EQUITY ANALYSTS INC.
REGISTERED INVESTMENT ADVISORS
ANALYSTS INVESTMENT TRUST
ANNUAL REPORT
July 31, 1998
ANALYSTS STOCK FUND
ANALYSTS FIXED INCOME FUND
<PAGE>
ANALYSTS INVESTMENT TRUST
ANNUAL REPORT
ANALYSTS STOCK FUND
ANALYSTS FIXED INCOME FUND
CONTENTS
PAGE
----
Message from the Fund President/Portfolio Manager 1
Performance Summary
Independent Auditors Report 5
Statement of Assets and Liabilities 6
Analysts Stock Fund Schedule of Investments in Securities 7
Analysts Fixed Income Fund Schedule of Investments in Securities 12
Statement of Operations 16
Statement of Changes in Net Assets 17
Financial Highlights 18
Notes to Financial Statements 19
Trustees and Officers 23
<PAGE>
MESSAGE FROM THE FUND PRESIDENT/PORTFOLIO MANAGER
-------------------------------------------------
ANALYSTS STOCK FUND
- -------------------
This report covers the period August 1, 1997 through July 31, 1998. The total
return of the Stock Fund from August 1, 1997 through July 31, 1998 was 4.25%.
This compares to a 9.31% 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 13.98% verses 11.63%
for the DJWG.
The Analysts Stock Fund has outperformed the DJWG since inception and every
period except the last fiscal year. Since inception the Analysts Stock Fund has
had a higher allocation to U.S. stocks than the DJWG. During this period, U.S.
stocks have outperformed most foreign markets. During the last fiscal year
though, Europe has had the best performing markets and the DJWG had a larger
allocation to Europe during this period. This accounts for the higher return
from the DJWG during the last fiscal year. The best performing sector in the
U.S. markets during the last fiscal year have been the large capitalization
stocks. The Analysts Stock Fund has a 14% allocation to medium capitalization
stocks which has hurt our performance relative to the S&P 500 and Dow Jones
Industrial Average. The Analysts Stock Fund has kept a low allocation of 8% to
Asian stocks due to the weakness in that region. This has helped our performance
relative to 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 have declined dramatically since March of 1997, due partly to a
flight to quality to U.S. Treasury Bonds, and due partly to a global
disinflation of prices. The real short term rates in the U.S. remain high
because inflation is very low and the Fed has kept Fed Funds unchanged. U.S.
stocks began a correction in July of 1998 that, as of the date of this letter,
still exists. The financial crisis that began in Southeast Asia last July has
spread to the rest of the emerging countries worldwide. The nervousness from
this crisis is causing money to flow out of equities and into safe investments.
The U.S. economy remains strong with low unemployment, moderate growth, low
inflation, and a balanced budget. As the world financial situation settles down,
money should begin to flow back to U.S. stocks. Over the next 12 months U.S.
stocks should begin to recover, prices of commodities should be flat, the Fed
will lower Fed Funds, and the yield curve should steepen. These events should
keep the U.S. out of recession and help settle down the world financial
difficulties.
1
<PAGE>
ANALYSTS FIXED INCOME FUND
- --------------------------
The total return of the Fixed Income Fund for the period August 1, 1997 through
July 31, 1998 was 4.30%. This compares to a 6.86% 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 4.70% verses 5.69% 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. The Fund's strategy is to remain broadly
diversified to reduce our exposure in any one area and reduce our volatility.
The world economic crisis that began in July of 1997 in Southeast Asia has
spread to the rest of the emerging countries. This has caused a worldwide
financial crisis, increasing nervousness and causing money to flow to U.S.
Treasury Bonds. Money has flowed out of foreign bonds and spreads are widening
on corporate bonds. Treasury bonds have outperformed all other fixed income
investments due to the flight to quality. The yield curve in the U.S. has
inverted and the markets are expecting a Fed Funds rate cut before the end of
the year. This should steepen the yield curve and money should begin to flow
back to corporate and sovereign debt. Interest rates should stay low in the U.S.
due to a global commodity oversupply situation holding prices down.
The U.S. economy during the next 12 months should see low inflation, moderate
growth, steepening yield curve, a balanced budget, and corporate spreads
narrowing. The Analysts Fixed Income Fund will primarily stay short to medium
term on maturities to take advantage of this environment.
Lee Manzler
President and Portfolio Manager
2
<PAGE>
[Graph Deleted Here]
ANALYSTS STOCK FUND
GROWTH OF A $10,000 INVESTMENT
COMPARED TO DOW JONES WORLD INDEX
FROM 8/25/93 THRU 7/31/98
ANALYSTS INVESTMENT TRUST STOCK FUND
TO
DOW JONES WORLD INDEX
<TABLE>
<CAPTION>
DJ
AIT STOCK WORLD
STOCK INDEX
----- -----
<S> <C> <C>
Average Annual Total Return 10000 10000
For the Period Ending 7/31/98 10649 10210
Since Inception: 13.97% 10796 9978
11189 10199
Total Return for the Period 10821 9559
8/1/97 through 7/31/98: 4.25% 11345 9981
11835 10658
Average Annual Total Return 11574 10491
For the Period Ending 6/30/98 10971 10044
1 Year: 13.03% Since Inception (8/25/93): 14.86% 11023 10319
10960 10319
10602 10298
10990 10468
11353 10694
11268 10504
11369 10711
10944 10184
10982 10239
10971 10011
11161 10118
11450 10577
11706 10933
12024 11014
12214 10981
12641 11485
12649 11270
12888 11499
12522 11327
12899 11669
13161 11993
13366 12215
13476 12241
13575 12402
13866 12704
14027 12686
13982 12700
13506 12187
13781 12319
14134 12799
14278 12816
15062 13497
15074 13263
15582 13359
15847 13501
15626 13185
15977 13543
16803 14402
17329 15056
18299 15744
17567 14790
18449 15565
17467 14640
17642 14845
18000 14976
18180 15278
18996 16325
19963 16981
19999 17101
19561 17009
19590 17286
19073 17208
</TABLE>
3
<PAGE>
[Graph Deleted Here]
ANALYSTS FIXED INCOME FUND
GROWTH OF A $10,000 INVESTMENT
COMPARED TO LEHMAN INTERMEDIATE T-BOND INDEX
FROM 8/25/93 THRU 7/31/98
ANALYSTS INVESTMENT TRUST FIXED INCOME FUND
TO
LEHMAN INTERMEDIATE T-BOND INDEX
<TABLE>
<CAPTION>
AIT LEHMAN
FIXED T-BOND
INCOME INDEX
------ -----
<S> <C> <C>
Average Annual Total Return 10000 10000
For the Period Ending 7/31/98 9885 10034
Since Inception: 4.69% 9851 10077
9850 10091
Total Return for the Period 9691 10042
8/1/97 through 7/31/98: 4.30% 9699 10085
9913 10186
Average Annual Total Return 9787 10054
For the Period Ending 6/30/98 9454 9912
1 Year: 7.59% Since Inception (8/25/93): 4.84% 9450 9844
9432 9854
9259 9860
9423 9983
9398 10012
9225 9927
9082 9934
9013 9886
9081 9882
9293 10048
9547 10244
9574 10296
9708 10417
10138 10710
10168 10782
10140 10782
10241 10868
10346 10939
10446 11062
10566 11199
10726 11313
10856 11412
10671 11282
10632 11228
10572 11193
10600 11189
10687 11309
10731 11343
3
<PAGE>
10757 11347
10915 11493
11128 11682
11366 11824
11386 11763
11387 11802
11483 11816
11288 11751
11401 11882
11536 11973
11687 12076
12023 12302
11892 12252
12145 12388
12135 12534
12272 12560
12433 12666
12615 12830
12567 12812
12573 12853
12528 12913
12573 13001
12576 13090
12542 13142
</TABLE>
4
<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, 1998, 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 four 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, 1998, 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, 1998, 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 four years in the period then
ended, in conformity with generally accepted accounting principles.
Berge & Company LTD
Cincinnati, Ohio
September 9, 1998
5
<PAGE>
ANALYSTS INVESTMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1998
<TABLE>
<CAPTION>
FIXED
STOCK FUND INCOME FUND
---------- -----------
ASSETS
Investment securities, at value
<S> <C> <C>
Unaffiliated Issuers $ 7,393,138 $ 4,466,067
Repurchase Agreements 730,000 110,000
----------- -----------
8,123,138 4,576,067
Receivable for investment securities sold -- 154
Dividends and interest receivable 9,701 55,139
Cash 63,355 47,021
----------- -----------
Total Assets 8,196,194 4,678,381
LIABILITIES
Management fee payable 14,360 5,980
----------- -----------
Total liabilities 14,360 5,980
----------- -----------
NET ASSETS $ 8,181,834 $ 4,672,401
=========== ===========
Net assets consist of:
Capital shares $ 6,258,237 $ 4,603,941
Accumulated undistributed net investment income 10,244 23,075
Accumulated net realized gains (losses)
from securities transactions (32,394) (20,303)
Net unrealized appreciation on investments 1,945,747 65,688
----------- -----------
NET ASSETS $ 8,181,834 $ 4,672,401
=========== ===========
Net asset value, offering price, and redemption
price per share $ 24.99 $ 14.27
=========== ===========
Fund shares outstanding 327,361 327,418
=========== ===========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1998
COMMON STOCK: 90.4%
Large Capitalization U.S. Stocks: 35.9%
<TABLE>
<CAPTION>
SHARES MARKET VALUE
- ------ ------------
<C> <S> <C>
2,000 Abbott Laboratories $ 83,125
3,000 Advanced Micro Devices * 51,750
1,112 Allstate Corporation 47,191
3,000 Alza Corporation * 116,625
1,030 Ameren Corporation 38,947
1,100 Ameritech Corporation 54,106
261 Associates First Capital Corporation 20,276
1,210 Banc One Corporation 62,541
3,020 Bell Atlantic Corporation 137,033
826 Bellsouth Corporation 56,426
660 Chevron Corporation 54,533
814 Chrysler Corporation 48,179
1,752 Cincinnati Financial Corporation 62.634
850 Cinergy Corporation 26,828
2,500 Compaq Computer Corporation 82,188
1,500 Computer Association International 49,781
3,000 Diamonds Trust 265,594
1,100 Du Pont EI De Nemours 68,200
450 Eastman Kodak 37,856
1,000 Entergy 27,375
800 Exxon Corporation 56,100
1,500 First Data Corporation 43,406
2,100 Firstenergy 57,881
998 Ford Motor Corporation 56,824
1,100 General Electric Corporation 98,244
800 Intel Corporation 67,550
600 J.P. Morgan 75,600
1,500 Micron Technology 50,063
2,000 Microsoft * 219,875
1,000 National Fuel Gas 41,313
900 PNC Bank 48,544
1,500 Potomac Electric Power Corporation 36,188
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1998
Large Capitalization U.S. Stocks (continued)
<TABLE>
<CAPTION>
SHARES MARKET VALUE
- ------ ------------
<C> <S> <C>
1,400 Proctor & Gamble Corporation $ 111,125
3,000 S&P 500 Depository Trust 335,344
600 Sears Roebuck & Company 30,450
2,100 Star Banc Corporation 146,738
810 Texaco, Inc. 49,258
2,000 Western Digital Corporation * 22,250
----------
Total (Cost: $1,906,383) $2,937,938
Small/Medium Capitalization U.S. Stocks: 14.3%
4,400 Airborne Freight Corporation $ 105,050
700 Ameron, Inc. 34,869
1,250 Aquarion Company 43,594
1,000 Arvin Industries 38,875
1,000 BJ's Warehouse Club * 37,000
1,500 Connecticut Energy 38,438
950 Essex County Gas Company 43,225
3,000 Fansteel, Inc. 21,375
3,000 Gibson Greetings, Inc. * 68,250
4,000 Handleman Company * 35,750
4,000 Homebase, Inc. * 31,000
1,900 Marsh Supermarkets, Inc. Class B 28,025
3,250 Nash Finch Company 48,344
2,600 Provident Companies 95,875
4,750 S&P 400 Deposit Receipt 316,543
1,400 Sea Containers Ltd. Class A 52,150
2,750 Sport Supply Group, Inc. 21,656
1,500 Standard Motor Products 31,875
3,375 Wynns International 61,383
1,200 Yellow Corporation * 19,200
----------
Total (Cost: $807,978) $1,172,476
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1998
Foreign Stocks: 35.4%
<TABLE>
<CAPTION>
SHARES MARKET VALUE
- ------ ------------
<C> <S> <C>
1,200 Akzo NV $ 60,600
2,600 Alcatel Alsthom 101,888
2,454 BAT Industries PLC 55,368
2,117 BG PLC 64,569
3,225 Brazil Fund, Inc. 65,508
900 Buenos Aires Embotella * 1,238
1,550 Cadbury Schweppes PLC 85,928
1,250 CRH PLC 86,875
8,600 Emerging Germany Fund 133,838
3,200 Ericsson L M Tel. Company 88,600
4,850 Europe Fund, Inc. 101,850
9,550 First Australia Fund, Inc 65,656
5,750 First Philippine Fund * 30,906
1,700 Hong Kong Telecommunications 31,344
1,400 Ito Yokado LTD 67,200
2,866 Japan Equity Fund, Inc. 20,958
2,400 KLM Royal Dutch Airlines 99,600
3,150 Koninklijke Ahold NV 97,256
300 Matsusita Electric 48,000
800 NEC Corporation ADR 37,000
3,400 Philippine Long Distance Tel. 75,225
1,200 Polygram NV 65,325
1,200 Royal Dutch 61,200
2,500 San Miguel Corporation 32,661
1,900 SKF AB 30,281
800 Sony Corporation ADR 68,000
900 TDK Corporation 65,925
2,200 Tele Denmark 111,650
800 Telecom CP New Zealand 27,900
900 Telefones De Mexico SA 45,000
5,100 Templeton China World 30,281
1,200 Tokio Marine & Fire Insurance 60,450
1,350 United News & Media PLC 36,281
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1998
Foreign Stocks (continued)
<TABLE>
<CAPTION>
SHARES MARKET VALUE
- ------ ------------
<C> <S> <C>
1,100 Vodafone Group PLC $ 150,150
6,000 WEBS - Canada 81,750
4,000 WEBS - France 87,500
3,500 WEBS - Italy 100,188
2,500 WEBS - Spain 76,406
3,500 WEBS - Sweden 78,969
4,500 WEBS - Switzerland 89,156
4,000 WEBS - UK 81,500
1,400 WPP Group PLC 94,325
----------
Total (Cost: $2,365,047) $2,894,304
Real Estate Stocks: 4.0%
1,450 American Health Properties $ 36,250
1,500 Carramerica Realty Corporation 40,406
2,800 Commercial Net Lease 44,100
2,000 Dynex Capital, Inc. 20,000
1,500 First Industrial Realty 41,438
2,100 Health & Retirement Properties Trust 35,569
1,500 New Plan Realty Trust 34,219
1,186 Omega Healthcare Investors 34,839
1,250 Simon Debartolo Group, Inc. 38,906
----------
Total (Cost: $290,330) $ 325,726
Mining/Precious Metals Stocks: 0.7%
900 Asarco $ 19,181
1,300 Barrick Gold Resources 21,288
400 Phelps Dodge Corporation 22,225
----------
Total (Cost: $77,650) $ 62,694
----------
Total Common Stock (Cost: $5,447,391) $7,393,138
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1998
REPURCHASE AGREEMENTS: 8.9%
<TABLE>
<CAPTION>
FACE MARKET VALUE
- ---- ------------
<C> <S> <C>
730,000 4.7% Star Bank Repurchase Agreement, issued $ 730,000
------------
January 28, 1997, due February 4, 1997,
collateralized by $1,130,000 GNMA
Pool # 8359, 6.5%; due January 20, 2024.
TOTAL INVESTMENTS AT MARKET VALUE (COST: $6,177,391) 99.3% $ 8,123,138
ALL OTHER ASSETS LESS LIABILITIES 0.7% 58,696
------------
NET ASSETS 100% $ 8,181,834
============
<FN>
* Non-dividend paying investment.
</FN>
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1998
COMMON STOCK: 31.9%
Natural Resources Stocks: 9.8%
<TABLE>
<CAPTION>
SHARES MARKET VALUE
- ------ ------------
<C> <S> <C>
2,050 American Health Properties $ 51,250
4,000 Berkshire Realty, Inc. 43,750
1,400 Carramerica Realty Corporation 37,713
3,580 Commercial Net Lease 56,385
4,200 Dynex Capital, Inc. 42,000
1,700 First Industrial Realty 46,963
1,500 Hospitality Properties 43,406
2,350 Health & Retirement Properties Trust 39,803
1,489 Omega Healthcare Investors 43,739
1,650 Simon Debartolo Group, Inc. 51,356
----------
Total (Cost: $421,673) $ 456,365
Closed End Mutual Funds: 22.1%
15,000 Dreyfus Strategic Government, Income $ 142,500
11,700 Duff & Phelps Bond Income 171,113
10,900 Kleinwort Benson Australian Income Fund 75,619
19,800 Putnam Premier Income 168,300
6,294 Scudder Global High Income Fund 78,675
9,200 Templeton Emerging Markets Income Fund 108,100
20,000 Templeton Global Government Fund 140,000
20,000 Templeton Global Income Fund 147,500
----------
Total (Cost: $1,092,820) $1,031,806
----------
Total Common Stock (Cost: $1,514,493) $1,488,171
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1998
PREFERRED STOCKS: 4.4%
<TABLE>
<CAPTION>
SHARES MARKET VALUE
- ------ ------------
<C> <S> <C>
2,000 Carolina Power & Light Company $ 51,625
2,000 Consolidated Edison 51,000
2,000 Travelers Cap 51,750
2,000 Unum Corp MIDS 51,875
----------
Total Preferred Stock (Cost: $200,000) $ 206,250
CORPORATE BONDS: 32.3%
FACE
----
<C> <S> <C>
3,000.00 AMR Corporation 8.1%, 11/1/98 $ 3,015
30,000.00 Merrill Lynch 7.75%, 3/1/99 30,307
4,000.00 Nabisco, Inc. 8.3%, 4/15/99 4,030
35,000.00 Texaco Capital Corporation 9.0%, 12/15/99 36,402
50,000.00 Du Pont E I De Nemours & Company 9.15, 4/15/00 52,544
46,000.00 Household Financial 9.625%, 7/15/00 48,902
4,000.00 American Telephone & Telegraph Company 6.0%, 8/1/00 4,000
5,000.00 First Chicago Corporation 11.25%, 2/20/01 5,605
5,000.00 Bankamerica Corporation 8.375%, 3/15/02 5,367
100,000.00 Associates Corporation 6.375%, 7/15/02 100,910
100,000.00 Sony Corporation 6.125%, 3/4/03 100,134
100,000.00 Kentucky Power 6.65% 5/01/03 102,239
10,000.00 General Motors Corporation 8.875%, 5/15/03 11,102
10,000.00 Consolidated National Gas Company 5.75%, 11/01/03 9,874
50,000.00 New York Telephone Company 5.625% 11/01/03 48,983
50,000.00 American Telephone & Telegraph Company 6.75%, 4/1/04 51,670
50,000.00 Nationsbank Corporation 7.75%, 8/15/04 54,020
10,000.00 Southwestern Bell 5.75%, 9/1/04 9,718
100,000.00 Salomon Smith Barney 6.25%, 1/15/05 100,187
50,000.00 Pacific Bell Telephone Company 6.25%, 3/1/05 50,688
50,000.00 U.S. West Communications 6.125%, 11/15/05 49,929
150,000.00 Loews Corporation 6.75%, 12/15/06 152,637
100,000.00 Entergy Mississippi, Inc. 6.45%, 4/1/08 99,963
100,000.00 GE Capital Corporation 8.65%, 5/15/09 120,478
30,000.00 Chemical Banking Corporation 7.5%, 5/15/10 30,668
50,000.00 Coca-Cola Enterprises 7.0%, 12/1/10 49,944
50,000.00 Citicorp 7.0% 12/15/10 49,671
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1998
CORPORATE BONDS: 32.3% (CONTINUED)
<TABLE>
<CAPTION>
FACE MARKET VALUE
---- ------------
<C> <S> <C>
50,000.00 J.P. Morgan 6.61% 15/15/10 $ 50,712
10,000.00 Caterpillar Inc. Del. 9.375%, 8/15/11 12,699
50,000.00 Aetna Life & Cas Company 6.75%, 9/15/13 49,194
10,000.00 International Business Machines 8.375%, 11/1/19 11,875
----------
Total Corporate Bonds (Cost: $1,478,166) $1,507,465
GOVERNMENT BONDS: 23.7%
50,000.00 Federal National Mortgage Association 6.32%,
7/28/03 $ 50,000
1,000.000.00 United States Treasury Notes 6.5%, 10/15/06 1,058,438
----------
Total Government Bonds (Cost: $1,047,594) $1,108,438
MORTGAGE BACKED OBLIGATIONS: 3.3%
2,555.68 Paine Webber CMO Trust Series 1988-I, 8.6%, 4/1/18 $ 2,663
12,000.00 FHLMC REMIC 1991 Trust1177 Class1, 6,95%, 1/15/21 12,114
15,000.00 FNMA Series 93-160L, 6.5%, 7/25/22 14,624
12,000.00 FNMA REMIC 1992 Trust G53 Class J, 7.0%, 9/25/22 12,264
18,000.00 FHLMC 1993 Trust 1462 Class D, 7.5%, 11/15/22 17,717
12,000.00 FNMA 1993 Trust 122 Class L, 6.5%, 1/25/23 11,881
20,000.00 FNMA REMIC 1993 Trust G 10 Class J, 5.0%, 3/25/23 17,678
20,000.00 FHLMC REMIC 1993 Trust 1497 Class Q, 7.0%, 4/15/23 19,639
20,000.00 FHLMC REMIC 1993 T 1602 Class BB, 6.1%, 4/15/23 19,223
12,000.00 FHLMC REMIC 1993 Trust 1503 Class H, 7.0%, 5/15/23 11,706
12,000.00 FNMA REMIC 1993 Trust 50 Class L, 7.0%, 5/25/23 12,210
4,000.00 FHLMC REMIC 1993 Trust G 13 Class D, 6.75%, 6/25/23 4,023
----------
Total Mortgage Backed (Cost: $160,126) $ 155,743
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JULY 31, 1998
REPURCHASE AGREEMENTS: 2.4%
<TABLE>
<CAPTION>
FACE MARKET VALUE
---- ------------
<C> <S> <C>
110,000 4.7% Star Bank Repurchase Agreement, issued
January 28, 1997, due February 4, 1997,
collateralized by $1,130,000 GNMA Pool
#8359, 6.5%; due January 20, 2024. $ 110,000
------------
TOTAL INVESTMENTS AT MARKET VALUE (COST: $4,510,379) 97.9% $ 4,576,067
ALL OTHER ASSETS LESS LIABILITIES 2.1% 96,334
------------
NET ASSETS 100% $ 4,672,401
============
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
ANALYSTS INVESTMENT TRUST
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1998
<TABLE>
<CAPTION>
FIXED
STOCK FUND INCOME FUND
---------- -----------
INVESTMENT INCOME:
<S> <C> <C>
Dividends $ 142,648 $ 131,971
Interest 28,855 177,899
--------- ---------
Total Investment Income 171,503 309,870
EXPENSES:
Management Fee 144,760 66,346
--------- ---------
NET INVESTMENT INCOME 26,743 243,524
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS:
Net realized gains (losses) from security transactions (23,447) 13,072
Net change in net unrealized appreciation on investments 298,454 (70,735)
--------- ---------
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS 275,007 (57,663)
--------- ---------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 301,750 $ 185,861
========= =========
</TABLE>
See accompanying notes to financial statements.
16
<PAGE>
ANALYSTS INVESTMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED JULY 31, 1998 AND 1997
<TABLE>
<CAPTION>
FIXED
STOCK FUND INCOME FUND
---------- -----------
1998 1997 1998 1997
---- ---- ---- ----
FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 26,743 $ 71,281 $ 243,524 $ 182,430
Net realized gains (losses) from
Security transactions (23,447) 52,396 13,073 (752)
Net realized gains from covered
call option transactions
Net change in net unrealized appreciation
(depreciation) on investments 298,454 1,331,388 (70,735) 192,392
----------- ---------- ----------- -----------
Net increase in net assets from operations 301,750 1,455,065 185,862 374,070
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income 17,818 78,102 238,220 177,516
From capital gains 43,883 29,457
----------- ---------- ----------- -----------
Decrease in net assets from distributions
to shareholders 61,701 107,559 238,220 177,516
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold 3,314,488 2,550,587 1,492,824 2,143,361
Net asset value of shares issued in reinvestment
of distributions to shareholders 61,701 107,560 217,950 159,244
Payment for shares redeemed (1,822,896) (1,259,653) (1,010,987) (793,410)
----------- ---------- ----------- -----------
Net increase from fund share transactions 1,553,293 1,398,494 699,787 1,509,195
----------- ---------- ----------- -----------
NET INCREASE IN NET ASSETS: 1,793,342 2,746,000 647,429 1,705,749
NET ASSETS:
Beginning of period 6,388,492 3,642,492 4,024,972 2,319,223
----------- ---------- ----------- -----------
End of period $ 8,181,834 $ 6,388,492 $ 4,672,401 $ 4,024,972
=========== =========== =========== ===========
Accumulated undistributed net
investment income $ 8,925 $ 1,320 $ 71,650 $ 17,771
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
ANALYSTS INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Years ended July 31, 1998, 1997, 1996,
1995 and the Period from Inception (August 25, 1993) through July 31, 1994
<TABLE>
<CAPTION>
Stock Fund Fixed Income Fund
--------------------------------------------- ----------------------------------------------
1998 1997 1996 1995 1994 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value beginning of period $ 24.18 $ 18.28 $ 17.87 $ 15.79 $ 14.46 $ 14.43 $ 13.62 $ 13.57 $ 13.38 $ 14.74
Income from investment operations:
Net investment income .09 .32 .34 .24 .19 .80 .79 .78 .80 .77
Net realized and unrealized
gains on securities .93 6.06 .81 2.11 1.24 (.18) .78 .01 .18 (1.63)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations 1.02 6.38 1.15 2.35 1.43 .62 1.57 .79 .98 (.86)
Less distributions:
Dividends from net investment
income (.06) (.35) (.31) (.27) (.10) (.78) (.76) (.74) (.79) (.50)
Capital gains distributions (.15) (.13) (.43) -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions (.21) (.48) (.74) (.27) (.10) (.78) (.76) (.74) (.79) (.50)
Net asset value, end of period $ 24.99 $ 24.18 $ 18.28 $ 17.87 $ 15.79 $ 14.27 $ 14.43 $ 13.62 $ 13.57 $ 13.38
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Total return 4.25% 35.47% 6.84% 15.01% 10.70%* 4.30% 12.05% 5.84% 7.61% 6.20%*
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Ratios, supplemental data:
Net assets, end of period
(thousands) $ 8,182 $ 6,388 $ 3,642 $ 2,549 $ 2,068 $ 4,672 $ 4,025 $ 2,319 $ 1,477 $ 1,079
Ratio of expenses to average
net assets 2.00% 2.00% 2.00% 2.00% 2.00% 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income to
average net assets .37% 1.54% 1.89% 1.45% 1.18% 5.50% 5.63% 5.65% 6.03% 5.57%
Portfolio turnover rate 5.47% 5.11% 6.19% 32.02% 4.52% 9.91% .97% 22.34% 18.01% 22.67%
Average commission rate paid $0.0920 $0.0635 $0.0862 -- -- $0.0652 $0.0550 $0.0818 -- --
<FN>
* Annualized
</FN>
</TABLE>
See accompanying notes to financial statements
18
<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.
19
<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.
20
<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, 1998:
<TABLE>
<CAPTION>
ANALYSTS FIXED
ANALYSTS STOCK FUND INCOME FUND
------------------- -----------
<S> <C> <C>
Purchase of investment securities $ 1,546,251 $ 1,067,412
Proceeds from sales and maturities
of investment securities 356,529 399,181
</TABLE>
The table above includes U.S. Government Securities purchased and sold by
Analysts Fixed Income Fund amounting to $0 and $0, 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
21
<PAGE>
ANALYSTS INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
(3) TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
------------------------------------------------
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.
(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 ANALYSTS FIXED
STOCK FUND INCOME FUND
---------- -----------
<S> <C> <C>
Shares sold 133,870 102,806
Shares issued in reinvestment
of distributions 2,608 15,096
-------- --------
Totals 136,478 117,902
Less shares redeemed 73,279 69,348
-------- --------
Net increase in shares outstanding 63,199 48,554
Shares at beginning of year 264,162 278,864
-------- --------
Shares at end of year 327,361 327,418
======== ========
</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, 1998.
(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, 1998, 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 $ 2,387,406 $ (441,659) $ 1,945,747
Fixed Income Fund 162,092 (96,404) 65,688
</TABLE>
22
<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 LTD
20 West 9th Street
Cincinnati, OH 45202
- ------------------------------------------------------------------------------
Equity Analysts Inc.
Registered Investment Advisors
9200 Montgomery Road
Suite 13A
Cincinnati, OH 45242
513-792-5400
513-984-2411
23
