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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21753
--------------------------------------
Church Capital Investment Trust
-----------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
301 Oxford Valley Road, Suite 801B Yardley, Pennsylvania 19067
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Christy Oeth
Church Capital Management, LLC
301 Oxford Valley Road, Suite 801B Yardley, PA 19067
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (215) 321-1900
----------------------
Date of fiscal year end: November 30, 2006
----------------------------
Date of reporting period: May 31, 2006
----------------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
CHURCH CAPITAL INVESTMENT TRUST
Church Capital Value Trust
Church Capital Money Market Fund
SEMI-ANNUAL REPORT
May 31, 2006
(Unaudited)
INVESTMENT ADVISER
Church Capital Management, LLC
Yardley, PA
CHURCH CAPITAL VALUE TRUST
SUPPLEMENTARY PORTFOLIO INFORMATION
MAY 31, 2006 (UNAUDITED)
================================================================================
CHURCH CAPITAL VALUE TRUST VS S&P 500 INDEX
SECTOR DIVERSIFICATION (% OF NET ASSETS)
[BAR CHART OMITTED]
Church Capital S&P 500
Value Trust Index
---------------------------
Consumer Discretionary 3.6% 10.4%
Consumer Staples 3.4% 9.6%
Energy 12.0% 9.9%
Financials 12.1% 21.5%
Health Care 18.9% 12.3%
Industrials 10.9% 11.7%
Information Technology 12.8% 15.0%
Materials 4.6% 3.1%
Telecommunication Services 0.0% 3.2%
Utilities 0.0% 3.3%
Exchange-Traded Funds 8.1% 0.0%
Cash 13.6% 0.0%
TOP 10 HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
- --------------------------------- ---------------
General Electric Co. 5.7%
SPDR Trust Series 1 5.0%
Wachovia Corp. 3.9%
Citigroup, Inc. 3.9%
Honeywell International, Inc. 3.4%
Johnson & Johnson 3.3%
Royal Dutch Shell PLC - ADR 3.3%
Cimarex Energy Co. 3.2%
Amgen, Inc. 3.2%
Nabors Industries Ltd. 3.1%
1
CHURCH CAPITAL MONEY MARKET FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
MAY 31, 2006 (UNAUDITED)
================================================================================
PORTFOLIO ALLOCATION
% OF NET ASSETS
[PIE CHART OMITTED]
Commercial Paper 84%
Repurchase Agreements 12%
U.S. Government Agency 4%
- --------------------------------------------------------------------------------
MATURITY DISTRIBUTION
% OF NET ASSETS
[PIE CHART OMITTED]
0 - 13 Days 44%
14 - 29 Days 44%
30 + Days 12%
CREDIT ANALYSIS YIELD ANALYSIS
- ------------------------- ------------------------------
A-1 / P-1 100.0% 7-Day Current Yield 4.34%
7-Day Effective Yield 4.43%
2
CHURCH CAPITAL INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 2006 (UNAUDITED)
================================================================================
CHURCH CAPITAL
CHURCH CAPITAL MONEY MARKET
VALUE TRUST FUND
- ----------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost $ 27,763,840
===============
At value (Note 2) $ 27,564,459 $ 45,405,482
Dividends and interest receivable 61,973 25,609
Receivable for capital shares sold 39,353 --
Other assets 15,039 5,718
--------------- ---------------
TOTAL ASSETS 27,680,824 45,436,809
--------------- ---------------
LIABILITIES
Distributions payable -- 161,174
Payable for investment securities purchased 2,365,468 --
Payable for capital shares redeemed 3,566 --
Payable to Adviser (Note 4) 9,203 7,880
Payable to affiliate (Note 4) 6,050 7,675
Other accrued expenses 7,635 8,950
--------------- ---------------
TOTAL LIABILITIES 2,391,922 185,679
--------------- ---------------
NET ASSETS $ 25,288,902 $ 45,251,130
=============== ===============
NET ASSETS CONSIST OF:
Paid-in capital $ 25,396,952 $ 45,251,130
Accumulated net investment income 87,769 --
Accumulated net realized gains from security transactions 3,562 --
Net unrealized depreciation on investments (199,381) --
--------------- ---------------
NET ASSETS $ 25,288,902 $ 45,251,130
=============== ===============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 2,521,763 45,251,130
=============== ===============
Net asset value, redemption price and offering price
per share (Note 2) $ 10.03 $ 1.00
=============== ===============
See accompanying notes to financial statements.
3
CHURCH CAPITAL INVESTMENT TRUST
STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED MAY 31, 2006 (a) (UNAUDITED)
================================================================================
CHURCH CAPITAL
CHURCH CAPITAL MONEY MARKET
VALUE TRUST FUND
- -----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest income $ 72,989 $ 716,937
Dividend income 99,490 --
--------------- ---------------
TOTAL INVESTMENT INCOME 172,479 716,937
--------------- ---------------
EXPENSES
Investment advisory fees (Note 4) 67,768 77,028
Administration fees (Note 4) 8,767 15,100
Fund accounting fees (Note 4) 11,503 12,338
Custody fees 8,120 7,091
Insurance expense 6,733 6,733
Registration fees 4,592 6,317
Transfer agent fees (Note 4) 5,500 4,500
Postage and supplies 5,652 4,266
Professional fees 3,312 3,312
Trustee fees and expenses 3,206 3,206
Report printing fees 4,319 1,050
Other expenses 1,383 1,116
--------------- ---------------
TOTAL EXPENSES 130,855 142,057
Fees waived by the Adviser (Note 4) (46,145) (40,349)
--------------- ---------------
NET EXPENSES 84,710 101,708
--------------- ---------------
NET INVESTMENT INCOME 87,769 615,229
--------------- ---------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gains from security transactions 3,562 --
Net change in unrealized appreciation/depreciation on investments (199,381) --
--------------- ---------------
NET REALIZED AND UNREALIZED LOSSES
ON INVESTMENTS (195,819) --
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ (108,050) $ 615,229
=============== ===============
(a) Represents the periods from the commencement of operations (January 19,
2006 for Church Capital Value Trust and January 20, 2006 for Church
Capital Money Market Fund) through May 31, 2006.
See accompanying notes to financial statements.
4
CHURCH CAPITAL INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIODS ENDED MAY 31, 2006 (a) (UNAUDITED)
================================================================================
CHURCH CAPITAL
CHURCH CAPITAL MONEY MARKET
VALUE TRUST FUND
- -----------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 87,769 $ 615,229
Net realized gains from security transactions 3,562 --
Net change in unrealized appreciation/depreciation on investments (199,381) --
--------------- ---------------
Net increase (decrease) in net assets from operations (108,050) 615,229
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income -- (615,229)
--------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 26,231,675 70,883,739
Net asset value of shares issued in revinestment of
distributions to shareholders -- 59,396
Payments for shares redeeemed (884,723) (25,742,005)
--------------- ---------------
Net increase in net assets from capital share transactions 25,346,952 45,201,130
--------------- ---------------
TOTAL INCREASE IN NET ASSETS 25,238,902 45,201,130
NET ASSETS
Beginning of period 50,000 50,000
--------------- ---------------
End of period $ 25,288,902 $ 45,251,130
=============== ===============
CAPITAL SHARE ACTIVITY
Shares sold 2,604,055 70,883,739
Shares reinvested -- 59,396
Shares redeemed (87,292) (25,742,005)
--------------- ---------------
Net increase in shares outstanding 2,516,763 45,201,130
Shares outstanding, beginning of period 5,000 50,000
--------------- ---------------
Shares outstanding, end of period 2,521,763 45,251,130
=============== ===============
(a) Represents the periods from the commencement of operations (January 19,
2006 for Church Capital Value Trust and January 20, 2006 for Church
Capital Money Market Fund) through May 31, 2006.
See accompanying notes to financial statements.
5
CHURCH CAPITAL VALUE TRUST
FINANCIAL HIGHLIGHTS
================================================================================
PERIOD
ENDED
PER SHARE DATA FOR A SHARE MAY 31, 2006(a)
OUTSTANDING THROUGHOUT THE PERIOD: (UNAUDITED)
- --------------------------------------------------------------------------------
Net asset value at beginning of period $ 10.00
---------------
Income (loss) from investment operations:
Net investment income 0.05 (b)
Net realized and unrealized losses on investments (0.02)
---------------
Total from investment operations 0.03
---------------
Net asset value at end of period $ 10.03
===============
RATIOS AND SUPPLEMENTAL DATA:
Total return (c) 0.30% (d)
===============
Net assets at end of period (000's) $ 25,289
===============
Ratio of gross expenses to average net assets 1.91% (f)
Ratio of net expenses to average net assets (e) 1.24% (f)
Ratio of net investment income to average net
assets (e) 1.28% (f)
Portfolio turnover rate 162% (f)
- --------------------------------------------------------------------------------
(a) Represents the period from the commencement of operations (January 19,
2006) through May 31, 2006.
(b) Calculated using weighted average shares outstanding during the period.
(c) Total return is a measure of the change in value of an investment in the
Fund over the period covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. The return shown does
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(d) Not annualized.
(e) Ratio was determined after advisory fee waivers.
(f) Annualized.
See accompanying notes to financial statements.
6
CHURCH CAPITAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
================================================================================
PERIOD
ENDED
PER SHARE DATA FOR A SHARE MAY 31, 2006(a)
OUTSTANDING THROUGHOUT THE PERIOD: (UNAUDITED)
- --------------------------------------------------------------------------------
Net asset value at beginning of period $ 1.000
Net investment income 0.014
Dividends from net investment income (0.014)
---------------
Net asset value at end of period $ 1.000
===============
RATIOS AND SUPPLEMENTAL DATA:
Total return (b) 1.44% (c)
================
Net assets at end of period $ 45,251
================
Ratio of gross expenses to average net assets 0.92% (e)
Ratio of net expenses to average net assets (d) 0.66% (e)
Ratio of net investment income to average net
assets (d) 3.99% (e)
- --------------------------------------------------------------------------------
(a) Represents the period from the commencement of operations (January 20,
2006) through May 31, 2006.
(b) Total return is a measure of the change in value of an investment in the
Fund over the period covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. The return shown does
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(c) Not annualized.
(d) Ratio was determined after advisory fee waivers.
(e) Annualized.
See accompanying notes to financial statements.
7
CHURCH CAPITAL VALUE TRUST
SCHEDULE OF INVESTMENTS
MAY 31, 2006 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 78.3% VALUE
- -------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 3.6%
4,000 Gannett Co., Inc. $ 216,040
40,000 Time Warner, Inc. 688,400
-----------------
904,440
-----------------
CONSUMER STAPLES -- 3.4%
30,000 Coca-Cola Enterprises, Inc. 589,800
10,000 Smithfield Foods, Inc. (a) 278,100
-----------------
867,900
-----------------
ENERGY -- 12.0%
7,000 Baker Hughes, Inc. 604,100
20,000 Cimarex Energy Co. 811,200
22,000 Nabors Industries Ltd. (a) 790,020
12,500 Royal Dutch Shell PLC - ADR 828,875
-----------------
3,034,195
-----------------
FINANCIALS -- 12.1%
16,000 Bank of America Corp. 774,400
20,000 Citigroup, Inc. 986,000
4,000 SunTrust Banks, Inc. 302,840
18,500 Wachovia Corp. 989,750
-----------------
3,052,990
-----------------
HEALTH CARE -- 18.9%
12,000 Amgen, Inc. (a) 811,080
2,000 Bausch & Lomb, Inc. 98,300
14,000 Baxter International, Inc. 527,800
13,500 Beckman Coulter, Inc. 746,550
12,500 Biogen Idec, Inc. (a) 582,875
22,000 Biomet, Inc. 774,620
14,000 Johnson & Johnson 843,080
18,750 PerkinElmer, Inc. 391,125
-----------------
4,775,430
-----------------
INDUSTRIALS -- 10.9%
42,000 General Electric Co. 1,438,920
21,000 Honeywell International, Inc. 864,780
10,000 Raytheon Co. 458,500
-----------------
2,762,200
-----------------
8
CHURCH CAPITAL VALUE TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS (CONTINUED) -- 78.3% VALUE
- -------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 12.8%
15,000 Activision, Inc. (a) $ 196,050
9,500 Agilent Technologies, Inc. (a) 331,455
23,500 Corning, Inc. (a) 569,875
10,000 Electronic Arts, Inc. (a) 420,700
20,000 Maxim Integrated Products, Inc. 614,600
20,000 Microsoft Corp. 453,000
21,000 Texas Instruments, Inc. 655,830
-----------------
3,241,510
-----------------
MATERIALS -- 4.6%
17,500 Alcoa, Inc. 555,100
15,000 Dow Chemical Co. (The) 598,050
-----------------
1,153,150
-----------------
TOTAL COMMON STOCKS (Cost $19,994,353) $ 19,791,815
-----------------
=================================================================================================
SHARES EXCHANGE-TRADED FUNDS -- 8.1% VALUE
- -------------------------------------------------------------------------------------------------
20,000 NASDAQ-100 Index Tracking Stock $ 776,400
10,000 SPDR Trust Series 1 1,274,500
-----------------
TOTAL EXCHANGE-TRADED FUNDS (Cost $2,047,743) $ 2,050,900
-----------------
=================================================================================================
PAR VALUE REPURCHASE AGREEMENTS -- 22.6% VALUE
- -------------------------------------------------------------------------------------------------
$5,721,744 U.S. Bank N.A., 4.50%, dated 05/31/06, due 06/01/06
repurchase proceeds: $5,722,459 (Cost $5,721,744) (b) $ 5,721,744
-----------------
TOTAL INVESTMENTS AT VALUE -- 109.0% (Cost $27,763,840) $ 27,564,459
LIABILITIES IN EXCESS OF OTHER ASSETS -- (9.0%) (2,275,557)
-----------------
NET ASSETS -- 100.0% $ 25,288,902
=================
(a) Non-income producing security.
(b) Repurchase agreement is fully collateralized by $6,119,915 FGCI, Pool
#E99430, 4.50%, 09/01/18. The aggregate market value of the collateral at
May 31, 2006 was $5,836,521.
ADR American Depositary Receipt
See accompanying notes to financial statements.
9
CHURCH CAPITAL MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
MAY 31, 2006 (UNAUDITED)
================================================================================
PAR VALUE COMMERCIAL PAPER -- 83.8% VALUE
- -------------------------------------------------------------------------------------------------
$2,000,000 AIG Funding, Inc., 4.97%, 06/01/06 $ 2,000,000
2,000,000 Alcon Capital Corp., 4.98%, 06/29/06 1,992,253
2,000,000 Allied Irish Banks PLC, 5.00%, 06/12/06 1,996,944
1,500,000 American Express Co., 4.96%, 06/05/06 1,499,173
2,000,000 American General Finance Corp., 4.99%, 06/19/06 1,995,010
2,000,000 Chevron Corp., 4.97%, 06/30/06 1,991,993
2,000,000 Citigroup, Inc., 4.98%, 06/15/06 1,996,127
1,500,000 Cornell University, 5.04%, 07/11/06 1,491,600
2,000,000 General Electric Co., 4.97%, 06/02/06 1,999,724
2,000,000 Household Finance Corp., 5.00%, 07/05/06 1,990,556
1,800,000 International Lease Finance Corp., 4.97%, 06/12/06 1,797,267
2,000,000 Kimberly-Clark Corp., 4.95%, 06/26/06 1,993,125
2,000,000 LaSalle Bank N.A., 5.01%, 07/06/06 1,990,258
2,000,000 National Rural Utilities Cooperative Finance
Corp., 5.00%, 06/22/06 1,994,167
1,700,000 Nestle Capital Corp., 4.97%, 06/07/06 1,698,592
2,000,000 Prudential Funding LLC, 4.97%, 06/29/06 1,992,269
1,500,000 Shell International Finance, 4.86%, 06/12/06 1,497,772
2,000,000 Southern Co. (The), 5.00%, 06/15/06 1,996,111
2,000,000 UBS AG, 4.99%, 06/26/06 1,993,069
2,000,000 United Parcel Service, Inc., 4.94%, 06/19/06 1,995,060
-----------------
TOTAL COMMERCIAL PAPER (Amortized Cost $37,901,070) $ 37,901,070
-----------------
=================================================================================================
PAR VALUE U.S. GOVERNMENT SECURITIES -- 4.4% VALUE
- -------------------------------------------------------------------------------------------------
$2,000,000 Federal Home Loan Bank, 4.83%, 06/09/06
(Amortized Cost $1,997,853) $ 1,997,853
-----------------
10
CHURCH CAPITAL MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE REPURCHASE AGREEMENTS -- 12.2% VALUE
- -------------------------------------------------------------------------------------------------
$5,506,559 U.S. Bank N.A., 4.50%, dated 05/31/06, due 06/01/06
repurchase proceeds: $5,507,247 (Cost $5,506,559) (a) $ 5,506,559
-----------------
TOTAL INVESTMENTS -- 100.4% (Amortized Cost $45,405,482) $ 45,405,482
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.4%) (154,352)
-----------------
NET ASSETS -- 100.0% $ 45,251,130
=================
(a) Repurchase agreement is fully collateralized by $6,002,950 FGCI, Pool
#G11440, 4.00%, 08/01/18 and $28,741 FNCI, Pool #555611, 4.50%, 07/01/18.
The aggregate market value of the collateral at May 31, 2006 was
$5,611,332.
See accompanying notes to financial statements.
11
CHURCH CAPITAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
MAY 31, 2006 (UNAUDITED)
================================================================================
1. ORGANIZATION
Church Capital Value Trust and Church Capital Money Market Fund (the "Funds")
are each a diversified series of Church Capital Investment Trust (the "Trust"),
an open-end management investment company established as an Ohio business trust
under a Declaration of Trust dated April 6, 2005. On December 20, 2005, 5,000
shares of the Church Capital Value Trust were issued for cash, at $10.00 per
share, and 50,000 shares of the Church Capital Money Market Fund were issued for
cash, at $1.00 per share, to Church Capital Management LLC, the investment
adviser to the Funds. Church Capital Value Trust and Church Capital Money Market
Fund commenced operations on January 19, 2006 and January 20, 2006,
respectively.
The investment objective of Church Capital Value Trust is capital appreciation.
The investment objective of Church Capital Money Market Fund is to maximize
current income consistent with the preservation of capital and maintenance of
liquidity by investing in high quality short-term money market instruments.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Funds' significant accounting policies:
SECURITIES VALUATION - The Church Capital Value Trust values its portfolio
securities as of the end of the regular session of trading on the New York Stock
Exchange (the "Exchange") (normally 4:00 p.m., Eastern time) on each day the
Exchange is open for business. Equity securities are valued at their market
value when reliable market quotations are readily available. Securities that are
traded on any stock exchange are generally valued at the last quoted sale price.
Lacking a last sale price, an exchange traded security is generally valued at
its last bid price. Securities which are quoted by NASDAQ are generally valued
at the NASDAQ Official Closing Price. When reliable market quotations are not
readily available, when the investment adviser determines that a market
quotation does not accurately reflect the current market value or when
restricted securities are being valued, such securities are valued as determined
in good faith by the investment adviser, in conformity with guidelines adopted
by and subject to review by the Board of Trustees of the Trust. Short-term
investments with maturities of less than 60 days of maturity, are valued by
using the amortized cost method of valuation, which the Board of Trustees has
determined will represent fair value.
The Church Capital Money Market Fund values its portfolio instruments at
amortized cost, which means they are valued at their acquisition cost, as
adjusted for amortization of premium or discount, rather than at current market
value.
SHARE VALUATION - The net asset value per share of each Fund is calculated daily
by dividing the total value of each Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
of each Fund is equal to the net asset value per share.
INVESTMENT INCOME - Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned and includes, where applicable, the
pro-rata amortization of premium or accretion of discount.
SECURITY TRANSACTIONS - Security transactions are accounted for on the trade
date. Gains and losses on securities sold are determined on a specific
identification basis.
12
CHURCH CAPITAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
MAY 31, 2006 (UNAUDITED)
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS - Dividends arising from net investment income are
declared and paid at least once each year to shareholders of the Church Capital
Value Trust. Dividends arising from net investment income are declared daily and
paid monthly, on the last business day of each month, to shareholders of the
Church Capital Money Market Fund. Net realized capital gains, if any, are
distributed at least once each year. The amount of distributions from net
investment income and net realized gains are determined in accordance with
federal income tax regulations, which may differ from accounting principles
generally accepted in the United States of America. For the period ended May 31,
2006, there were no differences between the book basis and tax basis of
distributions for the Church Capital Money Market Fund. There were no
distributions during the period for the Church Capital Value Trust.
REPURCHASE AGREEMENTS - The Funds may enter into repurchase agreements
(agreements to purchase securities subject to the seller's agreement to
repurchase them at a specified time and price) with well-established registered
securities dealers or banks. Repurchase agreements may be deemed to be loans by
the Funds. It is each Fund's policy to take possession of U.S. Government
obligations as collateral under a repurchase agreement and, on a daily basis,
mark-to-market such obligations to ensure that their value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under the
repurchase agreement.
ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
FEDERAL INCOME TAX - It is each Fund's policy to comply with the special
provisions of Subchapter M of the Internal Revenue Code applicable to regulated
investment companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distribute at least 90% of its taxable net income, the Fund (but
not the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes is required.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is computed on a tax basis for each item as of May 31,
2006:
--------------------------------------------------------------------------
CHURCH CAPITAL
CHURCH CAPITAL MONEY MARKET
VALUE TRUST FUND
--------------------------------------------------------------------------
Tax cost of portfolio investments $ 27,808,791 $ 45,405,482
============== ==============
Gross unrealized appreciation $ 517,238 $ --
Gross unrealized depreciation (761,570) --
-------------- --------------
Net unrealized depreciation $ (244,332) $ --
Undistributed ordinary income 87,769 --
Other gains 48,513 --
-------------- --------------
Accumulated earnings (deficit) $ (108,050) $ --
============== ==============
--------------------------------------------------------------------------
13
CHURCH CAPITAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
MAY 31, 2006 (UNAUDITED)
================================================================================
3. INVESTMENT TRANSACTIONS
During the period ended May 31, 2006, cost of purchases and proceeds from sales
of investment securities, other than short-term investments and U.S. government
securities, were as follows:
--------------------------------------------------------------------------
CHURCH CAPITAL
CHURCH CAPITAL MONEY MARKET
VALUE TRUST FUND
--------------------------------------------------------------------------
Cost of purchases of investment
securities $ 31,090,386 $ --
============== ==============
Proceeds from sales of investment
securities $ 9,051,852 $ --
============== ==============
--------------------------------------------------------------------------
4. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
Church Capital Management LLC (the "Adviser") serves as the investment advisor
to the Funds. For these services, Church Capital Value Trust pays the Adviser a
monthly fee at the annual rate of 1.00% of its average daily net assets and
Church Capital Money Market Fund pays the Adviser a monthly fee at the annual
rate of 0.50% of its average daily net assets.
The Adviser has contractually agreed (for a period of three years from each
Fund's commencement of operations) to reduce its fees and/or to absorb expenses
to the extent necessary to limit the ordinary operating expenses (excluding
brokerage costs, taxes, interest and extraordinary expenses) to 1.25% of Church
Capital Value Trust's average daily net assets and to 0.66% of Church Capital
Money Market Fund's average daily net assets. Any such fee reductions by the
Adviser, or payments by the Adviser of expenses which are the Funds'
obligations, are subject to repayment by the Funds, provided that the repayments
do not cause each Fund's ordinary operating expenses to exceed the expense
limitation noted above, and provided further that the fees and expenses which
are the subject of repayment were incurred within three years of the repayment.
During the period ended May 31, 2006, the Adviser waived investment advisory
fees of $46,145 and $40,349 for Church Capital Value Trust and Church Capital
Money Market Fund, respectively.
As of May 31, 2006, the amount of fee waivers and expense reimbursements
available for reimbursement to the Adviser is $46,145 for the Church Capital
Value Trust and $40,349 for the Church Capital Money Market Fund. The Adviser
may recapture all or a portion of these amounts no later than May 31, 2009.
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement with the Trust, Ultimus Fund
Solutions, LLC ("Ultimus") provides non-investment related statistical and
research data, internal regulatory compliance services and executive and
administrative services for the Funds. Ultimus supervises the preparation of tax
returns, reports to shareholders of the Funds, reports to and filings with the
Securities and Exchange Commission and state securities commissions and
materials for meetings of the Board of Trustees. For these services, each Fund
pays to Ultimus a monthly fee equal to 0.10% per annum of its average daily net
assets up to $500 million, 0.075% of such assets from $500 million to $1 billion
and 0.05% of such assets in excess of $1 billion, provided, however, that the
minimum fee is $2,000 per month with respect to each Fund. During the period
ended May 31, 2006, Ultimus was paid administration fees of $8,767 and $15,100
by Church Capital Value Trust and Church Capital Money Market Fund,
respectively.
14
CHURCH CAPITAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
MAY 31, 2006 (UNAUDITED)
================================================================================
ACCOUNTING SERVICES AGREEMENT
Under the terms of a Fund Accounting Agreement, Ultimus calculates the daily net
asset value per share and maintains the financial books and records of the
Funds. For these services, each Fund pays to Ultimus a base fee of $2,500 per
month, plus an asset-based fee at the annual rate of .01% of each Fund's average
daily net assets. During the period ended May 31, 2006, Ultimus was paid fund
accounting fees of $11,503 and $12,338 by Church Capital Value Trust and Church
Capital Money Market Fund, respectively. In addition, the Funds pay all costs of
external pricing services.
TRANSFER AGENT AGREEMENT
Under the terms of a Transfer Agent and Shareholder Services Agreement, Ultimus
maintains the records of each shareholder's account, answers shareholders'
inquiries concerning their accounts, processes purchase and redemption of each
Fund's shares, acts as dividend and distribution disbursing agent and performs
other shareholder service functions. For these services, Ultimus receives from
each Fund for its services as transfer agent a fee, payable monthly, at an
annual rate of $24 per account, provided, however, that the minimum fee with
respect to each Fund is $1,000 per month if a Fund has 25 shareholder accounts
or less, $1,250 per month if a Fund has between 26 and 100 shareholder accounts,
and $1,500 per month if a Fund has more than 100 shareholder accounts. In
addition, the Fund pays out-of-pocket expenses, including but not limited to,
postage and supplies. During the period ended May 31, 2006, Ultimus was paid
transfer agent and shareholder services fees of $5,500 and $4,500 by Church
Capital Value Trust and Church Capital Money Market Fund, respectively.
DISTRIBUTION AGREEMENT
Under the terms of a Distribution Agreement, Bainbridge Securities Inc. (the
"Distributor") serves as principal underwriter to the Funds. The Distributor
receives no compensation from the Funds for acting as principal underwriter.
Certain trustees and officers of the Fund are directors and officers of the
Advisor, or of Ultimus, or of the Distributor.
PORTFOLIO TRANSACTIONS
A majority of the Church Capital Value Trust's portfolio transactions were
executed through the Distributor. During the period ended May 31, 2006,
brokerage commissions of $39,940 were paid by Church Capital Value Trust to the
Distributor for these transactions.
5. CONTINGENCIES AND COMMITMENTS
The Funds indemnify the Trust's officers and trustees for certain liabilities
that might arise from their performance of their duties to the Funds.
Additionally, in the normal course of business the Funds enter into contracts
that contain a variety of representations and warranties and which provide
general indemnifications. Each Fund's maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the
Funds that have not yet occurred. However, based on experience, the Funds expect
the risk of loss to be remote.
15
CHURCH CAPITAL INVESTMENT TRUST
ABOUT YOUR FUNDS' EXPENSES (Unaudited)
================================================================================
We believe it is important for you to understand the impact of costs on your
investment. As a shareholder of the Funds, you incur ongoing costs, including
management fees and other fund expenses. Operating expenses, which are deducted
from each Fund's gross income, directly reduce the investment returns of the
Funds.
A Fund's expenses are expressed as a percentage of its average net assets. This
figure is known as the expense ratio. The following examples are intended to
help you understand your ongoing costs (in dollars) of investing in the Funds
and to compare these costs with the ongoing costs of investing in other mutual
funds. The expenses in the table are based on an investment of $1,000 made at
the beginning of the period shown and held for the entire period.
The table below illustrates each Fund's costs in two ways:
ACTUAL FUND RETURN - This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from the
Fund's actual return, and the third column shows the dollar amount of operating
expenses that would have been paid by an investor who started with $1,000 in the
Fund. You may use the information here, together with the amount you invested,
to estimate the expenses that you paid over the period.
To do so, 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
given for the Fund under the heading "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN - This section is intended to help you compare the Funds'
costs with those of other mutual funds. It assumes that each Fund had an annual
return of 5% before expenses during the period shown, but that the expense ratio
is unchanged. In this case, because the return used is not the Funds' actual
return, the results do not apply to your investment. The example is useful in
making comparisons because the Securities and Exchange Commission requires all
mutual funds to calculate expenses based on a 5% return. You can assess each
Fund's costs by comparing this hypothetical example with the hypothetical
examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you
compare ongoing costs only. The Funds do not charge transaction fees, such as
purchase or redemption fees, nor do they carry a "sales load."
The calculations assume no shares were bought or sold during the period. Your
actual costs may have been higher or lower, depending on the amount of your
investment and the timing of any purchases or redemptions.
More information about the Funds' expenses, including annualized expense ratios,
can be found in this report. For additional information on operating expenses
and other shareholder costs, please refer to each Fund's prospectus.
16
CHURCH CAPITAL INVESTMENT TRUST
ABOUT YOUR FUNDS' EXPENSES (Unaudited) (Continued)
================================================================================
Ending
Beginning Account Value Expenses Paid
Account Value* May 31, 2006 During Period**
- --------------------------------------------------------------------------------------
CHURCH CAPITAL VALUE TRUST
- --------------------------------------------------------------------------------------
Based on Actual Fund Return $ 1,000.00 $ 1,003.00 $ 4.53
Based on Hypothetical 5% Return
(before expenses) $ 1,000.00 $ 1,013.70 $ 4.55
- --------------------------------------------------------------------------------------
CHURCH CAPITAL MONEY MARKET FUND
- --------------------------------------------------------------------------------------
Based on Actual Fund Return $ 1,000.00 $ 1,014.40 $ 2.40
Based on Hypothetical 5% Return
(before expenses) $ 1,000.00 $ 1,015.70 $ 2.41
- --------------------------------------------------------------------------------------
* January 19, 2006 for Church Capital Value Trust and January 20, 2006 for
Church Capital Money Market Fund.
** Expenses are equal to the Funds' annualized expense ratios (after waivers
and reimbursement) for the period as stated below, multiplied by the
average account value over the period, multiplied by 133/365 and 132/365
for Church Capital Value Trust and Church Capital Money Market Fund,
respectively (to reflect the period covered by this report).
Church Capital Value Trust 1.24%
Church Capital Money Market 0.66%
OTHER INFORMATION (Unaudited)
================================================================================
A description of the policies and procedures that the Funds use to vote proxies
relating to portfolio securities is available without charge upon request by
calling 1-877-742-8061, or on the Securities and Exchange Commission's ("SEC")
website at http://www.sec.gov.
The Trust files a complete listing of portfolio holdings of the Funds with the
SEC as of the end of the first and third quarters of each fiscal year on Form
N-Q. The filings are available upon request by calling 1-877-742-8061.
Furthermore, you may obtain a copy of the filings on the SEC's website at
http://www.sec.gov. The Trust's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC, and information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
17
CHURCH CAPITAL INVESTMENT TRUST
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
(UNAUDITED)
================================================================================
The Board of Trustees, including the Independent Trustees voting separately,
reviewed and approved each Fund's Investment Advisory Agreement ("Advisory
Agreement") with the Adviser at an in-person meeting held on December 8, 2005,
at which all of the Trustees were present.
In the course of their deliberations, the Independent Trustees met in executive
session and were advised by legal counsel for the Trust. The Independent
Trustees received and reviewed a substantial amount of information provided by
the Adviser in response to requests of the Trustees and counsel.
In considering the Advisory Agreements and reaching their conclusions, the
Trustees reviewed and analyzed various factors that they determined were
relevant, including the factors described below.
Nature, Extent and Quality of Services
- --------------------------------------
The Board received and considered various data and information regarding
the nature, extent and quality of services to be provided to the Funds by the
Adviser. The most recent registration form ("Form ADV") for the Adviser was
provided to the Board. The Board reviewed and analyzed the Form ADV which
included, among other things, information about the background and experience of
senior management of the Adviser. In this regard, the Board specifically
reviewed the qualifications, backgrounds and responsibilities of the key
personnel at the Adviser that will oversee the day-to-day management and
operations of the Funds.
In addition, the Board considered the investment and legal compliance
programs of the Trust and the Adviser. The Board also considered the depth and
experience of the Adviser's compliance staff.
Based on the above factors, together with those referenced below, the
Board concluded that it was generally satisfied with the expected nature, extent
and quality of the investment advisory services to be provided by the Adviser to
each of the Funds.
Performance and Expenses
- ------------------------
The Board reviewed information provided by the Adviser relating to the
performance record of its equity composite and its fixed income composite for
various periods ended December 31, 2004. The Board also reviewed year-to-date
2005 performance information through November 30th for both of these composites.
In addition, the Board discussed the differences in fee structures and account
minimums for the Funds and the composites. The Board considered the Adviser's
comments that it will be difficult for the Funds to replicate the performance
numbers for each of the composites due in large part to the different (higher)
fee structures for the Funds and, to a lesser extent, the impact of more
frequent cash inflows and outflows within the Funds. The Board considered the
fact that the fixed income composite is not managed like a money market fund and
is not a good indicator of how the Money Market Fund will perform. The Board
discussed the performance information provided by the Adviser, factoring in the
limitations with the comparative information, and concluded that the Adviser has
the requisite experience to manage the portfolio of each Fund.
18
CHURCH CAPITAL INVESTMENT TRUST
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
(UNAUDITED) (CONTINUED)
================================================================================
The Board considered statistical information regarding each Fund's total
expense ratio and its various components, including contractual advisory fees
and fee waivers and/or expense reimbursements. It also considered comparisons of
these fees to the comparative expense information for each Fund's peer group, as
determined by the Adviser.
The Value Trust's overall expense ratio, after contractual fee waivers,
was compared to funds within the Morningstar category of "Value Equity Funds"
having $50 million or less in net assets and to funds within the broader
category of "U.S. Equity Funds" having $50 million or less in net assets. The
Board noted that the overall expense ratio of the Value Trust, after fee
waivers, will be higher than the average for Value Funds, but slightly lower
than the average for U.S. Equity Funds. The Board also noted that, under the
expense cap arrangement agreed to by the Adviser, shareholders of the Value
Trust are guaranteed a competitive expense ratio during the infancy stages (the
first three years of operations) of the Value Trust.
The Board also discussed the Money Market Fund's rate of advisory fee and
estimated expense ratio, before and after fee waivers, noting that the Money
Market Fund's overall expense ratio is in line with or below the average for
taxable money market funds, according to data compiled by a nationally
recognized tracking service for money market funds. The Board also noted that
under the expense cap arrangement agreed to by the Adviser, shareholders of the
Money Market Fund are guaranteed a competitive expense ratio during the infancy
stages (the first three years of operations) of the Money Market Fund.
Investment Advisory Fee Rates
- -----------------------------
The Board reviewed and considered the proposed contractual investment
advisory fee rates payable by the Funds to the Adviser for investment advisory
services. Additionally, the Board received and considered information comparing
those advisory fee rates with those of the other funds in their relevant peer
group, as defined above. The Board concluded that the advisory fee rate for the
Value Trust was higher than the average rates for each of the peer groups
presented. The Board further concluded that, although the advisory fee is
higher, the overall expense ratio of the Value Trust, after contractual fee
waivers, was generally lower than average expense ratios within its peer group.
The Board performed the same type of analysis with regards to the Money Market
Fund, concluding that the advisory fee rate for the Money Market Fund was
slightly higher than the average for comparable funds, but that the overall
expense ratio of the Money Market Fund, after contractual fee waivers, is
comparable to its peer group.
Profitability
- -------------
The Board discussed profitability and other ancillary benefits that the
Adviser may receive with regard to providing these services to the Funds and
concluded that, in light of the fact that the Funds are new, with limited
assets, these factors are only secondary factors at this time. The Board did
note that, as the Funds grow, the Independent Trustees would continue to monitor
this issue.
19
CHURCH CAPITAL INVESTMENT TRUST
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
(UNAUDITED) (CONTINUED)
================================================================================
Economies of Scale
- ------------------
The Board discussed economies of scale, noting that at this stage, the
Funds have not had an opportunity to recognize any economies of scale. The Board
observed that, as the Funds grow in assets, this factor will become more
relevant to their consideration process.
Conclusion
- ----------
After full consideration of the above factors as well as other factors,
the Trustees, including all the Independent Trustees, unanimously concluded that
approval of the Advisory Agreements were in the best interest of each Fund and
its shareholders.
20
ITEM 2. CODE OF ETHICS.
Not required
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable [schedule filed with 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 INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant has not adopted procedures by which shareholders may recommend
nominees to the registrant's board of trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940) as of a date within 90 days of the filing date of this report, the
registrant's principal executive officer and principal financial officer have
concluded that such disclosure controls and procedures are reasonably designed
and are operating effectively to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to them
by others within those entities, particularly during the period in which this
report is being prepared, and that the information required in filings on Form
N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)
that occurred during the second fiscal quarter of the period covered by this
report that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not required
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2(a)): Attached hereto
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the Act (17 CFR 270.23c-1) sent or given during the period covered by the report
by or on behalf of the registrant to 10 or more persons: Not applicable
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)): Attached hereto
Exhibit 99.CERT Certifications required by Rule 30a-2(a) under the Act
Exhibit 99.906CERT Certifications required by Rule 30a-2(b) under the Act
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.
(Registrant) Church Capital Investment Trust
---------------------------------------------------------
By (Signature and Title)* /s/ Gregory A. Church
-----------------------------------------
Gregory A. Church, President
Date August 2, 2006
------------------------------------------
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 (Signature and Title)* /s/ Gregory A. Church
-----------------------------------------
Gregory A. Church, President
Date August 2, 2006
------------------------------------------
By (Signature and Title)* /s/ Mark J. Seger
-----------------------------------------
Mark J. Seger, Treasurer
Date August 2, 2006
------------------------------------------
* Print the name and title of each signing officer under his or her signature.