<PAGE>
Message From The Chairman
- -------------------------------------------------------------------------------
Fellow Shareholders:
A financial storm of surprising magnitude raged through the world's capital
markets over the summer, culminating with a dramatic worldwide downturn in
August. The storm began in Southeast Asia nearly a year ago, spread to Russia
and then to Latin America; the waves hitting our domestic U.S. shoreline
becoming progressively larger until the market broke in a selling climax
during the last week of August. U.S. high yield bonds were damaged badly and
as a result the Salomon Brothers High Yield Market Index/1/ had a 1 month
total return of -6.70% as of August 31, 1998. However, as in past storms, the
damage was not as severe as that suffered by the U.S. equity markets (S&P
500/2/ 1 month total return of -14.44% as of August 31, 1998) or that
sustained by emerging markets debt (Bear Stearns Emerging Country Index/3/ 1
month total return of -24.33% as of August 31, 1998). September was quiet, but
October, with an already poor reputation for performance, took a turn for the
worse. The news of a hedge fund crisis and the subsequent partial liquidations
of the high-yield portfolios of several hedge funds exacerbated the sell-off.
Spreads rose to their widest levels in mid-October, stopped by the Federal
Reserve's cut of both the discount rate and the Fed funds rate.
Just after most market pundits had written off any hope of recovery this year,
the high-yield, and especially the emerging, markets staged a stunning rebound
following the Federal Reserves surprise rate cut on October 15. The positive
trends continued through November after an additional Federal Reserve rate
cut, and largely reflected the rally in the equity markets (S&P 500 gained
approximately 19% from mid-October through the end of November). Strong high-
yield mutual fund inflows have helped fuel the rally. After approximately 10
weeks of negative fund flows resulting in an aggregate outflow of
$2.8 billion, high-yield mutual funds experienced four consecutive weeks of
inflows aggregating nearly $4.5 billion.
Angst
Unlike previous periods, our Summit High Yield Fund/4/ (A share without sales
charge)+ produced results that lagged its benchmarks. Our 1 month return of
- -8.82% versus the Salomon Brothers High Yield Market Index return of -6.70%,
both as of August 31, 1998, illustrates the rocky road we faced in August.
September brought no solace to our Fund as high-yield investors shunned
securities issued by smaller, lesser-known companies. Akin to the
underperformance of small-cap stocks versus large-cap stocks, the fund's
smaller issues underperformed their larger-capitalization brethren. In
addition, a general worldwide flight to quality meant that while U.S.
Treasuries performed very well in this period, BB-rated high-yield bonds
outperformed our predominately B-rated holdings. Our holdings of two sectors--
telecommunications issuers (both domestic and European) and energy issuers
(natural gas producers for the most part) proved to be less than fortuitous
during the sell-off. Telecommunication issuers' appetite for capital and the
fall of oil prices to 12-year lows impacted both sectors negatively. The
result: September's 1 month total return of -3.53% (A share without sales
charge)+ trailed the Salomon Brothers High Yield Market Index performance
of 1.23%.
Volatility has been the name of the game for the emerging markets sector. The
Summit Emerging Markets Bond Fund/5/ was no exception. In the
- --------
+ With the maximum sales charge of 4.50%, the 1 month total return for August
31, 1998 would have been -12.94% and the September 30, 1998 1 month return
would have been -7.88%.
++ With the maximum sales charge of 4.50%, the 6 month total return for
November 30, 1998 would have been -25.13%.
-1-
<PAGE>
Message From The Chairman, Continued
- -------------------------------------------------------------------------------
six-month period ending November 30, 1998 the total return was -21.56% (A
share without sale charge)++, versus -13.76% for the JP Morgan Emerging Market
Bond Index./6/ The relative performance of the fund versus the index was
hampered by its overweighting (in excess of 90%) of corporate versus sovereign
issues that comprise a majority of the index.
The Longer Term Perspective
Since our June 1994 inception, the Summit High Yield Fund has delivered
excellent returns for shareholders who believe that the high-yield sector
deserves a portion of a long-term investor's assets. The Summit High Yield
Fund's cumulative total return from inception, June 27, 1994, through November
30, 1998, is 65.0% (A shares without sales charge)+, versus 58.4% for the
Salomon Brothers High Yield Market Index and 46.4% for the average high-yield
mutual fund in Lipper Analytical Services' High Current Yield category./7/ For
the 3 year period as of November 30, 1998 the Fund's Class A Shares ranked a
very credible 4th of 138 funds./8/
Historical Perspective
The three month return of -6.85% for the Salomon Brothers High Yield Market
Index/1/ ending October 31, 1998, was the worst since 1990. As compared to the
darkest period in high-yield history, there are a number of noticeable
differences. The collapse of Drexel Burnham in 1989, the most prominent dealer
in high-yield securities, exacerbated the erosion of the high-yield market, as
there were far fewer dealers and investors involved. The breadth of the market
was far less diverse than it is today in terms of industry and sector
distribution. The S&L crisis and the peril of Executive Life had resulted in a
regulatory backlash against the market. The U.S. economy was showing clear
signs of a recession. The invasion of Kuwait in August 1990 sent oil prices
soaring to over $40 a barrel, essentially sealing the fate of the economy and
the high-yield market. With recession assured, the average high-yield bond
lost roughly 15% of its value in the Fall of 1990.
The Changing High-Yield Landscape
In the eight years that followed these lows--a period of broad economic
expansion and stellar growth for the high-yield sector--much has changed in
the landscape. Most importantly, the extreme excesses that were seen in the
leveraged buyout (LBO) craze of the late Eighties and the resultant backlash
against an immature high-yield market do not exist today. Default rates are
roughly 1.5% today, compared to nearly 9% in 1990. We expect that default
rates should rise moderately in 1999 to around 2.5%, nothing like 1990. While
$80 billion in new debt has been added to the market, it is now predominately
used for working capital--by a far more diverse base of investors.
Back to "Normal"?
New issues were priced at a record-breaking $17 billion per month during the
first half of the year, resulting in significant supply pressure on secondary
issues. Technically, the high-yield market is much healthier, with issuance
averaging roughly $3-$4 billion over the past couple of months, the market
shrinking via attrition, and the sharp inflows to mutual funds. As the new
year approaches, it appears both pension funds and insurance companies are
poised to give the high-yield market an overweighted position.
The improvement in prices has somewhat restored confidence. Yield spreads have
tightened
- --------
+With the maximum sales charge of 4.50%, the total return since inception
would have been 57.63%.
-2-
<PAGE>
Message From The Chairman, Continued
- -------------------------------------------------------------------------------
significantly, and as of November 30, 1998, liquidity was back in the market.
Issuers are returning to the market. With average yields above 10%, up from a
record low of 8.84% on March 31, 1998, investors again search for yield and
relatively low, historical volatility.
What are the dominating factors driving the high-yield market today? We
believe the favorable shift in U.S. demographics and the steady maturation of
the high-yield market with an ever-expanding sophisticated investor base are
major factors against the backdrop of a recession threat in 1999. The high-
yield market trades, to a very large extent, on the future prospect of
recession. High-yield securities have historically performed lower than most
other U.S. classes during the initial period of recession, due to the average
high-yield issuer having more leverage than the average investment-grade
issuer. Therefore, the question of whether our domestic economy is about to
enter a recession is of paramount importance. Our view is that the economy
will muddle along in similar fashion to 1998, with inflationary pressures
being rather benign.
During this trying period, I would like to thank you for the trust and
confidence you have placed in our portfolio management team. Please direct
comments or questions to me regarding any aspect of our Funds.
Sincerely,
/s/ Steven R. Sutermeister
Steven R. Sutermeister
Chairman
- ------
/1/The Salomon Brothers High Yield Market Index, a broad based index of the
high-yield bond market is unmanaged and does not reflect the deduction of
expenses associated with a mutual fund, such as investment management and
fund accounting fees.
/2/The S&P 500 Stock Index represents the performance of the U.S. stock market
as a whole. The index is unmanaged and does not reflect the deduction of
fees associated with mutual fund, such as investment management and fund
accounting fees. Past performance is not predictive 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 their original cost.
/3/The Bear Stearns Emerging Country Index is an unmanaged index generally
representative of the emerging debt market as a whole. 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.
/4/Although the fund's yield may be higher than that of fixed income funds
that purchase higher-rated securities, the potentially higher yield is a
function of the greater risk that the fund's share price will decline.
/5/International investing involves increased risk and volatility.
/6/The J.P. Morgan Emerging Market Bond Index is an unmanaged index generally
representative of the emerging debt market as a whole. 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.
/7/The Lipper High Yield Index is a managed index which aims at high yield
from fixed income securities, has no quality or maturity restrictions, and
tends to invest in lower grade debt issues.
/8/For the 1 and 3 year periods ended 11/30/98 the Summit High Yield Fund
(Class A) ranked 199/235 and 4/138 funds within Lippers High Yield funds
category. The Lipper ranking is based on total return for the period and
does not reflect a sales charge.
Mutual Funds: Are Not FDIC Insured/ May Lose Value/ Have No Bank Guarantee
Although the fund's yield may be higher than that of fixed-income funds that
purchase higher rated securities, the potentially higher yield is a function
of the greater risk that the fund's share price will decline.
The performance of the Summit High Yield Fund and Emerging Markets Bond Fund
reflects the deduction of fees for these value-added services.
Past performance is not predictive of future results. Investment return and
the principal value of shares in the Summit High Yield Fund and Emerging
Markets Bond Fund will fluctuate, so that the shares, when redeemed, may be
worth more or less than their original cost.
The Summit High Yield Fund and Emerging Markets Bond Fund are distributed by
BISYS Fund Services. This report is authorized for distribution only when
preceded or accompanied by a current prospectus.
-3-
<PAGE>
Table of Contents
Message From the Chairman
Page 1
Statement of Assets and Liabilities
Page 5
Statement of Operations
Page 6
Statement of Changes in Net Assets
Page 7
Schedule of Portfolio Investments
Page 8
Notes to Financial Statements
Page 13
Financial Highlights
Page 20
-4-
<PAGE>
SUMMIT INVESTMENT TRUST
Statements of Assets and Liabilities
November 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Emerging
High Yield Markets
Fund Bond Fund
----------- -----------
<S> <C> <C>
ASSETS:
Investments, at value (cost $69,897,907 and
$27,211,732, respectively)........................... $64,992,208 $20,053,456
Receivable for investments sold...................... 2,020,000 1,002,500
Interest receivable.................................. 1,603,524 948,060
Prepaid expenses.................................... 16,392 8,367
Deferred organizational expenses.................... -- 16,880
----------- -----------
Total Assets...................................... 68,632,124 22,029,263
----------- -----------
LIABILITIES:
Payable for investments purchased.................... 6,411,860 1,480,000
Payable for capital shares redeemed.................. 2,757 --
Accrued expenses and other payables:.................
Investment advisory fees............................ 2,349 940
Administration fees................................. 1,783 584
12b-1 fees (A shares)............................... 10,653 3,905
12b-1 fees (B shares)............................... 20 1
Shareholder Service fees............................ 5 --
Custodian fees...................................... 3,536 453
Legal fees.......................................... 19,072 6,428
Audit fees.......................................... 6,870 4,630
Other............................................... 30,762 18,870
----------- -----------
Total Liabilities................................. 6,489,667 1,515,811
----------- -----------
NET ASSETS:
Capital.............................................. 69,509,013 27,689,511
Undistributed net investment income.................. 114,622 45,302
Accumulated net realized loss from investment and
foreign currency transactions........................ (2,575,479) (63,085)
Net unrealized depreciation on investments and assets
and liabilities denominated in foreign currencies.... (4,905,699) (7,158,276)
----------- -----------
Net Assets........................................ $62,142,457 $20,513,452
=========== ===========
Net Assets:
A Shares............................................ $62,114,006 $20,512,215
B Shares............................................ 28,451 1,237
Outstanding units of beneficial interest (shares):
A Shares............................................ 6,753,419 2,848,403
B Shares............................................ 3,096 172
Net Asset Value
A Shares Redemption price per share................. $9.20 $7.20
=========== ===========
Maximum sales charge................................ 4.50% 4.50%
=========== ===========
Maximum offering price A Shares (100%/100% -
maximum sales charge) of net asset value per share
(adjusted to the nearest cent)..................... $9.63 $7.54
=========== ===========
B Shares Offering price per share (a)............... $9.19 $7.20
=========== ===========
</TABLE>
- --------
(a) Redemption price for B Shares varies based on length of time shares are
held.
See notes to financial statements.
-5-
<PAGE>
SUMMIT INVESTMENT TRUST
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Emerging
Markets
High Yield Fund Bond Fund
For the Six For the Six
Months Ended Months Ended
November 30, 1998 November 30, 1998
----------------- -----------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income............................ $ 3,164,018 $ 1,564,614
Dividend income............................ 21,682 --
----------- -----------
Total Income............................. 3,185,700 1,564,614
----------- -----------
EXPENSES:
Investment advisory fees................... 200,227 79,888
Administration fees........................ 53,647 21,304
12b-1 fees (A Shares)...................... 62,959 26,625
12b-1 fees (B Shares)...................... 20 1
Shareholder service fees (B shares)........ 5 --
Audit fees................................. 6,772 5,298
Custodian fees............................. 17,630 1,878
Fund accounting fees....................... 20,961 31,849
Legal fees................................. 46,932 17,315
Organization expenses...................... -- 8,181
Printing fees.............................. 30,940 11,081
Registration fees.......................... 13,787 6,327
Transfer agent fees........................ 37,383 21,559
Trustees' fees............................. 11,947 5,038
Miscellaneous expenses..................... 8,723 4,195
----------- -----------
Total expenses before voluntary
reductions............................... 511,933 240,539
Expenses voluntarily reduced............. (63,695) (28,010)
----------- -----------
Net Expenses............................. 448,238 212,529
----------- -----------
Net Investment Income...................... 2,737,462 1,352,085
----------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains (losses) on investments
and foreign currency transactions.......... (2,462,979) (63,085)
Net change in unrealized appreciation
(depreciation) on investments and assets
and liabilities denominated in foreign
currencies................................ (5,331,514) (6,836,869)
----------- -----------
Net realized/unrealized gains (losses) on
investments................................ (7,794,493) (6,899,954)
----------- -----------
Change in net assets resulting from
operations................................. ($5,057,031) ($5,547,869)
=========== ===========
</TABLE>
See notes to financial statements.
-6-
<PAGE>
SUMMIT INVESTMENT TRUST
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
High Yield Fund Emerging Markets Bond Fund
------------------------------ ---------------------------------
For the Six For the Six For the
Months Ended For the Months Ended Five Month
November 30, 1998 Year Ended November 30, 1998 Period Ended
(Unaudited) May 31, 1998 (Unaudited) May 31, 1998(b)
----------------- ------------ ----------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income.. $ 2,737,462 $ 4,222,185 $ 1,352,085 $ 892,066
Net realized gains
(losses) on
investments
and foreign currency
transactions.......... (2,462,979) 3,821,677 (63,085) 105,690
Net change in
unrealized
appreciation
(depreciation)
on investments and
assets and liabilities
denominated in foreign
currencies............ (5,331,514) (1,467,951) (6,836,869) (321,407)
----------- ----------- ----------- -----------
Change in net assets
resulting from
operations.............. (5,057,031) 6,575,911 (5,547,869) 676,349
----------- ----------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
A Shares............... (2,752,782) (4,184,950) (1,343,340) (857,402)
B Shares............... (257) -- (27) --
Institutional Shares... -- (75,986)(a) -- --
----------- ----------- ----------- -----------
(2,753,039) (4,260,936) (1,343,367) (857,402)
----------- ----------- ----------- -----------
In excess of net
investment income
A Shares............... -- -- -- --
B Shares............... -- -- -- --
Institutional Shares... -- (3,718)(a) -- --
----------- ----------- ----------- -----------
-- (3,718) -- --
----------- ----------- ----------- -----------
Net realized gains
A Shares............... (1,598,270) (3,955,064) (113,762) --
B Shares............... (873) -- (7) --
Institutional Shares... -- -- -- --
----------- ----------- ----------- -----------
(1,599,143) (3,955,064) (113,769) --
----------- ----------- ----------- -----------
Change in net assets
from shareholder
distributions........... (4,352,182) (8,219,718) (1,457,136) (857,402)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 24,050,696 45,870,906 292,935 25,207,058
Dividends reinvested... 4,133,552 7,543,747 1,456,680 857,402
Cost of shares
redeemed............... (12,275,988) (35,071,165) (110,626) (3,939)
----------- ----------- ----------- -----------
Change in net assets
from capital
transactions............ 15,908,260 18,343,488 1,638,989 26,060,521
----------- ----------- ----------- -----------
Change in net assets.... 6,499,047 16,699,681 (5,366,016) 25,879,468
NET ASSETS:
Beginning of period.... 55,643,410 38,943,729 25,879,468 --
----------- ----------- ----------- -----------
End of period.......... $62,142,457 $55,643,410 $20,513,452 $25,879,468
=========== =========== =========== ===========
SHARE TRANSACTIONS:
Issued................. 2,472,797 4,047,983 43,345 2,537,918
Reinvested............. 434,299 680,082 197,258 84,891
Redeemed............... (1,211,790) (3,106,428) (14,455) (382)
----------- ----------- ----------- -----------
Change in shares........ 1,695,306 1,621,637 226,148 2,622,427
=========== =========== =========== ===========
</TABLE>
- --------
(a) On July 31, 1997 Institutional Shares ceased operations and were
transferred to High Yield Shares.
(b) Emerging Markets Bond Fund commenced operations on December 31, 1997.
See notes to financial statements.
-7-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
Schedule of Portfolio Investments
November 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- -------------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds (100.9%):
Communications (50.0%):
Cellular Telephone (1.7%):
1,000,000 Dobson Communications, 11.75%, 4/15/07.................. $ 1,042,500
-----------
Data/Internet (4.9%):
1,500,000 Psinet, Inc., 11.50%, 11/1/08**......................... 1,597,500
1,500,000 Teligent, Inc., 11.50%, 12/1/07......................... 1,425,000
-----------
3,022,500
-----------
Domestic--Retail Telecom (6.0%):
1,000,000 E.Spire Communication, Inc., 0.00%, 4/1/06 (b).......... 715,000
2,625,000 Focal Communications Corp., 0.00%, 2/15/08 (c).......... 1,417,500
1,500,000 ITC Deltacom, Inc., 9.75%, 11/15/08**................... 1,567,500
28 Nextel Communications, Inc., 11.13%, 2/15/10............ 25
-----------
3,700,025
-----------
Domestic--Wholesale Telecom (6.7%):
2,000,000 Level 3 Communications, Inc., 9.13%, 5/1/08............. 2,000,000
1,000,000 Qwest Communications International, 10.88%, 4/1/07...... 1,155,000
1,000,000 Qwest Communications International, 7.25%, 11/1/08**.... 1,010,000
-----------
4,165,000
-----------
Equipment Providers (1.5%):
1,500,000 SBA Communications Corp., 0.00%, 3/1/08 (d)............. 915,000
-----------
International--Retail Telecom (8.3%):
1,000,000 ESAT Telecom Group plc, Senior Notes, 11.88%, 12/1/08**. 1,037,500
1,000,000 Metronet Communications Corp., 12.00%, 8/15/07.......... 1,112,500
2,000,000 Versatel Telecom BV, 13.25%, 5/15/08**.................. 2,015,000
1,000,000 Versatel Telecom BV, 13.25%, 5/15/08**.................. 1,007,500
-----------
5,172,500
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- -------------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Communications, continued:
International--Wholesale Telecom (12.9%):
1,725,000 Esprit Telecom Group plc, 11.50%, 12/15/07.............. $ 1,768,125
2,000,000 Facilicom International, Inc., 10.50%, 1/15/08.......... 1,650,000
1,500,000 Global Crossing Holding Co., Ltd., 9.63%, 5/15/08....... 1,620,000
100,000 Global Crossing Holding Co., Ltd., 10.50%, 12/1/08**.... 1,000,000
2,000,000 Viatel, Inc., 11.25%, 4/15/08........................... 2,000,001
-----------
8,038,126
-----------
Paging/Telegraph (5.4%):
2,500,000 Arch Communications Group, 6.75%, 12/1/03**............. 1,275,000
1,000,000 Paging Network Do Brazil SA, 13.50%, 6/6/05............. 510,000
1,500,000 Paging Network, Inc., 10.00%, 10/15/08.................. 1,567,500
-----------
3,352,500
-----------
Pay Phone Operators (2.6%):
1,500,000 Phonetel Technologies, Inc., 12.00%, 12/15/06........... 675,000
1,000,000 Talton Holdings, Inc., 11.00%, 6/30/07.................. 950,000
-----------
1,625,000
-----------
Total Communications.............................................. 31,033,151
-----------
Energy/Mining (7.6%):
Distribution (1.3%):
1,000,000 Empire Gas Corp., 7.00%, 7/15/04 (e).................... 800,000
-----------
Oil/Gas Extraction (6.3%):
2,000,000 Abraxas Petroleum Corp., 11.50%, 11/1/04................ 1,700,000
1,000,000 Costilla Energy, Inc., 10.25%, 10/1/06.................. 865,000
1,500,000 Eagle Geophysical, Inc., 10.75%, 7/15/08................ 1,365,000
-----------
3,930,000
-----------
Total Energy/Mining............................................... 4,730,000
-----------
</TABLE>
Continued
-8-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
Schedule of Portfolio Investments, Continued
November 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- -------------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Financial (1.2%):
Banking/Insurance (1.2%):
1,000,000 Arcadia Financial Ltd., 11.50%, 3/15/07................. $ 750,000
-----------
Manufacturing/Consumer Goods (10.0%):
Consumer Products (2.4%):
1,000,000 Stuart Entertainment, 12.50%, 11/15/04.................. 485,000
1,000,000 Werner Holdings Co., Inc., 10.00%, 11/15/07............. 990,000
-----------
1,475,000
-----------
Electric/HVAC (1.7%):
1,000,000 International Wire Group, 11.75%, 6/1/05................ 1,045,000
-----------
Furniture & Fixtures (1.2%):
1,000,000 Macsaver Financial Services, 7.60%, 8/1/07.............. 747,730
-----------
Professional & Commercial Equipment (1.4%):
1,000,000 Anchor Lamina, Inc., 9.88%, 2/1/08...................... 850,000
-----------
Textile/Apparel (3.3%):
1,500,000 Anvil Knitwear, 10.88%, 3/15/07......................... 1,050,000
1,000,000 Tropical Sportswear International, 11.00%, 6/15/08...... 1,042,500
-----------
2,092,500
-----------
Total Manufacturing/Consumer Goods................................ 6,210,230
-----------
Manufacturing/Trade (12.5%):
Auto/Related Products (2.3%):
1,500,000 Prestolite Electric, Inc., 9.63%, 2/1/08................ 1,440,000
-----------
Metals (3.2%):
2,000,000 Kaiser Aluminum & Chemicals, 12.75%, 2/1/03............. 1,980,000
-----------
Miscellaneous (6.0%):
1,500,000 Derby Cycle Corp., 10.00%, 5/15/08**.................... 1,230,000
500,000 IMO Industries, Inc., 11.75%, 5/1/06.................... 520,000
1,000,000 International Knife & Saw Corp., 11.38%, 11/15/06....... 1,025,000
1,000,000 Numatics, Inc., 9.63%, 4/1/08........................... 945,000
-----------
3,720,000
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- -------------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Manufacturing/Trade, continued:
Paper & Pulp (1.0%):
1,000,000 Indah Kiat Fin Mauritius, 10.00%, 7/1/07................ $ 645,000
-----------
Total Manufacturing/Trade......................................... 7,785,000
-----------
Media (6.8%):
Cable/Pay TV/Other (0.2%):
500,000 TV Filme, Inc., 12.88%, 12/15/04........................ 135,000
-----------
Outdoor Advertising (3.2%):
2,000,000 Tri-State Outdoor Media, 11.00%, 5/15/08 **............. 1,980,000
-----------
Radio Broadcasting (3.4%):
1,000,000 Citadel Broadcasting Co., 9.25%, 11/15/08**............. 1,037,500
1,000,000 Spanish Broadcasting System, 11.00%, 3/15/04............ 1,060,000
-----------
2,097,500
-----------
Total Media....................................................... 4,212,500
-----------
Miscellaneous Services (11.3%):
General Merchandise (1.2%):
750,000 Pamida, Inc., 11.75%, 3/15/03........................... 720,000
-----------
Healthcare (2.3%):
1,500,000 Insight Health Services, 9.63%, 6/15/08................. 1,455,000
-----------
Hotel/Gaming (6.1%):
2,000,000 Argosy Gaming, 13.25%, 6/1/04........................... 2,250,000
500,000 Casino Magic--Louisiana, Inc., 13.00%, 8/15/03.......... 567,500
1,000,000 Station Casinos, 8.88%, 12/1/08**....................... 1,010,000
-----------
3,827,500
-----------
Other (1.7%):
1,000,000 Affinity Group Holdings, Inc., 11.00%, 4/1/07........... 1,040,000
-----------
Total Miscellaneous Services...................................... 7,042,500
-----------
Transportation (1.5%):
Shipping (1.1%):
750,000 Navigator Gas Transport, 12.00%, 6/30/07**.............. 712,500
-----------
</TABLE>
Continued
-9-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
Schedule of Portfolio Investments, Continued
November 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------- ------------
<C> <S> <C>
Corporate Bonds, continued:
Transportation, continued:
Trucking/Warehousing (0.4%):
500,000 Trism, Inc., 10.75%, 12/15/00.......................... $ 225,000
------------
Total Transportation............................................. 937,500
------------
Total Corporate Bonds............................................ 62,700,881
------------
Common Stocks (0.0%):
Communications (0.0%):
Paging/Telegraph (0.0%):
1,000 Paging Do Brazil Holding Co. LLC, Class B**............ --
------------
Total Common Stocks.............................................. --
------------
Preferred Stock (0.2%):
Communications (0.2%):
International--Wholesale Telecom (0.2%):
991 Viatel, Inc............................................ 94,145
------------
Total Preferred Stock............................................ 94,145
------------
Rights/Warrants (0.1%):
Communications (0.1%):
International--Retail Telecom (0.0%):
2,000 Versatel Telecom, Warrants, expire 5/15/08............. 20,000
1,000 Versatel Telecom, Warrants, expire 5/15/08............. 10,000
------------
30,000
------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -----------
<C> <S> <C>
Rights/Warrants, continued:
Communications, continued:
Network--Domestic (0.1%):
1,000 Metronet Communication Corp., Warrants, expire
12/31/99............................................ $ 35,880
-----------
Total Communications........................................... 65,880
-----------
Manufacturing/Consumer Goods (0.0%):
Consumer Products (0.0%):
2,000 Renaissance Cosmetics, Inc., Warrants, expire
8/15/01**........................................... 2
-----------
Media (0.0%):
200 American Telecasting, Inc., Warrants, expire 8/10/00. --
-----------
Total Manufacturing/Consumer Goods............................. 2
-----------
Total Rights/Warrants.......................................... 65,882
-----------
Investment Companies (3.4%):
2,131,300 Fifth Third Commercial Paper Fund.................... 2,131,300
-----------
Total Investment Companies..................................... 2,131,300
-----------
Total Investments
(Cost $69,897,907) (a)--104.6%................................ 64,992,208
-----------
Liabilities in excess of other assets--(4.6)%.................. (2,849,751)
-----------
Total Net Assets--100.0%....................................... $62,142,457
===========
</TABLE>
- --------
Percentages indicated are based on net assets of $62,142,457.
(a)Cost for federal income tax purposes differs from value by net unrealized
depreciation as follows:
<TABLE>
<S> <C>
Unrealized appreciation......... $ 1,249,563
Unrealized depreciation......... $(6,155,262)
-----------
Net unrealized depreciation..... $(4,905,699)
===========
</TABLE>
(b)Interest rate increases to 12.75% on April 1, 2001.
(c)Interest rate increases to 12.13% on February 15, 2003.
(d)Interest rate increases to 12.00% on March 1, 2003.
(e)Interest rate increases to 12.88% on July 15, 1999.
** Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At November
30, 1998, the market value of Rule 144A securities amounted to $16,480,002
or 27% of net assets.
See notes to financial statements.
-10-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT EMERGING MARKETS BOND FUND
Schedule of Portfolio Investments
November 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ -----------
<C> <S> <C>
Corporate Bonds (95.7%):
Asia (12.6%):
Indonesia (10.1%):
1,000,000 APP International Finance, 11.75%, 10/1/05............ $ 775,000
1,000,000 DGS International Finance Co. BV, 10.00%, 6/1/07**.... 640,000
1,000,000 Tjiwi Kimia Finance Mauritius, 10.00%, 8/1/04......... 640,000
-----------
2,055,000
-----------
Israel (2.5%):
1,000,000 Barak I.T.C., 0.00%, 11/15/07 (b)..................... 520,000
-----------
2,575,000
-----------
Caribbean (4.0%):
Dominican Republic (4.0%):
1,000,000 Tricom SA, 11.38%, 9/1/04............................. 820,000
-----------
Eastern Europe (10.0%):
Poland (4.3%):
1,000,000 Netia Holdings BV, 10.25%, 11/1/07.................... 870,000
-----------
Russia (1.6%):
2,498,794 Russia-Ian, Floating Rate Note, currently 6.63%,
12/15/15............................................. 337,337
-----------
Turkey (4.1%):
1,000,000 Cellco Finance NV, 15.00%, 8/1/05**................... 835,000
-----------
2,042,337
-----------
Latin America (57.4%):
Argentina (22.0%):
1,000,000 Acindar Ind., 11.25%, 2/15/04......................... 855,000
1,000,000 Autopistas Del Sol SA, 10.25%, 8/1/09**............... 730,000
1,000,000 Cia International Telecom Cointel, 10.38%, 8/1/04..... 695,000
1,000,000 CTI Holdings SA, 0.00%, 4/15/08 (e)................... 480,000
1,000,000 Mastellone Hermanos SA, 11.75%, 4/1/08................ 780,000
1,000,000 Supercanal Holdings, 11.50%, 5/15/05**................ 540,000
500,000 Supermercados Norte, 10.88%, 2/9/04**................. 455,000
-----------
4,535,000
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ -----------
<C> <S> <C>
Corporate Bonds, continued:
Latin America, continued:
Brazil (19.0%):
1,000,000 Banco Nacional Desenvolvimento, Floating Rate Note,
currently 10.80%, 6/16/08**.......................... $ 785,000
1,000,000 Comtel Brasileira Ltd., 10.75%, 9/26/04**............. 860,000
1,000,000 Espirito Santo Centrais Electrias, 10.00%, 7/15/07.... 760,000
1,000,000 MRS Logistica SA, 10.63%, 8/15/05**................... 520,000
1,000,000 Paging Network Do Brazil SA, 13.50%, 6/6/05........... 510,000
500,000 Tevecap SA, 12.63%, 11/26/04.......................... 325,000
500,000 TV Filme, Inc., 12.88%, 12/15/04...................... 135,000
-----------
3,895,000
-----------
Mexico (16.4%):
1,000,000 Consorcio Grupo Dina, 8.00%, 8/8/04, Convertible Bond. 400,000
1,000,000 Groupo Azucarero Mexico SA, 11.50%, 1/15/05........... 400,000
500,000 Gruma, SA de C.V., 7.63%, 10/15/07.................... 448,085
500,000 Grupo Industrial Durango, 12.63%, 8/1/03.............. 455,000
1,000,000 Innova S de R.L., 12.88%, 4/1/07...................... 765,000
1,000,000 TV Azteca SA, 10.50%, 2/15/07......................... 890,000
-----------
3,358,085
-----------
11,788,085
-----------
North America (1.8%):
Canada (1.8%):
1,000,000 Microcell Telecommunications, 0.00%, 10/15/07 (c)..... 362,863
-----------
Western Europe (9.9%):
Greece (4.1%):
1,000,000 Fage Dairy Industries SA, 9.00%, 2/1/07............... 861,440
-----------
Ireland (3.3%):
1,000,000 ESAT Telecom Group plc, 0.00%, 2/1/07 (d)............. 670,000
-----------
</TABLE>
Continued
-11-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT EMERGING MARKETS BOND FUND
Schedule of Portfolio Investments, Continued
November 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Western Europe, continued:
Netherlands (2.5%):
500,000 Versatel Telecom BV, 13.25%, 5/15/08**................. $ 503,750
-----------
2,035,190
-----------
Total Corporate Bonds............................................ 19,623,475
-----------
Rights/Warrants (0.0%):
Western Europe (0.0%):
Netherlands (0.0%):
500 Versatel Telecom BV, Warrants, expire 5/15/08**........ 5,000
-----------
Total Rights/Warrants............................................ 5,000
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Investment Companies (2.1%):
North America (2.1%):
United States (2.1%):
424,981 Fifth Third Commercial Paper Fund...................... $ 424,981
-----------
Total Investment Companies....................................... 424,981
-----------
Total Investments
(Cost $27,211,732) (a)--97.8%................................... 20,053,456
Other assets in excess of liabilities--2.2%...................... 459,996
-----------
Total Net Assets--100.0%......................................... $20,513,452
===========
</TABLE>
- --------
Percentages indicated are based on net assets of $20,513,452.
(a)Cost for federal income tax purposes differs from value by net unrealized
depreciation as follows:
<TABLE>
<S> <C>
Unrealized appreciation......... $ 38,361
Unrealized depreciation......... $(7,196,637)
-----------
Net unrealized depreciation..... $(7,158,276)
===========
</TABLE>
(b) Interest rate increases to 12.50% on November 15, 2002.
(c) Interest rate increases to 11.13% on October 15, 2002.
(d) Interest rate increases to 12.50% on February 1, 2002.
(e) Interest rate increases to 11.50% on April 15, 2003.
** Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At November
30, 1998, the market value of Rule 144A securities amounted to $5,873,750
or 29% of net assets.
See notes to financial statements.
-12-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements
November 30, 1998
(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 comprised of two managed investment portfolios, the Summit High Yield Fund
(the "High Yield Fund") and the Summit Emerging Markets Bond Fund (the
"Emerging Markets Fund"), collectively (the "Funds"), or individually (the
"Fund"). On July 31, 1997, the Institutional Service Shares of the Summit
High Yield Fund ceased operations and all outstanding shares were converted
to High Yield Shares. Effective September 30, 1998, the High Yield Shares
were redesignated to A Shares and the Funds began offering B Shares to the
public. B Shares impose a back end sales charge (load) if you sell your
shares before the sixth year.
The High Yield 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 Emerging Market Fund's investment objective is to provide high income and
capital appreciation. The Fund will invest primarily in government and
corporate debt securities of emerging market nations.
The Funds are authorized to issue an unlimited number of shares, which are
units of beneficial interest without par value.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Funds 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 and disclosures. 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 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 the net asset value of shares of the Funds. 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.
Continued
-13-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
November 30, 1998
(Unaudited)
The Funds may invest their 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.
Foreign Currency Translation:
The accounting records of the Trust are maintained in U.S. dollars.
Investment securities and other assets and liabilities of the Emerging
Markets Fund denominated in a foreign currency are translated into U.S.
dollars at the exchange rate on the date of valuation. Purchases and
sales of securities, income receipts and expense payments are translated
into U.S. dollars at the exchange rate on the dates of transactions. The
Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchanges on investments from the fluctuations
arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gains or
losses from investments.
Foreign Currency Contracts:
A forward currency contract ("forward") is an agreement between two
parties to buy and sell a currency at a set price on a future date. The
market value of the forward fluctuates with changes in currency exchange
rates. The forward is marked-to-market daily and the change in market
value is recorded by a Fund as appreciation or depreciation. When the
forward is closed, the Fund records a realized gain or loss equal to the
fluctuations in value during the period the forward was open. A Fund
could be exposed to risk if a counterparty is unable to meet the terms of
a forward or if the value of the currency changes unfavorably.
Forward foreign exchange contracts may involve market or credit risk in
excess of the amounts reflected on the Fund's statement of assets and
liabilities. The gain or loss from the difference between the original
contracts and the amount realized upon the closing of such contracts is
included in net realized gains/losses from investment and foreign
currency transactions. No forward foreign exchange contracts were held at
November 30, 1998.
Securities Transactions and Related Income:
Securities transactions are accounted for on the trade date. Interest
income is recognized on the accrual basis and includes, where applicable,
the amortization of premiums or accretion of discounts. Dividend income
is recorded on the ex-dividend date. Net realized gains and losses on
investments sold and on foreign currency transactions are recorded on the
basis of identified cost.
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.
Continued
-14-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
November 30, 1998
(Unaudited)
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 "book/tax"
differences are primarily due to differing treatments for organization
costs, market discount, and foreign currency transactions.
These "book/tax" differences are either considered temporary or permanent
in nature. To the extent these differences are permanent in nature, such
amounts are reclassified within the composition of net assets based on
their federal tax-basis treatment; temporary differences do not require
reclassifications. Dividends and distributions to shareholders which
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 or distribution in excess of net realized
gains. To the extent they exceed net investment income and net realized
gains for tax purposes, they are reported as distribution of capital. As
of May 31, 1998, the following reclassifications were made to increase
(decrease) such accounts with offsetting adjustments made to paid-in-
capital:
<TABLE>
<CAPTION>
Accumulated Accumulated Net
Undistributed Net Realized Gain/(Loss)
Investment Income on Investments
------------------ --------------------
<S> <C> <C>
High Yield Fund..................... $124,443 ($127,213)
Emerging Markets Fund............... $ 1,920 $ 8,079
</TABLE>
Federal Income Taxes:
It is the policy of each 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.
International Funds:
The Emerging Markets Bond Fund has a relatively large concentration of
securities invested in companies domiciled in the emerging markets. The
Fund may be more susceptible to the political, social and economic events
adversely affecting the emerging market companies than funds not so
concentrated.
Other:
Expenses directly attributable to a Fund are charged to that Fund, while
expenses which are attributable to both Funds are allocated among each
Fund based upon relative net assets or another appropriate method. Costs
incurred in connection with the organization and initial registration of
the Emerging Markets Fund have been deferred and are being amortized over
a twenty four month period, beginning with each Fund's commencement of
operations.
Continued
-15-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
November 30, 1998
(Unaudited)
3. Purchases and Sales of Portfolio Securities:
Purchases and sales of securities (excluding short-term securities) for the
six months ended November 30, 1998 are as follows:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
High Yield Fund..................................... $48,008,570 $32,151,313
Emerging Markets Fund............................... $ 7,176,450 $ 5,876,991
</TABLE>
4. Related Party Transactions:
First Summit Capital Management ("FSCM" or the "Adviser"), a joint venture
having its principal offices at 312 Elm Street, Suite 2525, Cincinnati, Ohio
45202, is the investment adviser to the Funds. FSCM was organized principally
for purposes of sponsoring and managing the Trust pursuant to a joint venture
agreement (the "Joint Venture Agreement") between Summit Investment Partners,
LLC, ("SIP") and Freeman Holding Company, Inc. ("Freeman"), a Delaware
corporation. Under the Joint Venture Agreement, SIP 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. SIP is a division of Union Central Life, an Ohio mutual insurance
company, which owns approximately 52% of the High Yield Fund and 98% of the
Emerging Markets Fund as of November 30, 1998. 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 Funds. Effective July 1,
1995, the investment advisory fee is based on the total return investment
performance of the High Yield 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 High Yield Fund's average daily net
assets. For the Emerging Markets Fund the advisory fee is paid monthly at an
annual rate of 0.75% 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 total annual
expenses of the High Yield Fund to 1.60% and the Emerging Markets to 2.00%.
For the six months ended November 30, 1998, FSCM received $148,134 and
$57,204 of advisory fees after voluntarily waiving $52,093 and $22,684 of
advisory fees for the High Yield Fund and Emerging Markets Fund,
respectively.
Summit Investment Partners, LLC, with offices at 312 Elm Street, Suite 2525,
Cincinnati, Ohio 45202, serves as investment sub-adviser (the "Sub-Adviser")
to the Funds pursuant to an Investment Sub-Advisory Agreement with the
Adviser dated September 18, 1996 (the "Sub-Advisory Agreement"). Under the
Sub-Advisory Agreement, Summit Investment Partners, LLC 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 Funds. Under the Sub-Advisory Agreement, the Sub-Adviser receives from
the Adviser an
Continued
-16-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
November 30, 1998
(Unaudited)
annual fee in the amount of $150,000 and $150,000 per year from the High
Yield Fund and Emerging Markets Fund, respectively. 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 SIP, or paid by FSCM.
BISYS Fund Services (the "Administrator"), an indirect, wholly-owned
subsidiary of The BISYS Group, Inc. ("BISYS") serves as the administrator,
manager, and distributor to the Trust.
Certain officers of the Trust are affiliated with BISYS or with FSCM. Such
officers are not paid any fees directly by the Funds or the Trust for serving
as officers of the Trust.
BISYS Fund Services, LP ("BISYS" or "Administrator"), a wholly-owned
subsidiary of The BISYS Group, Inc., serves as the Trust's administrator and
assists the Trust in all aspects of its administration and operation. The
administrator is entitled to a fee Under the terms of the Management and
Administration Agreement between the Trust and, BISYS' fees are computed
daily and paid monthly as a percentage of the average daily net assets of the
Funds at an annual rate of 0.20%. For the six months ended November 30, 1998,
BISYS received $42,045 and $15,978 of administration fees after voluntarily
waiving $11,602 and $5,326 of administration fees for the High Yield Fund and
Emerging Markets Fund, respectively.
The Trust has adopted a Distribution Plan (the "Plan") in which BISYS
receives fees for providing distribution and shareholder services under the
Distribution Agreement between the Trust and BISYS pursuant to Rule 12b-1
under the 1940 Act. Under the Plan, Class A shares are subject to an annual
distribution fee of up to 0.25% of the average daily net assets. Class B
shares are subject to an annual distribution fee of up to 1.00% of the
average daily net assets. The Distributor may use up to 0.25% of the fees for
shareholder servicing and up to 0.75% for distribution activities. For the
six months ended November 30, 1998, BISYS has received $62,979 and $26,626
for the High Yield Fund and the Emerging Markets Fund, respectively. These
fees may be used by BISYS to pay financial institutions, including the Summit
Investment Partners, LLC, broker dealers and other institutions, or to
reimburse BISYS or its affiliates for distribution or shareholder service
assistance. 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 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, 1998, BISYS received $66,390 and $0 from
commissions earned on sales of the High Yield Fund and Emerging Markets Fund,
respectively, of which $54,207 and $0 was reallowed to unaffiliated
broker/dealers, respectively.
Continued
-17-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
November 30, 1998
(Unaudited)
BISYS 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 also serves the Trust as fund accountant.
Under the terms of the Fund Accounting Agreement, BISYS is entitled to
receive a minimum annual fee of $30,000 and $45,000 or 0.03% and 0.05% of the
average daily net assets of the High Yield Fund and Emerging Markets Fund,
respectively. In addition, BISYS is entitled to be 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,
1998 were $58,344 and $53,408, for the High Yield Fund and the Emerging
Markets Fund, respectively.
Continued
-18-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
November 30, 1998
(Unaudited)
5. Shares of Beneficial Interest
The following is a summary of transactions in Fund shares:
<TABLE>
<CAPTION>
Summit High Yield Fund Emerging Markets Bond Fund
-------------------------- ------------------------------
For the Six For the For the Six For the Five
Months Ended Year Ended Months Ended Months Ended
November 30, May 31, November 30, May 31,
1998 1998 1998 1998
------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
A Shares:
Proceeds from shares
issued................. $ 24,024,087 $ 44,901,158 $ 291,935 $ 25,207,058
Dividends reinvested... 4,132,422 7,475,727 1,456,646 857,402
Shares redeemed........ (12,275,988) (29,628,147) (110,626) (3,939)
------------ ------------ ------------- --------------
Change in net assets
from A Shares
transactions........ $ 15,880,521 $ 22,748,738 $ 1,637,955 $ 26,060,521
============ ============ ============= ==============
B Shares:
Proceeds from shares
issued................. $ 26,609 -- $ 1,000 --
Dividends reinvested... 1,130 -- 34 --
Shares redeemed........ -- -- -- --
------------ ------------ ------------- --------------
Change in net assets
from B Shares
transactions........ $ 27,739 -- $ 1,034 --
============ ============ ============= ==============
Institutional Service
Shares: (a)
Proceeds from shares
issued................. -- $ 969,749 -- --
Dividends reinvested... -- 68,019 -- --
Shares redeemed........ -- (5,443,018) -- --
------------ ------------ ------------- --------------
Change in net assets
from Institutional
Service Shares
transactions........ -- $ (4,405,250) -- --
============ ============ ============= ==============
SHARE TRANSACTIONS:
A Shares:
Proceeds from shares
issued................. 2,469,828 3,964,100 43,178 2,537,918
Dividends reinvested... 434,172 674,217 197,253 84,891
Shares redeemed........ (1,211,790) (2,641,732) (14,455) (382)
------------ ------------ ------------- --------------
Change in A Shares... 1,692,210 1,996,585 225,976 2,622,427
============ ============ ============= ==============
B Shares:
Proceeds from shares
issued................. 2,969 -- 167 --
Dividends reinvested... 127 -- 5 --
Shares redeemed........ -- -- -- --
------------ ------------ ------------- --------------
Change in B Shares... 3,096 -- 172 --
============ ============ ============= ==============
Institutional Service
Shares: (a)
Proceeds from shares
issued................. -- 83,883 -- --
Dividends reinvested... -- 5,865 -- --
Shares redeemed........ -- (464,696) -- --
------------ ------------ ------------- --------------
Change in
Institutional
Service Shares...... -- (374,948) -- --
============ ============ ============= ==============
</TABLE>
(a) On July 31, 1997 Institutional Shares ceased operations and were
transferred High Yield Shares.
Continued
-19-
<PAGE>
SUMMIT HIGH YIELD FUND
Financial Highlights
<TABLE>
<CAPTION>
A Shares
---------------------------------------------------
For the For the
Six Months Period
Ended Year Year Year June 27,
November 30, Ended Ended Ended 1994 to
1998 May 31, May 31, May 31, May 31,
(Unaudited) 1998 1997 1996 1995(a)
------------ ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................. $ 10.99 $ 11.32 $ 11.05 $ 10.11 $ 10.00
------- ------- ------- ------- -------
INVESTMENT ACTIVITIES:
Net investment income... 0.49 1.01 0.99 1.01 0.83
Net realized and
unrealized gains
(losses) on investments. (1.49) 0.70 0.90 0.95 0.11
------- ------- ------- ------- -------
Total from Investment
Activities........... (1.00) 1.71 1.89 1.96 0.94
------- ------- ------- ------- -------
DISTRIBUTIONS:
Net investment income... (0.50) (1.01) (0.99) (1.01) (0.83)
In excess of net
investment income....... -- -- (0.13) -- --
Net realized gains...... (0.29) (1.03) (0.50) (0.01) --
------- ------- ------- ------- -------
Total Distributions... (0.79) (2.04) (1.62) (1.02) (0.83)
------- ------- ------- ------- -------
Net Asset Value, End of
Period.................... $ 9.20 $ 10.99 $ 11.32 $ 11.05 $ 10.11
======= ======= ======= ======= =======
Total Return (excludes
sales charges)............ (9.12%)(b) 16.17% 18.15% 20.34% 9.97%(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)............ $62,114 $55,643 $34,707 $28,628 $27,676
Ratio of expenses to
average net assets..... 1.60%(c) 1.60% 1.60% 1.60% 1.56%(c)
Ratio of net investment
income
to average net assets.. 9.77%(c) 8.81% 8.73% 9.42% 9.13%(c)
Ratio of expenses to
average net assets*.... 1.83%(c) 2.03% 2.32% 2.24% 1.61%(c)
Ratio of net investment
income
to average net assets*. 9.54%(c) 8.38% 8.01% 8.78% 9.08%(c)
Portfolio turnover (d).. 58.35% 518.74% 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 the shares issued.
See notes to financial statements.
-20-
<PAGE>
SUMMIT HIGH YIELD FUND
Financial Highlights
<TABLE>
<CAPTION>
B Shares
------------
For the
Period Ended
November 30,
1998(a)
(Unaudited)
------------
<S> <C>
Net Asset Value, Beginning of Period.............................. $9.10
-----
INVESTMENT ACTIVITIES:
Net investment income........................................... 0.13(b)
Net realized and unrealized gains (losses) on investments....... 0.38
-----
Total from Investment Activities.............................. 0.51
-----
DISTRIBUTIONS:
Net investment income........................................... (0.13)(b)
In excess of net investment income.............................. --
Net realized gains.............................................. (0.29)
-----
Total Distributions........................................... (0.42)
-----
Net Asset Value, End of Period.................................... $9.19
=====
Total Return (excludes sales charges)............................. 5.85%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)............................... $ 28
Ratio of expenses to average net assets......................... 2.35%(d)
Ratio of net investment income to average net assets............ 6.95%(d)
Ratio of expenses to average net assets*........................ 2.38%(d)
Ratio of net investment income to average net assets*........... 6.92%(d)
Portfolio turnover (e).......................................... 58.35%
</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 (October 8, 1998).
(b) Calculated based on average shares outstanding during the period.
(c) Not Annualized.
(d) Annualized
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of the shares issued.
See notes to financial statements.
-21-
<PAGE>
SUMMIT EMERGING MARKETS BOND FUND
Financial Highlights
<TABLE>
<CAPTION>
A Shares
----------------------------
For the
Six Months For the
Ended Five Month
November 30, Period Ended
1998 May 31,
(Unaudited) 1998(a)
------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $ 9.87 $ 10.00
------- -------
INVESTMENT ACTIVITIES:
Net investment income........................... 0.50 0.35
Net realized and unrealized gains (losses) on
investments..................................... (2.63) (0.15)
------- -------
Total from Investment Activities.............. (2.13) 0.20
------- -------
DISTRIBUTIONS:
Net investment income........................... (0.50) (0.33)
In excess of net investment income.............. -- --
Net realized gains.............................. (0.04) --
------- -------
Total Distributions........................... (0.54) (0.33)
------- -------
Net Asset Value, End of Period.................... $ 7.20 $ 9.87
======= =======
Total Return (excludes sales charges)............. (21.57%)(b) 2.01%(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)............... $20,512 $25,879
Ratio of expenses to average net assets......... 2.00%(c) 2.00%(c)
Ratio of net investment income to average net
assets.......................................... 12.70%(c) 8.67%(c)
Ratio of expenses to average net assets*........ 2.31%(c) 2.20%(c)
Ratio of net investment income to average net
assets*......................................... 12.40%(c) 8.47%(c)
Portfolio turnover (d).......................... 28.94% 85.69%
</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 (December 31, 1997).
(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 the shares issued.
See notes to financial statements.
-22-
<PAGE>
SUMMIT EMERGING MARKETS BOND FUND
Financial Highlights
<TABLE>
<CAPTION>
B Shares
------------
For the
Period Ended
November 30,
1998(a)
(Unaudited)
------------
<S> <C>
Net Asset Value, Beginning of Period.............................. $5.94
-----
INVESTMENT ACTIVITIES:
Net investment income........................................... 0.14
Net realized and unrealized gains (losses) on investments....... 1.30
-----
Total from Investment Activities.............................. 1.44
-----
DISTRIBUTIONS:
Net investment income........................................... (0.14)
In excess of net investment income.............................. --
Net realized gains.............................................. (0.04)
-----
Total Distributions........................................... (0.18)
-----
Net Asset Value, End of Period.................................... $7.20
=====
Total Return (excludes sales charges)............................. 24.96%(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)............................... $ 1
Ratio of expenses to average net assets......................... 2.75%(c)
Ratio of net investment income to average net assets............ 14.75%(c)
Ratio of expenses to average net assets*........................ 3.07%(c)
Ratio of net investment income to average net assets*........... 14.43%(c)
Portfolio turnover (d).......................................... 28.94%
</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 (October 8, 1998).
(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 the shares issued.
See notes to financial statements.
-23-
<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
Malcom B. Sheldrick, Jr., Vice President
John Quillin, Secretary
Nimish Bhatt, Treasurer
-----------
Investment Adviser
First Summit Capital Management
312 Elm St., Suite 2525
Cincinnati, OH 45202
Sub-Investment Adviser
Summit Investment Partners, LLC
312 Elm St., Suite 2525
Cincinnati, OH 45202
Administrator and Distributor
BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219-3035
Legal Counsel
Stradley, Ronon, Stevens & Young, LLP
2600 Commerce Square
Philadelphia, PA 19103-7098
Auditors
PricewaterhouseCoopers LLP
100 East Broad Street
Columbus, OH 43215
1/99
-----------------------------------
-----------------------------------
LOGO
SUMMIT
INVESTMENT
TRUST
High Yield Fund
Emerging Markets Bond Fund
Managed by
First Summit Capital Management
Sub-Advised by
Summit Investment Partners, LLC
SEMI-ANNUAL REPORT
TO
SHAREHOLDERS
NOVEMBER 30, 1998
-----------------------------------
