WPG TUDOR FUND
One New York Plaza
New York, NY 10004
June 9, 1995
VIA ELECTRONIC TRANSMISSION
File Desk
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, NW
Washington, DC 20549
Re: WPG Tudor Fund (the "Trust")
File Nos. 2-30456 and 811-1745
Account No. R0000100132
Ladies and Gentlemen:
Pursuant to Rule 497(e) and Rule 101 of Regulation S-T under
the Securities Act of 1933, attached for electronic filing is a
copy the Trust's Prospectus dated April 28, 1995, supplemented as
of June 9, 1995 and tagged to reflect changes in the text. The
tags reflect changes made to the Trust's Prospectus since the
filing made pursuant to Rule 497(c) on May 2, 1995.
Please be advised that the Trust uses a combined Prospectus
relating to all the mutual funds in the Weiss, Peck & Greer Group
of Funds, each of which is filing contemporaneously herewith the
supplemented Prospectus.
If you have any questions concerning the foregoing or the
enclosures, please call Leonard A. Pierce, Esq. of Hale and Dorr,
counsel to the Trust, at (617) 526-6440 (collect).
Very truly yours,
/s/Gerald Murphy
Gerald Murphy
Vice President
Attachment(s)
cc: SEC Operations Center
Christopher P. Harvey, Esq.
Leonard A. Pierce, Esq.
(all w/ copy of submission)
<PAGE>
WEISS, PECK & GREER, L.L.C.
MUTUAL FUNDS
No-Load Open-End Funds
One New York Plaza
New York, New York 10004
1-800-223-3332
WPG Government Money Market Fund
WPG Tax Free Money Market Fund
WPG Intermediate Municipal Bond Fund
WPG Government Securities Fund
WPG Growth and Income Fund
WPG Tudor Fund
Weiss, Peck & Greer International Fund
WPG Growth Fund
WPG Quantitative Equity Fund
Although the Government Money Market Fund and the Tax Free Money Market
Fund are money market funds and attempt to maintain a stable $1.00 net asset
value per share, investment in these funds is neither insured nor guaranteed by
the U.S. Government. There can be no assurance that either Fund will be able to
maintain a stable net asset value of $1.00 per share.
Shares of the Funds are not deposits or obligations of, or endorsed or
guaranteed by, any bank or other insured depository institution and are not
insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other Government agency.
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. REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Prospectus sets forth concisely the information that a prospective investor
should know before investing in any of the Funds. It should be retained for
future reference. Individual Statements of Additional Information ("SAIs") about
each Fund, dated April 28, 1995, have been filed with the Securities and
Exchange Commission ("SEC") and are available, without charge, by writing to the
Funds at the address for the Funds shown above. The SAI for each Fund is
incorporated by reference into this Prospectus solely with respect to that Fund.
All of the Funds are open-end management investment companies registered under
the Investment Company Act of 1940, as amended ("1940 Act"). All the Funds are
no-load mutual funds, which means you pay no sales commission or other
transaction charges when you purchase or redeem shares of the Funds.
(continued on next page)
Prospectus Dated April 28, 1995
<PAGE>
WPG Government Money Market Fund (the "Government Money Market Fund") is a
money market fund that seeks to provide high current income, consistent with
preservation of capital and liquidity, through investment primarily in a
portfolio of short-term securities issued or guaranteed by the U.S.
Government, its agencies, or instrumentalities and repurchase agreements
collateralized by such securities.
WPG Tax Free Money Market Fund (the "Tax Free Money Market Fund") seeks to
provide high current income exempt from regular federal income tax, consistent
with preservation of capital and liquidity, through investment primarily in high
quality, tax-exempt money market instruments.
WPG Intermediate Municipal Bond Fund (the "Municipal Bond Fund") seeks to
provide a high level of current income exempt from regular federal income tax,
consistent with relative stability of principal, through investment primarily in
a diversified portfolio of investment grade municipal securities.
WPG Government Securities Fund (the "Government Fund") seeks to provide high
current income, consistent with capital preservation, through investment
primarily in U.S. Government securities with remaining maturities of one year or
more.
WPG Growth and Income Fund (the "Growth and Income Fund") seeks long-term growth
of capital, a reasonable level of current income, and an increase in future
income through investment primarily in income-producing equity securities
that have prospects for growth of capital and increasing dividends.
WPG Tudor Fund (the "Tudor Fund") seeks capital appreciation through investment
in common stocks, securities convertible into common stocks, and "special
situations."
Weiss, Peck & Greer International Fund (the "International Fund") seeks
long-term capital growth through investment primarily in a diversified portfolio
of non-U.S. equity securities. Current income is a secondary objective.
WPG Growth Fund (the "Growth Fund") seeks maximum capital appreciation through
an aggressively managed portfolio that emphasizes investments in common stocks
or securities convertible into common stocks of emerging growth companies, and
"special situations."
WPG Quantitative Equity Fund (the "Quantitative Equity Fund") seeks to provide
investment results that exceed the performance of publicly traded common stocks
in the aggregate, as represented by the Capitalization Weighted Standard &
Poor's 500 Composite Stock Price Index.
- 2 -
<PAGE>
TABLE OF CONTENTS
Page
Expense Information..................................................... 4
Financial Highlights..................................................... 5
Overview................................................................. 9
Description of the Funds................................................. 9
How to Purchase Shares................................................... 19
Shareholder Services..................................................... 21
How Each Fund's Net Asset Value is Determined............................ 24
How to Redeem Shares..................................................... 24
Management of the Funds.................................................. 26
Dividends, Distributions and Taxes....................................... 30
Portfolio Brokerage...................................................... 32
Organization and Capitalization.......................................... 33
Risk Considerations and Other Investment Practices and Policies of the Funds.34
The Funds' Investment Performance........................................ 44
- 3 -
<PAGE>
EXPENSE INFORMATION
The Table and Examples below are included in this Prospectus to assist your
understanding of all the fees and expenses to which an investment in each Fund
would be subject. Shown below are all fees and expenses incurred by each Fund
during its most recently completed fiscal year. Actual fees and expenses for the
Funds in the future may be greater or less than those shown below. A more
complete description of all fees and expenses for the Funds is included in this
Prospectus under "Management of the Funds."
<TABLE>
<CAPTION>
Shareholder Transaction Expenses
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Tax
GovernmentFree Growth
Money Money Municipal and Inter- Quantitative
Market Market Bond GovernmentIncome Tudor national Growth Equity
Fund Fund Fund Fund Fund Fund Fund Fund Fund
Sales Load Imposed
on Purchase None None None None None None None None None
Sales Load Imposed
on Reinvested
Dividends None None None None None None None None None
Deferred Sales Load
Imposed on
Redemptions None None None None None None None None None
Redemption Fee (1) None None None None None None None None None
Exchange Fee None None None None None None None None None
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
Management Fees 0.50% 0.50% 0.00%(2) 0.60% 0.75% 0.90% 0.56%(2) 0.75% 0.75%
Rule 12b-1 Fees 0.00% 0.00% 0.00% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00%
Other Expenses 0.30% 0.23% 0.85%(2) 0.19% 0.48% 0.38% 1.39%(2) 0.20% 0.39%
----- ----- ----- ----- ----- ----- ----- ----- -----
Total Fund Operating
Expenses 0.80% 0.73% 0.85%(2) 0.80% 1.23% 1.28% 1.95%(2) 0.95% 1.14%
===== ===== ===== ===== ===== ===== ===== ===== =====
- ---------------------
<FN>
(1) There are no charges imposed upon redemption, although the Transfer Agent
will charge a fee (currently $9.00) for transfers of redemption proceeds by
wire. For further information regarding wire fees, please call toll free
1-800-223-3332.
(2) Weiss, Peck & Greer, L.L.C. ("WPG" or "the Investment Adviser") voluntarily
and temporarily agreed not to impose a portion of its management fee and to
limit certain other expenses. Absent any fee reduction or expense
limitation the Management Fee, Other Expenses and Total Fund Operating
Expense ratios for the fiscal year ended December 31, 1994 would have been
0.96%, 1.39% and 2.35%, respectively, for the International Fund; and
0.41%, 1.04% and 1.45%, respectively, for the Municipal Bond Fund.
Municipal Bond Fund's and International Fund's management fees were
voluntarily and permanently reduced by the Investment Adviser effective
October 19, 1994. See "Management of the Fund's.
</FN>
</TABLE>
- 4 -
<PAGE>
See "Management of the Funds" below for a description of the expense
limitations to which the Funds are subject.
Examples: An investor in each Fund would pay the following expenses on a
hypothetical $1,0001 investment, assuming (1) 5% annual return and (2)
redemption at the end of each future time period:
<TABLE>
<S> <C> <C> <C> <C>
Fund 1 Year 3 Years 5 Years 10 Years
---- ------ ------- ------- --------
Government Money Market $ 8 $26 $ 45 $ 99
Tax Free Money Market $ 7 $23 $ 41 $ 91
Municipal Bond $ 9 $27 $ 47 $105
Government Securities $ 8 $26 $ 45 $ 99
Growth and Income $13 $39 $ 68 $150
Tudor $13 $41 $ 71 $155
International $20 $62 $106 $229
Growth $10 $30 $ 53 $117
Quantitative Equity $12 $36 $ 63 $139
- -----------------
<FN>
1 The minimum initial investment required for each Fund is $2,500, except
for the Growth Fund and the Quantitative Equity Fund whose minimum initial
investments are $250,000 and $5,000, respectively.
</FN>
</TABLE>
These examples should not be considered a representation of past or future
expenses for each Fund. Actual expenses may be greater or less than those shown
above. Similarly, the annual rate of return assumed in the examples is not an
indication or guarantee of future investment performance. The payment of a Rule
12b-1 fee by Government Fund and International Fund may result in a long-term
shareholder paying more than the economic equivalent of the maximum front-end
sales charges permitted under the rules of the National Association of
Securities Dealers, Inc.
FINANCIAL HIGHLIGHTS
The following tables represent a condensed financial history for each Fund
and use each Fund's taxable year (which ends on December 31 except for certain
periods for the International Fund as noted below). The tables express the
information for each of the Funds in terms of a single share for the Fund
outstanding throughout each period. The condensed financial information for each
of the Funds for the periods subsequent to 1989, which is set forth in the
tables, has been derived from the financial statements of each Fund, which
financial statements have been audited by each Fund's independent auditors, KPMG
Peat Marwick LLP, independent certified public accountants, whose unqualified
reports thereon are incorporated by reference into each Fund's Statement of
Additional Information. The Funds' Annual Report includes more information about
the Funds' performance and is available free of charge by writing to the Funds
at the address shown on the cover of this Prospectus.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
$ per share
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Total
Realized Income
Net Net and From Dividends Distri- Net Net
Asset Invest- Unrealized Invest- From butions Tax Asset Assets at
Value at ment Gains or ment Net From Return Total Contri- Value at End of
Beginning Income (Losses) Opera- Investment Capital of Distri- butions to End of Total Period
of Period (Loss) Securities tions Income Gains Capital butions Capital Period Return ($000's)
Tudor
1994 23.40 (0.13) (2.14) (2.27) 0.00 (1.79) 0.00 (1.79) 0.00 19.34 (9.81%) 144,207
1993 24.85 (0.22) 3.51 3.29 0.00 (4.74) 0.00 (4.74) 0.00 23.40 13.38% 242,067
1992 24.76 (0.16) 1.40 1.24 0.00 (1.15) 0.00 (1.15) 0.00 24.85 5.13% 273,394
1991 17.85 (0.02) 8.14 8.12 (0.23) (0.98) 0.00 (1.21) 0.00 24.76 45.84% 263,703
1990 22.21 0.21 (1.32) (1.11) (0.21) (3.04) 0.00 (3.25) 0.00 17.85 (5.16%) 162,202
Growth and Income Fund
1994 23.34 0.56 (1.83) (1.27) (0.62) (0.09) 0.00 (0.71) 0.00 21.36 (5.47%) 61,045
1993 23.89 0.56 1.71 2.27 (0.89) (1.93) 0.00 (2.82) 0.00 23.34 9.53% 62,714
1992 24.07 0.45 2.82 3.27 (0.43) (3.02) 0.00 (3.45) 0.00 23.89 13.80% 49,304
1991 18.53 0.29 7.23 7.52 (0.31) (1.67) 0.00 (1.98) 0.00 24.07 40.72% 41,538
1990 22.05 0.26 (2.51) (2.25) (0.33) (0.94) 0.00 (1.27) 0.00 18.53 (10.38%) 29,948
Growth
1994 116.62 (0.29) (15.96) (16.25) 0.00 (5.92) 0.00 (5.92) 0.00 94.45 (14.03%) 87,942
1993 126.68 (0.78) 19.42 18.64 0.00 (28.70) 0.00 (28.70) 0.00 116.62 14.87% 169,302
1992 132.06 (0.47) 8.24 7.77 (0.02) (13.13) 0.00 (13.15) 0.00 126.68 6.27% 208,384
1991 95.28 0.00 54.03 54.03 0.00 (17.25) 0.00 (17.25) 0.00 132.06 56.80% 160,586
1990 111.13 0.61 (14.76) (14.15) (0.68) (1.02) 0.00 (1.70) 0.00 95.28 (12.80%) 117,847
Quantitative Equity Fund
1994 5.58 0.13 (0.11) 0.02 (0.11) (0.05) 0.00 (0.16) 0.00 5.44 0.34% 73,484
1993 5.00 0.08 0.62 0.70 (0.08) (0.04) 0.00 (0.12) 0.00 5.58 13.90% 46,921
International
1994 11.72 0.01 (0.75) (0.74) 0.00 (0.05) 0.00 (0.05) 0.00 10.93 (6.32%) 17,102
1993 8.54 (0.02) 3.20 3.18 0.00 0.00 0.00 0.00 0.00 11.72 37.24% 15,996
1992 9.04 0.07 (0.57) (0.50) 0.00 0.00 0.00 0.00 0.00 8.54 (5.53%) 8,311
1991 8.99 0.06 0.02 0.08 0.00 0.00 (0.03) (0.03) 0.00 9.04 0.90% 9,443
1990# 9.53 0.02 (0.40) (0.38) (0.06) (0.10) 0.00 (0.16) 0.00 8.99 (4.04%) 11,751
1990@ 10.40 0.05 (0.61) (0.56) (0.03) (0.28) 0.00 (0.31) 0.00 9.53 (5.48%) 14,064
Government Securities
1994 10.37 0.68 (1.56) (0.88) (0.64) (0.02) 0.00 (0.66) 0.00 8.83 (8.70%) 216,364
1993 10.38 0.79 0.14 0.93 (0.79) (0.15) 0.00 (0.94) 0.00 10.37 8.96% 334,904
1992 10.54 0.70 0.01 0.71 (0.70) (0.17) 0.00 (0.87) 0.00 10.38 7.90% 263,407
1991 10.22 0.80 0.57 1.37 (0.80) (0.25) 0.00 (1.05) 0.00 10.54 13.96% 193,616
1990 10.18 0.82 0.04 0.86 (0.82) 0.00 0.00 (0.82) 0.00 10.22 8.95% 130,897
Intermediate Municipal Bond
1994 10.15 0.41 (0.64) (0.23) (0.41) 0.00 0.00 (0.41) 0.00 9.51 (2.29%) 14,005
1993 10.00 0.19 0.15 0.34 (0.19) 0.00 0.00 (0.19) 0.00 10.15 3.48% 12,334
Government Money Market
1994 1.00 0.04 (0.01) 0.03 (0.04) 0.00 0.00 (0.04) 0.01 1.00 3.58% 188,197
1993 1.00 0.03 0.00 0.03 (0.03) 0.00 0.00 (0.03) 0.00 1.00 2.80% 140,926
1992 1.00 0.03 0.00 0.03 (0.03) 0.00 0.00 (0.03) 0.00 1.00 2.95% 103,109
1991 1.00 0.05 0.00 0.05 (0.05) 0.00 0.00 (0.05) 0.00 1.00 5.33% 94,553
1990 1.00 0.07 0.00 0.07 (0.07) 0.00 0.00 (0.07) 0.00 1.00 7.74% 129,076
Tax Free Money Market
1994 1.00 0.03 0.00 0.03 (0.03) 0.00 0.00 (0.03) 0.00 1.00 2.61% 152,501
1993 1.00 0.02 0.00 0.02 (0.02) 0.00 0.00 (0.02) 0.00 1.00 2.32% 136,889
1992 1.00 0.03 0.00 0.03 (0.03) 0.00 0.00 (0.03) 0.00 1.00 2.95% 125,622
1991 1.00 0.05 0.00 0.05 (0.05) 0.00 0.00 (0.05) 0.00 1.00 4.63% 106,512
1990 1.00 0.06 0.00 0.06 (0.06) 0.00 0.00 (0.06) 0.00 1.00 5.70% 96,912
<S> <C> <C> <C>
ratios
Ratio of
Ratio of Net Invest-
Expenses ment Income Portfolio
To Average To Average Turnover
Net Assets Net Assets Rate
Tudor
1994 (1.28%) (0.62%) 109.1%
1993 (1.25%) (0.76%) 118.2%
1992 (1.21%) (0.71%) 88.8%
1991 (1.17%) (0.11%) 89.8%
1990 (1.11%) 0.84% 73.2%
Growth and Income Fund
1994 (1.23%) 2.49% 71.9%
1993 (1.26%) 2.15% 86.4%
1992 (1.34%) 1.79% 75.5%
1991 (1.48%) 1.28% 88.6%
1990 (1.56%) 1.21% 91.0%
Growth
1994 (0.95%) (0.27%) 99.3%
1993 (0.98%) (0.54%) 126.6%
1992 (0.95%) (0.57%) 84.3%
1991 (0.96%) 0.00% 83.6%
1990 (1.05%) 0.55% 81.6%
Quantitative Equity Fund
1994 (1.14%) 2.36% 46.8%
1993 (1.32%) 2.01% 20.6%
International
1994 (1.95%) 0.12% 69.8%
1993 (2.12%) 0.13% 75.9%
1992 (2.28%) 0.71% 96.8%
1991 (2.38%) 0.58% 76.5%
1990# (2.56%)A 0.99%A 47.1%A
1990@ (2.28%) 0.52% 74.7%
Government Securities
1994 (0.80%) 7.18% 115.9%
1993 (0.81%) 7.43% 97.5%
1992 (0.78%) 7.36% 137.2%
1991 (0.81%) 7.64% 189.8%
1990 (0.75%) 8.13% 183.6%
Intermediate Municipal Bond
1994 (0.85%) 4.20% 30.8%
1993 (0.84%)A 3.86%A 17.0%A
Government Money Market
1994 (0.80%) 3.54% N/A
1993 (0.81%) 2.75% N/A
1992 (0.92%) 2.92% N/A
1991 (0.88%) 5.35% N/A
1990 (0.75%) 7.47% N/A
Tax Free Money Market
1994 (0.73%) 2.59% N/A
1993 (0.74%) 2.29% N/A
1992 (0.76%) 2.92% N/A
1991 (0.78%) 4.52% N/A
1990 (0.75%) 5.56% N/A
</TABLE>
<TABLE>
The Adviser agreed not to impose its full fee for certain periods. Had the Adviser not
so agreed, the expenses and net investment income would have been:
<S> <C> <C> <C> <C>
Ratio of
Net Net
Investment Ratio of Investment
Income Expenses Income
(Loss) Total to Average to Average
Per Share Return Net Assets Net Assets
Tudor
1990 $0.20 (5.22%) (1.13%) 0.82%
Quantitative Equity
1993 0.07 13.90% (1.41%) 1.92%
International
1994 0.03 (6.66%) (2.35%) (0.28%)
1993 (0.10) 36.42% (2.89%) (0.64%)
1992 (0.02) (6.53%) (3.23%) (0.24%)
1991 (0.01) 0.12% (3.02%) (0.06%)
1990 0.01 (4.09%) (3.22%)A 0.33%A
1990 (0.02) (6.35%) (3.05%) (0.25%)
Intermediate Municipal Bond
1994 0.41 (2.90%) (1.45%) 3.60%
1993* 0.14 3.07% (2.00%)A 2.70%A
<FN>
Notes:
# Two month period ended December 31, 1990
@ For the year ended October 31, 1990
* From July 1, 1993 (commencement of operations) to December 31, 1993
A Annualized
See notes to financial statements.
</FN>
</TABLE>
OVERVIEW
Weiss, Peck & Greer, L.L.C. ("WPG" or the "Investment Adviser") serves as
investment adviser to the Funds.
WPG is a privately held limited liability company with over 20 years'
experience as an investment adviser to individual and institutional clients. WPG
seeks to maintain a balance between being large enough to offer a fully
diversified range of investment alternatives and small enough to focus on
providing the quality investment advice and services needed to achieve each
client's investment objectives. WPG is a member firm of the New York Stock
Exchange and, together with its affiliates, has approximately $13 billion under
management.
DESCRIPTION OF THE FUNDS
GOVERNMENT MONEY MARKET FUND
Investment Objective. The Government Money Market Fund is a money market fund
that seeks to provide high current income, consistent with preservation of
capital and liquidity, through investment primarily in a diversified portfolio
of short-term securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and repurchase agreements collateralized by such
securities.
Investment Program. To seek to achieve its objective, the Government Money
Market Fund will, under normal circumstances, invest at least 65% of its total
assets in short-term obligations of the U.S. Government, its agencies (such as
the Government National Mortgage Association) and instrumentalities (such as the
Federal National Mortgage Association). For a general description of the types
of securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities, their varying guarantees and their risks, see the discussion
of these securities under "Government Fund-Investment Program" in this
Prospectus. All of the Fund's investments will consist of U.S.
dollar-denominated money market instruments that present minimal credit risks
and that at the time of acquisition are eligible securities. Eligible securities
are securities rated in one of the two highest rating categories for short-term
debt obligations by any two nationally recognized statistical rating
organizations ("NRSROs") or by one NRSRO if only one has rated the securities
("Requisite NRSROs") or, if unrated, are determined to be of equivalent
investment quality. The Fund will invest at least 95% of its total assets in
eligible securities that are rated in the highest rating category for short-term
debt obligations by the Requisite NRSROs or unrated securities of equivalent
investment quality.
In addition, the Fund may invest up to 35% of its total assets in other
securities, including the following types of eligible money market instruments:
(1) Short-term obligations, including certifi-
cates of deposit, loan participations, bankers' acceptances and time
deposits of banks and savings and loan associations whose deposits are
federally insured and that have total assets in excess of one billion
dollars (except that obligations of smaller institutions may be held in
amounts not exceeding federal insurance coverage);
(2) Short-term corporate obligations, including notes and bonds with remaining
actual or effective maturities of 13 months or less;
(3) Commercial paper (unsecured promissory notes having maturities of nine
months or less) issued by corporations and finance companies;
(4) Repurchase agreements (see "Repurchase Agreements" in this Prospectus for a
description of this investment technique and its risks);
(5) U.S. dollar-denominated obligations of for-
eign issuers. Up to 20% of the Fund's assets
may be invested in obligations of foreign
branches of U.S. banks (Eurodollar obliga-
tions) and U.S. branches of foreign banks
(Yankee dollar obligations), if in the opinion
of WPG such obligations are of comparable
quality to obligations of domestic banks the
Fund may purchase. See "Eurodollar and
Yankee Dollar Investments" in this Prospectus
for a more complete description of these
securities and their risks; and
(6) Privately issued obligations collateralized by a portfolio of U.S.
Government securities or by a portfolio of privately issued asset-backed
securities. See "Asset-Backed Securities" in this Prospectus for a more
complete description of these securities and their risks.
Certain of these money market securities may have adjustable or floating
rates of interest or periodic demand features. The Fund may lend its portfolio
securities and purchase securities on a when-issued or forward commitment basis.
For further information concerning the Fund's investment techniques, policies
and risks, see "Risk Considerations and Other Investment Practices and Policies
of the Funds" in this Prospectus.
Maturity. The Fund invests in eligible money market securities with remaining
actual or effective maturities of 13 months or less and maintains a
dollar-weighted average portfolio maturity of 90 days or less. These practices
are designed to minimize any price fluctuation in the Fund's portfolio
securities.
Price. The Fund seeks to maintain a constant net
asset value of $1.00 per share. The Fund uses the
amortized cost method of valuing its portfolio
securities.
Portfolio Management. WPG actively manages the Fund, adjusting the composition
of investments and the average maturity of the Fund's portfolio according to its
outlook for short-term interest rates.
TAX FREE MONEY MARKET FUND Investment Objective. The Tax Free Money Market Fund
seeks to provide high current income exempt from regular federal income taxes,
consistent with preservation of capital and liquidity, through investment
primarily in a diversified portfolio of high quality money market instruments,
the interest on which is not included in gross income for federal income tax
purposes and may be exempt from state income taxes in certain cases ("tax-exempt
money market instruments").
Investment Program. To seek to achieve its objective, the Tax Free Money Market
Fund will, under normal market conditions, invest at least 80% of its net assets
in a diversified portfolio of tax-exempt money market instruments. All of the
Fund's investments will consist of instruments that present minimal credit risks
and that at the time of acquisition are eligible securities. Eligible securities
are securities rated in one of the two highest rating categories by the
Requisite NRSROs or, if unrated, determined to be of equivalent investment
quality. The Tax Free Money Market Fund intends to satisfy certain federal tax
requirements so that the dividends it pays to its shareholders that are
attributable to interest income on such tax-exempt securities will be exempt
from regular federal income tax, but such dividends may be subject to state or
local taxes. The eligible tax-exempt money market securities in which the Fund
may invest include: (1) Short-term municipal debt obligations issued
by or on behalf of states, territories and possessions of the United States
and the District of Columbia and their political subdivisions, agencies and
instrumentalities. Such municipal debt securities include: (a) municipal
notes such as tax anticipation notes, revenue anticipation notes, bond
anticipation notes and construction loan notes, and (b) short-term
municipal bonds that have remaining actual or effective maturities of 13
months or less such as (i) general obligation bonds, which are secured by
the issuer's pledge of its faith, credit and taxing power for payment of
principal and interest, (ii) revenue bonds, which are paid from the
revenues of a particular facility, a specific tax or other sources, and
(iii) pre-refunded tax-exempt bonds and escrowed tax-exempt bonds (see
"Municipal Securities" in this Prospectus for more complete description of
these securities);
(2) Tax-exempt commercial paper; and
(3) Variable or floating rate tax-exempt instru-
ments. See "Municipal Securities" in this
Prospectus for a more complete description
of these securities and their risks.
Although it has no current intention of doing so, the Tax Free Money Market
Fund may, under normal market circumstances, invest up to 20% of its assets in
obligations subject to regular federal income tax. To the extent the Fund
invests in these securities, a portion of the income the Fund receives and
distributes to shareholders may be subject to regular federal, as well as state
and local, income tax. The Fund's distributions from its tax-exempt interest
income may also be subject to alternative minimum tax and/or state and local
income taxes. See "Dividends, Distributions and Taxes" for additional
information. Such taxable short-term obligations will be of the same type as are
permissible investments for the Government Money Market Fund. The Fund may also
enter into repurchase agreements, purchase securities on a when-issued or
forward commitment basis and lend its portfolio securities. For further
information concerning the Fund's investment techniques, policies and risks, see
"Risk Considerations and Other Investment Practices and Policies of the Funds"
in this Prospectus.
Maturity. The Fund invests in eligible money market securities with remaining
actual or effective maturities of 13 months or less and maintains a
dollar-weighted average portfolio maturity of 90 days or less. These practices
are designed to minimize any price fluctuation in the Fund's portfolio
securities.
Price. The Fund seeks to maintain a constant net
asset value of $1.00 per share. The Fund uses the
amortized cost method of valuing its portfolio
securities.
Portfolio Management. WPG actively manages the Fund, adjusting the composition
of investments and the average maturity of the Fund's portfolio according to its
outlook for short-term interest rates.
MUNICIPAL BOND FUND
Investment Objective. The Municipal Bond Fund seeks to provide a high level of
current income exempt from regular federal income tax, consistent with relative
stability of principal, through investment primarily in a diversified portfolio
of investment grade municipal securities.
Investment Program. To seek to achieve its objective, Municipal Bond Fund will
invest primarily in investment grade municipal securities. Municipal securities
include bonds, notes and other instruments issued by or on behalf of the states,
territories and possessions of the U.S. (including the District of Columbia) and
their political subdivisions, agencies and municipalities. These securities may
be issued in a number of forms, including general obligation and revenue bonds,
tax exempt commercial paper, variable and floating rate instruments (including
variable rate demand obligations and inverse floating rate instruments), auction
rate securities, tender option bonds, zero coupon and capital appreciation
bonds, and municipal leases and participations therein, pre-refunded tax-exempt
and escrowed tax-exempt bonds. The Fund may also invest in other types of
municipal securities that currently exist or which may be developed in the
future, the interest on which is, or will be, in the opinion of counsel (when
available) excluded from gross income for federal income tax purposes, i.e.,
exempt from regular federal income tax; provided that investing in such
securities is consistent with the Fund's investment objective and policies. See
"Municipal Securities" in this Prospectus for a more complete description of
these securities and their risks.
The average dollar-weighted effective maturity of the Fund's portfolio will
generally range between four and ten years. When, in the opinion of WPG, market
conditions warrant, the Fund's average effective portfolio maturity may be
shorter than four years. As a matter of fundamental policy, Municipal Bond Fund
will, under normal circumstances, invest at least 80% of its net assets in
securities whose interest income is exempt from regular federal income tax.
Although it has no present intention of doing so, the Fund may also invest in
private activity bonds that pay interest which, when distributed to shareholders
as an "exempt-interest dividend," will be treated as a tax preference item under
the federal alternative minimum tax. See "Dividends, Distributions and Taxes."
Although it has no current intention of doing so, the Municipal Bond Fund
may, under normal market circumstances, invest up to 20% of its total assets in:
(a) corporate commercial paper and other short-term commercial obligations rated
Prime-1 or MIG by Moody's Investors Service, Inc. ("Moody's") or A-1 or AAA by
Standard & Poors Ratings Group ("S&P"); (b) obligations of banks (including
certificates of deposit, bankers' acceptances and repurchase agreements) with $1
billion or more of assets; (c) obligations issued or guaranteed by the U.S.
Government; and (d) other taxable investment grade securities. As a temporary
defensive measure during times of adverse market conditions, the Fund may invest
up to 50% of its assets in those investments. Distributions from the income
earned on those investments may be taxable to shareholders.
Quality of Investments. The Municipal Bond Fund's investments in municipal
securities are limited to securities of "investment grade" quality, at the time
of investment, as rated by any NRSRO or, if not rated, judged to be of
comparable credit quality by WPG. Investment grade municipal securities eligible
for purchase by the Fund include (i) municipal bonds rated BBB or higher by S&P
or Baa or higher by Moody's, (ii) municipal notes (including variable rate
demand obligations) rated SP-2/A-2 or higher by S&P or MIG- 2/VMIG-2 or higher
by Moody's and (iii) tax-exempt commercial paper rated A-2 or higher by S&P or
Prime-2 or higher by Moody's. Comparable ratings by other NRSROs may be used.
Obligations in the lowest investment grade (i.e., BBB or Baa), referred to
as "medium grade" obligations, have speculative characteristics, and changes in
economic conditions and other factors are more likely to lead to weakened
capacity to make interest payments and repay principal on these obligations than
is the case for higher rated securities. In the event that a municipal security
purchased by the Fund is subsequently downgraded below investment grade, WPG
will consider such event in its determination of whether the Fund should
continue to hold the security. However, at no time may the Fund have more than
5% of its net assets invested in securities rated below investment grade as a
result of such downgrades.
In order to enhance the liquidity, stability or quality of a municipal
obligation, the Fund may acquire the right to sell the security to another party
for a guaranteed price and term. These rights are commonly referred to as puts,
demand features or standby commitments. In addition, the Municipal Bond Fund may
lend portfolio securities, enter into repurchase agreements, purchase securities
on a forward commitment or when-issued basis and invest in other investment
companies.
There are market risks inherent in all investments in securities, and the
value of the Fund's investments and, consequently, of an investment in the Fund
will fluctuate over time. Generally, the value of the Fund's investments varies
inversely with changes in interest rates. For example, as interest rates rise,
the value of the Fund's investments will tend to decline and, as interest rates
fall, the value of the Fund's investments will tend to increase. For further
information concerning the Fund's investment techniques, policies and risks, see
"Risk Considerations and Other Investment Practices and Policies of the Funds"
in this Prospectus.
GOVERNMENT FUND
Investment Objective. The Government Fund seeks to provide high current income,
consistent with capital preservation, through investment primarily in a
diversified portfolio of U.S. Government securities with maturities of one year
or more.
Investment Program. To seek to achieve its
objective, the Government Fund will invest, under
normal market conditions, at least 65% of its total
assets in a diversified portfolio of debt obligations
having remaining maturities of one year or more
issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. The U.S. Govern-
ment securities in which the Fund may invest
include:
(1) U.S. Treasury bills, notes and bonds which
are direct obligations of the U.S. Treasury
and differ mainly in their stated maturities;
(2) Obligations issued by or guaranteed by
agencies and instrumentalities of the U.S.
Government, including the various types of
debt instruments currently outstanding or
which may be offered in the future. Agencies
include, among others, the Federal Housing
Administration, Government National Mort-
gage Association ("GNMA"), Farmer's Home
Administration, Export-Import Bank of the
United States, Maritime Administration, and
General Services Administration. Instru-
mentalities include, for example, each of the
Federal Home Loan Banks, the National
Bank for Cooperatives, the Federal Home
Loan Mortgage Corporation, the Farm Credit
Banks, the Federal National Mortgage Asso-
ciation, the Small Business Administration,
and the United States Postal Service;
and
(3) Zero coupon U.S. Government securities that have been stripped of their
unmatured interest coupons by the U.S. Government or private issuers.
U.S. Government securities are either (i) backed by the full faith and credit
of the U.S. Government (e.g., U.S. Treasury bills), (ii) guaranteed by the U.S.
Treasury (e.g., GNMA mortgage-backed securities), (iii) supported by the issuing
agency's or instrumentality's right to borrow from the U.S. Treasury (e.g.,
Federal National Mortgage Association Discount Notes), or (iv) supported only by
the issuing agency's or instrumentality's own credit (e.g., securities of each
of the Federal Home Loan Banks). Such guarantees of the securities in the Fund,
however, do not guarantee the market value of the shares of the Fund. With
respect to securities supported only by the credit of the issuing agency or
instrumentality or by an additional line of credit with the U.S. Treasury, there
is no guarantee that the U.S. Government will continue to provide support to
such agencies or instrumentalities.
There are market risks inherent in all investments in securities, and the
value of the Fund's investments and, consequently, of an investment in the Fund
will fluctuate over time. Generally, the value of the Fund's investments varies
inversely with changes in interest rates. For example, as interest rates rise,
the value of the Fund's investments will tend to decline and, as interest rates
fall, the value of the Fund's investments will tend to increase.
In addition, the potential for appreciation in the event of a decline in
interest rates may be limited or negated by increased principal prepayments with
respect to certain mortgage-backed securities, such as GNMA securities held by
the Fund. Prepayment of high interest rate mortgage-backed securities during
times of declining interest rates will generally tend to lower the return of the
Fund and may even result in losses to the Fund if some securities were acquired
at a premium.
In addition, the Government Fund may hold up to 35% of its net assets in
other securities including: (a) short-term U.S. Government obliga- tions; (b)
other domestic and U.S. dollar denominated foreign money market instruments; (c)
privately issued obligations collateralized by a portfolio of U.S. Government
securities; (d) privately issued obligations collateralized by a portfolio of
privately issued mortgage-backed or asset-backed securities; and (e) other fixed
income securities rated, at the time of purchase, BBB or Baa or higher by S&P or
Moody's, respectively, or their equivalents, or if unrated, determined to be of
comparable credit quality by WPG. For temporary or defensive purposes, the Fund
may invest in money market instruments without limitation.
The Fund may invest in mortgage-backed securities in a variety of forms,
including mortgage pass-through certificates and multiple class pass-through
certificates, real estate mortgage investment conduit pass-through certificates
and collateralized mortgage obligations. The Fund may also invest in floating
rate debt instruments, (including floating rate mortgage securities). The Fund
may invest in other types of securities which enhance interest rate risk or
which involve prepayment risk. For further information concerning the Fund's
investments in mortgage-backed securities and floating rate debt instruments,
see "Risk Considerations and Other Investment Practices and Policies of the
Funds" below.
In order to enhance current income or reduce market interest rate risks,
the Government Fund may engage in a variety of hedging strategies involving the
use of exchange-traded options and futures contracts. The Government Fund may
(i) write exchange-traded and over-the-counter covered call and put options on
securities and securities indices, (ii) purchase exchange-traded and
over-the-counter call and put options with respect to securities and securities
indices, (iii) purchase and sell interest rate futures contracts, and (iv) write
and purchase call and put options on interest rate futures contracts. In
addition, the Government Fund may lend portfolio securities, enter into
repurchase and reverse repurchase agreements, and purchase securities on a
forward commitment or when-issued basis. For further information concerning the
Fund's investment techniques, policies and risks, see "Risk Considerations and
Other Investment Practices and Policies of the Funds" below in this Prospectus.
GROWTH AND INCOME FUND
Investment Objective. The Growth and Income Fund seeks long-term growth of
capital, a reasonable level of current income and an increase in future income
through investment primarily in a diversified portfolio of income-producing
equity securities that have prospects for growth of capital and increasing
dividends.
Investment Program. To seek to achieve its objective, the Growth and Income Fund
will, under normal circumstances, invest in common stocks and other
equity-related securities (including preferred stocks and securities convertible
into or exchangeable for common stocks) that offer the prospect of capital
appreciation and growth of income, while paying current income. The common
stocks and equity-related securities selected by WPG will typically be those of
companies believed by WPG either (i) to possess better than average prospects
for long-term growth of capital or (ii) to be growing faster than the U.S.
economy at the time of purchase. While WPG's selection of equity securities
emphasizes current income, the Fund may purchase equity securities that do not
pay current dividends but offer prospects for growth of capital and future
income.
Although the Growth and Income Fund will ordinarily invest in common stocks
and equity-related securities (including shares of real estate investment
trusts), the Fund may also invest in other securities, including (i) corporate
and U.S. Government debt securities (including U.S. Treasury bonds and notes),
asset-backed securities, and structured or hybrid notes, (ii) write
exchange-traded and over-the-counter covered call options on securities and
write covered call options on stock indices and enter into closing purchase
transactions on such options, (iii) invest in securities of non-U.S. issuers,
and (iv) invest in domestic and U.S. dollar-denominated foreign money market
investments (including repurchase agreements and Eurodollar and Yankee Dollar
obligations).
The Fund may invest up to 35% of its net assets in preferred stock and debt
obligations rated as low as BB or B (or their equivalent) by any NRSRO or, if
unrated, of equivalent investment quality as determined by WPG. Such securities,
commonly referred to as "junk bonds," are regarded as predominantly speculative
with respect to the issuer's capacity to make interest payments and repay
principal in accordance with the terms of the obligation. The Fund may also lend
its portfolio securities, invest in warrants and purchase securities on a
forward commitment or when-issued basis. For temporary or defensive purposes,
the Growth and Income Fund may invest in money market instruments or U.S.
Government bonds without limitation. For further information concerning the
Fund's investment techniques, policies and risks, see "Risk Considerations and
Other Investment Practices and Policies of the Funds" in this Prospectus.
TUDOR FUND
Investment Objective. The Tudor Fund seeks capital appreciation through
investment in a non-diversified portfolio of common stocks, securities
convertible into common stocks and special situations.
Investment Program. To seek to achieve its investment objective, the Tudor Fund
will, under normal circumstances, invest in common stocks or equity-related
securities (including securities convertible into or exchangeable for common
stocks, shares of real estate investment trusts and warrants) of companies
believed by WPG to offer the potential for capital appreciation. Certain of
these companies may have operating histories of less than three years. In
addition, the Fund may invest in "special situations." Special situations refer
to unusual and possibly unique developments for a company which may create a
special opportunity for significant returns. Developments that may be considered
special situations include: significant technological improvements or important
discover- ies; a reorganization, recapitalization, or other significant security
exchange or conversion; a merger, liquidation, or distribution of cash,
securities, or other assets; a breakup or workout of a holding company;
litigation which, if resolved favorably, would enhance the value of the
company's stock; a new or changed management; or material changes in management
policies.The Fund may also invest up to 5% of its net assets in debt securities
and preferred stocks rated as low as B or its equivalent by any NRSRO or, if
unrated, of equivalent investment quality as determined by WPG.
Although the Tudor Fund will invest primarily in common stocks and
equity-related securities, the Fund may also utilize other investment practices
or invest in other securities, including: (i) the writing of both
exchange-traded and over-the-counter covered call or put options on securities
and stock indices, (ii) the purchase of both exchange-traded and
over-the-counter call and put options on securities and indices, (iii)
investment in securities and indices of non-U.S. issuers; and (iv) investment in
domestic and U.S. dollar-denominated foreign money market instruments. To a
limited extent the Fund may also purchase and sell futures contracts on
securities and securities indices and purchase and sell options on such futures
contracts. The Fund may also lend its portfolio securities, enter into
repurchase agreements, invest in warrants and rights, and purchase securities on
a forward commitment or when-issued basis. For temporary or defensive purposes
the Fund may invest in money market instruments without limitation. For further
information concerning the Fund's investment techniques, policies and risks, see
"Risk Considerations and Other Investment Practices and Policies of the Funds"
in this Prospectus.
Because the Fund selects portfolio securities on the basis of their
potential for capital appreciation, no consideration is given to possible
dividend or interest income and, therefore, the Fund may realize little, if any,
such income. The Fund is not intended as a complete investment program and is
not suitable for those investors whose objective is income or preservation of
capital. The Tudor Fund is a non-diversified investment company under the 1940
Act. See "Risk Consideration and Other Investment Practices and Policies of the
Funds" below for further information on diversification.
INTERNATIONAL FUND
Investment Objectives. The International Fund
seeks long-term capital growth primarily through
investment in a diversified portfolio of non-U.S.
equity securities. Current income is a secondary
objective.
Investment Program. To seek to achieve its investment objectives, the
International Fund will, under normal circumstances, invest at least 65% of its
total assets in common stocks and equity-related securities (i.e., securities
convertible into or exchangeable for common stocks, preferred stocks, rights and
warrants) of issuers, wherever organized, which do business primarily outside
the U.S. and whose securities are traded primarily in non-U.S. markets. In
analyzing equity investments, WPG, or the Fund's subadviser, Lloyds Investment
Management International Limited ("Lloyds"), 48 Chiswell Street, London,
England, will generally consider the following factors, among others: the
company's overall growth prospects, strong competitive advantages, management
strength, earnings growth, government regulations which may favorably affect the
company, and the company's overall financial strength and capital resources.
Investments in preferred stock and convertible and fixed income securities will
be selected on the basis of a consistent record of payment of dividends or
interest. Although the Fund will invest principally in securities of established
larger capitalization companies, the Fund may also purchase securities of medium
and small size companies when, in the judgment of WPG or Lloyds, such securities
offer above-average appreciation potential. The Fund will generally invest in
equity securities listed on non-U.S. stock exchanges or in established non-U.S.
over-the-counter markets. The Fund may invest in equity securities of non-U.S.
issuers through the purchase of American Depository Receipts ("ADRs"), European
Depository Receipts ("EDRs") and International Depository Receipts ("IDRs"), or
other similar securities representing interests in or convertible into
securities of foreign issuers.
The Fund intends to diversify its holdings with respect to the number of
issuers, the industries of such issuers, and the number of countries in which
the Fund invests. Under normal circumstances, the Fund will have at least three
countries other than the U.S. represented in its portfolio. The Fund may also
invest in emerging industrial countries if, in WPG's or Lloyds' opinion, the
opportunities presented by such investments outweigh the related risks, taking
into account the quality of those securities markets and other factors relevant
generally to such investments.
Although the Fund intends to invest primarily in non-U.S. equity
securities, the Fund may also invest in other securities and instruments. For
example, the Fund may also (i) invest in equity securities of U.S. issuers, and
investment grade debt securities of the U.S. and foreign governments and U.S.
and foreign corporations; (ii) invest in securities of closed-end investment
companies (limited in amount so that no more than 5% of the Fund's total assets
will be invested in one investment company and no more than 10% of the Fund's
total assets will be invested, in the aggregate, in such companies); (iii)
invest in domestic and foreign money market securities; (iv) write
exchange-traded and over-the-counter covered call and put options on securities
and stock indices; and (v) purchase exchange-traded and over-the-counter call
and put options on securities and stock indices. For temporary or defensive
purposes, the Fund may invest in money market instruments without limitation. To
a limited extent the Fund may also purchase and sell futures contracts on
securities and securities indices and may purchase options on such futures. The
Fund may also purchase warrants and rights, lend its portfolio securities and
purchase securities on a forward commitment or when-issued basis. In addition,
to attempt to reduce risks associated with currency fluctuations, the Fund may
(i) enter into currency futures contracts and forward currency contracts to
purchase or sell selected currencies; (ii) write exchange-traded covered call
and put options on currencies and currency futures contracts; and (iii) purchase
exchange-traded call and put options on currencies. For further information
concerning the Fund's investment techniques, policies and risks, see "Risk
Considerations and Other Investment Practices and Policies of the Funds" in this
Prospectus.
GROWTH FUND
Investment Objective. The Growth Fund seeks maximum capital appreciation through
an aggressively managed non-diversified portfolio that emphasizes investment in
common stocks or securities convertible into common stocks of emerging growth
companies and special situations. The Fund is designed especially for
institutional investors.
Investment Program. To seek to achieve its objective, the Growth Fund will,
under normal circumstances, invest at least 65% of its total assets in common
stocks and equity-related securities (including securities convertible into or
exchangeable for common stocks, shares of real estate investment trusts and
warrants) of small, emerging growth companies and special situations. WPG
considers an emerging growth company to be a smaller company (i.e., normally, a
company having a capitalization of $750 million or less), a less well-known
company, or a company that has been in business for a relatively short time and
offers superior growth potential. Special situations refer to unusual and
possibly unique developments for a company which may create a special
opportunity for significant returns. Developments that may be considered special
situations include: significant technological improvements or important
discoveries; a reorganization, recapitalization, or other significant security
exchange or conver- sion; a merger, liquidation, or distribution of cash,
securities or other assets; a breakup or workout of a holding company;
litigation which, if resolved favorably, would enhance the value of the
company's stock; a new or changed management; or material changes in management
policies. For further information concerning the Fund's investment techniques,
policies and risks, see "Risk Considerations and Other Investment Practices and
Policies of the Funds" in this Prospectus.
While the Growth Fund will invest primarily in common stocks and
equity-related securities of emerging growth companies and special situations,
the Fund may also invest in other securities and instruments. For example, the
Fund may also (i) invest in common stocks and equity-related securities of
relatively established, better-known companies in growth industries which, in
the opinion of WPG, have superior products, management, or other advantages over
other companies in those industries; (ii) invest in securities of non-U.S.
issuers; (iii) write both exchange-traded and over-the-counter covered call and
put options on securities and stock indices; (iv) purchase exchange-traded and
over-the-counter put and call options on securities; (v) purchase both
exchange-traded and over-the-counter call and put options on stock indices; and
(vi) invest in high-quality domestic and U.S. dollar-denominated foreign money
market instruments rated within the two highest rating categories assigned by
any NRSRO or, if unrated, of equivalent investment quality as determined by WPG.
To a limited extent, the Fund may purchase and sell futures contracts on
securities and securities indices and may purchase and sell options on such
futures. The Fund may also lend its portfolio securities, enter into repurchase
agreements, invest in warrants and rights, and purchase securities on a forward
commitment or when-issued basis.
The Fund may also invest up to 35% of its net assets in debt securities and
preferred stocks rated as low as B or its equivalent by any NRSRO or, if
unrated, of equivalent investment quality as determined by WPG. Such securities,
commonly referred to as "junk bonds," are regarded as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation.
For temporary or defensive purposes the Growth Fund may invest in money
market instruments without limitation. For further information concerning the
Fund's investment techniques, policies and risks, see "Risk Considerations and
Other Investment Practices and Policies of the Funds" in this Prospectus.
Current income is considered an incidental factor in the selection of
portfolio securities and, accordingly, the Fund may realize little, if any,
income from its investments. The Fund is not intended as a complete investment
program. In addition, there may be a greater degree of risk involved in
connection with an investment in the Fund, as compared to investments in other
mutual funds whose investment programs seek capital appreciation, but who invest
in better-known or larger companies, and do not invest in special situations.
The Growth Fund is a non-diversified investment company under the 1940 Act. See
"Risk Considerations and Other Investment Practices and Policies of the Funds"
for further information concerning diversification.
QUANTITATIVE EQUITY FUND
Investment Objective. The Quantitative Equity Fund seeks to provide investment
results that exceed the performance of publicly traded common stocks in the
aggregate, as represented by the capitalization weighted Standard & Poor's 500
Composite Stock Price Index (the "S&P 500 Index").
Investment Program. To seek to achieve its investment objective, the
Quantitative Equity Fund will, under normal market conditions, invest in a
portfolio of stocks that is considered more "efficient" than the S&P 500 Index
of selected common stocks. An efficient portfolio is one that has the maximum
expected return for any level of risk. The efficient mix of such a portfolio's
investments is established mathematically, taking into account the expected
return and volatility of returns for each security in a given universe, as well
as the historical price relationships between different securities in the
universe.
To implement this strategy, WPG compiles the historical price data of all
500 stocks of the S&P 500 Index. WPG may eliminate an issue from consideration
if WPG considers it to have an inadequate or misleading price history. WPG
builds a complete matrix, using historical price data, and then examines all
125,000 possible relationships between these stocks in the S&P 500.
Using a sophisticated software program incorporating risk reduction
techniques that have been developed by investment professionals of WPG, a number
of portfolios, consisting of stocks in the S&P 500, are constructed that are
believed to have optimized risk/reward ratios. From these alternative
portfolios, WPG selects the combination of S&P 500 stocks, together with their
appropriate weightings, that WPG believes will comprise the optimal portfolio
for the Fund.
In modeling the portfolio, no stock will normally, at the time of purchase,
have a weighting in the Fund's portfolio greater than four times its weighting
in the S&P 500 Index or constitute more than 10% of the Fund's total assets. It
is expected that the Fund's optimal portfolio will consist of between 200 and
400 of the S&P 500 stocks. This optimal portfolio is designed to have a return
greater than, but highly correlated to, the return of the S&P 500 Index.
After the optimal portfolio is constructed, the portfolio may be rebalanced
monthly to maintain the original optimal weights. WPG will sell a stock when the
stock's weight within the portfolio becomes significantly greater than its
optimal weight. WPG will buy a stock when the stock's weight within the
portfolio becomes significantly less than its optimal weight.
Every six months, WPG repeats the entire optimization process and a new
portfolio is constructed adding the most recent six months of historical data,
and deleting the oldest data. When a stock is removed from the S&P 500 Index, it
will not necessarily be removed from the Fund's portfolio within any
predetermined length of time.
The S&P 500 Index is a market weighted compilation of 500 common stocks
selected on a statistical basis by S&P. The S&P 500 Index is typically composed
of issues in the following sectors: industrial, financial, public utilities and
transportation. Most of the stocks that comprise the index are traded on the New
York Stock Exchange, although some are traded on the American Stock Exchange and
in the over-the-counter market.
While the Quantitative Equity Fund will generally be substantially fully
invested in equity securities, it may invest up to 35% of its total assets in
fixed income obligations maturing in one year or less that are rated at least AA
by S&P or Aa by Moody's, or their equivalents, or unrated securities determined
by WPG to be of comparable quality. The Fund may also purchase and sell futures
contracts on securities and securities indices and options on such futures
contracts, as well as purchase and sell (write) exchange-traded and
over-the-counter put and call options on securities and securities indices. The
Fund also may lend its portfolio securities to generate additional income, enter
into repurchase agreements, invest in warrants and ADRs, and purchase securities
on a forward commitment or when-issued basis. The realization of current income
is not a significant part of the Fund's investment strategy, and any income
generated will be incidental to the Fund's objective of outperforming the S&P
500 Index.
WPG's research personnel will monitor and occasionally make changes in the
way the portfolio is constructed or traded. Such changes may include determining
better ways to eliminate issues from consideration in the matrix, improving the
manner in which the matrix is calculated, altering constraints in the
optimization process and effecting changes in trading procedure (to reduce
transaction costs or enhance the effects of rebalancing). Any such changes are
intended to be consistent with the Fund's basic philosophy of seeking higher
returns than those that could be obtained by investing directly in all of the
stocks in the S&P 500 Index.
There can be no assurance that the Fund will achieve its investment
objective. No quantitative methodology or technical analysis, including WPG's,
has ever been objectively proven to provide enhanced investment return and
reduced investment risk in actual long-term portfolio results. For further
information concerning the Fund's investment techniques, policies and risks, see
"Risk Considerations and Other Investment Practices and Policies of the Funds"
in this Prospectus.
HOW TO PURCHASE SHARES
Initial Investment: Minimum $2,500 per
Fund ($250 for retirement accounts and Uniform Gifts to Minors); $250,000 for
the Growth Fund; $5,000 for the Quantitative Equity Fund.
Opening an account. You may make an initial purchase of shares of any Fund
by mail, by wire, or through any authorized securities dealer. Shares of the
Funds may be purchased on any day on which the New York Stock Exchange is open
for business.
YOU WILL FIND AN APPLICATION INCLUDED WITH THIS PROSPECTUS. A COMPLETED AND
SIGNED APPLICATION IS REQUIRED FOR EACH NEW ACCOUNT YOU OPEN WITH ANY FUND
REGARDLESS OF HOW YOU CHOOSE TO MAKE YOUR INITIAL PURCHASE.
By Mail. You may purchase shares of the Funds by mailing the completed
Application, with your check(s) or money order(s) made payable to the particular
Fund(s) in which you have chosen to invest, to the Funds' Transfer Agent, The
Shareholder Services Group, Inc., Attention: WPG Mutual Funds, P.O. Box 9037,
Boston, Massachusetts 02205.
By Wire. You may also purchase shares of a Fund by wiring funds to the wire
bank account for such Fund with the Fund's Custodian. Before wiring funds,
please call WPG toll free at 1-800-223-3332 to receive instructions as to how
and where to wire your investment. Please remember to return your completed
Application to The Shareholder Services Group, Inc., as described in the prior
paragraph.
Through an Authorized Securities Dealer. Securities dealers approved by WPG
are authorized to sell you shares of the Funds. You also may obtain copies of
the Application from any such authorized securities dealer. Shares purchased
through such securities dealers may be subject to transaction fees, no part of
which will be received by the Funds or WPG.
WPG, at its own expense, provides compensation to Trading Partners, Inc.
whose customers become shareholders of one or more of the Funds for introducing
such customers to the Funds and responding to certain customer inquiries. Such
compensation is paid at the annual rate of .25% of a Fund's average net assets
attributable to shares held by customers. WPG also compensates CBL Equities for
similar services to its customers at an annual rate of .25% and .15% of the
average daily net assets of the Equity Funds and the Income Funds, respectively
(as defined in "Share Price" below). Such compensation does not represent an
additional expense to any Fund or its shareholders, since it will be paid from
the assets of WPG or its affiliates, including amounts received by WPG under its
Investment Advisory Agreements with the Funds.
Subsequent Investments: Minimum $100 per Fund; $25,000 for the Growth Fund;
$500 for the Quantitative Equity Fund. Subsequent purchases of shares of the
Funds may be made by mail, wire, through an authorized securities dealer, or by
means of certain services available to shareholders of the Funds, such as the
Exchange Privilege and Automatic Investment Plan described below under
"Shareholder Services." The minimum subsequent investment under the Automatic
Investment Plan is $50 per Fund (not available for the Growth Fund or the
Quantitative Equity Fund).
Share Price. Your shares in each Fund will be priced at the net asset value
per share of that Fund next determined after your purchase order has been
received in good order.
With respect to the Government Money Market Fund, the Tax Free Money Market
Fund, the Government Fund and the Municipal Bond Fund (the "WPG Income Funds"),
if your purchase payment is transmitted by federal funds wire, the purchase
order will be considered in good order upon receipt of the wire payment by
Boston Safe Deposit and Trust Company, the Funds' Custodian. If your purchase
payment as transmitted to the Funds' Transfer Agent is not in federal funds
(i.e., monies credited to the Funds' Custodian by a Federal Reserve Bank), your
payment must first be converted to federal funds before your purchase order will
be considered in "good order." If your purchase payment is by a check drawn on a
member bank of the Federal Reserve System, conversion to federal funds usually
occurs within one business day after the check is deposited by the Funds'
Custodian. Checks drawn on banks which are not members of the Federal Reserve
System may take longer to convert into federal funds. During the period prior to
receipt of federal funds by the Funds' Custodian, your money will not be
invested in the WPG Income Funds. You will begin to earn dividends on the
business day following the date on which your purchase order is converted to
federal funds (i.e., the trade date). With respect to Government Money Market
Fund and Tax Free Money Market Fund, for a purchase by federal funds wire, you
may qualify for a dividend on the date the purchase order is received if your
federal funds wire is received prior to 12:00 noon Eastern Time.
With respect to the other Funds in the WPG family of funds (the "WPG Equity
Funds"), receipt of federal funds by the Funds' Custodian is not necessary for a
purchase order to be considered in good order when received by the Funds'
Transfer Agent.
If you purchase shares through an authorized securities dealer, the dealer
must receive your order before the close of regular trading on the New York
Stock Exchange and transmit it to the Fund(s) by 4:00 p.m. Eastern Time to
receive that day's net asset value. (Each Fund's per share net asset value is
computed as described under "How Each Fund's Net Asset Value is Determined" in
this Prospectus.)
Conditions of Your Purchase. Each Fund reserves the right to reject any
purchase for any reason and to cancel any purchase due to nonpayment. Purchase
orders are not binding on the Funds or considered received until such purchase
orders are received in good order as described above. All purchases must be made
in U.S. dollars and, to avoid fees and delays, all checks must be drawn only on
U.S. banks. No cash will be accepted. As a condition of this offering, if your
purchase is cancelled due to nonpayment or because your check does not clear
(and, therefore, your account is required to be redeemed), you will be
responsible for any loss incurred by the Fund(s) affected.
Share Certificates. The Government Money Market Fund, Tax Free Money Market
Fund, Municipal Bond Fund, and Quantitative Equity Fund will not issue share
certificates. With respect to the other Funds, share certificates will not be
issued for shares unless you have been a shareholder of the Fund in question for
at least 30 days and you specifically request share certificates in writing. The
Funds will issue certificates only for full shares. Most shareholders elect not
to receive share certificates. If you lose a share certificate you may incur an
expense to replace it.
Retirement Plan Accounts. If you are a participant in a corporate or
institutional retirement plan account (including any deferred compensation
plan), you must contact your Plan Administrator regarding purchase and
redemption procedures, including limitations thereon, contained in your
retirement plan. Requests for redemptions from retirement plan accounts must be
in writing.
In-Kind Purchases. Shares of the Funds may be purchased in whole or in part
by delivering to the Funds' Custodian securities determined by WPG to be
suitable for that Fund's portfolio. Investors interested in making "in-kind"
purchases should refer to the SAI of the applicable Fund for the terms,
conditions and tax consequences of these transactions.
SHAREHOLDER SERVICES
Shareholder Inquiries and Services Offered. If you have any questions about
the Funds or the shareholder services described below, please call the Funds at
1-800-223-3332. Written inquiries should be sent to The Shareholder Services
Group, Inc., P.O. Box 9037, Boston, MA 02205. The Funds reserve the right to
amend the shareholder services described below or to change the terms or
conditions relating to such services upon 60 days' notice to shareholders. You
may discontinue any service you select, provided that with respect to the
Automatic Investment and Systematic Withdrawal Plans described below, the Funds'
Transfer Agent receives your notification to discontinue such service(s) at
least ten days before the next scheduled investment or withdrawal date.
Confirmations, Shareholder Statements, and Reports. Each time you buy or
sell shares you will receive a confirmation statement with respect to such
transaction. In addition, following each distribution for each WPG Equity Fund
in which you are a shareholder, you will receive a shareholder statement
reflecting any reinvestment of a dividend or distribution in the Fund including
your current share balance with the Fund. For each WPG Income Fund in which you
are a shareholder, such shareholder statements will be sent to you monthly. The
Funds also will send you shareholder reports no less frequently than
semi-annually. You also will receive year-end tax information about your
account(s) with each Fund.
Telephone Exchange Privilege. For your convenience, the Funds provide a
Telephone Exchange Privilege that enables you by telephone to authorize the
exchange of shares from your account in one Fund for shares in any other WPG
Mutual Fund described in this Prospectus provided all accounts are identically
registered. The telephone exchange privilege is not available to shareholders
automatically; to authorize this Telephone Exchange Privilege, please mark the
appropriate boxes on the Application and supply us with the information
required. To exchange shares by telephone, simply call 1-800-223-3332 between
9:00 a.m. and 4:00 p.m. Eastern Time on any day the Funds are open. Shares
exchanged will be valued at their respective net asset values next determined
after the telephone exchange request is received. Telephone exchange requests
made after 4:00 p.m. Eastern Time will not be accepted. At the time of any
telephone exchange request, please notify the Funds of all current shareholder
service privileges you wish to continue to utilize in any new account opened. To
confirm that telephone exchange requests are genuine, the Funds will employ
reasonable procedures such as providing written confirmation of telephone
exchange transactions and tape recording of telephone exchange requests. If a
Fund does not employ such reasonable procedures, it may be liable for any loss
incurred by a shareholder due to a fraudulent or other unauthorized telephone
exchange request. Otherwise, neither the Funds nor their agents will be liable
for any loss incurred by a shareholder as a result of following instructions
communicated by telephone that they reasonably believe to be genuine. The Funds
reserve the right to refuse any request made by telephone and may limit the
amount involved or the numbers of telephone requests made by any shareholder.
(Such exchange requests may, however, be made in writing in accordance with
procedures described in this Prospectus.) During periods of extreme economic
conditions or market changes, requests by telephone may be difficult to make due
to heavy volume. During such times, please consider placing your order by mail.
The telephone exchange privilege is not available with respect to (i)
shares for which certificates have been issued or (ii) redemptions for accounts
requiring supporting legal documents. See "Written Exchange Privilege" below for
further information concerning exchanges and "Excessive Trading" below for
information concerning the Funds' policy limiting excessive exchanges and
purchase/redemption transactions.
Written Exchange Privilege. The Written Exchange Privilege is a convenient
way to change your investment mix in the WPG Mutual Funds in order to respond to
changes in your investment goals or market conditions. In addition to using the
Telephone Exchange Privilege described above, shareholders in any of the Funds
may
exchange their shares for shares in any other Fund by submitting a written
request, in proper form, to the Transfer Agent. Such shares exchanged will be
valued at their respective net asset values next determined after the receipt of
the written exchange request. When making a written exchange request, please
provide your current Fund's name, your account name(s) and number(s), and the
dollar or share amount you wish to exchange, and specify all current plans or
shareholder service privileges you wish to continue to utilize in your new
account (e.g. Automatic Investment Plans). For written exchange requests, the
signatures of all registered owners (or executed powers of attorney) are
required. Signature guarantees are also required if the account in the Fund
whose shares are being purchased will not be identically registered. See "How to
Redeem Shares" below for a discussion of acceptable signature guarantors. If
share certificates were issued for the shares being exchanged, such
certificates, properly endorsed, must accompany the written exchange request. No
sales charge is imposed on exchanges. Please note that an exchange is treated as
a sale of shares exchanged and may therefore produce a gain or loss which may be
recognizable for tax purposes. The minimum initial investment in each Fund,
whether by exchange or purchase, is $2,500 for each Fund ($250,000 for the
Growth Fund; $5,000 for the Quantitative Equity Fund). All subsequent amounts
exchanged must be a minimum of $100 for each Fund ($25,000 for the Growth Fund;
$500 for the Quantitative Equity Fund). Exchange requests will not be accepted
for shares purchased by check within 15 days of the request. The exchange
privilege is available to shareholders in all states where it is legally
permitted. Currently all states permit such exchanges. See "Excessive Trading"
below for information concerning the Funds' policy limiting excessive exchanges
and purchase/redemption transactions.
Checkwriting Service. Checkwriting is available for shareholders of the
Government Money Market Fund and Tax Free Money Market Fund. There is no charge
for this service. The minimum amount of each check must be $500. The
checkwriting service may not be used for a complete redemption of your account.
If the amount of the check is greater than the value of your account, the check
will be returned unpaid. In addition, checks written on amounts subject to the
15-day check clearing period, described below under "How to Redeem Shares," also
will be returned unpaid. The Application for this service is included with this
Prospectus. All notices with respect to checks must be given to the Funds'
Transfer Agent. The checkwriting service is not available for Individual
Retirement Accounts or other retirement accounts.
Automatic Investment and Systematic
Withdrawal Plans. For your convenience, the
Funds provide plans that enable you to add to
your investment or withdraw from your account(s)
with a minimum of paperwork. The Application
for these plans is included with this Prospectus.
(1) Automatic Investment Plan. The Automatic
Investment Plan is a convenient way for you to purchase shares of the Funds
at regular monthly or quarterly intervals selected by you. The Automatic
Investment Plan enables you to achieve dollar-cost averaging with respect
to investments in Funds with fluctuating net asset values through regular
purchases of a fixed dollar amount of shares in the Funds. Dollar-cost
averaging brings discipline to your investing. Dollar-cost averaging
results in more shares being purchased when a Fund's net asset value is
relatively low and fewer shares being purchased when a Fund's net asset
value is relatively high, thereby helping to decrease the average price of
your shares. Through the Automatic Investment Plan, Fund shares are
purchased by transferring funds (minimum of $50 per transaction per Fund)
from your designated checking, NOW, or bank account. Your automatic
investment in the Fund(s) designated by you will be processed on a regular
basis beginning on or about the first business day of the month or quarter
you select. This Plan is not available to shareholders of the Growth Fund
or the Quantitative Equity Fund.
(2) Systematic Withdrawal Plan. The
Systematic Withdrawal Plan provides a
convenient way for you to receive regular
cash payments while maintaining an invest-
ment in the Funds. The Systematic With-
drawal Plan permits you to have payments of
$50 or more automatically transferred from
your account(s) in the Fund(s) to you or
your designated bank account on a monthly
or quarterly basis. In order to start this Plan,
you must have a minimum balance of
$10,000 in any Fund account utilizing this
feature. Your systematic withdrawals will be
processed on a regular basis beginning on or
about the first business day of the month or
quarter you select.
Sweep Program. The Sweep Program is a convenient way for you to
automatically invest excess credit balances in any of your brokerage accounts
with WPG in shares of the Government Money Market Fund or the Tax Free Money
Market Fund. Under the Sweep Program, if you have a brokerage account with WPG
you may elect to have credit balances automatically invested in shares of the
Government Money Market Fund or Tax Free Money Market Fund. WPG will transmit
orders for the purchase of a Fund's shares on the same day that excess credit
balances are available in your brokerage account. To obtain further information
concerning this service, please call 1-800-223-3332.
Tax-Sheltered Retirement Plans. Investors
in the Funds (other than the Growth Fund, the Tax
Free Money Market Fund and the Municipal Bond
Fund) may make use of a variety of retirement
plans, including Individual Retirement Accounts,
simplified employee pension plans, money pur-
chase pension and profit sharing plans, and 401(k)
Plans.
(1) Individual Retirement Accounts ("IRAs")
and Simplified Employee Pension Plans ("SEP-IRAs"). You may also save for
your retirement and shelter your investment income from current taxes by
either: (i) establishing a new IRA; or (ii) "rollingover" or transferring
to an IRA invested in the Funds monies from other IRA accounts or qualified
distributions from a plan. An IRA is an attractive retirement-savings
vehicle for qualified individuals. Using your IRA, you can invest, on a
tax-favored basis, up to $2,000 per year in the Funds. You may also invest
in a spousal IRA for your non-employed spouse provided the total annual
contributions to your IRA and your spouse's IRA do not exceed $2,250. In
addition, your employer may (i) establish new SEP-IRAs for its employees
that can be used to invest on a tax-favored basis in the Funds or (ii) use
the Funds as additional funding vehicles for existing SEP-IRAs.
(2) Prototype Retirement Plans. Both a proto-
type money purchase pension plan and a
profit sharing plan, which may be used alone
or in combination, are available to sole
proprietors, partnerships and corporations to
provide retirement benefits for individuals
and employees.
(3) 401(k) Plans. Through the establishment of a 401(k) Plan by your company,
your employees can invest a portion of their wages in the Funds on a
tax-deferred basis for their retirement needs.
Other Accounts. The Funds also offer special
services to meet the needs of investors.
(1) Uniform Gift to Minors. By establishing a
Uniform Gift to Minors Account with the Funds, you can build a fund for
your children's education or a nest egg for their future and, at the same
time, potentially reduce your own income taxes. (Not available for the
Growth Fund.)
(2) Custodial and Fiduciary Accounts. The
Funds provide a convenient means of estab-
lishing custodial and fiduciary accounts for
investors with fiduciary responsibilities.
For further information regarding any of the above retirement plans and
accounts, please call toll free at 1-800-223-3332. Retirement investors should
consult with their own tax counsel or adviser.
HOW EACH FUND'S NET ASSET
VALUE IS DETERMINED
The net asset value per share of the Funds is normally calculated as of the
close of regular trading on the New York Stock Exchange ("Exchange"), currently
4:00 p.m. Eastern Time, every day the Exchange is open for regular trading. The
per share net asset value, calculated as described below, is effective for all
orders received in good order (as previously described) prior to the close of
regular trading on the Exchange for that day. Orders received after the close of
regular trading on the Exchange or on a day when the Exchange is not open for
business will be priced at the net asset value per share next computed.
The net asset value of each Fund's shares is determined by adding the value
of all securities, cash, and other assets of the Fund, subtracting liabilities
(including accrued expenses and dividends payable), and dividing the result by
the total number of outstanding shares in the Fund.
For purposes of calculating the net asset value per share of the Government
Money Market Fund and the Tax Free Money Market Fund, portfolio securities are
valued on the basis of amortized cost, which method does not take into account
unrealized gains or losses on the Fund's portfolio securities. Amortized cost
valuation involves initially valuing a security at its cost, and, thereafter,
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the security. While this method provides certainty in valuation, it may result
in periods during which the value of a security, as determined by amortized
cost, may be higher or lower than the price the Government Money Market Fund or
the Tax Free Money Market Fund would receive if the Fund sold the security. The
Board of Trustees has established procedures to monitor any such deviation
between amortized cost and market value and to take corrective action should the
deviation exceed specified amounts.
For purposes of calculating each other Fund's net asset value per share,
portfolio securities (other than certain money market instruments) are valued
primarily based on market quotations, or, if market quotations are not
available, by a valuation committee as appointed by the Board of Trustees. In
accordance with procedures and agreements approved by the Board of Trustees for
each Fund, the Funds may use pricing services to value bonds and other fixed
income investments of the Funds. Money market instruments with a remaining
maturity of 60 days or less at the time of purchase are generally valued at
amortized cost.
HOW TO REDEEM SHARES
Subject to the restrictions outlined below, shareholders have the right to
redeem all or any part of their shares in the Funds at a price equal to the net
asset value of such shares next computed following receipt and acceptance of the
redemption request by the Funds' Transfer Agent. A redemption is treated as a
sale of the shares redeemed and may therefore produce a gain or loss which may
be recognizable for tax purposes. In order to redeem shares of the Funds, a
written request in "proper form" (as explained below) must be sent directly to
The Shareholder Services Group, Inc., Attention: WPG Mutual Funds, P.O. Box
9037, Boston, MA 02205. No charge is imposed on any redemption request processed
by the Funds' Transfer Agent or WPG. You may also, of course, transmit your
redemption request to the Funds through your broker-dealer, who may charge you a
transaction fee for such services. Please note that you cannot redeem shares by
telephone or telegram. In addition, the Funds cannot accept requests which
specify a particular date or price for redemption or which specify any other
special conditions.
Proper Form for All Redemption Requests. Your redemption request must be in
proper form. To be in proper form, your request must include: (1) your share
certificates, if any, endorsed by all shareholders for the account exactly as
the shares are registered or accompanied by executed power(s) of attorney and
the signature(s) must be guaranteed, as described below; (2) for written
redemption requests, a "letter of instruction," which is a letter specifying the
name of the Fund, the number of shares to be sold, the name(s) in which the
account is registered, and your account number. The letter of instruction must
be signed by all registered shareholders for the account using the exact names
in which the account is registered or accompanied by executed power(s) of
attorney; (3) any signature guarantees that are required as described above in
(1), or required by the Funds if the redemption proceeds are to be sent to an
address other than the address of record or to a person other than the
registered shareholder(s) for the account; and (4) other supporting legal
documents, as may be necessary, for redemption requests by corporations,
estates, trusts, guardianships, custodianships, partnerships, and pension and
profit sharing plans. Signature guarantees, when required, must be obtained from
any one of the following institutions, provided that such institution meets
credit standards established by the Funds' Transfer Agent: (i) a bank; (ii) a
securities broker or dealer, including a government or municipal securities
broker or dealer, that is a member of a clearing corporation or has net capital
of at least $100,000; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, or a federal savings bank or association; or
(v) a national securities exchange, a registered securities exchange or a
clearing agency.
Your request for redemption will not be processed unless it is in proper
form, as described above.
Receiving Your Redemption Payment. Except under certain emergency
conditions, your redemption payment will be sent to you (net of any required
withholding taxes) after receipt of your written redemption request, in proper
form, by the Funds' Transfer Agent as follows: prior to June 5,1995, within five
business days; June 5 and 6, within four business days; and after June 6, within
three business days. If you wish to have your redemption proceeds wired to your
checking or bank account, you may so elect. Currently, the Transfer Agent for
the Funds charges a fee for wire transfers. If you make a redemption request
within 15 days of the date you purchased shares by means of a personal,
corporate or government check, the redemption payment will be held until the
purchase check has cleared (up to 15 days). Nevertheless, the shares redeemed
will be priced for redemption at the price next determined after receipt of your
redemption request. You can avoid the inconvenience of this check clearing
period by purchasing shares with a certified, treasurer's or cashier's check, or
with a federal funds or bank wire.
Minimum Account Size. Due to the relatively high cost of maintaining
smaller accounts, the Funds reserve the right to redeem shares in any account
if, as the result of redemptions, the value of that account drops below $100.
You will be allowed at least 60 days, after written notice by the Funds, to make
an additional investment to bring your account value up to at least $100 before
the redemption is processed.
Excessive Trading. To prevent excessive transaction activity and to protect
shareholders, the Funds have adopted a policy ("Trading Policy") to limit the
number of exchanges and purchase/redemption transactions (as described below) by
any one shareholder account (or group of accounts under common management) to a
total of six such transactions per year. This Trading Policy applies to: (i)
exchanges into or out of any Fund described in this Prospectus (other than
between WPG Income Funds), and (ii) any pair of transactions involving a
purchase of shares of any one Fund followed by a redemption of an offsetting or
substantially equivalent dollar amount of shares of that same Fund. This Trading
Policy does not apply to transactions solely among or solely involving the WPG
Income Funds. If you violate this Trading Policy, your future purchases of, or
exchanges into, the Funds may be permanently refused. This Trading Policy does
not prohibit you from redeeming shares of any Fund. WPG reserves the right to
waive the Trading Policy in its discretion.
MANAGEMENT OF THE FUNDS
Investment Adviser and Administrator. As noted above, WPG, One New York Plaza,
New York, New York 10004, serves as the investment adviser to each Fund. Lloyds
serves as subadviser to the International Fund pursuant to a Subadvisory
Agreement with the International Fund and WPG.
On April 3, 1995, WPG was converted from a New York limited partnership to
a limited liability company organized under Delaware law. The conversion did not
result in any change in the existing ownership, structure or business of the
firm.
Under the investment advisory agreements withthe Funds, WPG manages the
Funds' portfolios. Subject to the general supervision of the Funds' Boards of
Trustees, WPG is responsible for the selection and management of all portfolio
investments of each Fund (other than as described below for the International
Fund) in accordance with each Fund's investment objective, investment program,
policies and restrictions.
With respect to the International Fund, WPG (i) is responsible for the
selection and management of the International Fund's U.S. securities, (ii)
oversees and assists in the management of the International Fund's assets by
Lloyds and monitors on a continuous basis Lloyds' selection and management of
the Fund's investments in non-U.S. securities, and (iii) determines, in
consultation with Lloyds, the percentage allocation of the International Fund's
assets between U.S. and non-U.S.
securities.
Each Fund pays WPG a fee equal on an annual basis to a percentage of such
Fund's average daily net assets as follows:
<TABLE>
<S> <C> <C>
Actual Rate
Paid for the
Present Year Ended
Annual December 31,
Fund Fee Rate 1994
Government Money Market Fund .50% of net assets up to $500 million .50%
and .45% of net assets $500 million to $1 billion
Tax-Free Money Market Fund .40% of net assets $1 billion to $1.5 billion
.35% of net assets in excess of $1.5 billion
Municipal Bond Fund 0.00% of average daily net assets while net assets .00%1
are less than $17 million and
0.50% of average daily net assets while net assets
are $17 million or more
Government Fund .60% of net assets up to $300 million .60%
.55% of net assets $300 million to $500 million
.50% of net assets in excess of $500 million
Growth and Income Fund .75% .75%
Tudor Fund .90% of net assets up to $300 million .90%
.80% of net assets $300 million to $500 million
.75% of net assets in excess of $500 million
International Fund2 0.50% of average daily net assets when net assets .56%3
are less than $15 million
0.85% of average daily net assets when net assets
are $15 or more million but are less than $20 million
1.00% of average daily net assets when net assets
are $20 million or more
Growth Fund .75% .75%
Quantitative Equity Fund .75% .75%
------------------
<FN>
1 Prior to October 19, 1994, Municipal Bond Fund's investment advisory fee
was equal on an annual basis to 0.50% of the Fund's average daily net assets.
WPG voluntarily waived its advisory fee with respect to the Municipal Bond Fund
during the period January 1, 1994 through October 18, 1994.
2 Pursuant to the International Fund's Subadvisory Agreement, WPG pays
Lloyds, on a quarterly basis, a subadvisory fee equal on an annual basis to .40%
of the International Fund's average daily net assets. The International Fund has
no responsibility to pay such subadvisory fee and pays only the advisory fee at
the rate set forth above.
3 Prior to October 19, 1994, International Fund's investment advisory fee
was equal on an annual basis to 1.00% of the Fund's average daily net assets.
WPG voluntarily agreed to reduce its advisory fee with respect to the
International Fund during the period January 1, 1994 through October 18, 1994.
</FN>
</TABLE>
-9-
<PAGE>
Pursuant to separate administration agreements, WPG also acts as the
administrator of each Fund. As administrator, WPG provides personnel for
supervisory, administrative, accounting, shareholder services and clerical
functions; oversees the performance of administrative and professional services
to the Funds by others; provides office facilities, furnishings and office
equipment; and prepares, but does not pay for, reports to shareholders, the SEC
and other regulatory authorities. For all administrative services and facilities
provided by WPG under each administration agreement, WPG receives a fee,
computed daily and payable monthly, at an annual rate based on the average net
assets of each Fund as shown as follows: Tudor .07%, Growth and Income .09%,
Growth .02%, Quantitative Equity .02%, International .06% while assets exceed
$25 million, Government Securities .03%, Municipal Bond .12% while assets exceed
$50 million, Government Money Market .06%, Tax Free Money Market .03%.
The administrative fee of each Fund is reviewed and approved annually by
the Board of Trustees.
WPG has agreed to limit each Fund's respective total operating expenses
(excluding taxes, brokerage commissions, interest, dividends on securities sold
short and extraordinary legal fees and expenses) ("Operating Expenses") payable
under the advisory or administration agreements during any fiscal year to the
limits set by state securities administrators in those states in which the
Fund's shares are sold. Currently, the most restrictive limits imposed by a
state are: 2.5% of the first $30 million of average net assets, 2.00% of the
next $70 million of net assets, and 1.5% of net assets over $100 million. For
the year ended December 31, 1994, there was no reduction in advisory fees for
any of the Funds as a result of the expense limitation agreement.
Portfolio Managers. The following is a list of the portfolio managers of the
Funds and their business experience during the past five years. Each portfolio
manager is responsible for the day-to-day management of his or her Fund.
WPG Government Money Market Fund. Ellen
Welsh has been the portfolio manager of the Fund
since its inception. Ms. Welsh has been a principal
of WPG since 1990. Prior to this, Ms. Welsh was
an associate principal of WPG.
WPG Tax Free Money Market Fund. Arthur L.
Schwarz and Janet A. Fiorenza have been the
portfolio managers of the Fund since its inception.
Mr. Schwarz is a principal of WPG. Ms. Fiorenza
has been a principal of WPG since 1993. Prior to
this, Ms. Fiorenza was an associate principal of
WPG.
WPG Intermediate Municipal Bond Fund.
Arthur L. Schwarz and S. Blake Miller have been
the portfolio managers of the Fund since its
inception. Mr. Schwarz is a principal of WPG.
Mr. Miller is an associate principal of WPG. Prior
to this, Mr. Miller was a vice president and a
portfolio manager in WPG's tax exempt fixed
income division.
WPG Government Securities Fund. Daniel S.
Vandivort has been the portfolio manager of the
Fund since February, 1995. Mr. Vandivort has
been a principal of WPG since November, 1994.
From 1989 to 1994, Mr. Vandivort served in
various capacities with CS First Boston Investment
Management, including Managing Director and
Head of U.S. Fixed Income and Senior Portfolio
Manager and Director, Global Product Devel-
opment and Marketing.
WPG Growth and Income Fund. A. Roy
Knutsen has been the portfolio manager of the
Fund since 1992. Mr. Knutsen is a principal of
WPG.
WPG Tudor Fund. Melville Straus has been the
portfolio manager of the Fund since 1973. Mr.
Straus is a principal of WPG.
WPG International Fund. Raymond Haines has
been the portfolio manager of the Fund since
January, 1994. He was Director of Lloyds from
1986 to 1993. Mr. Haines is the chief investment
officer of Lloyds (the subadvisor of the Fund)
since 1993.
WPG Growth Fund. John P. Callaghan has been
the portfolio manager of the Fund since May,
1993. Mr. Callaghan has been a principal of WPG
since 1993. Prior to this, Mr. Callaghan was a
managing director and equity portfolio manager of
Equitable Capital Management Corporation.
WPG Quantitative Equity Fund. Joseph N.
Pappo has been the portfolio manager of the Fund
since its inception. Mr. Pappo has been a principal
of WPG since 1994. Prior to this, Mr. Pappo was
an associate principal of WPG. Prior to joining
WPG, Mr. Pappo was the founder and president of
Eden Financial Group which was acquired by
WPG in 1991.
Transfer Agent and Dividend Disbursing Agent. The Shareholder Services Group,
Inc., P.O. Box 9037, Boston, MA, 02205 serves as Transfer Agent and Dividend
Disbursing Agent for the Funds. The Funds may also enter into agreements with
and compensate other transfer agents and financial institutions who process
shareholder transactions and maintain shareholder accounts.
Principal Underwriter. Shares of the Funds are
offered directly to the public by the Funds them-
selves. The Funds employ no principal underwriter
or distributor.
Expenses. Each Fund bears all expenses of its operation, subject to the expense
limitation agreement described above. In particular, each Fund pays: investment
advisory fees; administration fees; custodian and transfer agent expenses; legal
and accounting fees and expenses; expenses of preparing, printing, and
distributing Prospectuses and SAIs to existing shareholders, and shareholder
communications and reports, except as used to market its shares; expenses of
computing its net asset value per share; federal and state registration fees and
expenses with respect to its shares; proxy and shareholder meeting expenses;
expenses of issuing and redeeming its shares; independent trustee fees and
expenses; expenses of bond, liability, and other insurance coverage; brokerage
commissions; taxes; trade association fees; and certain non-recurring and
extraordinary expenses. In addition, the expense of organizing the Municipal
Bond Fund and the Quantitative Equity Fund and initially registering and
qualifying their shares under federal and state securities laws are being
charged to such Funds' operations, as an expense, over a period not to exceed 60
months from each such Fund's respective inception date.
Administration and Service Plans. Pursuant to Administration and Service Plans
(the "Plans"), the Government Fund and the International Fund may each enter
into contracts ("Servicing Agreements") with banks, trust companies,
broker-dealers or other financial organizations ("Service Organizations") to
provide certain administrative and shareholder services for such Funds. As of
the date of this Prospectus, Servicing Agreements have been entered with respect
to each such Fund.
Administrative and shareholder servicing functions to be provided by the
Service Organizations may include, among other things: processing purchase and
redemption transactions; answering client inquiries regarding the applicable
Fund, assisting clients in changing dividend and distribution options, account
designations and address- es; performing sub-accounting; establishing and
maintaining shareholder accounts and records; investing client cash account
balances automatically in shares in accordance with arrangements made by the
client; providing periodic statements of a client's account balance and
integrating such statements with those of other transactions and balances in the
client's other accounts serviced by the Service Organization; arranging for bank
wires; and such other services as the Funds may request, to the extent permitted
by applicable statute, rule or regulation. Each Fund will pay all costs and
expenses in connection with the preparation, printing and distribution of its
Prospectus and Statement of Additional Information to existing shareholders.
Each Service Organization may receive a fee payable by the applicable Fund,
in respect of shares held by or through such Service Organization for its
customers, for services performed pursuant to the Plans and the applicable
Servicing Agreements. The schedule of fees and the basis upon which such fees
may be paid will be determined by the Trustees, and may be based on a flat fee,
a percentage of the average daily net assets attributable to the shares held by
the customers of the Service Organizations or other reasonable basis. Each Fund
may pay an aggregate amount of up to .05% per year of its total average daily
net assets in order to pay the Service Organizations the appropriate fee and to
pay its expenses under the Plans. For the fiscal year ended December 31, 1994,
Government Fund paid Service Organizations fees of less than 0.01% of the Fund's
average daily net assets. International Fund did not make any payments to
service organizations during the fiscal year ended December 31, 1994. For
additional information on the Plans, see the Funds' Statements of Additional
Information, "Investment Adviser-Administration and Service Plans."
Some Service Organizations may impose certain additional or different
conditions on their clients, such as requiring their clients to invest more than
the minimum initial investment, and may charge their clients a direct fee for
services provided to their customers. These fees would be in addition to any
amounts which might be received from the Funds under the Plans. Shareholders are
urged to consult their Service Organiza-
-------------------
tions to obtain a schedule of any such fees.
The annualized ratios of operating expenses to average net assets for the
Funds for the year ended December 31, 1994 are set forth under the "Financial
Highlights" section.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund has qualified and elected to be
treated as a "regulated investment company" ("RIC") under the Internal Revenue
Code of 1986, as amended ("Code"), and intends to qualify as such for each
taxable year. A Fund which qualifies as a RIC will not be subject to federal
income or excise tax on income and gains distributed to its shareholders at
least annually in accordance with the Code's distribution requirements. Each
Fund intends to distribute all of its net investment income and net capital
gains each year.
Income dividends, if any, will be declared daily and distributed monthly
for the Government Money Market Fund, the Tax Free Money Market Fund, the
Government Fund and the Municipal Bond Fund and at least annually for each other
Fund. Net capital gains of each Fund, if any, realized during the taxable year
will be distributed no less frequently than annually. Income dividends are
derived from each Fund's net investment income (including dividends, interest
and recognized market discount income), net short-term capital gains, and
certain net foreign currency gains received by a Fund, and are taxable to you as
ordinary income for regular federal income tax purposes, except for dividends
paid by the Tax-Free Money Market Fund and the Municipal Bond Fund from
tax-exempt interest they receive as described below. Corporate shareholders may
be entitled to take the corporate dividends-received deduction for income
dividends received from a Fund that are attributable to dividends received by
that Fund from a domestic corporation, subject to certain restrictions under the
Code. Distributions from each Fund's net long-term capital gains are taxable to
you as long-term capital gains, regardless of how long you have held your
shares. Income dividends and distributions of capital gains declared in October,
November or December as of a record date in such a month and paid in the
following January are treated under the Code as if they were received on
December 31 of the year declared. Each Fund in which you are a shareholder will
mail to you tax information by the end of January indicating the federal tax
status of your income dividends and capital gains distributions for that Fund.
Such tax status is not affected by your choice to receive such distributions in
additional shares or in cash.
Provided that the Tax Free Money Market Fund and the Municipal Bond Fund
satisfy certain requirements of the Code, each such Fund may designate its
dividends derived from the interest earned on tax-exempt obligations as "exempt
interest dividends," which are not subject to regular federal income tax. The
Tax Free Money Market Fund and the Municipal Bond Fund anticipate that
substantially all of their income dividends will be exempt from regular federal
income tax, although they may be included in the tax base for determining
taxability of Social Security or railroad retirement benefits and may increase a
shareholder's liability, if any, for federal alternative minimum taxes ("AMT").
Distributions of interest income exempt for federal income tax purposes may also
be exempt under the tax laws of certain individual states or localities if
derived from obligations of such states or localities. You may wish to consult
your tax adviser concerning the status in your state or locality of income
dividends from the Tax Free Money Market Fund and the Municipal Bond Fund, the
impact, if any, of the AMT, and the possible taxability of exempt interest
dividends for "substantial users" of facilities financed by industrial revenue
or certain private activity bonds.
If, as is anticipated, the International Fund pays withholding or other
taxes to any foreign government during the year with respect to its investment
in foreign securities, such taxes paid net of amounts to be reclaimed will
reduce the Fund's dividends. If the Fund satisfies certain requirements of the
Code, it may elect to pass through to each shareholder its proportionate share
of such foreign taxes that are treated as income taxes under the Code, which
would then be included in your taxable income. However, you may be able to claim
an offsetting credit or itemized deduction on your tax return, subject to
certain limitations under the Code. The Form 1099 you receive will indicate the
amount of foreign tax for which a credit or deduction may be available. Please
consult your tax adviser if you have any questions.
If you invest in the Government Fund or the Government Money Market Fund,
you should know that many states and local taxing authorities allow an exemption
from state or local income tax for distributions derived from interest received
by a fund from direct obligations of the U.S. Government, such as U.S. Treasury
obligations, or an exemption from intangibles taxes based on the extent of a
fund's investment in such direct U.S. Government obligations, subject in some
states to satisfaction of minimum holding thresholds and/or reporting
requirements. You may wish to consult your tax adviser concerning the possible
existence of such an exemption in the states and localities where you pay tax.
Tax Withholding And Certification
Instructions
Each Fund is required by federal law to withhold as "backup withholding"
31% of reportable payments (which may include taxable income dividends, capital
gains distributions and, except for Funds that maintain a constant net asset
value per share, share redemption proceeds) paid to individuals and other
non-exempt shareholders who have not provided the Fund with their correct social
security or other taxpayer identification number (TIN) and certain required
certifications. In order to avoid such withholding and possible penalties, you
must certify under penalties of perjury on your Application, or on a separate
W-9 Form supplied by the Transfer Agent, that the TIN you provide is correct (or
that you have applied for such a number and are waiting for it to be issued, in
which case backup withholding may apply until you provide your number and
required certifications to the Fund) and that you are not currently subject to
backup withholding, or you are exempt from backup withholding.
An individual's TIN is generally his social security number. Special rules
apply in determining the TIN an entity, including an exempt recipient, must
provide. Exempt recipients include corporations, tax exempt pension plans and
IRAs, governmental agencies, financial institutions, registered securities and
commodities dealers and others. If you are unsure of the correct TIN to provide
or whether you are an exempt recipient, consult your tax adviser. A Fund may
nevertheless be required to impose backup withholding if it is notified by the
IRS or a broker that the TIN you have provided is incorrect or that you are
otherwise subject to such withholding. Any tax withheld may be credited against
taxes owed on your federal income tax return. For further information, see
Section 3406 of the Code and consult your tax adviser.
If you are not a U.S. person under the Code, you should provide the Funds
with an IRS Form W-8 to avoid backup withholding on capital gain distributions
and, except for Funds that maintain a constant net asset value per share,
redemption proceeds. You should consider the U.S. and foreign tax consequences
of your investment in a Fund, including the possible applicability of a U.S.
withholding tax at rates up to 30% on income dividends paid to non-U.S. persons.
Reinvestment of Income Dividends and
Capital Gains Distributions
Unless you elect otherwise, as permitted in the New Account Application,
income dividends and capital gains distributions with respect to a particular
Fund will be reinvested in additional shares of that Fund and will be credited
to your account with that Fund at the net asset value per share next determined
as of the ex-dividend date. Both income dividends and capital gains
distributions are paid by the Fund on a per share basis. As a result, at the
time of such payment, the net asset value per share of the Funds (except the
Government Money Market Fund and the Tax Free Money Market Fund) will be reduced
by the amount of such payment. Income dividends (other than exempt-interest
dividends of the Tax Free Money Market Fund or the Municipal Bond Fund) and
capital gains distributions are taxable to shareholders of each Fund that are
subject to federal income tax as described above, regardless of whether they are
taken in cash or reinvested in shares of the Fund, unless the accounts of such
shareholders are maintained as qualified retirement plans, IRAs, SEP-IRAs and
other tax-deferred plans or accounts or such shareholders are otherwise exempt
from federal income tax. Participants in such retirement plans or accounts may
be subject to tax on all or a portion of their distributions from such plans or
accounts under complex Code provisions concerning which a tax adviser should be
consulted. If you wish to change the manner in which you receive income
dividends and capital gains distributions, your written notification of such
change must be received by the Funds' Transfer Agent at least ten days before
the next scheduled distribution.
PORTFOLIO BROKERAGE
In effecting securities transactions, the Funds generally seek to obtain
the best price and execution of orders. Commission rates are a component of
price and are considered along with other factors, including the ability of the
broker to effect the transaction, and the broker's facilities, reliability and
financial responsibility. Subject to the foregoing, the Funds intend to utilize
WPG as the primary broker for the Funds in connection with the purchase and sale
of exchange-traded portfolio securities. As the Funds' primary broker, WPG will
receive brokerage commissions from the Funds, limited to the "usual and
customary broker's commission" specified in Section 17(e) of the 1940 Act. The
Funds intend to continue to use WPG as their primary broker on exchange-traded
securities, provided WPG is able to provide execution at least as favorable as
that provided by other qualified brokers.
With respect to the International Fund, it is also contemplated that Lloyds
Bank Stockbrokers ("LBS") and Schroder Munchmeyer Hengst & Co. ("SMH"), both
brokers and affiliated with Lloyds, may serve as brokers with respect to
portfolio transactions effected on U.K. securities exchanges and German
securities exchanges, respectively, subject to the limits specified in Section
17(e) of the 1940 Act, and provided further that LBS and SMH are able to provide
execution at least as favorable as that of other qualified brokers.
The Board of Trustees for each Fund has developed procedures to limit the
commissions received by WPG, LBS and SMH to the standard described in Section
17(e) of the 1940 Act and the rules thereunder. On a quarterly basis, each
Fund's Board of Trustees reviews transactions of each Fund with WPG, LBS and SMH
to assure their compliance with such procedures.
The Funds expect that they will also execute their portfolio transactions
through qualified brokers other than WPG. In selecting such other brokers, WPG
will also consider the quality and reliability of brokerage services, including
execution capability and performance and financial responsibility, and may
consider the research and other investment information provided by such brokers.
Accordingly, the commissions paid to any such broker may be greater than the
amount another firm might charge, provided WPG determines in good faith that the
amount of such commission is reasonable in relation to the value of the
brokerage services and research information provided by such broker. Such
information may be used by WPG (and its affiliates) in managing all of its
accounts and not all of such information may be used by WPG in managing the
Funds. In selecting other brokers, each Fund may also consider the sale of its
shares effected through such other brokers as a factor in their selection,
provided the Fund obtains the best price and execution of orders.
Money market securities and other fixed income securities in which the
Funds may invest are traded primarily in the over-the-counter ("OTC") market.
For transactions effected in the OTC market, the Funds intend to deal with the
primary market-makers in the securities involved, unless a more favorable result
is obtainable elsewhere.
ORGANIZATION AND CAPITALIZATION
The Funds described in this Prospectus are separately managed investment
portfolios.
The Government Money Market Fund, the Tax Free Money Market Fund, the
Government Fund, the Quantitative Equity Fund and the Municipal Bond Fund are
each separate portfolios of the Weiss, Peck & Greer Funds Trust ("WPG Funds
Trust"). Each Fund in the WPG Funds Trust represents a separate series of shares
in the Trust having different objectives, programs, policies, and restrictions.
The WPG Funds Trust was organized as a business trust under the laws of the
Commonwealth of Massachusetts ("Massachusetts business trust") on September 11,
1985. Each share of beneficial interest of each of these five Funds represents
an equal proportionate interest in that Fund with each other share in that Fund.
Each share of each of these five Funds is entitled to one vote on all matters
submitted to a vote of all shareholders of the WPG Funds Trust, such as the
election of Trustees and ratification of the selection of auditors. Shares of a
particular Fund vote separately on matters affecting only that Fund, including
approval of an investment advisory agreement for a particular Fund and changes
in fundamental policies or restrictions of a particular Fund. The WPG Funds
Trust is authorized to issue an unlimited number of full and fractional shares
of beneficial interest, having a par value of $.001 per share, in one or more
portfolios.
The Growth and Income Fund was organized as a Delaware corporation in
December 1966 and reorganized as a Massachusetts business trust on April 29,
1988. In January 1991, the Fund changed its name from the "WPG Fund" to "WPG
Growth and Income Fund." The Growth and Income Fund is authorized to issue an
unlimited number of full and fractional shares of beneficial interest, par value
$1.00 per share.
The Tudor Fund was organized as a Delaware corporation in June 1968 and
reorganized as a Massachusetts business trust on April 29, 1988. In December
1989, the Fund changed its name from "Tudor Fund" to the "WPG Tudor Fund." The
Tudor Fund is authorized to issue an unlimited number of full and fractional
shares of beneficial interest, par value $.33 1/3 per share.
The International Fund was organized as a Massachusetts business trust on
January 24, 1989. The International Fund is authorized to issue an unlimited
number of full and fractional shares of beneficial interest, par value $.01 per
share.
The Growth Fund was organized as a Delaware corporation in October 1985 and
reorganized as a Massachusetts business trust on April 29, 1988. The Growth Fund
is authorized to issue an unlimited number of full and fractional shares of
beneficial interest, par value $.001 per share.
Each Fund, including each of the five Funds in the WPG Funds Trust offered
through this Prospectus, currently issues one class of shares all of which have
equal rights with regard to voting, redemptions, dividends and distributions.
Each Fund, subject to the authorization by its Board of Trustees, is
authorized to issue multiple classes of shares which may in the future be
marketed to different types of investors. The Boards currently do not intend to
authorize the issuance of multiple classes of shares. In addition, subject to
approval by its Board of Trustees, each Fund may pursue its investment objective
by investing all of its investable assets in a pooled fund. See "Risk
Considerations and Other Investment Practices and Policies of the Funds" below.
Shares in each Fund, when issued, will be fully paid and nonassessable. The
shares in each Fund have no preemptive or conversion rights. In the event of
liquidation of a Fund, shareholders in that Fund are entitled to share pro rata
in that Fund's net assets available for distribution to shareholders.
Each Fund's activities are supervised by the Board of Trustees for that
Fund or, as appropriate, the WPG Funds Trust. The Board of Trustees for each
Fund has overall responsibility for the management of the business of each Fund.
Shareholders in each Fund have one vote for each share held on matters as to
which they are entitled to vote. The Funds are not required to hold and have no
current intention of holding annual shareholder meetings. Nevertheless, special
meetings may be called for purposes such as electing or removing Trustees,
changing fundamental policies, or approving an investment advisory agreement.
Shareholders will be assisted in communicating with other shareholders in
connection with removing a Trustee as if Section 16(c) of the 1940 Act were
applicable.
Although each Fund is offering only its own shares, since the Funds use a
combined Prospectus, it is possible that one Fund (or the WPG Funds Trust) might
become liable for a misstatement or omission in this Prospectus regarding
another Fund. The Trustees for each Fund and the WPG Funds Trust have considered
this factor in approving the use of a combined Prospectus.
RISK CONSIDERATIONS AND
OTHER INVESTMENT PRACTICES AND
POLICIES OF THE FUNDS
Writing and Purchasing Covered Put and Call Options on Securities, Stock
Indices, and Currencies. To earn additional income or to minimize anticipated
declines in the value of its securities, the Government Fund, the Growth and
Income Fund, the Tudor Fund, the International Fund, the Growth Fund and the
Quantitative Equity Fund may each write (i.e., sell) exchange-traded and
over-the-counter covered call options on securities and securities indices. The
Government Fund, the International Fund, the Tudor Fund, the Growth Fund and the
Quantitative Equity Fund may also write exchange-traded and over-the-counter
covered put options on securities and securities indices. In addition, to earn
additional income or to attempt to reduce risks associated with currency
fluctuations, the International Fund may write exchange-traded covered call and
put options on currencies. The Tudor Fund, the International Fund, the
Government Fund, the Growth Fund and the Quantitative Equity Fund may purchase
exchange-traded and over-the-counter call and put options on securities and
securities indices, and the International Fund may also purchase call and put
options on currencies.
In general, a call option on a security gives the holder (purchaser) the
right to buy and obligates the writer (seller) to sell (if the option is
exercised), in return for a premium paid, the underlying security at the
exercise price during the option period. Conversely, a put option on a security
gives the holder the right to sell and obligates the writer to purchase (if the
option is exercised), in return for a premium paid, the underlying security at
the exercise price during the option period. A call or put option on a currency
operates in a similar manner, except that delivery is made of the particular
currency. A securities index call or put option is, in economic effect, similar
to a call or put option on a security, except that the value of the option
depends on the weighted value of the group of securities comprising the
securities index, rather than a particular security, and settlements are made in
cash rather than by delivery of a particular security.
Although these investment practices will be used to generate additional
income and to attempt to reduce the effect of any adverse price movement in the
securities or currency subject to the option, they do involve certain risks that
are different in some respects from investment risks associated with similar
funds which do not engage in such activities. These risks include the follow-
ing: for writing covered call options, the inability to effect closing
transactions at favorable prices and the inability to participate in the
appreciation of the underlying securities or currencies above the exercise
price; for writing covered put option-the inability to effect closing
transactions at favorable prices and the obligation to purchase the specified
securities or currencies or to make a cash settlement on the securities index at
prices which may not reflect current market values or exchange rates; and for
purchasing call and put options-possible loss of the entire premium paid. In
addition, the effectiveness of hedging through the purchase or sale of
securities index options, including options on the S&P 500 Index, will depend
upon the extent to which price movements in the portion of the securities
portfolio being hedged correlate with the price movements in the selected
securities index. Perfect correlation may not be possible because the securities
held or to be acquired by a Fund may not exactly match the composition of the
securities index on which options are written. If the forecasts of WPG or Lloyds
regarding movements in securities prices, interest rates, or currency exchange
rates are incorrect, a Fund's investment results may have been better without
the hedge transactions. The ability of the Funds to terminate over-the-counter
options is more limited than with exchange-traded options and may involve the
risk that broker-dealers participating in such transactions will not fulfill
their obligations. Until such time as the staff of the SEC changes its position,
the Funds will treat purchased over-the-counter options and all assets used to
cover written over-the-counter options as illiquid securities. However, for
options written with primary dealers in U.S. Government securities pursuant to
an agreement requiring a closing purchase transaction at a formula price, the
amount of illiquid securities may be calculated with reference to a formula
approved by the SEC staff. A more extensive description of these investment
practices and their associated risks is contained in each Fund's SAI.
Special Situations and Emerging Growth Companies. The Tudor Fund and Growth Fund
may invest in special situations. Special situations refer to unusual and
possibly unique developments for a company which may create a special
opportunity for significant returns. Smaller, less well-known companies are
often more likely to present special situation investment opportunities;
however, such opportunities may also exist in larger, well-capitalized
companies. Since every special situation involves a departure from past
experience, uncertainties in the appraisal of the particular special situation
company's future value and the risk of possible loss tend to be greater than
with an investment in a well-established company carrying on business according
to long-established patterns. On the other hand, if an investment in a special
situation is made at the appropriate time and the anticipated development does
materialize, greater than average appreciation may be achieved by the Fund.
The Growth Fund may also invest in emerging growth companies. An emerging
growth company may be a smaller company (i.e., normally, a company having a
capitalization of $750 million or less), a less well-known company, or a company
that has been in business for less than three years and offers superior growth
potential. While investment in emerging growth companies can provide
opportunities for rapid capital growth, it may also involve greater risk than is
customarily associated with investment in more established companies. Emerging
growth companies often have limited product lines, and lack established markets,
depth of experienced management, or the ability to generate necessary funds. The
securities of such companies may have limited marketability and may be subject
to greater price volatility than securities of larger companies or the market
averages in general.
Futures Contracts and Options on Futures Contracts. To hedge against changes in
interest rates, securities prices or currency exchange rates or for non-hedging
purposes, a Fund, subject to its investment objectives and policies, may
purchase and sell various kinds of futures contracts, and purchase and write
call and put options on any of such futures contracts. A Fund may also enter
into closing purchase and sale transactions with respect to any of such
contracts and options. The futures contracts may be based on various securities
(such as U.S. Government securities), securities indices, foreign currencies and
other financial instruments and indices. A Fund will engage in futures and
related options transactions only for bona fide hedging and non-hedging purposes
as defined in regulations of the Commodity Futures Trading Commission. A Fund
will not enter into futures contracts or options thereon for non-hedging
purposes if, immediately thereafter, the aggregate initial margin and premiums
required to establish non-hedging positions in futures contracts and options on
futures will exceed 5% of the net asset value of the Fund's portfolio, after
taking into account unrealized profits and losses on any such positions and
excluding the amount by which such options were in-the-money at the time of
purchase.
The use of futures contracts entails certain risks, including but not
limited to the following: no assurance that futures contracts transactions can
be offset at favorable prices; possible reduction of the Fund's income due to
the use of hedging; possible reduction in value of both the securities hedged
and the hedging instrument; possible lack of liquidity due to daily limits on
price fluctua- tions; imperfect correlation between the contract and the
securities being hedged; and potential losses in excess of the amount initially
invested in the futures contracts themselves. If the expectations of WPG
regarding movements in securities prices or interest rates are incorrect, the
Fund may have experienced better investment results without hedging. The use of
futures contracts and options on futures contracts requires special skills in
addition to those needed to select portfolio securities. A further discussion of
futures contracts and their associated risks is contained in the Funds' SAIs.
Securities of Foreign Issuers. Subject to each Fund's investment objective,
investment program, policies and restrictions, each Fund (other than Government
Fund, Municipal Bond Fund and Tax Free Money Market Fund) may invest in certain
types of U.S. dollar-denominated securities of foreign issuers. With respect to
certain foreign securities, the Funds may purchase ADRs, EDRs, and IDRs. ADRs
are U.S. dollar-denominated certificates issued by a U.S. bank or trust company
and represent the right to receive securities of a foreign issuer deposited in a
domestic bank or foreign branch of a U.S. bank. EDRs and IDRs are receipts
issued in Europe, generally by a non-U.S. bank or trust company, and evidence
ownership of non-U.S. securities. ADRs are traded on domestic exchanges or in
the U.S. over-the-counter market and, generally, are in registered form. EDRs
and IDRs are traded on non-U.S. exchanges or in non-U.S. OTC markets and,
generally, are in bearer form. Investments in ADRs have certain advantages over
direct investment in the underlying non-U.S. securities because (i) ADRs are
U.S. dollar-denominated investments which are registered domestically, easily
transferable, and for which market quotations are readily available, and (ii)
issuers whose securities are represented by ADRs are subject to the same
auditing, accounting and financial reporting standards as domestic issuers. To
the extent a Fund acquires ADRs through banks which do not have a contractual
relationship with the foreign issuer of the security underlying the ADR to issue
and service such ADRs, there may be an increased possibility that the Fund would
not become aware of and be able to respond to corporate actions such as stock
splits or rights offerings involving the foreign issuer in a timely manner.
In addition, the Growth and Income Fund, Tudor Fund, Growth Fund and
International Fund may invest in securities denominated in foreign currencies
("foreign denominated securities") in accordance with their specific investment
objectives, investment programs, policies and restrictions. Investing in foreign
denominated securities may involve advantages and disadvantages not present in
domestic investments. International diversification of a Fund's portfolio may
lower overall risk to the extent that it lessens the portfolio's susceptibility
to adverse conditions unique to domestic markets, while simultaneously expanding
investment opportunities. There may, however, be less publicly available
information about securities not registered domestically, or their issuers, than
is available about domestic issuers or their domestically registered securities.
Stock markets outside the U.S. may not be as developed as domestic markets, and
there may also be less government supervision of foreign exchanges and brokers.
Foreign denominated securities may be less liquid or more volatile than U.S.
securities. Trade settlements may be slower and could possibly be subject to
failure. In addition, brokerage commissions and custodial costs with respect to
foreign denominated securities may be higher than those for domestic
investments. Accounting, auditing, financial reporting, and disclosure standards
for foreign issuers may be different than those applicable to domestic issuers.
Foreign denominated securities may be affected favorably or unfavorably by
changes in currency exchange rates and exchange control regulations (including
currency blockage) and a Fund using such securities may incur costs in
connection with conversions between various currencies. Foreign denominated
securities may also involve risks due to changes in the political or economic
conditions of such foreign countries, the possibility of expropriation of assets
or nationalization, and possible difficulty in obtaining and enforcing judgments
against foreign entities.
Municipal Securities. Certain Funds, and in particular the Tax Free Money Market
Fund and the Municipal Bond Fund, may invest in municipal securities. Municipal
securities include bonds, notes and other instruments issued by or on behalf of
states, territories and possessions of the United States (including the District
of Columbia) and their political subdivisions, agencies or instrumentalities,
the interest on which is, in the opinion of bond counsel for the issuers (when
available), excluded from gross income for federal income tax purposes, i.e.
exempt from regular federal income tax. The two principal classifications of
municipal bonds are "general obligations" and "revenue obligations." General
obligations are secured by the issuer's pledge of its full faith and credit for
the payment of principal and interest, although the characteristics and
enforcement of general obligations may vary according to the law applicable to
the particular issuer. Revenue obligations are not backed by the credit and
taxing authority of the issuer, but are payable solely from the revenues derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise tax or other specific revenue source. In addition,
revenue obligations may be backed by a letter of credit, guarantee or insurance.
Revenue obligations include private activity bonds, resource recovery bonds,
certificates of participation and certain municipal notes.
A Fund may invest in variable, floating rate and other municipal securities
on which the interest may fluctuate based on changes in market rates. The
interest rates payable on variable rate securities are adjusted at designated
intervals (e.g., daily, monthly, semi-annually) and the interest rates payable
on floating rate securities are adjusted whenever there is a change in the
market rate of interest on which the interest payable is based. The interest
rate on variable and floating rate securities is ordinarily determined by
reference to or is a percentage of a bank's prime rate, the 90-day U.S. Treasury
bill rate, the rate of return on commercial paper or bank certificates of
deposit, an index of short-term interest rates, or some other objective measure.
The value of floating and variable rate securities generally is more stable than
that of fixed rate securities in response to changes in interest rate levels. A
Fund may consider the maturity of a variable or floating rate municipal security
to be shorter than its ultimate maturity if that Fund has the right to demand
prepayment of its principal at specified intervals prior to the security's
ultimate maturity.
Funds that may invest in municipal securities may invest in municipal
leases and certificates of participation in municipal leases. A municipal lease
is an obligation in the form of a lease or installment purchase which is issued
by a state or local government to acquire equipment and facilities. Certificates
of participation represent undivided interests in municipal leases, installment
purchase agreements or other instruments. The certificates are typically issued
by a trust or other entity which has received an assignment of the payments to
be made by the state or political subdivision under such leases or installment
purchase agreements. The primary risk associated with municipal lease
obligations and certificates of participation is that the governmental lessee
will fail to appropriate funds to enable it to meet its payment obligations
under the lease. Although the obligations may be secured by the lease equipment
or facilities, the disposition of the property in the event of nonappropriation
or foreclosure might prove difficult, time consuming and costly, and may result
in a delay in recovering, or the failure to fully recover, the Fund's original
investment. To the extent that a Fund invests in unrated municipal leases or
participates in such leases, the Investment Adviser will monitor on an ongoing
basis the credit quality rating and risk of cancellation of such unrated leases.
Certain municipal lease obligations and certificates of participation may be
deemed illiquid for the purposes of the Funds' 15% limitation on investments in
illiquid securities.
Zero Coupon and Capital Appreciation Bonds. Funds that may invest in debt
securities may invest in zero coupon and capital appreciation bonds. Zero coupon
and capital appreciation bonds are debt securities issued or sold at a discount
from their face value that do not entitle the holder to any payment of interest
prior to maturity or a specified redemption date (or cash payment date). The
amount of the discount varies depending on the time remaining until maturity or
cash payment date, prevailing interest rates, the liquidity of the security and
the perceived credit quality of the issuer. These securities also may take the
form of debt securities that have been stripped of their unmatured interest
coupons, the coupons themselves or receipts or certificates representing
interests in such stripped debt obligations or coupons. A portion of the
discount with respect to stripped tax-exempt securities or their coupons may be
taxable. The market prices of zero coupon and capital appreciation bonds
generally are more volatile than the market prices of interest-bearing
securities and are likely to respond to a greater degree to changes in interest
rates than interest-bearing securities having similar maturities and credit
quality.
A Fund may also invest in municipal securities in the form of notes which
generally are used to provide for short-term capital needs in anticipation of an
issuer's receipt of other revenues or financing, and typically have maturities
of up to three years. Such instruments may include tax anticipation notes,
revenue anticipation notes, bond anticipation notes and construction loan notes.
The obligations of an issuer of municipal notes are generally secured by the
anticipated revenues from taxes, grants or bond financing. An investment in such
instruments, however, presents a risk that the anticipated revenues will not be
received or that such revenues will be insufficient to satisfy the issuer's
payment obligations under the notes or that refinancing will be otherwise
unavailable.
Funds that may invest in municipal securities may invest in "pre-refunded
tax-exempt bonds" and "escrowed tax-exempt bonds." Pre-refunded tax-exempt bonds
and escrowed tax-exempt bonds are issued originally as general obligation or
revenue bonds of governmental entities, but are now secured until the call date
or maturity by an escrow fund consisting entirely of U.S. Government obligations
that are sufficient for paying the bondholders. A new issue of refunding bonds
is brought to the market and the proceeds are placed into an escrow account to
defease and, at a future date, to retire the old issue. The escrow account is
typically invested in direct U.S. Treasury obligations, other U.S. Government
securities or a combination of these securities. The principal and interest flow
through the escrow account to pay the investor the debt service on the refunded
or escrowed municipal bond.
Foreign Currency Exchange Transactions. Currency transactions may be utilized by
the Growth and Income Fund, Tudor Fund, Growth Fund and International Fund, in
connection with their purchase and sale of foreign currency denominated
securities. Such currency transactions may be either: (i) on the spot (i.e.,
cash) basis at the spot rate prevailing in the foreign exchange market, or (ii)
conducted through the use of forward foreign currency exchange contracts
("forward currency contracts"). A forward currency contract involves an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the forward currency contract as
agreed upon by the parties, at a price set at the time of the contract. Forward
currency contracts are principally traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers and are not guaranteed by a third party. Accordingly, each party to a
forward currency contract is dependent upon the creditworthiness and good faith
of the other party.
The Funds will enter into forward currency contracts only under two
circumstances. First, when a Fund enters into a contract to purchase or sell a
foreign denominated security, the Fund may be able to protect itself against a
possible loss between the trade date and settlement date for such security
resulting from a decline in the U.S. dollar against the foreign currency in
which such security is denominated by entering into a forward currency contract
in U.S. dollars for the purchase or sale of the amount of the foreign currency
involved in the underlying security transaction. This practice may limit the
potential gains that might result from a positive change in such currency
relationships. Second, if WPG, or Lloyds in the case of the International Fund,
believes that the value of currency of a particular foreign country may
depreciate or appreciate substantially relative to the U.S. dollar (or other
currency), each Fund may enter into a forward currency contract to sell or buy
an amount of foreign currency approximating the value of some or all of that
Fund's portfolio securities denominated in such foreign currency. The
forecasting of short-term currency market movements is extremely difficult and
it is uncertain whether such short-term hedging strategies will be successful.
Eurodollar and Yankee Dollar Investments. Certain Funds may invest in
obligations of foreign branches of U.S. banks (Eurodollars) and U.S. branches of
foreign banks (Yankee dollars) as well as foreign branches of foreign banks.
These investments involve risks that are different from investments in
securities of U.S. banks, including potential unfavorable political and economic
developments, different tax provisions, seizure of foreign deposits, currency
controls, interest limitations or other governmental restrictions which might
affect payment of principal or interest.
Real Estate Investment Trusts. Certain Funds may invest in shares of real estate
investment trusts ("REITs"). REITs are pooled investment vehicles which invest
primarily in income producing real estate or real estate related loans or
interests. REITs are generally classified as equity REITs, mortgage REITs or a
combination of equity and mortgage REITs. Equity REITs invest the majority of
their assets directly in real property and derive income primarily from the
collection of rents. Equity REITs can also realize capital gains by selling
properties that have appreciated in value. Mortgage REITs invest the majority of
their assets in real estate mortgages and derive income from the collection of
interest payments. Like investment companies such as the Funds, REITs are not
taxed on income distributed to shareholders provided they comply with several
requirements of the Code. Funds that invest in REITs will indirectly bear their
proportionate share of any expenses paid by such REITs in addition to the
expenses paid by the Funds.
Investing in REITs involves certain risks: equity REITs may be affected by
changes in the value of the underlying property owned by the REITs, while
mortgage REITs may be affected by the quality of any credit extended. REITs are
dependent upon management skills, are not diversified, and are subject to the
risks of financing projects. REITs are subject to heavy cash flow dependency,
default by borrowers, self-liquidation, and the possibilities of failing to
qualify for the exemption from tax for distributed income under the Code and
failing to maintain their exemptions from the 1940 Act. REITs whose underlying
assets include long-term health care properties, such as nursing, retirement and
assisted living homes, may be impacted by federal regulations concerning the
health care industry.
Investing in REITs may involve risks similar to those associated with
investing in small capitalization companies. REITs may have limited financial
resources, may trade less frequently and in a limited volume and may be subject
to more abrupt or erratic price movements than larger company securities.
Historically, small capitalization stocks, such as REITs, have been more
volatile in price than the larger capitalization stocks included in the S&P 500.
Mortgage-Backed Securities. Certain Funds, and in particular the Government
Money Market Fund and the Government Fund may invest in mortgage pass-through
certificates and multiple-class pass-through securities, such as real estate
mortgage investment conduits ("REMIC") pass-through certificates and
collateralized mortgage obligations ("CMOs").
Guaranteed Mortgage Pass-Through Securities. Guaranteed mortgage pass-through
securities represent participation interests in pools of residential mortgage
loans and are issued by U.S. Governmental or private lenders and guaranteed by
the U.S. Government or one of its agencies or instrumentalities, including but
not limited to the Government National Mortgage Association ("Ginnie Mae"), the
Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan
Mortgage Corporation ("Freddie Mac"). Ginnie Mae certificates are guaranteed by
the full faith and credit of the U.S. Government for timely payment of principal
and interest on the certificates. Fannie Mae certificates are guaranteed by
Fannie Mae, a federally chartered and privately owned corporation, for full and
timely payment of principal and interest on the certificates. Freddie Mac
certificates are guaranteed by Freddie Mac, a corporate instrumentality of the
U.S. Government, for timely payment of interest and the ultimate collection of
all principal of the related mortgage loans.
Multiple-Class Pass-Through Securities and Collateralized Mortgage Obligations.
CMOs and REMIC pass-through or participation certificates may be issued by,
among others, U.S. Government agencies and instrumentalities as well as private
lenders. CMOs and REMIC certificates are issued in multiple classes and the
principal of and interest on the mortgage assets may be allocated among the
several classes of CMOs or REMIC certificates in various ways. Each class of
CMOs or REMIC certificates, often referred to as a "tranche," is issued at a
specific adjustable or fixed interest rate and must be fully retired no later
than its final distribution date. Generally, interest is paid or accrues on all
classes of CMOs or REMIC certificates on a monthly basis.
Typically, CMOs are collateralized by Ginnie Mae, Fannie Mae or Freddie
Mac certificates but also may be collateralized by other mortgage assets such as
whole loans or private mortgage pass-through securities. Debt service on CMOs is
provided from payments of principal and interest on collateral of mortgaged
assets and any reinvestment income thereon.
A REMIC is a CMO that qualifies for special tax treatment under the
Code and invests in certain mortgages primarily secured by interests in real
property and other permitted investments. Investors may purchase "regular" and
"residual" interest shares of beneficial interest in REMIC trusts although the
Funds do not intend to invest in residual interests.
Risk Factors Associated with Mortgage-Backed Securities. Investing in
Mortgage-Backed Securities involves certain risks, including the failure of a
counter-party to meet its commitments, adverse interest rate changes and the
effects of prepayments on mortgage cash flows. Further, the yield
characteristics of Mortgage-Backed Securities differ from those of traditional
fixed income securities. The major differences typically include more frequent
interest and principal payments (usually monthly), the adjustability of interest
rates, and the possibility that prepayments of principal may be made
substantially earlier than their final distribution dates.
Prepayment rates are influenced by changes in current interest rates
and a variety of economic, geographic, social and other factors and cannot be
predicted with certainty. Both adjustable rate mortgage loans and fixed rate
mortgage loans may be subject to a greater rate of principal prepayments in a
declining interest rate environment and to a lesser rate of principal
prepayments in an increasing interest rate environment. Under certain interest
rate and prepayment rate scenarios, a Fund may fail to recoup fully its
investment in Mortgage-Backed Securities notwithstanding any direct or indirect
governmental or agency guarantee. When a Fund reinvests amounts representing
payments and unscheduled prepayments of principal, it may receive a rate of
interest that is lower than the rate on existing adjustable rate mortgage
pass-through securities. Thus, Mortgage-Backed Securities, and adjustable rate
mortgage pass-through securities in particular, may be less effective than other
types of U.S. Government securities as a means of "locking in" interest rates.
Conversely, in a rising interest rate environment, a declining
prepayment rate will extend the average life of many Mortgage-Backed Securities.
This possibility is often referred to as extension risk. Extending the average
life of a Mortgage-Backed Security increases the risk of depreciation due to
future increases in market interest rates.
Risks Associated With Specific Types of Derivative Debt Securities. Different
types of derivative debt securities are subject to different combinations of
prepayment, extension and/or interest rate risk. Conventional mortgage
pass-through securities and sequential pay CMOs are subject to all of these
risks, but are typically not leveraged. Thus, the magnitude of exposure may be
less than for more leveraged Mortgage-Backed Securities.
Planned amortization class ("PAC") and target amortization class
("TAC") CMO bonds involve less exposure to prepayment, extension and interest
rate risk than other Mortgage-Backed Securities, provided that prepayment rates
remain within expected prepayment ranges or "collars." To the extent that
prepayment rates remain within these prepayment ranges, the residual or support
tranches of PAC and TAC CMOs assume the extra prepayment, extension and interest
rate risk associated with the underlying mortgage assets. Asset-Backed
Securities. Certain Funds, and in particular the Government Money Market Fund,
Government Fund and Growth and Income Fund, may invest in asset-backed
securities, which represent participations in, or are secured by and payable
from, pools of assets such as motor vehicle installment sale contracts,
installment loan contracts, leases of various types of real and personal
property, receivables from revolving credit (credit card) agreements and other
categories of receivables. Assetbacked securities may also be collateralized by
a portfolio of U.S. Government securities, but are not direct obligations of the
U.S. Government, its agencies or instrumentalities. Such asset pools are
securitized through the use of privately-formed trusts or special purpose
corporations. Payments or distributions of principal and interest on
asset-backed securities may be guaranteed up to certain amounts and for a
certain time period by a letter of credit or a pool insurance policy issued by a
financial institution unaffiliated with the trust or corporation, or other
credit enhancements may be present; however privately issued obligations
collateralized by a portfolio of privately issued asset-backed securities do not
involve any government-related guarantee or insurance. In addition to risks
similar to those associated with Mortgage-Backed Securities, assetbacked
securities present further risks that are not presented by Mortgage-Backed
Securities because asset-backed securities generally do not have the benefit of
a security interest in collateral that is comparable to mortgage assets.
Convertible Securities and Preferred Stocks. Certain Funds may invest in debt
securities or preferred stocks that are convertible into or exchangeable for
common stock. Preferred stocks are securities that represent an ownership
interest in a company and provide their owner with claims on the company's
earnings and assets prior to the claims of owners of common stock but after
those of bond owners. Preferred stocks in which the Funds may invest include
sinking fund, convertible, perpetual fixed and adjustable rate (including
auction rate) preferred stocks.
Risk Factors of Lower Rated Securities. The Growth and Income Fund, Growth Fund
and Tudor Fund may also invest in securities rated as low as B by Moody's or B
by S&P (and comparable unrated securities) (commonly known as "junk bonds").
These securities are considered speculative and, while generally providing
greater income than investments in higher rated securities, will involve greater
risk of loss of principal and income (including the possibility of default or
bankruptcy of the issuers of such securities) and may involve greater volatility
of price (especially during periods of economic uncertainty or change) than
securities in the higher rating categories. However, since yields vary over
time, no specific level of income can ever be assured. These lower rated, high
yielding fixed income securities generally tend to be affected by economic
changes and short-term corporate and industry developments to a greater extent
than higher rated securities, which react primarily to fluctuations in the
general level of interest rates. (These lower rated securities are also affected
by changes in interest rates as described below.) These fixed income securities
will also be affected by the market's perception of their credit quality
(especially during times of adverse publicity) 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 leveraged issuers. The market for these lower rated fixed income
securities may be less liquid than the market for investment grade fixed income
securities. Therefore, judgment may at times play a greater role in valuing
these securities than in the case of investment grade fixed income securities,
and it also may be more difficult during certain adverse market conditions to
sell these lower rated securities to meet redemption requests or to respond to
changes in the market. The value of fixed-income securities in the Funds'
portfolios generally varies inversely with changes in interest rates.
Forward Commitments and When-Issued Securities. Each Fund may purchase
securities on a when-issued, delayed delivery, or forward commitment basis. When
such transactions are negotiated, the price of such securities is fixed at the
time of the commitment, but delivery and payment for the securities may take
place up to 90 days after the date of the commitment to purchase. The securities
so purchased are subject to market fluctuation, and no interest accrues to the
purchaser during this period. When-issued securities or forward commitments
involve a risk of loss if the value of the security to be purchased declines
prior to the settlement date. When a Fund purchases securities on a forward
commitment or when-issued basis, the Fund's custodian will maintain in a
segregated account cash or liquid, high grade debt securities having a value
(determined daily) at least equal to the amount of the Fund's purchase
commitment. A Fund may closeout a position in securities purchased on a
whenissued, delayed delivery or forward commitment basis prior to the settlement
date.
Lending of Portfolio Securities. Subject to its investment policies and
restrictions, each Fund may also seek to increase its income by lending
portfolio securities. Such loans may be made to institutions, such as certain
broker-dealers, and are required to be secured continuously by collateral in
cash, cash equivalents, or U.S. Government securities maintained on a current
basis at an amount at least equal to the market value of the securities loaned.
If WPG determines to make securities loans, the value of the securities loaned
would not exceed 33 1/3% of the value of the total assets of the Fund. A Fund
may experience a loss or delay in the recovery of its securities if the
borrowing institution breaches its agreement with the Fund.
Restricted and Illiquid Securities. Each Fund, subject to its investment
objective, may invest up to 15% of its total assets in "restricted securities"
(i.e., securities that would be required to be registered under the Securities
Act of 1933, as amended ("1933 Act"), prior to distribution to the general
public) including restricted securities eligible for resale to "qualified
institutional buyers" under Rule 144A under the 1933 Act. Each Fund may agree to
adhere to more restrictive limits on investments in restricted and illiquid
investments as a condition of the registration of its shares in various states.
Each Fund may also invest up to 15% (10% in the case of the Government Money
Market Fund and the Tax Free Money Market Fund) of its net assets in illiquid
investments, which includes repurchase agreements maturing in more than seven
days, securities that are not readily marketable, certain over-the-counter
options and restricted securities, unless the Board of Trustees determines,
based upon a continuing review of the trading markets for the specific
restricted security, that such restricted securities are liquid. The Board of
Trustees has adopted guidelines and delegated to WPG the daily function of
determining and monitoring liquidity of restricted securities. The Board,
however, retains sufficient oversight and is ultimately responsible for the
determinations. Since it is not possible to predict with assurance exactly how
this market for restricted securities sold and offered under Rule 144A will
develop, the Board of Trustees carefully monitors each Fund's investments in
these securities, focusing on such important factors, among others, as
valuation, liquidity and availability of information. This investment practice
could have the effect of increasing the level of illiquidity in a Fund to the
extent that qualified institutional buyers become for a time uninterested in
purchasing these restricted securities.
Repurchase Agreements. Subject to its investment policies and restrictions, each
Fund may utilize repurchase agreements through which the Fund may purchase a
security (the "underlying security") from a domestic securities dealer or bank
that is a member of the Federal Reserve System. Under the agreement, the seller
of the repurchase agreement (i.e., the securities dealer or bank) agrees to
repurchase the underlying security at a mutually agreed upon time and price. In
repurchase transactions, the underlying security, which must be a high-quality
debt security, is held by the Fund's custodian through the federal book-entry
system as collateral and marked-to-market on a daily basis to ensure full
collateralization of the repurchase agreement. For the Government Money Market
Fund and the Tax Free Money Market Fund, the underlying security must be either
a U.S. Government security or a security rated in the highest rating category by
the Requisite NRSROs. In the event of bankruptcy or default of certain sellers
of repurchase agreements, the Funds could experience costs and delays in
liquidating the underlying security held as collateral and might incur a loss if
such collateral declines in value during this period.
Market Changes. The market value of the Funds' investments, and thus the Funds'
net asset values, will change in response to market conditions affecting the
value of its portfolio securities. When interest rates decline, the value of
fixed rate obligations can be expected to rise. Conversely, when interest rates
rise, the value of fixed rate obligations can be expected to decline. In
contrast, as interest rates on adjustable rate loans are reset periodically,
yields on investments in such loans will gradually align themselves to reflect
changes in market interest rates, causing the value of such investments to
fluctuate less dramatically in response to interest rate fluctuations than would
investments in fixed rate obligations.
Diversification. All the Funds, except the Tudor Fund, the Growth Fund and the
Quantitative Equity Fund, are diversified, as defined in the 1940 Act. As such,
each of these Funds has a fundamental policy that limits its investments so
that, with respect to 75% of the assets of the International Fund and the
Municipal Bond Fund and 100% of the assets of each of the other Funds, (i) no
more than 5% of that Fund's total assets will be invested in the securities of a
single issuer and (ii) each will purchase no more than 10% of the outstanding
voting securities of a single issuer. These limitations do not apply to
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or repurchase agreements collateralized by U.S. Government
securities. In addition, the Government Money Market Fund and the Tax Free Money
Market Fund will limit their investment in any one issuer of securities that has
received less than the highest rating from the Requisite NRSROs (i.e., Second
Tier Securities) to no more than 1% of each Fund's total assets.
Each of the Tudor Fund, the Growth Fund and the Quantitative Equity Fund is
non-diversified, as defined in the 1940 Act. While the Tudor Fund, the Growth
Fund and the Quantitative Equity Fund are non-diversified for securities law
purposes, each such Fund (as well as the other Funds) intends to qualify
annually as a Registered Investment Company ("RIC") for purposes of Subchapter M
of the Code. Such qualification requires each Fund to limit its investments so
that, among other things, at the close of each quarter of its taxable year at
least 50% of its total assets is comprised of cash, cash items, U.S. Government
securities, securities of RICs and other securities limited so that the
securities of a single issuer do not comprise more than 5% of the value of the
Fund's total assets nor more than 10% of the outstanding voting securities of
the issuer. Since, as "non-diversified" funds, the Tudor Fund, the Growth Fund
and the Quantitative Equity Fund are permitted to invest a greater proportion of
their assets in the securities of a smaller number of issuers, these Funds may
be subject to greater risk with respect to their portfolio securities than an
investment company which is more broadly diversified. Under the Quantitative
Equity Fund's investment methodology, no security will normally comprise more
than 10% of the Fund's total assets at the time of investment.
Portfolio Turnover. Although no Fund purchases securities with a view to rapid
turnover, there are no limitations on the length of time that securities must be
held by any Fund and a Fund's annual portfolio turnover rate may vary
significantly from year to year. A high rate of portfolio turnover (100% or
more) involves correspondingly greater transaction costs which must be borne by
the applicable Fund and its shareholders and may, under certain circumstances,
make it more difficult for such Fund to qualify as a RIC under the Code. The
actual portfolio turnover rates for each Fund for the year ended December 31,
1994 are noted in the "Financial Highlights" section of this Prospectus.
Certain Other Policies to Reduce Risk. Each Fund has adopted certain fundamental
investment policies in managing its portfolio that are designed to reduce risk.
No Fund will (i) invest more than 25% of its total assets in securities of
companies in the same industry, except that the Government Money Market and Tax
Free Money Market Funds may invest a greater percentage in bank and bank holding
companies and the Quantitative Equity Fund may invest more of its total assets
in securities of issuers in the same industry to the extent that the optimal
portfolio derived from the S&P 500 Index is also so concentrated, (ii) issue
senior securities except as permitted by the 1940 Act or borrow money except for
certain temporary or emergency purposes and then not in excess of 33% of its
assets; (iii) engage in underwriting securities of others except to the extent a
Fund may be deemed to be an underwriter in purchasing and selling portfolio
securities; (iv) purchase real estate except that a Fund may acquire office
space for its principal office and may invest in securities representing
interests in real estate or companies engaged in the real estate business and
Municipal Bond Fund may acquire real estate as a result of ownership of
securities; (v) make loans except that a Fund may lend its portfolio securities
and enter into repurchase agreements; or (vi) invest in commodities or
commodities contracts other than financial futures contracts, options on futures
and forward commitment and when-issued securities. The Municipal Bond Fund will
not invest 25% or more of its total assets in securities issued in any one
state, territory or possession of the United States (except U.S. Government
securities and securities the payment of which is secured by U.S. Government
securities). To the extent that a Fund concentrates its investments in one or
more industries, the Fund may be more susceptible to factors affecting those
industries than are Funds not so concentrated. See each Fund's SAI for further
information concerning its investment policies and restrictions.
Other Investment Companies. The shareholders of each Fund have approved a
fundamental policy authorizing each Fund, subject to authorization by its Board
of Trustees, and notwithstanding any other investment restriction, to invest all
of its assets in the securities of a single open-end investment company (a
"pooled fund"). If authorized by its Board, a Fund would seek to achieve its
investment objective by investing in a pooled fund which would invest in a
portfolio of securities that complies with the Fund's investment objective,
policies and restrictions. The Boards currently do not intend to authorize
investing in pooled funds.
In order to effectively manage its cash balances, the Municipal Bond Fund
may invest up to 10% of its total assets, calculated at the time of purchase, in
the securities of money market funds (not affiliated with WPG) which invest in
municipal obligations. The Fund may not invest more than 5% of its total assets
in the securities of any one money market fund or acquire more than 3% of the
voting securities of any money market fund. The Fund will indirectly bear its
proportionate share of any expenses paid by money market funds in which it
invests in addition to the expenses paid by the Fund.
Further Information. Each Fund's investment program is subject to further
restrictions as described in the SAI. Each Fund's investment objectives and
investment program, unless otherwise specified, are not fundamental and may be
changed without shareholder approval by the Board of Trustees of each Fund. If
there is a change in a Fund's investment objective, shareholders should consider
whether the Fund remains an appropriate investment in light of their current
financial position and needs.
THE FUNDS' INVESTMENT PERFORMANCE
Each Fund may illustrate in advertisements and sales literature its average
annual total return, which is the rate of growth of the Fund that would be
necessary to achieve the ending value of an investment kept in the Fund for the
period specified and is based on the following assumptions: (1) all dividends
and distributions by the Fund are reinvested in shares of the Fund at net asset
value; and (2) all recurring fees are included for applicable periods.
Each Fund may also illustrate in advertisements its cumulative total return
for several time periods throughout the Fund's life based on an assumed initial
investment of $1,000. Any such cumulative total return for each Fund will assume
the reinvestment of all income dividends and capital gains distributions for the
indicated periods and will include all recurring fees.
The Government Money Market Fund and the Tax Free Money Market Fund each
may illustrate in advertisements and sales literature its current yield and
effective yield. Current yield quotations of each of these Funds are based on
that Fund's investment income, less expenses, for a seven-day period. To
calculate the current yield quotations, this income is annualized, by assuming
that the amount of income generated during that seven-day period is generated
each week over a one-year period, and expressed as a percentage of the
investment. The effective yield for each of these Funds is calculated similarly
but, when annualized, income earned from an investment is assumed to be
reinvested. Effective yield for each of these Funds will be slightly higher than
its current yield because of the compounding effect of this assumed
reinvestment. The Tax Free Money Market Fund and the Municipal Bond Fund may
also illustrate a tax equivalent yield that compares the yield on a tax free
investment to the yield on a taxable investment. See the WPG Funds Trust's SAI
for a sample of taxable equivalent yields.
The Government Fund and the Municipal Bond Fund each may also illustrate in
advertisements and sales literature its yield and effective yield. Yield for
each of these Funds is based on income generated by an investment in the Fund
during a 30-day (or one-month) period. To calculate yield, this income is
annualized, that is, the amount of income generated during the 30-day (or
one-month) period is assumed to be generated each 30-day (or one-month) period
over a one-year period, and expressed as an annual percentage rate. Effective
yield for these Funds is calculated in a similar manner but, when annualized,
the income earned from an investment is assumed to be reinvested. Effective
yield for each of these Funds will be slightly higher than its current yield
because of the compounding effect of this assumed reinvestment. For additional
information on the WPG Funds or for daily Fund prices, please call
1-800-223-3332.
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