<PAGE>
Message From The Chairman Summit High Yield Fund
- -------------------------------------------------------------------------------
Dear Fellow Shareholders:
For the six-month period ending November 30, 1996, the Summit High Yield Fund,
as well as the high- yield bond market in general, posted strong returns. As
the following table shows, your Fund's total return exceeded both an average
of similar funds and the Salomon High Yield Index, a common benchmark of
performance for the high-yield bond market.
Performance Comparison
<TABLE>
<CAPTION>
PERIODS ENDING
11/30/96
------------------
6 MONTHS 12 MONTHS
-------- ---------
<S> <C> <C>
Summit High Yield Fund (High Yield Shares NAV)............... 9.34% 22.69%
Lipper High Yield Fund Average............................... 7.35% 13.86%
Salomon Brothers High Yield Index............................ 8.11% 12.16%
</TABLE>
Moreover, the Summit High Yield Fund has delivered particularly strong
performance versus its peers. The Fund's 22.69% (High Yield Shares NAV) total
return substantially outpaced the average total return of 13.86% earned by
other high-yield funds in Lipper Analytical Services' High Current Yield
category for the 12 months ending November 30, 1996. IN FACT, SINCE OUR JUNE
1994 INCEPTION, THE SUMMIT HIGH YIELD FUND'S PERFORMANCE (HIGH YIELD SHARES)
WAS RANKED #1 AMONG 105 HIGH YIELD FUNDS FOR THE PERIOD 6/30/94 THROUGH
12/31/96 WITH A TOTAL RETURN OF 47.06%/1/.
MARKET ENVIRONMENT
The environment for high-yield bonds was just about all anyone could hope for
in 1996. The fundamentals of the market continued to improve throughout the
year.
Demand remained extremely strong as investors seeking further portfolio
diversification and alternatives to low-yielding investments and equities
poured cash into the high-yield market. On average, about $300 million a week
has come into high-yield mutual funds this year.
A record level of $65 billion of new corporate securities were issued and
readily absorbed by the growing market. About one half of new securities
issued this year have been from the media/communications sector, a trend
which should continue in 1997.
The technical support of the high-yield market remains strong. In addition to
the strong cash flows from mutual funds, a number of other financial
institutions have provided new sources of cash. A number of large pension
finds and endowments have started to commit funds, and over $7 billion of
Collateralized Bond Obligation (CBO) portfolios--a record number--were
completed during 1996, with more slated for 1997. Also, several large
insurance companies that lately have been absent from or were never a
participant in the high-yield market are allocating new monies to high-yield
issues from their high-grade portfolios.
The economic environment remained favorable for high-yield bond issuers,
enabling many to improve their creditworthiness. Numerous heavily indebted
companies took advantage of low interest rates and the generally receptive
stock market to replace older high-cost debt with equity or with lower-cost
bonds
- ------
/1/The rankings are based on total return and do not include the effect of a
sales charge. Past performance is no guarantee of future results. During the
period for which this ranking is based, the fund waived fees. In the absence
of these waivers, the ranking may have been lower. For the one-year period
ended 12/31/96, the Summit High Yield Fund ranked #5 of 148 high yield
funds. Source: Lipper Analytical Services, Inc.
-1-
<PAGE>
Message From The Chairman Summit High Yield Fund
- -------------------------------------------------------------------------------
or bank loans. In addition, the slow-to-moderate- growth economic environment
has led to stronger cash flows at many companies, enabling them to improve
their financial prospects.
OUR INVESTMENT STRATEGY
During the recent six-month period, the Fund continued to benefit from
excellent individual security selection as well as rising demand from
institutional investors for high-yield bonds. The Fund's performance also
reflected our attempts to
maximize total returns by combining capital appreciation and current income.
One tenet to our strategy is to avoid troubled companies. The default rate in
1996 should be a very respectable 1.5%, less than half 1995's default rate of
3.1% and well below the 20-year average of about 3.0%. Given market
participants' viewpoint that the U.S. economy is past its midpoint in its
business cycle, investors have become intolerant of issuers whose results have
been disappointing. We stress the ability to avoid defaulted securities as one
of the key determinants of portfolio outperformance.
In closing, we believe that the high-yield market will continue to deliver
solid returns appropriate for the risks investors in this asset class take.
The economy appears likely to grow at a moderate pace with benign inflation in
the coming year, providing significant opportunities for the Fund.
Again, I would like to thank you for the confidence that you have placed in
our portfolio management. As one of the top-ranked high-yield mutual funds in
the country, the Summit Fund has had an excellent 1996. Please feel free to
call me with comments or suggestions concerning any aspects of our Fund.
Sincerely,
/s/Steven R. Sutermeister
Chairman
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AS OF DECEMBER 31, 1996
--------------------------------------------------------
SINCE
INCEPTION
1 YEAR 6/27/94
--------------------------------------------------------
<S> <C> <C>
High Yield Shares NAV 22.55% 16.55%
MOP 17.18% 14.50%
--------------------------------------------------------
Institutional Shares 22.68% 16.60%
--------------------------------------------------------
</TABLE>
During the period, investment advisory and administration fees were
voluntarily reduced, resulting in a higher total return than would have
occurred if full fees had been charged. Past performance is no guarantee of
future results. The Investment return and NAV will fluctuate so that an
Investor's Shares, when redeemed, may be worth more or less than the original
cost.
Although the Fund's yield may be significantly higher than that of other
fixed-income funds that purchase higher rated securities, this yield is
generally accompanied by greater risk that the Fund's share price will
decline. For further information regarding this and other risks, please
consult the prospectus.
The Summit High Yield Fund is distributed by BISYS Fund Services.
This report is authorized for distribution only when preceded or accompanied
by a current prospectus.
-2-
<PAGE>
TABLE OF CONTENTS
Message From the Chairman
Page 1
Statement of Assets and Liabilities
Page 4
Statement of Operations
Page 5
Statements of Changes in Net Assets
Page 6
Schedule of Portfolio Investments
Page 7
Notes to Financial Statements
Page 10
Financial Highlights
Page 15
-3-
<PAGE>
SUMMIT HIGH YIELD FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $31,327,990).......................... $33,531,711
Cash.............................................................. 199,954
Interest receivable............................................... 697,780
Receivable for capital shares issued.............................. 14,340
Prepaid expenses.................................................. 10,842
-----------
Total Assets.................................................. 34,454,627
-----------
LIABILITIES:
Payable for investments purchased................................. 500,000
Payable for capital shares redeemed............................... 625
Accrued expenses and other payables:
Investment advisory fees........................................ 1,310
Administration fees............................................. 1,382
12b-1 fees (High Yield shares).................................. 6,331
12b-1 fees (Institutional Service shares)....................... 143
Custodian and accounting fees................................... 2,148
Printing costs.................................................. 22,750
Other........................................................... 17,458
-----------
Total Liabilities............................................. 552,147
-----------
NET ASSETS:
Capital........................................................... 29,601,130
Undistributed net investment income............................... 34,485
Net unrealized appreciation on investments........................ 2,203,721
Accumulated undistributed net realized gains on investment trans-
actions.......................................................... 2,063,144
-----------
Net Assets.................................................... $33,902,480
===========
Net Assets
High Yield shares............................................... $31,608,469
Institutional shares............................................ 2,294,011
-----------
Total........................................................... $33,902,480
===========
Outstanding units of beneficial interest (shares)
High Yield shares............................................... 2,732,360
Institutional Service shares.................................... 198,670
-----------
Total........................................................... 2,931,030
===========
Net asset value
Redemption price per share--High Yield shares................... $11.57
Offering and Redemption price per share--Institutional Service
shares......................................................... $11.55
===========
Maximum Sales Charge--High Yield shares........................... 4.50%
===========
Maximum Offering Price--High Yield shares (100%/(100%-Maximum
Sales Charge)
of net asset value adjusted to nearest cent) per share........... $12.11
===========
</TABLE>
See notes to financial statements.
-4-
<PAGE>
SUMMIT HIGH YIELD FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1996
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income..................................................... $1,654,678
Dividend income..................................................... 15,487
----------
Total Income...................................................... 1,670,165
----------
EXPENSES:
Investment advisory fees............................................ 169,217
Administration fees................................................. 31,941
12b-1 fees--High Yield shares....................................... 37,289
12b-1 fees--Institutional Service shares............................ 472
Custodian and accounting fees....................................... 26,661
Legal and audit fees................................................ 15,365
Organization costs.................................................. 728
Trustees' fees...................................................... 14,293
Transfer agent fees................................................. 27,736
Registration and filing fees........................................ 6,636
Printing costs...................................................... 27,336
Other............................................................... 11,183
----------
Total expenses before voluntary reductions........................ 368,857
Expenses voluntarily reduced...................................... (112,428)
----------
Total Expenses.................................................... 256,429
----------
Net investment income............................................... 1,413,736
----------
REALIZED/UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on investment transactions....................... 1,307,654
Net change in unrealized appreciation on investments................ 149,633
----------
Net realized/unrealized gains on investments........................ 1,457,287
----------
Change in net assets resulting from operations...................... $2,871,023
==========
</TABLE>
See notes to financial statements.
-5-
<PAGE>
SUMMIT HIGH YIELD FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
1996 1996
------------ ------------
(UNAUDITED)
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............................ $ 1,413,736 $ 2,580,722
Net realized gains on investment transactions.... 1,307,654 1,021,588
Net change in unrealized appreciation on invest-
ments........................................... 149,633 1,498,333
----------- -----------
Change in net assets resulting from operations.... 2,871,023 5,100,643
----------- -----------
DISTRIBUTIONS TO HIGH YIELD SHAREHOLDERS FROM:
Net investment income............................ (1,296,534) (2,515,712)
Net realized gains............................... -- (66,947)
DISTRIBUTIONS TO INSTITUTIONAL SHAREHOLDERS FROM:
Net investment income............................ (90,004) (52,460)(a)
In excess of net investment income............... -- (5,333)(a)
----------- -----------
Change in net assets from shareholder distribu-
tions........................................... (1,386,538) (2,640,452)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued...................... 784,986 3,568,045
Dividends reinvested............................. 1,352,246 2,865,386
Cost of shares redeemed.......................... (119,783) (6,168,600)
----------- -----------
Change in net assets from capital transactions... 2,017,449 264,831
----------- -----------
Change in net assets............................. 3,501,934 2,725,022
NET ASSETS:
Beginning of period.............................. 30,400,546 27,675,524
----------- -----------
End of period.................................... $33,902,480 $30,400,546
=========== ===========
SHARE TRANSACTIONS:
Issued........................................... 69,516 333,322
Reinvested....................................... 120,170 272,922
Redeemed......................................... (10,790) (591,773)
----------- -----------
Change in shares.................................. 178,896 14,471
=========== ===========
</TABLE>
- ------
(a) For the period from January 19, 1996 (commencement of operations) to May
31, 1996.
See notes to financial statements.
-6-
<PAGE>
SUMMIT HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (0.3%):
Transportation (0.3%):
279,669 Central Transport Rental Group
PLC-ADR............................................... $ 96,136
-----------
Total Common Stocks............................................. 96,136
-----------
CORPORATE BONDS (97.2%):
Consumer (6.9%):
Consumer Goods & Services (5.0%):
1,000,000 Renaissance Cosmetics, Inc.,
13.75%, 8/15/01....................................... 1,165,000
500,000 Speedy Muffler King, Inc.,
10.88%, 10/1/06....................................... 532,500
-----------
1,697,500
-----------
Food Processors (1.9%):
1,000,000 PM Holdings Corp.,
0.00%, 9/1/00 (b)..................................... 650,000
-----------
Total Consumer.................................................. 2,347,500
-----------
Energy (3.2%):
Oil/Gas Exploration (1.6%):
500,000 Trans Texas Gas Corp.,
11.50%, 6/15/02....................................... 542,500
-----------
Oilfield Service (1.6%):
500,000 Energy Ventures, Inc.,
10.25%, 3/15/04....................................... 527,500
-----------
Total Energy.................................................... 1,070,000
-----------
Financial Services (5.5%):
1,000,000 Coleman Holdings,
0.00%, 5/27/98*....................................... 838,750
1,000,000 Tri Polyta Finance, Inc.,
11.38%, 12/1/03....................................... 1,003,750
-----------
Total Financial Services........................................ 1,842,500
-----------
Manufacturing (39.0%):
Apparel/Textile (12.3%):
500,000 CMI Industries,
9.50%, 10/1/03........................................ 455,000
1,000,000 Collins & Aikman Products Corp.,
11.50%, 4/15/06....................................... 1,067,500
500,000 Pillowtex Corp.,
10.00%, 11/15/06...................................... 512,500
1,000,000 Synthetic Industries, Inc.,
12.75%, 12/1/02....................................... 1,098,750
500,000 Tultex Corp.,
10.63%, 3/15/05....................................... 540,000
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Manufacturing, continued:
Apparel/Textile, continued:
500,000 William Carter Co.,
10.38%, 12/1/06**..................................... $ 508,750
-----------
4,182,500
-----------
Auto & Related (5.4%):
1,000,000 Great Dane Holdings,
14.50%, 1/1/06........................................ 1,005,000
1,000,000 Venture Holdings,
9.75%, 4/1/04......................................... 832,880
-----------
1,837,880
-----------
Conglomerates (1.4%):
500,000 J.P. Poindexter,
12.50%, 8/15/01....................................... 487,500
-----------
General Industrial (15.2%):
500,000 Gulf States Steel,
13.50% 4/15/03........................................ 472,500
500,000 IMO Industries,
11.75%, 5/1/06**...................................... 475,000
1,000,000 International Knife & Saw Corp.,
11.38%, 11/16/06**.................................... 1,027,500
1,000,000 International Wire Group,
11.75%, 6/1/05........................................ 1,072,500
1,000,000 Terex Corp.,
13.75%, 5/15/02....................................... 1,080,000
1,000,000 Unifrax Investment Corp.,
10.50%, 11/1/03....................................... 1,027,500
-----------
5,155,000
-----------
Information Services/Technology (3.1%):
1,000,000 Computervision Industries Corp.,
11.38%, 8/15/99....................................... 1,042,500
-----------
Paper Products (1.6%):
500,000 Florida Coast Paper,
12.75%, 6/1/03**...................................... 525,000
-----------
Total Manufacturing............................................. 13,230,380
-----------
Service (21.4%):
Gaming/Hotels (6.1%):
500,000 Argosy Gaming Co.,
13.25%, 6/1/04........................................ 470,000
1,000,000 Alliance Gaming Corp.,
12.88%, 6/30/03....................................... 1,052,500
</TABLE>
Continued
-7-
<PAGE>
SUMMIT HIGH YIELD FUND
SCHEDULE OF INVESTMENTS, CONTINUED
NOVEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Service, continued:
Gaming/Hotels, continued:
500,000 Majestic Star Casino,
12.75%, 5/15/03....................................... $ 536,250
-----------
2,058,750
-----------
Grocery (2.8%):
1,000,000 Eagle Food Centers,
8.63%, 4/15/00........................................ 940,000
-----------
Health Care (2.9%):
1,000,000 Regency Health Services,
9.88%, 10/25/02....................................... 1,007,500
-----------
Media & Cable (1.7%):
500,000 CS Wireless Systems, Inc.,
0.00%, 3/1/06** (g)................................... 180,000
1,000,000 Peoples' Choice TV Corp.,
0.00%, 6/1/04 (c)..................................... 390,000
-----------
570,000
-----------
Other Services (7.9%):
500,000 Allied Waste North America, Inc.,
10.25%, 12/1/06**..................................... 511,875
1,000,000 Intertek Finance PLC,
10.25%, 11/1/06**..................................... 1,027,500
500,000 Iron Mountain, Inc.,
10.13%, 10/1/06....................................... 528,125
600,000 Neodata Services, Inc.,
12.00%, 5/1/03........................................ 618,000
-----------
2,685,500
-----------
Total Service................................................... 7,261,750
-----------
Transportation (15.8%):
Air Transportation/Related (8.1%):
1,000,000 Airplanes Pass Through Trust, 10.88%, 3/15/19.......... 1,110,000
500,000 CHC Helicopter,
11.50%, 7/15/02....................................... 510,000
1,000,000 SC International,
13.00%, 10/1/05....................................... 1,130,000
-----------
2,750,000
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- ----------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Transportation, continued:
Trucking/Other (7.7%):
1,000,000 Ameritruck Distribution,
12.25%, 11/15/05...................................... $ 990,000
579,131 Central Transport Rental Group
PLC-ADR, 9.50%, 4/30/03............................... 542,936
500,000 Sea Containers Ltd.,
10.50%, 7/1/03........................................ 510,000
500,000 TNT Transport PLC, TNT USA, 11.50%, 4/15/04............ 570,000
----------
2,612,936
----------
Total Transportation............................................ 5,362,936
----------
Utilities (5.4%):
Telecommunications (5.4%):
1,000,000 Arch Communications Group, Inc., 0.00%, 3/15/08 (e).... 577,500
750,000 Call-Net Enterprises, Inc.,
0.00%, 12/1/04 (f).................................... 603,750
1,000,000 Intermedia Communications,
0.00%, 5/15/01 (d).................................... 657,500
----------
Total Utilities................................................. 1,838,750
----------
Total Corporate Bonds........................................... 32,953,816
----------
WARRANTS (0.5%):
Broadcast, Radio & Television (0.0%):
200 American Telecastings, 5 Warrant Package, expire
6/15/99............................................... 2,400
----------
Consumer (0.4%):
2,000 Renaissance Cosmetics, Inc.,
Warrants, expire 8/15/01.............................. 126,000
----------
Hotels/Gaming (0.0%):
500 Boomtown Warrants, expire 11/98........................ 5
----------
Paper Products (0.1%):
10,000 S.D. Warren Warrants................................... 45,000
----------
Total Warrants.................................................. 173,405
----------
</TABLE>
Continued
-8-
<PAGE>
SUMMIT HIGH YIELD FUND
SCHEDULE OF INVESTMENTS, CONTINUED
NOVEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
INVESTMENT COMPANIES (0.9%):
308,354 Fountain Square Money Market Fund...................... $ 308,354
-----------
Total Investment Companies...................................... 308,354
-----------
TOTAL INVESTMENTS
(Cost--$31,327,990)(a).......................................... $33,531,711
===========
</TABLE>
- ------
Percentages indicated are based on net assets of $33,902,480.
(a)Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........... $2,607,576
Unrealized depreciation........... (403,855)
----------
Net unrealized appreciation....... $2,203,721
==========
</TABLE>
(b) Interest rate increases to 11.50% on September 1, 2000.
(c) Interest rate increases to 13.13% on June 1, 2000.
(d) Interest rate increases to 12.5% on May 15, 2001.
(e) Interest rate increases to 10.88% on March 15, 2001.
(f) Interest rate increases to 13.25% on December 1,1999.
(g) Interest rate increases to 11.38% on March 1, 2001.
* Represents discount note.
** Represents private placement securities.
PLC = Public Limited Company
ADR = American Depository Receipt
See notes to financial statements.
-9-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996
(UNAUDITED)
1.ORGANIZATION:
Summit Investment Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as an open-end management
investment company established as a Massachusetts business trust under a
Declaration of Trust dated March 8, 1994. The Trust is currently comprised
of one investment portfolio, the Summit High Yield Fund (the "Fund").
Between the date of organization and the date of commencement of operations
of the Fund (June 27, 1994), the Trust had no operations other than those
relating to organizational matters, including the issuance on May 24, 1994
of 10,000 shares at $10.00 per share, to The Union Central Life Insurance
Company ("Union Central Life").
The Fund's investment objective is high current income with capital
appreciation as a secondary goal. The Fund invests primarily in lower-
quality, intermediate to long-term corporate bonds.
The Fund is authorized to issue an unlimited number of shares, which are
units of beneficial interest with par value of $0.001 per share. The Fund is
authorized to issue two classes of shares, High Yield and Institutional
Service. The High Yield shares are subject to an initial sales charge
imposed at the time of purchase, in accordance with the Fund's prospectus.
Each class of shares has identical rights and privileges except with respect
to voting rights on matters affecting a single class of shares and the
exchange privileges of each class of shares.
2.SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses for
the period. Actual results could differ from those estimates.
SECURITIES VALUATION:
Securities which are traded on stock exchanges are valued at the last
sales price as of the close of the New York Stock Exchange (the
"Exchange"), or lacking any sales, at the closing bid prices. Securities
traded only in the "over-the-counter" market are valued at the last bid
prices quoted by brokers that make markets in the securities at the close
of trading on the Exchange. Fixed income securities are generally traded
in the over-the-counter market. Securities and assets for which market
quotations are not readily available or not obtained from a pricing
service are valued at fair value as determined in good faith by the Board
of Trustees, although the actual calculations may be made by persons
acting pursuant to the direction of the Trustees. The Fund uses a pricing
service or services in determining the net asset value of the Fund. Debt
securities with a remaining maturity of 60 days or less are valued on an
amortized cost basis, which the Trustees have determined reflects fair
value.
Continued
-10-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOVEMBER 30, 1996
(UNAUDITED)
The Fund may invest its assets in intermediate to long-term, high yield,
medium and lower quality, fixed income securities. Because the market for
lower-rated securities may be thinner and less active than for higher
rated securities, there may be market price volatility for these
securities and limited liquidity in the resale market. If market
quotations are not readily available for the Fund's lower-rated or non-
rated securities, these securities will be valued by a method that the
Trustees believe accurately reflects fair value. Judgment plays a greater
role in valuing lower rated debt securities than with respect to
securities for which external sources of quotations and last sale
information are more available.
SECURITIES TRANSACTIONS AND RELATED INCOME:
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the
accrual basis and includes, where applicable, the pro rata amortization
of premium or discount. Dividend income is recorded on the ex-dividend
date. Gains or losses realized on sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared and paid monthly.
Distributable net realized capital gains, if any, are declared and
distributed at least annually.
Dividends from net investment income and from net realized capital gains
are determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These differences are
primarily due to differing treatments for organization costs and
deferrals of certain losses.
FEDERAL INCOME TAXES:
It is the policy of the Fund 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 of net investment income and net
realized capital gains sufficient to relieve it from all, or
substantially all, Federal income taxes.
OTHER:
All expenses in connection with the Trust's organization and registration
under the 1940 Act and the Securities Act of 1933 were paid by the Fund.
Such expenses are being amortized over a period of two years commencing
with the date of the initial public offering. In the event that any of
the initial shares of the fund are redeemed during the amortization
period by any holder thereof, the redemption proceeds will be reduced by
any unamortized organizational expenses of the trust in the same
proportion as the number of said shares being redeemed bears to the
number of initial shares that are outstanding at the time of redemption.
Other operating expenses of the Trust are prorated to the Fund on the
basis of relative net assets.
Continued
-11-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOVEMBER 30, 1996
(UNAUDITED)
3.PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities for the Fund (excluding short-term
securities) for the six months ended November 30, 1996 were $42,359,798 and
$39,082,381 respectively.
4. RELATED PARTY TRANSACTIONS:
First Summit Capital Management ("FSCM" or the "Adviser"), a joint venture
having its principal offices at 1876 Waycross Road, Cincinnati, Ohio 45240,
is the investment adviser to the Fund. FSCM was organized principally for
purposes of sponsoring and managing the Trust pursuant to a Joint Venture
Agreement between Carillon Advisers, Inc. ("Carillon"), an Ohio corporation,
and Freeman Holding Company, Inc. ("Freeman"), a Delaware corporation.
Carillon is a wholly-owned subsidiary of Union Central Life, an Ohio mutual
insurance company, which owns more than 96% of the shares of the Fund.
Freeman is the parent corporation of Freeman Securities Company, Inc., a New
Jersey corporation which is registered as a broker-dealer under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc.
Under the terms of the Investment Advisory Agreement, FSCM is entitled to
receive fees based on a percentage of the average net assets of the Fund.
Effective July 1, 1995, the investment advisory fee is based on the total
return investment performance of the Fund for the prior twelve-month period
relative to the percentage change in the Salomon Brothers High Yield Market
Index for the same period. The advisory fee is paid monthly at an annual
rate which varies between 0.35% and 1.15% of the Fund's average daily net
assets. The adviser has agreed to waive a portion of its advisory fee so as
to limit the Fund's total expenses to 1.60%. For the six months ended
November 30, 1996, FSCM voluntarily reduced $104,363 of investment advisory
fees.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS")
is an Ohio limited partnership. BISYS Fund Services Ohio, Inc. ("BISYS
Ohio"), and BISYS are subsidiaries of The BISYS Group, Inc.
Certain officers of the Trust are affiliated with BISYS or with FSCM. Such
officers are not paid any fees directly by the Fund for serving as officers
of the Trust.
BISYS serves the Trust as manager and administrator. Under the terms of the
Management and Administration Agreement, BISYS' fees are computed daily as a
percentage of the average net assets of the Fund at an annual rate of 0.20%.
For the six months ended November 30, 1996, BISYS voluntarily reduced $8,065
of administration fees.
BISYS also serves as distributor of the Fund's shares. BISYS receives fees
for providing distribution services under the Distribution Agreement (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Plan,
the Fund shall pay BISYS a fee not to exceed, on an annual basis, 0.25% of
the average daily net assets of
Continued
-12-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOVEMBER 30, 1996
(UNAUDITED)
certain shares of the Fund for payments BISYS makes to financial
institutions, including FSCM, and broker/dealers, and for expenses BISYS and
any of its affiliates incur for providing distribution or shareholder
service assistance. For the six months ended November 30, 1996, BISYS
received $11,732 from commissions earned on sales of shares of the Fund,
$10,549 of which was reallowed to unaffiliated broker/dealers.
BISYS Ohio serves as the Trust's transfer agent and is entitled to receive
fees based upon a contractually specified amount per shareholder with
specified minimum per portfolio amounts and surcharges. In addition, the
transfer agent is reimbursed for certain out-of-pocket expenses incurred in
providing transfer agency services. BISYS Ohio also serves as fund
accountant for the Trust. Under the terms of the Fund Accounting Agreement,
the fund accountant is entitled to receive fees based on a percentage of the
average net assets of the Fund and is reimbursed for certain out-of-pocket
expenses incurred in providing such fund accounting services. Transfer agent
and fund accounting fees for the six months ended November 30, 1996 were
$27,736 and $22,574, respectively.
Continued
-13-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOVEMBER 30, 1996
(UNAUDITED)
5.CAPITAL SHARE TRANSACTIONS
Transactions in capital shares for the Fund were as follows:
<TABLE>
<CAPTION>
SUMMIT HIGH YIELD
BOND FUND
------------------------
FOR THE FOR THE
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
1996 1996
------------ -----------
(UNAUDITED)
<S> <C> <C>
CAPITAL TRANSACTIONS:
HIGH YIELD SHARES:
Proceeds from shares issued..................... $ 390,440 $ 573,171
Dividends reinvested............................ 1,277,912 2,820,631
Shares redeemed................................. (78,019) (4,848,104)
---------- -----------
Change in net assets from High Yield share
transactions................................. $1,590,333 $(1,454,302)
========== ===========
INSTITUTIONAL SERVICE SHARES:
Proceeds from shares issued..................... $ 394,546 $ 2,994,874 (a)
Dividends reinvested............................ 74,334 44,755 (a)
Shares redeemed................................. (41,764) (1,320,496)(a)
---------- -----------
Change in net assets from Institutional
Service share transactions................... $ 427,116 $ 1,719,133 (a)
========== ===========
SHARE TRANSACTIONS:
HIGH YIELD SHARES:
Issued.......................................... 34,483 54,443
Reinvested...................................... 113,565 268,810
Redeemed........................................ (7,076) (469,528)
---------- -----------
Change in High Yield shares................... 140,972 (146,275)
========== ===========
INSTITUTIONAL SERVICE SHARES
Issued.......................................... 35,033 278,879 (a)
Reinvested...................................... 6,605 4,112 (a)
Redeemed........................................ (3,714) (122,245)(a)
---------- -----------
Change in Institutional Service shares........ 37,924 160,746 (a)
========== ===========
</TABLE>
- ------
(a) For the period from January 19, 1996 (commencement of operations) to May
31, 1996.
-14-
<PAGE>
SUMMIT HIGH YIELD FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INSTITUTIONAL
HIGH YIELD SHARES SERVICE SHARES
---------------------- --------------------------
FOR THE FOR THE
FOR THE FOR THE PERIOD FROM PERIOD
SIX MONTHS YEAR SIX MONTHS JANUARY 19, JUNE 27,
ENDED ENDED ENDED 1996 TO 1994 TO
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, MAY 31,
1996 1996 1996 1996(D) 1995(A)
------------ ------- ------------ ----------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD......... $ 11.05 $ 10.11 $ 11.03 $10.59 $ 10.00
------- ------- ------- ------ -------
INVESTMENT ACTIVITIES:
Net investment income. 0.50 1.01 0.51 0.40 0.83
Net realized and
unrealized gains
on investments....... 0.51 0.95 0.51 0.47 0.11
------- ------- ------- ------ -------
Total from Invest-
ment Activities.... 1.01 1.96 1.02 0.87 0.94
------- ------- ------- ------ -------
DISTRIBUTIONS:
Net investment income. (0.49) (1.01) (0.50) (0.40) (0.83)
In excess of net in-
vestment income...... (0.03)
Net realized gains.... (0.01)
------- ------- ------- ------ -------
Total Distributions. (0.49) (1.02) (0.50) (0.43) (0.83)
------- ------- ------- ------ -------
NET ASSET VALUE, END OF
PERIOD................. $ 11.57 $ 11.05 $ 11.55 $11.03 $ 10.11
======= ======= ======= ====== =======
Total Return (excludes
sales charges)......... 9.34%(b) 20.34% 9.38%(b) 20.16%(b) 9.97%(b)
RATIOS/SUPPLEMENTAL DA-
TA:
Net Assets at end of
period (000)......... $31,608 $28,628 $2,294 $1,773 $27,676
Ratio of expenses to
average net assets... 1.62%(c) 1.60% 1.42%(c) 1.52%(c) 1.56%(c)
Ratio of net invest-
ment income to average
net assets........... 8.84%(c) 9.42% 9.02%(c) 9.86%(c) 9.13%(c)
Ratio of expenses to
average net assets*.. 2.32%(c) 2.24% 2.12%(c) 2.76%(c) 1.61%(c)
Ratio of net invest-
ment income to average
net assets*.......... 8.14%(c) 8.78% 8.32%(c) 8.62%(c) 9.08%(c)
Portfolio turnover
(e).................. 131.35% 187.61% 131.35% 187.61% 158.36%
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) On January 19, 1996, the Fund issued a second series of shares and
designated such shares as "Institutional Service" shares.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
See notes to financial statements.
-15-
<PAGE>
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TRUSTEES AND OFFICERS
Steven R. Sutermeister, Chairman and Trustee
James F. Smith, President and Trustee
Theodore H. Emmerich, Trustee
Frederick Moss, Trustee
Bruce H. Olson, Trustee
Scott A. Englehart, Treasurer
Craig C. Rudesill, Secretary
-----------
Investment Adviser
First Summit Capital Management
1876 Waycross Road
Cincinnati, Ohio 45246
Administrator and Distributor
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219-3035
Legal Counsel
Stradley Ronon Stevens & Young
2600 Commerce Square
Philadelphia, PA 19103-7098
Auditors
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, Ohio 43215
1/97
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[LOGO OF SUMMIT HIGH YIELD FUND]
A PORTFOLIO OF SUMMIT INVESTMENT TRUST
MANAGED BY
FIRST SUMMIT CAPITAL MANAGEMENT
SEMI-ANNUAL REPORT
TO
SHAREHOLDERS
NOVEMBER 30, 1996
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