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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)
Gregory A. Church
Church Capital Management, LLC 301 Oxford Valley Road 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, 2007
---------------------------------------------
Date of reporting period: November 30, 2007
---------------------------------------------
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
ANNUAL REPORT
November 30, 2007
INVESTMENT ADVISER
Church Capital Management LLC
Yardley, PA
[LOGO] CHURCH CAPITAL
INVESTMENT TRUST
Church Capital Investment Trust
Letter to Shareholders
November 30, 2007
To the Shareholders of the Church Capital Investment Trust:
We are pleased to include this letter with the second Annual Report of the
Church Capital Investment Trust. Our second year of operation witnessed strong
growth in both Funds, with the Value Trust rising to $36.3 million and the Money
Market Fund to $69.1 million.
Equity markets continued their out-performance of fixed income instruments and
money funds by a small margin during the fiscal year ended November 30, 2007.
Slowing economic growth and a concurrent slowing in corporate earnings led to
declines late in the year. Credit concerns stemming from the subprime mortgage
market resulted in risk premiums being reigned in throughout asset classes.
After a firming of rates by the Federal Open Market Committee in the first half
of 2006, the Federal Reserve reversed course and began cutting rates late in
2007 as a result of the credit problems arising from subprime instruments.
As we move into 2008, we expect both domestic and international economies to
soften. However, given the lower rate environment, we anticipate a rebound in
equity prices late in 2008 as most credit issues move to the rearview and lower
rates begin to spur further global economic expansion.
We appreciate your continued support.
/s/ Gregory A. Church
Gregory A. Church
Chief Investment Officer
Church Capital Investment Trust
1
Distributed by Bainbridge Securities Inc. o P.O. Box 46707
Cincinnati, Ohio 45246 o 877-742-8061
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
CHURCH CAPITAL VALUE TRUST
1) How did the Fund perform during the fiscal year?
The Church Capital Value Trust had a total return of 7.38% for the year
ended November 30, 2007.
2) What were the most significant market factors affecting the Fund's
performance during the past year?
Market factors included:
1) Subprime credit issues
2) Reduced corporate earnings expectations
3) Slowing economic growth
4) Positive equity markets
3) How did the Fund perform relative to its benchmark, and why did the Fund
outperform/underperform the benchmark?
The Fund employs a GARP (Growth at a Reasonable Price) strategy, and
utilizing this strategy the Fund posted a total return of 7.38% for the period
year ended November 30, 2007. The Fund slightly underperformed its primary
benchmark, the S&P 500 Index, although it posted returns which outperformed
several major large cap indices, including the Value Line Index and the Russell
1000 Value Index. This slight under performance to its primary benchmark was a
result of the Fund's exposure to the retail sector which underperformed the
market as a whole.
4) What strategies did you use to manage the Fund?
Management utilizes a macro economic perspective to identify sectors or
industries that are poised to outperform. In the context of a diversified
portfolio of stocks, favored industries receive a greater weighting in the
Fund's portfolio to enhance performance.
5) What were the primary strategic factors that guided your management of the
Fund?
Utilizing a "growth at reasonable price" or GARP methodology, management
identifies quality companies that are selling at attractive prices relative to
their growth rates. Stocks that possess strong fundamentals and that trade below
intrinsic valuation levels or at the low end of peer group valuations are prime
investment candidates.
THE VIEWS IN THIS REPORT WERE THOSE OF CHURCH CAPITAL MANAGEMENT LLC, AS OF
NOVEMBER 30, 2007 AND MAY NOT REFLECT THE FIRM'S VIEWS ON THE DATE THIS REPORT
IS FIRST PUBLISHED OR ANYTIME THEREAFTER. THESE VIEWS ARE INTENDED TO ASSIST
SHAREHOLDERS IN UNDERSTANDING THEIR INVESTMENT IN THE FUND AND DO NOT CONSTITUTE
INVESTMENT ADVICE.
2
CHURCH CAPITAL VALUE TRUST
Comparison of the Change in Value of a $10,000 Investment in the
Church Capital Value Trust versus the S&P 500 Index
[LINE GRAPH OMITTED]
Church Capital S&P 500
Value Trust Index
----------- -----
1/19/2006 $ 10,000 $ 10,000
2/28/2006 10,020 9,991
5/31/2006 10,030 9,956
8/31/2006 10,120 10,270
11/30/2006 10,860 11,084
2/28/2007 10,910 11,187
5/31/2007 11,885 12,225
8/31/2007 11,742 11,824
11/30/2007 11,661 11,940
Past performance is not predictive of future performance.
-----------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (a)
(FOR PERIODS ENDED NOVEMBER 30, 2007)
1 YEAR SINCE INCEPTION (b)
------ -------------------
Church Capital Value Trust * 7.38% 8.60%
S&P 500 Index 7.72% 9.99%
* The Fund's ratio of total expenses to average net assets as
of November 30, 2007 is 1.55%. The Fund's ratio of net
expenses (after advisory fee waivers) to average net assets as
of November 30, 2007 is 1.25% (Note 4).
-----------------------------------------------------------
(a) The total return shown does not reflect the deduction of taxes a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
(b) Commencement of operations was January 19, 2006.
Past performance does not guarantee future results. The investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Total return
assumes reinvestments of dividends and distributions. Current performance may be
lower or higher than the performance data quoted. To obtain performance data
current to the most recent month end, please call 1-877-742-8061. Fee waivers
have positively impacted Fund performance.
Indices are unmanaged, do not incur fees, expenses, or taxes and cannot be
invested in directly.
3
CHURCH CAPITAL VALUE TRUST
SUPPLEMENTARY PORTFOLIO INFORMATION
NOVEMBER 30, 2007 (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 13.4% 8.8%
Consumer Staples 7.6% 10.3%
Energy 9.6% 11.9%
Financials 16.2% 18.5%
Health Care 14.0% 12.3%
Industrials 9.9% 11.6%
Information Technology 15.8% 16.3%
Materials 5.2% 3.3%
Telecommunications Services 0.0% 3.4%
Utilities 0.0% 3.6%
Exchange Traded Funds 1.9% 0.0%
Other Assets and Liabilities 6.4% 0.0%
TOP 10 EQUITY HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
-----------------------------------------------
Bank of America Corp. 4.4%
General Electric Co. 4.4%
JPMorgan Chase & Co. 4.1%
Citigroup, Inc. 3.7%
Cisco Systems, Inc. 3.6%
Genentech, Inc. 3.5%
Genzyme Corp. 3.3%
Procter & Gamble Co. (The) 3.1%
Time Warner, Inc. 2.9%
Corning, Inc. 2.7%
4
CHURCH CAPITAL MONEY MARKET FUND
SUPPLEMENTARY PORTFOLIO INFORMATION
NOVEMBER 30, 2007 (UNAUDITED)
================================================================================
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
% OF NET ASSETS
[PIE CHART OMITTED]
Commercial Paper 89%
Certificates of Deposit 4%
Money Market Funds and Other 7%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MATURITY DISTRIBUTION
% OF TOTAL INVESTMENTS
[PIE CHART OMITTED]
0 - 14 Days 49%
15 - 29 Days 16%
30 + Days 35%
- --------------------------------------------------------------------------------
CREDIT ANALYSIS YIELD ANALYSIS
- ------------------------------- -------------------------------------
A-1 / P-1 77.3% 7-Day Current Yield 4.16%
A-1 / F-1 11.1% 7-Day Effective Yield 4.25%
A-2 / P-2 4.3%
Money Market Funds 7.3%
5
CHURCH CAPITAL VALUE TRUST
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2007
================================================================================
SHARES COMMON STOCKS -- 91.7% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 13.4%
17,000 Boyd Gaming Corp. $ 658,240
10,000 CBRL Group, Inc. 334,600
30,000 Comcast Corp. - Class A (a) 616,200
31,000 Lowe's Co., Inc. 756,710
21,000 Macy's, Inc. 622,650
25,000 Nordstrom, Inc. 838,500
60,000 Time Warner, Inc. 1,035,600
------------
4,862,500
------------
CONSUMER STAPLES -- 7.6%
20,000 Archer-Daniels-Midland Co. 727,000
10,000 Diageo PLC - ADR 905,800
15,000 Procter & Gamble Co. (The) 1,110,000
------------
2,742,800
------------
ENERGY -- 9.6%
5,000 Baker Hughes, Inc. 401,350
20,000 Cimarex Energy Co. 772,600
35,000 Nabors Industries Ltd. (a) 941,500
10,000 Royal Dutch Shell PLC - Class A - ADR 814,300
9,000 Weatherford International Ltd. (a) 563,580
------------
3,493,330
------------
FINANCIALS -- 16.2%
9,500 American International Group 552,235
35,000 Bank of America Corp. 1,614,550
40,000 Citigroup, Inc. 1,332,000
4,000 Goldman Sachs Group, Inc. 906,560
32,500 JPMorgan Chase & Co. 1,482,650
------------
5,887,995
------------
HEALTH CARE -- 14.0%
15,000 Baxter International, Inc. 898,050
15,000 Covidien Ltd. 601,650
16,500 Genentech, Inc. (a) 1,258,125
16,000 Genzyme Corp. (a) 1,198,880
14,000 Johnson & Johnson 948,360
7,000 PerkinElmer, Inc. 190,960
------------
5,096,025
------------
INDUSTRIALS -- 9.9%
42,000 General Electric Co. 1,608,180
12,000 Honeywell International, Inc. 679,440
15,000 Raytheon Co. 927,750
5,000 United Parcel Service, Inc. 368,400
------------
3,583,770
------------
6
CHURCH CAPITAL VALUE TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 91.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 15.8%
10,000 Activision, Inc. (a) $ 221,500
16,000 Agilent Technologies, Inc. (a) 605,280
46,000 Cisco Systems, Inc. (a) 1,288,920
40,000 Corning, Inc. 971,600
14,000 Electronic Arts, Inc. (a) 786,660
22,000 EMC Corp. (a) 423,940
25,000 Intel Corp. 652,000
15,000 Marvell Technology Group Ltd. (a) 224,100
17,500 Texas Instruments, Inc. 552,475
------------
5,726,475
------------
MATERIALS -- 5.2%
13,000 Alcoa, Inc. 472,810
26,500 Cabot Corp. 912,130
21,500 Sealed Air Corp. 502,455
------------
1,887,395
------------
TOTAL COMMON STOCKS (Cost $31,565,118) $ 33,280,290
------------
================================================================================
SHARES EXCHANGE TRADED FUNDS -- 1.9% VALUE
- --------------------------------------------------------------------------------
7,000 Retail HOLDRS Trust (Cost $691,435) $ 678,860
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 4.6% VALUE
- --------------------------------------------------------------------------------
1,672,754 AIM STIT - Liquid Assets Portfolio (The),
4.791% (b) (Cost $1,672,754) $ 1,672,754
------------
TOTAL INVESTMENTS AT VALUE -- 98.2%
(Cost $33,929,307) $ 35,631,904
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.8% 667,198
------------
NET ASSETS -- 100.0% $ 36,299,102
============
(a) Non-income producing security.
(b) The rate shown is the effective dividend rate at November 30, 2007.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
7
CHURCH CAPITAL MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 2007
================================================================================
PAR VALUE COMMERCIAL PAPER -- 88.6% VALUE
- --------------------------------------------------------------------------------
$2,500,000 Anheuser-Busch Cos., Inc., 4.47%, due 12/18/07 $ 2,494,723
1,000,000 AstraZeneca PLC, 5.37%, due 12/12/07 998,359
500,000 AstraZeneca PLC, 4.55%, due 01/25/08 496,524
600,000 AstraZeneca PLC, 4.67%, due 02/28/08 593,073
3,300,000 Bemis Co., Inc., 4.90%, due 12/26/07 3,288,771
3,600,000 BHP Billiton Ltd., 4.65%, due 12/04/07 3,598,605
639,000 Campbell Soup Co., 4.77%, due 12/07/07 638,492
1,000,000 Campbell Soup Co., 4.80%, due 12/11/07 998,667
2,800,000 Cargill Global Funding LLC, 4.84%, due 01/24/08 2,779,672
2,500,000 Chevron Corp., 4.45%, due 12/28/07 2,491,656
3,500,000 Dean Health Systems, Inc., 4.60%, due 12/12/07 3,495,080
2,000,000 Dollar Thrifty Funding LLC, 5.00%, due 12/18/07 1,995,278
2,500,000 Ecolab, Inc., 4.50%, due 12/05/07 2,498,750
2,900,000 Estee Lauder Co. (The), 4.72%, due 12/10/07 2,896,578
3,500,000 General Electric Co., 4.52%, due 12/05/07 3,498,242
3,500,000 General Electric Co., 4.49%, due 12/13/07 3,494,762
3,000,000 General Mills, Inc., 5.25%, due 01/07/08 2,983,812
2,200,000 International Business Machines Corp.,
4.50%, due 01/23/08 2,185,406
497,000 JP Morgan Chase & Co., 4.70%, due 12/24/07 495,508
316,000 Massachusetts College of Pharmacy and
Health Sciences, 4.60%, due 12/31/07 314,789
3,500,000 PepsiAmericas, Inc., 4.67%, due 12/13/07 3,494,552
1,000,000 Procter & Gamble Co. (The), 4.46%, due 02/08/08 991,452
1,000,000 Procter & Gamble Co. (The), 4.47%, due 02/08/08 991,432
1,700,000 Salvation Army Eastern Territory (The), 4.80%,
due 01/09/08 1,691,160
1,500,000 Salvation Army Eastern Territory (The), 4.90%,
due 01/16/08 1,490,608
3,350,000 Total Capital Corp., 4.65%, due 12/31/07 3,337,444
3,400,000 Verizon Communications, Inc., 4.80%, due 01/07/08 3,383,227
3,600,000 YUM! Capital Funding Corp., 4.85%, due 12/11/07 3,595,150
------------
TOTAL COMMERCIAL PAPER (Amortized Cost $61,211,772) $ 61,211,772
------------
================================================================================
PAR VALUE CERTIFICATES OF DEPOSIT -- 4.3% VALUE
- --------------------------------------------------------------------------------
$3,000,000 Wilmington Trust Corp., 5.36%, due 01/09/08
(Amortized Cost $3,000,496) $ 3,000,496
------------
8
CHURCH CAPITAL MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES MONEY MARKET FUNDS -- 7.4% VALUE
- --------------------------------------------------------------------------------
3,399,971 AIM STIT - Liquid Assets Portfolio (The),
4.791% (b) $ 3,399,971
1,679,760 Fidelity Institutional Money Market Portfolio -
Select Class, 4.89% (b) 1,679,760
------------
TOTAL MONEY MARKET FUNDS (Cost $5,079,731) $ 5,079,731
------------
TOTAL INVESTMENTS -- 100.3%
(Amortized Cost $69,291,999) $ 69,291,999
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.3%) (175,346)
------------
NET ASSETS -- 100.0% $ 69,116,653
============
(b) The rate shown is the effective dividend rate at November 30, 2007.
See accompanying notes to financial statements.
9
CHURCH CAPITAL INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES
NOVEMBER 30, 2007
==========================================================================================
CHURCH CAPITAL
CHURCH CAPITAL MONEY MARKET
VALUE TRUST FUND
- ------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At amortized cost $ 33,929,307 $ 69,291,999
============ ============
At value (Note 2) $ 35,631,904 $ 69,291,999
Dividends and interest receivable 54,348 89,903
Receivable for investment securities sold 1,299,383 --
Receivable for capital shares sold 34,335 --
Other assets 8,478 3,035
------------ ------------
TOTAL ASSETS 37,028,448 69,384,937
------------ ------------
LIABILITIES
Distributions payable -- 231,873
Payable for investment securities purchased 608,022 --
Payable for capital shares redeemed 86,211 --
Payable to Adviser (Note 4) 20,328 17,651
Payable to administrator (Note 4) 7,300 10,170
Other accrued expenses 7,485 8,590
------------ ------------
TOTAL LIABILITIES 729,346 268,284
------------ ------------
NET ASSETS $ 36,299,102 $ 69,116,653
============ ============
NET ASSETS CONSIST OF:
Paid-in capital $ 32,238,026 $ 69,116,653
Accumulated undistributed net investment income 196,326 --
Accumulated net realized gains from security transactions 2,162,153 --
Net unrealized appreciation on investments 1,702,597 --
------------ ------------
NET ASSETS $ 36,299,102 $ 69,116,653
============ ============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 3,159,504 69,116,653
============ ============
Net asset value, redemption price and offering
price per share (Note 2) $ 11.49 $ 1.00
============ ============
See accompanying notes to financial statements.
10
CHURCH CAPITAL INVESTMENT TRUST
STATEMENTS OF OPERATIONS
YEAR ENDED NOVEMBER 30, 2007
================================================================================
CHURCH CAPITAL
CHURCH CAPITAL MONEY MARKET
VALUE TRUST FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Dividend income $ 643,590 $ 270,499
Foreign withholding taxes on dividends (4,215) --
Interest income -- 2,757,372
------------ ------------
TOTAL INVESTMENT INCOME 639,375 3,027,871
------------ ------------
EXPENSES
Investment advisory fees (Note 4) 348,141 286,121
Administration fees (Note 4) 34,829 57,250
Fund accounting fees (Note 4) 33,483 35,721
Professional fees 28,257 28,082
Custody fees 21,718 26,232
Transfer agent fees (Note 4) 18,000 13,750
Trustees' fees and expenses 13,623 13,623
Insurance expense 8,239 10,805
Compliance service fees (Note 4) 9,000 9,000
Postage and supplies 8,770 3,968
Shareholder report printing fees 3,102 2,520
Other expenses 12,718 1,163
------------ ------------
TOTAL EXPENSES 539,880 488,235
Fees waived by the Adviser (Note 4) (104,704) (110,555)
------------ ------------
NET EXPENSES 435,176 377,680
------------ ------------
NET INVESTMENT INCOME 204,199 2,650,191
------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gains from security transactions 2,167,650 --
Net change in unrealized appreciation/
depreciation on investments (91,263) --
------------ ------------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS 2,076,387 --
------------ ------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 2,280,586 $ 2,650,191
============ ============
See accompanying notes to financial statements.
11
CHURCH CAPITAL VALUE TRUST
STATEMENTS OF CHANGES IN NET ASSETS
==============================================================================================
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
2007 2006 (a)
- ----------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 204,199 $ 215,013
Net realized gains from security transactions 2,167,650 230,248
Net change in unrealized appreciation/
depreciation on investments (91,263) 1,793,860
------------ ------------
Net increase in net assets from operations 2,280,586 2,239,121
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (222,886) --
From realized gains from sales of investments (235,745) --
------------ ------------
Net decrease in net assets from distributions to shareholders (458,631) --
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 10,360,826 32,468,596
Net asset value of shares issued in reinvestment of
distributions to shareholders 278,002 --
Payments for shares redeeemed (8,141,101) (2,778,297)
------------ ------------
Net increase in net assets from capital share transactions 2,497,727 29,690,299
------------ ------------
TOTAL INCREASE IN NET ASSETS 4,319,682 31,929,420
NET ASSETS
Beginning of period 31,979,420 50,000
------------ ------------
End of period $ 36,299,102 $ 31,979,420
============ ============
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME $ 196,326 $ 215,013
============ ============
CAPITAL SHARE ACTIVITY
Shares sold 915,678 3,217,032
Shares reinvested 25,812 --
Shares redeemed (727,223) (276,795)
------------ ------------
Net increase in shares outstanding 214,267 2,940,237
Shares outstanding, beginning of period 2,945,237 5,000
------------ ------------
Shares outstanding, end of period 3,159,504 2,945,237
============ ============
(a) Represents the period from the commencement of operations (January 19,
2006) through November 30, 2006.
See accompanying notes to financial statements.
12
CHURCH CAPITAL MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
===============================================================================================
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
2007 2006 (a)
- -----------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income $ 2,650,191 $ 1,738,279
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (2,650,191) (1,738,279)
-------------- --------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 88,674,084 109,172,152
Net asset value of shares issued in reinvestment of
distributions to shareholders 51,853 63,711
Payments for shares redeeemed (71,127,511) (57,767,636)
-------------- --------------
Net increase in net assets from capital share transactions 17,598,426 51,468,227
-------------- --------------
TOTAL INCREASE IN NET ASSETS 17,598,426 51,468,227
NET ASSETS
Beginning of period 51,518,227 50,000
-------------- --------------
End of period $ 69,116,653 $ 51,518,227
============== ==============
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME $ -- $ --
============== ==============
CAPITAL SHARE ACTIVITY
Shares sold 88,674,084 109,172,152
Shares reinvested 51,853 63,711
Shares redeemed (71,127,511) (57,767,636)
-------------- --------------
Net increase in shares outstanding 17,598,426 51,468,227
Shares outstanding, beginning of period 51,518,227 50,000
-------------- --------------
Shares outstanding, end of period 69,116,653 51,518,227
============== ==============
(a) Represents the period from the commencement of operations (January 20,
2006) through November 30, 2006.
See accompanying notes to financial statements.
13
CHURCH CAPITAL VALUE TRUST
FINANCIAL HIGHLIGHTS
=============================================================================================
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD: 2007 2006 (a)
- ---------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 10.86 $ 10.00
---------- ----------
Income from investment operations:
Net investment income 0.07 0.07
Net realized and unrealized gains on investments 0.72 0.79
---------- ----------
Total from investment operations 0.79 0.86
---------- ----------
Less distributions:
From net investment income (0.08) --
From net realized gains on investments (0.08) --
---------- ----------
Total distributions (0.16) --
---------- ----------
Net asset value at end of period $ 11.49 $ 10.86
========== ==========
Total return (b) 7.38% 8.60%(c)
========== ==========
RATIOS AND SUPPLEMENTAL DATA:
Net assets at end of period (000's) $ 36,299 $ 31,979
========== ==========
Ratio of total expenses to average net assets 1.55% 1.75%(e)
Ratio of net expenses to average net assets (d) 1.25% 1.25%(e)
Ratio of net investment income to average net assets (d) 0.59% 1.04%(e)
Portfolio turnover rate 90% 127%(c)
- ---------------------------------------------------------------------------------------------
(a) Represents the period from the commencement of operations (January 19,
2006) through November 30, 2006.
(b) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital
gains distributions are reinvested in shares of the Fund. The returns
shown do 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 (Note 4).
(e) Annualized.
See accompanying notes to financial statements.
14
CHURCH CAPITAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
=============================================================================================
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD: 2007 2006 (a)
- ---------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 1.000 $ 1.000
Net investment income 0.046 0.037
Dividends from net investment income (0.046) (0.037)
---------- ----------
Net asset value at end of period $ 1.000 $ 1.000
========== ==========
Total return (b) 4.74% 3.80%(c)
========== ==========
RATIOS AND SUPPLEMENTAL DATA:
Net assets at end of period (000's) $ 69,117 $ 51,518
========== ==========
Ratio of total expenses to average net assets 0.85% 0.89%(e)
Ratio of net expenses to average net assets (d) 0.66% 0.66%(e)
Ratio of net investment income to average net assets (d) 4.63% 4.35%(e)
- ---------------------------------------------------------------------------------------------
(a) Represents the period from the commencement of operations (January 20,
2006) through November 30, 2006.
(b) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital
gains distributions, if any, are reinvested in shares of the Fund. The
returns shown do 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 (Note 4).
(e) Annualized.
See accompanying notes to financial statements.
15
CHURCH CAPITAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2007
================================================================================
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. 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 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 (those with
maturities of 60 days or less) are valued at amortized cost, which the Board of
Trustees has determined best represents a 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, which is believed to reflect
fair 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.
16
CHURCH CAPITAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 2007
================================================================================
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 by each Fund 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 and are recorded on the
ex-dividend date. These "book/tax" differences are either temporary or permanent
in nature and are primarily due to differing book./tax treatment of short-term
capital gains. The tax character of distributions paid by the Funds during the
periods ended November 30, 2007 and 2006 was ordinary income. On December 3,
2007, a distribution of $0.003654 per share was paid to shareholders of record
from November 1, 2007 to November 30, 2007, as the Fund declares dividends
daily. On December 31, 2007, a distribution of $0.7733 per share was declared
for the Church Capital Value Trust. The dividend was paid on December 31, 2007,
to shareholders of record on December 28, 2007.
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 and the disclosure of contingent 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 distributes 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 November 30) plus undistributed amounts from prior years.
17
CHURCH CAPITAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 2007
================================================================================
The following information is computed on a tax basis for each item as of
November 30, 2007:
--------------------------------------------------------------------
CHURCH CAPITAL CHURCH CAPITAL
VALUE TRUST MONEY MARKET FUND
--------------------------------------------------------------------
Tax cost of portfolio investments $ 33,969,769 $ 69,291,999
============ ============
Gross unrealized appreciation $ 2,974,786 $ --
Gross unrealized depreciation (1,312,651) --
------------ ------------
Net unrealized appreciation $ 1,662,135 $ --
Undistributed ordinary income 1,633,645 231,873
Undistributed long-term gains 765,296 --
Other temporary differences -- (231,873)
------------ ------------
Accumulated earnings $ 4,061,076 $ --
============ ============
-------------------------------------------------------------------
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for the Church Capital Value Trust is due to
certain timing differences in the recognition of capital gains or losses under
income tax regulations and accounting principles generally accepted in the
United States of America. These "book/tax" differences are temporary in nature
and are either due to the tax deferral of losses on wash sales or the
differences in the timing of the deduction for dividends paid.
3. INVESTMENT TRANSACTIONS
During the year ended November 30, 2007, cost of purchases and proceeds from
sales of investment securities, other than short-term investments and U.S.
government securities, were as follows:
- --------------------------------------------------------------------------------
CHURCH CHURCH CAPITAL
CAPITAL MONEY MARKET
VALUE TRUST FUND
- --------------------------------------------------------------------------------
Cost of purchases of investment securities $ 32,870,914 $ --
============ ============
Proceeds from sales of investment securities $ 28,909,204 $ --
============ ============
- --------------------------------------------------------------------------------
4. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
Church Capital Management LLC (the "Adviser") serves as the investment adviser
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.
18
CHURCH CAPITAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 2007
================================================================================
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 reimburse
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. The Adviser's agreement to
cap the Funds' ordinary operating expenses does not include indirect expenses,
such as fees and expenses of underlying investment companies in which the Funds
may invest. 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 year ended November 30, 2007, the
Adviser reduced its investment advisory fees by $104,704 and $110,555 for Church
Capital Value Trust and Church Capital Money Market Fund, respectively. As of
November 30, 2007, the amounts of fee reductions available for reimbursement to
the Adviser are $208,834 and $203,177 for Church Capital Value Trust and Church
Capital Money Market Fund, respectively.
The Adviser may recapture a portion of such fee reductions no later than the
dates as stated below:
-----------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30,
2009 2010
-----------------------------------------------------------------
Church Capital Value Trust $ 104,130 $ 104,704
Church Capital Money Market Fund $ 92,622 $ 110,555
-----------------------------------------------------------------
The Chief Compliance Officer (the CCO) of the Trust is an officer of the
Adviser. The Funds pay the Adviser $18,000 annually for providing CCO services.
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement with the Trust, Ultimus Fund
Solutions, LLC ("Ultimus") provides executive and administrative services and
internal regulatory compliance 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.
FUND ACCOUNTING 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. In addition, the Funds pay all costs of external pricing
services.
19
CHURCH CAPITAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 2007
================================================================================
TRANSFER AGENT AND SHAREHOLDER SERVICES 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 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 Funds pay out-of-pocket
expenses, including but not limited to, postage and supplies.
DISTRIBUTION AGREEMENT
Under the terms of a Distribution Agreement, Bainbridge Securities Inc. (the
"Distributor") serves as principal underwriter to the Funds. The Distributor is
an affiliate of the Adviser. The Distributor receives no compensation from the
Funds for acting as principal underwriter, but the Distributor executes
brokerage transactions for the Funds as described under "PORTFOLIO TRANSACTIONS"
below.
TRUSTEES AND OFFICERS
Certain officers of the Trust are directors and officers of the Adviser or the
Distributor, or of Ultimus. Each Independent Trustee receives from the Trust an
annual retainer of $4,000, payable quarterly, and a fee of $1,000 for attendance
at each meeting of the Board of Trustees, plus reimbursement of travel and other
expenses incurred in attending meetings.
PORTFOLIO TRANSACTIONS
A majority of the Church Capital Value Trust's portfolio transactions were
executed through the Distributor. During the year ended November 30, 2007,
brokerage commissions of $54,747 were paid by Church Capital Value Trust to the
Distributor with respect to transactions totaling $50,877,654.
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.
6. ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48 ("FIN 48") "Accounting for Uncertainty in Income
Taxes." FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken in the course of preparing
each Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be booked
as a tax benefit or expense in the current year. Adoption of FIN 48 is required
for fiscal years beginning after December 15, 2006 and is to be applied to all
open tax years as of the effective date. Recent SEC guidance allows implementing
FIN 48 in Fund NAV calculations as late as the Fund's last such calculation in
the first required financial statement period. As a result, the Funds will
incorporate FIN 48 in their Semi-Annual Report on May 31, 2008. Management is in
the process of determining the impact of the adoption of FIN 48.
20
CHURCH CAPITAL INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 2007
================================================================================
In September 2006, FASB issued Statement on Financial Accounting Standards
("SFAS") No. 157, "Fair Value Measurements." This standard establishes a single
authoritative definition of fair value, sets out a framework for measuring fair
value and requires additional disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years. The changes to current generally accepted accounting
principles from the application of SFAS No. 157 relate to the definition of fair
value, the methods used to measure fair value, and the expanded disclosures
about fair value measurements. As of November 30, 2007, the Funds do not believe
the adoption of SFAS No. 157 will impact the amounts reported in the financial
statements; however, additional disclosures may be required about the inputs
used to develop the measurements and the effect of certain of the measurements
reported on the statement of changes in net assets for a fiscal period.
21
[LOGO] BRIGGS,
BUNTING &
DOUGHERTY, LLP
CERTITIED
PUBLIC
ACCOUNTANTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
CHURCH CAPITAL INVESTMENT TRUST
We have audited the accompanying statements of assets and liabilities of Church
Capital Value Trust and Church Capital Money Market Fund, each a series of
shares of beneficial interest of Church Capital Investment Trust, including the
portfolios of investments, as of November 30, 2007, and the related statements
of operations for the year then ended, and the statements of changes in net
assets and the financial highlights for the year then ended and for the period
January 19 and 20, 2006, respectively (commencement of operations), through
November 30, 2006. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of November 30, 2007 by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Church
Capital Value Trust and Church Capital Money Market Fund as of November 30,
2007, the results of their operations for the year then ended, and the changes
in their net assets and their financial highlights for the year then ended and
the period January 19 and 20, 2006, respectively, through November 30, 2006, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ BRIGGS, BUNTING & DOUGHERTY, LLP
BRIGGS, BUNTING & DOUGHERTY, LLP
PHILADELPHIA, PENNSYLVANIA
JANUARY 28, 2008
22
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 operating expenses. These ongoing costs, which
are deducted from each Fund's gross income, directly reduce the investment
returns of the Funds.
A mutual fund's ongoing costs 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 expense examples 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 (June 1, 2007 through November 30, 2007).
The table below illustrates each Fund's costs in two ways:
ACTUAL FUND RETURN - This line provides information about actual expenses and
actual account values. The "Ending Account Value" shown on the first line 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 line is intended to help you compare each Fund's
costs with those of other mutual funds, based on the Fund's respective actual
expense ratio and an assumed annual rate of return of 5% before expenses during
the period shown. In this case, because the return used is not the actual return
of either Fund, you should not use the hypothetical account value or expenses to
estimate your actual ending account balance or expenses you paid for the period.
The example is useful in making comparisons among various mutual funds because
the Securities and Exchange Commission requires all mutual funds to calculate
expenses based on a hypothetical 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." Therefore, the
information provided for the hypothetical 5% return is useful in comparing
ongoing costs only and will not help you determine the relative total costs of
owning different funds.
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 annual 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.
23
CHURCH CAPITAL INVESTMENT TRUST
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED) (CONTINUED)
================================================================================
- -------------------------------------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
June 1, 2007 November 30, 2007 During Period*
- -------------------------------------------------------------------------------------------------------------
CHURCH CAPITAL VALUE TRUST
- -------------------------------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 981.20 $6.21
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.80 $6.33
- -------------------------------------------------------------------------------------------------------------
CHURCH CAPITAL MONEY MARKET FUND
- -------------------------------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,023.40 $3.35
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.76 $3.35
- -------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Funds' annualized expense ratios (after waivers
and reimbursement) stated below, multiplied by the average account value
over the period, multiplied by 183/365 (to reflect the one-half year
period).
Church Capital Value Trust 1.25%
Church Capital Money Market Fund 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. Information regarding how the Funds voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30 is also available without charge upon request by calling 1-877-742-8061,
or on the SEC's 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 without charge 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. Information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
FEDERAL TAX INFORMATION (Unaudited)
================================================================================
In accordance with federal tax requirements, the following provides shareholders
with information concerning distributions from net realized gains made by the
Funds during the year ended November 30, 2007. On December 31, 2006, the Church
Capital Value Trust declared and paid a short-term capital gain distribution of
$235,745. As provided by the Jobs and Growth Tax Relief Reconciliation Act of
2003, the distribution may be subject to a maximum tax rate of 15%. Early in
2007, as required by federal regulations, shareholders received notification of
their portion of the Church Capital Value Trust's taxable capital gain
distribution, if any, paid during the 2006 calendar year.
24
CHURCH CAPITAL INVESTMENT TRUST
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED)
================================================================================
Overall responsibility for management of the Trust rests with the Board of
Trustees. The Trustees serve for terms of indefinite duration until death,
resignation, retirement or removal from office. The Trustees, in turn, elect the
officers of the Trust to actively supervise the Trust's day-to-day operations.
The officers are elected annually.
The Trust is managed by the Trustees in accordance with the laws of the State of
Ohio governing business trusts. There are currently four Trustees, all of whom
are not "interested persons" of the Trust within the meaning of that term under
the 1940 Act (the "Independent Trustees"). The Independent Trustees receive
compensation for their services as a Trustee and attendance at meetings of the
Trustees. Officers of the Trust receive no compensation from the Trust for
performing the duties of their offices.
The Trustees and executive officers of the Trust, their addresses and their
principal occupations during the past five (5) years are as follows:
NUMBER OF
PORTFOLIOS IN
POSITION(S) PRINCIPAL OCCUPATION(S) DURING FUND COMPLEX
LENGTH OF TIME HELD WITH PAST 5 YEARS AND DIRECTORSHIPS OF OVERSEEN BY
NAME, ADDRESS AND AGE SERVED TRUST PUBLIC COMPANIES TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
Independent Trustees:
Gerald L. Printz Since Chairman & From November 1993 through present, 2
301 Oxford Valley Road, Suite 801B December 2005 Trustee President of Amsador, Ltd.
Yardley, Pennsylvania 19067 (information management consulting
Year of Birth: 1956 firm). From April 2002 through
present, Chief Executive Officer of
20/20 Innovations, LLC (provides
crisis management planning and
prevention services). From March
of 1996 to 2005, Trustee of the
Matterhorn Growth Fund (an open end
mutual fund).
Mark LoManto, CPA Since Trustee Principal and Co-owner of ML Weekes 2
301 Oxford Valley Road, Suite 801B October 2007 & Company, PC (CPA firm).
Yardley, Pennsylvania 19067
Year of Birth: 1957
Portia Sue Perrotty Since Trustee From January 2003 to present, Chief 2
301 Oxford Valley Road, Suite 801B December 2005 of Staff for the First Lady of
Yardley, Pennsylvania 19067 Pennsylvania; from August 1981 to
Year of Birth: 1953 January 2002, served in various
roles for Wachovia Bank. Ms.
Perrotty's last position was
Executive Vice President of
Wachovia Corporation. From August
2006 to present, Director of
KnowledgeFlow, Inc. (software
company).
Brian D. Wassell, CPA Since Trustee Partner of Trout, Ebersole & Groff 2
301 Oxford Valley Road, Suite 801B December 2005 LLP (CPA firm).
Yardley, Pennsylvania 19067
Year of Birth: 1969
25
CHURCH CAPITAL INVESTMENT TRUST
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED)(CONTINUED)
================================================================================
POSITION(S) PRINCIPAL OCCUPATION(S) DURING
LENGTH OF TIME HELD WITH PAST 5 YEARS AND DIRECTORSHIPS OF
NAME, ADDRESS AND AGE SERVED TRUST PUBLIC COMPANIES
- -------------------------------------------------------------------------------------------------------------------
Executive Officers:
Gregory A. Church Since President Founder and Chairman of Church
301 Oxford Valley Road, Suite 801B December 2005 Capital Management, LLC.
Yardley, Pennsylvania 19067
Year of Birth: 1956
Robert G. Dorsey Since Vice President Managing Director of Ultimus Fund
225 Pictoria Drive, Suite 450 December 2005 Solutions, LLC and Ultimus Fund
Cincinnati, Ohio 45246 Distributors, LLC.
Year of Birth: 1957
Mark J. Seger Since Treasurer Managing Director of Ultimus Fund
225 Pictoria Drive, Suite 450 December 2005 Solutions, LLC and Ultimus Fund
Cincinnati, Ohio 45246 Distributors, LLC.
Year of Birth: 1962
John F. Splain Since Secretary Managing Director of Ultimus Fund
225 Pictoria Drive, Suite 450 December 2005 Solutions, LLC and Ultimus Fund
Cincinnati, Ohio 45246 Distributors, LLC.
Year of Birth: 1956
Andrew Peterson Since Chief Compliance Compliance Officer of Church
301 Oxford Valley Road, Suite 801B April 2007 Officer Capital Management, LLC and
Yardley, Pennsylvania 19067 Bainbridge Securities, Inc.; prior
Year of Birth: 1956 to February 2007, Field Compliance
Supervisor of Ameriprise Financial
Corp.
Additional information about members of the Board of Trustees and
executive officers is available in the Statement of Additional Information
("SAI"). To obtain a free copy of the SAI, please call 1-877-742-8061.
26
CHURCH CAPITAL INVESTMENT TRUST
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
(UNAUDITED)
================================================================================
The Board of Trustees, including the Independent Trustees voting separately,
have reviewed and approved the continuance of the Investment Advisory Agreements
with the Adviser for the Church Capital Value Trust ("Value Fund") and the
Church Capital Money Market Fund ("Money Market Fund"). These approvals took
place at an in-person meeting held on October 22, 2007, at which all of the
Independent Trustees were present.
The Trustees were advised by experienced counsel of their fiduciary obligations
in approving the Investment Advisory Agreements and the Trustees requested such
information from the Adviser as they deemed reasonably necessary to evaluate the
terms of the Agreements and whether the Agreements continue to be in the best
interests of the Funds and their shareholders. The Trustees reviewed: (i) the
nature, extent and quality of the services provided by the Adviser; (ii) the
investment performance of each Fund and the Adviser; (iii) the costs of the
services to be provided and profits to be realized by the Adviser and its
affiliates from the relationship with the Funds; and (iv) the extent to which
economies of scale would be realized as the Funds grow and whether advisory fee
levels reflect these economies of scale for the benefit of Fund shareholders.
The Trustees reviewed the background, qualifications, education and experience
of the Adviser's investment and operational personnel. The Trustees also
discussed and considered the quality of administrative and other services
provided to the Trust, the Adviser's compliance program, and the Adviser's role
in coordinating such services and programs. The Independent Trustees were
advised by experienced counsel throughout the process. Prior to voting on the
Agreements, the Independent Trustees reviewed the Agreements with management and
also met in a private session with counsel at which no representatives of the
Adviser were present.
Below are summaries of the discussions and findings of the Trustees in regard to
the approvals of the Investment Advisory Agreements.
(i) THE NATURE, EXTENT, AND QUALITY OF THE SERVICES PROVIDED BY THE ADVISER.
In this regard, the Independent Trustees reviewed the services being
provided to the Funds by the Adviser. They discussed the responsibilities
of the Adviser under the Advisory Agreements and the Adviser's
compensation under the Agreements. The Independent Trustees reviewed the
background and experience of the Adviser's key investment and operating
personnel. They also considered the Adviser's commitment to maintain a
qualified professional staff. After reviewing the foregoing information,
the Independent Trustees concluded that the quality, extent and nature of
the services provided by the Adviser were satisfactory for the Value Fund
and the Money Market Fund.
(ii) THE INVESTMENT PERFORMANCE OF EACH FUND AND THE ADVISER. In this regard,
the Independent Trustees compared the performance of the Value Fund with
the performance of the S&P 500 Index, the Fund's primary benchmark, over
various periods ended September 30, 2007. It was noted by the Independent
Trustees that as of September 30, 2007, the Value Fund has outperformed
the S&P 500 Index over the one year period and has slightly underperformed
the S&P 500 Index over the period since the Fund's inception. The
Independent Trustees were also provided with comparative performance
statistics of the universe of funds categorized by Morningstar as "large
blend" funds, which is the category to which the Value Fund has been
assigned. The Independent Trustees noted that for the one year period
ended September 30, 2007, the Value Fund (17.62%) outperformed the average
fund in the Morningstar large blend category by 0.93% (16.69%). They also
reviewed performance information with respect to the Adviser's other
managed accounts with similar investment objectives, concluding that the
Value Fund's performance was comparable to the performance of these other
accounts. The Independent Trustees also considered the consistency of the
Adviser's management of the Value Fund with the Fund's investment
objective and policies. After considerable discussion, the Independent
Trustees concluded that the investment performance of the Value Fund has
been above average.
27
CHURCH CAPITAL INVESTMENT TRUST
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
(UNAUDITED) (CONTINUED)
================================================================================
The Independent Trustees next discussed the performance of the Money
Market Fund. Its performance was first compared to four money market funds
selected by the Adviser based on the Adviser's familiarity with the funds
and their similar investment objectives (hereafter referred to as the
"Peer Group"). It was noted by the Independent Trustees that the Money
Market Fund's current 7 day-yield as September 30, 2007 was slightly
higher than each of the funds within the Peer Group. The Independent
Trustees further noted that based on information taken from the Wall
Street Journal the Money Market Fund's current 7 day-yield as September
30, 2007 (4.80%) was higher than the average 7 day-yield for all retail
taxable money market funds (4.60%). The Independent Trustees were advised
that the Adviser does not manage any other accounts in similar manner to
the Money Market Fund. The Independent Trustees also considered the
consistency of the Adviser's management of the Money Market Fund with the
Fund's investment objective and policies and the Adviser's commitment to
compliance with regards to the management of the Fund. After considerable
discussion, the Independent Trustees concluded that the investment
performance of the Money Market Fund has been above average.
(iii) THE COSTS OF THE SERVICES TO BE PROVIDED AND PROFITS TO BE REALIZED BY THE
ADVISER AND ITS AFFILIATES FROM THE RELATIONSHIP WITH THE FUNDS. In this
regard, the Independent Trustees considered the Adviser's staffing,
personnel and methods of operating; the financial condition of the Adviser
and the level of commitment to the Funds by the Adviser; the asset levels
of each Fund; and the overall expenses of each Fund. The Independent
Trustees reviewed the rate of the advisory fees paid by the Funds under
the Advisory Agreements and compared them to the average advisory fee
ratios of similar mutual funds as reported by Morningstar or as compiled
by the Adviser. They also compared the total operating expense ratios of
the Funds with average expense ratios of representative funds. It was
noted by the Independent Trustees that the Value Fund's advisory fee of
1.00% and its overall expense ratio of 1.25% were each higher than the
average advisory fee (0.55%) and average expense ratio (0.91%) for
Morningstar's large blend fund category (oldest class of shares only). The
Independent Trustees further noted that when all classes of shares are
included within the dataset for the Morningstar large blend category the
average expense ratio increased to 1.14%. The Independent Trustees also
compared the Value Fund's advisory fee and overall expense ratio to large
blend funds (oldest class of shares only) with less than $50 million in
net assets, noting that large blend funds with $50 million or less in net
assets had an average advisory fee of 0.71%, and that the average expense
ratio of such funds (1.24%) was just slightly lower than the Value Fund's
overall expense ratio after fee waivers. It was noted again by the
Independent Trustees that if all classes of shares are included within the
dataset for large blend fund's with $50 million or less in net assets the
average expense ratio would likely adjust upward as it did for the entire
category. The Independent Trustees performed a similar comparison for the
Money Market Fund, finding that the Money Market Fund's advisory fee of
0.50% was higher than the average management fee charged by the Peer Group
(0.34%). It was noted, however, that the Money Market Fund's overall
expense ratio of 0.66% was lower than three of the four funds within the
Peer Group. The Independent Trustees considered that the Adviser has
waived a significant amount of its advisory fees (approximately 38.1% and
41.6% for the Value Fund and the Money Market Fund, respectively, since
inception) in order to maintain the expense ratios of the Value Fund and
the Money Market Fund at 1.25% and 0.66%, respectively. The Independent
Trustees were presented with information regarding the financial condition
of the Adviser and its insurance coverages, and concluded that the Adviser
has the necessary financial resources to serve as the Funds' investment
adviser. The Independent Trustees also considered the "fallout benefits"
to the Adviser, including the additional exposure the Adviser has received
as a result of managing the Funds and the brokerage commissions received
by Bainbridge Securities Inc., an affiliated broker-dealer, for executing
portfolio trades of the Value Fund. The Independent Trustees considered
that Bainbridge has been paid $106,349 in brokerage commissions by the
Value Fund from the Fund's inception through September 30, 2007. Following
consideration of the foregoing, the Independent Trustees concluded that
the fees paid by each Fund to the Adviser are reasonable.
28
CHURCH CAPITAL INVESTMENT TRUST
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
(UNAUDITED) (CONTINUED)
================================================================================
(iv) THE EXTENT TO WHICH ECONOMIES OF SCALE WOULD BE REALIZED AS THE FUNDS GROW
AND WHETHER ADVISORY FEE LEVELS REFLECT THESE ECONOMIES OF SCALE FOR THE
BENEFITS OF THE FUNDS' INVESTORS. In this regard, the Independent Trustees
considered that the Adviser is not collecting its full advisory fees from
either Fund due to its commitment to cap their overall expenses. The
Independent Trustees concluded that, at current asset levels, it would not
be relevant to consider the extent to which economies of scale are being
realized. It was noted by the Independent Trustees that, to the extent
that the Funds continue to grow, this factor will likely become a more
important consideration at future contract renewals. The Independent
Trustees further determined that it is not necessary or appropriate to
introduce fee breakpoints at the present time for either Fund. The
Independent Trustees noted, however, that to the extent that a Fund
continues to grow in assets, it may become necessary for the Adviser to
consider adding fee breakpoints to such Fund's Advisory Agreement.
The Independent Trustees concluded that, based on each Fund's performance
record along with the Adviser's financial commitment to the Funds, they believe
that the Adviser has provided high quality advisory services to the Funds. The
Independent Trustees indicated that, although the advisory fees of the Funds are
in the higher range of fees for other comparably managed funds, they believe the
fees to be reasonable given the Funds' above average performance records, the
quality of services provided by the Adviser, and the relatively small size of
each Fund.
In conclusion, the Trustees did not identify any single factor discussed
previously as all-important or controlling in their determination to approve the
Investment Advisory Agreements. The Trustees, including a majority of the
Independent Trustees, concluded that the terms of the Investment Advisory
Agreements were fair and reasonable, that the Adviser's fees were reasonable in
light of the services provided to the Funds and the benefits received by the
Adviser, and that the Agreements are in the best interests of the Funds.
29
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions, regardless of whether these individuals
are employed by the registrant or a third party. Pursuant to Item 12(a)(1), a
copy of registrant's code of ethics is filed as an exhibit to this Form N-CSR.
During the period covered by this report, the code of ethics has not been
amended, and the registrant has not granted any waivers, including implicit
waivers, from the provisions of the code of ethics.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's board of trustees has determined that the registrant has at
least one audit committee financial expert serving on its audit committee. The
name of the audit committee financial expert is Brian D. Wassell. Mr. Wassell is
"independent" for purposes of this Item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES. The aggregate fees billed for professional services
rendered by the principal accountant for the audit of the
registrant's annual financial statements or for services that are
normally provided by the accountant in connection with statutory and
regulatory filings or engagements were $23,000 and $22,500 with
respect to the registrant's fiscal years ended November 30, 2007 and
2006, respectively.
(b) AUDIT-RELATED FEES. No fees were billed in either of the last two
fiscal years for assurance and related services by the principal
accountant that are reasonably related to the performance of the
audit of the registrant's financial statements and are not reported
under paragraph (a) of this Item.
(c) TAX FEES. The aggregate fees billed for professional services
rendered by the principal accountant for tax compliance, tax advice,
and tax planning were $3,000 and $3,000 with respect to the
registrant's fiscal years ended November 30, 2007 and 2006,
respectively. The services comprising these fees are the preparation
of the registrant's federal income and excise tax returns.
(d) ALL OTHER FEES. No fees were billed in either of the last two fiscal
years for products and services provided by the principal
accountant, other than the services reported in paragraphs (a)
through (c) of this Item.
(e)(1) The audit committee has not adopted pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of
Regulation S-X.
(e)(2) None of the services described in paragraph (b) through (d) of
this Item were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Less than 50% of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the
most recent fiscal year were attributed to work performed by persons
other than the principal accountant's full-time, permanent
employees.
(g) With respect to the fiscal years ended November 30, 2007 and 2006,
aggregate non-audit fees of $3,000 and $3,000, respectively, were
billed by the registrant's accountant for services rendered to the
registrant. No non-audit fees were billed during either of the last
two fiscal years by the registrant's accountant for services
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and
any entity controlling, controlled by, or under common control with
the adviser that provides ongoing services to the registrant.
(h) The principal accountant has not provided any non-audit services to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant.
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: Attached hereto
(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.CODE ETH Code of Ethics
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 February 1, 2008
------------------------------------------
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 February 1, 2008
------------------------------------------
By (Signature and Title)* /s/ Mark J. Seger
----------------------------------------
Mark J. Seger, Treasurer
Date February 1, 2008
------------------------------------------
* Print the name and title of each signing officer under his or her signature.