<PAGE>
Message From The Chairman
- -------------------------------------------------------------------------------
Fellow Shareholders:
Summit High Yield Fund/1/
Investors in high yield bonds found the twelve-month period ended May 31, 1999
to be a more difficult time than in years past. The Salomon Brothers High
Yield Index had a total return of only 0.72% and, for the first time in many
years, high yield bonds failed to outperform investment grade fixed income
securities as measured by the 4.33% total return of the Salomon Brothers
Investment Grade Bond Index/2/.
The Summit High Yield Fund's performance was disappointing during the period.
Our -8.45% total return (without the sales charge)* was a reflection of how
our aggressive posture of primarily investing in smaller, B-rated issuers
within the high yield marketplace was penalized by investors' bias towards the
larger, upper quality tier of high yield issuers. Longer-term this aggressive
posture has proven to be beneficial to shareholders as evidenced by Lipper
Analytical Services' ranking the Summit High Yield Fund (Class A Shares) #9
among 100 "High Current Yield" funds as of May 31, 1999 since our June 27,
1994 inception./3/
In its brief nearly five-year history your Fund has now produced a double-
digit annualized total return of 10.87% (without the sales charge)* for the
period ended May 31, 1999. The "correction" that we have witnessed in the high
yield market leads us to believe that the high yield market currently offers
compelling value and we are optimistic that the sector has the potential to
deliver good returns relative to its risk.
Strategy The Next Twelve Months
Spreads in the high yield market widened as market participants became
increasingly concerned over the direction of interest rates and the U.S.
economy. This widening of credit or quality spreads suggests that investors
are requiring higher yields to compensate them for the credit risk inherent in
high yield bonds. This is especially true for the B-rated issuers that the
Fund primarily invests in. The bonds of these smaller issuers have widened
more in yield spread than larger, better-quality issuers.
Over time, our belief is that other fixed income investors will recognize that
smaller, B-rated issuers have sound business and operational plans that they
are in the process of executing and therefore, the bonds of these companies
will be viewed as undervalued as the financial profiles of these companies
improve.
As a portfolio management team, we believe that our major strength is the
selection of individual companies and their related securities that have, in
our view, exceptional relative value within the high
- --------
/1/ Although the fund's yield and total return may be higher than that of fixed
income funds that purchase higher-rated securities, the potentially higher
yield and total return is a function of the greater risk that the fund's
share price will decline as described in the prospectus.
/2/ The Salomon Brothers Investment Grade Index is widely representational of
the performance of investment grade corporate and U.S. Government Bonds. The
index 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.
/3/ The Lipper ranking is based on total return for the period and does not
reflect a sales charge. As of May 31, 1999 the Summit High Yield Fund (Class
A Shares) ranked 270/281 and 72/158 for the 1-year and 3-year periods,
respectively. Also, as of June 30, 1999 the Summit High Yield Fund ranked
284/291 and 78/161 for the 1-year and 3-year periods respectively, and
10/100 since it's inception on June 27, 1994. Past performance is no
guarantee of future results. During the period for which this ranking is
based, the Fund waived fees. In the absence of those waivers, the ranking
may have been lower.
* See graph and additional footnotes on pages 3.
-1-
<PAGE>
Message From The Chairman, Continued
- -------------------------------------------------------------------------------
yield market. We believe this "bottom-up" approach to credit portfolio
management, combined with our traditional fully invested position, has allowed
us to perform well in the Fund's nearly five-year existence.
As portfolio managers, we continue to pursue our goal of increasing total
returns in three ways. First, we seek to apply sound, fundamental credit
analysis to select securities that have been overlooked by other high yield
investors. Second, we seek to invest in securities of companies that are
improving their financial profile and therefore, will benefit from improving
credit quality. Third, we make strategic "theme-oriented" moves to pursue
opportunities in sectors within the high yield market.
Summit Emerging Markets Bond Fund/4/--WOW!
WOW indeed! The fixed income emerging markets have certainly provided a roller
coaster experience in the twelve-month period ended May 31, 1999. As emerging
market countries suffered around the globe last summer (June 1, 1998 through
August 31, 1998), our Fund had a total return of -26.05% (without the sales
charge)** for the quarter (versus -30.32% for the JP Morgan Emerging Market
Plus Bond Index or "EMBI+" for the same period). The fall period showed better
results as a number of emerging market nations put into place various measures
to ensure fiscal solvency. An example of these better results is the Summit
Emerging Markets Bond Fund performance for November 1998 when the Fund had a
total return of 16.76% (without the sales charge)** for the month versus the
EMBI+ total return of 5.89% for the month. When "it's all said and done,"
however, our Fund had a total return of -14.86% (without the sales charge)**
for its May 31, 1999 fiscal year versus the EMBI+ return of -11.01% for the
same period. We continue to believe that the emerging market bond sector
offers an attractive investment opportunity that many long-term investors may
find appealing. The Summit Emerging Markets Bond Fund offers a convenient
means to help capitalize on the world's developing economics, while seeking to
reduce international stock market risk.
While returns for this sector were negative and therefore below expectations,
we are optimistic that the many political and economic reforms being made in
emerging market economies may act as the catalysts for increased business
activity and demand for capital. In return for potentially greater risks,
emerging market bonds have the potential to offer higher returns than typical
U.S. high yield corporate bonds. Potential capital appreciation is also
possible in this sector in a positive global economic environment.
I would like to thank you for the trust and confidence you have placed in our
portfolio management team. Please drop me a note with comments or questions
about any aspect of our Funds or our operations.
Sincerely,
/s/ Steven R. Sutermeister
Steven R. Sutermeister
Chairman
- --------
/4/ International investing involves increased risk and volatility. Investing in
emerging markets securities involves unique risks such as currency risks,
political, social and economic risks, credit risks and liquidity risk, as
described in the prospectus.
** See graph and additional footnotes on pages 4.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate so that an investor's shares when redeemed may be
worth more or less than the original cost.
The Summit High Yield Fund and Summit Emerging Markets Bond Fund are
distributed by BISYS Fund Services.
This report is authorized for distribution only when preceded or accompanied
by a prospectus. Read it carefully before investing.
-2-
<PAGE>
[CHART OF SUMMIT HIGH YIELD FUND APPEARS HERE]
- ------------------------------------------------------------------------------
Label A B C D E
- ------------------------------------------------------------------------------
Label Salomon A Shares A Shares* B Shares B Shares**
High Yield (w/out load) (w/load) (w/out CDSC) (w/CDSC)
- ------------------------------------------------------------------------------
1 6/27/94 10000 10000 9551 10000 10000
- ------------------------------------------------------------------------------
2 5/31/95 11309 10997 10503 10997 10497
- ------------------------------------------------------------------------------
3 5/31/96 12387 12233 12639 13233 12833
- ------------------------------------------------------------------------------
4 5/31/97 13411 15635 14933 15633 15333
- ------------------------------------------------------------------------------
5 5/31/98 15289 18161 17345 18161 17861
- ------------------------------------------------------------------------------
6 5/31/99 15399 16627 15880 16531 16355
- ------------------------------------------------------------------------------
Summit High Yield Fund
- ------------------------------------------------------------------------
Average Annual Total Return
- ------------------------------------------------------------------------
Since
Inception
Period Ended 5/31/99 1 Year (6/27/94)
- ------------------------------------------------------------------------
A Shares w/out load (8.45)% 10.87%
- ------------------------------------------------------------------------
A Shares w/load* (12.58)% 9.84%
- ------------------------------------------------------------------------
B Shares w/out CDSC (8.97)% 10.74%
- ------------------------------------------------------------------------
B Shares w/CDSC** (12.96)% 10.50%
- ------------------------------------------------------------------------
*Reflects the maximum 4.50% sales charge.
**Reflects the contingent deferred sales charge (maximum 5.00%)
The Fund's performance is measured against 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. The
performance of the Summit High Yield Fund reflects the deduction of fees for
these value-added services.
Performance for the B Shares, which commenced operations on October 8, 1998,
is based on historical performance of the A Shares (without sales charge)
prior to that date. A Shares performance does not reflect the higher 12b-1
fees associated with the B Shares. Had the higher 12b-1 fees been
incorporated, total return and growth of $10,000 figures would have been
different.
Past performance is not predictive of future performance and the composition
of the Fund's holdings is subject to change. Investment return and principal
value of the Summit High Yield Fund will fluctuate so that the shares, when
redeemed, may be worth more or less than their original cost.
During the period, investment advisory and administration fees were
voluntarily reduced, resulting in a higher total return than would have
occurred if full fees had been charged.
-3-
<PAGE>
[CHART OF SUMMIT HIGH YIELD FUND APPEARS HERE]
Label A B C D E
- ------------------------------------------------------------------------------
J.P. Morgan A Shares A Shares B Shares B Shares
Label Emerging (w/out load) (w/load) (w/out CDSC) (w/CDSC)
- ------------------------------------------------------------------------------
1 12/31/97 10000 10000 9551 10000 9550
- ------------------------------------------------------------------------------
2 2/28/98 10265 10247 9787 10247 9747
- ------------------------------------------------------------------------------
3 5/31/98 10186 10201 9743 10201 9707
- ------------------------------------------------------------------------------
4 8/31/98 7098 7537 7198 7537 7182
- ------------------------------------------------------------------------------
5 11/30/98 8785 8000 7641 7994 7634
- ------------------------------------------------------------------------------
6 2/28/99 8365 7783 7433 7762 7492
- ------------------------------------------------------------------------------
7 5/31/99 9065 8685 8295 8644 8353
- ------------------------------------------------------------------------------
Summit High Yield Fund
- ------------------------------------------------------------------------
Average Annual Total Return
- ------------------------------------------------------------------------
Since
Inception
Period Ended 5/31/99 1 Year (12/31/97)
- ------------------------------------------------------------------------
A Shares w/out load (14.86)% (9.49)%
- ------------------------------------------------------------------------
A Shares w/load* (18.73)% (12.38)%
- ------------------------------------------------------------------------
B Shares w/out CDSC (15.26)% (9.79)%
- ------------------------------------------------------------------------
B Shares w/CDSC** (18.95)% (11.95)%
- ------------------------------------------------------------------------
* Reflects the maximum 4.50% sales charge.
** Reflects the contingent deferred sales charge (maximum 5.00%)
The Fund's performance is measured against the J.P. Morgan EMBI+ Index an
Index which tracks total returns for traded external debt instruments in the
emerging markets. The instruments include external-currency-denominated Brady
bonds, loans and Eurobonds, as well as U.S. dollar local markets. 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 Emerging Markets Fund reflects the deduction of fees
for these valued-added services.
Performance for the B Shares, which commenced operations on October 8, 1998,
is based on historical performance of the A Shares (without sales charge)
prior to that date. The A Shares performance does not reflect the higher 12b-1
fees associated with the B Shares. Had the higher 12b-1 fees been
incorporated, total return and growth of $10,000 figures would have been
different.
Past performance is not predictive of future performance and the composition
of the Fund's holdings is subject to change. Investment return and principal
value of the Summit Emerging Markets Bond Fund will fluctuate so that the
shares, when redeemed, may be worth more or less than their original cost.
During the period, investment advisory and administration fees were
voluntarily reduced, resulting in a higher total return than would have
occurred if full fees had been charged.
-4-
<PAGE>
Table of Contents
Message From the Chairman
Page 1
Report of Independent Accountants
Page 6
Statements of Assets and Liabilities
Page 7
Statements of Operations
Page 8
Statements of Changes in Net Assets
Page 9
Schedules of Portfolio Investments
Page 10
Notes to Financial Statements
Page 15
Financial Highlights
Page 22
-5-
<PAGE>
Report of Independent Accountants
- -------------------------------------------------------------------------------
To the Shareholders and Trustees
Summit Investment Trust
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Summit High
Yield Fund and the Summit Emerging Markets Bond Fund (separate portfolios
constituting the Summit Investment Trust, hereafter referred to as the
"Funds") at May 31, 1999, the results of each of their operations for the year
then ended, the changes in each of their net assets for each of the periods
presented, and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which include
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Columbus, Ohio
July 23, 1999
-6-
<PAGE>
SUMMIT INVESTMENT TRUST
Statements of Assets and Liabilities
May 31, 1999
<TABLE>
<CAPTION>
High Yield Emerging Markets
Fund Bond Fund
----------- ----------------
<S> <C> <C>
ASSETS:
Investments, at value (cost $53,005,895 and
$27,272,520, respectively)....................... $47,219,687 $21,463,329
Interest receivable.............................. 1,445,786 795,523
Receivable for capital shares issued........... 50,002 --
Deferred organizational expenses............... -- 8,326
----------- -----------
Total Assets................................. 48,715,475 22,267,178
----------- -----------
LIABILITIES:
Payable for capital shares redeemed.............. 50,000 --
Payable to Custodian............................. 895,587 --
Accrued expenses and other payables:
Investment advisory fees........................ 5,582 3,821
Administration fees............................. 985 455
12b-1 fees (A shares)........................... 9,632 4,862
12b-1 fees (B shares)........................... 245 3
Shareholder Service fees........................ 13 --
Other........................................... 55,550 19,788
----------- -----------
Total Liabilities.............................. 1,017,594 28,929
----------- -----------
NET ASSETS:
Capital.......................................... 57,524,961 29,134,406
Undistributed net investment income.............. 62,531 26,368
Accumulated undistributed net realized losses
from investments and foreign currency
transactions.................................... (4,103,403) (1,113,334)
Net unrealized depreciation on investments and
assets and liabilities denominated in foreign
currencies...................................... (5,786,208) (5,809,191)
----------- -----------
Net Assets..................................... $47,697,881 $22,238,249
=========== ===========
Net Assets:
A Shares....................................... $47,325,481 $22,236,911
B Shares....................................... 372,400 1,338
Outstanding units of beneficial interest
(shares):
A Shares....................................... 5,382,321 3,053,293
B Shares....................................... 42,424 184
Net Asset Value
A Shares Redemption price per share............ $ 8.79 $ 7.28
=========== ===========
Maximum sales charge........................... 4.50% 4.50%
=========== ===========
Maximum offering price (100%/100%--maximum
sales charge) of net asset value per share
(adjusted to the nearest cent)................ $ 9.20 $ 7.62
=========== ===========
B Shares Offering price per share (a).......... $ 8.78 $ 7.28
=========== ===========
</TABLE>
- --------
(a) Redemption price for B Shares varies based on length of time shares are
held.
See notes to financial statements.
-7-
<PAGE>
SUMMIT INVESTMENT TRUST
Statements of Operations
For the year ended May 31, 1999
<TABLE>
<CAPTION>
Emerging Markets
High Yield Fund Bond Fund
--------------- ----------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income............................... $ 6,261,945 $ 3,191,569
Dividend income............................... 26,304 23,524
----------- -----------
Total Income................................ 6,288,249 3,215,093
----------- -----------
EXPENSES:
Investment advisory fees...................... 303,469 157,444
Administration fees........................... 106,274 41,986
12b-1 fees (A Shares)......................... 123,297 52,475
12b-1 fees (B Shares)(a)...................... 602 6
Shareholder service fees (B shares)(a)........ 204 2
Audit fees.................................... 15,847 7,588
Custodian fees................................ 33,389 3,749
Accounting fees............................... 41,637 53,852
Legal fees.................................... 94,807 31,997
Organization expenses......................... -- 16,735
Transfer agent fees........................... 84,633 42,114
Trustees' fees................................ 23,044 9,133
Miscellaneous expenses........................ 104,614 40,710
----------- -----------
Total expenses before voluntary reductions.. 931,817 457,791
Expenses voluntarily reduced................ (61,924) (38,441)
----------- -----------
Net Expenses................................ 869,893 419,350
----------- -----------
Net Investment Income......................... 5,418,356 2,795,743
----------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized losses on investments and foreign
currency transactions......................... (3,965,380) (1,113,310)
Net change in unrealized depreciation on
investments and assets and liabilities
denominated in foreign currencies............ (6,212,023) (5,487,784)
----------- -----------
Net realized/unrealized losses on investments. (10,177,403) (6,601,094)
----------- -----------
Change in net assets resulting from
operations.................................... ($4,759,047) ($3,805,351)
=========== ===========
</TABLE>
(a) Period from commencement of operations (October 8, 1998)
See notes to financial statements.
-8-
<PAGE>
SUMMIT INVESTMENT TRUST
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
High Yield Fund Emerging Markets Bond Fund
--------------------------- -----------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Period Ended
May 31, 1999 May 31, 1998 May 31, 1999 May 31, 1998(c)
------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.. $ 5,418,356 $ 4,222,185 $ 2,795,743 $ 892,066
Net realized gains
(losses) on investment
and foreign currency
transactions.......... (3,965,380) 3,821,677 (1,113,310) 105,690
Net change in
unrealized
depreciation on
investments and assets
and liabilities
denominated in foreign
currencies............ (6,212,023) (1,467,951) (5,487,784) (321,407)
----------- ----------- ----------- -----------
Change in net assets
resulting from
operations.............. (4,759,047) 6,575,911 (3,805,351) 676,349
----------- ----------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
A Shares.............. (5,502,063) (4,184,950) (2,805,873) (857,402)
B Shares(a)........... (9,484) -- (110) --
Institutional
Shares(b)............. -- (75,986) -- --
----------- ----------- ----------- -----------
(5,511,547) (4,260,936) (2,805,983) (857,402)
----------- ----------- ----------- -----------
In excess of net
investment income
Institutional
Shares(b)............. -- (3,718) -- --
----------- ----------- ----------- -----------
-- (3,718) -- --
----------- ----------- ----------- -----------
Net realized gains
A Shares.............. (1,598,270) (3,955,064) (113,762) --
B Shares(a)........... (873) -- (7) --
----------- ----------- ----------- -----------
(1,599,143) (3,955,064) (113,769) --
----------- ----------- ----------- -----------
Change in net assets
from shareholder
distributions........... (7,110,690) (8,219,718) (2,919,752) (857,402)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 29,367,573 45,870,906 864,623 25,207,058
Dividends reinvested... 6,754,211 7,543,747 2,917,885 857,402
Cost of shares
redeemed............... (32,197,576) (35,071,165) (698,624) (3,939)
----------- ----------- ----------- -----------
Change in net assets
from capital
transactions............ 3,924,208 18,343,488 3,083,884 26,060,521
----------- ----------- ----------- -----------
Change in net assets.... (7,945,529) 16,699,681 (3,641,219) 25,879,468
NET ASSETS:
Beginning of period.... 55,643,410 38,943,729 25,879,468 --
----------- ----------- ----------- -----------
End of period.......... $47,697,881 $55,643,410 $22,238,249 $25,879,468
=========== =========== =========== ===========
</TABLE>
- --------
(a) Period from commencement of operations (October 8, 1998).
(b) On July 31, 1997, Institutional Shares ceased operations and were
transferred to A Shares.
(c) Emerging Market Bond Fund commenced operations on December 31, 1997.
See notes to financial statements.
-9-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
Schedule of Portfolio Investments
May 31, 1999
Shares or
Principal Security Market
Amount Description Value
---------- ---------------------------------------------------- ------------
Common Stocks (0.8%):
Communications (0.8%):
International--Wholesale Telecom (0.8%):
8,083 Viatel, Inc. (b).................................... $ 363,735
------------
Paging/Telegraph (0.0%):
1,000 Paging Do Brazil Holding Co. LLC, Class B........... --
------------
Total Common Stocks............................................ 363,735
------------
Corporate Bonds (97.9%):
Communications (44.4%):
Data/Internet (5.3%):
$ 500,000 Covad Communications Group, Inc., 12.50%, 2/15/09... 482,500
1,000,000 Psinet, Inc., 11.50%, 11/1/08....................... 1,055,000
1,000,000 Teligent, Inc., 11.50%, 12/1/07..................... 985,000
------------
2,522,500
------------
Domestic--Retail Telecom (6.6%):
1,000,000 E.Spire Communication, Inc., 0.00%, 4/1/06 (c)...... 580,000
2,625,000 Focal Communications Corp., 0.00%, 2/15/08 (d)...... 1,496,250
1,000,000 ITC Deltacom, Inc., 9.75%, 11/15/08................. 1,050,000
------------
3,126,250
------------
Domestic--Wholesale Telecom (1.6%):
650,000 Qwest Communications International, 10.88%, 4/1/07.. 744,250
------------
Equipment Providers (1.9%):
1,500,000 SBA Communications Corp., 0.00%, 3/1/08 (e)......... 930,000
------------
International--Retail Telecom (7.9%):
1,000,000 ESAT Telecom Group plc, Senior Notes, 11.88%,
12/1/08............................................ 1,050,000
1,000,000 Metronet Communications Corp., 12.00%, 8/15/07...... 1,165,000
1,500,000 Versatel Telecom, 13.25%, 5/15/08................... 1,567,500
------------
3,782,500
------------
International--Wholesale Telecom (12.7%):
1,725,000 Esprit Telecom Group plc, 11.50%, 12/15/07.......... 1,871,625
2,000,000 Facilicom International, Inc., 10.50%, 1/15/08...... 1,560,000
Corporate Bonds, continued:
Communications, continued:
International--Wholesale Telecom, continued:
$ 100,000 Global Crossing Holding Co., Ltd., 10.50%, 12/1/08.. $ 1,110,000
1,500,000 Viatel, Inc., 11.25%, 4/15/08....................... 1,515,000
------------
6,056,625
------------
Paging/Telegraph (5.3%):
2,500,000 Arch Communications Group, 6.75%, 12/1/03........... 1,425,000
1,000,000 Paging Network Do Brazil SA, 13.50%, 6/6/05......... 450,000
1,000,000 Paging Network, Inc., 10.13%, 8/1/07................ 655,000
------------
2,530,000
------------
Pay Phone Operators (3.1%):
1,500,000 Phonetel Technologies, Inc., 12.00%, 12/15/06**..... 510,000
1,000,000 Talton Holdings, Inc., 11.00%, 6/30/07.............. 945,000
------------
1,455,000
------------
21,147,125
------------
Energy/Mining (4.2%):
Distribution (0.9%):
1,000,000 Empire Gas Corp., 7.00%, 7/15/04 (f)................ 450,000
------------
Oil/Gas Extraction (1.3%):
1,000,000 Abraxas Petroleum Corp., 11.50%, 11/1/04............ 613,750
------------
Services (2.0%):
1,500,000 Eagle Geophysical, Inc., 10.75%, 7/15/08............ 930,000
------------
1,993,750
------------
Financial (2.1%):
Banking/Insurance (2.1%):
1,000,000 AmeriCredit Corp., 9.88%, 4/15/06*.................. 1,025,000
------------
Manufacturing/Consumer Goods (9.9%):
Consumer Products (2.1%):
1,000,000 Werner Holdings Co., Inc., 10.00%, 11/15/07......... 1,007,500
------------
Continued
-10-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
Schedule of Portfolio Investments, Continued
May 31, 1999
Shares or
Principal Security Market
Amount Description Value
---------- ---------------------------------------------------- ------------
Corporate Bonds, continued:
Manufacturing/Consumer Goods, continued:
Electric/HVAC (2.3%):
$1,000,000 International Wire Group, 11.75%, 6/1/05............ $ 1,040,000
------------
Financial Services (1.6%):
1,000,000 Macsaver Financial Services, 7.60%, 8/1/07.......... 770,000
------------
Professional & Commercial Equipment (1.9%):
1,000,000 Anchor Lamina, Inc., 9.88%, 2/1/08.................. 930,000
------------
Textile/Apparel (2.0%):
1,500,000 Anvil Knitwear, 10.88%, 3/15/07..................... 960,000
------------
4,707,500
------------
Manufacturing/Trade (12.2%):
Metals (3.1%):
1,500,000 Kaiser Aluminum & Chemicals, 12.75%, 2/1/03......... 1,500,000
------------
Miscellaneous (7.8%):
1,500,000 Derby Cycle Corp., 10.00%, 5/15/08.................. 1,290,000
500,000 IMO Industries, Inc., 11.75%, 5/1/06................ 515,000
1,000,000 International Knife & Saw Corp., 11.38%, 11/15/06... 977,500
1,000,000 Numatics, Inc., 9.63%, 4/1/08....................... 890,000
------------
3,672,500
------------
Paper & Pulp (1.3%):
1,000,000 Indah Kiat Fin Mauritius, 10.00%, 7/1/07............ 630,000
------------
5,802,500
------------
Media (7.5%):
Cable TV/Programming (1.1%):
500,000 Avalon Cable of Michigan, 9.38%, 12/1/08............ 510,000
------------
Outdoor Advertising (3.2%):
1,500,000 Tri-State Outdoor Media, 11.00%, 5/15/08............ 1,533,750
------------
Radio Broadcasting (3.2%):
500,000 Emmis Communications Corp., 8.13%, 3/15/09.......... 485,625
Corporate Bonds, continued:
Media, continued:
Radio Broadcasting, continued:
$1,000,000 Spanish Broadcasting System, 11.00%, 3/15/04........ $ 1,070,000
------------
1,555,625
------------
3,599,375
------------
Miscellaneous Services (16.7%):
Healthcare (4.8%):
1,000,000 Genesis Health Ventures, Inc., 9.88%, 1/15/09....... 860,000
1,500,000 Insight Health Services Corp., 9.63%, 6/15/08....... 1,440,000
------------
2,300,000
------------
Hotel/Gaming (9.8%):
1,000,000 Argosy Gaming, 13.25%, 6/1/04....................... 1,137,160
500,000 Casino Magic--Louisiana, Inc., 13.00%, 8/15/03...... 575,000
1,000,000 Mohegan Tribal Gaming, 8.75%, 1/1/09................ 997,500
1,000,000 Station Casinos, 8.88%, 12/1/08..................... 985,000
1,000,000 Vail Resorts, Inc., 8.75%, 5/15/09*................. 980,000
------------
4,674,660
------------
Other (2.1%):
1,000,000 Affinity Group Holdings, Inc., 11.00%, 4/1/07....... 1,010,000
------------
7,984,660
------------
Transportation (0.9%):
Shipping (0.6%):
750,000 Navigator Gas Transport, 12.00%, 6/30/07*........... 292,500
------------
Trucking/Warehousing (0.3%):
500,000 Trism, Inc., 10.75%, 12/15/00**..................... 150,000
------------
442,500
------------
Total Corporate Bonds.......................................... 46,702,410
------------
Rights/Warrants (0.3%):
Communications (0.3%):
International--Retail Telecom (0.1%):
1,500 Versatel Telecom, Warrants, expire 5/15/08.......... 75,000
------------
Continued
-11-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
Schedule of Portfolio Investments, Continued
May 31, 1999
Shares or
Principal Security Market
Amount Description Value
---------- ---------------------------------------------------- ------------
Rights/Warrants, continued:
Communications, continued:
Network-Domestic (0.2%):
1,000 Metronet Communication Corp., Warrants, expire
12/31/99........................................... $ 78,540
------------
153,540
------------
Manufacturing/Consumer Goods (0.0%):
Consumer Products (0.0%):
2,000 Renaissance Cosmetics, Inc., Warrants, expire
8/15/01............................................ 2
------------
Rights/Warrants, continued:
Communications, continued:
Media (0.0%):
200 American Telecasting, Inc., Warrants, expire 8/10/00.. $ --
------------
Total Rights/Warrants........................................... 153,542
------------
Total Investments (Cost $53,005,895) (a)--99.0%................. 47,219,687
Other assets in excess of liabilities--1.0%..................... 478,194
------------
Total Net Assets--100.0%........................................ $ 47,697,881
============
- --------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by amount of losses recognized for
financial reporting purposes in excess of federal income tax reporting of
$112,500. Cost for federal income tax purposes differs from value by net
unrealized depreciation of securities as follows:
Unrealized appreciation......... $ 1,230,136
Unrealized depreciation......... (7,128,844)
-----------
Net unrealized depreciation..... $(5,898,708)
===========
(b)Non-income producing security.
(c)Interest rate increases to 12.75% on April 1, 2001.
(d)Interest rate increases to 12.13% on February 15, 2003.
(e)Interest rate increases to 12.00% on March 1, 2003.
(f)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 May 31,
1999, the market value of Rule 144A securities amounted to $2,297,500 or 5%
of net assets.
** Bond is in default as of 5/31/99.
See notes to financial statements
-12-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT EMERGING MARKETS BOND FUND
Schedule of Portfolio Investments
May 31, 1999
Shares or
Principal Security Market
Amount Description Value
---------- ----------------------------------------------------- -----------
Corporate Bonds (93.9%):
Asia (9.1%):
Indonesia (9.1%):
$1,000,000 APP International Finance, 11.75%, 10/1/05........... $ 735,000
1,000,000 DGS International Finance Co. BV, 10.00%, 6/1/07**... 660,000
1,000,000 Tjiwi Kimia Finance Mauritius, 10.00%, 8/1/04........ 630,000
-----------
2,025,000
-----------
2,025,000
-----------
Caribbean (3.9%):
Dominican Republic (3.9%):
1,000,000 Tricom SA, 11.38%, 9/1/04............................ 870,000
-----------
Eastern Europe (12.1%):
Israel (2.6%):
1,000,000 Barak I.T.C., 0.00%, 11/15/07 (b).................... 570,000
-----------
Poland (4.0%):
1,000,000 Netia Holdings BV, 10.25%, 11/1/07................... 900,000
-----------
Russia (1.0%):
2,498,794 Russia-Ian, Floating Rate Note, currently 5.97%,
12/15/15**.......................................... 224,891
-----------
Turkey (4.5%):
1,000,000 Cellco Finance NV, 15.00%, 8/1/05**.................. 995,000
-----------
2,689,891
-----------
Latin America (57.2%):
Argentina (22.5%):
1,000,000 Acindar Ind., 11.25%, 2/15/04........................ 770,000
1,000,000 Autopistas Del Sol SA, 10.25%, 8/1/09**.............. 815,000
500,000 Cablevision SA, 13.75%, 5/1/09....................... 472,500
1,000,000 Cia International Telecom Cointel, 10.38%, 8/1/04.... 740,000
1,000,000 CTI Holdings SA, 0.00%, 4/15/08 (c).................. 530,000
1,000,000 Mastellone Hermanos SA, 11.75%, 4/1/08............... 770,000
1,000,000 Supercanal Holdings, 11.50%, 5/15/05**............... 470,000
500,000 Supermercados Norte, 10.88%, 2/9/04**................ 445,000
-----------
5,012,500
-----------
Corporate Bonds, continued:
Latin America, continued:
Brazil (17.3%):
$1,000,000 Banco Nacional Desenvolvimento, Floating Rate Note,
currently 15.22%, 6/16/08........................... $ 825,000
1,000,000 Comtel Brasileira Ltd., 10.75%, 9/26/04**............ 880,000
1,000,000 Espirito Santo Centrais Electrias, 10.00%, 7/15/07... 735,000
1,000,000 MRS Logistica SA, 10.63%, 8/15/05**.................. 640,000
1,000,000 Paging Network Do Brazil SA, 13.50%, 6/6/05.......... 450,000
500,000 Tevecap SA, 12.63%, 11/26/04......................... 325,000
-----------
3,855,000
-----------
Mexico (13.7%):
500,000 Alestra SA de RL de CV, 12.63%, 5/15/09**............ 475,000
1,000,000 Consorcio Grupo Dina, 8.00%, 8/8/04, Convertible
Bond................................................ 478,750
500,000 Gruma, SA de CV, 7.63%, 10/15/07..................... 439,510
500,000 Grupo Industrial Durango, 12.63%, 8/1/03............. 477,500
1,000,000 Innova SA de RL, 12.88%, 4/1/07...................... 810,000
500,000 TV Azteca SA, 10.50%, 2/15/07........................ 365,000
-----------
3,045,760
-----------
Venezuela (3.7%):
1,000,000 Cantv Finance Ltd., 9.25%, 2/1/04.................... 812,500
-----------
12,725,760
-----------
North America (2.0%):
Canada (2.0%):
1,000,000 Microcell Telecommunications, 0.00%, 10/15/07 (d).... 434,807
-----------
Western Europe (9.6%):
Greece (4.1%):
1,000,000 Fage Dairy Industries SA, 9.00%, 2/1/07.............. 900,000
-----------
Ireland (3.2%):
1,000,000 ESAT Telecom Group plc, 0.00%, 2/1/07 (e)............ 710,000
-----------
Continued
-13-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT EMERGING MARKETS BOND FUND
Schedule of Portfolio Investments, Continued
May 31, 1999
Shares or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ -----------
Corporate Bonds, continued:
Western Europe, continued:
Netherlands (2.3%):
$ 500,000 Versatel Telecom BV, 13.25%, 5/15/08.................. $ 522,500
-----------
2,132,500
-----------
Total Corporate Bonds............................................ 20,877,958
-----------
Rights/Warrants (0.1%):
Western Europe (0.1%):
Netherlands (0.1%):
500 Versatel Telecom BV, Warrants......................... 25,000
-----------
Total Rights/Warrants............................................ 25,000
-----------
Investment Companies (2.5%):
North America (2.5%):
United States (2.5%):
560,371 Fifth Third Commercial Paper Fund..................... $ 560,371
-----------
Total Investment Companies....................................... 560,371
-----------
Total Investments (Cost $27,272,520) (a)--96.5%.................. 21,463,329
-----------
Other assets in excess of liabilities--3.5%...................... 774,920
-----------
Total Net Assets--100.0%......................................... $22,238,249
===========
- --------
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation as follows:
Unrealized appreciation......... $ $182,225
Unrealized depreciation......... $(5,991,416)
------------
Net unrealized depreciation..... $(5,809,191)
============
(b) Interest rate increases to 12.50% on November 15, 2002.
(c) Interest rate increases to 11.50% on April 15, 2003.
(d) Interest rate increases to 11.13% on October 15, 2002.
(e) Interest rate increases to 12.50% on February 1, 2002.
** 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 May 31,
1999, the market value of Rule 144A securities amounted to $5,604,891 or
25% of net assets.
See notes to financial statements.
-14-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements
May 31, 1999
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 October 8, 1998, the Funds added Class B
Shares, which 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 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 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
-15-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 1999
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 as of May 31,
1999.
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.
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.
Continued
-16-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 1999
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, 1999, 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........................ $25,523 $(25,523)
Emerging Markets Fund.................. $ 24 $ (24)
</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.
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.
3.Purchases and Sales of Portfolio Securities:
Purchases and sales of securities (excluding short-term securities) for the
fiscal year ended May 31, 1999 are as follows:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
High Yield Fund........................................ $95,581,432 $93,249,828
Emerging Markets Fund.................................. $ 8,387,922 $ 7,297,616
</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
Continued
-17-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 1999
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 55%
of the High Yield Fund and 98% of the Emerging Markets Fund as of May 31,
1999. 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 A shares and B shares of the High Yield Fund to 1.60% and
2.35% and the Emerging Markets to 2.00% and 2.75%, respectively. For the
fiscal year ended May 31, 1999, FSCM received $266,304 and $129,500 of
advisory fees after voluntarily waiving $37,165 and $27,944 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 annual fee in the amount of $125,000 and $125,000 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.
Continued
-18-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 1999
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 fiscal year ended May 31, 1999, BISYS
received $81,515 and $31,489 of administration fees after voluntarily waiving
$24,759 and $10,497 of administration fees for the High Yield Fund and
Emerging Markets Fund, respectively.
The Trust has adopted a Distribution Plan and Distribution and Shareholder
Service Plan under which BISYS receives fees for providing distribution and
shareholder services under the Distribution Agreement between the Trust and
BISYS and the Trust's (the "Plan") 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 fiscal year ended May 31, 1999,
BISYS has received $123,899 and $52,481 for the High Yield Fund and the
Emerging Markets Fund for distribution fees, 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
fiscal year ended May 31, 1999, BISYS received $106,216 and $178 from
commissions earned on sales of the High Yield Fund and Emerging Markets Fund,
respectively, of which $7,386 was re-allowed to BISYS and Carillon
Investments (affiliated broker/dealers).
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 an 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 fiscal year ended
May 31, 1999 were $126,270 and $95,966, for the High Yield Fund and the
Emerging Markets Fund, respectively.
The Funds entered into a $4,000,000 revolving credit agreement for liquidity
and other purposes on January 22, 1999. Borrowings under this arrangement
bear interest at the Fed Funds rate in effect on the business day that the
loan is made. Interest expense for the year ended May 31, 1999 was
approximately $4,576 and $81 for the High Yield and Emerging Markets,
respectively.
Continued
-19-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 1999
5. Shares of Beneficial Interest:
The following is a summary of transactions in Fund shares:
<TABLE>
<CAPTION>
High Yield Fund Emerging Markets Bond Fund
-------------------------- ----------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Period Ended
May 31, 1999 May 31, 1998 May 31, 1999 May 31, 1998(a)
------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
A Shares:
Proceeds from shares
issued................. $28,992,269 $44,901,158 $ 863,623 $25,207,058
Dividends reinvested... 6,750,909 7,475,727 2,917,768 857,402
Cost of shares
redeemed............... (32,197,576) (29,628,147) (698,624) (3,939)
----------- ----------- ---------- -----------
Change in net assets
from A Shares
transactions......... $ 3,545,602 $22,748,738 $3,082,767 $26,060,521
=========== =========== ========== ===========
B Shares: (b)
Proceeds from shares
issued................. $ 375,304 -- $ 1,000 --
Dividends reinvested... 3,302 -- 117 --
Cost of shares
redeemed............... -- -- -- --
----------- ----------- ---------- -----------
Change in net assets
from B Shares
transactions......... $ 378,606 -- $ 1,117 --
=========== =========== ========== ===========
Institutional Service
Shares: (c)
Proceeds from shares
issued................. -- $ 969,749 -- --
Dividends reinvested... -- 68,019 -- --
Cost of 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................. 3,020,270 3,964,100 121,988 2,537,918
Dividends reinvested... 727,633 674,217 405,991 84,891
Cost of shares
redeemed............... (3,426,791) (2,641,732) (97,113) (382)
----------- ----------- ---------- -----------
Change in A Shares... 321,112 1,996,585 430,866 2,622,427
=========== =========== ========== ===========
B Shares: (b)
Proceeds from shares
issued................. 42,053 -- 167 --
Dividends reinvested... 371 -- 17 --
Cost of shares
redeemed............... -- -- -- --
----------- ----------- ---------- -----------
Change in B Shares... 42,424 -- 184 --
=========== =========== ========== ===========
Institutional Service
Shares: (c)
Proceeds from shares
issued................. -- 83,883 -- --
Dividends reinvested... -- 5,865 -- --
Cost of shares
redeemed............... -- (464,696) -- --
----------- ----------- ---------- -----------
Change in
Institutional Service
Shares............... -- (374,948) -- --
=========== =========== ========== ===========
</TABLE>
(a) Period from commencement of operations (December 31, 1997).
(b) Period from commencement of operations (October 8, 1998).
(c) On July 31, 1997 Institutional Shares ceased operations and were
transferred to A Shares.
Continued
-20-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 1999
6. Federal Tax Information (unaudited):
Capital Loss Carryover:
As of May 31,1999, the following Funds had net capital loss carryover which
will be available through stated years to offset any future net capital
gains, if any, to the extent provided by the Treasury regulations. To the
extent that this carryover is used to offset future capital gains, it is
probable that the gains so offset will not be distributed to shareholders:
<TABLE>
<CAPTION>
Amount Year Expired
--------- ------------
<S> <C> <C>
High Yield Fund....................................... $(853,764) 2007
Emerging Markets Bond Fund............................ $ (80,585) 2007
</TABLE>
Capital Gain Distributions:
During the period ended May 31, 1999 the High Yield Fund declared long term
capital gain distributions of $173,165.
Post October Loss Deferral:
Capital losses and foreign currency losses incurred after October 31, within
the Funds' fiscal year are deemed to arise on the first business day of the
following fiscal year for tax purposes. The High Yield and Emerging Markets
Funds have incurred and will elect to defer such capital losses and foreign
currency losses of $3,137,139 and $1,032,749, respectively.
7. Concentration of Credit Risk:
The Funds 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.
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.
-21-
<PAGE>
SUMMIT HIGH YIELD FUND
Financial Highlights
For a unit of beneficial interest outstanding for each period
<TABLE>
<CAPTION>
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Period Ended
May 31, 1999 May 31, 1998 May 31, 1997 May 31, 1996 May 31, 1995(a)
------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
A Shares
Net Asset Value,
Beginning of Period..... $ 10.99 $ 11.32 $ 11.05 $ 10.11 $ 10.00
------- ------- ------- ------- -------
INVESTMENT ACTIVITIES:
Net investment income. 0.95 1.01 0.99 1.01 0.83
Net realized and
unrealized gains
(losses) on
investments.......... (1.89) 0.70 0.90 0.95 0.11
------- ------- ------- ------- -------
Total from
Investment
Activities.......... (0.94) 1.71 1.89 1.96 0.94
------- ------- ------- ------- -------
DISTRIBUTIONS:
Net investment income. (0.97) (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. (1.26) (2.04) (1.62) (1.02) (0.83)
------- ------- ------- ------- -------
Net Asset Value, End of
Period.................. $ 8.79 $ 10.99 $ 11.32 $ 11.05 $ 10.11
======= ======= ======= ======= =======
Total Return (excludes
sales charges).......... (8.45%) 16.17% 18.15% 20.34% 9.97%(b)
Ratios to Average Net
Assets/Supplemental
Data:
Net Assets at end of
period (000).......... $47,325 $55,643 $34,707 $28,628 $27,676
Expenses before
waivers............... 1.71% 2.03% 2.32% 2.24% 1.61%(c)
Net investment income
before waivers....... 9.86% 8.38% 8.01% 8.78% 9.08%(c)
Expenses net of
waivers............... 1.60% 1.60% 1.60% 1.60% 1.56%(c)
Net investment income
net
of waivers........... 9.97% 8.81% 8.73% 9.42% 9.13%(c)
Portfolio turnover
(d)................... 176.06% 518.74% 271.68% 187.61% 158.36%
</TABLE>
- --------
(a) Period from commencement of operations (June 27, 1994).
(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 HIGH YIELD FUND
Financial Highlights
For a unit of beneficial interest outstanding for each period
<TABLE>
<CAPTION>
For the
Period Ended
May 31, 1999(a)
---------------
<S> <C>
B Shares
Net Asset Value, Beginning of Period............................ $ 9.10
------
INVESTMENT ACTIVITIES:
Net investment income......................................... 0.53
Net realized and unrealized gains (losses) on investments..... 0.02
------
Total from Investment Activities............................ 0.55
------
DISTRIBUTIONS:
Net investment income......................................... (0.58)
In excess of net investment income............................ --
Net realized gains............................................ (0.29)
------
Total Distributions......................................... (0.87)
------
Net Asset Value, End of Period.................................. $ 8.78
======
Total Return (excludes sales charges)........................... 6.20%(b)
Ratios to Average Net Assets/Supplemental Data:
Net Assets at end of period (000)............................. $ 372
Expenses before waivers....................................... 2.31%(c)
Net investment income before waivers.......................... 9.02%(c)
Expenses net of waivers....................................... 2.22%(c)
Net investment income net of waivers.......................... 9.11%(c)
Portfolio turnover (d)........................................ 176.06%
</TABLE>
- --------
(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>
SUMMIT EMERGING MARKETS BOND FUND
Financial Highlights
For a unit of beneficial interest outstanding for each period
<TABLE>
<CAPTION>
A Shares B Shares
---------------------------- ---------------
For the For the For the
Year ended Period Ended Period Ended
May 31, 1999 May 31, 1998(a) May 31, 1999(b)
------------ --------------- ---------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 9.87 $ 10.00 $5.94
------- ------- -----
INVESTMENT ACTIVITIES:
Net investment income............ 0.99 0.35 0.62
Net realized and unrealized gains
(losses) on investments.......... (2.54) (0.15) 1.39
------- ------- -----
Total from Investment
Activities...................... (1.55) 0.20 2.01
------- ------- -----
DISTRIBUTIONS:
Net investment income............ (1.00) (0.33) (0.63)
Net realized gains............... (0.04) -- (0.04)
------- ------- -----
Total Distributions............. (1.04) (0.33) (0.67)
------- ------- -----
Net Asset Value, End of Period.... $ 7.28 $ 9.87 $7.28
======= ======= =====
Total Return (excludes sales
charges).......................... (14.86%) 2.01%(c) 35.12%(c)
Ratios to Average Net
Assets/Supplemental Data:
Net Assets at end of period
(000)............................ $22,237 $25,879 $ 1
Expenses before waivers.......... 2.18% 2.20%(d) 2.94%(d)
Net investment income before
waivers.......................... 13.13% 8.47%(d) 13.26%(d)
Expenses net of waivers.......... 2.00% 2.00%(d) 2.75%(d)
Net investment income net of
waivers.......................... 13.31% 8.67%(d) 13.43%(d)
Portfolio turnover (e)........... 37.83% 85.69% 37.83%
</TABLE>
- --------
(a) Period from commencement of operations (December 31, 1997).
(b) Period from commencement of operations (October 8, 1998).
(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
-24-
<PAGE>
-----------------------------------
Trustees and Officers
Steven R. Sutermeister, Chairman and Trustee
James F. Smith, President and Trustee
Theodore H. Emmerich, Trustee
T. Ashley Cooper, Trustee
Bruce H. Olson, Trustee
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
LOGO
SUMMIT
INVESTMENT
TRUST
High Yield Fund
Emerging Markets Bond Fund
Managed by
First Summit Capital Management
Sub-Advised by
Summit Investment Partners, LLC
ANNUAL REPORT
TO
SHAREHOLDERS
MAY 31, 1999
7/99
-----------------------------------
