________________________________________________________________________________
CAPITAL MANAGEMENT MID-CAP FUND
________________________________________________________________________________
a series of the Capital Management Investment Trust
Annual Report 1999
FOR THE YEAR ENDED NOVEMBER 30
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
INCORPORATED
140 BROADWAY NEW YORK, N.Y. 10005
INVESTMENT ADVISORS TEL: (212) 320-2000
FAX: (212) 320-2040
Dear Fellow Shareholders:
As the year, decade, century, and millennium all draw to a close, U.S.
companies continue to reel in profits at a surprising clip, and equity investors
are enjoying another year of positive returns. We are pleased to report that,
once again, your fund has participated with a return in excess of 17% for the
twelve months ended November 30.
In terms of stock market action, 1999 has turned out to be in large
measure a mirror image of 1998, and almost a repeat of 1997. The two groups,
which were the bete noire of last year, are once again leading the market
averages: these being technology and energy. We began over weighting these
groups in late 1998, and until late summer they were our largest sector
concentration. In May we developed a more positive view of the economy, which
had significant strategy implications in terms of portfolio construction. We
began to rotate toward the many depressed groups that had not participated in
the narrow advance of 1998, specifically select capital goods and basic
industries. We also felt that the odds of a Fed tightening were increasing,
which lead us to begin thinking about reducing our tech weighting.
After an unusual degree of debate and uncertainty, the Federal Reserve
has cleared the policy air (for now) with its third 25-basis-point rate hike
since midyear. Along with a similar bump up in the discount rate, the return to
a 5.5% fed funds rate completes the unwinding of the last year's easing detour
and cements a relatively high level of real short-term interest rates into the
millennium. We continue to believe that the Fed is reasonably on track toward
keeping inflation in check and thereby maintaining conditions for sustainable
economic growth. However, the economy appears to be taking its medicine well -
perhaps a little too well, and financial conditions on balance are tightening
only hesitantly.
Chances are, barring a financial bolt from the blue, the Fed will have
to tighten again at some point in the next three to six months. We do not
believe the remaining task is significant, but the Fed probably cannot remain
comfortable that tightening is complete as long as imbalances (tight labor
markets, low savings, and record current account deficit) continue to
deteriorate. Also, there is a good chance that Y2K-related distortions are
beginning to cloud assessments of underlying economic activity and inflation.
This period of uncertainty could last through much of the first quarter, perhaps
hampering the Fed's ability to discern the appropriate monetary police. As such,
significant swings in equity markets are likely to continue. Investors are
balancing the influences of earnings reports against the ongoing weakness in
bonds and concerns about inflation. Rising interest rates have contained the
performance of U.S. equities since April, and in our view the expansion in
equity valuation measures likely peaked in the first quarter of 1999 and is not
expected to be a major force in the 1999/2000 time frame.
<PAGE>
Our present investment stance is that, notwithstanding current
volatility, broader market leadership is likely to unfold into 2000. We believe
that improved, broader-based earnings, driven primarily by global growth and
less by U.S. consumer growth, are unfolding. Presently, however, the gap between
performance of the S&P 500 top 50 stocks and the overall S&P 500 is wider than
in recent years. It appears that investors continue to seek strong growth and
are willing to pay a significant premium for it as long as growth persists. In
essence, the popular averages have been supported increasingly by a diminishing
number of stocks. As noted previously, we think this narrowness will change as
earnings gains continue, but until breadth improves the upside potential of the
market is likely to be limited.
In terms of market cap, mid- and small-cap stocks continue to show more
attractive valuations that the large caps.
Thank you for your support of the Capital Management Mid-Cap Fund, and
we look forward to serving you in the coming investment year.
C. Lennis Koontz, II, C.F.A.
President
December 2, 1999
<PAGE>
CAPITAL MANAGEMENT MID-CAP FUND
INSTITUTIONAL SHARES
Performance Update - $250,000 Investment
For the period from January 27, 1995 (Commencement of Operations)
to November 30, 1999
------------------------------------------------------------------------
Institutional S&P 400 Russell 2500
Shares Mid-Cap Index Index
------------------------------------------------------------------------
27-Jan-95 $250,000 $250,000 $250,000
28-Feb-95 260,950 262,369 262,480
31-May-95 280,704 278,878 279,504
31-Aug-95 304,612 310,987 315,156
30-Nov-95 307,511 323,827 324,294
29-Feb-96 313,391 338,624 342,173
31-May-96 338,926 357,925 375,203
31-Aug-96 332,125 347,749 356,438
30-Nov-96 367,685 384,443 387,294
28-Feb-97 375,531 396,031 397,455
31-May-97 414,220 423,012 419,630
31-Aug-97 474,283 477,328 468,817
30-Nov-97 492,411 489,952 479,159
28-Feb-98 526,789 540,574 515,674
31-May-98 511,976 549,380 515,243
31-Aug-98 384,830 432,544 389,794
30-Nov-98 438,528 540,789 462,105
28-Feb-99 459,341 551,979 457,118
31-May-99 509,967 614,836 516,569
31-Aug-99 512,128 612,250 516,098
30-Nov-99 519,246 656,353 548,886
This graph depicts the performance of the Capital Management Mid-Cap Fund
Institutional Shares versus the S&P 400 Mid-Cap Index and the Russell 2500
Index. It is important to note that the Capital Management Mid-Cap 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
- -------------------------------------------------
One Year Three Years Since Inception
- -------------------------------------------------
18.41% 12.19% 16.29%
- -------------------------------------------------
The graph assumes an initial $250,000 investment at January 27, 1995. All
dividends and distributions are reinvested.
At November 30, 1999, the value of the Capital Management Mid-Cap Fund
Institutional Shares would have grown to $519,246 - total investment return of
107.70% since January 27, 1995.
At November 30, 1999, a similar investment in the S&P 400 Mid-Cap Index would
have grown to $656,353 - total investment return of 162.54% since January 27,
1995; and a similar investment in the Russell 2500 Index would have grown to
$548,886 - total investment return of 119.55% since January 27, 1995. The Lipper
Capital Appreciation Index that was used in the prior year's annual report graph
for illustrative purposes is not used in this year's annual report graph because
the index is no longer in existence.
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.
<PAGE>
CAPITAL MANAGEMENT MID-CAP FUND
INVESTOR SHARES
Performance Update - $10,000 Investment
For the period from April 7, 1995 (Commencement of Operations)
to November 30, 1999
------------------------------------------------------------------------
Investor S&P 400 Russell 2500
Shares Mid-Cap Index Index
------------------------------------------------------------------------
7-Apr-95 $ 9,700 $10,000 $10,000
31-May-95 9,825 10,433 10,350
31-Aug-95 10,619 11,635 11,671
30-Nov-95 10,693 12,115 12,009
29-Feb-96 10,878 12,669 12,671
31-May-96 11,750 13,391 13,894
31-Aug-96 11,541 13,010 13,199
30-Nov-96 12,790 14,383 14,342
28-Feb-97 13,063 14,816 14,718
31-May-97 14,393 15,826 15,540
31-Aug-97 16,440 17,858 17,361
30-Nov-97 17,025 18,330 17,744
28-Feb-98 18,173 20,224 19,096
31-May-98 17,634 20,553 19,080
31-Aug-98 13,228 16,182 14,435
30-Nov-98 15,038 20,232 17,112
28-Feb-99 15,727 20,650 16,928
31-May-99 17,429 23,002 19,129
31-Aug-99 17,473 22,905 19,112
30-Nov-99 17,677 24,555 20,326
This graph depicts the performance of the Capital Management Mid-Cap Fund
Investor Shares versus the S&P 400 Mid-Cap Index and the Russell 2500 Index. It
is important to note that the Capital Management Mid-Cap 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
- ------------------------------------------------------------------------
One Year Three Years Since Inception
- ------------------------------------------------------------------------
No Sales Load 17.55% 11.39% 13.77%
- ------------------------------------------------------------------------
Maximum 3.0% Sales Load 14.02% 10.27% 13.03%
- ------------------------------------------------------------------------
The graph assumes an initial $10,000 investment at April 7, 1995 ($9,700 after
maximum sales load of 3.0%). All dividends and distributions are reinvested.
At November 30, 1999, the value of the Capital Management Mid-Cap Fund Investor
Shares would have grown to $17,677 - total investment return of 76.77% since
April 7, 1995. Without the deduction of the 3.0% maximum sales load, the value
of the Capital Management Mid-Cap Fund Investor Shares would have grown to
$18,224 - total investment return of 82.24% since April 7, 1995. The sales load
may be reduced or eliminated for larger purchases.
At November 30, 1999, a similar investment in the S&P 400 Mid-Cap Index would
have been worth $24,555 - total investment return of 145.55% since April 7,
1995; and a similar investment in the Russell 2500 Index would have grown to
$20,326 - total investment return of 103.26% since April 7, 1995. The Lipper
Capital Appreciation Index that was used in the prior year's annual report graph
for illustrative purposes is not used in this year's annual report graph because
the index is no longer in existence.
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.
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CAPITAL MANAGEMENT MID-CAP FUND
PORTFOLIO OF INVESTMENTS
November 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 88.68%
Advertising - 3.75%
(a)Outdoor Systems, Inc. .................................................. 5,750 $ 255,875
----------
Airlines - 2.80%
Southwest Airlines Co. ................................................. 11,750 190,937
----------
Computer Software & Services - 4.82%
(a)Compuware Corporation .................................................. 6,700 226,544
(a)Comverse Technology, Inc. .............................................. 850 102,744
----------
329,288
----------
Electrical Equipment - 2.62%
Avista Corporation ..................................................... 11,000 178,750
----------
Electronics - Semiconductor - 12.06%
(a)Analog Devices, Inc. ................................................... 1,700 97,750
(a)Applied Materials, Inc. ................................................ 800 78,000
Helix Technology Corporation ........................................... 3,000 121,453
(a)LSI Logic Corporation .................................................. 1,800 108,787
(a)National Semiconductor Corporation ..................................... 5,400 229,500
(a)PRI Automation, Inc. ................................................... 300 14,213
(a)Teradyne, Inc. ......................................................... 4,000 174,250
----------
823,953
----------
Financial - Banks, Commercial - 7.20%
Compass Bancshares, Inc. ............................................... 6,200 157,325
Old Kent Financial Corporation ......................................... 4,000 162,250
UnionBanCal Corporation ................................................ 3,900 172,331
----------
491,906
----------
Food - Processing - 2.82%
McCormick & Company, Incorporated ...................................... 6,000 192,375
----------
Forest Products & Paper - 3.50%
Bowater Incorporated ................................................... 3,500 171,500
Weyerhaeuser Company ................................................... 1,100 67,238
----------
238,738
----------
Machine - Diversified - 2.64%
Deere & Company ........................................................ 4,200 180,337
----------
Medical - Biotechnology - 3.03%
(a)Chiron Corporation ..................................................... 6,300 206,719
----------
(Continued)
</TABLE>
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CAPITAL MANAGEMENT MID-CAP FUND
PORTFOLIO OF INVESTMENTS
November 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Medical Supplies - 2.94%
C. R. Bard, Inc. ....................................................... 3,700 $ 200,956
----------
Oil & Gas - Domestic - 1.78%
El Paso Energy Corporation ............................................. 3,200 121,800
----------
Oil & Gas - Equipment & Services - 12.27%
Apache Corporation ..................................................... 5,000 179,063
ENSCO International Incorporated ....................................... 9,400 188,588
Halliburton Company .................................................... 4,000 154,750
(a)Nabors Industries, Inc. ................................................ 5,900 156,719
The Williams Companies, Inc. ........................................... 4,700 158,625
----------
837,745
----------
Pharmaceuticals - 3.88%
(a)IVAX Corporation ....................................................... 13,000 264,875
----------
Publishing - 2.36%
Houghton Mifflin Company ............................................... 4,400 161,425
----------
Publishing - Printing - 2.48%
(a)Valassis Communications, Inc. .......................................... 4,300 169,312
----------
Retail - Grocery - 2.55%
Hannaford Bros. Co. .................................................... 2,400 174,450
----------
Retail - Restaurants - 2.42%
Brinker International, Inc. ............................................ 7,300 165,163
----------
Retail - Specialty Line - 2.24%
Harcourt General, Inc. ................................................. 4,600 152,662
----------
Steel - Specialty - 2.71%
Texas Industries, Inc. ................................................. 5,100 184,875
----------
Utilities - Electric - 2.26%
IDACORP, Inc ........................................................... 5,500 154,000
----------
Utilities - Gas - 2.64%
Sempra Energy .......................................................... 9,774 180,208
----------
(Continued)
</TABLE>
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CAPITAL MANAGEMENT MID-CAP FUND
PORTFOLIO OF INVESTMENTS
November 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Utilities - Telecommunications - 2.91%
U S WEST, Inc. ......................................................... 3,200 $ 198,600
----------
Total Common Stocks (Cost $5,056,597) ............................................................ 6,054,949
----------
INVESTMENT COMPANIES - 9.21%
Evergreen Money Market Fund Institutional Money
Market Fund Institutional Service Shares ............................... 314,600 314,600
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares ............................... 314,600 314,600
----------
Total Investment Companies (Cost $629,200) ....................................................... 629,200
----------
Total Value of Investments (Cost $5,685,797 (b)) ................................... 97.89 % $6,684,149
Other Assets in Excess of Liabilities .............................................. 2.11 % 143,990
------ ----------
Net Assets .................................................................. 100.00 % $6,828,139
====== ==========
(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 .......................................................................... $1,167,757
Unrealized depreciation .......................................................................... (169,405)
----------
Net unrealized appreciation ...................................................... $ 998,352
==========
See accompanying notes to financial statements
</TABLE>
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CAPITAL MANAGEMENT MID-CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999
ASSETS
Investments, at value (cost $5,685,797) ...................................................................... $6,684,149
Cash ......................................................................................................... 168,710
Income receivable ............................................................................................ 5,201
----------
Total assets ............................................................................................ 6,858,060
----------
LIABILITIES
Accrued expenses ............................................................................................. 29,648
Other liabilities ............................................................................................ 273
----------
Total liabilities ....................................................................................... 29,921
----------
NET ASSETS .......................................................................................................... $6,828,139
==========
NET ASSETS CONSIST OF
Paid-in capital .............................................................................................. $5,314,995
Undistributed net realized gain on investments ............................................................... 514,792
Net unrealized oappreciation on investments .................................................................. 998,352
----------
$6,828,139
==========
INSTITUTIONAL CLASS
Net asset value, offering and redemption price per share ($5,796,478 / 345,045 shares outstanding) ........... $16.80
==========
INVESTOR CLASS
Net asset value, offering and redemption price per share ($1,031,661 / 62,862 shares outstanding) ............ $16.41
==========
Maximum offering price per share (100 / 97% of 16.41) ........................................................ $16.92
==========
See accompanying notes to financial statements
</TABLE>
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CAPITAL MANAGEMENT MID-CAP FUND
STATEMENT OF OPERATIONS
Year ended November 30, 1999
INVESTMENT INCOME
Income
Dividends ..................................................................................... $ 117,474
----------
Expenses
Investment advisory fees (note 2) ............................................................. 67,423
Fund administration fees (note 2) ............................................................. 8,430
Distribution and service fees - Investor Class (note 3) ....................................... 10,519
Custody fees .................................................................................. 3,205
Registration and filing administration fees (note 2) .......................................... 7,919
Fund accounting fees (note 2) ................................................................. 36,000
Audit fees .................................................................................... 10,300
Legal fees .................................................................................... 6,667
Securities pricing fees ....................................................................... 2,424
Shareholder recordkeeping fees ................................................................ 9,000
Other accounting fees (note 2) ................................................................ 3,731
Shareholder servicing expenses ................................................................ 2,842
Registration and filing expenses .............................................................. 13,697
Printing expenses ............................................................................. 7,000
Trustee fees and meeting expenses ............................................................. 8,468
Other operating expenses ...................................................................... 2,460
----------
Total expenses .......................................................................... 200,085
----------
Less:
Expense reimbursements (note 2) .................................................... (21,045)
Investment advisory fees waived (note 2) ........................................... (67,423)
----------
Net expenses ............................................................................ 111,617
----------
Net investment income .............................................................. 5,857
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ..................................................... 603,046
Increase in unrealized appreciation on investments ................................................. 500,396
----------
Net realized and unrealized gain on investments ............................................... 1,103,442
----------
Net increase in net assets resulting from operations .................................... $1,109,299
==========
See accompanying notes to financial statements
</TABLE>
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CAPITAL MANAGEMENT MID-CAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Year ended Year ended
November 30, November 30,
1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income (loss) ........................................................ $ 5,857 $ (3,416)
Net realized gain (loss) from investment transactions ............................... 603,046 (70,827)
Increase (decrease) in unrealized appreciation on investments ....................... 500,396 (795,106)
---------- ----------
Net increase (decrease) in net assets resulting from operations ................. 1,109,299 (869,349)
---------- ----------
Distributions to shareholders from
Net investment income - Institutional Class ......................................... (8,499) 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 ............................. (8,499) (922,688)
---------- ----------
Capital share transactions
(Decrease) increase in net assets resulting from capital share transactions (a) ..... (969,079) 1,303,097
---------- ----------
Total increase (decrease) in net assets .................................... 131,721 (488,940)
NET ASSETS
Beginning of year ........................................................................ 6,696,418 7,185,358
---------- ----------
End of year .............................................................................. $6,828,139 $6,696,418
========== ==========
(a) A summary of capital share activity follows:
--------------------------------------------------------------------------
Year ended Year ended
November 30, 1999 November 30, 1998
Shares Value Shares Value
--------------------------------------------------------------------------
- -----------------------------------------------
INSTITUTIONAL CLASS
- -----------------------------------------------
Shares sold ............................................. 68,421 $1,118,601 18,735 $ 299,573
Shares issued for reinvestment of distributions ......... 529 8,501 41,056 678,656
---------- ---------- ---------- ----------
68,950 1,127,102 59,791 978,229
Shares redeemed ......................................... (70,880) (1,111,573) (4,650) (73,195)
---------- ---------- ---------- ----------
Net (decrease) increase ............................ (1,930) $ 15,529 55,141 $ 905,034
========== ========== ========== ==========
- -----------------------------------------------
INVESTOR CLASS
- -----------------------------------------------
Shares sold ............................................. 2,985 $ 45,557 57,629 $ 941,702
Shares issued for reinvestment of distributions ......... 0 0 14,339 234,590
---------- ---------- ---------- ----------
2,985 45,557 71,968 1,176,292
Shares redeemed ......................................... (66,673) (1,030,165) (49,270) (778,229)
---------- ---------- ---------- ----------
Net (decrease) increase ............................ (63,688) $ (984,608) 22,698 $ 398,063
========== ========== ========== ==========
See accompanying notes to financial statements
</TABLE>
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CAPITAL MANAGEMENT MID-CAP FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
INSTITUTIONAL CLASS
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
January 27, 1995
(commencement of
Year ended Year ended Year ended Year ended operations) to
Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 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 .............................. 0.03 0.03 0.01 0.23 0.20
Net realized and unrealized gain (loss)
on investments ................................... 2.58 (1.70) 4.60 2.08 2.10
---------- ---------- ---------- ---------- ----------
Total from investment operations ............... 2.61 (1.67) 4.61 2.31 2.30
---------- ---------- ---------- ---------- ----------
Distributions to shareholders from
Net investment income .............................. (0.02) 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 ............................ (0.02) (2.32) (0.40) (0.48) (0.14)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period ............................ $16.80 $14.21 $18.20 $13.99 $12.16
========== ========== ========== ========== ==========
Total return (a) .......................................... 18.41 % (10.94)% 33.92 % 19.57 % 23.00 %
========== ========== ========== ========== ==========
Ratios/supplemental data
Net assets, end of period ............................ $5,796,478 $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 ...... 2.81 % 2.60 % 2.92 % 3.70 % 7.20 %(b)
After expense reimbursements and waived fees ....... 1.50 % 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 ...... (1.07)% (0.93)% (1.34)% (1.77)% (4.45)%(b)
After expense reimbursements and waived fees ....... 0.24 % 0.17 % 0.08 % 1.94 % 2.44 %(b)
Portfolio turnover rate .............................. 114.00 % 89.04 % 66.30 % 82.30 % 47.74 %
(a) Total return does not reflect payment of a sales charge.
(b) Annualized.
(Continued)
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CAPITAL MANAGEMENT MID-CAP FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
INVESTOR CLASS
- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
April 7, 1995
(commencement of
Year ended Year ended Year ended Year ended operations) to
Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 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 ....................... (0.11) (0.09) (0.05) 0.24 0.11
Net realized and unrealized gain (loss)
on investments ................................... 2.56 (1.67) 4.53 2.06 1.02
---------- ---------- ---------- ---------- ----------
Total from investment operations ............... 2.45 (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 ............................ $16.41 $13.96 $18.04 $13.96 $12.09
========== ========== ========== ========== ==========
Total return (a) .......................................... 17.55 % (11.67)% 33.11 % 19.61 % 10.24 %
========== ========== ========== ========== ==========
Ratios/supplemental data
Net assets, end of period ............................ $1,031,661 $1,766,893 $1,873,942 $ 746,136 $ 550,814
========== ========== ========== ========== ==========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ...... 3.56 % 3.35 % 3.71 % 4.45 % 7.18 %(b)
After expense reimbursements and waived fees ....... 2.25 % 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 ...... (1.82)% (1.67)% (2.10)% (2.50)% (4.23)%(b)
After expense reimbursements and waived fees ....... (0.51)% (0.57)% (0.63)% 1.95 % 1.89 %(b)
Portfolio turnover rate .............................. 114.00 % 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
</TABLE>
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CAPITAL MANAGEMENT MID-CAP FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1999
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
$0.01 par value beneficial interest shares that are authorized, 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 - The Fund is considered a personal
holding company as defined under Section 542 of the Internal
Revenue Code since 50% of the value of the Fund's shares were
owned directly or indirectly by five or fewer individuals at
certain times during the last year. As a personal holding
company, the Fund is subject to federal income taxes on
undistributed personal holding company income at the maximum
individual income tax rate. 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.
(Continued)
<PAGE>
CAPITAL MANAGEMENT MID-CAP FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1999
As a result of the Fund's operating net investment loss, a
reclassification adjustment of $2,644 has been made on the
statement of assets and liabilities to decrease accumulated
net investment loss, bringing it to zero, and decrease
undistributed net realized gain on investments.
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.
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 $67,423 ($0.17 per share) and reimbursed $21,045 of the
operating expenses incurred by the Fund for the year ended November 30,
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.
(Continued)
<PAGE>
CAPITAL MANAGEMENT MID-CAP FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 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.
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 November 30,
1999, the Distributor retained sales charges in the amount of $168.
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 $10,519 of such
expenses under the Plan for the year ended November 30, 1999.
NOTE 4 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $6,902,859 and $7,697,225 respectively, for the year ended
November 30, 1999.
NOTE 5 - DISTRIBUTIONS TO SHAREHOLDERS
For federal income tax purposes, the Fund must report distributions
from net realized gain from investment transactions that represent
long-term capital gain to its shareholders. The total $0.02 per share
distributions for the year ended November 30, 1999, represents ordinary
distributions. Shareholders should consult a tax advisor on how to
report distributions for state and local income tax purposes.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees of Capital Management Investment Trust and Shareholders
of Capital Management Mid-Cap Fund:
We have audited the accompanying statement of assets and liabilities of Capital
Management Mid-Cap Fund (the "Fund")(a portfolio of Capital Management
Investment Trust), including the portfolio of investments, as of November 30,
1999, and the related statement of operations for the year then ended, the
statement of changes in net assets, and the financial highlights for each of the
two years then ended. 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
audits.
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 included confirmation of the securities owned as of
November 30, 1999, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
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, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Capital Management Mid-Cap Fund as of November 30, 1999, the results of its
operations for the year then ended, the changes in its net assets, and the
financial highlights for each of the two years then ended, in conformity with
generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
December 17, 1999
<PAGE>
________________________________________________________________________________
CAPITAL MANAGEMENT SMALL-CAP FUND
________________________________________________________________________________
a series of the Capital Management Investment Trust
Annual Report 1999
FOR THE YEAR ENDED NOVEMBER 30
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
<PAGE>
CAPITAL MANAGEMENT ASSOCIATES
INCORPORATED
140 BROADWAY NEW YORK, N.Y. 10005
INVESTMENT ADVISORS TEL: (212) 320-2000
FAX: (212) 320-2040
Dear Fellow Shareholders:
The year 1999 marked the beginning of the Capital Management Small-Cap
Fund, and I am pleased to report that your fund is off to a rousing start with a
total return of 32.2% for investor shares for the period January 12, 199,
through December 31, 1999.
Looking ahead, we expect stock markets in general to be tugged back and
forth by continued above-average corporate earnings on the plus side and by the
fear of higher interest rates on the negative side. No doubt, small-stock shares
will participate in these moves, as recent volatility has shown. The good news
remains, however, that relative valuations in the small-stock sector are still
near historic lows, even after the rally of 1999. In other word, while the road
may be bumpy in the near term, the one- to two-year outlook for small-company
investments is excellent.
Thank you for your support in our initial year, and we look forward to
serving you in the future.
C. Lennis Koontz, II, CFA
President
January 4, 2000
<PAGE>
CAPITAL MANAGEMENT SMALL-CAP FUND
INSTITUTIONAL SHARES
Performance Update - $250,000 Investment
For the period from January 12, 1999 (Commencement of Operations)
to November 30, 1999
- -----------------------------------------------------
Institutional S&P 600 Small-Cap
Shares Index
- -----------------------------------------------------
12-Jan-99 $250,000 $250,000
31-Jan-99 259,554 247,859
28-Feb-99 250,227 225,531
31-Mar-99 249,090 228,446
30-Apr-99 271,383 243,534
31-May-99 286,397 249,462
30-Jun-99 303,458 263,659
31-Jul-99 306,415 261,345
31-Aug-99 299,136 249,843
30-Sep-99 301,183 250,906
31-Oct-99 308,917 250,276
30-Nov-99 316,424 260,905
This graph depicts the performance of the Capital Management Small-Cap Fund
Institutional Shares versus the S&P 600 Small-Cap Index. It is important to note
that the Capital Management Small-Cap Fund is a professionally managed mutual
fund while the index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
Cumulative Total Return
- -------------------------
Since 1/12/99
- -------------------------
26.57%
- -------------------------
The graph assumes an initial $250,000 investment at January 12, 1999. All
dividends and distributions are reinvested.
At November 30, 1999, the value of the Capital Management Small-Cap Fund
Institutional Shares would have grown to $316,424 - total investment return of
26.57% since January 12, 1999.
At November 30, 1999, a similar investment in the S&P 600 Small-Cap Index would
have grown to $260,905 - total investment return of 4.36% since January 12,
1999.
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.
<PAGE>
CAPITAL MANAGEMENT SMALL-CAP FUND
INVESTOR SHARES
Performance Update - $10,000 Investment
For the period from January 12, 1999 (Commencement of Operations)
to November 30, 1999
- -----------------------------------------------------
Investor S&P 600 Small-Cap
Shares Index
- -----------------------------------------------------
12-Jan-99 $ 9,700 $10,000
31-Jan-99 10,062 9,914
28-Feb-99 9,691 9,021
31-Mar-99 9,647 9,138
30-Apr-99 10,503 9,741
31-May-99 11,077 9,978
30-Jun-99 11,730 10,546
31-Jul-99 11,836 10,454
31-Aug-99 11,545 9,994
30-Sep-99 11,615 10,036
31-Oct-99 11,907 10,011
30-Nov-99 12,198 10,436
This graph depicts the performance of the Capital Management Small-Cap Fund
Investor Shares versus the S&P 600 Small-Cap Index. It is important to note that
the Capital Management Small-Cap Fund is a professionally managed mutual fund
while the index is not available for investment and is unmanaged. The comparison
is shown for illustrative purposes only.
Cumulative Total Return
- ------------------------- ----------------
No Sales Load 25.75%
- ------------------------- ----------------
Maximum 3.0% Sales Load 21.98%
- ------------------------- ----------------
The graph assumes an initial $10,000 investment at January 12, 1999 ($9,700
after maximum sales load of 3.0%). All dividends and distributions are
reinvested.
At November 30, 1999, the value of the Capital Management Small-Cap Fund
Investor Shares would have grown to $12,198 - total investment return of 21.98%
since January 12, 1999. Without the deduction of the 3.0% maximum sales load,
the value of the Capital Management Small-Cap Fund Investor Shares would have
grown to $12,575 - total investment return of 25.75% since January 12, 1999. The
sales load may be reduced or eliminated for larger purchases.
At November 30, 1999, a similar investment in the S&P 600 Small-Cap Index would
have grown to $10,436 - total investment return of 4.36% since January 12, 1999.
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.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
CAPITAL MANAGEMENT SMALL-CAP FUND
PORTFOLIO OF INVESTMENTS
November 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 76.98%
Broadcast - Radio & Television - 1.71%
(a)Cox Radio, Inc. .......................................................... 50 $ 3,800
--------
Chemicals - 2.15%
MacDermid, Incorporated .................................................. 125 4,758
--------
Computer Software & Services - 5.90%
(a)Digi International Inc. .................................................. 150 2,419
(a)MICROS Systems, Inc. ..................................................... 100 5,056
(a)Proxim, Inc. ............................................................. 100 5,600
--------
13,075
--------
Electrical Equipment - 2.21%
Baldor Electric Company .................................................. 250 4,891
--------
Electronics - Semiconductor - 12.93%
(a)Brooks Automation, Inc. .................................................. 200 5,450
(a)Burr-Brown Corporation ................................................... 100 4,431
(a)Credence Systems Corporation ............................................. 100 5,794
Helix Technology Corporation ............................................. 100 4,048
(a)Novellus Systems, Inc. ................................................... 50 4,106
(a)Photronics, Inc. ......................................................... 200 4,825
--------
28,654
--------
Entertainment - 1.89%
(a)Pixar, Inc. .............................................................. 100 4,200
--------
Financial - Banks, Commercial - 8.20%
Carolina First Corporation ............................................... 200 4,087
Cullen/Frost Bankers, Inc. ............................................... 150 4,256
FirstMerit Corporation ................................................... 150 3,895
JSB Financial, Inc. ...................................................... 100 5,925
--------
18,163
--------
Forest Production & Paper - 2.15%
Pope & Talbot, Inc. ...................................................... 400 4,775
--------
Household Products & Housewares - 2.53%
Church & Dwight Co., Inc. ................................................ 200 5,600
--------
Insurance - Life & Health - 1.57%
Hooper Holmes, Inc. ...................................................... 150 3,488
--------
(Continued)
</TABLE>
<PAGE>
<TABLE>
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CAPITAL MANAGEMENT SMALL-CAP FUND
PORTFOLIO OF INVESTMENTS
November 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Leisure Time - 2.05%
(a)The Topps Company, Inc. .................................................. 400 $ 4,550
--------
Machine - Construction & Mining - 3.51%
(a)Astec Industries, Inc. ................................................... 200 4,975
(a)Terex Corporation ........................................................ 100 2,800
--------
7,775
--------
Office & Business Equipment - 2.09%
John H. Harland Company .................................................. 250 4,641
--------
Oil & Gas - Equipment & Services - 6.14%
(a)R&B Falcon Corporation ................................................... 400 4,950
(a)Rowan Companies, Inc. .................................................... 250 4,281
(a)Veritas DGC Inc. ......................................................... 300 4,369
--------
13,600
--------
Oil & Gas - Exploration - 5.15%
Cabot Oil & Gas Corporation .............................................. 250 3,828
EOG Resources, Inc. ...................................................... 200 3,712
(a)Newfield Exploration Company ............................................. 150 3,872
--------
11,412
--------
Real Estate Investment Trust - 1.44%
Crown American Realty Trust .............................................. 500 3,188
--------
Restaurants & Food Service - 5.63%
(a)NPC International, Inc. .................................................. 400 5,050
(a)Ryan's Family Steak Houses, Inc. ......................................... 400 3,950
(a)Taco Cabana, Inc. ........................................................ 400 3,475
--------
12,475
--------
Retail - Apparel - 1.81%
Spiegel, Inc. ............................................................ 500 4,000
--------
Utilities - Electric - 1.47%
Cleco Corporation ........................................................ 100 3,262
--------
Utilities - Gas - 2.65%
South Jersey Industries, Inc. ............................................ 200 5,863
--------
(Continued)
</TABLE>
<PAGE>
<TABLE>
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CAPITAL MANAGEMENT SMALL-CAP FUND
PORTFOLIO OF INVESTMENTS
November 30, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - (Continued)
Utilities - Water - 3.80%
Connecticut Water Service, Inc. .......................................... 100 $ 3,400
United Water Resources Inc. .............................................. 150 5,025
--------
8,425
--------
Total Common Stocks (Cost $157,331) ............................................................... 170,595
--------
INVESTMENT COMPANIES - 10.03%
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares ................................. 11,119 11,119
Evergreen Money Market Treasury Institutional Treasury
Money Market Fund Institutional Service Shares ........................... 11,118 11,118
--------
Total Investment Companies (Cost $22,237) .......................................................... 22,237
--------
Total Value of Investments (Cost $179,568 (b)) ............................................ 87.01% $192,832
Other Assets Less Liabilities ............................................................. 12.99% 28,776
------ --------
Net Assets ......................................................................... 100.00% $221,608
====== ========
(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 .......................................................................... $ 20,299
Unrealized depreciation .......................................................................... (7,035)
--------
Net unrealized appreciation $ 13,264
========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
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CAPITAL MANAGEMENT SMALL-CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999
ASSETS
Investments, at value (cost $179,568) ............................................................... $192,832
Cash ................................................................................................ 42,162
Income receivable ................................................................................... 249
Due from advisor (note 2) ........................................................................... 7,293
--------
Total assets ................................................................................... 242,536
--------
LIABILITIES
Accrued expenses .................................................................................... 20,928
--------
NET ASSETS ................................................................................................. $221,608
========
NET ASSETS CONSIST OF
Paid-in capital ..................................................................................... $180,052
Undistributed net realized gain on investments ...................................................... 28,292
Net unrealized appreciation on investments .......................................................... 13,264
--------
$221,608
========
INSTITUTIONAL CLASS
Net asset value, offering and redemption price per share ............................................ $13.91
($158,754 / 11,411 shares outstanding) ========
INVESTOR CLASS
Net asset value, offering and redemption price per share ............................................ $13.82
($62,854 / 4,550 shares outstanding) ========
Maximum offering price per share (100 / 97% of $13.82) .............................................. $14.25
========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
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CAPITAL MANAGEMENT SMALL-CAP FUND
STATEMENT OF OPERATIONS
Period from January 12, 1999
(commencement of operations)
to November 30, 1999
INVESTMENT LOSS
Income
Dividends ....................................................................................... $ 2,165
--------
Expenses
Investment advisory fees (note 2) ............................................................... 1,608
Fund administration fees (note 2) ............................................................... 201
Distribution and service fees - Investor Class (note 3) ......................................... 375
Custody fees .................................................................................... 3,783
Registration and filing administration fees (note 2) ............................................ 522
Fund accounting fees (note 2) ................................................................... 31,441
Audit fees ...................................................................................... 10,100
Legal fees ...................................................................................... 6,668
Securities pricing fees ......................................................................... 2,524
Shareholder recordkeeping fees .................................................................. 7,500
Other accounting fees (note 2) .................................................................. 10,346
Shareholder servicing expenses .................................................................. 1,470
Registration and filing expenses ................................................................ 1,759
Printing expenses ............................................................................... 3,518
Trustee fees and meeting expenses ............................................................... 7,000
Other operating expenses ........................................................................ 1,393
--------
Total expenses ............................................................................ 90,208
--------
Less:
Expense reimbursements (note 2) ...................................................... (84,291)
Investment advisory fees waived (note 2) ............................................. (1,608)
Other accounting fees waived (note 2) ................................................ (1,519)
--------
Net expenses .............................................................................. 2,790
--------
Net investment loss .................................................................. (625)
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ....................................................... 28,917
Increase in unrealized appreciation on investments ................................................... 13,264
--------
Net realized and unrealized gain on investments ................................................. 42,181
--------
Net increase in net assets resulting from operations ...................................... $ 41,556
========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
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CAPITAL MANAGEMENT SMALL-CAP FUND
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Period ended
November 30,
1999 (b)
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment loss ............................................................................. $ (625)
Net realized gain from investment transactions .................................................. 28,917
Increase in unrealized appreciation on investments .............................................. 13,264
---------
Net increase in net assets resulting from operations ....................................... 41,556
---------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ............................ 180,052
---------
Total increase in net assets .......................................................... 221,608
NET ASSETS
Beginning of period .................................................................................... 0
---------
End of period .......................................................................................... $ 221,608
=========
(a) A summary of capital share activity follows:
--------------------------------
Period ended
November 30, 1999 (b)
Shares Value
--------------------------------
- --------------------------
INSTITUTIONAL CLASS
- --------------------------
Shares sold ............................................................................ 11,411 $ 130,052
Shares redeemed ........................................................................ 0 0
--------- ---------
Net increase .................................................................... 11,411 $ 130,052
========= =========
- --------------------------
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 November 30, 1999.
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
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CAPITAL MANAGEMENT SMALL-CAP FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional Investor
Class Class
- ------------------------------------------------------------------------------------------------------------------------------------
Period ended Period ended
November 30, November 30,
1999 (a) 1999 (a)
-------------- -------------
Net asset value, beginning of period ................................................ $10.99 $10.99
Income from investment operations
Net investment loss ......................................................... (0.01) (0.10)
Net realized and unrealized gain on investments ............................. 2.93 2.93
-------- --------
Total from investment operations ........................................ 2.92 2.83
-------- --------
Net asset value, end of period ...................................................... $13.91 $13.82
======== ========
Total return (b) .................................................................... 26.57 % 25.75 %
======== ========
Ratios/supplemental data
Net assets, end of period ...................................................... $158,754 $ 62,854
======== ========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ............................... 55.71 % (c) 56.45 % (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 ............................... (54.36)% (c) (55.11)% (c)
After expense reimbursements and waived fees ................................ (0.15)% (c) (0.91)% (c)
Portfolio turnover rate ........................................................ 145.58 % 145.58 %
(a) For the period beginning January 12, 1999 (commencement of operations) to November 30, 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
November 30, 1999
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 - The Fund is considered a personal
holding company as defined under Section 542 of the Internal
Revenue Code since 50% of the value of the Fund's shares were
owned directly or indirectly by five or fewer individuals at
certain times during the last half of the year. As a personal
holding company, the Fund is subject to federal income taxes
on undistributed personal holding company income at the
maximum individual income tax rate. 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.
(Continued)
<PAGE>
CAPITAL MANAGEMENT SMALL-CAP FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1999
As a result of the Fund's operating net investment loss, a
reclassification adjustment of $625 has been made on the
statement of assets and liabilities to decrease accumulated
net investment loss, bringing it to zero, and decrease
undistributed net realized gain on investments.
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.
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 $1,608 ($0.11 per share) and reimbursed
$84,291 of the operating expenses incurred by the Fund for the period
ended November 30, 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 $4,000 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 ended November 30, 1999.
(Continued)
<PAGE>
CAPITAL MANAGEMENT SMALL-CAP FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 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.
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 November 30,
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 $375 of such expenses for the period ended November 30, 1999.
NOTE 4 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $360,026 and $231,612, respectively, for the period ended
November 30, 1999.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees of Capital Management Investment Trust and Shareholders
of Capital Management Small-Cap Fund:
We have audited the accompanying statement of assets and liabilities of Capital
Management Small-Cap Fund(the "Fund") (a portfolio of Capital Management
Investment Trust), including the portfolio of investments, as of November 30,
1999, and the related statements of operations and of changes in net assets and
the financial highlights for the period from January 12, 1999 (commencement of
operations) to November 30, 1999. 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 audit 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 included confirmation of the securities owned as of November 30,
1999, by correspondence with the custodian and broker. 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 audit provides 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
Capital Management Small-Cap Fund as of November 30 1999, the results of its
operations, the changes in its net assets and the financial highlights for the
period from January 12, 1999 to November 30, 1999, in conformity with generally
accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
December 17, 1999
