GrandView Investment Trust
Post Office Drawer 69
Rocky Mount, North Carolina 27802-0069
November 15, 1995
Telephone 919-972-9922
U.S. WATS 800-525-FUND
Facsimile 919-442-4226
To the Shareholders of the GrandView Realty Growth Fund:
We are pleased to enclose the semi-annual report for the GrandView Realty Growth
Fund. As is our custom, we are pleased to show our results in the table below
along with appropriate market benchmarks.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------=======================-------------------------
Period Ending Dow Jones S&P 500 GrandView GrandView GrandView
Utility Index Index REIT Index Realty Growth Realty Growth
(Total Return) (Total Return) (Total Return) Fund (NAV) Fund
(Total Return) (MOP)
(Total Return)
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months 4.92% 7.66% 11.30% 18.45% 14.90%
Ending 9/30/96
- ---------------------------------------------------------------------------------------------------------------------------------
One Year 7.20% 20.14% 18.29% 27.41% 23.59%
Ending 9/30/96
- ---------------------------------------------------------------------------------------------------------------------------------
Since Inception 15.27% 29.53% 23.53% 25.18% 21.43%
From 07/03/95
Ending 9/30/96
- ---------------------------------------------------------------------------------=======================-------------------------
</TABLE>
NAV= Net Asset Value (Without Sales Load)
MOP = Maximum Offering Price (With Sales Load)
We are extremely pleased with the overall performance of the GrandView Realty
Growth Fund over the last six months. The 18.45% total return exceeded the all
major stock market indices for the period, was 700 basis points above the
overall REIT market as measured by the GrandView REIT Index, and was the best
performing real estate fund for the period. These returns, coupled with the
previous six month performance, provided shareholders with exceptional total
returns in relation to all the various benchmarks. Shareholders, however, are
reminded that using short term returns, both good and bad, are not the best
measure of a evaluating a sector fund. In addition, past returns should never be
used as an indicator of future performance.
We do think that the past six month performance affirms the investment
philosophy of the fund in seeking capital gains opportunities in the real estate
securities industry. We are continuing our three prong investment philosophy
which includes high quality, well capitalized REITs, out of favor REITs and
small cap REITs. While we don't emphasis short term trading, we will take
advantage of short term buying and selling opportunities. This is one advantage
of a small fund versus our larger competitors in that we can efficiently move in
and out of positions which can greatly impact out performance but not impact the
particular securities price.
With the primary investment philosophy of growth of capital, we do expect that
The GrandView Realty Growth Fund will pay a significant capital gain
distribution in December of this year. Our secondary objective of dividend
income has allowed us to pay $0.17 over the last six months. We would expect
<PAGE>
our quarterly distributions to continue at about this rate in the future. In
addition, while the market in general experienced a mild correction in the mid
summer of 7-10%, your fund experienced positive returns throughout. We think
this shows the stabilizing influence a real estate fund can add to an investment
portfolio.
We are also please to inform you that your fund, in addition to all the
GrandView Funds are now available for 24 hour pricing and shareholder
information by calling 1-800-773-3863. Fund information is also available on
America On Line via keyword Morningstar as well in reports published by Lipper
Analytical, and Value Line. Finally, we are also listed in USA Today in the
first issue of every month in which all funds are ranked against their peers.
Again we thank you for your support and look forward to a prosperous future.
Should you have any questions or desire additional information, please feel free
to contact the Fund Administrator at 1-800- 525-3863, or the offices of
GrandView Advisers at 1-800-578-4301.
Winsor H. Aylesworth
President
GrandView Advisers
<PAGE>
GRANDVIEW REALTY GROWTH FUND
PORTFOLIO OF INVESTMENTS
September 30,1996
(Unaudited)
Value
Shares (note 1)
COMMON STOCKS - 84.96%
Real Estate Investment Trust - 84.96 %
American Real Estate Investment Corp 500 $3,875
(a)Angeles Participating Mortgage Trust 10,400 19,500
BRE Properties, Inc. 400 8,000
(a)Banyan Hotel Investment Fund 2,000 1,500
Bedford Property Investors, Inc. 600 8,550
Bradley Real Estate, Inc. 400 6,550
Burnham Pacific Properties, Inc. 800 9,400
(a)California Real Estate Investment Tr 3,000 7,500
Capstead Mortgage Corporation 450 9,281
Crescent Real Estate Equities, Inc. 300 12,337
Crown American Realty Trust 1,000 7,750
FAC Realty, Inc. 2,500 21,875
First Union Real Estate Investments 2,500 16,250
Health and Retirement Property Trust 250 4,469
Kimco Realty Corporation 250 7,437
(a)Koger Equity, Inc. 1,200 18,750
(a)Liberte Investors, Inc. 500 2,438
MGI Properties, Inc. 700 13,125
Merry Land & Investment Company, Inc 800 17,000
Public Storage, Inc. 400 9,050
Redwood Trust, Inc. 200 6,400
Sizeler Property Investors, Inc. 700 6,300
Spieker Properties, Inc. 250 7,344
Starwood Lodging Trust 350 14,613
Suntone Hotel Investors, Inc. 1,000 10,125
TIS Mortgage Investment Company 12,600 11,025
United Mobile Homes, Inc. 1,100 13,200
(a)Vinland Property Trust 2,200 15,400
Winston Hotels, Inc. 900 11,700
--- ------
Total Common Stocks (Cost $273,569) 300,744
======== =======
Principal
REPURCHASE AGREEMENT (b) - 11.62%
Wachovia Bank $41,152 41,152
5.75%, due October 1, 1996
(Cost $41,152)
Total Value of Investments (Cost $314,721 (c)) 96.58% 341,896
Other Assets Less Liabilities 3.42% 12,118
---- ------
Net Assets 100.00% $354,014
====== ========
See accompanying notes to financial statements (Continued)
<PAGE>
GRANDVIEW REALTY GROWTH FUND
PORTFOLIO OF INVESTMENTS
September 30,1996
(Unaudited)
(a)Non-income producing investment.
(b)The repurchase agreement is fully collateralized by U. S. government
and/or agency obligations based on market prices at the date of the
portfolio. The investment in the repurchase agreement is through
participation in a joint account with other funds administered by The
Nottingham Company.
(c)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 $35,860
Unrealized depreciation (8,685)
------
Net unrealized appreciation $27,175
=======
<PAGE>
GRANDVIEW REALTY GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996
(Unaudited)
ASSETS
Investments, at value (cost $273,569) $300,744
Repurchase agreement (cost $41,152) 41,152
Dividends receivable 891
Interest receivable 27
Receivable for investments sold 1,413
Receivable for fund shares sold 1,000
Prepaid expenses 4,945
Deferred organization expenses, net (note 4) 20,408
- ------
Total assets 370,580
=======
LIABILITIES
Accrued expenses 2,090
Due to investment advisor 13,919
Disbursements in excess of cash on demand deposit 557
------
Total liabilities 16,566
======
NET ASSETS
(applicable to 30,085 shares outstanding; unlimited
shares of no par value beneficial interest authorized) $354,014
========
NET ASSET VALUE AND REPURCHASE PRICE PER SHARE
($354,014 30,085 shares) $11.77
OFFERING PRICE PER SHARE
(100 95.5 of $11.77) $12.32
NET ASSETS CONSIST OF
Paid-in capital $309,880
Undistributed net investment income 44
Undistributed net realized gain on investments 16,915
Net unrealized appreciation on investments 27,175
--------
$354,014
========
See accompanying notes to financial statements
<PAGE>
GRANDVIEW REALTY GROWTH FUND
STATEMENT OF OPERATIONS
Period ended September 30, 1996
(Unaudited)
INVESTMENT INCOME
Income
Dividends $6,576
Interest 415
------
Total income 6,991
=====
Expenses
Fund accounting fees (note 2) 4,663
Professional fees 2,911
Custody fees 1,631
Investment advisory fees (note 2) 1,240
Registration and filing administration fees 748
Securities pricing fees 684
Fund administration fees (note 2) 372
Distribution fees (note 3) 310
Shareholder recordkeeping fees 71
Amortization of deferred organization expenses (note 4) 2,729
Shareholder servicing expenses 977
Other operating expenses 812
Printing expenses 302
Registration and filing expenses 68
Trustee fees and meeting expenses 57
-------
Total expenses 17,575
======
Less:
Expense reimbursements (note 2) (13,859)
Investment advisory fees waived (note 2) (1,240)
- ------
Net expenses 2,476
=======
Net investment income 4,515
======
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions 16,915
Increase in unrealized appreciation on investments 22,975
------
Net realized and unrealized gain on investments 39,890
------
Net increase in net assets resulting from operations $44,405
=======
See accompanying notes to financial statements
<PAGE>
GRANDVIEW REALTY GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the
period from
July 3, 1995
(commencement of
Period ended operations) to
September 30 March 31,
1996 1996
INCREASE IN NET ASSETS
Operations
Net investment income $4,515 $2,414
Net realized gain from investment transactions 16,915 3,462
Increase in unrealized appreciation on investments 22,975 4,200
------ -----
Net increase in net assets resulting from operations 44,405 10,076
====== ======
Distributions to shareholders from
Net investment income (4,471) (2,414)
Net realized gain from investment transactions 0 (3,462)
Tax return of capital 0 (851)
------ -------
Decrease in net assets resulting from distributions (4,471) (6,727)
====== ======
Capital share transactions
Increase in net assets resulting from capital share 132,058 178,673
------- -------
Total increase in net assets 171,992 182,022
======= =======
NET ASSETS
Beginning of period 182,022 0
------- --------
End of pe(including undistributed net investment income $354,014 $182,022
======== ========
of $44 as of September 30, 1996 and $0 as of
March 31, 1996)
(a) A summary of capital share activity follows:
For the period from July 3,
Period ended (commencement of operations) to
September 30,1996 March 31, 1996
Shares Value Shares Value
Shares sold 13,900 $150,660 18,289 $181,279
Shares issued for reinvestment
of distributions 281 3,157 526 5,247
----- ----- --- -----
14,181 153,817 18,815 186,526
====== ======= ====== =======
Shares redeemed (2,136) (21,759) (775) (7,853)
Net increase 12,045 $132,058 18,040 $178,673
====== ======== ====== ========
</TABLE>
See accompanying notes to financial statements
<PAGE>
GRANDVIEW REALTY GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the
period from
July 3, 1995
(commencement of
Period ended operations) to
September 30, March 31,
1996 1996
Net asset value, beginning of period $10.09 $10.00
Income from investment operations
Net investment income 0.17 0.20
Net realized and unrealized gain on investment 1.68 0.36
---- ----
Total from investment operations 1.85 0.56
==== ====
Distributions to shareholders from
Net investment income (0.17) (0.20)
Net realized gain from investment transactions 0.00 (0.22)
Tax return of capital 0.00 (0.05)
---- -----
Total distributions (0.17) (0.47)
----- -----
Net asset value, end of period $11.77 $10.09
====== ======
Total return 18.45 % 5.70 %
Ratios/supplemental data
Net assets, end of period $354,014 $182,022
Ratio of expenses to average net assets
Before expense reimbursements and waived fe 14.18 %(a 31.34 %(a)
After expense reimbursements and waived fee 1.99 %(a 2.00 %(a)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fe (8.54)%(a (25.55)%(a)
After expense reimbursements and waived fee 3.65 %(a 3.62 %(a)
Portfolio turnover rate 42.87 % 44.44 %
</TABLE>
(a) Annualized.
See accompanying notes to financial statements
<PAGE>
GRANDVIEW REALTY GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The GrandView Realty Growth Fund (the "Fund") is a non-diversified
series of shares of beneficial interest of the GrandView Investment
Trust (the "Trust"). The Trust, an open-end investment company, was
organized on February 6, 1995 as a Massachusetts Business Trust and is
registered under the Investment Company Act of 1940, as amended. The
Fund began operations on July 3, 1995. 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 the last sales price
as of 4:00 p.m., New York time on the day of valuation. 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 - At March 31, 1996, the Fund was
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 all taxable
income has been distributed to shareholders. 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.
The character of distributions made during the year from net
investment income or net realized gains from investment
transactions may differ from their ultimate characterization
for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or
realized gains are recorded by the Fund.
C. Investment Transactions - Investment transactions are recorded
on the trade date. Realized gains and losses are determined
using the specific identification cost method. Interest income
is recorded daily on an accrual basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend
date.
The Fund records distributions received from its investments
in real estate investment trusts that represent a tax return
of capital as a reduction of the cost basis of investments.
D. Distributions to Shareholders - The Fund generally declares
dividends quarterly, payable on a date selected by the Trust's
Trustees. In addition, distributions may be made annually in
December out of net realized gains through October 31 of that
year. The Fund may make a supplemental distribution subsequent
to the end of its fiscal year ending March 31.
<PAGE>
GRANDVIEW REALTY GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
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 estimated.
F. Repurchase Agreements - The Fund may acquire U. S. Government
Securities or corporate debt securities subject to repurchase
agreements. A repurchase agreement transaction occurs when the
Fund acquires a security and simultaneously resells it to the
vendor (normally a member bank of the Federal Reserve or a
registered Government Securities dealer) for delivery on an
agreed upon future date. The repurchase price exceeds the
purchase price by an amount which reflects an agreed upon
market interest rate earned by the Fund effective for the
period of time during which the repurchase agreement is in
effect. Delivery pursuant to the resale typically will occur
within one to five days of the purchase. The Fund will not
enter into a repurchase agreement which will cause more than
10% of its net assets to be invested in repurchase agreements
which extend beyond seven days. In the event of the bankruptcy
of the other party to a repurchase agreement, the Fund could
experience delays in recovering its cash or the securities
lent. To the extent that in the interim the value of the
securities purchased may have declined, the Fund could
experience a loss. In all cases, the creditworthiness of the
other party to a transaction is reviewed and found
satisfactory by the Advisor. Repurchase agreements are, in
effect, loans of Fund assets. The Fund will not engage in
reverse repurchase transactions, which are considered to be
borrowings under the Investment Company Act of 1940, as
amended.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, GrandView Advisers, 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 Fund's average daily net assets.
Currently, the Fund does not offer its shares for sale in states which
require limitations to be placed on its expenses. The Advisor currently
intends to voluntarily waive all or a portion of its fee and reimburse
expenses of the Fund to limit total Fund operating expenses to 2.00% of
the average daily net assets of the Fund. There can be no assurance
that the foregoing voluntary fee waivers or reimbursements will
continue. The Advisor has voluntarily waived its fee amounting to
$1,240 ($0.05 per share) and has voluntarily reimbursed $13,859 of the
Fund's operating expenses for the period ended September 30, 1996.
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 0.30% of the Fund's first $25 million of average daily
net assets, 0.275% of the next $25 million of average daily net assets,
and 0.225% of average daily net assets over $50 million. Additionally,
the Administrator charges the Fund for servicing of shareholder
accounts and registration of the Fund's shares. The Administrator also
charges the Fund for certain expenses involved with the daily valuation
of portfolio securities.
<PAGE>
GRANDVIEW REALTY GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
Capital Investment Group, Inc. (the "Distributor") serves as the Fund's
principal underwriter and distributor. The Distributor receives any
sales charges imposed on purchases of shares and re-allocates a portion
of such charges to dealers through whom the sale was made, if any. For
the period ended September 30, 1996, the Distributor retained no sales
charges.
Certain Trustees and officers of the Trust are also officers of the
Advisor, the Distributor or the Administrator.
At September 30, 1996, the Advisor, its officers, and Trustees of the
Fund held 8,875 shares or 29.5% of the Fund shares outstanding.
NOTE 3 - DISTRIBUTION AND SERVICE FEES
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company
Act of 1940 (the "Act"), adopted a distribution plan pursuant to Rule
12b-1 of the Act (the "Plan"). The Act regulates the manner in which a
regulated investment company may assume expenses of distributing and
promoting the sales of its shares and servicing of its shareholder
accounts.
The Plan provides that the Fund may incur certain expenses, which may
not exceed 0.25% per annum of the Fund's 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 shares of the Fund or support servicing
of shareholder accounts.
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
All expenses of the Fund incurred in connection with its organization
and the registration of its shares have been assumed by the Fund. The
organization expenses are being amortized over a period of sixty
months. Investors purchasing shares of the Fund bear such expenses only
as they are amortized against the Fund's investment income.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $238,082 and $94,241, respectively, for the period ended
September 30, 1996.
(Continued)
<PAGE>
