,380 $4,939,116 1.94%
99 CENTS Only Stores* 82,750 2,472,156 0.97
------- ---------- ------
Total Discount 7,411,272 2.91
========== ======
DRUGS -- 1.86%
K-V Pharmaceutical Company,
Class A* 47,300 821,837 0.32
Medicis Pharmaceutical Corporation,
Class A* 35,500 1,082,750 0.43
Roberts Pharmaceutical Corporation* 9,300 299,925 0.12
Shire Pharmaceuticals Group plc* 79,450 2,522,538 0.99
------- ---------- ------
Total Drugs 4,727,050 1.86
========== ======
EDUCATIONAL PROGRAMS -- 0.65%
Corinthian Colleges, Inc.* 57,100 1,113,450 0.44
Education Management Corporation* 58,200 552,900 0.21
------- ---------- ------
Total Educational Programs 1,666,350 0.65
========== ======
ELECTRIC POWER -- 0.77%
Calpine Corporation* 33,900 1,953,488 0.77
======= ========== ======
ELECTRICAL EQUIPMENT/PERIPHERALS -- 1.72%
Creo Products Inc.* 8,700 221,850 0.09
Dionex Corporation* 19,900 884,306 0.35
SanDisk Corporation* 31,200 1,891,500 0.74
TranSwitch Corporation* 29,400 1,383,637 0.54
------- ---------- ------
Total Electrical
Equipment/Peripherals 4,381,293 1.72
See Notes to Financial Statements.
55
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------ ----------- ------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 12.73%
Alpha Industries, Inc.* 25,200 $ 1,392,300 0.55%
Brooks Automation, Inc.* 32,800 623,200 0.25
Burr-Brown Corporation* 32,000 1,258,000 0.49
Credence Systems Corporation* 58,400 2,664,500 1.05
Cree Research, Inc.* 76,300 3,257,056 1.28
Cymer, Inc.* 47,000 1,736,062 0.68
Cypress Semiconductor Corporation* 36,800 940,700 0.37
The DII Group, Inc.* 63,100 2,271,600 0.89
Flextronics International Ltd.* 31,300 2,222,300 0.87
GlobeSpan, Inc.* 12,300 894,825 0.35
Integrated Device Technology, Inc.* 38,200 785,488 0.31
Lam Research Corporation* 37,800 3,191,738 1.25
Lattice Semiconductor Corporation* 71,800 2,539,925 1.00
Micrel, Incorporated* 49,200 2,675,250 1.05
Orbotech Ltd.* 25,200 1,968,750 0.77
Plexus Corp.* 21,200 561,800 0.22
QLogic Corporation* 8,300 864,237 0.34
Semtech Corporation* 34,800 1,333,275 0.52
Varian Semiconductor Equipment
Associates, Inc.* 55,400 1,253,425 0.49
------ ----------- ------
Total Electronic
Components/Semiconductors 32,434,431 12.73
=========== ======
ELECTRONICS -- 1.30%
Ancor Communications,
Incorporated* 34,900 1,105,894 0.43
ANTEC Corporation* 26,700 1,294,950 0.51
Power Integrations, Inc.* 8,900 907,244 0.36
------ ----------- ------
Total Electronics 3,308,088 1.30
See Notes to Financial Statements.
56
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------- ----------- ------
ENTERTAINMENT AND LEISURE -- 7.09%
American Classic Voyages Co.* 42,900 $ 1,072,500 0.42%
CINAR Corporation* 19,100 331,862 0.13
Citadel Communications
Corporation* 71,200 3,439,850 1.35
Cox Radio, Inc., Class A* 22,900 1,603,000 0.63
Emmis Communications Corporation,
Class A* 23,300 1,680,512 0.66
Entercom Communications Corp.,
Class A* 31,200 1,554,150 0.61
Fairfield Communities, Inc.* 116,770 1,430,433 0.56
International Speedway Corporation,
Class A 15,300 789,863 0.31
Jones Intercable, Inc., Class A* 22,375 1,222,234 0.48
Spanish Broadcasting System, Inc.,
Class A* 27,900 742,838 0.29
UnitedGlobalCom, Inc.* 48,300 4,202,100 1.65
------- ----------- ------
Total Entertainment and Leisure 18,069,342 7.09
=========== ======
FINANCIAL SERVICES -- 0.59%
Metris Companies Inc. 43,900 1,511,806 0.59
======= =========== ======
FOOD AND RESTAURANTS -- 0.50%
Performance Food Group Company* 46,600 1,264,025 0.50
======= =========== ======
INSURANCE -- 0.76%
Clark/Bardes Holdings, Inc.* 36,700 504,625 0.20
Financial Security Assurance
Holdings Ltd. 25,300 1,426,288 0.56
------- ----------- ------
Total Insurance 1,930,913 0.76
See Notes to Financial Statements.
57
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------ ----------- ------
INTERNET SERVICES -- 8.16%
About.com, Inc.* 29,500 $ 1,393,875 0.55%
AdForce, Inc.* 12,450 343,931 0.14
Agile Software Corporation* 11,000 1,078,000 0.42
Art Technology Group, Inc.* 24,200 1,306,800 0.51
Ask Jeeves, Inc.* 16,200 1,251,450 0.49
Critical Path, Inc.* 46,000 2,104,500 0.83
CyberSource Corporation* 12,200 774,700 0.30
Insweb Corporation* 9,950 179,100 0.07
JFAX.COM, Inc.* 54,300 235,866 0.09
Marimba, Inc.* 9,400 267,900 0.11
Media Metrix, Inc.* 22,000 1,031,250 0.40
Paradyne Networks, Inc.* 16,700 507,262 0.20
Primus Knowledge Solutions, Inc.* 33,500 1,009,187 0.40
PSINet Inc.* 7,000 252,000 0.10
Security First Corp.* 26,000 1,044,875 0.41
Vignette Corporation* 34,400 5,435,200 2.13
WebTrends Corporation* 31,400 1,938,950 0.76
Wink Communications, Inc.* 18,300 642,788 0.25
------ ----------- ------
Total Internet Services 20,797,634 8.16
=========== ======
MEDICAL AND DENTAL PRODUCTS -- 0.18%
Cytyc Corporation* 11,600 461,100 0.18
====== =========== ======
MEDICAL INSTRUMENTS -- 0.95%
Affymetrix, Inc.* 27,500 2,423,437 0.95
See Notes to Financial Statements.
58
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------- ---------- ------
MEDICAL/DENTAL SERVICES -- 1.75%
AmSurg Corp., Class A* 93,200 $ 570,850 0.22%
Professional Detailing, Inc.* 34,800 870,000 0.34
Renal Care Group, Inc.* 162,245 3,021,813 1.19
------- ---------- ------
Total Medical/Dental Services 4,462,663 1.75
========== ======
NETWORKING -- 3.12%
Emulex Corporation* 29,500 4,600,156 1.81
Extreme Networks, Inc.* 4,000 321,250 0.13
MMC Networks, Inc.* 10,700 341,063 0.13
Visual Networks, Inc.* 33,900 1,411,088 0.55
Xircom, Inc.* 25,500 1,286,156 0.50
------- ---------- ------
Total Networking 7,959,713 3.12
========== ======
OFFSHORE DRILLING -- 0.61%
Dril-Quip, Inc.* 11,700 273,487 0.11
Rowan Companies, Inc.* 81,600 1,269,900 0.50
------- ---------- ------
Total Offshore Drilling 1,543,387 0.61
========== ======
OIL FIELD SERVICES -- 1.52%
Atwood Oceanics, Inc.* 17,000 494,063 0.19
Global Industries, Ltd.* 90,000 720,000 0.28
Marine Drilling Companies, Inc.* 70,600 1,142,838 0.45
Patterson Energy, Inc.* 66,900 857,156 0.34
Trico Marine Services, Inc.* 96,300 668,081 0.26
------- ---------- ------
Total Oil Field Services 3,882,138 1.52
========== ======
POLLUTION CONTROL -- 0.85%
Newpark Resources, Inc.* 150,500 968,844 0.38
Waste Connections, Inc.* 78,125 1,206,055 0.47
------- ---------- ------
Total Pollution Control 2,174,899 0.85
See Notes to Financial Statements.
59
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
------- ----------- ------
PUBLISHING/ADVERTISING -- 4.11%
Catalina Marketing Corporation* 38,200 $ 3,576,475 1.40%
Lamar Advertising Company,
Class A* 60,700 3,277,800 1.29
Playboy Enterprises, Inc., Class B* 141,400 3,623,375 1.42
------- ----------- ------
Total Publishing/Advertising 10,477,650 4.11
=========== ======
SPECIALTY RETAIL -- 1.05%
Cost Plus, Inc.* 54,150 1,976,475 0.78
The Yankee Candle Company, Inc.* 46,000 701,500 0.27
------- ----------- ------
Total Specialty Retail 2,677,975 1.05
=========== ======
TELECOMMUNICATIONS -- 6.29%
AirGate PCS, Inc.* 23,900 1,195,000 0.47
American Mobile Satellite
Corporation* 46,000 511,750 0.20
Applied Micro Circuits Corporation* 27,600 2,147,625 0.84
AudioCodes Ltd.* 25,300 1,530,650 0.60
CD Radio Inc.* 83,200 2,121,600 0.83
E-TEK Dynamics, Inc.* 15,200 1,012,700 0.40
Gilat Satellite Networks, Ltd.* 38,800 2,022,450 0.80
Insight Communications
Company, Inc.* 33,300 786,713 0.31
Orckit Communications Ltd.* 26,900 741,431 0.29
Pinnacle Holdings Inc.* 50,300 1,207,200 0.47
Research in Motion Limited* 55,400 1,703,550 0.67
Time Warner Telecom Inc.* 21,000 528,938 0.21
WinStar Communications, Inc.* 13,200 512,325 0.20
------- ----------- ------
Total Telecommunications 16,021,932 6.29
See Notes to Financial Statements.
60
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
EQUITY SECURITIES, continued Shares Value Net Assets
--------- ------------ -------
TEXTILES AND SHOES -- 0.35%
Cutter & Buck Inc.* 53,700 $ 882,694 0.35%
========= ============ =======
TOYS -- 0.53%
JAKKS Pacific, Inc.* 32,800 1,344,800 0.53
========= ============ =======
TRUCKING -- 0.47%
Forward Air Corporation* 41,000 1,206,938 0.47
--------- ------------ -------
Total Equity Securities
(Cost $177,616,708) 243,962,622 95.76
============ =======
MONEY MARKET FUNDS -- 5.42%
Temporary Investment Fund Inc. --
Temp Fund 6,902,048 6,902,048 2.71
Temporary Investment Fund Inc. --
Temp Cash 6,902,048 6,902,048 2.71
--------- ------------ -------
Total Money Market Funds
(Cost $13,804,096) 13,804,096 5.42
------------ -------
Total Investments
(Cost $191,420,804) 257,766,718 101.18
============ =======
See Notes to Financial Statements.
61
<PAGE>
P-I-C
- ---------
SMALL CAP
PORTFOLIO
- ---------
Statement of Net Assets
as of October 31, 1999
Percentage of
OTHER ASSETS -- 0.91% Value Net Assets
------------ -------
Receivables:
Investment securities sold $ 2,128,359
Interest 72,743
Shares of beneficial interest sold 111,831
Other assets 18,417
------------
Total other assets 2,331,350 0.91%
============ =======
TOTAL ASSETS 260,098,068 102.09
------------ -------
LIABILITIES -- (2.09%)
Payables:
Investment securities purchased 4,979,923
Shares of beneficial interest redeemed 93,425
To Advisor (Note 3) 153,623
Accrued expenses 66,002
Deferred Trustees' compensation (Note 3) 42,194
------------
Total liabilities 5,335,167 (2.09)
============ =======
TOTAL NET ASSETS -- 100.00% $254,762,901 100.00%
------------ -------
* Non-income producing security.
See Notes to Financial Statements.
62
<PAGE>
P-I-C
- ----------
BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Statements of Operations
Year Ended October 31, 1999
<TABLE>
<CAPTION>
Balanced Growth Mid Cap Small Cap
INVESTMENT INCOME Portfolio Portfolio Portfolio Portfolio
------------ ----------- ---------- ------------
<S> <C> <C> <C> <C>
Income:
Dividends $ 81,881 $ 569,502 $ 15,409 $ 30,354
Interest 638,455 290,405 15,844 440,273
------------ ----------- ---------- ------------
Total income 720,336 859,907 31,253 470,627
============ =========== ========== ============
Expenses:
Investment advisory
fees (Note 3) 191,721 1,337,089 58,869 1,793,492
Administration fees
(Note 3) 31,954 167,136 45,625 224,187
Accounting services
fees 64,800 78,227 64,877 88,822
Custodian fees 20,275 36,960 21,662 66,810
Audit fee 15,301 20,499 8,289 22,997
Trustees' fees 12,382 23,498 4,636 23,835
Insurance 1,599 3,701 748 6,001
Legal fees 3,000 7,000 1,000 10,598
Miscellaneous 5,000 4,398 2,563 9,001
------------ ----------- ---------- ------------
Total expenses 346,032 1,678,508 208,269 2,245,743
Less:
reimbursement/waiver
from Provident
Investment Coun-
sel, Inc. (Note 3) (90,404) (7,147) (132,580) (3,878)
------------ ----------- ---------- ------------
Net expenses 255,628 1,671,361 75,689 2,241,865
============ =========== ========== ============
Net investment income
(loss) 464,708 (811,454) (44,436) (1,771,238)
============ =========== ========== ============
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on
investments 10,690,739 27,950,275 1,053,933 48,594,775
Net unrealized
appreciation
(depreciation) of
investments (4,247,201) 15,478,042 2,348,464 56,517,702
------------ ----------- ---------- ------------
Net gain on investments 6,443,538 43,428,317 3,402,397 105,112,477
============ =========== ========== ============
NET INCREASE
IN NET ASSETS
RESULTING
FROM
OPERATIONS $ 6,908,246 $42,616,863 $3,357,961 $103,341,239
============ =========== ========== ============
</TABLE>
See Notes to Financial Statements.
63
<PAGE>
P-I-C
- ----------
BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Statements of Changes in Net Assets
Balanced
INCREASE (DECREASE) IN NET ASSETS Portfolio
----------------------------------
Year Year
ended ended
From operations: October 31, 1999 October 31, 1998
---------------- ----------------
Net investment income (loss) $ 464,708 $ 479,629
Net realized gain (loss) on investments 10,690,739 2,840,824
Net unrealized appreciation (depreciation)
of investments (4,247,201) 3,069,602
------------- -------------
Net increase (decrease) in net assets
resulting from operations 6,908,246 6,390,055
============= =============
Transactions in interests:
Contributions by Holders 22,415,285 4,234,921
Withdrawals by Holders (38,590,582) (3,865,363)
------------- -------------
Net increase (decrease) in net assets from
transactions in interests (16,175,297) 369,558
============= =============
Total increase (decrease) in net assets (9,267,051) 6,759,613
============= =============
NET ASSETS
Beginning of period 42,143,141 35,383,528
------------- -------------
End of period $ 32,876,090 $ 42,143,141
------------- -------------
+ Commencement of operations.
See Notes to Financial Statements.
64
<PAGE>
<TABLE>
<CAPTION>
Growth Mid Cap Small Cap
Portfolio Portfolio Portfolio
- ---------------------------------- ---------------------------------- ----------------------------------
Year Year Year Dec. 31, 1997+ Year Year
ended ended ended through ended ended
October 31, 1999 October 31, 1998 October 31, 1999 October 31, 1998 October 31, 1999 October 31, 1998
- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
$ (811,454) $ (417,693) $ (44,436) $ (11,916) $ (1,771,238) $ (1,197,741)
27,950,275 9,511,479 1,053,933 (198,860) 48,594,775 (30,872,647)
15,478,042 15,517,462 2,348,464 57,277 56,517,702 (283,036)
------------- ------------- ------------ ------------ ------------- -------------
42,616,863 24,611,248 3,357,961 (153,499) 103,341,239 (32,353,424)
------------- ------------- ------------ ------------ ------------- -------------
28,654,776 64,364,321 4,331,368 9,426,366 68,296,971 123,809,971
(25,048,703) (35,037,926) (788,868) (3,509,589) (90,528,948) (57,458,705)
------------- ------------- ------------ ------------ ------------- -------------
3,606,073 29,326,395 3,542,500 5,916,777 (22,231,977) 66,351,266
------------- ------------- ------------ ------------ ------------- -------------
46,222,936 53,937,643 6,900,461 5,763,278 81,109,262 33,997,842
------------- ------------- ------------ ------------ ------------- -------------
136,082,323 82,144,680 5,763,278 -- 173,653,639 139,655,797
------------- ------------- ------------ ------------ ------------- -------------
$ 182,305,259 $ 136,082,323 $ 12,663,739 $ 5,763,278 $ 254,762,901 $ 173,653,639
------------- ------------- ------------ ------------ ------------- -------------
</TABLE>
65
<PAGE>
P-I-C
- ----------
BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Selected Ratio Data
Balanced Portfolio
----------------------------------------------
Year ended October 31,
----------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
Ratios to average net assets:*
Expenses 0.80% 0.80% 0.80% 0.80% 0.80%
Net investment income 1.45% 1.22% 1.35% 1.30% 1.57%
Portfolio turnover rate 174.19% 111.47% 104.50% 54.24% 106.50%
* Net of expense reimbursements and waivers equivalent to 0.28%, 0.18%, 0.36%,
0.90% and 0.78% of average net assets, respectively.
See Notes to Financial Statements.
66
<PAGE>
P-I-C
- ----------
BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Selected Ratio Data
Growth Portfolio
----------------------------------------------
Year ended October 31,
----------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
Ratios to average net assets:*
Expenses 1.00% 1.00% 1.00% 1.00% 1.00%
Net investment income (loss) (0.49%) (0.32%) (0.13%) (0.04%) 0.08%
Portfolio turnover rate 80.34% 81.06% 67.54% 64.09% 54.89%
* Net of expense reimbursements equivalent to 0.00%, 0.02%, 0.05%, 0.04% and
0.01% of average net assets, respectively.
See Notes to Financial Statements.
67
<PAGE>
P-I-C
- ----------
BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Selected Ratio Data
Mid Cap Portfolio
-------------------------------
Year Dec. 31, 1997**
ended through
Oct. 31, 1999 Oct. 31, 1998
------------- -------------
Ratios to average net assets:*
Expenses 0.90% 0.90%+
Net investment loss (0.53%) (0.29%)+
Portfolio turnover rate 144.64% 166.89%
* Net of expense reimbursements and waivers equivalent to 1.58% and 2.07% of
average net assets, respectively.
** Commencement of operations.
+ Annualized.
See Notes to Financial Statements.
68
<PAGE>
P-I-C
- ----------
BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Selected Ratio Data
Small Cap Portfolio
----------------------------------------------
Year ended October 31,
----------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
Ratios to average net assets:*
Expenses 1.00% 1.00% 1.00% 1.00% 1.00%
Net investment loss (0.79%) (0.68%) (0.49%) (0.59%) (0.51%)
Portfolio turnover rate 133.24% 81.75% 151.52% 53.11% 45.45%
* Net of expense reimbursements equivalent to 0.00%, 0.01%, 0.01%, 0.01% and
0.07% of average net assets, respectively.
See Notes to Financial Statements.
69
<PAGE>
P-I-C
- ----------
BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Notes to Financial Statements
1 -- ORGANIZATION
PIC Balanced and Growth Portfolios were organized on December 11, 1991, the
PIC Mid Cap Portfolio was organized on December 31, 1997 and PIC Small Cap
Portfolio was organized on March 22, 1993 as separate trusts under the laws of
the State of New York (each a "Portfolio" and collectively the "Portfolios").
The beneficial interests in each Portfolio are divided into an unlimited number
of non-transferable interests, par value $.01 each. The Portfolios are
registered under the Investment Company Act of 1940 as open-end, diversified
management investment companies.
2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Portfolios. 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. Each Portfolio intends to comply with the
requirements of the Internal Revenue Code applicable to it. Therefore,
no federal income tax provision is required.
C. 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.
D. Accounting Estimates. In preparing financial statements in conformity
with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements, as well as
the reported amounts of revenues and expenses during the periods
presented. Actual results could differ from those estimates.
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P-I-C
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BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Notes to Financial Statements,
continued
3 -- TRANSACTIONS WITH AFFILIATES
Each Portfolio has entered into an investment advisory agreement with
Provident Investment Counsel, Inc. ("PIC") and an administration agreement with
Investment Company Administration LLC ("ICA") pursuant to which agreements
certain employees of these entities serve as officers and/or trustees of the
Portfolios. PIC and ICA also provide management services necessary for the
operations of the Portfolios and furnish office facilities.
PIC receives from Balanced Portfolio an investment advisory fee at the
annual rate of 0.60% of its average daily net assets, 0.80% from the Growth
Portfolio, 0.70% from the Mid Cap Portfolio, and 0.80% from the Small Cap
Portfolio. In addition, PIC has voluntarily taken to limit the expenses of the
Balanced Portfolio to 0.80% of its average net assets, 1.00% for the Growth
Portfolio, 0.90% for the Mid Cap Portfolio, and 1.00% for the Small Cap
Portfolio.
Fees waived and expenses reimbursed by PIC for the year ended October 31,
1999 were as follows:
Waived Reimbursed
Fees Expenses
------- ----------
Balanced Portfolio $90,404 $ --
Growth Portfolio 7,147 --
Mid Cap Portfolio 58,869 73,711
Small Cap Portfolio 3,878 --
ICA receives for its services a fee at the annual rate of 0.10% of the
average daily net assets of each Portfolio subject to an annual minimum of
$45,000 (except for Balanced Portfolio which has no minimum). Fees paid to ICA
for the year ended October 31, 1999 are stated in the respective Portfolios'
Statement of Operations.
On December 19, 1995, each Portfolio approved a Deferred Compensation Plan
for Trustees (the "Plan"). Trustees are entitled to receive $2,500 per quarter
and $500 per meeting attended, which is allocated among the Portfolios. Trustees
can elect to receive payment in cash or defer payments provided for in the Plan.
If a Trustee elects to defer payment, the Plan provides for the creation of a
deferred payment account (phantom share account). This account accumulates the
deferred fees earned and the value of the account is adjusted at the end of each
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P-I-C
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BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Notes to Financial Statements,
continued
quarter to reflect a value which would have been earned if the account had been
invested in designated investments. The Portfolios recognize as trustee expense
amounts accrued as meetings are attended plus the change in the value of the
phantom share account determined on a quarterly basis.
4 -- INVESTMENT TRANSACTIONS
The aggregate cost of purchases and the proceeds from sales of investment
securities, other than short-term obligations, for the year ended October 31,
1999 were as follows:
Purchases Sales
------------ ------------
Balanced Portfolio $ 54,676,496 $ 69,053,873
Growth Portfolio 128,004,046 135,004,771
Mid Cap Portfolio 14,447,474 11,804,528
Small Cap Portfolio 291,632,958 317,295,454
The Balanced Portfolio purchased $19,680,976 and sold $18,162,659 of U.S.
Government securities. There were no purchases or sales of U.S. Government
securities by the Growth, Mid Cap and Small Cap Portfolios.
The aggregate gross unrealized appreciation and depreciation of investment
securities at October 31, 1999, based on their cost for federal income tax
purposes, were as follows:
Tax Gross Gross
Cost of Unrealized Unrealized
Investments Appreciation Depreciation
------------ ------------ ------------
Balanced Portfolio $ 27,883,900 $ 3,841,540 $ (139,649)
Growth Portfolio 119,734,492 51,804,877 (530,001)
Mid Cap Portfolio 9,929,191 2,570,517 (176,758)
Small Cap Portfolio 191,628,800 74,295,755 (8,157,837)
72
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P-I-C
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BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Report of Independent Accountants
To the Board of Trustees of
and the holders of Interests in:
PIC Balanced Portfolio
PIC Growth Portfolio
PIC Mid Cap Portfolio
PIC Small Cap Portfolio
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the selected ratio
data present fairly, in all material respects, the financial position of PIC
Balanced Portfolio, PIC Growth Portfolio, PIC Mid Cap Portfolio and PIC Small
Cap Portfolio (the "Portfolios") at October 31, 1999, and the results of each of
their operations, the changes in each of their net assets and the selected ratio
data for the year then ended, in conformity with generally accepted accounting
principles. These financial statements and selected ratio data (hereafter
referred to as "financial statements") are the responsibility of the Portfolios'
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these financial
statements in accordance with generally accepted auditing standards, which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities at October 31, 1999, by correspondence with the
custodian and brokers, provides a reasonable basis for the opinion expressed
above. The financial statements of the Portfolios as of October 31, 1998,
including the selected ratio data for each of the periods prior to October 31,
1998, were audited by other independent accountants whose report dated December
3, 1998 expressed an unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
December 3, 1999
73
<PAGE>
P-I-C
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BALANCED
GROWTH
MID CAP
SMALL CAP
PORTFOLIOS
- ----------
Change in Independent Accountant
On August 27, 1999, McGladrey & Pullen, LLP ("McGladrey") resigned as
independent auditors of PIC Investment Trust, PIC Balanced Portfolio, PIC Growth
Portfolio, PIC Mid Cap Portfolio and PIC Small Cap Portfolio pursuant to an
agreement by PricewaterhouseCoopers LLP ("PwC") to acquire McGladrey's
investment company practice. The McGladrey partners and professionals serving
the Portfolios at the time of the acquisition joined PwC.
The reports of McGladrey on the financial statements of PIC Investment Trust,
PIC Balanced Portfolio, PIC Growth Portfolio, PIC Mid Cap Portfolio and PIC
Small Cap Portfolio during the past two fiscal years contained no adverse
opinion or disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope or accounting principles.
In connection with its audits for the two most recent fiscal years and through
August 27, 1999, there were no disagreements with McGladrey on any matter of
accounting principle or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
McGladrey would have caused it to make reference to the subject matter of
disagreement in connection with its report.
On September 1, 1999, and October 25, 1999, PIC Portfolios and PIC Investment
Trust, respectively, with the approval of their Boards of Trustees and their
Audit Committees, engaged PwC as their independent auditors.
74
<PAGE>
- ----------------------------
Provident Investment Counsel
Mutual Funds
- ----------------------------
Trustees and Officers
TRUSTEES AND OFFICERS -- P-I-C INVESTMENT TRUST
Thomas J. Condon, Trustee
Jettie M. Edwards, Trustee
Bernard J. Johnson, Trustee Emeritus
Wayne H. Smith, Trustee
Richard N. Frank, Trustee
James Clayburn LaForce, Trustee
Angelo R. Mozilo, Trustee
Douglass B. Allen, President and Trustee
Aaron W.L. Eubanks, Sr., Vice President and Secretary
William T. Warnick, Vice President and Treasurer
TRUSTEES AND OFFICERS -- P-I-C PORTFOLIOS
Thomas J. Condon, Trustee
Richard N. Frank, Trustee
James Clayburn LaForce, Trustee
Angelo R. Mozilo, Trustee
Jettie M. Edwards, Trustee
Wayne H. Smith, Trustee
Bernard J. Johnson, Trustee Emeritus
Douglass B. Allen, President and Trustee
Aaron W.L. Eubanks, Sr., Vice President and Secretary
William T. Warnick, Vice President and Treasurer
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker, LLP
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
This report is intended for shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.
Past performance results shown in this report should not be considered a
representation of future performance. Share price and returns will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Statements and other information herein are dated and are subject to change.
