<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REIT INDEX FUND
PORTFOLIO OF INVESTMENTS
September 30, 1997
(Unaudited)
Value
Shares (note 1)
---------------- ----------------
COMMON STOCKS - 97.44%
Real Estate Investment Trusts - 97.44%
Avalon Properties, Inc. 897 $26,686
BRE Properties, Inc. 845 23,871
Bay Apartment Communities, Inc. 523 20,887
Beacon Properties Corporation 1,256 57,540
Boston Properties, Inc. 776 25,463
CWM Mortgage Holdings, Inc. 1,208 30,200
Cali Realty Corporation 753 31,344
Camden Property Trust 615 18,834
Capstead Mortgage Corporation 1,045 27,170
CarrAmerica Realty Corporation 1,346 43,072
Charles E. Smith Residential Realty, Inc. 573 19,482
Chateau Properties, Inc. 465 13,717
Chelsea GCA Realty, Inc. 208 8,684
Cousins Properties, Inc. 632 18,920
Crescent Real Estate Equities Company 2,146 86,108
Developers Diversified Realty Corporation 567 22,680
Duke Realty Investments, Inc. 1,408 32,120
Dynex Capital, Inc. 987 14,188
Equity Residential Properties Trust 1,586 86,536
Federal Realty Investment Trust 942 23,727
FelCor Suite Hotels, Inc. 641 26,321
First Industrial Realty Trust, Inc. 672 22,848
Franchise Finance Corporation of America 864 23,814
General Growth Properties 687 25,419
Health Care Property Investors, Inc. 725 28,094
Health and Retirement Property Trust 2,229 42,072
Highwoods Properties, Inc. 796 28,158
Horizon Group, Inc. 386 4,656
Hospitality Properties Trust 589 20,836
Kimco Realty Corporation 742 25,831
Liberty Property Trust 943 25,402
Manufactured Home Communities, Inc. 589 15,314
Meditrust Corporation 1,375 57,063
Merry Land & Investment Company, Inc. 850 18,753
National Health Investors, Inc. 602 23,403
Nationwide Health Properties, Inc. 912 21,945
New Plan Realty Trust 1,377 32,532
Patriot American Hospitality, Inc. 1,090 34,744
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REIT INDEX FUND
PORTFOLIO OF INVESTMENTS
September 30, 1997
(Unaudited)
Value
Shares (note 1)
---------------- ----------------
COMMON STOCKS - (Continued)
Real Estate Investment Trusts - (Continued)
Post Properties, Inc. 554 $22,022
Public Storage, Inc. 2,111 62,538
Realty Income Corporation 398 10,721
Reckson Associates Realty Corporation 756 20,129
Security Capital Atlantic Incorporated 1,089 24,366
Security Capital Pacific Trust 1,720 40,420
Security Capital Industrial Trust 2,409 56,160
Security Capital Group - WT WI 280 2,154
Shurgard Storage Centers, Inc. 659 19,276
Simon DeBartolo Group, Inc. 2,201 72,633
Spieker Properties, Inc. 1,043 42,307
Starwood Lodging Trust 1,008 57,897
Storage USA, Inc. 647 26,284
Sun Communities, Inc. 372 13,346
Tanger Factory Outlet Centers, Inc. 173 5,093
Taubman Centers, Inc. 868 11,121
The Macerich Company 608 17,632
TriNet Corporate Realty Trust, Inc. 388 13,629
United Dominion Realty Trust, Inc. 1,929 28,935
Vornado Realty Trust 569 48,329
Washington Real Estate Investment Trust 566 9,622
Weingarten Realty Investors 551 22,040
Westfield America, Inc. 1,802 29,958
----------------
Total Common Stocks (Cost $1,501,185) 1,765,046
----------------
INVESTMENT COMPANY - 0.86%
Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares 15,667 15,667
----------------
(Cost $15,667)
Total Value of Investments (Cost $1,516,852 (b)) 98.30% $1,780,713
Other Assets Less Liabilities 1.70% 30,794
---------------- ----------------
Net Assets 100.00% $1,811,507
================ ================
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REIT INDEX FUND
PORTFOLIO OF INVESTMENTS
September 30, 1997
(Unaudited)
(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 $270,921
Unrealized depreciation (7,060)
----------------
Net unrealized appreciation $263,861
================
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REIT INDEX FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1997
(Unaudited)
ASSETS
Investments, at value (cost $1,516,852) .......................................................... $1,780,713
Income receivable ............................................................................... 8,588
Reserve premium .................................................................................. 50
Deferred organization expenses, net (note 4) ..................................................... 14,966
Due from advisor (note 2) ........................................................................ 10,524
----------
Total assets ................................................................................ 1,814,841
----------
LIABILITIES
Accrued expenses ................................................................................. 382
Disbursements in excess of cash on demand deposit ................................................ 2,952
----------
Total liabilities ........................................................................... 3,334
----------
NET ASSETS
(applicable to 127,454 shares outstanding; unlimited
shares of no par value beneficial interest authorized) ........................................... $1,811,507
==========
NET ASSET VALUE, REDEMPTION, AND OFFERING PRICE PER SHARE
($1,811,507 / 127,454 shares) .................................................................... $ 14.21
==========
MAXIMUM OFFERING PRICE PER SHARE
(100 / 97% of $14.21) ............................................................................ $ 14.65
==========
NET ASSETS CONSIST OF
Paid-in capital .................................................................................. $1,512,708
Undistributed net investment income .............................................................. 204
Undistributed net realized gain on investments ................................................... 34,734
Net unrealized appreciation on investments ....................................................... 263,861
----------
$1,811,507
==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REIT INDEX FUND
STATEMENT OF OPERATIONS
Period ended September 30, 1997
(Unaudited)
INVESTMENT INCOME
Income
Dividends ..................................................................................... $ 45,834
Interest ...................................................................................... 454
---------
Total income ............................................................................. 46,288
---------
Expenses
Investment advisory fees (note 2) ............................................................. 2,808
Fund administration fees (note 2) ............................................................. 1,805
Custody fees .................................................................................. 3,195
Registration and filing administration fees (note 2) .......................................... 1,178
Fund accounting fees (note 2) ................................................................. 7,200
Audit fees .................................................................................... 4,043
Legal fees .................................................................................... 1,223
Securities pricing fees ....................................................................... 288
Shareholder recordkeeping fees ................................................................ 301
Shareholder servicing expenses ................................................................ 1,980
Registration and filing expenses .............................................................. 6,100
Printing expenses ............................................................................. 845
Amortization of deferred organization expenses (note 4) ....................................... 2,729
Trustee fees and meeting expenses ............................................................. 258
Other operating expenses ...................................................................... 2,224
---------
Total expenses ........................................................................... 36,177
---------
Less:
Expense reimbursements (note 2) .................................................... (24,955)
Investment advisory fees waived (note 2) ........................................... (2,808)
---------
Net expenses ............................................................................. 8,414
---------
Net investment income .............................................................. 37,874
---------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ..................................................... 38,518
Increase in unrealized appreciation on investments ................................................. 173,061
---------
Net realized and unrealized gain on investments ............................................... 211,579
---------
Net increase in net assets resulting from operations ..................................... $ 249,453
=========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REIT INDEX FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
----------------------------------
Period ended Year ended
September 30, March 31,
1997 1997
----------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income ............................................................... $37,874 $26,606
Net realized gain (loss) from investment transactions ............................... 38,518 (3,402)
Increase in unrealized appreciation on investments .................................. 173,061 91,681
------- ------
Net increase in net assets resulting from operations ............................. 249,453 114,885
------- -------
Distributions to shareholders from
Net investment income ............................................................... (37,670) (26,606)
Tax return of capital ............................................................... 0 (5,692)
Net realized gain from investment transactions ...................................... 0 (479)
------- ------
Decrease in net assets resulting from distributions .............................. (37,670) (32,777)
------- -------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ................ 132,626 1,132,197
------- ---------
Total increase in net assets .................................................. 344,409 1,214,305
NET ASSETS
Beginning of period .................................................................... 1,467,098 252,793
--------- -------
End of period (including undistributed net investment income ........................... $1,811,507 $1,467,098
of $204 at September 30, 1997) ========== ==========
(a) A summary of capital share activity follows:
--------------------------- ----------------------------
Period ended Year ended
September 30, 1997 March 31, 1997
--------------------------- ----------------------------
Shares Value Shares Value
Shares sold .................................... 17,693 $225,012 100,474 $1,238,757
Shares issued for reinvestment
of distributions ............................. 2,359 32,120 2,066 24,781
----- ------ ----- ------
20,052 257,132 102,540 1,263,538
Shares redeemed ................................ (9,651) (124,506) (10,250) (131,341)
------ -------- ------- --------
Net increase ................................. 10,401 $132,626 92,290 $1,132,197
====== ======== ====== ==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REIT INDEX FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
----------------------------------------------------------
For the
period from
July 3, 1995
(commencement of
Period ended Year ended operations) to
September 30, March 31, March 31,
1997 1997 1996
----------------------------------------------------------
Net asset value, beginning of period ................................ $12.53 $10.21 $10.00
Income from investment operations
Net investment income ......................................... 0.30 0.50 0.33
Net realized and unrealized gain on investments ............... 1.68 2.38 0.32
--------------- ------------- -----------
Total from investment operations ........................... 1.98 2.88 0.65
Distributions to shareholders from
Net investment income ......................................... (0.30) (0.50) (0.33)
Tax return of capital ......................................... 0.00 (0.05) 0.00
Net realized gain from investment transactions ................ 0.00 (0.01) (0.11)
--------------- ------------- -----------
Total distributions ........................................ (0.30) (0.56) (0.44)
Net asset value, end of period ...................................... $14.21 $12.53 $10.21
=============== ============= ===========
Total return (a) .................................................... 15.92% 28.85% 6.40%
=============== ============= ===========
Ratios/supplemental data
Net assets, end of period ........................................ $1,811,507 $1,467,098 $252,793
=============== ============= ===========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ................. 4.51 %(b) 7.59 % 20.63 %(b)
After expense reimbursements and waived fees .................. 1.05 %(b) 1.04 % 1.05 %(b)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ................. 1.26 %(b) (2.16)% (13.66)%(b)
After expense reimbursements and waived fees .................. 4.73 %(b) 4.38 % 5.86 %(b)
Portfolio turnover rate .......................................... 11.57 % 23.80 % 47.46 %
Average broker commissions per share (c) ......................... $0.0720 $0.07 --
(a) Total return does not reflect payment of sales charge.
(b) Annualized.
(c) Represents total commission paid on portfolio securities divided by total portfolio shares purchased or sold on which
commissions were charged.
See accompanying notes to financial statements
</TABLE>
<PAGE>
GRANDVIEW REIT INDEX FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The GrandView REIT Index Fund (the "Fund") is a diversified series of
shares of beneficial interest of the GrandView Investment Trust (the
"Trust"). The Trust, an open-ended 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 primary objective of
the Fund is long-term growth of capital by selecting investments which are
equity securities of real estate industry companies which are undervalued
or have significant "turnaround" potential. The Fund began operations on
July 3, 1995. Shares of the Fund purchased are subject to a maximum sales
charge of 3.00%. Shares of the Fund redeemed are subject to a 1.00%
redemption fee, which applies to redemptions during the first six months
after share purchases. The redemption fee is subsequently reduced after the
first six months and is eliminated after one year. 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 - 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 is 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. 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 March 31.
<PAGE>
GRANDVIEW REIT INDEX FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(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
amount 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 loaned. 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 0.35% of the Fund's average daily net assets.
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 1.05% 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
$2,808 ($0.02 per share) and has voluntarily reimbursed $24,955 of the
Fund's operating expenses for the period ended September 30, 1997.
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 0.225%
of the Fund's first $25 million of average daily net assets, 0.20% of the
next $25 million of average daily net assets, and 0.175% of average daily
net assets over $50 million. The Administrator also receives a monthly fee
of $1,200 for accounting and recordkeeping services. 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 REIT INDEX FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(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, 1997, the Distributor retained sales charges in the
amount of $78.
Certain Trustees and officers of the Trust are also officers of the
Advisor, the Distributor or the Administrator.
At September 30, 1997, the Advisor, its officers, and Trustees of the Fund
held 22,782 shares or 18% 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.
The Trustees of the Trust do not currently intend to authorize the payment
of any such distribution and service fees from the Fund, although they have
authority under the Plan to do so in the future. Shareholders of the Fund
will be given at least sixty days written notice before any distribution
and service fees are imposed.
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 $315,966 and $180,938, respectively, for the period ended
September 30, 1997.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REALTY GROWTH FUND
PORTFOLIO OF INVESTMENTS
September 30, 1997
(Unaudited)
Value
Shares (note 1)
---------------- ----------------
COMMON STOCKS - 94.48%
Agricultural Operations - 0.57%
(a) Cadiz Land Company, Inc. 1,500 $10,687
----------------
Engineering & Research and Development Services - 2.39%
Dames & Moore Group 3,400 44,837
----------------
Paper & Related Products - 2.64%
St. Joe Corporation 500 49,500
----------------
Real Estate Development - 0.74%
(a) FM Properties 2,800 13,825
----------------
Real Estate Investment Trusts - 85.04%
American Health Properties, Inc. 1,000 24,500
(a) American Industrial Properties REIT 17,500 54,688
(a) Angeles Participating Mortgage Trust 30,500 135,344
Asset Investors Corporation 16,500 71,156
(a) BRT Realty Trust 3,500 31,938
(a) Banyan Hotel Investment Fund 16,500 14,438
Bay Apartment Communities, Inc. 600 23,963
Bedford Property Investors, Inc. 750 16,500
(a) Boston Properties, Inc. 900 29,531
Bradley Real Estate, Inc. 3,800 79,800
Burnham Pacific Properties, Inc. 4,200 61,950
(a) Capital Trust 6,500 67,438
Crescent Real Estate Equities Company 600 24,075
(a) EQK Realty Investors 1 24,300 27,337
EastGroup Properties 1,550 33,906
(a) FAC Realty Trust Inc. 7,000 59,062
Golf Trust of America, Inc. 1,800 48,600
Humphrey Hospitality Trust, Inc. 3,200 35,200
JP Realty, Inc. 600 15,337
(a) Liberte Investors, Inc. 16,500 66,000
MGI Properties, Inc. 2,000 50,250
Merry Land & Investment Company, Inc. 800 17,650
National Golf Properties, Inc. 500 16,375
National Income Realty Trust 1,760 26,950
Ocwen Asset Investment Corporation 2,800 64,400
(a) Pan Pacific Retail Properties, Inc. 1,000 20,438
Patriot American Hospitality, Inc. 600 19,125
Post Properties, Inc. 1,200 47,700
(Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REALTY GROWTH FUND
PORTFOLIO OF INVESTMENTS
September 30, 1997
(Unaudited)
Value
Shares (note 1)
---------------- ----------------
COMMON STOCKS - (Continued)
Real Estate Investment Trusts - (Continued)
Realty Refund Trust 8,700 $42,956
Redwood Trust, Inc. 2,800 85,050
(a) Resort Income Investors, Inc. 63,000 22,050
Royale Investments, Inc. 5,700 37,050
Sizeler Property Investors, Inc. 2,000 23,125
Spieker Properties, Inc. 900 36,506
Starwood Lodging Trust 300 17,231
Summit Properties Inc. 1,100 24,063
(a) TIS Mortgage Investment Company 33,100 49,650
(a) Tarragon Realty Investors, Inc. 7,600 76,000
----------------
1,597,332
----------------
Real Estate Operating Companies - 3.10%
(a) Crescent Operating, Inc. 1,700 34,212
Newhall Land & Farming Company 1,000 24,125
----------------
58,337
----------------
Total Common Stocks (Cost $1,499,906) 1,774,518
----------------
Investment Company - 3.66%
Evergreen Money Market Treasury Institutional Money 68,759 68,759
----------------
Market Fund Institutional Service Shares
(Cost $68,759)
Total Value of Investments (Cost $1,568,665 (c)) 98.14% $1,843,277
Other Assets Less Liabilities 1.86% 34,867
---------------- ----------------
Net Assets 100.00% $1,878,144
================ ================
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax purposes is $1,571,221. Unrealized appreciation
(depreciation) of investments for federal income tax purposes is as follows:
Unrealized appreciation $311,333
Unrealized depreciation (39,277)
----------------
Net unrealized appreciation $272,056
================
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REALTY GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1997
(Unaudited)
ASSETS
Investments, at value (cost $1,568,665) .......................................................... $1,843,277
Cash ............................................................................................. 817
Income receivable ................................................................................ 5,991
Receivable for investments sold .................................................................. 43,924
Receivable for fund shares sold .................................................................. 5,000
Deferred organization expenses, net (note 4) ..................................................... 14,966
Due from advisor (note 2) ........................................................................ 8,273
Other assets ..................................................................................... 518
----------
Total assets ................................................................................ 1,922,766
----------
LIABILITIES
Accrued expenses ................................................................................. 342
Payable for investment purchases ................................................................. 44,280
----------
Total liabilities ........................................................................... 44,622
----------
NET ASSETS
(applicable to 124,662 shares outstanding; unlimited
shares of no par value beneficial interest authorized) ........................................... $1,878,144
==========
NET ASSET VALUE, REDEMPTION AND OFFERING PRICE PER SHARE
($1,878,144 / 124,662 shares) .................................................................... $ 15.07
==========
MAXIMUM OFFERING PRICE PER SHARE
(100 / 95.5 of $15.07) ........................................................................... $ 15.78
==========
NET ASSETS CONSIST OF
Paid-in capital .................................................................................. $1,529,610
Undistributed net realized gain on investments ................................................... 73,922
Net unrealized appreciation on investments ....................................................... 274,612
----------
$1,878,144
==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REALTY GROWTH FUND
STATEMENT OF OPERATIONS
Period ended September 30, 1997
(Unaudited)
INVESTMENT INCOME
Income
Dividends ..................................................................................... $ 23,918
Interest ...................................................................................... 1,050
---------
Total income ............................................................................. 24,968
---------
Expenses
Investment advisory fees (note 2) ............................................................. 6,625
Fund administration fees (note 2) ............................................................. 1,988
Distribution fees (note 3) .................................................................... 1,656
Custody fees .................................................................................. 3,161
Registration and filing administration fees (note 2) .......................................... 1,479
Fund accounting fees (note 2) ................................................................. 7,200
Audit fees .................................................................................... 3,450
Legal fees .................................................................................... 1,789
Securities pricing fees ....................................................................... 1,327
Shareholder recordkeeping fees ................................................................ 547
Shareholder servicing expenses ................................................................ 1,961
Registration and filing expenses .............................................................. 7,147
Printing expenses ............................................................................. 696
Amortization of deferred organization expenses (note 4) ....................................... 2,729
Trustee fees and meeting expenses ............................................................. 130
Other operating expenses ...................................................................... 1,693
---------
Total expenses ........................................................................... 43,578
---------
Less:
Expense reimbursements (note 2) .................................................... (22,506)
Investment advisory fees waived (note 2) ........................................... (6,625)
Distribution fees waived (note 3) .................................................. (1,242)
---------
Net expenses ............................................................................. 13,205
---------
Net investment income .............................................................. 11,763
---------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ..................................................... 73,970
Increase in unrealized appreciation on investments ................................................. 184,006
---------
Net realized and unrealized gain on investments ............................................... 257,976
---------
Net increase in net assets resulting from operations ..................................... $ 269,739
=========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REALTY GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
Period ended Year ended
September 30, March 31,
1997 1997
INCREASE IN NET ASSETS
Operations
Net investment income ............................................................... $ 11,763 $ 17,274
Net realized gain from investment transactions ...................................... 73,970 125,083
Increase in unrealized appreciation on investments .................................. 184,006 86,406
----------- -----------
Net increase in net assets resulting from operations ............................. 269,739 228,763
----------- -----------
Distributions to shareholders from
Net investment income ............................................................... (11,763) (17,274)
Net realized gain from investment transactions ...................................... (48) (125,083)
Tax return of capital ............................................................... 0 (948)
----------- -----------
Decrease in net assets resulting from distributions .............................. (11,811) (143,305)
----------- -----------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ................ 462,193 890,543
----------- -----------
Total increase in net assets .................................................. 720,121 976,001
NET ASSETS
Beginning of period .................................................................... 1,158,023 182,022
----------- -----------
End of period .......................................................................... $ 1,878,144 $ 1,158,023
=========== ===========
(a) A summary of capital share activity follows:
-------------------------------- --------------------------------
Period ended Year ended
September 30, 1997 March 31, 1997
-------------------------------- --------------------------------
Shares Value Shares Value
Shares sold .................................... 58,356 $ 779,789 120,300 $ 1,552,510
Shares issued for reinvestment
of distributions ............................. 708 10,054 9,716 123,136
----------- ----------- ----------- -----------
59,064 789,843 130,016 1,675,646
Shares redeemed ................................ (25,679) (327,650) (56,779) (785,103)
----------- ----------- ----------- -----------
Net increase ................................. 33,385 $ 462,193 73,237 $ 890,543
=========== =========== =========== ===========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GRANDVIEW REALTY GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
For the
period from
July 3, 1995
(commencement
Period ended Year ended of operations)
September 30, March 31, to March 31,
1997 1997 1996
Net asset value, beginning of period ................................ $12.69 $10.09 $10.00
Income from investment operations
Net investment income ......................................... 0.11 0.33 0.20
Net realized and unrealized gain on investments ............... 2.38 4.14 0.36
--------------- ------------- -----------
Total from investment operations ........................... 2.49 4.47 0.56
--------------- ------------- -----------
Distributions to shareholders from
Net investment income ......................................... (0.11) (0.33) (0.20)
Net realized gain from investment transactions ................ 0.00 (1.53) (0.22)
Tax return of capital ......................................... 0.00 (0.01) (0.05)
--------------- ------------- -----------
Total distributions ........................................ (0.11) (1.87) (0.47)
--------------- ------------- -----------
Net asset value, end of period ...................................... $15.07 $12.69 $10.09
=============== ============= ===========
Total return (a) .................................................... 19.68% 45.12% 5.70%
=============== ============= ===========
Ratios/supplemental data
Net assets, end of period ........................................ $1,878,144 $1,158,023 $182,022
=============== ============= ===========
Ratio of expenses to average net assets
Before expense reimbursements and waived fees ................. 6.58 %(b) 9.59 % 31.34 %(b)
After expense reimbursements and waived fees .................. 1.99 %(b) 1.89 % 2.00 %(b)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ................. (2.81)%(b) (4.58)% (25.55)%(b)
After expense reimbursements and waived fees .................. 1.78 %(b) 3.12 % 3.62 %(b)
Portfolio turnover rate .......................................... 71.87 % 197.90 % 44.44 %
Average broker commission per share (c) .......................... $0.0455 $0.04 --
(a) Total return does not reflect payment of a sales charge.
(b) Annualized.
(c) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
See accompanying notes to financial statements
</TABLE>
<PAGE>
GRANDVIEW REALTY GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(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-ended 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 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 - 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.
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 the accrual basis. Dividend income is 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 in March, June, September and December, on a date
selected by the Trust's Trustees. In addition, distributions may be
made annually in December out of net realized gains through October 31
of that year. 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 March 31.
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 assets,
liabilities, expenses and revenues reported in the financial
statements. Actual results could differ from those estimated.
<PAGE>
GRANDVIEW REALTY GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
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 loaned. 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.
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 $6,625 ($0.07 per share) and has
voluntarily reimbursed $22,506 of the Fund's operating expenses for the
period ended September 30, 1997.
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. The
Administrator also receives a monthly fee of $1,200 for accounting and
recordkeeping services. 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.
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, 1997, the Distributor retained no sales
charges.
<PAGE>
GRANDVIEW REALTY GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
Certain Trustees and officers of the Trust are also officers of the
Advisor, the Distributor or the Administrator.
At September 30, 1997, the Advisor, its officers, and Trustees of the
Fund held 21,673 shares or 17.39% 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 $1,322,000 and $929,703, respectively, for the period ended
September 30, 1997.
