PIC SMALL CAP. GROWTH FUND
Annual Report
October 31, 1995
<PAGE>
PIC SMALL CAP. GROWTH FUND
President's Message
The following is an interview with the members of the investment team at
Provident Investment Counsel regarding the PIC Small Cap Growth Portfolio (the
"portfolio").
Question: How did the PIC Small Cap Growth Fund perform relative to
overall markets for the fiscal year ended October 31, 1995?
Answer: The Standard and Poors 500 Index, a broad measure of the market's
overall performance, rose 23.11%, while the Fund rose 44.88%. The Russell 2000
Index and the Wilshire Small Company Growth Index, two widely recognized
independent consultant benchmarks for small capitalization stocks, rose 20.59%
and 25.20%, respectively.
Question: The broad market reached record levels early in 1995 and has
continued to advance for most of the year. What were some of the factors
attributable to this rise?
Answer: The year 1994 ended with uncertainty and weak financial markets due to
an economic transition that had taken place during the year which included the
Federal Reserve Board of Governors raising interest rates six times. During the
first quarter of 1995 investors gained confidence that the economy was beginning
to slow in reaction to the rate increases. The market's advance began despite a
weak dollar and an economic crisis in Mexico with the hopes of a domestic soft
landing for the economy.
Question: What are some of the sectors that have helped the overall markets
and the Fund's performance?
Answer: The technology sector has provided leadership most of the year supported
by high rates of revenue and earnings growth, along with visibility for future
sustainable growth. Companies in fields such as telecommunications, specialty
finance, consumer services, health care and health technology also added to the
market and the Fund's performance.
Question: Will these sectors continue to lead the market going forward?
Answer: We believe selected stocks in these sectors that have a sustainable
revenue and earnings growth rates will be rewarded going forward. We have begun
to see a greater disparity in performance of individual issues in strong
segments of the market such as technology. As always at PIC we are focusing on
those issues that continue to show revenue and earnings growth along with
visibility for future sustainable earnings growth.
Question: What is the outlook for the near future for the market and the Fund?
Answer: During the third quarter we saw some sluggish earnings reports from a
number of economically sensitive companies that would seem to reflect a slow but
steady domestic outlook for the economy. We are seeing a rotation in the market
toward companies with consistently growing revenues and earnings rather than a
reliance on upside earnings surprises. The reasonable level of inflation
currently along with the potential for near term reductions in interest rates
appears positive for the Fund's holdings.
<PAGE>
PIC SMALL CAP. GROWTH FUND
President's Message, continued;
[graphical material omitted]
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. GROWTH FUND
Statement of Assets and Liabilities as of October 31, 1995
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in PIC Small Cap. Portfolio, at value $130,331,871
Prepaid insurance 3,944
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets 130,335,815
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LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued expenses 28,476
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Applicable to 6,971,883 shares of beneficial interest outstanding $130,307,339
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $ 18.69
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- ------------------------------------------------------------------------------------------------------------------------------------
SOURCE OF NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $ 91,160,399
Accumulated net investment loss (939,274)
Accumulated net realized loss on investments (13,682,637)
Net unrealized appreciation of investments 53,768,851
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $130,307,339
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. GROWTH FUND
Statement of Operations Year ended October 31, 1995
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net investment loss from Portfolio $ (488,787)
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Administration fees (Note 3) 202,847
Reports to shareholders 5,999
Trustees' fees 10,625
Auditing fee 10,001
Legal fee 9,223
Transfer agent's fee 8,501
Custody and accounting services fee 6,000
Miscellaneous 6,954
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 260,150
Less, reimbursement/waiver by Provident Investment Counsel, Inc. (Note 3) (260,150)
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses -0-
====================================================================================================================================
Net investment loss (488,787)
- ------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized loss on investments (792,768)
Change in net unrealized appreciation of investments 39,983,063
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain on investments 39,190,295
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 38,701,508
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. GROWTH FUND
Statement of Changes in Net Assets
INCREASE IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Year Year
ended ended
From operations: October 31, 1995 October 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment loss $ (488,787) $ (394,380)
Net realized loss on investments (792,768) (12,561,378)
Change in unrealized appreciation of investments 39,983,063 11,985,084
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 38,701,508 (970,674)
====================================================================================================================================
Transactions in shares of beneficial interest:
Purchases of 791,568 and 447,942 shares, respectively 12,507,087 5,531,321
Redemptions of 357,853 and 236,228 shares, respectively (5,217,154) (2,824,393)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from share transactions 7,289,933 2,706,928
====================================================================================================================================
Total increase in net assets 45,991,441 1,736,254
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of year 84,315,898 82,579,644
- ------------------------------------------------------------------------------------------------------------------------------------
End of year $130,307,339 $ 84,315,898
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. GROWTH FUND
Financial Highlights
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------------------------------------------------------------------------------------------------------------
Year Year September 30, 1993*
ended ended through
October 31, 1995 October 31, 1994 October 31, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 12.90 $ 13.05 $ 12.83
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.07) (.06) (.01)
Net realized and unrealized gain (loss)
on investments 5.86 (.09) .23
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 5.79 (.15) .22
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 18.69 $ 12.90 $ 13.05
====================================================================================================================================
Total return 44.88% (1.15%)+ 19.50%+++
====================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (millions) $ 130.3 $ 84.3 $ 82.6
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:+**
Expenses 1.00% 1.00% 1.00%++
Net investment loss (.51%) (.49%) (.79%)++
<FN>
*Commencement of operations.
+Net of expense reimbursements.
**Includes the Fund's shares of expenses, net of expense reimbursements and
waivers, allocated from PIC Small Cap. Portfolio. If the expense
reimbursements and waivers, with respect to the Fund and PIC Small Cap.
Portfolio, had not been made, the ratio of expenses to average net assets would
have been 1.34%, 1.47% and 1.22%, respectively.
++Annualized.
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
PIC SMALL CAP. GROWTH FUND
Notes to Financial Statements October 31, 1995
1 - ORGANIZATION
- --------------------------------------------------------------------------------
PIC Small Cap. Growth Fund (the "Fund") is one of six series of PIC
Investment Trust (the "Trust"). The Trust was organized on December 11, 1991 as
a Delaware business trust, with an unlimited number of shares of beneficial
interest of $.01 par value, and is registered under the Investment Company Act
of 1940 as an open-end, diversified management investment company. The Fund
invests substantially all of its assets in the PIC Small Cap. Portfolio (the
"Portfolio"), a separate registered management investment company having the
same investment objective as the Fund. At October 31, 1995, the Fund owned
99.99% of the total net assets of the Portfolio. The financial statements of the
Portfolio are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements.
2 - SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. Investment Valuation. The Fund reflects its investment in the Portfolio
at its proportionate interest in the value of the Portfolio's net assets.
Valuation of securities by the Portfolio is discussed at Note 2A of the
Portfolio's Notes to Financial Statements.
B. Investment Income and Dividends to Shareholders. The Fund earns income,
net of the expenses of the Portfolio, daily on its investment in the Portfolio.
All net investment income and realized and unrealized gains or losses on
investments of the Portfolio are allocated pro rata among the Fund and the other
Holders of Interests in the Portfolio. Dividends, if any, are paid annually to
shareholders of the Fund and recorded on the ex-dividend date.
C. Federal Income Taxes. The Fund intends to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no federal
income tax provision is required.
3 - TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
The Trust has entered into administration agreements with Provident
Investment Counsel, Inc. ("PIC") and Investment Company Administration
Corporation ("ICAC"), pursuant to which agreements certain employees of these
entities serve as officers and/or trustees of the Trust and the Portfolio. PIC
and ICAC also provide management services necessary for the operations of the
Trust and the Portfolio and furnish office facilities. PIC receives a fee for
its services to the Fund at the rate of 0.20% of the average daily net assets of
the Fund, but waived its fee of $192,850 for the year ended October 31, 1995.
PIC has voluntarily agreed to reimburse the Fund to the extent necessary so that
the expenses of the Fund, including those expenses allocated from the Portfolio,
do not exceed 1.00% of the Fund's average net assets. The amount of
reimbursement for the year ended October 31, 1995 was $67,300.
ICAC receives an annual fee for its services at the rate of $10,000.
<PAGE>
PIC SMALL CAP. GROWTH FUND
Notes to Financial Statements, continued
First Fund Distributors, Inc. (an affiliate of ICAC), a registered
broker-dealer, acts as the principal underwriter for the Trust in connection
with the offering of its shares, but receives no compensation for its services.
4 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
Additions and reductions in the Fund's investment in the Portfolio
aggregated $12,662,902 and $5,287,514, respectively.
<PAGE>
PIC SMALL CAP. GROWTH FUND
Independent Auditor's Report
To the Board of Trustees of
PIC Investment Trust
and the Shareholders of
PIC Small Cap. Growth Fund
We have audited the accompanying statement of assets and liabilities of
PIC Small Cap. Growth Fund (a series of PIC Investment Trust) as of October
31, 1995, the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended and the financial highlights for each of the two years in the period then
ended and for the period September 30, 1993 (commencement of operations) to
October 31, 1993. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
PIC Small Cap. Growth Fund as of October 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
McGladrey & Pullen, LLP
New York, New York
November 22, 1995
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES - 94.6% Shares Value
Aerospace/Defense .. 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OEA, Inc. 23,900 $ 651,275
- ------------------------------------------------------------------------------------------------------------------------------------
Apparel & Shoes .. 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Eastbay, Inc. 4,000 85,000
- ------------------------------------------------------------------------------------------------------------------------------------
Audio/Video .. 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Harman International Industries, Inc. 14,595 673,194
- ------------------------------------------------------------------------------------------------------------------------------------
Bar Coding Systems .. 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Peak Technologies Group, Inc. 6,800 171,700
- ------------------------------------------------------------------------------------------------------------------------------------
Beverages .. 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Big Rock Brewery Ltd.* 12,900 129,000
- ------------------------------------------------------------------------------------------------------------------------------------
Beverage/Food .. 0.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Redhook Ale Brewer, Inc. 12,800 377,600
- ------------------------------------------------------------------------------------------------------------------------------------
Bio Technology .. 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Protein Design Labs, Inc. 13,500 226,125
- ------------------------------------------------------------------------------------------------------------------------------------
Builder .. 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Palm Harbor Homes, Inc. 16,600 313,325
- ------------------------------------------------------------------------------------------------------------------------------------
Building Products .. 5.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Fastenal Co. 204,000 7,101,750
- ------------------------------------------------------------------------------------------------------------------------------------
Business Services .. 2.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Accustaff Inc.* 28,900 1,286,050
Apac Teleservices, Inc. 20,000 505,000
Dendrite International, Inc. 11,000 191,125
Health Management Systems, Inc. 9,750 312,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value
Business Services, continued
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PMT Services, Inc.* 31,700 $ 851,938
Rural Metro Corp. 10,400 249,600
SPS Transaction Services Corp. 12,000 316,500
- ------------------------------------------------------------------------------------------------------------------------------------
Total Business Services 3,712,213
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Hardware .. 1.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Alantec Corp. 17,000 607,750
CDW Computers Centers, Inc.* 25,100 1,217,350
Zebra Technologies Corp., Class A 7,500 446,250
- ------------------------------------------------------------------------------------------------------------------------------------
Total Computer Hardware 2,271,350
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Services .. 2.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Cambridge Technology Partners, Inc. 14,700 834,225
Cycare Systems, Inc. 5,000 155,000
Datastream Systems, Inc. 13,700 304,825
Dataworks Corp. 7,000 97,125
Gartner Group, Inc., Class A 14,000 610,750
HBO & Co. 5,900 417,425
HCIA, Inc. 18,100 493,225
Itron, Inc. 19,600 568,400
- ------------------------------------------------------------------------------------------------------------------------------------
Total Computer Services 3,480,975
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Software .. 15.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Aspen Technology, Inc.* 14,200 390,500
Astea International, Inc. 10,500 189,000
Avid Technology Inc.* 22,300 975,625
BDM International, Inc. 13,400 335,000
Computron Software, Inc. 4,600 78,200
Eagle Point Software Corp. 7,700 148,225
Electronics For Imaging, Inc. 14,900 1,225,525
Epic Design Technology, Inc.* 10,000 460,000
Fiserv, Inc.* 42,700 1,099,525
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value
Computer Software, continued
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HNC Software, Inc. 10,200 $ 260,100
Hyperion Software Corp. 14,200 699,350
Integrated Systems, Inc. 2,000 70,000
McAfee Associates 6,700 390,275
Microchip Technology, Inc. 82,200 3,262,313
Netmanage, Inc. 12,000 244,500
Netscape Communications Corp. 7,800 686,400
Network General Corp.* 27,200 1,128,800
Parametric Technology Corp.* 58,400 3,905,500
Peoplesoft, Inc.* 16,400 1,410,400
Pinnacle Systems, Inc. 6,600 207,075
Platinum Technology, Inc. 12,200 222,650
Pure Software, Inc. 4,300 158,025
Smith Micro Software, Inc. 13,000 159,250
Softkey International, Inc. 20,300 639,450
Software Artistry, Inc. 3,800 62,700
Synopsys, Inc.* 42,200 1,582,500
Transactions Systems Architects, Inc. 22,000 572,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Computer Software 20,562,888
- ------------------------------------------------------------------------------------------------------------------------------------
Cosmetics and Soaps .. 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
USA Detergents, Inc. 7,000 178,500
- ------------------------------------------------------------------------------------------------------------------------------------
Credit & Finance .. 1.6%
- ------------------------------------------------------------------------------------------------------------------------------------
DVI, Inc. 13,900 184,175
First USA, Inc. 37,000 1,702,000
General Acceptance Corp. 8,300 219,950
- ------------------------------------------------------------------------------------------------------------------------------------
Total Credit & Finance 2,106,125
- ------------------------------------------------------------------------------------------------------------------------------------
Discount .. 0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Dollar Tree Stores, Inc. 26,800 723,600
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value
Drugs .. 0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Watson Pharmaceuticals, Inc. 18,500 $ 827,875
- ------------------------------------------------------------------------------------------------------------------------------------
Educational Programs .. 1.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Apollo Group, Inc., Class A 27,399 719,224
Minnesota Educational Computing Corp. 18,200 564,200
- ------------------------------------------------------------------------------------------------------------------------------------
Total Educational Programs 1,283,424
- ------------------------------------------------------------------------------------------------------------------------------------
Electric Components/Semiconductors .. 9.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Adflex Solutions, Inc. 13,700 363,050
Alliance Semiconductor Corp.* 5,625 172,969
Atmel Corp.* 128,000 4,000,000
Brooks Automation Inc. 15,300 275,400
C.P. Clare Corp. 18,900 489,037
Electroglas, Inc.* 20,700 1,454,175
Information Storage Devices, Inc. 16,800 365,400
Linear Technology Corp. 85,200 3,727,500
Mattson Technology, Inc.* 16,600 365,200
Ontrak Systems, Inc. 9,000 176,625
Paradigm Technology, Inc. 18,400 404,800
- ------------------------------------------------------------------------------------------------------------------------------------
Total Electric Components/Semiconductors 11,794,156
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment/Peripherals .. 0.9%
- ------------------------------------------------------------------------------------------------------------------------------------
American Superconductor Corp.* 17,750 186,375
Anadigics, Inc. 9,800 218,050
Cybex Computer Products Corp. 1,600 32,800
Eltron International, Inc. 11,800 383,500
Micros Systems, Inc. 8,600 320,350
- ------------------------------------------------------------------------------------------------------------------------------------
Total Electrical Equipment/Peripherals 1,141,075
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Products .. 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Chicago Miniature Lamp, Inc. 13,500 236,250
Pacific Scientific Co. 21,700 458,413
- ------------------------------------------------------------------------------------------------------------------------------------
Total Electrical Products 694,663
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value
Electronics .. 2.9%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Burr-Brown Corp. 6,700 $ 217,750
LAM Research Corp.* 14,100 858,338
Maxim Integrated Products, Inc. 32,500 2,429,375
Plasma & Materials Technologies, Inc. 11,500 132,250
Semitool, Inc. 7,700 125,125
- ------------------------------------------------------------------------------------------------------------------------------------
Total Electronics 3,762,838
- ------------------------------------------------------------------------------------------------------------------------------------
Engineering & Construction .. 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Oakwood Homes Corp. 15,200 570,000
- ------------------------------------------------------------------------------------------------------------------------------------
Entertainment & Leisure .. 2.3%
- ------------------------------------------------------------------------------------------------------------------------------------
HFS, Inc. 47,500 2,909,375
Sinclair Broadcasting Group, Inc., Class A 4,000 83,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Entertainment & Leisure 2,992,375
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Services .. 2.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Advanta Corp., Class B 10,600 378,950
Bisys Group, Inc.* 23,100 646,800
Credit Acceptance Corp.* 44,400 1,043,400
Oxford Resources Corp.* 26,800 703,500
- ------------------------------------------------------------------------------------------------------------------------------------
Total Financial Services 2,772,650
- ------------------------------------------------------------------------------------------------------------------------------------
Funeral Services .. 0.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Myriad Genetics, Inc. 13,600 367,200
- ------------------------------------------------------------------------------------------------------------------------------------
Gaming .. 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Trump Hotels & Casino Resorts, Inc. 18,700 317,900
- ------------------------------------------------------------------------------------------------------------------------------------
Health Industry Services .. 0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Physician Reliance Network 25,300 841,225
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value
Household Products .. 0.9%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Blyth Industries, Inc.* 13,400 $ 676,700
Duracraft Corp.* 19,800 430,650
- ------------------------------------------------------------------------------------------------------------------------------------
Total Household Products 1,107,350
- ------------------------------------------------------------------------------------------------------------------------------------
Industrials .. 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Continental Waste Industries, Inc. 10,000 172,500
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance .. 6.4%
- ------------------------------------------------------------------------------------------------------------------------------------
HCC Insurance Holdings, Inc.* 35,000 1,216,250
Healthsource, Inc.* 18,100 959,300
Oxford Health Plans, Inc.* 79,400 6,213,050
- ------------------------------------------------------------------------------------------------------------------------------------
Total Insurance 8,388,600
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery/Tools .. 0.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Cognex Corp. 8,400 501,900
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing .. 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Ultralife Batteries, Inc. 6,900 139,725
- ------------------------------------------------------------------------------------------------------------------------------------
Medical/Dental Products ..0.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Arrow International, Inc. 27,000 1,154,250
- ------------------------------------------------------------------------------------------------------------------------------------
Medical/Dental Services .. 1.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Avecor Cardiovascular, Inc. 38,000 703,000
Compdent Corp. 19,100 594,487
Orthodontic Centers of America, Inc. 13,500 432,000
Pediatrix Medical Group, Inc. 8,900 192,463
Quintiles Transnational Corp. 6,600 424,050
- ------------------------------------------------------------------------------------------------------------------------------------
Total Medical/Dental Services 2,346,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value
Medical Instruments .. 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Angeion Corp. 25,700 $ 195,962
- ------------------------------------------------------------------------------------------------------------------------------------
Medical Products .. 5.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Gulf South Medical Supply* 30,400 630,800
IDEXX Laboratories, Inc.* 110,700 4,511,025
Isolyser Company, Inc.* 29,400 525,525
Omnicare, Inc. 11,400 413,250
Target Therapeutics, Inc.* 17,500 1,356,250
- ------------------------------------------------------------------------------------------------------------------------------------
Total Medical Products 7,436,850
- ------------------------------------------------------------------------------------------------------------------------------------
Medical Services .. 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Medpartners, Inc. 4,100 114,800
- ------------------------------------------------------------------------------------------------------------------------------------
Medical Specialties .. 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Neopath, Inc. 7,700 173,250
- ------------------------------------------------------------------------------------------------------------------------------------
Networking .. 1.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Ascend Communications, Inc. 24,000 1,560,000
Fore Systems, Inc. 13,300 704,900
Legato Systems, Inc. 4,700 171,550
SDL, Inc. 4,000 102,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Networking 2,538,450
- ------------------------------------------------------------------------------------------------------------------------------------
Office Equipment/Supplies .. 1.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Viking Office Products, Inc.* 48,000 2,136,000
- ------------------------------------------------------------------------------------------------------------------------------------
Office Products .. 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Office Products Co. 10,400 178,100
- ------------------------------------------------------------------------------------------------------------------------------------
Package Goods/Cosmetics .. 0.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Luxottica Group SPA Sponsored ADR 18,900 921,375
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value
Pharmaceuticals .. 0.3%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Express Scripts, Inc.* 10,700 $ 406,600
- ------------------------------------------------------------------------------------------------------------------------------------
Pollution Control .. 0.8%
- ------------------------------------------------------------------------------------------------------------------------------------
United Waste Systems, Inc. 11,600 458,200
USA Waste Services, Inc. 29,600 621,600
- ------------------------------------------------------------------------------------------------------------------------------------
Total Pollution Control 1,079,800
- ------------------------------------------------------------------------------------------------------------------------------------
Publishing/Advertising .. 0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
IVI Publishing Inc.* 29,200 292,000
United International Holdings, Class A* 34,300 540,225
- ------------------------------------------------------------------------------------------------------------------------------------
Total Publishing/Advertising 832,225
- ------------------------------------------------------------------------------------------------------------------------------------
Radio, Television & Broadcasting .. 1.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Clear Channel Communications, Inc.* 15,650 1,283,300
Emmis Broadcasting Corp., Class A 2,000 53,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Radio, Television & Broadcasting 1,336,300
- ------------------------------------------------------------------------------------------------------------------------------------
Real Estate .. 0.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Insignia Financial Group, Class A* 37,900 1,023,300
- ------------------------------------------------------------------------------------------------------------------------------------
Real Estate Investment .. 0.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Apartment Investment & Management Co., Class A* 24,000 483,000
Storage USA, Inc. 2,200 64,350
- ------------------------------------------------------------------------------------------------------------------------------------
Total Real Estate Investment 547,350
- ------------------------------------------------------------------------------------------------------------------------------------
Restaurants .. 2.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Lone Star Steakhouse & Saloon* 30,200 1,166,475
Outback Steakhouse, Inc.* 33,000 1,035,375
Starbucks Corp.* 11,000 431,750
- ------------------------------------------------------------------------------------------------------------------------------------
Total Restaurants 2,633,600
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value
Retail .. 3.8%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Concord EFS, Inc. 24,750 $ 853,875
Cooper & Chyan Technology, Inc. 4,000 56,500
Creative Computers, Inc. 9,500 275,500
Just For Feet, Inc. 15,000 354,375
Kenneth Cole Productions, Class A* 24,100 985,088
Sunglass Hut International, Inc.* 92,200 2,512,450
- ------------------------------------------------------------------------------------------------------------------------------------
Total Retail 5,037,788
- ------------------------------------------------------------------------------------------------------------------------------------
Specialty Chains .. 1.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Baby Superstore, Inc.* 18,450 871,762
Garden Ridge Corp. 17,700 632,775
- ------------------------------------------------------------------------------------------------------------------------------------
Total Specialty Chains 1,504,537
- ------------------------------------------------------------------------------------------------------------------------------------
Technology .. 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Checkfree Corp. 5,500 116,188
Oak Technology, Inc. 6,800 372,300
Verity, Inc. 3,000 110,250
- ------------------------------------------------------------------------------------------------------------------------------------
Total Technology 598,738
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications .. 5.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Active Voice, Corp. 15,700 412,125
Arch Communications Group 15,400 417,725
Aspect Telecommunications Corp. 12,000 412,500
CAI Wireless Systems* 13,800 113,850
Cascade Communications Corp. 17,000 1,211,250
Coherent Communications System Corp. 24,400 500,581
Colonial Data Technologies Corp. 14,300 196,625
DSP Communications, Inc. 20,200 732,250
Glenayre Technologies, Inc.* 17,550 1,127,587
Inter-Tel, Inc., Class A 15,700 233,537
MIDCOM Communications, Inc. 17,000 255,000
MRV Communications, Inc. 20,300 385,700
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
EQUITY SECURITIES, continued Shares Value
Telecommunications, continued
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
P-Com, Inc. 34,200 $ 589,950
Pronet, Inc. 8,000 204,000
Tel-Save Holdings, Inc. 6,500 90,187
- ------------------------------------------------------------------------------------------------------------------------------------
Total Telecommunications 6,882,867
- ------------------------------------------------------------------------------------------------------------------------------------
Textiles .. 2.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Tommy Hilfiger Corp. 93,700 3,572,313
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation .. 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Atlas Air, Inc. 6,500 96,687
Railtex Inc.* 5,500 114,125
- ------------------------------------------------------------------------------------------------------------------------------------
Total Transportation 210,812
- ------------------------------------------------------------------------------------------------------------------------------------
Wireless Services .. 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Wireless One, Inc. 9,900 116,325
- ------------------------------------------------------------------------------------------------------------------------------------
Total Common Stock (Cost $69,648,751) 123,417,668
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER .. 4.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co., 5.73%, 11/22/95 $ 6,000,000 6,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Commercial Paper (Cost $6,000,000) 6,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS .. 0.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Government Securities, Inc., 5.56%, due 11/1/95
(Collateralized by $1,092,315 U.S. Treasury Note, 7.50%,
due 1/31/97) (Cost $1,060,500) 1,060,500 1,060,500
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost $76,709,251) 100.1% 130,478,168
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Net Assets as of October 31, 1995
OTHER ASSETS - 0.4%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Cash $ 43
Receivables:
For investment securities sold 465,642
Dividends and interest 13,467
Prepaid insurance 997
Deferred organization costs 30,000
Other assets 13,254
- ------------------------------------------------------------------------------------------------------------------------------------
Total other assets 523,403
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES - (0.5%)
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for investment securities purchased 566,575
Accrued expenses 102,979
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 669,554
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $130,332,017
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*Non-incoming producing security.
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Operations Year ended October 31, 1995
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
Income:
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Dividends $ 241,548
Interest 234,038
- ------------------------------------------------------------------------------------------------------------------------------------
Total income 475,586
====================================================================================================================================
Expenses:
- ------------------------------------------------------------------------------------------------------------------------------------
Investment advisory fee (Note 3) 771,499
Administration fees 96,687
Accounting services fee 66,383
Custodian fee 37,018
Auditing fee 20,498
Trustees fees 17,100
Legal fee 4,997
Amortization of organization costs 9,998
Miscellaneous 6,907
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 1,031,087
Less, reimbursement/waiver from Advisor (Note 3) (66,713)
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses 964,374
====================================================================================================================================
Net investment loss (488,788)
- ------------------------------------------------------------------------------------------------------------------------------------
NET REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized loss from security transactions (792,768)
Change in net unrealized appreciation of investments for the period 39,983,109
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain on investments 39,190,341
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $38,701,553
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
PIC SMALL CAP. PORTFOLIO
Statement of Changes in Net Assets
INCREASE IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Year Year
ended ended
From operations: October 31, 1995 October 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment loss $ (488,788) $ (394,381)
Net realized loss on investments (792,768) (12,561,396)
Change in unrealized appreciation of investments 39,983,109 11,985,101
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 38,701,553 (970,676)
====================================================================================================================================
Transactions in interests:
Contributions by Holders 12,662,902 5,598,213
Withdrawals by Holders (5,287,514) (2,952,207)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from transactions in interests 7,375,388 2,646,006
====================================================================================================================================
Total increase in net assets 46,076,941 1,675,330
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of year 84,255,076 82,579,746
- ------------------------------------------------------------------------------------------------------------------------------------
End of year $130,332,017 $84,255,076
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
PIC SMALL CAP. PORTFOLIO
Notes to Financial Statements October 31, 1995
1 - ORGANIZATION
- --------------------------------------------------------------------------------
PIC Small Cap. Portfolio (the "Portfolio") was organized on March 22,
1993 as a trust under the laws of the State of New York. The beneficial
interests in the Portfolio are divided into an unlimited number of
non-transferable Interests, par value $.01 each. The Portfolio is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company.
2 - SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
The following is a summary of significant accounting policies consistently
followed by the Portfolio. These policies are in conformity with generally
accepted accounting principles.
A. Valuation of Securities. Equity securities listed on a national
securities exchange or traded on the NASDAQ system are valued at their last sale
price. Other equity securities and debt securities for which market quotations
are readily available are valued at the mean between their bid and asked price,
except that debt securities maturing within 60 days are valued on an amortized
cost basis. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by the Board of Trustees.
B. Federal Income Taxes. The Portfolio intends to comply with the
requirements of the Internal Revenue Code applicable to it. Therefore, no
federal income tax provision is required.
C. Deferred Organization Expense. Organization costs of the Portfolio are
being amortized on a straight line basis over a period of sixty months. During
the amortization period the proceeds of any redemption of the original Interests
in the Portfolio by any Holder thereof will be reduced by a pro rata portion of
any then unamortized organization costs based on the ratio of Interests redeemed
to the total initial Interests outstanding prior to the redemption.
D. Other. Securities transactions are recorded on the trade date basis.
Realized gains and losses from securities transactions are reported on an
identified cost basis. Interest is recorded as accrued, and dividend income is
recorded on the ex-dividend date.
3 - TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
The Portfolio has entered into an investment advisory agreement with Provident
Investment Counsel, Inc. ("PIC") and an administration agreement with Investment
Company Administration Corporation ("ICAC"), pursuant to which agreements
certain employees of these entities serve as officers and/or trustees of the
Portfolio. PIC and ICAC also provide management services necessary for the
operations of the Portfolio and furnish office facilities. PIC receives a fee
for its services to the Portfolio at the rate of 0.80% of the average daily net
assets of the Portfolio. PIC has voluntarily agreed to limit the total expenses
of the Portfolio to an annual rate of 1.00% of the Portfolio's average net
assets. During the year ended October 31, 1995, PIC received $704,786 in fees
from the Portfolio, after deducting fees waived and expenses reimbursed of
$66,713. ICAC receives an annual fee for its services at the rate of .10% of
average daily net assets of the Portfolio. Fees paid to ICAC pursuant to the
agreement totalled $96,687 for the year ended October 31, 1995.
<PAGE>
PIC SMALL CAP. PORTFOLIO
Notes to Financial Statements, continued
4 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
During the year ended October 31, 1995, purchases and sales of investment
securities, other than short-term obligations, were $46,938,148 and $42,275,581,
respectively. The cost of securities for federal income tax purposes was
$76,730,851. The aggregate gross unrealized appreciation and depreciation of
portfolio securities, based on cost for federal income tax purposes, was as
follows:
<TABLE>
<S> <C>
Unrealized appreciation $55,430,938
Unrealized depreciation (1,683,622)
- --------------------------------------------------------------------------------
Net unrealized appreciation $53,747,316
================================================================================
</TABLE>
5 - SELECTED RATIO DATA
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Year Year September 30, 1993*
ended ended through
October 31, 1995 October 31, 1994 October 31, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:++
<S> <C> <C> <C>
Operating expenses 1.00%+ 1.00% 1.00%+
Net investment loss (.51%)+ (.49%) (.79%)+
Portfolio turnover rate 45.45% 63.89% 6.06%
<FN>
+Annualized.
++Net of expense reimbursements equivalent to 0.07%, 0.10% and 0.11% of average
net assets, respectively.
*Commencement of Operations.
</FN>
</TABLE>
<PAGE>
PIC SMALL CAP. PORTFOLIO
Independent Auditor's Report
To the Board of Trustees of,
and the holders of Interests in,
PIC Small Cap. Portfolio
We have audited the accompanying statement of assets of PIC Small Cap.
Portfolio as of October 31, 1995, the related statement of operations for the
year then ended and the statement of changes in net assets for each of the two
years in the period then ended. These financial statements are the
responsibility of the Portfolio's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of PIC Small Cap. Portfolio
as of October 31, 1995, the results of its operations and the changes in its net
assets for the periods indicated, in conformity with generally accepted
accounting principles.
McGladrey & Pullen, LLP
New York, New York
November 22, 1995
<PAGE>
PIC SMALL CAP. GROWTH FUND
Trustees and Officers
TRUSTEES AND OFFICERS - PIC INVESTMENT TRUST
- --------------------------------------------------------------------------------
Jeffrey J. Miller, Trustee and President
Jettie M. Edwards, Trustee
Bernard J. Johnson, Trustee
Jeffrey D. Lovell, Trustee
Wayne H. Smith, Trustee
Thad M. Brown, Vice President, Secretary and Treasurer
TRUSTEES AND OFFICERS - PIC SMALL CAP. PORTFOLIO
- --------------------------------------------------------------------------------
Jeffrey J. Miller, Trustee and President
Richard N. Frank, Trustee
James Clayburn LaForce, Trustee
Angelo R. Mozilo, Trustee
Bernard J. Johnson, Trustee Emeritus
Thad M. Brown, Vice President, Secretary and Treasurer
LEGAL COUNSEL - PIC INVESTMENT TRUST
- --------------------------------------------------------------------------------
Shereff, Friedman, Hoffman & Goodman
LEGAL COUNSEL - PIC SMALL CAP. PORTFOLIO
- --------------------------------------------------------------------------------
Heller, Ehrman, White & McAuliffe
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
McGladrey & Pullen, LLP
This report is intended for the information of shareholders of PIC Small Cap.
Growth Fund and should not be used as sales literature unless preceded or
accompanied by a current prospectus.
