EQUITY ANALYSTS INC.
REGISTERED INVESTMENT ADVISORS
ANALYSTS INVESTMENT TRUST
ANNUAL REPORT
July 31, 1997
ANALYSTS STOCK FUND
ANALYSTS FIXED INCOME FUND
<PAGE>
MESSAGE FROM THE FUND PRESIDENT/PORTFOLIO MANAGER
-------------------------------------------------
ANALYSTS STOCK FUND
- -------------------
This report covers the period August 1, 1996 through July 31, 1997. The total
return of the Stock Fund from August 1, 1996 through July 31, 1997 was 35.47%.
This compares to a 29.18% rate of return for the Dow Jones World-Global Index
(DJWG). Since inception of the Analysts Stock Fund (August 25, 1993), the
average annual total return of the Analysts Stock Fund is 16.58% verses 12.22%
for the DJWG.
The annual total return of the Analysts Stock Fund is higher than the DJWG for
several reasons. The Analysts Stock Fund has a slightly larger percentage of U.S
stocks than the DJWG and during this period the U.S. stock markets outperformed
the international markets. The Analysts Stock Fund has a lower allocation to
Japanese stocks, which during this period underperformed most of the world stock
markets. The Analysts Stock Fund has also allocated more of its portfolio to
sectors such as telecommunications, which have outperformed other sectors that
are more heavily weighted in the DJWG. The strategy of the Analysts Stock Fund
is to diversify between Large Capitalization, Small Capitalization,
International, Real Estate Investment Trusts and Natural Resources Stocks.
Research indicates that an allocation between these broad groups has provided
the lowest possible volatility for a portfolio of stocks while still keeping
stock market performance.
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 from May through
November, 1996, rose slightly through the end of January 1997, then declined
further through July 1997. The declining interest rates helped the performance
of the U.S. stock markets. The U.S. stock markets have had an unprecedented six
straight positive performance years. This has been fueled by a growing economy
with low inflation and increasing productivity. The rest of 1997 should see an
increase in volatility with some consolidation in the stock markets as corporate
profits catch up to stock prices. There has been some economic turmoil in
Southeast Asia, which presents opportunities to find good value. These markets
should begin to recover in 1998 and show good investment returns.
ANALYSTS FIXED INCOME FUND
- --------------------------
The total return of the Fixed Income Fund for the period August 1, 1996 through
July 31, 1997 was 12.05%. This compares to a 8.45% rate of return for the Lehman
Intermediate T-Bond Index (LITB) over the same period. Since inception of the
Analysts Fixed Income Fund (August 25, 1993), the average annual return of the
Analysts Fixed Income Fund was 4.79% verses 5.40% 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 Trust. The Fund's strategy is to remain broadly
diversified to reduce our exposure in any one area and reduce our volatility.
During 1996 U.S. interest rates declined from May through November 1996, rose
slightly through the end of January 1997 and then declined further through July
1997. The declining interest rates helped the performance of the U.S. fixed
income markets. The Analysts Fixed Income Fund has outperformed the LITB over
the last twelve months due to our diversification and allocation to
international and real estate investment trust sectors. The most appropriate
average maturity for our bond portfolio is approximately 10 years. If the
average maturity is too long then the volatility will be too high for the
outlook on interest rate movements. If the average maturity is too low, then the
yield on our portfolio will be too low.
Recently there has been concern that the Fed may have to raise short-term
interest rates to combat a possible increase in the rate of future inflation.
The Fed will probably raise short-term interest rates later on in 1997 or early
1998. Interest rates will not rise too much due to fiscal and monetary policies.
The economy has grown with low inflation for several years now along with strong
growth in corporate profits. Increasing productivity has kept prices low while
wages and profits have risen. These factors have balanced the growth and low
unemployment to keep prices stable. If the government can continue to reduce the
deficit, the U.S. long term interest rates should not rise significantly for the
rest of 1997 and early 1998.
Lee Manzler
President and Portfolio Manager
September 12, 1997
<PAGE>
ANALYSTS STOCK FUND
GROWTH OF $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDING 7/31/97
SINCE INCEPTION: 16.58%
TOTAL RETURN FOR THE PERIOD
8/1/96 THROUGH 7/31/97: 35.47%
Analysts Stock Fund
- -------------------
Analysts Dow Jones World
Month/Year Stock Fund Index
- ---------- ---------- -----
July 1993 10,000 10,000
August 1993 10,649 10,210
September 1993 10,796 9,978
October 1993 11,189 10,199
November 1993 10,821 9,559
December 1993 11,345 9,981
January 1994 11,835 10,658
February 1994 11,574 10,491
March 1994 10,971 10,044
April 1994 11,023 10,319
May 1994 10,960 10,319
June 1994 10,602 10,298
July 1994 10,990 10,468
August 1994 11,353 10,694
September 1994 11,268 10,504
October 1994 11,369 10,711
November 1994 10,944 10,184
December 1994 10,982 10,239
January 1995 10,971 10,011
February 1995 11,161 10,118
March 1995 11,450 10,577
April 1995 11,706 10,933
May 1995 12,024 11,014
June 1995 12,214 10,981
July 1995 12,641 11,485
August 1995 12,649 11,270
September 1995 12,888 11,499
October 1995 12,522 11,327
November 1995 12,899 11,669
December 1995 13,161 11,993
January 1996 13,366 12,215
February 1996 13,476 12,241
March 1996 13,575 12,402
April 1996 13,866 12,704
May 1996 14,027 12,686
June 1996 13,982 12,700
July 1996 13,506 12,187
August 1996 13,781 12,319
September 1996 14,134 12,799
October 1996 14,278 12,816
November 1996 15,062 13,497
December 1996 15,074 13,263
January 1997 15,582 13,359
February 1997 15,847 13,501
March 1997 15,626 13,185
April 1997 15,977 13,543
May 1997 16,803 14,402
June 1997 17,329 15,056
July 1997 18,299 15,744
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
<PAGE>
ANALYSTS FIXED INCOME FUND
GROWTH OF $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDING 7/31/97
SINCE INCEPTION: 4.79%
TOTAL RETURN FOR THE PERIOD
8/1/96 THROUGH 7/31/97: 12.05%
Analysts Fixed Income Fund
- --------------------------
Analysts Fixed Dow Jones World
Month/Year Income Fund Index
- ---------- ------------- ------
July 1993 10,000 10,000
August 1993 9,885 10,034
September 1993 9,851 10,077
October 1993 9,850 10,091
November 1993 9,691 10,042
December 1993 9,699 10,085
January 1994 9,913 10,186
February 1994 9,787 10,054
March 1994 9,454 9,912
April 1994 9,450 9,844
May 1994 9,432 9,854
June 1994 9,259 9,860
July 1994 9,423 9,983
August 1994 9,398 10,012
September 1994 9,225 9,927
October 1994 9,082 9,934
November 1994 9,013 9,886
December 1994 9,151 9,882
January 1995 9,364 10,048
February 1995 9,620 10,244
March 1995 9,648 10,296
April 1995 9,783 10,471
May 1995 10,216 10,767
June 1995 10,246 10,839
July 1995 10,218 10,839
August 1995 10,319 10,926
September 1995 10,425 10,997
October 1995 10,525 11,121
November 1995 10,683 11,258
December 1995 10,845 11,373
January 1996 10,976 11,473
February 1996 10,788 11,342
March 1996 10,794 11,288
April 1996 10,688 11,253
May 1996 10,717 11,248
June 1996 10,805 11,369
July 1996 10,849 11,403
August 1996 10,875 11,408
September 1996 11,035 11,555
October 1996 11,250 11,744
November 1996 11,491 11,886
December 1996 11,512 11,826
January 1997 11,513 11,865
February 1997 11,610 11,879
March 1997 11,412 11,814
April 1997 11,526 11,945
May 1997 11,664 12,037
June 1997 11,816 12,141
July 1997 12,156 12,368
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS
<PAGE>
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, 1997, the related statements of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the three 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, 1997, by correspondence with the custodian. 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, 1997, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the three years in the period then
ended, in conformity with generally accepted accounting principles.
Berge & Company LTD
Cincinnati, Ohio
September 11, 1997
<PAGE>
<TABLE>
<CAPTION>
ANALYSTS INVESTMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1997
<S> <C> <C>
FIXED
STOCK FUND INCOME FUND
---------- -----------
ASSETS
Investment securities, at value
Unaffiliated Issuers $ 5,975,967 $ 3,872,355
Repurchase Agreements 371,000
----------- -----------
6,346,967 3,872,355
Receivable for investment securities sold 150
Dividends and interest receivable 11,556 47,336
Cash 39,774 109,993
----------- -----------
Total Assets 6,398,297 4,029,834
LIABILITIES
Management fee payable 9,805 4,862
----------- -----------
Total Liabilities 9,805 4,862
----------- -----------
NET ASSETS $ 6,388,492 $ 4,024,972
=========== ===========
Net assets consist of:
Capital shares $ 4,704,944 $ 3,904,153
Accumulated undistributed net investment income 1,319 17,770
Accumulated net realized gains (losses)
from securities transactions 34,936 (33,375)
Net unrealized appreciation on investments 1,647,293 136,424
----------- -----------
NET ASSETS $ 6,388,492 $ 4,024,972
=========== ===========
Net asset value, offering price, and redemption price per share $ 24.18 $ 14.43
=========== ===========
Fund shares outstanding 264,162 278,864
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ANALYSTS INVESTMENT TRUST
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1997
FIXED
STOCK FUND INCOME FUND
---------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 146,681 $ 78,875
Interest 17,020 152,301
---------- ----------
Total Investment Income 163,701 231,176
EXPENSES:
Management Fee 92,420 48,746
---------- ----------
NET INVESTMENT INCOME 71,281 182,430
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS:
Net realized gains (losses) from security transactions 52,396 (752)
Net change in net unrealized appreciation on investments 1,331,388 192,392
---------- ----------
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS 1,383,784 191,640
---------- ----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,455,065 $ 374,070
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1997
COMMON STOCK: 93.5%
Large Capitalization U.S. Stocks: 33.9%
<C> <S> <C>
SHARES MARKET VALUE
------ ------------
2,000 Advanced Micro Devices* $ 70,125
556 Allstate Corporation 43,924
500 Ameritech Corporation 37,091
1,100 Banc One Corporation 61,737
500 Bell Atlantic Corporation 39,909
826 Bell South Corporation 39,134
800 Briggs & Stratton Corporation 40,550
4,000 Centerior Energy 45,250
660 Chevron Corporation 52,222
814 Chrysler Corporation 30,220
584 Cincinnati Financial Corporation 48,253
850 Cinergy Corporation 28,581
1,000 CIPSCO Inc. 37,875
1,250 Compaq Computer Corporation* 71,406
1,000 Computer Associates International 68,063
1,100 Du Pont EI De Nemours 73,631
450 Eastman Kodak Company 30,150
1,000 Entergy 27,313
800 Exxon Corporation 51,400
998 Ford Motor Corporation 40,793
1,100 General Electric Corporation 77,206
800 Intel Corporation 73,450
600 J.P. Morgan 69,525
1,500 Micron Technology* 73,031
1,000 Microsoft* 141,500
1,000 National Fuel Gas 42,500
1,250 Nynex Corporation 69,297
900 PNC Bank 41,175
1500 Potomac Electric Power 33,469
700 Procter & Gamble Company 106,487
950 RJR Nabisco Holdings 31,172
3,000 S&P 500 Deposit Trust 286,031
600 Sears, Roebuck & Company 37,988
2,100 Star Banc Corporation 98,831
405 Texaco, Inc. 47,005
----------
Total (Cost: $1,374,929) $2,166,294
See accompanying notes to financial statements.
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1997
Small/Medium Capitalization U.S. Stocks: 16.3%
SHARES MARKET VALUE
------ ------------
2,200 Airborne Freight Corporation $ 107,937
700 Ameron, Inc. 39,900
1,250 Aquarion Company 33,594
1,000 Arvin Industries 34,812
1,000 BJ's Wholesale Club* 29,625
1,500 Connecticut Energy 34,219
950 Essex County Gas 23,988
3,000 Fansteel, Inc.* 26,250
3,000 Gibson Greetings, Inc.* 67,875
4,000 Handleman Company* 25,750
1,000 Homebase Inc.* 8,750
1,900 Marsh Supermarkets Inc. Class B 27,550
1,250 Nash Finch Company 25,312
1,300 Provident Life & Accident Class B 82,388
4,750 S&P 400 Deposit Receipts 291,012
1,400 Sea Containers Ltd Class A 33,075
2,750 Sport Supply Group, Inc.* 22,172
1,500 Standard Motor Products 26,531
2,250 Wynns International 67,500
1,200 Yellow Corporation* 32,400
----------
Total (Cost: $731,126) $1,040,640
Foreign Stocks: 36.2%
600 Akzo NV ADR $ 46,725
2,600 Alcatel Alsthom 70,200
2,000 Anangel-American Shipholding ADR 20,000
2,454 BAT Industries PLC ADR 42,638
3,225 Brazil Fund, Inc. 97,153
1,200 British Gas ADR 48,900
1,300 British Steel ADR 36,156
3,000 BT Shipping LTD. ADR* 12,750
900 Buenos Aires Embotella ADR* 1,238
1,050 Cadbury Schwepps PLC ADR 40,556
See accompanying notes to financial statements.
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1997
Foreign Stocks (continued):
SHARES MARKET VALUE
------ ------------
28,000 Cifra S A De C V ADR $ 54,006
1,300 Compania Cervecerias Unida ADR 30,225
1,250 CRH PLC ADR 61,875
8,600 Emerging Germany Fund 92,988
1,600 Ericsson L M Tel. Company ADR 72,400
4,850 Europe Fund, Inc. 86,694
9,550 First Australia Fund, Inc. 85,353
5,750 First Philippine Fund 71,875
1,700 Hong Kong Telecommunications ADR 44,519
200 Ito Yakado LTD ADR 45,900
2,866 Japan Equity Fund, Inc. 27,943
2,400 KLM Royal Dutch Airlines ADR 85,800
3,150 Koninklijke Ahold N V ADR 92,728
2,600 Makita Corporation 38,350
300 Matsushita Electric 62,250
800 NEC Corp. ADR 58,200
3,400 Philippine Long Distance Tel. ADR 114,112
700 Polygram N V ADR 37,319
1,200 Royal Dutch 67,125
2,500 San Miguel Corporation 54,310
1,900 SKF AB ADR 52,250
800 Sony Corp. ADR 81,450
900 TDK Corp. ADR 78,300
2,200 Tele Danmark 61,738
800 Telecom Corp. New Zealand ADR 32,350
900 Telefonos De Mexico ADR 49,950
5,100 Templeton World China Fund 70,763
700 Tokio Marine & Fire Insurance ADR 44,275
1,350 United Newspapers Pub. ADR 30,712
1,100 Vodafone Group PLC ADR 55,550
1,400 WPP Group PLC ADR 57,575
----------
Total (Cost: $1,834,035) $2,315,201
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1997
Real Estate Stocks: 6.0%
SHARES MARKET VALUE
------ ------------
1,450 American Health Properties $ 36,522
900 Asarco 30,600
1,500 Carramerica Realty Corporation 45,000
2,800 Commercial Net Lease 43,575
2,000 Dynex Capital Inc. 28,750
1,500 First Industrial Realty 46,406
2,100 Health & Retirement Properties Trust 39,113
1,500 New Plan Realty Trust 34,219
1,186 Omega Healthcare Investors 38,841
1,250 Simon Debartolo Group Inc. 40,000
----------
Total (Cost: $319,214) $ 383,026
Mining/Precious Metals Stocks: 1.1%
1300 Barrick Gold Resources $ 29,656
1500 Pegasus Gold* 7,125
400 Phelps Dodge Corporation 34,025
----------
Total (Cost: $69,370) $ 70,806
----------
Total Common $4,328,674) $5,975,967
REPURCHASE AGREEMENTS: 5.8%
FACE
----
371,000 4.75% Star Bank Repurchase Agreement,
issued July 31, 1997,
due August 1, 1997,
collateralized by $377,400
GNMA Pool # 8359, 6.5%;
due January 2 $ 371,000
----------
TOTAL INVESTMENT AT MARKET VALUE
(COST:$4,699,674) 99.3% $6,346,967
ALL OTHER ASSETS 0.7% 41,525
----------
NET ASSETS 100% $6,388,492
==========
<FN>
* Non-dividend paying investment.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1997
COMMON STOCK: 30.0%
Real Estate Investment Trusts: 13.5%
SHARES MARKET VALUE
- ------ ------------
<C> <S> <C>
2,050 American Health Properties $ 51,634
4,000 Berkshire Realty, Inc. 44,750
1,400 Carramerica Realty Corporation 42,000
3,580 Commercial Net Lease 55,714
4,200 Dynex Capital, Inc. 60,375
1,700 First Industrial Realty 52,594
2,350 Health & Retirement Properties Trust 43,769
1,500 Hospitality Properties Trust 47,906
2,600 Kranzco Realty 44,687
1,489 Omega Healthcare Investors 48,765
1,650 Simon Debartolo Group Inc. 52,800
----------
Total (Cost $472,887) $ 544,994
Closed End Mutual Funds: 16.5%
8,700 Duff & Phelps Bond Income Fund $ 120,713
10,900 Kleinwort Benson Australian Income Fu 98,781
13,800 Putnam Premier Income Fund 118,162
9,200 Templeton Emerging Markets Income Fun 122,475
13,000 Templeton Global Government Fund 100,750
13,000 Templeton Global Income Fund 100,750
----------
Total (Cost: $651,679) $ 661,631
Total Common Stock
(Cost: $1,124,566) $1,206,625
PREFERRED STOCKS: 5.6%
2,000 Carolina Power & Light Company $ 52,875
2,000 Consolidated Edison 50,500
700 Environmental Systems Company 11,200
300 James River Corporation 7,575
2,000 Travelers Capital 52,125
2,000 Unum Corp. MIDS 52,375
----------
Total Preferred Stock
(Cost: $220,708) $ 226,650
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1997
CORPORATE BONDS: 26.6%
FACE MARKET VALUE
---- ------------
<C> <S> <C>
3,000 AMR Corp. 8.1%, 11/1/98 $ 3,060
30,000 Merrill Lynch 7.75%, 3/1/99 30,775
4,000 RJR Nabisco Inc. 8.3%, 4/15/99 4,100
35,000 Texaco Capital Corp. 9.0%, 12/15/99 37,242
50,000 DuPont E I De Nemours & Company 9.15%, 4/15/00 53,847
46,000 Household Financial 9.625%, 7/15/00 50,185
4,000 American Telephone & Telegraph 6.0%, 8/1/00 3,960
5,000 First Chicago Corp. 11.25%, 2/20/01 5,774
5,000 Bankamerica Corp. 8.375%, 3/15/02 5,397
100,000 Kentucky Power 6.65%, 5/1/03 102,201
10,000 General Motors Corp. 8.875%, 5/15/03 11,176
10,000 Consolidated Natural Gas Company 5.75%, 8/1/03 9,726
50,000 New York Telephone Company 5.625%, 11/1/03 48,127
50,000 American Telephone & Telegraph Company 6.75%, 4/1/04 51,009
50,000 Nationsbank Corp. 7.75%, 8/15/04 53,390
10,000 Southwestern Bell 5.75%, 9/1/04 9,563
50,000 Pacific Bell Telephone Company 6.25%, 3/1/05 49,396
50,000 U.S. West Communications 6.125%, 11/15/05 48,933
150,000 Loews Corp. 6.75%, 12/15/06 150,006
30,000 Chemical Banking Corp. 7.5%, 5/15/10 30,774
40,000 GE Capital Corp Step-Up 7.0%, 10/18/10 39,996
50,000 Coca-Cola Enterprises 7.0%, 12/01/10 49,472
50,000 Citicorp 7.0%, 12/15/10 49,742
50,000 J.P. Morgan 6.610%, 12/15/10 49,255
50,000 GE Capital Corp. Step-Up 7.0%, 3/18/11 49,999
10,000 Caterpillar Inc. Del. 9.375%, 8/15/11 12,508
50,000 Aetna Life & Cas Company 6.75%, 9/15/13 49,596
10,000 International Business Machines 8.375%, 11/1/19 11,500
----------
Total Corporate Bonds (Cost $1,045,326) $1,070,709
See accompanying notes to financial statements.
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1997
U.S. GOVERNMENT OBLIGATIONS: 29.8%
FACE MARKET VALUE
---- ------------
50,000 Tennessee Valley Authority 6.875%, 1/15/02 $ 50,772
50,000 FNMA 6.320%, 7/28/03 49,490
20,000 FNMA 6.420%, 2/25/04 19,798
1,000,000 U.S. Treasury Note 6.5%, 10/15/06 1,030,313
50,000 Federal Home Loan Bank 7.5%, 11/15/10 50,071
----------
Total U.S. Government Obligations (Cost: $1,168,938) $1,200,444
MORTGAGE BACKED OBLIGATIONS: 4.2%
3,737 Paine Webber CMO Trust Series 1988-I, 8.6%, 4/1/18 $ 3,916
2,641 Collaterized Mortgage Securities 1991-3I, 8.55%, 8/20/20 2,664
12,000 FHLMC REMIC 1991 Trust 1177 Class I, 6.95%, 1/15/21 12,138
15,000 FNMA REMIC Series 93-1601, 6.5%, 7/25/22 14,351
12,000 FNMA REMIC 1992 Trust G-53 Class J, 7.0%, 9/25/22 11,942
18,000 FHLMC 1993 Trust 1462 Class D, 7.5%, 11/15/22 17,800
12,000 FNMA 1993 Trust 122 Class L, 6.5%, 1/25/23 11,426
20,000 FNMA REMIC 1993 Trust G 10 Class J, 5.0%, 3/25/23 16,487
20,000 FHLMC REMIC 1993 Trust 1497 Class Q, 7.0%, 4/15/23 19,173
20,000 FHLMC REMIC 1993 Trust 1602 Class BB 6.1%, 4/15/23 19,048
12,000 FHLMC REMIC 1993 Trust 1503 Class H, 7.0%, 5/15/23 11,493
12,000 FNMA REMIC 1993 Trust 50 Class L, 7.0%, 5/25/23 11,913
4,000 FHLMC REMIC 1993 Trust G13 Class D, 6.75%, 6/25/23 3,902
12,000 Ray Ellison Mac Series 92-H Class I, 7.1%, 12/31/23 11,674
----------
Total Mortgage Backed (Cost: $176,393) $ 167,927
TOTAL INVESTMENT AT MARKET VALUE (COST: $3,735,931) 96.2% $3,872,355
ALL OTHER ASSETS LESS LIABILITIES 3.8% 152,617
-----------
NET ASSETS 100% $ 4,024,972
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ANALYSTS INVESTMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED JULY 31, 1997 AND 1996
Fixed
STOCK FUND INCOME FUND
1997 1996 1997 1996
FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 71,281 $59,413 $182,430 $ 105,198
Net realized gains (losses) from
security transactions 52,396 25,122 (752)
Net realized gains from covered call option transactions
Net change in net unrealized appreciation
(depreciation) on investments 1,331,388 108,455 192,392 (1,075)
---------- ----------- ----------- ---------
Net increase in net assets from operations 1,455,065 192,990 374,070 104,123
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income 78,102 53,510 177,516 100,346
From capital gains 29,457 75,004 16,114
----------- ------------ ------------ ----------
Decrease in net assets from distributions
to shareholders 107,559 128,514 177,516 116,460
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold 2,550,587 1,347,445 2,143,361 1,041,702
Net asset value of shares issued in reinvestment
of distributions to shareholders 107,560 128,415 159,244 86,046
Payment for shares redeemed (1,259,653) (447,334) (793,410) (273,154)
---------- ----------- ----------- ----------
Net increase from fund share transactions 1,398,494 1,028,526 1,509,195 854,594
---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS: 2,746,000 1,093,002 1,705,749 842,257
NET ASSETS:
Beginning of period 3,642,492 2,549,490 2,319,223 1,476,966
---------- ---------- ---------- ----------
End of period $ 6,388,492 $ 3,642,492 $ 4,024,972 $ 2,319,223
========== ========== ========== ==========
Accumulated undistributed net investment income $ 1,320 $ 8,141 $ 17,771 $ 12,857
============= ============= ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ANALYSTS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED JULY 31, 1997, 1996 AND 1995
AND THE PERIOD FROM INCEPTION (AUGUST 25, 1993) THROUGH JULY 31, 1994
STOCK FUND
-----------------------------------------------------
1997 1996 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net asset value beginning of period $ 18.28 $ 17.87 $ 15.79 $ 14.46
Income from investment operations:
Net investment income .32 .34 .24 .19
Net realized and unrealized gains on securities 6.06 .81 2.11 1.24
----------- ----------- --------- ---------
Total from investment operations 6.38 1.15 2.35 1.43
Less distributions:
Dividends from net investment income (.35) (.31) (.27) (.10)
Dividends from capital gains (.13) (.43)
Total distributions (.48) (.74) (.27) (.10)
----------- ----------- --------- ---------
Net asset value, end of period $ 24.18 $ 18.28 $ 17.87 $ 15.79
=========== =========== ========= =========
Total return 35.47% 6.84% 15.01% 10.70%*
=========== =========== ========= =========
Ratios/Supplemental Data:
Net assets, end of period (thousands) $ 6,388 $ 3,642 $ 2,549 $ 2,068
Ratio of expenses to average net assets 2.00% 2.00% 2.00% 2.00%
Ratio of net investment income to average net assets 1.54% 1.89% 1.45% 1.18%
Portfolio turnover rate 5.11% 6.19% 32.02% 4.52%
Average commission rate paid $ 0.0635 $ 0.0862 -- --
FIXED
INCOME FUND
-----------------------------------------------------
1997 1996 1995 1994
---- ---- ---- ----
Net asset value beginning of period $ 13.62 $ 13.57 $ 13.38 $ 14.74
Income from investment operations:
Net investment income .79 .78 .80 .77
Net realized and unrealized gains on securities .78 .01 .18 (1.63)
----------- ----------- --------- ---------
Total from investment operations 1.57 .79 .98 (.86)
Less distributions:
Dividends from net investment income (.76) (.74) (.79) (.50)
Dividends from capital gains
----------- ----------- --------- ---------
Total distributions (.76) (.74) (.79) (.50)
----------- ----------- --------- ---------
Net asset value, end of period $ 14.43 13.62 $ 13.57 $ 13.38
=========== =========== ========= =========
Total return 12.05% 5.84% 7.61% (6.20%)*
=========== =========== ========= =========
Ratios/Supplemental Data:
Net assets, end of period (thousands) $ 4,025 $ 2,319 $ 1,477 $ 1,079
Ratio of expenses to average net assets 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income to average net assets 5.63% 5.65% 6.03% 5.57%
Portfolio turnover rate 0.97% 22.34% 18.01% 22.67%
Average commission rate paid $ 0.0550 $ 0.0818 -- --
<FN>
*Annualized
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
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-the-counter 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.
<PAGE>
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, a gain 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.
<PAGE>
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, 1997:
<TABLE>
ANALYSTS STOCK FUND ANALYSTS FIXED INCOME FUND
------------------- --------------------------
<S> <C> <C>
Purchase of investment securities $ 1,832,601 $ 1,866,543
Proceeds from sales and maturities
of investment securities 222,090 29,258
</TABLE>
The table above includes U.S. Government Securities purchased by AFI amounting
to $998,594. There were no sales of U.S. Government Securities by AFI. There
were no purchases or sales of U.S. Government Securities by the ASF 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.
<PAGE>
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:
<TABLE>
<CAPTION>
ANALYSTS STOCK FUND ANALYSTS FIXED INCOME FUND
------------------- --------------------------
<S> <C> <C>
Shares sold 119,907 153,372
Shares issued in reinvestment of
distributions 5,239 11,459
---------- ---------
Totals 125,146 164,831
Less shares redeemed 60,257 56,294
---------- ---------
Net increase in shares outstanding 64,889 108,537
Shares at beginning of year 199,273 170,327
---------- --------
Shares at end of year 264,162 278,864
========== ========
</TABLE>
(5) FINANCIAL INSTRUMENT DISCLOSURE
-------------------------------
There are no reportable Financial Instruments which have any off-balance sheet
risk in either of the Funds as of July 31, 1997.
(6) SECURITY TRANSACTIONS
---------------------
For Federal income tax purposes, the cost of investments owned at July 31, 1997
was the same as identified cost. At July 31, 1997, the composition of unrealized
appreciation (the excess of value over tax cost) and depreciation (the excess of
tax cost over value) was as follows:
<TABLE>
<CAPTION>
APPRECIATION DEPRECIATION NET
------------ ------------ ---
<S> <C> <C> <C>
Stock Fund $ 1,766,384 $ (119,091) $ 1,647,293
Fixed Income Fund 162,314 (25,890) 136,424
</TABLE>
<PAGE>
TRUSTEES AND OFFICERS
David Lee Manzler Jr. President, Treasurer & Trustee
David L. Manzler Sr. Vice President, Secretary & Trustee
Walter E. Bowles, III Trustee
Robert W. Buechner Trustee
David J. Orth Trustee
Anthony J. Schement Trustee
- --------------------------------------------------------------------------------
INVESTMENT ADVISOR
Equity Analysts Inc.
9200 Montgomery Road
Suite 13A
Cincinnati, OH 45242
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202
AUDITORS
Berge & Company
20 West 9th Street
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Equity Analysts Inc.
Registered Investment Advisors
9200 Montgomery Road
Suite 13A
Cincinnati, OH 45242
513-984-3377
513-984-2411
