<PAGE>
Message From The Chairman
-------------------------------------------------------------------------------
Fellow Shareholders:
Summit High Yield Fund/1/
In an environment of rising interest rates and widening quality spreads over
the twelve month period ending May 31, 2000, high yield bonds failed to
outperform investment grade fixed income securities for the second consecutive
year. The Salomon Brothers High Yield Index had a total return of -3.83% as
compared to the 2.01% return of the Salomon Brothers Investment Grade Bond
Index./2/
The Summit High Yield Fund's performance relative to its high yield benchmark
was excellent during the period. Our -0.22% total return was a reflection of
how our strategy of adding the larger, upper quality tier of high yield
issuers to our portfolio complemented our existing more aggressive holdings.
Long-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) #8 among 96 "High Current Yield" funds as of May 31, 2000
since our June 1994 inception./3/
Strategy -- The Next Twelve Months
It is now clear that the high yield sector has been in an extended bear
market. The high yield market has been characterized by increasing premiums
for large liquid issuers, rising default rates, penalties for smaller, first-
time issuers, and by rising interest rates as the Federal Reserve (the "Fed")
reversed its 1998 rate cuts. The "adjustment" that we have witnessed in the
high yield market leads us to believe that the high yield asset class
currently offers compelling value and we are optimistic that the sector has
the potential to deliver good returns relative to its risk.
Why a strong case for high yield? First, we believe that the Fed is
approaching the end of its series of rate hikes and that the economy will
decelerate to a slower, sustainable, non-inflationary growth path. Second, we
believe that default rates are poised to decline later this year. Third,
current yield spreads offered by high yield bonds already incorporate most, if
not all, of the potential bad news to come--continuing high volatility,
another rate hike by the Fed, and high levels of defaults.
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 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 six year existence.
As portfolio managers (and also fellow shareholders), we continue to pursue
our goal of increasing total returns in three ways. First, we seek
--------
/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, 2000, the Summit High Yield Fund
(Class A Shares) ranked 97/350, 121/192 and 12/122 for the 1-year, 3-year
and 5-year periods, respectively. 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.
-1-
<PAGE>
Message From The Chairman, Continued
-------------------------------------------------------------------------------
to apply sound, fundamental credit analysis to select securities that have
been overlooked by other high yield investors. Second, the Fund seeks to
invest in securities of companies that are improving their financial profile
and therefore, will benefit from improving credit quality. Third, the Fund
makes strategic "theme-oriented" moves to pursue opportunities in sectors
within the high yield market.
Summit Emerging Markets Bond Fund/4/
The fixed income emerging markets have certainly provided among the top total
returns in the fixed income market for the past twelve month period ending May
31, 2000. The JP Morgan Emerging Market Plus Bond Index or "EMBI+" provided a
total return of 22.45%. Emerging market mutual funds with large exposure to
corporate names--like our Summit Emerging Markets Bond Fund--did not perform
as well as anticipated. Emerging market corporate bonds suffered
disproportionally in the recent downturn as yield spreads widened more than
higher quality fixed income instruments. Our Fund had a total return of 6.37%
(Class A Shares) for its May 31, 2000 fiscal year.
In our view, the historically cheap levels of emerging market corporate bonds
and the relatively more positive macroeconomic conditions in Latin America and
Asia than in the U.S. support outperformance of many of the Fund's holdings.
We believe sovereign issuers are further along in the credit cycle with
virtually no significant credit problems on the horizon. A resumption in the
rally in spreads on sovereign debt should help bolster trading levels for
emerging market corporate names as well. Furthermore, a significant portion of
the sell-off in emerging market corporate debt was a result of the recent
liquidation of a number of emerging market portfolios in the context of a
rather illiquid market. In our view, the market technicals have improved
dramatically. 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.
In closing, I would like to thank you for the 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.
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>
[GRAPH]
Summit High Yield Fund
Value of $10,000 in the Index
Salomon
High Yield A Shares A Shares* B Shares B Shares**
Market Index (w/out load) (w/load) (w/out CDSC) (w/CDSC)
6/27/94 10,000 10,000 9,551 10,000 9,500
5/31/95 11,309 10,997 10,503 10,997 10,497
5/31/96 12,387 13,233 12,639 13,233 12,833
5/31/97 14,065 15,635 14,933 15,633 15,333
5/31/98 16,028 18,161 17,345 18,161 17,861
5/31/99 16,144 16,627 15,880 16,531 16,355
5/31/2000 15,525 16,589 15,845 16,391 16,311
Average Annual Total Return
Since
Inception
Period Ended 5/31/00 1 Year 5 Year (6/27/94)
A Shares w/out load (0.22)% 8.57% 8.92%
A Shares w/load* (4.67)% 7.57% 8.08%
B Shares w/out CDSC (0.85)% 8.31% 8.70%
B Shares w/CDSC** (5.37)% 8.08% 8.61%
*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>
[GRAPH]
Summit Emerging Markets Bond Fund
Value of $10,000 in the Index
J.P. Morgan
Emerging
Markets Bond A Shares A Shares* B Shares B Shares**
Index EMBI (w/out load) (w/load) (w/out CDSC) (w/CDSC)
12/31/97 10,000 10,000 9,551 10,000 9,500
2/28/98 10,265 10,247 9,787 10,247 9,747
5/31/98 10,186 10,201 9,743 10,201 9,707
8/31/98 7,098 7,537 7,198 7,537 7,182
11/30/98 8,785 8,000 7,641 7,994 7,634
2/28/99 8,365 7,783 7,433 7,762 7,492
5/31/99 9,065 8,685 8,295 8,644 8,353
8/31/99 9,261 8,790 8,395 8,730 8,445
11/30/99 10,235 9,355 8,935 9,266 8,969
2/28/2000 11,257 9,880 9,436 9,769 9,538
5/31/2000 11,100 9,238 8,824 9,117 8,908
Average Annual Total Return
Since
Inception
Period Ended 5/31/00 1 Year (12/31/97)
A Shares w/out load 6.37% (3.23)%
A Shares w/load* 1.62% (5.05)%
B Shares w/out CDSC 5.47% (3.76)%
B Shares w/CDSC** 0.68% (4.68)%
*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 Bond 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 of
Summit Investment Trust
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of portfolio 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 Summit High Yield Fund and
Summit Emerging Markets Bond Fund (separate portfolios constituting the Summit
Investment Trust, hereafter referred to as the "Funds") at May 31, 2000, the
results of each of their operations for the year then ended, the changes in
each of their net assets for each of the two years then ended and the financial
highlights for each of the periods then ended, in conformity with accounting
principles generally accepted in the United States. 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 auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at May 31, 2000 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Columbus, Ohio
July 14, 2000
-6-
<PAGE>
SUMMIT INVESTMENT TRUST
Statements of Assets and Liabilities
May 31, 2000
<TABLE>
<CAPTION>
High Yield Emerging Markets
Fund Bond Fund
----------- ----------------
<S> <C> <C>
ASSETS:
Investments, at value (cost $39,685,596 and
$26,934,422, respectively)...................... $32,746,546 $21,284,861
Interest receivable.............................. 1,053,548 757,243
Other assets..................................... 10,892 5,078
----------- -----------
Total Assets................................... 33,810,986 22,047,182
----------- -----------
LIABILITIES:
Accrued expenses and other payables:
Investment advisory fees........................ 14,687 5,833
Administration fees............................. 832 545
12b-1 fees (A Shares)........................... 6,647 4,858
12b-1 fees (B Shares)........................... 205 3
Shareholder service fees (B Shares)............. 787 --
Other........................................... 47,878 31,345
----------- -----------
Total Liabilities.............................. 71,036 42,584
----------- -----------
NET ASSETS:
Capital.......................................... 47,788,318 29,846,446
Undistributed net investment income.............. 48,034 19,032
Accumulated undistributed net realized losses
from investments and foreign currency
transactions.................................... (7,157,352) (2,211,319)
Net unrealized depreciation on investments and
assets and liabilities denominated in foreign
currencies...................................... (6,939,050) (5,649,561)
----------- -----------
Net Assets..................................... $33,739,950 $22,004,598
=========== ===========
Net Assets:
A Shares........................................ $33,475,334 $22,003,187
B Shares........................................ 264,616 1,411
Outstanding units of beneficial interest
(shares):
A Shares........................................ 4,209,957 3,152,858
B Shares........................................ 33,338 203
Net Asset Value:
A Shares redemption price per share............. $ 7.95 $ 6.98
=========== ===========
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)................. $ 8.32 $ 7.31
=========== ===========
B Shares offering price per share(a)............ $ 7.94 $ 6.97
=========== ===========
</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, 2000
<TABLE>
<CAPTION>
Emerging Markets
High Yield Fund Bond Fund
--------------- ----------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income................................ $ 4,486,495 $ 2,808,213
Dividend income................................ 32,834 41,013
----------- -----------
Total Income................................. 4,519,329 2,849,226
----------- -----------
EXPENSES:
Investment advisory fees....................... 210,278 174,585
Administration fees............................ 79,825 46,556
12b-1 fees (A Shares).......................... 98,950 58,192
12b-1 fees (B Shares).......................... 2,432 11
Shareholder service fees (B Shares)............ 833 4
Audit fees..................................... 13,388 7,722
Custodian fees................................. 1,478 3,543
Accounting fees................................ 40,161 53,316
Legal fees..................................... 87,379 54,146
Transfer agent fees............................ 63,498 45,442
Trustees' fees................................. 22,578 13,357
Miscellaneous expenses......................... 76,058 49,567
----------- -----------
Total expenses before voluntary reductions... 696,858 506,441
Expenses voluntarily reduced................. (55,746) (40,869)
----------- -----------
Net Expenses................................. 641,112 465,572
----------- -----------
Net Investment Income.......................... 3,878,217 2,383,654
----------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized losses on investments and foreign
currency transactions......................... (3,053,949) (1,080,799)
Net change in unrealized
appreciation/depreciation on investments and
assets and liabilities denominated in foreign
currencies.................................... (1,152,842) 159,630
----------- -----------
Net realized/unrealized losses on investments
and foreign currencies........................ (4,206,791) (921,169)
----------- -----------
Change in net assets resulting from operations. $ (328,574) $ 1,462,485
=========== ===========
</TABLE>
See notes to financial statements.
-8-
<PAGE>
SUMMIT INVESTMENT TRUST
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Emerging Markets Bond
High Yield Fund Fund
------------------------- ------------------------
For the For the For the
For the Year Ended Year Ended Year Ended
Year Ended May 31, May 31, May 31,
May 31, 2000 1999 2000 1999
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.... $ 3,878,217 $ 5,418,356 $ 2,383,654 $ 2,795,743
Net realized gains
(losses) on investment
and foreign currency
transactions............ (3,053,949) (3,965,380) (1,080,799) (1,113,310)
Net change in unrealized
appreciation/depreciation
on investments and
assets and liabilities
denominated in foreign
currencies.............. (1,152,842) (6,212,023) 159,630 (5,487,784)
------------ ----------- ----------- -----------
Change in net assets
resulting from
operations.............. (328,574) (4,759,047) 1,462,485 (3,805,351)
------------ ----------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
A Shares................ (3,862,589) (5,502,063) (2,408,039) (2,805,873)
B Shares................ (30,125) (9,484)(a) (137) (110)(a)
------------ ----------- ----------- -----------
(3,892,714) (5,511,547) (2,408,176) (2,805,983)
------------ ----------- ----------- -----------
Net realized gains
A Shares................ -- (1,598,270) -- (113,762)
B Shares................ -- (873)(a) -- (7)(a)
------------ ----------- ----------- -----------
-- (1,599,143) -- (113,769)
------------ ----------- ----------- -----------
Change in net assets from
shareholder
distributions............ (3,892,714) (7,110,690) (2,408,176) (2,919,752)
------------ ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued.................. 4,067,781 29,367,573 1,917,991 864,623
Dividends reinvested..... 1,957,272 6,754,211 761,670 2,917,885
Cost of shares redeemed.. (15,761,696) (32,197,576) (1,967,621) (698,624)
------------ ----------- ----------- -----------
Change in net assets from
capital transactions..... (9,736,643) 3,924,208 712,040 3,083,884
------------ ----------- ----------- -----------
Change in net assets...... (13,957,931) (7,945,529) (233,651) (3,641,219)
NET ASSETS:
Beginning of period...... 47,697,881 55,643,410 22,238,249 25,879,468
------------ ----------- ----------- -----------
End of period............ $ 33,739,950 $47,697,881 $22,004,598 $22,238,249
============ =========== =========== ===========
</TABLE>
--------
(a) Period from commencement of operations (October 8, 1998).
See notes to financial statements.
-9-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
Schedule of Portfolio Investments
May 31, 2000
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds (95.7%):
Communications (50.1%):
Cable TV/Programming (4.0%):
$ 500,000 Charter Communications Holdings, LLC, Senior Notes,
10.25%, 1/15/10*.................................... $ 456,250
500,000 Frontiervision Holdings LP, 0.00%, 9/15/07*.......... 422,500
500,000 Telewest Communications plc, 0.00%, 10/1/07.......... 470,000
-----------
1,348,750
-----------
Data/Internet (8.4%):
500,000 Covad Communications Group Inc., 12.50%, 2/15/09*.... 472,500
1,000,000 Exodus Communications Inc., 10.75%, 12/15/09*........ 985,000
500,000 Psinet Inc., 11.00%, 8/1/09*......................... 450,000
500,000 Teligent Inc., 11.50%, 12/1/07....................... 390,000
500,000 Verio Inc., 10.63%, 11/15/09*........................ 550,000
-----------
2,847,500
-----------
Domestic--Retail Telecom (11.3%):
1,000,000 Fairpoint Communications Inc., 10.80%, 5/1/08*....... 910,000
1,000,000 Focal Communications Corp., 11.88%, 1/15/10*......... 960,000
1,000,000 ITC Deltacom Inc., 9.75%, 11/15/08*.................. 945,000
500,000 Nextel Communications Inc., 9.38%, 11/15/09*......... 472,500
500,000 Pac-West Telecomm Inc., 13.50%, 2/1/09*.............. 502,500
-----------
3,790,000
-----------
Domestic--Wholesale Telecom (2.1%):
650,000 Qwest Communications International, 10.88%, 4/1/07*.. 716,625
-----------
Equipment Providers (7.0%):
500,000 360NETWORKS INC., 12.00%, 8/1/09*.................... 462,500
1,500,000 SBA Communications Corp., 0.00%, 3/1/08(b)*.......... 1,020,000
1,000,000 World Access Inc., 13.25%, 1/15/08................... 870,000
-----------
2,352,500
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
International--Retail Telecom (9.7%):
$1,000,000 AT&T Canada Inc., 12.00%, 8/15/07*................... $ 1,132,500
1,000,000 ESAT Telecom Group plc, Senior Notes, 11.88%,
12/1/08*............................................ 1,160,000
1,000,000 VersaTel Telecom International NV, 13.25%, 5/15/08*.. 970,000
-----------
3,262,500
-----------
International--Wholesale Telecom (4.7%):
1,000,000 Esprit Telecom Group plc, 11.50%, 12/15/07........... 810,000
1,000,000 Viatel Inc., 11.25%, 4/15/08*........................ 775,000
-----------
1,585,000
-----------
Paging/Telegraph (0.4%):
1,000,000 Paging Network DO Brazil SA, 13.50%, 6/6/05*......... 140,000
-----------
Pay Phone Operators (2.5%):
1,000,000 Evercom Inc., 11.00%, 6/30/07*....................... 850,000
-----------
16,892,875
-----------
Energy/Mining (3.9%):
Distribution (2.1%):
1,000,000 Empire Gas Corp., 12.88%, 7/15/04*................... 700,000
-----------
Oil Comp--Intergrated (1.4%):
500,000 Chesapeake Energy Corp., 9.63%, 5/1/05*.............. 480,000
-----------
Services (0.4%):
1,500,000 Eagle Geophysical Inc., 10.75%, 7/15/08(c)*.......... 135,000
-----------
1,315,000
-----------
Financial (1.5%):
Banking/Insurance (1.5%):
500,000 AmeriCredit Corp., 9.88%, 4/15/06*................... 490,000
-----------
Food Items--Wholesale (2.3%):
Food Products (2.3%):
1,000,000 Chiquita Brands International Inc., 10.00%, 6/15/09.. 790,000
-----------
</TABLE>
Continued
-10-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
Schedule of Portfolio Investments, Continued
May 31, 2000
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Manufacturing/Consumer Goods (6.5%):
Electric/HVAC (3.0%):
$1,000,000 International Wire Group Inc., 11.75%, 6/1/05*......... $ 1,020,000
-----------
Professional & Commercial Equipment (2.2%):
1,000,000 Anchor Lamina Inc., 9.88%, 2/1/08*..................... 730,000
-----------
Textile/Apparel (1.3%):
500,000 Anvil Knitwear Inc., 10.88%, 3/15/07*.................. 432,500
-----------
2,182,500
-----------
Manufacturing/Trade (12.7%):
Metals (2.7%):
1,000,000 Kaiser Aluminum & Chemicals, 12.75%, 2/1/03............ 915,000
-----------
Miscellaneous (7.1%):
1,500,000 Derby Cycle Corp., 10.00%, 5/15/08*.................... 750,000
500,000 IMO Industries Inc., 11.75%, 5/1/06*................... 500,000
1,000,000 International Knife & Saw Corp., 11.38%, 11/15/06*..... 740,000
500,000 Knowles Electronics Inc., 13.13%, 10/15/09*............ 415,000
-----------
2,405,000
-----------
Paper & Pulp (2.9%):
1,000,000 Indah Kiat Fiat Mauritius, 10.00%, 7/1/07*............. 535,000
500,000 Repap New Brunswick, 10.63%, 4/15/05................... 445,000
-----------
980,000
-----------
4,300,000
-----------
Media (2.8%):
Outdoor Advertising (2.8%):
1,000,000 Tri-State Outdoor Media Group Inc., 11.00%, 5/15/08*... 940,000
-----------
Miscellaneous Services (15.4%):
Distribution (2.7%):
1,000,000 Affinity Group Holdings Inc., 11.00%, 4/1/07*.......... 900,000
-----------
Funeral Services (1.5%):
1,000,000 Service Corporation International, 6.50%, 3/15/08 ..... 490,000
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Healthcare (2.7%):
$1,000,000 Insight Health Services Corp., 9.63%, 6/15/08*......... $ 910,000
-----------
Hotel/Gaming (8.5%):
500,000 Casino Magic of Louisiana Corp., 13.00%, 8/15/03*...... 535,000
1,000,000 Hollywood Casino Corp, Senior Secured Notes, 11.25%,
5/1/07*............................................... 1,015,000
1,000,000 Host Marriott Corp., 7.88%, 8/1/08..................... 852,500
500,000 Venetian Casino Resort LLC, 12.25%, 11/15/04*.......... 482,500
-----------
2,885,000
-----------
5,185,000
-----------
Transportation (0.5%):
Trucking/Warehousing (0.5%):
173,953 Trism Inc., 12.00%, 2/15/05(c)*........................ 173,953
-----------
Total Corporate Bonds............................................. 32,269,328
-----------
Common Stocks (0.7%):
Communications (0.6%):
Equipment Providers (0.2%):
6,284 World Access Inc.**.................................... 65,982
-----------
International--Wholesale Telecom (0.3%):
4,283 Viatel Inc.**.......................................... 106,808
-----------
Paging/Telegraph (0.0%):
1,000 Paging Network DO Brazil Holding Co. LLC, Class B**.... 0
-----------
Pay Phone Operators (0.1%):
114,000 PhoneTel Technologies Inc.(c)**........................ 39,193
-----------
211,983
-----------
Transportation (0.1%):
Trucking/Warehousing (0.1%):
11,017 Trism Inc.**........................................... 27,887
-----------
Total Common Stocks............................................... 239,870
-----------
Investment Companies (0.7%):
237,346 Fifth Third Commercial Paper Fund...................... 237,346
-----------
Total Investment Companies........................................ 237,346
-----------
</TABLE>
Continued
-11-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT HIGH YIELD FUND
Schedule of Portfolio Investments, Continued
May 31, 2000
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Warrants (0.0%):
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.... 0
-----------
Total Warrants................................................... 2
-----------
Total Investments
(Cost $39,685,596)(a)--97.1%.................................... 32,746,546
-----------
Other assets in excess of liabilities--2.9%...................... 993,404
-----------
Total Net Assets--100.0%......................................... $33,739,950
===========
</TABLE>
--------
Percentages indicated are based on net assets of $33,739,950.
(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
$302,500. Cost for federal income tax purposes differs from value by net
unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation......... $ 511,246
Unrealized depreciation......... (7,752,796)
-----------
Net unrealized depreciation..... $(7,241,550)
===========
</TABLE>
(b) Interest rate increases to 12.00% on March 1, 2003.
(c) Security is in default as of 5/31/00.
* 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, 2000, the market value of Rule 144A securities amounted to
$26,236,828 or 78% of net assets.
** Non-income producing security.
See notes to financial statements.
-12-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT EMERGING MARKETS BOND FUND
Schedule of Portfolio Investments
May 31, 2000
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ -----------
<C> <S> <C>
Corporate Bonds (96.3%):
Asia (8.1%):
Indonesia (6.6%):
$ 500,000 APP China Group Ltd., 14.00%, 3/15/10*................ $ 295,000
500,000 APP International Finance Co., 11.75%, 10/1/05........ 340,000
1,000,000 DGS International Finance Co., 10.00%, 6/1/07*........ 270,000
1,000,000 Tjiwi Kimia Finance Mauritius Ltd., 10.00%, 8/1/04*... 555,000
-----------
1,460,000
-----------
Philippines (1.5%):
500,000 Bayan Telecommunications Inc., Senior Notes, 13.50%,
7/15/06*............................................. 325,000
-----------
1,785,000
-----------
Caribbean (4.3%):
Dominican Republic (4.3%):
1,000,000 Tricom SA, 11.38%, 9/1/04*............................ 950,000
-----------
Eastern Europe (11.6%):
Poland (3.8%):
1,000,000 Netia Holdings SA, 10.25%, 11/1/07*................... 840,000
-----------
Russia (3.0%):
2,498,794 Russia Government International Bond, 7.94%,
12/15/15(b)(d)....................................... 668,427
-----------
Turkey (4.8%):
1,000,000 Cellco Finance NV, 15.00%, 8/1/05*.................... 1,050,000
-----------
2,558,427
-----------
Latin America (51.7%):
Argentina (20.4%):
1,000,000 Acindar Industria Argentina de Aceros SA, 11.25%,
2/15/04.............................................. 630,000
1,000,000 Autopistas del Sol SA, 10.25%, 8/1/09*................ 780,000
500,000 Cablevision SA, 13.75%, 5/1/09*....................... 437,500
1,000,000 Cia International Telecom Cointel, 10.38%, 8/1/04*.... 820,000
1,000,000 CTI Holdings SA, 0.00%, 4/15/08(c)*................... 570,000
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ -----------
<C> <S> <C>
Corporate Bonds, continued:
Argentina, continued:
$1,000,000 Mastellone Hermanos SA, 11.75%, 4/1/08*............... $ 750,000
500,000 Supermercados Norte, 10.88%, 2/9/04*.................. 485,000
-----------
4,472,500
-----------
Brazil (11.5%):
1,000,000 Comtel Brasileira Ltd., 10.75%, 9/26/04*.............. 910,000
1,000,000 Espirito Santo Centrais Electrias, 10.00%, 7/15/07*... 740,000
1,000,000 MRS Logistica SA, 10.63%, 8/15/05*.................... 750,000
1,000,000 Paging Network DO Brasil SA, 13.50%, 6/6/05*.......... 140,000
-----------
2,540,000
-----------
Mexico (15.7%):
500,000 Alestra SA, 12.63%, 5/15/09*.......................... 437,500
1,000,000 Consorcio Grupo Dina, 8.00%, 8/8/04, Convertible
Bond(d).............................................. 355,000
500,000 Grupo Industrial Durango Gidusa, 12.63%, 8/1/03....... 492,500
500,000 Gruma SA, 7.63%, 10/15/07*............................ 415,320
1,000,000 Innova S. de R.L., 12.88%, 4/1/07*.................... 890,000
500,000 Maxcom Telecomunicaciones SA de SV, 13.75%, 4/1/07*... 425,000
500,000 TV Azteca SA de CV, 10.50%, 2/15/07*.................. 427,500
-----------
3,442,820
-----------
Venezuela (4.1%):
1,000,000 Cantv Finance Ltd., 9.25%, 2/1/04..................... 905,000
-----------
11,360,320
-----------
North America (2.0%):
United States (2.0%):
500,000 Impsat Fiber Networks Inc., 13.75%, 2/15/05*.......... 430,000
-----------
Western Europe (18.6%):
Greece (3.9%):
1,000,000 Fage Dairy Industries SA, 9.00%, 2/1/07*.............. 860,000
-----------
</TABLE>
Continued
-13-
<PAGE>
SUMMIT INVESTMENT TRUST
SUMMIT EMERGING MARKETS BOND FUND
Schedule of Portfolio Investments, Continued
May 31, 2000
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ -----------
<C> <S> <C>
Corporate Bonds, continued:
Luxembourg (4.2%):
$ 500,000 Millicom International Cellular SA, 0.00%, 6/1/06*.... $ 415,000
500,000 PTC International Finance II SA, 11.25%, 12/1/09*..... 507,500
-----------
922,500
-----------
Netherlands (6.1%):
500,000 United Pan-Europe Communications NV, 11.25%, 11/1/09*. 425,000
500,000 VersaTel Telecom International NV, 11.88%, 7/15/09.... 442,500
500,000 VersaTel Telecom International NV, 13.25%, 5/15/08*... 485,000
-----------
1,352,500
-----------
Spain (4.4%):
500,000 Jazztel plc, Senior Notes, 14.00%, 4/1/09*............ 462,500
500,000 Ono Finance plc, 13.00%, 5/1/09*...................... 500,000
-----------
962,500
-----------
4,097,500
-----------
Total Corporate Bonds............................................ 21,181,247
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- -------------------------------------------------------- -----------
<C> <S> <C>
Rights/Warrants (0.3%):
Western Europe (0.3%):
Spain (0.3%):
$ 500 Ono Finance plc, Warrants, expire 5/31/09*.............. $ 75,000
-----------
Total Rights/Warrants............................................. 75,000
-----------
Investment Companies (0.1%):
North America (0.1%):
United States (0.1%):
28,614 Fifth Third Commercial Paper Fund....................... 28,614
-----------
Total Investment Companies........................................ 28,614
-----------
Total Investments
(Cost $26,934,422)(a)--96.7%..................................... 21,284,861
-----------
Other assets in excess of liabilities--3.3%....................... 719,737
-----------
Total Net Assets--100.0%.......................................... $22,004,598
===========
</TABLE>
--------
Percentages indicated are based on net assets of $22,004,598.
(a) Cost for book and federal income tax purposes are the same. Cost for
federal income tax purposes differs from value by net unrealized
depreciation as follows:
<TABLE>
<S> <C>
Unrealized appreciation......... $ 245,274
Unrealized depreciation......... (5,894,835)
-----------
Net unrealized depreciation..... $(5,649,561)
===========
</TABLE>
(b) Floating rate note.
(c) Interest rate increases to 11.50% on April 15, 2003.
(d) Bond is in default as of 5/31/00.
* 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,
2000, the market value of Rule 144A securities amounted to $17,422,820 or
79% of net assets.
See notes to financial statements.
-14-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements
May 31, 2000
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 Class A Shares. Effective October 8, 1998, the Funds added
Class B Shares, which impose a back end sales charge (load) if an investor
sells the shares before the sixth year after their purchase.
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 term corporate bonds.
The Emerging Markets Fund's investment objective is to provide high income
and capital appreciation. The Fund invests 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 their 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, 2000
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.
Forwards 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 forwards were held as of May
31, 2000.
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.
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
Continued
-16-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 2000
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, 2000,
the following reclassifications were made to increase (decrease) such
accounts with offsetting adjustments made to paid-in-capital:
<TABLE>
<CAPTION>
Accumulated Accumulated
Undistributed Net Realized
Net Investment Gain/(Loss) on
Income Investments
-------------- --------------
<S> <C> <C>
Emerging Markets Fund........................... $17,186 $(17,186)
</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. Expenses of the
Fund are allocated among the share classes on a pro-rata basis.
3. Purchases and Sales of Portfolio Securities:
Purchases and sales of securities (excluding short-term securities) for the
fiscal year ended May 31, 2000 are as follows:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
High Yield Fund....................................... $40,340,516 $51,003,893
Emerging Markets Fund................................. $ 7,321,605 $ 5,451,913
</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"), originally Carillon Advisers, Inc. 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
Continued
-17-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 2000
division of Union Central Life, an Ohio mutual insurance company, which owns
approximately 69% of the High Yield Fund and 98% of the Emerging Markets Fund
as of May 31, 2000. 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%, respectively, and the Emerging Markets to 2.00% and 2.75%,
respectively. For the fiscal year ended May 31, 2000, FSCM received $182,407
and $145,355 of advisory fees after voluntarily waiving $27,871 and $29,230
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 a fee equal to 0.50% of the average daily net assets of each
fund, provided the total fee for each year and fund shall not exceed
$125,000. 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 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.
The Trust's Administrator 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 the Administrator. The fee is computed daily and paid monthly as a
percentage of the average daily net assets
Continued
-18-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 2000
of the Funds at an annual rate of 0.20%. For the fiscal year ended May 31,
2000, the Administrator received $59,869 and $34,917 of administration fees
after voluntarily waiving $19,956 and $11,639 of administration fees for the
High Yield Fund and Emerging Markets Fund, respectively.
The Trust has adopted a Distribution and Shareholder Service Plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act. Under which BISYS Fund
Services, LP, an indirect, wholly-owned subsidiary of BISYS (the
"Distributor"), receives fees for providing distribution and shareholder
services under the Distribution Agreement between the Trust and the
Distributor. 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, 2000, BISYS has received $94,296 and $58,207 of
distribution fees after voluntarily waiving $7,919 and $0 of distribution
fees for the High Yield Fund and 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
fiscal year ended May 31, 2000, BISYS received $5,668 and $0 from commissions
earned on sales of the High Yield Fund and Emerging Markets Fund,
respectively, of which $925 was re-allowed to BISYS and Carillon Investments
(affiliated broker/dealers).
The Administrator also 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. The Administrator also serves the Trust
as fund accountant. Under the terms of the Fund Accounting Agreement, the
Administrator is entitled to receive the greater 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, the Administrator 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, 2000 were $103,659 and $98,758, for
the High Yield Fund and the Emerging Markets Fund, respectively.
Continued
-19-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 2000
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 Year Ended
May 31, 2000 May 31, 1999 May 31, 2000 May 31, 1999
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
A Shares:
Proceeds from shares
issued................ $ 4,054,772 $ 28,992,269 $ 1,917,991 $ 863,623
Dividends reinvested... 1,952,598 6,750,909 761,533 2,917,768
Cost of shares re-
deemed................ (15,670,169) (32,197,576) (1,967,621) (698,624)
------------ ------------ ------------- ------------
Change in net assets
from A Shares trans-
actions............. $ (9,662,799) $ 3,545,602 $ 711,903 $ 3,082,767
============ ============ ============= ============
B Shares:
Proceeds from shares
issued................ $ 13,009 $ 375,304(a) $ -- $ 1,000(a)
Dividends reinvested... 4,674 3,302(a) 137 117(a)
Cost of shares re-
deemed................ (91,527) -- -- --
------------ ------------ ------------- ------------
Change in net assets
from B Shares trans-
actions............. $ (73,844) $ 378,606(a) $ 137 $ 1,117(a)
============ ============ ============= ============
SHARE TRANSACTIONS:
A Shares:
Proceeds from shares
issued................ 479,419 3,020,270 256,266 121,988
Dividends reinvested... 232,308 727,633 105,544 405,991
Cost of shares re-
deemed................ (1,884,091) (3,426,791) (262,245) (97,113)
------------ ------------ ------------- ------------
Change in A Shares... (1,172,364) 321,112 99,565 430,866
============ ============ ============= ============
B Shares:
Proceeds from shares
issued................ 1,498 42,053(a) -- 167(a)
Dividends reinvested... 564 371(a) 19 17(a)
Cost of shares re-
deemed................ (11,148) -- -- --
------------ ------------ ------------- ------------
Change in B Shares... (9,086) 42,424(a) 19 184(a)
============ ============ ============= ============
</TABLE>
(a) Period from commencement of operations (October 8, 1998).
Continued
-20-
<PAGE>
SUMMIT INVESTMENT TRUST
Notes to Financial Statements, Continued
May 31, 2000
6. Federal Tax Information (unaudited):
Capital Loss Carryover:
As of May 31, 2000, 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>
Year
Amount Expired
----------- -------
<S> <C> <C>
High Yield Fund.......................................... $ (853,764) 2007
(4,152,120) 2008
-----------
$(5,005,884)
===========
Emerging Markets Fund.................................... $ (80,585) 2007
(1,501,190) 2008
-----------
$(1,581,775)
===========
</TABLE>
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 $1,848,968 and $629,544, 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 Fund has a relatively large concentration of securities
invested in companies domiciled in emerging market nations. The Fund may be
more susceptible to the political, social and economic events adversely
affecting the 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 Year Ended
May 31, 2000 May 31, 1999 May 31, 1998 May 31, 1997 May 31, 1996
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
A Shares
Net Asset Value,
Beginning of Period.... $ 8.79 $ 10.99 $ 11.32 $ 11.05 $ 10.11
------- ------- ------- ------- -------
INVESTMENT ACTIVITIES:
Net investment income. 0.82 0.95 1.01 0.99 1.01
Net realized and
unrealized gains
(losses) on
investments.......... (0.84) (1.89) 0.70 0.90 0.95
------- ------- ------- ------- -------
Total from
Investment
Activities......... (0.02) (0.94) 1.71 1.89 1.96
------- ------- ------- ------- -------
DISTRIBUTIONS:
Net investment income. (0.82) (0.97) (1.01) (0.99) (1.01)
In excess of net
investment income.... -- -- -- (0.13) --
Net realized gains.... -- (0.29) (1.03) (0.50) (0.01)
------- ------- ------- ------- -------
Total Distributions. (0.82) (1.26) (2.04) (1.62) (1.02)
------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 7.95 $ 8.79 $ 10.99 $ 11.32 $ 11.05
======= ======= ======= ======= =======
Total Return (excludes
sales charges)......... (0.22)% (8.45)% 16.17% 18.15% 20.34%
Ratios to Average Net
Assets/Supplemental
Data:
Net Assets at end of
period (000)......... $33,475 $47,325 $55,643 $34,707 $28,628
Expenses before
waivers.............. 1.74% 1.71% 2.03% 2.32% 2.24%
Net investment income
before waivers....... 9.58% 9.86% 8.38% 8.01% 8.78%
Expenses net of
waivers.............. 1.60% 1.60% 1.60% 1.60% 1.60%
Net investment income
net of waivers....... 9.72% 9.97% 8.81% 8.73% 9.42%
Portfolio turnover(a). 105.29% 176.06% 518.74% 271.68% 187.61%
</TABLE>
--------
(a) 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 For the
Year Ended Period Ended
May 31, 2000 May 31, 1999(a)
------------ ---------------
<S> <C> <C>
B Shares
Net Asset Value, Beginning of Period.............. $ 8.78 $ 9.10
------ ------
INVESTMENT ACTIVITIES:
Net investment income........................... 0.76 0.53
Net realized and unrealized gains (losses) on
investments.................................... (0.84) 0.02
------ ------
Total from Investment Activities.............. (0.08) 0.55
------ ------
DISTRIBUTIONS:
Net investment income........................... (0.76) (0.58)
Net realized gains.............................. -- (0.29)
------ ------
Total Distributions........................... (0.76) (0.87)
------ ------
Net Asset Value, End of Period.................... $ 7.94 $ 8.78
====== ======
Total Return (excludes sales charges)............. (0.85)% 6.20%(b)
Ratios to Average Net Assets/Supplemental Data:
Net Assets at end of period (000)............... $ 265 $ 372
Expenses before waivers......................... 2.47% 2.31%(c)
Net investment income before waivers............ 8.86% 9.02%(c)
Expenses net of waivers......................... 2.35% 2.22%(c)
Net investment income net of waivers............ 8.98% 9.11%(c)
Portfolio turnover(d)........................... 105.29% 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>
For the For the For the
Year Ended Year Ended Period Ended
May 31, 2000 May 31, 1999 May 31, 1998(a)
------------ ------------ ---------------
<S> <C> <C> <C>
A Shares
Net Asset Value, Beginning of Period. $ 7.28 $ 9.87 $ 10.00
------- ------- -------
INVESTMENT ACTIVITIES:
Net investment income.............. 0.76 0.99 0.35
Net realized and unrealized gains
(losses) on investments........... (0.29) (2.54) (0.15)
------- ------- -------
Total from Investment Activities. 0.47 (1.55) 0.20
------- ------- -------
DISTRIBUTIONS:
Net investment income.............. (0.77) (1.00) (0.33)
Net realized gains................. -- (0.04) --
------- ------- -------
Total Distributions.............. (0.77) (1.04) (0.33)
------- ------- -------
Net Asset Value, End of Period....... $ 6.98 $ 7.28 $ 9.87
======= ======= =======
Total Return (excludes sales
charges)............................ 6.37% (14.86)% 2.01%(b)
Ratios to Average Net
Assets/Supplemental Data:
Net Assets at end of period (000).. $22,003 $22,237 $25,879
Expenses before waivers............ 2.18% 2.18% 2.20%(c)
Net investment income before
waivers........................... 10.06% 13.13% 8.47%(c)
Expenses net of waivers............ 2.00% 2.00% 2.00%(c)
Net investment income net of
waivers........................... 10.24% 13.31% 8.67%(c)
Portfolio turnover(d).............. 25.18% 37.83% 85.69%
</TABLE>
--------
(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.
-24-
<PAGE>
SUMMIT EMERGING MARKETS BOND FUND
Financial Highlights
For a unit of beneficial interest outstanding for each period
<TABLE>
<CAPTION>
For the For the
Year Ended Period Ended
May 31, 2000 May 31, 1999(a)
------------ ---------------
<S> <C> <C>
B Shares
Net Asset Value, Beginning of Period.............. $ 7.28 $ 5.94
------ ------
INVESTMENT ACTIVITIES:
Net investment income........................... 0.71 0.62
Net realized and unrealized gains (losses) on
investments.................................... (0.31) 1.39
------ ------
Total from Investment Activities.............. 0.40 2.01
------ ------
DISTRIBUTIONS:
Net investment income........................... (0.71) (0.63)
Net realized gains.............................. -- (0.04)
------ ------
Total Distributions........................... (0.71) (0.67)
------ ------
Net Asset Value, End of Period.................... $ 6.97 $ 7.28
====== ======
Total Return (excludes sales charges)............. 5.47% 35.12%(b)
Ratios to Average Net Assets/Supplemental Data:
Net Assets at end of period (000)............... $ 2 $ 1
Expenses before waivers......................... 2.93% 2.94%(c)
Net investment income before waivers............ 9.29% 13.26%(c)
Expenses net of waivers......................... 2.75% 2.75%(c)
Net investment income net of waivers............ 9.47% 13.43%(c)
Portfolio turnover(d)........................... 25.18% 37.83%
</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.
-25-
<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
Investment Sub-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
07/00
-----------------------------------
-----------------------------------
[LOGO OF SUMMIT INVESTMENT TRUST]
Summit High Yield Fund
Summit Emerging Markets Bond Fund
Managed by
First Summit Capital Management
Sub-Advised by
Summit Investment Partners, LLC
ANNUAL REPORT
TO
SHAREHOLDERS
MAY 31, 2000
-----------------------------------
