PROSPECTUS
January 31, 1999
(Leuthold Core Investment Fund Logo)
Leuthold Core Investment Fund seeks capital appreciation and income (or "total
return") in amounts attainable by assuming only prudent investment risk over the
long term. The Fund's definition of long term investment success is making it
AND keeping it.
Please read this Prospectus and keep it for future reference. It contains
important information, including information on how the Leuthold Core Investment
Fund invests and the services it offers to shareholders.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Leuthold Core Investment Fund
100 North Sixth Street
Suite 700A
Minneapolis, Minnesota 55403
(612) 332-9141
TABLE OF CONTENTS
Questions Every Investor Should Ask
Before Investing in the Leuthold Core
Investment Fund 1
Fees and Expenses 3
Investment Objective, Strategies and Risks 4
Management of the Fund 6
The Fund's Share Price 8
Purchasing Shares 8
Redeeming Shares 10
Dividends, Distributions and Taxes 12
Financial Highlights 13
QUESTIONS EVERY INVESTOR SHOULD ASK BEFORE INVESTING IN THE LEUTHOLD CORE
INVESTMENT FUND
1. WHAT ARE THE FUND'S GOALS?
Leuthold Core Investment Fund seeks capital appreciation and income (or "total
return") in amounts attainable by assuming only prudent investment risk over the
long term.
2. WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?
Leuthold Core Investment Fund is a "flexible" fund, meaning that it allocates
its investments among:
o Common stocks and other equity securities
o Bonds and other debt securities (other than money market instruments)
o Money market instruments
in proportions which reflect our Adviser's judgment of the potential returns and
risks of each asset class. Our Adviser considers a number of factors when
making these allocations, including economic conditions and monetary factors,
inflation and interest rate levels and trends, investor confidence and technical
stock market measures. The Fund expects that normally:
o 30% to 70% of its assets will be invested in common stocks and other equity
securities
o 30% to 70% of its assets will be invested in bonds and other debt securities
(other than money market instruments)
o up to 20% of its assets will be invested in money market instruments.
The Fund's investments in common stocks and other equity securities may consist
of:
o Large, mid or small capitalization common stocks
o Growth stocks, value stocks or cyclical stocks
o Aggressive stocks or defensive stocks
o Stocks in any industry or sector
o Equity mutual funds
o Common stocks of foreign issuers
o Options.
The Fund's investments in bonds and other debt securities normally will consist
of U.S. Treasury Notes and Bonds, although the Fund may also invest in
investment grade corporate debt securities and debt securities of foreign
issuers. The Fund may also invest in mutual funds that invest in high yield
securities commonly known as "junk bonds." The Fund selects individual
securities based on fundamental factors (such as price/earnings ratios or growth
rates) and technical factors (such as price movements).
3. WHAT ARE THE PRINCIPAL RISKS IN INVESTING IN THE FUND?
Investors in the Fund may lose money. There are risks associated with
investments in each of the asset classes in which the Fund invests. These risks
include:
o MARKET RISK: The prices of the securities, particularly the common stocks,
in which the Fund invests may decline for a number of reasons. The price
declines of common stocks, in particular, may be steep, sudden and/or
prolonged.
o INTEREST RATE RISK: In general, the value of bonds and other debt
securities rise when interest rates fall and fall when interest rates rise.
Longer term obligations are usually more sensitive to interest rate changes
than shorter term obligations. While bonds and other debt securities
normally fluctuate less in price than common stocks, there have been
extended periods of increases in interest rates that have caused significant
declines in bond prices.
o CREDIT RISK: The issuers of the bonds and other debt securities held by the
Fund may not be able to make interest or principal payments. Even if these
issuers are able to make interest or principal payments, they may suffer
adverse changes in financial condition that would lower the credit quality
of the security, leading to greater volatility in the price of the security.
o CURRENCY RISK: The U.S. dollar value of foreign securities traded in
foreign currencies (and any dividends and interest earned) held by the Fund
or by mutual funds in which the Fund invests may be affected favorably or
unfavorably by changes in foreign currency exchange rates. An increase in
the U.S. dollar relative to these other currencies will adversely affect the
Fund.
The Fund's performance will also be affected by our Adviser's ability to
anticipate correctly the relative potential returns and risks of the asset
classes in which the Fund invests. For example, the Fund's relative investment
performance would suffer if only a small portion of the Fund's assets were
allocated to stocks during a significant stock market advance, and its absolute
investment performance would suffer if a major portion of its assets were
allocated to stocks during a market decline. Finally, since the Fund intends
to assume only prudent investment risk, there will be periods in which the Fund
underperforms mutual funds that are willing to assume greater risk.
As a result the Fund is a suitable investment only for those investors who have
medium to long-term investment goals. Prospective investors who are
uncomfortable with an investment that will increase and decrease in value
should not invest in the Fund. Our Adviser does not intend the Fund to be a
fixed balanced investment program. Rather, as our name implies, the Fund is
intended to be a flexible core investment suitable for any long-term investor.
Long-term investors may wish to supplement an investment in the Fund with other
investments to satisfy their short-term financial needs and to diversify their
exposure to various markets and asset classes.
4. HOW HAS THE FUND PERFORMED?
The bar chart and table that follow provide some indication of the risks of
investing in the Fund by showing changes in the Fund's performance from year to
year and how its average annual returns over various periods compare to those of
Standard & Poor's Composite Index of 500 stocks (S&P 500), a Combined Index
(consisting of an unmanaged portfolio of 45% common stocks, 45% bonds and 10%
money market instruments) and the Lipper Flexible Fund Index. Please remember
that the Fund's past performance is not necessarily an indication of its future
performance. It may perform better or worse in the future.
TOTAL RETURN
(per calendar year)
1996 9.32%
1997 17.25%
1998 11.60%
- -------------------
Note: During the three year period shown on the bar chart, the Fund's highest
total return for a quarter was 8.79% (quarter ended September 30, 1997) and the
lowest total return for a quarter was - 1.92% (quarter ended March 31, 1997).
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ending December 31, 1998)
SINCE THE INCEPTION
DATE OF THE FUND
PAST YEAR (NOVEMBER 20, 1995)
- --------------------------------------------------------------------
LEUTHOLD CORE
INVESTMENT FUND 11.60% 13.02%
S&P 500*<F1> 28.57% 28.49%
Combined Index**<F2> 12.10% 13.57%
Lipper Flexible
Fund Index***<F3> 15.55% 16.45%
- -------------------
*<F1> The S&P 500 is a widely recognized unmanaged index of stock prices.
**<F2> The Combined Index consists of an unmanaged portfolio of 45% common
stocks represented by the S&P 500 (15%), the Standard & Poor's 400 Mid-
Cap Index (15%) and the Russell 2000 Index (15%); 45% bonds represented
by the Lehman Brothers Government/Corporate Bond Index; and 10% money
market instruments represented by 90-day United States Treasury Bills.
***<F3>The Lipper Flexible Fund Index is an index of mutual funds having an
investment objective similar to the Fund's investment objective.
FEES AND EXPENSES
The table below describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering price) No Sales Charge
Maximum Deferred Sales
Charge (Load) No Deferred Sales Charge
Maximum Sales Charge (Load)
Imposed on Reinvested
Dividends and Distributions No Sales Charge
Redemption Fee None*<F4>
Exchange Fee None
Maximum Account Fee No Account Fee
- -------------------
*<F4>Our transfer agent charges a fee of $12.00 for each wire redemption.
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
BEFORE
FEE WAIVERS*<F5>
-----------------
Management Fees 0.90%
Distribution and/
or Service (12b-1)
Fees None
Other Expenses 0.51%
Total Annual Fund
Operating Expenses 1.41%
- -------------------
*<F5>Since inception our Adviser has waived its advisory fee to the extent
necessary to ensure that our Total Fund Operating Expenses do not exceed
1.25% of our average daily net assets. It may discontinue these waivers at
any time.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of these periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------ ------ ------
$144 $446 $771 $1,691
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
The Fund seeks capital appreciation and income (or "total return") in amounts
attainable by assuming only prudent investment risk over the long term. The
Fund's definition of long term investment success is making it AND keeping it.
Our Adviser believes that maintaining profits when markets decline is as
important as earning profits when markets rise. Although we have no intention
of doing so, the Fund may change its investment objective without obtaining
shareholder approval. Please remember that an investment objective is not a
guarantee. An investment in the Fund might not appreciate and investors could
lose money.
HOW WE ALLOCATE OUR ASSETS
Our Adviser allocates your Fund's investments among the three asset classes as
follows:
FIRST, our Adviser analyzes the U.S. government bond market with the goal of
determining the risks and returns that U.S. Treasury securities present over the
next one to five years.
NEXT, our Adviser assesses the probability that common stocks as an asset class
will perform better than U.S. Treasury securities. In doing so, it considers
The Leuthold Group's Major Trend Index. This proprietary index comprises over
170 individual components that The Leuthold Group evaluates weekly.
FINALLY, our Adviser implements the asset allocation strategy. In doing so, our
Adviser may purchase put or call options on stock indexes or engage in short
sales of index-related and other securities to rapidly and cost-effectively
change the Fund's equity exposure.
HOW WE MAKE INDIVIDUAL SECURITY SELECTIONS
After our Adviser has determined the appropriate allocations among asset
classes, it selects individual investments as follows:
For our investments in bonds and debt securities (other than money market
instruments) our Adviser will first compare the anticipated returns and risks of
U.S. Treasury Notes and Bonds, foreign government debt securities (without
limitation as to rating) and corporate fixed-income securities (without
limitation as to rating) and determine how much to invest in each sector. Next
our Adviser will consider interest rate trends and economic indicators to
determine the desired maturity of the Fund's portfolio of debt securities. The
Fund may invest indirectly in fixed-income securities by investing in mutual
funds or closed-end investment companies which invest in such securities. The
Fund may do so to obtain a diversified exposure to high yield or "junk" bonds).
For our investments in common stocks and other equity securities, our Adviser
uses the following approach.
Our Adviser develops a broad sector strategy and determines what percentage of
its equity investments to allocate among large capitalization stocks ($4 billion
or more), mid-capitalization stocks ($1 to $4 billion) and small capitalization
stocks (less than $1 billion), and among "growth stocks" (stocks with high
price/earnings ratios), "value" stocks (stocks with low price/earnings ratios)
and "cyclical" stocks (stocks which are economically sensitive).
Also, our Adviser develops a more narrow sector strategy and determines what
percentage of each broad sector's investments to allocate among individual
sector categories using both traditional industrial sectors such as "housing,"
"energy" or "food," as well as conceptual themes such as "global energy."
Finally, our Adviser selects individual stocks after ranking each stock by
fundamental factors (such as price/earnings ratios or growth rates) and
technical factors (such as price movements) in the individual sector category.
In addition to investing in individual stocks, the Fund may invest in mutual
funds, unit investment trusts or closed-end investment companies which invest in
a specific category of common stocks. The Funds may do so to obtain (a)
exposure to international equity markets by investing in international funds,
(b) increased exposure to a particular industry by investing in a sector fund,
or (c) a broad exposure to small capitalization stocks by investing in small cap
funds.
The Fund may, in response to adverse market, economic, political or other
conditions, take temporary defensive positions. This means the Fund will invest
more than 20% of its assets in money market instruments (like U.S. Treasury
Bills, commercial paper or repurchase agreements). The Fund will not seek
capital appreciation to the extent that it invests in money market instruments
since these securities earn interest but do not appreciate in value. When the
Fund is not taking a temporary defensive position, it still will hold some cash
and money market instruments so that it can pay its expenses, satisfy redemption
requests, take advantage of investment opportunities, or as part of its normal
asset allocation process.
PORTFOLIO TURNOVER
The Fund's annual portfolio turnover rate usually will not exceed 100%.
(Generally speaking, a turnover rate of 100% occurs when the Fund replaces
securities valued at 100% of its average net assets within a one year period.)
Higher portfolio turnover (100% or more) will result in the Fund incurring more
transaction costs such as brokerage commissions or mark-ups or mark-downs.
Payment of these transaction costs reduces total return. Higher portfolio
turnover could result in the payment by the Fund's shareholders of increased
taxes on realized gains. Distributions to the Fund's shareholders, to the extent
they are short-term capital gains, will be taxed at ordinary income rates for
federal income tax purposes, rather than at lower capital gains rates.
RISKS
There are a number of risks associated with the various securities in which the
Fund will at times invest. These include:
RISKS ASSOCIATED WITH ZERO COUPON U.S. TREASURY SECURITIES. Zero coupon U.S.
Treasury securities are U.S. Treasury Notes and Bonds that have been stripped of
their unmatured interest coupons by the U.S. Department of Treasury. Zero
coupon U.S. Treasury securities are generally subject to greater fluctuation in
value in response to changing interest rates than debt obligations that pay
interest currently.
RISKS ASSOCIATED WITH SMALL CAP STOCKS. Stocks of smaller capitalization
companies tend to be riskier investments than stocks of larger capitalization
companies. Smaller capitalization companies may have limited product lines,
markets, market share and financial resources or they may be dependent on a
small or inexperienced management team. Stocks of smaller capitalization
companies may trade less frequently and in more limited volume and may be
subject to greater and more abrupt price swings than stocks of larger companies.
RISKS ASSOCIATED WITH FOREIGN SECURITIES. In addition to currency risk there is
often less information publicly available about foreign issuers than U.S.
issuers. The securities of foreign issuers may be less liquid and more volatile
than securities of comparable U.S. issuers. The costs associated with
securities transactions are often higher in foreign countries than in the U.S.
Foreign governments and foreign economies often are less stable than the U.S.
government and the U.S. economy.
RISKS ASSOCIATED WITH HIGH YIELD SECURITIES. The Fund may invest directly, or
indirectly in high yield securities. High yield securities (or "junk bonds")
provide greater income and opportunity for gains than higher-rated securities
but entail greater risk of loss of principal. High yield securities are
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. The market
for high yield securities is generally less active than the market for higher
quality securities. This may limit the ability of the Fund, or investment
companies in which the Fund invests, to sell high yield securities at the price
at which it is being valued for purposes of calculating net asset value.
RISKS ASSOCIATED WITH PURCHASING PUT AND CALL OPTIONS. If the Fund purchases a
put or call option and does not exercise or sell it prior to the option's
expiration date, the Fund will realize a loss in the amount of the entire
premium paid, plus commission costs. It is possible, although not likely, that
there may be times when a market for the Fund's outstanding options does not
exist.
RISKS ASSOCIATED WITH SHORT SALES. The Fund's investment performance will
suffer if a security for which the Fund has effected a short sale appreciates in
value. The Fund's investment performance may also suffer if the Fund is
required to close out a short position earlier than it had intended. This would
occur if the securities lender requires it to deliver the securities the Fund
borrowed at the commencement of the short sale and the Fund was unable to borrow
such securities from other securities lenders.
ADDITIONAL COSTS ASSOCIATED WITH REGISTERED INVESTMENT COMPANIES. When the Fund
invests in a registered investment company, the Fund's shareholders bear not
only their proportionate share of the expenses of the Fund (such as operating
costs and investment advisory fees) but also, indirectly, similar expenses of
the registered investment companies in which the Fund invests.
MANAGEMENT OF THE FUND
LEUTHOLD & ANDERSON, INC. MANAGES THE FUND'S INVESTMENTS
Leuthold & Anderson, Inc. (the "Adviser") is the Fund's investment adviser. The
Adviser's address is:
100 North Sixth Street
Suite 700A
Minneapolis, MN 55403
The Adviser has been in business since 1987 and has been the Fund's only
investment adviser. As the investment adviser to the Fund, the Adviser manages
the investment portfolio for the Fund. It makes the decisions as to which
securities to buy and which securities to sell. The Fund pays the Adviser an
annual investment advisory fee equal to 0.9% of its average net assets.
Steven C. Leuthold is primarily responsible for the day-to-day management of the
Fund's portfolio. He is the Fund's portfolio manager. Mr. Leuthold has been
Chairman and Portfolio Manager of the Adviser since its organization in August,
1987. He has also been a portfolio manager for Leuthold, Weeden & Associates,
L.P. since January, 1991 and Chairman of the Leuthold Group since November,
1981. Prior to founding The Leuthold Group, Mr. Leuthold was employed by
Criterion Investment Management as a portfolio manager for The Pilot Fund and
Industries Trend Fund.
THE ADVISER HAS EXPERIENCE MANAGING ACCOUNTS WITH THE SAME INVESTMENT OBJECTIVE
AS THE FUND
We are providing historical performance data of investment advisory accounts
managed by the Adviser. The data illustrates the investment performance of all
portfolios similar to the Fund and compares the performance to specified market
indices. The Leuthold & Anderson, Inc. Composite includes all active accounts
of the Adviser (including the Fund) invested in the Adviser's Conventional
portfolio. The Composite does not include all of the Adviser's assets under
management, but does include all accounts having the same investment objective
as the Fund. It may not accurately reflect the performance of all accounts
managed by the Adviser. The accounts included in the Composite had the same
investment objective as the Fund and were managed using substantially similar,
though not in all cases, identical, investment strategies and techniques as
those used by the Fund. All performance data is historical and investors should
not consider this performance data as an indication of the future performance of
the Fund or the results an individual investor might achieve by investing in the
Fund. Investors should not rely on the historical performance of the Adviser
when making an investment decision.
All returns are time-weighted total rates of return and include the reinvestment
of dividends and interest. The performance information for the Composite is net
of the advisory fees charged by the Adviser to the accounts comprising the
Composite and all other expenses (except custody and related expenses). The
performance information for the Composite does not reflect the assessment of the
Fund's advisory fee or other expenses equivalent to the Fund's operating
expenses. The fees and expenses of the Composite were less than the annual
expenses of the Fund. The performance of the Composite would have been lower
had the Composite incurred higher fees and expenses. The net effect of the
deduction of the Fund's advisory fee and other operating expenses on annualized
performance, including the compounded effect over time, may be substantial. The
Composite was not subject to certain investment limitations, diversification
requirements and other restrictions imposed by the Investment Company Act of
1940 and the Internal Revenue Code. If it were, its performance may have been
adversely affected.
The performance information of the Composite, the S&P 500 Index, the Combined
Index and the Lipper Flexible Fund Index is based on data supplied by the
Adviser or from statistical services, reports or other sources which the Adviser
believes are reliable. This performance information has not been verified by
any third party and is unaudited.
<TABLE>
ANNUAL RATES OF RETURN(1)<F6>
YEARS ENDED
DECEMBER 31, 1988 1889 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LEUTHOLD CORE
INVESTMENT FUND N/A N/A N/A N/A N/A N/A N/A N/A 9.32% 17.25% 11.60%
Leuthold & Anderson,
Inc. Composite 20.14% 24.88% 1.56% 17.93% 1.39% 14.57% (4.13)% 18.36% 9.94 18.11 12.13
S&P 500 Index 16.60 31.65 (3.17) 30.38 7.72 10.01 1.22 37.47 23.00 33.30 28.57
Combined Index(2)<F7> 12.61 18.72 (0.29) 25.71 9.09 11.08 (2.23) 22.14 10.10 17.46 12.10
Lipper Flexible
Fund Index 8.69 17.25 0.94 26.98 5.67 12.74 (2.67) 23.59 14.05 18.68 15.55
</TABLE>
<TABLE>
COMPOUNDED ANNUAL RATES OF RETURN(1)<F6>
(FOR THE PERIOD ENDED DECEMBER 31, 1998) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----- ------ ------ -------
<S> <C> <C> <C> <C>
LEUTHOLD CORE INVESTMENT FUND 11.60% 12.67% N/A N/A
Leuthold & Anderson, Inc. Composite 12.13 13.34 10.56% 11.12%
S&P 500 Index 28.57 28.22 24.01 19.17
Combined Index(2)<F7> 12.10 13.18 11.60 12.06
Lipper Flexible Fund Index 15.55 16.08 13.47 12.91
- ----------------
(1)<F6> The calculation of the rates of return was performed in accordance with the principles set forth in the Performance
Presentation Standards endorsed by the Association for Investment Management and Research ("AIMR"). Other performance
calculation methods, including the SEC method, may produce different results. The AIMR performance presentation criteria
require the presentation of at least a ten-year performance record or performance for the period since inception, if
shorter. Total annual rate of return is the change in redemption value of units, assuming the reinvestment of dividends.
Compounded annual rate of return represents the level annual rate which, if earned for each year in a multiple year
period, would produce the cumulative rate of return over that period.
(2)<F7> The Combined Index is an unmanaged portfolio composed of 45% common stocks represented by the S&P 500 (15%), the
Standard & Poor's 400 Mid-Cap Index (15%) and the Russell 2000 Index (15%); 45% bonds represented by the Lehman Bros.
Government/Corporate Bond Index; and 10% cash represented by 90-day United States Treasury Bills.
</TABLE>
Please remember that past performance is not necessarily an indication of future
performance. Investors should also be aware that other performance calculation
methods may produce different results, and that comparisons of investment
results should consider qualitative circumstances and should be made only for
portfolios with generally similar investment objectives.
YEAR 2000
The Fund is aware of the "Year 2000" issue. The "Year 2000" issue stems from
the use of a two-digit format to define the year in certain date-sensitive
computer application systems rather than the use of a four digit format. As a
result, date-sensitive software programs could recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in major systems or
process failures or the generation of erroneous data, which would lead to
disruptions in the Fund's business operations.
The Fund has no application systems of its own and is entirely dependent on its
service providers' systems and software. The Fund is working with its service
providers (including its investment adviser, administrator, transfer agent and
custodian) to identify and remedy any Year 2000 issues. However, the Fund
cannot guarantee that all Year 2000 issues will be identified and remedied, and
the failure to successfully identify and remedy all Year 2000 issues could
result in an adverse impact on the Fund.
THE FUND'S SHARE PRICE
The price at which investors purchase shares of the Fund and at which
shareholders redeem shares of the Fund is called its net asset value. The Fund
calculates its net asset value as of the close of regular trading on the New
York Stock Exchange (normally 4:00 p.m. Eastern Time) on each day the New York
Stock Exchange is open for trading. The New York Stock Exchange is closed on
holidays and weekends. The Fund calculates its net asset value based on the
market prices of the securities (other than money market instruments) it holds.
It values most money market instruments it holds at their amortized cost. The
Fund will process purchase orders that it receives and accepts and redemption
orders that it receives prior to the close of regular trading on a day in which
the New York Stock Exchange is open at the net asset value determined LATER THAT
DAY. It will process purchase orders that it receives and accepts and
redemption orders that it receives AFTER the close of regular trading at the net
asset value determined at the close of regular trading on the NEXT DAY the New
York Stock Exchange is open.
The Fund's net asset value can be found daily in the mutual fund listings of
many major newspapers under the heading "LeutholdCI". The Fund's NASDAQ symbol
is "LCORX".
PURCHASING SHARES
HOW TO PURCHASE SHARES FROM THE FUND
o Read this Prospectus carefully.
o Determine how much you want to invest, keeping in mind the following
minimums:
NEW ACCOUNTS
Individual Retirement
Accounts $ 1,000
All other accounts $10,000*<F8>
-----------------
*<F8> The Fund may, but is not required to, accept initial investments of
not less than $1,000 from investors who are related to, or affiliated
with, shareholders who have invested $10,000 in the Fund.
EXISTING ACCOUNTS
Dividend reinvestment No Minimum
Automatic
Investment Plan $ 50
All other accounts $100
o Complete the Purchase Application accompanying this Prospectus, carefully
following the instructions. For additional investments, complete the
Additional Investment Form attached to your Fund's confirmation statements.
(The Fund has additional Purchase Applications and Additional Investment
Forms if you need them.) If you have any questions, please call
1-800-273-6886.
o Make your check payable to "Leuthold Core Investment Fund." All checks must
be drawn on U.S. banks. The Fund will not accept cash or third party
checks. FIRSTAR MUTUAL FUND SERVICES, LLC, THE FUND'S TRANSFER AGENT, WILL
CHARGE A $25 FEE AGAINST A SHAREHOLDER'S ACCOUNT FOR ANY PAYMENT CHECK
RETURNED FOR INSUFFICIENT FUNDS. THE SHAREHOLDER WILL ALSO BE RESPONSIBLE
FOR ANY LOSSES SUFFERED BY THE FUND AS A RESULT.
Send the application and check to:
FOR FIRST CLASS MAIL
Leuthold Funds, Inc.
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
FOR OVERNIGHT DELIVERY SERVICE OR REGISTERED MAIL
Leuthold Funds, Inc.
c/o Firstar Mutual Fund Services, LLC
615 East Michigan Street, 3rd Floor
Milwaukee, WI 53202-5207
PLEASE DO NOT MAIL LETTERS BY OVERNIGHT DELIVERY SERVICE OR REGISTERED MAIL TO
THE POST OFFICE BOX ADDRESS.
If you wish to open an account by wire, please call 1-800-273-6886 prior to
wiring funds in order to obtain a confirmation number and to ensure prompt and
accurate handling of funds. FUNDS SHOULD BE WIRED TO:
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, WI 53202
ABA #075000022
CREDIT:
Firstar Mutual Fund Services, LLC
Account #112-952-137
FURTHER CREDIT:
Leuthold Core Investment Fund
(shareholder registration)
(shareholder account number, if known)
You should then send a properly signed Purchase Application marked "FOLLOW-UP"
to either of the addresses listed above. PLEASE REMEMBER THAT FIRSTAR BANK
MILWAUKEE, N.A. MUST RECEIVE YOUR WIRED FUNDS PRIOR TO THE CLOSE OF REGULAR
TRADING ON THE NEW YORK STOCK EXCHANGE FOR YOU TO RECEIVE SAME DAY PRICING. THE
FUND AND FIRSTAR BANK MILWAUKEE, N.A. ARE NOT RESPONSIBLE FOR THE CONSEQUENCES
OF DELAYS RESULTING FROM THE BANKING OR FEDERAL RESERVE WIRE SYSTEM, OR FROM
INCOMPLETE WIRING INSTRUCTIONS.
PURCHASING SHARES FROM BROKER-DEALERS, FINANCIAL INSTITUTIONS AND OTHERS
Some broker-dealers may sell shares of the Fund. These broker-dealers may
charge investors a fee either at the time of purchase or redemption. The fee,
if charged, is retained by the broker-dealer and not remitted to the Fund or the
Adviser.
The Fund may enter into agreements with broker-dealers, financial institutions
or other service providers ("Servicing Agents") that may include the Fund as an
investment alternative in the programs they offer or administer. Servicing
agents may:
o Become shareholders of record of the Fund. This means all requests to
purchase additional shares and all redemption requests must be sent through
the Servicing Agent. This also means that purchases made through Servicing
Agents are not subject to the Fund's minimum purchase requirement.
o Use procedures and impose restrictions that may be in addition to, or
different from, those applicable to investors purchasing shares directly
from the Fund.
o Charge fees to their customers for the services they provide them. Also,
the Fund and/or the Adviser may pay fees to Servicing Agents to compensate
them for the services they provide their customers.
o Be allowed to purchase shares by telephone with payment to follow the next
day. If the telephone purchase is made prior to the close of regular
trading on the New York Stock Exchange, it will receive same day pricing.
o Be authorized to accept purchase orders on the Fund's behalf. This means
that the Fund will process the purchase order at the net asset value which
is determined following the Servicing Agent's acceptance of the customer's
order.
If you decide to purchase shares through Servicing Agents, please carefully
review the program materials provided to you by the Servicing Agent. When you
purchase shares of the Fund through a Servicing Agent, it is the responsibility
of the Servicing Agent to place your order with the Fund on a timely basis. If
the Servicing Agent does not, or if it does not pay the purchase price to the
Fund within the period specified in its agreement with the Fund, it may be held
liable for any resulting fees or losses.
OTHER INFORMATION ABOUT PURCHASING SHARES OF THE FUND
The Fund may reject any share purchase applications for any reason. The Fund
will not accept initial purchase orders made by telephone, unless they are from
a Servicing Agent which has an agreement with the Fund.
The Fund will issue certificates evidencing shares purchased only upon request.
The Fund will send investors a written confirmation for all purchases of shares.
The Fund offers an automatic investment plan allowing shareholders to make
purchases on a regular and convenient basis. The Fund also offers a telephone
purchase option permitting shareholders to make additional purchases by
telephone. The Fund offers the following retirement plans:
TRADITIONAL IRA
ROTH IRA
Investors can obtain further information about the automatic investment plan,
the telephone purchase plan and the IRAs by calling the Fund at 1-800-273-6886.
The Fund recommends that investors consult with a competent financial and tax
advisor regarding the IRAs before investing through them.
REDEEMING SHARES
HOW TO REDEEM (SELL) SHARES BY MAIL
Prepare a letter of instruction containing:
o account number(s)
o the amount of money or number of shares being redeemed
o the name(s) on the account
o daytime phone number
o additional information that the Fund may require for redemptions by
corporations, executors, administrators, trustees, guardians, or others who
hold shares in a fiduciary or representative capacity. Please contact the
Fund's transfer agent, Firstar Mutual Fund Services, LLC, in advance, at
1-800-273-6886 if you have any questions.
Sign the letter of instruction exactly as the shares are registered. Joint
ownership accounts must be signed by all owners.
Have the signatures guaranteed by a commercial bank or trust company in the
United States, a member firm of the New York Stock Exchange or other eligible
guarantor institution IN THE FOLLOWING SITUATIONS:
o The redemption proceeds are to be sent to a person other than the person in
whose name the shares are registered
o The redemption proceeds are to be sent to an address other than the address
of record
o The redemption request is received within 30 days after an address change.
A NOTARIZED SIGNATURE IS NOT AN ACCEPTABLE SUBSTITUTE FOR A SIGNATURE GUARANTEE.
Send the letter of instruction to:
FOR FIRST CLASS MAIL
Leuthold Funds, Inc.
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
FOR OVERNIGHT DELIVERY SERVICE OR REGISTERED MAIL
Leuthold Funds, Inc.
c/o Firstar Mutual Fund Services, LLC
615 East Michigan Street, 3rd Floor
Milwaukee, WI 53202-5207
PLEASE DO NOT MAIL LETTERS BY OVERNIGHT DELIVERY SERVICE OR REGISTERED MAIL TO
THE POST OFFICE BOX ADDRESS.
HOW TO REDEEM (SELL) SHARES BY TELEPHONE
Instruct Firstar Mutual Fund Services, LLC that you want the option of redeeming
shares by telephone. This can be done by completing the appropriate section on
the Purchase Application. Shares held in IRAs cannot be redeemed by telephone.
Assemble the same information that you would include in the letter of
instruction for a written redemption request.
Call Firstar Mutual Fund Services, LLC at 1-800-273-6886. PLEASE DO NOT CALL
THE FUND OR THE ADVISER.
HOW TO REDEEM (SELL) SHARES THROUGH SERVICING AGENTS
If your shares are held by a Servicing Agent, you must redeem your shares
through the Servicing Agent. Contact the Servicing Agent for instructions on
how to do so.
PAYMENT OF REDEMPTION PROCEEDS
The redemption price per share you receive for redemption requests is the next
determined net asset value after:
o Firstar Mutual Fund Services, LLC receives your written request in proper
form with all required information.
o Firstar Mutual Fund Services, LLC receives your authorized telephone request
with all required information.
o A Servicing Agent that has been authorized to accept redemption requests on
behalf of the Fund receives your request in accordance with its procedures.
For those shareholders who redeem shares by mail, Firstar Mutual Fund Services,
LLC will mail a check in the amount of the redemption proceeds no later than the
seventh day after it receives the written request in proper form with all
required information. For those shareholders who redeem by telephone, Firstar
Mutual Fund Services, LLC normally will transfer the redemption proceeds to your
designated bank account if you have elected to receive redemption proceeds by
either Electronic Funds Transfer or wire. An Electronic Funds Transfer
generally takes up to 3 business days to reach the shareholder's account whereas
Firstar Mutual Fund Services, LLC generally wires redemption proceeds on the
business day following the calculation of the redemption price. However, the
Fund may direct Firstar Mutual Fund Services, LLC to pay the proceeds of a
telephone redemption on a date no later than the seventh day after the
redemption request. Firstar Mutual Fund Services, LLC currently charges $12 for
each wire redemption but does not charge a fee for Electronic Funds Transfers.
Those shareholders who redeem shares through Servicing Agents will receive their
redemption proceeds in accordance with the procedures established by the
Servicing Agent.
OTHER REDEMPTION CONSIDERATIONS
When redeeming shares of the Fund, shareholders should consider the following:
o The redemption may result in a taxable gain.
o Shareholders who redeem shares held in an IRA must indicate on their
redemption request whether or not to withhold federal income taxes. If
not, these redemptions will be subject to federal income tax withholding.
o The Fund may delay the payment of redemption proceeds for up to seven days
in all cases.
o If you purchased shares by check, the Fund may delay the payment of
redemption proceeds until it is reasonably satisfied the check has cleared
(which may take up to 15 days from the date of purchase).
o Firstar Mutual Fund Services, LLC will send the proceeds of telephone
redemptions to an address or account other than that shown on its records
only if the shareholder has sent in a written request with signatures
guaranteed.
o Firstar Mutual Fund Services, LLC will not accept telephone redemption
requests made within 30 days after an address change.
o The Fund reserves the right to refuse a telephone redemption request if it
believes it is advisable to do so. Both the Fund and Firstar Mutual Fund
Services, LLC may modify or terminate its procedures for telephone
redemptions at any time. Neither the Fund nor Firstar Mutual Fund
Services, LLC will be liable for following instructions for telephone
redemption transactions that they reasonably believe to be genuine,
provided they use reasonable procedures to confirm the genuineness of the
telephone instructions. They may be liable for unauthorized transactions
if they fail to follow such procedures. These procedures include requiring
some form of personal identification prior to acting upon the telephone
instructions and recording all telephone calls. During periods of
substantial economic or market change, telephone redemptions may be
difficult to implement. If a shareholder cannot contact Firstar Mutual
Fund Services, LLC by telephone, he or she should make a redemption request
in writing in the manner described earlier.
o If your account balance falls below $1,000 because you redeem shares, you
will be given 60 days to make additional investments so that your account
balance is $1,000 or more. If you do not, the Fund may close your account
and mail the redemption proceeds to you.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund distributes substantially all of its net investment income quarterly
and substantially all of its capital gains annually. You have three
distribution options:
AUTOMATIC REINVESTMENT OPTION - Both dividend and capital gains distributions
will be reinvested in additional Fund Shares.
CASH DIVIDEND OPTION - Your dividends will be paid in cash and your capital
gains will be reinvested in additional Fund shares.
ALL CASH OPTION - Both dividend and capital gains distributions will be paid in
cash.
You may make this election on the Purchase Application. You may change your
election by writing to Firstar Mutual Fund Services, LLC or by calling 1-800-
273-6886.
The Fund's distributions, whether received in cash or additional shares of the
Fund, may be subject to federal and state income tax. These distributions may
be taxed as ordinary income and capital gains (which may be taxed at different
rates depending on the length of time the Fund holds the assets generating the
capital gains). In managing the Fund, our Adviser considers the tax effects of
its investment decisions to be of secondary importance.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the period of the Fund's operations. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Arthur Andersen LLP, whose
report, along with the Fund's financial statements, are included in the Annual
Report which is available upon request.
<TABLE>
FOR THE YEARS ENDED NOV. 20, 1995(1)<F9>
9/30/98 9/30/97 THROUGH SEPT. 30, 1996
------- ------- ----------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $11.17 $10.18 $10.00
Income from investment operations:
Net Investment Income (2)<F10> 0.40 0.44 0.38
Net Realized and Unrealized Gains on Investments 1.16 1.32 0.16
------- ------ ------
Total from Investment Operations 1.56 1.76 0.54
------- ------ ------
Less Distributions:
Dividends (from net investment income) (0.40) (0.46) (0.36)
Distributions (from net realized gains) (0.36) (0.26) --
Returns of Capital -- (0.05) --
------- ------ ------
Total Distributions (0.76) (0.77) (0.36)
------- ------ ------
Net Asset Value, End of Period $11.97 $11.17 $10.18
------- ------ ------
------- ------ ------
TOTAL RETURN 14.45% 17.96% 5.43%(3)<F11>
RATIO/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000s) 46,267 30,560 31,740
Ratio of Expenses to Average Net Assets:
Before expense reimbursement 1.41% 1.47% 1.55%(4)<F12>
After expense reimbursement 1.25% 1.25% 1.25%(4)<F12>
Ratio of Net Investment Income to Average Net Assets:
Before expense reimbursement 3.50% 4.05% 4.14%(4)<F12>
After expense reimbursement 3.66% 4.27% 4.44%(4)<F12>
Portfolio Turnover Rate 73.43% 35.62% 103.50%
- -----------------
(1)<F9> Commencement of operations.
(2)<F10>Net investment income per share is calculated using ending balances prior to
consideration of adjustments for permanent book and tax differences.
(3)<F11>Not annualized.
(4)<F12>Annualized.
</TABLE>
To learn more about Leuthold Core Investment Fund, you may want to read Leuthold
Core Investment Fund's Statement of Additional Information (or "SAI") which
contains additional information about the Fund. Leuthold Core Investment Fund
has incorporated by reference, the SAI into the Prospectus. This means that you
should consider the contents of the SAI to be part of the Prospectus.
You also may learn more about Leuthold Core Investment Fund's investments by
reading the Fund's annual and semi-annual reports to shareholders. The annual
report includes a discussion of the market conditions and investment strategies
that significantly affected the performance of Leuthold Core Investment Fund
during its last fiscal year.
The SAI and the annual and semi-annual reports are all available to shareholders
and prospective investors without charge, simply by calling Firstar Mutual Fund
Services, LLC at 1-800-273-6886.
Prospective investors and shareholders who have questions about Leuthold Core
Investment Fund may also call the following number or write to the following
address.
Leuthold Core Investment Fund
100 North Sixth Street
Suite 700A
Minneapolis, MN 55403
1-888-200-0409
The general public can review and copy information about Leuthold Core
Investment Fund (including the SAI) at the Securities and Exchange Commission's
Public Reference Room in Washington, D.C. (Please call 1-800-SEC-0330 for
information on the operations of the Public Reference Room.) Reports and other
information about Leuthold Core Investment Fund are also available at the
Securities and Exchange Commission's Internet site at http://www.sec.gov and
copies of this information may be obtained, upon payment of a duplicating fee,
by writing to:
Public Reference Section
Securities and Exchange Commission
Washington, D.C. 20549-6009
Please refer to Leuthold Core Investment Fund's Investment Company Act File No.
811-09094 when seeking information about the Fund from the Securities and
Exchange Commission.
