EQUITY ANALYSTS INC.
REGISTERED INVESTMENT ADVISORS
------------------------------
ANALYSTS
INVESTMENT
TRUST
SEMI-ANNUAL REPORT
August 1, 1997
through
January 31, 1998
--------------------------------
ANALYSTS STOCK FUND
ANALYSTS FIXED INCOME FUND
--------------------------------
- ------------------------------
EQUITY ANALYSTS INC.
Registered Investment Advisors
9200 Montgomery Road
Suite 13A
Cincinnati, OH 45242
(513) 984-3377
(FAX) 984-2411
<PAGE>
EQUITY ANALYSTS INC.
REGISTERED INVESTMENT ADVISORS
ANALYSTS INVESTMENT TRUST
SEMI-ANNUAL REPORT
JANUARY 31, 1998
ANALYSTS STOCK FUND
ANALYSTS FIXED INCOME FUND
<PAGE>
ANALYSTS INVESTMENT TRUST
SEMI-ANNUAL REPORT
ANALYSTS STOCK FUND
ANALYSTS FIXED INCOME FUND
CONTENTS
--------
PAGE
----
Message from the Fund President/Portfolio Manager 2
Performance Summary 3
Analysts Stock Fund Schedule of Investments in Securities 5
Analysts Fixed Income Fund Schedule of Investments in Securities 9
Statement of Assets and Liabilities 12
Statement of Operations 13
Statement of Changes in Net Assets 14
Financial Highlights 15
Notes to Financial Statements 16
Trustees and Officers 20
<PAGE>
MESSAGE FROM THE FUND PRESIDENT/PORTFOLIO MANAGER
---------------------------------------------------
ANALYSTS STOCK FUND
- -------------------
This report covers the period August 1, 1997 through January 31, 1998. The total
return of the Stock Fund from August 1, 1997 through January 31, 1998 was
(0.48%). This compares to a (2.66%) 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 14.44%
verses 10.04% 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 and Southeast Asian 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 during the second
half of 1997 helping U.S. equity markets. The main factor in causing this was
the Southeast Asian economic situation. The countries of Thailand, Indonesia,
Malaysia, and the Philippines experienced deteriorating economies, currency
devaluations, and declining stock markets. This kept import prices low to the
U.S. and the currency strong. 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. 1998 should see the U.S.
stock markets consolidate as corporate profits catch up to stock prices and
interest rates level off.
ANALYSTS FIXED INCOME FUND
- --------------------------
The total return of the Fixed Income Fund for the period August 1, 1997 through
January 31, 1998 was 4.88%. This compares to a 4.27% 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 5.37% verses 5.79% 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.
The deteriorating economic situation in Southeast Asia has lowered the growth
rate of the U.S. by .5% to 1.5%. This caused the Fed not to increase interest
rates during the second half of 1997. As a result, U.S. 30 year treasury
interest rates declined to 5.8%. 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 six 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.
Last year there was concern that the Fed would raise short-term interest rates
to combat a possible increase in the rate of future inflation. These fears are
now gone and there is speculation that the Fed may lower short term rates due to
the effect of the Southeast Asian situation. The balanced federal budget will
also work to keep interest rates low as the supply of Treasury Bonds decreases.
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 fiscal discipline and reduce the national
debt, interest rates should stay low for 1998.
Lee Manzler
President and Portfolio Manager
February 19, 1998
<PAGE>
ANALYSTS STOCK FUND
GROWTH OF $10,000 INVESTMENT
COMPARED TO DOW JONES WORLD INDEX
FROM 08/24/93 THRU 01/31/98
ANALYSTS INVESTMENT FUND
TO
DOW JONES WORLD INDEX
AIT DJ
STOCK STOCK
WORLD
AVERAGE ANNUAL TOTAL RETURN 100.00 100.00
FOR THE PERIOD ENDING 1/31/98 106.49 102.10
SINCE INCEPTION: 14.44% 107.96 99.78
111.89 101.99
108.20 95.59
113.44 99.81
TOTAL RETURN FOR THE PERIOD 118.34 106.58
8/1/97 THROUGH 1/31/98: -0.48% 115.73 104.91
109.70 100.44
110.22 103.19
109.59 103.18
106.01 102.98
109.90 104.68
113.52 106.94
112.67 105.04
113.69 107.11
109.43 101.84
109.81 102.39
109.70 100.12
111.60 101.18
114.48 105.77
117.05 109.33
120.23 110.14
122.12 109.81
126.40 114.85
126.47 112.70
128.86 114.99
125.20 113.26
128.96 116.69
131.58 119.93
133.62 122.15
134.72 122.40
135.72 124.02
138.63 127.03
140.24 126.85
139.80 126.99
135.05 121.85
137.81 123.18
141.33 127.98
142.78 128.15
150.62 134.97
150.73 132.61
155.80 133.58
158.45 134.99
156.24 131.84
159.74 135.42
167.99 144.02
173.25 150.55
182.95 157.42
175.60 147.88
184.43 155.63
174.61 146.39
176.36 148.44
179.94 149.74
181.73 152.76
2
<PAGE>
ANALYSTS FIXED INCOME FUND
GROWTH OF $10,000 INVESTMENT
COMPARED TO LEHMAN INTERMEDIATE T-BOND INDEX
FROM 08/24/93 THRU 01/31/98
ANALYSTS INVESTMENT FUND
TO
LEHMAN INTERMEDIATE T-BOND INDEX
AIT T-
STOCK BOND
AVERAGE ANNUAL TOTAL RETURN 100.00 100.00
FOR THE PERIOD ENDING 1/31/98 98.85 100.34
SINCE INCEPTION: 5.37% 98.51 100.77
98.50 100.91
96.91 100.41
96.98 100.85
TOTAL RETURN FOR THE PERIOD 99.12 101.85
8/1/97 THROUGH 1/31/98: 4.88% 97.87 100.53
94.54 99.11
94.49 98.44
94.32 98.54
92.59 98.59
94.23 99.83
93.98 100.11
92.25 99.26
90.82 99.33
90.13 98.85
90.81 98.81
92.93 100.47
95.46 102.43
95.74 102.95
97.08 104.15
101.38 107.09
101.67 107.81
101.40 107.82
102.41 108.67
103.47 109.38
104.46 110.61
105.66 111.97
107.27 113.12
108.57 114.11
106.71 112.80
106.33 112.27
105.72 111.92
106.00 111.88
106.88 113.07
107.32 113.42
107.58 113.46
109.16 114.92
111.29 116.79
113.68 118.21
113.88 117.61
113.89 117.99
114.85 118.13
112.90 117.48
114.03 118.79
115.38 119.70
116.89 120.73
120.25 122.99
118.94 122.49
121.47 123.85
121.37 125.31
122.75 125.57
124.35 126.62
126.15 128.30
3
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JANUARY 31, 1998
COMMON STOCK: 89.2%
Large Capitalization U.S. Stocks: 35.3%
SHARES MARKET VALUE
- ------ ------------
1,000 Abbott Laboratories $ 70,813
3,000 Advanced Micro Devices* 60,188
556 Allstate Corporation 49,206
3,000 Alza Corporation* 106,875
1,030 Ameren Corporation 37,724
1,100 Ameritech Corporation 47,231
1,100 Banc One Corporation 61,463
1,510 Bell Atlantic Corporation 139,769
826 Bell South Corporation 50,025
800 Briggs & Stratton Corporation 35,250
660 Chevron Corporation 49,376
814 Chrysler Corporation 28,337
584 Cincinnati Financial Corporation 74,460
850 Cinergy Corporation 29,325
2,500 Compaq Computer Corporation* 75,156
1,500 Computer Associates Intl. 79,781
1,100 Du Pont EI De Nemours 62,288
450 Eastman Kodak Company 29,363
1,000 Entergy 28,625
800 Exxon Corporation 47,450
1,500 First Data Corporation 45,938
2,100 First Energy 60,900
998 Ford Motor Corporation 50,898
1,100 General Electric Corporation 85,250
800 Intel Corporation 64,800
600 J.P. Morgan 60,713
1,500 Micron Technology 51,938
1,000 Microsoft* 149,187
1,000 National Fuel Gas 46,000
900 PNC Bank 46,406
1500 Potomac Electric Power 37,312
1,400 Procter & Gamble Company 109,725
950 RJR Nabisco Holdings 29,925
3,000 S&P 500 Depository Trust 294,938
4
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JANUARY 31, 1998
Large Capitalization U.S. Stocks: (continued)
SHARES MARKET VALUE
- ------ ------------
600 Sears, Roebuck & Company 27,637
2,100 Star Banc Corporation $ 115,631
810 Texaco, Inc. 42,171
2000 Western Digital Corporation* 37,375
----------
Total (Cost:$1,692,094) $2,519,447
Small/Medium Capitalization U.S. Stocks: 16.9%
2,200 Airborne Freight Corporation 156,475
700 Ameron, Inc. 41,169
1,250 Aquarion Company 43,359
1,000 Arvin Industries 34,500
1,000 BJ's Wholesale Club* 30,000
1,500 Connecticut Energy 40,781
950 Essex County Gas 42,869
3,000 Fansteel, Inc. 24,000
3,000 Gibson Greetings, Inc.* 65,250
4,000 Handleman Company 24,500
4,000 Homebase Inc.* 27,000
1,900 Marsh Supermarkets Inc. Class B 29,212
3,250 Nash Finch Company 63,375
2,600 Provident Life & Accident Class B 94,575
4,750 S&P 400 Deposit Receipts 299,992
1,400 Sea Containers Ltd Class A 40,863
2,750 Sport Supply Group, Inc. 20,281
1,500 Standard Motor Products 24,844
3,375 Wynns International 76,992
1,200 Yellow Corporation 31,350
----------
Total (Cost:$807,978) $1,211,388
Foreign Stocks: 30.6%
600 Akzo NV ADR $ 54,375
2,600 Alcatel Alsthom 67,763
2,000 Anangel-American Shipholding ADR 16,125
2,454 BAT Industries PLC ADR 45,092
5
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JANUARY 31, 1998
Foreign Stocks: (continued)
SHARES MARKET VALUE
- ------ ------------
2,112 BG PLC ADR* 54,496
3,225 Brazil Fund, Inc. 65,508
1,300 British Steel ADR 29,006
3,000 BT Shipping LTD. ADR* 14,250
900 Buenos Aires Embotella ADR 1,238
1,550 Cadbury Schwepps PLC ADR 72,850
349 Cifra S A De C V ADR 6,452
2,000 Compania Cervecerias Unida ADR 48,000
1,250 CRH PLC ADR 75,000
8,600 Emerging Germany Fund 104,275
1,600 Ericsson L M Tel. Company ADR 61,800
4,850 Europe Fund, Inc. 80,934
9,550 First Australia Fund, Inc. 74,012
5,750 First Philippine Fund 45,641
1,700 Hong Kong Telecommunications ADR 37,400
350 Ito Yakado LTD ADR 74,222
2,866 Japan Equity Fund, Inc. 22,749
2,400 KLM Royal Dutch Airlines ADR 83,400
3,150 Koninklijke Ahold N V ADR 87,413
2,600 Makita Corporation 27,950
300 Matsushita Electric 46,181
800 NEC Corp. ADR 46,500
3,400 Philippine Long Distance Tel. ADR 89,250
1,200 Polygram N V ADR 53,175
1,200 Royal Dutch 61,500
2,500 San Miguel Corp. 30,481
1,900 SKF AB ADR 37,050
800 Sony Corp. ADR 75,100
900 TDK Corp. ADR 70,088
2,200 Tele Danmark 72,050
800 Telecom Corp. New Zealand ADR 29,000
900 Telefonos De Mexico ADR 44,325
5,100 Templeton World China Fund 40,800
1,200 Tokio Marine & Fire Insurance ADR 66,600
1,350 United Newspapers Pub. ADR $ 31,725
1,100 Vodafone Group PLC ADR 82,775
6
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS STOCK FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JANUARY 31, 1998
Foreign Stocks: (continued)
SHARES MARKET VALUE
- ------ ------------
1,400 WPP Group PLC 60,900
----------
Total (Cost:$1,923,620) $2,189,450
Real Estate Stocks: 5.4%
1,450 American Health Properties 40,600
1,500 Carramerica Realty Corporation 43,969
2,800 Commercial Net 48,825
2,000 Dynex Capital 26,500
1,500 First Industrial Realty 53,812
2,100 Health & Retirement Properties Trust 42,263
1,500 New Plan Realty Trust 37,875
1,186 Omega Healthcare Investors 47,292
1,250 Simon Debartolo Group Inc. 41,484
----------
Total (Cost: $292,131) $ 382,620
Mining/Precious Metals Stocks: 1.0%
1300 Barrick Gold Resources 25,188
900 Asarco 20,025
1500 Pegasus Gold* 150
400 Phelps Dodge Corporation 26,350
----------
Total (Cost: $96,455) $ 71,713
----------
Total Common Stock (Cost: $4,812,276) $6,374,617
REPURCHASE AGREEMENTS: 9.6%
FACE
- ----
688,000 4.7% Star Bank Repurchase Agreement, issued January 28, 1998
due February 4, 1998, collateralized by $1,130,000
GNMA Pool # 8359, 6.5%; due January 20, 2024. $ 688,000
----------
TOTAL INVESTMENT AT MARKET VALUE (COST: $5,500,276) 98.8% $7,062,617
ALL OTHER ASSETS LESS LIABILITIES 1.2% 84,466
----------
NET ASSETS 100% $7,147,083
==========
7
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JANUARY 31, 1998
COMMON STOCK: 30.9%
Real Estate Investment Trusts: 12.8%
SHARES MARKET VALUE
- ------ ------------
2,050 American Health Properties $ 57,400
4,000 Berkshire Realty, Inc. 47,250
1,400 Carramerica Realty Corporation 41,038
3,580 Commercial Net Lease 62,426
4,200 Dynex Capital 55,650
1,700 First Industrial Realty 60,987
2,350 Health & Retirement Properties Trust 47,294
1,500 Hospitality Properties Trust 51,281
2,600 Kranzco Realty 50,050
1,489 Omega Healthcare Investors 59,374
1,650 Simon Debartolo Group Inc. 54,759
----------
Total (Cost $472,887) $ 587,510
Closed End Mutual Funds: 18.1%
10,000 Dreyfus Strategic Govt. Income $ 96,875
8,700 Duff & Phelps Bond Income Fund 129,413
10,900 Kleinwort Benson Australian Income Fund 87,200
13,800 Putnam Premier Income Fund 119,025
6,294 Scudder Global High Income Fund 89,690
9,200 Templeton Emerging Markets Income Fund 116,150
13,000 Templeton Global Government Fund 96,688
13,000 Templeton Global Income Fund 99,937
----------
Total (Cost: $ 847,922) $ 834,977
Total Common $1,320,809) $1,422,487
PREFERRED STOCKS 4.6%
2,000 Carolina Power & Light Company 53,625
2,000 Consolidated Edison 52,500
2,000 Travelers Trust 52,625
8
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JANUARY 31, 1998
PREFERRED STOCKS: (CONTINUED)
SHARES MARKET VALUE
- ------ ------------
2,000 Unum Corp. MIDS 52,750
--------
Total Preferred Stock (Cost: $200,000) $211,500
CORPORATE BONDS: 25.9%
FACE MARKET VALUE
- ---- ------------
3,000 AMR Corp. 8.1%, 11/1/98 3,049
30,000 Merrill Lynch 7.75%, 3/1/99 30,608
4,000 RJR Nabisco Inc. 8.3%, 4/15/99 4,084
35,000 Texaco Capital Corp. 9.0%, 12/15/99 37,043
50,000 DuPont E I De Nemours & Company 9.15%, 4/15/00 53,541
46,000 Household Financial 9.625%, 7/15/00 49,755
4,000 American Telephone & Telegraph 6.0%, 8/1/00 4,005
5,000 First Chicago Corp. 11.25%, 2/20/01 5,743
5,000 Bankamerica Corp. 8.375%, 3/15/02 5,426
100,000 Kentucky Power 6.65%, 5/1/03 103,795
10,000 General Motors Corp. 8.875%, 5/15/03 11,251
10,000 Consolidated Natural Gas Company 5.75%, 8/1/03 9,956
50,000 New York Telephone Company 5.625%, 11/1/03 49,195
50,000 American Telephone & Telegraph Company 6.75%, 4/1/04 52,125
50,000 Nationsbank Corp. 7.75%, 8/15/04 54,449
10,000 Southwestern Bell 5.75%, 9/1/04 9,799
50,000 Pacific Bell Telephone Company 6.25%, 3/1/05 50,563
50,000 U.S. West Communications 6.125%, 11/15/05 49,899
150,000 Loews Corporation 6.75%, 12/5/06 153,907
30,000 Chemical Banking Corp. 7.5%, 5/15/10 31,140
40,000 GE Capital Corp Step-Up 7.0%, 10/18/10 40,162
50,000 Coca-Cola Enterprises 7.0%, 12/01/10 50,038
50,000 Citicorp 7.0%, 12/15/10 49,923
50,000 J.P. Morgan 6.610%, 12/15/10 50,950
50,000 GE Capital Corp. Step-Up 7.0%, 3/18/11 50,126
10,000 Caterpillar Inc. Del. 9.375, 8/15/11 12,829
50,000 Aetna Life & Cas Company 6.750%, 9/15/13 48,937
10,000 International Business Machines 8.375%, 11/1/19 11,900
----------
9
<PAGE>
ANALYSTS INVESTMENT TRUST
ANALYSTS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JANUARY 31, 1998
CORPORATE BONDS: (CONTINUED)
FACE MARKET VALUE
- ---- ------------
Total Corporate Bonds (Cost: $1,045,326) $1,084,197
U.S. GOVERNMENT OBLIGATIONS: 25.7%
50,000 Tennessee Valley Authority 6.875%, 1/15/02 $ 50,868
50,000 FNMA 6.320%, 7/28/03 49,918
20,000 FNMA 6.420%, 2/25/04 19,981
1,000,000 United States Treasury Notes 6.5%, 10/15/06 1,063,125
----------
Total U.S. Government Obligations (Cost: $1,118,703) $1,183,892
MORTGAGE BACKED OBLIGATIONS: 3.7%
3,123 Paine Webber CMO Trust Series 1988-I, 8.6%, 4/1/18 $ 3,284
1,227 Collaterized Mortgage Securities 1991-3I, 8.55%, 8/20/20 1,232
12,000 FHLMC REMIC 1991 Trust 1177 Class I, 6.95%, 1/15/21 12,174
15,000 FNMA REMIC Series 93-1601, 6.5%, 7/25/22 14,520
12,000 FNMA REMIC 1992 Trust G-53 Class J, 7.0%, 9/25/22 12,246
18,000 FHLMC 1993 Trust 1462 Class D, 7.5%, 11/15/22 18,260
12,000 FNMA 1993 Trust 122 Class L, 6.5%, 1/25/23 11,879
20,000 FNMA REMIC 1993 Trust G 10 Class J, 5.0%, 3/25/23 17,491
20,000 FHLMC REMIC 1993 Trust 1497 Class Q, 7.0%, 4/15/23 20,014
20,000 FHLMC REMIC 1993 Trust 1602 Class BB 6.1%, 4/15/23 19,624
12,000 FHLMC REMIC 1993 Trust 1503 Class H, 7.0%, 5/15/23 11,789
12,000 FNMA REMIC 1993 Trust 50 Class L, 7.0%, 5/25/23 12,137
4,000 FHLMC REMIC 1993 Trust G13 Class D, 6.75%, 6/25/23 4,026
12,000 Ray Ellison Mac Series 92-H Class I, 7.1%, 12/31/23 12,000
----------
Total Mortgage Backed (Cost: $174,287) $ 170,673
REPURCHASE AGREEMENTS: 9.4%
434,000 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. $ 434,000
----------
TOTAL INVESTMENT AT MARKET VALUE (COST: $4,293,126) 97.9% $4,506,749
ALL OTHER AS 2.1% 98,413
----------
NET ASSETS 100% $4,605,162
==========
10
<PAGE>
ANALYSTS INVESTMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998
(Unaudited)
FIXED
STOCK FUND INCOME FUND
---------- -----------
ASSETS
Investment securities, at value
Unaffiliated Issuers $ 6,374,617 $4,072,749
Repurchase Agreements 688,000 434,000
---------- ----------
7,062,617 4,506,749
Capital gain distribution receivable 3053 1,232
Dividends and interest receivable 9,707 46,151
Receivable for investment security sold 0 142
Cash 83,247 56,516
----------
Total Assets 7,158,624 4,610,790
---------- ----------
LIABILITIES
Management fee payable 11,541 5,628
---------- ----------
Total Liabilities 11,541 5,628
---------- ----------
NET ASSETS $ 7,147,083 $4,605,162
=========== ==========
Net assets consist of:
Capital shares $ 5,558,037 $4,393,940
Accumulated undistributed net investment income (2610) 17,582
Accumulated net realized gains (losses)
from securities transactions 29,314
Net unrealized appreciation
(depreciation) on investments 1,562,342 213,623
---------- ---------
NET ASSETS $ 7,147,083 $4,605,162
=========== ==========
Net asset value, offering price,
and redemption price per share $ 23.81 $ 14.72
=========== ==========
Fund shares outstanding 300,118 312,769
=========== ==========
11
<PAGE>
ANALYSTS INVESTMENT TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998
(Unaudited)
FIXED
STOCK FUND INCOME FUND
---------- -----------
INVESTMENT INCOME:
Dividends $ 68,138 $ 67,302
Interest 13,309 86,628
-------- --------
Total Investment Income 81,447 153,930
EXPENSES:
Management Fee 67,559 32,191
-------- --------
NET INVESTMENT INCOME 13,888 121,739
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains (losses) from security transactions 38,261 13,393
Net change in net unrealized appreciation (depreciation)
on investments (84,952) 77,199
-------- --------
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS (46,691) 90,592
-------- --------
NET INCREASE IN NET ASSETS FROM OPERATIONS $(32,803) $212,331
======== ========
12
<PAGE>
ANALYSTS INVESTMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED 1/31/98
YEARS ENDED 7/31/97, 7/31/96 & 7/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
STOCK FUND
----------
1/31/98 1997 1996 1995
------- ---- ---- ----
FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 13,888 $ 71,281 $ 59,413 $ 30,970
Net realized gains (losses) from
securities transactions $ 38,261 $ 52,396 $ 25,122 $ 60,118
Net realized gains from covered call
option transactions $ 0 $ 0 $ 0 $ 6,016
Net change in unrealized appreciation
(depreciation) on investments ($ 84,952) $ 1,331,388 $ 108,455 $ 216,927
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
from operations ($ 32,803) $ 1,455,065 $ 192,990 $ 314,031
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income $ 17,818 $ 78,102 $ 53,510 $ 34,771
From capital gains $ 43,883 $ 29,457 $ 75,004 $ 0
----------- ----------- ----------- -----------
Decrease in net assets from distributions
to shareholders $ 61,701 $ 107,559 $ 128,514 $ 34,771
FROM FUND SHARE TRANSACTIONS:
Proceeds form shares sold $ 1,318,485 $ 2,550,587 $ 1,347,445 $ 931,945
Net asset value of shares issued in reinvest-
ment of distributions to shareholders $ 61,700 $ 107,560 $ 128,415 $ 34,750
Payment for shares redeemed ($ 527,090) ($ 1,259,653) ($ 447,334) ($ 764,831)
----------- ----------- ----------- -----------
Net increase from fund share transactions $ 853,095 $ 1,398,494 $ 1,028,526 $ 201,864
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS: $ 758,591 $ 2,746,000 $ 1,093,002 $ 481,124
NET ASSETS:
Beginning of period $ 6,388,492 $ 3,642,492 $ 2,549,490 $ 2,068,366
End of period $ 7,147,083 $ 6,388,492 $ 3,642,492 $ 2,549,490
Accumulated undistributed net investment inc ($ 2,610) $ 1,320 $ 8,141 $ 2,239
</TABLE>
<TABLE>
<CAPTION>
FIXED INCOME FUND
-----------------
01/31/98 1997 1996 1995
-------- ---- ---- ----
FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 121,739 $ 182,430 $ 105,198 $ 73,306
Net realized gains (losses) from
securities transactions $ 13,393 ($ 752) $ 0 ($ 9,397)
Net realized gains from covered call
option transactions $ 0 $ 0 $ 0 $ 0
Net change in unrealized appreciation
(depreciation) on investments $ 77,199 $ 192,392 ($ 1,075) $ 36,231
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
from operations $ 212,331 $ 374,070 $ 104,123 $ 100,140
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income $ 121,927 $ 177,516 $ 100,346 $ 72,527
From capital gains $ 0 $ 0 $ 16,114 $ 0
----------- ----------- ----------- -----------
Decrease in net assets from distributions
to shareholders $ 121,927 $ 177,516 $ 116,460 $ 72,527
FROM FUND SHARE TRANSACTIONS:
Proceeds form shares sold $ 722,781 $ 2,143,361 $ 1,041,702 $ 738,491
Net asset value of shares issued in reinvest-
ment of distributions to shareholders $ 112,639 $ 159,244 $ 86,046 $ 63,505
Payment for shares redeemed ($ 345,634) ($ 793,410) ($ 273,154) ($ 431,283)
----------- ----------- ----------- -----------
Net increase from fund share transactions $ 489,786 $ 1,509,195 $ 854,594 $ 370,713
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS: $ 580,190 $ 1,705,749 $ 842,257 $ 398,326
NET ASSETS:
Beginning of period $ 4,024,972 $ 2,319,223 $ 1,476,966 $ 1,078,640
End of period $ 4,605,162 $ 4,024,972 $ 2,319,223 $ 1,476,966
Accumulated undistributed net investment inc $ 17,582 $ 17,771 $ 12,857 $ 8,004
</TABLE>
13
<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.
14
<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.
15
<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 six months ended January 31,
1998:
ANALYSTS ANALYSTS
STOCK FUND FIXED INCOME FUND
----------- -----------------
Purchase of investment securities $ 527,306 $ ,196,248
Proceeds from sales and maturities
of investment securities 49,732 71,957
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 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.
16
<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:
ANALYSTS ANALYSTS
STOCK FUND FIXED INCOME FUND
---------- -----------------
Shares sold 55,720 49,940
Shares issued in reinvestment of
distributions 2,608 7,782
--------- ----------
Totals 58,328 57,722
Less shares redeemed 22,372 23,817
--------- ----------
Net increase in shares outstanding 35,956 33,905
Shares at beginning of year 264,162 278,864
---------- ----------
Shares at end of year 300,118 312,769
========== ==========
(5) FINANCIAL INSTRUMENT DISCLOSURE
-------------------------------
There are no reportable Financial instruments which have any off-balance sheet
risk in either of the Funds as of January 31, 1998.
(6) SECURITY TRANSACTIONS
---------------------
For Federal income tax purposes, the cost of investments owned at January 31,
1997 was the same as identified cost. At January 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:
APPRECIATION DEPRECIATION NET
------------ ------------ ---
Stock Fund $ 1,928,747 $ (366,406) $ 1,562,341
Fixed Income Fund 254,103 (40,480) 213,623
17
<PAGE>
ANALYSTS INVESTMENT TRUST
FOR A SHARE OUTSTANDING
FOR THE SIX MONTHS ENDING 1/31/98,
FOR THE YEARS ENDING 7/31/95, 7/31/96 & 7/31/97,
FOR THE PERIOD FROM 8/25/93 (INCEPTION) TO 7/31/94
(Unaudited)
<TABLE>
<CAPTION>
STOCK FUND
----------
01/31/98 07/31/97 07/31/96 07/31/95 07/31/94
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value beginning of period $ 24.18 $ 18.28 $ 17.87 $ 15.79 $ 14.46
Income from investment operations:
Net investment income 0.05 0.32 0.34 0.24 0.19
Net realized and unrealized gains on securities (0.21) 6.06 0.81 2.11 1.24
---------- ---------- ---------- ---------- ----------
Total from investment operations (0.16) 6.38 1.15 2.35 1.43
Less distributions:
Dividends from net investment income (0.06) (0.35) (0.31) (0.27) (0.10)
Capital gains distributions (0.15) (0.13) (0.43)
Total Distributions (0.21) (0.48) (0.74) (0.27) (0.10)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 23.81 $ 24.18 $ 18.28 $ 17.87 $ 15.79
---------- ---------- ---------- ---------- ----------
Total return* -0.96% 35.47% 6.84% 15.01% 10.70%
---------- ---------- ---------- ---------- ----------
Ratios, supplemental data:
Net assets, end of period (thousands) $ 7,147 $ 6,388 $ 3,642 $ 2,549 $ 2,068
Ratio of expenses to average net assets 2.00% 2.00% 2.00% 2.00% 2.00%
Ratio of net investment income to average net assets 0.21% 1.54% 1.89% 1.45% 1.18%
Portfolio turnover rate 0.70% 5.11% 6.19% 32.02% 4.52%
Average commission paid $ 0.092 $ 0.064 $ 0.086
</TABLE>
<TABLE>
<CAPTION>
FIXED INCOME FUND
-----------------
01/31/98 07/31/97 07/31/96 07/31/95 07/31/94
--------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Net asset value beginning of period $ 14.43 $ 13.62 $ 13.57 $ 13.38 $ 14.74
Income from investment operations:
Net investment income 0.41 0.79 0.78 0.80 0.77
Net realized and unrealized gains on securities 0.29 0.78 0.01 0.18 (1.63)
---------- --------- --------- --------- ---------
Total from investment operations 0.70 1.57 0.79 0.98 (0.86)
Less distributions:
Dividends from net investment income (0.41) (0.76) (0.74) (0.79) (0.50)
Capital gains distributions
Total Distributions (0.41) (0.76) (0.74) (0.79) (0.50)
---------- --------- --------- --------- ---------
Net asset value, end of period $ 14.72 $ 14.43 $ 13.62 $ 13.57 $ 13.38
---------- --------- --------- --------- ---------
Total return* 9.76% 12.05% 5.84% 7.61% -6.20%
---------- --------- --------- --------- ---------
Ratios, supplemental data:
Net assets, end of period (thousands) $ 4,605 $ 4,025 $ 2,319 $ 1,477 $ 1,079
Ratio of expenses to average net assets 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income to average net assets 2.80% 5.63% 5.65% 6.03% 5.57%
Portfolio turnover rate 1.68% 0.97% 22.34% 18.01% 22.67%
Average commission paid $ 0.050 $ 0.055 $ 0.082
<FN>
*Annualized
</FN>
See accompanying notes to financial statements
</TABLE>
18
<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
513-792-5400
513-984-2411
19
