PROSPECTUS APRIL 1, 1999
COLUMBIA PARTNERS EQUITY FUND
1775 Pennsylvania Ave, N. W.
Washington, D.C. 20006
For Information, Shareholder Services and Requests:
(888) 696-2733
The investment objective of the Columbia Partners Equity Fund is to
provide long term capital growth for its shareholders. The Fund seeks to achieve
this objective by investing primarily in a portfolio of U.S. common stocks that
is diversified by economic sector and market capitalization. The Fund's advisor,
Columbia Partners, L.L.C., Investment Management, selects stocks which it
believes offer strong growth prospects and are reasonably valued.
The Fund is "no-load," which means that investors incur no sales
charges, commissions or deferred sales charges on the purchase or redemption of
their shares. The Fund is one of the mutual funds comprising AmeriPrime Funds,
an open-end management investment company, distributed by AmeriPrime Financial
Securities, Inc.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information dated April 1, 1999 has been filed with the
Securities and Exchange Commission (the "SEC"), is incorporated herein by
reference, and can be obtained without charge by calling the Fund at the phone
number listed above. The SEC maintains a Web Site (http://www.sec.gov) that
contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on estimated amounts for the current
fiscal year. The expenses are expressed as a percentage of average net assets.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE FUND PERFORMANCE
OR EXPENSES, BOTH OF WHICH MAY VARY.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. In addition, the Fund does not
charge a 12b-1 fee. Unlike most other mutual funds, the Fund does not pay
directly for transfer agency, pricing, custodial, auditing or legal services,
nor does it pay directly any general administrative or other significant
operating expenses. The Advisor pays all of the expenses of the Fund except
brokerage, taxes, interest, fees and expenses of non-interested person trustees
and extraordinary expenses.
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases ..................... NONE
Sales Load Imposed on Reinvested Dividends .......... NONE
Deferred Sales Load ................................. NONE
Redemption Fees ..................................... NONE
Exchange Fees ....................................... NONE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)1
Management Fees....................................1.20%
12b-1 Fees.........................................NONE
Other Expenses2....................................0.00%
Total Fund Operating Expenses......................1.20%
1 The Fund's total operating expenses are equal to the management fee
paid to the Advisor because the Advisor pays all of the Fund's
operating expenses (except as described in footnote 2).
2 The Fund estimates that other expenses (fees and expenses of the
trustees who are not "interested persons" as defined in the Investment
Company Act) will be less than .001% of average net assets for the
first fiscal year.
The tables above are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund.
Example
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 YEAR 3 YEARS
$12 $38
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THE FUND
The Columbia Partners Equity Fund (the "Fund") was organized as a
series of AmeriPrime Funds, an Ohio business trust (the "Trust") on February 2,
1999. This prospectus offers shares of the Fund and each share represents an
undivided, proportionate interest in the Fund. The investment advisor to the
Fund is Columbia Partners, L.L.C., Investment Management (the "Advisor").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide long term capital
growth for its shareholders. The Fund seeks to achieve this objective by
investing primarily in a portfolio of U.S. common stocks. The Advisor selects
stocks which it believes offer strong growth prospects and are reasonably
valued. The Advisor uses computer analysis and fundamental research to select
stocks that have all or some of the following characteristics: strong earnings
growth; improving analysts expectations for future earnings growth; reasonable
price/earnings ratios relative to their historic ranges; and improving stock
price performance and momentum.
The Fund will invest in large, medium and small capitalization
companies in varying amounts depending on the comparative attractiveness of the
companies. To the extent the Fund invests in smaller capitalization companies,
the Fund will be subject to the risks associated with such companies. Smaller
capitalization companies may experience higher growth rates and higher failure
rates than do larger capitalization companies. They may have limited product
lines, markets or financial resources and may lack management depth. The trading
volume of securities of smaller capitalization companies is normally less than
that of larger capitalization companies, and, therefore, may disproportionately
affect their market price, tending to make them rise more in response to buying
demand and fall more in response to selling pressure than is the case with
larger capitalization companies.
Under normal circumstances, at least 65% of the total assets of the
Fund will be invested in U.S. equity securities. The Fund may also invest in
fixed income securities, American Depositary Receipts (ADRs) and options on
stocks and stock indices. See "Investment Policies and Techniques and Risk
Considerations" for a more detailed discussion of the Fund's investment
practices.
For temporary defensive purposes under abnormal market or economic
conditions, the Fund may hold all or a portion of its assets in money market
instruments (including money market funds) or U.S. Government repurchase
agreements. The Fund may also invest in such instruments at any time to maintain
liquidity or pending selection of investments in accordance with its policies.
If the Fund acquires securities of another mutual fund, the shareholders of the
Fund will be subject to additional management fees.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. In addition, it should be noted that the Fund has no operating
history. Rates of total return quoted by the Fund may be higher or lower than
past quotations, and there can be no assurance that any rate of total return
will be maintained.
HOW TO INVEST IN THE FUND
The Fund is a "no-load" and shares of the Fund are sold directly to
investors on a continuous basis, subject to a minimum initial investment of
$5,000 ($2,000 for qualified retirement plans) and minimum subsequent
investments of $500. These minimums may be waived by the Advisor for accounts
participating in an automatic investment program. Investors choosing to purchase
or redeem their shares through a broker/dealer or other institution may be
charged a fee by that institution. Investors choosing to purchase or redeem
shares directly from the Fund will not incur charges on purchases or
redemptions. To the extent investments of individual investors are aggregated
into an omnibus account established by an investment adviser, broker or other
intermediary, the account minimums apply to the omnibus account, not to the
account of the individual investor.
INITIAL PURCHASE
BY MAIL - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to the Fund, and sent to the P.O. Box listed below. If you prefer
overnight delivery, use the overnight address listed below.
U.S. Mail: Overnight:
Columbia Partners Equity Fund Columbia Partners Equity Fund
c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc.
P.O. Box 6110 431 North Pennsylvania Street
Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204
Your purchase of shares of the Fund will be effected at the next share
price calculated after receipt of your investment.
BY WIRE - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 888-696-2733 to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application. Then, you should provide your bank with the
following information for purposes of wiring your investment:
Firstar Bank, N.A.
ABA #0420-0001-3
Attn: Columbia Partners Equity Fund
D.D.A. # 823257860
Account Name _________________ (write in shareholder name) For
the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund, Custodian and Transfer Agent are
open for business. A wire purchase will not be considered made until the wired
money is received and the purchase is accepted by the Fund. Any delays which may
occur in wiring money, including delays which may occur in processing by the
banks, are not the responsibility of the Fund or the Transfer Agent. There is
presently no fee for the receipt of wired funds, but the right to charge
shareholders for this service is reserved by the Fund.
ADDITIONAL INVESTMENTS
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to Columbia Partners Equity Fund and should be sent to the address
listed above. A bank wire should be sent as outlined above.
AUTOMATIC INVESTMENT PLAN
You may make regular investments in the Fund with an Automatic
Investment Plan by completing the appropriate section of the account application
and attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $100 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
TAX SHELTERED RETIREMENT PLANS
Since the Fund seeks to provide long term capital growth, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); SIMPLE plans; 401(k) plans; qualified corporate pension and profit
sharing plans (for employees); tax deferred investment plans (for employees of
public school systems and certain types of charitable organizations); and other
qualified retirement plans. You should contact the Transfer Agent for the
procedure to open an IRA or SEP plan, as well as more specific information
regarding these retirement plan options. Consultation with an attorney or tax
advisor regarding these plans is advisable. Custodial fees for an IRA will be
paid by the shareholder by redemption of sufficient shares of the Fund from the
IRA unless the fees are paid directly to the IRA custodian. You can obtain
information about the IRA custodial fees from the Transfer Agent.
OTHER PURCHASE INFORMATION
You may exchange securities that you own for shares of the Fund,
provided the securities meet the Fund's investment criteria and the Advisor
deems them to be a desirable investment for the Fund. Any exchange will be a
taxable event and you may incur certain transaction costs relating to the
exchange. Contact the Transfer Agent for more information.
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. Presently there is no charge for wire
redemptions; however, the Fund reserves the right to charge for this service.
Any charges for wire redemptions will be deducted from the shareholder's Fund
account by redemption of shares. Investors choosing to purchase or redeem their
shares through a broker/dealer or other institution may be charged a fee by that
institution.
BY MAIL - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
Columbia Partners Equity Fund
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or Unified Fund Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
BY TELEPHONE - You may redeem any part of your account in the Fund by
calling the Transfer Agent at 888-696-2733. You must first complete the Optional
Telephone Redemption and Exchange section of the investment application to
institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
ADDITIONAL INFORMATION - If you are not certain of the requirements for
a redemption please call the Transfer Agent at 888-696-2733. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $10,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax advisor concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at anytime if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Advisor determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Advisor, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Advisor believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Advisor, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
short term capital gains to individuals are taxed at the same rate as ordinary
income. All distributions of net capital gains to corporations are taxed at
regular corporate rates. Any distributions designated as being made from net
realized long term capital gains are taxable to shareholders as long term
capital gains regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisors regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a diversified series of AmeriPrime Funds, an open-end
management investment company organized as an Ohio business trust on August 8,
1995. The Board of Trustees supervises the business activities of the Fund. Like
other mutual funds, the Fund retains various organizations to perform
specialized services.
The Fund retains Columbia Partners, L.L.C., Investment Management, 1775
Pennsylvania Ave. N.W., Washington, D.C. 20006 (the "Advisor") to manage the
assets of the Fund. The Advisor is an independent limited liability company
owned 50% by its employees and 50% by Galway Capital Management, L.L.C., a
venture capital firm. The Advisor currently manages just under $2 billion in
assets for pension funds, endowment funds and individuals in large, medium and
small capitalization equity portfolios and fixed income and balanced portfolios.
The Advisor was organized in 1995 and currently has a staff of 25 with average
experience of 17 years among the investment professionals. The day-to-day
management of the Fund will be directed by a team of three senior professionals:
Robert A. von Pentz, Managing Partner; Gary Dickinson, CFA, Principal; and Rhys
H. Williams, CFA, Principal. Mr. von Pentz has responsibility for all equity
investment activities at the Advisor. He was previously chairman of the board
and the chief investment officer at Riggs Investment Management Company (RIMCO)
in Washington prior to forming the Advisor. Mr. von Pentz has a BA in economics
and an MBA from the University of New Mexico. Mr. Dickinson has responsibility
for equity research and management and was a research analyst at RIMCO before
joining the Advisor in 1995. He has a BS in business administration (summa cum
laude) from Georgetown University. Mr. Williams also has responsibility for
equity research and management at the Advisor and oversees the firm's hedge
fund. Prior to joining the Advisor (from 1990 to 1997), Mr. Williams was Senior
Vice President at Prudential Securities, where, among his responsibilities, he
successfully managed small and medium capitalization portfolios. He has a BA
from Duke University (magna cum laude) and a MA in international economics from
Johns Hopkins University.
The Advisor determines the securities to be held or sold by the Fund,
and the portion of the Fund's assets to be held uninvested. The Advisor always
follows the Fund's investment objectives, policies and restrictions and any
policies and instructions of the Board of Trustees. The Fund is authorized to
pay the Advisor a fee equal to an annual average rate of 1.20% of its average
daily net assets. The Advisor pays all of the operating expenses of the Fund
except brokerage, taxes, interest, fees and expenses of non-interested person
trustees and extraordinary expenses. In this regard, it should be noted that
most investment companies pay their own operating expenses directly, while the
Fund's expenses, except those specified above, are paid by the Advisor.
The Fund retains AmeriPrime Financial Services, Inc. (the
"Administrator") to manage the Fund's business affairs and provide the Fund with
administrative services, including all regulatory reporting and necessary office
equipment, personnel and facilities. The Administrator receives a monthly fee
from the Advisor equal to an annual average rate of 0.10% of the Fund's average
daily net assets up to fifty million dollars, 0.075% of the Fund's average daily
net assets from fifty to one hundred million dollars and 0.050% of the Fund's
average daily net assets over one hundred million dollars (subject to a minimum
annual payment of $30,000). The Fund retains Unified Fund Services, Inc., 431
North Pennsylvania Street, Indianapolis, Indiana 46204 (the "Transfer Agent") to
serve as transfer agent, dividend paying agent and shareholder service agent.
The Trust retains AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive,
Suite 200, Southlake, Texas 76092 (the "Distributor") to act as the principal
distributor of the Fund's shares. The services of the Administrator, Transfer
Agent and Distributor are operating expenses paid by the Advisor.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Advisor may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. The Advisor (not the Fund) may pay certain financial
institutions (which may include banks, brokers, securities dealers and other
industry professionals) a fee for providing distribution related services and/or
for performing certain administrative servicing functions for Fund shareholders
to the extent these institutions are allowed to do so by applicable statute,
rule or regulation.
INVESTMENT POLICIES AND TECHNIQUES AND RISK FACTORS
This section contains general information about various types of
securities and investment techniques that the Fund may purchase or employ. The
Statement of Additional Information provides more information.
EQUITY SECURITIES. Equity securities consist of common stock,
convertible preferred stock, convertible bonds, rights and warrants. Common
stocks, the most familiar type, represent an equity (ownership) interest in a
corporation. Convertible stocks and bonds are securities that can be converted
into common stock pursuant to their terms. Warrants are options to purchase
equity securities at a specified price for a specific time period. Rights are
similar to warrants, but normally have a short duration and are distributed by
the issuer to its shareholders. Although equity securities have a history of
long term growth in value, their prices fluctuate based on changes in a
company's financial condition and on overall market and economic conditions. The
Fund may not invest more than 5% of its net assets in either convertible
preferred stocks or convertible bonds. The Advisor will limit the Fund's
investment in convertible securities to investment grade (those rated BBB or
better by Moodys Investors Service, Inc. or Standard & Poor's Rating Group) or,
if unrated, of comparable quality in the opinion of the Advisor.
Equity securities include S&P Depositary Receipts ("SPDRs") and other
similar instruments. SPDRs are shares of a publicly traded unit investment trust
which owns the stock included in the S&P 500 Index, and changes in the price of
the SPDRs track the movement of the Index relatively closely. Similar
instruments may track the movement of other stock indexes.
The Fund may invest up to 20% of its net assets in foreign equity
securities by purchasing American Depositary Receipts (ADRs). ADRs are
certificates evidencing ownership of shares of a foreign-based issuer held in
trust by a bank or similar financial institution. They are alternatives to the
direct purchase of the underlying securities in their national markets and
currencies. To the extent that the Fund does invest in ADRs, such investments
may be subject to special risks. For example, there may be less information
publicly available about a foreign company than about a U.S. company, and
foreign companies are not generally subject to accounting, auditing and
financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities.
Investments in equity securities are subject to inherent market risks
and fluctuations in value due to earnings, economic conditions and other factors
beyond the control of the Advisor. As a result, the return and net asset value
of the Fund will fluctuate. Securities in the Fund's portfolio may decrease in
value or not increase as much as the market as a whole. Although profits in some
Fund holdings may be realized quickly, it is not expected that most investments
will appreciate rapidly.
At times, a portion of the Fund may be invested in companies with short
operating histories ("new issuers") and in initial public offerings ("IPOs"),
and such investments could be considered speculative. New issuers are relatively
unseasoned and may lack sufficient resources, may be unable to generate
internally the funds necessary for growth and may find external financing to be
unavailable on favorable terms or even totally unavailable. New issuers will
often be involved in the development or marketing of a new product with no
established market, which could lead to significant losses. To the extent the
Fund invests in smaller capitalization companies, the Fund will also be subject
to the risks associated with such companies. Smaller capitalization companies,
IPOs and new issuers may experience lower trading volumes than larger
capitalization, established companies and may experience higher growth rates and
higher failure rates than larger capitalization companies. Smaller
capitalization companies, IPOs and new issuers also may have limited product
lines, markets or financial resources and may lack management depth.
REAL ESTATE INVESTMENT TRUSTS (REITS). The Fund may invest up to 20% of
its assets in real estate investment trusts ("REITs"). A REIT is a corporation
or business trust that invests substantially all of its assets in interests in
real estate. Equity REITs are those which purchase or lease land and buildings
and generate income primarily from rental income. Equity REITs may also realize
capital gains (or losses) when selling property that has appreciated (or
depreciated) in value. Mortgage REITs are those which invest in real estate
mortgages and generate income primarily from interest payments on mortgage
loans. Hybrid REITs generally invest in both real property and mortgages. In
addition, REITs are generally subject to risks associated with direct ownership
of real estate, such as decreases in real estate values or fluctuations in
rental income caused by a variety of factors, including increases in interest
rates, increases in property taxes and other operating costs, casualty or
condemnation losses, possible environmental liabilities and changes in supply
and demand for properties. Risks associated with REIT investments include the
fact that equity and mortgage REITs are dependent upon specialized management
skills and are not fully diversified. These characteristics subject REITs to the
risks associated with financing a limited number of projects. They are also
subject to heavy cash flow dependency, defaults by borrowers, and
self-liquidation. Additionally, equity REITs may be affected by any changes in
the value of the underlying property owned by the trusts, and mortgage REITs may
be affected by the quality of any credit extended.
FIXED INCOME SECURITIES. Although the Fund intends to invest primarily
in U.S. common stocks, the Advisor reserves the right, during periods of
unusually high interest rates or unusual market conditions, to invest in fixed
income securities for preservation of capital, total return and capital gain
purposes, if the Advisor believes that such a position would best serve the
Fund's investment objective. Fixed income securities include corporate debt
securities, U.S. government securities and participation interests in such
securities. Fixed income securities are generally considered to be interest rate
sensitive, which means that their value will generally decrease when interest
rates rise and increase when interest rates fall. Securities with shorter
maturities, while offering lower yields, generally provide greater price
stability than longer term securities and are less affected by changes in
interest rates.
CORPORATE DEBT SECURITIES - Corporate debt securities are long
and short term debt obligations issued by companies (such as publicly issued and
privately placed bonds, notes and commercial paper). The Advisor considers
corporate debt securities to be of investment grade quality if they are rated
BBB or higher by Standard & Poor's Corporation, or Baa or higher by Moody's
Investors Services, Inc., or if unrated, determined by the Advisor to be of
comparable quality. Investment grade debt securities generally have adequate to
strong protection of principal and interest payments. In the lower end of this
category, credit quality may be more susceptible to potential future changes in
circumstances and the securities have speculative elements.
U.S. GOVERNMENT OBLIGATIONS - U.S. government obligations may
be backed by the credit of the government as a whole or only by the issuing
agency. U.S. Treasury bonds, notes, and bills and some agency securities, such
as those issued by the Federal Housing Administration and the Government
National Mortgage Association (GNMA), are backed by the full faith and credit of
the U.S. government as to payment of principal and interest and are the highest
quality government securities. Other securities issued by U.S. government
agencies or instrumentalities, such as securities issued by the Federal Home
Loan Banks and the Federal Home Loan Mortgage Corporation, are supported only by
the credit of the agency that issued them, and not by the U.S. government.
Securities issued by the Federal Farm Credit System, the Federal Land Banks, and
the Federal National Mortgage Association (FNMA) are supported by the agency's
right to borrow money from the U.S. Treasury under certain circumstances, but
are not backed by the full faith and credit of the U.S. government.
OPTIONS ON STOCKS OR BONDS. The Fund may write covered call options,
and purchase put or call options, on stocks or bonds. A call option gives the
purchaser of the option the right to buy, and obligates the writer to sell, the
underlying security at the exercise price at any time during the option period.
Similarly, a put option gives the purchaser of the option the right to sell, and
obligates the writer to buy the underlying security at the exercise price at any
time during the option period. A covered call option with respect to which the
Fund owns the underlying security sold by the Fund exposes the Fund during the
term of the option to possible loss of opportunity to realize appreciation in
the market price of the underlying security or to possible continued holding of
a security which might otherwise have been sold to protect against depreciation
in the market price of the security.
OPTIONS ON STOCK AND BOND INDICES. The Fund may write covered call
options, and purchase put or call options, on stock or bond indices listed on
domestic and foreign stock exchanges, in lieu of direct investment in the
underlying securities or for hedging purposes. A stock or bond index fluctuates
with changes in the market values of the securities included in the index.
Options on securities indices are generally similar to options on stocks except
that the delivery requirements are different. Instead of giving the right to
take or make delivery of securities at a specified price, an option on a stock
or bond index gives the holders the right to receive a cash "exercise settlement
amount" equal to (a) the amount, if any, by which the fixed exercise price of
the option exceeds (in the case of a put) or is less than (in the case of a
call) the closing value of the underlying index on the date of the exercise,
multiplied by (b) a fixed "index multiplier." To cover the potential obligations
involved in writing call options, the Fund will either (a) hold a portfolio of
stocks substantially replicating the movement of the index, or (b) the Fund will
segregate with the Custodian high grade liquid debt obligations equal to the
market value of the stock index option, marked to market daily. Successful use
by the Fund of options on security indices will be subject to the Advisor's
ability to predict correctly movement in the direction of the security market
generally or of a particular industry. This requires different skills and
techniques than predicting changes in the price of individual securities.
REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements
fully collateralized by obligations of the U.S. Government and its agencies. A
repurchase agreement is a short-term investment in which the purchaser (i.e.,
the Fund) acquires ownership of a U.S. Government or agency obligation (which
may be of any maturity) and the seller agrees to repurchase the obligation at a
future time at a set price, thereby determining the yield during the purchaser's
holding period (usually not more than seven days from the date of purchase). Any
repurchase transaction in which the Fund engages will require full
collateralization of the seller's obligation during the entire term of the
repurchase agreement. In the event of a bankruptcy or other default of the
seller, the Fund could experience both delays in liquidating the underlying
security and losses in value. However, the Fund intends to enter into repurchase
agreements only with Firstar Bank, N.A. (the Fund's Custodian), other banks with
assets of $1 billion or more and registered securities dealers determined by the
Advisor (subject to review by the Board of Trustees) to be creditworthy. The
Advisor monitors the creditworthiness of the banks and securities dealers with
which the Fund engages in repurchase transactions.
GENERAL INFORMATION
FUNDAMENTAL POLICIES. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
PORTFOLIO TURNOVER. From time to time, the Fund may purchase or sell
securities for short term trading purposes, as a result, short term profits or
losses may be realized by the Fund. It is anticipated that the Fund's annual
portfolio turnover rate will not exceed 150%, and may be as low as 50%,
depending on market conditions. To the extent the Fund has high portfolio
turnover, it will generally incur higher brokerage commissions than those
incurred by a fund with a lower portfolio turnover rate, and the higher turnover
rate may result in the realization for federal tax purposes of more net capital
gains, which may be ordinary income.
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights. Prior to the public offering of the Fund, Kenneth D. Trumpfheller
purchased for investment all of the outstanding shares of the Fund and may be
deemed to control the Fund.
Shareholder inquiries should be made by telephone to 888-696-2733, or
by mail, c/o Unified Fund Services, Inc., to P.O. Box 6110, Indianapolis,
Indiana 46206-6110.
YEAR 2000 ISSUE. Like other mutual funds, financial and business
organizations and individuals around the world, the Fund could be adversely
affected if the computer systems used by the Advisor, Administrator or other
service providers to the Fund do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known as
the "Year 2000 Issue." The Advisor and Administrator have taken steps that they
believe are reasonably designed to address the Year 2000 Issue with respect to
computer systems that are used and to obtain reasonable assurances that
comparable steps are being taken by the Fund's major service providers. At this
time, however, there can be no assurance that these steps will be sufficient to
avoid any adverse impact on the Fund. In addition, the Advisor cannot make any
assurances that the Year 2000 Issue will not affect the companies in which the
Fund invests or worldwide markets and economies.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also advertise performance information (a
"non-standardized quotation") which is calculated differently from "average
annual total return." A non-standardized quotation of total return may be a
cumulative return which measures the percentage change in the value of an
account between the beginning and end of a period, assuming no activity in the
account other than reinvestment of dividends and capital gains distributions. A
non-standardized quotation may also be an average annual compounded rate of
return over a specified period, which may be a period different from those
specified for "average annual total return." In addition, a non-standardized
quotation may be an indication of the value of a $10,000 investment (made on the
date of the initial public offering of the Fund's shares) as of the end of a
specified period. A non-standardized quotation will always be accompanied by the
Fund's "average annual total return" as described above.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index and the Dow Jones Industrial Average.
THE ADVERTISED PERFORMANCE DATA OF THE FUND IS BASED ON HISTORICAL
PERFORMANCE AND IS NOT INTENDED TO INDICATE FUTURE PERFORMANCE. RATES OF TOTAL
RETURN QUOTED BY THE FUND MAY BE HIGHER OR LOWER THAN PAST QUOTATIONS, AND THERE
CAN BE NO ASSURANCE THAT ANY RATE OF TOTAL RETURN WILL BE MAINTAINED. THE
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT A
SHAREHOLDER'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE
SHAREHOLDER'S ORIGINAL INVESTMENT.
INVESTMENT ADVISOR
Columbia Partners, L.L.C., Investment Management
1775 Pennsylvania Ave., N.W.
Washington, D.C. 20006
CUSTODIAN ADMINISTRATOR
Firstar Bank, N.A. AmeriPrime Financial Services, Inc.
425 Walnut Street, M.L. 6118 1793 Kingswood Drive, Suite 200
Cincinnati, Ohio 45202 Southlake, Texas 76092
TRANSFER AGENT (ALL PURCHASES AND DISTRIBUTOR
ALL REDEMPTION REQUESTS) AmeriPrime Financial Securities, Inc.
Unified Fund Services, Inc. 1793 Kingswood Drive, Suite 200
431 North Pennsylvania Street Southlake, Texas 76092
Indianapolis, Indiana 46204
LEGAL COUNSEL INDEPENDENT AUDITORS
Brown Cummins & Brown Co., LPA McCurdy & Associates CPA's, Inc.
3500 Carew Tower 27955 Clemens Road
441 Vine Street Westlake, Ohio 44145
Cincinnati, Ohio 45202
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
<PAGE>
TABLE OF CONTENTS
PAGE
SUMMARY OF FUND EXPENSES 3
THE FUND 4
INVESTMENT OBJECTIVE AND STRATEGIES 4
HOW TO INVEST IN THE FUND 4
HOW TO REDEEM SHARES 6
SHARE PRICE CALCULATION 7
DIVIDENDS AND DISTRIBUTIONS 8
TAXES 8
OPERATION OF THE FUND 9
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS 10
GENERAL INFORMATION 12
PERFORMANCE INFORMATION 13
<PAGE>
COLUMBIA PARTNERS EQUITY FUND
STATEMENT OF ADDITIONAL INFORMATION
April 1, 1999
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Columbia Partners Equity Fund
dated April 1, 1999. A copy of the Prospectus can be obtained by writing the
Transfer Agent at 431 N. Pennsylvania Street, Indianapolis, IN 46204, or by
calling 1-888-696-2733.
7696 3/30/99
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS PAGE
Description Of The Trust.......................................................1
Additional Information About Fund Investments And Risk Considerations..........1
Investment Limitations.........................................................3
The Investment Adviser.........................................................5
Trustees And Officers..........................................................6
Portfolio Transactions And Brokerage...........................................7
Determination Of Share Price...................................................8
Investment Performance.........................................................8
Custodian......................................................................9
Transfer Agent.................................................................9
Accountants....................................................................9
Distributor....................................................................9
<PAGE>
- 5 -
DESCRIPTION OF THE TRUST
Columbia Partners Equity Fund (the "Fund") was organized as a series of
AmeriPrime Funds (the "Trust"). The Trust is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. The Fund is one of a series of funds
currently authorized by the Trustees.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
For information concerning the purchase and redemption of shares of the
Fund, see "How to Invest in the Fund" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Share Price Calculation" in the Fund's
Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objectives and Strategies" and
"Investment Policies and Techniques and Risk Considerations").
A........Option Transactions. An option involves either (a) the right
or the obligation to buy or sell a specific instrument at a specific price until
the expiration date of the option, or (b) the right to receive payments or the
obligation to make payments representing the difference between the closing
price of a market index and the exercise price of the option expressed in
dollars times a specified multiple until the expiration date of the option.
Options are sold (written) on securities and market indices. The purchaser of an
option on a security pays the seller (the writer) a premium for the right
granted but is not obligated to buy or sell the underlying security. The
purchaser of an option on a market index pays the seller a premium for the right
granted, and in return the seller of such an option is obligated to make the
payment. A writer of an option may terminate the obligation prior to expiration
of the option by making an offsetting purchase of an identical option. Options
are traded on organized exchanges and in the over-the-counter market. Call
options on securities which the Fund sells (writes) will be covered or secured,
which means that it will own the underlying security; or (for an option on a
stock index) will hold a portfolio of securities substantially replicating the
movement of the index (or, to the extent it does not hold such a portfolio, will
maintain a segregated account with the Custodian of high quality liquid debt
obligations equal to the market value of the option, marked to market daily).
When the Fund writes call options, it may be required to maintain a margin
account, to pledge the underlying securities or U.S. government obligations or
to deposit liquid high quality debt obligations in a separate account with the
Custodian.
The purchase and writing of options involves certain risks; for
example, the possible inability to effect closing transactions at favorable
prices and an appreciation limit on the securities set aside for settlement, as
well as (in the case of options on a stock index) exposure to an indeterminate
liability. The purchase of options limits the Fund's potential loss to the
amount of the premium paid and can afford the Fund the opportunity to profit
from favorable movements in the price of an underlying security to a greater
extent than if transactions were effected in the security directly. However, the
purchase of an option could result in the Fund losing a greater percentage of
its investment than if the transaction were effected directly. When the Fund
writes a covered call option, it will receive a premium, but it will give up the
opportunity to profit from a price increase in the underlying security above the
exercise price as long as its obligation as a writer continues, and it will
retain the risk of loss should the price of the security decline. When the Fund
writes a covered call option on a stock index, it will assume the risk that the
price of the index will rise above the exercise price, in which case the Fund
may be required to enter into a closing transaction at a loss.
B........Convertible Securities. A convertible security is a bond,
debenture, preferred stock or other security that may be converted into or
exchanged for a prescribed amount of common stock. The Fund may invest up to 5%
of its assets in convertible securities rated BBB or higher by Standard & Poor's
Corporation ("S&P") or by Moody's Investors Services, Inc. ("Moody's"), or if
unrated, determined by the Advisor to be of comparable quality. Generally,
investments in securities in the lower rating categories provide higher yields
but involve greater volatility of price and risk of loss of principal and
interest than investments in securities with higher ratings. Securities rated
lower than Baa by Moody's or BBB by S&P are considered speculative. In addition,
lower ratings reflect a greater possibility of an adverse change in the
financial conditions affecting the ability of the issuer to make payments of
principal and interest. The market price of lower rated securities generally
responds to short term corporate and market developments to a greater extent
than higher rated securities which react primarily to fluctuations in the
general level of interest rates. Lower rated securities will also be affected by
the market's perception of their credit quality and the outlook for economic
growth.
In the past, economic downturns or an increase in interest rates have
under certain circumstances caused a higher incidence of default by the issuers
of these securities and may do so in the future, especially in the case of
highly leverages issuers.
The prices for these securities may be affected by legislative and
regulatory developments. For example, new federal rules require that savings and
loan associations gradually reduce their holdings of high-yield securities. An
effect of such legislation may be to significantly depress the prices of
outstanding lower rated securities. The market for lower rated securities may be
less liquid than the market for higher rated securities. Furthermore, the
liquidity of lower rated securities may be affected by the market's perception
of their credit quality. Therefore, judgment may at times play a greater role in
valuing these securities than in the case of higher rated securities, and it
also may be more difficult during certain adverse market conditions to sell
lower rated securities at their fair value to meet redemption requests or to
respond to changes in the market.
If the rating of a security by S&P or Moody's drops below investment
grade, the Advisor will dispose of the security as soon as practicable
(depending on market conditions) unless the Advisor determines based on its own
credit analysis that the security provides the opportunity of meeting the Fund's
objective without presenting excessive risk. The Advisor will consider all
factors which it deems appropriate, including ratings, in making investment
decisions for the Fund and will attempt to minimize investment risk through
conditions and trends. While the Advisor may refer to ratings, it does not rely
exclusively on ratings, but makes its own independent and ongoing review of
credit quality.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1........Borrowing Money. The Fund will not borrow money, except (a)
from a bank, provided that immediately after such borrowing there is an asset
coverage of 300% for all borrowings of the Fund; or (b) from a bank or other
persons for temporary purposes only, provided that such temporary borrowings are
in an amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2........Senior Securities. The Fund will not issue senior securities.
This limitation is not applicable to activities that may be deemed to involve
the issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and Exchange Commission or its
staff.
3........Underwriting. The Fund will not act as underwriter of
securities issued by other persons. This limitation is not applicable to the
extent that, in connection with the disposition of portfolio securities
(including restricted securities), the Fund may be deemed an underwriter under
certain federal securities laws.
4........Real Estate. The Fund will not purchase or sell real estate.
This limitation is not applicable to investments in marketable securities which
are secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5........Commodities. The Fund will not purchase or sell commodities
unless acquired as a result of ownership of securities or other investments.
This limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6........Loans. The Fund will not make loans to other persons, except
(a) by loaning portfolio securities, (b) by engaging in repurchase agreements,
or (c) by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7........Concentration. The Fund will not invest 25% or more of its
total assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
<PAGE>
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
i........Pledging. The Fund will not mortgage, pledge, hypothecate or
in any manner transfer, as security for indebtedness, any assets of the Fund
except as may be necessary in connection with borrowings described in limitation
(1) above. Margin deposits, security interests, liens and collateral
arrangements with respect to transactions involving options, futures contracts,
short sales and other permitted investments and techniques are not deemed to be
a mortgage, pledge or hypothecation of assets for purposes of this limitation.
ii.......Borrowing. The Fund will generally borrow only for liquidity
purposes. The Fund will not purchase any security while borrowings (including
reverse repurchase agreements) representing more than 5% of its total assets are
outstanding. The Fund will not enter into reverse repurchase agreements.
iii......Margin Purchases. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv.......Short Sales. The Fund will not effect short sales of
securities.
v........Options. The Fund will not purchase or sell puts, calls,
options or straddles, except as described in the Prospectus and the Statement of
Additional Information.
vi. Restricted/Illiquid Securities. The Fund will not purchase restricted or
illiquid securities.
THE INVESTMENT ADVISOR
The Fund's investment advisor is Columbia Partners, L.L.C., Investment
Management, 1775 Pennsylvania Avenue, N.W., Washington, D.C. 20006. Galway
Capital Management, L.L.C., 700 13th Street, N.W., Suite 1169, Washington, D.C.
20005, ("Galway") may be deemed to be a "controlling person" of the Advisor due
to its share of ownership of the Advisor. However, as Galway is a venture
capital firm, the Advisor does not believe itself to be controlled by Galway.
Under the terms of the management agreement (the "Agreement"), the
Advisor manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Advisor a
fee computed and accrued daily and paid monthly at an annual rate of 1.20% of
the average daily net assets of the Fund. The Advisor may waive all or part of
its fee, at any time, and at its sole discretion, but such action shall not
obligate the Advisor to waive any fees in the future.
The Advisor retains the right to use the name "Columbia Partners" or
any variation thereof in connection with another investment company or business
enterprise with which the Advisor is or may become associated. The Trust's right
to use the name "Columbia Partners" or any variation thereof automatically
ceases ninety days after termination of the Agreement and may be withdrawn by
the Advisor on ninety days written notice.
The Advisor may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
==================================== ---------------- ======================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
==================================== ---------------- ======================================================================
<S> <C> <C>
*Kenneth D. Trumpfheller President and President, Treasurer and Secretary of AmeriPrime Financial Services,
Age: 40 Trustee Inc., the Fund's administrator, and AmeriPrime Financial Securities,
1793 Kingswood Drive Inc., the Fund's distributor, since 1994. Prior to December, 1994,
Suite 200 a senior client executive with SEI Financial Services.
Southlake, Texas 76092
==================================== ---------------- ======================================================================
Paul S. Bellany Secretary, Secretary, Treasurer and Chief Financial Officer of AmeriPrime
Age: 39 Treasurer Financial Services, Inc. and AmeriPrime Financial Securities, Inc.;
1793 Kingswood Drive various positions with Fidelity Investments from 1987 to 1998; most
Suite 200 recently Fund Reporting Unit Manager.
Southlake, Texas 76092
==================================== ---------------- ======================================================================
Steve L. Cobb Trustee President of Chandler Engineering Company, L.L.C., oil and gas
Age: 41 services company; various positions with Carbo Ceramics, Inc., oil
2001 Indianwood Avenue field manufacturing/supply company, from 1984 to 1997, most recently
Broken Arrow, OK 74012 Vice President of Marketing.
==================================== ================ ======================================================================
Gary E. Hippenstiel Trustee Director, Vice President and Chief Investment Officer of Legacy
Age: 51 Trust Company since 1992; President and Director of Heritage Trust
600 Jefferson Street Company from 1994-1996; Vice President and Manager of Investments of
Suite 350 Kanaly Trust Company from 1988 to 1992.
Houston, TX 77063
==================================== ================ ======================================================================
</TABLE>
The compensation paid to the Trustees of the Trust for the fiscal year
ended October 31, 1998 is set forth in the following table. Trustee fees are
Trust expenses and each series of the Trust pays a portion of the Trustee fees.
<TABLE>
<CAPTION>
==================================== ----------------------- ==================================
Aggregate Total Compensation
Compensation from Trust (the Trust is
Name From Trust not in a Fund Complex)
==================================== ----------------------- ==================================
<S> <C> <C>
Kenneth D. Trumpfheller 0 0
==================================== ----------------------- ==================================
Steve L. Cobb $4,000 $4,000
==================================== ======================= ==================================
Gary E. Hippenstiel $4,000 $4,000
==================================== ======================= ==================================
</TABLE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Advisor is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Advisor seeks the best qualitative execution for the Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Advisor generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Advisor is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Advisor determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Advisor's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Advisor in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Advisor in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Advisor, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Advisor that the review and study of the research and other information will not
reduce the overall cost to the Advisor of performing its duties to the Fund
under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Advisor's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will be made on a pro rata
basis.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return for the period indicated that would equate the initial amount invested
to the ending redeemable value, according to the following formula:
.................. P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as the Fund's transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' Inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, Unified provides the Fund with fund accounting services, which
includes certain monthly reports, record-keeping and other management-related
services. For its services as fund accountant, Unified receives an annual fee
from the Advisor equal to 0.0275% of the Fund's assets up to $100 million
(subject to various monthly minimum fees, the maximum being $2,000 per month for
assets of $20 to $100 million).
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending October 31, 1999. McCurdy & Associates performs an
annual audit of the Funds' financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the exclusive agent for distribution of shares of the
Fund. The Distributor is obligated to sell the shares of the Fund on a best
efforts basis only against purchase orders for the shares. Shares of the Fund
are offered to the public on a continuous basis.
