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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-4000
--------
SUMMIT MUTUAL FUNDS, INC.
(Exact name of registrant as specified in charter)
1876 Waycross Road, Cincinnati, Ohio 45240
(Address of principal executive offices) Zip code)
John F. Labmeier, Esq.
The Union Central Life Insurance Company
P.O. Box 40888
1876 Waycross Road
Cincinnati, Ohio 45240
(Name and address of agent for service)
Registrant's telephone number, including area code: (513) 595-2600
Date of fiscal year end: September 30, 2004
Date of reporting period: March 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS
SUMMIT MUTUAL FUNDS
SEMIANNUAL REPORT
SUMMIT APEX SERIES
NASDAQ-100 INDEX FUND
EVEREST FUND
BOND FUND
SHORT-TERM GOVERNMENT FUND
HIGH YIELD BOND FUND
MONEY MARKET FUND
MARCH 31, 2005
[SUMMIT MUTUAL FUNDS LOGO]
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
SEMI ANNUAL REPORT - TABLE OF CONTENTS
<Table>
Message from the President 1
Fund Expenses 2
Fund Managers' Reports and Financial Statements:
Nasdaq-100 Index Fund 3
Everest Fund 9
Bond Fund 14
Short-term Government Fund 22
High Yield Bond Fund 27
Money Market Fund 33
Notes to Financial Statements 38
</Table>
THE FUND FILES A COMPLETE SCHEDULE OF INVESTMENTS IN SECURITIES WITH THE SEC
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORM N-Q IS AVAILABLE ON THE SEC'S WEBSITE AT www.sec.gov. THE FUND'S FORM
N-Q MAY ALSO BE REVIEWED AND COPIED AT THE SEC'S PUBLIC REFERENCE ROOM IN
WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE ROOM MAY
BE OBTAINED BY CALLING 1-800-SEC-0330.
THIS REPORT HAS BEEN PREPARED FOR THE INFORMATION OF SHAREHOLDERS AND BENEFICIAL
OWNERS AND IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE PURCHASERS UNLESS
IT IS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS FOR SUMMIT MUTUAL
FUNDS, INC.
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
MESSAGE FROM THE PRESIDENT
We are pleased to send you Summit Mutual Funds' 2005 Semiannual Report for the
six-month period ended March 31, 2005. We welcome new and thank existing
investors that have selected Summit Funds. We strive to help you reach your
financial goals.
The last six months continued to be a volatile period for both the U.S. economy
and investors. Real gross domestic product grew at a strong 3.8% pace in the
last quarter of 2004, and the Congressional Budget Office estimates a similar
growth rate to continue throughout 2005. Unemployment rates have continued to
drift downward during the period and now stand at 5.2%. Corporate profits
continued their upward march, while consumer confidence surged in the fourth
quarter of 2004, only to retreat somewhat in 2005. In contrast, energy prices
remained high, peaking at $57 per barrel. High energy prices have contributed to
a record foreign trade imbalance and a weak dollar, resurfacing inflation fears.
These conditions weighed in on the Federal Reserve's decision to continue their
systematic rise in interest rates to 2.75% by March 31, 2005.
"...MAINTAIN THE PROPER PERSPECTIVE..."
On the national and world scene, news has been more settling in the last six
months. In Iraq, the January elections were accomplished without major violence,
demonstrating a strong, albeit nascent, foothold of democracy in that troubled
region. Domestically, threats of terrorist attacks have waned, and the
Presidential election was settled in a much more normal fashion than in 2000.
Consequently, the political class has been able to focus more on economic issues
such as social security and tax reform. The outcome and impact of these issues
remains to be seen.
Equity markets responded by providing fluctuating returns, soaring in the fourth
quarter of 2004 and pulling back sharply so far in 2005. During the entire
six-month period, the S&P 500 Index advanced 6.9%, the S&P 400 MidCap Index
returned 11.7% and the Russell 2000 Index gained 8.0%. However, in the last
three months alone, these same indices were down 2.2%, 0.4% and 5.3%,
respectively. In other market sectors, the Nasdaq-100 Index gained 5.2% while,
in international arenas, the EAFE Index advanced 15.3%. While all of the
six-month returns were positive, uncertainty is never a friend to the markets,
and this volatile period may continue for some time until managers get a better
sense for how these conditions are resolved.
Fixed income markets also provided positive but small returns. The 10 year
Treasury rate ended the period at 4.5%, up 36 basis points from last September,
with much of the rise occurring in the last five weeks. The Lehman Aggregate
Bond Index return was +0.5% for the entire period, but was down 0.5% in the
first quarter of 2005. High yield markets rewarded risk takers with a return of
3.0% in the Merrill Lynch High Yield Master II Index. Money market returns have
generally rebounded from record lows as a result of the string of rate
increases, but first tier retail money market funds lagged and returned only
0.7% on average for the period.
"...ENSURE THAT YOUR INVESTMENT STRATEGY IS APPROPRIATE FOR YOUR RISK TOLERANCE
AND TIME HORIZON."
Our message to you continues - maintain the proper perspective on your goals,
have realistic expectations and ensure that your investment strategy is
appropriate for your risk tolerance and time horizon. Asset allocation both
within and across equity and fixed income sectors and portfolio rebalancing are
critical tactics to improve your opportunities to fulfill your investment
objectives. Summit Mutual Funds provides a solid foundation for diversified
investment planning with choices across equity and fixed-income styles.
RECENT HIGHLIGHTS:
- - Summit's Everest Fund has demonstrated strong one, three and five year
performance (with average annual returns of +13.3%, 4.4% and 8.4%). This
ranks it as a top performer by leading rating agencies.
- - Despite the volatility in the fixed-income markets, the Summit Bond Fund
returned +0.2%, in line with the return on the Lehman Aggregate Bond Index.
Thank you for choosing Summit Funds and for the trust that you have placed in
us.
Best regards,
/s/ Steven R. Sutermeister
Steven R. Sutermeister
President
1
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
2005 SEMIANNUAL REPORT - FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments*, and (2) ongoing
costs, including management fees; distribution and/or service (12b-1) fees; and
other Fund expenses. This Example is intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period October 1, 2004 through March 31, 2005.
ACTUAL EXPENSES
The first section of the table below provides information about actual account
values and actual net expenses. You may use the information in this section,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first section under the heading entitled "Expenses Paid" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio, net of fee waivers and expense reimbursements, and an assumed rate of
return of 5% per year before expenses, which is not the Fund's actual return.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. You may use
this information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that the second section of the table is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds.
<Table>
<Caption>
BEGINNING ENDING ANNUALIZED EXPENSES PAID **
ACCOUNT VALUE ACCOUNT VALUE NET EXPENSE OCTOBER 1, 2004 TO
FUND SEPTEMBER 30, 2004 MARCH 31, 2005 RATIO MARCH 31, 2005
- ----------------------------------------------------------------------------------------------------------------
BASED ON ACTUAL RETURN
Nasdaq-100 Index Fund Class I $ 1,000 $ 1,045 0.65% $ 3
Nasdaq-100 Index Fund Class A* 1,000 1,042 0.90% 5
Everest Fund Class I 1,000 1,098 0.98% 5
Everest Fund Class A* 1,000 1,096 1.23% 6
Bond Fund 1,000 998 0.73% 4
Short-term Government Fund 1,000 996 0.73% 4
High Yield Bond Fund 1,000 1,018 1.20% 6
Money Market Fund 1,000 1,007 0.45% 2
BASED ON HYPOTHETICAL RETURN
(5% return before expenses)
Nasdaq-100 Index Fund Class I $ 1,000 $ 1,021 0.65% $ 3
Nasdaq-100 Index Fund Class A* 1,000 1,020 0.90% 5
Everest Fund Class I 1,000 1,020 0.98% 5
Everest Fund Class A* 1,000 1,018 1.23% 6
Bond Fund 1,000 1,021 0.73% 4
Short-term Government Fund 1,000 1,021 0.73% 4
High Yield Bond Fund 1,000 1,019 1.20% 6
Money Market Fund 1,000 1,022 0.45% 2
</Table>
* Prior to October 1, 2004, the Class A shares of the Nasdaq-100 Index and
Everest Funds' shares were designated as Class F, and were not subject to
an initial sales charge.
**Expenses are equal to the Fund's annualized net expense ratio, multiplied
by the average account value over the period, multiplied by 182/365 (to
reflect the one-half year period).
2
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
NASDAQ-100 INDEX FUND
OBJECTIVE - Seeks investment results that correspond to the investment
performance of U.S. common stocks, as represented by the Nasdaq-100 Index (the
"Index").
STRATEGY - The Nasdaq-100 Index Fund (the "Fund") will attempt to achieve, in
both rising and falling markets, a correlation of at least 95% between the total
return of its net assets before expenses and the total return of the Index.
MANAGER'S COMMENTS:
For the six-month period ended March 31, 2005, the Fund's (Class I) total return
was 4.83% (after waivers and reimbursements, but before the impact of any
product or contract-level fees). This compares to a 5.16% total return for the
Index. The difference of 0.33% is referred to as "tracking error" and is largely
attributed to the Fund's operating expenses. These expenses represent the Fund's
costs for advisory, administration, accounting, custody and other services. The
remaining difference can be caused by a number of factors, including the timing
and size of cash flows into and out of the Fund; brokerage commissions or other
trading costs; and holding security positions in amounts that are different than
the weightings in the Index, among others. While an exact replication of the
capitalization weightings of securities in the Index is not feasible, the Fund's
objectives and strategies call for correlation of at least 95% between the
Fund's pre-expense total return and that of the Index. The Fund achieved this
level of correlation for the period presented.
FUND DATA
<Table>
Manager: Team Managed
Inception Date: December 29, 1999
Total Net Assets: $17.1 Million
Number of Equity Holdings: 100
Median Cap Size: $7.3 Billion
Dividend Yield: 0.36%
</Table>
[CHART]
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
Summit Nasdaq-100 Index Fund Class I - Average Annual Total Return
<Table>
<Caption>
1-YEAR 5-YEAR SINCE INCEPTION
2.85% -20.32% -16.17%
</Table>
Summit Nasdaq-100 Index Fund Class A - Average Annual Total Return
<Table>
<Caption>
1-YEAR 5-YEAR SINCE INCEPTION
2.53% -20.47% -16.24%
</Table>
Past performance is not predictive of future results.
Performance does not reflect the deduction of taxes that a shareholder would pay
on fund distributions or redemption of fund shares.
<Table>
<Caption>
SUMMIT NASDAQ-100 SUMMIT NASDAQ-100
INDEX FUND CLASS I INDEX FUND CLASS A NASDAQ-100 INDEX
Dec 27, 1999 $ 10,000.00 $ 10,000.00 $ 10,000.00
Dec 31, 1999 $ 10,310.00 $ 10,361.60 $ 10,304.00
Jan 31, 2000 $ 9,970.00 $ 9,716.49 $ 9,921.72
Feb 29, 2000 $ 12,020.00 $ 12,070.86 $ 11,859.43
Mar 31, 2000 $ 12,310.00 $ 12,371.35 $ 12,223.52
Apr 30, 2000 $ 10,590.00 $ 10,640.74 $ 10,487.78
May 31, 2000 $ 9,310.00 $ 9,352.51 $ 9,239.73
Jun 30, 2000 $ 10,540.00 $ 10,586.75 $ 10,462.15
Jul 31, 2000 $ 10,070.00 $ 10,111.44 $ 10,033.20
Aug 31, 2000 $ 11,371.91 $ 11,417.78 $ 11,335.51
Sep 30, 2000 $ 9,937.89 $ 9,965.82 $ 9,926.51
Oct 31, 2000 $ 9,115.58 $ 9,147.94 $ 9,125.44
Nov 30, 2000 $ 6,995.73 $ 7,016.95 $ 6,969.10
Dec 31, 2000 $ 6,511.77 $ 6,529.54 $ 6,510.53
Jan 31, 2001 $ 7,166.98 $ 7,187.36 $ 7,209.76
Feb 28, 2001 $ 5,271.91 $ 5,283.69 $ 5,306.38
Mar 31, 2001 $ 4,334.46 $ 4,341.10 $ 4,375.11
Apr 30, 2001 $ 5,100.55 $ 5,109.25 $ 5,159.13
May 31, 2001 $ 4,949.35 $ 4,957.51 $ 5,005.91
Jun 30, 2001 $ 5,019.91 $ 5,027.37 $ 5,090.01
Jul 31, 2001 $ 4,616.70 $ 4,621.65 $ 4,682.81
Aug 31, 2001 $ 4,021.97 $ 4,024.40 $ 4,088.09
Sep 30, 2001 $ 3,195.40 $ 3,193.59 $ 3,250.03
Oct 31, 2001 $ 3,719.57 $ 3,718.79 $ 3,796.69
Nov 30, 2001 $ 4,344.54 $ 4,347.29 $ 4,440.23
Dec 31, 2001 $ 4,294.14 $ 4,297.25 $ 4,387.39
Jan 31, 2002 $ 4,223.58 $ 4,226.06 $ 4,312.80
Feb 28, 2002 $ 3,697.39 $ 3,697.24 $ 3,781.90
Mar 31, 2002 $ 3,947.38 $ 3,947.62 $ 4,042.47
Apr 30, 2002 $ 3,467.57 $ 3,464.96 $ 3,553.73
May 31, 2002 $ 3,276.04 $ 3,273.04 $ 3,362.90
Jun 30, 2002 $ 2,846.63 $ 2,840.93 $ 2,926.06
Jul 31, 2002 $ 2,610.75 $ 2,603.49 $ 2,677.93
Aug 31, 2002 $ 2,554.31 $ 2,546.46 $ 2,623.30
Sep 30, 2002 $ 2,253.92 $ 2,242.25 $ 2,317.42
Oct 31, 2002 $ 2,675.27 $ 2,664.79 $ 2,754.72
Nov 30, 2002 $ 3,017.99 $ 3,010.79 $ 3,107.32
Dec 31, 2002 $ 2,659.14 $ 2,649.97 $ 2,740.66
Jan 31, 2003 $ 2,655.11 $ 2,645.37 $ 2,737.37
Feb 28, 2003 $ 2,725.67 $ 2,716.63 $ 2,813.47
Mar 31, 2003 $ 2,745.83 $ 2,736.80 $ 2,838.51
Apr 30, 2003 $ 2,979.69 $ 2,972.99 $ 3,082.34
May 31, 2003 $ 3,223.63 $ 3,218.99 $ 3,338.79
Jun 30, 2003 $ 3,231.69 $ 3,227.68 $ 3,349.47
Jul 31, 2003 $ 3,431.28 $ 3,428.01 $ 3,559.48
Aug 31, 2003 $ 3,600.62 $ 3,597.89 $ 3,739.24
Sep 30, 2003 $ 3,497.81 $ 3,494.90 $ 3,634.91
Oct 31, 2003 $ 3,800.21 $ 3,798.34 $ 3,951.51
Nov 30, 2003 $ 3,818.35 $ 3,816.25 $ 3,974.43
Dec 31, 2003 $ 3,931.25 $ 3,928.35 $ 4,096.84
Jan 31, 2004 $ 3,995.77 $ 3,993.60 $ 4,167.31
Feb 29, 2004 $ 3,933.27 $ 3,930.27 $ 4,105.22
Mar 31, 2004 $ 3,844.56 $ 3,839.79 $ 4,016.13
Apr 30, 2004 $ 3,743.76 $ 3,736.83 $ 3,913.32
May 31, 2004 $ 3,917.14 $ 3,909.78 $ 4,095.68
Jun 30, 2004 $ 4,048.18 $ 4,040.52 $ 4,236.57
Jul 31, 2004 $ 3,737.71 $ 3,728.39 $ 3,912.48
Aug 31, 2004 $ 3,655.06 $ 3,643.75 $ 3,826.40
Sep 30, 2004 $ 3,771.99 $ 3,760.14 $ 3,949.61
Oct 31, 2004 $ 3,965.52 $ 3,954.21 $ 4,156.97
Nov 30, 2004 $ 4,193.34 $ 4,178.61 $ 4,396.41
Dec 31, 2004 $ 4,324.71 $ 4,310.27 $ 4,537.09
Jan 31, 2005 $ 4,053.40 $ 4,038.47 $ 4,253.52
Feb 28, 2005 $ 4,031.13 $ 4,016.16 $ 4,233.11
Mar 31, 2005 $ 3,954.19 $ 3,937.05 $ 4,153.52
</Table>
TOP 10 EQUITY HOLDINGS
<Table>
<Caption>
(% OF NET ASSETS)
-----------------
Microsoft Corporation 6.95%
QUALCOMM Inc. 5.59%
Intel Corporation 3.89%
Apple Computer, Inc. 3.65%
Cisco Systems, Inc. 3.17%
Nextel Communications, Inc. 3.04%
eBay Inc. 2.87%
Dell Inc. 2.67%
Amgen Inc. 2.63%
Comcast Corp. 2.47%
</Table>
[CHART]
SECTOR ALLOCATIONS
<Table>
Communications 28.5%
Consumer Cyclical 10.5%
Consumer Non-Cyclical 14.1%
Industrial 2.5%
Technology 39.2%
Short-Term, Futures & Other 5.2%
</Table>
"Nasdaq" and related marks are trademarks or service marks of The Nasdaq
Stock Market, Inc. and have been licensed for use for certain purposes by
Summit Mutual Funds, Inc. and the Nasdaq-100 Index Fund. Nasdaq makes no
warranty, express or implied, and bears no liability with respect to Summit
Mutual Funds, its use, or any data included therein.
3
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
FINANCIAL HIGHLIGHTS NASDAQ-100 INDEX FUND
FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding throughout the
period. Share amounts and net asset values have been adjusted as a result of the
1-for-5 reverse stock split on February 15, 2002.
<Table>
<Caption>
CLASS I
-------------------------------------------------------------
FOR THE SIX MONTHS
ENDED MARCH 31,
(UNAUDITED) YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------------
2005 2004 2003 2002 2001
------------------------------------------------------------
Net asset value, beginning of period $ 18.71 $ 17.35 $ 11.18 $ 15.85 $ 49.55
---------- ------- ------- ------- -------
Investment Activities:
Net investment income / (loss) 0.17 (0.07) (0.04) (0.03) 0.05
Net realized and unrealized gains / (losses) 0.74 1.43 6.21 (4.64) (33.55)
---------- ------- ------- ------- -------
Total from Investment Activities 0.91 1.36 6.17 (4.67) (33.50)
---------- ------- ------- ------- -------
DISTRIBUTIONS:
Net investment income (0.09) -- -- -- (0.15)
Return of capital -- -- -- -- (0.05)
---------- -------- ------- ------- -------
Total Distributions (0.09) -- -- -- (0.20)
---------- ------- ------- ------- -------
Net asset value, end of period $ 19.53 $ 18.71 $ 17.35 $ 11.18 $ 15.85
========== ======= ======= ======= =======
Total return 4.83% 7.84% 55.19% -29.46% -67.85%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets - net(2) 0.65%(3) 0.65% 0.65% 0.65% 0.65%
Ratio of expenses to average net assets - gross 1.11%(3) 1.13% 1.38% 1.35% 1.14%
Ratio of net investment income / (loss) to
average net assets 1.64%(3) -0.33% -0.33% -0.17% 0.10%
Portfolio turnover rate 14.12%(3) 4.92% 7.68% 1.94% 13.94%
Net assets, end of period (000's) $ 16,910 $16,874 $15,847 $ 6,426 $ 7,406
<Caption>
CLASS I
--------------------
PERIOD FROM
DECEMBER 29, 1999(1)
TO SEPTEMBER 30,
--------------------
2000
--------------------
Net asset value, beginning of period $ 50.00
--------------------
Investment Activities:
Net investment income / (loss) 0.25
Net realized and unrealized gains / (losses) (0.55)
--------------------
Total from Investment Activities (0.30)
--------------------
DISTRIBUTIONS:
Net investment income (0.15)
Return of capital --
--------------------
Total Distributions (0.15)
--------------------
Net asset value, end of period $ 49.55
====================
Total return -0.62%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets - net (2) 0.61%(3)
Ratio of expenses to average net assets - gross 1.14%(3)
Ratio of net investment income / (loss) to
average net assets 1.09%(3)
Portfolio turnover rate 113.32%(3)
Net assets, end of period (000's) $ 13,093
</Table>
<Table>
<Caption>
CLASS A
---------------------------------------------------------------
FOR THE SIX MONTHS PERIOD FROM
ENDED MARCH 31, JULY 1, 2002(1)
(UNAUDITED) YEAR ENDED SEPTEMBER 30, TO SEPTEMBER 30,
---------------------------------------------------------------
2005 2004 2003 2002
---------------------------------------------------------------
Net asset value, beginning of period $ 18.60 $ 17.30 $ 11.17 $ 13.41
---------- -------- -------- ----------
Investment Activities:
Net investment income / (loss) 0.11 (0.08) (0.08) (0.02)
Net realized and unrealized gains / (losses) 0.77 1.38 6.21 (2.22)
---------- -------- -------- ----------
Total from Investment Activities 0.88 1.30 6.13 (2.24)
---------- -------- -------- ----------
DISTRIBUTIONS:
Net investment income (0.07) -- -- --
---------- -------- -------- ----------
Total Distributions (0.07) -- -- --
---------- -------- -------- ----------
Net asset value, end of period $ 19.41 $ 18.60 $ 17.30 $ 11.17
========== ======== ======== ==========
Total return 4.70% 7.51% 54.88% -16.70%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets - net (2) 0.90%(3) 0.90% 0.89% 0.90%(3)
Ratio of expenses to average net assets - gross 1.36%(3) 1.39% 1.52% 2.01%(3)
Ratio of net investment income / (loss) to
average net assets 1.19%(3) -0.59% -0.63% -0.49%(3)
Portfolio turnover rate 14.12%(3) 4.92% 7.68% 1.94%
Net assets, end of period (000's) $ 215 $ 153 $ 99 $ 4
</Table>
(1) COMMENCEMENT OF OPERATIONS.
(2) NET EXPENSES REPRESENT GROSS EXPENSES REDUCED BY FEES WAIVED AND/OR
REIMBURSED BY THE ADVISER.
(3) ANNUALIZED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
4
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
NASDAQ-100 INDEX FUND SCHEDULE OF INVESTMENTS
MARCH 31, 2005 (UNAUDITED)
<Table>
<Caption>
SHARES VALUE
--------------------------
COMMON STOCKS - 95.41%
BASIC MATERIALS - 0.61%
Sigma-Aldrich Corporation 874 $ 53,532
Smurfit-Stone Container Corporation* 3,280 50,742
------------
104,274
------------
COMMUNICATIONS - 28.47%
Amazon.com, Inc.* 3,568 122,275
Check Point Software Technologies Ltd.* 3,351 72,851
Cisco Systems, Inc.* 30,368 543,284
Comcast Corporation* 12,532 423,331
Comverse Technology, Inc.* 2,702 68,144
eBay Inc.* 13,190 491,459
EchoStar Communications Corporation 2,938 85,937
IAC/InterActiveCorp* 9,445 210,340
JDS Uniphase Corporation* 21,593 36,060
Juniper Networks, Inc.* 4,651 102,601
Lamar Advertising Company* 1,121 45,165
Level 3 Communications, Inc.* 8,946 18,429
Liberty Media International, Inc.* 2,328 101,827
LM Ericsson Telephone Company* 2,294 64,691
MCI, Inc. 5,070 126,344
Nextel Communications, Inc.* 18,343 521,308
NTL Incorporated* 1,259 80,161
QUALCOMM Incorporated 26,108 956,858
Sirius Satellite Radio Inc.* 18,039 101,379
Symantec Corporation* 9,686 206,602
Tellabs, Inc.* 3,132 22,864
VeriSign, Inc.* 3,162 90,749
XM Satellite Radio Holdings Inc.* 2,780 87,570
Yahoo! Inc.* 8,703 295,032
------------
4,875,261
------------
CONSUMER CYCLICAL - 10.51%
Bed Bath & Beyond Inc.* 5,332 194,831
CDW Corporation 1,139 64,559
Cintas Corporation 2,714 112,115
Costco Wholesale Corporation 3,255 143,806
Dollar Tree Stores, Inc.* 1,432 41,141
Fastenal Company 956 52,876
PACCAR Inc. 2,565 185,680
PETsMART, Inc. 1,904 54,740
Ross Stores, Inc. 1,913 55,745
Sears Holdings Corporation* 2,134 284,185
Staples, Inc. 4,406 138,481
Starbucks Corporation* 7,276 375,878
Wynn Resorts, Limited* 1,409 95,446
------------
1,799,483
------------
CONSUMER NON-CYCLICAL - 14.16%
Amgen Inc.* 7,727 449,789
Apollo Group, Inc.* 2,468 182,780
Biogen Idec Inc* 4,774 164,751
Biomet, Inc. 4,490 162,987
Career Education Corporation* 1,374 47,073
Chiron Corporation* 3,441 120,641
DENTSPLY International Inc. 1,021 $ 55,553
Express Scripts, Inc.* 893 77,861
Genzyme General* 4,016 229,876
Gilead Sciences, Inc.* 5,616 201,053
Invitrogen Corporation* 636 44,011
Lincare Holdings Inc.* 1,276 56,437
MedImmune, Inc.* 3,505 83,454
Millennium Pharmaceuticals, Inc.* 4,418 37,200
Patterson Companies Inc.* 1,734 86,613
Paychex, Inc. 4,726 155,107
Teva Pharmaceutical Industries Limited 6,061 187,891
Whole Foods Market, Inc. 807 82,419
------------
2,425,496
------------
INDUSTRIAL - 2.49%
American Power Conversion Corporation 2,533 66,137
C.H. Robinson Worldwide, Inc. 1,111 57,250
Expeditors International of Washington, Inc. 1,379 73,845
Flextronics International Ltd.* 7,999 96,308
Garmin Ltd. 1,321 61,188
Molex Incorporated 1,302 34,321
Sanmina-SCI Corporation* 7,326 38,242
------------
427,291
------------
TECHNOLOGY - 39.17%
Adobe Systems Incorporated 3,151 211,653
Altera Corporation* 6,899 136,462
Apple Computer, Inc.* 14,992 624,717
Applied Materials, Inc.* 11,352 184,470
ATI Technologies Inc.* 3,230 55,750
Autodesk, Inc. 3,175 94,488
BEA Systems, Inc.* 4,943 39,396
Broadcom Corporation* 3,248 97,180
Citrix Systems, Inc.* 2,651 63,147
Cognizant Technology Solutions Corporation* 1,707 78,863
Dell Inc.* 11,898 457,121
Electronic Arts Inc.* 4,056 210,020
Fiserv, Inc.* 3,223 128,275
Intel Corporation 28,676 666,143
Intersil Corporation 2,003 34,692
Intuit Inc.* 3,105 135,906
KLA-Tencor Corporation* 3,119 143,505
Lam Research Corporation* 1,853 53,478
Linear Technology Corporation 5,407 207,142
Marvell Technology Group, Ltd.* 3,394 130,126
Maxim Integrated Products, Inc. 6,005 245,424
Mercury Interactive Corporation* 1,184 56,098
Microchip Technology Incorporated 2,261 58,809
Microsoft Corporation 49,240 1,190,131
Network Appliance, Inc.* 4,941 136,668
Novellus Systems, Inc.* 1,878 50,199
Oracle Corporation* 28,653 357,589
Pixar* 766 74,723
QLogic Corporation* 1,243 50,342
Research in Motion Limited* 2,473 188,987
SanDisk Corporation* 1,969 54,738
Siebel Systems, Inc.* 7,839 71,570
Sun Microsystems, Inc.* 19,307 78,000
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
5
<Page>
<Table>
<Caption>
SHARES VALUE
--------------------------
TECHNOLOGY - 39.17% (CONTINUED)
Synopsys, Inc.* 1,791 $ 32,416
VERITAS Software Corporation* 5,680 131,890
Xilinx, Inc. 6,087 177,923
------------
6,708,041
------------
Total Common Stocks
(cost $16,635,736) 16,339,846
------------
UNIT INVESTMENT TRUST - 0.18%
Nasdaq 100 Shares* 818 29,898
------------
Total Unit Investment Trust
(cost $18,034) 29,898
------------
SHORT-TERM INVESTMENTS(3) - 4.47%
NORTHERN TRUST DIVERSIFIED ASSETS
FUND - 2.73% 467,847 467,847
------------
<Caption>
PRINCIPAL VALUE
--------------------------
U.S. TREASURY BILL - 1.74%
(2.520% due 06/16/05) $ 300,000 $ 298,292
------------
Total Short-Term Investments
(cost $766,118) 766,139
------------
TOTAL INVESTMENTS - 100.06%
(cost $17,419,888)(1) 17,135,883
------------
NORTHERN INSTITUTIONAL LIQUID ASSET
PORTFOLIO(2) - 6.30% 1,079,344
------------
OTHER ASSETS AND LIABILITIES - (6.36%) (1,089,863)
------------
TOTAL NET ASSETS - 100.00% $ 17,125,364
============
</Table>
* Non-income producing
(1) For federal income tax purposes, cost is $17,580,537 and gross unrealized
appreciation and depreciation of securities as of March 31, 2005 was
$3,473,475 and ($3,918,129), respectively, with a net appreciation /
depreciation of ($444,654).
(2) This security was purchased with cash collateral held from securities
lending. The market value of the securities on loan, the collateral
purchased with cash, and the noncash collateral accepted is $1,335,462,
$1,079,344, and $292,811, respectively.
(3) Securities and other assets with an aggregate value of $745,500 have been
segregated with the custodian or designated to cover margin requirements
for the open futures contracts as of March 31, 2005:
<Table>
<Caption>
UNREALIZED
APPRECIATION/
TYPE CONTRACTS (DEPRECIATION)
- ----------------------------------------------------------
Nasdaq-100 Index (06/05) 5 $ (14,640)
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
6
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
NASDAQ-100 INDEX FUND FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2005 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value $ 17,135,883
Collateral for securities loaned, at fair value 1,079,344
Receivables:
Shares sold 239
Interest and dividends 2,486
Receivable from Adviser 2,734
Prepaid expenses and other 10,774
----------------
18,231,460
----------------
LIABILITIES
Payables:
Payable upon return of securities loaned 1,079,344
12b-1 fees 48
Directors' fees 867
Custodian fees 2,525
Fund accounting fees 6,465
Professional fees 8,102
Variation margin 4,000
Other accrued expenses 4,745
----------------
1,106,096
----------------
NET ASSETS*
Paid-in capital 27,523,146
Accumulated undistributed net
investment income 65,839
Accumulated net realized gain / (loss)
on investments and futures contracts (10,164,976)
Net unrealized appreciation / (depreciation)
on investments and futures contracts (298,645)
----------------
$ 17,125,364
================
Investments at cost $ 17,419,888
Shares authorized per class ($.10 par value) 20,000,000
</Table>
NET ASSET VALUE (NAV) BY SHARE CLASS
<Table>
<Caption>
SHARES
SHARE CLASS NET ASSETS/ OUTSTANDING
Class I $ 16,910,166 865,979 $ 19.53
Class A $ 215,198 11,086 $ 19.41
</Table>
*FEDERAL TAX DATA AS OF SEPTEMBER 30, 2004
<Table>
<Caption>
CAPITAL LOSS CARRYFORWARD POST-OCTOBER CAPITAL
EXPIRING SEPTEMBER 30: LOSSES DEFERRED:
- -------------------------------------------------------------------
SEPTEMBER 30,
2009 2010 2012 2004
------------- ------------- ------------- -------------
$ (3,158,439) $ (2,454,653) $ (1,364,110) $ 974,189
</Table>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 (UNAUDITED)
<Table>
INVESTMENT INCOME
Interest $ 6,564
Dividends 196,593
Foreign dividend taxes withheld (136)
Other income 2,121
----------------
205,142
----------------
EXPENSES
Advisory fees 31,337
Administration expenses 8,954
Custodian fees and expenses 4,890
Fund accounting fees 19,438
Professional fees 10,013
Directors' fees 1,229
Transfer agent fees 13,222
Royalty fee 2,493
12b-1 fees 240
Registration expense 5,701
Other expenses 2,308
----------------
99,825
Reimbursements and waivers (41,387)
----------------
58,438
----------------
NET INVESTMENT INCOME / (LOSS) 146,704
----------------
REALIZED AND UNREALIZED GAIN / (LOSS)
Net realized gain / (loss) on investments
and options (2,099,474)
Net realized gain / (loss) on
futures contracts 45,165
----------------
(2,054,309)
----------------
Net change in unrealized appreciation /
(depreciation) on investments 2,781,553
----------------
NET REALIZED AND UNREALIZED
GAIN / (LOSS) 727,244
----------------
NET INCREASE / (DECREASE)
IN NET ASSETS FROM OPERATIONS $ 873,948
================
</Table>
TRANSACTIONS WITH AFFILIATES:
<Table>
<Caption>
PERCENT OF CURRENT NET ASSET VALUE
- -------------------------------------------
ADMINISTRATION EXPENSE
ADVISORY FEE FEE LIMIT(1) WAIVER REIMBURSEMENT
- ---------------------------------------------------------------------------
0.35% 0.10% 0.30% $ -- $ 41,387
</Table>
(1) The Adviser has agreed to pay other expenses of the portfolio, other than
the advisory fees, to the extent that such expenses exceed the stated
percentage of their average net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
7
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE SIX MONTHS
ENDED MARCH 31, YEAR ENDED
(UNAUDITED) SEPTEMBER 30,
------------------------------
2005 2004
----------------------------
OPERATIONS
Net investment income / (loss) $ 146,704 $ (60,370)
Net realized gain / (loss) on investments and futures (2,054,309) (701,453)
Net change in unrealized appreciation / (depreciation) on investments
and futures contracts 2,781,553 1,965,986
----------- -----------
873,948 1,204,163
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS*
Class I
Net investment income (80,211) --
Class A
Net investment income (654) --
----------- -----------
(80,865) --
----------- -----------
FUND SHARE TRANSACTIONS
Class I
Proceeds from shares sold 2,356,281 6,744,486
Reinvestment of distributions 80,006 --
Payments for shares redeemed (3,188,508) 6,917,021)
----------- -----------
(752,221) (172,535)
----------- -----------
Class A
Proceeds from shares sold 56,700 140,770
Reinvestment of distributions 654 --
Payments for shares redeemed (8) (91,737)
----------- -----------
57,346 49,033
----------- -----------
NET INCREASE / (DECREASE) IN NET ASSETS 98,208 1,080,661
NET ASSETS
Beginning of period 17,027,156 15,946,495
----------- -----------
End of period $17,125,364 $17,027,156
=========== ===========
ACCUMULATED UNDISTRIBUTED / (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME $ 65,839 $ --
=========== ===========
FUND SHARE TRANSACTIONS
Class I
Sold 118,323 352,416
Reinvestment of distributions 3,813 --
Redeemed (158,108) (363,681)
----------- -----------
Net increase / (decrease) from fund share transactions (35,972) (11,265)
=========== ===========
Class A
Sold 2,806 7,358
Reinvestment of distributions 31 --
Redeemed -- (4,849)
----------- -----------
Net increase / (decrease) from fund share transactions 2,837 2,509
=========== ===========
TOTAL COST OF PURCHASES OF:
Common Stocks $ 1,208,625 $ 4,263,743
----------- -----------
$ 1,208,625 $ 4,263,743
=========== ===========
TOTAL PROCEEDS FROM SALES OF:
Common Stocks $ 2,297,831 $ 809,048
- --------- -----------
$ 2,297,831 $ 809,048
=========== ===========
*TAX CHARACTER OF DISTRIBUTIONS PAID
Ordinary income $ 80,865 $ --
----------- -----------
$ 80,865 $ --
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
8
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
EVEREST FUND
OBJECTIVE - Seeks primarily long-term appreciation of capital, without incurring
unduly high risk, by investing primarily in common stocks and other equity
securities. Current income is a secondary objective.
STRATEGY - The Everest Fund (the "Fund") seeks special opportunities in
securities that are selling at a discount from theoretical price/earnings ratios
and that seem capable of recovering from their temporarily out-of-favor status
(a "value" investment style).
MANAGER'S COMMENTS:
The Fund's (Class I) performance for the six-month period ended March 31, 2005
was 10.35% (before the impact of any product or contract-level fees) versus
10.48% for the Russell 1000 Value Index (Russell 1000) and 6.88% for the
Standard and Poors' 500 Composite Stock Index (S&P 500). The six month returns
blended a strong final quarter of 2004 with a much weaker first quarter of 2005.
After the presidential election, investor optimism pushed the markets up in the
closing quarter of 2004 with the Russell 1000 surging 10.38%, the S&P 500 up
9.23%, and the Fund showing a 9.73% return. During the first quarter of the New
Year, investors realized that the economy faced several challenges, and the
Russell 1000 reflected this sentiment with a flat +0.01% performance, the S&P
500 retreated 2.15%, and Fund eked out a 0.57% return.
The Federal Reserve has consistently voiced their intentions to raise the
federal funds rate until growth is more subdued and inflation is under control.
Rates were raised a quarter percent four times in the period as the economy
continued to grow in excess of 3%. Housing has remained strong so far but may
yet succumb to the Fed's strategy. Crude oil prices have moved from near $40 per
barrel to the mid $50's during the period. Higher energy prices tend to dampen
consumer spending and push up inflation. These two compelling forces clearly are
driving the economy and the stock market as they fluctuate.
The transportation sector was a solid performer for the Fund as a result of good
stock selection. Portfolio exposure to this sector concentrated in railroads,
avoiding the troubled automobile stocks. Railroads benefit from a high barrier
to entry, and the stocks soared with booming demand for their services. Within
the consumer discretionary group, media stocks also boosted performance. We like
the media sub-sector because companies continue to advertise even as consumer
spending weakens. Some media companies in the group are experiencing turmoil at
the top executive ranks, which will likely result in some action intended to
increase shareholder value. While high energy prices continue to put a on drag
the economy, they had a favorable impact on the portfolio as significant
exposure to energy stocks benefited from robust commodity prices.
Pharmaceutical companies continue to be a drag on performance. The drug makers
are struggling with the FDA over product safety issues, and high drug prices
remain in the headlines. The stocks have recently hit historically low
valuations and, therefore, remain attractive for inclusion in the portfolio.
Exposure to telecommunications stocks hurt the performance of the utilities
group relative to the benchmark. These stocks traded down on investor
nervousness over capital improvements spending and acquisitions. Generous
dividend yields and low valuations continue to drive our interest in these
companies. In the basic materials sector, stocks in aluminum underperformed
their peers.
The Fund continues to focus on companies with strong balance sheets that are
able to raise dividends and buyback stock to counter a rising rate environment.
FUND DATA
<Table>
Manager: James McGlynn
Inception Date: December 29, 1999
Total Net Assets: $63.0 Million
Number of Equity Holdings: 57
Median Cap Size: $46.7 Billion
Average Price-to-earnings Ratio: 18.00x
Average Price-to-book Ratio: 2.20x
Dividend Yield: 2.39%
</Table>
[CHART]
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
Summit Everest Fund Class I - Average Annual Total Return
<Table>
<Caption>
1-YEAR 5-YEAR SINCE INCEPTION
13.26% 8.41% 7.69%
</Table>
Summit Everest Fund Class A - Average Annual Total Return
<Table>
<Caption>
1-YEAR 5-YEAR SINCE INCEPTION
6.52% 6.85% 6.22%
</Table>
Past performance is not predictive of future results.
Performance does not reflect the deduction of taxes that a shareholder would pay
on fund distributions or redemption of fund shares.
<Table>
<Caption>
SUMMIT EVEREST FUND CLASS I SUMMIT EVEREST FUND CLASS A RUSSELL 1000 VALUE INDEX
Dec 28, 1999 $ 10,000.00 $ 10,000.00 $ 10,000.00
Dec 31, 1999 $ 10,040.00 $ 10,019.93 $ 10,109.00
Jan 31, 2000 $ 9,450.00 $ 9,449.14 $ 9,779.24
Feb 29, 2000 $ 8,760.00 $ 8,758.21 $ 9,052.65
Mar 31, 2000 $ 9,860.00 $ 9,859.86 $ 10,157.16
Apr 30, 2000 $ 9,670.00 $ 9,667.84 $ 10,038.93
May 31, 2000 $ 10,040.00 $ 10,035.71 $ 10,144.74
Jun 30, 2000 $ 9,780.00 $ 9,773.11 $ 9,681.13
Jul 31, 2000 $ 9,720.00 $ 9,710.75 $ 9,802.33
Aug 31, 2000 $ 10,230.36 $ 10,217.76 $ 10,347.74
Sep 30, 2000 $ 10,320.89 $ 10,305.86 $ 10,442.52
Oct 31, 2000 $ 10,723.26 $ 10,706.12 $ 10,698.99
Nov 30, 2000 $ 10,642.75 $ 10,622.90 $ 10,301.84
Dec 31, 2000 $ 11,284.63 $ 11,262.25 $ 10,817.97
Jan 31, 2001 $ 11,730.34 $ 11,705.63 $ 10,859.61
Feb 28, 2001 $ 11,537.88 $ 11,510.59 $ 10,557.61
Mar 31, 2001 $ 11,203.00 $ 11,173.18 $ 10,184.92
Apr 30, 2001 $ 11,913.34 $ 11,880.99 $ 10,683.99
May 31, 2001 $ 12,296.84 $ 12,258.51 $ 10,924.38
Jun 30, 2001 $ 12,162.28 $ 12,122.21 $ 10,681.85
Jul 31, 2001 $ 12,338.24 $ 12,295.64 $ 10,659.42
Aug 31, 2001 $ 11,841.40 $ 11,797.18 $ 10,231.98
Sep 30, 2001 $ 11,251.40 $ 11,204.93 $ 9,511.65
Oct 31, 2001 $ 11,458.42 $ 11,409.29 $ 9,429.85
Nov 30, 2001 $ 12,069.12 $ 12,017.26 $ 9,977.72
Dec 31, 2001 $ 12,464.37 $ 12,395.09 $ 10,213.20
Jan 31, 2002 $ 12,375.41 $ 12,305.25 $ 10,134.56
Feb 28, 2002 $ 12,526.63 $ 12,453.85 $ 10,150.77
Mar 31, 2002 $ 12,958.05 $ 12,882.42 $ 10,630.90
Apr 30, 2002 $ 12,348.73 $ 12,271.83 $ 10,266.26
May 31, 2002 $ 12,275.34 $ 12,195.22 $ 10,317.59
Jun 30, 2002 $ 11,270.19 $ 11,187.60 $ 9,725.36
Jul 31, 2002 $ 9,947.03 $ 9,861.41 $ 8,820.90
Aug 31, 2002 $ 10,098.25 $ 10,010.09 $ 8,887.06
Sep 30, 2002 $ 8,861.82 $ 8,773.30 $ 7,898.82
Oct 31, 2002 $ 9,346.61 $ 9,253.34 $ 8,484.12
Nov 30, 2002 $ 10,229.45 $ 10,131.99 $ 9,018.62
Dec 31, 2002 $ 9,496.92 $ 9,395.87 $ 8,627.21
Jan 31, 2003 $ 9,261.31 $ 9,157.33 $ 8,418.44
Feb 28, 2003 $ 9,132.18 $ 9,155.57 $ 8,193.66
Mar 31, 2003 $ 9,200.14 $ 9,091.60 $ 8,207.59
Apr 30, 2003 $ 10,122.20 $ 10,009.08 $ 8,929.86
May 31, 2003 $ 10,801.84 $ 10,684.23 $ 9,506.73
Jun 30, 2003 $ 11,135.70 $ 11,015.74 $ 9,625.56
Jul 31, 2003 $ 11,217.33 $ 11,095.18 $ 9,768.99
Aug 31, 2003 $ 11,332.98 $ 11,207.82 $ 9,921.38
Sep 30, 2003 $ 11,310.30 $ 11,182.51 $ 9,824.15
Oct 31, 2003 $ 11,874.91 $ 11,743.93 $ 10,425.39
Nov 30, 2003 $ 12,029.10 $ 11,896.74 $ 10,567.18
Dec 31, 2003 $ 12,812.47 $ 12,675.39 $ 11,218.11
Jan 31, 2004 $ 13,141.47 $ 13,002.72 $ 11,415.55
Feb 29, 2004 $ 13,268.00 $ 13,127.93 $ 11,659.84
Mar 31, 2004 $ 13,035.64 $ 12,892.71 $ 11,557.24
Apr 30, 2004 $ 12,943.61 $ 12,797.33 $ 11,275.24
May 31, 2004 $ 12,987.32 $ 12,838.71 $ 11,390.25
Jun 30, 2004 $ 13,399.14 $ 13,247.36 $ 11,659.06
Jul 31, 2004 $ 13,077.05 $ 12,923.24 $ 11,494.67
Aug 31, 2004 $ 13,238.10 $ 13,081.23 $ 11,657.89
Sep 30, 2004 $ 13,378.44 $ 13,220.52 $ 11,838.59
Oct 31, 2004 $ 13,638.41 $ 13,474.14 $ 12,035.11
Nov 30, 2004 $ 14,190.58 $ 14,017.71 $ 12,644.08
Dec 31, 2004 $ 14,679.53 $ 14,497.56 $ 13,067.66
Jan 31, 2005 $ 14,364.99 $ 14,182.98 $ 12,835.06
Feb 28, 2005 $ 14,855.38 $ 14,664.68 $ 13,259.90
Mar 31, 2005 $ 14,763.74 $ 14,571.29 $ 13,078.24
</Table>
TOP 10 EQUITY HOLDINGS
<Table>
<Caption>
(% OF NET ASSETS)
-----------------
Alliance Capital Holdings 2.61%
Unilever 2.61%
Viacom Inc. 2.57%
Time Warner Inc. 2.52%
Sony Corp. 2.51%
Equity Residential Properties Trust 2.49%
Coca Cola Co. 2.36%
St. Paul Travelers Companies 2.31%
J.P. Morgan Chase & Co. 2.27%
Citigroup Inc. 2.24%
</Table>
[CHART]
SECTOR ALLOCATIONS
<Table>
Consumer Discretionary 11.6%
Consumer Non-Cyclical 7.0%
Energy 12.4%
Financials 27.3%
Healthcare 6.3%
Industrials 5.1%
Materials 4.7%
Technology 10.3%
Transportation 3.9%
Utilities 7.5%
Short-Term & Other 3.9%
</Table>
9
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
FINANCIAL HIGHLIGHTS EVEREST FUND
FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding throughout the
period. Share amounts and net asset values have been adjusted as a result of the
1-for-5 reverse stock split on February 15, 2002.
<Table>
<Caption>
CLASS I
-----------------------------------------------------------------------------
FOR THE SIX MONTHS PERIOD FROM
ENDED MARCH 31, DECEMBER 29, 1999(1)
(UNAUDITED) YEAR ENDED SEPTEMBER 30, TO SEPTEMBER 30,
-------------------------------------------------------------------------------
2005 2004 2003 2002 2001 2000
-------------------------------------------------------------------------------
Net asset value, beginning
of period $ 58.15 $ 49.88 $ 39.85 $ 54.35 $ 51.30 $ 50.00
------- ------- ------- ------- ------- -------
Investment Activities:
Net investment income /
(loss) 0.49 0.80 0.74 0.74 0.95 0.40
Net realized and
unrealized gains /
(losses) 5.43 8.27 10.13 (11.12) 3.80 1.20
------- ------- ------- ------- ------- -------
Total from Investment
Activities 5.92 9.07 10.87 (10.38) 4.75 1.60
------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Net investment income (0.79) (0.80) (0.80) (0.53) (0.70) (0.30)
Net realized gains (3.67) -- (0.04) (3.59) (1.00) --
------- ------- ------- ------- ------- -------
Total Distributions (4.46) (0.80) (0.84) (4.12) (1.70) (0.30)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 59.61 $ 58.15 $ 49.88 $ 39.85 $ 54.35 $ 51.30
======= ======= ======= ======= ======= =======
Total return 10.35% 18.29% 27.63% -21.24% 9.01% 3.21%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets - net (2) 0.98%(3) 0.97% 0.98% 0.96% 0.78% 0.81%(3)
Ratio of expenses to
average net assets - gross 0.98%(3) 0.97% 0.98% 0.96% 0.80% 0.85%(3)
Ratio of net investment
income / (loss) to average
net assets 1.64%(3) 1.46% 1.64% 1.33% 1.67% 1.51%(3)
Portfolio turnover rate 61.57%(3) 73.43% 58.23% 66.74% 105.91% 138.39%(3)
Net assets, end of period (000's) $62,982 $61,042 $48,821 $42,194 $57,497 $49,440
</Table>
<Table>
<Caption>
CLASS A
-----------------------------------------------------------------
FOR THE SIX MONTHS PERIOD FROM
ENDED MARCH 31, JULY 1, 2002(1)
(UNAUDITED) YEAR ENDED SEPTEMBER 30, TO SEPTEMBER 30,
-----------------------------------------------------------------
2005 2004 2003 2002
-----------------------------------------------------------------
Net asset value, beginning
of period $ 58.62 $ 50.34 $ 39.84 $ 49.73
---------- ---------- ---------- ----------
Investment Activities:
Net investment income / (loss) 1.18 0.66 0.61 0.15
Net realized and unrealized
gains / (losses) 4.69 8.35 10.22 (10.04)
---------- ---------- ---------- ----------
Total from Investment Activities 5.87 9.01 10.83 (9.89)
---------- ---------- ---------- ----------
DISTRIBUTIONS:
Net investment income (1.53) (0.73) (0.29) --
Net realized gains (3.67) -- (0.04) --
---------- ---------- ---------- ----------
Total Distributions (5.20) (0.73) (0.33) --
---------- ---------- ---------- ----------
Net asset value, end of period $ 59.29 $ 58.62 $ 50.34 $ 39.84
========== ========== ========== ==========
Total return 10.21% 17.99% 27.32% -19.89%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets - net (2) 1.23%(3) 1.22% 1.23% 1.24%(3)
Ratio of expenses to average net
assets - gross 1.23%(3) 1.22% 1.23% 1.24%(3)
Ratio of net investment income /
(loss) to average net assets 1.14%(3) 1.17% 1.39% 1.37%(3)
Portfolio turnover rate 61.57%(3) 73.43% 58.23% 66.74%
Net assets, end of period (000's) $ 26 $ 16 $ 5 $ 4
</Table>
(1) COMMENCEMENT OF OPERATIONS.
(2) NET EXPENSES REPRESENT GROSS EXPENSES REDUCED BY FEES WAIVED AND/OR
REIMBURSED BY THE ADVISER.
(3) ANNUALIZED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
10
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
EVEREST FUND SCHEDULE OF INVESTMENTS
MARCH 31, 2005 (UNAUDITED)
<Table>
<Caption>
SHARES VALUE
-----------------------------
COMMON STOCKS - 96.14%
CONSUMER DISCRETIONARY - 11.63%
News Corporation 72,000 $ 1,267,920
Sony Corp. 39,500 1,580,790
Time Warner Inc.* 90,300 1,584,765
The Walt Disney Co. 44,400 1,275,612
Viacom Inc. 46,448 1,617,784
-------------
7,326,871
-------------
CONSUMER NON-CYCLICAL - 6.98%
Coca Cola Co. 35,700 1,487,619
Kraft Foods 38,300 1,265,815
Unilever 24,000 1,642,080
-------------
4,395,514
-------------
ENERGY - 12.42%
Anadarko Petroleum 8,200 624,020
Baker Hughes Inc. 29,400 1,308,006
ChevronTexaco Corp. 23,756 1,385,212
ConocoPhillips 6,277 676,912
Devon Energy Corp. 17,200 821,300
Nabors Industries Ltd.* 19,000 1,123,660
Unocal Corp. 13,400 826,646
Weatherford International* 18,300 1,060,302
-------------
7,826,058
-------------
FINANCIALS - 27.35%
Alliance Capital Holdings 34,900 1,645,535
Bank of America Corp. 18,600 820,260
Bank of New York 43,400 1,260,770
Charles Schwab Corp. 27,500 289,025
Citigroup Inc. 31,400 1,411,116
Equity Residential Properties Trust 48,800 1,571,848
Freddie Mac 8,900 562,480
Goldman Sachs Group Inc 7,300 802,927
J.P. Morgan Chase & Co. 41,364 1,431,194
Marsh & McLennan Co. 19,500 593,190
Mellon Financial Corp. 35,700 1,018,878
Morgan Stanley Dean Witter & Co. 17,800 1,019,050
PNC Financial Services Group 24,100 1,240,668
St. Paul Travelers Companies 39,600 1,454,508
Washington Mutual Inc. 23,500 928,250
Wells Fargo Company 19,800 1,184,040
-------------
17,233,739
-------------
HEALTH CARE - 6.33%
Bristol-Meyers Squibb 41,500 1,056,590
Johnson & Johnson Co. 10,400 698,464
Merck & Co. 25,900 838,383
Pfizer Inc. 53,100 1,394,937
-------------
3,988,374
-------------
INDUSTRIALS - 5.08%
Deere & Co. 17,500 $ 1,174,775
General Electric 36,800 1,327,008
SPX Corp. 16,200 701,136
-------------
3,202,919
-------------
MATERIALS - 4.69%
Alcan Inc. 26,400 1,001,088
Dow Chemical 14,400 717,840
Du Pont (E.I.) 24,100 1,234,884
-------------
2,953,812
-------------
TECHNOLOGY - 10.27%
Electronic Data Systems Corp. 28,500 589,095
Hewlett-Packard Co. 58,200 1,276,908
International Business Machines 11,400 1,041,732
Intel Corp. 45,300 1,052,319
Microsoft Corp. 48,000 1,160,160
Nokia Corp.* 87,800 1,354,754
-------------
6,474,968
-------------
TRANSPORTATION - 3.91%
CSX Corp. 28,900 1,203,685
Union Pacific Corp.* 18,100 1,261,570
-------------
2,465,255
-------------
UTILITIES - 7.48%
AllTell Corp 10,900 597,865
Ameren Corporation 6,200 303,862
Cinergy Corporation 15,800 640,216
Comcast Corporation* 18,800 627,920
SBC Communications, Inc. 41,000 971,290
Southern Co. 19,300 614,319
Verizon Communications 26,900 954,950
-------------
4,710,422
-------------
Total Common Stocks
(cost $55,265,933) 60,577,932
-------------
SHORT-TERM INVESTMENTS - 3.31%
NORTHERN TRUST DIVERSIFIED ASSETS
FUND - 3.31% 2,085,693 2,085,693
-------------
Total Short-Term Investments
(cost $2,085,693) 2,085,693
-------------
TOTAL INVESTMENTS - 99.45%
(cost $57,351,626)(1) 62,663,625
-------------
OTHER ASSETS AND LIABILITIES - 0.55% 344,130
-------------
TOTAL NET ASSETS - 100.00% $ 63,007,755
=============
</Table>
* Non-income producing
(1) For federal income tax purposes, cost is $57,396,864 and gross unrealized
appreciation and depreciation of securities as of March 31, 2005 was
$7,305,032 and ($2,038,271), respectively, with a net appreciation /
depreciation of $5,266,761.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
11
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
FINANCIAL STATEMENTS EVEREST FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2005 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value $ 62,663,625
Receivables:
Shares sold 250
Securities sold 367,974
Interest and dividends 108,289
Prepaid expenses and other 11,711
----------------
63,151,849
----------------
LIABILITIES
Payables:
Shares redeemed 79,352
12b-1 fees 40
Advisory fees 34,224
Administration expenses 5,348
Directors' fees 2,871
Custodian fees 1,318
Fund accounting fees 6,504
Professional fees 9,201
Other accrued expenses 5,236
----------------
144,094
----------------
NET ASSETS*
Paid-in capital 54,549,734
Accumulated undistributed
net investment income 222,434
Accumulated net realized gain / (loss)
on investments and futures contracts 2,923,588
Net unrealized appreciation / (depreciation)
on investments and futures contracts 5,311,999
----------------
$ 63,007,755
================
Investments at cost $ 57,351,626
Shares authorized per class ($.10 par value) 20,000,000
</Table>
NET ASSET VALUE (NAV) BY SHARE CLASS
<Table>
<Caption>
SHARES
SHARE CLASS NET ASSETS/ OUTSTANDING
Class I $ 62,982,250 1,056,614 $ 59.61
Class A $ 25,505 430 $ 59.29
</Table>
*FEDERAL TAX DATA AS OF SEPTEMBER 30, 2004
<Table>
Undistributed ordinary income $ 2,875,273
Undistributed long-term gains $ 958,092
Unrealized appreciation $ 3,098,229
</Table>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 (UNAUDITED)
<Table>
INVESTMENT INCOME
Interest $ 18,337
Dividends 813,475
Foreign dividend taxes withheld (6,367)
Other income 2,727
----------------
828,172
----------------
EXPENSES
Advisory fees 201,778
Administration expenses 31,528
Custodian fees and expenses 4,258
Fund accounting fees 19,218
Professional fees 16,417
Directors' fees 4,586
Transfer agent fees 14,624
12b-1 fees 15
Other expenses 18,013
----------------
310,437
----------------
NET INVESTMENT INCOME / (LOSS) 517,735
----------------
REALIZED AND UNREALIZED GAIN / (LOSS)
Net realized gain / (loss) on investments
and options 3,498,869
Net change in unrealized appreciation /
(depreciation) on investments 2,213,770
----------------
NET REALIZED AND UNREALIZED
GAIN / (LOSS) 5,712,639
----------------
NET INCREASE / (DECREASE)
IN NET ASSETS FROM OPERATIONS $ 6,230,374
================
</Table>
TRANSACTIONS WITH AFFILIATES:
<Table>
<Caption>
PERCENT OF CURRENT
NET ASSET VALUE
- ----------------------------------
ADVISORY ADMINISTRATION EXPENSE
FEE FEE LIMIT(1) WAIVER REIMBURSEMENT
- -----------------------------------------------------------
0.64% 0.10% 1.00% $ -- $ --
</Table>
(1) If total operating expenses, exclusive of advisory fees and certain other
expenses, for any fiscal quarter exceed the indicated limit, the Adviser
will reimburse the fund for such excess, up to the amount of the advisory
fee for that year.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
12
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
EVEREST FUND FINANCIAL HIGHLIGHTS
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE SIX MONTHS
ENDED MARCH 31, YEAR ENDED
(UNAUDITED) SEPTEMBER 30,
---------------------------------
2005 2004
---------------------------------
OPERATIONS
Net investment income / (loss) $ 517,735 $ 835,296
Net realized gain / (loss) on investments and futures 3,498,869 5,180,380
Net change in unrealized appreciation / (depreciation) on investments 2,213,770 3,053,260
------------ ------------
6,230,374 9,068,936
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS*
Class I
Net investment income (833,358) (797,813)
Net realized gain on investments (3,870,074) --
Class A
Net investment income (151) (71)
(364) --
------------ ------------
(4,703,947) (797,884)
------------ ------------
FUND SHARE TRANSACTIONS
Class I
Proceeds from shares sold 3,579,808 8,680,804
Reinvestment of distributions 4,697,108 797,813
Payments for shares redeemed (7,862,818) (5,527,747)
------------ ------------
414,098 3,950,870
------------ ------------
Class A
Proceeds from shares sold 19,175 10,010
Reinvestment of distributions 516 71
Payments for shares redeemed (10,656) (5)
------------ ------------
9,035 10,076
------------ ------------
NET INCREASE / (DECREASE) IN NET ASSETS 1,949,560 12,231,998
NET ASSETS
Beginning of period 61,058,195 48,826,197
------------ ------------
End of period $ 63,007,755 $ 61,058,195
============ ============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 222,434 $ 538,207
============ ============
FUND SHARE TRANSACTIONS
Class I
Sold 59,756 154,026
Reinvestment of distributions 80,609 14,591
Redeemed (133,421) (97,666)
------------ ------------
Net increase / (decrease) from fund share transactions 6,944 70,951
============ ============
Class A
Sold 322 174
Reinvestment of distributions 9 1
Redeemed (174) --
------------ ------------
Net increase / (decrease) from fund share transactions 157 175
============ ============
TOTAL COST OF PURCHASES OF:
Common Stocks $ 18,828,130 $ 44,235,432
------------ ------------
$ 18,828,130 $ 44,235,432
============ ============
TOTAL PROCEEDS FROM SALES OF:
Common Stocks $ 22,840,574 $ 40,561,213
------------ ------------
$ 22,840,574 $ 40,561,213
============ ============
*TAX CHARACTER OF DISTRIBUTIONS PAID
Ordinary income $ 3,096,316 $ 797,884
Long-term capital gains 1,607,631 --
------------ ------------
$ 4,703,947 $ 797,884
============ ============
Percentage of ordinary income distributions designated as qualified
dividend income 100% 100%
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
13
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
BOND FUND
OBJECTIVE - Seeks a high level of current income, as is consistent with
reasonable investment risk, by investing primarily in long-term, fixed-income,
investment-grade corporate bonds.
STRATEGY - Under normal circumstances, the Bond Fund (the "Fund") will invest at
least 80% of the value of its assets in fixed income securities. Further, the
Fund normally will invest at least 75% of the value of its assets in
publicly-traded straight debt securities which have a rating within the four
highest grades as rated by a national rating agency. Up to 25% of the portfolio
may be invested in below investment grade debt securities or convertible debt
securities.
MANAGER'S COMMENTS:
The Fund had a total return of 0.16% (before the impact of any product or
contract-level fees) for the six-month period ended March 31, 2005. During the
period, the Fund underperformed the Lehman Brothers Aggregate Bond Index (the
"Index), which produced a 0.47% total return. The primary reason that the Fund
underperformed the Index is that the Fund was over-weighted in corporate bonds,
which underperformed the broad market during the period.
Interest rate rose substantially during the period, especially in the short end
of the yield curve. Led by the Federal Reserve's actions raising the discount
rate four times by a total of 100 basis points to 2.75%, the yield on the 2 year
Treasury note rose by 117 basis points during the period. While longer term
interest rates increased more slowly, the yield on the 5 year Treasury note rose
79 basis points, and the yield on the 10 year Treasury note rose 36 basis
points. The yield at the long end of the curve was the only place yields
declined during the period, with the 30 year Treasury bond yield declining 13
basis points. The flattening in the yield curve suggests that fixed income
market participants believe that inflation is under control, and that economic
growth will slow in the near term. We find the action in the long end of the
yield curve curious, as we are not as sanguine about the prospects for inflation
given high oil prices and the pricing power that many companies are reporting
for the first time in several years.
High yield and mortgage-backed securities were the best performing sectors of
the market, while Treasury notes were the worst performing sector. Securities
that provide incremental yield over Treasuries, which include corporate,
mortgage-backed and high yield bonds, have generally outperformed the market
over the last two (2) years. With interest rates low, investor demand continues
to been strong for bonds that provide incremental yield over Treasuries. The
first major deviation from this theme occurred near the end of the period, when
the market became spooked by the possibility that General Motors debt ratings
would be cut to below investment grade. This sent shock waves through the market
that may very well set the tone for the corporate bond market for the balance of
the year.
Looking ahead, we believe that the economy will continue to improve in 2005,
albeit at a slower pace. We expect corporate and mortgage-backed bond spreads to
tighten slightly compared to Treasury bonds, but believe spreads will fluctuate
for the balance of the year, especially in lower rated corporate bonds.
Therefore, while we are maintaining our over-weight in higher yielding bonds, we
are becoming more defensive in our thinking. We also remain cautious with regard
to overall interest rates, and continue to believe that there is a better chance
of rates rising than falling for the balance of the year. Higher Treasury rates
would undermine overall returns in the fixed income marketplace.
FUND DATA
<Table>
Managers: Gary R. Rodmaker
Michael J. Schultz
Dave M. Weisenburger
Inception Date: April 3, 2000
Total Net Assets: $94.3 Million
Number of Holdings: 139
Average Duration: 4.22 years
Average Maturity: 11.90 years
Weighted Average Maturity: 5.88 years
Average Credit Quality: A/A2
Current Yield: 5.50%
</Table>
[CHART]
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
Summit Bond Fund - Average Annual Total Return
<Table>
<Caption>
1-YEAR 3-YEAR SINCE INCEPTION
0.61% 6.07% 6.28%
</Table>
Past performance is not predictive of future results.
Performance does not reflect the deduction of taxes that a shareholder would pay
on fund distributions or redemption of fund shares.
<Table>
<Caption>
SUMMIT BOND FUND LEHMAN BROTHERS AGGREGATE BOND INDEX
Mar 31, 2000 $ 10,000.00 $ 10,000.00
Apr 30, 2000 $ 9,920.00 $ 9,971.37
May 31, 2000 $ 9,810.06 $ 9,966.79
Jun 30, 2000 $ 10,051.54 $ 10,174.15
Jul 31, 2000 $ 10,152.16 $ 10,266.43
Aug 31, 2000 $ 10,334.88 $ 10,415.19
Sep 30, 2000 $ 10,304.09 $ 10,480.60
Oct 31, 2000 $ 10,283.56 $ 10,550.08
Nov 30, 2000 $ 10,408.84 $ 10,722.58
Dec 31, 2000 $ 10,555.01 $ 10,921.59
Jan 31, 2001 $ 10,755.15 $ 11,100.70
Feb 28, 2001 $ 10,892.89 $ 11,197.28
Mar 31, 2001 $ 10,956.78 $ 11,253.26
Apr 30, 2001 $ 10,914.19 $ 11,206.00
May 31, 2001 $ 10,974.72 $ 11,273.24
Jun 30, 2001 $ 10,953.07 $ 11,316.07
Jul 31, 2001 $ 11,191.18 $ 11,569.55
Aug 31, 2001 $ 11,322.76 $ 11,702.60
Sep 30, 2001 $ 11,311.76 $ 11,839.52
Oct 31, 2001 $ 11,542.62 $ 12,086.97
Nov 30, 2001 $ 11,430.93 $ 11,920.17
Dec 31, 2001 $ 11,317.36 $ 11,843.88
Jan 31, 2002 $ 11,385.20 $ 11,939.82
Feb 28, 2002 $ 11,428.16 $ 12,055.63
Mar 31, 2002 $ 11,360.10 $ 11,855.51
Apr 30, 2002 $ 11,553.88 $ 12,085.51
May 31, 2002 $ 11,621.46 $ 12,188.23
Jun 30, 2002 $ 11,579.90 $ 12,293.66
Jul 31, 2002 $ 11,609.91 $ 12,441.92
Aug 31, 2002 $ 11,752.09 $ 12,651.94
Sep 30, 2002 $ 11,796.60 $ 12,856.90
Oct 31, 2002 $ 11,646.66 $ 12,798.28
Nov 30, 2002 $ 11,771.29 $ 12,794.95
Dec 31, 2002 $ 11,933.37 $ 13,059.16
Jan 31, 2003 $ 11,928.58 $ 13,070.26
Feb 28, 2003 $ 12,137.14 $ 13,251.16
Mar 31, 2003 $ 12,190.39 $ 13,240.95
Apr 30, 2003 $ 12,396.15 $ 13,350.19
May 31, 2003 $ 12,634.54 $ 13,599.04
Jun 30, 2003 $ 12,717.79 $ 13,571.98
Jul 31, 2003 $ 12,409.27 $ 13,115.69
Aug 31, 2003 $ 12,500.67 $ 13,202.78
Sep 30, 2003 $ 12,884.23 $ 13,552.25
Oct 31, 2003 $ 12,839.40 $ 13,425.95
Nov 30, 2003 $ 12,919.36 $ 13,458.03
Dec 31, 2003 $ 13,059.28 $ 13,595.04
Jan 31, 2004 $ 13,209.04 $ 13,704.48
Feb 29, 2004 $ 13,351.04 $ 13,852.76
Mar 31, 2004 $ 13,475.06 $ 13,956.65
Apr 30, 2004 $ 13,143.59 $ 13,593.50
May 31, 2004 $ 13,047.99 $ 13,539.13
Jun 30, 2004 $ 13,095.38 $ 13,615.62
Jul 31, 2004 $ 13,229.68 $ 13,750.56
Aug 31, 2004 $ 13,477.21 $ 14,012.92
Sep 30, 2004 $ 13,535.15 $ 14,050.89
Oct 31, 2004 $ 13,643.11 $ 14,168.64
Nov 30, 2004 $ 13,555.98 $ 14,055.57
Dec 31, 2004 $ 13,681.16 $ 14,184.88
Jan 31, 2005 $ 13,718.76 $ 14,273.82
Feb 28, 2005 $ 13,699.83 $ 14,189.61
Mar 31, 2005 $ 13,556.62 $ 14,116.67
</Table>
QUALITY BREAKDOWN
<Table>
<Caption>
(% OF PORTFOLIO)
-----------------
AAA 40%
AA 3%
A 9%
BBB 35%
BB 5%
B 5%
CCC 2%
D 1%
</Table>
[CHART]
SECTOR ALLOCATIONS
<Table>
U.S. Treasuries and Agencies 16.1%
Mortgage & Asset Backed Securities 34.5%
Corporate Bonds 45.5%
Short-Term & Other 3.9%
</Table>
14
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
BOND FUND FINANCIAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding throughout the
period. Share amounts and net asset values have been adjusted as a result of the
1-for-5 reverse stock split on February 15, 2002.
<Table>
<Caption>
BOND FUND
--------------------------------------------------------------------------
FOR THE SIX MONTHS PERIOD FROM
ENDED MARCH 31, APRIL 3, 2000(1)
(UNAUDITED) YEAR ENDED SEPTEMBER 30, TO SEPTEMBER 30,
-----------------------------------------------------------------------------
2005 2004 2003 2002 2001 2000
-----------------------------------------------------------------------------
Net asset value, beginning of
period $ 51.40 $ 51.73 $ 50.35 $ 51.45 $ 50.20 $ 50.00
------- ------- -------- -------- -------- -------
Investment Activities:
Net investment income / (loss) 1.21 2.44 3.34 3.10 3.35 1.80
Net realized and unrealized
gains / (losses) (1.12) 0.06 1.12 (0.98) 1.40 (0.30)
------- ------- ------- -------- -------- -------
Total from Investment
Activities 0.09 2.50 4.46 2.12 4.75 1.50
------- ------- ------- -------- -------- -------
DISTRIBUTIONS:
Net investment income (1.32) (2.83) (3.08) (3.13) (3.40) (1.30)
Net realized gains -- -- -- (0.09) (0.10) --
------- ------- ------- -------- -------- -------
Total Distributions (1.32) (2.83) (3.08) (3.22) (3.50) (1.30)
------- ------- ------- -------- -------- -------
Net asset value, end of period $ 50.17 $ 51.40 $ 51.73 $ 50.35 $ 51.45 $ 50.20
======= ======= ======= ======== ======== =======
Total return 0.16% 5.05% 9.22% 4.29% 9.78% 3.04%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets - net (2) 0.73%(3) 0.72% 0.69% 0.71% 0.61% 0.64%(3)
Ratio of expenses to average
net assets - gross 0.73%(3) 0.72% 0.69% 0.71% 0.62% 0.66%(3)
Ratio of net investment income /
(loss) to average net assets 4.74%(3) 4.82% 6.53% 6.17% 6.72% 7.19%(3)
Portfolio turnover rate 58.36%(3) 79.28% 125.15% 51.52% 76.96% 80.03%(3)
Net assets, end of period (000's) $94,344 $92,148 $91,745 $103,505 $102,056 $69,875
</Table>
(1) COMMENCEMENT OF OPERATIONS.
(2) NET EXPENSES REPRESENT GROSS EXPENSES REDUCED BY FEES WAIVED AND/OR
REIMBURSED BY THE ADVISER.
(3) ANNUALIZED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
15
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
SCHEDULE OF INVESTMENTS BOND FUND
MARCH 31, 2005 (UNAUDITED)
<Table>
<Caption>
SHARES VALUE
-----------------------------
PREFERRED STOCKS - 0.26%
MEDIA & CABLE - 0.26%
Paxson Communications 14.25% PIK Dividend 35,160 $ 240,389
-------------
Total Preferred Stocks
(cost $290,025) 240,389
-------------
COMMON STOCKS - 0.34%
TELECOMMUNICATIONS - 0.34%
MCI Inc. 13,029 324,683
-------------
Total Common Stocks
(cost $246,032) 324,683
-------------
<Caption>
PRINCIPAL VALUE
-----------------------------
U.S. TREASURY OBLIGATIONS - 11.37%
U.S. TREASURY NOTES & BONDS - 11.37%
5.875% due 11/15/05 $ 300,000 $ 304,805
2.000% due 05/15/06 2,000,000 1,966,876
7.000% due 07/15/06 2,000,000 2,084,532
2.625% due 11/15/06 2,200,000 2,162,618
3.125% due 04/15/09 3,400,000 3,278,742
4.250% due 11/15/14 630,000 616,982
5.250% due 02/15/29 300,000 315,902
-------------
Total U.S. Treasury Obligations
(cost $10,863,553) 10,730,457
-------------
MORTGAGE-BACKED SECURITIES - 19.58%
FHLMC 5.000% due 05/01/18 511,385 512,216
FHLMC 4.500% due 09/01/18 3,363,040 3,299,077
FNMA 5.500% due 02/01/09 1,180,729 1,201,689
FNMA 5.000% due 03/01/09 836,854 843,354
FNMA 5.000% due 11/01/10 1,293,857 1,303,509
FNMA 5.500% due 05/01/12 560,875 574,344
FNMA 6.000% due 06/01/16 737,048 761,568
FNMA 4.500% due 03/01/17 1,965,776 1,932,492
FMNA 5.000% due 10/01/17 3,902,079 3,909,937
FNMA 5.500% due 08/01/18 3,165,931 3,229,880
FNMA 6.500% due 02/01/29 221,879 231,148
FNMA 5.000% due 02/01/33 310,777 304,929
GNMA 6.500% due 10/15/28 351,823 368,306
-------------
Total Mortgage-Backed Securities
(cost $18,533,093) 18,472,449
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 17.44%
AGENCY SECTOR - 4.77%
FNR 2002-48 GF
(6.500% due 10/25/31) 2,700,000 2,790,100
FHR 2810 YA
(5.500% due 06/15/34) 1,688,753 1,715,931
-------------
4,506,031
-------------
PRIVATE SECTOR - 12.67%
ABN Amro Mortgage Corp.
(6.000% due 03/25/17) 274,804 274,774
BAFC 2003-2 B3
(6.366% due 06/25/32) $ 644,138 $ 641,264
BOAA 2003-5 2B3
(5.000% due 07/25/18) 597,160 549,048
BOAA 2003-8 3B3
(4.750% due 10/25/18) 648,137 591,007
BOAMS 2003-10 4A2
(5.000% due 01/25/19) 485,487 484,091
BOAMS 2004-3 3B3
(4.875% due 04/25/19) 188,757 176,011
BOAMS 2003-5 3B2
(7.500% due 02/25/31) 416,001 431,074
BOAMS 2003-8 1A10
(5.500% due 11/25/33) 327,250 331,342
BOAMS 2004-6 1A11
(5.500% due 07/25/34) 938,557 949,259
CS First Boston
(6.250% due 09/25/32) 581,822 585,499
CXHE 2001-B M2
(7.360% due 07/25/32) 296,006 300,990
GMACM 2003- J3 B1(2)
(5.000% due 05/25/18) 272,721 257,403
GMACM 2004- J1 A16
(5.250% due 04/25/34) 647,999 653,947
HS 1994-2 M2
(6.500% due 07/25/09) 56,014 55,887
MASTR 2003-9 2A12
(5.500% due 10/25/33) 269,625 273,208
MSSTR 2004-1 15B1
(6.252% due 08/25/17) 537,762 554,965
MSSTR 2004-1 30B2
(6.500% due 08/25/32) 927,186 962,317
Morgan Stanley
(5.169% due 11/25/33) 540,033 513,525
RALI 2001-QS15 M3
(6.750% due 09/25/31) 501,006 499,766
RALI 2002-QS16 M2
(5.750% due 10/25/17) 287,128 289,663
RALI 2002-QS16 M3
(5.750% due 10/25/17) 287,128 282,610
RAMP 2003-RZ3 M1
(4.120% due 06/25/33) 500,000 487,927
SASC 2003-2O B2
(5.378% due 07/25/33) 700,563 672,880
Salomon Brothers
(4.139% due 09/25/33) 490,148 469,770
WAMMS 2003-MS6 CB2
(5.966% due 05/25/33) 659,748 664,482
-------------
11,952,709
-------------
Total Collateralized Mortgage Obligations
(cost $15,703,477) 16,458,740
-------------
ASSET-BACKED SECURITIES - 2.21%
COMMERCIAL MORTGAGE-BACKED SECURITIES - 2.21%
Chase Commercial Mortgage Sec
(6.600% due 12/19/07) 1,982,000 2,082,902
-------------
Total Asset-Backed Securities
(cost $1,881,984) 2,082,902
-------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
16
<Page>
<Table>
<Caption>
PRINCIPAL VALUE
-----------------------------
CORPORATE BONDS AND NOTES - 45.55%
AEROSPACE & DEFENSE - 0.14%
Hexcel Corp.
(9.750% due 01/15/09) $ 130,000 $ 135,291
-------------
AIR TRANSPORTATION - 2.45%
America West Airlines, AMBAC Insured
(7.100% due 04/02/21) 649,881 691,841
Continental Airlines Inc.
(7.875% due 07/02/18) 696,237 652,994
Jet Equipment(2)(5)(6)
(7.630% due 08/15/12) 805,625 507,544
NWA Trust No. 2 Class B
(10.230% due 06/21/14) 521,477 458,900
-------------
2,311,279
-------------
CONSUMER CYCLICAL - 8.24%
Accuride Corp.(2)
(8.500% due 02/01/15) 375,000 367,500
American Axle & Mfg Inc.
(5.250% due 02/11/14) 600,000 535,181
Boise Cascade(2)
(5.535% due 10/15/12) 37,000 37,740
DaimlerChrysler AG
(6.500% due 11/15/13) 750,000 779,981
Ford Motor Company
(5.700% due 01/15/10) 700,000 659,369
General Motors
(8.250% due 07/15/23) 546,000 471,653
GMAC
(5.850% due 01/14/09) 750,000 693,989
Hertz Corp.
(7.625% due 06/01/12) 750,000 760,421
ICI Wilmington
(5.625% due 12/01/13) 750,000 759,934
Lear Corp
(8.110% due 05/15/09) 700,000 757,532
Lubrizol Corp.
(7.250% due 06/15/25) 700,000 776,154
MDC Holdings Inc.
(5.500% due 05/15/13) 350,000 345,480
PQ Corp.(2)
(7.500% due 02/15/13) 94,000 92,590
Tech Olympic USA Inc.
(9.000% due 07/01/10) 375,000 388,125
WCI Communities(6)
(6.625% due 03/15/15) 375,000 346,875
-------------
7,772,524
-------------
CONSUMER NON-DURABLE - 4.67%
American Restaurant Group Inc.(5)
(11.500% due 11/01/06) 500,000 310,000
Amerigas Partner
(8.875% due 05/20/11) 187,000 198,220
Block Financial Corp.
(5.125% due 10/30/14) 490,000 471,192
Bunge Ltd Finance Corp.
(7.800% due 10/15/12) 700,000 810,427
Del Monte Corp.(2)
(6.750% due 02/15/15) 188,000 183,300
Dex Media West
(9.875% due 08/15/13) 182,000 202,930
Hughes Supply Inc.(2)
(5.500% due 10/15/14) $ 945,000 $ 917,727
Land O'Lakes
(7.450% due 03/15/28) 375,000 260,625
Landry's Restaurant(2)
(7.500% due 12/15/14) 375,000 363,750
RH Donnelley Finance Corp.
(8.875% due 12/15/10) 187,000 203,830
RH Donnelley Finance Corp.(2)
(10.875% due 12/15/12) 187,000 215,518
Werner Holdings Co. Inc.
(10.000% due 11/15/07) 375,000 266,250
-------------
4,403,769
-------------
ELECTRIC - 2.99%
AES Corporation
(9.375% due 09/15/10) 375,000 413,438
Ametek Inc.
(7.200% due 07/15/08) 750,000 800,718
First Energy Corp.
(6.450% due 11/15/11) 760,000 801,834
Sierra Power
(6.250% due 04/15/12) 94,000 95,410
TXU Corp.(2)
(5.550% due 11/15/14) 750,000 711,608
-------------
2,823,008
-------------
ENERGY - 7.06%
Aventine Renewable Energy(2)
(9.010% due 12/15/11) 188,000 190,820
Calpine Corp.
(10.500% due 05/15/06) 375,000 369,375
Canadian Oil Sands(2)
(5.800% due 08/15/13) 700,000 718,776
Chesapeake Energy
(9.000% due 08/15/12) 375,000 413,906
Enterprise Products(2)
(5.600% due 10/15/14) 700,000 690,851
Kaneb Pipeline
(5.875% due 06/01/13) 700,000 717,191
Kern River Funding Corp.(2)
(6.676% due 07/31/16) 127,843 137,102
Nevada Power Co.
(6.500% due 04/15/12) 94,000 97,055
Nexen Inc.
(5.875% due 03/10/35) 560,000 535,629
Northwest Pipeline Corp.
(8.125% due 03/01/10) 187,000 200,090
Pemex Master Trust
(8.000% due 11/15/11) 750,000 829,875
Plains All American Pipline
(5.625% due 12/15/13) 700,000 706,883
Southern Energy Inc.(2)(5)
(7.900% due 07/15/09) 375,000 299,062
Stone Energy(2)
(6.750% due 12/15/14) 375,000 363,750
Williams Co.
(7.125% due 09/01/11) 375,000 391,406
-------------
6,661,771
-------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
17
<Page>
<Table>
<Caption>
PRINCIPAL VALUE
-----------------------------
HOTEL & GAMING - 0.60%
MGM Mirage
(6.750% due 09/01/12) $ 375,000 $ 377,813
Station Casinos
(6.000% due 04/01/12) 188,000 186,590
-------------
564,403
-------------
HEALTH CARE - 2.41%
Beckman Coulter Inc.
(6.875% due 11/15/11) 700,000 773,895
Davita Inc.
(7.250% due 03/15/15) 94,000 92,120
Fisher Scientific International
(8.000% due 09/01/13) 375,000 407,813
Genesis Healthcare Corp.
(8.000% due 10/15/13) 188,000 204,920
Medco Health Solutions
(7.250% due 08/15/13) 350,000 386,875
Resolution Performance
(13.500% due 11/15/10) 375,000 405,000
-------------
2,270,623
-------------
INSURANCE - 4.44%
American Financial Group
(7.125% due 04/15/09) 750,000 807,091
Duke Capital
(5.668% due 08/15/14) 700,000 703,948
Farmer Exchange Capital(2)
(6.000% due 08/01/14) 700,000 709,726
Nationwide Financial Services
(5.625% due 02/13/15) 1,125,000 1,132,948
USF&G Capital
(8.470% due 01/10/27) 760,000 836,955
-------------
4,190,668
-------------
MEDIA & CABLE - 1.64%
CSC Holdings
(8.125% due 08/15/09) 375,000 395,625
Charter Communications
(4.750% due 06/01/06) 187,000 177,183
Charter Communications(2)
(8.000% due 04/30/12) 187,000 186,065
Emmis Co.
(6.875% due 05/15/12) 375,000 367,500
Panamsat Holdings Corp.(2)
(0.000% / 10.375% step bond due 11/01/14) 375,000 243,750
Paxson Communications
(0.000% / 12.75% step bond due 01/15/09) 188,000 174,840
-------------
1,544,963
-------------
MEDIA CONGLOMERATE - 2.32%
AOL Time Warner Inc.
(6.875% due 05/01/12) 760,000 829,984
Comcast Corp.
(5.300% due 01/15/14) 250,000 247,286
News American Holdings Nts.(2)
(5.300% due 12/15/14) 1,139,000 1,115,768
-------------
2,193,038
-------------
METALS & MINING - 0.45%
Falconbridge Ltd.
(7.350% due 06/05/12) $ 375,000 $ 421,114
-------------
PRINTING & PUBLISHING - 0.21%
Cadmus Communications
(8.375% due 06/15/14) 187,000 195,415
-------------
REAL ESTATE - 1.11%
Health Care REIT
(8.000% due 09/12/12) 750,000 859,301
La Quinta Properties
(7.000% due 08/15/12) 188,000 190,350
-------------
1,049,651
-------------
TECHNOLOGY - 1.15%
Jabil Circuit Inc.
(5.875% due 07/15/10) 1,050,000 1,084,192
-------------
TELECOMMUNICATIONS - 5.67%
America Movil
(5.500% due 03/01/14) 750,000 718,985
AT&T Wireless Services
(7.875% due 03/01/11) 375,000 426,522
Cox Communications Inc.(2)
(5.450% due 12/15/14) 700,000 681,456
IWO Escrow Co.(2)
(0.000% / 10.75% step bond due 01/15/15) 188,000 120,320
MCI Inc.
(5.908% due 05/01/07) 375,000 381,563
Qwest Communications International(2)
(7.750% due 02/15/14) 375,000 366,563
Sprint Capital Corp.
(7.625% due 01/30/11) 750,000 834,833
TCI Communications Inc.
(8.750% due 08/01/15) 760,000 950,425
Telus Corp.
(8.000% due 06/01/11) 750,000 868,526
-------------
5,349,193
-------------
Total Corporate Bonds & Notes
(cost $44,173,247) 42,970,902
-------------
<Caption>
SHARES VALUE
-----------------------------
SHORT-TERM INVESTMENTS - 2.73%
NORTHERN TRUST DIVERSIFIED ASSETS
FUND - 2.73% 2,574,194 2,574,194
-------------
Total Short-Term Investments
(cost $2,574,194) 2,574,194
-------------
TOTAL INVESTMENTS - 99.48%
(cost $94,265,605)(1) 93,854,716
-------------
NORTHERN INSTITUTIONAL LIQUID
ASSET PORTFOLIO(3) - 17.50% 16,506,736
-------------
OTHER ASSETS AND LIABILITIES - (16.98%) (16,017,859)
-------------
TOTAL NET ASSETS - 100.00% $ 94,343,593
=============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
18
<Page>
* Non-income producing
(1) For federal income tax purposes, cost is $94,874,893 and gross unrealized
appreciation and depreciation of securities as of March 31, 2005 was
$920,191 and ($1,940,368), respectively, with a net appreciation /
depreciation of ($1,020,177).
(2) Security exempt from registration under Rule 144(a) of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(3) This security was purchased with cash collateral held from securities
lending. The market value of the securities on loan, the collateral
purchased with cash, and the noncash collateral accepted is $21,137,533,
$16,506,736, and $5,028,810, respectively.
(4) Represent restricted private placement shares.
(5) Security in default.
(6) Valued at fair value as determined in good faith under procedures adopted
by the Board of Directors.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
19
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
FINANCIAL STATEMENTS BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2005 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value $ 93,854,716
Collateral for securities loaned,
at fair value 16,506,736
Receivables:
Shares sold 3
Securities sold 261,262
Interest and dividends 1,065,757
Other receivable 23,959
Prepaid expenses and other 5,736
---------------
111,718,169
---------------
LIABILITIES
Payables:
Investment securities purchased 650,327
Shares redeemed 141,743
Payable upon return of securities loaned 16,506,736
Bank overdraft 1,348
Advisory fees 37,779
Administration expenses 8,038
Directors' fees 3,935
Custodian fees 2,992
Fund accounting fees 7,891
Professional fees 8,595
Other accrued expenses 5,192
---------------
17,374,576
---------------
NET ASSETS*
Paid-in capital 94,847,026
Accumulated undistributed net
investment income 342,027
Accumulated net realized gain / (loss)
on investments and futures contracts (434,571)
Net unrealized appreciation / (depreciation)
on investments and futures contracts (410,889)
---------------
$ 94,343,593
===============
Investments at cost $ 94,265,605
Shares authorized per class ($.10 par value) 20,000,000
</Table>
NET ASSET VALUE (NAV) BY SHARE CLASS
<Table>
<Caption>
SHARES
SHARE CLASS NET ASSETS/ OUTSTANDING
Class I $ 94,343,593 1,880,347 $ 50.17
</Table>
*FEDERAL TAX DATA AS OF SEPTEMBER 30, 2003
<Table>
Undistributed ordinary income $ 523,129
Unrealized appreciation $ 1,536,393
</Table>
<Table>
<Caption>
CAPITAL LOSS CARRYFORWARD POST-OCTOBER CAPITAL
EXPIRING SEPTEMBER 30: LOSSES DEFERRED:
-------------------------------------------------------------------------------
2011 SEPTEMBER 30, 2004
--------------- ------------------
$ (329,238) $ --
</Table>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 (UNAUDITED)
<Table>
INVESTMENT INCOME
Interest $ 2,559,256
Dividends 5,212
Other income 22,598
----------------
2,587,066
----------------
EXPENSES
Advisory fees 221,693
Administration expenses 47,168
Custodian fees and expenses 6,806
Fund accounting fees 24,927
Professional fees 19,401
Directors' fees 6,652
Transfer agent fees 10,683
Other expenses 9,457
----------------
346,787
----------------
NET INVESTMENT INCOME / (LOSS) 2,240,279
----------------
REALIZED AND UNREALIZED GAIN / (LOSS)
Net realized gain / (loss) on investments
and options 539,051
Net change in unrealized appreciation /
(depreciation) on investments (2,638,867)
----------------
NET REALIZED AND UNREALIZED
GAIN / (LOSS) (2,099,816)
----------------
NET INCREASE / (DECREASE)
IN NET ASSETS FROM OPERATIONS $ 140,463
================
</Table>
TRANSACTIONS WITH AFFILIATES:
<Table>
<Caption>
PERCENT OF CURRENT
NET ASSET VALUE
- -------------------------------------
ADVISORY ADMINISTRATION EXPENSE
FEE FEE LIMIT(1) WAIVER REIMBURSEMENT
- ---------------------------------------------------------------
0.47% 0.10% 1.00% $ -- $ --
</Table>
(1) If total operating expenses, exclusive of advisory fees and certain other
expenses, for any fiscal quarter exceed the indicated limit, the Adviser
will reimburse the fund for such excess, up to the amount of the advisory
fee for that year.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
20
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE SIX MONTHS
ENDED MARCH 31, YEAR ENDED
(UNAUDITED) SEPTEMBER 30,
2005 2004
----------------------------------
OPERATIONS
Net investment income / (loss) $ 2,240,279 $ 4,379,364
Net realized gain / (loss) on investments and futures 539,051 185,064
Net change in unrealized appreciation / (depreciation) on investments (2,638,867) (149,327)
----------- -----------
140,463 4,415,101
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS*
Net investment income (2,456,477) (5,003,377)
----------- -----------
(2,456,477) (5,003,377)
----------- -----------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 11,195,662 10,565,651
Reinvestment of distributions 2,456,477 5,002,702
Payments for shares redeemed (9,140,823) (14,576,342)
----------- -----------
4,511,316 992,011
----------- -----------
NET INCREASE / (DECREASE) IN NET ASSETS 2,195,302 403,735
NET ASSETS
Beginning of period 92,148,291 91,744,556
----------- -----------
End of period $94,343,593 $92,148,291
=========== ===========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 342,027 $ 523,129
=========== ===========
FUND SHARE TRANSACTIONS
Sold 218,633 207,022
Reinvestment of distributions 48,240 99,217
Redeemed (179,343) (287,118)
----------- -----------
Net increase / (decrease) from fund share transactions 87,530 19,121
=========== ===========
TOTAL COST OF PURCHASES OF:
Preferred and Common Stocks $ -- $ 1,018,624
U.S. Government Securities 10,298,378 20,495,891
Corporate Bonds 20,453,171 54,216,958
----------- -----------
$30,751,549 $75,731,473
=========== ===========
TOTAL PROCEEDS FROM SALES OF:
Preferred and Common Stocks $ 266,931 $1,009,762.00
U.S. Government Securities 6,346,797 9,103,980
Corporate Bonds 20,202,341 58,051,413
----------- -----------
$26,816,069 $68,165,155
=========== ===========
*TAX CHARACTER OF DISTRIBUTIONS PAID
Ordinary income $ 2,456,477 $ 5,003,377
----------- -----------
$ 2,456,477 $ 5,003,377
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
21
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
SHORT-TERM GOVERNMENT FUND
OBJECTIVE - Seeks to provide a high level of current income and preservation of
capital by investing 100% of its total assets in bonds issued by the U.S.
government or its agencies or instrumentalities.
STRATEGY - Under normal market conditions, the Short-term Government Fund (the
"Fund") will invest 100% of the value of its assets in bonds issued by the U.S.
government or its agencies or instrumentalities.
MANAGER'S COMMENTS:
The Fund had a total return of -0.02% (after waivers and reimbursements, but
before the impact of any product or contract-level fees) for the six-month
period ended March 31, 2005 compared to a total return of -0.64% for the
Citigroup 1-5 Year Treasury Index (the "Index"). Following a long period of low
interest rates and benign inflation, interest rates moved into a less friendly
environment over the last six months. The Federal Reserve increased its target
short-term interest rate four times during the period in 25 basis point
increments. The Fed also indicated that further measured increases in short-term
interest rates are likely over the near term due to heightened inflation
concerns. The inflation pressures triggered speculation that the Fed was laying
the groundwork for the possibility of more aggressive rate increases in the
future. As a result interest rates rose across the maturity spectrum lead by
shorter maturities.
The Fund's out performance to the Index was primarily a result of a shorter
duration and asset allocation. During the period, the Fund's exposure to
mortgage-backed securities provided the largest incremental return. The Fund's
holdings in this sector included mainly shorter maturity securities that are not
as sensitive to rising interest rates. The Fund was also over-weighted in the
shorter maturity U.S. Treasury and Agency sector versus the longer sector
resulting in out performance during the period. The U.S. Agency sector generally
outperformed similar maturity U.S. Treasury Securities. The sectors that
provided the largest negative contribution to the Fund included treasury notes
with maturities of 3 years or more.
FUND DATA
<Table>
Manager: Michael J. Schultz
Inception Date: April 3, 2000
Total Net Assets: $27.1 Million
Number of Holdings: 24
Average Duration: 1.62 years
Average Maturity: 1.97 years
Average Credit Quality: GOV/AGN
Current Yield: 3.85%
</Table>
[CHART]
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
Summit Short-term Government Fund - Average Annual Total Return
<Table>
<Caption>
1-YEAR 3-YEAR SINCE INCEPTION
-0.19% 2.73% 4.47%
</Table>
Past performance is not predictive of future results.
Performance does not reflect the deduction of taxes that a shareholder would pay
on fund distributions or redemption of fund shares.
<Table>
<Caption>
SUMMIT SHORT-TERM GOVERNMENT FUND CITIGROUP 1-5 YEAR TREASURY
Mar 31, 2000 $ 10,000.00 $ 10,000.00
Apr 30, 2000 $ 10,020.00 $ 10,012.90
May 31, 2000 $ 10,040.35 $ 10,053.95
Jun 30, 2000 $ 10,160.96 $ 10,179.33
Jul 31, 2000 $ 10,261.46 $ 10,243.96
Aug 31, 2000 $ 10,352.42 $ 10,332.27
Sep 30, 2000 $ 10,413.74 $ 10,414.72
Oct 31, 2000 $ 10,464.84 $ 10,474.71
Nov 30, 2000 $ 10,578.43 $ 10,593.28
Dec 31, 2000 $ 10,731.53 $ 10,811.50
Jan 31, 2001 $ 10,857.17 $ 10,946.65
Feb 28, 2001 $ 10,930.73 $ 11,032.03
Mar 31, 2001 $ 11,004.66 $ 11,107.05
Apr 30, 2001 $ 11,004.66 $ 11,105.94
May 31, 2001 $ 11,047.24 $ 11,161.47
Jun 30, 2001 $ 11,068.59 $ 11,198.30
Jul 31, 2001 $ 11,207.34 $ 11,359.56
Aug 31, 2001 $ 11,282.55 $ 11,443.62
Sep 30, 2001 $ 11,466.10 $ 11,659.90
Oct 31, 2001 $ 11,595.66 $ 11,795.16
Nov 30, 2001 $ 11,497.67 $ 11,722.03
Dec 31, 2001 $ 11,464.87 $ 11,699.75
Jan 31, 2002 $ 11,498.26 $ 11,730.17
Feb 28, 2002 $ 11,587.31 $ 11,806.42
Mar 31, 2002 $ 11,475.65 $ 11,674.19
Apr 30, 2002 $ 11,614.26 $ 11,841.25
May 31, 2002 $ 11,679.43 $ 11,910.87
Jun 30, 2002 $ 11,760.53 $ 12,032.48
Jul 31, 2002 $ 11,900.18 $ 12,231.14
Aug 31, 2002 $ 12,012.94 $ 12,308.07
Sep 30, 2002 $ 12,121.73 $ 12,474.97
Oct 31, 2002 $ 12,124.00 $ 12,485.57
Nov 30, 2002 $ 12,076.03 $ 12,406.29
Dec 31, 2002 $ 12,201.08 $ 12,577.87
Jan 31, 2003 $ 12,187.26 $ 12,556.99
Feb 28, 2003 $ 12,263.28 $ 12,649.03
Mar 31, 2003 $ 12,258.66 $ 12,663.58
Apr 30, 2003 $ 12,279.48 $ 12,690.55
May 31, 2003 $ 12,335.28 $ 12,805.66
Jun 30, 2003 $ 12,332.95 $ 12,807.06
Jul 31, 2003 $ 12,214.18 $ 12,649.54
Aug 31, 2003 $ 12,221.04 $ 12,654.34
Sep 30, 2003 $ 12,340.78 $ 12,840.11
Oct 31, 2003 $ 12,284.43 $ 12,755.49
Nov 30, 2003 $ 12,286.88 $ 12,746.82
Dec 31, 2003 $ 12,338.69 $ 12,836.68
Jan 31, 2004 $ 12,367.12 $ 12,876.86
Feb 29, 2004 $ 12,423.97 $ 12,968.29
Mar 31, 2004 $ 12,464.23 $ 13,036.11
Apr 30, 2004 $ 12,326.27 $ 12,824.02
May 31, 2004 $ 12,297.85 $ 12,800.80
Jun 30, 2004 $ 12,307.39 $ 12,812.32
Jul 31, 2004 $ 12,352.71 $ 12,875.62
Aug 31, 2004 $ 12,450.76 $ 13,014.55
Sep 30, 2004 $ 12,443.56 $ 13,008.56
Oct 31, 2004 $ 12,479.57 $ 13,064.76
Nov 30, 2004 $ 12,441.10 $ 12,963.50
Dec 31, 2004 $ 12,462.85 $ 13,007.58
Jan 31, 2005 $ 12,467.70 $ 13,000.17
Feb 28, 2005 $ 12,445.81 $ 12,940.36
Mar 31, 2005 $ 12,440.94 $ 12,925.22
</Table>
[CHART]
SECTOR ALLOCATIONS
<Table>
U.S. Treasuries & Agencies 67.6%
Mortgage-Backed Securities 29.0%
Short-Term & Other 3.4%
</Table>
22
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
SHORT-TERM GOVERNMENT FUND FINANCIAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding throughout the
period. Share amounts and net asset values have been adjusted as a result of the
1-for-5 reverse stock split on February 15, 2002.
<Table>
<Caption>
FOR THE SIX MONTHS PERIOD FROM
ENDED MARCH 31, APRIL 3, 2000(1)
(UNAUDITED) YEAR ENDED SEPTEMBER 30, TO SEPTEMBER 30,
---------------------------------------------------------------------------
2005 2004 2003 2002 2001 2000
---------------------------------------------------------------------------
Net asset value, beginning of
period $ 51.84 $ 52.56 $ 53.48 $ 53.10 $ 50.95 $ 50.00
------- ------- ------- -------- ------- -------
Investment Activities:
Net investment income / (loss) 0.68 1.30 1.37 1.74 2.55 1.50
Net realized and unrealized
gains / (losses) (0.69) (0.87) (0.42) 1.18 2.45 0.55
------- ------- ------- ------- ------- -------
Total from Investment Activities (0.01) 0.43 0.95 2.92 5.00 2.05
------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Net investment income (0.72) (1.15) (1.58) (1.79) (2.60) (1.10)
Net realized gains -- -- (0.29) (0.75) (0.25) --
------- ------- ------- ------- ------- -------
Total Distributions (0.72) (1.15) (1.87) (2.54) (2.85) (1.10)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 51.11 $ 51.84 $ 52.56 $ 53.48 $ 53.10 $ 50.95
======= ======= ======= ======= ======= =======
Total return -0.02% 0.83% 1.81% 5.72% 10.11% 4.14%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets - net (2) 0.73%(3) 0.73% 0.73% 0.73% 0.73% 0.73%(3)
Ratio of expenses to average net
assets - gross 0.88%(3) 0.85% 0.81% 0.97% 0.91% 1.25%(3)
Ratio of net investment income /
(loss) to average net assets 2.49%(3) 2.16% 2.00% 3.55% 5.08% 5.89%(3)
Portfolio turnover rate 16.84%(3) 32.31% 55.57% 64.75% 48.30% 99.38%(3)
Net assets, end of period (000's) $27,149 $28,981 $31,664 $25,646 $16,826 $10,199
</Table>
(1) COMMENCEMENT OF OPERATIONS.
(2) NET EXPENSES REPRESENT GROSS EXPENSES REDUCED BY FEES WAIVED AND/OR
REIMBURSED BY THE ADVISER.
(3) ANNUALIZED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
23
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
SCHEDULE OF INVESTMENTS SHORT-TERM GOVERNMENT FUND
MARCH 31, 2005 (UNAUDITED)
<Table>
<Caption>
PRINCIPAL VALUE
-------------------------------
U.S. TREASURY OBLIGATIONS - 43.92%
U.S. TREASURY NOTES & BONDS - 43.92%
5.750% due 11/15/05 $ 2,000,000 $ 2,030,390
4.625% due 05/15/06 2,000,000 2,023,984
2.375% due 08/15/06 1,000,000 983,242
2.875% due 11/30/06 2,000,000 1,972,812
3.375% due 02/28/07 1,000,000 992,695
4.375% due 05/15/07 1,000,000 1,011,172
3.250% due 08/15/07 1,000,000 986,523
3.000% due 02/15/09 2,000,000 1,923,360
--------------
Total U.S. Treasury Obligations
(cost $12,066,224) 11,924,178
--------------
U.S. AGENCY OBLIGATIONS - 23.71%
FHLB 3.700% due 12/24/07 2,000,000 1,947,912
FHLMC 2.875% due 10/15/05 2,500,000 2,492,893
FNMA 2.875% due 09/15/05 2,000,000 1,996,982
--------------
Total U.S. Agency Obligations
(cost $6,505,738) 6,437,787
--------------
MORTGAGE-BACKED SECURITIES - 17.39%
FHLMC 5.000% due 05/01/18 477,293 478,068
FNMA 4.500% due 04/01/08 391,018 392,577
FNMA 5.000% due 12/01/08 262,372 264,620
FNMA 5.000% due 01/01/09 571,197 576,093
FNMA 5.000% due 02/01/09 190,517 191,995
FNMA 5.500% due 05/01/12 405,076 414,804
FNMA 4.500% due 03/01/17 1,310,517 1,288,328
FNMA 7.000% due 12/01/29 1,040,191 1,102,734
GNMA 9.500% due 09/15/09 10,076 10,777
--------------
Total Mortgage-Backed Securities
(cost $4,694,377) 4,719,996
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 11.63%
FHR 2791 KA 4.000% due 11/15/15 $ 728,059 $ 728,120
FHR 2858 OP 4.000% due 03/15/20 717,633 714,352
FHR 2534 MF 3.210% due 09/15/30 597,393 597,902
FHR 2550 FI 3.160% due 11/15/32 1,110,375 1,115,747
--------------
Total Collateralized Mortgage Obligations
(cost $3,171,268) 3,156,121
--------------
<Caption>
SHARES VALUE
-------------------------------
SHORT-TERM INVESTMENTS - 2.56%
NORTHERN INSTITUTIONAL
GOVERNMENT FUND - 2.56% 695,332 $ 695,332
--------------
Total Short-Term Investments
(cost $695,332) 695,332
--------------
TOTAL INVESTMENTS - 99.21%
(cost $27,132,939)(1) 26,933,414
--------------
NORTHERN INSTITUTIONAL LIQUID
ASSET PORTFOLIO(2) - 34.99% 9,501,552
--------------
OTHER ASSETS AND LIABILITIES - (34.20%) (9,285,895)
--------------
TOTAL NET ASSETS - 100.00% $ 27,149,071
==============
</Table>
(1) For federal income tax purposes, cost is $27,132,939 and gross unrealized
appreciation and depreciation of securities as of March 31, 2005 was
$81,097 and ($280,622), respectively, with a net appreciation /
depreciation of ($199,525).
(2) This security was purchased with cash collateral held from securities
lending. The market value of the securities on loan, the collateral
purchased with cash, and the noncash collateral accepted is $11,956,464,
$9,501,552, and $2,679,775, respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
24
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
SHORT-TERM GOVERNMENT FUND FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2005 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value $ 26,933,414
Collateral for securities loaned, at fair value 9,501,552
Receivables:
Shares sold 25,487
Interest and dividends 217,450
Prepaid expenses and other 1,460
--------------
36,679,363
--------------
LIABILITIES
Payables:
Payable upon return of securities loaned 9,501,552
Advisory fees 5,034
Administration expenses 3,733
Directors' fees 1,661
Custodian fees 802
Fund accounting fees 7,190
Professional fees 7,076
Other accrued expenses 3,244
--------------
9,530,292
--------------
NET ASSETS*
Paid-in capital 27,518,276
Accumulated undistributed
net investment income 91,472
Accumulated net realized gain / (loss)
on investments and futures contracts (261,152)
Net unrealized appreciation /
(depreciation) on investments and
futures contracts (199,525)
--------------
$ 27,149,071
==============
Investments at cost $ 27,132,939
Shares authorized per class ($.10 par value) 20,000,000
</Table>
NET ASSET VALUE (NAV) BY SHARE CLASS
<Table>
<Caption>
SHARES
SHARE CLASS NET ASSETS/ OUTSTANDING
Class I $ 27,149,071 531,155 $ 51.11
</Table>
* FEDERAL TAX DATA AS OF SEPTEMBER 30, 2004
<Table>
Undistributed ordinary income $ 116,225
Unrealized appreciation $ 151,049
</Table>
<Table>
<Caption>
CAPITAL LOSS CARRYFORWARD POST-OCTOBER
EXPIRING SEPTEMBER 30: CAPITAL LOSSES DEFERRED:
- --------------------------------------------------------------------------------
2011 2012 SEPTEMBER 30, 2004
---- ---- ------------------
$ (22,527) $ (147,729) $ 66,876
</Table>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 (UNAUDITED)
<Table>
INVESTMENT INCOME
Interest $ 443,879
Other income 6,178
--------------
450,057
--------------
EXPENSES
Advisory fees 62,859
Administration expenses 13,969
Custodian fees and expenses 2,008
Fund accounting fees 20,592
Professional fees 10,454
Directors' fees 2,166
Transfer agent fees 8,003
Other expenses 2,850
--------------
122,901
Reimbursements and waivers (20,929)
--------------
101,972
--------------
NET INVESTMENT INCOME / (LOSS) 348,085
--------------
REALIZED AND UNREALIZED GAIN / (LOSS)
Net realized gain / (loss) on investments
and options 1,923
Net change in unrealized appreciation /
(depreciation) on investments (350,574)
--------------
NET REALIZED AND UNREALIZED
GAIN / (LOSS) (348,651)
--------------
NET INCREASE / (DECREASE)
IN NET ASSETS FROM OPERATIONS $ (566)
==============
</Table>
TRANSACTIONS WITH AFFILIATES:
<Table>
<Caption>
PERCENT OF CURRENT
NET ASSET VALUE
- ---------------------------------------------
ADVISORY ADMINISTRATION EXPENSE
FEE FEE LIMIT(1) WAIVER REIMBURSEMENT
- -----------------------------------------------------------------------------
0.45% 0.10% 0.28% $ -- $ 20,929
</Table>
(1) The Adviser has agreed to pay other expenses of the portfolio, other than
the advisory fees, to the extent that such expenses exceed the stated
percentage of their average net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
25
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE SIX MONTHS
ENDED MARCH 31, YEAR ENDED
(UNAUDITED) SEPTEMBER 30,
-----------------------------------
2005 2004
-----------------------------------
OPERATIONS
Net investment income / (loss) $ 348,085 $ 623,326
Net realized gain / (loss) on investments and futures 1,923 57,616
Net change in unrealized appreciation / (depreciation) on investments (350,574) (446,981)
----------- -----------
(566) 233,961
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS*
Net investment income (398,420) (637,398)
----------- -----------
(398,420) (637,398)
----------- -----------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 2,318,283 6,397,892
Reinvestment of distributions 398,420 637,398
Payments for shares redeemed (4,149,337) (9,315,505)
----------- -----------
(1,432,634) (2,280,215)
----------- -----------
NET INCREASE / (DECREASE) IN NET ASSETS (1,831,620) (2,683,652)
NET ASSETS
Beginning of period 28,980,691 31,664,343
----------- -----------
End of period $27,149,071 $28,980,691
=========== ===========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 91,472 $ 116,225
=========== ===========
FUND SHARE TRANSACTIONS
Sold 45,016 123,161
Reinvestment of distributions 7,750 12,271
Redeemed (80,660) (178,798)
----------- -----------
Net increase / (decrease) from fund share transactions (27,894) (43,366)
=========== ===========
TOTAL COST OF PURCHASES OF:
U.S. Government Securities $ 3,959,402 $ 8,028,046
----------- -----------
$ 3,959,402 $ 8,028,046
=========== ===========
TOTAL PROCEEDS FROM SALES OF:
U.S. Government Securities $ 1,648,651 $ 7,547,548
----------- -----------
$ 1,648,651 $ 7,547,548
=========== ===========
*TAX CHARACTER OF DISTRIBUTIONS PAID
Ordinary income $ 398,420 $ 637,398
----------- -----------
$ 398,420 $ 637,398
=========== ===========
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
26
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
HIGH YIELD BOND FUND
OBJECTIVE - Seeks high current income and capital appreciation, secondarily.
STRATEGY - Under normal circumstances, the High Yield Bond Fund (the "Fund")
will invest at least 80% of its assets in high yield, high risk bonds, also
known as "junk" bonds, with intermediate maturities.
MANAGER'S COMMENTS:
For the six-month period ended March 31, 2005, the Fund provided a total return
of 2.33% (before the impact of any product or contract-level fees). The Fund's
return slightly trailed the Merrill Lynch High Yield Master II Index return of
3.03% for the same period. The primary reasons for the fund's underperformance
include fund expenses and exposure to certain lower quality securities.
The high yield market remained strong during the fourth quarter of 2004, but
then provided a negative return for the 1st quarter of 2005. Before the sell-off
in the first quarter, spreads on high yield securities had reached seven year
lows. Therefore, it is not surprising that the market retrenched. The catalyst
for the sell-off was the prospect that General Motors debt would be downgraded
to below investment grade status. With roughly $300 billion in debt, the fear is
that General Motors debt would simply flood the high yield marketplace. Many
investors are not waiting for the downgrade to occur. Rather, they are
positioning themselves today for that eventuality. The dislocations caused in
both the high yield and high grade corporate bond markets were nothing short of
spectacular. Both markets were materially negatively affected as the ripple
effect was felt by all participants in the corporate bond marketplace. Even with
the sell-off though, high yield bonds provided a better return than Treasuries,
Mortgage-backed and investment grade corporate bonds during the period.
The yield curve flattened materially during the period. The yield on the 2 year
Treasury note rose by 117 basis points during the period, while the yield on the
30 year Treasury bond declined 13 basis points. The flattening in the yield
curve suggests that fixed income market participants believe that inflation is
under control, and that economic growth will slow in the near term. Slowing
economic growth would not be a positive for high yield investors.
Looking ahead, we believe that the economy will continue to grow for the balance
of 2005, albeit at a slower pace. We expect corporate profitability to improve
modestly and expect default rates to remain near cyclical lows. We expect the
yield spread between Treasury bonds and high yield bonds to fluctuate the
remainder of the year, with a slight bias toward tightening. While this is not a
bad environment for the high yield marketplace, there are clearly items to be
concerned about. Stubbornly high oil prices are clearly putting a drag on the
economy and corporate profitability. In addition, the increasing rate of
inflation is troubling and will negatively affect all fixed income returns if it
translates into higher bond yields. Therefore, we remain slightly defensive as
we move into the second quarter of 2005.
FUND DATA
<Table>
Managers: Team Managed
Inception Date: July 9, 2001
Total Net Assets: $18.8 Million
Number of Holdings: 54
Average Duration: 4.05 years
Average Maturity: 6.60 years
Average Credit Quality: B/B2
Current Yield: 7.77%
</Table>
[CHART]
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
Summit High Yield Bond Fund - Average Annual Total Return
<Table>
<Caption>
1-YEAR 3-YEAR SINCE INCEPTION
5.05% 7.92% 5.30%
</Table>
Past performance is not predictive of future results.
Performance does not reflect the deduction of taxes that a shareholder would pay
on fund distributions or redemption of fund shares.
<Table>
<Caption>
SUMMIT HIGH YIELD BOND FUND MERRILL LYNCH HIGH YIELD MASTER II INDEX
Jul 9, 2001 $ 10,000 $ 10,000
Jul 31, 2001 $ 10,000 $ 10,117
Aug 31, 2001 $ 10,033 $ 10,197
Sep 30, 2001 $ 9,169 $ 9,493
Oct 31, 2001 $ 9,551 $ 9,796
Nov 30, 2001 $ 9,955 $ 10,141
Dec 31, 2001 $ 9,838 $ 10,061
Jan 31, 2002 $ 9,561 $ 10,116
Feb 28, 2002 $ 9,302 $ 9,983
Mar 31, 2002 $ 9,646 $ 10,234
Apr 30, 2002 $ 9,772 $ 10,398
May 31, 2002 $ 9,812 $ 10,318
Jun 30, 2002 $ 9,087 $ 9,520
Jul 31, 2002 $ 8,776 $ 9,150
Aug 31, 2002 $ 8,939 $ 9,378
Sep 30, 2002 $ 8,563 $ 9,232
Oct 31, 2002 $ 8,370 $ 9,155
Nov 30, 2002 $ 9,015 $ 9,727
Dec 31, 2002 $ 9,011 $ 9,869
Jan 31, 2003 $ 9,136 $ 10,165
Feb 28, 2003 $ 9,257 $ 10,302
Mar 31, 2003 $ 9,487 $ 10,574
Apr 30, 2003 $ 9,958 $ 11,188
May 31, 2003 $ 9,989 $ 11,316
Jun 30, 2003 $ 10,297 $ 11,633
Jul 31, 2003 $ 10,137 $ 11,476
Aug 31, 2003 $ 10,282 $ 11,622
Sep 30, 2003 $ 10,612 $ 11,938
Oct 31, 2003 $ 10,879 $ 12,185
Nov 30, 2003 $ 10,899 $ 12,354
Dec 31, 2003 $ 11,107 $ 12,647
Jan 31, 2004 $ 11,288 $ 12,851
Feb 29, 2004 $ 11,341 $ 12,837
Mar 31, 2004 $ 11,541 $ 12,922
Apr 30, 2004 $ 11,315 $ 12,837
May 31, 2004 $ 11,158 $ 12,635
Jun 30, 2004 $ 11,344 $ 12,819
Jul 31, 2004 $ 11,475 $ 12,992
Aug 31, 2004 $ 11,722 $ 13,228
Sep 30, 2004 $ 11,847 $ 13,412
Oct 31, 2004 $ 12,040 $ 13,671
Nov 30, 2004 $ 12,174 $ 13,813
Dec 31, 2004 $ 12,310 $ 14,021
Jan 31, 2005 $ 12,297 $ 14,007
Feb 28, 2005 $ 12,472 $ 14,207
Mar 31, 2005 $ 12,127 $ 13,819
</Table>
QUALITY BREAKDOWN
<Table>
<Caption>
(% OF PORTFOLIO)
----------------
BB 37%
B 43%
CCC 15%
D 5%
</Table>
[CHART]
SECTOR ALLOCATIONS
<Table>
Common Stock 9.4%
Preferred Stock 1.9%
Corporate Bonds & Notes 84.8%
Short-Term & Other 3.9%
</Table>
27
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
FINANCIAL HIGHLIGHTS HIGH YIELD BOND FUND
FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding throughout the
period. Share amounts and net asset values have been adjusted as a result of the
1-for-5 reverse stock split on February 15, 2002.
<Table>
<Caption>
FOR THE SIX MONTHS PERIOD FROM
ENDED MARCH 31, JULY 9, 2001(1)
(UNAUDITED) YEAR ENDED SEPTEMBER 30, TO SEPTEMBER 30,
-------------------------------------------------------------
2005 2004 2003 2002 2001
-------------------------------------------------------------
Net asset value, beginning of period $ 27.59 $ 26.67 23.48 $ 27.60 $ 30.30
------- ------- ------- -------- -------
Investment Activities:
Net investment income / (loss) 0.84 1.90 2.20 2.39 0.65
Net realized and unrealized gains / (losses) (0.19) 1.08 3.13 (3.98) (3.15)
------- ------- ------- ------- --------
Total from Investment Activities 0.65 2.98 5.33 (1.59) (2.50)
------- ------- ------- ------- --------
DISTRIBUTIONS:
Net investment income (0.83) (2.06) (2.14) (2.53) (0.20)
------- ------- ------- ------- --------
Total Distributions (0.83) (2.06) (2.14) (2.53) (0.20)
------- ------- ------- ------- --------
Net asset value, end of period $ 27.41 $ 27.59 $ 26.67 $ 23.48 $ 27.60
======= ======= ======= ======= ========
Total return 2.33% 11.64% 23.92% -6.61% -8.31%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets - net (2) 1.20%(3) 1.21% 1.18% 1.22% 1.30%(3)
Ratio of expenses to average net assets - gross 1.20%(3) 1.21% 1.18% 1.22% 1.30%(3)
Ratio of net investment income / (loss)
to average net assets 5.99%(3) 6.93% 8.80% 8.86% 9.11%(3)
Portfolio turnover rate 117.08%(3) 162.69% 214.02% 185.02% 111.21%(3)
Net assets, end of period (000's) $18,810 $18,777 $18,519 $16,420 $ 18,850
</Table>
(1) COMMENCEMENT OF OPERATIONS.
(2) NET EXPENSES REPRESENT GROSS EXPENSES REDUCED BY FEES WAIVED AND/OR
REIMBURSED BY THE ADVISER.
(3) ANNUALIZED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
28
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
HIGH YIELD BOND FUND SCHEDULE OF INVESTMENTS
MARCH 31, 2005 (UNAUDITED)
<Table>
<Caption>
SHARES VALUE
-------------------------------
PREFERRED STOCKS - 1.94%
MEDIA & CABLE - 1.94%
Paxson Communications 14.25% PIK Dividend 56,303 $ 364,225
--------------
Total Preferred Stocks
(cost $439,375) 364,225
--------------
COMMON STOCKS - 9.36%
CONSUMER NON-DURABLE - 0.58%
Simonds Industries Inc.
(Acquired 4/8/1997, Cost $1,000,000)(4)(5)(6)+* 2,746 109,840
--------------
ENERGY - 4.15%
NRG Energy Inc. 20,000 683,000
High Voltage Engineering Corp. 30,000 97,500
--------------
780,500
--------------
INSURANCE - 2.71%
Conseco Inc. 25,000 510,500
--------------
TELECOMMUNICATIONS - 1.92%
MCI Inc. 14,476 360,742
--------------
Total Common Stocks
(cost $2,539,825) 1,761,582
--------------
<Caption>
PRINCIPAL VALUE
-------------------------------
CORPORATE BONDS AND NOTES - 84.77%
AEROSPACE & DEFENSE - 1.04%
Hexcel Corp.
(9.750% due 01/15/09) $ 187,000 $ 194,611
--------------
AIR TRANSPORTATION - 3.15%
Atlas Air Inc.
(7.380% due 01/02/18) 85,451 84,526
Jet Equipment(2)(5)(6)*
(7.630% due 08/15/12) 805,625 507,543
--------------
592,069
--------------
CONSUMER CYCLICAL - 2.88%
Accuride Corp.(2)
(8.500% due 02/01/15) 500,000 490,000
Boise Cascade(2)
(5.535% due 10/15/12) 50,000 51,000
--------------
541,000
--------------
CONSUMER NON-DURABLE - 18.02%
American Restaurant Group Inc.(5)
(11.500% due 11/01/06) 750,000 465,000
Amerigas Partner
(8.875% due 05/20/11) 500,000 530,000
Del Monte Corp.(2)
(6.750% due 02/15/15) 250,000 243,750
Dex Media West
(9.875% due 08/15/13) 250,000 278,750
Land O'Lakes
(7.450% due 03/15/28) 500,000 347,500
Landry's Restaurant(2)
(7.500% due 12/15/14) 500,000 485,000
PQ Corp.(2)
(7.500% due 02/15/13) 125,000 123,125
RH Donnelley Financial Corp.(2)
(8.875% due 12/15/10) $ 250,000 $ 272,500
RH Donnelley Financial Corp.(2)
(10.875% due 12/15/12) 250,000 288,125
Werner Holdings Co. Inc.
(10.000% due 11/15/07) 500,000 355,000
--------------
3,388,750
--------------
ELECTRIC - 3.61%
AES Corporation
(9.375% due 09/15/10) 500,000 551,250
Sierra Pac Power
(6.250% due 04/15/12) 125,000 126,875
--------------
678,125
--------------
ENERGY - 16.48%
Aventine Renewable Energy(2)
(9.010% due 12/15/11) 250,000 253,750
Calpine Corp.
(10.500% due 05/15/06) 500,000 492,500
Chesapeake Energy
(9.000% due 08/15/12) 500,000 551,875
Nevada Power Co.
(6.500% due 04/15/12) 125,000 129,062
Northwest Pipeline Corp.
(8.125% due 03/01/10) 250,000 267,500
Southern Energy Inc.(2)(5)
(7.900% due 07/15/09) 500,000 398,750
Stone Energy(2)
(6.750% due 12/15/14) 500,000 485,000
Williams Co.
(7.125% due 09/01/11) 500,000 521,875
--------------
3,100,312
--------------
HEALTH CARE - 7.86%
Davita Inc.
(7.250% due 03/15/15) 125,000 122,500
Fisher Scientific International
(8.000% due 09/01/13) 500,000 543,750
Genesis Healthcare Corp.
(8.000% due 10/15/13) 250,000 272,500
Resoulution Performance
(13.500% due 11/15/10) 500,000 540,000
--------------
1,478,750
--------------
HOMEBUILDING - 5.21%
Tech Olympic USA Inc.
(9.000% due 07/01/10) 500,000 518,000
WCI Communities Inc. Sr. Sub Nts.(6)
(6.625% due 03/15/15) 500,000 462,500
--------------
980,500
--------------
HOTEL & GAMING - 5.34%
La Quinta Properties
(7.000% due 08/15/12) 250,000 253,125
MGM Mirage
(6.750% due 09/01/12) 500,000 503,750
Station Casinos
(6.000% due 04/01/12) 250,000 248,125
--------------
1,005,000
--------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
29
<Page>
<Table>
<Caption>
PRINCIPAL VALUE
-------------------------------
MEDIA & CABLE - 10.95%
Charter Communications
(4.750% due 06/01/06) $ 250,000 $ 236,875
Charter Communications(2)
(8.000% due 04/30/12) 250,000 248,750
CSC Holdings
(8.125% due 08/15/09) 500,000 527,500
Emmis Operating Co.
(6.875% due 05/15/12) 500,000 490,000
Panamsat Holdings Corp.(2)
(0.000% / 10.375% step bond due 11/01/14) 500,000 325,000
Paxson Communications
(0.000% / 12.75% step bond due 01/15/09) 250,000 232,500
--------------
2,060,625
--------------
PRINTING & PUBLISHING - 1.39%
Cadmus Communications
(8.375% due 06/15/14) 250,000 261,250
--------------
REAL ESTATE - 2.69%
Corrections Corp. of America
(7.500% due 05/01/11) 500,000 506,250
--------------
TELECOMMUNICATIONS - 6.15%
IWO Escrow Co.(2)
(0.000% / 10.75% step bond due 01/15/15) $ 250,000 $ 160,000
MCI Inc.
(5.908% due 05/01/07) 500,000 508,750
Qwest Communications International(2)
(7.750% due 02/15/14) 500,000 488,750
--------------
1,157,500
--------------
Total Corporate Bonds and Notes
(cost $16,167,243) 15,944,742
--------------
<Caption>
SHARES VALUE
-------------------------------
SHORT-TERM INVESTMENTS - 5.51%
NORTHERN TRUST DIVERSIFIED ASSETS
FUND - 5.51% 1,035,744 $ 1,035,744
--------------
Total Short-Term Investments
(cost $1,035,744) 1,035,744
--------------
TOTAL INVESTMENTS - 101.58%
(cost $20,182,186)(1) 19,106,293
--------------
NORTHERN INSTITUTIONAL LIQUID ASSET
PORTFOLIO(3) - 33.29% 6,262,427
--------------
OTHER ASSETS AND LIABILITIES - (34.87%) (6,559,020)
--------------
TOTAL NET ASSETS - 100.00% $ 18,809,700
==============
</Table>
* Non-income producing
+ Illiquid
(1) For federal income tax purposes, cost is $20,360,451 and gross unrealized
appreciation and depreciation of securities as of March 31, 2005 was
$727,468 and ($1,844,894), respectively, with a net appreciation /
depreciation of ($1,117,426).
(2) Security exempt from registration under Rule 144(a) of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(3) This security was purchased with cash collateral held from securities
lending. The market value of the securities on loan, the collateral
purchased with cash, and the noncash collateral accepted is $6,357,006,
$6,262,427, and $219,600, respectively.
(4) Represent restricted private placement shares.
(5) Security in default.
(6) Valued at fair value as determined in good faith under procedures adopted
by the Board of Directors.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
30
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
HIGH YIELD BOND FUND FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2005 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value $ 19,106,293
Collateral for securities loaned,
at fair value 6,262,427
Receivables:
Securities sold 134,793
Interest and dividends 271,950
Variation margin 23,960
Prepaid expenses and other 823
--------------
25,800,246
--------------
LIABILITIES
Payables:
Investment securities purchased 534,280
Shares redeemed 68,390
Payable upon return of securities loaned 6,262,427
Bank overdraft 93,750
Advisory fees 10,646
Administration expenses 1,638
Directors' fees 881
Custodian fees 710
Fund accounting fees 7,166
Professional fees 7,336
Other accrued expenses 3,322
--------------
6,990,546
--------------
NET ASSETS*
Paid-in capital 41,902,471
Accumulated undistributed net
investment income 148,054
Accumulated net realized gain / (loss)
on investments and futures contracts (22,164,932)
Net unrealized appreciation / (depreciation)
on investments and futures contracts (1,075,893)
--------------
$ 18,809,700
==============
Investments at cost $ 20,182,186
Shares authorized per class ($.10 par value) 20,000,000
</Table>
NET ASSET VALUE (NAV) BY SHARE CLASS
<Table>
<Caption>
SHARES
SHARE CLASS NET ASSETS/ OUTSTANDING
Class I $ 18,809,700 686,111 $ 27.41
</Table>
*FEDERAL TAX DATA AS OF SEPTEMBER 30, 2004
<Table>
Undistributed ordinary income $ 140,455
</Table>
<Table>
<Caption>
POST-OCTOBER
CAPITAL LOSS CARRYFORWARD CAPITAL LOSSES
EXPIRING SEPTEMBER 30: DEFERRED:
- --------------------------------------------------------------------------------
SEPTEMBER 30,
2009 2010 2011 2012 2004
-------------- -------------- -------------- ------------ --------------
$ (19,121,451) $ (1,527,322) $ (1,025,886) $ (791,075) $ --
</Table>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 (UNAUDITED)
<Table>
INVESTMENT INCOME
Interest $ 660,746
Dividends 5,790
Other income 20,969
--------------
687,505
--------------
EXPENSES
Advisory fees 61,992
Administration expenses 9,537
Custodian fees and expenses 1,700
Fund accounting fees 21,299
Professional fees 9,469
Directors' fees 1,274
Transfer agent fees 8,089
Other expenses 1,683
--------------
115,043
--------------
NET INVESTMENT INCOME / (LOSS) 572,462
--------------
REALIZED AND UNREALIZED GAIN / (LOSS)
Net realized gain / (loss) on investments
and options 300,545
Net change in unrealized appreciation /
(depreciation) on investments (428,577)
--------------
NET REALIZED AND UNREALIZED
GAIN / (LOSS) (128,032)
--------------
NET INCREASE / (DECREASE)
IN NET ASSETS FROM OPERATIONS $ 444,430
==============
</Table>
TRANSACTIONS WITH AFFILIATES:
<Table>
<Caption>
PERCENT OF CURRENT
NET ASSET VALUE
- ------------------------------------------------
ADMINISTRATION EXPENSE
ADVISORY FEE FEE LIMIT(1) WAIVER REIMBURSEMENT
- ------------------------------------------------------------------------------
0.65% 0.10% -- $ -- $ --
</Table>
(1) The Adviser has agreed to pay other expenses of the portfolio, other than
the advisory fees, to the extent that such expenses exceed the stated
percentage of their average net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
31
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE SIX MONTHS
ENDED MARCH 31, YEAR ENDED
(UNAUDITED) SEPTEMBER 30,
---------------------------------
2005 2004
---------------------------------
OPERATIONS
Net investment income / (loss) $ 572,462 $ 1,276,639
Net realized gain / (loss) on investments and futures 300,545 656,521
Net change in unrealized appreciation / (depreciation) on investments (428,577) 99,125
------------ ------------
444,430 2,032,285
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS*
Net investment income (564,605) (1,390,524)
------------ ------------
(564,605) (1,390,524)
------------ ------------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 2,228,430 2,728,128
Reinvestment of distributions 151,286 296,111
Payments for shares redeemed (2,226,792) (3,408,521)
------------ ------------
152,924 (384,282)
------------ ------------
NET INCREASE / (DECREASE) IN NET ASSETS 32,749 257,479
NET ASSETS
Beginning of period 18,776,951 18,519,472
------------ ------------
End of period $ 18,809,700 $ 18,776,951
============ ============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 148,054 $ 140,454
============ ============
FUND SHARE TRANSACTIONS
Sold 79,780 100,404
Reinvestment of distributions 5,420 11,036
Redeemed (79,665) (125,132)
------------ ------------
Net increase / (decrease) from fund share transactions 5,535 (13,692)
============ ============
TOTAL COST OF PURCHASES OF:
Common Stocks $ 187,738 $ 2,642,691
U.S. Government Securities 1,002,383 1,001,445
Corporate Bonds 9,699,601 25,305,340
------------ ------------
$ 10,889,722 $ 28,949,476
============ ============
TOTAL PROCEEDS FROM SALES OF:
Common Stocks $ 288,481 $ 1,421,123
U.S. Government Securities 1,006,211 1,006,602
Corporate Bonds 9,518,831 28,084,773
------------ ------------
$ 10,813,523 $ 30,512,498
============ ============
*TAX CHARACTER OF DISTRIBUTIONS PAID
Ordinary income $ 564,605 $ 1,390,524
------------ ------------
$ 564,605 $ 1,390,524
============ ============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
32
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
MONEY MARKET FUND
OBJECTIVE - Seeks to maintain stability of capital and to maintain the liquidity
of capital and to provide current income.
STRATEGY - The Money Market Fund (the "Fund") intends to invest 100% of the
value of its assets in high quality short-term securities.
MANAGER'S COMMENTS:
The economic momentum has yet to slow in light of the obstacles in the last
semi-annual period. The U.S. trade deficit surged to record levels, driven by
both strong domestic demand for imports and the recent jump in oil prices. High
oil prices, which have topped $57/barrel due to tight supplies and high demand,
have threatened both consumer spending and inflation. While corporate profits
fared well, spreads have widened due to setbacks experienced in the airline,
auto, pharmaceutical, and insurance industries. Despite the challenges
presented, the economy continued to prove resilient and still experienced a
healthy degree of growth.
The U.S economy expanded at a 3.8% annual rate in the 4th quarter of 2004, and
economists forecast 4% growth in the 1st quarter of 2005. Even as oil and
gasoline prices set records, consumer and corporate spending are helping to keep
growth above the last decade's annual average of 3.3%. As corporate profits have
improved, hiring has followed. The previously ambiguous labor market has also
been steadily firming up as the monthly non farm payrolls have averaged 175,000
new jobs over the last two quarters. Given consistent job growth, investors
shifted their focus to inflation as the catalyst for change in monetary policy,
while the Fed continued to warn of upside price risks and expressed confusion
regarding low long-term rates.
Since October 2004, the Fed has raised their target rate 100 bps to 2.75%. While
maintaining a balanced bias, they have tightened their policy by 25 bps
consecutively at each of their last meetings. With inflation apparently
contained, the Fed has been content with eliminating the excess accommodation of
low rates at a "measured" pace. The recently more transparent Fed has also
suggested that the pace of any continued tightening will be dependent on
economic conditions in the months to come.
Money market yields have increased in line with Fed policy, with one year Libor
rising over 135 bps in yield in the last six months. We shortened the fund
throughout the 4th quarter, only to put on some duration in 2005 as the market
began to appropriately price in the forthcoming rate hikes. We are maintaining a
healthy position in floating rate securities and monitoring economic
developments in order to gauge the pace of tightening in the upcoming
quarter.
FUND DATA
<Table>
Manager: Subadvised by
Deutsche Investment
Management Americas Inc.
Inception Date: June 28, 2000
Total Net Assets: $100.8 Million
7-day Yield: 2.30%
</Table>
[CHART]
SECTOR ALLOCATIONS
<Table>
Short-Term Investments and Other 100.0%
</Table>
33
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
FINANCIAL HIGHLIGHTS MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Computed on the basis of a share of capital stock outstanding throughout the
period.
<Table>
<Caption>
MONEY MARKET FUND
---------------------------------------------------------------------------
FOR THE SIX MONTHS PERIOD FROM
ENDED MARCH 31, JUNE 28, 2000(1)
(UNAUDITED) YEAR ENDED SEPTEMBER 30, TO SEPTEMBER 30,
---------------------------------------------------------------------------
2005 2004 2003 2002 2001 2000
---------------------------------------------------------------------------
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------- -------
Investment Activities:
Net investment income / (loss) 0.01 0.01 0.01 0.02 0.05 0.02
-------- -------- -------- -------- ------- -------
Total from Investment Activities 0.01 0.01 0.01 0.02 0.05 0.02
-------- -------- -------- -------- ------- -------
DISTRIBUTIONS:
Net investment income (0.01) (0.01) (0.01) (0.02) (0.05) (0.02)
-------- -------- -------- -------- ------- -------
Total Distributions (0.01) (0.01) (0.01) (0.02) (0.05) (0.02)
-------- -------- -------- -------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======= =======
Total return 0.88% 0.79% 0.95% 1.64% 4.99% 1.64%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets - net (2) 0.45%(3) 0.45% 0.45% 0.44% 0.43% 0.45%(3)
Ratio of expenses to average net
assets - gross 0.61%(3) 0.59% 0.56% 0.60% 0.48% 0.54%(3)
Ratio of net investment income /
(loss) to average net assets 1.76%(3) 0.79% 0.95% 1.62% 4.78% 6.41%(3)
Net assets, end of period (000's) $100,774 $103,499 $112,651 $120,401 $86,889 $64,489
</Table>
(1) COMMENCEMENT OF OPERATIONS.
(2) NET EXPENSES REPRESENT GROSS EXPENSES REDUCED BY FEES WAIVED AND/OR
REIMBURSED BY THE ADVISER.
(3) ANNUALIZED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
34
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
MONEY MARKET FUND SCHEDULE OF INVESTMENTS
MARCH 31, 2005 (UNAUDITED)
<Table>
<Caption>
PRINCIPAL VALUE
-----------------------------
SHORT-TERM INVESTMENTS - 99.62%
COMMERCIAL PAPER - 99.62%
American Express Credit
(2.933% due 04/18/05) $ 5,000,000 $ 5,000,310
Barclays Bank
(3.020% due 06/30/05) 1,000,000 999,999
Barclays Bank
(3.060% due 08/09/05) 2,000,000 2,000,000
British Tansco Capital, Inc.(1)
(2.770% due 05/04/05) 1,000,000 997,461
Cancara Asset Securitization(1)
(2.780% due 04/25/05) 4,000,000 3,992,587
CC (USA) Inc.(1)
(2.630% due 04/25/05) 2,000,000 1,996,493
Charta Corporation(1)
(2.800% due 04/28/05) 5,000,000 4,989,500
Citibank
(2.510% due 04/04/05) 2,000,000 2,000,000
CIT Group Inc(1)
(2.360% due 04/04/05) 1,000,000 999,803
Credit Suisse First Boston
(2.970% due 09/09/05) 2,000,000 2,000,211
Depfa Bank
(2.990% due 06/15/05) 1,000,000 1,000,000
Depfa Bank
(3.220% due 02/06/06) 1,000,000 1,000,000
Falcon Asset Securitization(1)
(2.790% due 04/12/05) 5,000,000 4,995,738
Federal National Mortgage Corp.
(1.750% due 05/23/05) 1,500,000 1,500,000
Federal National Mortgage Corp.
(2.550% due 10/07/05) 4,000,000 4,000,000
Federal National Mortgage Assistance Notes
(2.625% due 09/07/06) 1,000,000 998,882
Giro Funding US Corp.(1)
(2.780% due 05/03/05) 4,000,000 3,990,116
Goldman Sachs Group
(1.975% due 08/10/05)(2)+ 2,000,000 2,000,000
Goldman Sachs Group
(2.630% due 10/28/05) 1,000,000 1,000,000
Household Finance Co.
(2.920% due 08/18/05) 3,000,000 3,001,566
International Business Machine
(2.724% due 12/08/05) 1,000,000 999,766
Irish Life & Permanent(1)
(2.430% due 05/16/05) 4,000,000 3,987,850
Liberty Street Funding(1)
(2.780% due 04/21/05) $ 4,000,000 $ 3,993,822
Liberty Street Funding(1)
(3.020% due 06/23/05) 1,000,000 993,038
Mane Funding Corp.(1)
(2.790% due 04/19/05) 5,000,000 4,993,025
Met Life Global Funding
(2.735% due 03/06/06) 2,000,000 2,000,000
Morgan Stanley
(2.400% due 04/19/05) 2,000,000 2,000,000
Morgan Stanley
(2.570% due 11/15/05) 2,000,000 2,000,000
Natexis Banque Populaires
(2.550% due 04/29/05) 5,000,000 5,000,000
Morthern Rock
(3.000% due 06/22/05) 2,000,000 2,000,000
Perry Global Funding(1)
(2.740% due 04/25/05) 2,000,000 1,996,347
Royal Bank of Scotland
(2.810% due 05/03/05) 5,000,000 5,000,000
RWE(1)
(2.910% due 08/01/05) 3,000,000 2,970,415
Sanofi-Aventis(1)
(2.610% due 04/11/05) 4,000,000 3,997,100
Sanofi-Aventis(1)
(2.740% due 05/03/05) 1,000,000 997,564
Societe Generale
(2.955% due 08/08/05) 2,000,000 2,000,035
Societe Generale
(3.265% due 03/03/06) 1,000,000 1,000,000
Toronto Dominion Holdings
(2.500% due 05/27/05) 2,000,000 2,000,015
Westlb
(2.960% due 04/01/05) 4,000,000 4,000,000
-------------
Total Short-Term Investments
(cost $100,391,643) 100,391,643
-------------
SHORT-TERM INVESTMENTS - 1.35%
NORTHERN TRUST DIVERSIFIED ASSETS
FUND - 1.35% 1,358,615 1,358,615
-------------
Total Short-Term Investments
(cost $1,358,615) 1,358,615
-------------
TOTAL INVESTMENTS - 100.97%
(cost $101,750,258) 101,750,258
-------------
OTHER ASSETS AND LIABILITIES - (0.97%) (976,710)
-------------
TOTAL NET ASSETS - 100.00% $ 100,773,548
=============
</Table>
+ Illiquid
(1) Security is exempt from registration under Rule 144(a) of the Securities
Act of 1933. It may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers. These securities
have been determined to be liquid in accordance with procedures adopted by
the Fund's Board for 4(2) paper that requires each security to be rated in
one of the two highest rating categories by at least two nationally
recognized rating organizations ("NRSO"), or if one NRSO rates the
security, by that NRSO.
(2) Security is exempt from registration under Rule 144(a) of the Securities
Act of 1933. It may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers. These securities
have been determined to be illiquid for not meeting the required criteria
adopted by the Fund's Board to be classified a liquid security. The
aggregate of such securities are limited to 10% of net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
35
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
FINANCIAL STATEMENTS MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2005 (UNAUDITED)
<Table>
<Caption>
MONEY
MARKET
FUND
----------------
ASSETS
Investments in securities, at value $ 101,750,258
Receivables:
Shares sold 903
Interest and dividends 150,167
Prepaid expenses and other 5,352
----------------
101,906,680
----------------
LIABILITIES
Payables:
Shares redeemed 64,537
Bank overdraft 1,000,083
Advisory fees 28,276
Administration expenses 8,538
Directors' fees 5,370
Custodian fees 3,411
Fund accounting fees 8,297
Professional fees 9,020
Other accrued expenses 5,600
----------------
1,133,132
----------------
NET ASSETS
Paid-in capital 100,773,548
----------------
$ 100,773,548
================
Investments at cost $ 101,750,258
Shares authorized per class ($.10 par value) 200,000,000
</Table>
NET ASSET VALUE (NAV) BY SHARE CLASS
<Table>
<Caption>
SHARES
SHARE CLASS NET ASSETS/ OUTSTANDING
Class I $ 100,773,548 100,773,548 $ 1.00
</Table>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 (UNAUDITED)
<Table>
<Caption>
MONEY
MARKET
FUND
----------------
INVESTMENT INCOME
Interest $ 1,129,365
----------------
1,129,365
----------------
EXPENSES
Advisory fees 178,069
Administration expenses 50,877
Custodian fees and expenses 7,961
Fund accounting fees 24,382
Professional fees 20,443
Directors' fees 7,780
Transfer agent fees 10,646
Other expenses 10,310
----------------
310,468
Reimbursements and waivers (81,522)
----------------
228,946
----------------
NET INVESTMENT INCOME / (LOSS) 900,419
----------------
REALIZED AND UNREALIZED GAIN / (LOSS)
Net realized gain / (loss) on investments
and options 2,522
Net change in unrealized appreciation /
(depreciation) on investments --
----------------
NET REALIZED AND UNREALIZED
GAIN / (LOSS) 2,522
----------------
NET INCREASE / (DECREASE)
IN NET ASSETS FROM OPERATIONS $ 902,941
================
</Table>
TRANSACTIONS WITH AFFILIATES:
<Table>
<Caption>
PERCENT OF CURRENT
NET ASSET VALUE
- -------------------------------------
ADVISORY ADMINISTRATION EXPENSE
FEE FEE LIMIT(1) WAIVER REIMBURSEMENT
- ---------------------------------------------------------------
0.35% 0.10% 0.10% $ -- $ 81,522
</Table>
(1) The Adviser has agreed to pay other expenses of the portfolio, other than
the advisory fees, to the extent that such expenses exceed the stated
percentage of their average net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
36
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
MONEY MARKET FUND
-----------------------------------
FOR THE SIX MONTHS
ENDED MARCH 31, YEAR ENDED
(UNAUDITED) SEPTEMBER 30,
----------------------------------
2005 2004
----------------------------------
OPERATIONS
Net investment income / (loss) $ 900,419 $ 808,832
Net realized gain / (loss) on investments and futures 2,522 592
------------ ------------
902,941 809,424
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS*
Net investment income (900,419) (808,832)
Net realized gain on investments (2,522) (592)
------------ ------------
(902,941) (809,424)
------------ ------------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 19,139,658 45,621,857
Reinvestment of distributions 902,636 808,954
Payments for shares redeemed (22,767,607) (55,582,910)
------------ ------------
(2,725,313) (9,152,099)
------------ ------------
NET INCREASE / (DECREASE) IN NET ASSETS (2,725,313) (9,152,099)
NET ASSETS
Beginning of period 103,498,861 12,650,960
------------ ------------
End of period $100,773,548 $103,498,861
============ ============
FUND SHARE TRANSACTIONS
Sold 19,139,658 45,621,857
Reinvestment of distributions 902,636 808,954
Redeemed (22,767,607) (55,582,910)
------------ ------------
Net increase / (decrease) from fund share transactions (2,725,313) (9,152,099)
============ ============
*TAX CHARACTER OF DISTRIBUTIONS PAID
Ordinary income $ 902,941 $ 809,424
------------ ------------
$ 902,941 $ 809,424
============ ============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
37
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2005
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Summit Mutual Funds, Inc. ("Summit Mutual Funds") is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. Summit Mutual Funds is offered in two series, the Pinnacle Series and
the Apex Series. The results of the Apex Series are presented herein. The Class
I shares of the Apex Series (the "Series") are offered without sales charge to
institutional and retail investors. Effective October 1, 2004, two funds began
offering a Class A share, which includes a front-end sales charge (see Note 3).
These funds are also offered to insurance company exempt separate accounts,
including The Union Central Life Insurance Company (parent company of Summit
Investment Partners Inc., the Adviser). The Series' shares are offered in six
different funds - Nasdaq-100 Index Fund, Everest Fund, Bond Fund, Short-term
Government Fund, High Yield Bond Fund, and Money Market Fund (individually
"Fund", collectively "Funds"). The Nasdaq-100 Index Fund seeks investment
results that correspond to the total return performance of U.S. common stocks as
represented by its respective index. The Everest Fund primarily seeks long-term
appreciation of capital, without incurring unduly high risk, by investing
primarily in common stocks and other equity securities. The Bond Fund seeks as
high a level of current income as is consistent with reasonable investment risk,
by investing primarily in long-term, fixed-income, investment-grade corporate
bonds. The Short-term Government Fund seeks to provide a high level of current
income and preservation of capital by investing 100% of its total assets in
bonds issued by the U.S. government and its agencies. The High Yield Bond Fund
seeks high current income and capital appreciation, secondarily, by investing
primarily in high yield, high risk bonds, with intermediate maturities. The
Money Market Fund seeks to maintain stability of capital and, consistent
therewith, to maintain the liquidity of capital and to provide current income.
The results of the Fund(s) for your investment product are included herein.
On November 8, 2004, the Board of Directors approved a plan of Liquidation for
the Total Stakeholder Impact Fund. A majority of shareholders approved the plan
on January 14, 2005 and the fund was liquidated.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("generally accepted
accounting principles") requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
SECURITIES VALUATION - Securities held in each Fund, except for money market
instruments maturing in 60 days or less, are valued as follows: Securities
traded on stock exchanges (including securities traded in both the
over-the-counter market and on an exchange), or listed on the NASDAQ National
Market System, are valued at the last sales price as of the close of the New
York Stock Exchange on the day the securities are being valued, or, lacking any
sales, at the closing bid prices. Alternatively, NASDAQ listed securities may be
valued on the basis of the NASDAQ Official Closing Price. Securities traded only
in the over-the-counter market are valued at the last bid price, as of the close
of trading on the New York Stock Exchange, quoted by brokers that make markets
in the securities. Other securities for which market quotations are not readily
available are valued at fair value as determined in good faith under procedures
adopted by the Board of Directors. Money market instruments maturing in 60 days
or less are valued at amortized cost, which approximates market value.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME - Securities transactions are
recorded on the trade date (the date the order to buy or sell is executed).
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. All amortization of discount and premium is
recognized currently under the effective interest method. Gains and losses on
sales of investments are calculated on the identified cost basis for financial
reporting and tax purposes. Paydown gains and losses on mortgage and
asset-backed securities are presented as interest income.
FEDERAL TAXES - Each Fund contemplates declaring as dividends each year all, or
substantially all, of its taxable income, including net capital gains (the
excess of long-term capital gains over short-term capital losses). Capital loss
carryforwards may be utilized in future years to offset net realized capital
gains, if any, prior to distributing such gains to shareholders. Shareholders
will be subject to income taxes on these distributions regardless of whether
they are paid in cash or reinvested in additional Fund shares. Distributions
attributable to the net capital gains of a Fund will be taxable to the
shareholder as long-term capital gains, regardless of how long the shareholder
has held the Fund shares. Other Fund distributions will generally be taxable as
ordinary income. The one major exception to these tax principles is that
distributions on, and sales, exchanges and redemptions of, Fund shares held in
an IRA (or other tax-qualified plan) will not be currently taxable.
38
<Page>
Shareholders may also be subject to state and local taxes on distributions and
redemptions. State income taxes may not apply, however, to the portions of each
Funds' distributions, if any, that are attributable to interest on federal
securities or interest on securities of the particular state. Shareholders
should consult their tax advisers regarding the tax status of distributions in
their state and locality.
It is the intent of Summit Mutual Funds to comply with the requirements under
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net investment income and any net
realized capital gains. Accordingly, no provision for federal or state income
taxes has been recorded.
DISTRIBUTIONS - Distributions from net investment income in all fixed income
Funds, except the Money Market Fund, are generally declared and paid quarterly.
Distributions from net investment income of the Money Market Fund are declared
daily and paid monthly. Equity Funds generally declare and pay dividends
annually. Net realized capital gains are distributed periodically, no less
frequently than annually. Distributions are recorded on the ex-dividend date.
All distributions are reinvested in additional shares of the respective Fund at
the net asset value per share unless you notify Summit Mutual Funds that you
elect to receive distributions in cash.
The amounts of distributions are determined in accordance with federal income
tax regulations, which may differ from accounting principles generally accepted
in the United States of America. These "book/tax" differences are either
considered temporary or permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their federal tax-basis treatment; temporary differences do not require
reclassification. Distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not for tax purposes
are reported as distributions in excess of net investment income or
distributions in excess of net realized capital gains. To the extent they exceed
net investment income and net realized capital gains for tax purposes, they are
reported as distributions of paid-in-capital.
EXPENSES - Allocable expenses of Summit Mutual Funds are charged to each Fund
based on the ratio of the net assets of each Fund to the combined net assets of
Summit Mutual Funds. Nonallocable expenses are charged to each Fund based on
specific identification.
FOREIGN CURRENCY - Summit Mutual Funds' accounting records are maintained in
U.S. dollars. Funds may purchase foreign securities within certain limitations
set forth in the Prospectus. Amounts denominated in or expected to settle in
foreign currencies are translated into U.S. dollars at the spot rate at the
close of the London Market. Summit Mutual Funds does not isolate that portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the underlying fluctuation in the securities resulting from
market prices. All are included in net realized and unrealized gain or loss for
investments.
Foreign security and currency transactions may involve certain risks not
typically associated with those of U.S. companies, including the level of
governmental supervision and regulations of foreign securities markets and the
possibility of political and economic instability.
FUTURES CONTRACTS AND FUND SECURITIES LOANED - Certain Funds may enter into
futures contracts for hedging purposes, including protecting the price or
interest rate of securities that the Fund intends to buy, that relate to
securities in which it may directly invest and indices comprised of such
securities may purchase and write call and put options on such contracts. Each
eligible Fund may invest up to 20% of its assets in such futures and/or options.
The Nasdaq-100 Index and Everest Funds may invest up to 100% of their assets in
such futures and/or options until each Fund reaches $50 million in net assets.
These contracts provide for the sale of a specified quantity of a financial
instrument at a fixed price at a future date. When the Funds enter into a
futures contract, they are required to deposit, or designate and maintain as
collateral such initial margin as required by the exchange on which the contract
is traded. Under terms of the contract, the Funds agree to receive from or pay
to the broker an amount equal to the daily fluctuation in the value of the
contract (known as the variation margin). The variation margin is recorded as
unrealized gain or loss until the contract expires or is otherwise closed, at
which time the gain or loss is realized. The Funds invest in futures as a
substitute to investing in the common stock positions in the Index that they
intend to match. The potential risk to the Funds is that the change in the value
in the underlying securities may not correlate to the value of the contracts.
The Funds (except the Money Market Funds) lend their securities to approved
brokers to earn additional income and receive cash and/or securities as
collateral to secure the loans. Income from securities lending is included in
"Other Income" on the
39
<Page>
Statement of Operations. Collateral is maintained at not less than 100% of the
current market value of loaned securities. Although the risk of lending is
mitigated by the collateral, the Funds could experience a delay in recovering
its securities and a possible loss of income or value if the borrower fails to
return them. In addition to cash collateral, the Funds may accept noncash
collateral consisting of government securities and irrevocable letters of credit
from domestically domiciled banks.
NOTE 2 - TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEES - Summit Mutual Funds pays investment advisory fees to
Summit Investment Partners, Inc. (the "Adviser"), under terms of an Investment
Advisory Agreement (the "Agreement"). Certain officers and directors of the
Adviser are affiliated with Summit Mutual Funds. Summit Mutual Funds pays the
Adviser, as full compensation for all services and facilities furnished, a
monthly fee computed separately for each Fund on a daily basis.
SELECTION AND APPROVAL FACTORS - At its November 8, 2004 meeting, the Board
of Directors renewed the Adviser's contract and approved the advisory fees at
the same level as in the prior year. The following factors, among others,
were considered in the Board's decision: (1) The nature, extent and quality
of the services provided by the Adviser have been consistent and continue to
meet the standards established by the Board; (2) The investment performance
of the Funds, when compared to industry rankings and other criteria, in all
cases exceeded the 50th percentile; (3) The costs and profitability of the
services provided by the Adviser were analyzed, and the Board determined that
staff compensation (the largest cost component) was appropriate to maintain
continuity in service, and that the Adviser's profitability was in line with
industry standards; (4) The Board discussed economies of scale and determined
that they have not been achieved and are not expected in the near term
because of the relatively small size of the Funds; and (5) Fee levels were
determined to be competitive and reflective of current industry and Adviser
conditions. The structure and level of fees will be addressed as economies of
scale are realized to the benefit of shareholders.
ADMINISTRATION FEES - Summit Mutual Funds pays the Adviser to perform certain
administration services. The Fund shall pay the Adviser as full compensation for
all facilities and services furnished a fee computed separately for each
portfolio of the Fund.
DIRECTORS' FEES - Each director who is not affiliated with the Adviser receives
fees from Summit Mutual Funds for service as a director. Members of the Board of
Directors who are not affiliated with the Adviser are eligible to participate in
a deferred compensation plan. The value of each director's deferred compensation
account will increase or decrease at the same rate as if it were invested in
shares of the Summit Money Market Fund.
Summit Investment Partners, Inc. is a wholly-owned subsidiary of Union Central.
On or about January 28, 2005, the boards of directors of Union Central and The
Ameritas Acacia Companies of Lincoln, Nebraska voted to combine at the mutual
holding company level. This transaction is subject to appropriate regulatory
approval and the approval of the members and policyholders of both insurance
companies
NOTE 3 - MULTIPLE CLASSES OF SHARES
The Nasdaq-100 Index and Everest Funds offer a second class of shares (Class A).
The Class A shares are subject to a Distribution and Shareholder Service Plan
("12b-1 Plan"), which was approved by the Funds' Board of Directors effective
March 1, 2002. The 12b-1 Plan provides that each 12b-1 Plan class shall pay to
the Series' Distributor, Carillon Investments, Inc., a fee for payments the
Distributor makes to banks, financial planners, retirement plan service
providers, broker/dealers and other institutions for distribution assistance
and/or shareholder services in connection with the 12b-1 Plan class shares. The
fee shall be in an amount not to exceed on an annual basis 0.25% of the average
daily net asset value of each 12b-1 Plan class. Since the fee is paid out of the
assets or income of the 12b-1 Plan Class on an ongoing basis, over time the fee
will increase the cost and reduce the return of an investment.
The two classes of shares represent interests in the same portfolio of
investments, have the same rights, and are generally identical in all respects,
except that each class bears its separate class-specific expenses, and has
exclusive voting rights with respect to any matter on which a separate vote of
any class is required. Income, non-class specific expenses, and
realized/unrealized gains and losses are allocated to the respective classes on
the basis of the relative daily net assets.
As of October 1, 2004, the Nasdaq-100 Index and Everest Funds replaced Class F
shares with a different class of shares (Class A). The Class A shares are
subject to a 12b-1 Plan, as described in Note 3. In addition, Class A shares
have a front-end sales load. Additionally effective October 1, 2004, Quasar
Distributors, LLC. is the Series' Distributor.
40
<Page>
SUMMIT MUTUAL FUNDS, INC. - APEX SERIES
MANAGEMENT OF THE FUND
DIRECTORS AND OFFICERS
INDEPENDENT DIRECTORS
<Table>
<Caption>
NUMBER OF
TERM OF PORTFOLIOS IN OTHER
POSITION(S) OFFICE AND FUND COMPLEX DIRECTORSHIPS
WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
NAME, AGE AND ADDRESS(1) FUND TIME SERVED DURING PAST FIVE YEARS DIRECTOR DIRECTOR
- ---------------------------------------------------------------------------------------------------------------------
Theodore H. Emmerich Director Director Consultant; former Partner, 15 American
(78) since 1987 Ernst & Whinney, Accountants Financial Group
Yvonne L. Gray Director Director Chief Operating Officer, United 15
(54) since 1999 Way of Greater Cincinnati
(Social Services Provider);
prior thereto, Vice President/
Trust Operations Officer,
Fifth Third Bank; former Audit
Manager, Price Waterhouse
(Accounting Firm)
David C. Phillips Director Director Co-Founder, Cincinnati Works 15 Meridian Bioscience,
(66) since 2001 Inc. (Job Placement); prior Inc.; Cintas, Inc.
thereto, Chief Executive
Officer, Downtown Cincinnati
Inc. (Economic Revitalization
of Cincinnati)
Mary W. Sullivan Director Director Attorney, Peck, Shaffer & 15 Franklin Savings and
(48) since 2001 Williams LLP (Law Firm) Loan Co.; First
Franklin Corporation
</Table>
INTERESTED DIRECTORS AND OFFICERS
<Table>
<Caption>
NUMBER OF
TERM OF PORTFOLIOS IN OTHER
POSITION(S) OFFICE AND FUND COMPLEX DIRECTORSHIPS
WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
NAME, AGE AND ADDRESS(1) FUND TIME SERVED DURING PAST FIVE YEARS DIRECTOR DIRECTOR
- -----------------------------------------------------------------------------------------------------------------------
Steven R. Sutermeister* Director, Director Senior Vice President, Union 15 Carillon
Investments,
(51) President and since 1999 Central; President and Chief Inc.; Summit
Chief Executive Executive Officer, Adviser. Investment Partners,
Officer Inc.; Union Central
Mortgage Funding,
Inc.
John F. Labmeier Vice President Officer since Vice President, Associate NA NA
1876 Waycross Rd. and Secretary 1990 General Counsel and Assistant
(56) Secretary, Union Central; Vice
President and Secretary,
Carillon Investments, Inc.;
Secretary, Adviser
Thomas G. Knipper Vice President, Officer since Treasurer, Adviser NA NA
(47) Controller and 1995
Chief
Compliance
Officer
John M. Lucas Assistant Officer since Second Vice President, Counsel NA NA
1876 Waycross Rd. Secretary 1990 and Assistant Secretary, Union
Cincinnati, OH 45240 Central
(54)
</Table>
- ----------
(1) Except as otherwise indicated, the business of each listed person is 312
Elm St., Ste. 1212, Cincinnati, OH 45202
* Mr. Sutermeister may be considered to be an "interested person" of the Fund
(within the meaning of the Investment Company Act of 1940) because of his
affiliation with the Adviser.
<Page>
The Summit Pinnacle Series is distributed to insurance company's separate
accounts available in variable annuity and variable universal life insurance
products. The Pinnacle Series consists of the following Portfolios:
EQUITY INDEX ACCOUNTS
S&P 500 Index Portfolio
S&P MidCap 400 Index Portfolio
Russell 2000 Small Cap Index Portfolio
Nasdaq-100 Index Portfolio
EAFE International Index Portfolio
FIXED INCOME & BALANCED INDEX ACCOUNT
Balanced Index Portfolio
Lehman Aggregate Bond Index Portfolio
MANAGED ACCOUNTS
Zenith Portfolio
Bond Portfolio
The Summit Apex Series is a family of Mutual Funds intended for institutional
and retail accounts. For more complete information about the Summit Mutual
Funds' Apex Series, including charges and expenses, call 888-259-7565 for a
prospectus. Please read it carefully before you invest or send money. Summit
Apex Series is distributed by Quasar Distributors, LLC. Milwaukee, Wisconsin
Member SIPC. The Apex Series consists of the following Funds:
EQUITY INDEX ACCOUNTS
Nasdaq-100 Index Fund
MANAGED ACCOUNTS
Everest Fund
Bond Fund
Short-term Government Fund
High Yield Bond Fund
STABLE VALUE ACCOUNT
Money Market Fund
Please visit our Website at www.summitfunds.com to learn more about the Summit
Mutual Funds.
[SUMMIT MUTUAL FUNDS LOGO]
SMFI 573APEX 05/05
<page>
ITEM 2. CODE OF ETHICS
Not applicable for semiannual report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable for semiannual report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable for semiannual report.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable for semiannual report.
ITEM 6. SCHEDULE OF INVESTMENTS
Included in Report to Shareholders (ITEM 1).
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The following discloses the procedures by which shareholders
may recommend nominees to the board of directors, as set
forth in the Nominating Committee Charter (adopted as of
November 8, 2004):
"4.While the Committee is solely responsible for the selection
and nomination of potential candidates to serve on the Board,
the Committee may consider nominations from shareholders of
the Funds. Shareholders may submit for the Committee's
consideration, recommendations regarding potential nominees
for service on the Boards. Each eligible shareholder or
shareholder group may submit no more than one nominee each
calendar year.
(a) In order for the Committee to consider shareholder
submissions, the following requirements must be satisfied
regarding the nominee:
(i) The nominee must satisfy all qualifications provided
herein and in the Funds' organizational documents,
including qualification as a possible Independent
Director if the nominee is to serve in that capacity.
(ii) The nominee may not be the nominating shareholder,
a member of the nominating shareholder group or a
member of the immediate family of the nominating
shareholder or any member of the nominating
shareholder group.(1)
(iii) Neither the nominee nor any member of the nominee's
immediate family may be currently employed or
employed within the year prior to the nomination
by any nominating shareholder entity or entity in
a nominating shareholder group.
(iv) Neither the nominee nor any immediate family member
of the nominee is permitted to have accepted
directly or indirectly, during the year of the
election for which the nominee's name was submitted,
during the immediately preceding calendar year,
or during the year when the nominee's name was
submitted, any consulting, advisory, or other
compensatory fee from the nominating shareholder
or any member of a nominating shareholder group.
(v) The nominee may not be an executive officer, director
or person fulfilling similar functions of the
nominating shareholder or any member of the
nominating shareholder group, or of an affiliate
of the nominating shareholder or any such member
of the nominating shareholder group.
(vi) The nominee may not control the nominating
shareholder or any member of the nominating
shareholder group (or, in the case of a holder
or member that is a fund, an interested person
of such holder or member as defined by Section
2(a)(19) of the 1940 Act).
(vii) A shareholder or shareholder group may not submit
for consideration a nominee which has previously
been considered by the Committee.
- ---------
(1) Terms such as "immediate family member" and "control" shall
be interpreted in accordance with the federal securities laws.
(b) In order for the Committee to consider shareholder
submissions, the following requirements must be satisfied
regarding the shareholder or shareholder group submitting
the proposed nominee:
(i) Any shareholder or shareholder group submitting
a proposed nominee must beneficially own, either
individually or in the aggregate, more than 5% of
a Fund's (or a series thereof) securities that
are eligible to vote both at the time of submission
of the nominee and at the time of the Board member
election. Each of the securities used for purposes
of calculating this ownership must have been held
continuously for at least two years as of the date
of the nomination. In addition, such securities
must continue to be held through the date of the
meeting. The nominating shareholder or shareholder
group must also bear the economic risk of the
investment.
(ii) The nominating shareholder or shareholder group
must also submit a certification which provides
the number of shares which the person or group
has (a) sole power to vote or direct the vote;
(b) shared power to vote or direct the vote;
(c) sole power to dispose or direct the disposition
of such shares; and (d) shared power to dispose
or direct the disposition of such shares. In
addition the certification shall provide that
the shares have been held continuously for at
least two years.
(c) Shareholders or shareholder groups submitting proposed
nominees must substantiate compliance with the above
requirements at the time of submitting their proposed
nominee as part of their written submission to the
attention of the Funds' Secretary, who will provide all
submissions to the Committee. This submission to the
Funds must include:
(i) the shareholder's contact information;
(ii) the nominee's contact information and the number
of applicable Fund shares owned by the proposed
nominee;
(iii) all information regarding the nominee that would
be required to be disclosed in solicitations of
proxies for elections of directors required by
Regulation 14A under the Securities Exchange Act; and
(iv) a notarized letter executed by the nominee, stating
his or her intention to serve as a nominee and be
named in a Fund's proxy statement, if so designated
by the Committee and the Fund's Board.
The Committee will consider all submissions meeting the
applicable requirements stated herein that are received not
earlier than January 1 of the most recently completed calendar
year. It shall be in the Committee's sole discretion whether
to seek corrections of a deficient submission or to exclude a
nominee from consideration."
ITEM 11. CONTROLS AND PROCEDURES
(a) The Registrant's President and Treasurer have evaluated
the Registrant's disclosure controls and procedures
within 90 days of this filing and have concluded that
the Registrant's disclosure controls and procedures
were effective, as of that date, in ensuring that
information required to be disclosed by the Registrant
in this form N-CSR was recorded, processed, summarized,
and reported timely.
(b) There were no significant changes in Registrant's
internal controls or other factors that could
significantly affect these controls subsequent
to the date of their evaluation, including any
corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 12. EXHIBITS
(a) Certifications as required by Rule 30a-2(a) under the
Act filed herewith.
(b) Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SUMMIT MUTUAL FUNDS, INC.
Date: May 25 2005 Steven R. Sutermeister
-------------- By: -------------------------------
Steven R. Sutermeister,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: /s/ Steven R. Sutermeister /s/ Thomas G. Knipper
---------------------------- --------------------------
Steven R. Sutermeister Thomas G. Knipper
President and Chief Executive Officer Vice President, Controller
and Chief Compliance Officer
Date: May 25, 2005 Date: May 25, 2005
----------------- -------------------