<PAGE> 1
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THE ONE GROUP(R) INVESTMENT TRUST
ANNUAL REPORT
DECEMBER 31, 1998
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<PAGE> 2
THE ONE GROUP(R) INVESTMENT TRUST
ANNUAL REPORT
DECEMBER 31, 1998
TABLE OF CONTENTS
<TABLE>
<S> <C>
Management Discussion of Fund Performance:
Government Bond Fund................................... 1
Asset Allocation Fund.................................. 3
Growth Opportunities Fund.............................. 5
Large Company Growth Fund.............................. 7
Equity Index Fund...................................... 9
Report of Independent Accountants........................... 11
Statements of Investments:
Government Bond Fund................................... 12
Asset Allocation Fund.................................. 14
Growth Opportunities Fund.............................. 19
Large Company Growth Fund.............................. 24
Equity Index Fund...................................... 27
Statements of Assets and Liabilities........................ 34
Statements of Operations.................................... 35
Statements of Changes in Net Assets......................... 36
Financial Highlights........................................ 38
Notes to Financial Statements............................... 43
</TABLE>
<PAGE> 3
THE ONE GROUP(R) INVESTMENT TRUST
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
GOVERNMENT BOND FUND
DECEMBER 31, 1998
HOW DID THE FUND PERFORM?
For the year ended December 31, 1998, the Government Bond Fund posted a total
return of 7.32%.
HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
<S> <C>
$1,400 $14,103
1,300 $13,977 (Gov't Bond)
1,200
1,100
1,000
9000
8/1/94 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- -.- Government Bond -..- Solomon Bros. 3-7 Yr. Treas./Gov't
</TABLE>
- --------------------------------------------------------------
*Initial public offering commenced August 1, 1994.
<TABLE>
<CAPTION>
Government Bond Fund
Average Annual Total Return
---------------------------------
<S> <C>
One Year Since Inception
---------------------------------
7.32% 7.87%
---------------------------------
</TABLE>
Past performance is not predictive of future performance.
HOW WOULD YOU CHARACTERIZE THE BOND MARKET DURING 1998?
1998 will be characterized as one of the most volatile periods for the fixed
income markets. During the year, interest rates declined overall as the economic
flu that attacked Southeast Asia in late 1997 spread to Russia and Latin
America. (The yield on the 10-year Treasury, for example, declined from 5.74% to
4.66%.)
These economic problems along with the fear of further contagion through the
developed world, especially the United States, led to a significant increase in
interest rate volatility and a huge flight to quality. For this reason, spreads
on non-Treasury securities significantly deteriorated, and illiquidity became a
concern in the markets. In addition, as non-Treasury borrowing cost rose (as the
result of the illiquidity), several large and very leveraged investors were
forced into liquidation, which only compounded the market problems. These events
led the Federal Reserve to ease monetary policy in the fall, which significantly
helped the markets return to more "normal" behavior.
WHAT HAPPENED IN THE MORTGAGE-BACKED SECTOR?
The decline in interest rates (both in January and in the fall) provided
borrowers with the best opportunities to refinance their homes since 1993. The
rapid increase in prepayments led to a significant shortening of mortgage
durations, and to large cash flows that needed to be invested at the new lower
interest rates. In addition, the rise in quality spreads meant that
mortgage-backed spreads needed to rise to compensate for both the larger
prepayment risk and the competing yields from other fixed income products. Due
to these factors, mortgages were the worst-performing fixed income sector for
the one-year period, lagging Treasuries, agencies and corporate securities.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 1
<PAGE> 4
THE ONE GROUP(R) INVESTMENT TRUST
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
GOVERNMENT BOND FUND (CONTINUED)
DECEMBER 31, 1998
HOW DID THIS INFLUENCE FUND PERFORMANCE?
With an average mortgage position of 68%, the Fund suffered from its focus on
mortgage securities. As interest rates declined, the duration of our mortgage-
backed component dropped sharply. Because our strategy involves maintaining
stable portfolio duration close to five years, the cost of maintaining this
duration rose sharply as interest rate volatility increased, also negatively
affecting the performance of the Fund.
WHAT WAS THE FUND'S PRIMARY INVESTMENT STRATEGY?
As always, the Fund's strategy is to maximize total rate of return while
maintaining a very stable duration of approximately five years. (Duration is a
measure of a fund's sensitivity to interest rate changes. A higher number
indicates greater sensitivity; a lower number indicates less.) Furthermore, the
Fund invests only in assets that are directly or indirectly guaranteed by the
U.S. government.
In our efforts to maximize the Fund's income return, we typically invest a
significant portion of the Fund in mortgage-backed securities that represent
attractive value. Because mortgage-backed durations tend to fluctuate with
changes in interest rates, we must constantly adjust the Fund's duration in
order to maintain total portfolio duration of five years.
This strategy is successful when undervalued mortgage securities appreciate to
their full value and when interest rate volatility remains low to moderate.
However, during 1998, interest rate volatility was very strong, which created
problems for mortgage-backed securities.
WHAT IS YOUR OUTLOOK FOR THE MARKET?
We expect interest rates to remain stable or decline slightly in 1999, as the
U.S. economy slows down in response to the economic problems abroad. In
addition, we expect the overall level of volatility to gradually decline, as the
uncertainty relating to emerging markets and the economic flu dissipates. In
this environment, we expect mortgage-backed securities to perform well, which
may help the Fund recapture some of the luster that it lost in 1998.
/s/ Gary J. Madich
Gary J. Madich
Senior Managing Director of Fixed Income Securities
The Fund's composition is subject to change.
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
2 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 5
THE ONE GROUP(R) INVESTMENT TRUST
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
ASSET ALLOCATION FUND
DECEMBER 31, 1998
HOW DID THE FUND PERFORM?
For the year ended December 31, 1998, the Asset Allocation Fund posted a total
return of 19.09%.
HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
<S> <C>
$30,000 $29,377
25,000 $22,055
20,000 $19,509
15,000 $13,929
10,000
8/1/94 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- -.- Asset Allocation -..- Blended Index**
- -0- LB Interm Gov't Corp -00- S&P 500
</TABLE>
- --------------------------------------------------------------
*Initial public offering commenced August 1, 1994.
**Blended Index consists of 60% S&P 500 & 40% Lipper Intermediate
U.S. Government Bond Index
<TABLE>
<CAPTION>
Asset Allocation Fund
Average Annual Total Return
---------------------------------
<S> <C>
One Year Since Inception
---------------------------------
19.09% 16.32%
---------------------------------
</TABLE>
Past performance is not predictive of future performance.
WHAT WAS YOUR PRIMARY ASSET ALLOCATION STRATEGY?
In November 1998 we increased the Fund's equity weighting by 3 percentage
points, bringing the Fund's asset allocation to 60% equities and 40% fixed
income securities. Our research indicated that while stock valuations remained
fairly high, interest rates were easing. This prompted the slight shift toward
equities.
HOW DID EVENTS PLAY OUT IN THE FUND'S EQUITY PORTFOLIO?
Overall, corporate profits exceeded expectations throughout the year,
contributing to the market's strong performance. At the same time, a favorable
interest rate environment helped support additional gains in the market.
The Fund's equity philosophy is research driven. Our bottom-up stock selection
philosophy led to attractive results in the Fund's equity portfolio. Instead of
trying to time the market or focus on certain market sectors, we rely on
fundamental research to select individual stocks from all market sectors. As a
result, the Fund's stock portfolio represents the "best ideas" of the equity
research team.
Equity returns primarily were driven by stock selection in the following areas:
technology (America Online, up 164%; Dell Computer, up 248%), energy (Exxon, up
22%), capital equipment (Tyco, up 67%), retail (Wal-Mart, up 107%), and consumer
capital spending (Medusa, up 42%).
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 3
<PAGE> 6
THE ONE GROUP(R) INVESTMENT TRUST
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
ASSET ALLOCATION FUND (CONTINUED)
DECEMBER 31, 1998
WHAT WERE THE TOP 10 HOLDINGS IN THE EQUITY PORTFOLIO?*
As of December 31, 1998, the Fund's top 10 equity holdings included Microsoft
(technology), General Electric (capital goods), Intel (technology), Cisco
Systems (technology), IBM (technology), Exxon (energy), Wal-Mart (retail),
Bristol Myers Squibb (health care), Philip Morris (consumer non-durable) and MCI
WorldCom (utilities).
HOW DID EVENTS PLAY OUT IN THE FIXED INCOME PORTFOLIO?
In general, the bond market benefited from the overall decline in interest rates
throughout 1998. The most significant event, though, was a late-summer rally in
the U.S. Treasury market that was sparked by the ongoing economic problems in
Asia, Russia and Latin America. This flight-to-quality, which lasted into
October, pushed Treasuries ahead of all other bond market sectors for 1998.
Our ongoing strategy is to maintain diversity among government, agency
mortgage-backed and corporate securities, with a focus on non-Treasury sectors.
Our research indicates that over the long term, non-Treasury sectors tend to
outperform Treasuries, and we will continue to pursue this strategy. At the end
of the year, 14% of the Fund's portfolio was invested in government securities,
16% in mortgage-backed securities and 7.5% in corporate and asset-backed
securities.
Credit quality within the Fund's bond portfolio remained high, with 81% of the
portfolio's securities AAA-rated, 3% AA-rated, 13% A-rated and 4% BBB-rated.
(Percentages are rounded.)
WHAT IS YOUR OUTLOOK FOR THE FINANCIAL MARKETS AND THE FUND?
We plan to maintain the Fund's current asset allocation mix and investment
strategies, as we expect the U.S. economy to maintain steady, albeit slower,
growth during 1999. Of course, we will continue to monitor valuation levels in
the financial markets and watch for signs of inflationary pressures. Any changes
may warrant a shift in our strategy.
In the stock market, we expect corporate earnings growth to decelerate, and,
thus, we look for more "normal" performance from the stock market. We plan to
maintain our sector neutrality/research-driven stock selection process, which
presents opportunities in various industries and companies.
Because we expect economic growth to slow somewhat, we plan to upgrade the bond
portfolio's holdings by slightly reducing its corporate and asset-backed
securities. Our outlook for mortgage-backed securities remains positive, and we
have increased the portfolio's exposure to this sector.
/s/ Richard R. Jandrain III
Richard R. Jandrain III
Senior Managing Director of Equity Securities
* The Fund's composition is subject to change.
Please refer to the prospectus and the accompanying financial statements for
further information about your Fund.
4 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 7
THE ONE GROUP(R) INVESTMENT TRUST
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
GROWTH OPPORTUNITIES FUND
DECEMBER 31, 1998
HOW DID THE FUND PERFORM?
The Growth Opportunities Fund posted a total return of 38.82% for the year ended
December 31, 1998.
HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
<S> <C>
$30,000 $27,319
25,000 $25,082
20,000 $18,433
15,000
10,000
8/1/94* 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- -.- Growth Opportunities -..- Russell 2000
- -0- S&P/BARRA Midcap 400 Growth
</TABLE>
- --------------------------------------------------------------
*Initial public offering commenced August 1, 1994.
<TABLE>
<CAPTION>
Growth Opportunities Fund
Average Annual Total Return
---------------------------------
<S> <C>
One Year Since Inception
---------------------------------
38.82% 23.13%
---------------------------------
</TABLE>
Past performance is not predictive of future performance.
The Russell 2000, an unmanaged index, is generally representative of small to
mid-sized companies. The S&P/BARRA Midcap 400 Growth Index, an unmanaged index,
represents the highest price to book securities in the S&P Midcap 400 Index. The
benchmark index for the Growth Opportunities Fund will be changing from the
Russell 2000 to the S&P/BARRA Midcap 400 Growth Index in order to better
represent the investment policies of the Fund for comparison purposes.
TO WHAT DO YOU ATTRIBUTE THE FUND'S SOLID RETURN?
Despite a severe stock market downturn in late summer and early fall,
medium-capitalization growth stocks continued to benefit from a strong economy,
solid corporate earnings, low inflation and low interest rates. In addition to
these factors, the Fund's performance has benefited from good stock selection.
Instead of looking for stocks based on general economic or market trends, we
evaluate stocks on an individual basis, searching for those with appealing
fundamentals.
WHAT WERE YOUR PRIMARY STRATEGIES AND TACTICS?
Our primary investment strategy is to identify high growth companies within
attractive, fast-growing industries. We look for companies that will benefit
from strong management teams and competitive advantages. These factors should
allow sustained high growth at a rate that outpaces the industry average.
After the Asian crisis erupted, we evaluated the impact of the fallout. Many of
the Fund's technology companies had significant Asian exports, so we cut certain
technology holdings to lessen the impact that decreased Asian demand would have
on these companies. At the same time, we increased our retail holdings because
many of these companies purchase materials from Asia. As such, these retailers
were able to benefit from lower prices on Asian imports.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 5
<PAGE> 8
THE ONE GROUP(R) INVESTMENT TRUST
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
GROWTH OPPORTUNITIES FUND (CONTINUED)
DECEMBER 31, 1998
DID THE PORTFOLIO BENEFIT FROM ANY PARTICULARLY STRONG HOLDINGS?*
The Fund enjoyed outstanding performance from computer manufacturer Dell
Computer, up 248% for the year; online services provider America Online, up
164%, and technology company Compuware, up 144%.
WHAT WERE THE FUND'S TOP TEN HOLDINGS?*
At year-end, the Fund's top 10 holdings included Coca-Cola Enterprises (consumer
non-durable), BMC Software (technology), Just for Feet (retail), AES Corp.
(utilities), AFLAC (financial services), America Online, USA Waste Services
(capital equipment), Compuware, Kohl's (retail) and Staples (retail).
WHAT IS YOUR OUTLOOK FOR THE FUND?
Looking ahead, we remain optimistic about continued U.S. economic growth and low
inflation. However, we think that economic growth will slow somewhat. We believe
that interest rates may continue to decline, which would support ongoing stock
market growth, but perhaps not at the unusually strong pace we've seen over the
last several years. As such, it seems prudent to lower our expectations somewhat
for the next year.
Our overall strategy remains intact -- to search for companies with strong
fundamentals, effective management teams and favorable long-term growth rates.
Because the Asian situation remains unresolved, we will continue to monitor its
effects on the Fund's holdings.
/s/ Ashi Parikh
Ashi Parikh
Managing Director, Growth Equity Team
/s/ Richard R. Jandrain III
Richard R. Jandrain III
Senior Managing Director of Equity Securities
* The Fund's composition is subject to change.
Please refer to the prospectus and the accompanying financial statements for
more information about your fund.
6 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 9
THE ONE GROUP(R) INVESTMENT TRUST
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
LARGE COMPANY GROWTH FUND
DECEMBER 31, 1998
HOW DID THE FUND PERFORM?
The Large Company Growth Fund posted a total return of 41.27% for the year ended
December 31, 1998.
HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
<S> <C>
$35,000 $34,602
30,000 $29,377
25,000 $27,133
20,000
15,000
10,000
8/1/94* 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- -.- Large Co. -..- S&P 500
- -0- S&P/BARRA 500 Growth
</TABLE>
- --------------------------------------------------------------
*Initial public offering commenced August 1, 1994.
<TABLE>
<CAPTION>
Large Company Growth Fund
Average Annual Total Return
---------------------------------
<S> <C>
One Year Since Inception
---------------------------------
41.27% 25.34%
---------------------------------
</TABLE>
Past performance is not predictive of future performance.
The S&P 500, an unmanaged index, is generally representative of the performance
of large companies in the U.S. stock market. The S&P/BARRA 500 Growth Index, an
unmanaged index, represents the highest price to book securities in the S&P 500.
The benchmark index for the Large Company Growth Fund will be changing from the
S&P 500 to the S&P/BARRA 500 Growth Index in order to better represent the
investment policies of the Fund for comparison purposes.
TO WHAT DO YOU ATTRIBUTE THE FUND'S SOLID RETURN?
Despite global economic crises and a strong stock market downturn in late summer
and early fall, a strong domestic economy, low inflation and declining interest
rates all worked together to maintain a favorable equity environment. Once
again, the market favored the largest growth-oriented companies because of their
earnings reliability and stock liquidity.
WHAT WERE YOUR PRIMARY STRATEGIES AND TACTICS?
Our primary investment strategy during this market climate has been to find good
companies within industries that are growing at a faster rate than the economy.
These are companies that have the ability to exhibit sustained growth at some
multiple of their underlying industry growth rate. In addition, we search for
strong management teams and superior product positioning.
After evaluating the impact of the Asian crisis on the Fund's stocks, we cut the
portfolio's technology holdings because much of these companies' exports went to
Asia. We also increased our retail holdings, as many of these companies purchase
their materials from Asia and thus benefit from lower costs.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 7
<PAGE> 10
THE ONE GROUP(R) INVESTMENT TRUST
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
LARGE COMPANY GROWTH FUND (CONTINUED)
DECEMBER 31, 1998
DID THE PORTFOLIO BENEFIT FROM ANY PARTICULARLY STRONG HOLDINGS?*
The Fund enjoyed outstanding performance from computer manufacturer Dell
Computer, up 248% for the year; software giant Microsoft, up 115% and online
service provider America Online, up 164%.
WHAT WERE THE FUND'S TOP TEN HOLDINGS?*
At year-end, the Fund's top 10 holdings included Dell Computer, Lucent
Technologies (technology), General Electric (capital goods), Microsoft,
Coca-Cola (consumer non-durable), Wal-Mart (retail), Merck (health care),
Bristol-Myers Squibb (health care), Pfizer (health care) and Proctor & Gamble
(consumer non-durable).
WHAT IS YOUR OUTLOOK FOR THE FUND?
Looking ahead, we remain optimistic about continued U.S. economic growth and low
inflation. However, we think that economic growth will slow down somewhat. We
believe that interest rates may continue to decline, which would support ongoing
stock market growth, but perhaps not at the unusually strong pace we've seen
over the last several years. As such, it seems prudent to lower our expectations
somewhat for the next year.
Our overall strategy remains intact--to search for companies with strong
fundamentals, effective management teams and favorable long-term outlooks.
Because the Asian situation remains unresolved, we will continue to monitor its
effects on the Fund's holdings.
/s/ Ashi Parikh
Ashi Parikh
Managing Director, Growth Equity Team
/s/ Richard R. Jandrain III
Richard R. Jandrain III
Senior Managing Director of Equity Securities
* The Fund's composition is subject to change.
Please refer to the prospectus and the accompanying financial statements for
more information about your fund.
8 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 11
THE ONE GROUP(R) INVESTMENT TRUST
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
EQUITY INDEX FUND
DECEMBER 31, 1998
HOW DID THE FUND PERFORM?
For the period May 1, 1998 to December 31, 1998, the Equity Index Fund posted a
total return of 10.52%.
HYPOTHETICAL $10,000 INVESTMENT
<TABLE>
<CAPTION>
<S> <C>
$12,000 $11,172
11,500 $11,052
11,000
10,500
10,000
5/1/98 12/31/98
- -.- S&P 500 -..- EQUITY INDEX
</TABLE>
- --------------------------------------------------------------
*Initial public offering commenced May 1, 1998.
<TABLE>
<CAPTION>
Equity Index Fund
Total Return
---------------------------------
<S> <C>
One Year Since Inception
---------------------------------
NA 10.52%
---------------------------------
</TABLE>
Past performance is not predictive of future performance.
As it is designed to do, the Fund offered a return that nearly matched that of
the S&P 500 Index, the unmanaged group of stocks the Fund seeks to track. The
S&P 500 Index returned 11.72% for the period May 1, 1998 to December 31, 1998.
The slight difference in returns between the Fund and the Index is due to fees
and transaction costs charged to the Fund but not to the Index.
WHAT CONTRIBUTED TO SUCH A STRONG RETURN?
The market suffered a severe setback in late summer and early fall, but a series
of Federal Reserve interest rate cuts helped renew investor confidence in the
U.S. stock market. In addition, a strong economy, low inflation and favorable
corporate earnings growth helped generate attractive stock market returns for
yet another year. Once again, large-capitalization growth companies, the type
represented in the S&P 500 Index, outperformed other types of U.S. stocks.
WHICH MARKET SECTORS OFFERED NOTABLE PERFORMANCE?
The Fund offered exposure to 15 market sectors. Among those sectors, retail,
telephone utilities and technology offered the strongest performance. The retail
sector benefited from lower costs on Asian imports, while telephone utilities
advanced due to acquisition activity. Strong returns late in the year from the
largest technology companies helped boost the technology sector's overall
performance.
The weakest-performing sectors included energy and industrial commodities.
Energy stocks declined due to lower oil prices, and in the industrial
commodities sector (chemical, paper and metal companies), stocks suffered from a
lack of pricing power.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 9
<PAGE> 12
THE ONE GROUP(R) INVESTMENT TRUST
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
EQUITY INDEX FUND (CONTINUED)
DECEMBER 31, 1998
WHAT WERE SOME OF THE STRONGEST AND WEAKEST STOCKS?*
The Fund enjoyed outstanding performance from a handful of stocks, including
technology provider Unisys, computer manufacturer Dell Computer, cable
television company Tele-Communications, financial service provider Providian
Financial, and auto manufacturer Ford Motor.
Weak earnings contributed to poor performance from certain holdings, including
diversified mining company Freeport-McMoran Copper and Gold, technology company
Advanced Micro Devices, and technology provider Cabletron Systems.
WHAT IS YOUR OUTLOOK FOR THE STOCK MARKET?
The environment for stocks should remain favorable during the coming year. We
expect economic growth to continue, but at a slower pace. We also expect
interest rates and inflation to remain low. Corporate earnings and stock prices
should continue to grow, but earnings are likely to come under increasing
pressure. Nevertheless, it's important to remember that returns of the last few
years have been unusually strong, and they probably are not sustainable. We
expect to see stock returns revert to more "normal" levels.
/s/ Richard R. Jandrain III
Richard R. Jandrain III
Senior Managing Director of Equity Securities
* The Fund's composition is subject to change.
Please refer to the prospectus and the accompanying financial statements for
more information about your Fund.
The S&P 500 Index is an unmanaged group of stocks generally representative of
the performance of large U.S.-based companies. Investors cannot purchase the
index directly, but they can invest in the underlying securities.
10 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 13
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
The One Group(R) Investment Trust
In our opinion, the accompanying statements of assets and liabilities, including
the statements of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Government Bond Fund, the Asset
Allocation Fund, the Growth Opportunities Fund, the Large Company Growth Fund,
and the Equity Index Fund (five of the portfolios constituting The One Group
Investment Trust, hereafter referred to as the "Trust"), at December 31, 1998,
and the results of each of their operations, the changes in each of their net
assets and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Columbus, Ohio
February 17, 1999
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 11
<PAGE> 14
THE ONE GROUP(R) INVESTMENT TRUST
GOVERNMENT BOND FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------
PRINCIPAL SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(27.7%)
$1,500,000 FHLB, 6.145%, 09/30/02 $ 1,548,166
1,000,000 FNMA Disc. Note, 5.25%, 01/15/03 1,007,977
600,000 FNMA Disc. Note, 5.75%, 04/15/03 616,292
975,000 Resolution Funding Corp.,
Principal STRIP, 10/15/08 593,549
3,500,000 Resolution Funding Corp.,
Principal STRIP, 10/15/16 1,271,718
1,000,000 Resolution Funding Corp.,
Principal STRIP, 10/15/17 342,398
2,000,000 Resolution Funding Corp.,
Principal STRIP, 01/15/20 600,956
4,000,000 Resolution Funding Corp.,
Principal STRIP, 07/15/20 1,172,932
1,000,000 U.S. Treasury Bond, 6.25%,
08/15/23 (a) 1,118,750
1,000,000 U.S. Treasury Inflation
Protection Security, 3.625%,
01/15/08 (a) 995,154
900,000 U.S. Treasury Notes, 7.50%,
11/15/01 (a) 967,218
750,000 U.S. Treasury Notes, 6.50%,
08/15/05 (a) 824,062
550,000 U.S. Treasury Notes, 6.875%,
05/15/06 (a) 621,672
-----------
TOTAL U.S. GOVERNMENT AND AGENCY
OBLIGATIONS 11,680,844
-----------
(cost $11,034,677)
MORTGAGE-BACKED SECURITIES (68.6%)
64,904 FGLMC 5Y, 6.50%, Pool #G50324,
01/01/01 64,886
169,815 FGLMC 15Y, 8.50%, Pool #E20150,
12/01/09 176,509
727,897 FGLMC 15Y, 7.00%, Pool #E63959,
02/01/11 744,420
387,643 FGLMC 15Y, 6.00%, Pool #E00560,
07/01/13 389,221
1,000,000 FGLMC 15Y, 6.50%, 01/01/14 1,015,320
500,457 FGLMC 30Y, 8.00%, Pool #D55955,
09/01/24 518,623
773,120 FGLMC 30Y, 6.50%, Pool #D65545,
11/01/25 778,755
977,289 FGLMC 30Y, 6.00%, Pool #D70244,
04/01/26 966,567
476,592 FGLMC 30Y, 8.50%, Pool #G00981,
07/01/28 499,168
2,285,000 FHR, 2018 PE, 6.25%, 04/15/27 2,242,878
1,400,000 FHR, 2075 PM, 6.25%, 08/15/28 1,336,056
2,000,000 FHR, 2080 PJ, 6.50%, 08/15/28 2,027,048
1,118,000 FHR, 2091 PG, 6.00%, 11/15/28 1,055,569
363,330 FNMA 7Y, 7.00%, Pool #359952,
09/01/03 371,490
249,440 FNMA 15Y, 7.50%, Pool #279759,
08/01/09 256,706
225,793 FNMA 15Y, 6.50%, Pool #356206,
11/01/11 229,037
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
PRINCIPAL SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
MORTGAGE-BACKED SECURITIES
(CONTINUED)
$ 385,645 FNMA 30Y, 6.50%, Pool #250375,
09/01/25 $ 388,352
758,485 FNMA 30Y, 6.50%, Pool #341811,
03/01/26 763,513
799,532 FNMA 30Y, 6.50%, Pool #338417,
05/01/26 804,832
840,514 FNR, 97-26 GD, 7.00%, 07/17/05 858,498
500,000 FNR, 98-37 VB, 6.00%, 01/17/13 483,330
245,000 FNR, 93-155 PJ, 7.00%, 09/25/23 252,221
1,000,000 FNR, 98-58 PC, 6.50%, 10/25/28 998,111
1,500,000 GNR, 98-14 PG, 6.375%, 11/20/26 1,519,556
500,000 GNR, 97-19 PJ, 6.50%, 06/20/27 492,831
1,000,000 GNR, 98-22 PD, 6.50%, 09/20/28 1,001,086
395,749 GNMA 30Y, 7.50%, Pool #326977,
05/15/23 408,009
239,209 GNMA 30Y, 7.50%, Pool #359588,
06/15/23 246,619
295,454 GNMA 30Y, 9.00%, Pool #780029,
11/15/24 316,153
104,206 GNMA 30Y, 7.00%, Pool #405535,
12/15/25 106,653
319,039 GNMA 30Y, 7.50%, Pool #2341,
12/20/26 326,970
709,859 GNMA 30Y, 6.00%, Pool #80094,
07/20/27 718,178
381,462 GNMA 30Y, 8.00%, Pool #412336,
10/15/27 396,301
458,471 GNMA 30Y, 7.00%, Pool #412369,
11/15/27 469,039
851,304 GNMA 30Y, 7.50%, Pool #427208,
01/15/28 877,728
488,815 GNMA 30Y, 6.50%, Pool #467705,
03/15/28 493,707
495,787 GNMA 30Y, 7.00%, Pool #472543,
04/15/28 507,254
483,708 GNMA 30Y, 7.00%, Pool #472679,
06/15/28 494,896
458,421 GNMA 30Y, 7.50%, Pool #780828,
07/15/28 472,650
249,347 GNMA 30Y, 6.50%, Pool #467225,
09/15/28 251,843
996,681 GNMA 30Y, 6.00%, Pool#2657,
10/20/28 982,986
999,127 GNMA 30Y, 7.00%, Pool #469699,
11/15/28 1,022,236
600,000 GNMA 30Y, 6.50%, Pool #2689,
12/20/28 602,825
-----------
TOTAL MORTGAGE-BACKED SECURITIES 28,928,630
-----------
(cost $28,751,462)
</TABLE>
12 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 15
THE ONE GROUP(R) INVESTMENT TRUST
GOVERNMENT BOND FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------
PRINCIPAL SECURITY VALUE
- ----------------------------------------------------------
<C> <S> <C>
SHORT TERM DEBT (1.7%)
$ 703,000 FMC Discount Note 0.00%,
01/20/99 (cost $701,358) $ 701,399
-----------
- ----------
SHARES
- ----------
MUTUAL FUNDS (3.8%)
1,623,986 The One Group Government Money
Market Fund 1,623,986
-----------
(cost $1,623,986)
TOTAL INVESTMENTS $42,934,859
===========
(cost $42,111,483)
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $42,111,483
The abbreviations in the above statement stand for the following:
FGLMC Federal Home Loan Mortgage Corporation Gold
FHLB Federal Home Loan Bank
FNR Fannie Mae REMIC
FNMA Federal National Mortgage Association
FHR Federal Home Loan Mortgage Corporation REMIC
GNMA Government National Mortgage Association
GNR Ginnie Mae REMIC
REMIC Real Estate Mortgage Investment Conduit
STRIP Separate Trading of Registered Interest and Principal Securities
Portfolio holding percentages represent market value as a percentage of net
assets.
(a) A portion of this security was loaned as of December 31, 1998.
See accompanying notes to financial statements.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 13
<PAGE> 16
THE ONE GROUP(R) INVESTMENT TRUST
ASSET ALLOCATION FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
COMMON STOCK (59.6%)
AIRCRAFT (0.3%)
3,100 Lockheed Martin Corp. $ 262,725
------------
APPAREL (0.2%)
8,810 Jones Apparel Group, Inc.* 194,371
300 Warnaco Group, Inc. Class A 7,575
------------
201,946
------------
BANKS (5.3%)
14,540 BankAmerica Corp. 874,217
10,080 Charter One Financial, Inc. 279,720
9,590 Chase Manhattan Corp. 652,719
15,520 Citigroup, Inc. 768,240
7,080 First Union Corp. 430,552
12,590 MBNA Corp. 313,963
6,520 National City Corp. 472,700
7,230 PNC Bank Corp. 391,324
10,770 SouthTrust Corp. 397,817
4,800 State Street Corp. 333,900
14,250 Wells Fargo Co. 569,109
------------
5,484,261
------------
BEVERAGES (0.8%)
9,470 Coca Cola Co. 633,306
4,820 Coca-Cola Enterprises, Inc. 172,315
------------
805,621
------------
BROADCASTING (1.9%)
10,150 Belo, (AH) Corp. Series A 202,366
8,740 Tele-Communications, Inc.
Class A* 483,431
12,200 Time Warner, Inc. 757,163
6,860 Viacom, Inc. Class B* 507,640
------------
1,950,600
------------
BUSINESS EQUIPMENT & SERVICES (1.0%)
5,510 Herman Miller, Inc. 148,081
7,230 Office Depot, Inc.* 267,058
10,100 Service Corp. International 384,431
4,230 Waste Management, Inc. 197,224
------------
996,794
------------
CAPITAL EQUIPMENT (0.4%)
9,900 Teleflex, Inc. 451,688
------------
CHEMICALS-PETROLEUM & INORGANIC (0.6%)
7,290 Du Pont (E.I.) De Nemours &
Co. 386,826
3,700 Monsanto Co. 175,750
------------
562,576
------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
CHEMICALS-SPECIALTY (1.6%)
7,350 Crompton & Knowles Corp. $ 152,053
5,620 Cytec Industries, Inc.* 119,425
2,320 Eastman Chemical Co. 103,820
8,820 Ferro Corp. 229,320
9,710 Morton International, Inc. 237,895
6,630 Nalco Chemical Co. 205,530
6,330 Olin Corp. 179,218
11,910 RPM, Inc., Ohio 190,560
3,130 Sigma-Aldrich Corp. 91,944
9,050 Wellman, Inc. 92,197
------------
1,601,962
------------
COMMUNICATION EQUIPMENT (2.6%)
7,140 BMC Software, Inc.* 318,176
15,600 Cisco Systems, Inc.* 1,447,875
8,250 Lucent Technologies, Inc. 907,500
------------
2,673,551
------------
COMPUTERS-MAIN/MINI (1.4%)
7,600 International Business
Machines Corp. 1,404,100
------------
COMPUTERS-MICRO (1.0%)
14,330 Dell Computer Corp.* 1,048,777
------------
COMPUTERS-PERIPHERAL (3.4%)
7,240 American Power Conversion
Corp.* 350,687
8,770 Cadence Design Systems, Inc.* 260,907
6,460 EMC Corp.* 549,100
16,820 Microsoft Corp.* 2,332,724
------------
3,493,418
------------
CONSTRUCTION MATERIALS (0.2%)
1,130 Martin Marietta Materials,
Inc. 70,272
2,100 Southdown, Inc. 124,294
------------
194,566
------------
COSMETIC/TOILETRY (0.1%)
5,910 Revlon, Inc. Class A* 97,146
------------
ELECTRICAL EQUIPMENT (3.5%)
7,290 Emerson Electric Co. (a) 441,045
20,180 General Electric Co. 2,059,621
3,240 Hubbell, Inc. Class B 123,120
5,020 Johnson Controls, Inc. 296,180
8,860 Tyco International Ltd. 668,376
------------
3,588,342
------------
</TABLE>
14 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 17
THE ONE GROUP(R) INVESTMENT TRUST
ASSET ALLOCATION FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
ELECTRONIC COMPONENTS (2.0%)
12,300 Intel Corp. $ 1,458,319
6,470 Maxim Integrated Products,
Inc.* 282,658
4,880 SCI Systems, Inc.* (a) 281,820
------------
2,022,797
------------
ELECTRONIC INSTRUMENTS (0.2%)
5,210 Applied Materials, Inc.* 222,402
------------
FINANCE COMPANIES (0.2%)
4,680 Associates First Capital Corp. 198,315
------------
FOOD & RELATED (1.6%)
17,030 Archer-Daniels-Midland Co. 292,703
6,160 General Mills, Inc. 478,940
5,680 Interstate Bakeries Corp. (a) 150,165
14,760 Sara Lee Corp. 416,048
7,310 Smithfield Foods, Inc.* 247,626
------------
1,585,482
------------
FOREST/PAPER PRODUCT (0.9%)
12,110 Kimberly Clark Corp. 659,995
7,230 Pentair, Inc. 287,844
------------
947,839
------------
FURNITURE (0.6%)
11,410 Leggett & Platt, Inc. 251,020
13,230 Masco Corp. 380,363
------------
631,383
------------
HEALTH CARE-DRUGS (2.3%)
4,420 Cardinal Health, Inc. (a) 335,367
100 Elan Corp. PLC ADR* (a) 6,956
4,650 Merck & Co., Inc.* 686,747
3,150 Pfizer, Inc. 395,128
15,190 Schering-Plough Corp. 839,248
1,950 Watson Pharmaceuticals, Inc.* 122,606
------------
2,386,052
------------
HEALTH CARE-GENERAL (4.2%)
13,470 American Home Products Corp. 758,529
7,230 Bausch & Lomb, Inc. 433,800
4,910 Boston Scientific, Inc.* (a) 131,649
9,460 Bristol-Meyers Squibb Co. 1,265,866
7,360 IDEXX Laboratories, Inc.* 198,030
3,470 Johnson & Johnson 291,046
2,440 Sofamor Danek Group, Inc.* 297,070
5,190 Sybron International Corp.* 141,103
10,660 Warner-Lambert Co. 801,499
------------
4,318,592
------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
HOSPITAL SUPPLY & MANAGEMENT (0.6%)
8,150 Medtronic, Inc. $ 605,138
------------
HOTELS & GAMING (0.4%)
11,860 Hilton Hotels Corp. 226,823
5,290 MGM Grand, Inc.* (a) 143,491
------------
370,314
------------
HOUSEHOLD-GENERAL PRODUCT (1.1%)
3,850 Lancaster Colony Corp. 123,681
9,100 Newell Co. 375,375
3,960 Procter & Gamble Co. 361,598
8,370 Rubbermaid, Inc. 263,132
------------
1,123,786
------------
INSURANCE-LIFE (0.2%)
4,210 Equitable Cos., Inc. 243,654
------------
INSURANCE-PROPERTY/CASUALTY (1.8%)
9,040 Allstate Corp. 349,170
5,550 American International Group,
Inc. 536,269
5,210 CIGNA Corp. 402,798
8,450 Hartford Financial Services
Group, Inc. 463,694
2,320 PMI Group, Inc. 114,550
------------
1,866,481
------------
LEISURE TIME PRODUCTS (0.6%)
9,460 Hasbro, Inc. 341,742
10,120 Walt Disney Co. 303,600
------------
645,342
------------
MOTOR VEHICLE PARTS (0.5%)
6,080 Danaher Corp. 330,220
4,980 Lear Corp.* 191,730
------------
521,950
------------
PETROLEUM-DOMESTIC (1.0%)
4,710 Ashland, Inc. 227,846
4,150 Devon Energy Corp. (a) 127,353
6,510 Tosco Corp. 168,446
6,630 Ultramar Diamond Shamrock
Corp. 160,778
13,100 USX-Marathon Group 394,638
------------
1,079,061
------------
PETROLEUM-INTERNATIONAL (2.5%)
18,520 Exxon Corp. 1,354,275
12,450 Royal Dutch Petroleum Co. 596,044
10,870 Texaco, Inc. 574,751
------------
2,525,070
------------
</TABLE>
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 15
<PAGE> 18
THE ONE GROUP(R) INVESTMENT TRUST
ASSET ALLOCATION FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
PETROLEUM-SERVICES (0.2%)
3,850 Halliburton Co. $ 114,056
3,880 Transocean Offshore, Inc. 104,033
------------
218,089
------------
RESTAURANTS (0.2%)
4,890 Outback Steakhouse, Inc.* 194,989
------------
RETAIL-FOOD STORES (0.8%)
7,900 Kroger Co.* 477,950
6,370 Safeway, Inc.* 388,172
------------
866,122
------------
RETAIL-GENERAL MERCHANT (2.4%)
8,680 Dayton Hudson Corp. 470,890
11,900 Family Dollar Stores, Inc. 261,800
6,260 Kohls Corp.* 384,599
16,540 Wal-Mart Stores, Inc. 1,346,976
------------
2,464,265
------------
RETAIL-SPECIALTY (0.6%)
100 Abercrombie & Fitch* 7,075
14,500 Just For Feet, Inc.* 251,938
200 Saks, Inc.* 6,313
9,720 Williams Sonoma, Inc.* 391,838
------------
657,164
------------
SECURITY & COMMERCIAL BROKER (1.5%)
4,220 Bear Stearns Cos., Inc. (a) 157,722
10,820 Fannie Mae 800,680
8,120 Morgan Stanley Dean Witter &
Co. 576,520
------------
1,534,922
------------
TIMESHARE & SOFTWARE (0.5%)
3,410 America Online, Inc.* 545,600
------------
TOBACCO (1.4%)
22,040 Philip Morris Cos., Inc. 1,179,140
8,120 UST, Inc. 283,185
------------
1,462,325
------------
UTILITIES-ELECTRIC (1.7%)
8,790 Baltimore Gas and Electric Co. 271,391
8,150 Cinergy Corp. 280,156
11,160 Energy East Corp. 630,540
9,740 GPU, Inc. 430,386
5,050 LG & E Energy Corp. 142,978
------------
1,755,451
------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
UTILITIES-GAS/PIPELINE (0.6%)
6,760 El Paso Energy Corp. $ 235,332
12,980 Williams Cos., (The) 404,814
------------
640,146
------------
UTILITIES-TELEPHONE (4.7%)
7,630 Century Telephone Enterprises,
Inc. 515,025
11,570 GTE Corp. 752,050
16,260 MCI WorldCom, Inc.* 1,166,655
8,200 Qwest Communications
International, Inc.* 410,000
20,570 SBC Communications, Inc. 1,103,066
9,860 Sprint Corp. 829,473
4,200 Sprint PCS Group, Inc.* 97,125
------------
4,873,394
------------
TOTAL COMMON STOCK 61,324,198
------------
(cost $50,917,898)
- ----------
PRINCIPAL
- ----------
CORPORATE BONDS (7.0%)
BANKS (1.4%)
$ 250,000 Banco Central Hispano, 7.50%,
06/15/05 266,350
250,000 BankAmerica Corp., 8.125%,
02/01/02 268,525
376,000 First Hawaiian, Inc., 6.25%,
08/15/00 379,883
250,000 Huntington National Bank,
6.75%, 06/15/03 261,488
230,000 Society National Bank, 6.75%,
06/15/03 239,287
------------
1,415,533
------------
BROKER DEALERS (0.5%)
300,000 Goldman Sachs Group, 7.20%,
03/01/07 317,563
200,000 Morgan Stanley Group, 6.50%,
03/30/01 203,778
------------
521,341
------------
DIVERSIFIED FINANCE (2.3%)
200,000 Associates Corp. of North
America, 6.375%, 07/15/02 205,107
300,000 Boatmens Bancshares, 6.75%,
03/15/03 312,425
250,000 Chrysler Financial Corp.,
5.875%, 02/07/01 252,675
200,000 Ford Capital, 9.375%, 05/15/01 216,606
250,000 GMAC Medium Term Note, 8.25%,
02/24/04 279,110
465,000 Lockheed Corp., 6.75%,
03/15/03 483,136
333,000 McDonnel Douglas Finance,
6.45%, 12/05/02 343,242
300,000 Tyco International, 6.25%,
06/15/13 303,105
------------
2,395,406
------------
</TABLE>
16 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 19
THE ONE GROUP(R) INVESTMENT TRUST
ASSET ALLOCATION FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
PRINCIPAL SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
OIL & GAS (0.5%)
$ 248,000 Columbia Gas Systems, 6.80%,
11/28/05 $ 261,841
250,000 Occidental Petroleum, 9.25%,
08/01/19 283,672
------------
545,513
------------
RENTAL SERVICES (0.2%)
250,000 Hertz Corp., 6.00%, 01/15/03 251,537
------------
RETAIL (0.8%)
250,000 Dayton Hudson Co., 7.25%,
09/01/04 270,244
250,000 J.C. Penny & Co., 7.25%,
04/01/02 260,196
250,000 Sears Roebuck Acceptance
Corp., 7.13%, 05/02/03 262,572
------------
793,012
------------
TELECOMMUNICATIONS (0.5%)
250,000 AT&T Corp., 7.50%, 06/01/06 281,625
200,000 Ohio Bell Telephone Co.,
5.75%, 05/01/00 201,711
------------
483,336
------------
TRANSPORTATION (0.5%)
250,000 Hunt, J.B., Transport, 6.25%,
09/01/03 248,379
250,000 International Lease, 5.875%,
01/15/01 251,681
------------
500,060
------------
UTILITIES (0.3%)
250,000 Virginia Electric & Power Co.,
6.625%, 04/01/03 261,851
------------
TOTAL CORPORATE BONDS 7,167,589
------------
(cost $7,001,847)
ASSET-BACKED SECURITIES (0.5%)
250,000 Chemical Master 95-2, 6.23%,
06/15/03 254,205
250,000 Circuit City 1995 1-A, 6.375%,
08/15/05 254,622
------------
TOTAL ASSET-BACKED SECURITIES 508,827
------------
(cost $504,591)
MORTGAGE-BACKED SECURITIES (15.7%)
303,905 FNMA 7Y, 6.50%, Pool #250357,
09/01/02 308,272
486,528 FNMA 15Y, 6.00%, Pool #251900,
08/01/13 487,900
105,248 FNMA 30Y, 7.00%, Pool #270725,
08/01/25 107,435
1,000,000 FNMA 15Y, 7.50%, Pool #292020,
08/01/09 1,029,130
901,336 FNMA 30Y, 8.50%, Pool #313280,
12/15/28 955,741
497,348 FNMA 15Y, 6.00%, Pool #323458,
11/01/13 498,751
191,122 FNMA 30Y, 7.50%, Pool #402032,
10/01/27 196,282
461,756 FNMA 15Y, 6.50%, Pool #414513,
04/01/13 468,396
398,311 FNMA 15Y, 7.00%, Pool #427488,
06/01/13 406,986
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
PRINCIPAL SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
MORTGAGE-BACKED SECURITIES (CONTINUED)
$ 992,866 FNMA 30Y, 6.00%, Pool #428970,
06/01/28 $ 980,048
996,437 FNMA 30Y, 6.50%, Pool #433526,
08/01/28 1,003,362
552,203 FGLMC 30Y, 8.00%, Pool
#C00476, 09/01/26 571,745
996,384 FGLMC 30Y, 6.00%, Pool
#C13638, 08/01/28 984,138
325,144 FGLMC 30Y, 7.50%, Pool
#D81027, 07/01/27 333,946
418,560 FGLMC 30Y, 7.00%, Pool
#D83256, 10/01/27 426,797
473,877 FGLMC 15Y, 6.50%, Pool
#E00552, 06/01/13 481,137
445,110 FGLMC 15Y, 7.00%, Pool
#E00554, 06/01/13 455,080
458,354 FGLMC 15Y, 6.00%, Pool
#E69409, 03/01/13 460,220
468,647 FGLMC 15Y, 6.50%, Pool
#E69466, 03/01/13 476,291
455,167 FGLMC 30Y, 8.50%, Pool
#G00981, 07/01/28 476,728
498,341 GNMA 30Y, 6.00%, Pool #2657,
11/01/28 491,494
489,769 GNMA 30Y, 6.50%, Pool #430634,
03/15/28 494,672
496,359 GNMA 15Y, 6.50%, Pool #468228,
09/15/13 505,462
1,000,000 GNMA 15Y, 7.00%, Pool #348872,
07/15/08 1,029,410
166,194 GNMA 15Y, 7.00%, Pool #412559,
02/15/11 170,937
177,130 GNMA 30Y, 7.50%, Pool #398663,
05/15/26 182,525
331,409 GNMA 30Y, 7.50%, Pool #2360,
01/20/27 339,827
420,183 GNMA 30Y, 8.00%, Pool #451932,
09/15/27 436,528
405,966 GNMA 30Y, 7.00%, Pool #473915,
04/15/28 415,356
438,534 GNMA 30Y, 7.50%, Pool #465069,
05/15/28 452,146
497,296 GNMA 30Y, 7.00%, Pool #477123,
06/15/28 508,797
------------
TOTAL MORTGAGE-BACKED
SECURITIES 16,135,539
------------
(cost $15,975,589)
U.S. GOVERNMENT OBLIGATIONS (13.8%)
5,700,000 U.S. Treasury Note, 6.50%,
08/31/01 5,958,284
2,275,000 U.S.Treasury Note, 7.25%,
05/15/04 (a) 2,549,422
2,500,000 U.S.Treasury Note, 7.00%,
07/15/06 (a) 2,846,875
2,175,000 U.S. Treasury Bond, 7.875%,
02/15/21 (a) 2,866,243
------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS 14,220,824
------------
(cost $13,635,973)
FOREIGN GOVERNMENT OBLIGATIONS (0.5%)
500,000 Province of Quebec, 6.50%,
01/17/06 522,420
------------
(cost $504,525)
</TABLE>
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 17
<PAGE> 20
THE ONE GROUP(R) INVESTMENT TRUST
ASSET ALLOCATION FUND
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<S> <C> <C>
MUTUAL FUNDS (2.4%)
2,459,200 The One Group Prime Money
Market Fund $ 2,459,200
------------
(cost $2,459,200)
- ----------
PRINCIPAL
- ----------
SHORT-TERM SECURITIES HELD AS COLLATERAL
(1.3%)
$1,353,206 Lehman Brothers A2/P2
Tri-Party Repurchase Agreement
5.50%, dated 12/31/98, due
01/04/99, collateralized by
RACERS 1998-MM-12-2, 06/07/99,
market value $1,420,940 1,353,206
------------
(cost $1,353,206)
TOTAL INVESTMENTS $103,691,803
============
(cost $92,352,829)
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $92,379,235
* Denotes a non-income producing security.
The abbreviations in the above statement stand for the following:
<TABLE>
<CAPTION>
<S> <C>
ADR American Depository Receipt
FGLMC Federal Home Loan Mortgage Corporation Gold
FNMA Federal National Mortgage Association
GNMA Government National Mortgage Association
PLC Public Limited Company
</TABLE>
Portfolio holding percentages represent market value as percentage of net
assets.
(a) A portion of this security was loaned as of December 31, 1998.
See accompanying notes to financial statements.
18 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 21
THE ONE GROUP(R) INVESTMENT TRUST
GROWTH OPPORTUNITIES FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCK (97.5%)
AIR TRANSPORTATION (0.3%)
8,600 Airborne Freight Corp. $ 310,137
------------
AIRCRAFT (0.1%)
200 United Technologies Corp. 21,750
------------
APPAREL (0.4%)
18,200 Jones Apparel Group, Inc.* 401,538
------------
BANKS (3.1%)
325 Associated Banc-Corp. 11,111
9,700 City National Corp. 403,762
100 Fifth Third Bancorp. 7,131
400 First Security Corp. 9,350
18,900 First Tennessee National
Corp. 719,381
1,300 Marshall & Ilsley Corp. 75,969
18,900 North Fork Bancorp., Inc. 452,419
100 Northern Trust Corp. 8,731
20,600 Sovereign Bancorp., Inc. 293,550
100 State Street Corp. 6,956
1,100 Union Planters Corp. 49,844
3,600 Wilmington Trust Corp. 221,850
10,400 Zions Bancorp 648,700
------------
2,908,754
------------
BEVERAGES (0.1%)
600 Coca-Cola Enterprises, Inc. 21,450
------------
BROADCASTING (0.2%)
6,600 TCA Cable TV, Inc. 235,537
------------
BUSINESS EQUIP. & SERVICE (7.0%)
23,000 Allied Waste Industries,
Inc.* 543,375
7,200 Cambridge Tech Partners,
Inc.* 159,300
16,300 Cintas Corp. 1,148,131
20,800 Comdisco, Inc. 351,000
3,400 Convergys Corp.* (a) 76,075
10,200 Corrections Corp. of America* 179,775
3,100 GTech Holdings Corp.* 79,437
14,600 Herman Miller, Inc. 392,375
100 Interpublic Group of Cos.,
Inc. 7,975
12,900 Manpower, Inc. 324,919
13,100 Modis Professional Services,
Inc.* 189,950
8,900 NOVA Corp.* 308,719
500 Omnicom Group, Inc. 29,000
1,900 Pittston Brink's Group 60,562
15,700 Reynolds & Reynolds Co. Class
A 360,119
7,850 Staples, Inc.* 342,947
14,366 Sterling Commerce, Inc.* 646,470
20,300 Sungard Data Systems, Inc.*
(a) 805,656
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
BUSINESS EQUIP. & SERVICE (CONTINUED)
8,000 Viad Corp. $ 243,000
7,000 Wallace Computer Services,
Inc. 184,625
300 Waste Management, Inc. 13,987
------------
6,447,397
------------
CAPITAL EQUIPMENT (1.0%)
9,075 Diebold, Inc. 323,864
2,100 Donaldson Co., Inc. 43,575
500 Flowserve Corp. 8,281
9,200 Sundstrand Corp. 477,250
4,800 UCAR International, Inc.* 85,500
------------
938,470
------------
CHEMICALS--PETROLEUM & INORGANIC (0.6%)
11,200 Lyondell Petrochemical Co. 201,600
17,000 Solutia, Inc. 380,375
------------
581,975
------------
CHEMICALS--SPECIALTY (1.3%)
12,200 Crompton & Knowles Corp. 252,387
6,000 Cytec Industries, Inc.* 127,500
5,900 Ferro Corp. 153,400
5,100 Vulcan Materials Co. (a) 670,969
------------
1,204,256
------------
COMMUNICATION EQUIPMENT (2.7%)
24,100 ADC Telecommunications, Inc.* 837,475
100 Cisco Systems, Inc.* 9,281
9,600 Comverse Technology, Inc.* 681,600
20,600 Fore Systems, Inc.* 377,237
300 Northern Telecom Ltd. (a) 15,037
9,200 Symbol Technology, Inc. 588,225
500 Telefonaktiebolaget LM
Ericsson ADR 11,969
300 Tellabs, Inc.* 20,569
------------
2,541,393
------------
COMPUTERS--MAIN/MINI (0.1%)
100 Xerox Corp. 11,800
------------
COMPUTERS--MICRO (0.3%)
3,700 Dell Computer Corp.* 270,794
------------
COMPUTERS--PERIPHERAL (12.1%)
13,300 American Power Conversion
Corp.* 644,219
2,100 Beyond.com Corp.* (a) 43,575
32,000 Cadence Design Systems, Inc.* 952,000
6,100 Citrix Systems, Inc.* 592,081
32,700 Compuware Corp.* 2,554,687
300 Creative Technology Ltd.* 4,500
8,800 Electronic Arts, Inc.* 493,900
8,600 Intuit, Inc.* 623,500
</TABLE>
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 19
<PAGE> 22
THE ONE GROUP(R) INVESTMENT TRUST
GROWTH OPPORTUNITIES FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
COMPUTERS--PERIPHERAL (CONTINUED)
12,300 Keane, Inc.* $ 491,231
11,700 Lexmark International Group,
Inc.* 1,175,850
3,400 Maxtor Corp.* 47,600
400 Microsoft Corp.* 55,475
22,850 Networks Associates, Inc.* 1,513,812
700 Peoplesoft, Inc.* 13,256
13,400 Platinum Technology, Inc.*
(a) 256,275
12,700 Siebel Systems, Inc.* 431,006
17,700 Storage Technology Corp.* 629,456
2,700 Structural Dynamics Research
Corp.* 53,662
5,600 Symantec Corp.* 121,800
9,900 Synopsys, Inc.* 537,075
------------
11,234,960
------------
CONSTRUCTION MATERIALS (0.8%)
12,300 American Standard Cos.* 442,800
5,200 Martin Marietta Materials,
Inc. 323,375
------------
766,175
------------
ELECTRICAL EQUIPMENT (0.2%)
5,300 Federal Signal Corp. 145,087
300 Hubbell, Inc. Class B 11,400
200 Tyco International Ltd. 15,087
------------
171,574
------------
ELECTRONIC COMPONENTS (8.3%)
13,200 Altera Corp.* 803,550
44,433 Analog Devices, Inc.* 1,394,085
11,700 Linear Technology Corp. 1,047,881
26,500 Maxim Integrated Products,
Inc.* 1,157,719
11,700 Microchip Technology, Inc.*
(a) 432,900
10,500 SCI Systems, Inc.* (a) 606,375
17,400 Solectron Corp.* 1,617,112
10,100 Xilinx, Inc.* (a) 657,762
------------
7,717,384
------------
ELECTRONIC INSTRUMENTS (0.1%)
300 Applied Materials, Inc.* 12,806
------------
FINANCE COMPANIES (1.4%)
4,800 Capital One Financial Corp. 552,000
16,350 Robert Half International,
Inc.* 730,641
1,700 UniCapital Corp.* 12,537
------------
1,295,178
------------
FOOD & RELATED (2.3%)
9,200 Dean Foods Co. 375,475
12,400 Dole Food Co., Inc. (a) 372,000
14,600 Flowers Industries, Inc. 349,487
15,100 General Nutrition Cos., Inc.* 245,375
10,800 Interstate Bakeries Corp. (a) 285,525
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
FOOD & RELATED (CONTINUED)
14,100 McCormick & Co., Inc. $ 476,756
2,200 Vlasic Foods International,
Inc.* 52,387
200 Wrigley (Wm.) Jr. Co. 17,912
------------
2,174,917
------------
FOREST/PAPER PRODUCTS (0.6%)
200 Sealed Air Corp.* 10,212
14,650 Sonoco Products Co. 434,006
5,100 Wausau-Mosinee Paper Corp. 90,206
------------
534,424
------------
FURNITURE/FURNISHINGS (1.4%)
9,200 Hon Industries, Inc. 220,225
28,900 Leggett & Platt, Inc. 635,800
19,000 Shaw Industries, Inc. 460,750
------------
1,316,775
------------
HEALTH CARE--DRUGS (7.2%)
14,700 Biogen, Inc.* 1,220,100
2,647 Cardinal Health, Inc. (a) 200,841
10,500 Centocor, Inc.* 473,812
5,100 Covance, Inc.* 148,537
500 Eli Lilly & Co. 44,437
12,200 Forest Labs, Inc.* 648,887
10,000 ICN Pharmaceuticals, Inc. 226,250
16,100 McKesson Corp. (a) 1,272,906
17,600 Mylan Laboratories, Inc. (a) 554,400
13,400 Quintiles Transnational
Corp.* 715,225
1,000 Schering-Plough Corp. 55,250
17,600 Watson Pharmaceuticals, Inc.* 1,106,600
------------
6,667,245
------------
HEALTH CARE--GENERAL (3.3%)
1,700 Allegiance Corp. 79,263
2,500 Beckman Coulter, Inc. 135,625
300 Bristol-Meyers Squibb Co. 40,144
12,000 Dentsply International, Inc. 309,000
9,400 Hillenbrand Industries, Inc. 534,625
16,800 Omnicare, Inc. (a) 583,800
9,900 Steris Corp.* 281,531
26,300 Sybron International Corp.* 715,031
12,800 Total Renal Care Holdings,
Inc.* (a) 378,400
500 Warner-Lambert Co. 37,594
------------
3,095,013
------------
HOSPITAL SUPPLY & MANAGEMENT (3.0%)
2,100 Concentrated Managed Care,
Inc.* (a) 22,444
12,500 First Health Group Corp.* 207,031
20,000 Foundation Health Systems,
Inc* 238,750
200 Guidant Corp. 22,050
800 HBO & Co. 22,950
</TABLE>
20 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 23
THE ONE GROUP(R) INVESTMENT TRUST
GROWTH OPPORTUNITIES FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
HOSPITAL SUPPLY & MANAGEMENT (CONTINUED)
600 HCR Manor Care, Inc.* $ 17,625
35,550 Health Management Associates,
Inc. Class A* 768,769
200 HealthSouth Corp.* 3,088
6,800 Lincare Holdings, Inc.* (a) 275,825
14,200 Oxford Health Plans, Inc.* 211,225
4,800 PSS World Medical, Inc.* 110,400
13,700 Quorum Health Group, Inc.* 177,244
13,600 Stryker Corp. (a) 748,850
------------
2,826,251
------------
HOTELS & GAMING (0.5%)
17,200 International Game Technology 418,175
600 Marriott International, Inc.
Class A 17,400
475 Promus Hotel Corp.* 15,378
------------
450,953
------------
HOUSEHOLD--GENERAL PRODUCTS (0.8%)
300 Colgate-Palmolive Co. 27,863
15,300 Dial Corp. (The) (a) 441,788
8,450 Lancaster Colony Corp. 271,456
------------
741,107
------------
INSURANCE--LIFE (2.0%)
41,400 AFLAC, Inc. 1,821,600
200 SunAmerica, Inc. 16,225
------------
1,837,825
------------
INSURANCE--PROPERTY & CASUALTY (0.1%)
200 American International Group,
Inc. 19,325
300 MGIC Investment Corp. 11,944
------------
31,269
------------
LEISURE TIME INDUSTRIES (0.1%)
500 Callaway Golf Co. 5,125
100 Walt Disney Co. 3,000
------------
8,125
------------
METAL FABRICATION (0.4%)
8,500 Fastenal Co. (a) 374,000
------------
MOTOR VEHICLE PARTS (2.3%)
21,400 Danaher Corp. 1,162,288
8,600 Federal-Mogul Corp. 511,700
3,500 Kaydon Corp. 140,219
4,800 SPX Corp. 321,600
------------
2,135,807
------------
MOTOR VEHICLES (1.1%)
21,100 Harley-Davidson, Inc. 999,613
------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
MULTIPLE INDUSTRY (0.5%)
4,500 Celestica, Inc.* (a) $ 111,094
15,100 Whitman Corp. 383,163
------------
494,257
------------
NON-RESIDENT CONSTRUCTION (0.1%)
3,400 Newport News Shipbuilding,
Inc. 113,688
------------
PETROLEUM--DOMESTIC (0.1%)
14,400 Ocean Energy, Inc. 90,900
------------
PETROLEUM--SERVICES (1.1%)
300 BJ Services Co.* 4,688
600 Ensco International, Inc. 6,413
32,100 Global Marine, Inc.* 294,919
500 Halliburton Co. 14,813
1,200 Nabors Industries, Inc.* (a) 16,275
300 R & B Falcon Corp.* 2,288
1,582 Schlumberger Ltd. 72,970
6,700 Smith International, Inc.* 168,756
16,700 Varco International, Inc.* 129,425
13,800 Weatherford International,
Inc.* 267,375
------------
977,922
------------
PUBLISHING (1.2%)
300 Gannett Co., Inc. 19,350
200 McGraw-Hill Cos., Inc. 20,375
3,500 Media General, Inc. Class A 185,500
900 Meredith Corp. 34,088
200 Tribune Co. 13,200
1,400 Washington Post Co. Class B 809,113
------------
1,081,626
------------
RAILROAD (0.9%)
92 Canadian National Railway Co. 4,773
17,000 Kansas City Southern
Industries, Inc. 836,188
------------
840,961
------------
RESTAURANTS (1.3%)
7,300 Outback Steakhouse, Inc.* 291,088
15,500 Starbucks Corp.* 869,938
------------
1,161,026
------------
RETAIL--FOOD STORES (0.1%)
500 Walgreen Co. 29,281
400 Safeway, Inc. 24,375
------------
53,656
------------
RETAIL--GENERAL MERCHANDISE (0.8%)
300 Dayton Hudson Corp. 16,275
2,195 Dollar General Corp. 51,857
28,100 Family Dollar Stores, Inc. 618,200
</TABLE>
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 21
<PAGE> 24
THE ONE GROUP(R) INVESTMENT TRUST
GROWTH OPPORTUNITIES FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
RETAIL--GENERAL MERCHANDISE (CONTINUED)
400 Kohls Corp.* $ 24,575
1,300 TJX Cos., Inc. 37,700
100 Wal-Mart Stores, Inc. 8,144
------------
756,751
------------
RETAIL--SPECIALTY (7.0%)
11,900 Abercrombie & Fitch Co.* 841,925
10,000 Barnes & Noble, Inc.* 425,000
21,100 Bed, Bath and Beyond, Inc.* 720,038
18,500 Best Buy, Inc.* 1,135,438
12,900 Borders Group, Inc.* 321,694
300 CompUSA, Inc.* 3,919
1 Consolidated Stores Corp.* 20
12,000 Dollar Tree Stores, Inc.* 524,250
400 Fred Meyer, Inc.* 24,100
750 Gap, Inc. 42,188
200 Home Depot, Inc. 12,238
96,000 Just For Feet, Inc.* 1,668,000
4,200 Lands End, Inc.* 113,138
7,900 Ross Stores, Inc. 311,063
100 Tandy Corp. 4,119
16,600 The Finish Line, Inc.* (a) 132,800
4,600 Tiffany & Co. 238,625
------------
6,518,555
------------
SAVINGS & LOANS (0.1%)
4,900 TCF Financial Corp. 118,519
------------
SECURITIES & COMMERCIAL BROKERS (0.8%)
100 American Express Co. 10,225
100 Amresco, Inc.* 875
100 Fannie Mae 7,400
900 Franklin Resources, Inc.* (a) 28,800
20,700 Price, T Rowe Associates,
Inc. (a) 708,975
150 Schwab, Charles Corp. 8,428
------------
764,703
------------
TEXTILE (0.5%)
7,300 Unifi, Inc. 142,806
10,900 Westpoint Stevens, Inc.* (a) 344,031
------------
486,837
------------
TIMESHARE & SOFTWARE (14.0%)
74,600 America Online, Inc.* 11,936,000
600 Broadcast.com, Inc.* (a) 45,900
1,200 Ebay, Inc.* (a) 289,500
12,250 Fiserv, Inc.* 630,109
150 Paychex, Inc. 7,716
6,100 Policy Management Systems
Corp.* 308,050
3,500 Unigraphics Solutions, Inc.* 50,750
------------
13,268,025
------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------
SHARES SECURITY VALUE
- -------------------------------------------------------
<C> <S> <C>
TRUCKING (0.1%)
400 CNF Transportation, Inc. $ 15,025
------------
UTILITIES--ELECTRIC (1.3%)
8,500 Interstate Energy Corp. 274,125
31,600 LG & E Energy Corp. 894,675
------------
1,168,800
------------
UTILITIES--GAS/PIPELINES (0.3%)
5,200 K N Energy, Inc. 189,150
300 MCN Energy Group, Inc. 5,719
8,000 Seagull Energy Corp.* 50,500
------------
245,369
------------
UTILITIES--TELEPHONE (2.1%)
100 AirTouch Communications,
Inc.* 7,213
922 Alltel Corp. 55,147
200 Ameritech Corp. 12,675
200 Bell Atlantic Co. 10,600
21,700 Cincinnati Bell, Inc. 820,531
191 Qwest Communications
International, Inc.* 9,550
19,151 SBC Communications, Inc. 1,026,972
100 U S West, Inc. 6,463
------------
1,949,151
------------
TOTAL COMMON STOCK 90,392,423
------------
(cost $66,829,488)
MUTUAL FUNDS (2.5%)
2,296,023 The One Group Prime Money
Market Fund 2,296,023
------------
(cost $2,296,023)
- ---------
PRINCIPAL
- ---------
SHORT-TERM SECURITIES HELD AS COLLATERAL
(9.4%)
$8,671,517 Lehman Brothers A2/P2
Tri-Party Repurchase
Agreement 5.50%, dated
12/31/98, due 01/04/99,
collateralized by RACERS
1998-MM-12-2, 06/07/99,
market value $9,105,568 8,671,517
------------
(cost $8,671,517)
TOTAL INVESTMENTS $101,359,963
============
(cost $77,797,028)
</TABLE>
22 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 25
THE ONE GROUP(R) INVESTMENT TRUST
GROWTH OPPORTUNITIES FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $78,093,864
* Denotes a non-income producing security.
The abbreviations in the above statement stand for the following:
<TABLE>
<S> <C>
ADR American Depository Receipt
</TABLE>
Portfolio holding percentages represent market value as a percentage of net
assets.
(a) A portion of this security was loaned as of December 31, 1998.
See accompanying notes to financial statements.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 23
<PAGE> 26
THE ONE GROUP(R) INVESTMENT TRUST
LARGE COMPANY GROWTH FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
COMMON STOCK (95.1%)
AIR TRANSPORT (0.1%)
3,200 Southwest Airlines Co. $ 71,800
------------
AIRCRAFT (0.2%)
3,800 United Technologies Corp. 413,250
------------
BANKS (2.9%)
29,900 Chase Manhattan Corp. 2,035,069
9,900 Fifth Third Bancorp. 705,994
26,175 MBNA Corp. 652,739
11,600 National City Corp. 841,000
8,200 State Street Corp. 570,413
24,966 US Bancorp Class A 886,293
2,100 Washington Mutual, Inc. 80,194
------------
5,771,702
------------
BEVERAGES (4.1%)
12,900 Anheuser-Busch Cos., Inc. 846,562
86,300 Coca Cola Co. 5,771,312
7,000 Coca-Cola Enterprises, Inc. 250,250
36,000 PepsiCo, Inc. 1,473,750
------------
8,341,874
------------
BROADCASTING (1.0%)
13,700 Comcast Corp. Class A 804,019
21,200 Tele-Communications, Inc.
Class A* 1,172,625
------------
1,976,644
------------
BUSINESS EQUIPMENT/SERVICES (0.8%)
3,300 Omnicom Group, Inc. 191,400
8,300 Staples, Inc.* 362,606
23,900 Waste Management, Inc. 1,114,338
------------
1,668,344
------------
CHEMICALS--PETROLEUM AND INORGANIC (1.3%)
31,100 Du Pont (E.I.) De Nemours &
Co. 1,650,244
20,400 Monsanto Co. 969,000
------------
2,619,244
------------
COMMUNICATION--EQUIPMENT (6.9%)
5,800 Ascend Communications, Inc.* 381,350
16,600 BMC Software, Inc.* 739,737
67,825 Cisco Systems, Inc.* 6,295,008
46,650 Lucent Technologies, Inc. 5,131,500
16,800 Northern Telecom Ltd. (a) 842,100
7,000 Tellabs, Inc.* 479,938
------------
13,869,633
------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
COMPUTER--MAIN/MINI (3.8%)
34,300 International Business
Machines Corp. $ 6,336,925
10,900 Xerox Corp. 1,286,200
------------
7,623,125
------------
COMPUTER--MICRO (2.7%)
72,100 Dell Computer Corp.* 5,276,819
4,100 Gateway 2000, Inc.* 209,869
------------
5,486,688
------------
COMPUTER--PERIPHERAL (9.1%)
18,950 Computer Associates
International, Inc. 807,744
100 Compuware Corp.* 7,812
25,800 EMC Corp.* 2,193,000
104,100 Microsoft Corp.* 14,437,369
18,800 Oracle Corp.* 810,750
16,700 Parametric Technology Corp.* 271,375
------------
18,528,050
------------
COSMETIC AND TOILETRY (1.3%)
6,600 Avon Products, Inc. 292,050
48,374 Gillette Co. (The) 2,337,069
------------
2,629,119
------------
ELECTRICAL EQUIPMENT (7.1%)
12,400 Emerson Electric Co. 750,200
116,800 General Electric Co. 11,920,900
20,900 Tyco International Ltd. 1,576,644
------------
14,247,744
------------
ELECTRONIC COMPONENTS (3.5%)
60,100 Intel Corp. 7,125,606
------------
FINANCE COMPANIES (0.1%)
2,400 Capital One Financial Corp. 276,000
------------
FOOD AND RELATED (3.0%)
9,100 BestFoods 484,575
19,200 Campbell Soup Co. 1,056,000
11,000 ConAgra, Inc. 346,500
11,600 Heinz (H.J.) Co. 656,850
9,200 Kellogg Co. (a) 313,950
7,400 Ralston-Ralston Purina Group 239,575
31,600 Sara Lee Corp. 890,725
24,100 Unilever N.V. 1,998,794
90 Vlasic Foods International,
Inc.* 2,143
------------
5,989,112
------------
FOREST AND PAPER PRODUCTS (0.4%)
16,200 Kimberly Clark Corp. 882,900
------------
</TABLE>
24 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 27
THE ONE GROUP(R) INVESTMENT TRUST
LARGE COMPANY GROWTH FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
HEALTHCARE--DRUGS (11.0%)
42,400 Abbott Laboratories $ 2,077,600
5,800 Amgen, Inc.* 606,462
9,300 Cardinal Health, Inc. (a) 705,637
34,600 Eli Lilly & Co. 3,075,075
41,200 Merck & Co., Inc.* 6,084,725
47,400 Pfizer, Inc. 5,945,737
67,800 Schering-Plough Corp. 3,745,950
------------
22,241,186
------------
HEALTHCARE--GENERAL (7.8%)
44,900 American Home Products Corp. 2,528,431
7,500 Baxter International, Inc. 482,344
14,000 Boston Scientific, Inc.* (a) 375,375
42,000 Bristol-Meyers Squibb Co. 5,620,125
43,200 Johnson & Johnson 3,623,400
42,000 Warner-Lambert Co. 3,157,875
------------
15,787,550
------------
HOSPITAL SUPPLY AND MANAGEMENT (1.6%)
4,100 Guidant Corp. 452,025
13,700 HBO & Co. 393,019
4,100 IMS Health, Inc. 309,294
27,000 Medtronic, Inc. 2,004,750
------------
3,159,088
------------
HOTELS AND GAMING (0.1%)
7,100 Hilton Hotels Corp. (a) 135,787
------------
HOUSEHOLD--GENERAL PRODUCTS (2.9%)
11,600 Colgate-Palmolive Co. 1,077,350
5,900 Newell Co. (a) 243,375
50,500 Procter & Gamble Co. 4,611,281
------------
5,932,006
------------
INSURANCE--PROPERTY CASUALTY (1.7%)
34,762 American International Group,
Inc. 3,358,878
------------
LEISURE TIME INDUSTRY (0.1%)
6,300 Mattel, Inc. 143,719
------------
MULTIPLE INDUSTRY (0.4%)
9,900 Minnesota Mining &
Manufacturing Co. 704,137
------------
PETROLEUM--SERVICES (0.5%)
5,400 Halliburton Co. 159,975
19,100 Schlumberger Ltd. 880,988
------------
1,040,963
------------
PUBLISHING (0.3%)
9,500 Gannett Co., Inc. 612,750
------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
RETAIL--FOOD STORES (0.8%)
10,800 Kroger Co.* $ 653,400
17,900 Walgreen Co. 1,048,269
------------
1,701,669
------------
RETAIL--GENERAL (4.4%)
1,600 Costco Cos., Inc.* 115,500
11,600 Dayton Hudson Corp. 629,300
2,900 Family Dollar Stores, Inc. 63,800
8,300 Kohls Corp.* 509,931
13,400 TJX Cos., Inc. 388,600
87,800 Wal-Mart Stores, Inc. 7,150,213
------------
8,857,344
------------
RETAIL--SPECIALITY (3.0%)
13,300 CVS Corp. 731,500
15,750 GAP, Inc. 885,937
52,800 Home Depot, Inc. 3,230,700
77,000 Just For Feet, Inc.* 1,337,875
------------
6,186,012
------------
SECURITY AND COMMISSION BROKER (2.1%)
14,600 American Express Co. 1,492,850
400 Fannie Mae 29,600
9,600 Franklin Resources, Inc. (a) 307,200
33,200 Freddie Mac 2,139,325
50 Marsh & McLennan Cos., Inc. 2,922
100 Morgan Stanley Dean Witter &
Co. 7,100
1,600 Price, T Rowe Associates, Inc.
(a) 54,800
5,175 Schwab, Charles Corp. 290,770
------------
4,324,567
------------
TIMESHARE AND SOFTWARE (1.5%)
7,800 America Online, Inc.* (a) 1,248,000
10,800 Automatic Data Processing,
Inc. 866,025
4,500 Computer Science Corp. 289,969
10,800 Entrust Technologies* (a) 257,850
8,300 Paychex, Inc. 426,931
------------
3,088,775
------------
TOBACCO (2.1%)
77,100 Philip Morris Cos., Inc. 4,124,850
4,200 UST, Inc. 146,475
------------
4,271,325
------------
UTILITY--TELEPHONE (6.5%)
17,400 AirTouch Communications, Inc.* 1,254,975
37,400 Ameritech Corp. 2,370,225
51,800 Bell Atlantic Co. 2,745,400
33,300 GTE Corp. 2,164,500
</TABLE>
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 25
<PAGE> 28
THE ONE GROUP(R) INVESTMENT TRUST
LARGE COMPANY GROWTH FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
UTILITY--TELEPHONE (CONTINUED)
11,700 MCI WorldCom, Inc. $ 839,475
69,100 SBC Communications, Inc.* 3,705,488
------------
13,080,063
------------
TOTAL COMMON STOCK 192,146,654
------------
(cost $136,163,248)
MUTUAL FUNDS (4.4%)
8,835,574 The One Group Prime Money
Market Fund (cost $8,835,574) 8,835,574
------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
PRINCIPAL SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT (.5%)
$1,000,000 Prudential Securities, Inc.
dated 12/31/98, due 01/04/99
Collateralized by $931,000
U.S. Treasury Note, 7.50%, due
05/15/02, market value
$1,020,148.00 $ 1,000,000
------------
(cost $1,000,000)
SHORT-TERM SECURITIES HELD AS COLLATERAL
(1.6%)
3,330,837 Lehman Brothers A2/P2
Tri-Party Repurchase Agreement
5.50%, dated 12/31/98, due
01/04/99, collateralized by
RACERS 1998-MM-12-2, 06/07/99,
market value $3,497,562 3,330,837
------------
(cost $3,330,837)
TOTAL INVESTMENTS $205,313,065
============
(cost $149,329,659)
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $149,403,223
* Denotes a non-income producing security.
Portfolio holding percentages represent market value as a percentage of net
assets.
(a) A portion of this security was loaned as of December 31, 1998.
See accompanying notes to financial statements.
26 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 29
THE ONE GROUP(R) INVESTMENT TRUST
EQUITY INDEX FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
COMMON STOCK (94.4%)
AIR TRANSPORT (0.4%)
300 AMR Corp.* $ 17,812
200 Delta Air Lines, Inc. (a) 10,400
200 FDX Corp.* 17,800
450 Southwest Airlines Co. 10,097
100 U.S. Airways Group, Inc.* 5,200
-----------
61,309
-----------
AIRCRAFT (0.8%)
1,400 Boeing Co., The 45,675
300 Lockheed Martin Corp. 25,425
100 Northrop Grumman Corp. 7,312
300 United Technologies Corp. 32,625
-----------
111,037
-----------
ALUMINUM (0.3%)
300 Alcan Aluminium Ltd. 8,119
300 Aluminum Co. of America 22,369
100 Reynolds Metals Co. 5,269
-----------
35,757
-----------
APPAREL (0.2%)
100 Fruit of the Loom, Inc.* 1,381
100 Liz Claiborne, Inc. 3,156
400 Nike, Inc. Class B 16,225
100 Reebok International Ltd.* 1,487
100 Russell Corp. 2,031
200 V.F. Corp. 9,375
-----------
33,655
-----------
BANKS (8.1%)
1,000 Bank of New York Co., Inc. 40,250
1,586 Bank One Corp. 80,985
2,392 BankAmerica Corp. 143,819
400 BankBoston Corp. 15,575
100 Bankers Trust Corp. 8,544
400 BB&T Corp. 16,125
1,200 Chase Manhattan Corp. 81,675
3,150 Citigroup, Inc. 155,925
200 Comerica, Inc. 13,637
400 Fifth Third Bancorp 28,525
100 Firstar Corp. 9,325
1,400 First Union Corp. 85,137
800 Fleet Financial Group, Inc. 35,750
310 Huntington Bancshares, Inc. 9,319
600 KeyCorp 19,200
1,050 MBNA Corp. 26,184
400 Mellon Bank Corp. 27,500
200 Mercantile Bancorp, Inc. 9,225
200 Morgan, J P & Co., Inc. 21,012
500 National City Corp. 36,250
200 Northern Trust Corp. 17,462
400 PNC Bank Corp. 21,650
300 Regions Financial Corp. 12,094
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
BANKS (CONTINUED)
100 Republic New York Corp. $ 4,556
200 State Street Corp. 13,912
200 Summit Bancorp. 8,737
300 Suntrust Banks, Inc. 22,950
350 Synovus Financial Corp. 8,531
200 Union Planters Corp. 9,062
1,000 US Bancorp Class A 35,500
300 Wachovia Corp. 26,231
818 Washington Mutual, Inc. 31,237
2,200 Wells Fargo Co. 87,862
-----------
1,163,746
-----------
BEVERAGES (2.8%)
100 Adolph Coors Co. 5,644
700 Anheuser-Busch Cos., Inc. 45,937
100 Brown-Forman Corp. Class B 7,569
3,400 Coca Cola Co. 227,375
500 Coca-Cola Enterprises, Inc. 17,875
2,000 PepsiCo, Inc. 81,875
500 Seagram Co. Ltd. 19,000
-----------
405,275
-----------
BROADCASTING (2.1%)
1,000 CBS Corp. 32,750
400 Clear Channel Communications,
Inc.* 21,800
500 Comcast Corp. Class A 29,344
100 King World Productions, Inc.* 2,944
800 MediaOne Group, Inc.* (a) 37,600
700 Tele-Communications, Inc. Class
A* 38,719
1,700 Time Warner, Inc. 105,506
500 Viacom, Inc. Class B* 37,000
-----------
305,663
-----------
BUSINESS EQUIPMENT & SERVICES (1.5%)
200 Browning Ferris Industries 5,687
100 Ceridian Corp.* 6,981
100 Deluxe Corp.* 3,656
200 Dun & Bradstreet Corp. 6,312
200 Ecolab, Inc. 7,237
700 Electronic Data Systems Corp. 35,175
600 First Data Corp. 19,012
100 H&R Block, Inc. 4,500
100 IKON Office Solutions, Inc. 856
200 Interpublic Group of Cos., Inc. 15,950
500 Laidlaw, Inc. 5,031
200 Omnicom Group 11,600
400 Pitney Bowes, Inc. 26,425
200 R. R. Donnelley & Sons Co. 8,762
100 Ryder System, Inc. 2,600
400 Service Corp. International 15,225
800 Waste Management, Inc. 37,300
-----------
212,309
-----------
</TABLE>
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 27
<PAGE> 30
THE ONE GROUP(R) INVESTMENT TRUST
EQUITY INDEX FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
CAPITAL EQUIPMENT (0.7%)
100 Aeroquip-Vickers, Inc. $ 2,994
500 Caterpillar, Inc. 23,000
100 Cummins Engine Co., Inc. 3,550
100 Fluor Corp. 4,256
100 Foster Wheeler Corp. 1,319
100 Harnischfeger Industries, Inc. 1,019
300 Illinois Tool Works, Inc. 17,400
200 Ingersoll-Rand Co. 9,387
100 McDermott International, Inc. 2,469
100 Milacron, Inc. 1,925
100 NACCO Industries, Inc. 9,200
100 PACCAR, Inc. 4,112
200 Parker-Hannifin Corp. 6,550
100 Snap-on, Inc. 3,481
200 Thermo Electron Corp.* 3,387
100 Timken Co. (The) 1,888
-----------
95,937
-----------
CHEMICALS--SPECIALTY (0.4%)
300 Air Products & Chemicals, Inc. 12,000
200 Avery Dennison Corp. 9,012
100 Eastman Chemical Co. 4,475
200 Engelhard Corp. 3,900
100 Great Lakes Chemical Corp. 4,000
200 Morton International, Inc. 4,900
100 Nalco Chemical Co. 3,100
200 Pall Corp. 5,062
200 Praxair, Inc. 7,050
100 Sigma-Aldrich Corp. 2,937
-----------
56,436
-----------
CHEMICALS--PETROLEUM & INORGANIC (1.2%)
300 Dow Chemical Co. 27,281
1,600 Du Pont (E.I.) De Nemours & Co. 84,900
100 Goodrich (B.F.) Co. 3,587
100 Hercules, Inc. 2,737
900 Monsanto Co. 42,750
300 Rohm & Haas Co. 9,037
200 Union Carbide Corp. 8,500
100 W.R. Grace & Co.* 1,569
-----------
180,361
-----------
COMMUNICATION EQUIPMENT (3.8%)
500 3Com Corp.* 22,406
100 Andrew Corp.* 1,650
300 Ascend Communications, Inc.* 19,725
300 BMC Software, Inc.* 13,369
200 Cabletron System, Inc.* 1,675
2,200 Cisco Systems, Inc.* 204,187
200 General Instrument Corp.* 6,787
100 Harris Corp. 3,662
1,800 Lucent Technologies, Inc. 198,000
860 Northern Telecom Ltd. 43,107
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
COMMUNICATION EQUIPMENT (CONTINUED)
500 Novell, Inc.* $ 9,062
100 Scientific-Atlanta, Inc. 2,281
300 Tellabs, Inc.* 20,569
-----------
546,480
-----------
COMPUTERS--MAIN/MINI (2.9%)
200 Data General Corp.* 3,287
1,400 Hewlett-Packard Co. 95,637
1,300 International Business Machines
Corp. 240,175
200 Silicon Graphics, Inc. 2,575
400 Unisys Corp.* 13,775
500 Xerox Corp. 59,000
-----------
414,449
-----------
COMPUTERS--MICRO (2.0%)
200 Apple Computer, Inc.* (a) 8,187
2,394 Compaq Computer Corp. 100,398
1,800 Dell Computer Corp.* 131,737
200 Gateway 2000, Inc.* 10,237
500 Sun Microsystems, Inc.* 42,812
-----------
293,371
-----------
COMPUTERS--PERIPHERAL (4.5%)
100 Adobe Systems, Inc. 4,675
100 Autodesk, Inc. 4,269
700 Computer Associates
International, Inc. 29,837
100 Compuware Corp.* 7,813
700 EMC Corp.* 59,500
3,400 Microsoft Corp.* 471,537
1,300 Oracle Corp.* 56,062
400 Parametric Technology Corp.* 6,500
300 PeopleSoft, Inc.* 5,681
300 Seagate Technology, Inc.* 9,075
-----------
654,949
-----------
CONSTRUCTION MATERIALS (0.2%)
100 Black & Decker Corp. 5,606
150 Crane Co. 4,528
100 Owens Corning 3,544
200 PPG Industries, Inc. 11,650
200 Sherwin-Williams Co. 5,875
100 Stanley Works (The) 2,775
-----------
33,978
-----------
CONTAINERS (0.1%)
100 Ball Corp. 4,575
100 Bemis, Inc. 3,794
200 Crown Cork & Seal Co., Inc. 6,162
-----------
14,531
-----------
</TABLE>
28 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 31
THE ONE GROUP(R) INVESTMENT TRUST
EQUITY INDEX FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
COSMETIC/TOILETRY (0.7%)
400 Avon Products, Inc. $ 17,700
1,500 Gillette Company (The) 72,469
100 International Flavor and Fra-
grances, Inc. 4,419
-----------
94,588
-----------
DEFENSE (0.4%)
100 EG&G, Inc. 2,781
200 General Dynamics Corp. 11,725
500 Raytheon Co. 26,625
300 Rockwell International Corp. 14,569
-----------
55,700
-----------
ELECTRICAL EQUIPMENT (4.2%)
300 Dover Corp. 10,987
600 Emerson Electric Co. 36,300
4,500 General Electric Co. 459,281
200 Grainger (W.W.), Inc. 8,325
876 Tyco International Ltd. 66,083
100 Cooper Industries, Inc. 4,769
200 Honeywell, Inc. 15,062
100 Johnson Controls, Inc. 5,900
-----------
606,707
-----------
ELECTRONIC COMPONENTS (2.9%)
300 AMP, Inc. 15,619
200 Advanced Micro Devices, Inc.* 5,787
2,300 Intel Corp. 272,694
200 LSI Logic Corp.* 3,225
300 Micron Technology, Inc.* 15,169
800 Motorola, Inc. 48,850
200 National Semiconductor Corp.* 2,700
100 Raychem Corp. 3,231
500 Texas Instruments, Inc. 42,781
100 Thomas & Betts Corp. 4,331
-----------
414,387
-----------
ELECTRONIC INSTRUMENTS (0.3%)
500 Applied Materials, Inc.* 21,344
100 KLA-Tencor Corp.* 4,337
100 Perkin-Elmer Corp. (The) 9,756
100 Tektronix, Inc. 3,006
-----------
38,443
-----------
FARM MACHINERY (0.1%)
100 Case Corp. 2,181
300 Deere & Co. 9,937
100 Navistar International Corp.* 2,850
-----------
14,968
-----------
FINANCE COMPANIES (0.6%)
1,000 Associates First Capital Corp. 42,375
100 Capital One Financial Corp. 11,500
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
FINANCE COMPANIES (CONTINUED)
200 Countrywide Credit Industries,
Inc. $ 10,037
706 Household International, Inc. 27,975
-----------
91,887
-----------
FOOD & RELATED (2.4%)
815 Archer-Daniels Midland Co. 14,008
400 BestFoods 21,300
600 Campbell Soup Co. 33,000
700 ConAgra, Inc. 22,050
200 General Mills, Inc. 15,550
500 Heinz (H.J.) Co. 28,312
200 Hershey Foods Corp. 12,437
600 Kellogg Co. 20,475
300 Pioneer Hi-Bred International,
Inc. 8,100
200 Quaker Oats Co. 11,900
400 Ralston Purina Group 12,950
1,300 Sara Lee Corp. 36,644
200 Supervalu, Inc. 5,600
500 Sysco Corp. 13,719
900 Unilever NV N.Y. Shares 74,644
200 Wrigley (Wm.) Jr. Co. 17,912
-----------
348,601
-----------
FOREST/PAPER PRODUCTS (0.8%)
100 Boise Cascade Corp. 3,100
100 Champion International Corp. 4,050
100 Georgia Pacific Corp. 5,856
400 International Paper Co. 17,925
700 Kimberly Clark Corp. 38,150
100 Louisiana-Pacific Corp. 1,831
100 Mead Corp. 2,931
200 Owens-Illinois, Inc.* 6,125
100 Sealed Air Corp.* 5,106
100 Temple-Inland, Inc. 5,931
100 Union Camp Corp. 6,750
100 Westvaco Corp. 2,681
300 Weyerhauser Co. 15,244
200 Willamette Industries, Inc. 6,700
-----------
122,380
-----------
FURNITURE (0.1%)
100 Armstrong World Industries,
Inc. 6,031
500 Masco Corp. 14,375
-----------
20,406
-----------
GOLD/PRECIOUS METALS (0.1%)
500 Barrick Gold Corp. 9,750
400 Battle Mountain Gold Co. 1,650
300 Homestake Mining Co. 2,756
300 Placer Dome, Inc. 3,450
-----------
17,606
-----------
</TABLE>
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 29
<PAGE> 32
THE ONE GROUP(R) INVESTMENT TRUST
EQUITY INDEX FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
HEALTH CARE--DRUGS (6.4%)
2,100 Abbott Laboratories $ 102,900
100 Allergan, Inc. 6,475
100 Alza Corp.* (a) 5,225
400 Amgen, Inc.* 41,825
250 Cardinal Health, Inc. (a) 18,969
1,500 Eli Lilly & Co. 133,312
1,600 Merck & Co., Inc.* 236,300
100 Millipore Corp. 2,844
1,800 Pfizer, Inc. 225,787
700 Pharmacia Upjohn, Inc. 39,637
2,000 Schering-Plough Corp. 110,500
-----------
923,774
-----------
HEALTH CARE--GENERAL (4.2%)
1,800 American Home Products Corp. 101,362
100 Bausch & Lomb, Inc. 6,000
400 Baxter International, Inc. 25,725
300 Becton, Dickinson and Co. 12,806
200 Biomet, Inc. 8,050
500 Boston Scientific, Inc.* (a) 13,406
1,400 Bristol-Meyers Squibb Co. 187,337
1,900 Johnson & Johnson 159,362
100 Mallinckrodt, Inc. 3,081
100 St. Jude Medical, Inc.* 2,769
1,100 Warner-Lambert Co. 82,706
-----------
602,604
-----------
HOME BUILDING, MOBILE HOMES (0.2%)
100 Centex Corp. 4,506
100 Fleetwood Enterprises, Inc. 3,475
100 Kaufman & Broad Home Corp. 2,875
200 Loews Corp. 19,650
100 Pulte Corp. 2,781
-----------
33,287
-----------
HOSPITAL SUPPLY & MANAGEMENT (1.3%)
200 Aetna, Inc. 15,725
100 Bard (C.R.), Inc. 4,950
900 Columbia/HCA Healthcare Corp. 22,275
200 Guidant Corp. 22,050
600 HBO & Co. 17,212
200 HCR Manor Care, Inc.* 5,875
600 HealthSouth Corp.* 9,262
200 Humana, Inc.* 3,562
200 IMS Health, Inc. 15,087
700 Medtronic, Inc. 51,975
400 Tenet Healthcare Corp.* 10,500
300 United HeathCare Corp. 12,919
-----------
191,392
-----------
HOTELS & GAMING (0.1%)
100 Harrah's Entertainment* 1,569
400 Hilton Hotels Corp. 7,650
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
HOTELS & GAMING (CONTINUED)
300 Marriott International, Inc.
Class A $ 8,700
200 Mirage Resorts, Inc.* 2,987
-----------
20,906
-----------
HOUSEHOLD--GENERAL PRODUCTS (1.8%)
100 American Greetings Corp. Class
A 4,106
100 Clorox Co. 11,681
400 Colgate-Palmolive Co. 37,150
300 Fort James Corp. 12,000
200 Fortune Brands, Inc. 6,325
100 Jostens, Inc. 2,619
200 Newell Co. 8,250
1,800 Procter & Gamble Co. 164,362
200 Rubbermaid, Inc. 6,288
100 Tupperware Corp. 1,644
-----------
254,425
-----------
HOUSEHOLD--MAJOR APPLIANCES (0.1%)
100 Briggs & Stratton Corp. 4,988
100 Maytag Corp. 6,225
100 Whirlpool Corp. 5,538
-----------
16,751
-----------
INSURANCE--LIFE (0.9%)
300 American General Corp. 23,400
200 AON Corp. 11,075
391 Conseco, Inc. 11,950
100 Jefferson-Pilot Corp. 7,500
200 Provident Cos., Inc. 8,300
150 Providian Corp. 11,250
300 SunAmerica, Inc. 24,338
200 Torchmark Corp. 7,063
100 Transamerica Corp. 11,550
200 UNUM Corp. 11,675
-----------
128,101
-----------
INSURANCE--PROPERTY/CASUALTY (2.0%)
1,100 Allstate Corp. 42,488
1,400 American International Group,
Inc. 135,275
200 Chubb Corp. 12,975
300 CIGNA Corp. 23,194
200 Cincinnati Financial Corp. 7,325
300 Hartford Financial Services
Group, Inc. 16,463
100 Lincoln National Corp. 8,181
100 MBIA, Inc. 6,556
200 MGIC Investment Corp. 7,963
100 Progressive Corp. OH 16,938
200 SAFECO Corp. 8,588
300 St. Paul Cos., Inc. (a) 10,425
-----------
296,371
-----------
</TABLE>
30 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 33
THE ONE GROUP(R) INVESTMENT TRUST
EQUITY INDEX FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
LEISURE TIME INDUSTRY (1.1%)
800 Carnival Corp. Class A $ 38,400
1,200 Cendant Corp.* 22,875
200 Hasbro, Inc. 7,225
100 Brunswick Corp. 2,475
2,800 Walt Disney Co. 84,000
400 Mattel, Inc. 9,125
-----------
164,100
-----------
MINING (0.1%)
100 Asarco, Inc. 1,506
100 Cyprus Amax Minerals Co. 1,000
100 Freeport-McMoRan Copper & Gold,
Inc. 1,044
100 Inco Ltd. 1,056
200 Newmont Mining Corp. 3,613
100 Phelps Dodge Corp. 5,088
-----------
13,307
-----------
MOTOR VEHICLE PARTS (0.2%)
200 Autozone, Inc.* 6,588
192 Dana Corp. 7,848
100 Eaton Corp. 7,069
200 Genuine Parts Co. 6,688
100 ITT Industries, Inc. 3,975
-----------
32,168
-----------
MOTOR VEHICLES (1.1%)
1,700 Ford Motor Co. 99,769
900 General Motors Corp. 64,406
-----------
164,175
-----------
MULTIPLE INDUSTRY (1.2%)
800 Allied-Signal, Inc. 35,450
.35 Berkshire Hathaway, Inc. Class
A* 24,500
300 Corning, Inc. 13,500
200 Danaher Corp. 10,863
100 FMC Corp.* 5,600
100 Harcourt General, Inc. 5,319
600 Minnesota Mining &
Manufacturing Co. 42,675
100 National Service Industries,
Inc. 3,800
200 Textron, Inc. 15,188
200 TRW, Inc. 11,238
-----------
168,133
-----------
PETROLEUM--DOMESTIC (0.8%)
200 Anadarko Petroleum Corp. 6,175
100 Apache Corp. 2,531
100 Ashland, Inc. 4,838
400 Atlantic Richfield Co. 26,100
200 Burlington Resources, Inc. 7,163
100 Kerr Mcgee Corp. (a) 3,825
500 Occidental Petroleum Corp. 8,438
100 ORYX Energy Co.* 1,344
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
PETROLEUM--DOMESTIC (CONTINUED)
400 Phillips Petroleum Co. $ 17,050
100 Sunoco, Inc. 3,606
200 Tenneco, Inc. 6,813
300 Union Pacific Resources Group,
Inc. 2,719
300 Unocal Corp. 8,756
400 USX - Marathon Group 12,050
-----------
111,408
-----------
PETROLEUM--INTERNATIONAL (4.2%)
3,000 Royal Dutch Petroleum Co. 143,625
900 Chevron Corp. 74,644
3,400 Exxon Corp. 248,625
1,100 Mobil Corp. 95,838
700 Texaco, Inc. 37,013
100 Amerada Hess Corp. 4,975
-----------
604,720
-----------
PETROLEUM SERVICES (0.4%)
370 Baker Hughes, Inc. 6,544
600 Halliburton Co. 17,775
800 Schlumberger Ltd. 36,900
-----------
61,219
-----------
PHOTO EQUIPMENT (0.2%)
400 Eastman Kodak Co. 28,800
100 Polaroid Corp. 1,869
-----------
30,669
-----------
PUBLISHING (0.5%)
100 Dow Jones & Co., Inc. 4,813
400 Gannett Co., Inc. 25,800
100 Knight-Ridder, Inc. 5,113
100 McGraw-Hill Cos., Inc. 10,188
100 Meredith Corp. 3,788
300 New York Times Co. Class A 10,406
100 Times Mirror Co. (The) (a) 5,600
200 Tribune Co. 13,200
-----------
78,908
-----------
RAILROAD (0.4%)
600 Burlington Northern Santa Fe
Corp. 20,250
300 CSX Corp. 12,450
500 Norfolk Southern Corp. 15,844
300 Union Pacific Corp. 13,519
-----------
62,063
-----------
RESTAURANTS (0.6%)
200 Darden Restaurants, Inc. (a) 3,600
900 McDonald's Corp. 68,963
200 Tricon Global Restaurants,
Inc.* 10,025
200 Wendy's International, Inc. 4,363
-----------
86,951
-----------
</TABLE>
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 31
<PAGE> 34
THE ONE GROUP(R) INVESTMENT TRUST
EQUITY INDEX FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
RETAIL--FOOD STORES (1.2%)
300 Albertson's, Inc. (a) $ 19,106
400 American Stores Co. 14,775
400 Kroger Co.* 24,200
100 Longs Drug Stores Corp. 3,750
400 Rite Aid Corp. 19,825
700 Safeway, Inc.* 42,656
100 The Great Atlantic & Pacific
Tea Co., Inc. 2,963
700 Walgreen Co. 40,994
200 Winn-Dixie Stores, Inc. 8,975
-----------
177,244
-----------
RETAIL--GENERAL MERCHANDISE (3.0%)
300 Costco Cos., Inc.* 21,656
600 Dayton Hudson Corp. 32,550
100 Dillard's, Inc. 2,838
225 Dollar General Corp. 5,316
300 Federated Department Stores,
Inc.* 13,069
400 J. C. Penney Company, Inc. 18,750
700 Kmart Corp.* 10,719
200 Kohls Corp.* 12,288
300 May Department Stores Co. 18,113
200 Nordstrom, Inc. 6,938
500 Sears, Roebuck & Co.* 21,250
400 TJX Cos., Inc. 11,600
3,100 Wal-Mart Stores, Inc. 252,456
-----------
427,543
-----------
RETAIL--SPECIALTY (2.0%)
100 Circuit City Stores - Circuit
City Group 4,994
100 Consolidated Stores Corp.* 2,019
500 CVS Corp. 27,500
200 Fred Meyer, Inc.* 12,050
800 Gap, Inc. 45,000
2,200 Home Depot, Inc. 134,613
500 Lowe's Cos. 25,594
400 Staples, Inc.* 17,475
100 Tandy Corp. 4,119
300 The Limited, Inc. 8,738
200 The Pep Boys - Manny, Moe &
Jack 3,138
300 Toys 'R' Us, Inc.* 5,063
-----------
290,303
-----------
SAVINGS & LOANS (0.1%)
100 Golden West Financial Corp. 9,169
-----------
SECURITY & COMMERCIAL BROKERS (2.8%)
600 American Express Co. 61,350
200 Bear Stearns Cos., Inc. (a) 7,475
1,400 Fannie Mae 103,600
300 Franklin Resources, Inc. (a) 9,600
900 Freddie Mac 57,994
200 Lehman Brothers Holdings, Inc. 8,813
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
SECURITY & COMMERCIAL BROKERS (CONTINUED)
350 Marsh & McLennan Cos., Inc. $ 20,453
500 Merrill Lynch & Co., Inc. 33,375
800 Morgan Stanley Dean Witter &
Co.* 56,800
550 Schwab, Charles Corp. 30,903
200 Student Loan Market Association 9,600
-----------
399,963
-----------
STEEL (0.1%)
200 Allegheny Teledyne, Inc. 4,088
100 Bethlehem Steel Corp. 838
100 Nucor Corp. 4,325
100 USX-U.S. Steel Group, Inc. 2,300
100 Worthington Industries, Inc. 1,250
-----------
12,801
-----------
TEXTILE (0.1%)
100 Springs Industries, Inc. Class
A 4,144
-----------
TIMESHARE & SOFTWARE (0.4%)
400 Automatic Data Processing, Inc. 32,075
200 Computer Science Corp. 12,888
200 Equifax, Inc. 6,838
200 Paychex, Inc. 10,288
-----------
62,089
-----------
TIRES/RUBBER PRODUCTS (0.1%)
100 Cooper Tire and Rubber Co. 2,044
200 Goodyear Tire & Rubber Co. 10,088
-----------
12,132
-----------
TOBACCO (1.4%)
400 RJR Nabisco Holding Corp. 11,875
3,400 Philip Morris Cos., Inc. 181,900
300 UST, Inc. 10,463
-----------
204,238
-----------
UTILITIES--ELECTRIC (2.2%)
200 AES Corp.* 9,475
200 Ameren Corp. 8,538
300 American Electric Power
Company, Inc. 14,119
200 Carolina Power & Light Co. 9,413
200 DTE Energy Corp. 8,575
300 Dominion Resources, Inc. 14,025
300 PECO Energy Co. 12,488
500 PG&E Corp. 15,750
400 PacificCorp 8,425
200 Baltimore Gas and Electric Co. 6,175
300 Central & Southwest Corp. 8,231
200 Cinergy Corp. 6,875
300 Consolidated Edison, Inc. 15,863
500 Duke Power Co. 32,031
500 Edison International 13,938
300 Entergy Corp. 9,338
</TABLE>
32 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 35
THE ONE GROUP(R) INVESTMENT TRUST
EQUITY INDEX FUND
STATEMENT OF INVESTMENTS -- DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
UTILITIES--ELECTRIC (CONTINUED)
200 FPL Group, Inc. $ 12,325
200 GPU, Inc. 8,838
400 Houston Industries, Inc. 12,850
200 New Century Energies, Inc. 9,750
200 Niagara Mohawk Power Corp.* 3,225
200 Northern States Power Co. 5,550
200 PP&L Resources, Inc. 5,575
300 Public Service Enterprise
Group, Inc. 12,000
1,000 Southern Co. 29,063
400 Texas Utilities Co. 18,675
300 Unicom Corp. 11,569
-----------
322,679
-----------
UTILITIES--GAS/PIPELINE (0.7%)
300 Coastal Corp. (The) 10,481
150 Columbia Energy Group 8,663
100 Consolidated National Gas Co. 5,400
100 Eastern Enterprises 4,375
500 Enron Corp. 28,531
300 FirstEnergy Corp. 9,769
100 NICOR, Inc. 4,225
100 ONEOK, Inc. 3,613
100 People's Energy Corp. 3,988
300 Sempra Energy 7,613
100 Sonat, Inc. 2,706
600 Williams Cos., (The) 18,713
-----------
108,077
-----------
UTILITIES--TELEPHONE (7.9%)
800 AirTouch Communications, Inc.* 57,700
400 Alltel Corp. 23,925
1,500 Ameritech Corp. 95,063
2,500 AT&T Corp. 188,125
2,100 Bell Atlantic Co. 111,300
2,600 Bellsouth Corp. 129,675
200 Frontier Corp. 6,800
1,300 GTE Corp. 84,500
2,570 MCI WorldCom, Inc.* 184,403
400 Nextel Communication* 9,450
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
SHARES SECURITY VALUE
- ---------------------------------------------------------
<C> <S> <C>
UTILITIES--TELEPHONE (CONTINUED)
2,700 SBC Communications, Inc. $ 144,788
600 Sprint Corp. 50,475
550 Sprint PCS Group, Inc.* 12,719
705 U S West Communications Group 45,561
-----------
1,144,484
-----------
TOTAL COMMON STOCK 13,665,214
-----------
(cost $12,307,823)
PREFERRED STOCK (0.1%)
100 Alberto Culver Class B 2,669
-----------
(cost $2,959)
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
PRINCIPAL
- ---------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS (.9%)
$ 15,000 U.S. Treasury Bills, 4.41%,
02/04/99 14,944
70,000 U.S. Treasury Bills, 4.30%,
02/18/99 69,620
35,000 U.S. Treasury Bills, 4.29%,
02/25/99 34,783
15,000 U.S. Treasury Bills, 4.35%,
03/18/99 14,868
-----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS 134,215
-----------
(cost $134,165)
----------
SHARES
----------
MUTUAL FUNDS (4.2%)
621,987 The One Group Prime Money
Market Fund 621,987
-----------
(cost $621,987)
----------
PRINCIPAL
----------
SHORT-TERM SECURITIES HELD AS
COLLATERAL (1.0%)
$ 138,974 Lehman Brothers A2/P2
Tri-Party Repurchase Agreement
5.50%, dated 12/31/98, due
01/04/99, collateralized by
RACERS 1998-MM-12-2, 06/07/99,
market value $145,930 138,974
-----------
(cost $138,974)
TOTAL INVESTMENTS $14,563,059
===========
(cost $13,205,908)
</TABLE>
- --------------------------------------------------------------------------------
Cost for federal income tax purposes: $13,209,899
* Denotes a non-income producing security.
Portfolio holding percentages represent market value as a percentage of net
assets.
(a) A portion of this security was loaned as of December 31, 1998.
See accompanying notes to financial statements.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 33
<PAGE> 36
THE ONE GROUP(R) INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT ASSET GROWTH LARGE COMPANY EQUITY
BOND ALLOCATION OPPORTUNITIES GROWTH INDEX
----------- ------------ ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at
value (cost $42,111,483,
$90,999,623, $69,125,511,
$144,998,822 and $13,066,934
respectively) $42,934,859 $102,338,597 $92,688,446 $ 200,982,228 $14,424,085
Repurchase agreements, at cost -- 1,353,206 8,671,517 4,330,837 138,974
----------- ------------ ----------- ------------- -----------
Total investments 42,934,859 103,691,803 101,359,963 205,313,065 14,563,059
Receivable for investment
securities sold -- -- -- -- 80,395
Interest and dividends
receivable 289,970 578,889 44,079 186,227 14,745
Withholding tax reclaim
receivable -- 227 -- 1,043 30
Prepaid assets 1,400 3,174 3,328 6,946 251
Deferred organization expenses 961 1,991 2,869 1,897 --
----------- ------------ ----------- ------------- -----------
Total assets 43,227,190 104,276,084 101,410,239 205,509,178 14,658,480
----------- ------------ ----------- ------------- -----------
LIABILITIES
Payable for investments
purchased 1,019,368 -- -- -- 17,143
Payable for return of collateral
received for securities on
loan -- 1,353,206 8,671,517 3,330,837 138,974
Investment advisory fee payable 9,644 55,660 45,038 106,050 4,937
Administration fee payable 7,499 18,000 14,918 35,127 1,560
Other accrued expenses 3,509 4,284 5,058 2,456 15,147
----------- ------------ ----------- ------------- -----------
Total liabilities 1,040,020 1,431,150 8,736,531 3,474,470 177,761
----------- ------------ ----------- ------------- -----------
NET ASSETS $42,187,170 $102,844,934 $92,673,708 $ 202,034,708 $14,480,719
=========== ============ =========== ============= ===========
REPRESENTED BY:
Capital $41,361,634 $ 91,110,984 $69,407,609 $ 146,107,612 $13,176,531
Net unrealized appreciation on
investments 823,376 11,338,974 23,562,935 55,983,406 1,357,151
Accumulated undistributed
(distributions in excess of)
realized gain (loss) on
investments and financial
futures 2,160 367,455 (296,836) (57,277) (52,963)
Accumulated undistributed
(distributions in excess of)
net investment income (loss) -- 27,521 -- 967 --
----------- ------------ ----------- ------------- -----------
NET ASSETS $42,187,170 $102,844,934 $92,673,708 $ 202,034,708 $14,480,719
=========== ============ =========== ============= ===========
Shares of beneficial interest
outstanding, no par value
(unlimited number of shares
authorized) 3,963,923 6,792,039 5,002,655 8,928,745 1,319,667
=========== ============ =========== ============= ===========
NET ASSET VALUE, redemption and
offering price per share $ 10.64 $ 15.14 $ 18.52 $ 22.63 $ 10.97
=========== ============ =========== ============= ===========
</TABLE>
See accompanying notes to financial statements.
34 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 37
THE ONE GROUP(R) INVESTMENT TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT ASSET GROWTH LARGE COMPANY EQUITY
BOND ALLOCATION OPPORTUNITIES GROWTH INDEX(A)
---------- ----------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
INCOME:
Dividend income $ -- $ 457,214 $ 331,712 $ 1,402,593 $ 67,907
Interest income 1,936,353 2,111,253 130,565 423,758 34,963
Income from securities lending 2,145 9,381 12,301 3,071 90
---------- ----------- ----------- ----------- ----------
Total income 1,938,498 2,577,848 474,578 1,829,422 102,960
---------- ----------- ----------- ----------- ----------
EXPENSES:
Investment advisory fees 138,300 493,132 431,700 948,112 15,432
Administration fees 69,649 158,161 151,830 330,612 7,202
Professional fees 12,800 17,700 19,000 29,400 12,800
Custodian fees 7,375 18,900 17,100 14,800 12,000
Insurance expense 2,000 3,200 4,875 8,401 156
Trustee fees 1,600 3,400 3,700 7,600 200
Other 8,169 12,843 13,839 24,104 10,472
---------- ----------- ----------- ----------- ----------
Total expenses before waivers
and reimbursements 239,893 707,336 642,044 1,363,029 58,262
Less waivers (9,393) (2,862) -- -- (15,432)
Less reimbursements -- -- -- -- (14,538)
---------- ----------- ----------- ----------- ----------
Net expenses 230,500 704,474 642,044 1,363,029 28,292
---------- ----------- ----------- ----------- ----------
NET INVESTMENT INCOME (LOSS) $1,707,998 $ 1,873,374 $ (167,466) $ 466,393 $ 74,668
---------- ----------- ----------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on
investments and financial
futures $ 140,967 $ 1,660,601 $ 4,626,878 $13,358,107 $ (52,963)
Net change in unrealized
appreciation on investments 255,875 8,916,609 19,581,381 37,839,553 1,357,151
---------- ----------- ----------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN 396,842 10,577,210 24,208,259 51,197,660 1,304,188
---------- ----------- ----------- ----------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,104,840 $12,450,584 $24,040,793 $51,664,053 $1,378,856
========== =========== =========== =========== ==========
</TABLE>
- ------------------------------------------------------
(a) For the period May 1, 1998, date of commencement of operations, through
December 31, 1998.
See accompanying notes to financial statements.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 35
<PAGE> 38
THE ONE GROUP(R) INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT BOND ASSET ALLOCATION
--------------------------------- ---------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 1,707,998 $ 1,061,995 $ 1,873,374 $ 873,061
Net realized gain on investments 140,967 45,096 1,660,601 3,089,370
Net change in unrealized appreciation
of investments 255,875 596,960 8,916,609 1,416,110
----------- ----------- ------------ -----------
Net increase in net assets
resulting from operations 2,104,840 1,704,051 12,450,584 5,378,541
----------- ----------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (1,707,998) (1,061,995) (1,873,374) (871,191)
In excess of net investment income (33,739) (5,056) (26,808) --
From net realized gain from investment
transactions (105,068) (41,992) (1,265,780) (3,031,880)
----------- ----------- ------------ -----------
Decrease in net assets from
distributions to shareholders (1,846,805) (1,109,043) (3,165,962) (3,903,071)
----------- ----------- ------------ -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 19,963,136 6,514,599 49,983,354 21,414,090
Net asset value of shares issued to
shareholders from reinvestment of
distributions 1,846,805 1,109,043 3,165,962 3,903,071
Cost of shares redeemed (2,245,378) (475,970) (1,034,680) (230,267)
----------- ----------- ------------ -----------
Increase in net assets from
capital share transactions 19,564,563 7,147,672 52,114,636 25,086,894
----------- ----------- ------------ -----------
NET INCREASE IN NET ASSETS 19,822,598 7,742,680 61,399,258 26,562,364
NET ASSETS-BEGINNING OF PERIOD 22,364,572 14,621,892 41,445,676 14,883,312
----------- ----------- ------------ -----------
NET ASSETS-END OF PERIOD $42,187,170 $22,364,572 $102,844,934 $41,445,676
=========== =========== ============ ===========
Undistributed net realized gain on
investments $ 2,160 $ -- $ 367,455 $ 25,093
=========== =========== ============ ===========
Undistributed (distributions in excess
of) net investment income $ -- $ -- $ 27,521 $ 1,870
=========== =========== ============ ===========
SHARE ACTIVITY:
Shares sold 1,866,627 631,011 3,510,954 1,615,750
Reinvestment of distributions 173,661 108,358 215,204 296,400
Shares redeemed (210,017) (46,749) (75,663) (18,108)
----------- ----------- ------------ -----------
Net increase in number of shares 1,830,271 692,620 3,650,495 1,894,042
=========== =========== ============ ===========
</TABLE>
See accompanying notes to financial statements.
36 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 39
THE ONE GROUP(R) INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES LARGE COMPANY GROWTH EQUITY INDEX
--------------------------- --------------------------------- --------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997 1998(a)
--------------------------- -------------------------------- -------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ (167,466) $ (87,568) $ 466,393 $ 485,771 $ 74,668
Net realized gain (loss) on investments 4,626,878 4,951,110 13,358,107 3,943,220 (52,963)
Net change in unrealized appreciation of
investments 19,581,381 3,493,572 37,839,553 13,307,669 1,357,151
----------- ----------- ------------ ------------ -----------
Net increase in net assets from
operations 24,040,793 8,357,114 51,664,053 17,736,660 1,378,856
----------- ----------- ------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -- -- (465,426) (485,771) (74,668)
In excess of net investment income -- -- -- (11,566) --
From net realized gain from investment
transactions (4,300,170) (4,757,643) (13,342,889) (3,931,556) --
In excess of realized gain on investment
transactions (132,232) (17,827) (57,277) (1,846) --
Tax return of capital distribution (1,002,643) (61,358) -- (6,585) (601)
----------- ----------- ------------ ------------ -----------
Decrease in net assets from
distributions to shareholders (5,435,045) (4,836,828) (13,865,592) (4,437,324) (75,269)
----------- ----------- ------------ ------------ -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 19,618,361 20,249,383 51,828,422 39,242,534 13,636,522
Net asset value of shares issued to
shareholders from reinvestment of
distributions 5,435,045 4,836,828 13,865,593 4,437,323 75,269
Cost of shares redeemed (1,692,146) (238,598) (1,085,409) (244,898) (534,659)
----------- ----------- ------------ ------------ -----------
Increase in net assets from capital
share transactions 23,361,260 24,847,613 64,608,606 43,434,959 13,177,132
----------- ----------- ------------ ------------ -----------
NET INCREASE IN NET ASSETS 41,967,008 28,367,899 102,407,067 56,734,295 14,480,719
NET ASSETS-BEGINNING OF PERIOD 50,706,700 22,338,801 99,627,641 42,893,346 --
----------- ----------- ------------ ------------ -----------
NET ASSETS-END OF PERIOD $92,673,708 $50,706,700 $202,034,708 $ 99,627,641 $14,480,719
=========== =========== ============ ============ ===========
Distributions in excess of net realized gain
on investments $ (296,836) $ (326,708) $ (57,277) $ (15,218) $ (52,963)
=========== =========== ============ ============ ===========
Undistributed net investment income $ -- $ -- $ 967 $ -- $ --
=========== =========== ============ ============ ===========
SHARE ACTIVITY:
Shares sold 1,240,487 1,400,572 2,584,144 2,412,572 1,370,180
Reinvestment of distributions 305,683 342,551 613,470 258,782 7,334
Shares redeemed (113,075) (17,586) (58,686) (18,404) (57,847)
----------- ----------- ------------ ------------ -----------
Net increase in number of shares 1,433,095 1,725,537 3,138,928 2,652,950 1,319,667
=========== =========== ============ ============ ===========
</TABLE>
- ------------------------------------------------------
(a) For the period May 1, 1998, date of commencement of operations, through
December 31, 1998.
See accompanying notes to financial statements.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 37
<PAGE> 40
THE ONE GROUP(R) INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT BOND
------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 1, -
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996 1995 1994(a)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD $ 10.48 $ 10.15 $ 10.48 $ 9.69 $10.00
------- ------- ------- ------ ------
Net investment income 0.56 0.60 0.59 0.64 0.22
Net realized and unrealized
appreciation (depreciation) 0.20 0.35 (0.33) 0.94 (0.31)
------- ------- ------- ------ ------
Total from investment
operations 0.76 0.95 0.26 1.58 (0.09)
------- ------- ------- ------ ------
Distributions:
From net investment income (0.56) (0.60) (0.59) (0.64) (0.22)
In excess of net investment
income (0.01) -- -- -- --
From net realized gains from
investments (0.03) (0.02) -- (0.15) --
------- ------- ------- ------ ------
Total distributions (0.60) (0.62) (0.59) (0.79) (0.22)
------- ------- ------- ------ ------
Net increase (decrease) in
net asset value 0.16 0.33 (0.33) 0.79 (0.31)
------- ------- ------- ------ ------
NET ASSET VALUE -- END OF PERIOD $ 10.64 $ 10.48 $ 10.15 $10.48 $ 9.69
======= ======= ======= ====== ======
Total return 7.32% 9.67% 2.69% 16.69% (.90%)(b)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000) $42,187 $22,365 $14,622 $9,016 $5,112
Ratio of expenses to average net
assets 0.75% 0.75% 0.75% 0.75% 0.75%(c)
Ratio of expenses to average net
assets excluding
waivers/reimbursements 0.78% 0.88% 1.01% 1.47% 1.94%(c)
Ratio of net investment income to
average net assets 5.56% 6.06% 6.11% 6.54% 6.09%(c)
Ratio of net investment income to
average net assets excluding
waivers/reimbursements 5.53% 5.93% 5.85% 5.80% 4.90%(c)
Portfolio turnover 40.4% 21.3% 21.3% 34.1% 3.5%(b)
</TABLE>
- ------------------------------------------------------
(a) Initial public offering was August 1, 1994.
(b) Not Annualized.
(c) Annualized.
See accompanying notes to financial statements.
38 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 41
THE ONE GROUP(R) INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION
---------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 1, -
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996 1995 1994(a)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE -- BEGINNING OF
PERIOD $ 13.19 $ 11.93 $ 11.24 $ 9.81 $10.00
-------- ------- ------- ------ ------
Net investment income 0.39 0.39 0.34 0.36 0.06
Net realized and unrealized
appreciation (depreciation) 2.14 2.31 0.98 1.64 (0.19)
-------- ------- ------- ------ ------
Total from investment
operations 2.53 2.70 1.32 2.00 (0.13)
-------- ------- ------- ------ ------
Distributions:
From net investment income (0.39) (0.39) (0.34) (0.36) (0.06)
From net realized gains from
investments (0.19) (1.05) (0.23) (0.21) --
In excess of realized gains
from investment
transactions -- -- (0.04) -- --
Tax return of capital -- -- (0.02) -- --
-------- ------- ------- ------ ------
Total distributions (0.58) (1.44) (0.63) (0.57) (0.06)
-------- ------- ------- ------ ------
Net increase (decrease) in
net asset value 1.95 1.26 0.69 1.43 (0.19)
-------- ------- ------- ------ ------
NET ASSET VALUE -- END OF PERIOD $ 15.14 $ 13.19 $ 11.93 $11.24 $ 9.81
======== ======= ======= ====== ======
Total return 19.09% 22.90% 11.92% 20.69% (1.32%)(b)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000) $102,845 $41,446 $14,883 $5,455 $2,063
Ratio of expenses to average net
assets 1.00% 1.00% 1.00% 1.00% 1.00%(c)
Ratio of expenses to average net
assets excluding waivers/
reimbursements 1.00% 1.15% 1.44% 1.96% 2.36%(c)
Ratio of net investment income
to average net assets 2.66% 3.24% 3.27% 3.66% 1.88%(c)
Ratio of net investment income
to average net assets
excluding
waivers/reimbursements 2.66% 3.07% 2.83% 2.70% 0.52%(c)
Portfolio turnover 32.1% 60.9% 64.8% 66.3% --
</TABLE>
- ------------------------------------------------------
(a) Initial public offering was August 1, 1994.
(b) Not Annualized.
(c) Annualized.
See accompanying notes to financial statements.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 39
<PAGE> 42
THE ONE GROUP(R) INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH OPPORTUNITIES
------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 1, -
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996 1995 1994(a)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE --
BEGINNING OF PERIOD $ 14.21 $ 12.11 $ 11.52 $ 9.70 $10.00
------- ------- ------- ------ ------
Net investment income (loss) (0.03) (0.03) 0.18 0.04 --
Net realized and unrealized
appreciation (depreciation) 5.95 3.63 1.62 2.29 (0.30)
------- ------- ------- ------ ------
Total from investment
operations 5.92 3.60 1.80 2.33 (0.30)
------- ------- ------- ------ ------
Distributions:
From net investment income -- -- (0.19) (0.04) --
From net realized gains from
investments (1.38) (1.48) (0.78) (0.47) --
In excess of realized gains from
investment transactions (0.03) -- (0.24) -- --
Tax return of capital (0.20) (0.02) -- -- --
------- ------- ------- ------ ------
Total distributions (1.61) (1.50) (1.21) (0.51) --
------- ------- ------- ------ ------
Net increase (decrease) in
net asset value 4.31 2.10 0.59 1.82 (0.30)
------- ------- ------- ------ ------
NET ASSET VALUE --
END OF PERIOD $ 18.52 $ 14.21 $ 12.11 $11.52 $ 9.70
======= ======= ======= ====== ======
Total return 38.82% 29.81% 15.67% 24.06% (3.00%)(b)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000) $92,674 $50,707 $22,339 $6,685 $ 940
Ratio of expenses to average net
assets 0.97% 1.10% 1.06% 0.90% 0.90%(c)
Ratio of expenses to average net
assets excluding
waivers/reimbursements 0.97% 1.11% 1.40% 2.78% 2.96%(c)
Ratio of net investment income to
average net assets (0.25%) (0.25%) 1.85% 0.46% (0.17%)(c)
Ratio of net investment income to
average net assets excluding
waivers/reimbursements (0.25%) (0.26%) 1.51% (1.42%) (2.22%)(c)
Portfolio turnover 87.7% 175.6% 326.9% 193.3% 3.5%(b)
</TABLE>
- ------------------------------------------------------
(a) Initial public offering was August 1, 1994.
(b) Not Annualized.
(c) Annualized.
See accompanying notes to financial statements.
40 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 43
THE ONE GROUP(R) INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE COMPANY GROWTH
------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED AUGUST 1, -
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996 1995 1994(a)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE --
BEGINNING OF PERIOD $ 17.21 $ 13.67 $ 12.12 $ 9.99 $10.00
-------- ------- ------- ------- ------
Net investment income 0.06 0.10 0.16 0.20 0.05
Net realized and unrealized
appreciation 7.03 4.25 1.86 2.20 0.01
-------- ------- ------- ------- ------
Total from investment
operations 7.09 4.35 2.02 2.40 0.06
-------- ------- ------- ------- ------
Distributions:
From net investment income (0.06) (0.10) (0.16) (0.20) (0.05)
From net realized gains from
investments (1.61) (0.71) (0.30) (0.07) (0.02)
In excess of realized gains from
investment transactions -- -- (0.01) -- --
-------- ------- ------- ------- ------
Total distributions (1.67) (0.81) (0.47) (0.27) (0.07)
-------- ------- ------- ------- ------
Net increase (decrease) in
net asset value 5.42 3.54 1.55 2.13 (0.01)
-------- ------- ------- ------- ------
NET ASSET VALUE --
END OF PERIOD $ 22.63 $ 17.21 $ 13.67 $ 12.12 $ 9.99
======== ======= ======= ======= ======
Total return 41.27% 31.93% 16.67% 24.13% 0.52%(b)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000) $202,035 $99,628 $42,893 $16,119 $4,175
Ratio of expenses to average net
assets 0.93% 1.00% 0.98% 0.90% 0.90%(c)
Ratio of expenses to average net
assets excluding
waivers/reimbursements 0.93% 1.00% 1.16% 1.64% 2.08%(c)
Ratio of net investment income to
average net assets 0.32% 0.69% 1.29% 2.02% 1.39%(c)
Ratio of net investment income to
average net assets excluding
waivers/reimbursements 0.32% 0.69% 1.11% 1.28% 0.22%(c)
Portfolio turnover 61.0% 34.4% 38.7% 37.4% 4.4%(b)
</TABLE>
- ------------------------------------------------------
(a) Initial public offering was August 1, 1994.
(b) Not Annualized.
(c) Annualized.
See accompanying notes to financial statements.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 41
<PAGE> 44
THE ONE GROUP(R) INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INDEX
---------------
PERIOD ENDED
DECEMBER 31,
1998(a)
------------
<S> <C>
NET ASSET VALUE -- BEGINNING OF PERIOD $ 10.00
-------
Net investment income 0.08
Net realized and unrealized appreciation 0.97
-------
Total from investment operations 1.05
-------
Distributions:
From net investment income (0.08)
-------
Net increase (decrease) in net asset value 0.97
-------
NET ASSET VALUE -- END OF PERIOD $ 10.97
=======
Total return 10.52%(b)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000) $14,481
Ratio of expenses to average net assets 0.55%(c)
Ratio of expenses to average net assets excluding waivers/
reimbursements 1.13%(c)
Ratio of net investment income to average net assets 1.45%(c)
Ratio of net investment income to average net assets
excluding waivers/ reimbursements 0.87%(c)
Portfolio turnover 2.3%(b)
</TABLE>
- ------------------------------------------------------
(a) Initial public offering was May 1, 1998.
(b) Not Annualized.
(c) Annualized.
See accompanying notes to financial statements.
42 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 45
THE ONE GROUP(R) INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
NOTE 1 -- ORGANIZATION
The One Group(R) Investment Trust (the Trust) was organized as a Massachusetts
Business Trust on June 7, 1993. The Trust is registered under the Investment
Company Act of 1940 as an open-end management investment company. The Trust
comprises five operating series: the Government Bond Fund, the Asset Allocation
Fund, the Growth Opportunities Fund, the Large Company Growth Fund and the
Equity Index Fund (the Funds). The shares of the Funds are sold at net asset
value to separate accounts of insurance companies to fund variable annuity and
variable life contracts.
Investment operations commenced on August 23, 1994 for the Government Bond and
the Large Company Growth Funds, September 29, 1994 for the Asset Allocation
Fund, November 3, 1994 for the Growth Opportunities Fund and May 1, 1998 for the
Equity Index Fund.
On October 2, 1998, First Chicago NBD Corporation and BANC ONE CORPORATION
merged with and into BANK ONE CORPORATION. The Pegasus Variable Funds are
advised by First Chicago NBD Investment Management Company (FCNIMCO) which have
been sold exclusively to separate accounts of Hartford Life and Annuity
Insurance Company (Hartford) to fund variable annuity and variable life
contracts. Hartford has filed an exemptive application with the Securities and
Exchange Commission (SEC) requesting relief from certain rules in order to
substitute five of the One Group Investment Trust Funds for the Pegasus Variable
Funds. Assuming approval by the SEC, it is anticipated this substitution will
occur in March, 1999.
In 1998, The One Group Investment Trust's Declaration of Trust was amended to
create four new series. In February, 1999, the Declaration of Trust was amended
to name the four new series as follows:
One Group Investment Trust Bond Portfolio
One Group Investment Trust Diversified Equity Portfolio
One Group Investment Trust Diversified Mid Cap Portfolio
One Group Investment Trust Mid Cap Value Portfolio
In addition to the four new series, in February, 1999, the Trust's Declaration
of Trust was amended to change the name of the Trust from "The One Group
Investment Trust" to "One Group Investment Trust" and the names of the existing
series will also be changed as follows:
<TABLE>
<CAPTION>
EXISTING NAME NEW NAME
- ------------- --------
<S> <C>
Government Bond Fund One Group Investment Trust Government Bond Portfolio
Asset Allocation Fund One Group Investment Trust Balanced Portfolio
Growth Opportunities Fund One Group Investment Trust Mid Cap Growth Portfolio
Large Company Growth Fund One Group Investment Trust Large Cap Growth Portfolio
Equity Index Fund One Group Investment Trust Equity Index Portfolio
</TABLE>
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization costs incurred in connection with the organization and initial
registration of the Trust were paid by the Administrator and have been
reimbursed by the Funds. Such organization costs have been deferred and are
being amortized ratably over a period of sixty months from the commencement of
operations. If any of the initial shares are redeemed before the end of the
amortization period, the proceeds of the redemption will be reduced by the
pro-rata share of the unamortized organization costs.
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 43
<PAGE> 46
THE ONE GROUP(R) INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
SECURITY VALUATION
Securities traded on a securities exchange are valued at the last quoted sale
price on the principal exchange, or if no sale, at their fair value as
determined in good faith under consistently applied procedures authorized by the
Board of Trustees. Securities traded only in the over-the-counter (OTC) market
are valued at the last quoted sale price, or if there is no sale, at the quoted
bid price provided by and independent pricing agent. Corporate debt securities
and debt securities of U.S. issuers, including municipal securities, are valued
by a combination of daily quotes and matrix evaluations provided by an
independent pricing service approved by the Board of Trustees. Inactive
securities that have little or no trading activity are valued by the independent
pricing services by obtaining dealer quotes. Futures contracts and options
thereon traded on a commodities exchange or board of trade are valued at the
last sales price at the close of trading, or if there was no sale, the quoted
bid price at the close of trading. Securities for which either reliable market
quotations are not readily available or for which the pricing agent does not
provide a valuation that, in the judgement of the Fund's investment adviser
represent fair value, shall each be valued in accordance with procedures
authorized by the Board of Trustees.
The Funds may invest in repurchase agreements with institutions that the
investment advisor has determined are creditworthy. Each repurchase agreement is
recorded at cost. The Funds require that the securities purchased in a
repurchase agreement transaction be transferred to the custodian in a manner
sufficient to enable the Funds to obtain those securities in the event of a
counterparty default. The seller, under the repurchase agreement, is required to
maintain the value of the securities held at not less than the repurchase price,
including accrued interest.
FEDERAL INCOME TAX
The Trust treats each Fund as a separate entity for federal income tax purposes.
Each Fund intends to continue to qualify as a regulated investment company by
complying with the provisions available to certain investment companies as
defined in applicable sections of the Internal Revenue Code, and to make
distributions from net investment income and from net realized capital gains
sufficient to relieve it from all, or substantially all, federal income taxes.
As of December 31, 1998, the Equity Index Fund had a capital loss carryforward
in the amount of $48,972 which, if unused, will expire in eight years.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are recorded on the trade date. Net realized gains or
losses from sales of securities are determined on the specific identification
method. Dividend income is recorded on the ex-dividend date; interest income is
recorded on an accrual basis and includes, where applicable, the pro-rata
amortization of premium or accretion of discount.
DIVIDENDS TO SHAREHOLDERS
Dividends are recorded on the ex-dividend date. The Funds declare and pay income
dividends quarterly. Distributable net realized capital gains are declared and
distributed at least annually. Dividends and distributions to shareholders are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These "book/tax" differences are
considered either permanent or temporary in nature. To the extent that these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their nature for federal income tax purposes;
temporary differences do not require reclassification. Dividends and
distributions that exceed net investment income and net realized gains for
financial reporting purposes but not for tax purposes are reported as dividends
in excess of net investment income and net realized gains. To the
44 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 47
THE ONE GROUP(R) INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
extent distributions exceed current and accumulated earnings and profits for
federal income tax purposes, they are reported as distributions of
paid-in-capital.
Accordingly, as of December 31, 1998, the capital accounts have been adjusted by
the following amounts:
<TABLE>
<CAPTION>
UNDISTRIBUTED
NET INVESTMENT DISTRIBUTIONS IN EXCESS
INCOME OF NET REALIZED GAIN CAPITAL
-------------- ----------------------- ----------
<S> <C> <C> <C>
Government Bond............... $ (33,739) $ 33,739 $ --
Asset Allocation.............. (52,459) 52,459 --
Growth Opportunities.......... 167,466 838,039 1,005,505
Equity Index.................. (601) -- 601
</TABLE>
EXPENSES
Direct expenses of a Fund are allocated to that Fund. The general expenses of
the Trust are allocated to the Funds based on the relative net assets of the
Funds at the time the expense is incurred.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
SECURITIES LENDING
To generate additional income, the Funds may lend up to 1/3 of securities in
which each fund is invested, pursuant to agreements requiring that the loan be
continuously secured by collateral equal at all times to at least 100% of the
market value plus accrued interest on the securities lent. Collateral may
include cash, U.S. Government or U.S. Government Agency securities, shares of an
investment trust or mutual fund, letters of credit or any combination of such
collateral. The Funds receive payments from borrowers equivalent to the
dividends and interest on securities lent while simultaneously seeking to earn
interest on the investment of cash collateral. Collateral is marked to market
daily to provide a level of collateral at least equal to the market value plus
accrued interest of securities lent. There may be risks of delay in recovery of
the securities or even loss of rights in the collateral should the borrower of
the securities fail financially. However, loans will be made only to borrowers
deemed by the Advisor to be of good standing and creditworthy under guidelines
established by the Board of Trustees and when, in the judgment of the Advisor,
the consideration which can be earned currently from such securities loans
justifies the attendant risk. Loans are subject to termination by the Funds or
the borrower at any time, and are, therefore, not considered to be illiquid
investments. As of December 31, 1998, the following Funds had securities with
the following market values on loan (amounts in thousands):
<TABLE>
<CAPTION>
MARKET VALUE MARKET VALUE MARKET VALUE
OF CASH OF NON-CASH OF LOANED
COLLATERAL COLLATERAL SECURITIES
------ ------ ------
<S> <C> <C> <C>
Government Bond......................... $ -- $4,684 $4,527
Asset Allocation........................ 1,353 6,202 7,299
Growth Opportunities.................... 8,672 -- 8,665
Large Company Growth.................... 3,331 -- 3,209
Equity Index............................ 139 -- 135
</TABLE>
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 45
<PAGE> 48
THE ONE GROUP(R) INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
NOTE 3 -- RELATED PARTY TRANSACTIONS
As Investment Advisor, Banc One Investment Advisors Corporation manages the
investments of each Fund of the Trust and earns a fee from the Funds at the
following annual rates: .45% of the average daily net assets of the Government
Bond Fund, .70% of the average daily net assets of the Asset Allocation Fund,
.65% of the average daily net assets of the Growth Opportunities Fund and the
Large Company Growth Fund and .30% of the average daily net assets of the Equity
Index Fund. Such fees are calculated daily and paid monthly.
Nationwide Advisory Services, Inc. (NAS) provides administrative and accounting
services to the Funds. For its services, NAS earns a fee from the Trust at an
annual rate of .24% of the Trust's aggregate average daily net assets (excluding
the Equity Index Fund) up to $250 million, and .14% of such net assets in excess
of $250 million. NAS earns an annual rate of .14% of the aggregate average daily
net assets of the Equity Index Fund.
Nationwide Investors Services, Inc. (NIS), an affiliate of NAS, serves as the
Transfer Agent to the Trust. For its services, NIS receives an annual fee of
$2,500 for each Fund.
The Investment Advisor has voluntarily agreed to waive all or part of its fees
in order to limit the Funds' operating expenses to no more than .75% of the
average daily net assets of the Government Bond Fund, 1.00% of the average daily
net assets of the Asset Allocation Fund, 1.10% of the average daily net assets
of each of the Growth Opportunities Fund, 1.00% of the average daily net assets
of the Large Company Growth Fund and .55% of the average daily net assets of the
Equity Index Fund. During the period ended December 31, 1998, the Investment
Advisor voluntarily waived fees in the amount of $9,393 in the Government Bond
Fund, $2,862 in the Asset Allocation Fund, and $15,432 in the Equity Index Fund.
During the period ended December 31, 1998 the Investment Advisor reimbursed the
Equity Index Fund $14,538.
NOTE 4 -- INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding U.S. Government obligations,
short-term securities and financial futures), and purchases and sales of U.S.
Government Obligations for the period ended December 31, 1998 are summarized as
follows:
<TABLE>
<CAPTION>
SECURITIES
PURCHASES SALES
------------ -----------
<S> <C> <C>
Government Bond.................................. $ 24,013,319 $ 7,542,028
Asset Allocation................................. 64,728,319 16,790,185
Growth Opportunities............................. 75,152,734 56,566,943
Large Company Growth............................. 140,902,324 84,279,396
Equity Index..................................... 12,476,568 172,258
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT OBLIGATIONS
PURCHASES SALES
------------ -----------
<S> <C> <C>
Government Bond.................................. $ 6,087,099 $ 4,612,083
Asset Allocation................................. 8,915,789 3,872,907
Equity Index..................................... 351,961 220,000
</TABLE>
The Asset Allocation Fund and Equity Index Fund engaged in trading financial
futures contracts. The Fund is exposed to market risks in excess of the amounts
recognized in the statement of assets and liabilities as a result of changes in
the value of the underlying financial instruments. Investments in financial
futures require the Fund to "mark to market" such futures on a daily basis, to
reflect the change in the market value of the contract at the close
46 THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT
<PAGE> 49
THE ONE GROUP(R) INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
of each day's trading. Typically, variation margin payments are made or received
to reflect daily unrealized gains or losses. When the contracts are closed, the
Fund recognizes a realized gain or loss. Realized gains and losses have been
computed on the specific identification method.
A stock index futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the stock index value at the close of
trading of the contracts and the price at which the futures contract was
originally struck. The purpose of entering into futures contracts is to remain
fully invested and reduce transaction costs.
Net unrealized appreciation (depreciation) on investments at December 31, 1998,
based on cost for federal income tax purposes, was as follows:
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ --------------
<S> <C> <C> <C>
Government Bond............................... $ 1,028,473 $ (205,097) $ 823,376
Asset Allocation.............................. 12,970,138 (1,657,570) 11,312,568
Growth Opportunities.......................... 27,930,804 (4,664,705) 23,266,099
Large Company Growth.......................... 57,854,922 (1,945,080) 55,909,842
Equity Index.................................. 1,697,501 (344,341) 1,353,160
</TABLE>
NOTE 5 -- SHARES HELD BY AFFILIATES
As of December 31, 1998, Nationwide Life and Annuity Insurance Company
beneficially owned shares of the Funds with the following net asset values:
<TABLE>
<S> <C>
Government Bond $6,988,511
Asset Allocation 1,902,139
Growth Opportunities 62,704
Large Company Growth 8,139,758
Equity Index 2,762,948
</TABLE>
As of December 31, 1998, Banc One Capital Corporation owned shares of the Equity
Index Fund with a net asset value of $828,884.
NOTE 6 -- FEDERAL INCOME TAX INFORMATION (UNAUDITED)
The following represents distributions from long-term capital gains for the
Funds for the period ended December 31, 1998:
<TABLE>
<S> <C>
Government Bond $ 44,830
Asset Allocation 1,016,495
Growth Opportunities 3,170,933
Large Company Growth 9,948,349
</TABLE>
THE ONE GROUP(R) INVESTMENT TRUST ANNUAL REPORT 47
<PAGE> 50
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