P.I.C PINNACLE GROWTH FUND
Semi-Annual Report
April 30, 1997
<PAGE>
P.I.C
PINNACLE
GROWTH FUND Message to Shareholders
The following is an interview with the members of the investment team at
Provident Investment Counsel regarding the Pinnacle Growth Fund (the "Fund").
Question: How did the Pinnacle Growth Fund perform for the six month's ended
April 30, 1997?
Answer: The Fund returned 1.86% for the six months ended April 30 as compared to
the broad market's return as measured by the Standard and Poor's 500 index of
14.72%. The Lipper Growth Fund Average, a group of several hundred growth mutual
funds, returned 8.53% for the period. The broad market's return continued to be
driven by the largest, most liquid issues as the record flows of assets in
equity mutual funds drove managers into these types of names. The Fund's growth
investing style, which focuses our managers on finding companies with both
strong sales and earnings gains, precluded the managers from buying many of
these larger companies with relatively lower rates of growth. We believe that
many of the gains in earnings realized by some of these companies without large
rates of change in sales growth may not be sustainable.
Question: What are some of the other factors that have driven the broad market's
strong, albeit volatile performance during the last six months?
Answer: The broad market ended 1996 with extremely positive returns as the
economy continued to grow very nicely with little signs of inflation. Investors
with record cash flows into mutual funds were driven to continue buying the
largest, most liquid issues. 1997 began with continued strong returns and then
quickly retreated as the Federal Reserve Board announced that it felt compelled
to raise interest rates in advance of perceived inflationary signals. The
volatility subsided in April as the general consensus in the markets led
investors to believe that inflation was in check and the Federal Reserve would
leave interest rates alone. This thinking has proven to be correct through the
Federal Reserve's most recent meeting in May.
Question: How are the Fund's holdings valued in the market relative to the broad
market as of the end of April?
Answer: We believe the Fund portfolio represents a very compelling value at this
time relative to the broad market. At the end of April the S&P 500 was valued at
premium to its average expected growth rate of 9.00% with a price/earnings ratio
of more than 17.00%.
Question: What is the outlook for the broad market and the Fund in the months
ahead?
Answer: We believe the challenge ahead for the broad market, and in particular
the larger "blue chip" companies that have performed so well during the past
year, will be continuing to generate earnings gains without above average gains
in sales. Many of the these issues have continued to show increases in earnings
by making gains in productivity with the help of technology and other means
without large increases in sales. Therefore we do not feel that these earnings
gains are sustainable. The Fund on the other hand is built with companies that
have demonstrated the ability to grow both sales and earnings and will be
recognized at some point for the visibility of their growth going forward.
Question: Have there been any changes or are there any planned changes in the
sector allocation for the Fund?
Answer: The Fund is built one stock at a time and although we monitor our
exposure to certain sectors and the effect on performance, the Fund is managed
in a bottom up approach. The sector allocation has remained fairly constant over
the last year. Going forward we still expect stock selection to be a critical
factor in achieving above
<PAGE>
P.I.C
PINNACLE
GROWTH FUND Message to Shareholders, Continued
average returns. A number of issues that have driven the broad market
performance and are not currently Fund holdings, including bellwether technology
stocks Intel and Hewlett Packard, have reported slowdowns and results below
expectations. We feel this selective market environment is advantageous to the
Fund's growth style of investing, that is, investing in those companies with
sustainable earnings growth, and we are excited about the Fund's prospects over
the coming months.
Performance results of P.I.C Pinnacle Growth Fund reflect the total return of
the P.I.C Growth Fund (included in another report) managed by Provident
Investment Counsel prior to the effective date of the Fund's registration
statement, which was 2/3/97. Both Funds invest all of their assets in shares of
the P.I.C Growth Portfolio. P.I.C Growth Fund returns are restated to reflect
all fees and expenses applicable to the P.I.C Pinnacle Growth Fund.
<PAGE>
P.I.C PINNACLE GROWTH FUND
Statement of Assets and Liabilities as of April 30, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------
<S> <C>
Investment in P.I.C Growth Portfolio, at value $976
Receivables:
For investment securities sold in P.I.C Growth Portfolio 9,328
Prepaid Expenses 10,705
- -----------------------------------------------------------------------------------------------
Total Assets 21,009
- -----------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------
Deferred Trustees Compensation (Note 3) 762
Accrued expenses 19,272
- -----------------------------------------------------------------------------------------------
Total Liabilities 20,034
- -----------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------
Applicable to 100 shares of beneficial
interest outstanding $975
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE $9.75
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
SOURCE OF NET ASSETS
- -----------------------------------------------------------------------------------------------
Paid-in capital $1,000
Accumulated net investment loss (1)
Accumulated net realized loss on investments (103)
Net unrealized appreciation of investments 79
- -----------------------------------------------------------------------------------------------
Net Assets $975
- -----------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C PINNACLE GROWTH FUND
Statement of Operations for Six Months Ended April 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------------
<S> <C>
Net investment income (loss) from Portfolio $ -
- ---------------------------------------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------------------------------------
Administration fees (Note 3) 4,816
Trustees' fees 1,605
Audit fee 3,307
Legal fee 3,226
Transfer agent's fee 4,719
Custody and accounting services fee 1,500
Report to shareholders 1,509
Registration fees 4,815
Amortization of organization costs -
Miscellaneous 1,605
------------------------------------------------------------------------------------------------
Total expenses 27,102
Less, reimbursement/waiver by Provident Investment Counsel, Inc. (Note 3) (27,101)
------------------------------------------------------------------------------------------------
Net expenses 1
- ---------------------------------------------------------------------------------------------------------
Net investment loss (1)
- ---------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ---------------------------------------------------------------------------------------------------------
Net realized loss on investments (103)
Change in net unrealized appreciation of investments 79
- ---------------------------------------------------------------------------------------------------------
Net loss on investments (24)
- ---------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ($25)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C PINNACLE GROWTH FUND
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------
Feb. 3, 1997*
through
From operations: April 30, 1997
- ---------------------------------------------------------------------------------------------------------
<S> <C>
Net Investment loss ($1)
Net realized gain on investments (103)
Change in unrealized appreciation of investments 79
- ---------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations (25)
- ---------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest:
Purchases of 100 shares 1,000
Redemptions of 0 shares -
- ---------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from share transactions. 1,000
- ---------------------------------------------------------------------------------------------------------
Total increase in net assets 975
- ---------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------
Beginning of period -
- ---------------------------------------------------------------------------------------------------------
End of period $975
- ---------------------------------------------------------------------------------------------------------
</TABLE>
*Commencement of operations.
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C PINNACLE GROWTH FUND
Financial Highlights
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------------------------------
Feb. 3, 1997*
through
April 30, 1997
- --------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $10.00
- --------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (0.01)
Net realized and unrealized loss
on investments (0.24)
- --------------------------------------------------------------------------------------------------------
Total from investment operations (0.25)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.75
- --------------------------------------------------------------------------------------------------------
Total return -2.50%
- --------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period $975
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets:+**
Expenses 0.35%~
Net investment loss -0.35%~
</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.IC Growth Portfolio. If the fee waivers and
expense reimbursements, with respect to the Fund and P.IC Growth Portfolio, had
not been made, the ratio of expenses to average net assets would have been
11747.30%.
~Annualized.
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C
- -----
PINNACLE Notes to Financial Statements
- --------
GROWTH FUND
- -----------
1 - ORGANIZATION
P.I.C Investment Trust (the "Trust") was organized on December 11, 1991
as a Delaware business trust, with an unlimited number of shares of beneficial
interest of $0.01 par value, and is registered under the Investment Company Act
of 1940 as an open-end, diversified management investment company. The Trust
currently offers six separate series: P.I.C Pinnacle Balanced Fund (formerly
P.I.C Institutional Balanced Fund), P.I.C Growth Fund (formerly P.I.C
Institutional Growth fund), P.I.C Pinnacle Growth Fund, P.I.C Small Company
Growth Fund (formerly P.I.C Institutional Small Cap. Fund), P.I.C Pinnacle Small
Company Growth Fund, and P.I.C Small Cap. Growth Fund (each a "Fund" and
collectively the "Funds"). The Funds invest substantially all of their assets in
the respective Portfolios, a separate registered management investment company
having the same investment objective as the Funds. The Financial Statements of
the P.I.C Growth Fund, P.I.C Small Company Growth Fund, P.I.C Pinnacle Balanced
Fund, P.I.C Pinnacle Small Company Growth Fund, and P.I.C Small Cap Growth Fund,
are in separate reports.
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 Funds reflect their investments in the
Portfolio at their 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 their investments 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 their taxable income to their
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
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.
<PAGE>
P.I.C
- -----
PINNACLE Notes to Financial Statements, continued
- --------
GROWTH FUND
- -----------
3 - TRANSACTIONS WITH AFFILIATES
The Trust has entered into an administration agreement 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 its average net assets of the
Fund, but waived its fee of $0 for the six months ended April 30, 1997. PIC has
voluntarily taken to limit the Fund's expenses, including those expenses
allocated from the Portfolio, to not exceed 1.35% of the Fund's average net
assets. The amount of reimbursement for the six months ended April 30, 1997 was
$27,101. ICAC receives an annual fee for its services at the rate of $15,000.
First Fund Distributors, Inc. (the "Distributor"), a registered
broker-dealer, acts as the principal underwriter for the Trust in connection
with the offering of its shares, but receives no compensation for its services.
The Distributor is an affiliate of the Administrator.
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 Fund. Trustees can
elect to receive payment in cash or defer payments provided for in the Plan.
4 - DISTRIBUTION PLAN
The Trust on behalf of the Pinnacle Growth Fund, has approved a
Distribution Plan (the "12b-1 Plan") in accordance with Rule 12b-1 under the
1940 Act. The 12b-1 Plan provides that each Fund will pay a fee to the
Distributor at an annual rate of 0.25% of each Fund's average daily net assets
as reimbursement for expenses incurred on distribution of Fund's shares.
5 - INVESTMENT TRANSACTIONS
Additions and reductions in the Fund's investment in the Portfolio
aggregated $1,000 and $0, respectively.
<PAGE>
P.I.C GROWTH PORTFOLIO
Statement of Net Assets as of April 30, 1997
<TABLE>
<CAPTION>
Percent of
Shares Value Net Assets
<S> <C> <C> <C>
EQUITY SECURITIES - 91.3%
Banks - 1.1%
Wells Fargo & Co. 5,200 $ 1,387,100 1.1%
Business Services - 1.1%
Danka Business System PLC, Sponsored ADR 36,279 1,108,776 0.9%
Ikon Office Solutions, Inc. 9,208 247,465 0.2%
------------------- ------------------
Total Business Services 1,356,241 1.1%
Chemicals - 1.1%
Monsanto Company 30,836 1,318,239 1.1%
Computer Services - 2.7%
Computer Sciences Corp.* 18,033 1,127,062 0.9%
Paychex, Inc. 25,093 1,174,665 1.0%
Sungard Data Systems, Inc. 21,600 958,500 0.8%
------------------- ------------------
Total Computer Services 3,260,227 2.7%
Computer Software - 7.6%
Mircrosoft Corp.* 76,156 9,252,953 7.6%
Cosmetics & Soaps - 2.3%
The Gillette Company 33,259 2,827,015 2.3%
Credit and Finance - 3.4%
MBNA Corporation 125,855 4,153,215 3.4%
Discount - 1.3%
Costco Companies, Inc.* 53,600 1,547,700 1.3%
Diversified - 1.9%
Tyco International Ltd. 37,880 2,310,680 1.9%
Electronics - 2.7%
Texas Instruments, Inc. 36,000 3,213,000 2.7%
Energy - 1.0%
AES Corp.* 17,625 1,150,031 1.0%
Entertainment & Leisure - 6.3%
British Sky Broadcasting Group 36,424 2,030,638 1.7%
Hospitality Franchise System, Inc.* 55,973 3,316,341 2.8%
The Walt Disney Co. 27,240 2,233,680 1.8%
------------------- ------------------
Total Entertainment & Leisure 7,580,659 6.3%
Financial Services - 5.4%
Associates First Capital Corp. 32,830 1,682,538 1.4%
First Data Corp. 88,944 3,068,568 2.5%
State Street Bank 19,600 1,543,500 1.3%
Synovus Financial Corp. 8,584 208,162 0.2%
------------------- ------------------
Total Financial Services 6,502,768 5.4%
</TABLE>
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C GROWTH PORTFOLIO
Statement of Net Assets as of April 30, 1997
<TABLE>
<CAPTION>
Percent of
Shares Value Net Assets
<S> <C> <C> <C>
Funeral Services - 1.3%
Service Corp. International 45,693 $ 1,564,985 1.3%
Gaming - 0.6%
Mirage Resorts, Inc.* 37,849 761,711 0.6%
Health Industry Services - 1.5%
Healthsouth Corp.* 92,230 1,821,543 1.5%
Health Maintenance Organizations - 2.5%
Oxford Health Plans, Inc.* 46,442 3,059,366 2.5%
Insurance - 3.2%
Aetna, Inc. 3,000 273,375 0.2%
American International Group, Inc. 16,412 2,108,942 1.7%
MGIC Investment Corp. 18,169 1,476,230 1.2%
------------------- ------------------
Total Insurance 3,858,547 3.2%
Medical Instruments - 4.1%
Boston Scientific Corp.* 29,546 1,425,595 1.2%
Medtronic, Inc. 51,152 3,542,276 2.9%
------------------- ------------------
Total Medical Instruments 4,967,871 4.1%
Medical/Dental Services - 1.3%
Cardinal Health, Inc. 29,741 1,583,708 1.3%
Miscellaneous - 1.2%
Republic Industries, Inc.* 59,676 1,480,711 1.2%
Mortgage and Related Services - 4.4%
Federal Home Loan Mortgage Corp. 92,719 3,813,069 3.2%
Federal National Mortgage Association 48,216 1,536,885 1.2%
------------------- ------------------
Total Mortgage and Related Services 5,349,954 4.4%
Networking - 1.1%
Tellabs, Inc.* 34,400 1,371,700 1.1%
Oil & Gas Production - 3.0%
Global Marine, Inc.* 43,600 877,450 0.7%
Schlumberger Ltd., Curacao 25,400 2,813,050 2.3%
------------------- ------------------
Total Oil & Gas Production 3,690,500 3.0%
Oil Refining\Marketing - 0.9%
Tosco Corp. 37,875 1,122,047 0.9%
Pharmaceuticals - 13.4%
Amgen, Inc. 9,084 534,821 0.4%
Elan Corp., PLC, ADR* 31,557 1,072,938 0.9%
Lilliy (Eli), and Co. 42,835 3,764,126 3.1%
Merck & Co., Inc. 29,014 2,625,767 2.2%
Pfizer, Inc. 64,342 6,176,832 5.1%
</TABLE>
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C GROWTH PORTFOLIO
Statement of Net Assets as of April 30, 1997
<TABLE>
<CAPTION>
Percent of
Shares Value Net Assets
<S> <C> <C> <C>
Pharmaceuticals - Continued
Walgreen Co. 13,200 $ 607,200 0.5%
Warner Lambert Co. 14,800 1,450,400 1.2%
------------------- ------------------
Total Pharmaceuticals 16,232,084 13.4%
Retail - 2.0%
CVs Corp. 23,900 1,186,038 1.0%
Dollar General Corp. 36,700 1,160,638 1.0%
------------------- ------------------
Total Retail 2,346,676 2.0%
Specialty Chains - 1.7%
CUC International, Inc.* 34,813 735,425 0.6%
Kohls Corp.* 26,179 1,279,499 1.1%
------------------- ------------------
Total Specialty Chains 2,014,924 1.7%
Supermarkets - 1.4%
Safeway, Inc. * 38,375 1,712,484 1.4%
Telecommunications - 7.5%
ADC Telecommunications, Inc.* 28,282 738,867 0.6%
Andrew Corp.* 18,406 455,549 0.4%
Ericsson, (L.M.) Telephone Co., ADR 139,140 4,678,583 3.9%
Lucent Technologies, Inc. 52,550 3,107,019 2.6%
------------------- ------------------
Total Telecommunications 8,980,018 7.5%
Telephone - 0.6%
Worldcom, Inc.* 31,150 747,600 0.6%
Textiles and Shoes - 0.9%
Gucci Group N.V. 2,635 182,803 0.2%
Tommy Hilfiger Corp.* 21,534 855,977 0.7%
------------------- ------------------
Total Textiles and Shoes 1,038,780 0.9%
Tobacco - 0.8%
Philip Morris Cos., Inc. 23,500 925,313 0.8%
Total Equity Securities (Cost $79,583,868) 110,490,350 91.3%
Principal
COMMERCIAL PAPER - 6.6 Amount
Ford Motor Credit Co., 5.5295%, 5/15/97 $ 4,000,000 4,000,000 3.3%
General Electric Capital Corp., 5.520%, 5/29/97 4,000,000 4,000,000 3.3%
------------------- ------------------
Total Commercial Paper (Cost $8,000,000) 8,000,000 6.6%
REPURCHASE AGREEMENTS - 2.8%
Lehman Brothers On-Line Repurchase Agreement
4.99%, dated 4/30/97, due 05/01/97, collateralized by
$3,483,418 U.S. Treasury Bill, 7.87%, due 2/15/2021
(Cost $3,396,800) 3,396,800 3,396,800 2.8%
Total Investments (Cost $90,980,668) 121,887,150
</TABLE>
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C GROWTH PORTFOLIO
Statement of Net Assets as of April 30, 1997
<TABLE>
<CAPTION>
Percent of
Value Net Assets
<S> <C> <C>
OTHER ASSETS - 0.4%
Cash $ 10
Receivables:
Investment securities sold 360,774
Dividends and interest 113,738
Deferred organization costs 51
Other assets 23,317
-------------------
Total Other Assets 497,890 0.4%
LIABILITIES - (1.1%)
Investment securities purchases 1,244,275
Deferred compensation to Trustees 11,047
Accrued expenses 114,134
-------------------
Total Liabilities 1,369,456 (1.1%)
TOTAL NET ASSETS - 100.0% 121,015,584 100.0%
===================
</TABLE>
*None income producing security.
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C GROWTH PORTFOLIO
Statement of Operations for Six Months Ended April 30, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------------
<S> <C>
Income:
Dividends $391,766
Interest 150,714
- --------------------------------------------------------------------------------------------------------
Total income 542,480
- --------------------------------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------------------------------
Investment advisory fee (Note 3) 471,376
Administration fee 58,922
Accounting services fee 34,267
Custodian fee 16,326
Audit fee 12,051
Trustees' fees 8,480
Miscellaneous 5,306
Amortization of organization costs 4,959
Legal fees 2,480
-----------------------------------------------------------------------------------------------
Total expenses 614,167
Less, reimbursement/waiver from Advisor (Note 3) (24,947)
-----------------------------------------------------------------------------------------------
Net expenses 589,220
- --------------------------------------------------------------------------------------------------------
Net investment loss (46,740)
- --------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
- --------------------------------------------------------------------------------------------------------
Net realized gain on security transactions 6,138,825
Change in net unrealized appreciation of investments 2,833,494
- --------------------------------------------------------------------------------------------------------
Net gain on investments 8,972,319
- --------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $8,925,579
- --------------------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C GROWTH PORTFOLIO
Statement of Changes in Net Assets
<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) Income ($46,740) ($34,806)
Net realized gain on investments 6,138,825 17,614,277
Change in net unrealized appreciation (depreciation) of investments 2,833,494 (28,383,014)
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 8,925,579 (10,803,543)
- ----------------------------------------------------------------------------------------------------------------------
Transactions in interests:
Contributions by Holders 10,553,110 19,462,190
Withdrawals by Holders (14,562,634) (122,401,366)
- ----------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from transactions interests (4,009,524) (102,939,176)
- ----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 4,916,055 (113,742,719)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 116,099,529 229,842,248
- ----------------------------------------------------------------------------------------------------------------------
End of period $121,015,584 $116,099,529
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C GROWTH PORTFOLIO
Selected Ratio Data
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Six months Year Year Year Year June 11, 1992*
ended ended ended ended ended ended
April 30, 1997 Oct. 31, 1996 Oct. 31, 1995 Oct. 31, 1994 Oct. 31, 1993 Oct. 31, 1992
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average net assets:++
Operating expenses 1.00%+ 1.00% 1.00% 1.00% 1.00% 1.00%+
Net investment (loss) income 0.08%+ (0.04%) 0.08% 0.10% 0.17% 0.70%+
Portfolio turnover rate 24.34% 64.09% 54.89% 68.26% 43.20% 7.42%
Average commission rate paid** $0.0434 $0.0440 - - - -
</TABLE>
*Commencement of Operations.
++Net of expense reimbursements equivalent to 0.04%, 0.04%, 0.01%, 0.01%, 0.09%
and 0.39% 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.
Unaudited. See Notes to Financial Statements
<PAGE>
P.I.C
- -----
GROWTH Notes to Financial Statements
- ------
PORTFOLIO
- ---------
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 is divided into an unlimited number of
non-transferable interests, par value $.01. The Portfolio is registered under
the Investment Company Act of 1940 as 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 Portfolios is
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.
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.
<PAGE>
P.I.C
- -----
GROWTH Notes to Financial Statements - continued
- ------
PORTFOLIO
- ---------
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 annual rate
of 0.80% of its average net assets of the Portfolio.
During the six months ended April 30, 1997, PIC waived its fees to the
Growth Portfolio in the amount of $24,947.
ICAC receives for its services a fee at the annual rate of 0.10% of the
average net assets of the Portfolio. Fees paid to ICAC for the six months ended
April 30, 1997 is stated on the Portfolio's Statement of Operations.
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.
4 - INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investment securities, other than
short-term obligations, for the six months ended April 30, 1997, is as follows:
Purchases Sales
--------- -----
Growth Portfolio $27,345,954 $36,955,499
The aggregate unrealized appreciation and depreciation of investment securities
at April 30, 1997, based on costs for federal income tax purposes, is as
follows:
Tax Gross Gross
Costs of Unrealized Unrealized
Investments Appreciation Depreciation
----------- ------------ ------------
Growth Portfolio $90,980,668 $32,100,993 $1,194,510
<PAGE>
P.I.C
PINNACLE
- --------
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
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 GROWTH PORTFOLIO
Paul, Hastings, Janofsky & Walker, LLP
INDEPENDENT AUDITORS
McGladrey & Pullen, LLP
This report is intended for the information of shareholders of P.I.C Pinnacle
Growth Fund and should not be used as sales literature unless preceded or
accompanied by a current prospectus.
