<PAGE> 1
[P-I-C LOGO]
P-I-C
SMALL CAP.
GROWTH FUND
Semi-Annual Report
April 30, 1997
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[P-I-C LOGO]
P-I-C
SMALL CAP.
GROWTH FUND MESSAGE TO SHAREHOLDERS
================================================================================
THE FOLLOWING IS AN INTERVIEW WITH THE MEMBERS OF THE INVESTMENT TEAM AT
PROVIDENT INVESTMENT COUNSEL REGARDING THE PIC SMALL CAP. GROWTH FUND.
QUESTION: How did the Small Cap. Growth Fund perform relative to the overall
market for the six months ended April 30?
ANSWER: The Fund returned -17.26% for the period as compared to the Russell 2000
Growth Index's return of -7.29%, a widely recognized index for Small Company
stocks. The past 6 months have been the most volatile period in the Fund's
history as investors moved away from smaller capitalization stocks to larger,
more liquid issues during the period. As of the writing of this report we have
seen a return to favor of small company stocks during the month of May. The Fund
participated, returning 15.10% for the month as compared to the Russell 2000
Growth's return of more than 12.00%.
QUESTION: What caused the volatility in the Fund and the broad market during the
period?
ANSWER: As we have discussed in previous communications, the broad market began
to retreat from the highs reached early in 1997 as a result of concerns
surrounding interest rates, a strong dollar and the predictability of corporate
earnings going forward. Small stocks, particularly those of small growth
companies, bore the brunt of this negative sentiment. Several portfolio holdings
retreated in price without any negative fundamental news from the companies.
Fund holdings like Fastenal, a distributor of industrial supplies, and
Peoplesoft, a software manufacturer, are examples of stocks whose price
retreated without any negative news and have since rebounded.
QUESTION: What has caused the more recent turnaround in performance of small
stocks and the Fund in May?
ANSWER: We believe that the valuation levels of many of these small companies
had become extremely attractive. As expected, those companies whose fundamentals
continued throughout the correction were bought aggressively in May by investors
when the macro economic environment proved more certain and investor confidence
returned.
QUESTION: What is the outlook for the Fund and the broad market going forward?
ANSWER: We believe stock selection will be the critical factor in achieving
2
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[P-I-C LOGO]
P-I-C
SMALL CAP.
GROWTH FUND MESSAGE TO SHAREHOLDERS
================================================================================
above average returns in the coming months. Recent evidence of select companies
in the market reporting slowdowns or disappointments substantiates our belief in
the importance of stock selection going forward. We feel this selective
environment is advantageous to our growth style of investing, that is, investing
in those companies with sustainable earnings growth, and we are excited about
our prospects over the coming months. In addition we believe that valuations of
small capitalization issues are very compelling at this time relative to larger
capitalization issues as illustrated by the chart below.
RELATIVE MULTIPLES FOR SMALL CAP ARE
NEAR THE TROUGHS OF RECENT YEARS
12/78 0.83
3/79 0.91
6/79 0.95
9/79 0.95
12/79 0.98
3/80 0.93
6/80 1.02
9/80 1.14
12/80 1.08
3/81 1.22
6/81 1.25
9/81 1.15
12/81 1.15
3/82 1.12
6/82 1.13
9/82 1.11
12/82 1.17
3/83 1.26
6/83 1.35
9/83 1.37
12/83 1.25
3/84 1.23
6/84 1.17
9/84 1.16
12/84 1.11
3/85 1.12
6/85 1.14
9/85 1.11
12/85 1.12
3/86 1.1
6/86 1.1
9/86 1.06
12/86 1.01
3/87 1.06
6/87 0.97
9/87 0.96
12/87 0.86
3/88 1
6/88 1.05
9/88 1.04
12/88 1.04
3/89 1.08
6/89 1.05
9/89 1.02
12/89 0.95
3/90 0.96
6/90 0.93
9/90 0.88
12/90 0.86
3/91 0.98
6/91 0.96
9/91 1.01
12/91 0.91
3/92 0.97
6/92 0.91
9/92 0.92
12/92 1.06
3/93 1.06
6/93 1.06
9/93 1.11
12/93 1.09
3/94 1.07
6/94 1.08
9/94 1.11
12/94 1.11
3/95 1.05
6/95 1.08
9/95 1.11
12/95 1.09
3/96 1.05
6/96 1.01
9/96 0.97
12/96 0.94
3/97 0.89
5/97 0.9
Russell 2000 Growth vs. Russell 1000 Growth - Relative P/E
3
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[P-I-C LOGO]
P-I-C STATEMENT OF ASSETS AND LIABILITIES
SMALL CAP. as of April 30, 1997
GROWTH FUND
<TABLE>
<CAPTION>
================================================================================
ASSETS
- --------------------------------------------------------------------------------
<S> <C>
Investment in P-I-C Small Cap. Portfolio, at value $178,594,068
Receivable from Provident Investment Counsel, Inc. (Note 3) 8,502
Prepaid expense 3,274
- --------------------------------------------------------------------------------
Total Assets 178,605,844
================================================================================
LIABILITIES
- --------------------------------------------------------------------------------
Deferred Trustees' compensation (Note 3) 6,584
Accrued expenses 10,751
- --------------------------------------------------------------------------------
Total Liabilities 17,335
================================================================================
NET ASSETS
- --------------------------------------------------------------------------------
Applicable to 9,428,356 shares of beneficial
interest outstanding $178,588,509
================================================================================
NET ASSET VALUE PER SHARE $ 18.94
- --------------------------------------------------------------------------------
================================================================================
SOURCE OF NET ASSETS
- --------------------------------------------------------------------------------
Paid-in capital $147,552,593
Accumulated net investment loss (2,426,066)
Undistributed net realized gain on investments 6,347,930
Net unrealized appreciation on investments 27,114,052
- --------------------------------------------------------------------------------
NET ASSETS $178,588,509
- --------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
4
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[P-I-C LOGO]
P-I-C STATEMENT OF OPERATIONS
SMALL CAP. Six Months ended April 30, 1997
GROWTH FUND
<TABLE>
<CAPTION>
================================================================================
INVESTMENT INCOME
- --------------------------------------------------------------------------------
<S> <C>
Net investment loss from Portfolio $ (457,123)
================================================================================
Expenses
- --------------------------------------------------------------------------------
Administration fees (Note 3) 207,196
Transfer agent's fee 9,521
Trustees' fees 6,199
Audit fee 5,108
Reports to shareholders 3,223
Legal fee 3,086
Custody and accounting services fee 3,000
Registration fee 2,480
Miscellaneous 2,480
- --------------------------------------------------------------------------------
Total expenses 242,293
Less, reimbursement/waiver by Provident
Investment Counsel, Inc. (Note 3) (242,293)
- --------------------------------------------------------------------------------
Net expenses -0-
================================================================================
Net investment loss (457,123)
================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain from security transactions 7,115,962
Change in net unrealized depreciation on investments (45,219,676)
- --------------------------------------------------------------------------------
Net loss on investments (38,103,714)
================================================================================
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ (38,560,837)
- --------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
5
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[P-I-C LOGO]
P-I-C STATEMENT OF CHANGES IN NET ASSETS
SMALL CAP.
GROWTH FUND
================================================================================
INCREASE (DECREASE) IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
ended ended
From operations: April 30, 1997 October 31, 1996
=================================================================================
<S> <C> <C>
Net investment loss $ (457,123) $ (1,029,669)
Net realized gain from security
transactions 7,115,962 15,463,565
Change in net unrealized (depreciation)
appreciation on investments (45,219,676) 18,564,877
- ---------------------------------------------------------------------------------
Net (decrease) increase in net assets
resulting from operations (38,560,837) 32,998,773
=================================================================================
Distributions to shareholders:
From net realized capital gains (2,548,960) -0-
=================================================================================
Transactions in shares of beneficial interest:
Purchases of 1,739,183 and 1,863,518
shares, respectively 39,602,937 41,179,324
Value of 110,728 and 0 shares
issued in payment of
dividends, respectively 2,548,960 -0-
Redemptions of 878,416 and 398,540
shares, respectively (18,542,443) (8,396,584)
- ---------------------------------------------------------------------------------
Net increase in net assets resulting
from share transactions 23,609,454 32,782,740
=================================================================================
Total (decrease) increase in net assets (17,500,343) 65,781,513
=================================================================================
NET ASSETS
- ---------------------------------------------------------------------------------
Beginning of period 196,088,852 130,307,339
- ---------------------------------------------------------------------------------
End of period $178,588,509 $196,088,852
- ---------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
6
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[P-I-C LOGO]
P-I-C FINANCIAL HIGHLIGHTS
SMALL CAP.
GROWTH FUND
<TABLE>
<CAPTION>
=============================================================================================================================
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -----------------------------------------------------------------------------------------------------------------------------
Six Months Year Year Year Sept. 30, 1993*
ended ended ended ended through
April 30, 1997 Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994 Oct. 31, 1993
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 23.19 $ 18.69 $ 12.90 $ 13.05 $ 12.83
Income from investment
operations:
Net investment loss (.02) (.10) (.07) (.06) (.01)
Net realized and unrealized
gain (loss) on investments (3.94) 4.60 5.86 (.09) .23
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.96) 4.50 5.79 (.15) .22
- -----------------------------------------------------------------------------------------------------------------------------
Less distributions from realized
capital gains (.29) -0- -0- -0- -0-
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 18.94 $ 23.19 $ 18.69 $ 12.90 $ 13.05
=============================================================================================================================
Total return (17.26%) 24.08% 44.88% (1.15%) 19.50%++
=============================================================================================================================
Ratios/supplemental data:
Net assets, end of period
(millions) $ 178.6 $ 196.1 $ 130.3 $ 84.3 $ 82.6
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: +**
Expenses 1.00%++ 1.00% 1.00% 1.00% 1.00%++
Net investment loss (.45%)++ (.60%) (.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 1.24%, 1.25%, 1.34%, 1.47% and 1.22%, respectively.
++Annualized.
Unaudited. See Notes to Financial Statements.
7
<PAGE> 8
[P-I-C LOGO]
P-I-C NOTES TO FINANCIAL STATEMENTS
SMALL CAP. April 30, 1997
GROWTH FUND
================================================================================
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, 1997, the
Fund owned 90.00% 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. Accounting Estimates. In preparing financial statements in conformity with
generally accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets
8
<PAGE> 9
[P-I-C LOGO]
P-I-C NOTES TO FINANCIAL STATEMENTS,
SMALL CAP. CONTINUED
GROWTH FUND
================================================================================
and liabilities at the date of the financial statements, as well as the
reported amounts of revenues and expenses during the period. Actual
results could differ from those estimates.
3 - TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
The Trust has entered into administration agreements with Provident
Investment Counsel, Inc. ("PIC") and Investment Company Administration
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 $202,237 for the period ended April 30, 1997.
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 six months ended April 30, 1997 was $40,056. ICAC receives
an annual fee for its services at the rate of $10,000.
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.
On December 19, 1995, the Trust approved a Deferred Compensation Plan for
Trustees (the "Plan"). Trustees are entitled to receive $2,500 per quarter and
$500 per meeting attended, which is allocated among the Funds. Trustees can
elect to receive payment in cash or defer payments provided for in the Plan.
4 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
Additions and reductions in the Fund's investment in the Portfolio
aggregated $39,642,955 and $18,596,140, respectively.
9
<PAGE> 10
[P-I-C LOGO]
P-I-C
SMALL CAP. STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
======================================================================================
Percentage of
EQUITY SECURITIES - 85.6% Shares Value Net Assets
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
AIR FREIGHT .. 0.6%
- --------------------------------------------------------------------------------------
Eagle USA Airfreight, Inc.* 57,800 $1,156,000 0.6%
======================================================================================
APPAREL AND SHOES .. 1.6%
- --------------------------------------------------------------------------------------
Abercrombie & Fitch Co.* 43,400 634,725 0.3%
Delia's, Inc.* 24,400 414,800 0.2%
Coldwater Creek, Inc.* 27,100 379,400 0.2%
Gadzooks, Inc.* 31,100 866,913 0.4%
Just For Feet, Inc.* 30,650 486,569 0.2%
Pacific Sunwear of California* 19,500 609,375 0.3%
- --------------------------------------------------------------------------------------
Total Apparel and Shoes 3,391,782 1.6%
======================================================================================
AUTO PARTS .. 0.5%
- --------------------------------------------------------------------------------------
Gentex Corp.* 50,000 900,000 0.5%
======================================================================================
BANKS .. 1.1%
- --------------------------------------------------------------------------------------
Hamilton Bancorp., Inc.* 6,800 130,900 0.1%
Sirrom Capital Corp. 61,300 1,907,962 1.0%
- --------------------------------------------------------------------------------------
Total Banks 2,038,862 1.1%
======================================================================================
BUILDERS AND BUILDING PRODUCTS .. 0.8%
- --------------------------------------------------------------------------------------
Diamond Home Services* 16,000 180,000 0.1%
Palm Harbor Homes, Inc.* 32,375 793,188 0.4%
Watsco, Inc. 24,900 619,388 0.3%
- --------------------------------------------------------------------------------------
Total Builders and Building Products 1,592,576 0.8%
======================================================================================
BUSINESS INFORMATION SERVICES .. 0.8%
- --------------------------------------------------------------------------------------
Gartner Group, Inc., Class A* 42,800 1,123,500 0.6%
Intelliquest Information Group, Inc.* 22,400 358,400 0.2%
- --------------------------------------------------------------------------------------
Total Business Information Services 1,481,900 0.8%
</TABLE>
10
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[P-I-C LOGO]
P-I-C
SMALL CAP. STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
=======================================================================================
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
BUSINESS SERVICES .. 4.7%
- ---------------------------------------------------------------------------------------
Accustaff Inc.* 127,808 $ 2,332,495 1.2%
Corrections Corp. of America* 43,900 1,432,237 0.7%
Elbit Vision Systems* 42,900 418,275 0.2%
Forrester Research, Inc.* 23,800 434,350 0.2%
Lason Holdings, Inc.* 21,100 358,700 0.2%
NCO Grupo, Inc.* 24,300 504,225 0.3%
Personnel Group of America, Inc.* 36,900 885,600 0.4%
Rental Service Corp.* 23,800 440,300 0.2%
Romac International, Inc.* 25,200 491,400 0.2%
Rural/Metro Corp.* 25,600 736,000 0.4%
TMP Worldwide, Inc.* 45,800 916,000 0.5%
Teletech Holdings, Inc.* 17,000 301,750 0.2%
- ---------------------------------------------------------------------------------------
Total Business Services 9,251,332 4.7%
=======================================================================================
COMPUTER SERVICES .. 6.5%
- ---------------------------------------------------------------------------------------
Bisys Group, Inc.* 36,000 1,152,000 0.6%
CCC Information Services Group* 38,500 452,375 0.2%
Cambridge Technology Partners, Inc.* 38,900 1,035,712 0.5%
Ciber, Inc.* 39,300 1,404,974 0.7%
Claremont Technology Group, Inc.* 16,300 220,050 0.1%
Envoy Corp.* 46,000 960,250 0.5%
Fiserv, Inc.* 78,500 2,963,375 1.5%
HBO & Co. 55,700 2,979,950 1.4%
HCIA, Inc.* 4,900 101,063 0.1%
Intelligroup, Inc.* 37,200 367,350 0.2%
National Techteam, Inc. 35,200 545,600 0.3%
Premiere Technologies, Inc.* 23,600 563,450 0.3%
Renaissance Solutions, Inc.* 10,400 226,200 0.1%
- ---------------------------------------------------------------------------------------
Total Computer Services 12,972,349 6.5%
</TABLE>
11
<PAGE> 12
[P-I-C LOGO]
P-I-C
SMALL CAP. STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
=======================================================================================
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMPUTER SOFTWARE .. 13.3%
- ---------------------------------------------------------------------------------------
Aspen Technology, Inc.* 63,400 $ 1,925,774 1.0%
Baan Company, N.V.* 45,600 2,451,000 1.1%
BDM International, Inc.* 65,800 1,529,850 0.7%
CBT Group, PLC-ADR* 18,900 919,013 0.5%
Dr. Solomon's Group* 20,400 471,750 0.2%
Electronics For Imaging, Inc.* 115,600 4,537,300 2.2%
HNC Software, Inc.* 48,000 1,272,000 0.6%
JDA Software Group, Inc.* 55,800 1,408,950 0.7%
McAfee Associates* 23,800 1,326,850 0.7%
Network General Corp.* 92,100 1,266,375 0.6%
Parametric Technology Corp.* 47,700 2,158,424 1.1%
Peoplesoft, Inc.* 46,500 1,929,750 1.0%
Scopus Technology, Inc. 17,000 454,750 0.2%
Synopsys, Inc.* 72,380 2,307,112 1.2%
Transaction Systems Architects, Inc.,
Class A* 66,300 1,989,000 1.0%
Vantive Corp.* 20,000 397,500 0.2%
Wind River Systems, Inc.* 24,400 561,200 0.3%
- ---------------------------------------------------------------------------------------
Total Computer Software 26,906,598 13.3%
=======================================================================================
COSMETICS .. 0.9%
- ---------------------------------------------------------------------------------------
Blyth Industries, Inc.* 43,600 1,722,200 0.9%
=======================================================================================
CREDIT AND FINANCE .. 0.5%
- ---------------------------------------------------------------------------------------
First USA Paymentech, Inc.* 38,000 916,750 0.5%
=======================================================================================
DISCOUNT .. 1.8%
- ---------------------------------------------------------------------------------------
Dollar Tree Stores, Inc.* 88,900 3,511,550 1.8%
</TABLE>
12
<PAGE> 13
[P-I-C LOGO]
P-I-C
SMALL CAP. STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
=======================================================================================
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
DRUGS .. 2.5%
- ---------------------------------------------------------------------------------------
Arqule, Inc.* 21,900 $ 309,338 0.2%
Capstone Pharmacy Services* 8,500 71,719 0.0%
Dura Pharmaceuticals* 77,600 2,250,400 1.0%
Jones Medical Industries, Inc. 33,375 1,176,468 0.6%
Kos Pharmaceuticals, Inc.* 22,400 504,000 0.3%
Medicis Pharmaceutical Corp., Class A* 26,100 639,450 0.3%
- ---------------------------------------------------------------------------------------
Total Drugs 4,951,375 2.5%
=======================================================================================
EDUCATIONAL PROGRAMS .. 1.7%
- ---------------------------------------------------------------------------------------
Apollo Group, Inc., Class A* 91,232 2,454,279 1.2%
Sylvan Learning Systems, Inc.* 33,650 1,013,706 0.5%
- ---------------------------------------------------------------------------------------
Total Educational Programs 3,467,985 1.7%
=======================================================================================
ELECTRICAL COMPONENT/SEMICONDUCTOR .. 2.7%
- ---------------------------------------------------------------------------------------
Anadigics, Inc.* 43,800 1,237,350 0.6%
Etec Systems, Inc.* 12,000 349,500 0.2%
Sawtek, Inc.* 19,600 580,650 0.3%
Vitesse Semiconductor, Inc.* 104,450 3,290,175 1.6%
- ---------------------------------------------------------------------------------------
Total Component/Semiconductor 5,457,675 2.7%
=======================================================================================
ELECTRICAL EQUIPMENT/PERIPHER .. 0.4%
- ---------------------------------------------------------------------------------------
Computer Products, Inc.* 26,800 458,950 0.2%
Ikos Systems, Inc.* 31,300 516,450 0.2%
- ---------------------------------------------------------------------------------------
Total Electrical Equipment/Peripher 975,400 0.4%
=======================================================================================
ELECTRICAL PRODUCTS .. 0.2%
- ---------------------------------------------------------------------------------------
Advanced Lighting Technologies, Inc.* 23,700 450,300 0.2%
</TABLE>
13
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[P-I-C LOGO]
P-I-C
SMALL CAP. STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
======================================================================================
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
ELECTRONICS .. 0.3%
- --------------------------------------------------------------------------------------
Anicom, Inc.* 36,100 $ 297,825 0.1%
Xionics Document Technologies, Inc.* 16,900 196,463 0.2%
- --------------------------------------------------------------------------------------
Total Electronics 494,288 0.3%
======================================================================================
ENTERTAINMENT AND LEISURE ..7.1%
- --------------------------------------------------------------------------------------
Condelwood Hotel Company, Inc.* 39,700 347,375 0.2%
Clear Channel Communications, Inc.* 64,700 3,137,950 1.5%
Extended Stay America, Inc.* 142,861 2,160,772 1.1%
Fairfield Communities, Inc.* 77,200 2,007,200 1.0%
HFS, Inc.* 77,200 4,574,100 2.3%
Interstate Hotels Co.* 28,300 711,038 0.4%
LodgeNet Entertainment Corp.* 40,000 360,000 0.2%
Rockshox, Inc.* 14,900 224,431 0.1%
Suburban Lodges of America* 39,700 640,163 0.3%
- --------------------------------------------------------------------------------------
Total Entertainment and Leisure 14,163,029 7.1%
======================================================================================
FINANCE COMPANIES .. 0.2%
- --------------------------------------------------------------------------------------
Ugly Duckling Corp.* 22,700 320,638 0.2%
======================================================================================
FINANCIAL SERVICES .. 2.0%
- --------------------------------------------------------------------------------------
BA Merchant Services, Inc.* 49,300 690,200 0.3%
Concord EFS, Inc.* 48,300 953,925 0.5%
Credit Acceptance Corp.* 24,200 261,663 0.1%
NOVA Corp.* 27,000 486,000 0.2%
PMT Services, Inc.* 119,000 1,413,125 0.7%
Pre-Paid Legal Services, Inc.* 34,900 497,325 0.2%
- --------------------------------------------------------------------------------------
Total Financial Services 4,302,238 2.0%
======================================================================================
GAMING .. 0.2%
- --------------------------------------------------------------------------------------
Dover Downs Entertainment 26,200 429,025 0.2%
</TABLE>
14
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[P-I-C LOGO]
P-I-C
SMALL CAP. STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
======================================================================================
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
HEALTH MAINTENANCE ORGANIZATIONS .. 6.4%
- --------------------------------------------------------------------------------------
Oxford Health Plans, Inc.* 194,600 $12,819,274 6.4%
======================================================================================
HOME FURNISHINGS .. 0.2%
- --------------------------------------------------------------------------------------
Zag Industries Ltd.* 33,100 459,262 0.2%
======================================================================================
INSURANCE .. 1.9%
- --------------------------------------------------------------------------------------
Capmac Holdings, Inc. 25,100 652,600 0.3%
Enhance Financial Services Group, Inc. 12,800 492,800 0.3%
HCC Insurance Holdings, Inc. 101,600 2,552,700 1.3%
- --------------------------------------------------------------------------------------
Total Insurance 3,698,100 1.9%
======================================================================================
MEDICAL/DENTAL PRODUCTS ..1.3%
- --------------------------------------------------------------------------------------
Cohr, Inc.* 23,700 527,325 0.3%
Henry Schein, Inc.* 42,300 1,173,824 0.6%
ResMed Inc.* 15,000 262,500 0.1%
Safeskin Corp.* 29,000 648,875 0.3%
- --------------------------------------------------------------------------------------
Total Medical/Dental Products 2,612,524 1.3%
======================================================================================
MEDICAL/DENTAL SERVICES .. 6.5%
- --------------------------------------------------------------------------------------
CRA Managed Care, Inc.* 22,500 793,125 0.4%
National Surgery Centers, Inc.* 31,800 954,000 0.5%
Occusystems, Inc.* 87,100 1,796,438 0.9%
Omnicare, Inc. 33,600 819,000 0.4%
Orthodontic Centers of America, Inc.* 91,900 1,102,800 0.6%
PAREXEL International Corp.* 45,600 1,276,800 0.6%
Pediatrix Medical Group, Inc.* 24,900 821,700 0.4%
Phymatrix Corp.* 27,900 320,850 0.2%
Quintiles Transnational Corp.* 58,100 2,955,837 1.5%
Renal Care Group, Inc.* 28,100 843,000 0.4%
Total Renal Care Holdings, Inc.* 34,400 1,105,100 0.6%
UroCor, Inc.* 10,200 94,350 0.0%
- --------------------------------------------------------------------------------------
Total Medical/Dental Services 12,883,000 6.5%
</TABLE>
15
<PAGE> 16
[P-I-C LOGO]
P-I-C
SMALL CAP. STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
========================================================================================
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
MEDICAL INSTRUMENTS .. 0.5%
- ----------------------------------------------------------------------------------------
Boston Scientific Corp.* 18,404 $ 887,993 0.4%
Ventana Medical Systems, Inc.* 18,400 181,700 0.1%
- ----------------------------------------------------------------------------------------
Total Medical Instruments 1,069,693 0.5%
========================================================================================
MISCELLANEOUS .. 0.2%
- ----------------------------------------------------------------------------------------
Trigen Energy Corp. 13,100 319,313 0.2%
========================================================================================
MORTGAGE AND RELATED SERVICES .. 1.8%
- ----------------------------------------------------------------------------------------
Cityscape Financial Corp.* 65,700 878,738 0.4%
ContiFinancial Corp.* 26,000 747,500 0.5%
Insignia Financial Group, Inc., Class A* 108,100 1,891,750 0.9%
- ----------------------------------------------------------------------------------------
Total Mortgage and Related Services 3,517,988 1.8%
========================================================================================
NETWORKING .. 0.2%
- ----------------------------------------------------------------------------------------
Yurie Systems, Inc.* 43,500 418,688 0.2%
========================================================================================
OIL AND GAS PRODUCTION .. 0.7%
- ----------------------------------------------------------------------------------------
Swift Energy Co.* 68,000 1,436,500 0.7%
========================================================================================
OIL FIELD SERVICES .. 0.5%
- ----------------------------------------------------------------------------------------
Chesapeake Energy Corp.* 70,900 1,072,362 0.5%
========================================================================================
PHARMACEUTICALS .. 0.1%
- ----------------------------------------------------------------------------------------
Applied Analytical Industries, Inc.* 7,900 104,675 0.1%
========================================================================================
POLLUTION CONTROL .. 2.4%
- ----------------------------------------------------------------------------------------
Newpark Resources, Inc.* 26,500 1,189,188 0.6%
Republic Industries, Inc.* 56,652 1,405,678 0.7%
Tetra Technologies* 25,400 590,550 0.3%
United Waste Systems, Inc.* 49,800 1,680,750 0.8%
- ----------------------------------------------------------------------------------------
Total Pollution Control 4,866,166 2.4%
</TABLE>
16
<PAGE> 17
[P-I-C LOGO]
P-I-C
SMALL CAP. STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
========================================================================================
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
PUBLISHING/ADVERTISING .. 0.2%
- ----------------------------------------------------------------------------------------
Getty Communications, PLC-ADR* 26,800 $ 368,500 0.2%
========================================================================================
SPECIALTY .. 3.3%
- ----------------------------------------------------------------------------------------
Barnett, Inc.* 28,300 523,550 0.3%
CDW Computers Centers, Inc.* 20,800 998,400 0.5%
Fastenal Co. 62,900 2,453,100 1.2%
Guitar Center, Inc.* 41,000 579,125 0.3%
Hibbett Sporting Goods, Inc.* 48,000 768,000 0.4%
Marks Bros. Jewelers, Inc.* 20,700 230,288 0.1%
Starbucks Corp.* 15,300 457,088 0.2%
West Marine, Inc.* 23,300 605,800 0.3%
- ----------------------------------------------------------------------------------------
Total Specialty Chains 6,615,351 3.3%
========================================================================================
TELECOMMUNICATIONS .. 5.9%
- ----------------------------------------------------------------------------------------
Advanced Fibre Communications, Inc.* 37,100 1,479,362 0.7%
Aspect Telecommunications Corp.* 45,100 800,525 0.5%
Davox Corp.* 19,000 627,000 0.4%
MRV Communications, Inc.* 79,300 1,635,563 0.8%
Pairgain Technologies, Inc.* 78,000 2,028,000 1.0%
P-Com, Inc.* 65,700 1,880,663 0.9%
Remec, Inc.* 34,300 788,900 0.4%
Tel-Save Holdings, Inc.* 132,100 1,849,400 0.9%
USCS International, Inc.* 30,400 501,600 0.3%
- ----------------------------------------------------------------------------------------
Total Telecommunications 11,591,013 5.9%
========================================================================================
TELEPHONE .. 0.2%
- ----------------------------------------------------------------------------------------
McLeod, Inc.* 24,900 457,538 0.2%
========================================================================================
TEXTILES AND SHOES .. 2.6%
- ----------------------------------------------------------------------------------------
St. John Knits, Inc.* 15,000 575,625 0.3%
Tommy Hilfiger Corp.* 115,300 4,583,175 2.3%
- ----------------------------------------------------------------------------------------
Total Textiles and Shoes 5,158,800 2.6%
</TABLE>
17
<PAGE> 18
[P-I-C LOGO]
P-I-C
SMALL CAP. STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOBACCO .. 0.3%
- -------------------------------------------------------------------------------------
Consolidated Cigar Holdings, Inc.* 27,800 $ 639,400 0.3%
- -------------------------------------------------------------------------------------
Total Equity Securities
(Cost $143,372,655) 170,961,999 85.6%
SHORT-TERM INVESTMENTS - 14.6%
=====================================================================================
COMMERCIAL PAPER .. 13.0% Principal
Amount
- -------------------------------------------------------------------------------------
American Express Credit Corp.,
5.5600%, 5/8/1997 $6,000,000 6,000,000 3.0%
Ford Motor Credit Co.,
5.2295%, 5/15/1997 7,000,000 7,000,000 3.5%
General Electric Capital Corp.,
5.5261%, 5/22/1997 6,000,000 6,000,000 3.0%
Prudential Funding Corp.,
5.5093%, 5/15/1997 7,000,000 7,000,000 3.5%
- -------------------------------------------------------------------------------------
Total Commercial Paper
(Cost $26,000,000) 26,000,000 13.0%
=====================================================================================
REPURCHASE AGREEMENT .. 1.6%
- -------------------------------------------------------------------------------------
Lehman Brothers On-Line Repurchase
Agreement, 4.99%, dated 4/30/1997,
due 5/1/1997 (collateralized by $3,236,375
U.S. Treasury Bill, 7.87%, due 2/15/2021
(Cost $3,155,900) 3,155,900 3,155,900 1.6%
- -------------------------------------------------------------------------------------
Total Investments
(Cost $172,528,555) 100.2% 200,117,899 100.2%
</TABLE>
18
<PAGE> 19
[P-I-C LOGO]
P-I-C STATEMENT OF NET ASSETS
SMALL CAP. as of April 30, 1997
PORTFOLIO
================================================================================
<TABLE>
<CAPTION>
Percentage of
OTHER ASSETS - 0.2% Value Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash $ 45
Receivables:
Investment securities sold 336,048
Dividends and interest 105,507
Prepaid insurance 5,127
Deferred organization costs 15,042
Other assets 13,254
- --------------------------------------------------------------------------------
Total assets 475,023 0.2%
================================================================================
LIABILITIES - (0.4%)
- --------------------------------------------------------------------------------
Payable for investment securities purchased 600,732
Deferred Trustees' compensation (Note 3) 11,407
Accrued expenses 177,064
- --------------------------------------------------------------------------------
Total liabilities 789,203 (0.4)%
================================================================================
TOTAL NET ASSETS - 100.0% $199,803,719 100.0%
- --------------------------------------------------------------------------------
</TABLE>
*Non-income producing security.
Unaudited. See Notes to Financial Statements.
19
<PAGE> 20
[P-I-C LOGO]
P-I-C STATEMENT OF OPERATIONS
SMALL CAP. Six Months ended April 30,1997
PORTFOLIO
<TABLE>
<CAPTION>
================================================================================
INVESTMENT INCOME
- --------------------------------------------------------------------------------
<S> <C>
Income:
- --------------------------------------------------------------------------------
Dividends $ 67,444
Interest 525,400
- --------------------------------------------------------------------------------
Total income 592,844
================================================================================
Expenses:
- --------------------------------------------------------------------------------
Investment advisory fee (Note 3) 858,350
Administration fees 107,294
Accounting services fee 43,941
Custodian fee 32,828
Trustees' fees 8,480
Audit fee 8,083
Miscellaneous 5,307
Amortization of organization costs 4,959
Legal fee 3,696
- --------------------------------------------------------------------------------
Total expenses 1,072,938
================================================================================
Net investment loss (480,094)
================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain from security transactions 3,925,861
Change in net unrealized depreciation on
investments for the period (45,162,195)
- --------------------------------------------------------------------------------
Net loss on investments (41,236,334)
================================================================================
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $(41,716,428)
- --------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
20
<PAGE> 21
[P-I-C LOGO]
P-I-C STATEMENT OF CHANGE IN NET ASSETS
SMALL CAP.
PORTFOLIO
<TABLE>
<CAPTION>
====================================================================================
INCREASE (DECREASE) IN NET ASSETS
- ------------------------------------------------------------------------------------
Six Months Year
ended ended
From operations: April 30, 1997 October 31, 1996
- ------------------------------------------------------------------------------------
<S> <C> <C>
Net investment loss $ (480,094) $ (1,037,169)
Net realized gain from security
transactions 3,925,861 14,963,528
Change in net unrealized (depreciation)
appreciation on investments (45,162,195) 18,982,622
- ------------------------------------------------------------------------------------
Net (decrease) increase in net assets
resulting from operations (41,716,428) 32,908,981
====================================================================================
Transactions in interests:
Contributions by Holders 58,928,644 57,035,094
Withdrawals by Holders (18,709,173) (18,975,416)
- ------------------------------------------------------------------------------------
Net increase in net assets from
transactions in interests 40,219,471 38,059,678
====================================================================================
Total (decrease) increase in net assets (1,496,957) 70,968,659
====================================================================================
NET ASSETS:
- ------------------------------------------------------------------------------------
Beginning of period 201,300,676 130,332,017
- ------------------------------------------------------------------------------------
End of period $199,803,719 $201,300,676
- ------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
21
<PAGE> 22
[P-I-C LOGO]
P-I-C NOTES TO FINANCIAL STATEMENTS
SMALL CAP. April 30, 1997
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
22
<PAGE> 23
[P-I-C LOGO]
P-I-C NOTES TO FINANCIAL STATEMENTS,
SMALL CAP. CONTINUED
PORTFOLIO
================================================================================
on an identified cost basis. Interest is recorded as accrued, and
dividend income is recorded on the ex-dividend date.
E. Accounting Estimates. In preparing financial statements in
conformity with generally accepted accounting principles, management
makes estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements, as
well as the reported amounts of revenues and expenses during the
period. Actual results could differ from those estimates.
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 six months ended April 30, 1997, PIC
received $858,350 in fees from the Portfolio. 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 $107,294 for the six months
ended April 30, 1997.
On December 19, 1995, the Portfolio approved a Deferred Compensation Plan
for Trustees (the "Plan"). Trustees are entitled to receive $2,500 per quarter
and $500 per meeting attended, which is allocated among the Portfolios. Trustees
can elect to receive payment in cash or defer payments provided for in the Plan.
23
<PAGE> 24
[P-I-C LOGO]
P-I-C NOTES TO FINANCIAL STATEMENTS,
SMALL CAP. CONTINUED
PORTFOLIO
4 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
During the six months ended April 30, 1997, purchases and sales of
investment securities, other than short-term obligations, were $94,029,054 and
$65,500,963, respectively. The cost of securities for federal income tax
purposes was $172,528,555. 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 $38,357,190
Unrealized depreciation (10,767,846)
===========
Net unrealized appreciation $27,589,344
===========
</TABLE>
5 - SELECTED RATIO DATA
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Six Months Year Year Year Sept. 30, 1993*
ended ended ended ended through
April 30, 1997 Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994 Oct. 31, 1993
============================================================================================================
<S> <C> <C> <C> <C> <C>
Ratios to average net assets:++
Operating expenses 1.00%+ 1.00% 1.00% 1.00% 1.00%+
Net investment loss (.45%)+ (.59%) (.51%) (.49%) (.79%)+
Portfolio turnover rate 35.70% 53.11% 45.45% 63.89% 6.06%
Average commission rate
paid per share** $0.0311 $0.0307 - - -
</TABLE>
*Commencement of operations.
++Net of expense reimbursements equivalent to 0.00%, 0.01%, 0.07%, 0.10% and
0.11% of average net assets, respectively.
+Annualized.
**For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on which
commissions are charged.
24
<PAGE> 25
[P-I-C LOGO]
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
- --------------------------------------------------------------------------------
Paul, Hastings, Janofsky & Walker, LLP
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.
28
