________________________________________________________________________________
CAPITAL MANAGEMENT MID-CAP FUND
________________________________________________________________________________
a series of the Capital Management Investment Trust
Semi-Annual Report 1999
FOR THE PERIOD ENDED MAY 31,
INVESTMENT ADVISOR
Capital Management Associates, Inc.
140 Broadway
New York, New York 10005
CAPITAL MANAGEMENT MID-CAP FUND
107 North Washington Street
Post Office Drawer 4365
Rocky Mount, North Carolina 27803-0365
1-888-626-3863
<PAGE>
CAPITAL MANAGEMENT ASSOCIATES
[letterhead]
Dear Fellow Shareholders,
In our December 1998 letter we related that we expected 1999 to be a good year
for the mid-cap investor. Now that we have reached midyear, I am pleased to
report that, so far, such has been the case. Through June 30th mid-cap stocks
have rebounded smartly. Your fund returned 11.3% over the first six months,
while the Standard & Poor's MidCap 400 Index's total return was 6.9%. Are
mid-caps still attractive? We think so.
Valuations are still in our favor. While there has been a slight snap back,
valuations of most mid-cap stocks remain very close to their historic lows
relative to large-cap stocks, which remain historically expensive. In other
words, price remains on the side of the mid-cap investor. Equally as important,
we expect growth in earnings to be greater in the mid-cap sector over the coming
months than that produced by large-cap stocks, given the strength in the U.S.
economy versus the rest of the world.
Regarding the recent interest rate increase by the Federal Reserve, we believe
it will be a positive for investors. Growth in the economy has been very rapid
of late, and while there are currently no signs of inflationary pressures, a
slight nudge toward restraint should help to prolong the recovery. The Federal
Reserve lowered interest rates three times in late 1998 in response to the
financial crisis in Asia. As a result, short-term rates are artificially low and
simply need to be brought back toward the pre-crisis level. Such action should
provide just the right combination of enough growth with little or no inflation
to keep the stock market moving ahead.
So, as we enter the last half of the year, we remain positive on the outlook for
your fund. We continue to position the portfolio for economic gains over the
next three years, particularly in the consumer and technology sectors.
Your continued support is appreciated, and we look forward to serving you over
the remainder of the investment year.
C. Lennis Koontz,II, CFA
President
July 1, 1999
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CAPITAL MANAGEMENT MID-CAP FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 99.40%
Advertising - 3.18%
(a)Outdoor Systems, Inc. .................................................. 6,550 $196,091
--------
Airlines - 2.86%
Southwest Airlines Co. ................................................. 5,500 176,344
--------
Chemicals - 6.69%
M. A. Hanna Company .................................................... 15,800 233,050
Union Carbide Corporation .............................................. 3,500 179,594
--------
412,644
--------
Commercial Services - 6.21%
(a)Deluxe Corporation ..................................................... 5,500 198,344
Stewart Enterprises .................................................... 10,000 184,375
--------
382,719
--------
Computer Software & Services - 5.27%
(a)BMC Software, Inc. ..................................................... 1,400 69,212
(a)Comverse Technology, Inc. .............................................. 1,350 91,209
(a)Legato Systems, Inc. ................................................... 1,600 87,600
(a)SanDisk Corporation .................................................... 2,500 77,500
--------
325,521
--------
Electrical Equipment - 3.22%
Avista Corporation ..................................................... 11,000 198,687
--------
Electronics - Semiconductor - 7.04%
(a)Applied Materials, Inc. ................................................ 1,500 82,406
Helix Technology Corporation ........................................... 7,000 119,437
(a)KLA-Tencor Corporation ................................................. 1,100 50,050
(a)LSI Logic Corporation .................................................. 3,500 129,719
(a)Teradyne, Inc. ......................................................... 1,000 52,812
--------
434,424
--------
Entertainment - 2.88%
Electronic Arts, Inc. .................................................. 3,634 177,839
--------
Financial - Banks, Commercial - 6.12%
First Tennessee National Corporation ................................... 4,200 172,987
Summit Bancorp ......................................................... 5,000 204,688
--------
377,675
--------
Food - Processing - 2.96%
McCormick & Company, Incorporated ...................................... 6,000 182,250
--------
(Continued)
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CAPITAL MANAGEMENT MID-CAP FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Forest Products & Paper - 1.11%
Weyerhaeuser Company ................................................... 1,100 $ 68,269
--------
Machine - Diversified - 2.59%
Deere & Company ........................................................ 4,200 159,862
--------
Medical - Biotechnology - 2.74%
(a)Chiron Corporation ..................................................... 8,000 169,000
--------
Medical Supplies - 2.74%
C. R. Bard, Inc. ....................................................... 3,700 169,044
--------
Oil & Gas - Equipment & Services - 15.08%
Apache Corporation ..................................................... 5,600 201,600
(a)Cooper Cameron Corporation ............................................. 4,400 159,225
Halliburton Company .................................................... 4,000 165,500
The Williams Companies, Inc. ........................................... 3,800 196,888
Unocal Corporation ..................................................... 5,200 206,700
--------
929,913
--------
Pharmaceuticals - 2.83%
(a)IVAX Corporation ....................................................... 13,000 174,688
--------
Publishing - 1.49%
Houghton Mifflin Company ............................................... 2,000 92,000
--------
Retail - Restaurants - 3.32%
(a)Brinker International, Inc. ............................................ 7,300 204,856
--------
Retail - Specialty Line - 4.24%
Harcourt General, Inc. ................................................. 2,000 98,375
(a)Office Depot, Inc. ..................................................... 7,800 162,825
--------
261,200
--------
Steel - Specialty - 4.25%
Texas Industries, Inc. ................................................. 7,200 261,900
--------
Utilities - Electric - 6.36%
CMS Energy Corporation ................................................. 4,500 209,250
IDACORP Inc. ........................................................... 5,500 182,875
--------
392,125
--------
Utilities - Gas - 3.41%
Sempra Energy .......................................................... 9,774 210,141
--------
(Continued)
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CAPITAL MANAGEMENT MID-CAP FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Utilities - Telecommunications - 2.81%
US West, Inc. ......................................................... 3,200 $ 173,000
-----------
Total Common Stocks (Cost $5,219,505) ................................. 6,130,192
-----------
INVESTMENT COMPANY - 0.62%
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares .............................. 38,424 38,424
-----------
(Cost $38,424)
Total Value of Investments (Cost $5,257,929 (b)) .................................. 100.02 % $ 6,168,616
Liabilities in Excess of Other Assets ............................................. (0.02)% (1,445)
----------- -----------
Net Assets ................................................................. 100.00 % $ 6,167,171
=========== ===========
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax purposes is the same. Unrealized appreciation (depreciation) of
investments for financial reporting and federal income tax purposes is as follows:
Unrealized appreciation ................................................................. $ 961,796
Unrealized depreciation ................................................................. (51,109)
---------
Net unrealized appreciation ....................................................... $ 910,687
=========
See accompanying notes to financial statements
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CAPITAL MANAGEMENT MID-CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
(Unaudited)
ASSETS
Investments, at value (cost $5,257,929) ..................................................................... $6,168,616
Cash ........................................................................................................ 338
Income receivable ........................................................................................... 7,660
Receivable for fund shares sold ............................................................................. 2,522
Other assets ................................................................................................ 2,969
Due from advisor (note 2) ................................................................................... 253
----------
Total assets ........................................................................................... 6,182,358
----------
LIABILITIES
Accrued expenses ............................................................................................ 15,187
----------
NET ASSETS ......................................................................................................... $6,167,171
==========
NET ASSETS CONSIST OF
Paid-in capital ............................................................................................. $4,783,064
Undistributed net realized gain on investments .............................................................. 473,420
Net unrealized appreciation on investments .................................................................. 910,687
----------
$6,167,171
==========
INSTITUTIONAL CLASS
Net asset value, offering and redemption price per share ($4,712,916 / 285,327 shares outstanding) .......... $ 16.52
==========
INVESTOR CLASS
Net asset value, offering and redemption price per share ($1,454,255 / 89,890 shares outstanding) ........... $ 16.18
==========
Maximum offering price per share (100 / 97% of $16.18) ...................................................... $ 16.68
==========
See accompanying notes to financial statements
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CAPITAL MANAGEMENT MID-CAP FUND
STATEMENT OF OPERATIONS
Period ended May 31, 1999
(Unaudited)
INVESTMENT INCOME
Income
Dividends ..................................................................................... $ 55,704
---------
Expenses
Investment advisory fees (note 2) ............................................................. 32,186
Fund administration fees (note 2) ............................................................. 4,023
Distribution and service fees - Investor Class (note 3) ....................................... 5,990
Audit fees .................................................................................... 4,728
Legal fees .................................................................................... 3,334
Fund accounting fees (note 2) ................................................................. 18,000
Custody fees .................................................................................. 1,408
Securities pricing fees ....................................................................... 922
Shareholder recordkeeping fees ................................................................ 4,500
Registration and filing administration fees (note 2) .......................................... 4,308
Other accounting fees (note 2) ................................................................ 2,156
Shareholder servicing expenses ................................................................ 1,905
Registration and filing expenses .............................................................. 6,482
Printing expenses ............................................................................. 3,491
Trustee fees and meeting expenses ............................................................. 4,958
Other operating expenses ...................................................................... 1,752
---------
Total expenses .......................................................................... 100,143
---------
Less:
Expense reimbursements (note 2) .................................................... (13,836)
Investment advisory fees waived (note 2) ........................................... (32,009)
---------
Net expenses ............................................................................ 54,298
---------
Net investment income .............................................................. 1,406
---------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ..................................................... 562,446
Increase in unrealized appreciation on investments ................................................. 412,731
---------
Net realized and unrealized gain on investments ............................................... 975,177
---------
Net increase in net assets resulting from operations .................................... $ 976,583
=========
See accompanying notes to financial statements
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CAPITAL MANAGEMENT MID-CAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Period ended Year ended
May 31, November 30,
1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS
Operations
Net investment income (loss) ............................................................ $ 1,406 $ (3,416)
Net realized gain (loss) from investment transactions ................................... 562,446 (70,827)
Increase (decrease) in unrealized appreciation on investments ........................... 412,731 (795,106)
----------- -----------
Net increase (decrease) in net assets resulting from operations .................... 976,583 (869,349)
----------- -----------
Distributions to shareholders from
Net investment income - Institutional Class ............................................. (1,545) 0
Net investment income - Investor Class .................................................. 0 0
Net realized gain from investment transactions - Institutional Class .................... 0 (678,656)
Net realized gain from investment transactions - Investor Class ......................... 0 (244,032)
----------- -----------
Decrease in net assets resulting from distributions ................................ (1,545) (922,688)
----------- -----------
Capital share transactions
(Decrease) increase in net assets resulting from capital share transactions.............. (1,504,285) 1,303,097
----------- -----------
Total decrease in net assets .................................................. (529,247) (488,940)
NET ASSETS
Beginning of period ......................................................................... 6,696,418 7,185,358
----------- -----------
End of period ............................................................................... $ 6,167,171 $ 6,696,418
=========== ===========
(a) A summary of capital share activity follows:
-----------------------------------------------------------------------
Period ended Year ended
May 31, 1999 November 30, 1998
Shares Value Shares Value
-----------------------------------------------------------------------
- ------------------------------------------------------
INSTITUTIONAL CLASS
- ------------------------------------------------------
Shares sold ............................................ 4,661 $ 71,200 18,735 $ 299,573
Shares issued for reinvestment of distributions ........ 103 1,545 41,056 678,656
----------- ----------- ----------- -----------
4,764 72,745 59,791 978,229
Shares redeemed ........................................ (66,412) (1,036,150) (4,650) (73,195)
----------- ----------- ----------- -----------
Net (decrease) increase ........................... (61,648) $ (963,405) 55,141 $ 905,034
=========== =========== =========== ===========
- --------------------------------------------------------
INVESTOR CLASS
- --------------------------------------------------------
Shares sold ............................................ 2,830 $ 43,037 57,629 $ 941,702
Shares issued for reinvestment of distributions ........ 0 0 14,339 234,590
----------- ----------- ----------- -----------
2,830 43,037 71,968 1,176,292
Shares redeemed ........................................ (39,490) (583,917) (49,270) (778,229)
----------- ----------- ----------- -----------
Net (decrease) increase ........................... (36,660) $ (540,880) 22,698 $ 398,063
=========== =========== =========== ===========
See accompanying notes to financial statements
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CAPITAL MANAGEMENT MID-CAP FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
INSTITUTIONAL CLASS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
January 27, 1995
(commencement of
Period ended Year ended Year ended Year ended operations) to
May 31, November 30, November 30, November 30, November 30,
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $14.21 $18.20 $13.99 $12.16 $10.00
Income from investment operations
Net investment income 0.01 0.03 0.01 0.23 0.20
Net realized and unrealized gain
(loss) on investments 2.30 (1.70) 4.60 2.08 2.10
------------- ----------- ----------- ----------- ------------
Total from investment operations 2.31 (1.67) 4.61 2.31 2.30
------------- ----------- ----------- ----------- ------------
Distributions to shareholders from
Net investment income 0.00 0.00 (0.04) (0.26) (0.14)
Distributions in excess of net investment income (0.00) (0.00) (0.02) 0.00 0.00
Net realized gain from investment transactions 0.00 (2.32) (0.34) (0.22) 0.00
------------- ----------- ----------- ----------- ------------
Total distributions (0.00) (2.32) (0.40) (0.48) (0.14)
------------- ----------- ----------- ----------- ------------
Net asset value, end of period $16.52 $14.21 $18.20 $13.99 $12.16
============= =========== =========== =========== ============
Total return (a) 16.29 % (10.94)% 33.92 % 19.57 % 23.00 %
============= =========== =========== =========== ============
Ratios/supplemental data
Net assets, end of period $4,712,916 $4,929,525 $5,311,416 $3,502,215 $1,832,507
============= =========== =========== =========== ============
Ratio of expenses to average net assets
Before expense reimbursements and waived fees 2.93 %(b) 2.60 % 2.92 % 3.70 % 7.20 %(b)
After expense reimbursements and waived fees 1.50 %(b) 1.50 % 1.50 % 0.00 % 0.31 %(b)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees (1.19)%(b) (0.93)% (1.34)% (1.77)% (4.45)%(b)
After expense reimbursements and waived fees 0.23 %(b) 0.17 % 0.08 % 1.94 % 2.44 %(b)
Portfolio turnover rate 57.15 % 89.04 % 66.30 % 82.30 % 47.74 %
(a) Total return does not reflect payment of a sales charge.
(b) Annualized.
See accompanying notes to financial statements
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CAPITAL MANAGEMENT MID-CAP FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
INVESTOR CLASS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
April 7, 1995
(commencement
Period ended Year ended Year ended Year ended of operations) to
May 31, November 30, November 30, November 30, November 30,
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $13.96 $18.04 $13.96 $12.09 $11.07
Income from investment operations
Net investment (loss) income (0.05) (0.09) (0.05) 0.24 0.11
Net realized and unrealized gain (loss)
on investments 2.27 (1.67) 4.53 2.06 1.02
------------- ------------- ------------- ------------- --------------
Total from investment operations 2.22 (1.76) 4.48 2.30 1.13
------------- ------------- ------------- ------------- --------------
Distributions to shareholders from
Net investment income 0.00 0.00 (0.03) (0.21) (0.11)
Distributions in excess of
net investment income 0.00 0.00 (0.03) 0.00 0.00
Net realized gain from
investment transactions 0.00 (2.32) (0.34) (0.22) 0.00
------------- ------------- ------------- ------------- --------------
Total distributions 0.00 (2.32) (0.40) (0.43) (0.11)
------------- ------------- ------------- ------------- --------------
Net asset value, end of period $16.18 $13.96 $18.04 $13.96 $12.09
============= ============= ============= ============= ==============
Total return (a) 15.90 % (11.67)% 33.11% 19.61% 10.24%
============= ============= ============= ============= ==============
Ratios/supplemental data
Net assets, end of period $1,454,255 $1,766,893 $1,873,942 $746,136 $550,814
============= ============= ============= ============= ==============
Ratio of expenses to average net assets
Before expense reimbursements and waived fees 3.66 %(b) 3.35 % 3.71 % 4.45 % 7.18 %(b)
After expense reimbursements and waived fees 2.25 %(b) 2.25 % 2.25 % 0.00 % 1.06 %(b)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees (1.94)%(b) (1.67)% (2.10)% (2.50)% (4.23)%(b)
After expense reimbursements and waived fees (0.52)%(b) (0.57)% (0.63)% 1.95 % 1.89 %(b)
Portfolio turnover rate 57.15 % 89.04 % 66.30 % 82.30 % 47.74 %
(a) Total return does not reflect payment of a sales charge.
(b) Annualized.
See accompanying notes to financial statements
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CAPITAL MANAGEMENT MID-CAP FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Capital Management Mid-Cap Fund (the "Fund"), formerly known as The
Capital Management Equity 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, as amended. The Fund began operations
on January 27, 1995. The investment objective of the fund is to seek
capital appreciation principally through investments in equity securities,
consisting of common and preferred stocks and securities convertible into
common stocks. 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 value. Securities listed on an exchange or quoted on a national
market system are valued at 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 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.
Each Fund files a tax return annually using tax accounting methods
required under provisions of the Code which may differ from generally
accepted accounting principles, the basis on which these financial
statements are prepared. Accordingly, the character of distributions
to shareholders reported in the financial highlights may differ from
that reported to shareholders for Federal income tax purposes.
Distributions which exceed net investment income and net realized
gains for financial reporting purposes but not for tax purposes, if
any, are shown as distributions in excess of net investment income and
net realized gains in the accompanying statements.
C. Investment Transactions - Investment transactions are recorded on
trade date. Realized gains and losses are determined using the
specific identification cost method. Interest income is recorded daily
on an accrual basis. Dividend income is recorded on the ex-dividend
date.
(Continued)
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CAPITAL MANAGEMENT MID-CAP FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
(Unaudited)
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. Distributions to shareholders are
recorded on the ex-dividend date. In addition, distributions may be
made annually in December out of net realized gains through October 31
of that year. Distributions to shareholders are recorded on the
ex-dividend date. The Fund may make a supplemental distribution
subsequent to the end of its fiscal year ending November 30.
E. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those
estimates.
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.
The Advisor currently intends to voluntarily waive all or a portion of its
fee and to 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 a portion of its fee amounting to $32,009
($0.08 per share) and reimbursed $13,836 of the operating expenses incurred
by the Fund for the period ended May 31, 1999. The Fund's administrator,
The Nottingham Company (the "Administrator"), 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 0.125% of the Fund's
first $50 million of average daily net assets, 0.100% of the next $50
million, and 0.075% of average daily net assets over $100 million as well
as a monthly fee of $2,250 for accounting and record-keeping services for
the initial class of shares and $750 per month for each additional class of
shares. The contract with the Administrator provides that the aggregate
fees for the aforementioned administration, accounting, and recordkeeping
services shall not be less than $4,000 per month. The Administrator also
charges the Fund for certain expenses involved with the daily valuation of
portfolio securities.
North Carolina Shareholder Services, LLC (the "Transfer Agent") serves as
the Fund's transfer, dividend paying, and shareholder servicing agent. The
Transfer Agent maintains the records of each shareholder's account, answers
shareholder inquiries concerning accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution
disbursing agent, and performs other shareholder servicing functions.
(Continued)
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CAPITAL MANAGEMENT MID-CAP FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
(Unaudited)
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 ended May 31, 1999, the Distributor retained
sales charges in the amount of $103.
Certain Trustees and officers of the Trust are also officers or directors
of the Advisor, the Distributor, or the Administrator.
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 $5,990 of such expenses under the Plan for
the period ended May 31, 1999.
NOTE 4 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $3,405,468 and $3,996,326, respectively, for the period ended
May 31, 1999.
<PAGE>
________________________________________________________________________________
CAPITAL MANAGEMENT SMALL-CAP FUND
________________________________________________________________________________
a series of the Capital Management Investment Trust
Semi-Annual Report 1999
FOR THE PERIOD ENDED MAY 31,
INVESTMENT ADVISOR
Capital Management Associates, Inc.
140 Broadway
New York, New York 10005
CAPITAL MANAGEMENT SMALL-CAP FUND
107 North Washington Street
Post Office Drawer 4365
Rocky Mount, North Carolina 27803-0365
1-888-626-3863
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<TABLE>
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CAPITAL MANAGEMENT SMALL-CAP FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 89.85%
Auto - Rental/Leasing - 2.87%
(a)United Rentals, Inc. ................................................... 175 $ 5,250
---------
Broadcast - Radio & Television - 2.92%
(a)Cox Radio, Inc. ........................................................ 100 5,344
---------
Chemicals - 2.75%
MacDermid, Incorporated ................................................ 125 5,030
---------
Computer Software & Services - 3.38%
(a)Comverse Technology, Inc. .............................................. 37 2,500
(a)PRI Automation, Inc. ................................................... 150 3,675
---------
6,175
---------
Cosmetics & Personal Care - 2.17%
(a)Helen of Troy Ltd. ..................................................... 250 3,969
---------
Electrical Equipment - 4.91%
Baldor Electric Company ................................................ 250 4,813
(a)Semtech Corporation .................................................... 100 4,180
---------
8,993
---------
Electronics - Semiconductor - 2.35%
(a)ETEC Systems, Inc. ..................................................... 50 1,341
(a)Photronics, Inc. ....................................................... 150 2,963
---------
4,304
---------
Emerging Technology - 2.00%
(a)Veritas DGC Inc. ....................................................... 200 3,650
---------
Financial - Banks, Commercial - 3.00%
Carolina First Corporation ............................................. 200 5,488
---------
Financial - Banks, Money Center - 1.47%
CCB Financial Corporation .............................................. 50 2,697
---------
Financial Services - 2.57%
National Data Corporation .............................................. 100 4,705
---------
Household Products & Housewares - 2.33%
Church & Dwight Co., Inc. .............................................. 100 4,269
---------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
CAPITAL MANAGEMENT SMALL-CAP FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Insurance - Life & Health - 2.18%
Protective Life Corporation ............................................ 110 $ 3,981
---------
Machine - Diversified - 3.72%
Helix Technology Corporation ........................................... 200 3,413
The Manitowoc Company, Inc. ............................................ 100 3,400
---------
6,813
---------
Medical - Biotechnology - 8.75%
ICN Pharmaceuticals, Inc. .............................................. 190 6,246
(a)Roberts Pharmaceutical Corporation ..................................... 250 4,750
(a)The Liposome Company, Inc. ............................................. 350 5,009
---------
16,005
---------
Medical Supplies - 2.60%
(a)Patterson Dental Company ............................................... 130 4,761
---------
Metal Fabrication & Hardware - 1.95%
(a)Wolverine Tube, Inc. ................................................... 150 3,572
---------
Miscellaneous - Manufacturing - 6.96%
(a)Gaylord Container Corporation .......................................... 400 3,350
Pope & Talbot, Inc. .................................................... 400 4,000
(a)Whittaker Corporation .................................................. 200 5,375
---------
12,725
---------
Oil & Gas - Domestic - 2.01%
(a)R&B Falcon Corporation ................................................. 400 3,675
---------
Oil & Gas - Equipment & Services - 1.84%
(a)Rowan Companies, Inc. .................................................. 200 3,375
---------
Oil & Gas - Exploration - 1.39%
(a)Newfield Exploration Company ........................................... 100 2,538
---------
Real Estate Investment Trust - 2.10%
Crown American Realty Trust ............................................ 500 3,844
---------
Restaurants & Food Service - 4.96%
(a)NPC International, Inc. ................................................ 200 3,525
(a)Ryan's Family Steak House, Inc. ........................................ 200 2,338
(a)Taco Cabana, Inc. ...................................................... 300 3,205
---------
9,068
---------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
CAPITAL MANAGEMENT SMALL-CAP FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Retail - Department Stores - 2.99%
(a)Venator Group, Inc. .................................................... 500 $ 5,469
---------
Retail - Specialty Line - 6.02%
(a)Action Performance Companies, Inc. ..................................... 150 5,700
Applebee's International, Inc. ......................................... 180 5,310
---------
11,010
---------
Telecommunications - 1.90%
(a)Genesys Telecommunications ............................................. 150 3,469
---------
Transportation - Miscellaneous - 2.15%
USFreightways Corporation .............................................. 100 3,938
---------
Utilities - Electric - 3.06%
South Jersey Industries, Inc. .......................................... 200 5,600
---------
Utilities - Water - 2.55%
Aquarion Company ....................................................... 150 4,659
---------
Total Common Stocks (Cost $152,045) .................................................................. 164,376
---------
INVESTMENT COMPANY - 3.62%
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares ............................... 6,615 6,615
(Cost $6,615) --------
Total Value of Investments (Cost $158,660 (b)) .............................................. 93.47% $ 170,991
Other Assets Less Liabilities ............................................................... 6.53% 11,955
------ ---------
Net Assets ........................................................................... 100.00% $ 182,946
====== =========
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax purposes is the same. Unrealized appreciation
(depreciation) of investments for financial reporting and federal income tax purposes is as follows:
Unrealized appreciation ......................................................................... $17,497
Unrealized depreciation ......................................................................... (5,166)
-------
Net unrealized appreciation ..................................................... $12,331
=======
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
CAPITAL MANAGEMENT SMALL-CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
(Unaudited)
ASSETS
Investments, at value (cost $158,660) .............................................................. $170,991
Income receivable .................................................................................. 113
Receivable for investments sold .................................................................... 25,576
Due from advisor (note 2) .......................................................................... 8,148
--------
Total assets .................................................................................. 204,828
--------
LIABILITIES
Accrued expenses ................................................................................... 11,882
Payable for investment purchases ................................................................... 10,000
--------
Total liabilities ............................................................................. 21,882
--------
NET ASSETS ................................................................................................ $182,946
========
NET ASSETS CONSIST OF
Paid-in capital .................................................................................... $159,949
Undistributed net realized ogain on investments .................................................... 10,666
Net unrealized oappreciation on investments ........................................................ 12,331
--------
$182,946
========
INSTITUTIONAL CLASS
Net asset value, offering and redemption price per share ........................................... $12.59
($125,868 / 10,000 shares outstanding) ========
INVESTOR CLASS
Net asset value, offering and redemption price per share ........................................... $12.55
($57,078 / 4,550 shares outstanding) ========
Maximum offering price per share (100 / 97% of $12.55 ) ............................................ $12.94
========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
CAPITAL MANAGEMENT SMALL-CAP FUND
STATEMENT OF OPERATIONS
Period from January 12, 1999
(commencement of operations)
to May 31, 1999
(Unaudited)
INVESTMENT LOSS
Income
Dividends ...................................................................................... $ 642
--------
Expenses
Investment advisory fees (note 2) .............................................................. 629
Fund administration fees (note 2) .............................................................. 79
Distribution and service fees - Investor class (note 3) ........................................ 147
Custody fees ................................................................................... 2,070
Registration and filing administration fees (note 2) ........................................... 197
Fund accounting fees (note 2) .................................................................. 13,441
Audit fees ..................................................................................... 4,737
Legal fees ..................................................................................... 2,988
Securities pricing fees ........................................................................ 980
Shareholder recordkeeping fees ................................................................. 3,000
Other accounting fees (note 2) ................................................................. 4,466
Shareholder servicing expenses ................................................................. 746
Registration and filing expenses ............................................................... 762
Printing expenses .............................................................................. 2,402
Trustee fees and meeting expenses .............................................................. 2,696
Other operating expenses ....................................................................... 1,084
--------
Total expenses ........................................................................... 40,424
--------
Less:
Expense reimbursements (note 2) ..................................................... (37,182)
Investment advisory fees waived (note 2) ............................................ (629)
Other accounting fees waived (note 2) ............................................... (1,519)
--------
Net expenses ............................................................................. 1,094
--------
Net investment loss ................................................................. (452)
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ...................................................... 11,118
Increase in unrealized appreciation on investments .................................................. 12,331
--------
Net realized and unrealized ogain on investments ............................................... 23,449
--------
Net increase in net assets resulting from operations .................................... $ 22,997
========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
CAPITAL MANAGEMENT SMALL-CAP FUND
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Period ended
May 31,
1999 (b)
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment loss .............................................................................. $ (452)
Net realized gain from investment transactions ................................................... 11,118
Increase in unrealized appreciation on investments ............................................... 12,331
---------
Net increase in net assets resulting from operations ....................................... 22,997
---------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ............................. 159,949
---------
Total increase in net assets ........................................................ 182,946
NET ASSETS
Beginning of period ................................................................................... 0
---------
End of period ......................................................................................... $ 182,946
=========
(a) A summary of capital share activity follows:
-------------------------------------
Period ended
May 31, 1999 (b)
Shares Value
-------------------------------------
- -------------------------------------------
INSTITUTIONAL CLASS
- -------------------------------------------
Shares sold .................................................................... 10,000 $ 109,949
Shares redeemed ................................................................ 0 0
--------- ---------
Net increase ............................................................ 10,000 $ 109,949
========= =========
- -------------------------------------------
INVESTOR CLASS
- -------------------------------------------
Shares sold .................................................................... 4,550 $ 50,000
Shares redeemed ................................................................ 0 0
--------- ---------
Net increase ............................................................ 4,550 $ 50,000
========= =========
(b) For the period beginning January 12, 1999 (commencement of operations) to May 31, 1999.
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
CAPITAL MANAGEMENT SMALL-CAP FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
--------------- ---------------
Institutional Investor
Class Class
--------------- ---------------
Period ended Period ended
May 31, May 31,
1999 (a) 1999 (a)
--------------- ---------------
Net asset value, beginning of period ..................................................... $10.99 $10.99
Income from investment operations
Net investment loss ........................................................ (0.02) (0.05)
Net realized and unrealized gain on investments ............................ 1.62 1.61
--------- ---------
Total from investment operations ...................................... 1.60 1.56
--------- ---------
Net asset value, end of period ........................................................... $12.59 $12.55
========= =========
Total return (b) ......................................................................... 14.56 % 14.19 %
========= =========
Ratios/supplemental data
Net assets, end of period ........................................................ $ 125,868 $ 57,078
========= =========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees .............................. 64.08 % (c) 64.83 % (c)
After expense reimbursements and waived fees ............................... 1.50 % (c) 2.25 % (c)
Ratio of net investment loss to average net assets
Before expense reimbursements and waived fees .............................. (63.06)% (c) (63.81)% (c)
After expense reimbursements and waived fees ............................... (0.48)% (c) (1.23)% (c)
Portfolio turnover rate .......................................................... 67.55 % 67.55 %
(a) For the period beginning January 12, 1999 (commencement of operations) to May 31, 1999.
(b) Total return does not reflect payment of a sales charge.
(c) Annualized.
See accompanying notes to financial statements
</TABLE>
<PAGE>
CAPITAL MANAGEMENT SMALL-CAP FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Capital Management Small-Cap 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, as
amended. The Fund began operations on January 12, 1999. The investment
objective of the Fund is to seek capital appreciation principally
through investments in equity securities, consisting of common and
preferred stocks and securities convertible into common stocks. The
Fund pursues its investment objective by investing primarily in equity
securities of small-capitalization ("small-cap") companies. The Fund
considers a small-cap company to be one that has market capitalization,
measured at the time the Fund purchases the security, within the range
of $100 million to $1 billion. The Fund has an unlimited number of
$0.01 par value beneficial interest shares that are authorized, which
are divided into two classes - Institutional Shares and Investor
Shares.
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 value. Securities listed on an exchange or quoted
on a national market system are valued at 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 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.
Each Fund files a tax return annually using tax accounting
methods required under provisions of the Code which may differ
from generally accepted accounting principles, the basis on
which these financial statements are prepared. Accordingly,
the character of distributions to shareholders reported in the
financial highlights may differ from that reported to
shareholders for Federal income tax purposes. Distributions
which exceed net investment income and net realized gains for
financial reporting purposes but not for tax purposes, if any,
are shown as distributions in excess of net investment income
and net realized gains in the accompanying statements.
C. Investment Transactions - Investment transactions are recorded
on trade date. Realized gains and losses are determined using
the specific identification cost method. Interest income is
recorded daily on an accrual basis. Dividend income is
recorded on the ex-dividend date.
(Continued)
<PAGE>
CAPITAL MANAGEMENT SMALL-CAP FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
(Unaudited)
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. Distributions to
shareholders are recorded on the ex-dividend date. In
addition, distributions may be made annually in December out
of net realized gains through October 31 of that year.
Distributions to shareholders are recorded on the ex-dividend
date. The Fund may make a supplemental distribution subsequent
to the end of its fiscal year ending November 30.
E. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and
revenues reported in the financial statements. Actual results
could differ from those estimates.
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.
The Advisor currently intends to voluntarily waive all or a portion of
its fee and to 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 shares and a maximum of 2.25%
of the average daily net assets of the Fund's Investor Class shares.
There can be no assurance that the foregoing voluntary fee waivers or
reimbursements will continue. The Advisor has voluntarily waived a
portion of its fee amounting to $629 ($0.04 per share) and reimbursed
$37,182 of the operating expenses incurred by the Fund for the period
ending May 31, 1999.
The Fund's administrator, The Nottingham Company (the "Administrator"),
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 0.125% of the Fund's first $50 million of average daily
net assets, 0.10% of the next $50 million, and 0.075% 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. The contract with the Administrator provides that the aggregate
fees for the aforementioned administration, accounting, and
recordkeeping 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. The Administrator has
voluntarily waived a portion of its fees amounting to $1,519 ($0.10 per
share) for the period ending May 31, 1999.
North Carolina Shareholder Services, LLC (the "Transfer Agent") serves
as the Fund's transfer, dividend paying, and shareholder servicing
agent. The Transfer Agent maintains the records of each shareholder's
account, answers shareholder inquiries concerning accounts, processes
purchases and redemptions of the Fund's shares, acts as dividend and
distribution disbursing agent, and performs other shareholder servicing
functions.
(Continued)
<PAGE>
CAPITAL MANAGEMENT SMALL-CAP FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
(Unaudited)
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 year ended May 31, the
Distributor did not retain any sales charges.
Certain Trustees and officers of the Trust are also officers or
directors of the Advisor, the Distributor, or the Administrator.
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 Class 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 Class Shares in the
Fund or support servicing of Investor Class Share shareholder accounts.
Such expenditures incurred as service fees may not exceed 0.25% per
annum of the Investor Class Shares' average daily net assets. The Fund
incurred $147 of such expenses for the period ending May 31, 1999.
NOTE 4 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $239,358 and $98,431, respectively, for the period ending
May 31, 1999.
<PAGE>
________________________________________________________________________________
CAPITAL MANAGEMENT ENERGY FUND
________________________________________________________________________________
a series of the Capital Management Investment Trust
Semi-Annual Report 1999
FOR THE PERIOD ENDED MAY 31,
INVESTMENT ADVISOR
Capital Management Associates, Inc.
140 Broadway
New York, New York 10005
CAPITAL MANAGEMENT ENERGY FUND
107 North Washington Street
Post Office Drawer 4365
Rocky Mount, North Carolina 27803-0365
1-888-626-3863
<PAGE>
<TABLE>
<S> <C> <C> <C>
CAPITAL MANAGEMENT ENERGY FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 97.75%
Oil & Gas - Equipment & Services - 38.15%
(a)BJ Services Company ........................................................ 200 $ 5,512
Baker Hughes Incorporated .................................................. 350 10,916
(a)Cooper Cameron Corporation ................................................. 300 10,856
ENSCO International ........................................................ 600 10,650
Halliburton Company ........................................................ 250 10,344
(a)Nabors Industries, Inc. .................................................... 200 4,000
(a)R&B Falcon Corporation ..................................................... 500 4,594
Schlumberger Limited ....................................................... 150 9,028
The Williams Companies, Inc. ............................................... 300 15,544
Transocean Offshore Inc. ................................................... 350 8,619
---------
90,063
---------
Oil & Gas - Exploration - 13.74%
Anadarko Petroleum Corporation ............................................. 300 11,250
Apache Corporation ......................................................... 350 12,600
Burlington Resources ....................................................... 200 8,587
---------
32,437
---------
Oil & Gas - International - 36.06%
Atlantic Richfield Company ................................................. 100 8,369
Chevron Corporation ........................................................ 100 9,250
Enron Corp. ................................................................ 150 10,706
Exxon Corporation .......................................................... 150 11,962
Phillips Petroleum Company ................................................. 200 10,488
Royal Dutch Petroleum Company .............................................. 200 11,313
Texaco, Inc. ............................................................... 200 13,100
Unocal Corporation ......................................................... 250 9,938
---------
85,126
---------
Utilities - Electric - 9.80%
Duke Energy Corporation .................................................... 200 12,062
Montana Power Company ...................................................... 150 11,081
---------
23,143
---------
Total Common Stocks (Cost $198,764) ........................................ 230,769
---------
INVESTMENT COMPANY - 3.69%
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares
(Cost $8,721) .............................................................. 8,721 8,721
---------
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
CAPITAL MANAGEMENT ENERGY FUND
PORTFOLIO OF INVESTMENTS
May 31, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Value
(note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (Cost $207,485 (b)) ......................................... 101.44 % $ 239,490
Liabilities in Excess of Other Assets .................................................. (1.44)% (3,407)
------ ---------
Net Assets ...................................................................... 100.00 % $ 236,083
====== =========
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax purposes is the same. Unrealized appreciation
(depreciation) of investments for financial reporting and federal income tax purposes is as follows:
Unrealized appreciation .......................................................................... $ 34,377
Unrealized depreciation .......................................................................... (2,372)
--------
Net unrealized appreciation ...................................................... $ 32,005
========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
CAPITAL MANAGMENT ENERGY FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
(Unaudited)
ASSETS
Investments, at value (cost $207,485) .............................................................. $ 239,490
Cash ............................................................................................... 208
Income receivable .................................................................................. 542
Prepaid expenses ................................................................................... 831
Due from advisor (note 2) .......................................................................... 7,417
---------
Total assets .................................................................................. 248,488
---------
LIABILITIES
Accrued expenses ................................................................................... 12,405
---------
NET ASSETS ................................................................................................ $ 236,083
=========
NET ASSETS CONSIST OF
Paid-in capital .................................................................................... $ 204,486
Undistributed net investment income ................................................................ 214
Accumulated net realized loss on investments ....................................................... (622)
Net unrealized appreciation on investments ......................................................... 32,005
---------
$ 236,083
=========
INSTITUTIONAL CLASS
Net asset value, redemption and maximum offering price per share
($176,820 / 15,458 shares outstanding ) ....................................................... $ 11.44
=========
INVESTOR CLASS
Net asset value, redemption and offering price per share
($59,263 / 5,198 shares outstanding ) ......................................................... $ 11.40
=========
Maximum offering price per share (100 / 97% of $11.40 ) ............................................ $ 11.75
=========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
CAPITAL MANAGEMENT ENERGY FUND
STATEMENT OF OPERATIONS
Period from January 12, 1999
(commencement of operations)
to May 31, 1999
(Unaudited)
INVESTMENT INCOME
Income
Dividends ...................................................................................... $ 1,386
--------
Expenses
Investment advisory fees (note 2) .............................................................. 680
Fund administration fees (note 2) .............................................................. 85
Distribution and service fees - Investor class (note 3) ....................................... 151
Custody fees ................................................................................... 1,973
Registration and filing administration fees (note 2) ........................................... 197
Fund accounting fees (note 2) .................................................................. 13,402
Audit fees ..................................................................................... 4,473
Legal fees ..................................................................................... 2,988
Securities pricing fees ........................................................................ 510
Shareholder recordkeeping fees ................................................................. 3,000
Other accounting fees (note 2) ................................................................. 4,460
Shareholder servicing expenses ................................................................. 886
Registration and filing expenses ............................................................... 998
Printing expenses .............................................................................. 2,388
Trustee fees and meeting expenses .............................................................. 2,678
Other operating expenses ....................................................................... 794
--------
Total expenses ........................................................................... 39,663
--------
Less:
Expense reimbursements (note 2) ..................................................... (36,288)
Investment advisory fees waived (note 2) ............................................ (680)
Other accounting fees waived (note 2) ............................................... (1,523)
--------
Net expenses ............................................................................. 1,172
--------
Net investment income ............................................................... 214
--------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss from investment transactions ...................................................... (622)
Increase in unrealized appreciation on investments .................................................. 32,005
--------
Net realized and unrealized gain on investments ................................................ 31,383
--------
Net increase in net assets resulting from operations ..................................... $ 31,597
========
See accompanying notes to financial statements
</TABLE>
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<S> <C> <C> <C> <C>
CAPITAL MANAGEMENT ENERGY FUND
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Period ended
May 31,
1999 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income .......................................................................... $ 214
Net realized loss from investment transactions ................................................. (622)
Increase in unrealized appreciation on investments ............................................. 32,005
---------
Net increase in net assets resulting from operations ..................................... 31,597
---------
Capital share transactions
Increase in net assets resulting from capital share transactions (b) ........................... 204,486
---------
Total increase in net assets ......................................................... 236,083
NET ASSETS
Beginning of period .................................................................................. 0
---------
End of period (including undistributed net investment income of $214) $ 236,083
=========
(b) A summary of capital share activity follows:
------------------------------------------
Period ended
May 31, 1999 (a)
Shares Value
------------------------------------------
- -------------------------------------------
INSTITUTIONAL CLASS
- -------------------------------------------
Shares sold .............................................................................. 15,458 $ 154,486
Shares redeemed .......................................................................... 0 0
--------- ---------
Net increase ....................................................................... 15,458 $ 154,486
========= =========
- -------------------------------------------
INVESTOR CLASS
- -------------------------------------------
Shares sold .............................................................................. 5,198 $ 50,000
Shares redeemed .......................................................................... 0 0
--------- ---------
Net increase ....................................................................... 5,198 $ 50,000
========= =========
(a) For the period beginning January 12, 1999 (commencement of operations) to May 31, 1999.
See accompanying notes to financial statements
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<S> <C> <C> <C> <C>
CAPITAL MANAGEMENT ENERGY FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
------------------ ------------------
Institutional Investor
Class Class
------------------ ------------------
Period ended Period ended
May 31, 1999 (a) May 31, 1999 (a)
------------------ ------------------
Net asset value, beginning of period ................................................. $ 9.62 $ 9.62
Income from investment operations
Net investment income (loss) ................................................. 0.02 (0.01)
Net realized and unrealized gain on investments .............................. 1.80 1.79
--------- ---------
Total from investment operations ......................................... 1.82 1.78
--------- ---------
Net asset value, end of period ....................................................... $ 11.44 $ 11.40
========= =========
Total return (b) ..................................................................... 18.92 % 18.50 %
========= =========
Ratios/supplemental data
Net assets, end of period ....................................................... $ 176,820 $ 59,263
========= =========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ................................ 58.80 % (c) 57.25 % (c)
After expense reimbursements and waived fees ................................. 1.50 % (c) 2.25 % (c)
Ratio of net investment (loss) income to average net assets
Before expense reimbursements and waived fees ................................ (56.74)% (c) (55.27)% (c)
After expense reimbursements and waived fees ................................. 0.56 % (c) (0.27)% (c)
Portfolio turnover rate ......................................................... 47.22 % 47.22 %
(a) For the period beginning January 12, 1999 (commencement of operations) to May 31, 1999.
(b) Total return does not reflect payment of a sales charge.
(c) Annualized.
See accompanying notes to financial statements
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<PAGE>
CAPITAL MANAGEMENT ENERGY FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Capital Management Energy 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, as amended. The
Fund began operations on January 12, 1999. The investment objective of
the Fund is to seek long-term capital appreciation. Current income is a
secondary consideration in selecting portfolio investments. The Fund
pursues its investment objective by investing primarily in securities
of large-, mid-, and small-cap companies involved in the energy field
("energy-related companies"), including companies whose business
focuses on or involves oil, gas, electricity, coal and all new or
emerging sources of energy. The Fund has an unlimited number of $0.01
par value beneficial interest shares authorized, which are divided into
two classes Institutional Shares and Investor Shares.
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 value. Securities listed on an exchange or quoted
on a national market system are valued at 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 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.
Each Fund files a tax return annually using tax accounting
methods required under provisions of the Code which may differ
from generally accepted accounting principles, the basis on
which these financial statements are prepared. Accordingly,
the character of distributions to shareholders reported in the
financial highlights may differ from that reported to
shareholders for Federal income tax purposes. Distributions
which exceed net investment income and net realized gains for
financial reporting purposes but not for tax purposes, if any,
are shown as distributions in excess of net investment income
and net realized gains in the accompanying statements.
C. Investment Transactions - Investment transactions are recorded
on trade date. Realized gains and losses are determined using
the specific identification cost method. Interest income is
recorded daily on an accrual basis. Dividend income is
recorded on the ex-dividend date.
(Continued)
<PAGE>
CAPITAL MANAGEMENT ENERGY FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
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. Distributions to
shareholders are recorded on the ex-dividend date. In
addition, distributions may be made annually in December out
of net realized gains through October 31 of that year.
Distributions to shareholders are recorded on the ex-dividend
date. The Fund may make a supplemental distribution subsequent
to the end of its fiscal year ending November 30.
E. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and
revenues reported in the financial statements. Actual results
could differ from those estimates.
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.
The Advisor currently intends to voluntarily waive all or a portion of
its fee and to 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 shares and a maximum of 2.25%
of the average daily net assets of the Fund's Investor Class shares.
There can be no assurance that the foregoing voluntary fee waivers or
reimbursements will continue. The Advisor has voluntarily waived a
portion of its fee amounting to $680 ($0.04 per share) and reimbursed
$36,288 of the operating expenses incurred by the Fund for the period
ending May 31, 1999.
The Fund's administrator, The Nottingham Company (the "Administrator"),
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 0.125% of the Fund's first $50 million of average daily
net assets, 0.10% of the next $50 million, and 0.075% 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. The contract with the Administrator provides that the aggregate
fees for the aforementioned administration, accounting, and
recordkeeping 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. The Administrator has
voluntarily waived a portion of its fees amounting to $1,523 ($0.07 per
share) for the period ending May 31, 1999.
North Carolina Shareholder Services, LLC (the "Transfer Agent") serves
as the Fund's transfer, dividend paying, and shareholder servicing
agent. The Transfer Agent maintains the records of each shareholder's
account, answers shareholder inquiries concerning accounts, processes
purchases and redemptions of the Fund's shares, acts as dividend and
distribution disbursing agent, and performs other shareholder servicing
functions.
(Continued)
<PAGE>
CAPITAL MANAGEMENT ENERGY FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1999
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 year ended May 31, the
Distributor did not retain any sales charges.
Certain Trustees and officers of the Trust are also officers or
directors of the Advisor, the Distributor, or the Administrator.
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 Class 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 Class Shares in the
Fund or support servicing of Investor Class Share shareholder accounts.
Such expenditures incurred as service fees may not exceed 0.25% per
annum of the Investor Class Shares' average daily net assets. The Fund
incurred $151 of such expenses for the period ending May 31, 1999.
NOTE 4 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $264,886 and $65,500, respectively, for the period ending
May 31, 1999.
