<PAGE> 1
[P-I-C LOGO] P-I-C
PINNACLE ---------------------------
BALANCED FUND
SMALL COMPANY GROWTH FUND
---------------------------
SEMI-ANNUAL REPORT
APRIL 30, 1997
<PAGE> 2
[P-I-C LOGO]
P-I-C MESSAGE TO SHAREHOLDERS
PINNACLE
- ---------------------------
BALANCED FUND
SMALL COMPANY GROWTH FUND
- ---------------------------
================================================================================
THE FOLLOWING ARE INTERVIEWS WITH THE MEMBERS OF THE INVESTMENT TEAM AT
PROVIDENT INVESTMENT COUNSEL.
PINNACLE BALANCED FUND
QUESTION: How did the Pinnacle Balanced Fund perform relative to the overall
markets during the six months ended April 30, 1997?
ANSWER: The Fund had a total return of 5.75% for the six months ended April 30
as compared to the Lipper Balanced Fund average, a group of several hundred
balanced mutual funds, which returned 6.95%.
QUESTION: Describe the environment for fixed-income investing during the last
six months?
ANSWER: Over the last six months interest rates have trended higher as hopes for
signs of economic slowing have been dashed by evidence of continuing strength. A
surprisingly strong fourth quarter of 1996 was followed by an even stronger
initial quarter this year. Many forecasters are expecting some temporary slowing
in the second quarter, to be followed by renewed growth in the remainder of the
year. The Federal Reserve raised short-term rates at the end of the first
quarter. Since then it has adopted a "wait and see attitude," delaying further
tightening in the hopes that growth will slow before inflationary pressures
become a problem.
QUESTION: What are some of the factors contributing to the continued rise in the
broad equity market during the period?
ANSWER: 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: How is the Fund valued 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
2
<PAGE> 3
[P-I-C LOGO]
P-I-C MESSAGE TO SHAREHOLDERS
PINNACLE
- ---------------------------
BALANCED FUND
SMALL COMPANY GROWTH FUND
- ---------------------------
================================================================================
valued at premium to its average expected growth rate of 9.00% with a
price/earnings ratio of more than 17.00%. The Fund has a price/earnings ratio
currently of 21.20% along with anticipated earnings growth of 24.00% and is
currently trading at a discount to its growth rate.
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 that we
believe will be recognized at some point for the visibility of their growth
going forward. The fixed-income markets appear to be maintaining a trading range
that will continue in place until more evidence of inflation or a slowdown in
the economy is apparent.
PINNACLE SMALL COMPANY GROWTH FUND
QUESTION: How did the Pinnacle Small Company Growth Fund perform relative to the
overall market for the six months ended April 30?
ANSWER: The Fund returned -17.51% 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 15.09% 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
3
<PAGE> 4
[P-I-C LOGO]
P-I-C MESSAGE TO SHAREHOLDERS
PINNACLE
- ---------------------------
BALANCED FUND
SMALL COMPANY GROWTH FUND
- ---------------------------
================================================================================
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
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.
Performance results of P-I-C Pinnacle Small Company Growth Fund reflect the
total return of the P-I-C Small Cap 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 Small Cap. Portfolio. P-I-C Small Cap. Growth Fund
returns are restated to reflect all fees and expenses applicable to the P-I-C
Pinnacle Small Company Growth Fund.
4
<PAGE> 5
[P-I-C LOGO]
P-I-C STATEMENTS OF ASSETS AND LIABILITIES
PINNACLE as of April 30, 1997
- ---------------------------
BALANCED FUND
SMALL COMPANY GROWTH FUND
- ---------------------------
<TABLE>
<CAPTION>
PINNACLE
PINNACLE SMALL COMPANY
BALANCED FUND GROWTH FUND
================================================================================
<S> <C> <C>
ASSETS
- --------------------------------------------------------------------------------
Investment in P-I-C Balanced Portfolio
and Small Cap. Portfolio, respectively,
at value $22,200,436 $ 233,218
Prepaid expenses 0 10,838
Receivable from Provident Investment
Counsel, Inc. (Note 3) 0 9,228
- --------------------------------------------------------------------------------
Total assets 22,200,436 253,284
================================================================================
LIABILITIES
- --------------------------------------------------------------------------------
Deferred Trustees' compensation (Note 3) 6,584 762
Accrued expenses 5,067 19,287
- --------------------------------------------------------------------------------
Total liabilities 11,651 20,049
================================================================================
NET ASSETS
- --------------------------------------------------------------------------------
Applicable to 1,637,964 and 28,363
shares of beneficial interest
outstanding, respectively $22,188,785 $ 233,235
================================================================================
NET ASSET VALUE PER SHARE $ 13.55 $ 8.22
- --------------------------------------------------------------------------------
================================================================================
SOURCE OF NET ASSETS
- --------------------------------------------------------------------------------
Paid-in capital $18,608,989 $ 271,274
Undistributed net investment
income (loss) 31,791 (370)
Undistributed net realized gain
(loss) on investments 729,850 (42,896)
Net unrealized appreciation
on investments 2,818,155 5,227
================================================================================
NET ASSETS $22,188,785 $ 233,235
- --------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
5
<PAGE> 6
[P-I-C LOGO]
P-I-C STATEMENTS OF ASSETS AND LIABILITIES
PINNACLE Six Months ended April 30, 1997
- ---------------------------
BALANCED FUND
SMALL COMPANY GROWTH FUND
- ---------------------------
<TABLE>
<CAPTION>
PINNACLE
PINNACLE SMALL COMPANY
BALANCED FUND GROWTH FUND
================================================================================
<S> <C> <C>
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Net investment income (loss) from Portfolios $ 143,398 $ (130)
================================================================================
Expenses:
- --------------------------------------------------------------------------------
Administration fees (Note 3) 26,601 4,915
Transfer agent's fee 6,545 4,719
Trustees' fees 6,199 1,605
Audit fee 5,108 3,307
Amortization of organization costs 2,538 0
Custody and accounting services fee 3,000 1,500
Distribution fees 2,787 64
Registration fees 2,479 4,815
Miscellaneous 1,693 1,605
Legal fee 1,575 3,226
Report to shareholders 1,439 1,509
- --------------------------------------------------------------------------------
Total expenses 59,964 27,265
Less, reimbursement/waiver by Provident
Investment Counsel, Inc. (Note 3) (36,011) (27,025)
- --------------------------------------------------------------------------------
Net expenses 23,953 240
================================================================================
Net investment income (loss) 119,445 (370)
================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain (loss) from security
transactions 740,251 (42,896)
Change in net unrealized appreciation
on investments 309,636 5,227
- --------------------------------------------------------------------------------
Net gain (loss) on investments 1,049,887 (37,669)
================================================================================
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 1,169,332 $(38,039)
- --------------------------------------------------------------------------------
</TABLE>
*February 3, 1997 (commencement of operations) through April 30, 1997.
Unaudited. See Notes to Financial Statements.
6
<PAGE> 7
[P-I-C LOGO]
P-I-C STATEMENTS OF CHANGES IN NET ASSETS
PINNACLE
- ---------------------------
BALANCED FUND
SMALL COMPANY GROWTH FUND
- ---------------------------
<TABLE>
<CAPTION>
PINNACLE
PINNACLE SMALL COMPANY
BALANCED FUND GROWTH FUND
======================================================================================================
INCREASE IN NET ASSETS
- ------------------------------------------------------------------------------------------------------
Six Months Year February 3, 1997*
ended ended through
From operations: April 30, 1997 October 31, 1996 April 30, 1996
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment income (loss) $ 119,445 $ 130,014 $ (370)
Net realized gain (loss) from
security transactions 740,251 955,355 (42,896)
Change in net unrealized appreciation
on investments 309,636 375,579 5,227
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 1,169,332 1,460,948 (38,039)
======================================================================================================
Distributions to shareholders:
From net investment income (98,243) (130,077) 0
From net realized capital gains (953,528) (595,121) 0
- ------------------------------------------------------------------------------------------------------
Total distributions to shareholders (1,051,771) (725,198) 0
======================================================================================================
Transactions in shares of beneficial interest:
Purchases of 769,889, 66,463 and
28,363 shares, respectively 10,053,576 853,581 271,274
Value of 80,384, 58,018 and 0 shares
issued in payment of dividends,
respectively 1,051,194 717,579 0
Redemptions of 137,089, 147,233
and 0 shares, respectively (1,901,750) (1,983,749) 0
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from share transactions 9,203,020 (412,589) 271,274
======================================================================================================
Total increase in net assets 9,320,581 323,161 233,235
======================================================================================================
NET ASSETS:
- ------------------------------------------------------------------------------------------------------
Beginning of period 12,868,204 12,545,043 0
- ------------------------------------------------------------------------------------------------------
End of period $ 22,188,785 $ 12,868,204 $ 233,235
- ------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
*Commencement of operations.
Unaudited. See Notes to Financial Statements.
7
<PAGE> 8
[P-I-C LOGO]
P-I-C FINANCIAL HIGHLIGHTS
PINNACLE
- ---------------------------
BALANCED FUND
SMALL COMPANY GROWTH FUND
- ---------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
================================================================================
<TABLE>
<CAPTION>
PINNACLE
BALANCED
FUND
- ----------------------------------------------------------------------------------
Six Months Year
ended ended
April 30, 1997 Oct. 31, 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 13.91 $ 13.24
Income from investment operations:
Net investment income .04 .14
Net realized and unrealized gain
(loss) on investments .67 1.34
- ----------------------------------------------------------------------------------
Total from investment operations .71 1.48
- ----------------------------------------------------------------------------------
Less distributions to shareholders:
From net investment income (.03) (.14)
From net realized capital gains (1.04) (.67)
- ----------------------------------------------------------------------------------
Total distributions to shareholders (1.07) (.81)
- ----------------------------------------------------------------------------------
Net asset value, end of period $ 13.55 $ 13.91
==================================================================================
Total return 5.75% 11.96%
==================================================================================
Ratios/supplemental data:
Net assets, end of period (millions) $ 22.2 $ 12.9
- ----------------------------------------------------------------------------------
Ratios to average net assets:+
Expenses 1.05%++** 1.05%**
Net investment income (loss) 1.25%++ 1.05%
- ----------------------------------------------------------------------------------
</TABLE>
- ----------
+Net of expense reimbursements.
**Includes the Fund's share 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
1.63%, 1.72%, 2.32%, 2.87%, 7.44% and 43.11%, respectively.
++Annualized.
8
<PAGE> 9
<TABLE>
<CAPTION>
PINNACLE
SMALL COMPANY
GROWTH FUND
- --------------------------------------------------------------------------------
Year Year Year June 11, 1992* February 3, 1997*
ended ended ended through ended
Oct. 31, 1995 Oct. 31, 1994 Oct. 31, 1993 Oct. 31, 1992 April 30, 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 11.24 $ 11.48 $ 10.82 $ 10.00 $ 10.00
.15 .15 .18 .04 (.01)
2.00 (.24) .69 .78 (1.77)
- --------------------------------------------------------------------------------
2.15 (.09) .87 .82 (1.78)
- --------------------------------------------------------------------------------
(.15) (.15) (.21) .00 .00
.00 .00 .00 .00 .00
- --------------------------------------------------------------------------------
(.15) (.15) (.21) .00 .00
- --------------------------------------------------------------------------------
$ 13.24 $ 11.24 $ 11.48 $ 10.82 $ 8.22
================================================================================
19.35% (.78%) 8.10% 21.14%++ (5.40%)
================================================================================
$ 12.5 $ 9.1 $ 6.7 $ 1.2 $ 0.2
- --------------------------------------------------------------------------------
1.05%** 1.05%** 1.05%** 1.05%++** 1.55%++#
1.32% 1.37% 1.79% 2.60%++ (0.85%)++
- --------------------------------------------------------------------------------
</TABLE>
- ----------
*Commencement of operations.
**Includes the Fund's share 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
1.63%, 1.72%, 2.32%, 2.87%, 7.44% and 43.11%, respectively.
#Includes the Fund's share of expenses allocated from P-I-C Small Cap.
Portfolio. If the fee waivers and expense reimbursements, 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 63.47%.
++Annualized.
Unaudited. See Notes to Financial Statements.
9
<PAGE> 10
[P-I-C LOGO]
P-I-C NOTES TO FINANCIAL STATEMENTS
PINNACLE
- ---------------------------
BALANCED FUND
SMALL COMPANY 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 $.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 Portfolios are included elsewhere in this report and should be read in
conjunction with the Funds' financial statements. The financial statements of
the P-I-C Growth Fund, P-I-C Small Company Growth Fund, P-I-C Pinnacle 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 Funds. 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 Funds earn 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
Funds and the other Holders of Interests in the Portfolio. Dividends, if
any, are paid annually to shareholders of the Funds and recorded on the
ex-dividend date.
10
<PAGE> 11
[P-I-C LOGO]
P-I-C NOTES TO FINANCIAL STATEMENTS,
PINNACLE CONTINUED
- ---------------------------
BALANCED FUND
SMALL COMPANY GROWTH FUND
- ---------------------------
================================================================================
C. Federal Income Taxes. The Funds intend to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and
to distribute all of their taxable income to their shareholders.
Therefore, no federal income tax 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.
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 Funds at the rate of 0.20% of the average daily net assets
of the Funds.
P-I-C has voluntarily taken to limit the Funds' expenses, including those
expenses allocated from the Portfolios, to the following levels:
<TABLE>
<S> <C>
Pinnacle Balanced Fund 1.05%
Pinnacle Small Company Growth Fund 1.55%
</TABLE>
The percentages are based on the Funds' average net assets. Fees waived
and expenses reimbursed by PIC for the six months ended April 30, 1997, were as
follows:
<TABLE>
<CAPTION>
Waived Reimbursed
Fees Expenses
---- --------
<S> <C> <C>
Pinnacle Balanced Fund $19,162 $16,849
Pinnacle Small Company Growth Fund 100 26,925
</TABLE>
11
<PAGE> 12
[P-I-C LOGO]
P-I-C NOTES TO FINANCIAL STATEMENTS,
PINNACLE CONTINUED
- ---------------------------
BALANCED FUND
SMALL COMPANY GROWTH FUND
- ---------------------------
================================================================================
ICAC receives an annual fee for its services of $15,000 from each of the
Funds.
First Fund Distributors, Inc. (the "Distributor"), a registered
broker-dealer, acts as the principal underwriter for the Trust in connection
with the offering of its shares, 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 Funds. 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 Small Company Growth Fund, has
approved a Distribution Plan (the "12b-1 Plan") in accordance with Rule 12b-1
under the 1940 Act. On February 19, 1997, shareholders of the Pinnacle Balanced
Fund approved its adoption of the 12b-1 Plan. 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 Funds' shares.
5 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
Additions and reductions in the investments in the respective Portfolios
for the period ended April 30, 1997, were as follows:
<TABLE>
<CAPTION>
Additions Reductions
--------- ----------
<S> <C> <C>
Pinnacle Balanced Fund $10,086,965 $ 1,948,117
Pinnacle Small Company Growth Fund 271,274 0
</TABLE>
12
<PAGE> 13
P-I-C STATEMENT OF NET ASSETS
- --------- as of April 30, 1997
BALANCED
- ---------
PORTFOLIO
- ---------
<TABLE>
<CAPTION>
=====================================================================================
Percentage of
EQUITY SECURITIES - 68.6% Shares Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
BANKS - 1.0%
- -------------------------------------------------------------------------------------
Wells Fargo & Co. 800 $ 213,400 1.0%
=====================================================================================
BUSINESS INFORMATION SERVICES - 0.7%
- -------------------------------------------------------------------------------------
Paychex, Inc. 3,450 161,503 0.7%
=====================================================================================
BUSINESS SERVICES - 0.7%
- -------------------------------------------------------------------------------------
Danka Business Systems, Plc,
Sponsored ADR 5,300 161,981 0.7%
- -------------------------------------------------------------------------------------
CHEMICALS - 0.8%
- -------------------------------------------------------------------------------------
Monsanto Co. 4,200 179,550 0.8%
=====================================================================================
COMPUTER SERVICES - 1.3%
- -------------------------------------------------------------------------------------
Computer Services Corp.* 2,500 156,250 0.7%
Sungard Data Systems, Inc.* 3,000 133,125 0.6%
- -------------------------------------------------------------------------------------
Total Computer Services 289,375 1.3%
=====================================================================================
COMPUTER SOFTWARE - 5.8%
- -------------------------------------------------------------------------------------
Microsoft Corp.* 10,658 1,284,011 5.8%
=====================================================================================
COSMETICS - 1.8%
- -------------------------------------------------------------------------------------
The Gillette Company 4,600 391,000 1.8%
=====================================================================================
CREDIT AND FINANCE - 2.6%
- -------------------------------------------------------------------------------------
MBNA Corp. 17,265 569,745 2.6%
=====================================================================================
DISCOUNTS - 1.0%
- -------------------------------------------------------------------------------------
Costco Companies, Inc.* 7,400 213,675 1.0%
=====================================================================================
DIVERSIFIED MANUFACTURING - 1.4%
- -------------------------------------------------------------------------------------
Tyco International Ltd. 5,200 317,200 1.4%
</TABLE>
13
<PAGE> 14
P-I-C STATEMENT OF NET ASSETS
- --------- as of April 30, 1997
BALANCED
- ---------
PORTFOLIO
- ---------
================================================================================
<TABLE>
<CAPTION>
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
ELECTRONICS - 1.9%
- -------------------------------------------------------------------------------------
Texas Instruments, Inc. 4,800 $ 428,400 1.9%
=====================================================================================
ENERGY - 1.0%
- -------------------------------------------------------------------------------------
AES Corp.* 3,300 215,325 1.0%
=====================================================================================
ENTERTAINMENT & LEISURE - 4.7%
- -------------------------------------------------------------------------------------
British Sky Broadcasting Group PLC,
Sponsored ADR 5,100 284,325 1.3%
Hospitality Franchise System, Inc.* 7,600 450,300 2.0%
Walt Disney Company 3,754 307,828 1.4%
- -------------------------------------------------------------------------------------
Total Entertainment 1,042,453 4.7%
=====================================================================================
FINANCIAL SERVICES - 4.0%
- -------------------------------------------------------------------------------------
Associates First Capital Corp. 4,400 225,500 1.0%
First Data Corp. 12,032 415,103 1.9%
State Street Corp. 2,700 212,625 1.0%
Synovus Financial Corp. 1,200 29,100 0.1%
- -------------------------------------------------------------------------------------
Total Financial Services 882,328 4.0%
=====================================================================================
FUNERAL SERVICES - 1.0%
- -------------------------------------------------------------------------------------
Service Corp. International 6,500 222,625 1.0%
=====================================================================================
GAMING - 0.5%
- -------------------------------------------------------------------------------------
Mirage Resorts, Inc.* 5,300 106,663 0.5%
=====================================================================================
HEALTH INDUSTRY SERVICES - 1.1%
- -------------------------------------------------------------------------------------
HealthSouth Corp.* 12,600 248,850 1.1%
=====================================================================================
HEALTH MAINTENANCE ORGANIZATIONS - 2.0%
- -------------------------------------------------------------------------------------
Oxford Health Plans, Inc.* 6,600 434,775 2.0%
</TABLE>
14
<PAGE> 15
P-I-C STATEMENT OF NET ASSETS
- --------- as of April 30, 1997
BALANCED
- ---------
PORTFOLIO
- ---------
================================================================================
<TABLE>
<CAPTION>
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
INSURANCE - 2.4%
- -------------------------------------------------------------------------------------
Aetna Life & Casualty Co. 400 $ 36,450 0.2%
American International Group, Inc. 2,200 282,700 1.3%
MGIC Investment Corp. 2,500 203,125 0.9%
- -------------------------------------------------------------------------------------
Total Insurance 522,275 2.4%
=====================================================================================
MEDICAL INSTRUMENTS - 2.9%
- -------------------------------------------------------------------------------------
Boston Scientific Corp.* 3,300 159,225 0.7%
Medtronic, Inc. 7,100 491,674 2.2%
- -------------------------------------------------------------------------------------
Total Medical Instruments 650,899 2.9%
=====================================================================================
MEDICAL SERVICES - 1.0%
- -------------------------------------------------------------------------------------
Cardinal Health, Inc. 4,150 220,988 1.0%
=====================================================================================
MISCELLANEOUS - 0.9%
- -------------------------------------------------------------------------------------
Republic Industries, Inc.* 8,400 208,425 0.9%
=====================================================================================
MORTGAGE AND RELATED SERVICES - 3.4%
- -------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 12,960 532,980 2.4%
Federal National Mortgage
Association 6,800 216,750 1.0%
- -------------------------------------------------------------------------------------
Total Mortgage and Related Services 749,730 3.4%
=====================================================================================
NETWORKING - 0.9%
- -------------------------------------------------------------------------------------
Tellabs, Inc.* 4,800 191,400 0.9%
=====================================================================================
OIL AND GAS PRODUCTION - 2.2%
- -------------------------------------------------------------------------------------
Global Marine, Inc.* 6,000 120,750 0.5%
Schlumberger Ltd. 3,500 387,625 1.7%
- -------------------------------------------------------------------------------------
Total Oil and Gas Production 508,375 2.2%
</TABLE>
15
<PAGE> 16
P-I-C STATEMENT OF NET ASSETS
- --------- as of April 30, 1997
BALANCED
- ---------
PORTFOLIO
- ---------
================================================================================
<TABLE>
<CAPTION>
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
OIL REFINING/MARKETING - 0.7%
- -------------------------------------------------------------------------------------
Tosco Corp. 5,400 $ 159,975 0.7%
=====================================================================================
PHARMACEUTICALS - 10.0%
- -------------------------------------------------------------------------------------
Amgen, Inc. 1,300 76,538 0.3%
Elan Corp. PLC, ADR* 4,500 153,000 0.7%
Eli Lilly & Company 5,900 518,462 2.3%
Merck & Co., Inc. 3,900 352,950 1.6%
Pfizer, Inc. 8,700 835,200 3.8%
Walgreen Co. 1,700 78,200 0.4%
Warner Lambert Co. 2,100 205,800 0.9%
- -------------------------------------------------------------------------------------
Total Pharmaceuticals 2,220,150 10.0%
=====================================================================================
RETAIL - 1.5%
- -------------------------------------------------------------------------------------
CVS Corp. 3,400 168,725 0.8%
Dollar General Corp. 5,100 161,288 0.7%
- -------------------------------------------------------------------------------------
Total Retail 330,013 1.5%
=====================================================================================
SPECIALTY CHAINS - 1.2%
- -------------------------------------------------------------------------------------
CUC International, Inc.* 4,700 99,288 0.4%
Kohls Corp.* 3,700 180,838 0.8%
- -------------------------------------------------------------------------------------
Total Specialty Chains 280,126 1.2%
=====================================================================================
SUPERMARKETS - 1.0%
- -------------------------------------------------------------------------------------
Safeway, Inc.* 5,200 232,050 1.0%
=====================================================================================
TELECOMMUNICATIONS - 5.5%
- -------------------------------------------------------------------------------------
ADC Telecommunications, Inc.* 4,100 107,113 0.5%
Andrew Corp.* 2,325 57,544 0.3%
L.M. Ericsson Telephone Co., ADR 18,900 635,512 2.8%
Lucent Technologies, Inc. 7,300 431,612 1.9%
- -------------------------------------------------------------------------------------
Total Telecommunications 1,231,781 5.5%
</TABLE>
16
<PAGE> 17
P-I-C STATEMENT OF NET ASSETS
- --------- as of April 30, 1997
BALANCED
- ---------
PORTFOLIO
- ---------
================================================================================
<TABLE>
<CAPTION>
Percentage of
EQUITY SECURITIES, CONTINUED Shares Value Net Assets
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TELEPHONE - 0.5%
- ----------------------------------------------------------------------------------------------
Worldcom, Inc.* 4,300 $ 103,200 0.5%
==============================================================================================
TEXTILES AND SHOES - 0.7%
- ----------------------------------------------------------------------------------------------
Gucci Group N.V. 300 20,813 0.1%
Tommy Hilfiger Corp.* 3,100 123,225 0.6%
- ----------------------------------------------------------------------------------------------
Total Textiles and Shoes 144,038 0.7%
==============================================================================================
TOBACCO - 0.5%
- ----------------------------------------------------------------------------------------------
Philip Morris Cos., Inc. 3,100 122,063 0.5%
- ----------------------------------------------------------------------------------------------
Total Equity Securities (Cost $12,352,152) 15,238,347 68.6%
==============================================================================================
FIXED INCOME SECURITIES - 29.7%
- ----------------------------------------------------------------------------------------------
Principal
CORPORATE BONDS - 4.3% Amount
- ----------------------------------------------------------------------------------------------
Ford Motor Credit Corp.,
7.250%, 5/15/1999 $ 175,000 177,625 0.8%
Hanson PLC,
7.375%, 1/15/2003 225,000 227,531 1.0%
Hertz Corp., 6.000%, 1/15/2003 200,000 189,750 0.9%
Household Bank, 6.500%, 7/15/2003 175,000 168,875 0.8%
International Lease Finance,
6.125%, 11/1/1999 175,000 173,031 0.8%
- ----------------------------------------------------------------------------------------------
Total Corporate Bonds (Cost $963,112) 936,812 4.3%
</TABLE>
17
<PAGE> 18
P-I-C STATEMENT OF NET ASSETS
- --------- as of April 30, 1997
BALANCED
- ---------
PORTFOLIO
- ---------
================================================================================
<TABLE>
<CAPTION>
Principal Percentage of
FIXED INCOME SECURITIES Amount Value Net Assets
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS - 25.4%
- ------------------------------------------------------------------------------------
U.S. Treasury Bond,
12.000%, 8/15/2013 $1,525,000 $ 2,124,722 9.6%
U.S. Treasury Bond,
9.875%, 11/15/2015 225,000 291,026 1.3%
U.S. Treasury Note,
6.875%, 7/31/1999 225,000 227,549 1.0%
U.S. Treasury Note,
7.750%, 1/31/2000 975,000 1,007,565 4.5%
U.S. Treasury Note,
7.500%, 11/15/2001 475,000 492,452 2.2%
U.S. Treasury Note,
6.250%, 2/15/2003 1,525,000 1,500,188 6.8%
- ------------------------------------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $5,685,212) 5,643,502 25.4%
SHORT-TERM INVESTMENTS - 1.6%
====================================================================================
REPURCHASE AGREEMENT - 1.6%
- ------------------------------------------------------------------------------------
Lehman Brothers On-Line Repurchase
Agreement, 4.99%, dated 4/30/1997,
due 5/1/1997 (collateralized by $361,284
U.S. Treasury Bill, 7.87%, due 2/15/2021)
(Cost $352,300) 352,300 352,300 1.6%
- ------------------------------------------------------------------------------------
Total Investments (Cost $19,352,776) 22,170,961 99.9%
</TABLE>
18
<PAGE> 19
P-I-C
BALANCED STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
OTHER ASSETS - 1.2% Value Percentage of
Net Assets
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Cash $ 60
Receivables:
Dividends and interest 143,181
For securities and interest sold 112,994
From Advisor 1,050
Other assets 1,207
- ---------------------------------------------------------------------------------------
Total Assets 258,492 1.2%
- ---------------------------------------------------------------------------------------
LIABILITIES - (1.1%)
- ---------------------------------------------------------------------------------------
Payable for shares of beneficial interest redeemed 194,307
Deferred Trustees' compensation (Note 3) 2,455
Accrued expenses 32,090
- ---------------------------------------------------------------------------------------
Total Liabilities 228,852 (1.1%)
- ---------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $22,200,601 100.0%
- ---------------------------------------------------------------------------------------
</TABLE>
*Non-income producing security.
Unaudited. See Notes to Financial Statements.
19
<PAGE> 20
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>
20
<PAGE> 21
P-I-C STATEMENT OF NET ASSETS
SMALL CAP. as of April 30, 1997
PORTFOLIO
<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>
21
<PAGE> 22
P-I-C STATEMENT OF NET ASSETS
SMALL CAP. as of April 30, 1997
PORTFOLIO
<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>
22
<PAGE> 23
P-I-C STATEMENT OF NET ASSETS
SMALL CAP. as of April 30, 1997
PORTFOLIO
<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>
23
<PAGE> 24
P-I-C STATEMENT OF NET ASSETS
SMALL CAP. as of April 30, 1997
PORTFOLIO
<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>
24
<PAGE> 25
P-I-C STATEMENT OF NET ASSETS
SMALL CAP. as of April 30, 1997
PORTFOLIO
<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>
25
<PAGE> 26
P-I-C STATEMENT OF NET ASSETS
SMALL CAP. as of April 30, 1997
PORTFOLIO
<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>
26
<PAGE> 27
P-I-C STATEMENT OF NET ASSETS
SMALL CAP. as of April 30, 1997
PORTFOLIO
<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>
27
<PAGE> 28
P-I-C STATEMENT OF NET ASSETS
SMALL CAP. as of April 30, 1997
PORTFOLIO
<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>
28
<PAGE> 29
P-I-C
SMALL CAP. STATEMENT OF NET ASSETS
PORTFOLIO as of April 30, 1997
<TABLE>
<CAPTION>
================================================================================
Value Percentage of
OTHER ASSETS - 0.2% 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.
29
<PAGE> 30
P-I-C STATEMENTS OF OPERATIONS
BALANCED Six Months ended April 30, 1997
SMALL CAP.
PORTFOLIOS
<TABLE>
<CAPTION>
Balanced Small Cap.
Portfolio Portfolio
================================================================================
<S> <C> <C>
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Income:
- --------------------------------------------------------------------------------
Dividends $ 49,745 $ 67,444
Interest 170,374 525,400
- --------------------------------------------------------------------------------
Total income 220,119 592,844
================================================================================
Expenses:
- --------------------------------------------------------------------------------
Investment advisory fee (Note 3) 57,540 858,350
Accounting services fee 32,400 43,941
Custodian fee 12,087 32,828
Administration fee 9,590 107,294
Audit fee 6,100 8,083
Miscellaneous 5,307 5,307
Amortization of organization costs 4,959 4,959
Legal fees 1,984 3,696
Trustees' fees 1,884 8,480
- --------------------------------------------------------------------------------
Total expenses 131,851 1,072,938
Less, reimbursement/waiver by
Advisor (Note 3) (55,131) 0
- --------------------------------------------------------------------------------
Net expenses 76,720 1,072,938
================================================================================
Net investment income (loss) 143,399 (480,094)
================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain from security transactions 740,260 3,925,861
Change in net unrealized appreciation
(depreciation) on investments 309,635 (45,162,195)
- --------------------------------------------------------------------------------
Net gain (loss) on investments 1,049,895 (41,236,334)
================================================================================
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $1,193,294 $(41,716,428)
- --------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
30
<PAGE> 31
P-I-C STATEMENTS OF CHANGES IN NET ASSETS
BALANCED
SMALL CAP.
PORTFOLIOS
<TABLE>
<CAPTION>
BALANCED SMALL CAP.
PORTFOLIO PORTFOLIO
===========================================================================================================
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------------------------------------------
Six Months Year Six Months Year
ended ended ended ended
From operations: April 30, 1997 Oct. 31, 1996 April 30, 1997 Oct. 31, 1996
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income (loss) $ 143,399 $ 161,045 $ (480,094) $ (1,037,169)
Net realized gain from security
transactions 740,260 955,369 3,925,861 14,963,528
Change in net unrealized
appreciation (depreciation)
on investments 309,635 375,580 (45,162,195) 18,982,622
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from operations 1,193,294 1,491,994 (41,716,428) 32,908,981
===========================================================================================================
Transactions in interests:
Contributions by Holders 10,086,965 904,221 58,928,644 57,035,094
Withdrawals by Holders (1,948,117) (2,068,351) (18,709,173) (18,975,416)
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets from
transactions in interests 8,138,848 (1,164,130) 40,219,471 38,059,678
===========================================================================================================
Total increase (decrease) in net assets 9,332,142 327,864 (1,496,957) 70,968,659
===========================================================================================================
NET ASSETS:
- -----------------------------------------------------------------------------------------------------------
Beginning of period 12,868,459 12,540,595 201,300,676 130,332,017
- -----------------------------------------------------------------------------------------------------------
End of period $22,200,601 $12,868,459 $199,803,719 $201,300,676
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Unaudited. See Notes to Financial Statements.
31
<PAGE> 32
P-I-C SELECTED RATIO DATA
BALANCED
SMALL CAP.
PORTFOLIOS
Balanced Portfolio
<TABLE>
<CAPTION>
Six Months Year Year Year Year June 11, 1992*
ended ended ended ended ended through
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 0.80%+ 0.80% 0.80% 0.80% 0.80% 0.80%+
Net investment income 1.36%+ 1.30% 1.57% 1.63% 2.05% 2.82%+
Portfolio turnover rate 53.73% 54.24% 106.50% 116.63% 92.65% 3.13%
Average commission rate
paid per share** $.0322 $0.0406 -- -- -- --
</TABLE>
*Commencement of operations.
+Annualized.
++Net of expense reimbursements equivalent to 0.73%, 0.90%, 0.78%, 1.16%, 4.68%
and 27.23% of average net assets, respectively.
**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.
32
<PAGE> 33
SMALL CAP. PORTFOLIO
<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 income (.45%)+ (.59%) (.51%) (.49%) (.79%)+
Portfolio turnover rate 35.70% 53.11% 45.45% 63.89% 6.06%
Average commisson rate
paid per share** $0.0311 $0.0307 -- -- --
</TABLE>
*Commencement of operations.
+Annualized.
#Net of expense reimbursements equivalent to 0.00%, 0.01%, 0.07%, 0.10%, and
0.11% of average net assets, respectively.
**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.
33
<PAGE> 34
P-I-C NOTES TO FINANCIAL STATEMENTS
BALANCED
SMALL CAP.
PORTFOLIOS
1 - ORGANIZATION
P-I-C Balanced Portfolio was organized on December 11, 1991 and P-I-C Small
Cap. Portfolio was organized on March 22, 1993 as separate trusts under the laws
of the State of New York (each a "Portfolio" and collectively the "Portfolios").
The beneficial interests in each Portfolio are divided into an unlimited number
of non-transferable interests, par value $.01 each. The Portfolios are
registered under the Investment Company Act of 1940 as open-end, diversified
management investment companies.
2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Portfolios. These policies are in conformity with generally
accepted accounting principles.
A. Valuation of Securities. Equity securities listed on a national securities
exchange or traded on the NASDAQ system are valued at their last sale price.
Other equity securities and debt securities for which market quotations are
readily available are valued at the mean between their bid and asked price,
except that debt securities maturing within 60 days are valued on an
amortized cost basis. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by the Board
of Trustees.
B. Federal Income Taxes. Each Portfolio intends to comply with the
requirements of the Internal Revenue Code applicable to it. Therefore,
no federal income tax provision is required.
C. Deferred Organization Expense. Organization costs of the Portfolios 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 a 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
34
<PAGE> 35
P-I-C
BALANCED NOTES TO FINANCIAL STATEMENTS,
SMALL CAP. CONTINUED
PORTFOLIOS
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
Each 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 Portfolios. PIC and ICAC also provide management services necessary for
the operations of the Portfolios and furnish office facilities.
PIC receives from the Balanced Portfolio an investment advisory fee at the
annual rate of 0.60% of its average net assets and 0.80% from the Small Cap.
Portfolio. In addition, PIC has voluntarily taken to limit the expenses of the
Balanced Portfolio to 0.80% of its average net assets and 1.00% for the Small
Cap. Portfolio.
During the six months ended April 30, 1997, PIC waived its fees to the
Balanced Portfolio in the amount of $55,131.
ICAC receives for its services a fee at the annual rate of 0.10% of the
average net assets of the Portfolios. Fees paid to ICAC for the six months ended
April 30, 1997 are stated on the respective Portfolios' Statement of Operations.
On December 19, 1995, each Portfolio approved a Deferred Compensation Plan
for Trustees (the "Plan"). Trustees are entitled to receive $2,500 per quarter
and $500 per meeting attended, which is allocated among the Portfolios. Trustees
can elect to receive payment in cash or defer payments provided for in the Plan.
35
<PAGE> 36
P-I-C NOTES TO FINANCIAL STATEMENTS,
BALANCED CONTINUED
SMALL CAP.
PORTFOLIOS
4 - INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investment securities, other than
short-term obligations, for the six months ended April 30, 1997, were as
follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
Balanced Portfolio $17,806,843 $ 9,696,480
Small Cap. Portfolio 94,029,054 65,500,963
</TABLE>
The aggregate unrealized appreciation and depreciation of investment
securities at April 30, 1997, based on costs for federal income tax purposes,
were as follows:
<TABLE>
<CAPTION>
Tax Gross Gross
Costs of Unrealized Unrealized
Investments Appreciation Depreciation
----------- ------------ ------------
<S> <C> <C> <C>
Balanced Portfolio $ 19,352,776 $ 3,102,281 $ 284,096
Small Cap. Portfolio 172,528,555 38,357,190 10,767,846
</TABLE>
36
<PAGE> 37
[P-I-C LOGO]
P-I-C TRUSTEES AND OFFICERS
PINNACLE
BALANCED FUND
SMALL COMPANY 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 PORTFOLIOS
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 PORTFOLIOS
Paul, Hastings, Janofsky & Walker, LLP
INDEPENDENT AUDITORS
McGladrey & Pullen, LLP
This report is intended for the information of shareholders of P-I-C Pinnacle
Funds and should not be used as sales literature unless preceded or accompanied
by a current prospectus.
