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PROVIDENT INVESTMENT COUNSEL
TAX MANAGED GROWTH FUND
Semi-Annual Report
April 30, 1998
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<PAGE>
Provident Investment Counsel Tax Managed Growth Fund
Message to Shareholders
Dear Shareholder,
The following is an interview with the members of the investment team at
Provident Investment Counsel regarding the Provident Investment Counsel Tax
Managed Growth Fund (the "Fund"). We hope this will provide you additional
information and insight to the investment management process and performance of
the Provident Investment Counsel Tax Managed Growth Fund.
Thank you for your continued confidence in Provident Investment Counsel.
Question: How did the Tax Managed Growth Fund perform relative to the overall
market during the period ended April 30, 1998?
Answer: The Lipper Small Cap Index rose 11.17% for the period ended April 30,
1998, while the Fund's returns was 15.40% in the same period.
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
Funds'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 economics. 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.
<PAGE>
Provident Investment Counsel Tax Managed Growth Fund
Schedule of Investments at April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Percent of
Common Stocks - 94.91% Shares Value Net Assets
------------- ----------------- ----------------
<S> <C> <C> <C>
Aerospace - 2.32%
Allied Signal, Inc. 500 $ 21,906 2.32%
Banks - 1.08%
MBNA Corporation 300 10,163 1.08%
Beverage - 2.10%
Pepsico, Inc, - North Carolina 500 19,844 2.10%
Biotechnology - 1.58%
Amgen, Inc. 250 14,906 1.58%
Commerical Services - 1.75%
Service Corporation International 400 16,500 1.75%
Computers - 4.22%
Diebold, Inc. 150 6,150 0.64%
Sun Microsystems, Inc. 300 12,356 1.31%
Sungard Data Systems, Inc. 600 21,375 2.27%
----------------- -----------------
Total Computers 39,881 4.22%
----------------- -----------------
Diversified Financial Services - 7.32%
Federal National Mortgage Association 300 17,963 1.89%
Household International, Inc. 250 32,859 3.48%
Travelers, Inc. 300 18,356 1.95%
----------------- -----------------
Total Diversified Financial Services 69,178 7.32%
----------------- -----------------
Food - 2.21%
Sara Lee Corporation 350 20,825 2.21%
Health Care - 4.07%
Becton Dickinson, Inc. 250 17,406 1.84%
United Healthcare Corporation 300 21,075 2.23%
----------------- -----------------
Total Health Care 38,481 4.07%
----------------- -----------------
Insurance - 5.54%
Aflac, Inc. 400 26,000 2.75%
American International Group, Inc. 200 26,313 2.79%
----------------- -----------------
Total Insurance 52,313 5.54%
----------------- -----------------
Leisure Time - 5.25%
Carnival Corporation - Class A 400 27,825 2.96%
Harley Davidson, Inc. 600 21,600 2.29%
----------------- -----------------
Total Leisure Time 49,425 5.25%
----------------- -----------------
Media - 6.80%
Time Warner, Inc. 500 39,250 4.16%
Walt Disney Company Holding Company 200 24,913 2.64%
----------------- -----------------
Total Media 64,163 6.80%
----------------- -----------------
</TABLE>
See Notes to Financial Statements
<PAGE>
Provident Investment Counsel Tax Managed Growth Fund
Schedule of Investments at April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Percent of
Common Stocks - 94.91% Shares Value Net Assets
------------- ----------------- ----------------
<S> <C> <C> <C>
Miscellaneous Manufacture - 3.26%
General Electric Company 200 $ 17,038 1.81%
Tyco International Ltd. New 250 13,656 1.45%
----------------- -----------------
Total Miscellaneous Manufacture 30,694 3.26%
----------------- -----------------
Oil & Gas Producers - 7.65%
Global Marine, Inc. - New 850 19,869 2.11%
Halliburton Company 500 27,375 2.90%
Schlumberger Ltd. 300 24,900 2.64%
----------------- -----------------
Total Oil & Gas Producers 72,144 7.65%
----------------- -----------------
Pharmaceuticals - 5.45%
Elan Corporation PLC-ADR 200 12,425 1.32%
Eli Lilly & Company 300 20,869 2.21%
Merck & Company, Inc. 150 18,075 1.92%
----------------- -----------------
Total Pharmaceuticals 51,369 5.45%
----------------- -----------------
Pipelines - 3.13%
Enron Corporation 600 29,513 3.13%
Radio - 1.01%
Chancellor Media Corporation 200 9,488 1.01%
Retail - 8.88%
CVS Corporation 245 18,069 1.92%
Dayton Hudson Corporation 300 26,194 2.78%
Proffitts, Inc. 800 31,800 3.37%
Safeway, Inc. 200 7,625 0.81%
----------------- -----------------
Total Retail 83,688 8.88%
----------------- -----------------
Savings & Loans - 1.63%
Dime Bancorp, Inc. - New 500 15,344 1.63%
Semiconductors - 2.57%
Intel Corporation 300 24,244 2.57%
Software - 1.77%
Automatic Data Processing, Inc. 250 16,734 1.77%
Telecommunication Equipment - 6.24%
Advanced Fibre Communications 600 25,425 2.70%
Nokia Corporation - Sponsored ADR 500 33,438 3.54%
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Total Telecommunication Equipment 58,863 6.24%
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Telecommunications - 3.79%
Airtouch Communications, Inc. 350 18,594 1.97%
Nextel Communications, Inc. 600 17,213 1.82%
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Total Telecommunications 35,807 3.79%
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</TABLE>
See Notes to Financial Statements
<PAGE>
Provident Investment Counsel Tax Managed Growth Fund
Schedule of Investments at April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Percent of
Common Stocks - 94.91% Shares Value Net Assets
------------- ----------------- ----------------
<S> <C> <C> <C>
Telephone - 2.27%
Worldcom, Inc. 500 $ 21,391 2.27%
Tobacco - 0.98%
Philip Morris Companies, Inc. 250 9,281 0.98%
Toys/Games/Hobbies - 1.22%
Mattel, Inc. 300 11,489 1.22%
Transportation - 0.82%
CNF Transportation, Inc. 200 7,725 0.82%
----------------- -----------------
Total Common Stock (Cost $818,807) $895,359
-----------------
Total Investments (Cost $818,807) 895,359 94.91%
----------------- -----------------
Other Assets Less Liabilities 48,017 5.09%
----------------- -----------------
Net Assets $ 943,376 100.00%
================= =================
</TABLE>
See Notes to Financial Statements
<PAGE>
Provident Investment counsel Tax Managed Growth Fund
Statement of Assets and Liabilities
as of April 30, 1998 (unaudited)
ASSETS
Investments in securities at market value (cost $818,807) $895,359
Cash 35,981
Receivables:
Dividends 131
Due from advisor (Note 3) 13,595
Investment securities sold 43,784
Net deferred organization costs 4,671
--------
Total assets 993,521
--------
LIABILITIES
Investment securities purchased 34,800
Due to advisor (Note 3) 5,000
Deferred Trustees' Compensation (Note 3) 875
Other accrued expenses 9,470
--------
Total liabilities 50,145
--------
Net assets $943,376
========
Net asset value per share (applicable to 81,748 shares outstanding
unlimited number of shares authorized, $0.01 par value) $ 11.54
========
SOURCE OF NET ASSETS
Paid-in capital $857,587
Accumulated net investment income 759
Undistributed net realized gain on investments 8,478
Net unrealized appreciation on investments 76,552
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Net assets $943,376
========
See Notes to Financial Statements
<PAGE>
Provident Investment Counsel Tax Managed Growth Fund
Statement of Operations
December 31, 1997* through April 30, 1998 (unaudited)
INVESTMENT INCOME
Income
Dividend income $ 1,701
Interest income 1,003
--------
Total income 2,704
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Expenses
Administration fees (Note 3) 3,945
Advisory fees (Note 3) 1,330
Audit fees 3,288
Legal fees 822
Reports to shareholders 329
Registration fees 118
Transfer agent fees 2,466
Trustees' fees 2,255
Deferred organization costs amortization 329
Miscellaneous fees 658
--------
Total expenses 15,540
Less: fees waived and expenses reimbursed (Note 3) (13,595)
--------
Net expenses 1,945
--------
Net investment income $ 759
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments sold 8,478
Net change in unrealized appreciation on investments 76,552
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Net gain on investments 85,030
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 85,789
========
*Commencement of operations.
See Notes to Financial Statements
<PAGE>
Provident Investment Counsel Tax Managed Growth Fund
Statement of Changes in Net Assets (unaudited)
Dec. 31, 1997*
through
INCREASE IN NET ASSETS April 30, 1998
--------------
Operations
Net investment income $ 759
Net realized gain on investments 8,478
Change in unrealized appreciation of investments 76,552
--------
Net increase in net assets resulting from operations 85,789
--------
Capital share transactions
Proceeds from shares sold 857,587
Cost of shares redeemed --
--------
Net increase from capital share transactions 857,587
--------
Net increase in net assets 943,376
NET ASSETS
Beginning of period --
--------
End of period (including undistributed net investment
income of $759) $943,376
========
CHANGES IN SHARES OUTSTANDING
Shares sold 81,738
Shares issued on reinvestment of distributions --
Shares redeemed --
--------
Net increase in shares outstanding 81,738
========
* Commencement of operations.
See Notes to Financial Statements
<PAGE>
Provident Investment Counsel Tax Managed Growth Fund
Financial Highlights (unaudited)
For a share outstanding throughout the period
Dec. 31, 1997*
through
April 30, 1998
--------------
Net asset value, beginning of period $ 10.00
Income from investment operations
Net investment income 0.01
Net realized and unrealized gain on investments 1.53
-----------
Total from investment operations 1.54
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Net asset value, end of period $ 11.54
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Total return 15.40%+
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Net assets at end of period (in 000's) $ 943
===========
Ratios of expenses to average net assets
Before expense reimbursement 7.59%++
After expense reimbursement 0.95%++
===========
Ratio of net investment income to average net assets,
net of expense reimbursement 0.37%++
===========
Portfolio turnover rate 14.54%+
===========
Average commission rate paid $ 0.0429
===========
*Commencement of operations
+Not annualized
++Annualized
See Notes to Financial Statements
<PAGE>
Provident Investment Counsel Tax Managed Growth Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - ORGANIZATION
Provident Investment Counsel Tax Managed Growth Fund (the "Fund) is one
of the several series of PIC Investment Trust (the "Trust"). The Trust was
organized on December 11, 1991 as a Delaware business trust, with an unlimited
number of shares of beneficial interest of $0.01 par value, and is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
consistently followed by the Fund. These policies are in conformity with
generally accepted accounting principles.
A. Security Valuation. Investments in securities are valued daily
based upon latest closing market prices for those securities
traded on national securities exchanges, or if there has been
no sale that day at the mean between the last bid and asked
prices, and at the closing bid price for those securities
traded in the over-the-counter market. Short-term investments
with less than 60 days to maturity when acquired by the Fund
are valued on an amortized cost basis. All other securities
and assets are valued at fair value, as determined in good
faith by the Board of Trustees.
B. Security Transactions and Related Investment Income.
Securities transactions are accounted for on the trade date,
and dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis. Realized
gains and losses from securities transactions are reported on
an identified cost basis.
C. Federal Income Taxes. It is the Fund's policy to comply with
the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income
tax provision is required.
D. Dividends and Distributions to Shareholders. Dividends and
distributions to shareholders are recorded on the ex-dividend
date. Income distributions and capital gain distributions are
determined in accordance with income tax regulations which may
differ from generally accepted accounting principles.
E. Accounting Estimates. In preparing financial statements in
conformity with general accepted accounting principles,
management makes estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements, as well as the reported amounts of
revenues and expenses during the period. Actual results could
differ from those estimates.
<PAGE>
Provident Investment Counsel Tax Managed Growth Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited), continued
NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
A. Investment Advisory Agreements. Pursuant to an Advisory
Agreement with Provident Investment Counsel (the "Adviser"),
the Adviser receives a fee, payable monthly, at the annual
rate of 0.65% of the Fund's daily average net assets. The
Advisor has voluntarily taken to limit the Fund's expense to
0.95% of it's average daily net assets. For the period
December 31, 1997 to April 30, 1998, the Adviser waived its
fees of $1,330 and reimbursed the Fund $12,265 in expenses.
B. Administration Agreement. Pursuant to an administration
agreement with Investment Company Administration Corporation
(the "Administrator" or "ICAC"), the Fund pays ICAC for its
services a monthly fee at the annual rate of 0.10% of the
Fund's average daily net assets, subject to a minimum annual
fee of $12,000.
C. Distribution Agreement. 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.
D. Deferred Trustees' Compensation Plan. 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.
NOTE 4 - INVESTMENT TRANSACTIONS
For the period December 31, 1997 to April 30, 1998, purchases and sales
of securities other than short-term securities aggregated $461,875 and
$151,543, respectively. The cost of securities for federal income tax
purposes was $818,807. The aggregate gross unrealized appreciation and
depreciation of Fund securities, based on cost for federal income tax
purposes, were as follows:
Unrealized appreciation $83,274
Unrealized depreciation $(6,722)
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Net unrealized appreciation $76,552
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