<PAGE>
Message From The Chairman Summit High Yield Fund
- -------------------------------------------------------------------------------
Fellow Shareholders:
The Summit High Yield Fund and the high-yield bond market provided excellent
returns for the six months ended November 30, 1997, surpassing gains posted by
higher quality bonds. As the following table shows, your Fund's total return
exceeded both an average of similar funds, the Salomon Brothers High Yield
Index, a common benchmark of performance for the high-yield bond market.
PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
PERIODS ENDED
NOVEMBER 30, 1997
-----------------------
SINCE
6 12 INCEPTION
MONTHS MONTHS 6/27/94
------ ------ ---------
<S> <C> <C> <C>
Summit High Yield Fund (NAV) 9.11% 17.90% 16.83%
Summit High Yield Fund
(with maximum load 4.50%) 4.32% 12.55% 15.28%
Lipper High Yield Fund
Average/1/ 7.46% 13.23% 11.58%
Salomon Brothers High Yield
Index/2/ 7.50% 12.91% 13.19%
Salomon Brothers Broad
(Investment Grade) Bond Index/3/ 6.55% 7.57% 9.64%
</TABLE>
The Summit High Yield Fund continued its particularly strong performance
relative to its peers. The Fund's 17.90% total return substantially out-paced
the average total return of 13.23% earned by other high-yield funds in Lipper
Analytical Services' High Yield category for the 12 months ended November 30,
1997. IN FACT, SINCE ITS JUNE 1994 INCEPTION, THE SUMMIT HIGH YIELD FUND'S
PERFORMANCE WAS RANKED #1 AMONG 100 HIGH-YIELD FUNDS FOR THE PERIOD 6/30/94
THROUGH 12/31/97, WITH A CUMULATIVE TOTAL RETURN OF 72.99% (VERSUS 47.08% FOR
THE AVERAGE LIPPER HIGH YIELD FUND).*
MARKET ENVIRONMENT
Favorable conditions in the high-yield market in 1997 allowed our market to
extend its strong run that began in 1995. The U.S. economy continued to grow
and interest rates, with benign inflation levels, declined throughout much of
1997, particularly the latter half of the year. Aftershocks from October's
collapse of Asian stock prices wreaked havoc in global financial markets
during the past three months. U.S. stocks went down initially, then rebounded
to lofty levels. Treasury bonds were a beneficiary as worldwide investors
bought those securities in a "flight-to-safety" trade. As bond/stock hybrids,
high-yield bonds were jostled by a variety of forces. The initial downdraft
had traders marking individual issues wider (by anywhere from 25 to 150 basis
points) versus Treasuries. Variations within the range generally corresponded
to the degree of credit risk, with zero-coupon issues characteristically
displaying greater-than-average price swings. Portfolio managers who had
heavily weighted the international emerging markets sector took an especially
hard hit.
Fundamentals of the high-yield market continued to improve throughout the
year. A record level of new issues were priced--with the majority of issues
priced at aggressive price talk levels, and then trading higher in the
secondary market. Year-to-date, approximately $115 billion has been brought to
market, compared with $67 billion in the same period last year.
Demand remained strong for high-yield securities. An ever-growing list of
institutional investors, especially public and private pension plans,
allocated new monies to the high-yield asset class as these investors sought
further portfolio diversification and
-1-
<PAGE>
Message From The Chairman, Continued Summit High Yield Fund
- -------------------------------------------------------------------------------
alternatives to low-yield fixed-rate investments and equities. On average,
$375 million a week has been invested with high-yield mutual funds year-to-
date and these mutual funds have seen their holdings of high-yield securities
grow from $80.7 billion at the beginning of 1997 to $98.7 billion at November
30.
The favorable economic conditions that investors have witnessed over the past
couple of years have enabled many high-yield bond issuers to improve their
creditworthiness. The moderate growth of the economy has led to stronger cash
flows at many companies, thus improving their long-term financial prospectus.
In addition, companies continued to take advantage of low interest rates and
the generally receptive stock market to replace older high-cost debt with
equity or lower-cost bonds of bank loans.
INVESTMENT STRATEGY
Our strategy remains unchanged. During the recent six-month period, the Fund
continued to benefit from excellent security selection as well as rising
demand from institutional investors for high-yield bonds. The Fund's strong
performance also reflected our attempts to increase total returns by combining
current income and capital appreciation.
In closing, we believe that the high-yield market will continue to deliver
solid returns appropriate for the risks assumed by investors in this asset
class. The U.S. economy likely will grow at a slow-to-moderate pace with
inflation expected to remain relatively low throughout much of 1998. This
environment should provide significant opportunities for the Fund.
Sincerely,
/s/ Steven R. Sutermeister
Steven R. Sutermeister
Chairman
- ------
/1/The Lipper High Yield Fund Average is an equally weighted bench-mark
composed of mutual funds, each of which normally invests in companies whose
long-term earnings are expected to grow significantly faster than the
earnings of the high yield bonds represented in the major unmanaged high
yield bond indexes. The performance figures are based on changes in net
asset value of the funds in the category with all capital gains
distributions and income dividends reinvested. Although the Fund's yield may
be significantly higher than that of other fixed income funds that purchase
higher rated securities, that is generally based upon greater risk that the
Fund's share price will decline.
/2/The Salomon High Yield Market Index, a broad-based index of the high-yield
bond market. The index is unmanaged and does not reflect the deduction of
expenses associated with a mutual fund, such as investment management and
fund accounting fees.
/3/The Salomon Brothers Broad (Investment Grade) Bond Index, a broad-based
index of the investment-grade corporate and U.S. Government bond market. The
index is unmanaged and does not reflect the deduction of expenses associated
with a mutual fund, such as investment management and fund accounting fees.
The performance of the Summit High Yield Fund reflects the deduction of fees
for these value-added services.
*The ranking is based on total return and does not include the effect of
sales charge. During the ranking period the Fund waived fees, without this
waiver the ranking may have been lower. For the one year period the fund
ranked #6 among 181 high-yield funds.
Past performance is not predictive of future results. Investment return and
the principal value of shares in the Summit High Yield Fund will fluctuate, so
that the shares, when redeemed, may be worth more or less than their 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 16
-3-
<PAGE>
SUMMIT HIGH YIELD FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $45,079,059).......................... $46,433,395
Interest receivable............................................... 1,012,276
Receivable for capital shares issued............................ 959
Prepaid expenses................................................ 33,659
-----------
Total Assets.................................................. 47,480,289
-----------
LIABILITIES:
Cash overdraft.................................................... 1,758
Payable for investments purchased................................. 1,000,000
Accrued expenses and other payables:
Investment advisory fees........................................ 4,997
Administration fees............................................. 954
12b-1 fees...................................................... 8,426
Fund Accounting fees............................................ 452
Legal fees...................................................... 5,467
Audit fees...................................................... 8,677
Printing costs.................................................. 1,537
Other........................................................... 120
-----------
Total Liabilities............................................. 1,032,388
-----------
NET ASSETS:
Capital........................................................... 41,003,936
Undistributed (distribution in excess of) net investment income... 74,193
Accumulated undistributed net realized gains (losses) from invest-
ment transactions................................................ 4,015,436
Net unrealized appreciation (depreciation) on investments......... 1,354,336
-----------
Net Assets.................................................... $46,447,901
===========
Outstanding units of beneficial interest.......................... 3,917,603
===========
Net asset value
Redemption price per share...................................... $11.86
===========
Maximum Sales Charge.............................................. 4.50%
===========
Maximum Offering Price--(100%/(100%-maximum sales charge)
of net asset value per share (adjusted to nearest cent))......... $12.42
===========
</TABLE>
See notes to financial statements.
-4-
<PAGE>
SUMMIT HIGH YIELD FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income.................................................... $2,062,989
Dividend income.................................................... 18,111
----------
Total Income..................................................... 2,081,100
----------
EXPENSES:
Investment advisory fees........................................... 194,930
Administration fees................................................ 41,843
12b-1 fees--(High Yield Shares Class).............................. 50,319
12b-1 fees--(Institutional Service Shares Class)................... 1,999
Accounting fees.................................................... 20,912
Custodian fees..................................................... 5,835
Transfer agent fees................................................ 32,175
Trustees' fees..................................................... 12,330
Legal fees......................................................... 30,987
Audit fees......................................................... 4,383
Registration and filing fees....................................... 14,962
Printing costs..................................................... 22,071
Other.............................................................. 9,488
----------
Total expenses before voluntary reductions....................... 442,234
Expenses voluntarily reduced..................................... (107,537)
----------
Total Expenses................................................... 334,697
----------
Net investment income.............................................. 1,746,403
----------
REALIZED/UNREALIZED GAINS ON INVESTMENTS:
Net realized gains (losses) on investment transactions............. 2,268,193
Net change in unrealized appreciation (depreciation) on invest-
ments............................................................. (539,430)
----------
Net realized/unrealized gains (losses) on investments.............. 1,728,763
----------
Change in net assets resulting from operations..................... $3,475,166
==========
</TABLE>
See notes to financial statements.
-5-
<PAGE>
SUMMIT HIGH YIELD FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
1997 1997
------------ -----------
<S> <C> <C>
(UNAUDITED)
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............................ $ 1,746,403 $ 2,979,432
Net realized gains (losses) on investment trans-
actions......................................... 2,268,193 2,908,478
Net change in unrealized appreciation (deprecia-
tion) on investments............................ (539,430) (160,322)
----------- -----------
Change in net assets resulting from operations.... 3,475,166 5,727,588
----------- -----------
DISTRIBUTIONS TO HIGH YIELD SHAREHOLDERS FROM:
Net investment income............................ (1,640,731) (2,754,994)
In excess of net investment income............... 0 (353,047)
Net realized gains............................... 0 (1,369,117)
DISTRIBUTIONS TO INSTITUTIONAL SERVICE
SHAREHOLDERS FROM:
Net investment income............................ (75,986)(a) (231,725)
In excess of net investment income............... (3,718)(a) (48,995)
Net realized gains............................... 0 (100,079)
----------- -----------
Change in net assets from shareholder distribu-
tions............................................ (1,720,435) (4,857,957)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued...................... 19,183,149 8,216,321
Dividends reinvested............................. 2,102,774 4,761,817
Cost of shares redeemed.......................... (15,536,482) (5,304,586)
----------- -----------
Change in net assets from capital transactions.... 5,749,441 7,673,552
----------- -----------
Change in net assets.............................. 7,504,172 8,543,183
NET ASSETS:
Beginning of period.............................. 38,943,729 30,400,546
----------- -----------
End of period.................................... $46,447,901 $38,943,729
=========== ===========
SHARE TRANSACTIONS:
Issued........................................... 1,408,773 733,390
Reinvested....................................... 140,216 426,459
Redeemed......................................... (1,070,958) (472,411)
----------- -----------
Change in shares.................................. 478,031 687,438
=========== ===========
</TABLE>
- --------
(a) Institutional Service Shares ceased operations and were abolished on July
31, 1997.
See notes to financial statements.
-6-
<PAGE>
SUMMIT HIGH YIELD FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------ -----------
<C> <S> <C>
COMMON STOCKS (0.0%):
Communications (0.0%):
1,000 Paging Do Brazil
Holding..................... $ 0
-----------
Total Common Stocks................... 0
-----------
CORPORATE BONDS (96.8%):
Cable/Broadcasting (10.4%):
Cable/Pay TV/Other (8.0%):
259,000 Adelphia Communication
Corp., 12.50%, 5/15/02...... 274,540
1,000,000 Kabelmedia Holdings,
0.00%, 8/1/06 (b)........... 730,000
1,000,000 People's Choice TV
Corp., 0.00%, 6/1/04
(c)......................... 350,000
500,000 Tevecap SA, 12.63%,
11/26/04**.................. 450,000
1,000,000 TV Azteca SA, 10.50%,
2/15/07**................... 1,040,000
1,000,000 TV Filme Inc., 12.88%,
12/15/04**.................. 900,000
-----------
3,744,540
-----------
Radio & Television Broadcasting (2.4%):
1,000,000 Spanish Broadcasting
System, 11.00%,
3/15/04**................... 1,100,000
-----------
Total Cable/Broadcasting............... 4,844,540
-----------
Communications (23.2%):
Network Services (3.7%):
1,000,000 Crown Castle
International Corp.,
0.00%, 11/15/07 (d)......... 605,000
1,000,000 Qwest Communications
International, 10.88%,
4/1/07**.................... 1,110,000
-----------
1,715,000
-----------
Telegraph/Paging (4.8%):
1,500,000 Knology Holdings Inc.,
0.00%, 10/15/07 (e)......... 780,000
500,000 Mobile
Telecommunications,
13.50%, 12/15/02............ 570,000
1,000,000 Paging Network Do Brazil
SA, 13.50%, 6/6/05.......... 875,000
-----------
2,225,000
-----------
Telephone Communications (14.7%):
1,000,000 American Communications
Services, 0.00%, 4/1/06 (f). 710,000
1,000,000 Dobson Communications,
11.75%, 4/15/07............. 1,040,000
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Cable/Broadcasting, continued:
Telephone Communications, continued:
1,000,000 Intermedia Communications, 0.00%, 5/15/06 (g).......... $ 775,000
1,000,000 Metronet Communications Corp., 12.00%, 8/15/07**....... 1,130,000
500,000 Nextlink Communications, 9.63%, 10/1/07................ 505,000
1,000,000 Phonetel Technologies Inc., 12.00%, 12/15/06........... 1,032,500
1,000,000 RCN Corp., 0.00%, 10/15/07 (h)......................... 580,000
1,000,000 Talton Holdings Inc., 11.00%, 6/30/07**................ 1,070,000
-----------
6,842,500
-----------
Total Communications............................................ 10,782,500
-----------
Energy/Mining (6.1%):
Distribution (1.8%):
1,000,000 Empire Gas Corp., 7.00%, 7/15/04 (i)................... 857,500
-----------
Oil/Gas Extraction (2.1%):
1,000,000 COHO Energy Inc., 8.88%, 10/15/07...................... 995,000
-----------
Refining/Processing (2.2%):
1,000,000 Clark R & M Inc., 8.88%, 11/15/07...................... 998,750
-----------
Total Energy/Mining............................................. 2,851,250
-----------
Financial (2.2%):
Banking/Insurance (2.2%):
1,000,000 Arcadia Financial Ltd., 11.50%, 3/15/07................ 1,010,000
-----------
Manufacturing/Consumer (14.9%):
Consumer Products (4.8%):
1,000,000 PM Holdings Corp., 0.00%, 9/1/05 (j)................... 795,000
500,000 Stuart Entertainment, 12.50%, 11/15/04................. 407,500
1,000,000 Werner Holdings Co. Inc., 10.00%, 11/15/07............. 1,020,000
-----------
2,222,500
-----------
Electric/HVAC (2.4%):
1,000,000 International Wire Group, 11.75%, 6/1/05............... 1,092,500
-----------
</TABLE>
Continued
-7-
<PAGE>
SUMMIT HIGH YIELD FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Manufacturing/Consumer, continued:
Food/Beverage (2.2%):
1,000,000 Fresh Del Monte Produce, 10.00%, 5/1/03................ $ 1,042,500
-----------
Printing & Publishing (1.1%):
500,000 ITT Publimedia BV, 9.38%, 9/15/07 522,500
-----------
Textile & Apparel (4.4%):
1,000,000 Anvil Knitwear Inc., 10.88%, 3/15/07**................. 1,030,000
1,000,000 Worldtex Inc., 9.63%, 12/15/07......................... 1,007,500
-----------
2,037,500
-----------
Total Manufacturing/Consumer..................................... 6,917,500
-----------
Manufacturing/Trade (18.8%):
Auto/Related Products (2.1%):
1,000,000 Venture Holdings, 9.75%, 4/1/04........................ 982,500
-----------
Chemicals (0.8%):
500,000 Tri Polyta Finance Inc., 11.38%, 12/1/03............... 380,000
-----------
Metals (4.5%):
1,000,000 Gulf States Steel, 13.50%, 4/15/03..................... 1,020,000
1,000,000 Kaiser Aluminum & Chemicals, 12.75%, 2/1/03............ 1,071,250
-----------
2,091,250
-----------
Miscellaneous (6.0%):
500,000 IMO Industries Inc., 11.75%, 5/1/06.................... 556,250
1,000,000 International Knife & Saw Inc., 11.38%, 11/5/06........ 1,070,000
1,000,000 Terex Corp., 13.25%, 5/15/02........................... 1,145,000
-----------
2,771,250
-----------
Paper & Pulp (5.4%):
1,000,000 Crown Paper Co., 11.00%, 9/1/05........................ 1,040,000
500,000 Florida Coast Paper, 12.75%, 6/1/03.................... 528,750
1,000,000 Indah Kiat Fin Mauritius, 10.00%, 7/1/07............... 920,000
-----------
2,488,750
-----------
Total Manufacturing/Trade........................................ 8,713,750
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Miscellaneous Services (13.7%):
General Merchandise (3.3%):
1,000,000 Duane Reade Corp., 12.00%, 9/15/02..................... $ 1,035,000
500,000 Pamida Inc., 11.75%, 3/15/03........................... 512,500
-----------
1,547,500
-----------
Hotel/Gaming (4.4%):
1,000,000 Alliance Gaming Corp., 10.00%, 8/1/07**................ 1,002,500
500,000 Casino Magic--Louisiana Inc., 13.00%, 8/15/03.......... 488,750
500,000 Majestic Star Casino, 12.75%, 5/15/03.................. 540,000
-----------
2,031,250
-----------
Other (5.3%):
1,000,000 Affinity Group Holdings Inc., 11.00%, 4/1/07........... 1,062,500
500,000 Allied Waste North America Inc., 10.25%, 12/1/06**..... 545,000
800,000 Neodata Services Inc., 12.00%, 5/1/03.................. 867,000
-----------
2,474,500
-----------
Specialty Retail (0.7%):
500,000 Speedy Muffler King Inc., 10.88%, 10/1/06.............. 330,000
-----------
Total Miscellaneous Services..................................... 6,383,250
-----------
Transportation (7.4%):
Air Transportation (1.1%):
500,000 CHC Helicopter, 11.50%, 7/15/02........................ 530,000
-----------
Shipping (2.8%):
750,000 Navigator Gas Transport, 12.00%, 6/30/07**............. 825,000
500,000 Pegasus Shipping Hellas Ltd., 11.88%, 11/15/04......... 491,250
-----------
1,316,250
-----------
</TABLE>
Continued
-8-
<PAGE>
SUMMIT HIGH YIELD FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
NOVEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Trucking/Warehousing (3.5%):
1,000,000 Ameritruck Distribution, 12.25%, 11/15/05............. $ 1,050,000
500,000 Iron Mountain Inc., 10.13%, 10/1/06................... 542,500
-----------
1,592,500
-----------
Total Transportation............................................ 3,438,750
-----------
Total Corporate Bonds........................................... 44,941,540
-----------
RIGHTS/WARRANTS (0.2%):
Cable/Broadcasting (0.0%):
200 American Telecastings, 5 Warrant Package, expire
6/15/99**............................................ 0
-----------
Manufacturing/Consumer (0.1%):
2,000 Renaissance Cosmetics Inc., Warrants, expire
8/15/01**............................................ 40,000
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
RIGHTS/WARRANTS, CONTINUED:
Manufacturing/Trade (0.1%):
4,000 Terex Corp., Rights, expire 5/15/02.................... $ 60,000
-----------
Total Rights/Warrants 100,000
-----------
INVESTMENT COMPANIES (3.0%):
1,391,855 Fountain Square Money Market Fund...................... 1,391,855
-----------
Total Investment Companies....................................... 1,391,855
-----------
TOTAL
(Cost $45,079,059)(a)--100.0%.................................... $46,433,395
===========
</TABLE>
- --------
Percentages indicated are based on net assets of $46,447,901.
(a)Represents cost for federal income tax purposes and differs from market
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation......... $ 2,487,842
Unrealized depreciation......... $(1,133,506)
-----------
Net unrealized appreciation..... $ 1,354,336
===========
</TABLE>
(b)Interest rate increases to 13.63% on August 1, 2001.
(c)Interest rate increases to 13.13% on June 1, 2000.
(d)Interest rate increases to 10.63% on November 15, 2002.
(e)Interest rate increases to 11.88% on October 15, 2002.
(f)Interest rate increases to 12.75% on April 1, 2001.
(g)Interest rate increases to 12.50% on May 15, 2001.
(h)Interest rate increases to 11.13% on October 15, 2002.
(i)Interest rate increases to 12.88% on July 15, 1999.
(j)Interest rate increases to 11.50% on September 1, 2000.
**Represents private placement securities.
See notes to financial statements.
-9-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
(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 an
Agreement and Declaration of Trust dated March 8, 1994, as amended. 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 without par value. During the six months ended
November 30, 1997, the Board of Trustees authorized and directed the officers
of the Trust to effectuate the exchanges of all shares of the Summit High
Yield Institutional Service Shares Class ("Institutional Service Class") into
shares of the Summit High Yield Shares class ("High Yield Shares Class") and,
upon completion of such exchanges, to effectuate the abolishment of the
Institution Service Class. The exchange of the shares and abolishment of the
Institution Service Class was completed on July 31, 1997. As of November 30,
1997, the Fund is offering only one class of shares to the public, the High
Yield Shares Class, which will continue to have substantially the same
expenses as prior to the abolishment of the Institutional Service Class.
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 United States 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 six months ended November 30, 1997. 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 price. Securities
traded in the "over-the-counter" market are valued at the last bid price
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. As approved by the
Board of Trustees, the Fund uses a pricing service or services in
determining
Continued
-10-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOVEMBER 30, 1997
(UNAUDITED)
the net asset value of shares of the Fund. Fixed income 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.
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 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. Net
realized capital gains, if any, are declared and paid 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 United States 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 of 1986, as amended, 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, as amended, were paid
by the Fund. Such expenses were amortized over a period of two years
commencing with the date of the initial public offering. Other operating
expenses of the Trust are paid by the Fund. (Once the new investment
portfolio of the Trust (described in paragraph 6 below) commences
operations, such operating expenses will be prorated to each investment
portfolio of the Trust on the basis of relative net assets).
Continued
-11-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOVEMBER 30, 1997
(UNAUDITED)
3. PURCHASES AND SALES OF PORTFOLIO SECURITIES:
Purchases and sales of portfolio securities for the Fund (excluding short-
term securities) for the six months ended November 30, 1997 were $101,630,613
and $96,124,383 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 (the "Joint Venture Agreement") between Carillon Advisers, Inc.
("Carillon"), an Ohio corporation, and Freeman Holding Company, Inc.
("Freeman"), a Delaware corporation. Under the Joint Venture Agreement,
Carillon serves as the general manager of the Adviser and is responsible for
maintaining its books of account and other financial records and for
preparing its quarterly financial statements. Carillon is a wholly-owned
subsidiary of Union Central Life, an Ohio mutual insurance company, which
owns as of November 30, 1997 approximately 68% of the High Yield Shares Class
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, as amended, and is a member of the
National Association of Securities Dealers, Inc.
Under the terms of the Investment Advisory Agreement between the Trust and
FSCM (the "Advisory Agreement"), FSCM is entitled to receive fees based on a
percentage of the average daily 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 annual expenses to 1.60%. For the six months ended November 30, 1997,
FSCM received $101,117 of advisory fees after voluntarily waiving $93,813 of
advisory fees.
Carillon, with offices at 1876 Waycross Road, Cincinnati, Ohio 45240, serves
as investment sub-adviser (the "Sub-Adviser") to the Fund pursuant to an
Investment Sub-Advisory Agreement with the Adviser dated September 18, 1996
(the "Sub-Advisory Agreement"). Under the Sub-Advisory Agreement, Carillon
provides, subject to the Adviser's direction, a portion of the investment
advisory services for which the Adviser is responsible pursuant to the
Advisory Agreement relating to the Fund. Under the Sub-Advisory Agreement,
the Sub-Adviser receives from the Adviser an annual fee in the amount of
$150,000 per year. If the Sub-Adviser renders services to the Adviser under
the Sub-Advisory Agreement for a period of less than twelve months, the Sub-
Adviser is entitled to a pro-rata portion of such fee, or such other fees as
shall be agreed to by the Adviser and the Sub-Adviser, not to exceed the
equivalent of the pro-rata portion of such fee. In the event that the amount
payable as the Sub-Adviser's fees exceeds the amount of advisory fees paid to
the Adviser pursuant to the Advisory Agreement, the difference will be shared
equally by the Adviser's general partners, Freeman and Carillon, or paid by
the Joint Venture.
Continued
-12-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOVEMBER 30, 1997
(UNAUDITED)
BISYS Fund Services, Limited Partnership d/b/a BISYS Fund Services ("BISYS")
is an Ohio limited partnership, of which BISYS Fund Services, Inc. is the
general partner. BISYS Fund Services Ohio, Inc. ("BISYS Ohio"), an Ohio
corporation, and BISYS Fund Services, Inc., a Delaware corporation, 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 or the Trust for serving
as officers of the Trust.
BISYS serves the Trust as manager and administrator. Under the terms of the
Management and Administration Agreement between the Trust and BISYS, BISYS'
fees are computed daily and paid monthly as a percentage of the average daily
net assets of the Fund at an annual rate of 0.20%. For the six months ended
November 30, 1997, BISYS received $31,348 of administration fees after
voluntarily waiving $10,495 of administration fees.
BISYS also serves as distributor of the Fund's shares. BISYS receives fees
for providing distribution and shareholder services under the Distribution
Agreement between the Trust and BISYS and the Trust's Distribution and
Shareholder Service Plan (the "Plan") pursuant to Rule 12b-1 under the 1940
Act. Under the Plan, the Fund pays BISYS a fee not to exceed, on an annual
basis, 0.25% of the average daily net assets 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, 1997,
BISYS received $49,089 of Rule 12b-1 distribution fees after waiving $3,229
of Rule 12b-1 distribution fees. In addition, BISYS has the right, as
principal underwriter, to purchase Fund shares at their net asset value and
to sell such shares to the public, or to dealers who have entered into
selected dealer agreements with the Distributor, in both cases against orders
for such shares. BISYS may sell such shares at the public offering price,
which for Institutional Service Class shares was net asset value, and for
High Yield Shares Class shares is net asset value plus a maximum sales charge
of 4.50% or, in the case of sales to dealers, at the public offering price
less a concession determined by BISYS which may not exceed the amount of the
sales charge or the underwriting discount. For the six months ended November
30, 1997, BISYS received $26,967 from commissions earned on sales of High
Yield Shares Class shares of the Fund, $24,282 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 between the
Trust and BISYS Ohio, the fund accountant is entitled to receive fees
computed daily and paid monthly as a percentage of the average daily net
assets of the Fund at an annual rate of 0.03% (but not less than $30,000 per
year), 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, 1997 were $32,175 and $17,302
respectively.
Continued
-13-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOVEMBER 30, 1997
5. CAPITAL SHARE TRANSACTIONS:
Transactions in capital shares for the Fund were as follows:
<TABLE>
<CAPTION>
SUMMIT HIGH YIELD FUND
-------------------------
FOR THE FOR THE
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
1997 1997
------------ -----------
(UNAUDITED)
<S> <C> <C>
CAPITAL TRANSACTIONS:
HIGH YIELD SHARES:
Proceeds from shares issued..................... $ 18,213,400 $ 4,256,939
Dividends reinvested............................ 2,034,755 4,423,689
Shares redeemed................................. (10,377,596) (3,409,061)
------------ -----------
Change in net assets from High Yield Shares
transactions................................. $ 9,870,559 $ 5,271,567
============ ===========
INSTITUTIONAL SERVICE SHARES: (A)
Proceeds from shares issued..................... $ 969,749 $ 3,959,382
Dividends reinvested............................ 68,019 338,128
Shares redeemed................................. (5,158,886) (1,895,525)
------------ -----------
Change in net assets from Institutional
Service Shares transactions.................. $ (4,121,118) $ 2,401,985
============ ===========
SHARE TRANSACTIONS:
HIGH YIELD SHARES:
Issued.......................................... 1,324,890 379,660
Reinvested...................................... 134,351 396,115
Redeemed........................................ (606,262) (302,538)
------------ -----------
Change in High Yield Shares................... 852,979 473,237
============ ===========
INSTITUTIONAL SERVICE SHARES: (A)
Issued.......................................... 83,883 353,730
Reinvested...................................... 5,865 30,344
Redeemed........................................ (464,696) (169,873)
------------ -----------
Change in Institutional Service Shares........ (374,948) 214,201
============ ===========
</TABLE>
--------
(a) Institutional Service Shares ceased operations and were abolished on July
31, 1997.
Continued
-14-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOVEMBER 30, 1997
(UNAUDITED)
6. SUBSEQUENT EVENTS (UNAUDITED):
The Trust will commence operations for an additional investment portfolio of
the Trust, the Summit Emerging Markets Bond Fund on December 31, 1997. The
Summit Emerging Markets Bond Fund will have the same investment adviser, sub-
adviser, administrator, transfer agent, fund accountant and distributor as
the Fund.
-15-
<PAGE>
SUMMIT HIGH YIELD FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
HIGH YIELD SHARES
-----------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR JUNE 27,
ENDED ENDED ENDED 1994 TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
1997(E) 1997 1996 1995(A)
------------ ------- ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................. $ 11.32 $ 11.05 $ 10.11 $ 10.00
------- ------- ------- -------
INVESTMENT ACTIVITIES:
Net investment income.... 0.50 0.99 1.01 0.83
Net realized and
unrealized gains
losses) on investments.. 0.53 0.90 0.95 0.11
------- ------- ------- -------
Total from Investment
Activities............ 1.03 1.89 1.96 0.94
------- ------- ------- -------
DISTRIBUTIONS:
Net investment income.... (0.49) (0.99) (1.01) (0.83)
In excess of net invest-
ment income............. (0.13)
Net realized gains....... (0.50) (0.01)
------- ------- ------- -------
Total Distributions.... (0.49) (1.62) (1.02) (0.83)
------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD.................... $ 11.86 $ 11.32 $ 11.05 $ 10.11
======= ======= ======= =======
Total Return (excludes
sales charges)............ 9.11%(b) 18.15% 20.34% 9.97%(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)............ $46,448 $34,707 $28,628 $27,676
Ratio of expenses to
average net assets...... 1.60%(c) 1.60% 1.60% 1.56%(c)
Ratio of net investment
income to average
net assets.............. 8.33%(c) 8.73% 9.42% 9.13%(c)
Ratio of expenses to
average net assets*..... 2.11%(c) 2.32% 2.24% 1.61%(c)
Ratio of net investment
income to average
net assets*............. 7.82%(c) 8.01% 8.78% 9.08%(c)
Portfolio turnover (d)... 242.75% 271.68% 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) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(e) The Institutional Service Shares class ceased operations on July 31, 1997,
and all Institutional Service Shares class shares were exchanged for
shares of the High Yield Shares class on July 31, 1997.
See notes to financial statements.
-16-
<PAGE>
SUMMIT HIGH YIELD FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE SHARES
----------------------------------
FOR THE
FOR THE PERIOD
PERIOD YEAR JANUARY 19,
ENDED ENDED 1996 TO
JULY 31, MAY 31, MAY 31,
1997(E) 1997 1996(A)
----------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $11.30 $11.03 $10.59
------ ------ ------
INVESTMENT ACTIVITIES:
Net investment income...................... 0.16 1.04 0.40
Net realized and unrealized gains (losses)
on investments............................ 0.44 0.87 0.47
------ ------ ------
Total from Investment Activities......... 0.60 1.91 0.87
------ ------ ------
DISTRIBUTIONS:
Net investment income...................... (0.16) (1.04) (0.40)
In excess of net investment income......... (0.03) (0.10) (0.03)
Net realized gains......................... (0.50)
------ ------ ------
Total Distributions...................... (0.19) (1.64) (0.43)
------ ------ ------
NET ASSET VALUE, AT JULY 31, 1997............ $11.71 N/A N/A
====== ====== ======
NET ASSET VALUE, END OF PERIOD............... $ 0.00 $11.30 $11.03
====== ====== ======
Total Return (excludes sales charges)........ 5.31%(b) 18.40% 20.16%(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000).......... $4,738 $4,237 $1,773
Ratio of expenses to average net assets.... 1.49%(c) 1.43% 1.52%(c)
Ratio of net investment income to average
net assets................................ 8.91%(c) 8.89% 9.86%(c)
Ratio of expenses to average net assets*... 2.20%(c) 2.32% 2.76%(c)
Ratio of net investment income to average
net assets*............................... 8.20%(c) 8.01% 8.62%(c)
Portfolio turnover (d)..................... 242.75% 271.68% 187.61%
</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) On January 19, 1996 the Fund issued a second series of shares designated
as Institutional Service Shares.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(e) The Institutional Service Shares class ceased operations on July 31, 1997,
and all Institutional Service Shares class shares were exchanged for the
shares of the High Yield Shares class on July 31, 1997.
See notes to financial statements.
-17-
<PAGE>
- --------------------------------------------------------------------------------
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
Gregory A. Sullivan, Vice President
Craig C. Rudesill, Secretary
Thresa Dewar, Treasurer
-----------
Investment Adviser
First Summit Capital Management
1876 Waycross Road
Cincinnati, Ohio 45240
Administrator and Distributor
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219-3035
Legal Counsel
Stradley, Ronon, Stevens & Young, LLP
2600 Commerce Square
Philadelphia, PA 19103-7098
Auditors
Coopers & Lybrand LLP
100 East Broad Street
Columbus, Ohio 43215
1/98
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[Logo of Summit appears here]
A PORTFOLIO OF SUMMIT INVESTMENT TRUST
MANAGED BY
FIRST SUMMIT CAPITAL MANAGEMENT
SEMI-ANNUAL REPORT
TO
SHAREHOLDERS
NOVEMBER 30, 1997
- --------------------------------------------------------------------------------
