PROVIDENT INVESTMENT COUNSEL
-------------------------
MUTUAL
FUNDS
-------------------------
GROWTH FUND
MID CAP FUND
SMALL COMPANY GROWTH FUND
Semi-Annual Report
April 30, 1998
<PAGE>
- ---------------------
Provident Investment
Counsel Mutual Funds Message to Shareholders
- ---------------------
================================================================================
Dear Shareholder,
The following are interviews with the members of the investment team at
Provident Investment Counsel. We hope this will provide you additional
information and insight to the investment management process and performance for
your Provident Investment Counsel Mutual Fund. In addition to the information in
this Semi-Annual Report, we will be sending the regular quarterly update along
with your statement.
Thank you for your continued confidence in Provident Investment Counsel.
Provident Investment Counsel Growth Fund
Question: How did the Provident Investment Counsel Growth Fund perform relative
to the overall market during the six months ended April 30, 1998?
Answer: The Lipper Growth Fund Index, a group of several hundred growth mutual
funds, rose 18.15% for the six months ended April 30, 1998 and 13.58% from
January 1, 1998 through April 30, while the Fund's returns were 18.65% and
15.78% in the same periods.
Question: What are of some of the sectors and specific holdings that have driven
the Fund's performance over the last six months?
Answer: Holdings in the finance, technology services, retail and health
technology sectors have been the best performers recently. Specific holdings
that have performed well include Microsoft, Pfizer, Lilly, Lowes, Safeway, State
Street Bank and Paychex.
Question: Given the changing global economic picture, have there been any
changes in the overall makeup of the Fund?
Answer: Yes, 1998 has seen a slight shift in emphasis. Our research effort
remains focused on identifying great individual companies based on their own
merit. However, we have seen an increase in our holdings in financial stocks and
consumer-oriented stocks, including the drug companies and specialty retailing.
In recent months, we have reduced our holdings in the electronic technology
sector due to strong appreciation as well as inherent exposure to Asian markets.
We have also attempted to give the Fund a
1
<PAGE>
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Provident Investment
Counsel Mutual Funds Message to Shareholders
- ---------------------
================================================================================
domestic bias, given the uncertain environment in the Pacific rim and the
spillover effect into other foreign stock markets.
Question: What is the outlook for the Fund and broad market in the near future?
Answer: We continue to marvel at the strength and length of the economic
expansion. The equity gains have certainly been above average for the last
several years, including the stellar gains of the first four months of 1998. We
continue to hold more modest expectations for the broad market in the months
ahead. However, those individual companies that can demonstrate consistency and
quality with regard to revenue and earnings reports will continue to be
rewarded. The focus of our research effort for all the Provident Investment
Counsel Funds will remain on identifying the highest quality growth stocks, with
superior earnings and revenue trends.
Provident Investment Counsel Mid Cap Fund
Question: How did the Provident Investment Counsel Mid Cap Fund perform relative
to the broad market since inception on December 31, 1997 through April 30, 1998?
Answer: The Lipper Mid Cap Fund Index rose 13.67% for the four months ended
April 30, 1998, while the Fund's return was 19.5%.
Question: What are some of the holdings and sectors that have driven the
positive performance in the Fund?
Answer: Thus far in 1998 the Fund's three largest sector commitments were also
the main contributors to performance. Holdings in the retail, health services
and finance sectors have been the best performers. Specific holdings included
Proffit's, Office Depot and Staples in retail, McKesson in Health Services and
Firstplus and Metris Companies in Finance.
Question: How are mid-sized companies positioned relative to both smaller and
larger issues in the markets?
Answer: At the time the Fund began operations we felt, and still feel that in
general mid-sized companies have been under-recognized in the recent period
2
<PAGE>
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Provident Investment
Counsel Mutual Funds Message to Shareholders
- ---------------------
================================================================================
of strong market performance. As expected, the market has broadened over the
first four months of the year, making the valuations of mid-sized companies very
attractive to investors as an alternative to the largest, most liquid issues
that have driven market performance in the past few years.
Provident Investment Counsel Small Company Growth Fund
Question: How did the Provident Investment Counsel Small Company Growth Fund
perform relative to the overall market during the six months ended April 30,
1998?
Answer: The Lipper Small Cap Fund Index rose 10.21% for the six months ended
April 30, 1998 and 11.17% from January 1, 1998 through April 30, while the
Fund's returns were 10.09% and 16.06% in the same periods.
Question: What sectors of the market are driving the Fund's positive performance
year-to-date?
Answer: The sectors with the most positive performance in the latest period
include electronic technology, commercial services and health services. The
Fund's holdings in electronic technology have made the largest impact. We have
also focused our holdings in technology on those companies with the smallest
amount of exposure, if any, to the Asian economies. Our total technology
exposure, which includes electronic technology and technology services, relative
to the broad market remains at a moderate level of roughly 30% of the Fund's
assets.
Question: Why have shares of larger companies posted returns superior to those
of smaller companies in general over the last couple of years? Will this
continue to be the case?
Answer: At the beginning of 1998, we felt that the valuations of smaller
companies, especially growth-oriented small companies, were significantly more
attractive than their larger counterparts. That is based on their expected
earnings and revenue growth over the next year relative to their current stock
price. After the first four months of 1998, we have yet to see a performance
differential materialize. In general we believe those companies, large or small,
with the greatest visibility of both sales and earnings will be rewarded going
forward.
3
<PAGE>
- ---------------------
Provident Investment Statements of Assets and Liabilities
Counsel Mutual Funds as of April 30, 1998
- ---------------------
Growth Mid Cap Small Company
Fund Fund Growth Fund
================================================================================
ASSETS
- --------------------------------------------------------------------------------
Investment in Portfolios, at value $136,443,121 $4,661,552 $42,004,740
Receivables:
From Provident Investment
Counsel, Inc. (Note 3) - 8,046 -
Prepaid expenses 52,447 - 13,364
- --------------------------------------------------------------------------------
Total assets 136,495,568 4,669,598 42,018,104
================================================================================
LIABILITIES
- --------------------------------------------------------------------------------
Payables:
To Provident Investment
Counsel, Inc. (Note 3) 18,352 - 4,028
Deferred Trustees'
compensation (Note 3) 13,131 1,296 8,658
Accrued expenses 30,202 27,773 12,359
- --------------------------------------------------------------------------------
Total liabilities 61,685 29,069 25,045
================================================================================
NET ASSETS
- --------------------------------------------------------------------------------
Applicable to 7,746,993, 388,296 and
3,849,181 shares of beneficial
interest outstanding, respectively
(unlimited number of shares
authorized, $0.01 par value) $136,433,883 $4,640,529 $41,993,059
================================================================================
NET ASSET VALUE
PER SHARE $ 17.61 $ 11.95 $ 10.91
================================================================================
SOURCE OF NET ASSETS
- --------------------------------------------------------------------------------
Paid-in capital $ 93,894,717 $3,927,533 $34,391,672
Accumulated net investment loss (668,932) (4,882) (414,696)
Undistributed net realized gain
(loss) on investments 8,098,944 139,171 (365,403)
Net unrealized appreciation
on investments 35,109,154 578,707 8,381,486
- --------------------------------------------------------------------------------
Net Assets $136,433,883 $4,640,529 $41,993,059
- --------------------------------------------------------------------------------
Unaudited. See Notes to Financial Statements.
4
<PAGE>
- ---------------------
Provident Investment Statements of Operations
Counsel Mutual Funds Six Months ended April 30, 1998
- ---------------------
Growth Mid Cap Small Company
Fund Fund Growth Fund
================================================================================
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Net investment loss from Portfolios $ (118,111) $ (3,721) $ (119,310)
================================================================================
Expenses:
- --------------------------------------------------------------------------------
Administration fees (Note 3) 124,701 8,293 41,880
Transfer agent's fee 20,827 8,834 12,644
Trustees' fees 3,968 2,688 3,968
Audit fee 6,100 3,957 5,108
Legal fee 3,720 461 992
Custody and accounting services fee 2,975 2,290 2,853
Reports to shareholders 4,959 2,689 4,959
Registration fees 7,935 6,961 12,397
Miscellaneous 3,968 993 2,480
- --------------------------------------------------------------------------------
Total expenses 179,153 37,166 87,281
Less, reimbursement/waiver
by Provident Investment
Counsel, Inc. (Note 3) (32,575) (36,005) (9,788)
- --------------------------------------------------------------------------------
Net expenses 146,578 1,161 77,493
================================================================================
Net investment loss (264,689) (4,882) (196,803)
================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain
on investments 8,175,608 139,171 2,094,865
Change in net unrealized
appreciation on investments 14,760,029 578,707 2,372,441
- --------------------------------------------------------------------------------
Net gain on investments 22,935,637 717,878 4,467,306
================================================================================
NET INCREASE IN
NET ASSETS RESULTING
FROM OPERATIONS $22,670,948 $712,996 $4,270,503
- --------------------------------------------------------------------------------
Unaudited. See Notes to Financial Statements.
5
<PAGE>
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Provident Investment Statements of Changes in Net Assets
Counsel Mutual Funds
- ---------------------
<TABLE>
<CAPTION>
Growth
Fund
=======================================================================================
INCREASE (DECREASE) IN NET ASSETS
- ---------------------------------------------------------------------------------------
Six Months Year
ended ended
From operations: April 30, 1998 Oct. 31, 1997
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Net investment loss $ (264,689) $ (391,124)
Net realized gain (loss) on investments 8,175,608 32,173,750
Change in net unrealized appreciation
(depreciation) on investments 14,760,029 (7,723,822)
- ---------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 22,670,948 24,058,804
=======================================================================================
Distributions to shareholders:
From net realized capital gains (14,604,225) (13,410,970)
=======================================================================================
Transactions in shares of beneficial interest:
Purchases of 3,318,924, 939,090, 435,745,
1,666,097 and 3,218,198 shares, respectively 49,934,918 15,132,320
Reinvestment of 916,270, 913,467, 0, 0,
and 0 shares, respectively 13,890,656 13,369,645
Redemptions of 897,877, 4,585,554, 65,449,
945,058 and 636,830 shares, respectively (15,459,222) (75,233,871)
- ---------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from share transactions 48,366,352 (46,731,906)
=======================================================================================
Total increase (decrease) in net assets 56,433,075 (36,084,072)
=======================================================================================
NET ASSETS:
- ---------------------------------------------------------------------------------------
Beginning of period 80,000,808 116,084,880
- ---------------------------------------------------------------------------------------
End of period 136,433,883 80,000,808
- ---------------------------------------------------------------------------------------
Accumulated net investment loss $ (668,932) $ (404,243)
- ---------------------------------------------------------------------------------------
</TABLE>
*Commencement of operations.
Unaudited. See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
Mid Cap Small Company
Fund Growth Fund
==================================================================================================================
INCREASE (DECREASE) IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------
Dec. 31, 1997* Six Months Year
through ended ended
From operations: April 30, 1998 April 30, 1998 Oct. 31, 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment loss $ (4,882) $ (196,803) $ (216,349)
Net realized gain (loss) on investments 139,171 2,094,865 (1,960,254)
Change in net unrealized appreciation
(depreciation) on investments 578,707 2,372,441 5,591,606
- -----------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 712,996 4,270,503 3,415,003
=================================================================================================================
Distributions to shareholders:
From net realized capital gains -- -- --
=================================================================================================================
Transactions in shares of beneficial interest:
Purchases of 3,318,924, 939,090, 435,745,
1,666,097 and 3,218,198 shares, respectively 4,680,508 16,291,154 28,742,445
Reinvestment of 916,270, 913,467, 0, 0,
and 0 shares, respectively -- -- --
Redemptions of 897,877, 4,585,554, 65,449,
945,058 and 636,830 shares, respectively (752,975) (9,582,345) (6,327,278)
- -----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from share transactions 3,927,533 6,708,809 22,415,167
=================================================================================================================
Total increase (decrease) in net assets 4,640,529 10,979,312 25,830,170
=================================================================================================================
NET ASSETS:
- -----------------------------------------------------------------------------------------------------------------
Beginning of period -- 31,013,747 5,183,577
- -----------------------------------------------------------------------------------------------------------------
End of period 4,640,529 41,993,059 31,013,747
- -----------------------------------------------------------------------------------------------------------------
Accumulated net investment loss $ (4,882) $ (414,696) $ (217,893)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
- ---------------------
Provident Investment Financial Highlights
Counsel Mutual Funds
- ---------------------
For a share outstanding throughout each period
<TABLE>
<CAPTION>
=================================================================================================================
Growth Fund
- -----------------------------------------------------------------------------------------------------------------
Six Months Year ended October 31,
ended ----------------------
April 30, 1998 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $18.14 $16.25 $14.25 $11.70 $11.60 $10.81
- -----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) .07 (.15) (.06) (.02) .00 .00
Net realized and unrealized
gain on investments 2.77 3.98 2.06 2.57 .10 .80
- -----------------------------------------------------------------------------------------------------------------
Total from investment
operations 2.84 3.83 2.00 2.55 .10 .80
- -----------------------------------------------------------------------------------------------------------------
Less distributions to shareholders:
From net realized
capital gains (3.37) (1.94) .00 .00 .00 .00
Return of capital .00 .00 .00 .00 .00 (.01)
- -----------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders (3.37) (1.94) .00 .00 .00 (.01)
- -----------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $17.61 $18.14 $16.25 $14.25 $11.70 $11.60
=================================================================================================================
Total return 18.65%^^ 26.44% 14.04% 21.79% 0.86% 7.40%
=================================================================================================================
Ratios/supplemental data:
Net assets, end
of period (millions) $136.4 $80.0 $116.1 $131.1 $102.3 $88.9
- -----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:*+
Expenses 1.25%++ 1.25% 1.25% 1.25% 1.25% 1.25%
Net investment loss (0.45%)++ (0.38%) (.28%) (.17%) N/A N/A
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
*Includes the Fund's share of expenses, net of expense reimbursements, allocated
from PIC Growth Portfolio. If the fee waivers and expense reimbursements, with
respect to the Fund and PIC Growth Portfolio, had not been made, the ratio of
expenses to average net assets would have been 1.34%, 1.35%, 1.30%, 1.30%,
1.53%, and 1.54%, respectively.
+Net of expense reimbursements.
++Annualized.
^^Not annualized.
Unaudited. See Notes to Financial Statements.
8
<PAGE>
- ---------------------
Provident Investment Financial Highlights, continued
Counsel Mutual Funds
- ---------------------
For a share outstanding throughout each period
<TABLE>
<CAPTION>
===================================================================================================================
Mid Cap Small Company
Fund Growth Fund
- -------------------------------------------------------------------------------------------------------------------
December 31, 1997* Six Months Year June 28, 1996*
through ended ended through
April 30, 1998 April 30, 1998 Oct. 31, 1997 Oct. 31, 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $ 9.91 $ 9.48 $10.00
- -------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.01) (.04) (.05) (.03)
Net realized and unrealized
gain (loss) on investments 1.96 1.04 .48 (.49)
- -------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.95 1.00 .43 (.52)
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.95 $10.91 $ 9.91 $ 9.48
===================================================================================================================
Total return 19.50%++ 10.09%++ 4.54%++ (5.20%)++
===================================================================================================================
Ratios/supplemental data:
Net assets, end of period (millions) $ 4.6 $42.0 $31.0 $ 5.2
- -------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:#+
Expenses 0.99%^^ 1.45%^^ 1.45% 1.43%^^
Net investment loss (0.38%)^^ (1.14%)^^ (0.96%) (0.91)%^^
</TABLE>
*Commencement of operations.
#Includes the Fund's share of expenses, allocated from their respective
Portfolios. If the fee waivers and expense reimbursements, with respect to the
Fund and Portfolios, had not been made, the ratio of expenses to average net
assets would have been 6.32%, 1.53%, 1.61% and 4.03%, respectively.
+Net of expense reimbursements.
++Not annualized.
^^Annualized.
Unaudited. See Notes to Financial Statements.
9
<PAGE>
- ---------------------
Provident Investment Notes to Financial Statements
Counsel Mutual Funds
- ---------------------
================================================================================
1 - ORGANIZATION
- --------------------------------------------------------------------------------
PIC 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 eight separate series: Provident Investment Counsel Pinnacle
Balanced Fund, Provident Investment Counsel Growth Fund, Provident Investment
Counsel Pinnacle Growth Fund, Provident Investment Counsel Small Company Growth
Fund, Provident Investment Counsel Pinnacle Small Company Growth Fund, Provident
Investment Counsel Small Cap Growth Fund, Provident Investment Counsel Mid Cap
Fund, and the Provident Investment Counsel Tax Managed 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 Provident Investment Counsel Pinnacle Balanced Fund,
Provident Investment Counsel Pinnacle Growth Fund, Provident Investment Counsel
Pinnacle Small Company Growth Fund, Provident Investment Counsel Small Cap
Growth Fund, and the Provident Investment Counsel Tax Managed 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 investment in the
Portfolio. All net investment income and realized and unrealized gains or
losses on investments of the Portfolio are allocated pro rata among the
Funds and the other Holders of Interests in the Portfolio. Dividends,
10
<PAGE>
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Provident Investment Notes to Financial Statements,
Counsel Mutual Funds continued
- ---------------------
================================================================================
if any, are paid annually to shareholders of the Funds and recorded on the
ex-dividend date.
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.
PIC has voluntarily taken to limit the Funds' expenses, including those
expenses allocated from the Portfolios, to the following levels:
Growth Fund 1.25%
Mid Cap Fund 0.99%
Small Company Growth Fund 1.45%
11
<PAGE>
- ---------------------
Provident Investment Notes to Financial Statements,
Counsel Mutual Funds continued
- ---------------------
================================================================================
The percentages are based on the Funds' average net assets. Fees waived
and expenses reimbursed by PIC for the six months ended April 30, 1998, were as
follows:
Waived Reimbursed
Fees Expenses
---- --------
Growth Fund $32,575 $ 0
Mid Cap Fund 2,531 33,474
Small Company Growth Fund 9,788 0
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. If
a trustee elects to defer payment, the Plan provides for the creation of a
deferred payment account (phantom share account). This account accumulates the
deferred fees earned and the value of the account is adjusted at the end of each
quarter to reflect a value which would have been earned if the account had been
invested in designated investments. The Funds recognize as trustee expense
amounts accrued as meetings are attended plus the change in the value of the
phantom share account determined on a quarterly basis.
4 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
Additions and reductions in the investments in the respective Portfolios
for the six months ended April 30, 1998, were as follows:
Additions Reductions
--------- ----------
Growth Fund $49,945,864 $16,311,659
Mid Cap Fund 4,711,348 762,953
Small Company Growth Fund 16,291,764 9,668,640
12
<PAGE>
P * I * C
- ----------- Statement of Net Assets
G R O W T H as of April 30, 1998
- -----------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES - 97.7% Shares Value Assets
- --------------------------------------------------------------------------------
Banks - 3.1%
- --------------------------------------------------------------------------------
State Street Corp. 60,300 $ 4,311,450 3.1%
================================================================================
Beverage/Food - 0.7%
- --------------------------------------------------------------------------------
General Nutrition Company, Inc. 26,900 965,038 0.7%
================================================================================
Building Products - 2.0%
- --------------------------------------------------------------------------------
Lowe's Companies, Inc. 40,800 2,853,450 2.0%
================================================================================
Business Information Services - 1.6%
- --------------------------------------------------------------------------------
Paychex, Inc. 42,351 2,300,189 1.6%
================================================================================
Computer Services - 3.1%
- --------------------------------------------------------------------------------
American Online, Inc. 22,800 1,824,000 1.3%
Sungard Data Systems, Inc. 68,800 2,451,000 1.8%
- --------------------------------------------------------------------------------
Total Computer Services 4,275,000 3.1%
================================================================================
Computer Software - 6.1%
- --------------------------------------------------------------------------------
Microsoft Corp. 94,112 8,481,844 6.1%
================================================================================
Cosmetics and Soaps - 3.1%
- --------------------------------------------------------------------------------
Colgate-Palmolive Company 17,500 1,569,531 1.1%
Gillette Company 24,359 2,811,942 2.0%
- --------------------------------------------------------------------------------
Total Cosmetics and Soaps 4,381,473 3.1%
================================================================================
Credit and Finance - 6.8%
- --------------------------------------------------------------------------------
Associates First Capital Corp. 20,530 1,534,617 1.1%
Household International, Inc. 14,400 1,892,700 1.4%
MBNA Corp. 180,944 6,129,478 4.3%
- --------------------------------------------------------------------------------
Total Credit and Finance 9,556,795 6.8%
Unaudited. See Notes to Financial Statements.
13
<PAGE>
P * I * C
- ----------- Statement of Net Assets
G R O W T H as of April 30, 1998
- -----------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Discount Chains - 5.5%
- --------------------------------------------------------------------------------
Costco Companies, Inc. 62,700 $ 3,503,362 2.5%
Dollar General Corp. 111,218 4,212,382 3.0%
- --------------------------------------------------------------------------------
Total Discount Chains 7,715,744 5.5%
================================================================================
Diversified - 3.4%
- --------------------------------------------------------------------------------
Tyco International, Ltd. 86,060 4,690,270 3.4%
================================================================================
Drugs - 18.6%
- --------------------------------------------------------------------------------
Elan Corp., PLC 59,157 3,675,129 2.6%
Lilly (Eli) & Co. 54,170 3,768,201 2.7%
Pfizer, Inc. 57,584 6,553,779 4.7%
Schering-Plough Corp. 52,500 4,206,562 3.0%
Warner-Lambert Co. 41,600 7,870,200 5.6%
- --------------------------------------------------------------------------------
Total Drugs 26,073,871 18.6%
================================================================================
Electrical Equipment/Periphery - 1.4%
- --------------------------------------------------------------------------------
Dell Computer Corp. 23,700 1,913,775 1.4%
================================================================================
Entertainment and Leisure - 1.4%
- --------------------------------------------------------------------------------
Chancellor Media Corp. 40,100 1,902,244 1.4%
================================================================================
Financial Services - 1.1%
- --------------------------------------------------------------------------------
First Data Corp. 45,300 1,534,537 1.1%
================================================================================
Health Maintenance Organizations - 1.1%
- --------------------------------------------------------------------------------
Health Management Associates, Inc.,
Class A 47,100 1,483,650 1.1%
Unaudited. See Notes to Financial Statements.
14
<PAGE>
P * I * C
- ----------- Statement of Net Assets
G R O W T H as of April 30, 1998
- -----------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Insurance - 4.6%
- --------------------------------------------------------------------------------
American International Group, Inc. 29,968 $ 3,942,665 2.8%
MGIC Investment Corp. 38,738 2,440,494 1.8%
- --------------------------------------------------------------------------------
Total Insurance 6,383,159 4.6%
================================================================================
Medical Instruments - 4.1%
- --------------------------------------------------------------------------------
Guidant Corp. 32,100 2,146,687 1.5%
Medtronic, Inc. 69,004 3,631,335 2.6%
- --------------------------------------------------------------------------------
Total Medical Instruments 5,778,022 4.1%
================================================================================
Miscellaneous - 1.7%
- --------------------------------------------------------------------------------
AES Corp. 42,950 2,370,303 1.7%
================================================================================
Mortgage and Related Services - 2.6%
- --------------------------------------------------------------------------------
Federal National Mortgage Association 60,319 3,611,600 2.6%
================================================================================
Networking - 1.1%
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 21,650 1,585,863 1.1%
================================================================================
Office Equipment/Supplies - 1.8%
- --------------------------------------------------------------------------------
Office Depot, Inc. 76,600 2,537,375 1.8%
================================================================================
Oil Refining - 0.8%
- --------------------------------------------------------------------------------
Tosco Corp. 31,875 1,135,547 0.8%
================================================================================
Real Estate Investment Trust - 1.0%
- --------------------------------------------------------------------------------
Starwood Hotels & Resorts Trust 28,000 1,405,250 1.0%
Unaudited. See Notes to Financial Statements.
15
<PAGE>
P * I * C
- ----------- Statement of Net Assets
G R O W T H as of April 30, 1998
- -----------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Specialty Chains - 7.7%
- --------------------------------------------------------------------------------
Bed, Bath & Beyond, Inc. 34,200 $ 1,684,350 1.2%
Cendant Corp. 114,418 2,860,450 2.0%
CVS Corp. 35,500 2,618,125 1.9%
Kohls Corp. 88,158 3,642,027 2.6%
- --------------------------------------------------------------------------------
Total Specialty Chains 10,804,952 7.7%
================================================================================
Supermarkets - 2.5%
- --------------------------------------------------------------------------------
Safeway, Inc. 90,750 3,471,188 2.5%
================================================================================
Telecommunications - 5.8%
- --------------------------------------------------------------------------------
Ericsson,(L.M.) Telephone Co., ADR 52,440 2,697,383 1.9%
Lucent Technologies, Inc. 39,500 3,006,938 2.1%
Nextel Communications, Inc., Class A 49,900 1,431,506 1.0%
Tellabs, Inc. 16,600 1,176,525 0.8%
- --------------------------------------------------------------------------------
Total Telecommunications 8,312,352 5.8%
================================================================================
Telephone - 3.5%
- --------------------------------------------------------------------------------
Worldcom, Inc. 113,150 4,840,698 3.5%
================================================================================
Wireless Services - 1.5%
- --------------------------------------------------------------------------------
Airtouch Communications, Inc. 39,500 2,098,438 1.5%
- --------------------------------------------------------------------------------
Total Equity Securities (Cost $101,159,957) 136,774,077 97.7%
Unaudited. See Notes to Financial Statements.
16
<PAGE>
P * I * C
- ----------- Statement of Net Assets
G R O W T H as of April 30, 1998
- -----------
PORTFOLIO
================================================================================
Percentage
of Net
OTHER ASSETS - 2.6% Value Assets
- --------------------------------------------------------------------------------
Receivables:
Investment securities sold $ 3,591,938
Dividends and interest 43,849
Other assets 23,317
- --------------------------------------------------------------------------------
Total other assets 3,659,104 2.6%
================================================================================
LIABILITIES - (0.3%)
- --------------------------------------------------------------------------------
Payables:
To custodian bank 308,222
To Advisor (Note 3) 92,429
Deferred Trustees' compensation (Note 3) 27,158
Accrued expenses 47,228
- --------------------------------------------------------------------------------
Total liabilities 475,037 (0.3%)
================================================================================
TOTAL NET ASSETS - 100.0% $139,958,144 100.0%
- --------------------------------------------------------------------------------
Unaudited. See Notes to Financial Statements.
17
<PAGE>
P * I * C
- --------- Statement of Net Assets
MID CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES - 96.9% Shares Value Assets
- --------------------------------------------------------------------------------
Apparel and Shoe - 2.3%
- --------------------------------------------------------------------------------
Proffitt's, Inc. 2,700 $107,325 2.3%
================================================================================
Banks - 1.3%
- --------------------------------------------------------------------------------
Zions Bancorp 1,200 61,350 1.3%
================================================================================
Beverages/Food - 1.3%
- --------------------------------------------------------------------------------
General Nutrition Companies, Inc. 1,700 60,987 1.3%
================================================================================
Building Products - 1.3%
- --------------------------------------------------------------------------------
U.S. Industries, Inc. 2,300 62,388 1.3%
================================================================================
Business Information Services - 1.3%
- --------------------------------------------------------------------------------
Paychex, Inc. 1,100 59,744 1.3%
================================================================================
Business Services - 2.5%
- --------------------------------------------------------------------------------
Accustaff, Inc. 1,900 68,162 1.5%
Robert Half International, Inc. 900 48,713 1.0%
- --------------------------------------------------------------------------------
Total Business Services 116,875 2.5%
================================================================================
Computer Services - 12.8%
- --------------------------------------------------------------------------------
Acxiom Corp. 1,900 46,075 1.0%
Ceridian Corp. 1,300 73,531 1.6%
DST Systems 1,600 88,200 1.9%
Fiserv, Inc. 1,300 84,987 1.8%
HBO & Co. 2,500 149,531 3.2%
National Data Corp. 1,500 61,219 1.3%
SunGard Data Systems, Inc. 2,600 92,625 2.0%
- --------------------------------------------------------------------------------
Total Computer Services 596,168 12.8%
Unaudited. See Notes to Financial Statements.
18
<PAGE>
P * I * C
- --------- Statement of Net Assets
MID CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
================================================================================
Computer Software - 3.4%
- --------------------------------------------------------------------------------
Parametric Technology Corp. 2,900 92,709 2.0%
Sterling Commerce, Inc. 1,600 68,100 1.4%
- --------------------------------------------------------------------------------
Total Computer Software 160,809 3.4%
================================================================================
Cosmetics and Soaps - 1.0%
- --------------------------------------------------------------------------------
Rexall Sundown, Inc. 1,500 47,906 1.0%
================================================================================
Credit and Finance - 3.7%
- --------------------------------------------------------------------------------
CIT Group, Inc., - Class A 1,700 60,244 1.3%
MBNA Corp. 3,300 111,787 2.4%
- --------------------------------------------------------------------------------
Total Credit and Finance 172,031 3.7%
================================================================================
Discount Chains - 4.2%
- --------------------------------------------------------------------------------
Dollar General Corp. 1,625 61,547 1.3%
Dollar Tree Stores, Inc. 1,200 65,100 1.4%
Family Dollar Stores, Inc. 2,100 71,400 1.5%
- --------------------------------------------------------------------------------
Total Discount Chains 198,047 4.2%
================================================================================
Drugs - 6.2%
- --------------------------------------------------------------------------------
ALZA Corp. 1,400 67,112 1.4%
Elan Corp. PLC, ADR 1,200 74,550 1.6%
McKesson Corp. 1,600 113,100 2.4%
Watson Pharmaceuticals, Inc. 800 34,400 0.8%
- --------------------------------------------------------------------------------
Total Drugs 289,162 6.2%
Unaudited. See Notes to Financial Statements.
19
<PAGE>
P * I * C
- --------- Statement of Net Assets
MID CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Electrical Component/Semiconductors - 3.3%
- --------------------------------------------------------------------------------
Analog Devices, Inc. 900 $ 35,044 0.8%
Flextronics International, Ltd. 1,500 71,250 1.5%
Linear Technology Corp. 600 48,300 1.0%
- --------------------------------------------------------------------------------
Total Electrical Component/Semiconductors 154,594 3.3%
================================================================================
Electrical Equipment/Peripherals - 2.0%
- --------------------------------------------------------------------------------
Waters Corp. 1,700 90,950 2.0%
================================================================================
Entertainment and Leisure - 5.2%
- --------------------------------------------------------------------------------
Chancellor Media Corp. - Class A 1,600 75,900 1.6%
Clear Channel Communications, Inc. 800 75,400 1.6%
Sinclair Broadcast Group, Inc. - Class A 1,800 93,375 2.0%
- --------------------------------------------------------------------------------
Total Entertainment and Leisure 244,675 5.2%
================================================================================
Financial Services - 5.0%
- --------------------------------------------------------------------------------
Firstplus Financial Group, Inc. 1,800 87,300 1.9%
Golden State Bancorp, Inc. 1,000 39,000 0.8%
Metris Companies, Inc. 1,200 68,025 1.5%
Newcourt Credit Group, Inc. 800 39,300 0.8%
- --------------------------------------------------------------------------------
Total Financial Services 233,625 5.0%
================================================================================
Food and Restaurants - 1.1%
- --------------------------------------------------------------------------------
Ruby Tuesday, Inc. 1,600 53,600 1.1%
================================================================================
Home Furnishing - 0.9%
- --------------------------------------------------------------------------------
Linens `N Things, Inc. 700 42,175 0.9%
Unaudited. See Notes to Financial Statements.
20
<PAGE>
P * I * C
- --------- Statement of Net Assets
MID CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Hospitals - 2.2%
- --------------------------------------------------------------------------------
Health Care & Retirement Corp. 700 $ 28,525 0.6%
Health Management
Associates, Inc. - Class A 2,300 72,450 1.6%
- --------------------------------------------------------------------------------
Total Hospitals 100,975 2.2%
================================================================================
Insurance - 2.1%
- --------------------------------------------------------------------------------
Mercury General Corp. 1,500 97,125 2.1%
================================================================================
Medical and Dental Products - 1.0%
- --------------------------------------------------------------------------------
Henry Schein, Inc. 1,200 46,800 1.0%
================================================================================
Medical/Dental Services - 3.5%
- --------------------------------------------------------------------------------
Concentra Managed Care, Inc. 1,900 59,137 1.3%
Omnicare, Inc. 900 30,825 0.7%
Quintiles Transnational Corp. 1,400 69,300 1.5%
- --------------------------------------------------------------------------------
Total Medical/Dental Services 159,262 3.5%
================================================================================
Medical Instruments - 3.8%
- --------------------------------------------------------------------------------
Guidant Corp. 1,300 86,937 1.9%
Sofamor Danek Group, Inc. 1,000 87,750 1.9%
- --------------------------------------------------------------------------------
Total Medical Instruments 174,687 3.8%
================================================================================
Miscellaneous - 2.6%
- --------------------------------------------------------------------------------
AES Corp. 2,200 121,412 2.6%
================================================================================
Mortgage and Related Services - 0.6%
- --------------------------------------------------------------------------------
CMAC Investment Corp. 400 25,825 0.6%
Unaudited. See Notes to Financial Statements.
21
<PAGE>
P * I * C
- --------- Statement of Net Assets
MID CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Networking - 2.0%
- --------------------------------------------------------------------------------
Ascend Communications, Inc. 1,200 $ 52,275 1.1%
J.D. Edwards & Co. 1,200 42,750 0.9%
- --------------------------------------------------------------------------------
Total Networking 95,025 2.0%
================================================================================
Office Equipment/Supplies - 5.3%
- --------------------------------------------------------------------------------
Office Depot, Inc. 3,100 102,688 2.2%
Staples, Inc. 3,950 97,516 2.1%
Steelcase, Inc. - Class A 1,400 48,475 1.0%
- --------------------------------------------------------------------------------
Total Office Equipment/Supplies 248,679 5.3%
================================================================================
Offshore Drilling - 1.8%
- --------------------------------------------------------------------------------
R&B Falcon Corp. 2,600 83,363 1.8%
================================================================================
Oil and Gas, US Exploration/Production - 1.0%
- --------------------------------------------------------------------------------
Petroleum Geo- Services ADR 700 46,025 1.0%
================================================================================
Pollution Control - 1.7%
- --------------------------------------------------------------------------------
Allied Waste Industries, Inc. 2,900 79,750 1.7%
================================================================================
Publishing/Advertising - 1.4%
- --------------------------------------------------------------------------------
Outdoor Systems, Inc. 2,100 66,675 1.4%
================================================================================
REIT - 0.7%
- --------------------------------------------------------------------------------
Crescent Real Estate Equities Co. 900 30,713 0.7%
Unaudited. See Notes to Financial Statements.
22
<PAGE>
P * I * C
- --------- Statement of Net Assets
MID CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Specialty Chains - 5.0%
- --------------------------------------------------------------------------------
Bed, Bath & Beyond, Inc. 1,000 $ 49,250 1.0%
Duane Reade, Inc. 1,900 45,125 1.0%
Rite Aid Corp. 1,400 44,975 1.0%
Starbucks Corp. 1,900 91,438 2.0%
- --------------------------------------------------------------------------------
Total Specialty Chains 230,788 5.0%
================================================================================
Telecommunications - 3.4%
- --------------------------------------------------------------------------------
Advanced Fibre Communications, Inc. 800 33,900 0.7%
ICG Communications, Inc. 1,400 49,000 1.0%
Tellabs, Inc. 1,100 77,963 1.7%
- --------------------------------------------------------------------------------
Total Telecommunications 160,863 3.4%
- --------------------------------------------------------------------------------
Total Equity Securities (cost $3,941,506) 4,520,378 96.9%
================================================================================
SHORT-TERM INVESTMENTS - 2.8%
- --------------------------------------------------------------------------------
Repurchase Agreement - 2.8% Principal Amount
- --------------------------------------------------------------------------------
Lehman Brothers On-Line Repurchase
Agreement, 5.13%, dated 4/30/1998,
due 5/1/1998 (collateralized by $133,277
U.S. Treasury Note, 6.38%, due
8/15/1997) (cost $130,191) $130,191 $130,191 2.8%
- --------------------------------------------------------------------------------
Total Investments (cost $4,071,697) 4,650,569 99.7%
Unaudited. See Notes to Financial Statements.
23
<PAGE>
P * I * C
- --------- Statement of Net Assets
MID CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
Other Assets - 1.4% Value Assets
- --------------------------------------------------------------------------------
Receivables:
Investment securities sold $ 56,137
Dividends and interest 636
From Advisor 9,276
- --------------------------------------------------------------------------------
Total Other Assets 66,049 1.4%
================================================================================
Liabilities - (1.1%)
- --------------------------------------------------------------------------------
Payables:
Investment securities purchased 36,643
Deferred Trustees' compensation (Note 3) 642
Accrued expenses 16,568
- --------------------------------------------------------------------------------
Total Liabilities 53,853 (1.1%)
================================================================================
Total Net Assets - 100.0% $4,662,765 100.0%
- --------------------------------------------------------------------------------
Unaudited. See Notes to Financial Statements.
24
<PAGE>
P * I * C
- --------- Statement of Net Assets
SMALL CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES - 98.5% Shares Value Assets
- --------------------------------------------------------------------------------
Air Freight .. 0.6%
- --------------------------------------------------------------------------------
Eagle USA Airfreight, Inc. 36,370 $ 1,195,664 0.6%
================================================================================
Airlines .. 0.5%
- --------------------------------------------------------------------------------
Ryanair Holdings PLC 25,470 977,411 0.5%
================================================================================
Apparel and Shoes .. 2.2%
- --------------------------------------------------------------------------------
Abercrombie & Fitch Co. - Class A 12,940 575,830 0.3%
Ashworth, Inc. 51,000 854,250 0.4%
Coldwater Creek, Inc. 24,400 481,900 0.3%
Gadzooks, Inc. 50,000 1,312,500 0.6%
Pacific Sunwear of California 28,750 1,268,594 0.6%
- --------------------------------------------------------------------------------
Total Apparel and Shoes 4,493,074 2.2%
================================================================================
Auto Parts .. 1.2%
- --------------------------------------------------------------------------------
Gentex Corp. 50,500 1,704,375 0.8%
Keystone Automotive Industries, Inc. 28,170 727,138 0.4%
- --------------------------------------------------------------------------------
Total Auto Parts 2,431,513 1.2%
================================================================================
Banks .. 0.9%
- --------------------------------------------------------------------------------
Hamilton Bancorp., Inc. 54,730 1,833,455 0.9%
================================================================================
Beverage/Food .. 0.3%
- --------------------------------------------------------------------------------
American Italian Pasta Co. 21,920 679,520 0.3%
================================================================================
Biotechnology .. 0.7%
- --------------------------------------------------------------------------------
Incyte Pharmaceuticals, Inc. 32,800 1,476,000 0.7%
================================================================================
Builder .. 0.8%
- --------------------------------------------------------------------------------
Palm Harbor Homes, Inc. 36,838 1,634,686 0.8%
Unaudited. See Notes to Financial Statements.
25
<PAGE>
P * I * C
- --------- Statement of Net Assets
SMALL CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Business Information Services .. 0.9%
- --------------------------------------------------------------------------------
Gartner Group, Inc. 55,480 $ 1,837,775 0.9%
================================================================================
Business Services .. 11.4%
- --------------------------------------------------------------------------------
Abacus Direct Corp. 7,700 437,937 0.2%
ABR Information Services, Inc. 27,110 784,496 0.4%
Accustaff, Inc. 99,538 3,570,926 1.8%
Casella Waste Systems, Inc. 34,970 1,088,441 0.5%
Forrester Research, Inc. 25,320 949,500 0.5%
Iron Mountain, Inc. 16,900 709,800 0.3%
Lason Holdings, Inc. 33,980 1,325,220 0.6%
Metzler Group, Inc. 14,700 508,987 0.2%
NCO Grupo, Inc. 44,535 1,110,592 0.5%
Pentacon, Inc. 17,200 227,900 0.1%
Personnel Group of America, Inc. 108,680 2,160,015 1.1%
Romac International, Inc. 94,490 2,503,985 1.2%
Staffmark, Inc. 54,310 2,308,175 1.2%
Superior Consultant Holdings Corp. 23,540 907,761 0.4%
The Profit Recovery Group
International, Inc. 39,600 1,029,600 0.5%
TMP Worldwide, Inc. 65,620 1,738,930 0.9%
United Rentals, Inc. 35,700 1,229,419 0.6%
Wackenhut Corrections Corp. 28,200 736,725 0.4%
- --------------------------------------------------------------------------------
Total Business Services 23,328,409 11.4%
================================================================================
Computer Services .. 9.5%
- --------------------------------------------------------------------------------
Cambridge Technology Partners, Inc. 22,330 1,166,742 0.6%
Cerner Corp. 88,390 2,635,127 1.3%
CSG Systems International, Inc. 61,038 2,777,229 1.3%
Daou Systems, Inc. 75,770 1,363,860 0.7%
Envoy Corp. 39,610 1,668,571 0.8%
Fiserv, Inc. 42,900 2,804,587 1.4%
Harbinger Corp. 17,400 632,925 0.3%
Unaudited. See Notes to Financial Statements.
26
<PAGE>
P * I * C
- --------- Statement of Net Assets
SMALL CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Computer Services, continued
- --------------------------------------------------------------------------------
Intelligroup, Inc. 23,850 $ 488,925 0.2%
International Network Services 20,500 689,312 0.3%
Lycos, Inc. 15,100 933,369 0.5%
Pegasus Systems, Inc. 17,800 476,150 0.2%
Premiere Technologies, Inc. 89,800 2,862,375 1.4%
QuadraMed Corp. 11,000 313,500 0.2%
RWD Technologies, Inc. 26,460 668,115 0.3%
- --------------------------------------------------------------------------------
Total Computer Services 19,480,787 9.5%
================================================================================
Computer Software .. 11.5%
- --------------------------------------------------------------------------------
Access Health Market 67,840 2,289,600 1.1%
AXENT Technologies, Inc. 70,930 1,861,912 0.9%
Business Objects S.A. 27,500 519,062 0.3%
CBT Group, PLC 21,280 1,082,620 0.5%
Filenet Corp. 22,600 1,231,700 0.6%
HNC Software, Inc. 40,160 1,566,240 0.8%
I2 Technologies, Inc. 12,500 834,375 0.4%
JDA Software Group, Inc. 53,620 2,711,161 1.3%
Medical Manager Corp. 10,000 295,625 0.1%
Mercury Interactive 26,400 1,069,200 0.5%
National Instruments Corp. 20,700 734,850 0.4%
PC Connection, Inc. 19,900 431,581 0.2%
Peregrine Systems, Inc. 35,200 849,200 0.4%
Platinum Software Corp. 37,300 834,587 0.4%
Siebel Systems, Inc. 50,740 1,312,897 0.6%
Software AG Systems, Inc. 56,370 1,395,157 0.7%
Transaction Systems Architects, Inc. 65,510 2,751,420 1.3%
VERITAS Software Corp. 10,700 585,825 0.3%
Walker Interactive Systems, Inc. 29,900 547,544 0.3%
Wind River Systems, Inc. 23,370 809,186 0.4%
- --------------------------------------------------------------------------------
Total Computer Software 23,713,742 11.5%
Unaudited. See Notes to Financial Statements.
27
<PAGE>
P * I * C
- --------- Statement of Net Assets
SMALL CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Cosmetics and Soaps .. 1.5%
- --------------------------------------------------------------------------------
Rexall Sundown, Inc. 69,720 $ 2,226,682 1.1%
Twinlab Corp. 19,600 769,300 0.4%
- --------------------------------------------------------------------------------
Total Cosmetics and Soap 2,995,982 1.5%
================================================================================
Credit and Finance .. 2.0%
- --------------------------------------------------------------------------------
Healthcare Financial Partners, Inc. 7,900 397,962 0.2%
Sirrom Capital Corp. 93,320 2,787,935 1.4%
United Panam Financial Corp. 23,300 308,725 0.2%
Waddell & Reed Financial, Inc. 20,500 507,375 0.2%
- --------------------------------------------------------------------------------
Total Credit and Finance 4,001,997 2.0%
================================================================================
Discount Chains .. 3.3%
- --------------------------------------------------------------------------------
Dollar Tree Stores, Inc. 113,920 6,180,160 3.0%
Fred's, Inc. - Class A 21,500 537,500 0.3%
- --------------------------------------------------------------------------------
Total Discount Chains 6,717,660 3.3%
================================================================================
Drugs .. 3.1%
- --------------------------------------------------------------------------------
Arqule, Inc. 35,990 623,077 0.3%
Atrix Laboratories, Inc. 49,440 902,280 0.4%
Jones Medical Industries, Inc. 50,825 1,499,337 0.7%
Medicis Pharmaceutical Corp. 47,400 2,026,350 1.1%
Pharmacyclics, Inc. 25,000 678,125 0.3%
Shire Pharmaceuticals Group 28,300 636,750 0.3%
- --------------------------------------------------------------------------------
Total Drugs 6,365,919 3.1%
================================================================================
Educational Programs .. 3.8%
- --------------------------------------------------------------------------------
Apollo Group, Inc. 125,061 4,283,339 2.1%
Sylvan Learning Systems, Inc. 70,700 3,490,812 1.7%
- --------------------------------------------------------------------------------
Total Educational Programs 7,774,151 3.8%
Unaudited. See Notes to Financial Statements.
28
<PAGE>
P * I * C
- --------- Statement of Net Assets
SMALL CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Electronics .. 0.8%
- --------------------------------------------------------------------------------
Anicom, Inc. 37,890 $ 592,031 0.3%
DBT Online, Inc. 22,950 608,175 0.3%
Power-One, Inc. 39,180 492,199 0.2%
- --------------------------------------------------------------------------------
Total Electronics 1,692,405 0.8%
================================================================================
Electrical Components/Semiconductor .. 3.7%
- --------------------------------------------------------------------------------
Etec Systems, Inc. 26,020 1,476,635 0.7%
Micrel, Inc. 11,100 435,675 0.2%
Photronics Labs, Inc. 48,400 1,784,750 0.9%
PRI Automation, Inc. 23,400 625,950 0.3%
Uniphase Corp. 14,000 759,500 0.4%
Vitesse Semiconductor Corp. 43,240 2,494,407 1.2%
- --------------------------------------------------------------------------------
Total Electrical Components/
Semiconductor 7,576,917 3.7%
================================================================================
Electrical Equipment/Periphery .. 1.2%
- --------------------------------------------------------------------------------
ATMI, Inc. 6,300 175,613 0.1%
Level One Communications, Inc. 33,265 1,035,373 0.5%
PMC-Sierra, Inc. 14,930 679,315 0.3%
Semtech Corp. 21,820 520,953 0.3%
- --------------------------------------------------------------------------------
Total Electrical Equipment/Periphery 2,411,254 1.2%
================================================================================
Electrical Products .. 0.4%
- --------------------------------------------------------------------------------
Advanced Lighting Technologies, Inc. 31,200 865,800 0.4%
================================================================================
Entertainment and Leisure ..2.3%
- --------------------------------------------------------------------------------
Fairfield Communities, Inc. 170,520 3,985,905 2.0%
Suburban Lodges of America 41,200 762,200 0.3%
- --------------------------------------------------------------------------------
Total Entertainment and Leisure 4,748,105 2.3%
Unaudited. See Notes to Financial Statements.
29
<PAGE>
P * I * C
- --------- Statement of Net Assets
SMALL CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Financial Services .. 3.2%
- --------------------------------------------------------------------------------
Financial Federal Corp. 18,500 $ 427,813 0.2%
First Sierra Financial, Inc. 40,000 1,010,000 0.5%
PMT Services, Inc. 173,810 3,389,295 1.7%
Pre-Paid Legal Services, Inc. 45,730 1,729,166 0.8%
- --------------------------------------------------------------------------------
Total Financial Services 6,556,274 3.2%
================================================================================
Food and Restaurants .. 1.0%
- --------------------------------------------------------------------------------
Dave & Buster's, Inc. 41,280 1,078,440 0.5%
Landry's Seafood Restaurants, Inc. 32,900 937,650 0.5%
- --------------------------------------------------------------------------------
Total Food and Restaurants 2,016,090 1.0%
================================================================================
Hospitals .. 1.8%
- --------------------------------------------------------------------------------
Alternative Living Services, Inc. 31,400 1,099,000 0.6%
Assisted Living Concepts, Inc. 47,690 876,304 0.4%
CareMatrix Corp. 25,800 699,825 0.3%
Province Healthcare Co. 14,700 406,088 0.2%
Sunrise Assisted Living 12,900 578,081 0.3%
- --------------------------------------------------------------------------------
Total Hospitals 3,659,298 1.8%
================================================================================
Insurance .. 1.2%
- --------------------------------------------------------------------------------
Annuity and Life Re, Ltd. 27,800 663,725 0.4%
Enhance Financial Services Group, Inc. 24,580 1,686,803 0.8%
- --------------------------------------------------------------------------------
Total Insurance 2,350,528 1.2%
================================================================================
Medical/Dental Products ..1.2%
- --------------------------------------------------------------------------------
Henry Schein, Inc. 26,970 1,051,830 0.6%
Heska Corp. 37,500 487,500 0.2%
Unaudited. See Notes to Financial Statements.
30
<PAGE>
P * I * C
- --------- Statement of Net Assets
SMALL CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Medical/Dental Products
- --------------------------------------------------------------------------------
Ocular Sciences, Inc. 24,780 $ 693,840 0.3%
Perclose, Inc. 5,500 167,063 0.1%
- --------------------------------------------------------------------------------
Total Medical/Dental Products 2,400,233 1.2%
================================================================================
Medical/Dental Services .. 10.0%
- --------------------------------------------------------------------------------
Boron Lepore & Associates 24,610 922,875 0.5%
Centennial Healthcare Corp. 51,490 1,222,888 0.6%
Coast Dental Services, Inc. 30,910 718,658 0.4%
Concentra Managed Care, Inc. 111,620 3,474,173 1.6%
Minimed, Inc. 9,540 477,000 0.2%
Omnicare, Inc. 44,170 1,512,823 0.7%
Orthodontic Centers of America, Inc. 103,640 2,215,305 1.1%
Paraxel International Corp. 76,610 2,566,435 1.3%
Quintiles Transnational Corp. 61,540 3,046,230 1.5%
Renal Care Group, Inc. 56,630 2,166,098 1.1%
Total Renal Care Holdings, Inc. 61,263 2,029,337 1.0%
- --------------------------------------------------------------------------------
Total Medical/Dental Services 20,351,822 10.0%
================================================================================
Medical Instruments .. 1.2%
- --------------------------------------------------------------------------------
ESC Medical Systems, Ltd. 22,600 734,500 0.4%
IDEXX Corp. 31,200 690,300 0.3%
Laser Vision Centers, Inc. 34,300 460,906 0.2%
VISX, Inc. 13,200 582,450 0.3%
- --------------------------------------------------------------------------------
Total Medical Instruments 2,468,156 1.2%
================================================================================
Mortgage and Related Services .. 0.4%
- --------------------------------------------------------------------------------
Franchise Mortgage Acceptance Co. 30,360 728,640 0.4%
Unaudited. See Notes to Financial Statements.
31
<PAGE>
P * I * C
- --------- Statement of Net Assets
SMALL CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Networking .. 0.2%
- --------------------------------------------------------------------------------
Objective Systems Integrators, Inc. 29,000 $ 322,625 0.2%
================================================================================
Oil Field Services .. 3.0%
- --------------------------------------------------------------------------------
Atwood Oceanics, Inc. 24,440 1,336,563 0.7%
Bayard Drilling Technologies, Inc. 61,430 852,341 0.4%
Global Industries, Ltd. 87,220 1,978,804 1.0%
Marine Drilling Co., Inc. 20,500 498,406 0.2%
Parker Drilling Co. 137,170 1,405,993 0.7%
- --------------------------------------------------------------------------------
Total Oil Field Services 6,072,107 3.0%
================================================================================
Pollution Control .. 2.2%
- --------------------------------------------------------------------------------
American Disposal Services, Inc. 26,060 1,044,843 0.6%
Newpark Resources, Inc. 139,410 3,354,553 1.6%
- --------------------------------------------------------------------------------
Total Pollution Control 4,399,396 2.2%
================================================================================
Publishing/Advertising .. 0.5%
- --------------------------------------------------------------------------------
Consolidated Graphics, Inc. 17,400 1,003,763 0.5%
================================================================================
Real Estate Investment Trust .. 0.4%
- --------------------------------------------------------------------------------
Lasalle Partners, Inc. 23,480 807,125 0.4%
================================================================================
Specialty Chains .. 2.8%
- --------------------------------------------------------------------------------
Black Box Corp. 15,900 528,675 0.3%
Central Garden & Pet Co. 18,020 617,185 0.3%
Guitar Center, Inc. 66,780 1,903,230 0.8%
Hibbett Sporting Goods, Inc. 45,980 1,540,330 0.8%
Starbucks Corp. 25,180 1,211,788 0.6%
- --------------------------------------------------------------------------------
Total Specialty Chains 5,801,208 2.8%
Unaudited. See Notes to Financial Statements.
32
<PAGE>
P * I * C
- --------- Statement of Net Assets
SMALL CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
EQUITY SECURITIES, continued Shares Value Assets
- --------------------------------------------------------------------------------
Telecommunications .. 5.6%
- --------------------------------------------------------------------------------
Advanced Fibre Communications 63,290 $ 2,681,914 1.3%
Applied Micro Circuits Corp. 15,200 419,900 0.2%
Clearnet Communications 33,900 472,481 0.2%
Davox Corp. 31,050 694,744 0.3%
Metromedia Fiber Network, Inc. 20,600 636,025 0.3%
MRV Communications, Inc. 110,200 2,961,625 1.5%
P-Com, Inc. 99,350 1,955,953 1.0%
REMEC, Inc. 47,070 1,170,866 0.6%
Tel-Save Holdings, Inc. 15,190 346,522 0.2%
- --------------------------------------------------------------------------------
Total Telecommunications 11,340,030 5.6%
================================================================================
Telephone .. 0.5%
- --------------------------------------------------------------------------------
McLeod USA, Inc. 24,400 1,122,400 0.5%
================================================================================
Textiles and Shoes .. 0.7%
- --------------------------------------------------------------------------------
Novel Denim Holdings, Ltd. 55,240 1,394,810 0.7%
- --------------------------------------------------------------------------------
Total Equity Securities (Cost $168,752,660) 201,026,731 98.5%
================================================================================
SHORT-TERM INVESTMENTS - 0.8%
- --------------------------------------------------------------------------------
Repurchase Agreement .. 0.8% Principal Amount
- --------------------------------------------------------------------------------
Lehman Brothers On-Line Repurchase
Agreement, 5.13%, dated 4/30/1998,
due 5/1/1998 (collateralized by $1,717,002
U.S. Treasury Note, 6.38%, due 8/15/2027)
(Cost $1,677,252) $1,677,252 1,677,252 0.8%
- --------------------------------------------------------------------------------
Total Investments
(Cost $170,429,912) 202,703,983 99.3%
Unaudited. See Notes to Financial Statements.
33
<PAGE>
P * I * C
- --------- Statement of Net Assets
SMALL CAP as of April 30, 1998
- ---------
PORTFOLIO
================================================================================
Percentage
of Net
OTHER ASSETS - 0.9% Value Assets
- --------------------------------------------------------------------------------
Receivables:
Investment securities sold $ 1,664,414
Shares of beneficial interest sold 180,577
Dividends and interest 2,954
Prepaid insurance 7,212
Deferred organization costs, net 5,041
Other assets 13,254
- --------------------------------------------------------------------------------
Total other assets 1,873,452 0.9%
================================================================================
LIABILITIES - (0.2%)
- --------------------------------------------------------------------------------
Payables:
Investment securities purchased 224,725
To Advisor (Note 3) 132,154
Deferred Trustees' compensation (Note 3) 25,821
Accrued expenses 70,750
- --------------------------------------------------------------------------------
Total liabilities 453,450 (0.2%)
================================================================================
TOTAL NET ASSETS - 100.0% $204,123,985 100.0%
- --------------------------------------------------------------------------------
Unaudited. See Notes to Financial Statements.
34
<PAGE>
P * I * C
- ----------- Statements of Operations
G R O W T H Six Months ended April 30, 1998
- -----------
M I D C A P
- -----------
SMALL CAP
- -----------
PORTFOLIOS Growth Mid Cap Small Cap
Portfolio Portfolio Portfolio
================================================================================
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Income:
- --------------------------------------------------------------------------------
Dividends $ 329,874 $ 2,730 $ 60,911
Interest 146,051 6,307 197,020
Other 3,224 - 3,877
- --------------------------------------------------------------------------------
Total income 479,149 9,037 261,808
================================================================================
Expenses:
- --------------------------------------------------------------------------------
Investment advisory fee (Note 3) 480,143 9,022 704,407
Administration fee (Note 3) 60,018 15,097 88,051
Accounting services fee 34,909 12,420 40,092
Custodian fee 16,299 7,491 37,175
Audit fee 12,547 3,740 9,076
Trustees' fees 7,513 1,113 8,480
Legal fees 1,984 1,236 3,514
Amortization of organization costs 967 - 4,959
Miscellaneous 2,827 1,317 4,604
- --------------------------------------------------------------------------------
Total expenses 617,207 51,436 900,358
Less, reimbursement/waiver
by Advisor (Note 3) (17,028) (38,676) (19,849)
- --------------------------------------------------------------------------------
Net expenses 600,179 12,760 880,509
================================================================================
Net investment loss (121,030) (3,723) (618,701)
================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain (loss)
on investments 8,217,486 139,221 (1,685,774)
Change in net unrealized
appreciation on investments 15,188,621 578,872 22,162,824
- --------------------------------------------------------------------------------
Net gain on investments 23,406,107 718,093 20,477,050
================================================================================
NET INCREASE IN NET
ASSETS RESULTING
FROM OPERATIONS $23,285,077 $714,370 $19,858,349
- --------------------------------------------------------------------------------
Unaudited. See Notes to Financial Statements.
35
<PAGE>
P * I * C
- -----------
G R O W T H Statements of Changes in Net Assets
- -----------
M I D C A P
- -----------
SMALL CAP
- -----------
PORTFOLIOS
<TABLE>
<CAPTION>
Growth Portfolio
=====================================================================================
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------------------
Six Months Year
ended ended
From operations: April 30, 1998 Oct. 31, 1997
- -------------------------------------------------------------------------------------
<S> <C> <C>
Net investment loss $ (121,030) $ (133,460)
Net realized gain (loss) on investments 8,217,486 32,161,956
Change in net unrealized appreciation
on investments 15,188,621 (7,683,870)
- -------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 23,285,077 24,344,626
=====================================================================================
Transactions in Interests:
Contributions by Holders 50,871,856 17,478,857
Withdrawals by Holders (16,343,469) (75,778,332)
- -------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from transactions in interests 34,528,387 (58,299,475)
=====================================================================================
Total increase (decrease) in net assets 57,813,464 (33,954,849)
=====================================================================================
NET ASSETS
- -------------------------------------------------------------------------------------
Beginning of period 82,144,680 116,099,529
- -------------------------------------------------------------------------------------
End of period $139,958,144 $ 82,144,680
- -------------------------------------------------------------------------------------
</TABLE>
*Commencement of operations.
Unaudited. See Notes to Financial Statements.
36
<PAGE>
<TABLE>
<CAPTION>
Mid Cap Portfolio Small Cap Portfolio
===============================================================================================================
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------------------------------------------------
Dec. 31, 1997* Six Months Year
through ended ended
From operations: April 30, 1998 April 30, 1998 Oct. 31, 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment loss $ (3,723) $ (618,701) $ (934,925)
Net realized gain (loss) on investments 139,221 (1,685,774) 72,084,822
Change in net unrealized appreciation
on investments 578,872 22,162,824 (62,640,291)
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 714,370 19,858,349 8,509,606
===============================================================================================================
Transactions in Interests:
Contributions by Holders 4,711,348 73,223,086 164,160,467
Withdrawals by Holders (762,953) (28,613,247) (234,314,952)
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from transactions in interests 3,948,395 44,609,839 (70,154,485)
===============================================================================================================
Total increase (decrease) in net assets 4,662,765 64,468,188 (61,644,879)
===============================================================================================================
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
Beginning of period - 139,655,797 201,300,676
- ---------------------------------------------------------------------------------------------------------------
End of period $4,662,765 $204,123,985 $139,655,797
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
37
<PAGE>
P * I * C
- -----------
G R O W T H Selected Ratio Data
- -----------
M I D C A P
- -----------
SMALL CAP
- -----------
PORTFOLIOS
<TABLE>
<CAPTION>
Growth Portfolio
==============================================================================================
Six Months Year ended October 31,
ended -----------------------------------------------
April 30, 1998 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------
<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 (0.20%)+ (0.13%) (0.04%) 0.08% 0.10% 0.17%
Portfolio turnover rate 42.39% 67.54% 64.09% 54.89% 68.26% 43.20%
Average commission rate
paid per share** $0.0423 $0.0416 $0.0440 - - -
</TABLE>
#Net of expense reimbursements equivalent to 0.03%, 0.05%, 0.04%, 0.01%, 0.01%
and 0.09% 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 paid per share for security trades on
which commissions are charged.
+Annualized.
Unaudited. See Notes to Financial Statements.
38
<PAGE>
P * I * C
- -----------
G R O W T H Selected Ratio Data
- -----------
M I D C A P
- -----------
SMALL CAP
- -----------
PORTFOLIOS
Mid Cap Portfolio
================================================================================
December 31, 1997*
through
April 30, 1998
- -------------------------------------------------------------------------------
Ratios to average net assets:#
Operating expenses 0.90%+
Net investment loss (0.25%)+
Portfolio turnover rate 55.12%
Average commission rate paid per share $0.0327
*Commencement of operations.
#Net of expense reimbursements equivalent to 2.56% of average net assets.
+Annualized.
Unaudited. See Notes to Financial Statements.
39
<PAGE>
P * I * C
- -----------
G R O W T H Selected Ratio Data
- -----------
M I D C A P
- -----------
SMALL CAP
- -----------
PORTFOLIOS
<TABLE>
<CAPTION>
Small Cap Portfolio
=============================================================================================================
Six Months Year ended October 31, Sept. 30, 1993*
ended ------------------------------------- through
April 30, 1998 1997 1996 1995 1994 Oct. 31, 1993
- -------------------------------------------------------------------------------------------------------------
<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 (.62%)+ (0.49%) (.59%) (.51%) (.49%) (.79%)+
Portfolio turnover rate 35.44% 151.52% 53.11% 45.45% 63.89% 6.06%
Average commission rate
paid per share** $0.0270 $0.0326 $0.0307 - - -
</TABLE>
*Commencement of operations.
#Net of expenses reimbursements equivalent to 0.02%, 0.01%, 0.01%, 0.07%, 0.10%
and 0.11% of average net assets, respectively.
+Annualized.
**For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on which
commissions are charged.
Unaudited. See Notes to Financial Statements.
40
<PAGE>
P * I * C
- -----------
G R O W T H Notes to Financial Statements
- -----------
M I D C A P
- -----------
SMALL CAP
- -----------
PORTFOLIOS
================================================================================
1 - ORGANIZATION
- --------------------------------------------------------------------------------
PIC Growth Portfolio was organized on December 11, 1991, the PIC Mid Cap
Portfolio was organized on December 31, 1997, and PIC 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 Costs. 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 an
identified cost basis. Interest is recorded as accrued, and dividend
income is recorded on the ex-dividend date.
41
<PAGE>
P * I * C
- -----------
G R O W T H Notes to Financial Statements
- ----------- continued
M I D C A P
- -----------
SMALL CAP
- -----------
PORTFOLIOS
================================================================================
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 each of Growth and Small Cap Portfolios an investment
advisory fee at the annual rate of 0.80% of its average net assets and 0.70%
from the Mid Cap Portfolio. In addition, PIC has voluntarily taken to limit the
expenses of the Growth and Small Cap Portfolios to 1.00% of its average net
assets and 0.90% of Mid Cap Portfolio's average net assets.
Fees waived by PIC for the six months ended April 30, 1998 were as
follows:
Waived Fees Reimbursed Expenses
----------- -------------------
Growth Portfolio $17,028 $ 0
Mid Cap Portfolio 9,022 29,654
Small Cap Portfolio 19,849 0
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, 1998 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.
If a trustee elects to defer payment, the Plan provides for the creation of a
deferred payment account (phantom share account). This
42
<PAGE>
P * I * C
- -----------
G R O W T H Notes to Financial Statements
- ----------- continued
M I D C A P
- -----------
SMALL CAP
- -----------
PORTFOLIOS
================================================================================
account accumulates the deferred fees earned and the value of the account is
adjusted at the end of each quarter to reflect a value which would have been
earned if the account had been invested in designated investments. The
Portfolios recognize as trustee expense amounts accrued as meetings are attended
plus the change in the value of the phantom share account determined on a
quarterly basis.
4 - INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
The aggregate cost of purchases and the proceeds from sales of investment
securities, other than short-term obligations, for the six months ended April
30, 1998, were as follows:
Purchases Sales
--------- -----
Growth Portfolio $ 84,369,454 $48,567,705
Mid Cap Portfolio 6,007,814 2,205,528
Small Cap. Portfolio 103,982,901 61,029,023
The aggregate unrealized appreciation and depreciation of investment
securities at April 30, 1998, based on costs for federal income tax purposes,
were as follows:
Tax Gross Gross
Costs of Unrealized Unrealized
Investments Appreciation Depreciation
----------- ------------ ------------
Growth Portfolio $101,159,957 $37,194,627 $(1,580,507)
Mid Cap Portfolio 4,071,697 601,839 (22,967)
Small Cap. Portfolio 170,429,912 36,081,515 (3,807,444)
43
<PAGE>
- ---------------------
Provident Investment
Counsel Mutual Funds 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 Emeritus
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 Provident
Investment Counsel Mutual Funds and should not be used as sales literature
unless preceded or accompanied by a current prospectus.
