January 26, 1996
Dear Follow Shareholders,
Welcome to the Capital Management Equity Fund. Nineteen Ninety-Five
was the startup year for your fund, and we are grateful that you chose to
place a portion of your investment portfolio in this vehicle. The fund's
institutional shares were available for purchase on January 27, 1995, but
most of the investment assets did not begin flowing in until after March.
Investor shares were not cleared for purchase until April. This gestation
phase is now complete, and the fund's portfolio is established and ongoing.
Now the question becomes, how do we see the investment landscape over the
coming year?
By any measure 1995 was a banner year for U.S. financial assets, but
equity indices posted particularly strong gains. The S&P 500 recorded its
best annual return since 1958 and its third-best performance in the post-war
period. Low inflation and declining interest rates provided an excellent
environment for financial instruments, and improved operating rates, stable
pricing, and stronger balance sheets propelled corporate America to record
profitability. Further enhancing shareholder value were a favorable
supply/demand situation created by share repurchases, significant merger and
restructuring activity, and strong flows into equity mutual funds.
While the broad averages were forging ahead to new highs, a major
internal shift began in the Fourth Quarter: big stocks were advancing while
smaller stocks were declining. Evidence of this crosscurrent is seen in the
performance differential between the S&P 500 in the quarter and the MidCap
400 (6% versus 1.4%, respectively). Since the S&P 500 is influenced by a few
large capitalization issues, the market has been rising on fewer shoulders,
and this is not a healthy sign going forward.
Two of last year's big winning groups were financial and technology.
Financial stocks were heavily represented in the fund, and continue to be,
while technology shares were not, purposely so. It seems that our caution
about this sector is paying off. Technology stocks are now struggling,
especially semiconductor shares, many of which have suffered price declines
in excess of 30% in the past six weeks due to disappointing earnings'
reports. These shortfalls in investor expectations were not surprising to
us. But it is a fact that we were too cautious on stocks in the latter part
of the year. The stock market's rise exceeded our expectations, principally
because interest rates fell more than we foresaw. Consequently, our
positions in energy, utilities, and one or two consumer cyclicals did not
keep pace.
As good as conditions were for the financial markets in 1995, we are
sounding a note of caution regarding the prospectus for U.S. stocks in 1996.
While stocks are not terribly overvalued, earnings' momentum has most likely
peaked for this cycle, and there is increasing reason to believe that the
economy may turn down. The consumer, who has given fuel to the economy this
year mainly through borrowing, is likely to curtail spending. As demand
fades, deflationary trends will accelerate which could lead to a mild
recession. This scenario would result in lower corporate earnings, and
certain market sectors would be more adversely affected than others.
Group movements in the equity markets are fundamentally driven by
relative shifts in profitability. The dominant force is the business cycle,
although on occasion secular changes in profitability have their impact such
as the oil embargo in the 1970's and the defence buildup in the '80's. As
profit margins approach their peak for this cycle, the key question becomes,
which industries can maintain margins when the change in direction is down?
The dynamics at this stage seem to favor consumer noncyclicals, finance,
utilities, and certain areas of the energy stocks, which we have emphasized
in your fund's portfolio.
C. Lennis Koontz, II CFA
President
January 26, 1996
CAPITAL MANAGEMENT EQUITY FUND
INSTITUTIONAL CLASS
Performance Update - $10,000 Investment
For the period from January 27, 1995 to November 30, 1995
[The following information is depicted in a graph]
Investor S&P Mid Cap Lipper Cap S&P
Shares 400 Apprec 500
1/27/95 10000.00 10000.00 10000.00 10000.00
1/31/95 10067.00 9972.00 9674.97 10005.00
2/28/95 10438.00 10494.53 10027.73 10395.20
3/31/95 11051.00 10677.14 10292.55 10701.85
4/30/95 11016.97 10891.75 10469.44 11016.49
5/31/95 11228.16 11154.24 10733.98 11457.15
6/30/95 11610.51 11608.22 11259.47 11722.95
7/31/95 12023.37 12214.17 11922.69 12112.16
8/31/95 12184.49 12440.13 12054.78 12142.44
9/30/95 12270.08 12741.18 12369.66 12654.85
10/31/95 11774.42 12413.73 12127.19 12609.29
11/30/95 12300.43 12956.21 12519.58 13162.84
This graph depicts the performance of the Capital Management Equity Fund-
Institutional Shares versus the S&P Mid Cap 400 Index, the Lipper Capital
Appreciation Index, and the S&P 500 Index. It is important to note the Capital
Management Equity Fund is a professionally managed mutual fund while the indexes
are not available for investment and are unmanaged. The comparison is shown for
illustrative purposes only.
Average Annual Total Return
January 27, 1995 No sales load
through 27.91%
November 30, 1995
- - The graph assumes an initial $10,000 investment at January 27, 1995.
All dividends and distributions are reinvested.
- - At November 30, 1995, the value of the Institutional Shares would have
grown to $12,300 - total investment return of 23.00% since January 27,
1995.
- - At November 30, 1995, a similar investment in the S&P Mid Cap 400 Index
would have been worth $12,956 - total investment return of 29.56% since
January 27, 1995; a similar investment in the Lipper Capital Appreciation
Index would have grown to $12,520 - total investment return of 25.20%; and
a similar investment in the S&P 500 Index would have grown to $13,163 -
total investment return of 31.63%.
- - Past performance is not a guarantee of future results. A mutual fund's
share price and investment return will vary with market conditions, and
the principal value of shares, when redeemed, may be worth more or less
than the original cost. Average annual total returns are historical in
nature and measure net investment income and capital gain or loss from
portfolio investments assuming reinvestments of dividends.
CAPITAL MANAGEMENT EQUITY FUND
INVESTOR CLASS
Performance Update - $10,000 Investment
For the period from April 7, 1995 to November 30, 1995
[The following information is depicted in a graph]
Investor S&P Mid Cap Lipper Cap S&P
Shares 400 Apprec 500
4/7/95 10000.00 10000.00 10000.00 10000.00
4/30/95 9644.78 9894.97 9848.50 9813.49
5/31/95 9825.35 10133.44 10097.35 10206.03
6/30/95 10134.78 10545.87 10591.68 10442.81
7/31/95 10485.78 11096.36 11215.55 10789.51
8/31/95 10618.06 11301.65 11339.81 10816.48
9/30/95 10693.03 11575.15 11636.02 11272.94
10/31/95 10250.80 11277.67 11407.93 11232.36
11/30/95 10693.03 11770.50 11777.04 11725.46
This graph depicts the performance of the Capital Management Equity Fund-
Investor Shares versus the S&P Mid Cap 400 Index, the Lipper Capital
Appreciation Index, and the S&P 500 Index. It is important to note the Capital
Management Equity Fund is a professionally managed mutual fund while the indexes
are not available for investment and are unmanaged. The comparison is shown for
illustrative purposes only.
Average Annual Total Return
With Maximum
Sales Load No Sales load
April 7, 1995
through 10.87% 16.20%
November 30, 1995
- - The graph assumes an initial $10,000 investment at April 7, 1995. All
dividends and distributions are reinvested.
- - At November 30, 1995, the value of the Investor Shares would have grown to
$10,693 - total investment return of 6.93% since April 7, 1995. Without
the deduction of the 3% maximum sales load, the value of the Investor
Shares would have grown to $11,024 - total investment return of 10.24%
since April 7, 1995. The sales load may be reduced or eliminated for
larger purchases.
- - At November 30, 1995, a similar investment in the S&P Mid Cap 400 Index
would have been worth $11,770 - total investment return of 17.70% since
April 7, 1995; a similar investment in the Lipper Capital Appreciation
Index would have grown to $11,777 - total investment return of 17.77%; and
a similar investment in the S&P 500 Index would have grown to $11,725 -
total investment return of 17.25%.
- - Past performance is not a guarantee of future results. A mutual fund's
share price and investment return will vary with market conditions, and
the principal value of shares, when redeemed, may be worth more or less
than the original cost. Average annual total returns are historical in
nature and measure net investment income and capital gain or loss from
portfolio investments assuming reinvestments of dividends.
CAPITAL MANAGEMENT EQUITY FUND
PORTFOLIO OF INVESTMENTS
November 30, 1995
Value
Shares (note 1)
COMMON STOCKS - 70.05%
Auto Parts - Replacement Equipment - 2.60%
Echlin, Inc. 1,700 $62,050
Broadcast - Radio & Television - 2.25%
Comcast Corporation 2,800 53,725
Chemicals - 5.63%
Air Products and Chemicals, Inc. 450 24,975
Hanna (M.A.) Company 2,300 61,813
Rohm & Haas Company 785 47,296
134,084
Computer Software & Services - 2.28%
Adobe Systems, Inc. 800 54,400
Electrical Equipment - 0.91%
Belden, Inc. 800 21,600
Electronics - 0.87%
Harman International
Industries, Inc. 472 20,709
Environmental Control - 1.96%
Browning-Ferris Industries, Inc. 1,550 46,694
Financial - Banks, Commercial - 5.51%
Barnett Banks, Inc. 1,075 64,634
Fleet Financial Group, Inc. 1,600 66,800
131,434
Financial - Savings/Loans/Thrifts - 1.40%
H. F. Ahmanson & Company 1,250 33,437
Food - Processing - 3.01%
Hershey Foods Corporation 1,160 71,630
Food - Wholesale - 2.01%
Richfood Holdings, Inc. 1,700 47,813
Homebuilders - 2.08%
Pulte Corporation 800 24,800
(a) U.S. Home Corporation 950 24,700
49,500
Insurance - Multiline - 2.24%
Chubb Corporation 550 53,487
(Continued)
CAPITAL MANAGEMENT EQUITY FUND
PORTFOLIO OF INVESTMENTS
November 30, 1995
(Continued)
Value
Shares (note 1)
COMMON STOCKS (Continued)
Medical - Hospital Management & Service - 2.22%
Caremark International, Inc. 2,700 $52,987
Miscellaneous - Manufacturing - 2.05%
Fisher Scientific International 1,500 48,938
Office & Business Equipment - 1.69%
Pitney-Bowes, Inc. 900 40,275
Oil & Gas - Domestic - 3.71%
Quaker State Corporation 3,200 43,200
Sonat, Inc. 1,400 45,150
88,350
Oil & Gas - Exploration - 6.04%
Louisiana Land and Exploration Co 830 32,370
Parker & Parsley Petroleum 1,075 20,156
Snyder Oil Corporation 4,000 46,500
Sonat Offshore Drilling Company 1,300 44,850
143,876
Publishing - Printing - 5.26%
Deluxe Corporation 1,200 33,150
McGraw-Hill Companies, Inc. 550 46,063
R.R. Donnelley & Sons Company 1,200 46,050
125,263
Retail - Department Stores - 2.17%
(a) Federated Department Stores, Inc 1,750 50,969
Kmart Corporation 100 775
51,744
Shoes - Leather - 1.53%
Reebok International Ltd. 1,400 36,400
Toys - 1.88%
Mattel, Inc. 1,600 44,800
Transportation - Rail - 1.25%
(a) Southern Pacific Rail Corp. 1,246 29,748
Utilities - Electric - 5.12%
Houston Industries, Inc. 800 36,600
Idaho Power Company 1,850 53,187
Montana Power Company 1,430 32,354
122,141
(Continued)
CAPITAL MANAGEMENT EQUITY FUND
PORTFOLIO OF INVESTMENTS
November 30, 1995
(Continued)
Value
Shares (note 1)
COMMON STOCKS (Continued)
Utilities - Gas - 4.38%
Brooklyn Union Gas Company 1,900 $53,675
Pacific Enterprises 1,900 50,825
104,500
Total Common Stocks (Cost $1,470,587) 1,669,585
Principal
Amount
REPURCHASE AGREEMENT (b) - 29.82%
Wachovia Bank
5.85%, due December 1, 1995 $710,590 710,590
(Cost $710,590)
Total Value of Investments (Cost $2,181,177 (c)) 99.87% 2,380,175
Other Assets Less Liabilities 0.13% 3,146
Net Assets 100.00% $2,383,321
(a) Non-income producing investment.
(b) Joint repurchase agreement entered into November 30, 1995, with a
maturity value of $22,915,232 collateralized by $22,546,000 U.S. Treasury
Notes, 6.50%, due August 15, 1997. The aggregate market value of the
collateral at November 30, 1995 was $23,381,213. The Fund's pro rata
interest in the market value of the collateral at November 30, 1995 was
$725,145. The Fund's pro rata interest in the joint repurchase agreement
collateral is taken into possession by the Fund's custodian upon entering
into the repurchase agreement. The collateral is marked to market daily
to ensure its market value is at least 102 percent of the sales price of
the repurchase agreement.
(c) Aggregate cost for federal income tax purposes is the same as for
financial reporting purposes. Unrealized appreciation (depreciation) of
investments for financial reporting and federal income tax purposes is as
follows:
Unrealized appreciation $225,391
Unrealized depreciation (26,393)
Net unrealized appreciation $198,998
See accompanying notes to financial statements
CAPITAL MANAGEMENT EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1995
ASSETS
Investments in common stocks at value (Cost $1,470,587) $1,669,585
Repurchase agreement 710,590
Cash 1,036
Dividends receivable 5,206
Interest receivable 852
Due from advisor (note 2) 24,195
Other assets 201
Total assets $2,383,321
LIABILITIES
Accrued expenses 28,344
NET ASSETS $2,383,321
NET ASSETS CONSIST OF:
Capital stock ($0.01 par value) $1,963
Additional paid-in capital 2,138,353
Undistributed net investment income 10,252
Undistributed net realized gain on investments 33,755
Net unrealized appreciation on investments 198,998
$2,383,321
INSTITUTIONAL CLASS
Net asset value and offering price per share
($1,832,507 / 150,725 shares outstanding) $12.16
INVESTOR CLASS
Net asset value ($550,814 / 45,557 shares outstanding) $12.09
Maximum offering price per share (100 / 97 of $12.09) $12.46
See accompanying notes to financial statements
CAPITAL MANAGEMENT EQUITY FUND
STATEMENT OF OPERATIONS
For the period from January 27, 1995
(commencement of operations)
to November 30, 1995
INVESTMENT INCOME
Income
Dividends $27,664
Interest 6,257
Total income 33,921
Expenses
Fund accounting fees (note 2) 23,500
Professional fees 14,791
Investment advisory fees (note 2) 12,413
Fund administration fees (note 2) 7,352
Custodian fees 4,925
Securities pricing fees 2,844
Registration and filing administration fees 1,961
Distribution and service fees - Investor Class (note 3) 379
Shareholder recordkeeping fees 187
Trustee fees and meeting expenses 6,945
Printing expenses 4,912
Shareholder servicing expenses 3,302
Registration and filing expenses 955
Other operating expenses 4,155
Total expenses 88,621
Less:
Expense reimbursements (note 2) (72,059)
Investment advisory fees waived (note 2) (12,413)
Net expenses 4,149
Net investment income 29,772
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions 33,755
Increase in unrealized appreciation on investments 198,998
Net realized and unrealized gain on investments 232,753
Net increase in net assets resulting from operations $262,525
See accompanying notes to financial statements
CAPITAL MANAGEMENT EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the period from January 27, 1995
(commencement of operations)
to November 30, 1995
INCREASE IN NET ASSETS
Operations
Net investment income $29,772
Net realized gain from investment transactions 33,755
Increase in unrealized appreciation on investments 198,998
Net increase in net assets resulting from operations 262,525
Distributions to shareholders from
Net investment income - Institutional Class (19,101)
Net investment income - Investor Class (419)
Decrease in net assets resulting from distributions (19,520)
Capital share transactions
Increase in net assets resulting from
capital share transactions (a) 2,140,316
Net increase in net assets 2,383,321
NET ASSETS
Beginning of period 0
End of period $2,383,321
(a) A summary of capital share activity follows:
INSTITUTIONAL CLASS INVESTOR CLASS
For the period from
January 27, 1995 For the peirod from
(commencement of operations) April 7, 1995
to November 30, 1995 to November 30, 1995
Shares Value Shares Value
Shares sold 149,099 $1,574,589 45,533 $546,342
Shares issued for
reinvestment of
distributions 1,626 19,101 35 419
150,725 1,593,690 45,568 546,761
Shares redeemed 0 0 (11) (135)
Net increase 150,725 $1,593,690 45,557 $546,626
See accompanying notes to financial statements
CAPITAL MANAGEMENT EQUITY FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
INSTITUTIONAL INVESTOR
CLASS CLASS
For the
period from
January 27, 1995 For the
(commencement period from
of operations) April 7, 1995
to November 30, to November 30,
1995 1995
Net asset value, beginning of period initial $10.00 $11.07
Income from investment operations
Net investment income 0.20 0.11
Net realized and unrealized gain on in 2.10 1.02
Total from investment operations 2.30 1.13
Distributions to shareholders from
Net investment income (0.14) (0.11)
Net asset value, end of period $12.16 $12.09
Total ret 23.00%(a) 10.24%(b)
Ratios/supplemental data
Net assets, end of period $1,832,507 $550,814
Ratio of expenses to average net assets
Before expense reimbursements and waivers 7.20%(c) 7.18%(c)
After expense reimbursements and waivers 0.31%(c) 1.06%(c)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waivers (4.45)% (c) (4.23)% (c)
After expense reimbursements and waivers 2.44%(c) 1.89%(c)
Portfolio turnover rate 47.74% 47.74%
(a) Annualized total return is 27.91%.
(b) Total return does not reflect payment of a sales charge. Annualized total
return is 16.20%.
(c) Annualized.
See accompanying notes to financial statements
CAPITAL MANAGEMENT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Capital Management Equity Fund (the "Fund") is a diversified series of
shares of beneficial interest of the Capital Management Investment Trust
(the "Trust"). The Trust, an open-end investment company, was organized
on October 18, 1994 as a Massachusetts Business Trust and is registered
under the Investment Company Act of 1940. The Fund began operations on
January 27, 1995. The Fund has an unlimited number of authorized shares,
which are divided into two classes - Institutional Shares and Investor
Shares. Only Institutional Shares were offered by the Fund prior to April
7, 1995.
Each class of shares has equal rights as to assets of the Fund, and the
classes are identical except for differences in their sales charge
structures and ongoing distribution and service fees. Income, expenses
(other than distribution and service fees, which are only attributable to
the Investor Class), and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative
net assets. Investor Shares purchased are subject to a maximum sales
charge of three percent. Both classes have equal voting privileges, except
where otherwise required by law or when the Board of Trustees determines
that the matter to be voted on affects only the interests of the
shareholders of a particular class. The following is a summary of
significant accounting policies followed by the Fund.
A. Security Valuation - The Fund's investments in securities are
carried at market value. Securities listed on an exchange or
quoted on a national market system are valued at the last sales
price as of 4:00 p.m. New York time. Other securities traded in
the over-the-counter market and listed securities for which no
sale was reported on that date are valued at the most recent bid
price. Securities for which market quotations are not readily
available, if any, are valued by using an independent pricing
service or by following procedures approved by the Board of
Trustees. Short-term investments are valued at cost which
approximates market value.
B. Federal Income Taxes - No provision has been made for federal
income taxes since it is the policy of the Fund to comply with
the provisions of the Internal Revenue Code applicable to
regulated investment companies and to make sufficient
distributions of taxable income to relieve it from all federal
income taxes.
C. Investment Transactions - Investment transactions are recorded
on the trade date. Realized gains and losses are determined
using the specific identification cost method. Interest income
is recorded daily on the accrual basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend
date.
D. Distributions to Shareholders - The Fund may declare dividends
quarterly, payable in March, June, September, and December on a
date selected by the Trust's Trustees. In addition,
distributions may be made annually in December out of net
realized gains through October 31 of that year. The Fund may
make a supplemental distribution subsequent to the end of its
fiscal year ending November 30.
CAPITAL MANAGEMENT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1995
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, Capital Management
Associates, Inc. (the "Advisor"), provides the fund with a continuous
program of supervision of the Fund's assets, including the composition
of its portfolio, and furnishes advice and recommendations with respect
to investments, investment policies, and the purchase and sale of
securities. As compensation for its services, the Advisor receives a
fee at the annual rate of 1.00% of the first $100 million of the Fund's
average daily net assets, 0.90% of the next $150 million, 0.85% of the
next $250 million, and 0.80% of all assets over $500 million.
Currently, the Fund does not offer its shares for sale in states which
require limitations to be placed on its expenses. The Advisor
currently intends to voluntarily waive all or a portion of its fee and
reimburse expenses of the Fund to limit total Fund operating expenses
to a maximum of 1.50% of the average daily net assets of the Fund's
Institutional Class and a maximum of 2.25% of the average daily net
assets of the Fund's Investor Class. There can be no assurance that
the foregoing voluntary fee waivers or reimbursements will continue.
The Advisor has voluntarily waived its fee amounting to $12,413 ($0.10
per share) and reimbursed $72,059 of the operating expenses incurred
by the Fund for the period from January 27, 1995 to November 30, 1995.
All organization expenses of the Fund were incurred and paid by the
Advisor. At November 30, 1995 the Advisor owned 10,360 Institutional
Shares and 112 Investor Shares of the Fund.
The Fund's administrator, The Nottingham Company, L.L.C. (the "A-
dministrator"), provides administrative services to and is generally
responsible for the overall management and day-to-day operations of the
Fund pursuant to an accounting and administrative agreement with the
Trust. As compensation for its services, the Administrator receives
a fee at the annual rate of 0.20% of the Fund's first $50 million of
average daily net assets, 0.175% of the next $50 million, and 0.15% of
average daily net assets over $100 million. The Administrator also
receives a monthly fee of $2,000 for accounting and record keeping
services for the initial class of shares and $750 per month for each
additional class of shares. Additionally, the Administrator charges
the Fund for servicing of shareholder accounts and registration of the
Fund's shares. The contract with the Administrator provides that the
aggregate fees for the aforementioned administration, accounting, and
record keeping services shall not be less than $3,000 per month. The
Administrator also charges the Fund for certain expenses involved with
the daily valuation of portfolio securities.
Shields & Company, Inc. (the "Distributor"), an affiliate of the
Advisor, serves as the Fund's principal underwriter and distributor.
The Distributor receives any sales charges imposed on purchases of
Investor Shares and re-allocates a portion of such charges to dealers
through whom the sale was made, if any. For the period from January
27, 1995 to November 30, 1995, the Distributor retained sales charges
in the amount of $1,109. At November 30, 1995 the Distributor owned
127,373 Institutional Shares of the Fund.
Certain Trustees and officers of the Trust are also officers or
directors of the Advisor, the Distributor, or the Administrator.
CAPITAL MANAGEMENT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1995
NOTE 3 - DISTRIBUTION AND SERVICE FEES
The Board of Trustees, including the Trustees who are not "interested
persons" of the Trust as defined in the Investment Company Act of 1940
(the "Act"), adopted a distribution and service plan pursuant to Rule
12b-1 of the Act (the "Plan") applicable to the Investor Shares. The
Act regulates the manner in which a regulated investment company may
assume costs of distributing and promoting the sales of its shares and
servicing of its shareholder accounts.
The Plan provides that the Fund may incur certain costs, which may not
exceed 0.75% per annum of the Investor Shares' average daily net assets
for each year elapsed subsequent to adoption of the Plan, for payment
to the Distributor and others for items such as advertising expenses,
selling expenses, commissions, travel, or other expenses reasonably
intended to result in sales of Investor Shares in the Fund or support
servicing of Investor Share shareholder accounts. Such expenditures
incurred as service fees may not exceed 0.25% per annum of the Investor
Shares' average daily net assets. The Fund incurred $379 of such
expenses under the Plan for the period from January 27, 1995 to
November 30, 1995.
NOTE 4 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $2,043,532 and $606,700, respectively, for the period from
January 27, 1995 to November 30, 1995.
The Fund's prospectus provides that the Fund may enter into repurchase
agreements which do not extend beyond seven days for up to 25% of its
assets with member banks of the Federal Reserve system or certain non-
bank dealers. At November 30, 1995 repurchase agreements of $710,590
represented 29.46% of the Fund's assets.
Independent Auditors' Report
To the Board of Trustees and Shareholders
Capital Management Investment Trust:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Capital Management Equity Fund (the
"Fund"), a series of the Capital Management Investment Trust, as of November 30,
1995, and the related statement of operations, statement of changes in net
assets and financial highlights for the period from January 27, 1995
(commencement of operations) to November 30, 1995. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures include confirmation of securities owned as of
November 30, 1995 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Capital Management Equity Fund as of November 30, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
period from Janyary 27, 1995 (commencement of operations) to November 30, 1995
in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Richmond, Virginia
December 21, 1995
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2140316
<SHARES-COMMON-STOCK> 45557
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 10252
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 33755
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 198998
<NET-ASSETS> 2383321
<DIVIDEND-INCOME> 27664
<INTEREST-INCOME> 6257
<OTHER-INCOME> 0
<EXPENSES-NET> (4149)
<NET-INVESTMENT-INCOME> 713
<REALIZED-GAINS-CURRENT> 212
<APPREC-INCREASE-CURRENT> 3674
<NET-CHANGE-FROM-OPS> 4599
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 19101
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 150725
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 1626
<NET-CHANGE-IN-ASSETS> 1593690
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12413
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 89370
<AVERAGE-NET-ASSETS> 1470957
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.20
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.14
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.16
<EXPENSE-RATIO> 0.31
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> CAPITAL MANAGEMENT EQUITY FUND - INVESTOR SHARES
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 2181177
<INVESTMENTS-AT-VALUE> 2380175
<RECEIVABLES> 30253
<ASSETS-OTHER> 1237
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2411665
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28344
<TOTAL-LIABILITIES> 28344
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2140316
<SHARES-COMMON-STOCK> 45557
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 10252
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 33755
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 198998
<NET-ASSETS> 2383321
<DIVIDEND-INCOME> 27664
<INTEREST-INCOME> 6257
<OTHER-INCOME> 0
<EXPENSES-NET> (4149)
<NET-INVESTMENT-INCOME> 713
<REALIZED-GAINS-CURRENT> 212
<APPREC-INCREASE-CURRENT> 3674
<NET-CHANGE-FROM-OPS> 4599
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 419
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 45568
<NUMBER-OF-SHARES-REDEEMED> 11
<SHARES-REINVESTED> 35
<NET-CHANGE-IN-ASSETS> 546626
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12413
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 89370
<AVERAGE-NET-ASSETS> 1470957
<PER-SHARE-NAV-BEGIN> 11.07
<PER-SHARE-NII> 0.11
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.11
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.09
<EXPENSE-RATIO> 1.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
