THE JUMPER STRATEGIC ADVANTAGE FUND
STATEMENT OF ADDITIONAL INFORMATION
March 15, 1999
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the Prospectus of The Jumper Strategic Advantage Fund
dated July 15, 1998 and the supplement to the Prospectus dated March 15, 1999. A
copy of the Prospectus and supplement can be obtained by writing he Transfer
Agent at 431 North Pennsylvania Street, Indianapolis, Indiana 46204, or by
calling 1-888-879-5723.
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS PAGE
Description Of The Trust......................................................3
Additional Information About Fund Investments And Risk Considerations..........3
Market Neutral Investment Strategies ..........................................5
Strategic Transactions.........................................................5
Investment Limitations .......................................................8
The Investment Advisor ........................................................9
Trustees And Officers.........................................................11
Portfolio Transactions And Brokerage..........................................11
Determination Of Share Price..................................................12
Investment Performance........................................................13
Custodian.....................................................................13
Transfer Agent................................................................14
Accountants...................................................................14
Distributor ..................................................................14
Financial Statements..........................................................14
DESCRIPTION OF THE TRUST
The Jumper Strategic Advantage 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.
As of March 15, 1999 the following persons may be deemed to beneficially
own 5% or more of the Fund: Sun Trust Bank, Custodian for a foundation, P.O. Box
105870, Atlanta , Georgia 30348, 92. 66%; Tennessee Aquarium, P.O. Box 11048,
Chattanooga, Tennessee, 37401, 7.34%. As a result, Sun Trust Bank may be deemed
to control the Fund. The officers and Trustees as a group beneficially owned, as
of March 15, 1999, less than 1% of the Fund.
Upon sixty days prior written notice to shareholders, the Fund may make
redemption payments in whole or in part in securities or other property if the
Trustees determine that existing conditions make cash payments undesirable. For
other 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.
A. Illiquid Securities. The Fund will not invest more than 15% of its
net assets in illiquid securities. Securities may be illiquid because they are
unlisted, subject to legal restrictions on resale or due to other factors which,
in the adviser's opinion, raise a question concerning the fund's ability to
liquidate the securities in a timely and orderly way without substantial loss.
Underlying funds and over-the-counter options are frequently illiquid. Illiquid
securities may also present difficult valuation issues.
B. Pricing of Portfolio Securities. There is no active market for the
securities of underlying funds which the Fund invests in. Underlying funds
typically value, and stand ready to redeem, their securities based upon current
net asset value, which they provide to shareholders on a periodic basis. The
Board of Trustees has approved procedures whereby the Fund's investment in
securities for which market quotations are not readily available (including
securities issued by underlying funds) may be established in good faith at fair
value on a daily basis. The procedures provide that the fair value of securities
issued by underlying funds is determined based upon current estimates of net
asset value provided to the Fund by the underlying funds. While the Fund has
adopted pricing procedures which address these pricing issues, there can be no
guarantee that such securities are accurately valued on a daily basis when the
Fund determines its net asset value per share.
C. Legal Investment Limitations on Investments in Underlying
Securities. Like all mutual funds publicly sold in the United States, the Fund
is subject to investment limitations imposed by the Investment Company Act of
1940 ("1940 Act"). Section 12(d)(1) of the 1940 Act limits the Fund's ability to
invest in other investment companies, including underlying funds. In general,
sub-section (A) prohibits the Fund from: (1)purchasing more than 3% of the
voting stock of an investment company: (2)investing more than 5% of the Fund's
total assets in an investment company; or (3) investing more than 10% of the
Fund's total assets in all investment companies combined. Sub-section (F)
provides an exception from the prohibitions established in sub-section (A) if:
(1) the Fund does not own more than 3% of the outstanding stock of any
investment company; (2) the Fund does not impose a sales load of more than 1.5%
(the Fund is only sold on a no-load basis); and (3)the investment companies are
not required to redeem more than 1% of their outstanding shares within any 30
day period. This discussion provides only a summary of section 12(d)(1) of the
1940 Act.
D. Repurchase Agreements. A repurchase agreement is a short-term
investment in which the purchaser (i.e., the Fund) acquires ownership of a U.S.
Government 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 the 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 credit worthy.
The Advisor monitors the creditworthiness of the banks and securities dealers
with which the Fund engages in repurchase transactions.
E. Reverse Repurchase Agreements. Reverse repurchase agreements involve
sales of portfolio securities by the Fund to member banks of the Federal Reserve
System or recognized securities dealers, concurrently with an agreement by the
Fund to repurchase the same securities at a later date at a fixed price, which
is generally equal to the original sale price plus interest. The Fund retains
record ownership and the right to receive interest and principal payments on the
portfolio security involved. The Fund's objective in such a transaction would be
to obtain funds to pursue additional investment opportunities whose yield would
exceed the cost of the reverse repurchase transaction. Generally, the use of
reverse repurchase agreements should reduce portfolio turnover and increase
yield. In connection with each reverse repurchase agreement, the Fund will
direct its Custodian to place cash or U.S. government obligations in a separate
account in an amount equal to the repurchase price. In the event of bankruptcy
or other default by the purchaser, the Fund could experience both delays in
repurchasing the portfolio securities and losses.
F. Borrowing and Leveraging. The Fund may have to deal with
unpredictable cash flows as shareholders purchase and redeem shares. Under
adverse conditions, the Fund might have to sell portfolio securities to raise
cash to pay for redemptions at a time when investment considerations would not
favor such sales. In addition, frequent purchases and sales of portfolio
securities tend to decrease the Funds' performance by increasing transaction
expenses.
The Fund may deal with unpredictable cash flows by borrowing money. Through
such borrowings the Fund may avoid selling portfolio securities to raise cash to
pay for redemptions at a time when investment considerations would not favor
such sales. In addition, the Fund's performance may be improved due to a
decrease in the number of portfolio transactions. After borrowing money, if
subsequent shareholder purchases do not provide sufficient cash to repay the
borrowed monies, the Fund will liquidate portfolio securities in an orderly
manner to repay the borrowed monies.
To the extent that a Fund borrows money prior to selling securities, or if
the Fund borrows money for the purpose of purchasing additional portfolio
securities, the Fund would be leveraged such that the Fund's net assets may
appreciate or depreciate in value more than an unleveraged portfolio of similar
securities. Since substantially all of the Fund's assets will fluctuate in value
and whereas the interest obligations on borrowings may be fixed, the net asset
value per share of the Fund will increase more when the Fund's portfolio assets
increase in value and decrease more when the Fund's portfolio assets decrease in
value than would otherwise be the case. Moreover, interest costs on borrowings
may fluctuate with changing market rates of interest and may partially offset or
exceed the returns which the Funds earn on portfolio securities. Under adverse
conditions, the Funds might be forced to sell portfolio securities to meet
interest or principal payments at a time when market conditions would not be
conducive to favorable selling prices for the securities.
MARKET NEUTRAL INVESTMENT STRATEGIES
To implement market neutral investment strategies, managers attempt to
purchase a portfolio of undervalued securities and short sell a portfolio of
overvalued securities with similar investment characteristics. Factors
considered when balancing a market neutral portfolio include market sectors and
market capitalization of equity securities, and cash flow, credit quality, and
duration of fixed income securities. Market neutral strategies may involve
purchasing and selling call and put options on either an individual security or
an index. In some cases, futures and options on futures may be used to effect
the desired risk/reward ratio. Market neutral investing does not depend upon any
particular market direction or favorable general economic conditions and thus
may be profitable during all economic cycles, including periods of economic
uncertainty and declining financial markets.
STRATEGIC TRANSACTIONS
The Fund, or the underlying funds, may purchase and sell exchange-listed
and over-the-counter put and call options on securities, equity and fixed-income
indices and other financial instruments, and purchase and sell financial futures
contracts and options thereon (collectively, all the above are called "Strategic
Transactions"). The Fund may engage in Strategic Transaction for hedging, risk
management, portfolio management, or speculation, and it will comply with
applicable regulatory requirements when implementing these strategies,
techniques and instruments.
Strategic Transactions may be used to attempt (1) to protect against
possible changes in the market value of securities held in or to be purchased
for a Fund's portfolio resulting from securities markets or currency
exchangerate fluctuations, (2) to protect a Fund's unrealized gains in the value
of its portfolio securities, (3) to facilitate the sale of such securities for
investment purposes, (4) to manage the effective maturity or duration of a
Fund's portfolio, (5) to establish a position in the derivatives markets as a
temporary substitute for purchasing or selling particular securities, (6) or to
gain additional market exposure and/or leverage in an attempt to enhance
investment returns. The Fund's ability to successfully use these Strategic
Transactions will depend upon the Advisor's ability to predict pertinent market
movements, and cannot be assured. Engaging in Strategic Transactions will
increase transaction expenses and may result in a loss that exceeds the
principal invested in the transactions.
Strategic Transactions have risk associated with them including possible
default by the other party to the transaction, illiquidity and, to the extent
the Advisor's view as to certain market movements is incorrect, the risk that
the use of such Strategic Transactions could result in losses greater than if
they had not been used. Use of put and call options may result in losses to the
Fund. For example, selling call options may force the sale of portfolio
securities at inopportune times or for lower prices than current market values.
Selling call options may also limit the amount of appreciation a Fund can
realize on its investments or cause a Fund to hold a security it might otherwise
sell. The use of currency transactions can result in a Fund incurring losses as
a result of a number of factors including the imposition of exchange controls,
suspension of settlements, or the inability to deliver or receive a specified
currency. The use of options and futures transactions entails certain other
risks. In particular, the variable degree of correlation between price movements
of futures contracts and price movements in the related portfolio position of a
Fund creates the possibility that losses on the hedging instrument may be
greater than gains in the value of a Fund's position. In addition, futures and
option markets may not be liquid in all circumstances and certain
over-the-counter options may have no markets. As a result, in certain markets, a
Fund might not be able to close out a transaction, and substantial losses might
be incurred. However, the use of futures and options transactions for hedging
should tend to minimize the risk of loss due to a decline in the value of a
hedged position. At the same time they tend to limit any potential gain that
might result from an increase in value of such position. Finally, the daily
variation margin requirement for futures contracts would create a greater on
going potential financial risk than would purchases of options, where the
exposure is limited to the cost of the initial premium. Losses resulting from
the use of Strategic Transactions would reduce net asset value, and possibly
income, and such losses can be greater than if the Strategic Transactions had
not been used.
The Fund's activities involving Strategic Transactions may be limited by
the requirements of Subchapter M of the Internal Revenue Code for qualification
as a regulated investment company.
Put and Call Options. The Fund may purchase and sell (issue) both put and
call options. The Fund may also enter into transactions to close out its
investment in any put or call options. A put option gives the purchaser of the
option, upon payment of a premium, the right to sell, and the issuer of the
option the obligation to buy the underlying security, commodity, index, currency
or other instrument at the exercise price. For instance, the Fund's purchase of
a put option on a security might be designed to protect its holdings in the
underlying instrument (or, in some cases, a similar instrument) against a
substantial decline in the market value by giving the Fund the right to sell
such instrument at the option exercise price. A call option, upon payment of a
premium, gives the purchaser of the option the right to buy, and the issuer the
obligation to sell, the underling instrument at the exercise price. The Fund's
purchase of a call option on a security, financial future, index currency or
other instrument might be intended to protect the Fund against an increase in
the price of the underlying instrument that it intends to purchase in the future
by fixing the price at which it may purchase such instrument. An "American
style" put or call option may be exercised at any time during the option period
while a "European style" put or call option may be exercised only upon
expiration or during a fixed period prior thereto.
The Fund is authorized to purchase and sell both exchange listed options
and over-the-counter options ("OTC options"). Exchange listed options are issued
by a regulated intermediary such as the Options Clearing Corporation("OCC"),
which guarantees the performance of the obligations of the parties to such
options. OTC options are purchased from or sold to securities dealers, financial
institutions or other parties, ("Counterparty(ies)"), through direct bilateral
agreement with the Counter party. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option are set by negotiation of the parties. Unless the parties provide for
it, there is no central clearing or guaranty function in an OTC option.
The Fund's ability to close out its position as a purchaser or seller of a
put or call option is dependent, in part, upon the liquidity of the market for
that particular option. Exchange listed options, because they are standardized
and not subject to Counterparty credit risk, are generally more liquid than OTC
options. There can be no guarantee that a Fund will be able to close out an
option position, whether in exchange listed options or OTC options, when
desired. An inability to close out its options positions may reduce the Fund's
anticipated profits or increase its losses.
If the Counterparty to an OTC option fails to make or take delivery of the
security, currency or other instrument underlying an OTC option it has entered
into with a Fund, or fails to make a cash settlement payment due in accordance
with the terms of that option, a Fund may lose any premium it paid for the
option as well as any anticipated benefit of the transaction. Accordingly, the
Advisor must assess the creditworthiness of each such Counterparty or any
guarantor or credit enhancement of the Counterparty's credit to determine the
likelihood that the terms of the OTC option will be satisfied.
The Fund will realize a loss equal to all or a part of the premium paid for
an option if the price of the underlying security, commodity, index, currency or
other instrument security decreases or does not increase by more than the
premium (in the case of a call option), or if the price of the underlying
security, commodity, index, currency or other instrument increases or does not
decrease by more than the premium (in the case of a put option). A Fund will not
purchase any option if, immediately thereafter, the aggregate market value of
all outstanding options purchased by the Fund would exceed 5% of the Fund's
total assets.
If the Fund sells (i.e., issues) a call option, the premium that it
receives may serve as a partial hedge, to the extent of the option premium,
against a decrease in the value of the underlying securities or instruments in
its portfolio, or may increase the Fund's income. If the Fund sells (i.e.,
issues) a put option, the premium that it receives may serve to reduce the cost
of purchasing the underlying security, to the extent of the option premium, or
may increase the Fund's capital gains. All options sold by the Fund must be
"covered" (i.e., the Fund must either be long (when selling a call option) or
short (when selling a put option), the securities or futures contract subject to
the calls or must meet the asset segregation requirements described below as
long as the option is outstanding. Even though a Fund will receive the option
premium to help protect it against loss or reduce its cost basis, an option sold
by the Fund exposes the Fund during the term of the option to possible loss.
When selling a call, the Fund is exposed to the loss of opportunity to realize
appreciation in the market price of the underlying security or instrument, and
the transaction may require the Fund to hold a security or instrument that it
might otherwise have sold. When selling a put, the Fund is exposed to the
possibility of being required to pay greater than current market value to
purchase the underlying security, and the transaction may require the Fund to
maintain a short position in a security or instrument it might otherwise not
have maintained.
Futures Contracts. The Fund may enter into financial futures contracts or
purchase or sell put and call options on such futures as a hedge against
anticipated interest rate, currency or equity market changes, for duration
management and for risk management purposes. Futures are generally bought and
sold on the commodities exchange where they are listed with payment of an
initial variation margin as described below. The sale of a futures contract
creates a firm obligation by a Fund, as seller, to deliver to the buyer the
specific type of financial instrument called for in the contract at a specific
future time for a specified price (or, with respect to index futures and
Eurodollar instruments, the net cash amount). Options on futures contracts are
similar to options on securities except that an option on a futures contract
gives the purchaser the right in return for the premium paid to assume a
position in a futures contract and obligates the seller to deliver such
position.
The Fund's use of financial futures and options thereon will in all cases
be consistent with applicable regulatory requirements and in particular the
rules and regulations of the CFTC and will be entered into only for bonafide
hedging, risk management (including duration management) or other portfolio
management purposes. Typically, maintaining a futures contract or selling an
option thereon requires a Fund to deposit with a financial intermediary as
security for its obligations an amount of cash or other specified assets(initial
margin) that initially is typically 1% to 10% of the face amount of the contract
(but may be higher in some circumstances). Additional cash or assets(variation
margin) may be required to be deposited thereafter on a daily basis as the
marked-to-market value of the contract fluctuates. The purchase of an option on
financial futures involves payment of a premium for the option without any
further obligation on the part of the purchaser. If a Fund exercises an option
on a futures contract, it will be obligated to post initial margin (and
potentially subsequent variation margin) for the resulting futures position just
as it would for any futures position. Futures contracts and options thereon are
generally settled by entering into an offsetting transaction, but there can be
no assurance that the position can be offset, before settlement, at an
advantageous price, nor that delivery will occur.
The Fund will not enter into a futures contract or related option(except
for closing transactions) if, immediately afterwards, the sum of the amount of
its initial margin and premiums on open futures contracts and options thereon
would exceed 5% of the Fund's total assets (taken at current value).However, in
the case of an option that is in-the-money at the time of the purchase, the
in-the-money amount may be excluded in calculating the 5% limitation. The
segregation requirements with respect to futures contracts and options thereon
are described below.
Use of Segregated and Other Special Accounts. Many Strategic Transactions,
in addition to other requirements, require that the Fund segregate liquid high
grade assets with its custodian to the extent that the Fund's obligations are
not otherwise "covered" through ownership of the underlying security, financial
instrument or currency. The Fund may place up to 100% of its assets in
segregated accounts. In general, either the full amount of any obligation of the
Fund to pay or deliver securities or assets must be covered at all times by the
securities, instruments or currency required to be delivered, or subject to any
regulatory restrictions, an amount of cash or liquid high grade debt securities
at least equal to the current amount of the obligation must either be identified
as being restricted in the Fund's accounting records or physically segregated in
a separate account at that Fund's custodian. The segregated assets cannot be
sold or transferred unless equivalent assets are substituted in their place or
it is no longer necessary to segregate them. For the purpose of determining the
adequacy of the liquid securities that have been restricted, the securities will
be valued at market or fair value. If the market or fair value of such
securities declines, additional cash or liquid securities will be restricted on
a daily basis so that the value of the restricted cash or liquid securities,
when added to the amount deposited with the broker as margin, equals the amount
of such commitments by the Fund.
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 this 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.
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 merge, consolidation or
acquisition, dispose of all of the securities of such issuer so acquired or such
portion thereof as shall bring the total investment there in within the
limitations imposed by said paragraphs above as of the date of consummation.
THE INVESTMENT ADVISOR
The Fund's investment advisor is The Jumper Group, Inc. Jay C. Jumper maybe
deemed to be a controlling person of the Advisor due to his ownership of the
shares of the corporation.
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, expenses
which the Fund is authorized to pay pursuant to the Distribution Plan, 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 0.75%.
The Advisor retains the right to use the name "Jumper" in connection with
another investment company or business enterprise with which the Advisor may
become associated. The Trust's right to use the name "Jumper" 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>
<S> <C> <C>
==================================== ---------------- ======================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
==================================== ---------------- ======================================================================
*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.
===================== ----------------------- ==================================
Aggregate Total Compensation
Compensation from Trust (the Trust is
Name from Trust not in a Fund Complex)
===================== ----------------------- ==================================
Kenneth D. Trumpfheller 0 0
===================== ----------------------- ==================================
Steve L. Cobb $4,000 $4,000
===================== ======================= ==================================
Gary E. Hippenstiel $4,000 $4,000
===================== ======================= ==================================
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 normally be made by random client selection.
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
everyday 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
(over the one and five year periods and the period from initial public offering
through the end of the Fund's most recent fiscal year) 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.
In addition to providing average annual total return, the Fund may also
provide non-standardized quotations of total return for differing periods and
may provide 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.
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 cash equivalent market in general. For
example, the Fund may use the Donahue Money Market Index, 90 day treasury bills,
or other money market index published by an independent third party.
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 Morning star, 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,
safekeeping 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., 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 shareholder service functions. In addition, Unified Fund Services, Inc.
provides the Fund with certain monthly reports and record-keeping services. Fund
accounting is provided by American Data Services, Inc.("ADS"), Hauppauge
Corporate Center, 150 Motor Parkway, Hauppauge, New York 11760. ADS receives an
annual fee equal to .0275% of average net assets, subject to a minimum monthly
fee of $800 to $2,000 based on net assets.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake, Ohio
44145, has been selected as independent public accountants for the Fund for the
fiscal year ending June 30, 1999. McCurdy & Associates performs an annual audit
of the Fund's 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.
FINANCIAL STATEMENTS
The Fund will send shareholders annual and semi-annual reports as they
become available.
<PAGE>
THE JUMPER STRATEGIC ADVANTAGE FUND
SUPPLEMENT DATED MARCH 15, 1999 TO
PROSPECTUS DATED JULY 15, 1998
Effective March 15, 1999, The Jumper Strategic Advantage Fund began
offering two classes of shares. All shares outstanding prior to that date were
redesignated "Institutional Class" shares by the Board of Trustees. This
Supplement to the Prospectus provides information about the "Institutional
Class" and the "Investor Class" and describes the difference between the
classes. The expense information for the Investor Class and Institutional Class
shares is based on estimated amounts for the current fiscal year. Replace the
operating expense table on page 3 with the following:
Investor Class Institutional Class
Annual Fund Operating Expenses (as a percentage of average net assets)1
Management Fees...........................0.75%.....................0.75%
12b-1 Charges.............................0.25%.....................none
Other Expenses 2 .........................0.00%.....................0.00%
Total Fund Operating Expenses 1...........1.00%.....................0.75%
1 The Fund's total operating expenses are equal to the management fee paid
to the Advisor (plus the 12b-1 charges, if applicable) because the Advisor pays
all operating expenses of the Fund except brokerage, taxes, interest, 12b-1
charges, fees and expenses of non-interested person trustees and extraordinary
expenses.
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 .00032 of 1% of average net assets for the first fiscal year.
The tables above are provided to assist an investor in understanding the direct
and indirect costs and expenses that an investor may incur as a shareholder in
the Fund.
Replace the expense example on page 3 with the following:
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
------ -------
Investor Class................ $10 $32
Institutional Class........... $ 8 $24
The Example above should not be considered a representation of future Fund
performance or expenses, both of which may vary.
Read the following in conjunction with the sections titled "The Fund" on page 4
and "Shareholder Rights" on page 17:
The Fund currently offers two classes of shares: "Institutional Class"
shares and "Investor Class" shares. The classes differ as follows: 1) Investor
Class shares pay 12b-1 expenses of 0.25%, and 2) each class may bear differing
amounts of certain class specific expenses.
Replace the first paragraph of the section titled "How To Invest In The Fund" on
page 11 with the following:
Shares of the Fund are sold on a continuous basis, and you may invest any
amount you choose, as often as you wish, subject to the applicable minimum
initial investment. 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 advisor, broker or other intermediary, the account
minimums apply to the omnibus account, not to the account of the individual
investor.
The minimum initial investment for Investor Class shares is $5,000 ($2,000
for IRAs and other retirement plans). The minimum initial investment for
Institutional Class shares is $5 million. The minimum subsequent investment for
either Class is $100.
The Advisor may waive the minimum initial investment amount. The minimum
initial investment amount will be waived for the following investors:
o Banks, bank or broker-affiliated trust departments and savings and loan
associations, in their fiduciary capacity or for their own accounts. To the
extent permitted by regulatory authorities, a bank trust department may
charge fees to clients for whose account it purchases shares.
o Federal and state credit unions.
o Investors purchasing through a broker dealer or other financial institution
authorized by the Distributor to hold shares in an omnibus account.
Investors may be charged a fee by the broker/dealer or other financial
institution for this service.
o Investors purchasing through certain broker/dealer wrap fee investment
programs.
o Broker-dealers who have a sales agreement with the Distributor, and their
registered personnel and employees, including members of the immediate
families of such registered personnel and employees.
o Trustees, directors, officers and employees of the Trust, the Advisor and
service providers to the Trust, including members of the immediate family
of such individuals and employee benefit plans established by such
entities.
o Clients of the Advisor, including members of the immediate family of such
individuals.
When purchasing shares, specify which Class you are purchasing. All
purchase orders that fail to specify a Class will automatically be invested in
Investor Class shares. The differing expenses applicable to the different
classes of the Fund's shares may affect the performance of those classes.
Broker/dealers and others entitled to receive compensation for selling or
servicing Fund shares may receive more with respect to one class than another.
The Board of Trustees of the Trust does not anticipate that there will be any
conflicts among the interests of the holders of the different classes of Fund
shares. On an ongoing basis, the Board will consider whether any such conflict
exists and, if so, take appropriate action.
Add the following section:
DISTRIBUTION PLAN
The Investor Class has adopted a plan, pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Plan"), which permits the Fund to pay for
certain distribution and promotion expenses related to marketing Investor Class
shares. The expenses paid by the Fund pursuant to the Plan shall be determined
by the Trustees of the Trust, but in no event may such expenditures exceed in
any fiscal year 0.25% of the average daily net asset value of the Investor Class
shares. Payments for distribution activities may be made directly by the Fund,
or the Fund's investment Advisor and distributor may pay such expenses and
obtain reimbursement from the Trust. Expenditures pursuant to the Plan and
related agreements will reduce current yield after expenses.
Under the Plan, the Fund may, directly or indirectly, engage in any
activities related to the distribution of Investor Class shares of the Fund
("Shares"), including without limitation the following: (a) payments, including
incentive compensation, to securities dealers or other financial intermediaries,
financial institutions, investment advisors and others that are engaged in the
sale of Shares, or that may be advising shareholders of the Trust regarding the
purchase, sale or retention of Shares; (b) expenses of maintaining personnel
(including personnel of organizations with which the Trust has entered into
agreements related to the Plans) who engage in or support distribution of
Shares; (c) costs of preparing, printing and distributing prospectuses and
statements of additional information and reports of the Fund for recipients
other than existing shareholders of the Fund; (d) costs of formulating and
implementing marketing and promotional activities, including, but not limited
to, sales seminars, direct mail promotions and television, radio, newspaper,
magazine and other mass media advertising; (e) costs of preparing, printing and
distributing sales literature; (f) costs of obtaining such information, analyses
and reports with respect to marketing and promotional activities as the Trust
may, from time to time, deem advisable; and (g) costs of implementing and
operating the Plan.
Replace the section titled "Share Price Calculation" on page 10 with the
following:
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.
Replace the first sentence of the section titled "Dividends and Distributions"
on page 14 with the following:
The Fund intends to declare substantially all of its net investment income
as dividends to its shareholders on a daily basis and to pay such dividends
monthly, and intends to distribute its net long term capital gains and its net
short term capital gains at least once a year.
Replace the fourth paragraph of the section titled "Operation of the Fund" on
page 16 with the following:
The Fund is authorized to pay the Advisor a fee equal to 0.75% of its
average daily net assets. Unlike most other mutual funds, the management fees
paid by the Fund to the Advisor include transfer agency, pricing, custodial,
auditing and legal services, and general administrative and other operating
expenses. The Advisor pays all of the operating expenses of the Fund except
brokerage, taxes, interest, expenses which the Fund is authorized to pay
pursuant to the Distribution Plan, fees and expenses on non-interested person
trustees and extraordinary expenses.
Read the following in conjunction with the sections titled "The Fund" on page 4
and "Shareholder Rights" on page 17:
As of March 15, 1999, Sun Trust Bank, custodian for a foundation, may be
deemed to control the Fund as a result of its beneficial ownership of shares of
the Fund.
