EQUITY ANALYSTS INC.
REGISTERED INVESTMENT
ADVISORS
ANALYSTS INVESTMENT TRUST
ANNUAL REPORT
July 31, 1996
ANALYSTS STOCK FUND
ANALYSTS FIXED INCOME FUND
MESSAGE FROM THE FUND PRESIDENT/PORTFOLIO MANAGER
ANALYSTS STOCK FUND
This report covers the period 8/1/95 through 7/31/96. The
total return of the Stock Fund from August 1, 1995 to July
31, 1996 was 6.84%. This compares to a 6.10% rate of
return for
the Dow Jones
World Index (DJWI). Since inception of the Analysts Stock
Fund (August 25, 1993), the average annual total return
of the Analysts Stock Fund is 10.78% versus 6.97% for the
DJWI.
The annual total return of the Analysts Stock Fund and the
DJWI were very close for the year ending
7/31/96. The total
allocation to foreign stocks in the Analysts Stock Fund is
very similar to the total allocation in the DJWI. The
Analysts Stock Fund has carried a lower allocation of
Japanese stocks than the DJWI which has been the primary
reason the Analysts Stock Fund has outperformed the Dow
Jones World Index since inception of the Fund. The Analysts
Stock Fund has also allocated more to certain sectors such
as telecommunications, which has also helped the Analysts
Stock Fund outperform the DJWI. The strategy of the
Analysts Stock Fund is to diversify between Large
Capitalization, Small
Capitalization, International, Real Estate Investment
Trusts and Precious Metal Stocks. Our goal is that over
time
these broad areas will move somewhat independent of each
other giving a lower overall volatility while not sacrificing
the rate of return.
Interest rates and the growth of the world economy will be
major factors in the performance of the stock markets. U.S.
interest rates declined significantly in 1995 which helped
the stock and bond markets recover from 1994 and
appreciate significantly in 1995.
The first half of 1996 saw interest rates rise and then
level off at the end of April. This caused the stock market
to remain flat from March through July 1996. Inflation
remains low and economic growth sluggish which should help
keep interest rates the same or slightly lower for the rest
of 1996. These factors should help the U.S. stock market
appreciate for the remainder of 1996. As the world
economies become dependent on each other for trade and
comparative advantages, strong world economic growth
should result. The international stock markets should
continue to develop and grow as countries look for ways to
raise capital and invite foreign investment.
ANALYSTS FIXED INCOME FUND
The total return of the Fixed Income Fund for the
period
8/1/95 through 7/31/96 was 5.84%. This compares to a
5.19% rate of return for the Lehman Intermediate T-Bond
Index over the same time period. Since inception of the
Analysts Fixed Income Fund (August 25, 1993), the
average annual total return of the Analysts Fixed Income
Fund is 2.44% versus 4.39% for the Lehman Intermediate T-
Bond Index.
The Analysts Fixed Income Fund is diversified between
Government Bonds, Corporate Bonds, Mortgage Backed
Securities, Preferred Stocks, Global Bond Funds and Real
Estate Investment Trusts. Our strategy is to remain broadly
diversified to reduce our exposure in any one area and
reduce our volatility. During 1995 interest rates declined
significantly. With long term interest rates declining,
fixed income investments performed well in 1995.
Interest rates in 1996 rose through the end of April.
This caused fixed income investments to decline through
April. From January 1996 through July 1996 the total
return of fixed income investments have been just slightly
positive.
Although unemployment is at historical lows, inflation
continues to be low and economic growth sluggish so far
in 1996. The current low inflation is good news for the
fixed income markets, but the low unemployment is cause
for concern. The low unemployment could lead to higher
inflation and could cause interest rates to rise sometime
in 1997. A major factor though is the federal
government's effort to balance the budget and American
corporations efforts to remain competitive. The federal
government will be under pressure to reduce spending and
raise taxes to balance the budget. Corporations will be
uner pressure to reduce payrolls and streamline to remain
competitive. These factors should balance the high
employment situation.
Thank you for your support of the Analysts Group of Funds
and your continued interest in our investment strategies.
Please feel free to call me any time if you have questions
about the funds or investments in general.
Lee Manzler
President and Portfolio Manager
Analysts Stock and Fixed Income Funds
INDEPENDENT AUDITORS REPORT
To the Shareholders and
Board of Trustees
Analysts Investment Trust
We have audited the accompanying statement of assets
and liabilities of the Analysts Investment Trust
(comprising, respectively, the Stock Fund and the Fixed
Income Fund), including the schedules of investments in
securities as of July 31, 1996, the related statements of
operations for the year then ended, the statement of changes
in net assets, and financial highlights for
each of the two years in the period then ended. These
financial statements and financial highlights are the
responsibility of the Trusts' management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
The financial highlights for the period from inception
(August 25, 1993) through July 31, 1994, were audited by
other auditors whose
report dated August 29, 1994, expressed an unqualified
opinion on those financial highlights.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audits to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of July 31, 1996, by correspondence with
the custodian and brokers. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of each of the
respective portfolios constituting the Analysts Investment
Trust as of July 31, 1996, the results of their
operations for the year then ended, the changes in their
net assets, and the financial highlights for each of the two
years in the period then ended, in conformity with generally
accepted accounting principles.
Berge & Company LTD
Cincinnati, Ohio
September 12, 1996
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
July 31, 1996
Common stock: 82.7%
Large Capitalization U.S. Stocks: 23.3%
Shares
Market
Value
2,000 Advanced Micro Devices* $ 24,250
556 Allstate Corporation 24,881
200 Ameritech Corporation 11,100
1,100 Banc One Corporation 38,088
200 Bell Atlantic Corporation 11,825
326 Bell South Corporation 13,366
400 Briggs & Stratton Corporation 15,050
2,500 Centerior Energy 18,437
460 Chevron Corporation 26,623
814 Chrysler Corporation 23,097
284 Cincinnati Financial Corporation 15,833
850 Cinergy Corporation 25,181
1,000 CIPSCO Inc. 35,750
500 Compaq Computer Corporation* 27,375
550 Du Pont EI De Nemours 44,413
450 Eastman Kodak Company 33,581
1,000 Entergy 25,500
300 Exxon Corporation 24,675
498 Ford Motor Corporation 16,185
550 General Electric Corporation 45,306
400 Intel Corporation 30,050
600 J.P. Morgan 51,600
1,000 National Fuel Gas 33,750
200 Nynex Corporation 8,975
900 PNC Bank 26,212
1500 Potomac Electric Power 36,187
950 RJR Nabisco Holdings 29,213
600 Sears, Roebuck & Company 24,600
700 Star Banc Corporation 52,500
305 Texaco, Inc. 25,925
1440 Woolworth Corporation* 27,720
Total (Cost: $674,884) $ 847,248
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
July 31, 1996
Small/Medium Capitalization U.S. Stocks: 14.7%
Shares
Market
Value
1,200 Airborne Freight Corporation $25,650
700 Ameron, Inc. 24,500
1,250 Aquarion Company 31,563
1,000 Arvin Industries 21,625
700 Circle Financial Corporation 23,975
1,500 Connecticut Energy 29,250
950 Essex County Gas 22,800
3,000 Fansteel, Inc. 18,375
3,000 Gibson Greetings, Inc.* 36,000
2,000 Handleman Company 9,250
1,900 Marsh Supermarkets Inc. Class B 19,712
1,250 Nash Finch Company 20,156
1,300 Provident Life & Accident Class B 47,450
1,000 S&P 400 Deposit Receipts 43,688
1,400 Sea Containers Ltd Class A 24,500
275 Silicon Graphics, Inc. 6,462
1,250 Sport Supply Group, Inc. 7,188
750 Standard Federal Bank 29,250
1,500 Standard Motor Products 22,500
1,000 Waban, Inc.* 19,000
1,500 Wynns International 36,187
1,200 Yellow Corporation* 15,300
Total (Cost: $510,400) $534,381
Foreign Stocks: 32.6%
600 Akzo NV ADR $33,675
1,800 Alcatel Alsthom 29,250
2,000 Anangel-American Shipholding ADR 19,500
1,454 BAT Industries PLC ADR 23,264
3,500 Bet PLC ADR 48,562
400 Brazil Fund, Inc. 8,650
900 British Gas ADR 27,338
1,000 British Steel ADR 27,750
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
July 31, 1996
Foreign Stocks (continued):
Shares
Market
Value
3,000 BT Shipping LTD. ADR* $12,562
900 Buenos Aires Embotella ADR 6,300
750 Cadbury Schwepps PLC ADR 24,281
13,000 Cifra S A De C V ADR 17,592
1,300 Compania Cervecerias Unida ADR 31,037
1,250 CRH PLC ADR 58,906
1,400 Emerging Germany Fund 9,975
1,200 Ericsson L M Tel. Company ADR 24,375
850 Europe Fund, Inc. 11,475
1,150 First Australia Fund, Inc. 9,919
2,000 Hanson PLC ADR 25,500
1,700 Hong Kong Telecommunications ADR 28,050
200 Ito Yakado LTD ADR 45,900
866 Japan Equity Fund, Inc. 9,418
700 KLM Royal Dutch Airlines ADR 22,050
1,050 Koninklijke Ahold N V ADR 53,287
2,600 Makita Corporation 39,650
300 Matsushita Electric 51,300
800 NEC Corp. ADR 42,000
200 Philippine Long Distance Tel. ADR 11,725
400 Polygram N V ADR 22,450
300 Royal Dutch 45,263
1,900 SKF AB ADR 40,613
800 Sony Corp. ADR 51,200
900 TDK Corp. ADR 51,638
1,200 Tele Danmark 28,050
400 Telecom Corp. New Zealand ADR 29,450
600 Telefonos De Mexico ADR 18,375
1,000 Templeton World China Fund 10,500
700 Tokio Marine & Fire Insurance ADR 43,050
1,350 United Newspapers Pub. ADR 26,325
600 Vodafone Group PLC ADR 21,450
1,400 WPP Group PLC ADR 45,500
Total (Cost: $1,078,107) $1,187,155
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
July 31, 1996
Real Estate Stocks: 10.0%
Shares
Market
Value
1,450 American Health Properties $30,450
900 Asarco 21,600
1,500 Carr Realty Corporation 36,000
2,800 Commercial Net Lease 38,150
1,500 First Industrial Realty 35,250
2,100 Health & Retirement Properties Trust 35,175
1,500 New Plan Realty Trust 31,875
1,186 Omega Healthcare Investors 33,505
3,500 Property Capital Trust 27,563
1,250 Public Storage Properties XVI 22,187
1,000 Resource Mtg. Capital, Inc. 24,125
1,250 Simon Property Group Inc. 29,375
Total (Cost: $362,602) $365,255
Mining/Precious Metals Stocks: 2.1%
1300 Barrick Gold Resources $36,238
1500 Pegasus Gold* 18,187
400 Phelps Dodge Corporation 23,500
Total (Cost: $69,370) $77,925
Total Common Stock (Cost: $2,695,363) $3,011,964
Repurchase Agreements: 16.6%
Face
604,000 4.7% Star Bank Repurchase Agreement, issued July
31,1996, due August 7, 1996, collateralized by $1,130,000 GNMA
Pool # 8359, 6.5%; due January 20, 2024.
$604,000
Total Investment at Market Value (Cost: $3,299,363) 99.3%
$3,615,964
All Other Assets less Liabilities 0.7%
26,528
Net Assets 100% $3,642,492
* Non-dividend paying investment.
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
July 31, 1996
Common Stock: 19.0%
Real Estate Investment Trusts: 14.9%
Shares
Market
Value
1,550 American Health Properties $32,550
3,000 Berkshire Realty, Inc. 32,250
1,000 Carr Realty Corporation 24,000
2,380 Commercial Net Lease 32,428
1,300 First Industrial Realty 30,550
1,850 Health & Retirement Properties Trust 30,987
1,000 Hospitality Properties Trust 26,375
2,000 Kranzco Realty 31,500
1,189 Omega Healthcare Investors 33,589
1,700 Resource Mortgage Capital, Inc. 41,013
1,250 Simon Property Group Inc. 29,375
Total (Cost $353,149) $344,617
Closed End Mutual Funds: 4.1%
3,900 Kleinwort Benson Australian Income Fund $35,100
5,800 Putnam Premier Income Fund 43,500
1,500 Templeton Emerging Markets Income Fund 17,437
Total (Cost: $103,260) $96,037
Total Common Stock (Cost: $456,409) $440,654
Preferred Stocks: 7.3%
2,000 Carolina Power & Light Company $51,500
2,000 Consolidated Edison 47,750
700 Environmental Systems Company 10,850
300 James River Corporation 7,463
2,000 Unum Corp. MIDS 51,500
Total Preferred Stock (Cost: $170,708) $169,063
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
July 31, 1996
Corporate Bonds: 38.2%
Face
Market
Value
5,000 DuPont E I De Nemours & Company 8.45%, 10/15/96 $5,025
3,000 AMR Corp. 8.1%, 11/1/98 3,068
30,000 Merrill Lynch 7.75%, 3/1/99 30,760
4,000 RJR Nabisco Inc. 8.3%, 4/15/99 4,080
35,000 Texaco Capital Corp. 9.0%, 12/15/99 37,323
50,000 DuPont E I De Nemours & Company 9.15%, 4/15/00 53,831
46,000 Household Financial 9.625%, 7/15/00 50,119
4,000 American Telephone & Telegraph 6.0%, 8/1/00 3,888
5,000 First Chicago Corp. 11.25%, 2/20/01 5,806
5,000 Bankamerica Corp. 8.375%, 3/15/02 5,290
100000 Kentucky Power 6.65%, 5/1/03 97,667
10,000 General Motors Corp. 8.875%, 5/15/03 10,827
10,000 Consolidated Natural Gas Company 5.75%, 8/1/03 9,294
50,000 New York Telephone Company 5.625%, 11/1/03 45,828
50,000 American Telephone & Telegraph Company
6.75%,4/1/04 49,187
50,000 Nationsbank Corp. 7.75%, 8/15/04 51,204
10,000 Southwestern Bell 5.75%, 9/1/04 9,054
50,000 Pacific Bell Telephone Company 6.25%, 3/1/05 46,794
50,000 U.S. West Communications 6.125%, 11/15/05 46,090
30,000 Chemical Banking Corp. 7.5%, 5/15/10 29,409
40,000 GE Capital Corp Step-Up 7.0%, 10/18/10 38,218
50,000 Coca-Cola Enterprises 7.0%, 12/01/10 45,934
50,000 Citicorp 7.0%, 12/15/10 45,917
50,000 J.P. Morgan 6.610%, 12/15/10 45,712
50,000 GE Capital Corp. Step-Up 7.0%, 3/18/11 48,176
10,000 Caterpillar Inc. Del. 9.375, 8/15/11 11,697
50,000 Aetna Life & Cas Company 6.750%, 9/15/13 45,216
10,000 International Business Machines 8.375%, 11/1/19 10,788
Total Corporate Bonds (Cost: $901,362) $886,202
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
July 31, 1996
U.S. Government Obligations: 8.0%
Face
Market
Value
50,000 Tennessee Valley Authority 6.875%, 1/15/02 $49,572
50,000 FNMA 6.320%, 7/28/03 47,897
20,000 FNMA 6.420%, 2/25/04 19,130
20,000 Federal Home Loan Bank 8.080%, 8/27/10 19,879
50,000 Federal Home Loan Bank 7.5%, 11/15/10 48,408
Total U.S. Government Obligations
(Cost: $190,344) $184,886
Mortgage Backed Obligations: 7.0%
4,721 Paine Webber CMO Trust Series 1988-I,
8.6%,4/1/18 $4,869
5,914 Collaterized Mortgage Securities 1991-3I,
8.55%,8/20/20 6,031
12,000 FHLMC REMIC 1991 Trust 1177 Class I,
6.95%,1/15/21 11,618
15,000 FNMA REMIC Series 93-1601, 6.5%, 7/25/22 12,966
12,000 FNMA REMIC 1992 Trust G-53 Class J, 7.0%,
9/25/22 11,290
18,000 FHLMC 1993 Trust 1462 Class D, 7.5%, 11/15/22 17,008
12,000 FNMA 1993 Trust 122 Class L, 6.5%, 1/25/23 11,303
20,000 FNMA REMIC 1993 Trust G 10 Class J, 5.0%, 3/25/23 14,313
20,000 FHLMC REMIC 1993 Trust 1497 Class Q, 7.0%,4/15/23 18,044
20,000 FHLMC REMIC 1993 Trust 1602 Class BB 6.1%,4/15/23 18,048
12,000 FHLMC REMIC 1993 Trust 1503 Class H, 7.0%,5/15/23 10,825
12,000 FNMA REMIC 1993 Trust 50 Class L, 7.0%, 5/25/23 11,284
4,000 FHLMC REMIC 1993 Trust G13 Class D, 6.75%, 6/25/23 3,708
12,000 Ray Ellison Mac Series 92-H Class I,
7.1%,12/31/23 11,318
Total Mortgage Backed (Cost: $181,064) $162,625
Repurchase Agreements: 18.9%
438,000 4.7% Star Bank Repurchase Agreement, issued
July31, 1996, due August 7, 1996, collateralized by $1,130,000
GNMA Pool # 8359, 6.5%; due January 20,2024 $438,000
Total Investment at Market Value
(Cost: $2,337,887) 98.4% $2,281,430
All Other Assets less Liabilities 1.6%
37,793
Net Assets 100% $2,319,223
ANALYSTS INVESTMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1996
Fixed Stock Fund
Income
Fund
ASSETS
Investment securities, at value
Unaffiliated Issuers $ 3,011,964 $1,843,430
Repurchase Agreements 604,000 438,000
3,615,964 2,281,430
Receivable for investment securities sold 245
Dividends and interest receivable 8,132 23,349
Cash 24,952 17,280
Total Assets 3,649,048 2,322,304
LIABILITIES
Management fee payable 6,556 3,081
Total Liabilities 6,556 3,081
NET ASSETS $ 3,642,492 $2,319,223
Net assets consist of:
Capital shares $ 3,306,449 $2,394,958
Accumulated undistributed
net investment income 8,141 12,857
Accumulated net realized gains (losses)
from securities transactions 11,997 (32,624)
Net unrealized appreciation (depreciation) on investments
315 ,905 (55,968)
NET ASSETS $ 3,642,492 $2,319,223
Net asset value, offering price, and redemption price per
share $ 18.28 $13.62
Fund shares outstanding 199,273 170,327
ANALYSTS INVESTMENT TRUST
STATEMENT OF OPERATIONS
Year ended July 31, 1996
Fixed Stock Fund
Income
Fund
INVESTMENT INCOME:
Dividends $ 104,921 $40,799
Interest 17,633 92,333
Total Investment Income 122,554 133,132
EXPENSES:
Management Fee 63,141 27,934
NET INVESTMENT INCOME 59,413 105,198
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains (losses) from security transactions
25,122
Net change in net unrealized appreciation
(depreciation) on investments 108,455 (1,075)
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS 133,577 (1,075)
NET INCREASE IN NET ASSETS FROM OPERATIONS $192,990 $104,123
ANALYSTS INVESTMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS
Years ended July 31, 1996 and 1995
Fixed
Stock Fund Income Fund
1996 1995 1996 1995
FROM OPERATIONS:
Net investment income $59,413 $30,970 $105,198 $73,306
Net realized gains (losses) from
security transactions 25,122 60,118 (9,397)
Net realized gains from covered call option
transactions 6,016
Net change in net unrealized appreciation
depreciation) on investments 108,455 216,927 (1,075) 36,231
Net increase (decrease) in net assets from
operations 192,990 314,031 104,123 100,140
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income 53,510 34,771 100,346 72,527
From capital gains 75,004 16,114
Decrease in net assets from distributions
to shareholders 128,514 34,771 116,460 72,527
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold 1,347,445 931,945 1,041,702 738,491
Net asset value of shares issued in
reinvestment of distributions
to shareholders 128,415 34,750 86,046 63,505
Payment for shares redeemed (447,334) (764,831) (273,154) (431,283)
Net increase from fund share transactions
1,028,526 201,864 854,594 370,713
NET INCREASE IN NET ASSETS: 1,093,002 481,124 842,257 398,326
NET ASSETS:
Beginning of period 2,549,490 2,068,366 1,476,966 1,078,640
End of period $3,642,492 $2,549,490 $2,319,223 $1,476,966
Accumulated undistributed net investment income
$8,141 $2,239 $12,857 $8,004
ANALYSTS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Years ended July 31, 1996
and 1995 and the Period from Inception (August 25, 1993) through
July 31, 1994
Fixed
Stock Fund Income Fund
1996 1995 1994 1996 1995 1994
Net asset value beginning of period
$17.87 $15.79 $14.46 $13.57 $13.38 $14.74
Income from investment operations:
Net investment income .34 .24 .19 .78 .80 .77
Net realized and unrealized gains on securities
.81 2.11 1.24 .01 .18 (1.63)
Total from investment operations
1.15 2.35 1.43 .79 .98 (.86)
Less distributions:
Dividends from net investment income
(.31) (.27) (.10) (.74) (.79) (.50)
Dividends from capital gains
(.43)
Total distributions (.74) (.27) (.10) (.74) (.79) (.50)
Net asset value, end of period
$ 18.28 $17.87 $15.79 $13.62 $13.57 $13.38
Total return 6.84% 15.01% 10.70%* 5.84% 7.61% (6.20%)*
Ratios/Supplemental Data:
Net assets, end of period (thousands)
$3,642 $2,549 $2,068 $2,319 $1,477 $1,079
Ratio of expenses to average net assets
2.00% 2.00% 2.00% 1.50% 1.50% 1.50%
Ratio of net investment income to average net assets
1.89% 1.45% 1.18% 5.65% 6.03% 5.57%
Portfolio turnover rate 6.19% 32.02% 4.52% 22.34% 18.01% 22.67%
Average commission rate paid
$0.086 - - $0.082 - -
*Annualized
ANALYSTS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
Analysts Investment Trust (AIT) is registered under the
Investment Advisor Act of 1940, as amended, as a no-load,
diversified, open end management investment company. AIT was
established as an Ohio Business Trust under a Declaration of
Trust dated May 28, 1993. The Declaration of Trust, as
amended, permits the Trustees to issue an unlimited
number of shares of the Analysts Stock Fund (ASF) and the
Analysts Fixed Income Fund (AFI) (The Funds). The following
is a summary of the significant accounting policies of AIT:
Securities Valuation: Equity securities, options and
commodities listed on exchanges or on the NASDAQ are valued
at the last sale price as of the close of business on the
day the securities are being valued. Lacking a last sale
price, a security is generally valued at its last bid
price, except when, in Equity Analysts Inc.'s (The
Advisor) opinion, the last bid price does not accurately
reflect the current value of the security. All other
securities for which over-thecounter market quotations
are readily available are valued at their bid price. When
market quotations are not readily available, when the Advisor
determines the last bid price does not accurately reflect the
current value, or when restricted securities are being
valued, such securities are valued as determined in good
faith by the Advisor, subject to review of the Trust's Board
of Trustees. Fixed income securities (including mortgage
related and asset backed and receivable backed securities)
may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately
reflect the fair market value of such securities. A
pricing service utilizes electronic data processing
techniques to determine prices for normal institutional-
size trading units of debt securities without regard to sale
or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value
as determined in good faith by the Advisor, subject to
review by the Trust's Board of Trustees. Short term
investments in fixed income
securities with maturities of less than 60 days when
acquired, or which subsequently are within 60 days of
maturity, are valued by using the amortized cost method of
valuation. Repurchase agreements are valued at cost
which approximates market. It is the policy of the Funds
that their custodian take possession of the underlying
collateral securities. Collateral is marked to market daily
to ensure that the market value of the underlying assets
equals or exceeds the value of the seller's repurchase
obligation. In the event of a bankruptcy or another default
of the seller of a repurchase agreement, a Fund could
experience both delays in liquidating the underlying
securities and losses. The loss would equal the
amount by which the carrying value of the repurchase
agreement(s) exceeded the proceeds received in
liquidation of the underlying collateral securities. To
minimize the possibility of loss, the Funds enter into
repurchase agreements only with institutions deemed to be
creditworthy by the Advisor, including banks that serve
as custodian for the Funds, banks having assets in excess
of $1 billion of primary government securities dealers.
ANALYSTS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES (continued)
Options Accounting Principles: When a put or call option
is written, an amount equal to the premium received is
recorded as an asset and an equivalent liability. The amount
of the liability is subsequently marked-to-market to reflect
the current market value of the option written at which time
an unrealized gain or loss is recognized. The current market
value of a traded option contract is the last sale price
or, in the absence of a last sale price, the mean between the
last bid and ask price, or in the absence of either of these
two prices, fair value as determined in good faith by the
Board of Trustees. When a written option contract expires or
is terminated (closing purchase transaction), a realized gain
(or realized loss if the cost of the closing purchase
transaction exceeds the premium received when the option was
sold) is recorded without regard to any unrealized gain or
loss on the underlying security, and the liability related
to such option is extinguished. When an option is exercised
by the holder, again or loss from the underlying security is
realized and the proceeds from such a sale are increased by
the premium originally received. When a put or call option
is written, the Fund must maintain a margin account with its
custodian or the broker with a maintenance margin determined
on a daily basis as the value of the underlying security,
commodity or currency fluctuates.
Share Valuation: The net asset value per share is
calculated daily by dividing the total value of each Fund's
investments and other assets, less liabilities, by the
total number of shares outstanding.
Investment Income and Distributions to Shareholders:
Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Distributions to
shareholders arising from net investment income are declared
and it is the intention that such distributions be paid
quarterly. Net realized capital gains, if any, are
distributed to shareholders at least once per year.
Security Transactions: Security transactions are accounted
for on a trade date basis, which is the date the order to buy
or sell is executed. Securities sold are valued on a specific
identification basis.
Use of estimates: The preparation of financial statements
in conformity with generally accepted accounting principles
requires the Advisor to make estimates and assumptions that
affect the amounts reported in these financial statements
and accompanying notes. The Advisor believes that the
estimates utilized in preparing these financial statements
are reasonable and prudent. Actual results could differ from
these estimates.
ANALYSTS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES (continued)
Federal Income Taxes: It is each Fund's policy to comply
with the special provisions of the Internal Revenue Code
available to regulated investment companies. As provided
therein, in any fiscal year in which a Fund so
qualifies, and distributes at least 90% of its taxable
net income, the Fund (but not its shareholders) will be
relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes is made. In
order to avoid imposition of the excise tax created by the
Tax Reform Act of 1986 as amended by the Revenue Act of
1987, it is each Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income
(earned during the calendar year) and 98% of its realized
capital gains (earned during the twelve months ended October
31 of the calendar year) plus undistributed amounts from
prior years.
(2) INVESTMENT TRANSACTIONS
Investment transactions are as follows for the year ended
July 31, 1996:
Analysts Stock Fund Analysts
Fixed Income Fund
Purchase of investment securities $742,906 $986,069
Proceeds from sales and maturities
of investment securities 168,181 332,831
The table above includes U.S. Government Securities purchased
and sold by Analysts Fixed Income Fund amounting to
$139,035 and $197,000, respectively. There were no purchases
or sales of U.S. Government Securities by the Analysts Stock
Fund during the year.
(3)TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
The President and Treasurer, and the Vice President and
Secretary of the Trust are shareholders and employees of
the Advisor, registered investment advisor to the Trust. In
addition, each of these individuals are shareholders of
the Funds. AIT's investments are managed by the
Advisor under the terms of a Management Agreement.
Under the Management Agreement, the
Advisor pays all of the expenses of the Funds except
brokerage, taxes, interest and extraordinary expenses. As
compensation for investment advisory services and agreement
to pay the above Fund expenses, each Fund pays the Advisor
a fee computed and accrued daily and paid monthly. The fee
for ASF is computed at an annual average rate of 2% of
average daily net assets of ASF up to and including $20
million, 1.75% of such assets from $20 million up
to and including $40 million, 1.5% of such assets from
$40 million up to and including $100 million, and .75% of
such assets above $100 million. The fee for AFI is
computed at an annual rate of 1.5% of average daily net
assets of AFI
up to and including $20 million, 1.25% of such assets
from $20 million up to and including $40 million, 1% of
such assets from $40 million up to and including $100
million and .75% of such assets above $100 million.
ANALYSTS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
(4) FUND SHARE TRANSACTIONS
Proceeds and payments on shares of the Funds as shown
in the Statement of Changes in Net Assets are the
result of the following share transactions:
Analysts Stock Fund Analysts Fixed
Income Fund
Shares sold 73,841 75,103
Shares issued in reinvestment of
distributions 7,097 6,276
Totals 80,938 81,379
Less shares redeemed 24,350 19,884
Net increase in shares outstanding 56,588 61,495
Shares at beginning of year 142,685 108,832
Shares at end of year 199,273 170,327
(5) FINANCIAL INSTRUMENT DISCLOSURE
There are no reportable Financial instruments which have any
offbalance sheet risk in either of the Funds as of July 31,
1996.
(6) SECURITY TRANSACTIONS
For Federal income tax purposes, the cost of investments
owned at July 31, 1996 was the same as identified cost. At
July 31, 1996, the composition of unrealized appreciation
(the excess of value over tax cost) and depreciation (the
excess of tax cost over value) was as follows:
Appreciation Depreciation Net
Stock Fund $488,442 $(172,538) $315,904
Fixed Income Fund 22,260 (78,227) (55,967)
