HUSSMAN INVESTMENT TRUST HUSSMAN STRATEGIC GROWTH FUND SEMI-ANNUAL REPORT FOR THE PERIOD ENDING DECEMBER 31, 2000 (Unaudited) Hussman Strategic Growth Fund Comparison of the Change in Value of a $10,000 Investment in the Hussman Strategic Growth Fund versus the Russell 2000 Index and the Standard & Poor's 500 Index* $11,640 $9,063 $9,468 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 7/20007/20008/20009/200010/200011/200012/2000 Hussman Strategic Growth Fund S&P 500 Index Russell 2000 Index Hussman Strategic Growth Fund Total Return Since Inception** 16.40% Past performance is not predictive of future performance. ** Initial public offering of shares was July 24, 2000. * The Russell 2000 Index contains small and medium capitalization stocks, and is generally representative of the stocks held by the Hussman Strategic Growth Fund.
The S&P 500 Index is a widely followed equity benchmark and is presented for comparative purposes only. Because the Hussman Strategic Growth Fund may vary its exposure to market fluctuations, Fund returns may differ from the performance of major stock market indices. Dear Shareholder, The Hussman Strategic Growth Fund (the Fund) performed as intended during the year 2000, gaining value in a falling market, without having a net short position.
The Fund ended 2000 at a net asset value of $11.64 ... more. less.
per share, up 16.4% from inception on July 24, 2000. Last year was difficult for the equity markets, reflecting a combination of extremely high valuations and uniformly weak trend conditions for most of the year. Historically, that combination has defined an unfavorable Market Climate.<br><br> Accordingly, the Fund generally held a cmarket neutral d position last year 3 nearly fully invested in favored stocks, and short an approximately equal value of major market indices, specifically the Russell 2000 and the S&P 100. When the Fund is in a market neutral position, as it was last year, the portfolio benefits to the extent that our favored stocks outperform the indices that we are short. It is not the direction of the market, but the performance of the stock portfolio relative to the market, that produces a gain or loss.<br><br> Last year, effective stock selection, relative to the market, contributed to the overall gain in the Fund. The Fund 9s stock portfolio remains diversified across a wide range of industries. Here again, both valuation and market action are important in determining the weight given to any particular sector.<br><br> Compared to the major market indices, the Fund has a smaller weight in technology stocks, due to extremely high valuations (e.g. high P/E and price/revenue multiples) as well as unfavorable market action in this group. In contrast, the Fund has above-market weightings in health care, utilities, energy, defense and apparel.<br><br> These higher weightings reflect a combination of favorable valuation and market action in these groups. Near the end of 2000, the internal action of the market began to improve, with strength in a wide range of stocks and industry groups. Valuations remained extreme, with prices still far out of line with fundamentals such as earnings, revenues and cash flows.<br><br> Even so, the market was able to recruit enough trend uniformity to move the Market Climate to a more constructive position. Accordingly, the Fund entered 2001 with a hedged, but modestly positive exposure to market fluctuations. It is not possible or necessary to predict how long this modestly favorable Climate will prevail.<br><br> Our discipline requires us to maintain a market exposure that is consistent with the Market Climate in effect, based on objective evidence. The strategy does not require us to forecast when shifts will occur, but only to identify which Market Climate is in effect at a given time. Looking forward, we believe that the economy faces an oncoming recession.<br><br> This view is based on market indicators such as credit spreads and equity prices, as well as business and consumer sentiment. Indeed, sharp declines in the NAPM Purchasing Managers Index and Consumer Confidence to the extent seen in recent months have always been followed by recession. Although further interest rate cuts by the Federal Reserve appear to be widely expected and priced into the market, the risk of sharply falling profit margins and further earnings disappointment does not appear to be widely anticipated.<br><br> Accordingly, we are sensitive to the possibility of further erosion in the stock market. This increases the chance that our next shift will be back to a defensive Climate. Again, it is not necessary to forecast when this might occur.<br><br> You may obtain ongoing updates, research and insight at no cost from our Fund website, www.hussman.net . In short, both the market position and the stock selection of the Fund remain driven by a disciplined strategy emphasizing both favorable valuation and market action as the foundations for long term growth. We continue to focus the Fund 9s investments in sectors that display these characteristics, and to avoid sectors that do not.<br><br> Best wishes, John P. Hussman, Ph.D. Net asset value at beginning of period10.00 $ Income from investment operations: Net investment income(loss)(0.01) Net realized and unrealized gains on investments1.65 Total from investment operations1.64 Net asset value at end of period11.64 $ Total Return (not annualized)16.40% Net assets at end of period14,157,14 5 $ Ratio of expenses to average net assets: Before advisory fees waived2.57%(1) After advisory fees waived1.99%(1) Ratio of net investment loss to average net assets-0.15%(1) Portfolio turnover rate67%(1) (1)Annualized.<br><br> * Represents the period from the commencement of operations (July 24, 2000) through December 31, 2000. HUSSMAN INVESTMENT TRUST Hussman Strategic Growth Fund Financial Highlights for the Period Ended December 31, 2000* (Unaudited) Selected Per Share Data and Ratios for a Share Outstanding Throughout the Period See accompanying notes to financial statements. ASSETS Investments in securities: At acquisition cos t 13,492,847 $ At value (Note 1)14,528,339 $ Cash81,858 Dividends and interest receivable14,979 Receivable for investment securities sold251,546 Receivable for capital shares sold33,718 Other assets16,085 Total Assets14,926,525 LIABILITIES Payable for investment securities purchased370,940 Accrued investment advisory fees (Note 3)5,940 Payable to Administrator (Note 3)6,200 Other accrued expenses800 Covered call options, at value (Notes 1 and 4) (premiums received $354,975)385,500 Total Liabilities769,380 NET ASSETS 14,157,145 $ Net assets consist of: Paid-in capital 12,358,404 $ Undistributed net investment loss(6,563) Accumulated net realized gains from security transactions800,337 Net unrealized appreciation on investments1,004,967 14,157,145 $ Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value)1,216,501 Net asset value and offering price price per share (A) (Note 1)11.64 $ (A)Redemption price varies based on length of time held.<br><br> (Unaudited) HUSSMAN INVESTMENT TRUST Hussman Strategic Growth Fund Statement of Assets and Liabilities December 31, 2000 See accompanying notes to financial statements. INVESTMENT INCOME Dividends77,233 $ EXPENSES Investment advisory fees (Note 3)52,373 Fund accounting fees (Note 3)11,294 Administration fees (Note 3)8,875 Printing of shareholder reports8,395 Transfer agent and shareholder services fees (Note 3)7,875 Trustees' fees6,000 Custodian and bank service fees5,480 Insurance expense3,973 Registration and filing fees1,565 Professional fees1,267 Postage and supplies1,190 Other expenses189 Total Expenses108,476 Less fees waived by the Advisor (Note 3)(24,680) Net Expenses83,796 NET INVESTMENT INCOME (LOSS) (6,563) REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENT S Net realized losses from security transactions(386,789) Net realized gains on call and/or put options sold530,842 Net realized gains on option contracts written656,284 Net change in unrealized appreciation/depreciation on investments1,004,967 NET REALIZED AND UNREALIZED GAINS ON INVESTMENT S 1,805,304 NET INCREASE IN NET ASSETS FROM OPERATION S 1,798,741 $ * Represents the period from the commencement of operations (July 24, 2000) through December 31, 2000. (Unaudited) HUSSMAN INVESTMENT TRUST Hussman Strategic Growth Fund Statement of Operations Period Ended December 31, 2000 * See accompanying notes to financial statements.<br><br> FROM OPERATIONS Net investment income(loss)(6,563) $ Net realized gains(losses) from: Security transactions(386,789) Call and/or put options sold530,842 Option contracts written656,284 Net change in unrealized appreciation/depreciation on investments1,004,967 Net increase in net assets resulting from operations1,798,741 FROM CAPITAL SHARE TRANSACTION S Proceeds from shares sold12,267,543 Payments for shares redeemed(9,139) Net increase in net assets from capital share transactions12,258,404 TOTAL INCREASE IN NET ASSETS 14,057,145 NET ASSETS Beginning of period100,000 End of period14,157,14 5 $ CAPITAL SHARE ACTIVITY Sold1,207,382 Redeemed(881) Net increase in shares outstanding1,206,501 Shares outstanding at beginning of period10,000 Shares outstanding at end of perio d 1,216,501 * Represents the period from the commencement of operations (July 24, 2000) through December 31, 2000. (Unaudited) HUSSMAN INVESTMENT TRUST Hussman Strategic Growth Fund Statement of Changes in Net Asset s Period Ended December 31, 2000 * See accompanying notes to financial statements. Market Shares V alue COMMON STOCKS - 96.1% Aerospace/Defense - 5.5% 3,000 Alliant Techsystems, Inc.<br><br> (a)200,250 $ 2,000 L-3 Communications Holdings, Inc. (a)154,000 5,000 Lockheed Martin Corp.169,750 3,000 Northorp Grumman Corp.249,000 773,000 Air Freight - 0.3% 2,000 Offshore Logistics, Inc. (a)43,093 Banks - 0.6% 3,000 KeyCorp84,000 Beverages (Non-alcoholic) - 1.4% 5,000 Pepsi Bottling Group, Inc.199,688 Biotechnology - 2.0% 2,000 Cell Therapeutics, Inc.<br><br> (a)90,125 1,000 Gene Logic, Inc. (a)18,375 2,000 Genzyme Corp. (a)179,875 288,375 Building Materials - 0.8% 5,000 Standard Pacific Corp.116,875 Chemicals (Diversified) - 1.2% 1,500 FMC Corp.<br><br> (a)107,531 3,000 Hercules, Inc. (a)57,188 164,719 Chemicals (Specialty) - 1.8% 5,000 Cytec Industries, Inc. (a)199,687 1,500 H.B.<br><br> Fuller Co.59,180 258,867 Computers (Software and Services) - 3.1% 13,000 Avant Corp. (a)238,062 8,000 Sybase, Inc. (a)158,500 3,000 3D Systems Corp.<br><br> (a)36,375 432,937 (Unaudited) HUSSMAN INVESTMENT TRUST Portfolio of Investments December 31, 2000 Hussman Strategic Growth Fund See accompanying notes to financial statements. Market Shares V alue Electrical Equipment - 6.1% 10,000 Anixter International, Inc. (a)216,250 $ 12,000 Cable Design Technologies Corp.<br><br> (a)201,750 4,880 Koninklijke Philips Electronics NV-ADR176,900 3,000 Molecular Devices Corp. (a)205,312 2,000 Park Electrochemical Corp.61,375 861,587 Electric Companies - 8.5% 2,000 Ameren Corp.92,625 3,000 Cleco Corp.164,250 3,000 DPL, Inc.99,562 2,000 DTE Energy Co.77,875 7,102 Progress Energy, Inc.349,341 2,500 Reliant Energy, Inc.108,282 5,000 UtiliCorp United, Inc.155,000 3,000 Wisconsin Energy Corp.67,688 3,000 Xcel Energy, Inc.87,188 1,201,811 Electronics (Component Distributors) - 0.4% 2,000 Bell Microproducts, Inc. (a)31,750 1,000 Tech Data Corp.<br><br> (a)27,047 58,797 Electronics (Semiconductors) - 1.7% 7,000 Advanced Micro Devices, Inc. (a)96,687 5,000 International Rectifier Corp. (a)150,000 246,687 Equipment (Semiconductors) - 0.5% 5,000 Nanometrics, Inc.<br><br> (a)69,062 Gold and Precious Metals Mining - 4.6% 16,000 Barrick Gold Corp.262,080 14,000 Homestake Mining Co.58,625 11,000 Newmont Mining Corp.187,688 15,000 Placer Dome, Inc.144,375 652,768 Health Care (Managed Care) - 4.2% 10,000 Health Net, Inc. (a)261,875 4,000 Oxford Health Plans, Inc. (a)158,000 1,500 Wellpoint Health Networks, Inc.<br><br> - Class A (a)172,875 592,750 (Unaudited) HUSSMAN INVESTMENT TRUST Hussman Strategic Growth Fund Portfolio of Investments (continued) December 31, 2000 See accompanying notes to financial statements. Market Shares V alue Health Care (Medical Products and Supplies) - 4.7% 6,000 Beckman Coulter, Inc.251,625 $ 6,000 DENTSPLY International, Inc.234,750 3,000 PolyMedica Corp. (a)100,125 3,000 Respironics, Inc.<br><br> (a)85,500 672,000 Health Care (Specialized Services) - 2.0% 1,000 Impath, Inc. (a)66,500 2,000 Orthodontic Centers of America, Inc. (a)62,500 3,000 RehabCare Group, Inc.<br><br> (a)154,125 283,125 Homebuilding - 3.2% 2,000 Centex Corp.75,125 5,000 D.R. Horton, Inc.122,187 3,500 Lennar Corp.126,875 3,000 Toll Brothers, Inc. (a)122,625 446,812 Household Furnishings and Appliances - 1.1% 15,000 Pier 1 Imports, Inc.154,687 Insurance (Life and Health) - 1.3% 2,500 Everest Reinsurance Group, Ltd.179,063 Insurance (Multi-Line) - 1.6% 7,000 Old Republic International Corp.224,000 Insurance (Property-Casualty) - 4.8 % 5,000 Ace, Ltd.212,188 7,000 Fidelity National Financial, Inc.258,563 4,000 St.<br><br> Paul Companies, Inc.217,250 688,001 Iron and Steel - 1.8% 6,000 Precision Castparts Corp.252,375 Machinery (Diversified) - 0.8% 5,000 Stewart & Stevenson Services, Inc.113,516 Manufacturing (Diversified) - 0.7% 4,000 National Service Industries, Inc.102,750 December 31, 2000 (Unaudited) HUSSMAN INVESTMENT TRUST Hussman Strategic Growth Fund Portfolio of Investments (continued) See accompanying notes to financial statements. Market Shares V alue Manufacturing (Specialized) - 1.8% 3,000 A. Schulman, Inc.34,500 $ 6,000 B.F.<br><br> Goodrich Co.218,250 252,750 Natural Gas - 2.6% 2,000 Equitable Resources, Inc.133,500 2,000 Keyspan Corp.84,750 5,000 Questar Corp.150,312 368,562 Office Equipment and Supplies - 1.4% 2,000 Kimball International, Inc. - Class B29,000 8,000 Standard Registar Co. (The)114,000 3,000 Wallace Computer Services, Inc.51,000 194,000 Oil and Gas (Drilling and Equipment) - 0.5% 3,000 Rowan Companies, Inc.<br><br> (a)81,000 Oil and Gas (Exploration and Production) - 3.4% 10,000 Patina Oil & Gas Corp.240,000 11,000 Vintage Petroleum, Inc.236,500 476,500 Real Estate Investment Trusts - 2.5% 5,000 AMLI Residential Properties Trust123,437 4,000 CarrAmerica Realty Corp.125,250 2,000 Spieker Properties, Inc.100,250 348,937 Restaurants - 2.8% 4,000 Applebee's International, Inc.125,750 4,000 Bob Evans Farms, Inc.85,250 10,000 CBRL Group, Inc.181,875 392,875 Retail (General Merchandise) - 0.4% 2,000 Coldwater Creek, Inc. (a)62,125 Retail (Home Shopping) - 0.7% 2,800 Rent-A-Center, Inc. (a)96,600 Retail (Specialty - Apparel) - 1.6% 8,000 Dress Barn, Inc.<br><br> (a)232,000 Portfolio of Investments (continued) December 31, 2000 (Unaudited) HUSSMAN INVESTMENT TRUST Hussman Strategic Growth Fund See accompanying notes to financial statements. Market Shares V alue Services (Advertising/Marketing) - 2.5% 5,000 ADVO, Inc. (a)221,875 $ 5,000 R.R.<br><br> Donnelley & Sons Co.135,000 356,875 Services (Commerical and Consumer) - 0.4% 2,000 Quanta Services, Inc. (a)64,375 Textiles (Apparel) - 3.9% 1,800 K-Swiss, Inc. - Class A45,000 3,000 Liz Claiborne, Inc.124,875 9,000 Reebok International, Ltd.<br><br> (a)246,060 2,000 Timberland Co. - Class A (a)133,750 549,685 Textiles (Home Furnishings) - 0.8% 4,000 Mohawk Industries, Inc. (a)109,500 Tobacco - 3.3% 5,000 Philip Morris Companies, Inc.220,000 5,000 R.J.<br><br> Reynolds Tobacco Holdings, Inc.243,750 463,750 Truckers - 1.4% 90 American Freightways Corp. (a)2,515 3,500 Landstar System, Inc. (a)194,031 196,546 Waste Management - 1.4% 12,000 Republic Services, Inc.<br><br> (a)206,250 Total Common Stocks - (Cost $12,411,796) 13,613,675 $ Contracts PUT OPTION CONTRACTS - 4.0 % 100Russell 2000 Index Option, 3/17/01 at $500378,000 $ 50S&P 100 Index Option, 3/17/01 at $700182,000 Total Put Option Contracts - (Cost $726,387) 560,000 $ Hussman Strategic Growth Fund Portfolio of Investments (continued) December 31, 2000 (Unaudited) HUSSMAN INVESTMENT TRUST See accompanying notes to financial statements. Market Shares V alue MONEY MARKETS - 2.5% 354,664 Firstar Stellar Treasury Fund - Institutional Class (Cost $354,664)354,664 $ Total Investments at Value - 102.6% (Cost $13,492,847) 14,528,339 $ Liabilities in Excess of Other Assets - (2.6)% (371,194) Net Assets - 100.0% 14,157,145 $ (a) Non-income producing security (Unaudited) HUSSMAN INVESTMENT TRUST Hussman Strategic Growth Fund Portfolio of Investments (continued) December 31, 2000 See accompanying notes to financial statements. Option Contracts Market Value of Options Premiums Received 100Russell 2000 Index Option, 3/17/01 at $500248,000 $ 230,130 $ 50S&P 100 Index Option, 3/17/01 at $700137,500 124,845 385,500 $ 354,975 $ Written Call Options HUSSMAN INVESTMENT TRUST Hussman Strategic Growth Fund Schedule of Open Options Written December 31, 2000 (Unaudited) See accompanying notes to financial statements.<br><br> HUSSMAN INVESTMENT TRUST Notes to Financial Statements December 31, 2000 (Unaudited) 1. Organization and Significant Accounting Policies The Hussman Investment Trust (the cTrust d) was organized as an Ohio business trust on March 20, 2000. The Trust is an open-end management investment company registered under the Investment Company Act of 1940 (the c1940 Act d).<br><br> The Trust currently offers one diversified investment portfolio, the Hussman Strategic Growth Fund (the cFund d). The Trust is authorized to issue an unlimited number of shares. As part of the Trust 9s organization, the Fund issued in a private placement 10,000 shares of beneficial interest to Hussman Econometrics Advisors, Inc, (the cAdviser d) at $10.00 a share on June 20, 2000.<br><br> The Fund commenced operations on July 24, 2000. The Fund 9s investment objective is to provide long-term capital appreciation, with added emphasis on capital preservation during unfavorable market conditions. Securities Valuation - The Fund values its portfolio securities at their current market value determined on the basis of market quotations, or if market quotations are not readily available, at their fair value as determined under procedures adopted by the Fund 9s Board of Trustees.<br><br> Option Transactions 3 The Fund may purchase and write put and call options on broad- based stock indices. The Fund may also purchase and write call and put options on individual securities. When the Fund writes an option, an amount equal to the net premium (the premium less the commission) received by the Fund is recorded in the liabilities section of the Fund 9s Statement of Assets and Liabilities and is subsequently valued at the closing prices on its primary exchange to reflect the current value of the option written.<br><br> The current value of the traded option is the last sale price or, in the absence of a sale, the average of the closing bid and asked prices. If an option expires on the stipulated expiration date or if the Fund enters into a closing purchase transaction, it will realize a gain (or a loss if the cost of a closing purchase transaction exceeds the net premium received when the option is sold) and the liability related to such option will be eliminated. If an option is exercised, the Fund may deliver the underlying security in the open market.<br><br> In either event, the proceeds of the sale will be increased by the net premium originally received and the Fund will realize a gain or loss. HUSSMAN INVESTMENT TRUST Notes to Financial Statements December 31, 2000 (Unaudited) 1.Organization and Significant Accounting Policies (continued) Share Valuation - The net asset value of the Fund 9s shares is calculated at the close of regular trading on the New York Stock Exchange (generally 4:00 p.m., Eastern time) on each day that the Exchange is open for business. To calculate the net asset value, the Fund 9s assets are valued and totaled, liabilities are subtracted, and the balance is divided by the number of shares outstanding.<br><br> The offering price and redemption price per share is equal to the net asset value per share, except that shares of the Fund are subject to a redemption fee of 1.5% if redeemed within six months of the date of purchase. Investment income - Interest income is accrued as earned. Dividend income is recorded on the ex-dividend date.<br><br> Distributions to shareholders - Dividends arising from net investment income, if any, are declared and paid annually to shareholders of the Fund. Net realized short-term capital gains, if any, may be distributed throughout the year and net realized long-term capital gains, if any, are distributed at least once a year. Income distributions and capital gain distributions are determined in accordance with income tax regulations.<br><br> Organization expenses 3 All costs incurred by the Trust in connection with the organization of the Fund and the initial public offering of shares of the Fund, principally professional fees and printing, has been paid by the Adviser, but is subject to recovery by the Adviser pursuant to the Expense Limitation Agreement (See Note 3). Security transactions - Security transactions are accounted for on trade date. Cost of securities sold is determined on a specific identification basis.<br><br> Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from these estimates. HUSSMAN INVESTMENT TRUST Notes to Financial Statements December 31, 2000 (Unaudited) 1.<br><br> Organization and Significant Accounting Policies (continued) Federal income tax - It is the Fund 9s policy to comply with the special provisions of the Internal Revenue Code applicable to regulated investment companies. As provided therein, in any fiscal year in which the 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 provisions for income taxes have been made.<br><br> In order to avoid imposition of the excise tax applicable to regulated investment companies, it is also the Fund 9s 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. For federal income tax purposes, the cost of portfolio investments amounted to $13,492,847 at December 31, 2000. The composition of unrealized appreciation (the excess of value over tax cost) and unrealized depreciation (the excess of tax cost over value) was as follows: Gross unrealized appreciation$ 1,707,367 Gross unrealized depreciation (702,400) Net unrealized appreciation$ 1,004,967 2.<br><br> Investment Transactions During the period ended December 31, 2000, purchases and proceeds from sales and maturities of investment securities, other than short-term investments, amounted to $15,320,568 and $2,521,983, respectively. HUSSMAN INVESTMENT TRUST Notes to Financial Statements December 31, 2000 (Unaudited) 3. Transactions with Affiliates Certain Trustees and officers of the Trust are affiliated with the Adviser or Ultimus Fund Solutions, LLC ( cUltimus d), the Fund 9s administrator, transfer agent and fund accounting agent.<br><br> ADVISORY AGREEMENT Under the terms of an Advisory Agreement between the Trust and the Adviser, the Adviser is entitled to receive fees at the annual rate of 1.25% of the average daily net assets of the Fund. Pursuant to an Expense Limitation Agreement, the Adviser has contractually agreed to waive a portion of its advisory fees and if necessary reimburse the Fund 9s organizational and operational expenses so that the Fund 9s net expenses do not exceed 2.00% (the cCap d) until at least December 31, 2001. If at any point the operational expenses of the Fund fall below the Cap, the Adviser may recoup fees previously waived or reimbursed so long as (1) the fee waiver or expense reimbursement to be recouped occurred within three years of the recoupment, and (2) the amount of the recouped fees does not cause the Fund 9s aggregate expenses on an annualized basis to exceed the Cap.<br><br> ADMINISTRATION AGREEMENT Under the terms of an Administration Agreement, Ultimus supplies executive, administrative and regulatory services to the Fund, supervises the preparation of tax returns, and coordinates the preparation of reports to shareholders and reports to and filings with the Securities and Exchange Commission and state securities authorities. For these services, Ultimus receives a monthly fee from the Fund at an annual rate of .15% on its average daily net assets up to $50 million; .125% on the next $50 million of such assets; .100% on the next $150 million of such assets; .075% on the next $250 million of such assets; and .05% of such net assets in excess of $500 million, subject to a minimum monthly fee of $2,000. During the period ended December 31, 2000, Ultimus was paid $8,875 under the Administration Agreement.<br><br> HUSSMAN INVESTMENT TRUST Notes to Financial Statements December 31, 2000 (Unaudited) 3.Transactions with Affiliates (continued) ACCOUNTING SERVICES AGREEMENT Under the terms of an Accounting Services Agreement between the Trust and Ultimus, Ultimus calculates the daily net asset value per share and maintains the financial books and records of the Fund. For these services, Ultimus receives from the Fund a monthly base fee of $2,500, plus an asset based fee equal to 0.01% of its average daily net assets up to $500 million and 0.005% of such assets in excess of $500 million. During the period ended December 31, 2000, Ultimus was paid $11,294 for accounting services.<br><br> In addition, the Fund pays certain out-of-pocket expenses incurred by Ultimus in obtaining valuations of the Fund 9s portfolio securities. TRANSFER AGENCY AND SHAREHOLDER SERVICES AGREEMENT Under the terms of a Transfer Agency and Shareholder Services Agreement between the Trust and Ultimus, Ultimus maintains the records of each shareholder 9s account, answers shareholders 9 inquiries concerning their accounts, processes purchases and redemptions of Fund shares, acts as dividend and distribution disbursing agent and performs other shareholder service functions. For these services, Ultimus receives from the Fund a monthly fee at an annual rate of $17 per account, subject to a minimum of $1,500 per month.<br><br> During the period ended December 31, 2000, Ultimus was paid $7,875 for transfer agent and shareholder services. In addition, the Fund pays certain out-of-pocket expenses incurred by Ultimus including, but not limited to, postage and supplies. 4.<br><br> Option Contracts Written The premium amount and the number of option contracts written during the period ended December 31, 2000, were as follows: Options Contracts Option Premiums Options outstanding at beginning of period -$ - Options written 636 1,720,283 Options cancelled in a closing purchase transaction(486) (1,365,308) Options outstanding at end of period 150 $ 354,975