<PAGE> 1
[LOGO P-I-C INSTITUTIONAL]
BALANCED FUND
SEMI-ANNUAL REPORT
APRIL 30, 1996
<PAGE> 2
P-I-C INSTITUTIONAL
BALANCED FUND
PRESIDENT'S MESSAGE
================================================================================
THE FOLLOWING IS AN INTERVIEW WITH THE MEMBERS OF THE INVESTMENT TEAM AT
PROVIDENT INVESTMENT COUNSEL REGARDING THE P-I-C INSTITUTIONAL BALANCED FUND
(THE "FUND").
Question: How did the P-I-C Institutional Balanced Fund perform relative to
overall markets for the first six months of the fiscal year ended April 30, 1996
and year to date 1996?
Answer: The Standard & Poor's 500 Index, a broad measure of the market's overall
performance, rose 11.97% for the first six months of the Fund's fiscal year and
5.38% year to date 1996 while the Fund rose 3.75% and 5.88 %, respectively. The
variance in performance of the Fund versus the index can be attributed mostly to
the last two months of 1995 and the first half of January 1996 when the Fund's
technology holdings were under pressure as investors began profit taking in this
sector. This pressure was lifted and these stocks began to perform well as
positive earnings reports were announced.
Question: What are some of the factors attributable to the Fund and the broad
market's positive performance in 1996?
Answer: Beginning in late January the Federal Reserve cut interest rates by
.25%. This seemed to fuel an already strong economy. Lower interest rates
combined with strong earnings reports from companies and record inflows into
equity mutual funds have moved the market to higher levels. Recently we have
begun to see an increase in bond yields that has caused some volatility in the
markets.
Question: What are some of the factors that have caused volatility in the bond
market in 1996?
Answer: The year began with the fixed income markets fully reflecting both a
balanced budget agreement and a weakening economy. The prospects of the former
disappeared quickly, with the result that long rates moved up from 5.95% to
6.50% by the end of March. As the result of a variety of unusual occurrences,
such as strikes at Boeing and General Motors, closing of the Federal Government
and harsher than normal winter conditions, the true state of the economy was
more difficult than usual to evaluate. It is now apparent that the economy is
growing at a reasonable rate. First quarter G.D.P. was 2.3%, with low
inflationary pressures. The prospects of an easing of monetary policy have all
but disappeared. Now the debate is centered on whether the economy will slow
down enough as a result of current higher interest rates or if the Federal
Reserve will have to move to a tighter policy.
Question: What sectors have helped the Fund to outperform the broad market year
to date?
Answer: The technology holdings that ended the year 1995 and began 1996 under
pressure have rebounded strongly as positive earnings reports have been
announced. The Fund's holdings in the entertainment and leisure sector such as
Mirage, Circus Circus and Hospitality Franchises have performed well along with
specialty finance concerns like credit card issuers First USA and MBNA.
Question: What is the outlook for both the stock and bond markets in the near
term and through the remainder of 1996?
Answer: It appears as though we have entered into a market that favors growth
oriented stocks in the near term and although valuation of some of these
securities has risen we remain confident in the ability of the Fund's holdings
to continue to show positive sales and earnings growth. Growth stocks have
historically outperformed other issues in periods of economic uncertainty
because investors are attracted to those growth issues that will deliver sales
and earnings growth in any economic environment.
The bond market appears to be pricing in a possible increase in rates by the
Federal Reserve late in 1996 and this may cause some volatility in the equity
markets later this year. We are holding a reasonable cash position in order to
dampen any volatility that may occur and have shortened the duration of the
fixed income portion of the investments in the P-I-C Balanced Portfolio.
2
<PAGE> 3
P-I-C INSTITUTIONAL
BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES as of April 30, 1996
<TABLE>
<CAPTION>
================================================================================
ASSETS
- --------------------------------------------------------------------------------
<S> <C>
Investment in P-I-C Balanced Portfolio, at value $12,499,781
Receivable from Provident Investment Counsel, Inc. (Note 3) 3,847
Prepaid insurance 154
Deferred organization costs 9,565
- --------------------------------------------------------------------------------
Total assets 12,513,347
================================================================================
LIABILITIES
- --------------------------------------------------------------------------------
Accrued expenses 4,299
================================================================================
NET ASSETS
- --------------------------------------------------------------------------------
Applicable to 965,336 shares of beneficial interest outstanding $12,509,048
================================================================================
NET ASSET VALUE PER SHARE $ 12.96
- --------------------------------------------------------------------------------
================================================================================
SOURCE OF NET ASSETS
- --------------------------------------------------------------------------------
Paid-in capital $ 9,986,796
Accumulated net realized gain on investments 505,727
Undistributed net investment income 11,301
Net unrealized appreciation of investments 2,005,224
================================================================================
NET ASSETS $12,509,048
- --------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
3
<PAGE> 4
P-I-C INSTITUTIONAL
BALANCED FUND
STATEMENT OF OPERATIONS Six Months ended April 30, 1996
<TABLE>
<CAPTION>
=========================================================================
INVESTMENT INCOME
- -------------------------------------------------------------------------
<S> <C>
Net investment income from Portfolio $ 75,093
=========================================================================
Expenses:
- -------------------------------------------------------------------------
Administration fees (Note 3) 19,476
Trustees' fees 6,215
Auditing fee 3,980
Legal fee 335
Transfer agent's fee 6,565
Custody and accounting services fee 3,000
Report to shareholders 1,492
Registration fees 1,989
Amortization of organization costs 4,972
Miscellaneous 2,602
- -------------------------------------------------------------------------
Total expenses 50,626
Less, reimbursement/waiver by Provident
Investment Counsel, Inc. (Note 3) (35,602)
- -------------------------------------------------------------------------
Net expenses 15,024
=========================================================================
Net investment income 60,069
- -------------------------------------------------------------------------
=========================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------
Net realized gain on investments 517,955
Change in net unrealized appreciation of investments (127,716)
- -------------------------------------------------------------------------
Net gain on investments 390,239
=========================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 450,308
- -------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
4
<PAGE> 5
P-I-C INSTITUTIONAL
BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
==============================================================================================================================
INCREASE IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Six Months Year
ended ended
From operations: April 30, 1996 October 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment income $ 60,069 $ 169,929
Net realized gain on investments 517,955 1,041,048
Change in unrealized appreciation of investments (127,716) 1,491,368
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 450,308 2,702,345
==============================================================================================================================
Dividends:
From net investment income (59,420) (168,227)
From net realized gains (595,121) (0)
- ------------------------------------------------------------------------------------------------------------------------------
Total dividends (654,541) (168,227)
==============================================================================================================================
Transactions in shares of beneficial interest:
Purchases of 30,095 and 674,528 shares, respectively 370,422 7,543,312
Value of 53,108 and 13,617 shares issued in payment of dividends, respectively 651,146 160,830
Redemptions of 65,399 and 554,383 shares, respectively (853,330) (6,843,102)
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from share transactions 168,238 861,040
==============================================================================================================================
Total (decrease) increase in net assets (35,995) 3,395,158
==============================================================================================================================
NET ASSETS:
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 12,545,043 9,149,885
- ------------------------------------------------------------------------------------------------------------------------------
End of period $ 12,509,048 $ 12,545,043
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
5
<PAGE> 6
P-I-C INSTITUTIONAL
BALANCED FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
==================================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------------------------------------------------------
Six Months Year Year Year June 11, 1992*
ended ended ended ended through
April 30, 1996 October 31, 1995 October 31, 1994 October 31, 1993 October 31, 1992
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.24 $11.24 $11.48 $10.82 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .06 .15 .15 .18 .04
Net realized and unrealized gain
(loss) on investments .39 2.00 (.24) .69 .78
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations .45 2.15 (.09) .87 .82
Less:
Dividends from net investment
income (.06) (.15) (.15) (.21) .00
Dividends from net realized gains (.67) .00 .00 .00 .00
- -------------------------------------------------------------------------------------------------------------------------------
Total dividends (.73) (.15) (.15) (.21) .00
- -------------------------------------------------------------------------------------------------------------------------------
Change in net asset value (.28) 2.00 (.24) .66 .82
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.96 $13.24 $11.24 $11.48 $10.82
===============================================================================================================================
Total return 7.67%++ 19.35% (.78%) 8.10% 21.14%++
===============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (millions) $ 12.5 $ 12.5 $ 9.1 $ 6.7 $ 1.2
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:+**
Expenses 1.05%++ 1.05% 1.05% 1.05% 1.05%++
Net investment income 1.00%++ 1.32% 1.37% 1.79% 2.60%++
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Commencement of operations.
+Net of expense reimbursements.
**Includes the Fund's shares of expenses, net of fee waivers and expense
reimbursements, allocated from P-I-C Balanced Portfolio. If the fee waivers and
expense reimbursements, with respect to the Fund and P-I-C Balanced Portfolio,
had not been made, the ratio of expenses to average net assets would have been
2.52%, 2.32%, 2.87%, 7.44% and 43.11%, respectively.
++Annualized.
Unaudited. See Notes to Financial Statements.
6
<PAGE> 7
P-I-C INSTITUTIONAL
BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
================================================================================
1 - ORGANIZATION
P-I-C Institutional Balanced Fund (the "Fund") is one of several series
of P-I-C 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 P-I-C Balanced Portfolio
(the "Portfolio"), a separate registered management investment company having
the same investment objective as the Fund. At April 30, 1996, 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 $12,018 for the period ended April 30, 1996. 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 1.05% of the Fund's average net assets. For the period ended April
30, 1996, PIC reimbursed expenses of the Fund amounting to $23,584. ICAC
receives an annual fee for its services at the rate of $15,000.
First Fund Distributors, Inc. (an affiliate of ICAC), a registered
broker-dealer, acts as the principal underwriter for the Trust in connection
with the offering of its shares, but receives no compensation for its services.
4 - INVESTMENT TRANSACTIONS
Additions and reductions in the Fund's investment in the Portfolio
aggregated $394,664 and $900,671, respectively.
7
<PAGE> 8
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
====================================================================================================
PERCENTAGE OF
EQUITY SECURITIES - 71.1% SHARES VALUE NET ASSETS
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AUTO PARTS - 1.2%
- ----------------------------------------------------------------------------------------------------
Autozone, Inc.* 4,000 $146,000 1.2%
Autozone is a leading specialty retailer of automotive
parts and accessories, focusing on Do-It-Yourself consumers
====================================================================================================
BUILDING PRODUCTS - 0.3%
- ----------------------------------------------------------------------------------------------------
Home Depot, Inc. 900 42,638 0.3%
Home Depot operates over 340 retail Do-It-Yourself warehouse
building supply stores in the United States and Canada
====================================================================================================
BUSINESS AND FINANCIAL SERVICES - 5.5%
- ----------------------------------------------------------------------------------------------------
AccuStaff, Inc.* 1,700 50,575 0.4%
AccuStaff is a national provider of temporary staffing
personnel to businesses, professional and service
organizations and government agencies through three divisions:
commercial, professional services, and telecommunications
Alco Standard Corporation 1,200 69,450 0.6%
Alco Standard is the largest independent copier distribution network
in North America and the largest distributor of printing paper
Danka Business System PLC, ADR 3,500 168,000 1.3%
Danka Business System is a leading independent retail and
wholesale distributor of photocopiers, fax equipment and
related service and parts, with 290 retail branches in the
United States, Canada and the United Kingdom.
First Data Corporation 5,266 400,215 3.2%
First Data Corporation is the world's largest processor
of credit cards, debit cards, and merchant transactions
- ----------------------------------------------------------------------------------------------------
Total Business and Financial Services 688,240
====================================================================================================
BUSINESS INFORMATION SERVICES - 0.7%
- ----------------------------------------------------------------------------------------------------
Paychex, Inc. 1,300 88,075 0.7%
Paychex provides computerized payroll-accounting services, salary
deposit services, automatic payroll-tax payments, return-filing
services, and human resource products and services to more
than 207,900 small and medium sized businesses nationwide
====================================================================================================
CHEMICALS - 0.6%
- ----------------------------------------------------------------------------------------------------
Monsanto Company 500 75,750 0.6%
Monsanto manufactures and markets agricultural products,
chemicals, food products and pharmaceuticals
====================================================================================================
COMPUTER SERVICES - 4.7%
- ----------------------------------------------------------------------------------------------------
Automatic Data Processing, Inc. 2,300 89,413 0.7%
Automatic Data Processing provides computerized transaction
processing, data communications, information recordkeeping
and payroll services
Ceridian Corporation* 1,400 66,850 0.5%
Ceridian Corporation is an information services company
providing payroll and human resource services to large corporations
Computer Sciences Corporation* 2,300 170,200 1.4%
Computer Sciences Corporation is an independent provider
of information technology consulting
3Com Corporation* 4,400 110,700 0.9%
3Com Corporation is a leading networking products vendor
with 50% of sales in systems (hubs, routers and switches)
and 50% in network adapter cards
</TABLE>
8
<PAGE> 9
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
==================================================================================================================
PERCENTAGE OF
EQUITY SECURITIES, CONTINUED SHARES VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------------
COMPUTER SERVICES, CONTINUED
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
General Motors Corporation, Class E 2,100 $ 118,388 0.9%
Electronic Data Systems is an information technology services company. The
company designs, installs, and operates data processing services for GM, federal
government, civilian agencies and commercial firms.
Shared Medical Systems Corporation 500 34,250 0.3%
Shared Medical Systems provides computer-based information processing systems to
hospitals, clinics and physician groups.
- ------------------------------------------------------------------------------------------------------------------
Total Computer Services 589,801
==================================================================================================================
COMPUTER SOFTWARE - 8.3%
- ------------------------------------------------------------------------------------------------------------------
Computer Associates International, Inc. 3,950 289,831 2.3%
Computer Associates manufactures software that enables computers to run more
efficiently. The company develops, markets and services over 300 products for a
wide range of mainframes, mini-computers and micro-computers.
Informix Corporation* 1,400 36,925 0.3%
Informix is a leading provider of relational database management software,
including application development tools and graphical- and character-based
productivity software, for use on most significant desktop platforms.
Microsoft Corporation* 3,834 434,680 3.5%
Microsoft develops and markets systems and applications software for business,
and home use.
Oracle Systems Corporation* 8,150 275,063 2.2%
Oracle Systems is the world's largest maker of database management systems
(DBMS), software that allows users to create, retrieve, and manipulate data in
computer-based files.
- ------------------------------------------------------------------------------------------------------------------
Total Computer Software 1,036,499
==================================================================================================================
COSMETICS AND SOAP - 1.4%
- ------------------------------------------------------------------------------------------------------------------
Estee Lauder Companies, Class A 500 18,313 0.1%
Estee Lauder is a worldwide manufacturer and marketer of prestige skin care,
makeup and fragrance products, under five current names (Estee Lauder, Clinique,
Aramis, Prescriptives and Origins).
The Gillette Company 2,900 156,600 1.3%
Gillette produces and manufactures razors and razor blades, cosmetics,
stationery products, small appliances and oral care products.
- ------------------------------------------------------------------------------------------------------------------
Total Cosmetics and Soap 174,913
==================================================================================================================
CREDIT AND FINANCE - 3.2%
- ------------------------------------------------------------------------------------------------------------------
First USA, Inc. 2,500 140,625 1.1%
First USA is one of the largest issuers of credit cards and processors of credit
card transactions for merchants.
MBNA Corporation 8,010 227,284 1.8%
MBNA is the fourth largest credit card issuer and processor in the United
States.
Mercury Finance Corporation 2,700 31,050 0.3%
Mercury Finance, a consumer finance company, provides short-term installment
loans directly to consumers, purchases installment sales contracts from dealers,
and sells credit insurance.
- ------------------------------------------------------------------------------------------------------------------
Total Credit and Finance 398,959
</TABLE>
9
<PAGE> 10
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
===================================================================================================================
PERCENTAGE OF
EQUITY SECURITIES, CONTINUED HARES VALUE NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
DIVERSIFIED - 1.8%
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
American Standard Company, Inc.* 1,200 $ 33,900 0.3%
American Standard is a global manufacturer of brand name products
such as air conditioning, plumbing and braking and control systems.
Thermo Electron Corporation* 1,800 110,924 0.9%
Thermo Electron manufactures analytical instruments, alternative-energy
systems, process equipment, biomedical items and other devices.
Tyco International Ltd. 2,000 77,250 0.6%
Tyco International, a diversified manufacturing company, produces fire
protection systems, pipes, fittings, and other flow control equipment.
- -------------------------------------------------------------------------------------------------------------------
Total Diversified 222,074
===================================================================================================================
DRUGS - 1.2%
- -------------------------------------------------------------------------------------------------------------------
Elan Corporation PLC, ADR* 1,000 66,125 0.5%
Elan Corporation is an Ireland-based company engaged in developing
drug delivery systems for controlling the absorption of drugs.
Eli Lilly & Company 1,500 88,500 0.7%
Eli Lilly develops and markets pharmaceutical products to treat
human and animal diseases.
- -------------------------------------------------------------------------------------------------------------------
Total Drugs 154,625
===================================================================================================================
ELECTRIC COMPONENTS/SEMICONDUCTORS - 0.6%
- -------------------------------------------------------------------------------------------------------------------
Analog Devices, Inc.* 2,950 75,961 0.6%
Analog Devices designs, manufactures and sells high performance
linear and mixed signal integrated circuits used in analog and
digital signal processing applications.
===================================================================================================================
ENTERTAINMENT - 4.7%
- -------------------------------------------------------------------------------------------------------------------
British Sky Broadcasting Group PLC, ADR 3,400 147,050 1.2%
British Sky Broadcasting is the leading pay television broadcasting
service in the United Kingdom with over 4.2 million subscribers.
Walt Disney Company 2,754 170,748 1.3%
Walt Disney is a diversified international entertainment company
with operations in three business segments:
Theme Parks and Resorts, Filmed Entertainment, and Consumer Products.
Hospitality Franchise System, Inc.* 4,400 226,050 1.8%
Hospitality Franchise is the world's largest hotel franchiser
with four nationally recognized brand names including Days Inn,
Ramada, Howard Johnson and Super 8.
Viacom, Inc.* 1,100 45,100 0.4%
Viacom owns and operates businesses in the entertainment industry,
including feature film and television production, home video retail,
publishing, cable, radio and television broadcasting and theme park operations.
- -------------------------------------------------------------------------------------------------------------------
Total Entertainment 588,948
===================================================================================================================
FOOD AND RESTAURANTS - 0.6%
- -------------------------------------------------------------------------------------------------------------------
McDonalds Corp. 1,400 67,025 0.6%
McDonalds is the largest global food service retailer.
McDonalds operates more than 15,000 restaurants and has
over 20% of the fast-food restaurant market in the United States.
</TABLE>
10
<PAGE> 11
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
==============================================================================================================================
PERCENTAGE OF
EQUITY SECURITIES, CONTINUED SHARES VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FUNERAL SERVICES - 0.7%
- ------------------------------------------------------------------------------------------------------------------------------
Service Corporation International 1,600 $ 85,000 0.7%
Service Corporation International is the world's largest funeral home and cemetery
consolidator with principal operation in North America, Australia, the United Kingdom,
and France. Service Corporation currently owns 1,471 funeral homes and 220 cemeteries.
==============================================================================================================================
GAMING - 1.3%
- ------------------------------------------------------------------------------------------------------------------------------
Circus Circus Enterprise, Inc.* 1,100 40,425 0.3%
Circus Circus Enterprises is one of the largest casino operators in the United
States.
Mirage Resorts, Inc.* 2,400 125,700 1.0%
Mirage Resorts owns and operates Mirage and Treasure Island resorts and the
Golden Nugget Hotel on the Las Vegas strip and the Golden Nugget in Laughlin,
Nevada.
- ------------------------------------------------------------------------------------------------------------------------------
Total Gaming 166,125
==============================================================================================================================
HEALTH INDUSTRY SERVICES - 1.9%
- ------------------------------------------------------------------------------------------------------------------------------
Healthsouth Corporation* 3,900 144,787 1.1%
Healthsouth is the nation's largest provider of outpatient and rehabilitative
health care services. Healthsouth provides these services through outpatient and
inpatient rehabilitation facilities, outpatient surgery centers and medical
centers.
St. Jude Medical, Inc.* 2,650 96,725 0.8%
St. Jude Medical manufactures and markets biomedical devices for cardiovascular
and vascular applications.
- ------------------------------------------------------------------------------------------------------------------------------
Total Health Industry Services 241,512
==============================================================================================================================
HEALTH MAINTENANCE ORGANIZATIONS - 3.3%
- ------------------------------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc.* 4,200 212,100 1.7%
Oxford Health Plans provides managed healthcare services in New Jersey, New York
and Connecticut.
United HealthCare Corporation 3,360 196,560 1.6%
United Healthcare is one of the largest and most geographically diverse health
maintenance organizations in the United States. United Healthcare offers
services from Alaska to Puerto Rico.
- ------------------------------------------------------------------------------------------------------------------------------
Total Health Maintenance Organizations 408,660
==============================================================================================================================
HOSPITALS - 0.4%
- ------------------------------------------------------------------------------------------------------------------------------
Columbia/HCA Healthcare 1,000 53,125 0.4%
Columbia Healthcare is a large healthcare services provider, with 199 acute care
and specialty hospitals located in the United States, Switzerland and the United
Kingdom.
==============================================================================================================================
INSURANCE - 2.3%
- ------------------------------------------------------------------------------------------------------------------------------
American International Group, Inc. 1,600 146,200 1.2%
American International Group is the leading United States-based international
insurance company and the nation's largest underwriter of specialty commercial
and industrial coverages. American International Group writes property,
casualty, marine, life and financial service insurance.
MGIC Investment Corp. 2,100 113,925 0.9%
MGIC Investment provides private mortgage insurance coverage to thrifts,
mortgage bankers and brokers, commercial banks and other lending institutions.
</TABLE>
11
<PAGE> 12
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
====================================================================================================================
PERCENTAGE OF
EQUITY SECURITIES, CONTINUED SHARES VALUE NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
INSURANCE, CONTINUED
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PMI Group, Inc. 500 $ 21,250 0.2%
PMI Group provides private mortgage insurance coverage to thrifts, mortgage
bankers and brokers, commercial banks, and lending institutions.
- --------------------------------------------------------------------------------------------------------------------
Total Insurance 281,375
====================================================================================================================
MAINFRAMES - 1.3%
- --------------------------------------------------------------------------------------------------------------------
Hewlett Packard Company 1,500 158,813 1.3%
Hewlett-Packard manufactures computers, calculators, electronic
test instruments and measurement analysis instruments.
====================================================================================================================
MEDICAL INSTRUMENTS - 2.6%
- --------------------------------------------------------------------------------------------------------------------
Boston Scientific Corporation* 1,500 64,687 0.5%
Boston Scientific is a worldwide developer, manufacturer, and marketer of
medical devices for less invasive procedures. The less invasive procedures
provide effective alternatives to traditional surgery by reducing procedural
trauma, complexity, risk to the patient, cost and recovery time.
Medtronic, Inc. 4,900 260,313 2.1%
Medtronic manufactures pacemakers, heart valves, neurological stimulation
devices, therapeutic catheters and blood oxygenators. The company markets its
products through hospitals, doctors, and other medical institutions throughout
the world.
- --------------------------------------------------------------------------------------------------------------------
Total Medical Instruments 325,000
====================================================================================================================
MEDICAL SERVICES - 0.8%
- --------------------------------------------------------------------------------------------------------------------
Cardinal Health, Inc. 1,500 94,125 0.8%
Cardinal Health is one of the largest wholesale drug distributor in the United
States.
====================================================================================================================
MORTGAGE AND RELATED SERVICES - 3.6%
- --------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 1,200 100,050 0.8%
Federal Home Loan Mortgage buys and holds mortgages from lenders through the
United States and sells guaranteed mortgage-backed securities.
Federal National Mortgage Association 11,460 350,963 2.8%
Federal National Mortgage provides supplemental assistance to the secondary
market in guaranteed and insured home mortgages.
- --------------------------------------------------------------------------------------------------------------------
Total Mortgage and Related Services 451,013
====================================================================================================================
NATURAL GAS PRODUCTS AND PIPELINES - 0.6%
- --------------------------------------------------------------------------------------------------------------------
Enron Corp. 1,940 78,085 0.6%
Enron is an integrated natural gas company engaged in the gathering,
transportation and wholesale marketing of natural gas throughout the
United States and internationally.
</TABLE>
12
<PAGE> 13
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
=========================================================================================================================
PERCENTAGE OF
EQUITY SECURITIES, CONTINUED SHARES VALUE NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
NETWORKING - 2.1%
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cabletron Systems, Inc.* 600 $ 45,224 0.4%
Cabletron manufactures local area network products and provides design and
support services for local area network systems.
Cisco Systems* 4,300 223,062 1.7%
Cisco Systems is the leading supplier of multimedia and multinetworking products
including routers, bridges, terminal servers and network management products.
- -------------------------------------------------------------------------------------------------------------------------
Total Networking 268,286
=========================================================================================================================
OFFICE EQUIPMENT/SUPPLIES - 0.8%
- -------------------------------------------------------------------------------------------------------------------------
Staples, Inc.* 5,000 95,000 0.8%
Staples operates 320 office supply stores in the United States and Canada.
=========================================================================================================================
PHARMACEUTICALS - 5.6%
- -------------------------------------------------------------------------------------------------------------------------
Amgen, Inc.* 3,100 178,250 1.4%
Amgen develops, manufactures and markets drugs based on advanced cellular and
molecular biology. The company's two principal drugs are Epogen, which promotes
the production of white blood cells, and Nuepogen, which stimulates the
production of certain white blood cells.
Merck & Company, Inc. 2,800 169,400 1.3%
Merck is the world's largest pharmaceutical company and the largest U.S.
pharmacy benefits management company.
Pfizer, Inc. 5,200 358,150 2.9%
Pfizer is a major producer of pharmaceuticals, hospital products, animal health
lines, consumer products and specialty chemicals and minerals.
- -------------------------------------------------------------------------------------------------------------------------
Total Pharmaceuticals 705,800
=========================================================================================================================
POLLUTION CONTROL - 0.6%
- -------------------------------------------------------------------------------------------------------------------------
Republic Industries, Inc.* 2,300 75,325 0.6%
Republic Industries is an integrated solid waste company providing a wide range
of services to public and private sector customers.
These services include disposal, collection, recycling, environmental treatment,
storage, resource recovery and transportation services.
=========================================================================================================================
SPECIALTY CHAINS - 1.4%
- -------------------------------------------------------------------------------------------------------------------------
CUC International, Inc.* 3,300 108,487 0.9%
CUC, a consumer services company, provides over 34 million members with access
to discount prices, product comparison information, and convenient purchasing
for home shopping, travel, insurance, auto and dining services.
Kohls Corporation* 2,000 68,750 0.5%
Kohls operates 109 family-oriented, specialty department stores in the Mid-West.
- -------------------------------------------------------------------------------------------------------------------------
Total Specialty Chains 177,237
</TABLE>
13
<PAGE> 14
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
=========================================================================================================================
PERCENTAGE OF
EQUITY SECURITIES, CONTINUED SHARES VALUE NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
TELEPHONE COMMUNICATIONS - 6.4%
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ADC Telecommunications, Inc.* 1,000 $ 42,000 0.3%
ADC Telecommunications is a leading telecommunications equipment supplier which
focuses on broadband connectivity, broadband transmission and wide area
networking products.
Andrew Corporation* 1,850 88,800 0.7%
Andrew Corporation is an international supplier of communications equipment and
services to commercial and government markets.
L.M. Ericsson Telephone Co., ADR 9,900 201,713 1.6%
Ericsson is a Swedish producer of telecommunications equipment suppliers and the
preeminent supplier in the cellular equipment market.
Frontier Corporation 4,500 142,314 1.2%
Frontier Corporation is a holding company that provides executive, legal, and
strategic services to a variety of subsidiaries involved in the local telephone
and telecommunications services industries. Frontier merged with ALC
Communications on August 16, 1995.
Glenayre Technologies, Inc.* 900 41,850 0.3%
Glenayre Technologies is a leading worldwide manufacturer of infrastructure
equipment for paging and other wireless telecommunications markets.
U.S. Robotics, Inc.* 1,300 203,450 1.7%
U.S. Robotics is the dominant provider of communications access products
including high speed modems and LAN/WAN hubs for dial up connectivity.
Worldcom* 1,600 75,200 0.6%
Worldcom is the fourth largest long distance carrier in the United States,
providing service throughout the nation and to over 220 foreign countries.
- --------------------------------------------------------------------------------------------------------------------
Total Telephone Communications 795,327
====================================================================================================================
TEXTILES AND SHOES - 0.4%
- --------------------------------------------------------------------------------------------------------------------
Tommy Hilfiger Corporation* 1,100 50,050 0.4%
Tommy Hilfiger designs, sources and markets mid-priced designer sportswear for
men and boys.
====================================================================================================================
TRANSPORTATION - 0.2%
- --------------------------------------------------------------------------------------------------------------------
Fritz Companies, Inc.* 800 29,400 0.2%
Fritz Companies provides global integrated logistics information services and
outsourcing to companies involved in the worldwide movement of goods.
- --------------------------------------------------------------------------------------------------------------------
Total Equity Securities (Cost $6,818,712) 8,888,766 71.1%
====================================================================================================================
FIXED INCOME SECURITIES - 25.9%
- --------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS - 6.5% PRINCIPAL AMOUNT
- --------------------------------------------------------------------------------------------------------------------
American Express Credit Corporation, 8.750%, 6/15/1996 $ 100,000 100,343 0.8%
Ford Motor Credit Corporation, 7.250%, 5/15/1999 175,000 178,063 1.4%
Hertz Corporation, 6.000%, 1/15/2003 200,000 189,000 1.5%
Household Bank, 6.500%, 7/15/2003 175,000 169,313 1.4%
International Lease Finance, 6.125%, 11/1/1999 175,000 172,156 1.4%
- --------------------------------------------------------------------------------------------------------------------
Total Corporate Bonds (Cost $833,483) 808,875 6.5%
</TABLE>
14
<PAGE> 15
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
=========================================================================================================================
PRINCIPAL PERCENTAGE OF
EQUITY SECURITIES, CONTINUED AMOUNT VALUE NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 19.4%
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Bond, 10.375%, 11/15/2012 $ 500,000 $ 635,275 5.1%
U.S. Treasury Bond, 9.875%, 11/15/2015 325,000 421,161 3.4%
U.S. Treasury Note, 6.750%, 5/31/1997 150,000 151,575 1.2%
U.S. Treasury Note, 5.625%, 1/31/1998 250,000 248,520 1.9%
U.S. Treasury Note, 6.875%, 7/31/1999 525,000 533,830 4.3%
U.S. Treasury Note, 6.250%, 2/15/2003 450,000 442,638 3.5%
- -------------------------------------------------------------------------------------------------------------------------
Total U.S. Treasury Obligations (Cost $2,473,194) 2,432,999 19.4%
=========================================================================================================================
SHORT-TERM INVESTMENTS - 3.3%
- -------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 3.3%
- -------------------------------------------------------------------------------------------------------------------------
Lehman Brothers On-Line Repurchase Agreement, 4.99%,
dated 4/30/96, due 5/1/96 (Collateralized by $428,684
U.S. Treasury Bill, 7.5%, due 10/3/96) (Cost $407,000) 407,000 407,000 3.3%
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost $10,532,389) 12,537,640 100.3%
=========================================================================================================================
OTHER ASSETS - 1.0%
- -------------------------------------------------------------------------------------------------------------------------
Cash 614
Receivables:
Dividends and interest 87,310
For securities sold 26,650
From Advisor 2,841
Deferred organization costs 9,565
Other assets 1,207
- -------------------------------------------------------------------------------------------------------------------------
Total Other Assets 128,187 1.0%
=========================================================================================================================
LIABILITIES - (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
Payable for securities purchased 149,386
Accrued expenses 16,516
- -------------------------------------------------------------------------------------------------------------------------
Total Liabilities 165,902 (1.3%)
=========================================================================================================================
TOTAL NET ASSETS - 100.0% $12,499,925 100.0%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Non-income producing security.
The above descriptions of portfolio companies are furnished by management solely
for the general information of investors.
Unaudited. See Notes to Financial Statements.
15
<PAGE> 16
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
STATEMENT OF OPERATIONS Six Months ended April 30, 1996
<TABLE>
<CAPTION>
================================================================================
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Income:
- --------------------------------------------------------------------------------
<S> <C>
Dividends $ 23,343
Interest 99,831
- --------------------------------------------------------------------------------
Total income 123,174
================================================================================
Expenses:
- --------------------------------------------------------------------------------
Investment advisory fee (Note 3) 36,061
Administration fee 6,010
Accounting services fee 32,400
Custodian fee 10,930
Auditing fee 5,968
Legal fees 1,243
Trustees' fees 1,889
Amortization of organization costs 4,972
Miscellaneous 1,563
- --------------------------------------------------------------------------------
Total expenses 101,036
Less, reimbursement/waiver by Advisor (Note 3) (52,955)
- --------------------------------------------------------------------------------
Net expenses 48,081
================================================================================
Net investment income 75,093
================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain from security transactions 517,963
Change in net unrealized appreciation of investments (127,719)
- --------------------------------------------------------------------------------
Net gain on investments 390,244
================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 465,337
- --------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
16
<PAGE> 17
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
===================================================================================================================
(DECREASE) INCREASE IN NET ASSETS:
- -------------------------------------------------------------------------------------------------------------------
Six Months Year
ended ended
From operations: April 30, 1996 October 31, 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment income $ 75,093 $ 202,082
Net realized gain on investments 517,963 1,041,070
Change in unrealized appreciation of investments (127,719) 1,491,367
- -------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 465,337 2,734,519
===================================================================================================================
Transactions in interests:
Contributions by Holders 394,664 7,579,804
Withdrawals by Holders (900,671) (6,913,353)
- -------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in net assets from transactions in interests (506,007) 666,451
===================================================================================================================
Total (decrease) increase in net assets (40,670) 3,400,970
===================================================================================================================
NET ASSETS:
- -------------------------------------------------------------------------------------------------------------------
Beginning of period 12,540,595 9,139,625
- -------------------------------------------------------------------------------------------------------------------
End of period $12,499,925 $12,540,595
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
17
<PAGE> 18
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
================================================================================
1 - ORGANIZATION
- --------------------------------------------------------------------------------
P-I-C Balanced Portfolio (the "Portfolio") was organized on December 11,
1991 as a trust under the laws of the State of New York. The beneficial
interests in the Portfolio are divided into an unlimited number of
non-transferable Interests, par value $.01 each. The Portfolio is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company.
2 - SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
The following is a summary of significant accounting policies consistently
followed by the Portfolio. These policies are in conformity with generally
accepted accounting principles.
A. Valuation of Securities. Equity securities listed on a national securities
exchange or traded on the NASDAQ system are valued at their last sale price.
Other equity securities and debt securities for which market quotations are
readily available are valued at the mean between their bid and asked price,
except that debt securities maturing within 60 days are valued on an
amortized cost basis. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by the Board
of Trustees.
B. Federal Income Taxes. The Portfolio intends to comply with the requirements
of the Internal Revenue Code applicable to it. Therefore, no federal income
tax provision is required.
C. Deferred Organization Expense. Organization costs of the Portfolio are being
amortized on a straight line basis over a period of sixty months. During the
amortization period the proceeds of any redemption of the original Interests
in the Portfolio by any Holder thereof will be reduced by a pro rata portion
of any then unamortized organization costs based on the ratio of Interests
redeemed to the total initial Interests outstanding prior to the redemption.
D. Other. Securities transactions are recorded on the trade date basis.
Realized gains and losses from securities transactions are reported on an
identified cost basis. Interest is recorded as accrued, and dividend income
is recorded on the ex-dividend date.
3 - TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
The Portfolio has entered into an investment advisory agreement with
Provident Investment Counsel, Inc. ("PIC") and an administration agreement with
Investment Company Administration Corporation ("ICAC"), pursuant to which
agreements certain employees of these entities serve as officers and/or trustees
of the Portfolio. PIC and ICAC also provide management services necessary for
the operations of the Portfolio and furnish office facilities.
PIC receives a fee for its services to the Portfolio at the rate of 0.60%
of the average daily net assets of the Portfolio, but waived its fee of $36,061
for the period ended April 30, 1996. PIC has voluntarily agreed to limit the
total expenses of the Portfolio to an annual rate of 0.80% of the Portfolio's
average net assets. For the period ended April 30, 1996, PIC reimbursed expenses
of the Portfolio amounting to $16,894. 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 $6,010 for the period ended
April 30, 1996.
18
<PAGE> 19
P-I-C INSTITUTIONAL
BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
================================================================================
4 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
During the period ended April 30, 1996, purchases and sales of investment
securities, other than short-term obligations, were $6,412,382 and $10,551,200,
respectively. The cost of securities for federal income tax purposes was
$10,532,389. The aggregate gross unrealized appreciation and depreciation of
portfolio securities, based on cost for federal income tax purposes, were as
follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation $2,122,479
Unrealized depreciation (117,228)
----------
Net unrealized appreciation $2,005,251
==========
</TABLE>
<TABLE>
<CAPTION>
5 - SELECTED RATIO DATA
- -------------------------------------------------------------------------------------------------------
Six Months Year Year Year
ended ended ended ended
April 30, 1996 October 31, 1995 October 31, 1994 October 31, 1993
-------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Ratios to average net assets:++
Operating expenses 0.80%* 0.80% 0.80% 0.80%
Net investment income 1.25%* 1.57% 1.63% 2.05%
Portfolio turnover rate 53.80% 106.50% 116.63% 92.65%
</TABLE>
*Annualized.
++Net of expense reimbursements equivalent to 0.88%, 0.78%, 1.16% and 4.68% of
average net assets, respectively.
19
<PAGE> 20
P-I-C INSTITUTIONAL
BALANCED FUND
TRUSTEES AND OFFICERS
================================================================================
TRUSTEES AND OFFICERS - P-I-C 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 - P-I-C BALANCED 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 - P-I-C INVESTMENT TRUST
- --------------------------------------------------------------------------------
Shereff, Friedman, Hoffman & Goodman
LEGAL COUNSEL - P-I-C BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
Heller, Ehrman, White & McAuliffe
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
McGladrey & Pullen, LLP
This report is intended for the information of shareholders of P-I-C
Institutional Balanced Fund and should not be used as sales literature unless
preceded or accompanied by a current prospectus.
20
<PAGE> 21
P-I-C INSTITUTIONAL
GROWTH FUND
SEMI-ANNUAL REPORT
APRIL 30, 1996
<PAGE> 22
P-I-C INSTITUTIONAL
GROWTH FUND
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
THE FOLLOWING IS AN INTERVIEW WITH THE MEMBERS OF THE INVESTMENT TEAM AT
PROVIDENT INVESTMENT COUNSEL REGARDING THE P-I-C INSTITUTIONAL GROWTH FUND (THE
"FUND").
Question: How did the P-I-C Institutional Growth Fund perform relative to
overall markets for the first six months of the fiscal year ended April 30, 1996
and year to date 1996?
Answer: The Standard & Poor's 500 Index, a broad measure of the market's overall
performance, rose 11.97% for the first six months of the Fund's fiscal year and
5.38% year to date 1996 while the Fund rose 4.35% and 8.54%, respectively. The
variance in performance of the Fund versus the index can be attributed mostly to
the last two months of 1995 and the first half of January 1996 when the Fund's
technology holdings were under pressure as investors began profit taking in this
sector. This pressure was lifted and these stocks began to perform well as
positive earnings reports were announced.
Question: What are some of the factors attributable to the Fund and the overall
market's positive performance in 1996?
Answer: Beginning in late January the Federal Reserve cut interest rates by
.25%. This seemed to fuel an already strong economy. Lower interest rates
combined with strong earnings reports from companies and record inflows into
equity mutual funds have moved the market to higher levels.
Question: What sectors have helped the Fund to outperform the broad market year
to date?
Answer: The technology holdings that ended the year 1995 and began 1996 under
pressure have rebounded strongly as positive earnings reports have been
announced. The Fund's holdings in the entertainment and leisure sector such as
Mirage, Circus Circus and Hospitality Franchises have performed well along with
specialty finance concerns like credit card issuers First USA and MBNA. The
Fund's holdings in retail issues such as Autozone, Tommy Hilfiger, Staples and
Home Depot have also performed well.
Question: What is the outlook for near term and through the remainder of 1996?
Answer: It appears as though we have entered into a market that favors growth
oriented stocks in the near term and although valuation of some of these
securities has risen we remain confident in the ability of the Fund's holdings
to continue to show positive sales and earnings growth. Growth stocks have
historically outperformed other issues in periods of economic uncertainty
because investors are attracted to those growth issues that will deliver sales
and earnings growth in any economic environment.
The bond market appears to be pricing in a possible increase in rates by the
Federal Reserve late in 1996 and this may cause some volatility in the equity
markets later this year. We are holding a reasonable cash position in order to
dampen any volatility that may occur.
2
<PAGE> 23
P-I-C INSTITUTIONAL
GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES as of April 30, 1996
<TABLE>
<CAPTION>
ASSETS
- --------------------------------------------------------------------------------
<S> <C>
Investment in P-I-C Growth Portfolio, at value $ 122,313,676
Deferred organization costs 9,564
- --------------------------------------------------------------------------------
Total assets 122,323,240
================================================================================
LIABILITIES
- --------------------------------------------------------------------------------
Accrued expenses 18,071
================================================================================
NET ASSETS
- --------------------------------------------------------------------------------
Applicable to 8,225,549 shares of beneficial interest
outstanding $ 122,305,169
================================================================================
NET ASSET VALUE PER SHARE $ 14.87
- --------------------------------------------------------------------------------
================================================================================
SOURCE OF NET ASSETS
- --------------------------------------------------------------------------------
Paid-in capital $ 89,251,772
Undistributed net realized gain on investments 8,016,806
Accumulated net investment loss (536,985)
Net unrealized appreciation of investments 25,573,576
- --------------------------------------------------------------------------------
Net assets $ 122,305,169
- --------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
3
<PAGE> 24
P-I-C INSTITUTIONAL
GROWTH FUND
STATEMENT OF OPERATIONS Six Months ended April 30, 1996
<TABLE>
<CAPTION>
================================================================================
INVESTMENT INCOME
- --------------------------------------------------------------------------------
<S> <C>
Net investment deficit from Portfolio $ (22,957)
================================================================================
Expenses:
- --------------------------------------------------------------------------------
Administration fees (Note 3) 132,236
Reports to shareholders 2,486
Registration fees 3,482
Trustees' fees 6,215
Auditing fee 5,968
Legal fee 3,755
Transfer agent's fee 11,934
Custody and accounting services fee 3,000
Insurance fees 6,534
Amortization of organization costs 4,972
Miscellaneous 3,730
- --------------------------------------------------------------------------------
Total expenses 184,312
Less, reimbursement/waiver by Provident
Investment Counsel, Inc. (Note 3) (28,338)
- --------------------------------------------------------------------------------
Net expenses 155,974
================================================================================
Net investment loss (178,931)
================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain on investments 9,695,407
Change in net unrealized appreciation of investments (4,099,845)
- --------------------------------------------------------------------------------
Net gain on investments 5,595,562
================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,416,631
- --------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
4
<PAGE> 25
P-I-C INSTITUTIONAL
GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
=====================================================================================================
(DECREASE) INCREASE IN NET ASSETS
- -----------------------------------------------------------------------------------------------------
Six Months Year
ended ended
From operations: April 30, 1996 October 31, 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment loss $ (178,931) $ (189,686)
Net realized gain on investments 9,695,407 715,922
Change in unrealized appreciation of investments (4,099,845) 22,079,471
- ----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 5,416,631 22,605,707
====================================================================================================
Transactions in shares of beneficial interest:
Purchases of 471,501 and 2,058,233 shares, respectively 6,596,463 25,480,815
Redemptions of 1,450,973 and 1,593,166 shares, respectively (20,847,347) (19,229,741)
- ----------------------------------------------------------------------------------------------------
Net (decrease) increase in net assets resulting
from share transactions (14,250,884) 6,251,074
====================================================================================================
Total (decrease) increase in net assets (8,834,253) 28,856,781
====================================================================================================
NET ASSETS:
- ----------------------------------------------------------------------------------------------------
Beginning of period 131,139,422 102,282,641
- ----------------------------------------------------------------------------------------------------
End of period $ 122,305,169 $ 131,139,422
- ----------------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
5
<PAGE> 26
P-I-C INSTITUTIONAL
GROWTH FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
============================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------------------------------------------
Six Months Year Year Year June 11, 1992*
ended ended ended ended through
April 30, 1996 October 31, 1995 October 31,1994 October 31, 1993 October 31, 1992
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.25 $ 11.70 $ 11.60 $ 10.81 $ 10.00
- -----------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment (loss) income (.03) (.02) .00 .00 .01
Net realized and unrealized
gain on investments .65 2.57 .10 .80 .80
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations .62 2.55 .10 .80 .81
- -----------------------------------------------------------------------------------------------------------------------------
Less distributions:
Return of capital .00 .00 .00 (.01) .00
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.87 $ 14.25 $ 11.70 $ 11.60 $ 10.81
=============================================================================================================================
Total return 8.92%++ 21.79% 0.86% 7.40% 20.88%++
=============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (millions) $ 122.3 $ 131.1 $ 102.3 $ 88.9 $ 5.7
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:**+
Expenses 1.25%++ 1.25% 1.25% 1.25% 1.25%++
Net investment (loss) income (.29%)++ (.17%) N/A N/A .25%++
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
** Includes the Fund's shares of expenses, net of expense reimbursements,
allocated from P-I-C Growth Portfolio. If the fee waivers and expense
reimbursements, with respect to the Fund and P-I-C Growth Portfolio, had
not been made, the ratio of expenses to average net assets would have
been 1.33%, 1.30%, 1.53%, 1.54% and 4.12%, respectively.
+ Net of expense reimbursements.
++ Annualized.
Unaudited. See Notes to Financial Statements.
6
<PAGE> 27
P-I-C INSTITUTIONAL
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, April 30, 1996
1 -- ORGANIZATION
- --------------------------------------------------------------------------------
P-I-C Institutional Growth Fund (the "Fund") is one of several series
of P-I-C 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 P-I-C Growth Portfolio
(the "Portfolio"), a separate registered management investment company having
the same investment objective as the Fund. At April 30, 1996, 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.
D. Deferred Organization Expense. Organization costs of the Fund are being
amortized on a straight line basis over a period of sixty months. During
the amortization period the proceeds of any redemption of the original
shares by the holder thereof will be reduced by a pro rata portion of any
then unamortized organization costs based on the ratio of shares redeemed
to the total initial shares outstanding prior to the redemption.
3 -- TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
The Trust has entered into administration agreements with Provident
Investment Counsel, Inc. ("PIC") and Investment Company Administration
Corporation ("ICAC"), pursuant to which agreements certain employees of these
entities serve as officers and/or trustees of the Trust and the Portfolio. PIC
and ICAC also provide management services necessary for the operations of the
Trust and the Portfolio and furnish office facilities. PIC receives a fee for
its services to the Fund at the rate of 0.20% of the average daily net assets of
the Fund; for the period ended April 30, 1996, PIC received a fee of $96,440 and
waived the balance of the fee amounting to $28,338. PIC has voluntarily agreed
to reimburse the Fund to the extent necessary so that the expenses of the Fund,
including those expenses allocated from the Portfolio, do not exceed 1.25% of
the Fund's average net assets. The amount of reimbursement for the year ended
October 31, 1995 is set forth in the Statement of Operations. ICAC receives an
annual fee for its services at the rate of $15,000.
First Fund Distributors, Inc. (an affiliate of ICAC), a registered
broker-dealer, acts as the principal underwriter for the Trust in connection
with the offering of its shares, but receives no compensation for its services.
7
<PAGE> 28
P-I-C INSTITUTIONAL
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
================================================================================
4 -- INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
Additions and reductions in the Fund's investment in the Portfolio, for
the period ended April 30, 1996, aggregated $8,463,562 and $94,745,682,
respectively.
8
<PAGE> 29
P-I-C
GROWTH
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
PERCENT OF
EQUITY SECURITIES - 90.8% SHARES VALUE NET ASSETS
- ----------------------------------------------------------------------------------
AUTO PARTS - 1.5%
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Autozone, Inc.* 50,050 $ 1,826,825 1.5%
Autozone is a leading specialty retailer
of automotive parts and accessories,
focusing on Do-It-Yourself consumers.
- ----------------------------------------------------------------------------------
BANKS - 0.1%
- ----------------------------------------------------------------------------------
Synovus Financial Corporation 6,150 138,375 0.1%
Synovus Financial is a bank holding
company that controls 80% of Total System
Services, a credit card processing
company.
- ----------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.8%
- ----------------------------------------------------------------------------------
Amgen, Inc.* 39,000 2,242,500 1.8%
Amgen develops, manufactures and markets
drugs based on advanced cellular and
molecular biology. The company's two
principal drugs are Epogen, which promotes
the production of white blood cells,
and Nuepogen, which stimulates the
production of certain white blood cells.
- ----------------------------------------------------------------------------------
BUILDING PRODUCTS - 0.5%
- ----------------------------------------------------------------------------------
Home Depot, Inc. 12,000 568,500 0.5%
Home Depot operates over 230 retail
Do-It-Yourself warehouse building supply
stores in 21 states.
- ----------------------------------------------------------------------------------
BUSINESS AND FINANCIAL SERVICES - 7.5%
- ----------------------------------------------------------------------------------
Accustaff, Inc.* 21,600 642,600 0.5%
Accustaff is a national provider of
temporary staffing personnel to
businesses, professional and service
organizations and government agencies
through three divisions: commercial,
professional services, and telecommunications.
Alco Standard Corporation 14,800 856,550 0.7%
Alco Standard is the largest independent
copier distribution network in North
America and the largest distributor of
printing paper.
Ceridian Corporation* 16,500 787,875 0.6%
Ceridian Corporation is an information
services company providing payroll and
human resource services to large
corporations. Their Arbitron division is
the dominant provider of radio rating
services and CDI provides electronic
solutions to defense markets.
Danka Business Systems PLC, ADR 40,950 1,965,600 1.6%
Danka Business Systems is an independent
retail and wholesale distributor of
photocopiers, fax equipment and related
service and parts, with 290 retail
branches in the United States, Canada, and
the United Kingdom.
First Data Corporation 65,498 4,977,848 4.1%
First Data Corporation is the world's
largest processor of credit cards, debit
cards, and merchant transactions.
- ----------------------------------------------------------------------------------
Total Business and Financial Services 9,230,473
- ----------------------------------------------------------------------------------
CHEMICALS - 0.8%
- ----------------------------------------------------------------------------------
Monsanto Company 6,600 999,900 0.8%
Monsanto manufactures and markets
agricultural products, chemicals, food
products and pharmaceuticals.
</TABLE>
9
<PAGE> 30
P-I-C
GROWTH
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
==================================================================================
PERCENT OF
EQUITY SECURITIES, CONTINUED SHARES VALUE NET ASSETS
- ----------------------------------------------------------------------------------
COMPUTER SERVICES - 5.0%
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Automatic Data Processing, Inc. 29,200 $ 1,135,150 1.0%
Automatic Data Processing provides
computerized transaction processing, data
communications, information recordkeeping
and payroll services.
Computer Sciences Corporation* 26,400 1,953,600 1.6%
Computer Sciences Corporation is a large
independent provider of information
technology consulting.
General Motor Corporation, Class E 26,800 1,510,850 1.2%
Electronic Data Systems is an information
technology services company. The company
designs, installs, and operates data
processing services for GM, federal
government, civilian agencies and
commercial firms.
Paychex, Inc. 16,150 1,094,163 0.9%
Provides computerized payroll-accounting
services, salary deposit services,
automatic-payroll-tax payments,
return-filing services, and human resource
products and services to more than 207,900
small and medium sized businesses
nationwide.
Shared Medical Systems Corporation 5,500 376,750 0.3%
Shared Medical Systems provides
computer-based information processing
systems to hospitals, clinics and
physician groups.
- ----------------------------------------------------------------------------------
Total Computer Services 6,070,513
- ----------------------------------------------------------------------------------
COMPUTER SOFTWARE - 10.1%
- ----------------------------------------------------------------------------------
Computer Associates International, Inc. 48,250 3,540,344 2.9%
Computer Associates manufactures software
that enables computers to run more
efficiently. The company develops, markets
and services over 300 products for a wide
range of mainframes, mini-computers and
micro-computers.
Microsoft Corporation* 47,988 5,440,640 4.4%
Microsoft develops and markets systems and
applications software for business and
home use.
Oracle Systems Corporation* 101,500 3,425,625 2.8%
Oracle Systems is the world's largest
maker of database management systems
(DBMS), software that allows users to
create, retrieve, and manipulate data in
computer-based files.
- ----------------------------------------------------------------------------------
Total Computer Software 12,406,609
- ----------------------------------------------------------------------------------
CONSUMER DURABLES - 0.4%
- ----------------------------------------------------------------------------------
American Standard Company, Inc., DE* 15,100 426,575 0.4%
American Standard Company is a global
manufacturer of brand name products such
as air conditioning, plumbing and braking
and control systems.
- ----------------------------------------------------------------------------------
COSMETICS - 1.8%
- ----------------------------------------------------------------------------------
Estee Lauder Companies, Class A 6,800 249,050 0.2%
Estee Lauder is a worldwide manufacturer
and marketer of prestige skin care, makeup
and fragrance products, under five current
names (Estee Lauder, Clinique, Aramis,
Prescriptives and Origins).
The Gillette Company 35,920 1,939,680 1.6%
Gillette produces and manufactures razors
and razor blades, cosmetics, stationery
products, small appliances and oral care
products.
- ----------------------------------------------------------------------------------
Total Cosmetics 2,188,730
</TABLE>
10
<PAGE> 31
P-I-C
GROWTH PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
==================================================================================
PERCENT OF
EQUITY SECURITIES - CONTINUED SHARES VALUE NET ASSETS
- ----------------------------------------------------------------------------------
CREDIT AND FINANCE - 4.0%
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
First USA Inc. 29,900 $ 1,681,875 1.4%
First USA is an issuer of credit cards and
a processor of credit card transactions
for merchants.
MBNA Corporation 99,590 2,825,866 2.3%
MBNA is the fourth largest credit card issuer
and processor in the United States.
Mercury Finance Company 34,200 393,300 0.3%
Mercury Finance, a consumer finance
company, provides short-term installment
loans directly to consumers, purchases
installment sales contracts from dealers
and sells credit insurance.
- ----------------------------------------------------------------------------------
Total Credit and Finance 4,901,041
- ----------------------------------------------------------------------------------
DIVERSIFIED - 2.0%
- ----------------------------------------------------------------------------------
Thermo Electron Corporation* 23,600 1,454,350 1.2%
Thermo Electron manufactures analytical
instruments, alternative-energy systems,
process equipment, biomedical items and
other devices.
Tyco International Ltd. 25,300 977,213 0.8%
Tyco International, a diversified
manufacturing company, produces fire
protection systems, pipes, fittings, and
other flow control equipment.
- ----------------------------------------------------------------------------------
Total Diversified 2,431,563
- ----------------------------------------------------------------------------------
DRUGS - 3.4%
- ----------------------------------------------------------------------------------
Elan Corporation, PLC, ADR* 15,100 998,487 0.8%
Elan Corporation is an Ireland-based
company engaged in developing drug
delivery systems for controlling the
absorption of drugs.
Eli Lilly & Company 18,600 1,097,400 0.9%
Eli Lilly develops and markets
pharmaceutical products to treat human and
animal diseases.
Merck & Company, Inc. 34,000 2,057,000 1.7%
Merck is the world's largest
pharmaceutical company and the largest
U.S. pharmacy benefits management company.
- ----------------------------------------------------------------------------------
Total Drugs 4,152,887
- ----------------------------------------------------------------------------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS - 0.8%
- ----------------------------------------------------------------------------------
Analog Devices, Inc.* 37,200 957,900 0.8%
Analog Devices designs, manufactures and
sells high performance linear and mixed
signal integrated circuits used in analog
and digital signal processing
applications.
- ----------------------------------------------------------------------------------
ENTERTAINMENT - 6.1%
- ----------------------------------------------------------------------------------
British Sky Broadcasting Group 42,600 1,842,450 1.5%
British Sky Broadcasting is the leading
pay television broadcasting service in the
United Kingdom, with over 4.2 million
subscribers.
Walt Disney Company 33,943 2,104,466 1.7%
Walt Disney is a diversified international
entertainment company with operations in
three business segments: Theme Parks and
Resorts, Filmed Entertainment, and
Consumer Products.
</TABLE>
11
<PAGE> 32
P-I-C GROWTH PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
===========================================================================================
PERCENT OF
EQUITY SECURITIES, CONTINUED SHARES VALUE NET ASSETS
- -------------------------------------------------------------------------------------------
ENTERTAINMENT, CONTINUED
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hospitality Franchise System, Inc.* 56,500 $ 2,902,688 2.4%
HFS is the world's largest hotel franchiser
with six nationally recognized brand names,
including Days Inn Ramada, Howard Johnson,
Park Inn, Village Lodge, and Super 8.
ViaCom, Inc. 14,000 574,000 0.5%
ViaCom owns and operates businesses in the
entertainment industry, including feature
film and television production, home video
retail, publishing, cable, radio and
television broadcasting and theme park
operations.
- -------------------------------------------------------------------------------------------
Total Entertainment 7,423,604
===========================================================================================
FOOD & RESTAURANTS - 0.7%
- -------------------------------------------------------------------------------------------
McDonalds Corporation 17,150 821,056 0.7%
McDonalds is the largest global food service
retailer. McDonalds operates more than 15,000
restaurants and has over 20% of the fast-food
restaurant market in the United States.
===========================================================================================
FUNERAL SERVICES - 0.9%
- -------------------------------------------------------------------------------------------
Service Corporation International 21,450 1,139,531 0.9%
Service Corporation International is the
world's largest funeral home and cemetery
consolidator with principal operation in
North America, Australia, the United Kingdom,
and France. Service Corporation currently
owns 1,471 funeral homes and 220 cemeteries.
===========================================================================================
GAMING - 1.9%
- -------------------------------------------------------------------------------------------
Circus Circus Enterprises, Inc.* 13,500 496,125 0.4%
Circus Circus Enterprises is one of the
largest casino operators in the United
States.
Mirage Resorts, Inc.* 34,200 1,791,225 1.5%
Mirage Resorts owns and operates Mirage and
Treasure Island resorts and the Golden Nugget
Hotel on the Las Vegas strip and the Golden
Nugget in Laughlin, Nevada.
- -------------------------------------------------------------------------------------------
Total Gaming 2,287,350
===========================================================================================
HEALTH MAINTENANCE ORGANIZATIONS - 4.1%
- -------------------------------------------------------------------------------------------
Oxford Health Plan, Inc.* 50,900 2,570,450 2.1%
Oxford Health Plans provides managed
healthcare services in New Jersey, New York
and Connecticut.
United HealthCare Corporation 41,300 2,416,050 2.0%
United HealthCare is one of the largest and
most geographically diverse health
maintenance organizations in the United
States. United HealthCare offers services
from Alaska to Puerto Rico.
- -------------------------------------------------------------------------------------------
Total Health Maintenance Organizations 4,986,500
===========================================================================================
HOSPITALS - 0.6%
- -------------------------------------------------------------------------------------------
Columbia/HCA Healthcare 12,700 674,687 0.6%
Columbia Healthcare is a large healthcare
services provider, with 199 acute care and
specialty hospitals located in the United
States, Switzerland and the United Kingdom.
</TABLE>
12
<PAGE> 33
P-I-C GROWTH PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
==========================================================================================
PERCENT OF
EQUITY SECURITIES, CONTINUED SHARES VALUE NET ASSETS
- ------------------------------------------------------------------------------------------
INSURANCE - 2.8%
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
American International Group, Inc. 20,050 $ 1,832,069 1.5%
AIG is the leading United States-based
international insurance company and the
nation's largest underwriter of specialty
commercial and industrial coverages. American
International Group writes property,
casualty, marine, life and financial service
insurance.
MGIC Investment Corporation 25,750 1,396,938 1.1%
MGIC Investment provides private mortgage
insurance coverage to thrifts, mortgage
bankers and brokers, commercial bankers and
other lending institutions.
PMI Group, Inc. 5,900 250,750 0.2%
PMI Group provides private mortgage insurance
coverage to thrifts, mortgage bankers and
brokers, commercial banks, and lending
institutions.
- ------------------------------------------------------------------------------------------
Total Insurance 3,479,757
==========================================================================================
MAINFRAMES - 1.6%
- ------------------------------------------------------------------------------------------
Hewlett Packard Co. 18,450 1,953,394 1.6%
Hewlett-Packard manufactures computers,
calculators, electronic test and measurement
analysis instruments.
==========================================================================================
MEDICAL INSTRUMENTS - 4.2%
- ------------------------------------------------------------------------------------------
Boston Scientific Corporation* 20,200 871,125 0.7%
Boston Scientific is worldwide developer,
manufacturer, and marketer of medical devices
for less invasive procedures. The less
invasive procedures provide effective
alternatives to traditional surgery by
reducing procedural trauma, complexity, risk
to the patient, cost and recovery time.
Medtronic, Inc. 57,450 3,052,031 2.5%
Medtronic manufacturers pacemakers, heart
valves, neurological stimulation devices,
therapeutic catheters and blood oxygenators.
The company markets its products through
hospitals, doctors, and other medical
institutions throughout the world.
St. Jude Medical, Inc.* 34,150 1,246,475 1.0%
St. Jude Medical manufactures and markets
biomedical devices for cardiovascular and
vascular applications.
- ------------------------------------------------------------------------------------------
Total Medical Instruments 5,169,631
==========================================================================================
MEDICAL SERVICES - 0.9%
- ------------------------------------------------------------------------------------------
Cardinal Health, Inc. 16,800 1,054,200 0.9%
Cardinal Health is one of the largest
wholesale drug distributor in the United
States.
==========================================================================================
MORTGAGE AND RELATED SERVICES - 4.7%
- ------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Association 15,300 1,275,638 1.0%
Federal Home Loan Mortgage buys and holds
mortgages from lenders through the United
States and sells guaranteed mortgage-backed
securities.
Federal National Mortgage Association 142,760 4,372,025 3.6%
Federal National Mortgage provides
supplemental assistance to the secondary
market in guaranteed and insured home
mortgages.
Finova Group Inc. 2,800 155,400 0.1%
Finova Group provides collateralized
financing in focused niche markets.
- ------------------------------------------------------------------------------------------
Total Mortgage and Related Services 5,803,063
</TABLE>
13
<PAGE> 34
P-I-C GROWTH PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
====================================================================================
PERCENT OF
EQUITY SECURITIES, CONTINUED SHARES VALUE NET ASSETS
- ------------------------------------------------------------------------------------
NATURAL GAS PRODUCTS AND PIPELINES - 0.8%
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Enron Corporation 24,510 $ 986,527 0.8%
Enron is an integrated natural gas company
engaged in the gathering, transportation and
wholesale marketing of natural gas throughout
the United States and internationally.
====================================================================================
NETWORKING - 3.6%
- ------------------------------------------------------------------------------------
3Com Corporation* 30,450 1,404,506 1.2%
3Com Corporation is a leading networking
products vendor with 50% of sales in systems
(hubs, routers and switches) and 50% in
network adapter cards.
Cabletron Systems, Inc.* 6,350 478,631 0.4%
Cabletron manufactures local area network
products and provides design and support
services for local area network systems.
U.S. Robotics, Inc.* 15,950 2,496,175 2.0%
U.S. Robotics is the dominant provider of
communications access products including high
speed modems and LAN/WAN hubs for dial up
connectivity.
- ------------------------------------------------------------------------------------
Total Networking 4,379,312
====================================================================================
OFFICE EQUIPMENT/SUPPLIES - 1.0%
- ------------------------------------------------------------------------------------
Staples, Inc.* 61,800 1,174,200 1.0%
Staples operates 320 office supply stores in
the United States and Canada.
====================================================================================
OUTPATIENT - HOME CARE - 1.5%
- ------------------------------------------------------------------------------------
Healthsouth Corporation* 49,000 1,819,125 1.5%
Healthsouth is the nation's largest provider
of outpatient and rehabilitative health care
services. Healthsouth provides these services
through outpatient and inpatient
rehabilitation facilities, outpatient surgery
centers and medical centers.
====================================================================================
PHARMACEUTICALS - 3.6%
- ------------------------------------------------------------------------------------
Pfizer, Inc. 64,200 4,421,775 3.6%
Pfizer is a major producer of
pharmaceuticals, hospital products, animal
health lines, consumer products and specialty
chemicals and minerals.
====================================================================================
POLLUTION CONTROL - 0.8%
- ------------------------------------------------------------------------------------
Republic Industries, Inc.* 30,100 985,775 0.8%
Republic Industries is an integrated solid
waste company providing a wide range of
services to public and private sector
customers. These services include disposal,
collection, recycling, environmental
treatment, storage, resource recovery and
transportation services.
====================================================================================
SPECIALTY CHAINS - 1.8%
- ------------------------------------------------------------------------------------
CUC International, Inc.* 42,000 1,380,750 1.1%
CUC, a consumer services company, provides
over 34 million members with access to
discount prices, product comparison
information, and convenient purchasing for
home shopping, travel, insurance, auto, and
dining services.
Kohls Corporation 24,400 838,750 0.7%
Kohls operates 109 family-oriented, specialty
department stores in the Mid-West.
- ------------------------------------------------------------------------------------
Total Specialty Chains 2,219,500
</TABLE>
14
<PAGE> 35
P-I-C GROWTH PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
==================================================================================================
PERCENT OF
EQUITY SECURITIES, CONTINUED SHARES VALUE NET ASSETS
- --------------------------------------------------------------------------------------------------
TECHNOLOGY - 2.6%
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cisco Systems, Inc.* 53,300 $ 2,764,937 2.2%
Cisco Systems is the leading supplier of
multimedia and multinetworking products
including routers, bridges, terminal servers
and network management products.
Informix Corporation* 17,350 457,606 0.4%
Informix is a leading provider of relational
database management software, including
application development tools and graphical-
and character-based productivity software,
for use on most significant desktop
platforms.
- --------------------------------------------------------------------------------------------------
Total Technology 3,222,543
==================================================================================================
TELEPHONE COMMUNICATIONS - 6.1%
- --------------------------------------------------------------------------------------------------
ADC Telecommunications, Inc.* 13,000 546,000 0.5%
ADC Telecommunications is a leading
telecommunications equipment supplier which
focuses on broadband connectivity, broadband
transmission and wide area networking
products.
Andrew Corporation* 23,625 1,134,000 0.9%
Andrew Corporation is an international
supplier of communications equipment and
services to commercial and government
markets.
L.M. Ericsson Telephone Company, ADR 122,750 2,501,031 2.0%
Ericsson is a Swedish producer of
telecommunications equipment suppliers and
the predominant supplier in the cellular
equipment market.
Frontier Corporation 57,100 1,805,788 1.5%
Frontier Corporation is a holding company
that provides executive, legal, and strategic
services to a variety of subsidiaries
involved in the local telephone and
telecommunications services industries.
Frontier merged with ALC Communications on
August 16, 1995.
Glenayre Technologies, Inc.* 11,200 520,800 0.4%
Glenayre Technologies is a leading worldwide
manufacturer of infrastructure equipment for
paging and other wireless telecommunications
markets.
Worldcom, Inc.* 19,700 925,900 0.8%
Worldcom is the fourth largest long distance
carrier in the United States, providing
service throughout the nation and to over 220
foreign countries.
- --------------------------------------------------------------------------------------------------
Total Telecommunications 7,433,519
==================================================================================================
TEXTILES & SHOES - 0.5%
- --------------------------------------------------------------------------------------------------
Tommy Hilfiger Corporation* 14,700 668,850 0.5%
Tommy Hilfiger designs, sources and markets
mid-priced designer sportswear for men and
boys.
==================================================================================================
TRANSPORTATION SERVICES - 0.3%
- --------------------------------------------------------------------------------------------------
Fritz Companies, Inc.* 10,300 378,525 0.3%
Fritz Companies provides global integrated
logistics information services and
outsourcing to companies involved in the
worldwide movement of goods.
- --------------------------------------------------------------------------------------------------
Total Equity Securities (Cost $85,414,825) 111,024,815 90.8%
</TABLE>
15
<PAGE> 36
P-I-C GROWTH PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
=====================================================================================================
PRINCIPAL PERCENT OF
SHORT-TERM INVESTMENTS - 7.8% AMOUNT VALUE NET ASSETS
- -----------------------------------------------------------------------------------------------------
COMMERCIAL PAPER - 5.7%
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
American Express Credit Corp., 5.31%, 6/13/96 $ 3,000,000 $ 3,000,000 2.4%
Ford Motor Credit Company, 5.32%, 6/6/96 4,000,000 4,000,000 3.3%
- -----------------------------------------------------------------------------------------------------
Total Commercial Paper (cost $7,000,000) 7,000,000
=====================================================================================================
REPURCHASE AGREEMENT - 2.1%
- -----------------------------------------------------------------------------------------------------
Lehman Brothers On-Line Repurchase Agreement, 4.99%,
dated 4/30/96, due 5/1/96 (Collateralized by $2,790,480
U.S. Treasury Bill, 7.5%, due 10/3/96) (Cost $2,607,200) 2,607,200 2,607,200 2.1%
- -----------------------------------------------------------------------------------------------------
Total Investments (Cost $95,022,025) 120,632,015 98.6%
=====================================================================================================
OTHER ASSETS - 2.0%
- -----------------------------------------------------------------------------------------------------
Cash $ 52
Dividends and interest receivable 59,058
Receivable for investment securities sold 2,390,808
Deferred organization costs 10,037
Other assets 20,267
- -----------------------------------------------------------------------------------------------------
Total Assets 2,480,222 2.0%
=====================================================================================================
LIABILITIES - (0.6%)
- -----------------------------------------------------------------------------------------------------
Payable for investment securities purchased 694,902
Accrued expenses 103,514
- -----------------------------------------------------------------------------------------------------
Total Liabilities 798,416 (0.6%)
=====================================================================================================
TOTAL NET ASSETS - 100.0% $122,313,821 100.0%
- -----------------------------------------------------------------------------------------------------
</TABLE>
*Non-income producing security.
The above descriptions of portfolio companies
are furnished by management solely for the
general information of investors.
Unaudited. See Notes to Financial Statements.
16
<PAGE> 37
P-I-C GROWTH PORTFOLIO
STATEMENT OF OPERATIONS Six Months ended April 30, 1996
<TABLE>
<CAPTION>
===============================================================================
INVESTMENT INCOME
- -------------------------------------------------------------------------------
Income:
- -------------------------------------------------------------------------------
<S> <C>
Dividends $ 305,335
Interest 298,347
- -------------------------------------------------------------------------------
Total income 603,682
===============================================================================
Expenses:
- -------------------------------------------------------------------------------
Investment advisory fee (Note 3) 501,315
Administration fee (Note 3) 62,663
Accounting services fee 32,562
Custody fee 19,445
Auditing fees 10,532
Trustees' fees 7,504
Legal fees 2,194
Insurance 4,804
Amortization of organization costs 4,388
Miscellaneous 4,388
- -------------------------------------------------------------------------------
Total expenses 649,795
Less, reimbursement/waiver from Advisor (Note 3) (23,156)
- -------------------------------------------------------------------------------
Net expenses 626,639
===============================================================================
Net investment loss (22,957)
===============================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------------
Net realized gain from security transactions 9,659,042
Change in net unrealized appreciation of investments (30,882,392)
- -------------------------------------------------------------------------------
Net loss on investments (21,223,350)
===============================================================================
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(21,246,307)
- -------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements. 17
<PAGE> 38
P-I-C GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
===============================================================================================================
(DECREASE) INCREASE IN NET ASSETS:
- ---------------------------------------------------------------------------------------------------------------
Six Months Year
ended ended
From operations: April 30, 1996 October 31, 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment (loss) income $ (22,957) $ 149,206
Net realized gain on investments 9,659,042 3,599,901
Change in unrealized appreciation of investments (30,882,392) 36,436,183
- ---------------------------------------------------------------------------------------------------------------
Net (decrease) increase in net assets resulting from operations (21,246,307) 40,185,290
===============================================================================================================
Transactions in Interests:
Contributions by Holders 8,463,562 37,495,575
Withdrawals by Holders (94,745,682) (25,350,557)
- ---------------------------------------------------------------------------------------------------------------
Net (decrease) increase in net assets from
transactions in interests (86,282,120) 12,145,018
===============================================================================================================
Total (decrease) increase in net assets (107,528,427) 52,330,308
===============================================================================================================
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 229,842,248 177,511,940
- ---------------------------------------------------------------------------------------------------------------
End of period $122,313,821 $229,842,248
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
18
<PAGE> 39
P-I-C GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS April 30, 1996
================================================================================
1 -- ORGANIZATION
- --------------------------------------------------------------------------------
P-I-C Growth Portfolio (the "Portfolio") was organized on December 11, 1991
as a trust under the laws of the State of New York. The beneficial interests in
the Portfolio are divided into an unlimited number of non-transferable
Interests, par value $.01 each. The Portfolio is registered under the Investment
Company Act of 1940 as an open-end, diversified management investment company.
2 -- SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
The following is a summary of significant accounting policies consistently
followed by the Portfolio. These policies are in conformity with generally
accepted accounting principles.
A. Valuation of Securities. Equity securities listed on a national securities
exchange or traded on the NASDAQ system are valued at their last sale
price. Other equity securities and debt securities for which market
quotations are readily available are valued at the mean between their bid
and asked price, except that debt securities maturing within 60 days are
valued on an amortized cost basis. Securities for which market quotations
are not readily available are valued at fair value as determined in good
faith by the Board of Trustees.
B. Federal Income Taxes. The Portfolio intends to comply with the requirements
of the Internal Revenue Code applicable to it. Therefore, no federal income
tax provision is required.
C. Deferred Organization Expense. Organization costs of the Portfolio are
being amortized on a straight line basis over a period of sixty months.
During the amortization period the proceeds of any redemption of the
original Interests in the Portfolio by any Holder thereof will be reduced
by a pro rata portion of any then unamortized organization costs based on
the ratio of Interests redeemed to the total initial Interests outstanding
prior to the redemption.
D. Other. Securities transactions are recorded on the trade date basis.
Realized gains and losses from securities transactions are reported on an
identified cost basis. Interest is recorded as accrued, and dividend income
is recorded on the ex-dividend date.
3 -- TRANSACTIONS WITH AFFILIATES
The Portfolio has entered into an investment advisory agreement with
Provident Investment Counsel, Inc. ("PIC") and an administration agreement with
Investment Company Administration Corporation ("ICAC"), pursuant to which
agreements certain employees of these entities serve as officers and/or trustees
of the Portfolio. PIC and ICAC also provide management services necessary for
the operations of the Portfolio and furnish office facilities.
PIC receives a fee for its services to the Portfolio at the rate of 0.80%
of the average daily net assets of the Portfolio. PIC has voluntarily agreed to
limit the total expenses of the Portfolio to an annual rate of 1.00% of the
Portfolio's average net assets. During the period ended April 30, 1996, PIC
received $478,159 in fees from the Portfolio, after deducting the reimbursement
of $23,156. ICAC receives an annual fee for its services at the rate of 0.10% of
average daily net assets of the Portfolio. Fees paid to ICAC pursuant to the
agreement totalled $62,663 for the period ended April 30, 1996.
19
<PAGE> 40
P-I-C GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS, CONTINUED
================================================================================
4 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
During the period ended April 30, 1996, purchases and sales of investment
securities, other than short-term obligations, were $51,778,367 and
$169,047,756, respectively. The cost of securities for federal income tax
purposes was $95,022,025. The aggregate gross unrealized appreciation and
depreciation of portfolio securities, based on cost for federal income tax
purposes, were as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized appreciation $ 26,505,818
Unrealized depreciation (895,827)
------------
Net unrealized appreciation $ 25,609,991
============
</TABLE>
- --------------------------------------------------------------------------------
5 - SELECTED RATIO DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year Year
ended ended ended ended
April 30, 1996 October 31, 1995 October 31, 1994 October 31, 1993
-------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Ratios to average net assets:
Operating expenses* 1.00%++ 1.00% 1.00% 1.00%
Net investment (loss) income* (0.04%)++ 0.08% 0.10% 0.17%
Portfolio turnover rate 36.09% 54.89% 68.26% 43.20%
</TABLE>
++Annualized.
*Net of expense reimbursements equivalent to 0.04%, 0.01%, 0.01% and 0.09% of
average net assets, respectively.
20
<PAGE> 41
P-I-C INSTITUTIONAL GROWTH FUND
TRUSTEES AND OFFICERS
================================================================================
TRUSTEES AND OFFICERS - P-I-C 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 - P-I-C GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Jeffrey J. Miller, Trustee and President
Richard N. Frank, Trustee
Bernard J. Johnson, Trustee Emeritus
James Clayburn LaForce, Trustee
Angelo R. Mozilo, Trustee
Thad M. Brown, Vice President, Secretary and Treasurer
LEGAL COUNSEL - P-I-C INVESTMENT TRUST
- --------------------------------------------------------------------------------
Shereff, Friedman, Hoffman & Goodman
LEGAL COUNSEL - P-I-C GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Heller, Ehrman, White & McAuliffe
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
McGladrey & Pullen, LLP
This report is intended for the information of shareholders of P-I-C
Institutional Growth Fund and should not be used as sales literature unless
preceded or accompanied by a current prospectus.
21
<PAGE> 42
P-I-C
SMALL CAP
GROWTH FUND
SEMI-ANNUAL REPORT
APRIL 30, 1996
<PAGE> 43
P-I-C
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 P-I-C SMALL CAP. GROWTH FUND (THE
"FUND").
Question: How did the P-I-C Small Cap. Growth Fund perform relative to the
overall market and comparable indices for the six months ended April 30, 1996?
Answer: The Standard & Poor's 500 Index, a broad measure of the market's overall
performance, rose 11.97%, while the Fund rose 29.21%. The Russell 2000 Index, a
broad measure of smaller capitalization stocks, rose 16.99% for the period.
Question: What has fueled the broad market and the Fund's positive performance
during the last six months?
Answer: Beginning in late January the Federal Reserve cut interest rates by
.25%. This seemed to fuel an already strong economy. Lower interest rates
combined with strong earnings reports from companies and record inflows into
equity mutual funds have moved the market to higher levels. A more controlled
inflationary environment and a strong dollar have interested investors in small
domestic companies versus large multi-nationals. Recently we have begun to see
an increase in bond yields that has caused some volatility in the markets.
Question: What sectors have helped the Fund to outperform the broad market
during the last six months?
Answer: The technology holdings that ended the year 1995 and began 1996 under
pressure have rebounded strongly as positive earnings reports have been
announced. The healthcare, specialty finance and retail sectors have also helped
the Fund's performance.
Question: What is the outlook for near term and through the remainder of 1996?
Answer: It appears as though we have entered into a market that favors growth
oriented stocks in the near term and although valuation of some of these
securities has risen we remain confident in the ability of the Fund's holdings
to continue to show positive sales and earnings growth. Growth stocks have
historically outperformed other issues in periods of economic uncertainty
because investors are attracted to those growth issues that will deliver sales
and earnings growth in any economic environment. The bond market appears to be
pricing in a possible increase in rates by the Federal Reserve late in 1996 and
this may cause some volatility in the equity markets later this year.
2
<PAGE> 44
P-I-C
SMALL CAP
GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES as of April 30, 1996
<TABLE>
<CAPTION>
====================================================================================
ASSETS
- ------------------------------------------------------------------------------------
<S> <C>
Investment in P-I-C Small Cap. Portfolio, at value $188,307,014
Receivable from Advisor 6,195
Prepaid insurance 3,669
- ------------------------------------------------------------------------------------
Total Assets 188,316,878
====================================================================================
LIABILITIES
- ------------------------------------------------------------------------------------
Accrued expenses 18,120
====================================================================================
NET ASSETS
- ------------------------------------------------------------------------------------
Applicable to 7,795,587 shares of beneficial interest outstanding $188,298,758
====================================================================================
NET ASSET VALUE PER SHARE $ 24.15
- ------------------------------------------------------------------------------------
====================================================================================
SOURCE OF NET ASSETS
- ------------------------------------------------------------------------------------
Paid-in capital $107,784,387
Accumulated net investment loss (1,409,090)
Accumulated net realized loss on investments (4,501,244)
Net unrealized appreciation of investments 86,424,705
- ------------------------------------------------------------------------------------
Net Assets $188,298,758
- ------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
3
<PAGE> 45
P-I-C
SMALL CAP
GROWTH FUND
STATEMENT OF OPERATIONS Six Months ended April 30, 1996
<TABLE>
<CAPTION>
================================================================================
INVESTMENT INCOME
- --------------------------------------------------------------------------------
<S> <C>
Net investment loss from Portfolio $ (469,817)
================================================================================
Expenses
- --------------------------------------------------------------------------------
Administration fees (Note 3) 153,518
Reports to shareholders 2,983
Trustees' fees 6,215
Auditing fee 4,475
Legal fee 3,096
Transfer agent's fee 9,548
Custody and accounting services fee 3,000
Miscellaneous 3,258
- --------------------------------------------------------------------------------
Total expenses 186,093
Less, reimbursement/waiver by Provident Investment
Counsel, Inc. (Note 3) (186,093)
- --------------------------------------------------------------------------------
Net expenses -0-
================================================================================
Net investment loss (469,817)
================================================================================
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain on investments 9,181,394
Change in net unrealized appreciation of investments 32,655,854
- --------------------------------------------------------------------------------
Net gain on investments 41,837,248
================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 41,367,431
- --------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
4
<PAGE> 46
P-I-C
SMALL CAP
GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
======================================================================================================
INCREASE IN NET ASSETS
- ------------------------------------------------------------------------------------------------------
Six Months Year
ended ended
From operations: April 30, 1996 October 31, 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment loss $ (469,817) $ (488,787)
Net realized gain (loss) on investments 9,181,394 (792,768)
Change in unrealized appreciation of investments 32,655,854 39,983,063
- ------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 41,367,431 38,701,508
======================================================================================================
Transactions in shares of beneficial interest:
Purchases of 953,497 and 791,568 shares, respectively 19,302,025 12,507,087
Redemptions of 129,793 and 357,853 shares, respectively 2,678,037 (5,217,154)
- ------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from share transactions 16,623,988 7,289,933
======================================================================================================
Total increase in net assets 57,991,419 45,991,441
======================================================================================================
NET ASSETS
- ------------------------------------------------------------------------------------------------------
Beginning of period 130,307,339 84,315,898
- ------------------------------------------------------------------------------------------------------
End of period $188,298,758 $130,307,339
- ------------------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
5
<PAGE> 47
P-I-C
SMALL CAP
GROWTH FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
======================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------------------------------------
Six Months Year Year September 30, 1993*
ended ended ended through
April 30, 1996 October 31, 1995 October 31, 1994 October 31, 1993
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.69 $ 12.90 $ 13.05 $ 12.83
- ----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.05) (.07) (.06) (.01)
Net realized and unrealized
gain (loss) on investments 5.51 5.86 (.09) .23
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations 5.46 5.79 (.15) .22
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.15 $ 18.69 $ 12.90 $ 13.05
======================================================================================================================
Total return 58.43%++ 44.88% (1.15%) 19.50%++
======================================================================================================================
Ratios/supplemental data:
Net assets, end of period (millions) $ 188.3 $ 130.3 $ 84.3 $ 82.6
- ----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:+**
Expenses 1.00%++ 1.00% 1.00% 1.00%++
Net investment loss (.63%)++ (.51%) (.49%) (.79%)++
</TABLE>
*Commencement of operations.
+Net of expense reimbursements.
**Includes the Fund's shares of expenses, net of expense reimbursements and
waivers, allocated from P-I-C Small Cap. Portfolio. If the expense
reimbursements and waivers, with respect to the Fund and P-I-C Small Cap.
Portfolio, had not been made, the ratio of expenses to average net assets would
have been 1.27%, 1.34%, 1.47% and 1.22%, respectively.
++Annualized.
Unaudited. See Notes to Financial Statements.
6
<PAGE> 48
P-I-C
SMALL CAP
GROWTH FUND
NOTES TO FINANCIAL STATEMENTS April 30, 1996
================================================================================
1 - ORGANIZATION
- --------------------------------------------------------------------------------
P-I-C Small Cap. Growth Fund (the "Fund") is one of several series of
P-I-C 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 P-I-C Small Cap.
Portfolio (the "Portfolio"), a separate registered management investment company
having the same investment objective as the Fund. At April 30, 1996, 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 $148,546 for the period ended April 30, 1996.
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 period ended April 30, 1996 was $37,547. ICAC receives an
annual fee for its services at the rate of $10,000.
7
<PAGE> 49
P-I-C
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 $19,333,737 and $2,726,025, respectively.
8
<PAGE> 50
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
=============================================================================
EQUITY SECURITIES - 93.0% SHARES VALUE
- -----------------------------------------------------------------------------
<S> <C> <C>
AIR FREIGHT .. 0.3%
- -----------------------------------------------------------------------------
Eagle USA Airfreight, Inc.* 15,500 $ 469,844
==============================================================================
AUDIO/VIDEO .. 0.4%
- -----------------------------------------------------------------------------
Harman International Industries, Inc. 17,495 826,639
==============================================================================
AUTO PARTS .. 0.2%
- -----------------------------------------------------------------------------
Gentex Corp.* 9,700 383,150
==============================================================================
BEVERAGES .. 0.1%
- -----------------------------------------------------------------------------
Big Rock Brewery Ltd.* 12,900 114,487
==============================================================================
BEVERAGE/FOOD .. 0.2%
- -----------------------------------------------------------------------------
Redhook Ale Brewer, Inc.* 14,800 344,100
==============================================================================
BIOTECHNOLOGY .. 0.5%
- -----------------------------------------------------------------------------
Martek Biosciences Corp.* 12,300 425,887
Neuromedical Systems, Inc.* 11,100 242,813
Protein Design Labs, Inc.* 12,200 323,300
- -----------------------------------------------------------------------------
Total Biotechnology 992,000
==============================================================================
BUILDERS .. 0.3%
- -----------------------------------------------------------------------------
Palm Harbor Homes, Inc.* 18,600 516,150
==============================================================================
BUILDING PRODUCTS .. 3.1%
- -----------------------------------------------------------------------------
Fastenal Co. 150,500 5,756,625
==============================================================================
BUSINESS INFORMATION SERVICES .. 0.3%
- -----------------------------------------------------------------------------
Intelliquest Information Group, Inc.* 5,500 211,750
M.A.I.D. PLC ADR* 23,300 332,025
==============================================================================
Total Business Information Services 543,775
</TABLE>
9
<PAGE> 51
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
===========================================================================
EQUITY SECURITIES, CONTINUED SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
BUSINESS SERVICES .. 5.2%
- ---------------------------------------------------------------------------
Accustaff Inc.* 89,700 $ 2,668,575
Apac Teleservices, Inc.* 20,000 1,550,000
Career Horizons* 19,900 701,475
CSG Systems, Inc.* 2,000 64,000
Data Processing Resources Corp.* 19,700 497,425
Dendrite International, Inc.* 6,100 144,875
Health Management Systems, Inc.* 29,625 762,844
PMT Services, Inc.* 69,600 2,009,700
Protection One, Inc.* 23,600 371,700
Rural Metro Corp.* 16,600 491,775
Wackenhut Corrections Corp.* 8,400 449,400
- ---------------------------------------------------------------------------
Total Business Services 9,711,769
============================================================================
CHEMICALS .. 0.1%
- ---------------------------------------------------------------------------
NuCo2, Inc.* 4,500 122,625
============================================================================
COMPUTER SERVICES .. 4.5%
- ---------------------------------------------------------------------------
Cambridge Technology Partners, Inc.* 19,500 1,311,375
Cycare Systems, Inc.* 10,600 386,900
Datastream Systems, Inc.* 16,200 526,500
Dataworks Corp.* 2,200 32,450
Enterprise Systems, Inc.* 7,100 237,850
Envoy Corp.* 7,600 219,450
Gartner Group, Inc., Class A* 31,600 1,082,300
HBO & Co. 8,000 950,000
HCIA, Inc.* 23,200 1,252,800
Indus Group, Inc.* 13,000 276,250
Itron, Inc.* 19,600 1,151,500
May & Speh, Inc.* 10,400 141,700
PowerCerv Corp.* 10,800 145,800
Premiere Technologies, Inc.* 10,300 388,825
Renaissance Solutions, Inc.* 11,400 376,200
- ---------------------------------------------------------------------------
Total Computer Services 8,479,900
</TABLE>
10
<PAGE> 52
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
=======================================================================
EQUITY SECURITIES, CONTINUED SHARES VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE .. 11.8%
- -----------------------------------------------------------------------
Aspen Technology, Inc.* 19,100 $ 1,060,050
Astea International, Inc.* 11,300 333,350
Avant Corp.* 4,500 96,750
Baan Company, N.V.* 4,800 288,000
BDM International, Inc.* 19,100 888,150
Citrix Systems, Inc.* 6,300 491,400
Data Dimensions* 1,800 69,300
Electronics For Imaging, Inc.* 34,800 2,122,800
Epic Design Technology, Inc.* 21,400 732,950
Fiserv, Inc.* 49,200 1,500,600
Gemstar International Group Limited* 8,400 278,250
HNC Software, Inc.* 11,600 432,100
Integrated Systems, Inc.* 17,200 503,100
McAfee Associates* 9,850 603,312
Meta-Software, Inc.* 20,500 369,000
Microchip Technology, Inc.* 26,400 673,200
Network General Corp.* 31,200 1,376,700
OrCAD, Inc.* 12,600 168,525
Parametric Technology Corp.* 125,600 5,055,400
Peoplesoft, Inc.* 20,800 1,310,400
Pinnacle Systems, Inc.* 6,600 169,950
Synopsys, Inc.* 48,900 2,017,125
Transactions Systems Architects, Inc.* 24,400 1,305,400
TCSI Corp.* 9,900 324,225
- -----------------------------------------------------------------------
Total Computer Software 22,170,037
=======================================================================
COSMETICS AND SOAPS .. 0.3%
- -----------------------------------------------------------------------
USA Detergents, Inc.* 15,200 623,200
=======================================================================
CREDIT & FINANCE .. 1.6%
- -----------------------------------------------------------------------
First USA Paymentech, Inc.* 19,800 861,300
First USA, Inc. 38,700 2,176,875
- -----------------------------------------------------------------------
Total Credit & Finance 3,038,175
</TABLE>
11
<PAGE> 53
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
=============================================================================
EQUITY SECURITIES, CONTINUED SHARES VALUE
- -----------------------------------------------------------------------------
<S> <C> <C>
DISCOUNT STORES .. 0.8%
- -----------------------------------------------------------------------------
Dollar Tree Stores, Inc.* 46,800 $ 1,567,800
=============================================================================
DRUGS .. 1.7%
- -----------------------------------------------------------------------------
Arris Pharmaceutical Corp.* 31,300 485,150
Biovail Corp. International* 17,000 480,250
Cephalon, Inc.* 18,400 529,000
Jones Medical Industries, Inc. 11,250 587,812
NCS Healthcare, Inc., Class A* 2,000 67,000
Watson Pharmaceuticals, Inc.* 23,300 1,106,750
- -----------------------------------------------------------------------------
Total Drugs 3,255,962
=============================================================================
EDUCATIONAL PROGRAMS .. 1.5%
- -----------------------------------------------------------------------------
Apollo Group, Inc., Class A* 54,748 2,408,912
Sylvan Learning Systems, Inc.* 11,000 426,250
- -----------------------------------------------------------------------------
Total Educational Programs 2,835,162
=============================================================================
ELECTRIC COMPONENTS/SEMICONDUCTORS .. 4.1%
- -----------------------------------------------------------------------------
Atmel Corp.* 149,200 5,968,000
Brooks Automation, Inc.* 15,700 235,500
C.P. Clare Corp.* 9,300 196,462
Electroglas, Inc.* 15,900 310,050
Linear Technology Corp. 28,600 983,125
Mattson Technology, Inc.* 5,700 86,925
- -----------------------------------------------------------------------------
Total Electric Components/Semiconductors 7,780,062
=============================================================================
ELECTRICAL EQUIPMENT/PERIPHERALS .. 0.5%
- -----------------------------------------------------------------------------
Dialogic Corp.* 6,100 283,650
Eltron International, Inc.* 13,800 396,750
Xeikon N.V. Sponsored ADR* 10,900 252,063
- -----------------------------------------------------------------------------
Total Electrical Equipment/Peripherals 932,463
</TABLE>
12
<PAGE> 54
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
=================================================================================
EQUITY SECURITIES, CONTINUED SHARES VALUE
- ---------------------------------------------------------------------------------
<S> <C> <C>
ELECTRICAL PRODUCTS .. 0.4%
- ---------------------------------------------------------------------------------
Chicago Miniature Lamp, Inc.* 18,300 $ 750,300
==================================================================================
ELECTRONICS .. 0.4%
- ---------------------------------------------------------------------------------
Maxim Integrated Products, Inc.* 19,700 674,725
Photon Dynamics, Inc.* 16,900 169,000
- ---------------------------------------------------------------------------------
Total Electronics 843,725
==================================================================================
ENGINEERING & CONSTRUCTION .. 0.4%
- ---------------------------------------------------------------------------------
Oakwood Homes Corp. 16,000 714,000
==================================================================================
ENTERTAINMENT & LEISURE .. 3.3%
- ---------------------------------------------------------------------------------
Ascent Entertainment Group, Inc.* 13,500 246,375
Chancellor Corp., Class A* 6,300 160,650
HFS, Inc.* 90,300 4,639,162
Paxson Communications Corp.* 47,800 711,025
StudioPLUS Hotels, Inc.* 18,400 510,600
- ---------------------------------------------------------------------------------
Total Entertainment & Leisure 6,267,812
==================================================================================
EQUIPMENT & LEASING .. 0.5%
- ---------------------------------------------------------------------------------
Oxford Resources Corp., Class A* 29,100 858,450
==================================================================================
FINANCIAL SERVICES .. 1.1%
- ---------------------------------------------------------------------------------
Advanta Corp., Class B 10,600 531,325
Bisys Group, Inc.* 27,600 1,055,700
Credit Acceptance Corp.* 12,200 228,750
The Profit Recovery Group International, Inc.* 11,900 236,513
- ---------------------------------------------------------------------------------
Total Financial Services 2,052,288
==================================================================================
FUNERAL SERVICES .. 0.2%
- ---------------------------------------------------------------------------------
Myriad Genetics, Inc.* 13,600 447,950
</TABLE>
13
<PAGE> 55
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
============================================================================
EQUITY SECURITIES, CONTINUED SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
GAMING .. 0.7%
=============================================================================
Sodak Gaming, Inc.* 15,300 $ 393,975
Trump Hotels & Casino Resorts, Inc.* 28,400 919,450
- ----------------------------------------------------------------------------
Total Gaming 1,313,425
=============================================================================
HEALTH INDUSTRY SERVICES .. 0.5%
- ----------------------------------------------------------------------------
Physician Reliance Network* 22,300 964,475
=============================================================================
HOUSEHOLD PRODUCTS .. 0.7%
- ----------------------------------------------------------------------------
Blyth Industries, Inc.* 32,100 1,275,975
=============================================================================
INDUSTRIALS .. 0.1%
- ----------------------------------------------------------------------------
Continental Waste Industries, Inc.* 18,466 221,592
=============================================================================
INSURANCE .. 6.7%
- ----------------------------------------------------------------------------
Amerin Corp.* 15,100 341,637
Enhance Financial Services Group, Inc. 7,200 195,300
HCC Insurance Holdings, Inc. 29,300 1,714,050
Healthsource, Inc.* 47,300 1,614,112
Meadowbrook Insurance Group, Inc. 13,300 413,963
Oxford Health Plans, Inc.* 163,400 8,251,700
RISCORP, Inc., Class A* 7,000 165,375
- ----------------------------------------------------------------------------
Total Insurance 12,696,137
=============================================================================
MACHINERY/TOOLS .. 0.4%
- ----------------------------------------------------------------------------
Cognex Corp.* 26,800 716,900
=============================================================================
MEDICAL/DENTAL PRODUCTS ..1.9%
- ----------------------------------------------------------------------------
Arrow International, Inc. 27,000 1,066,500
Arterial Vascular Engineering, Inc.* 22,000 968,000
Heartstream, Inc.* 24,200 369,050
Henry Schein, Inc.* 16,600 597,600
</TABLE>
14
<PAGE> 56
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
===============================================================================
EQUITY SECURITIES, CONTINUED SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
MEDICAL/DENTAL PRODUCTS, CONTINUED
- -------------------------------------------------------------------------------
Metra Biosystems, Inc.* 13,100 $ 176,850
Research Medical, Inc.* 14,300 359,288
- -------------------------------------------------------------------------------
Total Medical/Dental Products 3,537,288
================================================================================
MEDICAL/DENTAL SERVICES .. 4.9%
- -------------------------------------------------------------------------------
Avecor Cardiovascular, Inc.* 25,100 320,025
Compdent Corp.* 28,000 1,239,000
Medpartners/Mullikin, Inc.* 17,800 513,975
Occusystems, Inc.* 7,300 211,700
Orthodontic Centers of America, Inc.* 32,900 1,299,550
Pediatrix Medical Group, Inc.* 14,400 687,600
Phymatrix Corp.* 26,500 503,500
Physicians Resource Group, Inc.* 10,000 301,250
Quintiles Transnational Corp.* 28,100 2,058,325
Renal Care Group, Inc.* 14,200 489,900
Total Renal Care Holdings, Inc.* 43,400 1,660,050
- -------------------------------------------------------------------------------
Total Medical/Dental Services 9,284,875
================================================================================
MEDICAL INSTRUMENTS .. 0.5%
- -------------------------------------------------------------------------------
Angeion Corp.* 27,400 291,125
Cardio Thoracic Systems, Inc.* 9,600 226,800
Conceptus, Inc.* 14,700 290,325
Heartport, Inc.* 2,700 96,525
- -------------------------------------------------------------------------------
Total Medical Instruments 904,775
================================================================================
MEDICAL PRODUCTS .. 5.2%
- -------------------------------------------------------------------------------
Gulf South Medical Supply* 36,600 1,482,300
IDEXX Laboratories, Inc.* 110,700 4,926,150
Isolyser Company, Inc.* 41,100 729,525
Omnicare, Inc. 12,900 774,000
Target Therapeutics, Inc.* 33,800 1,833,650
- -------------------------------------------------------------------------------
Total Medical Products 9,745,625
</TABLE>
15
<PAGE> 57
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
================================================================================
EQUITY SECURITIES, CONTINUED SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
MEDICAL SPECIALTIES .. 0.2%
- --------------------------------------------------------------------------------
Neopath, Inc.* 19,300 $ 443,900
=================================================================================
MORTGAGE & RELATED SERVICES .. 1.1%
- --------------------------------------------------------------------------------
Cityscape Financial Corp.* 33,800 1,478,750
ContiFinancial Corp.* 18,800 599,250
- --------------------------------------------------------------------------------
Total Mortgage & Related Services 2,078,000
=================================================================================
NETWORKING .. 2.0%
- --------------------------------------------------------------------------------
Ascend Communications, Inc.* 33,200 2,041,800
Fore Systems, Inc.* 9,200 726,800
SDL, Inc.* 17,400 709,050
VideoServer, Inc.* 7,500 251,250
- --------------------------------------------------------------------------------
Total Networking 3,728,900
=================================================================================
OFFICE EQUIPMENT/SUPPLIES .. 1.6%
- --------------------------------------------------------------------------------
Viking Office Products, Inc.* 50,000 2,968,750
=================================================================================
OFFICE PRODUCTS .. 0.3%
- --------------------------------------------------------------------------------
U.S. Office Products Co.* 16,600 597,600
=================================================================================
OIL FIELD SERVICES .. 0.5%
- --------------------------------------------------------------------------------
Chesapeake Energy Corp.* 13,200 933,900
=================================================================================
PACKAGE GOODS/COSMETICS .. 1.3%
- --------------------------------------------------------------------------------
Luxottica Group SPA ADR 31,100 2,503,550
=================================================================================
PHARMACEUTICALS .. 0.3%
- --------------------------------------------------------------------------------
Express Scripts, Inc.* 11,600 574,200
</TABLE>
16
<PAGE> 58
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
==================================================================================
EQUITY SECURITIES, CONTINUED SHARES VALUE
- ----------------------------------------------------------------------------------
<S> <C> <C>
POLLUTION CONTROL .. 1.9%
- ----------------------------------------------------------------------------------
Memtec Ltd. ADR 29,700 $ 813,038
Republic Industries, Inc.* 31,500 1,031,625
United Waste Systems, Inc.* 16,100 885,500
USA Waste Services, Inc.* 34,000 884,000
- ----------------------------------------------------------------------------------
Total Pollution Control 3,614,163
===================================================================================
PUBLISHING/ADVERTISING .. 0.3%
- ----------------------------------------------------------------------------------
PIA Merchandising Services, Inc.* 20,300 532,875
===================================================================================
RADIO, TELEVISION & BROADCASTING .. 0.8%
- ----------------------------------------------------------------------------------
Clear Channel Communications, Inc.* 23,600 1,598,900
===================================================================================
REAL ESTATE .. 1.1%
- ----------------------------------------------------------------------------------
Insignia Financial Group, Class A* 94,000 2,068,000
===================================================================================
REAL ESTATE INVESTMENT .. 0.3%
- ----------------------------------------------------------------------------------
Apartment Investment & Management Co., Class A 24,000 504,000
===================================================================================
RESTAURANTS .. 1.7%
- ----------------------------------------------------------------------------------
Lone Star Steakhouse & Saloon* 31,700 1,311,587
Outback Steakhouse, Inc.* 38,200 1,532,775
Starbucks Corp.* 11,100 301,088
- ----------------------------------------------------------------------------------
Total Restaurants 3,145,450
===================================================================================
RETAIL .. 2.7%
- ----------------------------------------------------------------------------------
Cooper & Chyan Technology, Inc.* 11,200 198,800
Just For Feet, Inc.* 22,200 1,062,825
Kenneth Cole Productions, Class A* 60,200 1,204,000
Sunglass Hut International, Inc.* 88,200 2,579,850
- ----------------------------------------------------------------------------------
Total Retail 5,045,475
</TABLE>
17
<PAGE> 59
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
=============================================================================
EQUITY SECURITIES, CONTINUED SHARES VALUE
- -----------------------------------------------------------------------------
<S> <C> <C>
SPECIALTY CHAINS .. 2.0%
- -----------------------------------------------------------------------------
Baby Superstore, Inc.* 11,250 $ 511,875
Barnett, Inc.* 7,500 176,250
CDW Computers Centers, Inc.* 15,300 1,183,837
Garden Ridge Corp.* 24,800 1,376,400
Petco Animal Supplies, Inc.* 8,000 230,000
Wilmar Industries, Inc.* 12,300 292,125
- -----------------------------------------------------------------------------
Total Specialty Chains 3,770,487
==============================================================================
TELECOMMUNICATIONS .. 6.9%
- -----------------------------------------------------------------------------
Arch Communications Group* 238,000 565,250
Aspect Telecommunications Corp.* 203,000 1,167,250
CAI Wireless Systems* 13,800 94,875
Cascade Communications Corp.* 22,950 2,300,738
Cidco, Inc.* 14,100 504,075
Coherent Communications System Corp.* 27,200 523,600
Colonial Data Technologies Corp.* 37,500 857,812
DSP Communications, Inc.* 57,800 2,297,550
Glenayre Technologies, Inc.* 35,725 1,661,212
Inter-Tel, Inc., Class A* 20,200 426,725
MRV Communications, Inc.* 21,900 908,850
P-Com, Inc.* 39,700 982,575
Pronet, Inc.* 9,500 300,438
Tel-Save Holdings, Inc.* 27,750 464,813
- -----------------------------------------------------------------------------
Total Telecommunications 13,055,763
==============================================================================
TELEPHONE .. 0.1%
- -----------------------------------------------------------------------------
TresCom International, Inc.* 6,500 125,125
</TABLE>
18
<PAGE> 60
P-I-C
SMALL CAP
PORTFOLIO
STATEMENT OF NET ASSETS as of April 30, 1996
<TABLE>
<CAPTION>
==============================================================================================
EQUITY SECURITIES, CONTINUED SHARES VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
TEXTILES & SHOES .. 2.5%
- ----------------------------------------------------------------------------------------------
Mossimo, Inc.* 2,600 $ 98,800
Tommy Hilfiger Corp.* 99,800 4,540,900
- ----------------------------------------------------------------------------------------------
Total Textiles & Shoes 4,639,700
- ----------------------------------------------------------------------------------------------
Total Common Stock (Cost $88,563,452) 174,988,255
<CAPTION>
==============================================================================================
SHORT-TERM INVESTMENTS - 7.2% PRINCIPAL AMOUNT
===============================================================================================
COMMERCIAL PAPER .. 5.8%
- ----------------------------------------------------------------------------------------------
American Express Credit Corp., 5.31%, 6/13/96 $3,000,000 3,000,000
Ford Motor Credit Co., 5.73%, 11/22/96 8,000,000 8,000,000
- ----------------------------------------------------------------------------------------------
Total Commercial Paper (Cost $11,000,000) 11,000,000
===============================================================================================
REPURCHASE AGREEMENT .. 1.4%
- ----------------------------------------------------------------------------------------------
Lehman Brothers On-Line Repurchase Agreement, 4.99%,
dated 4/30/96, due 5/1/96 (Collateralized by $2,746,118
U.S. Treasury Bill, 7.5%, due 10/3/96) (Cost $2,648,500) 2,648,500 2,648,500
- ----------------------------------------------------------------------------------------------
Total Investments (Cost $102,211,952) 100.2% 188,636,755
</TABLE>
19
<PAGE> 61
P-I-C STATEMENT OF NET ASSETS AS OF APRIL 30, 1996
SMALL CAP
PORTFOLIO
<TABLE>
<CAPTION>
================================================================================
VALUE
<S> <C>
- --------------------------------------------------------------------------------
OTHER ASSETS - 0.1%
- --------------------------------------------------------------------------------
Cash $ 6
Receivables:
For investment securities sold 187,500
Dividends and interest 11,373
Deferred organization costs 25,028
Other assets 13,254
- --------------------------------------------------------------------------------
Total other assets 237,161
================================================================================
LIABILITIES - (0.3%)
- --------------------------------------------------------------------------------
Payable for investment securities purchased 417,721
Accrued expenses 148,992
- --------------------------------------------------------------------------------
Total liabilities 566,713
================================================================================
TOTAL NET ASSETS - 100.0% $188,307,203
- --------------------------------------------------------------------------------
</TABLE>
*Non-incoming producing security.
Unaudited. See Notes to Financial Statements.
20
<PAGE> 62
P-I-C STATEMENT OF OPERATIONS SIX MONTHS ENDED APRIL 30, 1996
SMALL CAP
PORTFOLIO
<TABLE>
<S> <C>
===============================================================================================
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------
Income:
- -----------------------------------------------------------------------------------------------
Dividends $ 44,880
Interest 223,236
Other 4,856
- -----------------------------------------------------------------------------------------------
Total income 272,972
===============================================================================================
Expenses:
- -----------------------------------------------------------------------------------------------
Investment advisory fee (Note 3) 594,232
Administration fees 74,279
Accounting services fee 37,503
Custodian fee 23,404
Auditing fee 7,458
Trustees' fees 8,503
Legal fee 2,486
Amortization of organization costs 4,972
Miscellaneous 6,552
- -----------------------------------------------------------------------------------------------
Total expenses 759,389
Less, reimbursement/waiver from Advisor (Note 3) (16,600)
- -----------------------------------------------------------------------------------------------
Net expenses 742,789
===============================================================================================
Net investment loss (469,817)
===============================================================================================
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
- -----------------------------------------------------------------------------------------------
Net realized gain from security transactions 9,181,404
Change in net unrealized appreciation of investments for the period 32,655,887
- -----------------------------------------------------------------------------------------------
Net gain on investments 41,837,291
===============================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $41,367,474
- -----------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
21
<PAGE> 63
P-I-C STATEMENT OF CHANGES IN NET ASSETS
SMALL CAP
PORTFOLIO
<TABLE>
<CAPTION>
=================================================================================================
NET INCREASE IN NET ASSETS
- -------------------------------------------------------------------------------------------------
Six Months Year
ended ended
From operations: April 30, 1996 October 31,1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment loss $ (469,817) $ (488,788)
Net realized gain (loss) on investments 9,181,404 (792,768)
Change in unrealized appreciation of investments 32,655,887 39,983,109
- -------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 41,367,474 38,701,553
=================================================================================================
Transactions in interests:
Contributions by Holders 19,333,737 12,662,902
Withdrawals by Holders (2,726,025) (5,287,514)
- -------------------------------------------------------------------------------------------------
Net increase in net assets from transactions in interests 16,607,712 7,375,388
=================================================================================================
Total increase in net assets 57,975,186 46,076,941
=================================================================================================
NET ASSETS:
- -------------------------------------------------------------------------------------------------
Beginning of period 130,332,017 84,255,076
- -------------------------------------------------------------------------------------------------
End of period $188,307,203 $130,332,017
- -------------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
22
<PAGE> 64
P-I-C NOTES TO FINANCIAL STATEMENTS April 30, 1996
SMALL CAP
PORTFOLIO
================================================================================
1 - ORGANIZATION
- --------------------------------------------------------------------------------
P-I-C 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 period ended April 30, 1996, PIC
received $577,632 in fees from the Portfolio, after deducting fees waived and
expenses reimbursed of $16,600. 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 $74,279 for the period ended April 30, 1996.
23
<PAGE> 65
P-I-C NOTES TO FINANCIAL STATEMENTS, continued
SMALL CAP
PORTFOLIO
================================================================================
4 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
During the period ended April 30, 1996, purchases and sales of investment
securities, other than short-term obligations, were $45,189,716 and $35,460,420,
respectively. The cost of securities for federal income tax purposes was
$102,211,952. The aggregate gross unrealized appreciation and depreciation of
portfolio securities, based on cost for federal income tax purposes, were as
follows:
<TABLE>
<S> <C>
Unrealized appreciation $87,340,785
Unrealized depreciation (915,982)
-----------
Net unrealized appreciation $86,424,803
===========
</TABLE>
5 - SELECTED RATIO DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year September 30, 1993*
ended ended ended through
April 30, 1996 October 31, 1995 October 31, 1994 October 31, 1993
-------------- ---------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Ratios to average net assets:++
Operating expenses 1.00%+ 1.00% 1.00% 1.00%+
Net investment loss (.63%)+ (.51%) (.49%) (.79%)+
Portfolio turnover rate 24.65% 45.45% 63.89% 6.06%
</TABLE>
+Annualized.
++Net of expense reimbursements equivalent to 0.02%, 0.07%, 0.10% and 0.11% of
average net assets, respectively.
*Commencement of Operations.
24
<PAGE> 66
P-I-C TRUSTEES AND OFFICERS
SMALL CAP
GROWTH FUND
================================================================================
TRUSTEES AND OFFICERS - P-I-C 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 - P-I-C 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 - P-I-C INVESTMENT TRUST
- --------------------------------------------------------------------------------
Shereff, Friedman, Hoffman & Goodman
LEGAL COUNSEL - P-I-C SMALL CAP. PORTFOLIO
- --------------------------------------------------------------------------------
Heller, Ehrman, White & McAuliffe
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
McGladrey & Pullen, LLP
This report is intended for the information of shareholders of P-I-C Small Cap.
Growth Fund and should not be used as sales literature unless preceded or
accompanied by a current prospectus.
25
