As filed with the Securities and Exchange Commission on February 26, 1999.
File No. 2-30465
File No. 811-1745
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. ___ |_|
Post-Effective Amendment No. 50 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 34 |X|
WPG TUDOR FUND
(Exact name of Registrant as Specified in Charter)
ONE NEW YORK PLAZA, NEW YORK, NEW
YORK 10004 (Address of Principal
Executive Offices) (Zip Code)
Registrant's Telephone Number: 800-223-3332
JAY C. NADEL, WEISS, PECK & GREER
ONENEW YORK PLAZA, NEW YORK, NEW
YORK 10004 (Name and Address of
Agent for Service)
Copies to:
Ernest V. Klein, Esq.
Hale and Dorr
60 State Street
Boston, MA 02109
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on ___________ pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[X] on May 1, 1999 pursuant to paragraph (a)(1) of Rule 485
___ 75 days after filing pursuant to paragraph (a)(2) of Rule 485
___ on ___________ pursuant to paragraph (a)(2) of Rule 485
<PAGE>
WEISS, PECK & GREER
MUTUAL FUNDS
Prospectus
May 1, 1999
WPG GOVERNMENT MONEY MARKET FUND
WPG TAX FREE MONEY MARKET FUND
WPG INTERMEDIATE MUNICIPAL BOND FUND
WPG CORE BOND FUND
WPG GROWTH AND INCOME FUND
WPG TUDOR FUND
WEISS, PECK & GREER INTERNATIONAL FUND
WPG QUANTITATIVE EQUITY FUND
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
800-223-3332
The Securities and Exchange Commission has not
approved or disapproved these securities or
determined whether this prospectus is accurate or
complete. Any statement to the contrary is a
crime.
<PAGE>
CONTENTS
- --------------------------------------------------------------------------------
Risk/Return Summary............................................................3
WPG Government Money Market Fund......................................3
WPG Tax Free Money Market Fund........................................6
WPG Intermediate Municipal Bond Fund..................................7
WPG Core Bond Fund....................................................8
WPG Growth and Income Fund...........................................12
Weiss, Peck & Greer International Fund...............................14
WPG Tudor Fund.......................................................15
WPG Quantitative Equity Fund.........................................18
The Funds' Investments........................................................20
The Adviser...................................................................22
Advisory Services...............................................................
Investment and Account Information............................................24
How to purchase shares...............................................25
How to exchange shares...............................................26
How to redeem shares.................................................27
Other shareholder service information................................28
Share Price...................................................................29
Dividends, Distributions and Taxes............................................30
Financial Highlights............................................................
For More Information............................................................
ABOUT THE INVESTMENT ADVISER
Weiss, Peck & Greer, L.L.C. serves as the investment adviser to each of the
funds. WPG is headquartered in New York and is a subsidiary of Robeco Groep
N.V., a Dutch public limited liability company. Founded in 1929, Robeco is one
of the world's oldest asset management organizations. As of the date of this
prospectus, Robeco had approximately $17 billion in assets under management,
including $95 billion managed directly by WPG. WPG, which has over 28 years
experience as an investment adviser to institutional and individual clients, is
a member firm of the New York Stock Exchange.
A WORD ABOUT RISK
An investment in the funds is not a bank deposit and is not insured or
guaranteed by the FDIC or any other government agency.
2
<PAGE>
RISK/RETURN SUMMARY WPG GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL
Current income, consistent with preservation of capital and liquidity.
- --------------------------------------------------------------------------------
PRINCIPAL INVESTMENTS
U.S. dollar denominated money market securities issued or guaranteed by the U.S.
government and its agencies and instrumentalities.
The fund invests substantially all, but at least 65% of assets, in money market
securities issued or guaranteed by the U.S. government and its agencies and
instrumentalities. The fund's other investments consist primarily of repurchase
agreements, although it may invest in all types of money market securities.
CREDIT QUALITY: Ratings in the rating agencies' two highest short term rating
categories or equivalent quality for unrated securities.
MATURITY: Average dollar weighted portfolio maturity of 90 days or less.
Maturity of 397 days or less for individual securities.
- --------------------------------------------------------------------------------
PRINCIPAL STRATEGIES
The fund seeks to maintain a stable share price of $1 by investing in securities
that the adviser believes present minimal credit risks to the fund. In
structuring the fund's portfolio, the adviser "ladders" the maturity of the
fund's investments. As securities mature at different intervals, the adviser
reinvests the proceeds in additional money market securities so as to maintain
the fund's duration within a target that the adviser believes is appropriate
based on the then current market environment. By laddering the maturity of the
fund's investments, the adviser maintains liquidity without causing the fund to
incur transaction costs associated with selling portfolio securities.
The adviser focuses on improving the fund's yield by actively managing the
fund's allocations among different government agencies and instrumentalities.
The adviser monitors the difference in yield of these securities and purchases
those securities for the fund that provide a higher yield relative to the amount
of risk involved. The adviser also considers a security's relative value based
on its interest rate sensitivity.
================================================================================
PERFORMANCE
The bar chart and table shown below indicate the risks of investing in the fund.
The bar chart shows changes in the performance of the fund from year to year
over the past ten years.
[GRAPH OMITTED HERE. THE BAR CHART OMITTED HERE SHOWS CHANGES IN THE PERFORMANCE
OF THE FUND FROM YEAR TO YEAR OVER THE LIFE OF THE FUND.]
WPG GOVERNMENT MONEY MARKET FUND
% TOTAL RETURN
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
8.84 7.74 5.33 2.95 2.80 3.58 5.16 4.56 4.76 4.80
CALENDAR YEARS ENDED DECEMBER 31
The table shows the fund's average annual returns for different calendar
periods.
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 1998)
1 YEAR 5 YEARS 10 YEARS
Fund 4.80% 4.57% 5.04%
As of December 31, 1998, the fund's 7-day yield was 3.16%. Call 1-800-223-3332
for the fund's current 7-day yield.
FUND'S BEST AND WORST QUARTERLY TOTAL RETURNS
Best: 2.21% in the 1st quarter of 1989
Worst: 0.65% in the 4th quarter of 1991
The fund's past performance does not necessarily indicate how
the fund will perform in the future.
3
<PAGE>
RISK/RETURN SUMMARY WPG GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
PRINCIPAL RISKS
You could lose money on your investment in the fund or the fund could
underperform other possible investments if any of the following occurs:
-- The issuer or guarantor of a security owned by the
fund defaults on its payment obligations.
-- Interest rates rise sharply or suddenly causing the
securities in the fund's portfolio to drop in value.
-- The adviser's judgments about the relative values of securities
selected for the fund's portfolio prove to be wrong.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE
THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY
INVESTING IN THE FUND.
- --------------------------------------------------------------------------------
WHO MAY WANT TO INVEST
The fund may be appropriate if you want:
-- Stability of principal and liquidity
-- A temporary investment
WHO MAY NOT WANT TO INVEST
The fund may not be appropriate if you want:
-- Long-term growth of capital
-- A rate of return that consistently exceeds the rate
of inflation
================================================================================
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES None
(paid directly from your investment)
ANNUAL FUND OPERATING EXPENSES
(paid by the fund as a % of fund net assets)
Management fee 0.50%
12b-1 distribution fees None
Other expenses 0.23%
-----
Total operating expenses 0.73%
=====
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. Your actual costs may be
higher or lower.
NUMBER OF YEARS YOU
OWN YOUR SHARES 1 year 3 years 5 years 10 years
Expenses: $75 $233 $406 $906
The example assumes:
-- You invest $10,000 for the periods shown
-- You redeem at the end of each period
-- You reinvest all distributions and dividends without a sales
charge
-- The fund's operating expenses have not been capped or
reduced and remain the same
-- Your investment has a 5% return each year
4
<PAGE>
RISK/RETURN SUMMARY WPG TAX FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL
High current income exempt from federal income tax, consistent with preservation
of capital and liquidity.
- --------------------------------------------------------------------------------
PRINCIPAL INVESTMENTS
U.S. dollar denominated, tax-exempt money market securities.
The fund invests substantially all, but at least 80% of assets, in tax-exempt
money market securities. Tax-exempt means that the securities pay interest that
is excluded from gross income for federal income tax purposes. Tax-exempt
securities are issued by states, territories and possessions of the U.S., the
District of Columbia and their political subdivisions, agencies and
instrumentalities.
The fund may invest in all types of tax-exempt money market securities,
including:
-- Municipal notes, such as tax anticipation notes, revenue anticipation
notes, bond anticipation notes and construction loan notes.
-- Municipal bonds, such as general obligation bonds, revenue bonds and
pre-refunded and escrowed bonds.
CREDIT QUALITY: Ratings in the rating agencies' two highest short term rating
categories or equivalent quality for unrated securities.
MATURITY: Average dollar weighted portfolio maturity of 90
days or less. Maturity of 397 days or less for individual
securities.
- --------------------------------------------------------------------------------
PRINCIPAL STRATEGIES
The fund seeks to maintain a stable share price of $1 by investing in securities
that the adviser believes present minimal credit risks to the fund. The adviser
focuses on improving the fund's yield by:
-- Exploiting inefficiencies in the valuation of risk and reward in the
municipal securities market to select attractive sectors and securities.
-- Focusing on municipal money market securities that appear to offer the
best relative value based on the adviser's analysis of credit quality and
interest sensitivity.
-- De-emphasizing interest rate forecasting.
================================================================================
PERFORMANCE
The bar chart and table shown below indicate the risks of investing in the fund.
The bar chart shows changes in the performance of the fund from year to year
over the past ten years.
[GRAPH OMITTED HERE. THE BAR CHART OMITTED HERE SHOWS CHANGES IN THE PERFORMANCE
OF THE FUND FROM YEAR TO YEAR OVER THE LIFE OF THE FUND.]
WPG TAX FREE MONEY MARKET FUND
% TOTAL RETURN
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
6.23 5.70 4.63 2.95 2.32 2.61 3.63 3.14 3.23 3.05
CALENDAR YEARS ENDED DECEMBER 31
The table shows the fund's average annual returns for
different calendar periods.
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 1998)
1 Year 5 Years 10 Years
Fund 3.05% 3.13% 3.75% As of December 31, 1998, the fund's 7-day yield was 3.16%
and its 7-day tax-equivalent yield was __% (using the maximum federal individual
income tax rate). Call 1-800-223-3332 for current yields.
FUND'S BEST AND WORST QUARTERLY TOTAL RETURNS
Best: 1.53% in the 3rd quarter of 1989
Worst: 0.53% in the 1st quarter of 1994
The fund's past performance does not necessarily indicate how
the fund will perform in the future.
5
<PAGE>
RISK/RETURN SUMMARY WPG TAX FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
PRINCIPAL RISKS
You could lose money on your investment in the fund or the fund could
underperform other possible investments if any of the following occurs:
-- The issuer or guarantor of a security owned by the fund defaults on its
payment obligations, becomes insolvent or has its credit rating
downgraded.
-- Interest rates rise sharply or suddenly causing the
securities in the fund's portfolio to drop in value.
-- The adviser's judgments about the relative values of securities
selected for the fund's portfolio prove to be wrong.
Distributions of the fund's income and, if any, gains will generally be subject
to state taxation. Some of the fund's distributions of tax-exempt interest may
be subject to the federal alternative minimum tax.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE
THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY
INVESTING IN THE FUND.
- --------------------------------------------------------------------------------
WHO MAY WANT TO INVEST
The fund may be appropriate if you want:
-- Stability of principal and liquidity
-- Tax-exempt interest
-- A temporary investment
WHO MAY NOT WANT TO INVEST
The fund may not be appropriate if you want:
-- Long-term growth of capital
-- A rate of return that consistently exceeds the rate
of inflation
================================================================================
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES None
(paid directly from your investment)
ANNUAL FUND OPERATING EXPENSES
(paid by the fund as a % of fund net assets)
Management fee 0.50%
12b-1 distribution fees None
Other expenses(1) 0.26%
Total operating expenses(1) 0.76%
- -----------------
(1) Because custodian fees were reduced by credits for cash balances, the fund's
actual expenses for fiscal 1998 were:
Other expenses 0.25%
Total operating expenses 0.75%
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. Your actual costs may be
higher or lower.
NUMBER OF YEARS YOU
OWN YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses: $78 $23 $422 $942
The example assumes:
-- You invest $10,000 for the periods shown
-- You redeem at the end of each period
-- You reinvest all distributions and dividends without a sales
charge
-- The fund's operating expenses have not been capped or reduced
and remain the same
-- Your investment has a 5% return each year
6
<PAGE>
RISK/RETURN SUMMARY WPG INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL
High current income exempt from federal income tax, consistent with relative
stability of principal.
- --------------------------------------------------------------------------------
PRINCIPAL INVESTMENTS
U.S. dollar denominated, investment grade, tax-exempt bonds.
The fund invests substantially all, but at least 80% of assets, in tax-exempt
bonds. Tax-exempt means that the bonds pay interest that is excluded from gross
income for federal income tax purposes. Tax-exempt bonds are issued by states,
territories and possessions of the U.S., the District of Columbia and their
political subdivisions, agencies and instrumentalities.
The fund may invest in all types of tax-exempt bonds, including:
-- General obligation bonds, revenue bonds and pre- refunded and escrowed
bonds.
-- Variable and floating rate securities, auction rate securities and zero
coupon bonds.
-- Municipal notes, such as tax anticipation notes, revenue anticipation
notes, bond anticipation notes and construction loan notes.
CREDIT QUALITY: Exclusively investment grade. This means that the bonds are
rated in one of the top four long-term rating categories by a rating agency or
are of comparable credit quality.
MATURITY: Average dollar weighted portfolio maturity between four and ten years,
but individual bonds may be of any maturity.
- --------------------------------------------------------------------------------
PRINCIPAL STRATEGIES
The adviser focuses on improving the fund's tax-exempt yield and return by:
-- Exploiting inefficiencies in the valuation of risk and reward in the
market to select attractive issuers, sectors, geographical regions and
securities.
-- Seeking to find value at any given point in the interest
rate cycle.
-- De-emphasizing interest rate forecasting.
-- Performing fundamental research and analysis. For
example, the adviser analyzes securities with complex
or unique structural features seeking to capture value
for the fund resulting from a general lack of
understanding of those features and other market
inefficiencies.
================================================================================
PERFORMANCE
The bar chart and table shown below indicate the risks of investing in the fund.
The bar chart shows changes in the performance of the fund from year to year
over the life of the fund.
[GRAPH OMITTED HERE. THE BAR CHART OMITTED HERE SHOWS CHANGES IN THE PERFORMANCE
OF THE FUND FROM YEAR TO YEAR OVER THE LIFE OF THE FUND.]
WPG INTERMEDIATE MUNICIPAL BOND FUND
% TOTAL RETURN
1994 1995 1996 1997 1998
-2.29 12.05 4.20 7.85 5.72
CALENDAR YEARS ENDED DECEMBER 31
The table shows how the fund's average annual returns
for different calendar periods and since inception on July 1, 1993 compared to
those of the Lehman Brothers 3-10 Year Municipal Bond Index, an unmanaged index
of tax-exempt bonds.
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 1998)
1 Year 5 Years Since inception
Fund 5.72% 5.40% 5.55%
Lehman
Brothers 3-10 6.03% 5.66% 5.92%
Year
Municipal
Bond Index
As of December 31, 1998, the fund's 30-day yield was 3.84% and its 30-day
tax-equivalent yield was __% (using the maximum federal individual income tax
rate). Call 1-800-223-3332 for current yields.
FUND'S BEST AND WORST QUARTERLY TOTAL RETURNS
Best: 4.59% in the 1st quarter of 1995
Worst: -3.61% in the 1st quarter of 1994
The fund's past performance does not necessarily indicate how
the fund will perform in the future.
5
<PAGE>
RISK/RETURN SUMMARY WPG INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL RISKS
You could lose money on your investment in the fund or the fund could
underperform other possible investments if any of the following occurs:
-- The issuer or guarantor of a bond owned by the fund defaults on its
payment obligations, becomes insolvent or has its credit rating
downgraded.
-- Interest rates rise, causing the bonds in the fund's
portfolio to decline.
-- As a result of declining interest rates, the issuer of a bond exercises
its right to prepay principal earlier than scheduled, forcing the fund
to reinvest in lower yielding bonds. This is known as call or
prepayment risk.
-- Municipal bonds fall temporarily out of favor with
investors.
-- Unfavorable legislation affects the tax-exempt status
of municipal bonds.
-- The adviser's judgments about the attractiveness, relative value or
yield of particular bonds prove to be wrong.
The fund may realize taxable gains on the sale of bonds or in other
transactions. Distributions of the fund's income and gains will generally be
subject to state taxation. Some of the fund's distributions of tax-exempt
interest may be subject to the federal alternative minimum tax.
- --------------------------------------------------------------------------------
WHO MAY WANT TO INVEST
The fund may be appropriate if you want:
-- Higher potential returns than a money market fund
and are willing to accept more risk of price
volatility
-- Tax-exempt interest
-- Diversification within the municipal securities
market that is not readily achievable by investing
directly in individual securities
WHO MAY NOT WANT TO INVEST
The fund may not be appropriate if you want:
-- Complete stability of principal
-- Long-term growth of capital
================================================================================
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES None
(paid directly from your investment)
ANNUAL FUND OPERATING EXPENSES
(paid by the fund as a % of fund net assets)
Management fee(1) 0.50%
12b-1 distribution fees None
Other expenses(1) 0.56%
-----
Total operating expenses(1) 1.06%
=====
- -----------------
(1) Because the adviser agreed to cap the fund's expenses, the fund's actual
expenses for fiscal 1998 were:
Management Fee 0.29%
Other expenses 0.56%
Total operating expenses 0.85%
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. Your actual costs may be
higher or lower.
NUMBER OF YEARS YOU
OWN YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses: $109 $340 $590 $1,306
The example assumes:
-- You invest $10,000 for the periods shown
-- You redeem at the end of each period
-- You reinvest all distributions and dividends without a sales
charge
-- The fund's operating expenses have not been capped or
reduced and remain the same
-- Your investment has a 5% return each year
8
<PAGE>
RISK/RETURN SUMMARY WPG CORE BOND FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL
High current income, consistent with capital preservation.
- --------------------------------------------------------------------------------
PRINCIPAL INVESTMENTS
U.S. denominated or quoted debt securities, or "bonds."
The fund invests substantially all, but at least 80% of its assets, in bonds.
These bonds are denominated in U.S. dollars and may be issued by domestic and
foreign companies or governmental entities. The fund may invest in all types of
bonds and other fixed income securities, including notes, mortgage-backed and
asset-backed securities (including mortgage-backed derivative securities),
convertible securities, preferred stock, municipal securities, and short-term
debt securities.
CREDIT QUALITY: Exclusively investment grade bonds. This means
that they are rated in one of the top four long-term rating categories by at
least one major rating agency or are of comparable credit quality.
DURATION: Average dollar weighted portfolio duration
between three and seven years, but individual bonds may be
of any duration. The fund's duration will generally be in a
narrow range relative to the duration of its benchmark, the
Lehman Brothers Aggregate Index.
- --------------------------------------------------------------------------------
PRINCIPAL STRATEGIES
There are three principal factors in the manager's selection process -- maturity
allocation, sector allocation and individual security selection.
- -- The adviser studies the relationship between bond yields
and maturities under current market conditions and identifies maturities
with high yields relative to the amount of risk involved.
- -- The adviser uses qualitative and quantitative methods to identify bond
sectors that it believes are undervalued or will outperform other sectors.
Sectors include corporate securities, U.S. Treasury securities, U.S.
government agency securities, and mortgage-backed and asset-backed
securities.
- -- After the fund's maturity and sector allocations are made, the adviser
selects individual bonds within each sector. The adviser performs both
fundamental and quantitative analysis, looking at:
-- Stable or improving issuer credit quality
-- Market inefficiencies that cause individual bonds to
have high relative values
-- Structural features of securities, such as callability,
liquidity, and prepayment characteristics and
expectations.
================================================================================
PERFORMANCE
The bar chart and table shown below indicate the risks of investing in the fund.
The bar chart shows changes in the performance of the fund from year to year
over the past ten years.
[GRAPH OMITTED HERE. THE BAR CHART OMITTED HERE SHOWS CHANGES IN THE PERFORMANCE
OF THE FUND FROM YEAR TO YEAR OVER THE LIFE OF THE FUND.]
WPG CORE BOND FUND
% TOTAL RETURN
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
13.94 8.95 13.96 7.90 8.96 -8.70 13.25 3.85 7.37 9.26
CALENDAR YEARS ENDED DECEMBER 31
The table shows how the fund's average annual returns for different calendar
periods compared to those of the Lehman Brothers Aggregate Index, an unmanaged
index of bonds.
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 1998)
1 Year 5 Years 10 Years
Fund 9.26% 4.72% 7.67%
Lehman Bros.
Aggregate
Index* 8.69% 7.27% 9.26%
- --------------
*Prior to January 20, 1998, the fund was subject to different investment
policies than those described in this prospectus. The fund's benchmark prior to
January 20, 1998 was the Lehman Brothers Intermediate Government/Mortgage
Backed Securities Index, an unmanaged index of U.S. government securities,
whose performance is as follows:
Lehman Bros.
Inter. Gov't/
Mortgage-Backed
Securities
Index 7.75% 6.68% 8.62%
FUND'S BEST AND WORST QUARTERLY TOTAL RETURNS
Best: 7.61% in the 2nd quarter of 1989
Worst: -4.64% in the 2nd quarter of 1994
The fund's past performance does not necessarily indicate how
the fund will perform in the future.
9
<PAGE>
RISK/RETURN SUMMARY WPG CORE BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL RISKS
You could lose money on your investment in the fund or the fund could
underperform other possible investments if any of the following occurs:
-- Interest rates rise, causing the bonds in the fund's
portfolio to drop in value.
-- The issuer or guarantor of a bond owned by the fund defaults on its
payment obligations, becomes insolvent or has its credit rating
downgraded.
-- As a result of declining interest rates, the issuer of a bond exercises
the right to prepay principal earlier than scheduled, forcing the fund
to reinvest in lower yielding bonds. This is known as call or
prepayment risk.
-- When interest rates are rising, the average life of a
bond is generally extended because of slower than
expected principal payments. This will lock
in a below-market interest rate, increase the bond's
duration and reduce the value of the bond. This is
known as extension risk.
-- The adviser's judgments about the attractiveness, relative value or
potential income of particular sectors or bonds proves to be wrong.
There is a greater risk that the fund will lose money due to prepayment and
extension risks because the fund may invest heavily in asset-backed and
mortgage-related securities. Mortgage derivatives in the fund's portfolio may
have especially volatile prices because of imbedded leverage or unusual interest
rate reset terms.
- --------------------------------------------------------------------------------
WHO MAY WANT TO INVEST
The fund may be appropriate if you want:
-- Higher potential income than a money market
fund with potential higher risk
-- To diversify by investing in a portfolio of
investment grade, fixed income securities
WHO MAY NOT WANT TO INVEST
The fund may not be appropriate if you want:
-- A temporary investment
-- Complete stability of principal
-- Long-term growth of capital
================================================================================
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES None
(paid directly from your investment)
ANNUAL FUND OPERATING EXPENSES
(paid by the fund as a % of fund net assets)
Management fee(1) 0.60%
12b-1 distribution fees 0.00%
Other expenses(1) 0.29%
-----
Total operating expenses(1) 0.89%
=====
- -----------------------
(1) Because the adviser agreed to cap the fund's expenses and because custodian
fees were reduced by credits for cash balances, the fund's actual expenses
for fiscal 1998 were:
Management fees 0.28%
Other expenses 0.22%
Total operating expenses 0.50%
EXAMPLE
These expense caps may be changed or dropped. This example is intended to
help you compare the cost of investing in the fund with the cost of investing in
other mutual funds. Your actual costs may be higher or lower.
NUMBER OF YEARS YOU
OWN YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses:
Without Cap $91 $285 $495 $1,100
With Cap $51 $161 $280 $629
EXAMPLE:
The example assumes:
-- You invest $10,000 for the periods shown
-- You redeem at the end of each period
-- You reinvest all distributions and dividends without a sales
charge
-- The fund's operating expenses remain the same
-- Your investment has a 5% return each year
10
<PAGE>
RISK/RETURN SUMMARY WPG GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL
Long-term growth of capital, a reasonable level of current income and an
increase in future income.
- --------------------------------------------------------------------------------
PRINCIPAL INVESTMENTS
Equity securities of U.S. companies.
The fund invests primarily in equity securities of large capitalization
companies that offer the prospect of capital appreciation and growth of income,
while paying current income.
The fund also may purchase equity securities that do not pay current dividends
but offer prospects for growth of capital and future income.
The fund may invest in all types of equity securities including:
-- Common and preferred stocks
-- Securities convertible into common stocks
-- Shares of REITs
-- Warrants and rights to purchase common stock
-- American depositary receipts (ADRs)
The fund may also invest, to a lesser extent, in fixed income securities
(primarily of investment grade quality).
- --------------------------------------------------------------------------------
PRINCIPAL STRATEGIES
In selecting stocks for investment, the adviser uses a "bottom-up" strategy,
which begins with individual stock selection, while diversifying the fund's
investments among various industries and sectors. Using a growth investment
style, the adviser:
-- Identifies promising companies by employing fundamental company and
industry analysis and valuation methods.
-- Evaluates historic and forecasted earnings growth, cash flows and
relative and absolute values by employing quantitative techniques.
In selecting stocks for the fund's portfolio, the adviser looks for:
-- Established companies with experienced management.
-- Better than average prospects for long-term growth of
capital.
-- Growth rates that are faster than the growth rate of
the U.S. economy at the time of purchase.
-- Companies with historically high returns on equity.
A security's valuation influences the timing of the fund's purchase and sale.
The adviser also considers the tax implications to the fund's shareholders in
making portfolio security decisions.
================================================================================
PERFORMANCE
The bar chart and table shown below indicate the risks of investing in the fund.
The bar chart shows changes in the performance of the fund from year to year
over the past ten years.
The table shows how the fund's average annual returns for different calendar
periods compared to those of the S&P 500 Index and the Lipper Growth & Income
Funds Average.
[GRAPH OMITTED HERE. THE BAR CHART OMITTED HERE SHOWS CHANGES IN THE PERFORMANCE
OF THE FUND FROM YEAR TO YEAR OVER THE LIFE OF THE FUND.]
WPG GROWTH AND INCOME FUND
% TOTAL RETURN
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
27.64 -10.38 40.72 13.80 9.53 -5.47 32.73 24.42 36.27 27.51
CALENDAR YEARS ENDED DECEMBER 31
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 1998)
1 Year 5 Years 10 Years
Fund 27.51% 22.09% 18.47%
S&P 500 Index 28.76% 24.15% 19.22%
Lipper Growth
& Income
Funds Avg. 15.61% 18.53% 15.76%
FUND'S BEST AND WORST QUARTERLY TOTAL RETURNS
Best: 19.82% in the 2nd quarter of 1997
Worst: -21.05% in the 3rd quarter of 1990
The fund's past performance does not necessarily indicate how
the fund will perform in the future.
11
<PAGE>
RISK/RETURN SUMMARY WPG GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
PRINCIPAL RISKS
You could lose money on your investment in the fund or the fund could
underperform other possible investments if any of the following occurs:
-- The U.S. stock market goes down.
-- Growth stocks or stocks of large capitalization
companies temporarily fall out of favor with
investors.
-- Companies in which the fund invests suffer unexpected
losses or lower than expected earnings.
-- The adviser's judgment about the attractiveness or potential
appreciation of a particular security proves to be wrong.
The risks associated with the fund's investments in fixed income securities are
similar to the risks associated with an investment in the WPG Core Bond Fund.
Please refer to WPG Core Bond Fund's Risk/Return Summary for a
description of those risks.
- --------------------------------------------------------------------------------
WHO MAY WANT TO INVEST
The fund may be appropriate if you:
-- Are seeking a long-term investment that may also
provide some current income
-- Want to diversify your portfolio
WHO MAY NOT WANT TO INVEST
The fund may not be appropriate if you:
-- Are pursuing a short-term investment goal
-- Want complete stability of principal
-- Seek income as your primary goal
================================================================================
FEES AND EXPENSES This table describes the fees and expenses that you
may pay if you buy and hold shares of the fund.
SHAREHOLDER FEES None
(paid directly from your investment)
ANNUAL FUND OPERATING EXPENSES
(paid by the fund as a % of fund net assets)
Management fee 0.75%
12b-1 distribution fees None
Other expenses 0.29%
-----
Total operating expenses 1.04%
=====
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. Your actual costs may be
higher or lower.
NUMBER OF YEARS YOU
OWN YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses: $106 $331 $574 $1,271
The example assumes:
-- You invest $10,000 for the periods shown
-- You redeem at the end of each period
-- You reinvest all distributions and dividends without a sales
charge
-- The fund's operating expenses have not been capped or
reduced and remain the same
-- Your investment has a 5% return each year
12
<PAGE>
RISK/RETURN SUMMARY WEISS, PECK & GREER INTERNATIONAL FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL
Long-term capital growth and, to a lesser extent, current income.
- --------------------------------------------------------------------------------
PRINCIPAL INVESTMENTS
Primarily, common stocks of foreign companies.
The fund invests primarily in companies with medium and large market
capitalizations located in the foreign countries represented in its benchmark,
the Morgan Stanley Capital International Europe Australia Far East (EAFE) Index.
The adviser diversifies the fund's holdings by the number of companies, the
number of industries of such companies and the number of foreign countries. The
fund may invest in emerging countries to a limited extent. Although the fund
invests primarily in common stocks, it may invest in other types of equity
securities, including:
-- Preferred stocks
-- securities convertible into common stocks
-- warrants and rights to purchase common stocks
-- depositary receipts for common stocks
The fund may use derivative contracts on foreign currencies for both hedging and
non-hedging purposes.
- --------------------------------------------------------------------------------
PRINCIPAL STRATEGIES
Taking advantage of the international investing resources of its parent
company--Robeco, the adviser employs an investment process that combines
top-down country selection with bottom-up stock selection to determine the
optimal country, sector and security risk within the fund's portfolio. The
adviser may, to a limited extent, overweight or underweight the fund's country
and sector allocations relative to the EAFE Indes. The EAFE Index consists of 20
countries outside of North America and represents approximately 60% of the total
market value of all publicly traded stocks in these countries.
The adviser selects stocks for inclusion in the two distinct portions of the
fund's portfolio--"core" holdings and "tilt" holdings. The fund's portfolio
consists primarily of core holdings, which are securities of large cap companies
that exhibit strong fundamental characteristics. The adviser selects core
holdings with a 2-3 year invest horizon. Tilt holdings represent a smaller
portion of the fund's portfolio and consist of both medium and large cap
companies. The adviser selects tilt stocks with a shorter investment horizon,
seeking to capture higher performance for the fund relative to the EAFE Index
based on a company's short-term fundamentals and quantitative characteristics.
================================================================================
PERFORMANCE
The bar chart and table shown below indicate the risks of investing in the fund.
The bar chart shows changes in the performance of the fund from year to year
over the life of the fund.
[GRAPH OMITTED HERE. THE BAR CHART OMITTED HERE SHOWS CHANGES IN THE PERFORMANCE
OF THE FUND FROM YEAR TO YEAR OVER THE LIFE OF THE FUND.]
WEISS, PECK & GREER INTERNATIONAL FUND
% TOTAL RETURN
1990 1991 1992 1993 1994 1995 1996 1997 1998
- -14.83 0.90 -5.53 37.24 -6.32 10.92 4.64 2.89 16.28
CALENDAR YEARS ENDED DECEMBER 31
The table shows how the fund's average annual returns
for different calendar periods and since inception on June 1, 1989 compared to
those of the EAFE Index, an unmanaged index of foreign stocks.
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 1998)
1 Year 5 Years Since inception
Fund 16.28% 5.41% 5.06%
EAFE Index 20.33% 9.50% 6.59%
FUND'S BEST AND WORST QUARTERLY TOTAL RETURNS
Best: 19.21% in the 4th quarter of 1998
Worst: -17.82% in the 3rd quarter of 1990
The fund's past performance does not necessarily indicate how
the fund will perform in the future.
13
<PAGE>
RISK/RETURN SUMMARY WPG INTERNATIONAL FUND
- --------------------------------------------------------------------------------
PRINCIPAL RISKS
You could lose money on your investment in the fund or the fund could
underperform other possible investments if any of the following occurs:
-- Foreign stock markets go down, or perform poorly
relative to the U.S. stock market.
-- Foreign stocks temporarily fall out of favor with
investors.
-- The adviser's judgments about the attractiveness,
value or potential appreciation of a particular
company's stock, currency or foreign market prove
to be wrong.
- --------------------------------------------------------------------------------
SPECIAL RISKS
There is a higher risk that the fund will lose money because it invests
primarily in stocks of foreign companies. There are additional risks associated
with investing in foreign companies compared to investing in U.S. companies.
These risks include:
-- Less information may be available about foreign companies and markets
due to relaxed disclosure or accounting standards or regulatory
practices.
-- Many foreign markets are smaller, less liquid and more volatile than
U.S. markets. As a result, the subadviser may not be able to sell the
fund's securities in amounts and at prices it considers reasonable.
-- The U.S. dollar appreciates against foreign currencies causing the
value of the fund's foreign stocks to be worth less.
-- Economic, political or social instability in foreign countries disrupts
the markets where the fund's foreign stocks are traded.
These risks are greater to the extent that the fund invests in emerging market
countries. In addition, you could lose money by investing in the fund as a
result of adverse changes in foreign currency exchange rates relative to the
fund's currency exposures. To the extent the fund uses currency derivative
contracts, the fund's risk of loss may be increased.
- --------------------------------------------------------------------------------
WHO MAY WANT TO INVEST
The fund may be appropriate if you:
-- Are pursuing a long-term goal, such as investing for
retirement.
-- Are seeking higher long term returns and can
accept a higher level of risk.
-- Are seeking to diversify your exposure to the U.S.
stock market by investing in foreign companies.
WHO MAY NOT WANT TO INVEST
The fund may not be appropriate if you:
-- Are pursuing a short-term investment goal.
-- Want stability of principal.
-- Are uncomfortable with the risk and price
volatility in foreign stock markets.
================================================================================
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES None
(paid directly from your investment)
ANNUAL FUND OPERATING EXPENSES
(paid by the fund as a % of fund net assets)
Management fee 0.50%
12b-1 distribution fees None
Other expenses(1) 1.88%
-----
Total operating expenses(1) 2.38%
=====
- -----------------
(1) Because custodian fees were reduced by credits for cash balances, the fund's
actual expenses for fiscal 1998 were:
Other expenses 1.85%
Total operating expenses 2.35%
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. Your actual costs may be
higher or lower.
NUMBER OF YEARS YOU
OWN YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses: $241 $742 $1,270 $2,716
The example assumes:
-- You invest $10,000 for the periods shown
-- You redeem at the end of each period
-- You reinvest all distributions and dividends without a sales
charge
-- The fund's operating expenses have not been capped or
reduced and remain the same
-- Your investment has a 5% return each year
14
<PAGE>
RISK/RETURN SUMMARY WPG TUDOR FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL
Capital appreciation by investing primarily in common stocks, securities
convertible into common stocks and in special situations.
- --------------------------------------------------------------------------------
PRINCIPAL INVESTMENTS
Primarily common stocks of U.S. companies with market capitalizations of less
than $2 billion.
Although the fund invests primarily in common stocks, the fund may invest in all
types of equity and equity-related securities, including:
-- Securities convertible into common stocks.
-- Shares of REITs.
-- Warrants and rights to purchase common stocks.
-- American depositary receipts (ADRs).
-- Preferred stocks.
SPECIAL SITUATIONS: The fund may invest in companies that may experience unusual
and possibly unique developments which may create a special opportunity for
significant returns. Special situations include: significant technological
improvements or important discoveries; reorganizations, recapitalizations or
mergers; favorable resolutions of litigation; new management or material changes
in company policies; and actual or potential changes in control of a company.
- --------------------------------------------------------------------------------
PRINCIPAL STRATEGIES
In selecting stocks for investment, the adviser uses a "bottom-up" process,
which begins with individual stock selection, while diversifying the fund's
investments among various industries and sectors to control risk.
The adviser performs fundamental research to seek small companies with prospects
for sustainable above-average growth in earnings, revenues, cash flow, asset
value and other measures of a company's growth prospects. The adviser also uses
quantitative tools to minimize sector selection risk, ensure the fund is abiding
by its growth discipline and as a guide to assist in maximizing the expected
return from stock selection.
The adviser also considers value characteristics by avoiding those growth
stocks that are overpriced -- this process is commonly known as "growth at a
reasonable price." A security's valuation influences the timing of the fund's
purchase and sale and the adviser uses the inherent volatility in the market
for these high growth stocks to acquire positions at reasonable prices relative
to their long-term growth potential.
The adviser emphasizes financially sound, well-managed, attractively-valued U.S.
companies with strong growth prospects.
The adviser considers the tax implications to the fund's shareholders in making
portfolio security decisions.
================================================================================
PERFORMANCE
The bar chart and table shown below indicate the risks of investing in the fund.
The bar chart shows changes in the performance of the fund from year to year
over the past ten years.
WPG TUDOR FUND
% TOTAL RETURN
1989 1990 1991 1992 1993 1994 1994 1996 1997 1998
25.05 -5.16 45.84 5.13 13.38 -9.81 41.18 18.82 11.11 -22.01
CALENDAR YEARS ENDED DECEMBER 31
The table shows how the fund's average annual returns for different calendar
periods compared to those of the Russell 2500 Growth Index, an unmanaged index
of small company stocks.
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 1998)
1 Year 5 Years 10 Years
Fund -22.01% 5.57% 10.45%
Russell 2500 3.10% 12.41% 13.69%
Growth Index
FUND'S BEST AND WORST QUARTERLY TOTAL RETURNS
Best: 22.68% in the 1st quarter of 1991
Worst: -29.35% in the 3rd quarter of 1998
15
<PAGE>
RISK/RETURN SUMMARY WPG TUDOR FUND
- --------------------------------------------------------------------------------
PRINCIPAL RISKS
You could lose money on your investment in the fund or the fund could
underperform other possible investments if any of the following occurs:
-- The stock market goes down.
-- Small capitalization stocks temporarily fall out of
favor with investors.
-- Companies in which the fund invests suffer unexpected losses or lower
than expected earnings which, in addition to causing the fund to be
less liquid, will reduce the fund's net asset value.
-- The adviser's judgments about the attractiveness, value or potential
appreciation of a particular company's stock selected for the fund's
portfolio prove to be wrong or the special situation that the adviser
anticipated does not occur.
- --------------------------------------------------------------------------------
SPECIAL RISKS
THERE IS A HIGHER RISK THAT THE FUND WILL LOSE MONEY BECAUSE IT INVESTS
PRIMARILY IN SMALL CAPITALIZATION STOCKS. SMALLER COMPANIES MAY HAVE LIMITED
PRODUCT LINES, MARKETS AND FINANCIAL RESOURCES. THE PRICES OF SMALL
CAPITALIZATION STOCKS TEND TO BE MORE VOLATILE THAN THOSE OF OTHER STOCKS. SMALL
CAPITALIZATION STOCKS ARE NOT PRICED AS EFFICIENTLY AS STOCKS OF LARGER
COMPANIES. IN ADDITION, IT MAY BE HARDER TO SELL THESE STOCKS, ESPECIALLY DURING
A DOWN MARKET OR UPON THE OCCURRENCE OF ADVERSE COMPANY-SPECIFIC EVENTS, WHICH
CAN REDUCE THEIR SELLING PRICES.
- --------------------------------------------------------------------------------
WHO MAY WANT TO INVEST
The fund may be appropriate if you:
-- Are seeking to diversify by investing in a portfolio
of common stocks of small companies
-- Are pursuing a long-term goal, such as investing for
retirement
-- Are seeking potentially higher long term returns
and can accept a higher level of risk
WHO MAY NOT WANT TO INVEST
The fund may not be appropriate if you:
-- Are pursuing a short-term investment goal
-- Want stability of principal
-- Are uncomfortable with the risk and price
volatility of the stock market and small
capitalization stocks
================================================================================
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES None
(paid directly from your investment)
ANNUAL FUND OPERATING EXPENSES
(paid by the fund as a % of fund net assets)
Management fee 0.90%
12b-1 distribution fees None
Other expenses 0.38%
-----
Total operating expenses 1.28%
=====
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. Your actual costs may be
higher or lower.
NUMBER OF YEARS YOU
OWN YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses: $130 $406 $702 $1,545
The example assumes:
-- You invest $10,000 for the periods shown
-- You redeem at the end of each period
-- You reinvest all distributions and dividends without a sales
charge
-- The fund's operating expenses have not been capped or reduced
and remain the same
-- Your investment has a 5% return each year
16
<PAGE>
RISK/RETURN SUMMARY WPG QUANTITATIVE EQUITY FUND
- --------------------------------------------------------------------------------
INVESTMENT GOAL
Investment results that exceed the aggregate performance of publicly traded
common stocks, as represented by the S&P 500 Index.
- --------------------------------------------------------------------------------
PRINCIPAL INVESTMENTS Common stocks traded in the U.S.
The fund invests primarily in common stocks of companies with large market
capitalizations. The fund's portfolio generally will consist of common stocks of
between 80 and 120 companies.
In order to remain fully invested and instead of purchasing and selling
securities directly, the fund may invest in depository receipts which seek to
replicate the price performance and dividend yield of the S&P 500 Index and use
derivative contracts (such as futures on the S&P 500 Index).
- --------------------------------------------------------------------------------
PRINCIPAL STRATEGIES
The adviser uses quantitative techniques to analyze a universe of approximately
900 companies, including those in the S&P 500 Index and about 400 other large
and medium companies. Using a proprietary multi-factor model, the adviser:
-- Identifies stocks with rising earnings expectations that the adviser
believes will outperform their peers.
-- Identifies stocks from among this group that are selling at low relative
prices in light of their earnings expectations.
-- Assesses the level of risk associated with each stock, and identifies
stocks with the maximum expected return at each acceptable level of risk.
Based on this information, the adviser selects the combination of stocks,
together with their appropriate weightings, that it believes will optimize the
fund's risk/return ratio. The adviser seeks to maintain the market
capitalization, sector allocations and style characteristics of the fund's
portfolio similar to those of the S&P 500 Index.
The portfolio is rebalanced regularly to maintain the optimal risk/return
trade-off. The adviser assesses each stock's changing characteristics relative
to its contribution to portfolio risk. A stock is sold when it no longer offers
an appropriate return-to-risk tradeoff.
================================================================================
PERFORMANCE
The bar chart and table shown below indicate the risks of investing in the fund.
The bar chart shows changes in the performance of the fund from year to year
over the life of the fund.
[GRAPH OMITTED HERE. THE BAR CHART OMITTED HERE SHOWS CHANGES IN THE PERFORMANCE
OF THE FUND FROM YEAR TO YEAR OVER THE LIFE OF THE FUND.]
WPG QUANTITATIVE EQUITY FUND
% TOTAL RETURN
1993 1994 1995 1996 1997 1998
13.90 0.34 33.37 18.51 25.47 26.71
CALENDAR YEARS ENDED DECEMBER 31
The table shows how the fund's average annual returns for different calendar
periods, and since inception on January 1, 1993, compared to those of the S&P
500 Index, an unmanaged index of common stocks.
AVERAGE ANNUAL TOTAL RETURNS
(for the periods ended December 31, 1998)
1 Year 5 Years Since inception
Fund 26.71% 20.31% 19.22%
S&P 500 28.76% 24.15% 21.67%
Index
FUND'S BEST AND WORST QUARTERLY TOTAL RETURNS
Best: 22.31% in the 4th quarter of 1998
Worst: -10.37% in the 3rd quarter of 1998
The fund's past performance does not necessarily indicate how
the fund will perform in the future.
17
<PAGE>
RISK/RETURN SUMMARY WPG QUANTITATIVE EQUITY FUND
- --------------------------------------------------------------------------------
PRINCIPAL RISKS
You could lose money on your investment in the fund or the fund could
underperform other possible investments if any of the following occurs:
-- The U.S. stock market goes down.
-- Stocks of large capitalization companies
temporarily fall out of favor with investors.
-- Companies in which the fund invests suffer
unexpected losses or lower than expected earnings.
-- The adviser's judgment about the attractiveness,
value or potential appreciation of a particular
company's common stock proves to be wrong.
-- The factors considered by the multi-factor model fail to select stocks
with better relative performance than those included in the S&P 500
Index.
- --------------------------------------------------------------------------------
WHO MAY WANT TO INVEST
The fund may be appropriate if you:
-- Are pursuing a long-term goal, such as investing for
retirement
-- Are seeking higher long-term returns and can
accept a higher level of risk
-- Are seeking to diversify your portfolio by investing
in a portfolio of common stocks of large companies
-- Are seeking an objective, disciplined investment
process
WHO MAY NOT WANT TO INVEST
The fund may not be appropriate if you:
-- Are pursuing a short-term investment goal
-- Want stability of principal
-- Desire a high level of current income
================================================================================
FEES AND EXPENSES This table describes the fees and expenses that you
may pay if you buy and hold shares of the fund.
SHAREHOLDER FEES None
(paid directly from your investment)
ANNUAL FUND OPERATING EXPENSES
(paid by the fund as a % of fund net assets)
Management fee 0.75%
12b-1 distribution fees None
Other expenses(1) 0.32%
-----
Total operating expenses(1) 1.07%
=====
- -----------------------
(1) Because custodian fees were reduced by credits for cash balances, the fund's
actual expenses for fiscal 1998 were:
Other expenses 0.31%
Total operating expenses 1.06%
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. Your actual costs may be
higher or lower.
NUMBER OF YEARS YOU
OWN YOUR SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Expenses: $110 $342 $593 $1,311
The example assumes:
-- You invest $10,000 for the periods shown
-- You redeem at the end of each period
-- You reinvest all distributions and dividends without a sales
charge
-- The fund's operating expenses have not been capped or
reduced and remain the same
-- Your investment has a 5% return each year
18
<PAGE>
MORE ABOUT THE FUNDS' INVESTMENTS AND RISKS
- --------------------------------------------------------------------------------
The Risk/Return Summary for each fund describes the fund's investment objective
and its principal investment strategies and risks. This section provides some
additional information about the funds' investments and certain portfolio
management techniques that the funds may use. More information about the funds'
investments and portfolio management techniques, some of which entail risks, is
included in the Statement of Additional Information (SAI).
EQUITY INVESTMENTS
The equity oriented funds may invest in all types of equity securities.
Equity securities include exchange-traded and over-the-counter common and
preferred stocks, warrants, rights, convertible securities, depositary
receipts and shares, trust certificates, limited partnership interests,
shares of other investment companies and REITs, and equity participations.
FIXED INCOME
INVESTMENTS
The Core Bond Fund may invest in all types of fixed income securities. The
equity oriented funds may invest a portion of their assets in fixed income
securities. Fixed income investments include bonds, notes (including
structured notes), mortgage-backed securities, asset-backed securities,
convertible securities, Eurodollar and Yankee dollar instruments, preferred
stocks and money market instruments. Fixed income securities may be issued
by corporate and governmental issuers and may have all types of interest
rate payment and reset terms, including fixed rate, adjustable rate, zero
coupon, contingent, deferred, payment-in-kind and auction rate features.
The credit quality of securities held in a fund's portfolio is determined
at the time of investment. If a security is rated differently by multiple
ratings organizations, a fund treats the security as being rated in the
higher rating category. A fund may choose not to sell securities that are
downgraded below the fund's minimum accepted credit rating after their
purchase.
MORTGAGE-BACKED
SECURITIES
Mortgage-backed securities may be issued by private companies or by
agencies of the U.S. government. Mortgage-backed securities represent
direct or indirect participation in, or are collateralized by and payable
from, mortgage loans secured by real property.
Certain debt instruments may only pay principal at maturity or may only
represent the right to receive payments of principal or payments of
interest on underlying pools of mortgage or government securities, but not
both. The value of these types of instruments may change more drastically
than debt securities that pay both principal and interest during periods of
changing interest rates. Principal only mortgage-backed securities are
particularly subject to prepayment risk. A fund may obtain a below market
yield or incur a loss on such instruments during periods of declining
interest rates. Interest only instruments are particularly subject to
extension risk. For mortgage derivatives and structured securities that
have imbedded leverage features, small changes in interest or prepayment
rates may cause large and sudden price movements. Mortgage derivatives can
also become illiquid and hard to value in declining markets.
The Core Bond Fund may use mortgage dollar rolls to finance the purchase of
additional investments. Dollar rolls expose a fund to the risk that it will
lose money if the additional investments do not produce enough income to
cover the fund's dollar roll obligations. In addition, if the adviser's
prepayment assumptions are incorrect, a fund may have performed better had
the fund not entered into the mortgage dollar roll.
FOREIGN SECURITIES
ALL FUNDS EXCEPT
TAX FREE MONEY
MARKET FUND AND
INTERMEDIATE
MUNICIPAL BOND FUND
All of the funds except Tax Free Money Market Fund and Intermediate
Municipal Bond Fund may invest in U.S. dollar denominated securities of
foreign issuers. In addition, International Fund invests primarily, and
Tudor Fund may invest to a lesser extent, in securities denominated in
foreign currencies.
Investments in securities of foreign entities and securities denominated in
foreign currencies involve special risks. These include possible political
and economic instability and the possible imposition of exchange controls
or other restrictions on investments. Changes in foreign currency rates
relative to the U.S. dollar will affect the U.S. dollar value of a fund's
assets denominated or quoted in currencies other than the U.S. dollar.
Emerging market investments offer the potential for significant gains but
also involve greater risks than investing in more developed countries.
Political or economic instability, lack of market
19
<PAGE>
MORE ABOUT THE FUNDS' INVESTMENTS AND RISKS
- --------------------------------------------------------------------------------
FOREIGN SECURITIES
(continued)
liquidity and government actions such as currency controls or seizure of
private business or property may be more likely in emerging markets. In
Europe, Economic and Monetary Union (EMU) and the introduction of a single
currency began on January 1, 1999. There are significant political and
economic risks associated with EMU, which may increase the volatility of a
fund's European securities and present valuation problems.
BELOW INVESTMENT
GRADE SECURITIES
GROWTH AND INCOME
FUND AND TUDOR FUND
Growth and Income Fund and Tudor Fund may invest in debt securities rated
below investment grade by a ratings organization, or if unrated, of
comparable quality. These bonds, commonly known as "junk bonds," are
considered speculative because they have a higher risk of issuer default,
are subject to greater price volatility and may be illiquid.
SECURITIES LENDING
Each fund may seek to increase its income by lending portfolio securities
to institutions, such as certain broker-dealers. Portfolio securities loans
are secured continuously by collateral maintained on a current basis at an
amount at least equal to the market value of the securities loaned. The
value of the securities loaned by a fund will not exceed 33 1/3% of the
value of the fund's total assets. A fund may experience a loss or delay in
the recovery of its securities if the borrowing institution breaches its
agreement with the fund.
DERIVATIVE CONTRACTS
ALL FUNDS EXCEPT GOVERNMENT
MONEY MARKET FUND AND TAX FREE
MONEY MARKET FUND
Each fund except government money market fund and tax free money market
fund may, but need not, use derivative contracts for any of the following
purposes:
-- To hedge against adverse changes caused by changes in stock market
prices, currency exchange rates or interest rates in the market value of
its securities or securities to be bought
-- As a substitute for buying or selling currencies or securities
-- To enhance the fund's return in non-hedging situations
Examples of derivative contracts include: futures and options on
securities, securities indices or currencies; options on these futures;
forward foreign currency contracts; and interest rate or currency swaps.
Only the international fund and the tudor fund may use derivative contracts
involving foreign currencies. A derivative contract will obligate or
entitle the fund to deliver or receive an asset or cash payment that is
based on the change in value of one or more securities, currencies or
indices. Even a small investment in derivative contracts can have a big
impact on a fund's stock market, currency and interest rate exposure.
Therefore, using derivatives can disproportionately increase losses and
reduce opportunities for gains when stock prices, currency rates or
interest rates are changing. A fund may not fully benefit from or may lose
money on derivatives if changes in their value do not correspond accurately
to changes in the value of the fund's holdings. The other parties to
certain derivative contracts present the same types of default risk as
issuers of fixed income securities. Derivatives can also make the fund less
liquid and harder to value, especially in declining markets.
TEMPORARY
INVESTMENTS
ALL FUNDS EXCEPT
GOVERNMENT
MONEY MARKET FUND
AND TAX
FREE MONEY MARKET
FUND
Each fund except Government Money Market Fund and Tax Free Money Market
Fund may depart from its principal investment strategies in response to
adverse market, economic or political conditions by taking temporary
defensive positions in all types of money market and short-term debt
securities. If a fund were to take a temporary defensive position, it may
be unable for a time to achieve its investment goal.
PORTFOLIO
TURNOVER
CORE BOND FUND
AND TUDOR FUND
The Core Bond Fund and the Tudor Fund may engage in active and frequent
trading, resulting in high portfolio turnover. This may lead to the
realization and distribution to shareholders of higher capital gains,
increasing their tax liability. Frequent trading may also increase
transaction costs, which could detract from the funds' performance.
INVESTMENT GOALS
Each fund's investment goal is not fundamental and may be changed without
shareholder approval by the fund's board of trustees. The Tax Free Money
Market Fund's policy of investing at least 80% of assets in tax-exempt
money market securities is fundamental and may only be changed with the
approval of that fund's shareholders. If there is a change in your fund's
investment goal, you should consider whether the fund remains an
appropriate investment.
20
<PAGE>
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------
THE ADVISER
Weiss, Peck & Greer, L.L.C. Serves as the investment adviser to each of the
funds. WPG is headquartered at One New York Plaza, New York, New York
10004, and is a subsidiary of Robeco, a Dutch public limited liability
company. Founded in 1929, Robeco is one of the world's oldest asset
management organizations.
Subject to the general supervision of the funds' boards of trustees, WPG
manages the funds' portfolios and is responsible for the selection and
management of all portfolio investments of each fund in accordance with
each fund's investment objective and policies.
<TABLE>
<CAPTION>
THE PORTFOLIO FUND PORTFOLIO MANAGER(S) SINCE PAST 5 YEARS' BUSINESS EXPERIENCE
MANAGERS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
THE PORTFOLIO WPG Government Money Market Daniel S. Vandivort and 1994 Managing director of the adviser.
MANAGERS ARE Fund Thomas J. Girard
PRIMARILY
RESPONSIBLE 1996 Principal of the adviser since 1996. Prior
FOR THE thereto, Mr. Girard served as a vice
DAY-TO-DAY president and portfolio manager with
OPERATION OF Bankers Trust Company.
THE FUNDS
INDICATED WPG Tax Free Money Market Fund Janet A. Fiorenza 1988 Managing director of the adviser.
BESIDE THEIR
NAMES. WPG Intermediate Municipal BondS. Blake Miller 1993 Principal of the adviser.
Fund
WPG Core Bond Fund Daniel S. Vandivort and 1995 Managing director of the adviser.
Sid Bakst
1998 Principal of the adviser. Prior thereto, vice
president and portfolio manager for New York
Life Asset Management.
WPG Growth and Income Fund A. Roy Knutsen 1992 Managing director of the adviser.
Weiss, Peck & Greer Eric Van Der Maarel
International Fund 1999 Portfolio manager of the adviser since 1999 and
senior Fund portfolio manager of Robeco, the
adviser's parent company since 1990.
WPG Tudor Fund Laurence Zuriff 1999 Managing director of the adviser. Prior thereto,
Mr. Zuriff was a vice president of York Capital
Management and a growth equity analyst at Granite
Capital.
WPG Quantitative Equity Fund Daniel J. Cardell 1996 Managing director of the adviser. Prior thereto,
senior vice president and director of equities for
the Bank of America.
</TABLE>
21
<PAGE>
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------
MANAGEMENT FEES PAID DURING THE FISCAL YEAR ENDED
MANAGEMENT FEES PAID DECEMBER 31, 1998 (AS % OF AVERAGE DAILY NET ASSETS)
BY EACH FUND
WPG Government Money Market Fund 0.50%
WPG Tax Free Money Market Fund 0.50%
WPG Intermediate Municipal Bond Fund 0.29%
WPG Core Bond Fund 0.28%
WPG Growth and Income Fund 0.75%
Weiss, Peck & Greer International Fund 0.50%
WPG Tudor Fund 0.90%
WPG Quantitative Equity Fund 0.75%
ADMINISTRATION AND
SERVICE PLANS
CORE BOND FUND AND
INTERNATIONAL FUND
Core Bond Fund and International Fund have adopted Rule 12b-1 plans for
their shares. Under the plans, the funds pay distribution and service fees
for the sale of their shares and for administrative and shareholder
services in an aggregate amount of up to 0.05% of their average daily net
assets. These fees are an ongoing expense and over time will increase the
cost of your investment and may cost you more than other types of sales
charges. For the year ended December 31, 1998, the International Fund did
not pay any fees under its plan and the amount paid by the Core Bond Fund
represented less than 0.01% of its average daily net assets.
YEAR 2000 CHALLENGE
Many computer software systems in use today cannot properly process
date-related information after December 31, 1999. This failure, commonly
referred to as the "Year 2000 Issue," could adversely affect the handling
of securities trades, pricing and account servicing for the funds. In
addition, the cost of addressing Year 2000 compliance may adversely affect
the issues of individual securities held by the funds. The adviser has made
Year 2000 compliance a high priority and is taking steps that it believes
are reasonably designed to address the Year 2000 Issue for its computer
systems. The adviser has also been informed that comparable steps are being
taken by the funds' other major service providers. The adviser does not
currently anticipate that the Year 2000 Issue will have a material impact
on its ability to continue to fulfill its duties as investment adviser.
However, non-compliant computer systems in general could have a material
adverse effect on a fund's business, operations or financial condition.
Additionally, a fund's performance could be hurt if a computer system
failure at a company or governmental unit affects the prices of portfolio
securities.
22
<PAGE>
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
IN GENERAL
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.
The funds reserve the right to reject any purchase for any reason and to
cancel any purchase due to nonpayment. 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.
INVESTMENT MINIMUMS
ALL FUNDS EXCEPT CORE BOND FUND CORE BOND FUND AUTOMATIC INVESTMENT
PLAN
- ------------------------------- -------------- --------------------
UNIFORM GIFTS TO
INVESTMENT ORDINARY MINOR (UGMA) RETIREMENT
ACCOUNTS ACCOUNTS ACCOUNTS ALL FUNDS
Initial
Investment $2,500 $250 $250 $25,000 n/a
Subsequent
Investment $100 $100 $100 $5,000 $50
THE FUNDS MAY WAIVE THESE MINIMUMS AT THEIR DISCRETION.
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, First
Data Investor Services Group, Inc., Attention: WPG Mutual Funds, P.O. Box
60448, King of Prussia, PA 19406-0448.
BY WIRE
You may also purchase shares of the funds by wiring your investment to a
fund's wire bank account with the funds' custodian. Please call the adviser
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 transfer agent, as described above.
THROUGH AN AUTHORIZED
BROKER-DEALER
Broker-dealers approved by the adviser 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 securities dealers
may be subject to transaction fees, no part of which will be received by
the funds or the adviser.
IN KIND PURCHASES
Shares of the funds may be purchased in whole or in part by delivering to
the funds' custodian securities determined by the adviser to be suitable
for that fund's portfolio.
AUTOMATIC INVESTMENT
PLAN
The Automatic Investment Plan is a convenient way for you to purchase a
fixed dollar amount of shares at regular intervals selected by you. Through
the plan, you may automatically transfer funds (minimum of $50 per
transaction per fund) from your designated bank account on a monthly or
quarterly basis. The plan is not available to shareholders of the
Quantitative Equity Fund.
GOOD ORDER
Orders to buy shares are not considered received until received "in good
order." For Government Money Market Fund, the Tax Free Money Market Fund,
the Core Bond Fund and the Intermediate Municipal Bond Fund, this means
that your investment has been received or converted into federal funds
(which, in the case of a check drawn on a bank, may take several days). You
will begin to earn dividends on the business day following the date your
order is converted to federal funds. For Government Money Market Fund and
Tax Free Money Market Fund, if you purchase shares by federal funds wire,
you may qualify for a dividend on the same date if your wire is received
prior to 12:00 noon Eastern time. For the other funds, receipt of federal
funds is not necessary for a request to be in good order.
If your purchase is cancelled due to nonpayment or because your check does
not clear (and as a result, your account must be redeemed), you will be
responsible for any loss incurred by the fund(s) affected.
22
<PAGE>
HOW TO EXCHANGE SHARES
- --------------------------------------------------------------------------------
IN GENERAL
You may exchange shares of a fund for shares of any other WPG Mutual Fund
described in this prospectus provided all accounts are identically
registered. Shares exchanged will be valued at their respective net asset
values next determined after the receipt of a proper exchange request.
Exchange requests may be delayed up to 15 days for shares purchased by
check.
BY TELEPHONE
You may authorize telephone exchanges by marking the appropriate boxes on
your account application and providing the information requested in the
application. 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 that the funds are
open. Telephone exchange requests made after 4:00 p.m. Eastern time will
not be accepted.
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.
BY MAIL
When making a written exchange request, please provide:
-- Name of the fund
-- Account number
-- Dollar amount or number of shares to exchange
-- Signature of each owner exactly as account is registered
-- Your share certificates, if any, properly endorsed
or with proper powers of attorney o Signature
guarantees, if the account in the fund whose shares
are being purchased will not be identically registered
-- Any other documentation required by the transfer agent or adviser
OTHER INFORMATION
ABOUT EXCHANGES
No sales charge or other fee is imposed on exchanges. An exchange involves
a redemption of the shares exchanged and may therefore result in a tax
liability for you except, generally, for exchanges from Government Money
Market Fund or Tax Free Money Market Fund to another fund. Unless waived by
the funds, you must satisfy the initial and subsequent minimum investment
for each fund you are exchanging into.
Certain qualified retirement plans (401(k) and 403(b) plans and other plans
but not Individual Retirement Accounts) may exchange their fund shares for
shares of the Tomorrow Funds, consisting of Tomorrow Long-Term Retirement
Fund, Tomorrow Medium-Term Retirement Fund and Tomorrow Short-Term
Retirement Fund. Please call 1-800-223-3332 to obtain a free copy of the
Tomorrow Funds' prospectus, including fees and expenses. You should read
the Tomorrow Funds' prospectus carefully before requesting any exchange
into the Tomorrow Funds.
MORE ABOUT
TELEPHONE
TRANSACTIONS
The funds may use identification procedures, such as providing written
confirmation of telephone exchange and redemption transactions and tape
recording of telephone requests, to confirm that a telephone request is
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 or redemption requests
may, however, be made in writing in accordance with procedures described
below.) 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.
23
<PAGE>
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
IN GENERAL
Subject to the restrictions outlined below, you may redeem all or any part
of your shares in the funds at a price equal to the net asset value next
computed following receipt and acceptance of your redemption request by the
transfer agent or other fund agent. A redemption is a taxable transaction
that may result in a tax liability for you, except, generally, redemptions
of the shares of Government Money Market Fund or Tax Free Money Market
Fund.
Except under certain emergency conditions, your redemption payment will be
sent to you (net of any required withholding taxes) within three business
days after receipt of your written redemption request in proper form by the
funds or their agents. If you wish to have your redemption proceeds wired
to your checking or bank account, you may so elect. Currently, the transfer
agent charges a fee for wire transfers.
The funds cannot accept requests which specify a particular date or price
for redemption or which specify any other special conditions.
BY TELEPHONE
You may authorize telephone redemptions by marking the appropriate boxes on
your account application and providing the information requested in the
application. To redeem shares by telephone, simply call 1-800-223-3332
between 9:00 a.m. and 4:00 p.m. Eastern time on any day that the funds are
open. Telephone redemption requests made after 4:00p.m. Eastern time will
not be accepted. See "More about Telephone Transactions" above.
The telephone redemption privilege is not available with respect to (i)
redemptions in excess of $50,000 during any 30-day period, (ii) accounts
that are registered jointly or requiring supporting legal documents or
(iii) shares for which certificates have been issued. Proceeds from
telephone redemptions will be mailed by check payable to the shareholder of
record to the address, or wired to the bank as directed, on the account
application.
BY MAIL
Unless you are redeeming by telephone or through an authorized
broker-dealer, you must submit a written request in "proper form" directly
to First Data Investor Services Group, Inc., Attention: WPG Mutual Funds,
P.O. Box 60448, King of Prussia, PA 19406-0448. No charge is imposed on any
redemption request processed by the transfer agent.
THROUGH AN
AUTHORIZED BROKER-
DEALER
You may transmit your redemption request to the funds through an authorized
broker-dealer. The broker-dealer may charge you a transaction fee for this
service.
PROPER FORM
To be in proper form, your redemption request must include:
-- Name of the fund
-- Account number
-- Dollar amount or number of shares to redeem
-- Signature of each owner exactly as account is registered
-- Your share certificates, if any, properly endorsed
or with proper powers of attorney
-- Signature guarantees, if your proceeds are being sent to an
address or person other than those listed on the account
registration, or if you are redeeming shares represented by
certificates
-- Any other documentation required by the transfer agent
or adviser (generally required for redemptions by
corporations, estates, trusts, guardianships, custodianships,
partnerships, and pension and profit sharing plans)
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 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.
SYSTEMATIC
WITHDRAWAL PLAN
The systematic withdrawal plan allows you to establish automatic monthly or
quarterly transfers of a fixed amount ($50 or more) from your account(s) in
the fund(s) to you or your designated bank account. You must have a minimum
balance of $15,000 in a fund account to use this feature.
24
<PAGE>
OTHER SHAREHOLDER SERVICE INFORMATION
- --------------------------------------------------------------------------------
SHAREHOLDER
INQUIRIES
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 First Data Investor Services Group, Inc., Attention: WPG
Mutual Funds, P.O. Box 60448, King of Prussia, PA 19406-0448.
The funds may amend the shareholder services described in this prospectus
or 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, 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
for that transaction. In addition, following each distribution from your
fund, you will receive a shareholder statement reflecting any reinvestment
of a dividend or distribution in shares of the fund, including your current
share balance with the fund. The funds will also send you shareholder
reports no less frequently than semi-annually. You also will receive,
shortly after year-end, tax information about your account(s) with each
fund.
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," 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.
THE SWEEP
PROGRAM
The sweep program is a convenient way for you to invest automatically
excess credit balances in any of your brokerage accounts with Weiss, Peck &
Greer 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
Weiss, Peck & Greer you may elect to have credit balances automatically
invested in shares of the Government Money Market Fund or Tax Free Money
Market Fund. Weiss, Peck & Greer 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.
MINIMUM
ACCOUNT SIZE
Due to the relatively high cost of maintaining smaller accounts, the funds
may redeem shares in any account if, as the result of redemptions, the
value of that account drops below $100 ($15,000 for the Core Bond Fund.)
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
the specified minimum before the redemption is processed.
EXCESSIVE TRADING
To protect shareholders, the funds have adopted a trading policy limiting
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 certain fixed 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. If you violate this 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. The funds may waive the trading policy in their discretion.
SIGNATURE
GUARANTEES
You can obtain a signature guarantee from most banks, dealers, brokers,
credit unions and federal savings and loans, but not from a notary public.
25
<PAGE>
SHARE PRICE
- --------------------------------------------------------------------------------
HOW SHARES OF THE
FUNDS ARE VALUED
Each fund's net asset value per share is calculated as of the close of
regular trading on the New York Stock Exchange, normally 4:00 p.m. Eastern
time, every day the Exchange is open for regular trading. In addition,
Government Money Market Fund and Tax Free Money Market Fund calculate their
net asset values per share as of 12:00 p.m. Eastern time on those days on
which the Exchange is open for regular trading and on which a purchase
order for fund shares and related federal funds wire is received prior to
12:00 p.m. Eastern time. The net asset value per share, calculated as
described below, is effective for all orders received in good order (as
previously described) by the funds or their agents prior to the close of
regular trading on the Exchange for that day. Orders received by the funds
or their agents 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 Exchange is generally open Monday
through Friday except for most national holidays.
The net asset value (NAV) 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 the Government Money Market Fund and the Tax Free Money Market Fund,
securities are valued using the "amortized cost" method, which does not
consider fluctuations in the market value of the funds' portfolio
securities. Instead the securities are valued at cost, and then marked up
or down each day, at a constant rate, to eliminate any discount or premium
over time, until the security reaches its full maturity. This method
provides certainty in valuation, but it may result in periods where the
"amortized cost" method results in a valuation that is 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 NAV, securities (other than
certain money market instruments) are valued primarily based on market
quotations. If market quotations are not available, then the fair value of
the securities is determined by a valuation committee appointed by the
Board of Trustees. When the values of securities in the International
Equity Fund's portfolio have been materially affected by events occurring
after the close of a foreign securities exchange, the fund may price those
securities at fair value. A fund that uses fair value to price securities
may value those securities higher or lower than another fund that uses
market quotations to price the same securities. The funds may use pricing
services to value bonds and other fixed income investments. Money market
instruments with a remaining maturity of 60 days or less at the time of
purchase are generally valued at amortized cost.
SHARE
CERTIFICATES
The Government Money Market Fund, Tax Free Money Market Fund, Municipal
Bond Fund, Core Bond Fund and Quantitative Equity Fund will not issue share
certificates. Each other fund will not issue share certificates unless you
have been a shareholder of the fund 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.
26
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DIVIDENDS AND
DISTRIBUTIONS
The funds normally pay dividends and distribute capital gains, if any, as
follows:
<TABLE>
<CAPTION>
FUND INCOME DIVIDEND DISTRIBUTIONS CAPITAL GAIN DISTRIBUTIONS ARE
DISTRIBUTIONS PRIMARILY FROM
<S> <C> <C> <C>
WPG Government Money Market Fund Monthly (declared daily) Annually* Income
WPG Tax-Free Money Market Fund Monthly (declared daily) Annually* Income
WPG Intermediate Municipal Bond Fund Monthly (declared daily) Annually Income
WPG Core Bond Fund Monthly (declared daily) Annually Income
WPG Growth and Income Fund Annually Annually Both
WPG Tudor Fund Annually Annually Capital gain
Weiss, Peck & Greer International Fund Annually Annually Capital gain
WPG Quantitative Equity Fund Annually Annually Capital gain
<FN>
- -------------------
*These funds do not expect to make any capital gain distributions.
</FN>
</TABLE>
The funds may pay additional distributions and dividends at other times if
necessary for a fund to avoid federal tax. Unless you instruct otherwise,
capital gain distributions and dividends are reinvested in additional fund
shares of the same class that you hold. The funds' distributions and
dividends (except for "exempt-interest dividends" paid by Tax Free Money
Market Fund or Intermediate Municipal Bond Fund), whether received in cash
or reinvested in additional fund shares, are subject to federal income tax.
You do not pay a sales charge on reinvested distributions or dividends.
TAXES
In general, distributions and share transactions are taxed as follows:
TRANSACTION FEDERAL INCOME TAX STATUS
Redemption or exchange of shares Usually capital gain or loss (except
usually no gain or loss for Tax Free
Money Market Fund and Government Money
Market Fund); long-term only if shares
owned more than one year
Long-term capital gain distributions Long-term capital gain
Short-term capital gain distributions Ordinary income
Dividends Ordinary income (for all funds except
Tax-Free Money Market Fund and
Intermediate Municipal Bond Fund)*
- --------------------
*Tax-Free Money Market Fund and Intermediate Municipal Bond Fund intend to
distribute the interest they earn on tax-exempt municipal securities as
"exempt-interest dividends," which are excludable from gross income for federal
income tax purposes but may be subject to state and local income tax. These
funds' distributions from other sources, if any, would be taxable as described
above.
Long-term capital gain distributions are taxable to you as long-term
capital gain regardless of how long you have owned your shares. You may want to
avoid buying shares when a fund is about to declare a capital gain distribution
or a taxable dividend (other than a dividend declared daily), because it will be
taxable to you even though it may actually be a return of a portion of your
investment.
After the end of each year, the funds will provide you with information about
the distributions and dividends that you received and any reportable redemptions
of shares during the previous year. If you do not provide a fund with your
correct taxpayer identification number and any required certifications, you may
be subject to back-up withholding of 31% of your distributions, dividends (other
than exempt-interest dividends), and, except for redemptions of shares of Tax
Free Money Market Fund and Government Money Market Fund, redemption proceeds.
Because each shareholder's circumstances are different and special tax rules may
apply, you should consult your tax adviser about your investment in a fund.
27
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE FINANCIAL HIGHLIGHTS TABLES ARE INTENDED TO HELP YOU UNDERSTAND THE
PERFORMANCE OF THE FUNDS FOR THE PAST FIVE YEARS. CERTAIN INFORMATION REFLECTS
FINANCIAL RESULTS FOR A SINGLE SHARE. TOTAL RETURNS REPRESENT THE RATE THAT A
SHAREHOLDER WOULD HAVE EARNED (OR LOST) ON A FUND SHARE ASSUMING REINVESTMENT OF
ALL DIVIDENDS AND DISTRIBUTIONS. THE INFORMATION IN THE FOLLOWING TABLES WAS
AUDITED BY KPMG LLP, INDEPENDENT AUDITORS, WHOSE REPORT, ALONG WITH THE FUNDS'
FINANCIAL STATEMENTS ARE INCLUDED IN THE ANNUAL REPORT (AVAILABLE UPON REQUEST).
WEISS, PECK & GREER MUTUAL FUNDS
Financial Highlights
<TABLE>
<CAPTION>
(for the years ended December 31)
$ per share RATIOS
NET TOTAL RATIO OF
REALIZED INCOME/ DISTRI- NET
NET NET AND LOSS DIVIDENDS BUTIONS NET NET INVESTMENT
ASSET INVEST- UNREAL- FROM IN- FROM FROM ASSET ASSETS AT RATIO INCOME/
VALUE AT MENT IZED VESTMENT NET NET TOTAL CONTRI- VALUE AT END OF EXPENSES (LOSS) PORTFOLIO
BEGINNING INCOME GAINS OR OPERA- INVEST- REALIZED DISTRI- BUTIONS END OF TOTAL YEAR TO TO TURNOVER
OF YEAR (LOSS) (LOSSES) TIONS MENT GAINS TIONS CAPITAL YEAR RETURN (000'S) AVERAGE AVERAGE T RATE
ON INCOME NET NET
SECURITIES ASSETS ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
TUDOR
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $21.90 ($0.02) ($4.86) ($4.88) $0.00 ($1.28) ($1.28) $0.00 $15.74 (22.01%) $86,817 1.28% (0.22%) 143.6%
1997 23.28 0.06 2.46 2.52 0.00 (3.90) (3.90) 0.00 21.90 11.11 166,459 1.24 (0.44) 106.3
1996 22.95 (0.14) 4.41 4.27 0.00 (3.94) (3.94) 0.00 23.28 18.82 181,370 1.25 (0.57) 105.4
1995 19.34 (0.10) 8.03 7.93 0.00 (4.32) (4.32) 0.00 22.95 41.18 165,534 1.30 (0.47) 123.1
1994 23.40 (0.13) (2.14) (2.27) 0.00 (1.79) (1.79) 0.00 19.34 (9.81) 144,207 1.28 (0.62) 109.1
GROWTH AND INCOME
1998 35.11 0.26 9.38 9.64 (0.26) (3.85) (4.11) 0.00 40.64 27.51 160,698 1.04 0.71 64.6
1997 29.32 0.24 10.30 10.54 (0.24) (4.51) (4.75) 0.00 35.11 36.27 117,146 1.06 0.88 69.6
1996 26.02 0.24 6.11 6.35 (0.39) (2.66) (3.05) 0.00 29.32 24.42 82,937 1.15 1.50 75.8
1995 21.36 0.51 6.44 6.95 (0.53) (1.76) (2.29) 0.00 26.02 32.73 67,357 1.22 2.10 79.4
1994 23.34 0.56 (1.83) (1.27) (0.62) (0.09) (0.71) 0.00 21.36 (5.47) 61,045 1.23 2.49 71.9
QUANTITATIVE EQUITY
1998 5.84 0.05 1.46 1.51 (0.06) (1.50) (1.56) 0.00 5.79 26.71 73,884 1.06 0.49 89.4
1997 5.89 0.08 1.42 1.50 (0.08) (1.47) (1.55) 0.00 5.84 25.47 96,055 1.03 1.03 77.7
1996 6.85 0.16 1.13 1.29 (0.15) (2.10) (2.25) 0.00 5.89 18.51 102,450 0.95 1.52 60.8
1995 5.44 0.13 1.70 1.83 (0.12) (0.30) (0.42) 0.00 6.85 33.37 133,201 1.00 2.00 26.1
1994 5.58 0.13 (0.11) 0.02 (0.11) (0.05) (0.16) 0.00 5.44 0.34 73,484 1.14 2.36 46.8
INTERNATIONAL
1998 10.15 0.00 1.65 1.65 0.00 (2.55) (2.55) 0.00 9.25 16.28 6,375 2.35 0.06 98.8
1997 10.29 0.01 0.29 0.30 (0.01) (0.43) (0.44) 0.00 10.15 2.89 8,555 1.89 0.02 55.1
1996 11.01 (0.07) 0.57 0.50 (0.04) (1.18) (1.22) 0.00 10.29 4.64 13,161 1.71 0.31 85.2
1995 10.93 0.04 1.15 1.19 (0.15) (0.96) (1.11) 0.00 11.01 10.92 14,194 1.74 0.39 55.9
1994 11.72 0.01 (0.75) (0.74) 0.00 (0.05) (0.05) 0.00 10.93 (6.32) 17,102 1.95 0.12 69.8
</TABLE>
28
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(for the years ended December 31)
$ per share RATIOS
NET TOTAL RATIO OF
REALIZED INCOME/ DISTRI- NET
NET NET AND LOSS DIVIDENDS BUTIONS NET NET INVESTMENT
ASSET INVEST- UNREAL- FROM IN- FROM FROM ASSET ASSETS AT RATIO INCOME/
VALUE AT MENT IZED VESTMENT NET NET TOTAL CONTRI- VALUE AT END OF EXPENSES (LOSS) PORTFOLIO
BEGINNING INCOME GAINS OR OPERA- INVEST- REALIZED DISTRI- BUTIONS END OF TOTAL YEAR TO TO TURNOVER
OF YEAR (LOSS) (LOSSES) TIONS MENT GAINS TIONS CAPITAL YEAR RETURN (000'S) AVERAGE AVERAGE T RATE
ON INCOME NET NET
SECURITIES ASSETS ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
CORE BOND
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $9.34 $0.54 $0.30 $0.84 ($0.54) $0.00 ($0.54) $0.00 $9.64 9.26% $139,463 0.50% 5.71% 684.9%
1997 9.19 0.51 0.15 0.66 (0.51) 0.00 (0.51) 0.00 9.34 7.37 108,443 0.86 5.56 330.3
1996 9.38 0.64 (0.29) 0.35 (0.54) 0.00 (0.54) 0.00 9.19 3.85 120,804 0.81 5.87 333.1
1995 8.83 0.60 0.54 1.14 (0.59) 0.00 (0.59) 0.00 9.38 13.25 171,578 0.82 6.52 375.0
1994 10.37 0.68 (1.56) (0.88) (0.64) (0.02) (0.66) 0.00 8.83 (8.70) 216,364 0.80 7.18 115.9
INTERMEDIATE MUNICIPAL BOND
1998 10.45 0.45 0.14 0.59 (0.47) (0.02) (0.49) 0.00 10.55 5.72 25,341 0.85 4.23 45.7
1997 10.14 0.47 0.31 0.78 (0.47) 0.00 (0.47) 0.00 10.45 7.85 23,508 0.85 4.55 39.8
1996 10.20 0.48 (0.06) 0.42 (0.48) 0.00 (0.48) 0.00 10.14 4.20 15,214 0.85 4.72 44.4
1995 9.51 0.44 0.69 1.13 (0.44) 0.00 (0.44) 0.00 10.20 12.05 12,730 0.85 4.38 51.2
1994 10.15 0.41 (0.64) (0.23) (0.41) 0.00 (0.41) 0.00 9.51 (2.29) 14,005 0.85 4.20 30.9
GOVERNMENT MONEY MARKET
1998 1.00 0.05 0.00 0.05 (0.05) 0.00 (0.05) 0.00 1.00 4.80 428,443 0.73 4.62 N/A
1997 1.00 0.05 0.00 0.05 (0.05) 0.00 (0.05) 0.00 1.00 4.76 207,817 0.81 4.68 N/A
1996 1.00 0.04 0.00 0.04 (0.04) 0.00 (0.04) 0.00 1.00 4.56 152,786 0.83 4.48 N/A
1995 1.00 0.05 0.00 0.05 (0.05) 0.00 (0.05) 0.00 1.00 5.16 131,210 0.82 5.06 N/A
1994 1.00 0.04 (0.01) 0.03 (0.04) 0.00 (0.04) 0.01 1.00 3.58 188,197 0.80 3.54 N/A
TAX FREE MONEY MARKET
1998 1.00 0.03 0.00 0.03 (0.03) 0.00 (0.03) 0.00 1.00 3.05 131,268 0.75 3.01 N/A
1997 1.00 0.03 0.00 0.03 (0.03) 0.00 (0.03) 0.00 1.00 3.23 130,083 0.74 3.17 N/A
1996 1.00 0.03 0.00 0.03 (0.03) 0.00 (0.03) 0.00 1.00 3.14 117,423 0.72 3.10 N/A
1995 1.00 0.04 0.00 0.04 (0.04) 0.00 (0.04) 0.00 1.00 3.63 121,754 0.76 3.56 N/A
1994 1.00 0.03 0.00 0.03 (0.03) 0.00 (0.03) 0.00 1.00 2.61 152,501 0.73 2.59 N/A
</TABLE>
29
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
The Advisor agreed to reimburse other operating expenses and not to impose
its full fee for certain periods. Had the Adviser not so agreed, and had
the Funds not received a custody fee earnings credit, the total return
would have been lower and the ratio of expenses to average net assets and
ratio of net investment income to average net assets would have been:
Ratio of
Net
Ratio of Investment
Expenses Income
to Average to Average
Net Assets Net Assets
QUANTITATIVE EQUITY
1998 1.07% 0.48%
INTERNATIONAL
1998 2.38% 0.03%
1997 1.92% (0.01%)
1996 1.76% 0.26%
1995 1.76% 0.39%
1994 2.35% (0.28%)
CORE BOND
1998 0.89% 5.32%
INTERMEDIATE MUNICIPAL BOND
1998 1.06% 4.02%
1997 1.15% 4.25%
1996 1.01% 4.56%
1995 0.97% 4.25%
1994 1.45% 3.60%
TAX FREE MONEY MARKET
1998 0.76% 3.00%
For the Tudor, Growth and Income, Government Money Market Funds custody fee
earnings credit had an effect of less than 0.01% per share on the above
ratios. The custody fee earnings credit had an effect of less than 0.01% on
the above ratios in 1994, 1995, 1996 and 1997 for the Quantitatvie Equity,
Core Bond, Intermediate Municipal Bond and Tax Free Money Market Funds.
30
<PAGE>
- --------------------------------------------------------------------------------
WEISS, PECK & GREER
MUTUAL FUNDS
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
If you want more information about the Weiss, Peck & Greer Mutual Funds, the
following documents are available upon request:
SHAREHOLDER REPORTS
Annual and semiannual reports to shareholders provide additional information
about the funds' investments. These reports discuss the market conditions and
investment strategies that significantly affected each fund's performance during
its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information (SAI) provides more detailed information
about each fund. It is incorporated into this prospectus by reference.
Investment Company Act file numbers 811-
- ------------------------------------------------
Government Money Market Fund
Tax-free Money Market Fund
Intermediate Municipal Bond Fund
Core Bond Fund
Quantitative Equity Fund 4404
- ------------------------------------------------
Growth And Income Fund 1447
- ------------------------------------------------
Tudor Fund 1745
- ------------------------------------------------
International Fund 5759
- ------------------------------------------------
HOW TO OBTAIN THIS INFORMATION
You may get free copies of the funds' shareholder reports and the SAI by
contacting the funds at:
Address: WPG Mutual Funds
c/o First Data Investor Services Group, Inc.
P.O. Box 60448
King of Prussia, PA 19406-0448
Telephone: 1-800-223-3332
You can review the funds' shareholder reports, prospectus and SAI at the Public
Reference Room of the Securities and Exchange Commission. You can get text-only
copies of these documents for free from the SEC's website at HTTP://WWW.SEC.GOV,
or for a fee by writing to or calling:
Address: Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-6009
Telephone: 1-800-733-0330
- --------------------------------------------------------------------------------
IF SOMEONE MAKES A STATEMENT THAT IS NOT IN THIS PROSPECTUS ABOUT ANY OF THE
FUNDS, YOU SHOULD NOT RELY UPON THAT INFORMATION. NEITHER THE FUNDS NOR THEIR
DISTRIBUTOR IS OFFERING TO SELL SHARES OF THE FUNDS TO ANY PERSON TO WHOM THE
FUNDS MAY NOT LAWFULLY SELL THEIR SHARES.
31
<PAGE>
WPG GOVERNMENT MONEY MARKET FUND
WPG TAX FREE MONEY MARKET FUND
WPG INTERMEDIATE MUNICIPAL BOND FUND
WPG CORE BOND FUND
WPG GROWTH AND INCOME FUND
WPG TUDOR FUND
WEISS, PECK & GREER INTERNATIONAL FUND
WPG QUANTITATIVE EQUITY FUND
One New York Plaza
New York, New York 10004
(800) 223-3332
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1999
This combined Statement of Additional Information (SAI) is not a
prospectus, but expands upon and supplements the information contained in the
combined prospectus dated May 1, 1999, as amended and/or supplemented from time
to time, of WPG Government Money Market Fund, WPG Tax Free Money Market Fund,
WPG Intermediate Municipal Bond Fund, WPG Core Bond Fund, WPG Growth and Income
Fund, WPG Tudor Fund, Weiss, Peck & Greer International Fund, and WPG
Quantitative Equity Fund.
This Statement of Additional Information should be read in conjunction
with the fund's prospectus. Additional information about each fund's investments
is available in the funds' annual and semi-annual reports to shareholders.
Investors can obtain free copies of reports and prospectuses by contacting the
funds at the phone number above. Each fund's financial statements, which are
included in the 1998 annual reports to shareholders, are incorporated by
reference into this SAI.
THE STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
<PAGE>
TABLE OF CONTENTS
PAGE
----
The Funds' Investment Objectives, Policies and Techniques......................1
Investment Restrictions ......................................................23
Advisory, Subadvisory and Administrative Services ............................33
Trustees and Officers ........................................................44
How to Purchase Shares .......................................................54
Redemption of Shares .........................................................56
Net Asset Value ..............................................................57
Investor Services ............................................................59
Dividends, Distributions and Tax Status ......................................61
Portfolio Brokerage ..........................................................70
Portfolio Turnover ...........................................................74
Organization .................................................................75
Custodian ....................................................................76
Transfer Agent ...............................................................76
Legal Counsel ................................................................77
Independent Auditors .........................................................77
Calculation of Performance Data ..............................................77
Financial Statements .........................................................82
Appendix A - Bond Ratings and Glossary ......................................A-1
Appendix B - Investors Services..............................................B-1
-i-
<PAGE>
THE FUNDS' INVESTMENT
OBJECTIVES, POLICIES AND
TECHNIQUES
The WPG Government Money Market Fund (the "Government Money Market
Fund"), WPG Tax Free Money Market Fund (the "Tax Free Money Market Fund"), WPG
Intermediate Municipal Bond Fund (the "Municipal Fund"), WPG Core Bond Fund (the
"Core Bond Fund"), WPG Growth and Income Fund (the "Growth and Income Fund"),
WPG Tudor Fund (the "Tudor Fund"), Weiss, Peck & Greer International Fund (the
"International Fund"), and WPG Quantitative Equity Fund (the "Quantitative
Fund") each have their own investment objective and investment policies. Tax
Free Money Market Fund and Government Money Market Fund are sometimes referred
to herein as the "Money Market Funds".
Weiss, Peck & Greer, L.L.C. (the "Adviser") serves as each fund's
investment adviser and administrator.
Each fund is a diversified, open-end, management investment company (or
series thereof). The investment objectives, policies and restrictions of each
fund may be changed or altered by the Board of Trustees of their respective fund
(each, a "Board" and collectively, the "Boards") without shareholder approval,
except to the extent such policies and restrictions have been adopted as
fundamental. See "Investment Restrictions." The securities in which each fund
may invest and certain other investment policies are further described in the
prospectus. There can be no assurance that any of the funds' investment
objectives will be achieved.
The Appendix to this SAI contains a description of the quality categories
of corporate bonds and municipal obligations in which the funds may invest and a
Glossary describing some of the funds' investments.
GOVERNMENT MONEY MARKET FUND
In addition to the types of investments described in the prospectus, the
Government Money Market Fund may invest in the following types of money
market instruments:
(1) Short-term obligations, including certificates 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 $1 billion (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) U.S. dollar-denominated obligations of foreign issuers. Up to 20% of the
Government Money Market Fund's assets may be invested in obligations of
foreign branches of U.S. banks (Eurodollar obligations) and U.S. branches
of foreign banks (Yankee dollar obligations), if in the opinion of the
Adviser such obligations are of comparable quality to obligations of
domestic banks the fund may purchase; and
- 1 -
<PAGE>
(5) Privately issued obligations collateralized by a portfolio of U.S.
Government securities or by a portfolio of privately issued asset-backed
securities.
Certain of these money market securities may have adjustable or floating
rates of interest or periodic demand features.
TAX FREE MONEY MARKET FUND
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 net
assets in obligations the interest on which is 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 would 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. Such taxable short-term obligations will be
of the same type as are permissible investments for the Government Money Market
Fund.
MUNICIPAL FUND
As a temporary defensive measure during times of adverse market
conditions, the Municipal Fund may invest up to 50% of its 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 & Poor's Ratings Group ("Standard & Poor's"); (b) obligations of banks
(including certificates of deposit, bankers' acceptances and repurchase
agreements) with $1 billion or more of assets; (c) U.S. Government securities;
and (d) other taxable investment grade securities. Distributions from the income
earned on those investments would be taxable to shareholders.
"SPECIAL SITUATIONS"
The Tudor Fund may invest in "Special Situations" as defined in, and
subject to, its fundamental investment restriction set forth under "Investment
Restrictions." Since every Special Situation involves, to some extent, a break
with past experience, the uncertainties in the appraisal of future value and the
risk of possible loss of capital are greater than in the experienced,
well-established companies carrying on business according to long-established
patterns. The market price of a Special Situation may decline significantly if
an anticipated development does not materialize. For the very same reasons,
however, the fund believes that if a Special Situation is carefully studied by
the Adviser and an investment is made at the appropriate time, maximum
appreciation may be achieved.
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
Subject to its investment restrictions and policies, each fund may enter
into repurchase agreements with banks, broker-dealers or other financial
institutions in order to generate additional current income. A repurchase
agreement is an agreement under which a fund acquires a security from a seller
subject to resale to the seller at an agreed upon price and date. The resale
price reflects an agreed upon interest rate effective for the time period the
security is held by a fund. The repurchase price may be higher than the purchase
price, the difference being income to the fund, or the purchase and repurchase
price may
- 2 -
<PAGE>
be the same, with interest at a stated rate due to the fund together with the
repurchase price on repurchase. In either case, the income to the fund is
unrelated to the interest rate on the security. Typically, repurchase agreements
are in effect for one week or less, but may be in effect for longer periods of
time. Repurchase agreements of more than one week's duration are subject to each
fund's respective limitation on investments in illiquid securities.
Repurchase agreements are considered by the Securities and Exchange
Commission (the "SEC") to be loans by the purchaser collateralized by the
underlying securities. 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. In an attempt to
reduce the risk of incurring a loss on a repurchase agreement, the
funds will generally enter into repurchase agreements only with domestic banks
with total assets in excess of one billion dollars or primary U.S. Government
securities dealers reporting to the Federal Reserve Bank of New York, with
respect to securities of the type in which the funds may invest. The funds will
monitor the value of the underlying securities throughout the term of the
agreement to ensure that their market value always equals or exceeds the
agreed-upon repurchase price to be paid to a fund. Each fund will maintain a
segregated account with the Custodian for the securities and other collateral,
if any, acquired under a repurchase agreement with a broker-dealer for the term
of the agreement.
In addition to the risk of the seller's default or a decline in value of
the underlying security, a fund also might incur disposition costs in connection
with liquidating the underlying securities. If the seller becomes insolvent and
subject to liquidation or reorganization under the Bankruptcy Code or other
laws, a court may determine that the underlying security is collateral for a
loan by a fund not within the control of that fund and therefore subject to sale
by the seller's trustee in bankruptcy. Finally, it is possible that a fund may
not be able to perfect its interest in the underlying security and may be deemed
an unsecured creditor of the seller. While the funds acknowledge these risks, it
is expected that they can be controlled through careful monitoring procedures.
The Core Bond Fund may enter into reverse repurchase agreements with
domestic banks or broker-dealers, subject to its policies and restrictions.
Under a reverse repurchase agreement, the fund sells a security held by it and
agrees to repurchase the instrument on a specified date at a specified price,
which includes interest. The fund will use the proceeds of a reverse repurchase
agreement to purchase other securities which either mature at a date
simultaneous with or prior to the expiration of the reverse repurchase agreement
or which are held under an agreement to resell maturing as of that time. The
Core Bond Fund will enter into reverse repurchase agreements only when the
Adviser believes the interest income and fees to be earned from the investment
of the proceeds of the transaction will be greater than the interest expense of
the transaction.
Under the Investment Company Act of 1940, as amended (the "1940 Act"),
reverse repurchase agreements may be considered borrowings by the seller. The
Core Bond Fund may not enter into a reverse repurchase agreement if as a result
its current obligations under such agreements would exceed one-third of the
current market value of its total assets (less its liabilities other than under
reverse repurchase agreements).
In connection with entering into reverse repurchase agreements, the fund
will segregate U.S. Government securities, cash or cash equivalents with an
aggregate current value sufficient to repurchase the securities or equal to the
proceeds received upon the sale, plus accrued interest.
- 3 -
<PAGE>
FOREIGN SECURITIES
The International Fund invests primarily, and the Tudor Fund may invest,
in securities of foreign issuers. The Government Money Market Fund, the Core
Bond Fund, Growth and Income Fund and Quantitative Fund may also invest in
securities of foreign issuers that are denominated in U.S. dollars. Investment
in foreign issuers involves certain special considerations, including those set
forth below, which are not typically associated with investment in U.S. issuers.
Since foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies, there may be less publicly
available information about a foreign company than about a domestic company.
Foreign stock markets, while growing in volume of trading activity, have
substantially less volume than the New York Stock Exchange, and securities of
some foreign companies are less liquid and more volatile than securities of
comparable U.S. companies. Similarly, volume and liquidity in most foreign bond
markets are less than in the United States and, at times, volatility of price
can be greater than in the United States. Although fixed commissions on foreign
stock exchanges are generally higher than negotiated commissions on U.S.
exchanges, the funds will endeavor to achieve the most favorable net results on
their foreign portfolio transactions.
There is generally less government supervision and regulation of stock
exchanges, brokers and listed companies in foreign countries than in the United
States. In some foreign transactions there may be a greater risk of delayed
settlements of portfolio transactions or loss of certificates for portfolio
securities. In addition, with respect to certain foreign countries, there is the
possibility of expropriation or confiscatory taxation, political or social
instability, or diplomatic developments which could affect a fund's investments
in those countries. Moreover, individual foreign economies may differ favorably
or unfavorably from the U.S. economy in such respects as growth of gross
national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position. In addition, it may be more
difficult to obtain and enforce a judgment against a foreign issuer or a foreign
custodian. The U.S. dollar value of foreign securities will be favorably or
adversely affected by exchange rate fluctuations between the dollar and the
applicable foreign currency. A fund will incur costs in converting foreign
currencies into U.S. dollars.
INVESTING IN EMERGING MARKETS
The International Fund may invest in countries with emerging economies or
securities markets.
MARKET CHARACTERISTICS. Debt securities of most emerging markets issuers
may be less liquid and are generally subject to greater price volatility than
securities of issuers in the U.S. and other developed countries. The markets for
securities of emerging markets may have substantially less volume than the
market for similar securities in the U.S. and may not be able to absorb, without
price disruptions, a significant increase in trading volume or trade size.
Additionally, market making and arbitrage activities are generally less
extensive in such markets, which may contribute to increased volatility and
reduced liquidity of such markets. The less liquid the market, the more
difficult it may be for the fund to accurately price its portfolio securities or
to dispose of such securities at the times determined to be appropriate. The
- 4 -
<PAGE>
risks associated with reduced liquidity may be particularly acute to the extent
that the fund needs cash to meet redemption requests, to pay dividends and other
distributions or to pay its expenses.
Securities markets of emerging markets may also have less efficient
clearance and settlement procedures than U.S. markets, making it difficult to
conduct and complete transactions. Delays in settlement could result in
temporary periods when a portion of the fund's assets is uninvested and no
return is earned thereon. Inability to make intended security purchases could
cause the fund to miss attractive investment opportunities. Inability to dispose
of portfolio securities could result either in losses to the fund due to
subsequent declines in value of the portfolio security or, if the fund has
entered into a contract to sell the security, could result in possible liability
of the fund to the purchaser.
Transaction costs, including brokerage commissions and dealer mark-ups,
in emerging markets may be higher than in the U.S. and other developed
securities markets. As legal systems in emerging markets develop, foreign
investors may be adversely affected by new or amended laws and regulations. In
circumstances where adequate laws exist, it may not be possible to obtain swift
and equitable enforcement of the law.
ECONOMIC, POLITICAL AND SOCIAL FACTORS. Emerging markets may be subject
to a greater degree of economic, political and social instability that could
significantly disrupt the principal financial markets than are the U.S., Japan
and most Western European countries. Such instability may result from, among
other things: (i) authoritarian governments or military involvement in political
and economic decision-making, including changes or attempted changes in
government through extra-constitutional means; (ii) popular unrest associated
with demands for improved economic, political and social conditions; (iii)
internal insurgencies; (iv) hostile relations with neighboring countries; and
(v) ethnic, religious and racial disaffection and conflict. Many emerging
markets have experienced in the past, and continue to experience, high rates of
inflation. In certain countries inflation has at times accelerated rapidly to
hyperinflationary levels, creating a negative interest rate environment and
sharply eroding the value of outstanding financial assets in those countries.
The economies of many emerging markets are heavily dependent upon international
trade and are accordingly affected by protective trade barriers and the economic
conditions of their trading partners. In addition, the economies of some
emerging markets may differ unfavorably from the U.S. economy in such respects
as growth of gross domestic product, rate of inflation, capital reinvestment,
resources, self-sufficiency and balance of payments
position.
RESTRICTIONS ON INVESTMENT AND REPATRIATION. Certain emerging markets
require governmental approval prior to investments by foreign persons or limit
investments by foreign persons to only a specified percentage of an issuer's
outstanding securities or a specific class of securities which may have less
advantageous terms (including price) than securities of the issuer available for
purchase by nationals. Repatriation of investment income and capital from
certain emerging markets is subject to certain governmental consents. Even where
there is no outright restriction on repatriation of capital, the mechanics of
repatriation may affect the operation of the fund.
EURODOLLAR AND YANKEE DOLLAR INVESTMENTS
The 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
- 5 -
<PAGE>
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.
DEPOSITORY RECEIPTS
With respect to certain foreign securities, the funds may purchase
depository receipts of all kinds, including American Depository Receipts (ADRs),
European Depository Receipts (EDRs), Global Depository Receipts (GDRs) and
International Depository Receipts (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, GDRs 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 (OTC) market and, generally, are in registered form. EDRs, GDRs
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.
RISK CONSIDERATIONS OF MEDIUM GRADE SECURITIES
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 security purchased
by a fund is subsequently downgraded below investment grade, the Adviser will
consider such event in its determination of whether the fund should continue to
hold the security. However, at no time may the Municipal Fund have more than 5%
of its net assets invested in securities rated below investment grade as a
result of such downgrades.
RISK CONSIDERATIONS OF LOWER RATED SECURITIES
The Growth and Income Fund and Tudor Fund may invest in fixed income
securities that are not investment grade but are rated as low as B by Moody's or
B by Standard & Poor's (or their equivalents or, if unrated, determined by the
Adviser to be of comparable credit quality). In the case of a security that is
rated differently by two or more rating services, the higher rating is used in
connection with the foregoing limitation. In the event that the rating on a
security held in a fund's portfolio is downgraded by a rating service, such
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action will be considered by the Adviser in its evaluation of the overall
investment merits of that security, but will not necessarily result in the sale
of the security. The widespread expansion of government, consumer and corporate
debt within the U.S. economy has made the corporate sector, especially
cyclically sensitive industries, more vulnerable to economic downturns or
increased interest rates. An economic downturn could severally disrupt the
market for high yield fixed income securities and adversely affect the value of
outstanding fixed income securities and the ability of the issuers to repay
principal and interest.
High yield fixed income securities (commonly known as "junk bonds") are
considered speculative investments and, while generally providing greater income
than investments in higher rated securities, 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.
The prices of high yield fixed income securities have been found to be
less sensitive to interest rate changes than higher-rated investments, but more
sensitive to adverse economic changes or individual corporate developments.
Also, during an economic downturn or substantial period of rising interest
rates, highly leveraged issuers may experience financial stress which would
adversely affect their ability to service their principal and interest payment
obligations, to meet projected business goals, and to obtain additional
financing. If the issuer of a fixed income security owned by a fund defaulted,
the fund could incur additional expenses to seek recovery. In addition, periods
of economic uncertainty and changes can be expected to result in increased
volatility of market prices of high yield fixed income securities and a fund's
net asset value, to the extent it holds such securities.
High yield fixed income securities also present risks based on payment
expectations. For example, high yield fixed income securities may contain
redemption or call provisions. If an issuer exercises these provisions in a
declining interest rate market, a fund may, to the extent it holds such fixed
income securities, have to replace the securities with a lower yielding
security, which may result in a decreased return for investors. Conversely, a
high yield fixed income security's value will decrease in a rising interest rate
market, as will the value of a fund's assets, to the extent it holds such fixed
income securities.
In addition, to the extent that there is no established retail secondary
market, there may be thin trading of high yield fixed income securities, and
this may have an impact on the Adviser's ability to accurately value such
securities and a fund's assets and on the fund's ability to dispose of such
securities. Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of high yield fixed
income securities, especially in a thinly traded market.
New laws and proposed new laws may have an impact on the market for high
yield securities. For example, legislation requiring federally-insured savings
and loan associations to divest their investments in high yield securities could
have an adverse effect on a fund's net asset value and investment practices, to
the extent it holds such securities.
Finally, there are risks involved in applying credit or dividend ratings
as a method for evaluating high yield securities. For example, ratings evaluate
the safety of principal and interest or dividend payments, not market value risk
of high yield securities. Also, since rating agencies may fail to timely change
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the credit ratings to reflect subsequent events, a fund will continuously
monitor the issuers of high yield securities in its portfolio, if any, to
determine if the issuers will have sufficient cash flow and profits to meet
required principal and interest payments, and to assure the security's liquidity
so the fund can meet redemption requests.
FORWARD COMMITMENT AND WHEN-ISSUED TRANSACTIONS
Each fund may purchase or sell securities on a when-issued or forward
commitment basis (subject to its investment policies and restrictions). These
transactions involve a commitment by a fund to purchase or sell securities at a
future date (ordinarily one or two months later). The price of the underlying
securities (usually expressed in terms of yield) and the date when the
securities will be delivered and paid for (the settlement date) are fixed at the
time the transaction is negotiated. When-issued purchases and forward
commitments are negotiated directly with the other party, and such commitments
are not traded on exchanges. A fund will not enter into such transactions for
the purpose of leverage.
When-issued purchases and forward commitments enable a fund to lock in what
is believed by the Adviser to be an attractive price or yield on a particular
security for a period of time, regardless of future changes in interest rates.
For instance, in periods of rising interest rates and falling prices, a fund
might sell securities it owns on a forward commitment basis to limit its
exposure to falling prices. In periods of falling interest rates and rising
prices, a fund might sell securities it owns and purchase the same or a similar
security on a when-issued or forward commitment basis, thereby obtaining the
benefit of currently higher yields. 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.
The value of securities purchased on a when-issued or forward commitment
basis and any subsequent fluctuations in their value are reflected in the
computation of a fund's net asset value starting on the date of the agreement to
purchase the securities, and the fund is subject to the rights and risks of
ownership of the securities on that date. A fund does not earn interest on the
securities it has committed to purchase until they are paid for and delivered on
the settlement date. When a fund makes a forward commitment to sell securities
it owns, the proceeds to be received upon settlement are included in the fund's
assets. Fluctuations in the market value of the underlying securities are not
reflected in the fund's net asset value as long as the commitment to sell
remains in effect. Settlement of when-issued purchases and forward commitment
transactions generally takes place within two months after the date of the
transaction, but a fund may agree to a longer settlement period.
A fund will make commitments to purchase securities on a when-issued
basis or to purchase or sell securities on a forward commitment basis only with
the intention of completing the transaction and actually purchasing or selling
the securities. If deemed advisable as a matter of investment strategy, however,
a fund may dispose of or renegotiate a commitment after it is entered into. A
fund also may sell securities it has committed to purchase before those
securities are delivered to the fund on the settlement date. A fund may realize
a capital gain or loss in connection with these transactions, and its
distributions from any net realized capital gains will be taxable to
shareholders.
When a fund purchases securities on a when-issued or forward commitment
basis, the fund or the Custodian will maintain in a segregated account cash or
liquid securities having a value (determined daily) at least equal to the amount
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of the fund's purchase commitments. These procedures are designed to ensure that
the fund will maintain sufficient assets at all times to cover its obligations
under when-issued purchases and forward commitments.
LOANS OF PORTFOLIO SECURITIES
Subject to its investment restrictions, each fund may seek to increase its
income by lending portfolio securities. Under present regulatory policies, such
loans may be made to financial institutions, such as broker-dealers, and would
be 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. The rules of the New
York Stock Exchange, Inc. give a fund the right to call a loan and obtain the
securities loaned at any time on five days' notice. For the duration of a loan,
a fund would receive the equivalent of the interest or dividends paid by the
issuer on the securities loaned and would also receive compensation from the
investment of the collateral. A fund would not, however, have the right to vote
any securities having voting rights during the existence of the loan, but the
fund would call the loan in anticipation of an important vote to be taken among
holders of the securities or of the giving or withholding of their consent on a
material matter affecting the investment. As with other extensions of credit,
there are risks of delay in recovery or even loss of rights in the collateral
should the borrower of the securities fail financially. However, the loans would
be made only to firms deemed by the Adviser to be of good standing, and when, in
the judgment of the Adviser, the consideration which can be earned currently
from securities loans of this type justifies the attendant risk.
At the present time the staff of the SEC does not object if an investment
company pays reasonable negotiated fees to its custodian in connection with
loaned securities as long as such fees are pursuant to a contract approved by
the investment company's trustees.
OPTIONS ON SECURITIES AND SECURITIES INDICES
WRITING COVERED OPTIONS. The Core Bond Fund, Growth and Income Fund, Tudor
Fund, International Fund and Quantitative Fund may each write covered call and
(except Growth and Income Fund) put options on any securities in which it may
invest or on any securities index based on securities in which it may invest. In
addition, International Fund may write call and put options on currencies. A
fund may purchase and write such options on securities that are listed on
national domestic securities exchanges or foreign securities exchanges or traded
in the over-the-counter market. A call option written by a fund obligates the
fund to sell specified securities to the holder of the option at a specified
price if the option is exercised at any time before the expiration date. All
call options written by a fund are covered, which means that the fund will own
the securities subject to the option so long as the option is outstanding or use
the other methods described below. The purpose of a fund in writing covered call
options is to realize greater income than would be realized in portfolio
securities transactions alone. However, in writing covered call options for
additional income, a fund may forego the opportunity to profit from an increase
in the market price of the underlying security.
A put option written by a fund obligates the fund to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. The purpose of writing such
options is to generate additional income. However, in return for the option
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premium, the fund accepts the risk that it will be required to purchase the
underlying securities at a price in excess of the securities' market value at
the time of purchase.
All call and put options written by a fund are covered. A written call
option or put option may be covered by (i) maintaining cash or liquid
securities, either of which, in the case of the International Fund, may be
quoted or denominated in any currency, in a segregated account noted on the
fund's records or maintained by the fund's custodian with a value at least equal
to the fund's obligation under the option, (ii) entering into an offsetting
forward commitment and/or (iii) purchasing an offsetting option or any other
option which, by virtue of its exercise price or otherwise, reduces the fund's
net exposure on its written option position.
A fund may terminate its obligations under an exchange traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated only by entering into an
offsetting transaction with the counterparty to such option. Such purchases are
referred to as "closing purchase transactions."
A fund may also write (sell) covered call and put options on any
securities index composed of securities in which it may invest. Options on
securities indices are similar to options on securities, except that the
exercise of securities index options requires cash settlement payments and does
not involve the actual purchase or sale of securities. In addition, securities
index options are designed to reflect price fluctuations in a group of
securities or segment of the securities market rather than price fluctuations in
a single security.
The funds may cover call options on a securities index by owning
securities whose price changes are expected to be similar to those of the
underlying index or by having an absolute and immediate right to acquire such
securities without additional cash consideration (or for additional cash
consideration held in a segregated account) upon conversion or exchange of other
securities in its portfolio. A fund may also cover call and put options on a
securities index by using the other methods described above.
PURCHASING OPTIONS. The Core Bond Fund, Tudor Fund, International Fund
and Quantitative Fund may each purchase put and call options on any securities
in which it may invest or on any securities index based on securities in which
it may invest, and a fund may enter into closing sale transactions in order to
realize gains or minimize losses on options it had purchased. In addition, the
International Fund may purchase put and call options on currencies.
A fund would normally purchase call options in anticipation of an
increase, or put options in anticipation of a decrease ("protective puts") in
the market value of securities of the type in which it may invest. The purchase
of a call option would entitle a fund, in return for the premium paid, to
purchase specified securities at a specified price during the option period. A
fund would ordinarily realize a gain on the purchase of a call option if, during
the option period, the value of such securities exceeded the sum of the exercise
price, the premium paid and transaction costs; otherwise the fund would realize
either no gain or a loss on the purchase of the call option. The purchase of a
put option would entitle a fund, in exchange for the premium paid, to sell
specified securities at a specified price during the option period. The purchase
of protective puts is designed to offset or hedge against a decline in the
market value of a fund's securities. Put options may also be purchased by a fund
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for the purpose of affirmatively benefiting from a decline in the price of
securities which it does not own. A fund would ordinarily realize a gain if,
during the option period, the value of the underlying securities decreased below
the exercise price sufficiently to cover the premium and transaction costs;
otherwise the fund would realize either no gain or a loss on the purchase of the
put option. Gains and losses on the purchase of put options may be offset by
countervailing changes in the value of the underlying portfolio securities.
A fund may purchase put and call options on securities indices for the
same purposes as it may purchase options on securities. Options on securities
indices are similar to options on securities, except that the exercise of
securities index options requires cash payments and does not involve the actual
purchase or sale of securities. In addition, securities index options are
designed to reflect price fluctuations in a group of securities or segment of
the securities market rather than price fluctuations in a single security.
Transactions by a fund in options on securities and securities indices
will be subject to limitations established by each of the exchanges, boards of
trade or other trading facilities on which such options are traded governing the
maximum number of options in each class which may be written or purchased by a
single investor or group of investors acting in concert, regardless of whether
the options are written or purchased on the same or different exchanges, boards
of trade or other trading facilities or are held or written in one or more
accounts or through one or more brokers. Thus, the number of options which a
fund may write or purchase may be affected by options written or purchased by
other investment advisory clients of the Adviser. An exchange, board of trade or
other trading facility may order the liquidation of positions found to be in
excess of these limits, and it may impose certain other sanctions.
WRITING AND PURCHASING CURRENCY CALL AND PUT OPTIONS. The International
Fund may write covered put and call options and purchase put and call options on
foreign currencies to seek to protect against declines in the dollar value of
portfolio securities and against increases in the dollar cost of securities to
be acquired.
A call option written by the fund obligates the fund to sell specified
currency to the holder of the option at a specified price if the option is
exercised at any time before the expiration date. A put option written by the
fund obligates the fund to purchase specified currency from the option holder at
a specified price if the option is exercised at any time before the expiration
date. The writing of currency options involves a risk that the fund will, upon
exercise of the option, be required to sell currency subject to a call at a
price that is less than the currency's market value or be required to purchase
currency subject to a put at a price that exceeds the currency's market value.
The fund may terminate its obligations under a written call or put option
by purchasing an option identical to the one written. Such purchases are
referred to as "closing purchase transactions." The fund would also be able to
enter into closing sale transactions in order to realize gains or minimize
losses on purchased options.
The fund would normally purchase call options in anticipation of an
increase in the U.S. dollar value of currency in which securities to be acquired
by the fund are denominated or quoted. The purchase of a call option would
entitle the fund, in return for the premium paid, to purchase specified currency
at a specified price during the option period. The fund would ordinarily realize
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a gain if, during the option period, the value of such currency exceeded the sum
of the exercise price, the premium paid and transaction costs; otherwise the
fund would realize either no gain or a loss on the purchase of the call option.
The fund would normally purchase put options in anticipation of a decline
in the U.S. dollar value of currency in which securities in its portfolio are
denominated or quoted ("protective puts"). The purchase of a put option would
entitle the fund, in exchange for the premium paid, to sell specified currency
at a specified price during the option period. The purchase of protective puts
is designed merely to offset or hedge against a decline in the U.S. dollar value
of the fund's portfolio securities due to currency exchange rate fluctuations.
The fund would ordinarily realize a gain if, during the option period, the value
of the underlying currency decreased below the exercise price sufficiently to
more than cover the premium and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of underlying currency.
RISKS ASSOCIATED WITH OPTIONS TRANSACTIONS. Although the funds may use
option transactions to seek to generate additional income and to seek 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 mutual funds which do not engage
in such activities. These risks include the following: for writing 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 put options, 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, the 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 the Adviser or HSAM 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.
There is no assurance that a liquid secondary market on a domestic or
foreign options exchange will exist for any particular exchange-traded option or
at any particular time. If a fund is unable to effect a closing purchase
transaction with respect to covered options it has written, the fund will not be
able to sell the underlying securities or currencies or dispose of assets held
in a segregated account until the options expire or are exercised. Similarly, if
a fund is unable to effect a closing sale transaction with respect to options it
has purchased, it would have to exercise the options in order to realize any
profit and will incur transaction costs upon the purchase or sale of underlying
securities or currencies.
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Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options; (iv) unusual or unforeseen circumstances may interrupt normal
operations on an exchange; (v) the facilities of an exchange or the Options
Clearing Corporation may not at all times be adequate to handle current trading
volume; or (vi) one or more exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of options
(or a particular class or series of options), in which event the secondary
market on that exchange (or in that class or series of options) would cease to
exist although outstanding options on that exchange that had been issued by the
Options Clearing Corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms.
The fund's ability 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. The
Adviser will monitor the liquidity of over-the-counter options and, if it
determines that such options are not readily marketable, a fund's ability to
enter such options will be subject to the fund's limitation on investments on
illiquid securities.
The writing and purchase of options is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions. The successful use of options
for hedging purposes depends in part on the Adviser's ability to predict future
price fluctuations and the degree of correlation between the options and
securities markets.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
To seek to increase total return or to hedge against changes in interest
rates, securities prices or, in the case of the International Fund (but only for
hedging purposes), currency exchange rates, Core Bond Fund, Tudor Fund,
International Fund and Quantitative Fund 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 (in the case of the
International Fund) and any other financial instruments and indices. A fund will
engage in futures and related options transaction only for bona fide hedging
purposes as defined below or for purposes of seeking to increase total return to
the extent permitted by regulations of the Commodity Futures Trading Commission
("CFTC"). All futures contracts entered into by a fund are traded on U.S.
exchanges or boards of trade that are licensed and regulated by the CFTC or on
foreign exchanges.
FUTURES CONTRACTS. A futures contract may generally be described as an
agreement between two parties to buy and sell particular financial instruments
or currencies for an agreed price during a designated month (or to deliver the
final cash settlement price, in the case of a contract relating to an index or
otherwise not calling for physical delivery at the end of trading in the
contract).
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When interest rates are rising or securities prices are falling, a fund can
seek to offset a decline in the value of its current portfolio securities
through the sale of futures contracts. When interest rates are falling or
securities prices are rising, a fund, through the purchase of futures contracts,
can attempt to secure better rates or prices than might later be available in
the market when it effects anticipated purchases. The International Fund may
seek to offset anticipated changes in the value of a currency in which its
portfolio securities, or securities that it intends to purchase, are quoted or
denominated by purchasing and selling futures contracts on such currencies.
Positions taken in the futures markets are not normally held to maturity
but are instead liquidated through offsetting transactions which may result in a
profit or a loss. While futures contracts on securities or currency will usually
be liquidated in this manner, a fund may instead make, or take, delivery of the
underlying securities or currency whenever it appears economically advantageous
to do so. A clearing corporation associated with the exchange on which futures
on securities or currency are traded guarantees that, if still open, the sale or
purchase will be performed on the settlement date.
HEDGING STRATEGIES. Hedging, by use of futures contracts, seeks to
establish with more certainty than would otherwise be possible the effective
price or rate of return on portfolio securities or securities that a fund
proposes to acquire or the exchange rate of currencies in which portfolio
securities are quoted or denominated. A fund may, for example, take a "short"
position in the futures market by selling futures contracts to seek to hedge
against an anticipated rise in interest rates or a decline in market prices or
(in the case of the International Fund) foreign currency rates that would
adversely affect the U.S. dollar value of the fund's portfolio securities. Such
futures contracts may include contracts for the future delivery of securities
held by a fund or securities with characteristics similar to those of the fund's
portfolio securities. Similarly, the International Fund may sell futures
contracts on any currencies in which its portfolio securities are quoted or
denominated or in one currency to hedge against fluctuations in the value of
securities denominated in a different currency if there is an established
historical pattern of correlation between the two currencies. If, in the opinion
of the Adviser, there is a sufficient degree of correlation between price trends
for a fund's portfolio securities and futures contracts based on other financial
instruments, securities indices or other indices, the fund may also enter into
such futures contracts as part of its hedging strategy. Although under some
circumstances prices of securities in a fund's portfolio may be more or less
volatile than prices of such futures contracts, the Adviser will attempt to
estimate the extent of this volatility difference based on historical patterns
and compensate for any such differential by having the fund enter into a greater
or lesser number of futures contracts or by seeking to achieve only a partial
hedge against price changes affecting the fund's portfolio securities. When
hedging of this character is successful, any depreciation in the value of
portfolio securities will be substantially offset by appreciation in the value
of the futures position. On the other hand, any unanticipated appreciation in
the value of a fund's portfolio securities would be substantially offset by a
decline in the value of the futures position.
On other occasions, a fund may take a "long" position by purchasing
futures contracts. This would be done, for example, when a fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices that are currently available.
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OPTIONS ON FUTURES CONTRACTS. The acquisition of put and call options on
futures contracts will give a fund the right (but not the obligation) for a
specified price to sell or to purchase, respectively, the underlying futures
contract at any time during the option period. As the purchaser of an option on
a futures contract, a fund obtains the benefit of the futures position if prices
move in a favorable direction but limits its risk of loss in the event of an
unfavorable price movement to the loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium
which may partially offset a decline in the value of a fund's assets. By writing
a call option, a fund becomes obligated, in exchange for the premium, (upon
exercise of the option) to sell a futures contract if the option is exercised,
which may have a value higher than the exercise price. Conversely, the writing
of a put option on a futures contract generates a premium which may partially
offset an increase in the price of securities that a fund intends to purchase.
However, the fund becomes obligated (upon exercise of the option) to purchase a
futures contract if the option is exercised, which may have a value lower than
the exercise price. Thus, the loss incurred by a fund in writing options on
futures is potentially unlimited and may exceed the amount of the premium
received. The funds will incur transaction costs in connection with the writing
of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same financial
instrument. There is no guarantee that such closing transactions can be
effected. A fund's ability to establish and close out positions on such options
will be subject to the development and maintenance of a liquid market.
OTHER CONSIDERATIONS. The funds will engage in futures and related
options transactions only for bona fide hedging or, except for purchases or
sales by the International Fund of futures on currencies, to seek to increase
total return as permitted by the CFTC regulations which permit principals of an
investment company registered under the Act to engage in such transactions
without registering as commodity pool operators. A fund will determine that the
price fluctuations in the futures contracts and options on futures used for
hedging purposes are substantially related to price fluctuations in securities
held by the fund or securities or instruments which it expects to purchase.
Except as stated below, a fund's futures transactions will be entered into for
traditional hedging purposes -- i.e., futures contracts will be sold to protect
against a decline in the price of securities (or the currency in which they are
quoted or denominated) that the fund owns or futures contracts will be purchased
to protect the fund against an increase in the price of securities (or the
currency in which they are quoted or denominated) it intends to purchase. As
evidence of this hedging intent, each fund expects that on 75% or more of the
occasions on which it takes a long futures or option position (involving the
purchase of futures contracts), the fund will have purchased, or will be in the
process of purchasing, equivalent amounts of related securities (or assets
denominated in the related currency) in the cash market at the time when the
futures or option position is closed out. However, in particular cases, when it
is economically advantageous for a fund to do so, a long futures position may be
terminated or an option may expire without the corresponding purchase of
securities or other assets.
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As an alternative to compliance with the bona fide hedging definition, a
CFTC regulation permits a fund to elect to comply with a different test under
which the aggregate initial margin and premiums required to establish positions
to seek to increase total return in futures contracts and options on futures
will not 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. Each
fund will engage in transactions in currency forward contracts, futures
contracts and options only to the extent such transactions are consistent with
the requirements of the Internal Revenue Code of 1986, as amended (the "Code"),
for maintaining its qualification as a regulated investment company for federal
income tax purposes. See "Taxation."
Transactions in futures contracts and options on futures involve
brokerage costs, require margin deposits and, in the case of contracts and
options obligating the International Fund to purchase securities or currencies,
require the fund to establish a segregated account consisting of cash or liquid
securities in an amount equal to the underlying value of such contracts and
options.
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 fluctuations; 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 the Adviser
regarding movements in securities prices, interest rates or currency exchange
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.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
while a fund may benefit from the use of futures and options on futures,
unanticipated changes in interest rates or securities prices or currency
exchange rates may result in a poorer overall performance for the fund than if
it had not entered into any futures contracts or options transactions. In the
event of an imperfect correlation between a futures position and a portfolio
position which is intended to be protected, the desired protection may not be
obtained and the fund may be exposed to risk of loss. In addition, it is not
possible to hedge fully or protect against currency fluctuations affecting the
value of securities denominated in foreign currencies because the value of such
securities is likely to fluctuate as a result of independent factors not related
to currency fluctuations.
Perfect correlation between a fund's futures positions and portfolio
positions will be impossible to achieve. There are no futures contracts based
upon individual securities, except certain U.S. Government securities. The only
futures contracts available to hedge the fund's portfolio are various futures on
Eurodollars, U.S. Government securities, securities indices and foreign
currencies.
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FORWARD FOREIGN CURRENCY TRANSACTIONS
The International Fund, Growth and Income Fund and Tudor Fund may each,
to the extent that it invests in foreign securities, enter into forward foreign
currency exchange contracts in order to protect against uncertainty in the level
of future foreign currency exchange rates. A fund will conduct its foreign
currency exchange transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market, or through entering
into forward contracts to purchase or sell foreign currencies. A forward foreign
currency exchange contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days (usually less
than one year) from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. These contracts are traded in the
interbank market conducted directly between traders (usually large commercial
banks) and their customers. A forward contract generally has no deposit
requirement, and no commissions are charged at any stage for trades. Although
foreign exchange dealers do not charge a fee for conversion, they do realize a
profit based on the difference (the spread) between the price at which they are
buying and selling various currencies.
The funds are permitted to enter into forward contracts under two
circumstances. First, when a fund enters into a contract for the purchase or
sale of a security quoted or denominated in a foreign currency, it may desire to
"lock in" the U.S. dollar price of the security. By entering into a forward
contract for the purchase or sale, for a fixed number of U.S. dollars, of the
amount of foreign currency involved in the underlying security transactions, the
fund will be able to insulate itself from a possible loss resulting from a
change in the relationship between the U.S. dollar and the subject foreign
currency during the period between the date on which the security is purchased
or sold and the date on which payment is made or received.
Second, when the Adviser believes that the currency of a particular
foreign country may suffer a substantial decline against the U.S. dollar, it may
cause a fund to enter a forward contract to sell, for a fixed U.S. dollar
amount, the amount of foreign currency approximating the value of some or all of
the fund's portfolio securities quoted or denominated in such foreign currency.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible since the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures.
Although the funds have no current intention to do so, the funds may
engage in cross-hedging by using forward contracts in one currency to hedge
against fluctuations in the value in securities denominated or quoted in a
different currency if the Adviser determines that there is a pattern of
correlation between the two currencies. Cross-hedging may also include entering
into a forward transaction involving two foreign currencies, using one foreign
currency as a proxy for the U.S. dollar to hedge against variations in the other
U.S. foreign currency, if the Adviser determines that there is a pattern of
correlation between the proxy currency and the U.S. dollar.
The funds will not enter into forward contracts to sell currency or
maintain a net exposure to such contracts if the consummation of such contracts
would obligate the funds to deliver an amount of foreign currency in excess of
the value of the funds' respective portfolio securities or other assets quoted
or denominated in that currency. At the consummation of the forward contract, a
fund may either make delivery of the foreign currency or terminate its
contractual obligation by purchasing an offsetting contract obligating it to
purchase at the same maturity date, the same amount of such foreign currency. If
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a fund chooses to make delivery of foreign currency, it may be required to
obtain such delivery through the sale of portfolio securities quoted or
denominated in such currency or through conversion of other assets of the fund
into such currency. If a fund engages in an offsetting transaction, the fund
will realize a gain or a loss to the extent that there has been a change in
forward contract prices. Closing purchase transactions with respect to forward
contracts are usually effected with the currency trader who is party to the
original forward contract.
The funds' transactions in forward contracts will be limited to those
described above. Of course, no fund is required to enter into such transactions
with regard to its foreign currency quoted or denominated securities, and a fund
will not do so unless deemed appropriate by the Adviser.
When entering into a forward contract, a fund will segregate either cash
or liquid securities quoted or denominated in any currency in an amount equal to
the value of the fund's total assets committed to the consummation of forward
currency exchange contracts which require the fund to purchase a foreign
currency. If the value of the segregated securities declines, additional cash or
securities will be segregated by the fund on a daily basis so that the value of
the segregated securities will equal the amount of the fund's commitments with
respect to such contracts.
This method of protecting the value of a fund's portfolio securities
against a decline in the value of a currency does not eliminate fluctuations in
the underlying prices of the securities. It simply establishes a rate of
exchange which can be achieved at some future point in time. The precise
projection of short-term currency market movements is not possible, and
short-term hedging provides a means of fixing the U.S. dollar value of only a
portion of a fund's foreign assets. It also reduces any potential gain which may
have otherwise occurred had the currency value increased above the settlement
price of the contract.
While the funds may enter into forward contracts to seek to reduce
currency exchange rate risks, transactions in such contracts involve certain
other risks. Thus, while a fund may benefit from such transactions,
unanticipated changes in currency prices may result in a poorer overall
performance for a fund than if it had not engaged in any such transactions.
Moreover, there may be imperfect correlation between a fund's portfolio holdings
or securities quoted or denominated in a particular currency and forward
contracts entered into by the fund. Such imperfect correlation may cause the
fund to sustain losses which will prevent the fund from achieving a complete
hedge or expose the fund to the risk of foreign exchange loss.
Forward contracts are subject to the risks that the counterparty to such
contract will default on its obligations. Since a forward foreign currency
exchange contract is not guaranteed by an exchange or clearing house, a default
on the contract would deprive a fund of unrealized profits, transaction costs or
the benefits of a currency hedge or force the fund to cover its purchase or sale
commitments, if any, at the current market price.
The funds' foreign currency transactions (including related options,
futures and forward contracts) may be limited by the requirements of Subchapter
M of the Code for qualification as a regulated investment company.
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MORTGAGE-BACKED SECURITIES
Certain funds, and in particular the Government Money Market Fund and the
Core Bond 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 Ginnie Mae, 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.
PRIVATELY ISSUED MORTGAGE-BACKED SECURITIES. Certain funds, and in particular
the Government Money Market Fund and the Core Bond Fund, may invest in
mortgage-backed securities issued by trusts or other entities formed or
sponsored by private originators of and institutional investors in mortgage
loans and other non-governmental entities (or representing custodial
arrangements administered by such institutions). These private originators and
institutions include savings and loan associations, mortgage bankers, commercial
banks, insurance companies, investment banks and special purpose subsidiaries of
the foregoing.
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Privately issued mortgage-backed securities are generally backed by pools
of conventional (i.e., non-government guaranteed or insured) mortgage loans.
Since such mortgage-backed securities normally are not guaranteed by an entity
having the credit standing of Ginnie Mae, Fannie Mae or Freddie Mac, in order to
receive a high quality rating from the rating organizations (e.g., Standard &
Poor's or Moody's), they often are structured with one or more types of "credit
enhancement." Such credit enhancement falls into two categories: (1) liquidity
protection and (2) protection against losses resulting after default by a
borrower and liquidation of the collateral (e.g., sale of a house after
foreclosure). Liquidity protection refers to the payment of cash advances to
holders of mortgage-backed securities when a borrower on an underlying mortgage
fails to make its monthly payment on time. Protection against losses resulting
after default and liquidation is designed to cover losses resulting when, for
example, the proceeds of a foreclosure sale are insufficient to cover the
outstanding amount on the mortgage. Such protection may be provided through
guarantees, insurance policies or letters of credit, through various means of
structuring the securities or through a combination of such approaches.
Examples of credit enhancement arising out of the structure of the
transaction include "senior- subordinated securities" (multiple class securities
with one or more classes entitled to receive payment before other classes, with
the result that defaults on the underlying mortgages are borne first by the
holders of the subordinated class), creation of "spread accounts" or "reserve
funds" (where cash or investments are held in reserve against future losses) and
"over-collateralization" (where the scheduled payments on the underlying
mortgages in a pool exceed the amount required to be paid on the mortgage-backed
securities). The degree of credit enhancement for a particular issue of
mortgage-backed securities is based on the level of credit risk associated with
the particular mortgages in the related pool. Losses on a pool in excess of
anticipated levels could nevertheless result in losses to security holders since
credit enhancement rarely covers every dollar owed on a pool.
RISK FACTORS ASSOCIATED WITH MORTGAGE- BACKED SECURITIES. Investing in
Mortgage-Backed Securities (such as those described above) 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.
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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. The market for certain types of Mortgage-
Backed Securities (I.E., certain CMOs) may not be liquid under all interest rate
scenarios, which may prevent a fund from selling such securities held in its
portfolio at times or prices that it desires.
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.
The Core Bond Fund may invest in floating rate securities based on the
Cost of Funds Index ("COFI floaters"), other "lagging rate" floating rate
securities, floating rate securities that are subject to a maximum interest rate
("capped floaters"), and Mortgage-Backed Securities purchased at a discount. The
primary risks associated with these derivative debt securities are the potential
extension of average life and/or depreciation due to rising interest rates.
MORTGAGE DOLLAR ROLL TRANSACTIONS
The Core Bond Fund may enter into mortgage dollar roll transactions in
which the fund sells securities for delivery in the current month and
simultaneously contracts with the same counterparty to repurchase similar (same
type, coupon and maturity), but not identical securities on a specified future
date. During the roll period, the Core Bond Fund will not receive principal and
interest paid on the securities sold. However, the fund would benefit to the
extent of any difference between the price received for the securities sold and
the lower forward price for the future purchase (often referred to as the
"drop") or fee income plus the interest on the cash proceeds of the securities
sold until the settlement date of the forward purchase. Unless such benefits
exceed the income, capital appreciation and gain or loss due to mortgage
prepayments that would have been realized on the securities sold as part of the
mortgage dollar roll, the use of this technique will diminish the investment
performance of the Core Bond Fund compared with what such performance would have
been without the use of mortgage dollar rolls. The Core Bond Fund will hold and
maintain in a segregated account until the settlement date cash or liquid, high
grade debt securities in an amount equal to the forward purchase price. Any
benefits derived from the use of mortgage dollar rolls may depend upon mortgage
prepayment assumptions, which will be affected by changes in interest rates.
There is no assurance that mortgage dollar rolls can be successfully employed.
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ASSET-BACKED SECURITIES
Certain funds, and in particular the Government Money Market Fund, Core
Bond 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. Asset- backed 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, asset-backed 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. See "Risk Factors Associated with Mortgage-Backed
Securities."
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. There is no minimum
credit rating applicable to a fund's investment in preferred stocks and
securities convertible into or exchangeable for common stocks.
STRUCTURED OR HYBRID NOTES
The Growth and Income Fund may invest in "structured" or "hybrid" notes.
The distinguishing feature of a structured or hybrid note is that the amount of
interest and/or principal payable on the note is based on the performance of a
benchmark asset or market other than fixed-income securities or interest rates.
Examples of these benchmarks include stock prices, currency exchange rates and
physical commodity prices. Investing in a structured note allows the fund to
gain exposure to the benchmark market while fixing the maximum loss that the
fund may experience in the event that market does not perform as expected.
Depending on the terms of the note, the fund may forego all or part of the
interest and principal that would be payable on a comparable conventional note;
the fund's loss cannot exceed this foregone interest and/or principal.
It is expected that not more than 5% of the fund's net assets will be at
risk as a result of investments in structured or hybrid notes. In addition to
the risks associated with a direct investment in the benchmark asset,
investments in structured and hybrid notes involve the risk that the issuer or
counterparty to the obligation will fail to perform its contractual obligations.
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Certain structured or hybrid notes may also be leveraged to the extent that the
magnitude of any change in the interest rate or principal payable on the
benchmark asset is a multiple of the change in the reference price. Leverage
enhances the price volatility of the security and, therefore, the volatility of
the fund's net asset value. Further, certain structured or hybrid notes may be
illiquid for purposes of the fund's limitation on investments in illiquid
securities.
VARIABLE AMOUNT MASTER DEMAND NOTES
The Government Money Market Fund, Tax Free Money Market Fund and Municipal
Fund may invest in variable amount master demand notes, which are a form of
commercial paper. These are obligations that permit the investment of
fluctuating amounts at varying rates of interest pursuant to direct arrangements
between a fund, as lender, and the borrower. These notes permit daily changes in
the amounts borrowed. The lender has the right to increase the amount under the
note at any time up to the full amount provided by the note agreement, or to
decrease the amount, and the borrower may prepay up to the full amount of the
note without penalty. Because variable amount master demand notes are direct
lending arrangements between the lender and borrower, it is not generally
contemplated that such instruments will be traded, and there is no secondary
market for these notes. However, they are redeemable (and thus immediately
repayable by the borrower) at face value, plus accrued interest, at any time. In
connection with master demand note arrangements, the Adviser will consider, on
an ongoing basis, the earning power, cash flow, and other liquidity ratios of
the borrower and its ability to pay principal and interest on demand. These
notes generally are not rated by Moody's or Standard & Poor's. A fund may invest
in them only if the Adviser believes that, at the time of investment, the notes
are of comparable quality to the other commercial paper in which that fund may
invest, including, in the case of the Government Money Market Fund and Tax Free
Money Market Fund, the requirements of the rules of the SEC applicable to the
use of the amortized cost method of securities valuation.
For the purpose of limitations on the maturities of the investments of a
fund, variable amount master demand notes will be considered to have a maturity
of one day unless the Adviser has reason to believe that the borrower could not
make immediate repayment upon demand.
VARIABLE RATE DEMAND INSTRUMENTS
The Government Money Market Fund, Tax Free Money Market Fund and
Municipal Fund may purchase variable rate demand instruments that are tax-exempt
municipal obligations and other debt securities providing for a periodic
adjustment in the interest rate paid on the instrument according to changes in
interest rates generally. These instruments also permit a fund to demand payment
of the unpaid principal balance plus accrued interest upon a specified number of
days' notice to the issuer or its agent. The demand feature may be backed by a
bank letter of credit or guarantee issued with respect to such instrument. A
bank that issues a repurchase commitment may receive a fee from a fund for this
arrangement. The issuer of a variable rate demand instrument may have a
corresponding right to prepay in its discretion the outstanding principal of the
instrument plus accrued interest upon notice comparable to that required for the
holder to demand payment.
The variable rate demand instruments that these funds may purchase are
payable on demand on not more than thirty calendar days' notice. The terms of
the instruments provide that interest rates are adjustable at intervals ranging
from daily up to six months, and the adjustments are based upon the prime rate
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of a bank or other appropriate interest rate adjustment index as provided in the
respective instruments. The funds intend to exercise the demand only (1) upon a
default under the terms of the debt security, (2) as needed to provide
liquidity, or (3) to maintain the respective quality standards of each fund's
investment portfolio. A fund will determine the variable rate demand instruments
that it will purchase in accordance with procedures approved by the Boards to
minimize credit risks. The Adviser may determine that an unrated variable rate
demand instrument meets a fund's quality criteria by reason of being backed by a
letter of credit or guarantee issued by a bank that meets the quality criteria
for the fund. Thus, either the credit of the issuer of the obligation or the
guarantor bank or both will meet the quality standards of a fund. The Adviser
will reevaluate each unrated variable rate demand instrument held by a fund on a
quarterly basis to determine that it continues to meet the fund's quality
criteria.
The value of the underlying variable rate demand instruments may change
with changes in interest rates generally, but the variable rate nature of these
instruments should decrease changes in value due to interest rate fluctuations.
Accordingly, as interest rates decrease or increase, the potential for capital
gain and the risk of capital loss on the disposition of portfolio securities are
less than would be the case with a comparable portfolio of fixed income
securities. The funds may purchase variable rate demand instruments on which
stated minimum or maximum rates, or maximum rates set by state law, limit the
degree to which interest on such variable rate demand instruments may fluctuate;
to the extent a fund purchases such instruments, increases or decreases in value
of such variable rate demand notes may be somewhat greater than would be the
case without such limits. Because the adjustment of interest rates on variable
rate demand instruments is made in relation to changes in the applicable rate
adjustment index, variable rate demand instruments are not comparable to
long-term fixed interest rate securities. Accordingly, interest rates on
variable rate demand instruments may be higher or lower than current market
rates for fixed rate obligations of comparable quality with similar final
maturities.
The maturity of the variable rate demand instruments held by the funds
will ordinarily be deemed to be the longer of (1) the notice period required
before a fund is entitled to receive payment of the principal amount of the
instrument or (2) the period remaining until the instrument's next interest rate
adjustment.
The acquisition of variable rate demand notes for the Government Money
Market Fund and the Tax Free Money Market Fund must also meet the requirements
of rules issued by the SEC applicable to the use of the amortized cost method of
securities valuation.
PARTICIPATION INTERESTS
Subject to their respective investment objective and policies, Government
Money Market Fund and Tax Free Money Market Fund may purchase from banks
participation interests in all or part of specific holdings of municipal or
other debt obligations. Each participation interest is backed by an irrevocable
letter of credit or guarantee of the selling bank that the Adviser has
determined meets the prescribed quality standards of each fund. Thus, even if
the credit of the issuer of the debt obligation does not meet the quality
standards of a fund, the credit of the selling bank will, subject in each
instance to the requirements of rules issued by the SEC applicable to the use by
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these funds of the amortized cost method of valuation. Each fund will have the
right to sell the participation interest back to the bank after seven days'
notice for the full principal amount of a fund's interest in the municipal or
debt obligation plus accrued interest, but only (1) as required to provide
liquidity to that fund, (2) to maintain the quality standards of each fund's
investment portfolio or (3) upon a default under the terms of the debt
obligation. The selling bank may receive a fee from a fund in connection with
the arrangement. Tax Free Money Market Fund will not purchase participation
interests in municipal obligations unless it receives an opinion of issuer's
counsel or a ruling of the Internal Revenue Service (the "Service") satisfactory
to its Board that interest earned by the fund on municipal obligations in which
it holds participation interests is excluded from gross income for Federal
income tax purposes in the hands of such fund.
MUNICIPAL OBLIGATIONS
Tax Free Money Market Fund and Municipal Fund may invest in municipal
obligations. Government Money Market Fund and Core Bond Fund may invest in
municipal obligations, but generally to a lesser extent than Tax Free Money
Market Fund and Municipal Fund. Municipal obligations are issued by or on behalf
of states, territories and possessions of the United States and their political
subdivisions, agencies and instrumentalities to obtain funds for various public
purposes. The interest on most of these obligations is generally exempt from
regular Federal income tax in the hands of most individual investors, although
it may be subject to the individual and corporate alternative minimum tax. The
two principal classifications of municipal obligations are "notes" and "bonds."
Municipal notes are generally used to provide for short-term capital
needs and generally have maturities of one year or less. Municipal notes include
tax anticipation notes, revenue anticipation notes, bond anticipation notes, and
construction loan notes. Tax anticipation notes are sold to finance working
capital needs of municipalities. They are generally payable from specific tax
revenues expected to be received at a future date. Revenue anticipation notes
are issued in expectation of receipt of other types of revenue such as federal
revenues available under the Federal Revenue Sharing Program. Tax anticipation
notes and revenue anticipation notes are generally issued in anticipation of
various seasonal revenues such as income, sales, use, and business taxes. Bond
anticipation notes are sold to provide interim financing. These notes are
generally issued in anticipation of long-term financing in the market. In most
cases, these monies provide for the repayment of the notes. Construction loan
notes are sold to provide construction financing. After the projects are
successfully completed and accepted, many projects receive permanent financing
through the Federal Housing Administration under "Fannie Mae" (the Federal
National Mortgage Association) or "Ginnie Mae" (the Government National Mortgage
Association). There are, of course, a number of other types of notes issued for
different purposes and secured differently from those described above.
Municipal bonds, which meet longer term capital needs and generally have
maturities of more than one year when issued, have two principal
classifications, "general obligation" bonds and "revenue" bonds. Issuers of
general obligation bonds include states, counties, cities, towns and regional
districts. The proceeds of these obligations are used to fund a wide range of
public projects including the construction or improvement of schools, highways
and roads, water and sewer systems and a variety of other public purposes. The
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basic security of general obligation bonds is the issuer's pledge of its faith,
credit, and taxing power for the payment of principal and interest. The taxes
that can be levied for the payment of debt service may be limited or unlimited
as to rate or amount or special assessments.
The principal security for a revenue bond is generally the net revenues
derived from a particular facility or group of facilities or, in some cases,
from the proceeds of a special excise or other specific revenue source. Revenue
bonds have been issued to fund a wide variety of capital projects including:
electric, gas, water and sewer systems; highways, bridges and tunnels; port and
facilities; colleges and universities; and hospitals. 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. Although the principal security behind these bonds
varies widely, many provide additional security in the form of a debt service
reserve fund whose monies may also be used to make principal and interest
payments on the issuer's obligations. Housing finance authorities have a wide
range of security including partially or fully insured, rent subsidized and/or
collateralized mortgages, and/or the net revenues from housing or other public
projects. In addition to a debt service reserve fund, some authorities provide
further security in the form of a state's ability (without obligation) to make
up deficiencies in the debt service reserve fund. Lease rental revenue bonds
issued by a state or local authority for capital projects are secured by annual
lease rental payments from the state or locality to the authority sufficient to
cover debt service on the authority's obligations.
Industrial development bonds (now a subset of a class of bonds known as
"private activity bonds"), although nominally issued by municipal authorities,
are generally not secured by the taxing power of the municipality but are
secured by the revenues of the authority derived from payments by the industrial
user. Distributions by the Tax Free Money Market Fund and the Municipal Fund of
interest income from private activity bonds may subject certain investors to the
federal alternative minimum tax.
These funds 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.
There is, in addition, a variety of hybrid and special types of municipal
obligations as well as numerous differences in the security of municipal
obligations both within and between the two principal classifications above.
An entire issue of municipal obligations may be purchased by one or a
small number of institutional investors such as one of the funds. Thus, the
issue may not be said to be publicly offered. Unlike securities which must be
registered under the Securities Act of 1933, as amended (the "1933 Act"), prior
to offer and sale unless an exemption from such registration is available,
municipal obligations which are not publicly offered may nevertheless be readily
marketable. A secondary market exists for municipal obligations which were not
publicly offered initially.
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The Adviser determines whether a municipal obligation is readily
marketable based on whether it may be sold in a reasonable time consistent with
the customs of the municipal markets (usually seven days) at a price (or
interest rate) which accurately reflects its value. The Adviser believes that
the quality standards applicable to the Tax Free Money Market Fund's investments
enhance marketability. In addition, stand-by commitments and demand obligations
also enhance marketability.
For the purpose of a fund's investment restrictions, the identification
of the "issuer" of municipal obligations which are not general obligation bonds
is made by the Adviser on the basis of the characteristics of the obligation as
described above, the most significant of which is the source of funds for the
payment of principal of and interest on such obligations.
Yields on municipal obligations depend on a variety of factors, including
money market conditions, municipal bond market conditions, the size of a
particular offering, the maturity of the obligation and the quality of the
issue. High grade municipal obligations tend to have a lower yield than lower
rated obligations. Municipal obligations are subject to the provisions of
bankruptcy, insolvency and other laws affecting the rights and remedies of
creditors, such as the Federal Bankruptcy Code, and laws, if any, which may be
enacted by Congress or state legislatures extending the time for payment of
principal or interest, or both, or imposing other constraints upon enforcement
of such obligations or municipalities to levy taxes. There is also the
possibility that as a result of litigation or other conditions the power or
ability of any one or more issuers to pay when due principal of and interest on
its or their municipal obligations may be materially affected.
The Tax Free Money Market Fund expects that it will not invest more than
25% of its total assets in municipal obligations whose issuers are located in
the same state or more than 25% its total assets in municipal obligations the
security of which is derived from any one of the following categories: hospitals
and health facilities; turnpikes and toll roads; ports and airports; or colleges
and universities. The Tax Free Money Market Fund may invest more than 25% of its
total assets in municipal obligations of one or more of the following types:
public housing authorities; general obligations of states and localities; lease
rental obligations of states and local authorities; state and local housing
finance authorities; municipal utilities systems; bonds that are secured or
backed by the Treasury or other U.S. Government guaranteed securities to the
extent such securities are tax-exempt as defined in the Code; or industrial
development and pollution control bonds. The Municipal Fund will not invest 25%
or more of its total assets in municipal obligations whose issuers are located
in the same state. There could be economic, business or political developments,
which might affect all municipal obligations of a similar type. However, the
Adviser believes that the most important consideration affecting risk is the
quality of particular issues of municipal obligations rather than factors
affecting all, or broad classes of, municipal obligations.
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The acquisition of municipal securities by the Tax Free Money Market Fund
will also be subject to the rules of the SEC applicable to use of the amortized
cost method of securities valuation.
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.
MUNICIPAL LEASES. 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 leased 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 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 Municipal Fund's
15% (10% with respect to the Money Market Funds) limitation on investments in
illiquid securities.
PRE-REFUNDED MUNICIPAL SECURITIES. Funds that invest in municipal
securities may invest in pre-refunded municipal securities. The principal of and
interest on pre-refunded municipal securities are no longer paid from the
original revenue source for the securities. Instead, the source of such payments
is typically an escrow fund consisting of U.S. Government securities. The assets
in the escrow fund are derived from the proceeds of refunding bonds issued by
the same issuer as the pre-refunded municipal securities. Issuers of municipal
securities use this advance refunding technique to obtain more favorable terms
with respect to securities that are not yet subject to call or redemption by the
issuer. For example, advance refunding enables an issuer to refinance debt at
lower market interest rates, restructure debt to improve cash flow or eliminate
restrictive covenants in the indenture or other governing instrument for the
pre-refunded municipal securities. However, except for a change in the revenue
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source from which principal and interest payments are made, the pre-refunded
municipal securities remain outstanding on their original terms until they
mature or are redeemed by the issuer. Pre-refunded municipal securities are
usually purchased at a price which represents a premium over their face value.
STAND-BY COMMITMENTS
The Tax Free Money Market Fund and Municipal Fund may acquire stand-by
commitments. Acquisition of stand-by commitments by a fund may improve portfolio
liquidity by making available same-day settlements on sales of portfolio
securities (and thus facilitate the same-day payments of redemption proceeds in
federal funds). A fund may engage in such transactions subject to the
limitations in the rules under the 1940 Act. A stand-by commitment is a right
acquired by a fund, when it purchases a municipal obligation from a broker,
dealer or other financial institution ("seller"), to sell up to the same
principal amount of such securities back to the seller, at that fund's option,
at a specified price. Stand-by commitments are also known as "puts." The
exercise by a fund of a stand-by commitment is subject to the ability of the
other party to fulfill its contractual commitment.
Stand-by commitments acquired by the funds will generally have the
following features: (1) they will be in writing and will be physically held by
the fund's custodian; (2) the funds' rights to exercise them will be
unconditional and unqualified; (3) they will be entered into only with sellers
which in the Adviser's opinion present a minimal risk of default; (4) although
stand-by commitments will not be transferable, municipal obligations purchased
subject to such commitments may be sold to a third party at any time, even
though the commitment is outstanding; and (5) their exercise price will be (i) a
fund's acquisition cost (excluding the cost, if any, of the stand-by commitment)
of the municipal obligations which are subject to the commitment (excluding any
accrued interest which the fund paid on their acquisition), less any amortized
market premium or plus any amortized market or original issue discount during
the period the fund owned the securities, plus (ii) all interest accrued on the
securities since the last interest payment date.
The Trust, on behalf of the Tax Free Money Market Fund and the Municipal
Fund, expects that stand-by commitments generally will be available without the
payment of any direct or indirect consideration. However, if necessary or
advisable, the funds will pay for stand-by commitments, either separately in
cash or by paying a higher price for portfolio securities which are acquired
subject to the commitments. If the fund pays additional consideration for a
stand-by commitment, the yield on the security to which the stand-by commitment
relates will, in effect, be lower than if the fund had not acquired such
stand-by commitment.
It is difficult to evaluate the likelihood of use or the potential
benefit of a stand-by commitment. Therefore, it is expected that the Boards will
determine that stand-by commitments ordinarily have a "fair value" of zero,
regardless of whether any direct or indirect consideration was paid. When a fund
has paid for a stand-by commitment, its cost will be reflected as unrealized
depreciation for the period during which the commitment is held.
The Adviser understands that the IRS has issued a favorable revenue ruling
to the effect that, under specified circumstances, a registered investment
company will be the owner of tax-exempt municipal obligations acquired subject
to a put option. The IRS has subsequently announced that it will not ordinarily
issue advance ruling letters as to the identity of the true owner of property in
cases involving the sale of securities or participation interests therein if the
purchaser has the right to cause the security, or the participation interest
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therein, to be purchased by either the seller or a third party. Each fund
intends to take the position that it is the owner of any municipal obligations
acquired subject to a stand-by commitment and that tax-exempt interest earned
with respect to such municipal obligations will be tax-exempt in its hands.
There is no assurance that the IRS will agree with this position in any
particular case or that stand-by commitments will be available to the funds, nor
have the funds assumed that such commitments would continue to be available
under all market conditions.
A fund, subject to its investment policies and restrictions, may also
enter into stand-by commitments in which the fund may bind itself to accept
delivery of a municipal obligation with a stated price and fixed yield upon the
exercise of an option held by the other party to the agreement at a stated
future date. The fund will receive a commitment fee in consideration of its
agreement to "stand-by" to purchase the municipal obligation. This stand-by
commitment may be deemed to be the sale by the fund of a put. The stand-by
commitment agreement creates a risk of loss to the investment company and its
shareholders well in excess of the commitment fees the fund would receive as
consideration for entering into the agreement. For example, if interest rates in
the marketplace increase after the agreement is made, it is likely that the
contract price on the delivery date will exceed the then current market value of
the municipal obligation. The broker-dealer can be expected to exercise its
option and, in effect, pass the decline in the value of the municipal obligation
to the investment company. That decline in value may significantly exceed the
fee received by the investment company for entering into the agreement. In
accordance with the SEC's General Statement of Policy (IC-10666), and in order
to limit risk of loss, if a fund engages in a stand-by commitment transaction,
such fund will maintain in a segregated account, commencing on the date the fund
enters into the stand-by commitment agreement, liquid assets equal to the value
of the purchase price under the stand-by commitment.
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.
REAL ESTATE INVESTMENT TRUSTS
Each fund, other than the Money Market Funds and Municipal Fund, 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
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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.
U.S. GOVERNMENT SECURITIES
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., Ginnie Mae mortgage-backed securities), (iii) supported
by the issuing agency's or instrumentality's right to borrow from the U.S.
Treasury (E.G., Fannie Mae 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 U.S. Government securities held by a fund
do not, however, guarantee the market value of the shares of the fund. There is
no guarantee that the U.S. Government will continue to provide support to its
agencies or instrumentalities in the future.
RESTRICTED AND ILLIQUID SECURITIES
Each fund may purchase securities that are not registered or offered in an
exempt non-public offering ("Restricted Securities") under the 1933 Act,
including securities eligible for resale to "qualified institutional buyers"
pursuant to Rule 144A under the 1933 Act. However, a fund will not invest more
than 15% of its net assets (10% of total assets in the case of the Government
Money Market Fund and the Tax Free Money Market Fund) in illiquid investments,
which include repurchase agreements maturing in more than seven days, interest
rate, currency and mortgage swaps, interest rate caps, floors and collars,
certain SMBS, municipal leases, certain over-the-counter options, securities
that are not readily marketable and Restricted Securities, unless the Boards
determine, based upon a continuing review of the trading markets for the
specific Restricted Securities, that such Restricted Securities are liquid.
Certain commercial paper issued in reliance on Section 4(2) of the 1933 Act is
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treated like Rule 144A Securities. The Boards have adopted guidelines and
delegated to the Adviser the daily function of determining and monitoring the
liquidity of the fund's portfolio securities. The Boards, however, retain
sufficient oversight and are ultimately responsible for the determinations.
Since it is not possible to predict with assurance exactly how the market for
Restricted Securities sold and offered under Rule 144A or Section 4(2) will
develop, the Boards will carefully monitor the funds' 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.
The purchase price and subsequent valuation of Restricted Securities
normally reflect a discount from the price at which such securities trade when
they are not restricted, since the restriction makes them less liquid. The
amount of the discount from the prevailing market price is expected to vary
depending upon the type of security, the character of the issuer, the party who
will bear the expenses of registering the Restricted Securities and prevailing
supply and demand conditions.
OTHER INVESTMENT COMPANIES
Each fund, subject to authorization by its Board, may invest all of its
investable assets in the securities of a single open-end investment company (a
"Portfolio"). If authorized by the Board, a fund would seek to achieve its
investment objective by investing in a Portfolio, which Portfolio would invest
in a portfolio of securities that complies with the fund's investment
objectives, policies and restrictions. The ability of the funds to convert to
the so-called master-feeder fund structure has been approved by the funds'
shareholders. The Boards do not intend to authorize investing in this manner at
this time.
Each fund may invest up to 10% of its total assets in the securities of
other investment companies not affiliated with WPG, but not invest more than 5%
of its total assets in the securities of any one investment company or acquire
more than 3% of the voting securities of any other investment company. For
example, the Quantitative Fund may invest in Standard & Poor's Depositary
Receipts (commonly referred to as "Spiders"), which are exchange-traded shares
of a closed-end investment company that are designed to replicate the price
performance and dividend yield of the Standard & Poor's 500 Composite Stock
Price Index. The Municipal Fund will only invest in investment companies that
are money market funds which invest in municipal obligations. A fund will
indirectly bear its proportionate share of any management fees and other
expenses paid by investment companies in which it invests in addition to the
advisory and administration fees paid by the fund.
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.
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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. The actual portfolio turnover rates for each fund are
noted in the prospectus.
INVESTMENT RESTRICTIONS
Each fund has adopted the following investment restrictions, which may not
be changed without approval of the holders of a majority of the outstanding
voting securities of the applicable fund. As defined in the 1940 Act and as used
in the prospectus and this SAI, "a majority of the outstanding voting
securities" of a fund, means the lesser of (1) 67% of the shares of the fund
present at a meeting if the holders of more than 50% of the outstanding shares
of the fund are present in person or by proxy, or (2) more than 50% of the
outstanding shares of the fund. So long as these fundamental restrictions are in
effect, each fund may not:
FOR THE GOVERNMENT MONEY MARKET FUND,
TAX FREE MONEY MARKET FUND, MUNICIPAL
FUND AND CORE BOND FUND:
1. With respect to 75% of its total assets, purchase securities of an issuer
(other than U.S. Government securities or, with respect to each fund other
than the Municipal Fund, repurchase agreements collateralized by U.S.
Government securities and shares of other investment companies), if:
(a) such purchase would cause more than 5% of the fund's total assets
taken at market value to be invested in the securities of such issuer;
or
(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the fund;
provided, however, that each fund may invest all or part of its investable
assets in an open-end investment company with substantially the same
investment objective, policies and restrictions as such fund.
2. Purchase or sell real estate (other than securities secured by real estate
or interests therein, or issued by entities which invest in real estate or
interests therein or, for Municipal Bond Fund, real estate acquired by the
fund as a result of the ownership of securities), but it may lease office
space for its own use and invest up to 15% of its assets in publicly held
real estate investment trusts.
3. Borrow amounts in excess of 33% of its total assets (including the amount
borrowed) and then only as a temporary measure for extraordinary or
emergency purposes. This restriction shall not apply to reverse repurchase
agreements entered into in accordance with a Fund's investment policies.
4. Make loans, except that this restriction shall not prohibit the purchase of
or investment in bank certificates of deposit or bankers acceptances, the
purchase and holding of all or a portion of an issue of publicly
distributed debt securities, the lending of portfolio securities and the
entry into repurchase agreements.
5. Engage in the business of underwriting securities of others, except to the
extent that the fund may be deemed to be an underwriter under the 1933 Act,
when it purchases or sells portfolio securities in accordance with its
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investment objectives and policies; provided, however, that the fund may
invest all or part of its investable assets in an open-end investment
company with substantially the same investment objective, policies and
restrictions as the fund.
6. Purchase securities, excluding U.S. Government securities, of one or more
issuers conducting their principal business activity in the same industry,
if immediately after such purchase the value of its investments in such
industry would exceed 25% of its total assets (except securities of banks
and bank holding companies in the case of the Government Money Market Fund
and the Tax Free Money Market Fund and except municipal securities, U.S.
Government securities and securities the payment of which is secured by
U.S. Government securities in the case of the Municipal Bond Fund);
provided, however, that the fund may invest all or part of its investable
assets in an open-end investment company with substantially the same
investment objective, policies and restrictions as the fund. In addition,
in the case of the Municipal Bond Fund, for purposes of this restriction,
state and municipal governments and their agencies and instrumentalities
are not deemed to be industries.
7. Issue senior securities, except as permitted under the 1940 Act and except
that the fund may issue shares of beneficial interest in multiple classes
or series.
FOR THE QUANTITATIVE FUND:
1. Purchase or sell real estate, but the fund may lease office space for its
own use as its principal office and may invest in securities of companies
engaged in the real estate business.
2. Borrow amounts in excess of 33% of its total assets (including the amount
borrowed) and then only as a temporary measure for extraordinary or
emergency purposes.
3. Make loans, except that this restriction shall not prohibit the purchase of
or investment in bank certificates of deposits or bankers acceptances, the
purchase and holding of all or a portion of an issue of publicly
distributed debt securities, the lending of portfolio securities and the
entry into repurchase agreements.
4. Engage in the business of underwriting securities of others, except to the
extent that the fund may be deemed to be an underwriter under the 1933 Act,
when it purchases or sells portfolio securities in accordance with its
investment objectives and policies; provided, however, that the fund may
invest all or part of its investable assets in an open-end investment
company with substantially the same investment objective, policies and
restrictions as the fund.
5. Purchase securities, excluding U.S. Government securities, of one or more
issuers conducting their principal business activity in the same industry,
if immediately after such purchase the value of its investments in such
industry would exceed 25% of its total assets except that the fund may
concentrate its assets in securities of issuers in any industry to the
extent the S&P 500 Index is so concentrated; provided, however, that the
fund may invest all or part of its investable assets in an open-end
investment company with substantially the same investment objective,
policies and restrictions as the fund.
6. Invest in commodities or in commodities contracts except that the fund may
purchase and sell financial futures contracts on securities, indices and
currencies and options on such futures contracts, and the fund may purchase
securities on a forward commitment or when-issued basis.
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7. Issue senior securities except as permitted under the 1940 Act and except
that the fund may issue shares of beneficial interest in multiple classes
or series.
8. With respect to 75% of its total assets, the fund may not purchase
securities of an issuer (other than the U.S. Government, its agencies,
instrumentalities or authorities or repurchase agreements collateralized by
U.S. Government securities and other investment companies), if:
(a) such purchase would cause more than 5% of the fund's total assets
taken at market value to be invested in the securities of such issuer;
or
(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the fund;
provided, however, that the fund may invest all or part of its investable
assets in an open-end investment company with substantially the same
investment objective, policies and restrictions as the fund.
FOR THE GROWTH AND INCOME FUND:
1. Purchase securities of an issuer if such purchase would result in more than
10% of the voting securities of any one issuer, other than the U.S.
Government and its instrumentalities, being held by the fund; provided,
however, that the fund may invest all or part of its investable assets in
an open-end investment company with substantially the same investment
objective, policies and restrictions as the fund.
2. Purchase securities of an issuer if such purchase would result in more than
5% of the fund's total assets being invested in the securities of any one
issuer other than the U.S. Government and its agencies and
instrumentalities; provided, however, that the fund may invest all or part
of its investable assets in an open-end investment company with
substantially the same investment objective, policies and restrictions as
the fund.
3. Purchase, sell or invest in commodities or commodity contracts or real
estate or interests in real estate, except futures contracts on securities
and securities indices and options on such futures, forward foreign
currency exchange contracts and except that the fund may purchase, sell or
invest in marketable securities of companies holding real estate or
interests in real estate, including real estate investment trusts.
4. Purchase securities of one or more issuers conducting their principal
business activity in the same industry, if immediately after such purchase
the value of its investments in such industry would exceed 25% of its total
assets, provided that this restriction shall not apply to securities issued
or guaranteed as to principal and interest by the U.S. Government, its
agencies or instrumentalities; provided, however, that the fund may invest
all or part of its investable assets in an open-end investment company with
substantially the same investment objective, policies and restrictions as
the fund.
5. Lend its funds to other persons, except through the purchase of all or a
portion of an issue of debt securities publicly distributed or other
securities or debt obligations in accordance with its objective or through
entering into repurchase agreements; provided that each such repurchase
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agreement has a duration of no more than seven days and that the value of
all of the fund's outstanding repurchase agreements, together with the
value of all illiquid investments of the fund, does not exceed 15% of the
fund's total assets at any time.
6. Lend its portfolio securities unless the borrower is a broker, dealer or
financial institution; provided that the terms, the structure and the
aggregate amount of such loans are not inconsistent with the 1940 Act or
the rules and regulations or interpretations of the SEC thereunder.
7. Borrow money, except from banks as a temporary measure to facilitate the
meeting of redemption requests which might otherwise require the untimely
disposition of portfolio investments or for extraordinary or emergency
purposes, provided that the aggregate amount of such borrowings may not
exceed 33% of the value of the fund's total assets (including amounts
borrowed) at the time of borrowing, or mortgage, pledge or hypothecate its
assets, except in an amount sufficient to secure any such borrowing.
8. Issue senior securities, except as permitted under the 1940 Act and except
that the fund may issue shares of beneficial interest in multiple classes
or series.
9. Engage in the business of underwriting the securities of other issuers
(except as the fund may be deemed an underwriter under the 1933 Act in
connection with the purchase and sale of portfolio securities in accordance
with its investment objective and policies); provided, however, that the
fund may invest all or part of its investable assets in an open-end
investment company with substantially the same investment objective,
policies and restrictions as the fund.
FOR THE TUDOR FUND:
1. Purchase securities of one or more issuers conducting their principal
business activity in the same industry, if immediately after such purchase
the value of its investments in such industry would exceed 25% of its total
assets provided that this restriction shall not apply to securities issued
or guaranteed as to principal and interest by the U.S. Government, its
agencies or instrumentalities; provided, however, that the fund may invest
all or part of its investable assets in an open-end investment company with
substantially the same investment objective, policies and restrictions as
the fund. In this connection, the fund may invest in "Special Situations."
The term "Special Situation" shall be deemed to refer to a security of a
company in which an unusual and possibly nonrepetitive development is
taking place which, in the opinion of the investment adviser of the fund,
may cause the security to attain a higher market value independently, to a
degree, of the trend in the securities market in general. The particular
development (actual or prospective) which may qualify a security as a
"Special Situation" may be one of many different types. Such developments
may include, among others, a technological improvement or important
discovery or acquisition which, if the expectation for it materialized,
would effect a substantial change in the company's business; a
reorganization; a recapitalization or other development involving a
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 improve the value
of the company's stock; a new or changed management; or material changes in
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<PAGE>
management policies. A "Special Situation" may often involve a
comparatively small company which is not well known and which has not been
closely watched by investors generally, but it may also involve a large
company. The fact, if it exists, that an increase in the company's
earnings, dividends or business is expected, or that a given security is
considered to be undervalued, would not in itself be sufficient to qualify
as a "Special Situation." The fund may invest in securities (even if not
"Special Situations") which, in the opinion of the investment adviser of
the fund, are appropriate investments for the fund, including securities
which the investment adviser of the fund believes are undervalued by the
market. The fund shall not be required to invest any minimum percentage of
its aggregate portfolio in "Special Situations," nor shall it be required
to invest any minimum percentage of its aggregate portfolio in securities
other than "Special Situations."
2. With respect to 75% of its total assets, the fund may not purchase
securities of an issuer (other than the U.S. Government, its agencies,
instrumentalities or authorities or repurchase agreements collateralized by
U.S. Government securities and other investment companies), if:
(a) such purchase would cause more than 5% of the fund's total assets
taken at market value to be invested in the securities of such issuer;
or
(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the fund;
provided, however, that the fund may invest all or part of its investable
assets in an open-end investment company with substantially the same
investment objective, policies and restrictions as the fund.
3. Lease, acquire, purchase, sell or hold real estate, but it may lease office
space for its own use and invest in marketable securities of companies
holding real estate or interests in real estate, including real estate
investment trusts.
4. Purchase or sell commodities or commodities contracts, except futures
contracts, including but not limited to contracts for the future delivery
of securities and contracts based on securities indices and options on such
futures contracts, and forward foreign currency exchange contracts.
5. Lend money, except that it may (i) invest in all or a portion of an issue
of bonds, debentures and other obligations distributed publicly or of a
type commonly purchased by financial institutions (e.g., certificates of
deposit, bankers' acceptances or other short-term debt obligations) or
other debt obligations in accordance with its objectives or (ii) enter into
repurchase agreements; provided that the fund will not enter into
repurchase agreements of more than one week's duration if more than 15% of
its net assets would be invested therein together with other illiquid or
not readily marketable securities.
6. Lend its portfolio securities unless the borrower is a broker, dealer, bank
or other qualified financial institution; provided that the terms, the
structure and the aggregate amount of such loans are not inconsistent with
the 1940 Act or the Rules and Regulations or interpretations of the SEC
thereunder.
- 37 -
<PAGE>
7. Engage in the business of underwriting the securities of others, except to
the extent that the fund may be deemed to be an underwriter under the 1933
Act when it purchases or sells portfolio securities; provided, however,
that the fund may invest all or part of its investable assets in an
open-end investment company with substantially the same investment
objective, policies and restrictions as the fund.
8. Borrow money except as a temporary measure to facilitate the meeting of
redemption requests or for extraordinary or emergency purposes, provided
that the aggregate amount of such borrowings may not exceed 33% of the
value of the fund's total assets (including the amount borrowed), at the
time of such borrowing.
9. Issue senior securities except as permitted under the 1940 Act and except
that the fund may issue shares of beneficial interest in multiple classes
or series.
FOR THE INTERNATIONAL FUND:
1. With respect to 75% of its total assets, invest more than 5% of its total
assets in securities of any one issuer, excluding securities issued or
guaranteed by the U.S. Government or by its agencies and instrumentalities
except that the fund may invest up to 10% of its total assets in repurchase
agreements with any member bank of the Federal Reserve System or member of
the NASD which is a primary dealer in U.S. Government securities; or
purchase more than 10% of the voting securities of any class of any issuer;
provided, however, that the fund may invest all or part of its investable
assets in an open-end investment company with substantially the same
investment objective, policies and restrictions as the fund.
2. Make an investment that would result in more than 25% of its total assets
being invested in securities of issuers in the same industry, except U.S.
Government securities; provided, however, that the fund may invest all or
part of its investable assets in an open-end investment company with
substantially the same investment objective, policies and restrictions as
the fund.
3. Purchase or sell commodities or commodities contracts, except that the fund
may enter into or purchase futures contracts, including but not limited to
contracts for the future delivery of securities, contracts based on
securities indices, forward foreign currency contracts, foreign currency
futures and options, and options on securities.
4. Lend money, except that it may (i) invest in all or a portion of an issue
of bonds, debentures and other obligations distributed publicly or of a
type commonly purchased by financial institutions (e.g., certificates of
deposit, bankers' acceptances or other short-term debt obligations) or
other debt obligations in accordance with its objectives or (ii) enter into
repurchase agreements; provided that the fund will not enter into
repurchase agreements of more than one week's duration if more than 15% of
its net assets would be invested therein together with other illiquid or
not readily marketable securities.
5. Lend its portfolio securities unless the borrower is a broker, dealer or
financial institution; provided that the terms, the structure and the
aggregate amount of such loans are not inconsistent with the 1940 Act or
the rules and regulations or interpretations of the SEC thereunder.
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<PAGE>
6. Engage in the business of underwriting the securities of other issuers
(except as the fund may be deemed an underwriter under the 1933 Act in
connection with the purchase and sale of portfolio securities in accordance
with its investment objective and policies); provided, however, that the
fund may invest all or part of its investable assets in an open-end
investment company with substantially the same investment objective,
policies and restrictions as the fund.
7. Invest in the securities of an issuer for the purpose of exercising control
or management, but it may do so where it is deemed advisable to protect or
enhance the value of an existing investment; provided, however, that the
fund may invest all or part of its investable assets in an open-end
investment company with substantially the same investment objective,
policies and restrictions as the fund.
8. Invest its assets in securities of other open-end investment companies but
the fund may invest in closed-end investment companies to the extent
permitted by the 1940 Act or rules, regulations or orders issued
thereunder; provided, however, that the fund may invest all or part of its
investable assets in an open-end investment company with substantially the
same investment objective, policies and restrictions as the fund.
9. Participate on a joint or joint and several basis in any securities trading
account; provided, however, that combining or "bunching" of orders of other
accounts under the investment management of the Adviser shall not be
considered participation in a joint securities trading account.
10. Invest in or retain the securities of any issuer, if, to the knowledge of
the fund, those officers and trustees of the fund who individually own in
excess of 1/2 of 1% of the issuer's securities own more than 5% of such
securities in the aggregate.
11. Issue senior securities, except as permitted under the 1940 Act and except
that the fund may issue shares of beneficial interest in multiple classes
or series.
12. Purchase securities on margin except as short-term credits may be necessary
for the clearance of transactions; provided, however, that this restriction
shall not prohibit the fund from entering into repurchase agreements or
option contracts, nor from entering into transactions pursuant to
investment restriction 14 below.
13. Make short sales of securities except short sales against the box;
provided, however, that this restriction shall not prohibit the fund from
writing or entering into option contracts.
14. Borrow money, except as a temporary or emergency measure, and then only
from banks and trust companies in an aggregate amount not exceeding 10% of
the value of its total assets taken at cost. The fund may pledge, mortgage,
or hypothecate no more than 15% of its total assets in connection with such
borrowings.
15. Lease, acquire, purchase, sell or hold real estate (including limited
partnership interests which are not readily marketable), but it may lease
office space for its own use and invest in (1) readily marketable interests
of real estate investment trusts or readily marketable securities of
issuers whose business involves the purchase and sale of real estate; and
(2) securities secured by real estate or interests therein.
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<PAGE>
Each fund may, notwithstanding any other fundamental or non-fundamental
investment restriction or policy, invest all of its assets in the securities of
a single open-end investment company with substantially the same investment
objectives, restrictions and policies as that fund.
For purposes of the above fundamental investment restrictions regarding
industry concentration, the Adviser generally classifies issuers by industry in
accordance with classifications set forth in the Standard & Poor's Stock Guide.
In the absence of such classification or if the Adviser determines in good faith
based on its own information that the economic characteristics affecting a
particular issuer make it more appropriately considered to be engaged in a
different industry, the Adviser may classify an issuer according to its own
sources.
In addition to the fundamental policies mentioned above, the Board has
adopted the following non-fundamental policies which may be changed or amended
by action of the Board without approval of shareholders. So long as these
non-fundamental restrictions are in effect, the fund may not:
(a) Invest in the securities of an issuer for the purpose of exercising
control or management, but it may do so where it is deemed advisable
to protect or enhance the value of an existing investment.
(b) Purchase securities of any other investment company except as
permitted by the 1940 Act.
(c) Purchase securities on margin, except any short-term credits which may
be necessary for the clearance of transactions and the initial or
maintenance margin in connection with options and futures contracts
and related options.
(d) Invest more than 15% of its net assets in securities which are
illiquid (10% of total assets for Government Money Market Fund and Tax
Free Market Fund).
(e) Purchase additional securities if the fund's borrowings exceed 5% of
its net assets.
All percentage limitations apply only at the time a transaction is
entered into. Accordingly, if a percentage restriction is adhered to at the time
of investment, a later increase or decrease in the percentage which results from
a relative change in values or from a change in a fund's net assets will not be
treated as a violation. Under the 1940 Act, each fund will be required to
maintain continuous asset coverage of at least 300% for borrowings from a bank.
In the event that such asset coverage is below 300%, the applicable fund will be
required to reduce the amount of its borrowings to obtain 300% asset coverage,
within three days (not including Sundays and holidays) or such longer period as
the rules and regulations of the SEC prescribe.
ADVISORY, SUBADVISORY AND
ADMINISTRATIVE SERVICES
INVESTMENT ADVISER
Weiss, Peck & Greer, L.L.C. (the "Adviser" or "WPG"), One New York Plaza,
New York, New York 10004, serves as investment adviser and administrator to each
fund.
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<PAGE>
On or about September 9, 1998, Robeco Groep N.V., a Dutch public limited
liability company ("Robeco"), acquired all of the outstanding equity interests
of WPG from its prior owners (the "Acquisition"). As a result of the
Acquisition, WPG is an indirect, wholly-owned subsidiary of Robeco. Robeco is a
Dutch corporation that was formed to be the holding company for 100% of the
shares of Robeco International B.V. and Robeco Nederland B.V. ("Robeco
Nederland") (collectively referred to as the "Robeco Group"). Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A., Rabobank Nederland owns 50% of the
shares of Robeco and the balance is owned by shareholders of the Robeco Group
funds.
The Robeco Group is a fund management group. Robeco Nederland advises and
manages investment funds, some of whose shares are traded primarily on the
Amsterdam Stock Exchange, which funds include (1) Robeco N.V., (2) Rolinco N.V.,
(3) Rorento N.V., (4) RG Rente Mixfund N.V., (5) RG Obligatie Mixfund N.V., (6)
RG Aandelen Mixfund N.V., (7) RG Florente Fund N.V., (8) RG Divirente Fund N.V.,
(9) RG America Fund N.V., (10) RG Europe Fund N.V., (11) RG Pacific Fund N.V.,
(12) Nettorente Fund N.V., (13) RG Hollands Bezit N.V., (14) RG Emerging Markets
Fund N.V., (15) RG Tactimix Funds, and (16) RG Zelfselect Landen Fund N.V.
Robeco Nederland also advises and manages a number of institutional funds. The
Robeco Group operates primarily outside of the United States, although it
currently holds significant ownership interests in three U.S. investment
advisers, in addition to being the parent company of WPG.
The Robeco Group, through its subsidiaries, has approximately 2,500
employees worldwide. Of the approximately $95 billion in assets under
management at December 31, 1998, approximately $44 billion was managed in the
U.S.
In connection with the Acquisition, the funds' Boards, including a
majority of the Trustees who are not "interested persons" (as such term is
defined in the 1940 Act) of the funds or WPG (the "non- Interested Trustees"),
approved the funds' current investment advisory agreements (the "Advisory
Agreements") at a meeting held on May 19, 1998. The Advisory Agreements were
approved by a "majority of the outstanding voting securities" (as defined in the
1940 Act) of each fund at a joint special meeting of shareholders held on July
29, 1998, and became effective upon the consummation of the Acquisition. Except
for the dates of execution, effectiveness and termination, the terms of each
fund's Advisory Agreement are substantially identical to the terms of such
fund's investment advisory agreement which was in effect immediately prior to
the Acquisition.
Pursuant to the Advisory Agreements, the Adviser supervises and assists in
the management of the assets of each fund and furnishes each fund with research,
statistical and advisory services. In managing the assets of the funds, the
Adviser furnishes continuously an investment program for each fund consistent
with the investment objectives and policies of that fund. More specifically, the
Adviser determines from time to time what securities shall be purchased for the
fund, what securities shall be held or sold by the fund and what portion of the
fund's assets shall be held uninvested as cash, subject always to the provisions
of the applicable fund's Declaration of Trust, By-Laws and registration
statement and to its investment objectives, policies and restrictions, as each
of the same shall be from time to time in effect, and subject, further, to such
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<PAGE>
policies and instructions as the applicable fund's Board may from time to time
establish. To carry out such determinations, the Adviser places orders for the
investment and reinvestment of each fund's assets. (See "Portfolio Brokerage.")
For its investment advisory services under the Advisory Agreements, the
Adviser receives an annual fee, payable monthly, which varies in accordance with
the average daily net assets of the funds under the management of the Adviser.
The advisory fee is accrued daily and will be prorated if the Adviser shall not
have acted as a fund's investment adviser during any entire monthly period.
The annual fee rates under the Advisory Agreements and the advisory fees
paid to the Adviser under the prior investment advisory agreements for the
fiscal years ended December 31, 1996, 1997 and 1998 are as set forth on the
following page.
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<PAGE>
<TABLE>
<CAPTION>
ADVISORY FEES PAID
DECEMBER 31,
ANNUAL
FUND FEE RATE 1996 1997 1998
- ---- -------- ---- ---- ----
<S> <S> <C> <C> <C>
GOVERNMENT MONEY 0.50% of net assets up to $ 684,845 $ 780,088 $ 1,279,834
MARKET FUND AND TAX $500 million
FREE MONEY MARKET 0.45% of net assets 637,124 650,081 601,613
FUND $500,000 million to $1
billion
0.40% of net assets $1
billion to $1.5 billion
0.35% of net assets in
excess $1.5 billion
MUNICIPAL FUND(1) 0.00% of average daily -0- 39,8631 73,997
net assets while net
assets are less than
$17 million
0.50% of average
daily net assets
while net assets are
$17 million or more
CORE BOND FUND(1) 0.60% of net assets 864,402 702,166 337,351
up to $300 million
0.55% of net assets $300
million to $500 million
0.50% of net assets in
excess of $500 million
GROWTH AND INCOME FUND 0.75% of net assets 551,520 759,489 1,058,219
TUDOR FUND 0.90% of net assets up 1,634,978 166,458,723 1,155,406
to $300 million
0.80% of net assets $300
million to $500 million
0.75% of net assets in
excess of $500 million
INTERNATIONAL FUND(2) 0.50% of net assets 66,670 61,731 41,449
while net assets are
less than $15 million
0.85% of net assets
while net assets are
between $15 million
and $20 million
1.00% of net assets while
net assets are $20
million or more
QUANTITATIVE FUND 0.75% of net assets 1,097,250 783,469 612,722
<FN>
- ------------
(1) During the fiscal years ended December 31, 1998 and 1997, WPG agreed
not to impose a portion of its advisory fees and to assume certain other
expenses on the Municipal Fund. During the fiscal year ended December 31, 1998,
WPG agreed to impose the same restriction on the Core Bond Fund. Had WPG not so
agreed, the Municipal Fund would have paid advisory fees of $126,054 and $96,169
and the Core Bond Fund would have paid $732,856.
</FN>
</TABLE>
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<PAGE>
(2) See "Subadviser to the International Fund" below for a discussion of
the subadvisory fees paid by the Adviser to the International Fund's subadviser
prior to May 1, 1999.
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<PAGE>
Each Advisory Agreement provides that the Adviser will not be liable for
any loss sustained by a fund by reason of the adoption or implementation of any
investment policy or the purchase, sale or retention of any security, whether or
not such purchase, sale or retention shall have been based upon the
investigation and research of the Adviser, or upon investigation and research
made by any other individual, firm or corporation if such recommendation shall
have been made and such other individual, firm or corporation shall have been
selected with due care and in good faith, except for a loss resulting from
willful misfeasance, bad faith, or gross negligence in the performance by the
Adviser of its duties or by reason of the Adviser's reckless disregard of its
obligations and duties thereunder.
Each Advisory Agreement may be modified or amended only with the approval
of the holders of a "majority of the outstanding voting securities" (as defined
in the 1940 Act) of the applicable fund and by a vote of the majority of the
non-Interested Trustees of the fund. Each Advisory Agreement's continuance after
its initial two-year term must be approved annually by a majority vote of the
applicable Board or by a vote of the holders of a "majority of the outstanding
voting securities" of the applicable fund, but in either event it also must be
approved by a vote of a majority of the non-Interested Trustees of the
applicable fund, cast in person at a meeting called for the purpose of voting on
such approval. Each Advisory Agreement may be terminated without penalty, by
either party, upon not more than 60 days' written notice and will terminate
automatically in the event of its assignment.
As of December 31, 1998, WPG had capital of approximately $[72] million.
WPG consists of 33 Managing Directors, one of whom is a member of the NYSE, and
certain principals. WPG has approximately 250 full-time employees in addition to
its Managing Directors. As of December 31, 1998, WPG and its affiliates had
assets under management of approximately $[16] billion, primarily for
institutions and high net worth individuals.
Roger J. Weiss is a Senior Managing Director of WPG and Chairman of the
Board and Trustee of each of the funds and President of the International Fund.
Stephen H. Weiss, brother of Roger J. Weiss, is also a Senior Managing Director
of WPG. [______________] is a Managing Director of WPG, and Executive Vice
President and Treasurer of each of the funds. [______________] is a Managing
Director of WPG and an Executive Vice President and Secretary of each of the
funds. Mr. R. Scott Richter is a Managing Director of WPG and Vice President of
Tax Free Money Market Fund and Municipal Fund. Ms. Janet A. Fiorenza is a
Managing Director of WPG and a Vice President of Tax Free Money Market Fund. A.
Roy Knutsen is a Managing Director of WPG and President of the Growth and Income
Fund. Adam Starr is a Managing Director of WPG and President of Tudor Fund.
The persons responsible for the day-to-day management of each fund's
portfolio are listed in the prospectus. Messrs. Stephen H. Weiss and Roger J.
Weiss may also participate in each fund's investment decisions and all of the
Managing Directors in WPG consult on a regular basis among themselves about
general market conditions, as well as specific securities and industries.
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<PAGE>
In the management of the funds and their other accounts, WPG and its
affiliates allocate investment opportunities to all accounts for which they are
appropriate subject to the availability of cash in any particular account and
the final decision of the individual or individuals in charge of such accounts.
Where market supply is inadequate for a distribution to all such accounts,
securities are allocated on a pro rata basis. In some cases this procedure may
have an adverse effect on the price or volume of the security as far as the
funds are concerned. However, it is the judgment of the Board that the
desirability of continuing the funds' advisory arrangements with the Adviser
outweighs any disadvantages that may result from contemporaneous transactions.
See "Portfolio Brokerage."
SUBADVISER TO THE INTERNATIONAL FUND
Prior to May 1, 1999, Hill Samuel Asset Management Limited ("Hill Samuel"
or the "Subadviser") of London, England, served as subadviser to the
International Fund pursuant to a Subadvisory Agreement by and among the fund,
the Adviser and Hill Samuel. This Subadvisory Agreement was terminated by the
parties effective May 1, 1999. The International Fund's assets are managed by
WPG from and after that date.
An affiliate of Hill Samuel, Hill Samuel Investment Management Limited
("HSIM"), served as the International Fund's subadviser prior to Hill Samuel
serving as the International Fund's subadviser. HSIM merged with Hill Samuel in
a transaction that did not, as represented by Hill Samuel, result in an
"assignment" of the Subadvisory Agreement (as such term is defined in the 1940
Act and the rules thereunder). Prior to April 4, 1996, Lloyds Investment
Management International Limited ("LIMI"), an affiliate of Hill Samuel, served
as the International Fund's subadviser. LIMI merged with Hill Samuel on April 4,
1996 in a transaction that did not, in the opinion of counsel to Hill Samuel and
LIMI, result in an "assignment" of the Subadvisory Agreement (as such term is
defined in the 1940 Act and the rules thereunder).
In connection with the Acquisition, the International Fund's Board,
including a majority of the non-Interested Trustees, approved the International
Fund's current subadvisory agreement (the "Subadvisory Agreement") by and among
WPG, Hill Samuel and the International Fund at a meeting held on May 19, 1998.
The Subadvisory Agreement was approved by a "majority of the outstanding voting
securities" (as defined in the 1940 Act) at the special meeting of shareholders
held on July 29, 1998, and became effective upon the consummation of the
Acquisition. Except for the dates of execution, effectiveness and termination,
the terms of the Subadvisory Agreement were substantially identical to the terms
of the investment subadvisory agreement which was in effect immediately prior to
the Acquisition.
Hill Samuel is a United Kingdom corporation regulated by IMRO in the
United Kingdom and registered with the SEC as an investment adviser under the
Investment Advisers Act of 1940. Hill Samuel is an indirect wholly owned
subsidiary of Lloyds TSB plc of London ("Lloyds TSB"), a major U.K. banking
institution whose predecessor was established in 1677 and whose shares are
listed on the International Stock Exchange in London.
Prior to termination of the Subadvisory Agreement, Hill Samuel provided
the International Fund and the Adviser with investment research, advice and
supervision and with an investment program for that portion of the International
Fund's portfolio invested in foreign securities consistent with the
International Fund's objective and policies. Pursuant to the terminated
Subadvisory Agreement, the Adviser paid to Hill Samuel a quarterly advisory fee
equal on an annual basis to 0.40% of the average daily net assets of the
International Fund. In the event that the advisory fee payable by the
International Fund to WPG was reduced, the amount payable by WPG to Hill Samuel
- 46 -
<PAGE>
was likewise reduced by a proportionate amount. The International Fund had no
responsibility to pay Hill Samuel's fees and paid only the Adviser's fee. Hill
Samuel's predecessor in interest agreed not to impose all or a portion of its
fee (payable by the International Fund's investment adviser) from time to time
since the International Fund's inception. For the years ended December 31, 1996,
1997 and 1998, WPG paid Hill Samuel or its predecessors in interest, as the case
may be, $26,668, $24,753 and 16,580, respectively, in subadvisory fees.
The Subadvisory Agreement provided that the Subadviser was not liable for
any loss sustained by the International Fund by reason of the adoption or
implementation of any investment policy or the purchase, sale or retention of
any security, whether or not such purchase, sale or retention shall have been
based upon investigation and research made by any other individual, firm or
corporation if such recommendation shall have been made and such other
individual firm or corporation shall have been selected with due care and in
good faith, except for a loss resulting from willful misfeasance, bad faith or
gross negligence in the performance by the Subadviser of its duties or by reason
of the Subadviser's reckless disregard of its obligations and duties thereunder.
The Adviser may from time to time recommend to the Board the engagement
of a new subadviser or may determine to continue to manage directly that portion
of the International Fund's portfolio invested in foreign securities. Any
agreement with a new subadviser will be subject to the approval of a majority
vote of shareholders of the International Fund unless otherwise permitted by the
1940 Act or an exemption therefrom.
ADMINISTRATOR
WPG, in its capacity as administrator to the funds, performs
administrative, transfer agency related and shareholder relations services and
certain clerical and accounting services for each fund under separate
administration agreements (the "Administration Agreements"). More specifically,
these obligations pursuant to the Administration Agreements include, subject to
the general supervision of the Boards, (a) providing supervision of all aspects
of the funds' non-investment operations (the parties giving due recognition to
the fact that certain of such operations are performed by others pursuant to
agreements with the funds), (b) providing the funds, to the extent not provided
pursuant to their custodian and transfer agency agreements or agreements with
other institutions, with personnel to perform such executive, administrative,
accounting and clerical services as are reasonably necessary to provide
effective administration of the funds, (c) arranging, to the extent not provided
pursuant to such agreements, for the preparation, at the funds' expense, of
their tax returns, reports to shareholders, periodic updating of the
prospectuses and reports filed with the SEC and other regulatory authorities,
(d) providing the funds, to the extent not provided pursuant to such agreements,
with adequate office space and certain related office equipment and services,
(e) maintaining all of the funds' records other than those maintained pursuant
to such agreements or the Advisory Agreements, and (f) providing to the funds
transfer agency-related and shareholder relations services and facilities and
the services of one or more of its employees or officers, or employees or
officers of its affiliates, relating to such functions (including salaries and
benefits, office space and supplies, equipment and teaching).
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<PAGE>
For its services under the Administration Agreements, WPG is entitled to
receive a fee, computed daily and payable monthly, at an annual rate based on
each fund's average daily net assets, and the annual fee rates are as set forth
on the following page.
<TABLE>
<CAPTION>
ADMINISTRATION FEES PAID
FOR THE YEAR ENDED DECEMBER 31,
PRESENT
FUND ANNUAL RATE(1) 1996 1997 1998
- ---- ----------- ---- ---- ----
<S> <S> <C> <C> <C>
Government Money 0.04% $ 82,182 $ 71,476 $102,376
Market Fund
Tax Free Money 0.05% 38,227 47,012 56,398
Market Fund
Municipal Fund 0.00% while n -0- -0- -0-
assets are less
than $50 million
0.12% while net
assets are $50
million or more
Core Bond Fund(2) 0.05% 43,212 50,727 -0-
Growth and Income Fund 0.06% 466,182 69,393 84,658
Tudor Fund 0.05% 127,165 99,436 64,189
International Fund 0.00% while net -0- -0- -0-
$25 million
0.06% while net
assets are $25
million or more
Quantitative Fund 0.06% 29,280 42,169 46,029
<FN>
- ------------
(1) The Trustees review the rate at which the administration fees are paid
at least annually and may change the rate of compensation without shareholder
approval. The administration fees were paid at different rates than those set
forth above at various times during the periods shown.
(2) The fund waived its entire administration fee of $61,432 for the year.
</FN>
</TABLE>
Each Administration Agreement provides that WPG will not be liable for
any error of judgment or mistake of law or for any loss suffered by a fund in
connection with the matters to which the Agreements relate, except for a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
WPG in the performance of its duties or from the reckless disregard by WPG of
its obligations and duties thereunder. Each Administration Agreement's
continuance must be approved annually by a majority vote of the Board and may be
terminated without penalty, by either party, upon not more than 60 days' written
notice.
- 48 -
<PAGE>
PRINCIPAL UNDERWRITER
First Data Distributors, Inc., P.O. Box 61503, King of Prussia, PA 19406-
0903. (the "Underwriter") serves as the principal underwriter in connection with
the continuous offering of shares of each fund pursuant to an Underwriting
Agreement dated August 1998. The Underwriting Agreement's continuance after its
initial two-year term must be approved annually by the Trustees, including a
majority of the non-Interested Trustees, cast in person at a meeting called for
the purpose of voting on such approval. The Underwriting Agreement was approved
by the Trustees at a meeting held on July 22, 1998. As the funds' principal
underwriter, the Underwriter performs certain services related to the
distribution of shares of the funds to the public.
The Underwriter bears all expenses in providing services under the
Underwriting Agreement. Such expenses include compensation to its employees and
representatives to any investment dealers and financial firms for distribution
related services. The Underwriter also pays certain expenses in connection with
the distribution of the funds' shares, including the cost of preparing, printing
and distributing advertising materials, and the cost of printing and
distributing prospectuses and supplements to prospective shareholders. WPG, and
not the funds, bears the fees charged by the Underwriter. Each fund bears, among
other things, the cost of registering its shares under federal, state and
foreign securities law.
EXPENSES
With respect to each fund, the fund pays: (i) fees and expenses of any
investment adviser or administrator of the fund; (ii) organization expenses of
the fund; (iii) fees and expenses incurred by the fund in connection with
membership in investment company organizations; (iv) brokers' commissions; (v)
payment for portfolio pricing services to a pricing agent, if any; (vi) legal,
accounting or auditing expenses (including an allocable portion of the cost of
the Adviser's employees rendering legal services to the fund); (vii) interest,
insurance premiums, taxes or governmental fees; (viii) the fees and expenses of
the transfer agent of the fund; (ix) the cost of preparing stock certificates or
any other expenses, including, without limitation, clerical expenses of issue,
redemption or repurchase of shares of the fund; (x) the expenses of and fees for
registering or qualifying shares of the fund for sale and of maintaining the
registration of the fund and registering the fund as a broker or a dealer; (xi)
the fees and expenses of Trustees of the fund who are not affiliated with the
Adviser; (xii) the cost of preparing and distributing reports and notices to
shareholders, the SEC and other regulatory authorities; (xiii) the fees or
disbursements of custodians of the fund's assets, including expenses incurred in
the performance of any obligations enumerated by the Declaration of Trust or
By-Laws of the fund insofar as they govern agreements with any such custodian;
(xiv) costs in connection with annual or special meetings of shareholders,
including proxy material preparation, printing and mailing; and (xv) litigation
and indemnification expenses and other extraordinary expenses not incurred in
the ordinary course of the fund's business.
During the fiscal years ended December 31, 1996, 1997 and 1998, the
Adviser voluntarily reimbursed the Municipal Fund in the amount of $21,096,
$4,292 and $0, respectively, and voluntarily did not impose its management fee
in the amount of $56,306 and $52,057 during the fiscal years ended December 31,
1997 and 1998. See the prospectus regarding current fee waivers and expense
limitations.
- 49 -
<PAGE>
Each fund may also enter into arrangements with third parties that
provide omnibus accounting and transfer agency-related services (including
recordkeeping and nondistribution-related shareholder servicing) for the benefit
of fund shareholders who are the beneficial owners of fund shares held in
nominee form with the third parties. A fund may compensate such third parties
for the provision of subaccounting and transfer agency-related services based on
a percentage of the fund's assets for which such entities perform such services.
To the extent that a fund compensates a third party for the provision of these
services, it will not incur duplicative fees with its transfer agent. As of the
date of this SAI, the funds have entered into arrangements with the following
third parties omnibus account service providers: Jack White (Growth and Income
Fund, Tudor Fund, Core Bond Fund, International Fund, Quantitative Fund and
Municipal Fund), Corroon (each Fund), Schwab (Quantitative Fund and Municipal
Fund) and Fidelity (Growth and Income Fund, Tudor Fund, Core Bond Fund,
Quantitative Fund and Municipal Fund).
The funds' Advisory and Administration Agreements each provide that WPG,
in its capacities as investment adviser and administrator, may render similar
services to others so long as the services provided thereunder are not impaired
thereby.
In an attempt to avoid any potential conflict with portfolio transactions
for a fund, the Adviser and the funds have adopted extensive restrictions on
personal securities trading by personnel of the Adviser and its affiliates.
These restrictions include: pre-clearance of all personal securities
transactions and a prohibition of purchasing initial public offerings of
securities. These restrictions are a continuation of the basic principle that
the interests of the funds and their shareholders come before those of the
Adviser and its employees.
ADMINISTRATION AND SERVICE PLANS
Under the administration and service plans of the Core Bond Fund and the
International Fund (each, a "Plan" and together, the "Plans"), these funds may
enter into contracts ("Servicing Agreements") with banks (other than the
Custodian), trust companies, broker-dealers (other than WPG) or other financial
organizations ("Service Organizations") to provide certain administrative and
shareholder services ("Services") on behalf of the funds. In connection with the
Acquisition, the Boards of the International Fund and Funds Trust, including a
majority of the non-Interested Trustees, approved the current Plans at a meeting
held on May 19, 1998. Each Plan was approved by a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the applicable fund at a
joint special meeting held on July 29, 1998, and became effective upon the
consummation of the Acquisition. The terms of the Plans are substantially
identical to the terms of the funds' administration and service plans in effect
prior to the consummation of the Acquisition.
A Service Organization will 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 Plan and the applicable
Servicing Agreement. The schedule of fees and the basis upon which such fees
will be paid will be determined by the Trustees of the applicable fund;
provided, however, that the aggregate annual fees to be paid to all Service
Organizations and a fund's expenses under the Plans will not exceed 0.05% of the
fund's average daily net assets per year. Neither the Custodian nor WPG will be
a Service Organization or receive fees for Services. During the year ended
December 31, 1998, the Core Bond Fund paid or incurred fees to Service
Organizations of $310 pursuant to its prior Plan, all of which was paid to
dealers. During the year ended December 31, 1998, no fees were paid by the
International Fund pursuant to its prior Plan.
- 50 -
<PAGE>
Rule 12b-1 (the "Rule") under the 1940 Act regulates the circumstances
under which an investment company may, directly or indirectly, bear the expenses
of distributing its shares. The Rule defines such distribution expenses to
include the cost of "any activity which is primarily intended to result in the
sale of fund shares." The Rule provides, among other things, that an investment
company may bear such expenses only pursuant to a plan adopted in accordance
with the Rule. Because some or all of the fees to be paid to certain Service
Organizations, in some cases, could be deemed to be payment of distribution
expenses, and because the Core Bond Fund and the International Fund bear the
expense of preparing, printing and distributing the prospectus and Statement of
Additional Information, the Boards have adopted the Plans and will enter into
Service Agreements pursuant thereto. In adopting the Plans, the Boards concluded
that there is a reasonable likelihood that the Plans will benefit the Core Bond
Fund and the International Fund and their respective shareholders by the
provision of the services described above. Specifically, the Boards determined
that the Plans may increase the assets of the funds which may reduce each fund's
expense ratio, reduce securities transaction costs, reduce the advisory fee
rates, prevent untimely disposition of portfolio securities to meet redemption
requests and increase the diversification of the fund's investments.
The Plans permit, among other things, the payments to Service Organizations
and the reimbursement by the funds, as well as the payment by the funds, of the
costs of preparing, printing and distributing prospectuses and statements of
additional information for prospective and existing shareholders and of
implementing and operating the Plans as described above. A report of the amounts
so expended, and the purposes for which such expenditures were incurred, must be
made to the Trustees for their review at least quarterly. In addition, the Plans
provide that they may not be amended to increase materially the costs which a
fund may bear for distribution pursuant to its Plan without shareholder approval
and that the other material amendments of the Plan must be approved by the
Trustees, and by the non-Interested Trustees who do not have any direct or
indirect financial interest in the operation of the Plan or in the related
Service Agreements, by vote cast in person at a meeting called for the purpose
of considering such amendments. The selection and nomination of the
non-Interested Trustees of Funds Trust and the International Fund has been
committed to the discretion of the non-Interested Trustees of Funds Trust and
the International Fund. Each Plan is subject to annual approval, by the
applicable Board and by the non-Interested Trustees who do not have any direct
or indirect financial interest in the operation of the Plan or in any of such
Service Agreements, by vote cast in person at a meeting called for the purpose
of voting on the Plan.
Each Plan is terminable at any time by a vote of a majority of the
non-Interested Trustees who have no direct or indirect financial interest in the
operation of the Plan or in any of the related Service Agreements or by vote of
the holders of a "majority of the outstanding voting securities" of the
applicable fund. Any Service Agreement will be terminable without penalty, at
any time, by vote of a majority of the non-Interested Trustees who have no
direct or indirect financial interest in the operation of the applicable Plan or
in any of the related Service Agreements, or upon not more than 60 days' written
notice to the Service Organization by vote of the holders of a majority of the
outstanding voting securities of the applicable fund. Each Service Agreement
will terminate automatically in the event of its assignment.
- 51 -
<PAGE>
The Glass-Steagall Act and other applicable statutes and regulations
prohibit certain types of banks from engaging in the business of underwriting,
selling or distributing securities. While the scope of this prohibition has not
been clearly defined by the courts or appropriate regulatory agencies, the
Trustees believe that such laws should not preclude a bank from acting as a
Service Organization. Accordingly, the Core Bond Fund and the International Fund
may engage banks to perform administrative and shareholder servicing functions.
Judicial or administrative decisions or interpretations of such laws, as well as
changes in either federal or state statutes or regulations relating to the
permissible activities of banks and their subsidiaries or affiliates, could
prevent a bank from continuing to perform all or a part of its servicing
activities. If a bank were prohibited from so acting, its shareholder clients
would be permitted to remain shareholders of the funds and alternative means for
continuing the servicing of such shareholders would be sought. In that event,
changes in the operation of the funds might occur and a shareholder serviced by
such bank might no longer be able to avail itself of any automatic investment or
other services then being provided by the bank. In addition, state securities
laws on this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions purchasing shares on behalf
of their customers may be required to register as dealers pursuant to state law.
- 52 -
<PAGE>
TRUSTEES AND OFFICERS
Each Board has responsibility for management of the business of its
fund(s). The executive officers of each fund are responsible for its day to day
operation. Set forth below is certain information concerning the Trustees and
officers of the funds. Unless otherwise noted, each individual serves in the
capacity indicated with each fund. Trustees and executive officers deemed to be
"interested persons" of the funds for purposes of the 1940 Act are indicated by
an asterisk. Each of the non-Interested Trustees is a member of each fund's
Audit Committee and Special Nominating Committee.
<TABLE>
<CAPTION>
NAME, ADDRESS AND POSITION(S) PRINCIPAL OCCUPATIONS DURING PAST
DATE OF BIRTH HELD FIVE YEARS
- ----------------- ----------- ---------------------------------
<S> <C> <C>
Roger J. Weiss* Chairman of Senior Managing Director, WPG;
One New York Plaza the Board and Chairman of the Board and Trustee,
New York, NY 10004 Trustee; RWB/WPG U.S. Large Stock Fund and
President(1) Tomorrow Funds Retirement Trust;
4/29/39 Executive Vice President and Director,
WPG Advisers, Inc.
Raymond R. Herrmann, Jr. Trustee Chairman of the Board, Sunbelt
654 Madison Avenue Beverage Corporation (distributor of
Suite 1400 wines and liquors); Former Vice
New York, NY 10017 Chairman and Director, McKesson
Corporation (U.S. distributor of drugs
9/11/20 and health care products, wine and
spirits); Life Member, Board of
Overseers of Cornell Medical College;
Member of Board and Executive
Committee, Sky Ranch for Boys;
Member, Evaluation Advisory Board,
Biotechnology Investments, Ltd.;
Trustee, RWB/WPG U.S. Large Stock
Fund and Tomorrow Funds Retirement
Trust
Lawrence J. Israel Trustee Private Investor; Director and Trustee
200 Broadway, Suite 249 of the Touro Infirmary; Member of the
New Orleans, LA 70018 Intercollegiate Athletics Committee of
the Administrators of the Tulane
12/13/34 Educational Fund; Trustee, RWB/WPG
U.S. Large Stock Fund and Tomorrow
Funds Retirement Trust
</TABLE>
- 53 -
<PAGE>
<TABLE>
<CAPTION>
NAME, ADDRESS AND POSITION(S) PRINCIPAL OCCUPATIONS DURING PAST
DATE OF BIRTH HELD FIVE YEARS
- ----------------- ----------- ---------------------------------
<S> <C> <C>
Graham E. Jones Trustee Senior Vice President, BGK Realty Inc.,
330 Garfield Street, since 1995; Financial Manager, Practice
Suite 200 Management Systems (Medical Services
Santa Fe, NM 87501 Company); Director, the Malaysia Fund;
Director, twelve closed-end funds
1/31/33 managed by Morgan Stanley Asset
Management; Trustee, various
investment companies managed by
Morgan Grenfell Capital Management,
Inc. and Morgan Grenfell Investment
Services, Ltd., since 1993; Trustee,
RWB/WPG U.S. Large Stock Fund and
Tomorrow Funds Retirement Trust
Paul Meek Trustee Financial and Economic Consultant to
5837 Cove Landing Road foreign central banks under the
Burke, VA 22015 auspices of each of the Harvard
Institute for International Development,
11/12/25 the International Monetary Fund and
the World Bank; President, PM
Consulting (financial and economic
consulting); Former Consultant, Fischer,
Francis, Trees & Watts ("FFTW") (fixed
income investment managers); Trustee,
FFTW Funds; Former Vice President
and Monetary Adviser, Federal Reserve
Bank of New York; Trustee, RWB/WPG
U.S. Large Stock Fund
William B. Ross Trustee Financial Consultant; Former Senior
2733 E. Newton Avenue Vice President, Mortgage Guaranty
Shorewood, WI 53211 Insurance Corporation (mortgage credit
insurer); Former Senior Vice President,
8/22/27 MGIC Investment Corporation
(financial services holding company);
Trustee, RWB/WPG U.S. Large Stock
Fund
Robert A. Straniere Trustee Member, New York State Assembly;
182 Rose Avenue Sole Proprietor, Straniere Law Firm;
Staten Island, NY 10306 Director, various Reich and Tang
Funds; Trustee, RWB/WPG U.S. Large
3/28/41 Stock Fund
</TABLE>
- 54 -
<PAGE>
<TABLE>
<CAPTION>
NAME, ADDRESS AND POSITION(S) PRINCIPAL OCCUPATIONS DURING PAST
DATE OF BIRTH HELD FIVE YEARS
- ----------------- ----------- ---------------------------------
<S> <C> <C>
A. Roy Knutsen* Vice President(2) Managing Director, WPG
One New York Plaza
New York, NY 10004
6/10/40
Adam Starr* Vice President(3) Managing Director, WPG; President,
One New York Plaza WPG Tudor Fund and WPG Growth
New York, NY 10004 Fund; Analyst and Portfolio Manager
for the Farber Fund prior thereto
4/16/51
[__________________]* Executive Vice Managing Director, WPG;
One New York Plaza President, [______________________] Executive
New York, NY 10004 Treasurer and Vice President and Treasurer,
Secretary RWB/WPG U.S. Large Stock Fund and
[______] Tomorrow Funds Retirement Trust
Daniel Cardell* Vice President(6) Managing Director, WPG; Senior Vice
One New York Plaza President and Director of Equities for
New York, NY 10004 the Bank of America prior thereto
7/31/57
Janet A. Fiorenza* Vice President(1) Managing Director, WPG
One New York Plaza
New York, NY 10004
6/9/49
S. Blake Miller* Vice President(5) Principal, WPG
One New York Plaza
New York, NY 10004
3/4/65
R. Scott Richter* Vice Managing Director, WPG; Vice
One New York Plaza President(1,5) President, WPG Tax Free Money
New York, NY 10004 Market Fund
12/6/50
</TABLE>
- 55 -
<PAGE>
<TABLE>
<CAPTION>
NAME, ADDRESS AND POSITION(S) PRINCIPAL OCCUPATIONS DURING PAST
DATE OF BIRTH HELD FIVE YEARS
- ----------------- ----------- ---------------------------------
<S> <C> <C>
Joseph J. Reardon Vice President Senior Vice President, Mutual Fund
One New York Plaza Operations, WPG; Vice President,
New York, NY 10004 Tomorrow Funds Retirement Trust
4/4/60
[_________________]* Assistant Vice Assistant Manager, Mutual Fund
One New York Plaza President Operations, WPG since 1999; Assistant
New York, NY 10004 Vice President, Tomorrow Funds
Retirement Trust
[--------]
Therese Hogan Assistant Manager, State Regulation, First Data
First Data Investor Secretary Investor Services Group, Inc. since June
Services Group 1994; Senior Legal Assistant, Palmer &
53 State Street Dodge prior thereto
Boston, MA 02109
2/27/62
<FN>
- ------------
(1). Tax Free Money Market Fund.
(2). Growth and Income Fund.
(3). Tudor Fund.
(4). International Fund.
(5). Municipal Fund.
(6). Quantitative Fund.
</FN>
</TABLE>
COMPENSATION OF TRUSTEES AND OFFICERS
The funds pay no compensation to their Trustees affiliated with the
Adviser or to their officers. None of the Trustees or officers have engaged in
any financial transactions with any fund or with the Adviser during the past
fiscal year (other than the purchase and redemption of fund shares) and except
that certain Trustees and officers who are managing directors or directors of
the Adviser may, from time to time, purchase and sell ownership interests in the
Adviser.
The table on the following page sets forth the compensation paid to the Trustees
for the funds' fiscal years ended December 31, 1998.
- 56 -
<PAGE>
AGGREGATE COMPENSATION FROM*
<TABLE>
<CAPTION>
GOVERN- TAX
MENT FREE GROWTH
MONEY MONEY CORE AND
MARKET MARKET MUNICIPAL BOND INCOME
NAME OF TRUSTEE FUND FUND FUND FUND FUND
- --------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Roger J. Weiss $0 $0 $0 $0 $0
Raymond R. Herrmann, Jr. 2,625 2,625 2,625 2,625 2,625
Lawrence J. Israel 2,625 2,625 2,625 2,625 2,625
Graham E. Jones 2,625 2,625 2,625 2,625 2,625
Paul Meek 2,625 2,625 2,625 2,625 2,625
William B. Ross 2,625 2,625 2,625 2,625 2,625
Robert A. Straniere 2,625 2,625 2,625 2,625 2,625
Harvey Sampson*** 1,625 1,625 1,625 1,625 1,625
PENSION OR
RETIREMENT TOTAL
BENEFITS COMPENSATION
ACCRUED AS FROM THE
PART OF FUNDS AND
TUDOR INTERNATIONAL QUANTITATIVE FUNDS' OTHER FUNDS
NAME OF TRUSTEE FUND FUND FUND EXPENSES IN COMPLEX**
- --------------- ---- ---- ---- -------- ----------
Roger J. Weiss $0 $0 $0 $0 $0
Raymond R. Herrmann, Jr. 2,625 2,625 2,625 0 29,000
Lawrence J. Israel 2,625 2,625 2,625 0 29,000
Graham E. Jones 2,625 2,625 2,625 0 23,375
Paul Meek 2,625 2,625 2,625 0 21,500
William B. Ross 2,625 2,625 2,625 0 21,500
Robert A. Straniere 2,625 2,625 2,625 0 21,500
Harvey Sampson*** 1,625 1,625 1,625 0 19,125
<FN>
- ------------
*IN ADDITION TO THE COMPENSATION PAID DURING 1998 BY THE FUNDS TO THE TRUSTEES,
THE FUNDS PAID DEFERRED COMPENSATION TO WILLIS WINN, A FORMER TRUSTEE, AS
FOLLOWS: GROWTH AND INCOME FUND - $1,045; TUDOR FUND - $1,045; CORE BOND FUND -
$799; GOVERNMENT MONEY MARKET FUND - $583; TAX FREE MONEY MARKET FUND - $583;
INTERNATIONAL FUND - $390; AND QUANTITATIVE FUND - $74.
**AS OF DECEMBER 31, 1998, THERE WERE 12 MUTUAL FUNDS IN THE WEISS, PECK & GREER
GROUP OF FUNDS (INCLUDING THE TOMORROW(R) FUNDS) THAT PUBLICLY OFFER THEIR
SHARES.
***EFFECTIVE APRIL 23, 1998, MR. SAMPSON IS NO LONGER A TRUSTEE OF THE FUNDS.
</FN>
</TABLE>
- 57 -
<PAGE>
BENEFICIAL OWNERSHIP TABLE
AS OF FEBRUARY ___,1999
<TABLE>
<CAPTION>
Trustees & Officers WPG WPG Advisory Accts(1) WPG Disclaims
------------------------- ------------------------ --------------------------- ---------------------------
SHARES % SHARES % SHARES % SHARES %
------ - ------ - ------ - ------ -
<S> <C> <C> <C> <C> <C> <C> <C>
Gov't M/M * 0 0 323,361,000 82.5% 321,548,000 99.4%
TFMM * 0 0 78,054,000 51.7% 78,054,000 100.0%
Muni * 0 0 1,021,429 49.6% 1,021,429 100.0%
Core * 1,136 0.0% 7,196,381 50.4% 7,179,628 99.8%
G&I * 278 0.0% 1,590,425 39.9% 1,550,391 97.5%
Tudor * 5,472 0.1% 590,050 11.4% 574,343 97.3%
Int'l 13,327 2.1% 1,148 0.2% 396,017 60.9% 391,066 98.7%
Quant * 0 0 6,079,299 48.8% 5,948,414 97.8%
<FN>
- -----------------
*AS OF JANUARY 31, 1999, THE TRUSTEES AND OFFICERS OF EACH FUND AS A GROUP
BENEFICIALLY OWNED NOT MORE THAN 1% OF THE OUTSTANDING SHARES OF EACH FUND.
1WPG ADVISORY ACCOUNTS ARE ADVISORY ACCOUNTS OVER WHICH WPG OR ITS AFFILIATES
HAVE DISCRETIONARY INVESTMENT AUTHORITY AND/OR DISCRETIONARY AUTHORITY TO VOTE
THE SECURITIES HELD IN SUCH ACCOUNTS.
</FN>
</TABLE>
- 58 -
<PAGE>
CERTAIN SHAREHOLDERS
As of February___, 1999, no person within the knowledge of the management
of the funds directly or indirectly owned, controlled or held with power to vote
5% or more of the outstanding voting securities (i.e., shares) of any fund,
except as set forth below:
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS OUTSTANDING SHARES
- ---------------- ------------------
<S> <C>
CORE BOND FUND
9.1%
Key Trust Co Ttee FBO
Bricklayers Allied Craftsmen
Local 83 Pen/PL
A/C 40009500
P. O. Box 94871
Cleveland, OH 44101-4871
The Trust Co. of Toledo 7.7%
Successor Ttee for
Toledo Roofers Local 134
Pen Plan dtd 7/6/83
6135 Trust Drive Ste. 206
Holland, OH 43528
The Trust Co. of Toledo NA 7.4%
Ttee. Toledo Plumbers Local
#50 Pension & Retirement Option C
Attn: Lenore Peterson
6135 Trust Drive, Suite #206
Holland, OH 43528
LaSalle National Bank 6.5%
Custodian Edgewater Medical Center
P. O. Box 1443
Chicago, IL 60690
Oneal Steel Co. Pension Trust 5.8%
Southtrust Corp - Trust Ops
Attn: Lisa Dark
P.O. Box 2554
Birmingham, AL 35290
</TABLE>
-59-
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS OUTSTANDING SHARES
- ---------------- ------------------
<S> <C>
GROWTH AND INCOME FUND
Star Creations Hong Kong Ltd. 10.8%
Ugland House
P.O. Box 309
Georgetown Grand Cayman BWI
Sunbelt Beverage Corporation* 6.6%
Profit Sharing Plan
4601 Hollins Ferry Rd.
Baltimore, MD 21227
Charles Schwab & Co., Inc. 6.0%
Reinvestment Account
101 Montgomery Street
San Francisco, CA 94101
WPG GOVERNMENT MONEY MARKET FUND
Stephen H. Weiss 7.8%
One New York Plaza
New York, NY 10004
INTERNATIONAL FUND
Gussman Investments 11.2%
Nadel & Gussman Oil Producers
First National Tower 32nd Floor
Tulsa, OK 74103
Petropower 7.2%
Nadel & Gussman Oil Producers
First National Tower
Tulsa, OK 74103
Boston and Co.
5.1%
FPRF 1744332
Mutual Fund Operations
P. O. Box 3198
Pittsburgh, PA 15230-3198
MUNICIPAL FUND
James J. Shea Jr. & 6.4%
Marisa Shea Ttees
FBO The Shea Family Trust
UTD 06/15/87
42-600 Bob Hope Drive. #406
Rancho Mirage, CA 92270
<FN>
- --------
*Mr. Herrmann, a non-interested Trustee of each fund, is Chairman of the
Board of Sunbelt Beverage Corporation. Mr. Herrmann disclaims beneficial
ownership of more than 99% of the shares held by the Sunbelt Beverage
Corporation's Profit Sharing Plan.
</FN>
</TABLE>
- 60 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS OUTSTANDING SHARES
- ---------------- ------------------
<S> <C>
QUANTITATIVE FUND
The Trust Co. of Toledo NA 34.1%
Ttee. Toledo Plumbers Local
#50 Pension & Retirement Pool A
Attn: Lenore Peterson
6135 Trust Drive, Suite #206
Holland, OH 43528
Star Creations Hong Kong Ltd. 12.5%
Ugland House
P.O. Box 309
Georgetown Grand Cayman BWI
</TABLE>
HOW TO PURCHASE SHARES
(See "How to Purchase Shares" in the prospectus.)
The offering of shares of each fund is continuous. A fund may terminate
the continuous offering of its shares and may refuse to accept any purchase
order at any time at the discretion of its Trustees. Shares of the funds may be
purchased from the funds directly by an investor or may be purchased on behalf
of an investor by WPG or another broker-dealer or, in the case of Core Bond Fund
and International Fund, by a Service Organization. An investor directly
purchasing a fund's shares should complete and execute the subscription form
included with the prospectus in accordance with the instructions in the
prospectus. Investors purchasing a fund's shares through WPG, another
broker-dealer or a Service Organization should contact WPG, the broker-dealer or
the Service Organization, as appropriate, directly by mail or by telephone for
appropriate instructions.
In the case of telephone subscriptions, if full payment for telephone
subscriptions is not received by the fund within the customary time period for
settlement then in effect after the acceptance of the order by the fund, the
order is subject to cancellation and the purchaser will be liable to the
affected fund for any loss suffered as a result of such cancellation. To recoup
such loss each fund reserves the right to redeem shares owned by any shareholder
whose purchase order is cancelled for non-payment, and such purchaser may be
prohibited from placing further telephone orders.
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<PAGE>
The purchaser of a fund's shares pays no sales load or underwriting
commission with respect to an investment in the fund. If a subscription or
redemption is arranged and settlement made through a member of the National
Association of Securities Dealers, Inc. ("NASD"), then that member may, in its
discretion, charge a fee for this service. Service Organizations may receive
fees for certain administrative services which they perform for the Core Bond
Fund and International Fund and may also charge their customers fees for
automatic investment, redemption or other services provided to the customers.
Information concerning services and customer charges will be provided by the
particular Service Organization to any customer who must authorize the purchase
of a fund's shares prior to such purchase.
Shares of the funds may be transferred upon delivery to the Transfer
Agent of appropriate written instructions which clearly identify the account and
the number of shares to be transferred. Such instructions must be signed by the
registered owner and must be accompanied by certificates for the shares, if any,
which are being transferred, duly endorsed, or with an executed stock power. No
signature guarantee will be required on a transfer request if the proceeds of
the transfer are requested to be made payable to the shareholder of record and
sent to the record address of such shareholder. Otherwise, the signature on the
letter of instructions and the share certificates or the stock power must be
guaranteed, and otherwise be in good order for purposes of transfer. The funds
are not bound to record any transfer until all required documents have been
received by the Transfer Agent.
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.
In addition to the Transfer Agent, each fund has authorized one or more
brokers and dealers to accept on its behalf orders for the purchase and
redemption of fund shares. Under certain conditions, such authorized brokers and
dealers may designate other intermediaries to accept orders for the purchase and
redemption of fund shares. In accordance with a position taken by the staff of
the SEC, such purchase and redemption orders are considered to have been
received by a fund when accepted by the authorized broker or dealer or, if
applicable, the authorized broker's or dealer's designee. Also in accordance
with the position taken by the staff of the SEC, such purchase and redemption
orders will receive the appropriate fund's net asset value per share next
computed after the purchase or redemption order is accepted by the authorized
broker or dealer or, if applicable, the authorized broker's or dealer's
designee.
LIMITS ON FUND SHARE TRANSACTIONS
In order to reduce the investment performance effect of excessive
shareholder trading in shares of the Weiss, Peck & Greer Equity Funds (as
defined below) and to minimize the funds' transaction expenses, WPG has adopted
a policy of limiting the number of shareholder exchange and purchase/redemption
transactions by any one account (or group of accounts under common management)
involving Weiss, Peck & Greer Equity Funds ("Equity Share Transactions"), to a
total of six such transactions per calendar year, computed on a multi-fund
basis. Equity Share Transactions subject to this limit are: (a) exchanges into
or out of any Weiss, Peck & Greer Equity Fund; and (b) any pair of transactions
involving a purchase followed by a redemption for offsetting or substantially
similar amounts, in any one Weiss, Peck & Greer Equity Fund.
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<PAGE>
The "Weiss, Peck & Greer Equity Funds" currently include WPG Tudor Fund,
WPG Growth and Income Fund, Weiss, Peck & Greer International Fund and WPG
Quantitative Equity Fund. This limit does not apply to any transactions solely
among or solely involving WPG Core Bond Fund, WPG Government Money Market Fund,
WPG Tax Free Money Market Fund and the WPG Intermediate Municipal Bond Fund.
If the transaction activity in any account or group of accounts under
common management exceeds this limit, the applicable fund may, at its
discretion, refuse additional purchase orders, or the purchase portion of
additional exchange orders, as the case may be, with respect to such account or
group of accounts for the remainder of the calendar year. Redemption orders will
not be refused.
"IN-KIND" PURCHASES
The shares of a fund may be purchased, in whole or in part, by delivering
to the fund securities that (a) meet the investment objective and policies of
that fund, (b) have readily available market prices and quotations, (c) are
liquid securities not restricted as to transfer and (d) are otherwise acceptable
to the Adviser and the fund, which reserve the right to reject all or any part
of the securities offered in exchange for shares of such fund. An investor who
wishes to make an "in-kind" purchase should furnish to the
fund a list with a full and exact description of all of the securities which he
proposes to deliver. The market value of securities accepted in exchange must be
at least equal to the initial or additional purchase minimum. The fund will
specify those securities which it is prepared to accept and will provide the
investor with the necessary forms to be completed and signed by the investor.
The investor should then send the securities, in proper form for transfer, with
the necessary forms to the fund's custodian and certify that there are no legal
or contractual restrictions on the free transfer and sale of the securities. The
securities will be valued as of the close of business on the day of receipt by
the fund in the same manner as portfolio securities of the fund are valued. See
"Net Asset Value." The number of full and fractional fund shares having a net
asset value (as next determined following receipt of the securities) equal to
the value of the securities delivered by the investor will be issued to the
investor, less any applicable stock transfer taxes. A fund will acquire such
securities for investment purposes only and not for immediate resale. The
exchange of securities by the investor for shares of a fund is a taxable
transaction that may result in recognition of gain or loss on the securities so
exchanged for federal, state and local income tax purposes. Investors should
consult their own tax advisers in light of their particular tax situations.
REDEMPTION OF SHARES
(See "How to Redeem Shares" in the prospectus.")
Any shareholder of a fund is entitled to require the fund to redeem all
or part of his shares. It is suggested that all redemption requests be sent by
certified mail, return receipt requested. Investors whose shares are purchased
through their accounts at WPG, a broker-dealer or a Service Organization may
redeem all or a part of their shares in accordance with instructions pertaining
to such accounts. It is the responsibility of WPG, the broker-dealer or the
Service Organization to transmit the redemption order and credit its customer's
account with the redemption proceeds on a timely basis. Other investors may
redeem all or part of their shares in accordance with the procedures
detailed in the prospectus.
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<PAGE>
The redemption price, which may be more or less than the price paid by
the shareholder for his shares, is the net asset value per share next determined
after a written request for redemption in proper form is received by First Data
Investor Services Group, Inc. (the "Transfer Agent") or the fund. Redemptions
are taxable transactions for shareholders who are subject to tax. There is no
redemption charge imposed by any fund with respect to the redemption of shares.
Redemption requests which are not in proper form will be returned to the
shareholder for correction. Redemptions will not become effective until all
documents in proper form have been received by the Transfer Agent. The Transfer
Agent will reject redemption requests unless checks (including certified checks
or cashier's checks) received for shares purchased have cleared (which may take
up to fifteen days). To prevent such rejection, an investor may contact the fund
or the Transfer Agent to arrange for payment for shares in cash or another form
of immediately available funds.
The redemption price may be paid in cash or portfolio securities, at each
fund's discretion. The funds have, however, elected to be governed by Rule 18f-1
under the 1940 Act pursuant to which each fund is obligated to redeem shares
solely in cash up to the lesser of $250,000 or 1% of the net asset value of the
fund during any 90-day period for any one shareholder. Should redemptions by any
shareholder exceed such limitation, a fund will have the option of redeeming the
excess in cash or portfolio securities. In the latter case, the securities are
taken at their value employed in determining the redemption price and the
shareholder may incur a brokerage charge when the shareholder sells the
securities he receives. The selection of such securities will be made in such
manner as the officers of the affected fund deem fair and reasonable.
Payment for redeemed shares normally will be made after receipt by the
Transfer Agent of a written request for redemption in proper form as more fully
described in the prospectus. Normally redemption proceeds are paid by check and
mailed to the shareholder of record. Shareholders may elect to have payments
wired to their bank, unless their bank cannot receive federal reserve wires.
(Please contact the funds for further information on wire charges.) Such payment
may be postponed, and the right of redemption suspended during any period when:
(a) trading on the New York Stock Exchange ("NYSE") is restricted as determined
by the applicable rules and regulations of the SEC or the NYSE is closed for
other than weekends and holidays; (b) the SEC has, by order, permitted such
suspension; or (c) an emergency, as defined by rules and regulations of the SEC,
exists, making disposal of portfolio securities or valuation of net assets of
the fund not reasonably practicable.
NET ASSET VALUE
(See "How Each Fund's Net Asset Value is Determined" in the prospectus.)
The net asset value of each Fund is determined once daily, Monday through
Friday (when the NYSE is open for regular trading) on each day (other than a day
during which no shares of the applicable Fund were tendered for redemption and
no order to purchase or sell shares of that Fund was received) in which there is
a sufficient degree of trading in that Fund's portfolio securities that the
current net asset value of that Fund's shares might be
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<PAGE>
materially affected. Such determination is made as of the close of regular
trading on the NYSE, normally 4:00 P.M. New York City time. In addition,
Government Money Market Fund and Tax Free Money Market Fund calculate their net
asset value per share as of 12:00 P.M. New York City time on those days on which
the NYSE is open for regular trading and on which a purchase order for fund
shares and related federal funds wire is received prior to 12:00 P.M. New York
City time. The net asset value per share is calculated by dividing the value of
a fund's securities, cash and other assets (including dividends accrued but not
collected) less all of its liabilities (including options and accrued expenses
but excluding capital and surplus), by the total number of shares outstanding,
the result being rounded to the nearest cent. All expenses of a fund are accrued
daily and taken into account for the purpose of determining the net asset value.
The NYSE is not open for trading on weekends or on New Year's Day (January 1),
Dr. Martin Luther King, Jr. Day (the third Monday in January), Presidents' Day
(the third Monday in February), Good Friday, Memorial Day (the last Monday in
May), Independence Day (July 4), Labor Day (the first Monday in September),
Thanksgiving Day (the fourth Thursday in November) and Christmas Day (December
25).
The public offering price of a fund's shares is the net asset value per
share next determined after receipt of an order. Orders for shares which have
been received by a fund or the Transfer Agent prior to the close of regular
trading of the NYSE are confirmed at the offering price effective at the close
of regular trading of the NYSE on that day, while orders received subsequent to
the close of regular trading of the NYSE will be confirmed at the offering price
effective at the close of regular trading of the NYSE on the next day on which
the net asset value is calculated.
Portfolio securities traded on more than one U.S. national securities
exchange or on a U.S. exchange and a foreign securities exchange are valued at
the last sale price from the exchange representing the principal market for such
securities on the business day when such value is determined. The value of all
assets and liabilities expressed in foreign currencies will be converted into
U.S. dollar values at currency exchange rates determined by the fund's custodian
to be representative of fair levels at times prior to the close of trading on
the NYSE. Trading in securities on European and Far Eastern securities exchanges
and over-the-counter markets is normally completed well before the close of
business on the NYSE and may not take place on all business days that the NYSE
is open and may take place on days when the NYSE is closed. Events affecting the
values of portfolio securities that occur between the time their prices are
determined and the close of regular trading on the NYSE will not be reflected in
a fund's calculation of net asset value unless the Adviser determines that the
particular event would materially affect net asset value, in which case an
adjustment may be made.
THE NON-MONEY MARKET FUNDS
In determining the net asset value of each non-Money Market Fund,
securities, options on securities, futures contracts and options thereon which
are listed or admitted to trading on a national exchange, are valued at their
last sale on such exchange prior to the time of determining net asset value; or
if no sales are reported on such exchange on that day, at the mean between the
most recent bid and asked price. Securities listed on more than one exchange
shall be valued on the exchange on which the security is most extensively
traded. Unlisted securities for which market quotations are readily available
are valued at the mean between the most recent bid and asked prices. Other
securities and assets for which market quotations are not readily available are
valued at their fair value as determined in good faith by the funds' Valuation
Committee as authorized by the Boards.
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Bonds and other fixed income securities (other than short-term
obligations but including listed issues) in a fund's portfolio are valued at
fair market value on the basis of valuations furnished by a pricing service
which utilizes both dealer-supplied valuations and electronic data processing
techniques which take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other market
data, without exclusive reliance upon quoted prices or exchange or
over-the-counter prices, when such valuations are believed to reflect the fair
value of such securities.
For purposes of determining the net asset value of the funds' shares,
options transactions will be treated as follows: When a fund sells an option, an
amount equal to the premium received by that fund will be included in that
fund's accounts as an asset and a deferred liability will be created in the
amount of the option. The amount of the liability will be marked to the market
to reflect the current market value of the option. If the option expires or if
that fund enters into a closing purchase transaction, that fund will realize a
gain (or a loss if the cost of the closing purchase exceeds the premium
received), and the related liability will be extinguished. If a call option
contract sold by a fund is exercised, that fund will realize the gain or loss
from the sale of the underlying security and the sale proceeds will be increased
by the premium originally received.
THE MONEY MARKET FUNDS
Pursuant to a Rule of the SEC, each Money Market Fund's portfolio
securities are valued using the amortized cost method of valuation to seek to
maintain a constant net asset value of $1.00 per share. This method involves
valuing a security at cost on the date of acquisition and thereafter assuming a
constant accretion of a discount or amortization of a premium to maturity,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price that a Money Market Fund would receive if it sold the
instrument. During such periods, the yield to investors in a Money Market Fund
may differ somewhat from that obtained in a similar investment company which
uses available market quotations to value all of its portfolio securities.
During periods of declining interest rates, the quoted yield on shares of a
Money Market Fund may tend to be higher than a like computation made by a fund
with identical investments utilizing a method of valuation based upon market
prices and estimates of market prices for all of its portfolio instruments.
Thus, if the use of amortized cost by a Money Market Fund resulted in a lower
aggregate portfolio value on a particular day, a prospective investor in the
fund would be able to obtain a somewhat higher yield if he or she purchased
shares of the fund on that day, than would result from investment in a fund
utilizing solely market values, and existing investors in the fund would receive
less investment income. The converse would apply in a period of rising interest
rates.
The Board of Trustees of Funds Trust has established procedures designed to
stabilize, to the extent reasonably possible, each Money Market Fund's price per
share as computed for the purpose of sales and redemptions at $1.00. Such
procedures include review of the Money Market Funds' respective portfolio by the
Board, at such intervals as they deem appropriate, to determine whether the
funds' net asset values per share calculated by using available market
quotations or market equivalents (the determination of value by reference to
interest rate levels, quotations of comparable securities and other factors)
deviate from $1.00 per share based on amortized cost. If such deviation exceeds
1/2 of 1%, the Board will promptly consider what action, if any, will be
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initiated. In the event that the Board determines that a deviation exists which
may result in material dilution or other unfair results to investors or existing
shareholders of either Money Market Fund, it will take such corrective action as
it regards to be necessary and appropriate, including the sale of portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
average portfolio maturity; withholding part or all of dividends or payment of
distributions from capital or capital gains; redemptions of shares in kind; or
establishing a net asset value per share by using available market quotations or
equivalents. In addition, in order to stabilize the net asset value per share at
$1.00 the Board has the authority (1) to reduce or increase the number of shares
outstanding on a pro rata basis, and (2) to offset each shareholder's pro rata
portion of the deviation between the net asset value per share and $1.00 from
the shareholder's accrued dividend account or from future dividends. Further,
the Board may authorize an affiliate of the Money Market Funds to purchase from
a Money Market Fund any security that is not an "eligible security" in
accordance with Rule 2a-7 under the 1940 Act. Each Money Market Fund may hold
cash for the purpose of stabilizing its net asset value per share. Holdings of
cash, on which no return is earned, would tend to lower the yield on a Money
Market Fund's shares.
Generally, in order to continue to use the amortized cost method of
valuation, the Money Market Funds' respective investments, including repurchase
agreements, must be U.S. dollar-denominated instruments which the Board
determines present minimal credit risks and which are of high quality (i.e., two
highest ratings) as determined by two nationally recognized statistical rating
organizations or, in the case of any instrument that is not so rated, of
comparable quality as determined by the Board. Each Money Market Fund must also
comply with certain other conditions, including certain diversification
requirements, and must maintain a dollar-weighted average portfolio maturity
(not more than 90 days) appropriate to its objective of maintaining a stable net
asset value of $1.00 per share and generally may not purchase any instrument
with a remaining maturity of more than 397 days. Should the disposition of a
portfolio security result in a dollar-weighted average portfolio maturity of
more than 90 days, a Money Market Fund will invest its available cash in such a
manner as to reduce such maturity to 90 days or less as soon as reasonable
practicable. The Adviser will periodically review this method of valuation and
recommend changes to the Board which may be necessary to assure that the
portfolio instruments are valued at their fair value as determined by the Board
in good faith.
INVESTOR SERVICES
The funds offer a variety of services, as described in Appendix B and in
the sections that follow, designed to meet the needs of their shareholders. The
costs of providing such services are borne by the funds, except as otherwise
specified below. Further information on each service is set forth in the
prospectus under the caption "Shareholder Services."
AUTOMATIC REINVESTMENT PLAN
For the convenience of a fund's shareholders and to permit shareholders
to increase their shareholdings in a fund, the funds' Transfer Agent is, unless
otherwise specified, appointed in the subscription form by the investor as an
agent to receive all dividends and capital gains distributions and to reinvest
them in shares (or fractions thereof) of the applicable fund, at the net asset
value per share next determined after the record date for the dividend or
distribution. The investor may, of course, terminate such agency agreement at
any time by written notice to the Transfer Agent, and direct the Transfer Agent
to have dividends or capital gains distributions, or both, if any, sent to him
in cash rather than reinvested in shares of the applicable fund. The funds or
Transfer Agent may also terminate such agency agreement, and the funds have the
right to appoint a successor Transfer Agent.
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EXCHANGE PRIVILEGE
Shares of a fund may be exchanged by mail for shares of any other fund at
their relative net asset values. Shareholders may exchange shares by telephone
or telegram once the Telephone Authorization Section of the account application
has been completed and filed with the Transfer Agent and it has been accepted.
To exchange shares by telephone, call 1-800-223-3222 between the hours of 9:00
A.M. and 4:00 P.M. Eastern time on any day that the funds are open for business.
A current prospectus, which may be obtained from a fund, should be read in
advance of any investment in any fund. For tax purposes, an exchange involves a
redemption of shares, which is a taxable transaction for shareholders who are
subject to tax. Signatures on the written authorization to exchange by telephone
or telegram must be guaranteed in the same manner as set forth under "How to
Purchase Shares." However, for exchanges by mail, no guarantee is required if
the exchange is being made into an identically registered account. The exchange
privilege is available only in those jurisdictions where shares of the funds may
be legally sold. When establishing a new account by an exchange, the value of
the shares redeemed must meet the minimum initial investment requirement of the
funds involved. In addition, the exchange privilege is available only when
payment for the shares to be redeemed has been made. Exchange requests will not
be accepted for shares purchased by check until such check clears which could be
up to 15 days from the date that the shares were purchased. If for these or
other reasons the exchange cannot be effected, the shareholder will be so
notified.
This service is intended to provide shareholders with a convenient way to
switch their investments when their objectives or perceived market conditions
suggest a change. The exchange privilege is not meant to afford shareholders an
investment vehicle to play short-term swings in the stock market by engaging in
frequent transactions in and out of the funds. Shareholders who engage in such
frequent transactions may be prohibited from or restricted in placing future
exchange orders. See "HOW TO REDEEM SHARES --Excessive Trading" in the
prospectus and "HOW TO PURCHASE SHARES --Limits On Fund Share Transactions"
above for limitations on exchanges and trading in the funds' shares.
AUTOMATIC INVESTMENT PLAN
The Automatic Investment Plan enables investors to make regular (monthly
or quarterly) investments of $50 or more in shares of any fund (except for the
Quantitative Fund) through an automatic withdrawal from your designated bank
account by simply completing the Automatic Investment Plan application. Please
call 1-800-223-3332 or write to WPG to receive this form. By completing the
form, you authorize the funds' Custodian to periodically draw money from your
designated account, and to invest such amounts in account(s) with the fund(s)
specified. The transaction will be automatically processed to your mutual fund
account on or about the first business day of the month or quarter you
designate.
If you elect the Automatic Investment Plan, please be aware that: (1) the
privilege may be revoked without prior notice if any check is not paid upon
presentation; (2) the funds' Custodian is under no obligation to notify you as
to the non-payment of any check, and (3) this service may be modified or
discontinued by the funds' Custodian upon thirty (30) days' written notice to
you prior to any payment date, or may be discontinued by you by written notice
to the Transfer Agent at least ten (10) days before the next payment date.
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SWEEP PROGRAM
Shares may be purchased through a sweep program under which funds in a
customer's private account with WPG are automatically invested in shares of the
Government Money Market Fund or the Tax Free Money Market Fund. Under this
program, funds deposited in a private account with WPG usually are invested
daily in the customer's account with the Government Money Market Fund or the Tax
Free Money Market Fund. The funds expect that WPG will transmit orders for the
purchase of a fund's shares on the same day that funds are swept from the
private account. The Sweep Program is serviced by WPG's outside service bureau,
ADP, in connection with the funds' Custodian. An account statement will be
generated through WPG.
SYSTEMATIC WITHDRAWAL PLAN
Redemption of shares for such purposes may reduce or even liquidate the
account, particularly in a declining market. Such payments paid to a shareholder
cannot be considered a yield or income on the investment. Payments to a
shareholder in excess of distributions of investment income will constitute a
return of his invested principal, and liquidation of shares pursuant to this
Plan is a redemption, which is a taxable transaction for shareholders who are
subject to tax.
Withdrawals at the same time as regular purchases of a fund's shares
ordinarily will not be permitted since purchases are intended to accumulate
capital and the Systematic Withdrawal Plan is designed for the regular
withdrawal of funds, except that a shareholder may make lump sum investments, of
$5,000 or more. The Systematic Withdrawal Plan may be terminated by the
shareholder, without penalty, at any time and the funds may terminate the Plan
at will. There are no contractual rights on the part of either party with
respect to the Plan.
DIVIDENDS, DISTRIBUTIONS AND
TAX STATUS
Each fund is separate for investment and accounting purposes and is treated
as a separate entity for federal income tax purposes. A regulated investment
company qualifying under Subchapter M of the Code is not subject to federal
income tax on distributed amounts to the extent that it distributes its taxable
and tax-exempt net investment income and net realized capital gains in
accordance with the timing and other requirements of the Code. Each fund intends
to qualify and be treated as a regulated investment company for each taxable
year.
Qualification of a fund for treatment as a regulated investment company
under the Code requires, among other things, that (a) at least 90% of the fund's
gross income for its taxable year, without offset for losses from the sale or
other disposition of stock or securities or other transactions, be derived from
interest, payments with respect to securities loans, dividends and gains from
the sale or other disposition of stock or securities or foreign currencies, or
other income (including but not limited to gains from options, futures, or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies; (b) the fund distribute for its taxable year
(in accordance with the Code's timing and other requirements) to its
shareholders as dividends at least 90% of the sum of its taxable and tax-exempt
net investment income, the excess of net short-term capital gain over net
long-term capital loss earned in such year and any other net income (except for
the excess, if any, of net long-term capital gain over net short-term capital
loss, which need not be distributed in order for the fund to qualify as a
regulated investment company but is taxed to the fund if it is not distributed);
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and (c) the fund diversify its assets so that, at the close of each quarter of
its taxable year, (i) at least 50% of the fair market value of its total (gross)
assets is comprised of cash, cash items, U.S. Government securities, securities
of other regulated investment companies and other securities, with such other
securities limited in respect of any one issuer to no more than 5% of the fair
market value of the fund's total assets and 10% of the outstanding voting
securities of such issuer and (ii) no more than 25% of the fair market value of
its total assets is invested in the securities of any one issuer (other than
U.S. Government securities and securities of other regulated investment
companies) or of two or more issuers controlled by the fund and engaged in the
same, similar, or related trades or businesses.
Each fund intends to distribute at least annually to its shareholders all
or substantially all of its taxable income (if any) (including net realized
capital gains) and any net tax-exempt interest. Exchange control or other
foreign laws, regulations or practices may restrict repatriation of investment
income, capital or the proceeds of securities sales by foreign investors and may
therefore make it more difficult for a fund that invests in foreign securities,
such as the International Fund, to satisfy the distribution requirements
described above, as well as the excise tax distribution requirements described
below. However, each fund generally expects to be able to obtain sufficient cash
to satisfy such requirements from new investors, the sale of securities or other
sources. If for any taxable year a fund does not qualify as a regulated
investment company, it will be taxed on all of its taxable income at corporate
rates, its net tax-exempt interest (if any) may be subject to the alternative
minimum tax, and its distributions to shareholders will be taxable as ordinary
dividends to the extent of its current and accumulated earnings and profits.
Each fund is subject to a 4% nondeductible federal excise tax on amounts
required to be but not distributed under a prescribed formula. The formula
requires that a fund distribute (or be deemed to have distributed) to
shareholders during a calendar year at least 98% of the fund's ordinary income
(not including tax-exempt interest) for the calendar year, at least 98% of the
excess of its capital gains over its capital losses realized during the one-year
period ending October 31 during such year, as well as any income or gain (as so
computed) from the prior calendar year that was not distributed for such year
and on which the fund paid no federal income tax. Each fund has distribution
policies that should generally enable it to avoid liability for this tax.
Net investment income for a fund is the fund's investment income less its
expenses. Dividends from taxable net investment income, certain net realized
foreign currency gains, and the excess, if any, of net short-term capital gain
over net long-term capital loss of a fund will be taxed to shareholders as
ordinary income, and dividends from net long-term capital gain in excess of net
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short-term capital loss ("capital gain dividends") will be taxed to shareholders
as long-term capital gain, for federal income tax purposes. Dividends, including
capital gain dividends, 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 in which they are
declared. These dividends are paid after taking into account, and reducing the
distribution to the extent of, any available capital loss carryforwards. The
funds have the following capital loss carryforwards as of December 31, 1998,
showing amount(s) and expiration date(s) for each fund:
<TABLE>
<CAPTION>
AMOUNT YEAR OF
FUND (000'S) EXPIRATION
- ---- ------- ----------
<S> <C> <C>
Tax Free Money Market Fund $11 2001
Government Money Market Fund 2,014 2003
Core Bond Fund 14,662 2002
Tax Free Money Market Fund 1 2003
Core Bond Fund 20,113 2003
Core Bond Fund 153 2004
Tax Free Money Market Fund 3 2004
Tax Free Money Market Fund 4 2005
Tax Free Money Market Fund 1 2006
</TABLE>
Long-term capital gains of a fund are taxable to shareholders as long-term
capital gains if they are either distributed in the form of capital gain
dividends or retained by the fund and designated for treatment as capital gains
distributed to the shareholders. Capital gain dividends are not eligible for the
dividends-received deduction, which is described below. If any net realized
long-term capital gain in excess of net realized short-term capital loss is
retained by a fund for reinvestment, requiring federal income taxes to be paid
thereon by the fund, the fund will elect to treat such capital gains as having
been distributed to shareholders. As a result, each shareholder will report such
long- term capital gains as capital gains, will be able to claim his share of
federal income taxes paid by the fund on such gains as a credit against his own
federal income tax liability, and will be entitled to increase the adjusted tax
basis of his fund shares by the difference between his pro rata share of such
gains and his tax credit.
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Each year, each fund will notify shareholders of the tax status of its
dividends and distributions including, in the case of the Tax-Free Money Market
Fund and the Municipal Fund, a statement of the percentage of the prior calendar
year's distributions which the fund has designated as tax-exempt, the percentage
(if any) of such tax-exempt distributions treated as a tax-preference item for
purposes of the federal alternative minimum tax, and the source on a
state-by-state basis of all distributions of tax-exempt interest. Distributions
of interest income exempt for federal income tax purposes may also be exempt
under the tax laws of certain states or localities if derived from obligations
of such states or localities. Such an exemption may be subject to certain
concentration, designation, reporting or other requirements in certain
jurisdictions, which in some cases may not be satisfied by a fund. You may wish
to consult your tax adviser concerning the status in the states and localities
where you pay tax of exempt-interest dividends from the Tax Free Money Market
Fund and the Municipal Bond Fund.
A portion of the dividends from the Growth and Income Fund, Tudor Fund,
International Fund and Quantitative Fund may qualify for the 70%
dividends-received deduction for corporate shareholders. The portion of such
dividends which qualifies for such deduction is the portion, properly designated
by the funds, which is derived from dividends of U.S. domestic corporations with
respect to shares held by the funds that are not debt-financed and have been
held for tax purposes at least a minimum period, generally 46 days, extending
before and after each such dividend. The international fund does not expect to
have any significant investment in U.S. domestic corporations. The
dividends-received deduction for corporations will be reduced to the extent the
shares of a fund with respect to which the dividends are received are treated as
debt-financed under the code and will be eliminated if such shares are deemed to
have been held (for tax purposes) for less than the minimum period referred to
above with respect to each dividend. Shareholders will be informed of the
percentages of dividends which may qualify for the dividends-received deduction.
Dividends from funds other than the Growth and Income Fund, Tudor Fund,
International Fund and Quantitative Fund will not qualify for the
dividends-received deduction.
Section 1059 of the Code provides for a reduction in a stock's basis for
the untaxed portion (i.E., The portion qualifying for the dividends-received
deduction) of an "extraordinary dividend" if the stock has not been held at
least two years prior to the extraordinary dividend. Extraordinary dividends are
dividends paid during a prescribed period which equal or exceed 10 percent (5
percent for preferred stock) of the recipient corporation's adjusted basis in
the stock of the payor or which meet an alternative fair market value test. To
the extent that dividend payments by the Growth and Income Fund, Tudor Fund,
International Fund and Quantitative Fund to their corporate shareholders
constitutes extraordinary dividends, such shareholders' basis in their shares
will be reduced, and to the extent such basis would be reduced below zero,
current recognition of income may be required.
The excess, if any, of a corporation's "adjusted current earnings" over
its "alternative minimum taxable income" includes the amount of dividends, if
any, excluded from income by virtue of the 70% dividends-received deduction,
which may increase its alternative minimum tax liability.
If you invest in the Core Bond Fund, Government Money Market Fund, or
Growth and Income 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 intangible
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property taxes based on the extent of a fund's investment in such direct U.S.
Government obligations. Such an exemption may be subject to certain
concentration, designation, reporting or other requirements in certain
jurisdictions, which in some cases may not be satisfied by a fund. 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.
Dividends, including capital gain dividends, paid by a fund (except for
daily dividends paid by the Money Market Funds, the Core Bond Fund and the
Municipal Bond Fund) shortly after a shareholder's purchase of shares have the
effect of reducing the net asset value per share of his shares by the amount per
share of the dividend distribution. Although such dividends are, in effect, a
partial return of the shareholder's purchase price to the shareholder, they will
be subject to federal income tax as described above, except for exempt-interest
dividends (as defined below). Therefore, prior to purchasing shares an investor
should consider the impact of an anticipated dividend distribution.
Distributions from a fund's current or accumulated earnings and profits
("E&P"), as computed for federal income tax purposes, will be taxable as
described above whether taken in shares or in cash. Amounts that are not
allowable as a deduction in computing taxable income, including expenses
associated with earning tax-exempt interest income, do not reduce current E&P
for this purpose. Distributions, if any, in excess of E&P will constitute a
return of capital, which will first reduce an investor's tax basis in fund
shares and thereafter (after such basis is reduced to zero) will generally give
rise to capital gains. Shareholders electing to receive distributions in the
form of additional shares will have a cost basis for federal income tax purposes
in the shares so received equal to the amount of cash they would have received
had they elected to receive cash.
All dividends and capital gain dividends, whether received in shares or
in cash, must be reported by each taxable shareholder on his or her federal
income tax return. Shareholders are also required to report tax-exempt interest,
including exempt-interest dividends. Redemptions of shares, including exchanges
for shares of another fund, may result in tax consequences to the shareholder
and are also subject to these reporting requirements, except for the redemption
or other disposition of shares of the Money Market Funds with respect to which
no gain or loss is realized.
Equity options (including options on stock and options on narrow-based
stock indices) and over-the-counter options on debt securities written or
purchased by a fund will be subject to tax under Section 1234 of the Code. In
general, no loss is recognized by a fund upon payment of a premium in connection
with the purchase of a put or call option. The character of any gain or loss
recognized (i.E., Long-term or short-term) will generally depend, in the case of
a lapse or sale of the option, on the fund's holding period for the option, and
in the case of an exercise of the option, on the fund's holding period for the
underlying security. The purchase of a put option may constitute a short sale
for federal income tax purposes, possibly requiring the recognition of gain in
an appreciated substantially identical portfolio stock or security or causing an
adjustment in the holding period of such a stock or security in the fund's
portfolio. If a fund writes a put or call option, no gain is recognized upon its
receipt of a premium. If the option lapses or is closed out, any gain or loss is
generally treated as a short-term capital gain or loss. If a call option is
exercised, whether the gain or loss is long-term or short-term depends on the
holding period of the underlying stock or security. The exercise of a put option
written by a fund is not a taxable transaction for the fund.
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Futures contracts, including certain foreign currency futures contracts,
that are "regulated futures contracts," entered into by a fund and listed
non-equity options written or purchased by a fund (including options on debt
securities, options on futures contracts, options on securities indices, options
on broad-based stock indices, and certain foreign currency options), will be
governed by Section 1256 of the Code. Absent a tax election to the contrary,
gain or loss attributable to the lapse, exercise or closing out of any such
position (with the exceptions stated in the next paragraph) will be treated as
60% long-term and 40% short-term capital gain or loss, and on the last trading
day of a fund's taxable year, all outstanding Section 1256 positions will be
marked to market (i.e., treated as if such positions were closed out at their
closing price on such day), and any resulting gain or loss will be recognized as
60% long-term and 40% short-term capital gain or loss. Under certain
circumstances, entry into a futures contract to sell a security may constitute a
short sale for federal income tax purposes, causing an adjustment in the holding
period of the underlying security or a substantially identical security in a
fund's portfolio. Additionally, a fund may be required to recognize gain (which
is subject to tax distribution requirements) if an option, future, forward
contract, short sale or other transaction that is not marked to market under
Section 1256 of the code is treated as a constructive sale of an appreciated
financial position in the fund's portfolio.
Certain foreign currency forward contracts entered into by a fund may
also be subject to section 1256 of the code, which as described above generally
requires that contracts governed by Section 1256 be marked to market (i.e.,
Treated as if they were closed out at their closing price) on the last day of
the fund's taxable year, with any resulting gain or loss taken into account for
such year. Absent a tax election to the contrary that may be available for any
such contract that is not part of a straddle, this mark to market gain or loss,
as well as gain or loss from the actual closing out of or delivery under such a
contract, will generally be treated as ordinary income or loss. Gain or loss
from any foreign currency forward contracts, foreign currency futures contracts
or foreign currency options that are not subject to Section 1256 will also
generally be treated as ordinary income or loss.
Certain tax rules governing foreign currency activities and foreign
currency options, futures and forward contracts not directly related to a fund's
principal business of investing in stock or securities could require that these
activities be limited, under possible future Treasury regulations, in order to
satisfy the 90% test described above.
Positions of a fund which consist of at least one stock and at least one
stock option or other position with respect to a related security which
substantially diminishes the fund's risk of loss with respect to such stock
could be treated as a "straddle" which is governed by Section 1092 of the Code,
the operation of which may cause deferral of losses, adjustments in the holding
periods of stock or securities and conversion of short-term capital losses into
long-term capital losses. An exception to these straddle rules exists for any
"qualified covered call options" on stock written by a fund.
Positions of a fund which consist of at least one debt security not
governed by Section 1256 and at least one futures contract or listed non-equity
option governed by Section 1256 which substantially diminishes a fund's risk of
loss with respect to such debt security will be treated as a "mixed straddle."
Although mixed straddles are subject to the straddle rules of Section 1092 of
the code, certain tax elections exist for them which reduce or eliminate the
operation of these rules. Each fund will monitor its transactions in options,
futures and forward contracts and may make certain tax elections in order to
mitigate the operation of these rules.
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Foreign exchange gain or loss realized with respect to foreign
currency-denominated debt instruments, foreign currency forward contracts,
foreign currency-denominated payables and receivables and foreign currency
options and futures contracts (other than foreign currency options and futures
contracts that are governed by Section 1256 of the Code and for which no
election is made) are generally treated as ordinary income or loss under Section
988 of the Code.
The tax rules applicable to options, futures, currency forward contracts,
foreign currency transactions and constructive sales may affect the amount,
timing and character of a fund's income and, consequently, its distributions to
shareholders by causing holding period adjustments, converting short-term
capital losses into long-term capital losses, converting capital gain or loss
into ordinary income or loss, and accelerating a fund's income or gains or
deferring its losses.
The federal income tax rules applicable to dollar rolls and certain
structured or hybrid securities are not or may not be settled, and a fund may be
required to account for these transactions or investments in a manner that,
under certain circumstances, may limit the extent of its use of such
transactions or investments.
A fund's investment in zero coupon securities, capital appreciation bonds,
or other securities having original issue discount (or market discount, if the
fund elects to include market discount in income currently) will generally cause
it to realize income prior to the receipt of cash payments with respect to these
securities. The mark to market and constructive sale rules described above may
also require a fund to recognize income or gains without a concurrent receipt of
cash. In order to distribute this income or gains, maintain its qualification as
a regulated investment company, and avoid federal income or excise taxes, the
fund may be required to liquidate portfolio securities that it might otherwise
have continued to hold.
Investments in lower-rated securities, in which the Growth and Income
Fund and Tudor Fund may invest, may present special tax issues for a fund to the
extent actual or anticipated defaults may be more likely with respect to such
securities. Tax rules are not entirely clear about issues such as when a fund
may cease to accrue interest, original issue discount, or market discount; when
and to what extent deductions may be taken for bad debts or worthless
securities; how payments received on obligations in default should be allocated
between principal and income; and whether exchanges of debt obligations in a
workout context are taxable. These and other issues will be addressed by the
funds, in the event they invest in such securities, in order to reduce the risk
of distributing insufficient income to preserve their status as regulated
investment companies and seek to avoid becoming subject to federal income or
excise tax.
A fund, to the extent it invests in foreign securities, may be subject to
foreign withholding or other foreign taxes with respect to income (possible
including, in some cases, capital gains) derived from foreign securities. These
taxes may be reduced or eliminated under the terms of an applicable U.S. Income
tax treaty in some cases. However, the funds, other than the International Fund,
generally will not be eligible to pass through to shareholders these taxes and
any associated foreign tax credits or deductions for foreign taxes paid by such
funds that are not thus reduced or eliminated. Such funds generally will,
however, be entitled to deduct such taxes in computing their income subject to
tax (if any).
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The International Fund may qualify for and make the election permitted
under Section 853 of the Code so that shareholders will be able to claim a
credit or deduction on their federal income tax returns for, and will be
required to treat as amounts distributed to them (in addition to the dividends
and distributions they actually received), their pro rata portion of qualified
taxes paid by the fund to foreign countries (not in excess of the fund's actual
tax liability). Qualified taxes generally include only taxes that are treated as
income taxes under United States tax principles and therefore would not include,
for example, stamp taxes, securities transaction taxes, and similar taxes. The
shareholders of the International Fund may claim a foreign tax credit or
deduction by reason of the fund's election under Section 853 of the Code, if the
fund makes such an election, which is permitted only if more than 50% of the
value of the total assets of the fund at the close of its taxable year consists
of stocks or securities of foreign corporations. The foreign tax credit or
deduction available to shareholders is subject to the satisfaction of holding
period requirements (applicable to the credit at both the fund and shareholder
levels) and certain other requirements and limitations imposed under the code.
For instance, under Section 63 of the Code, no deduction for foreign taxes may
be claimed by shareholders who do not itemize deductions on their federal income
tax returns, although any such shareholder may claim a credit for foreign taxes
and in any event will be treated as having taxable income increased by the
shareholder's pro rata share of qualified foreign taxes paid by the fund if the
fund makes the election permitted under Section 853. If a shareholder chooses to
take a credit for the foreign taxes deemed paid by such shareholder, the amount
of the credit that may be claimed in any year may not exceed the same proportion
of the U.S. tax against which such credit is taken which the shareholder's
taxable income from foreign sources (but not in excess of the shareholder's
entire taxable income) bears to his entire taxable income. For this purpose,
long-term and short-term capital gains the fund realizes and distributes to
shareholders will generally not be treated as income from foreign sources in
their hands, nor will distributions of certain foreign currency gains subject to
section 988 of the code and of any other income realized by the fund that is
deemed, under the code, to be U.S.-source income in the hands of the fund. This
foreign tax credit limitation does not apply to individuals that meet certain
requirements for an exemption, including the requirement that the amount of
creditable foreign taxes not exceed $300 ($600 in the case of a joint return).
This foreign tax credit limitation may also be applied separately to certain
specific categories of foreign-source income and the related foreign taxes. As a
result of these rules, which have different effects depending upon each
shareholder's particular tax situation, certain shareholders may not be able to
claim a credit for the full amount of their proportionate share of the foreign
taxes paid by the fund. It should also be noted that, if the election is made, a
tax-exempt shareholder, like other shareholders, will be required to treat as
part of the amounts distributed its pro rata portion of the income taxes paid by
the fund to foreign countries. However, that income will generally be exempt
from taxation by virtue of such shareholder's tax-exempt status, and such a
shareholder will not be entitled to either a tax credit or a deduction with
respect to such income.
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If a fund acquires stock (including, under proposed regulations, an option
to acquire stock such as is inherent in a convertible bond) in certain foreign
corporations that receive at least 75% of their annual gross income from passive
sources (such as interest, dividends, certain rents and royalties, or capital
gain) or hold at least 50% of their assets in investments producing such passive
income ("passive foreign investment companies"), the fund could be subject to
federal income tax and additional interest charges on "excess distributions"
received from such companies or gain from the sale of stock in such companies,
even if all income or gain actually received by the fund is distributed on a
timely basis to its shareholders. The fund would not be able to pass through to
its shareholders any credit or deduction for such tax and interest charges.
Certain elections may be available to ameliorate these adverse tax consequences,
but any such election could require the fund to include certain amounts as
income or gain (subject to the distribution requirements described above)
without a concurrent receipt of cash. These investments could also result in the
treatment of associated capital gains as ordinary income. Each fund that is
permitted to acquire foreign investments may limit and/or manage its investments
in passive foreign investment companies to minimize its tax liability or
maximize its return from these investments.
Subchapter M of the Code permits the character of tax-exempt interest
distributed by a regulated investment company to flow through as "exempt-
interest dividends" that are treated as tax-exempt interest to its shareholders,
provided that at least 50% of the value of its assets at the end of each quarter
of its taxable year is invested in state, municipal and other obligations the
interest on which is excluded from gross income under Section 103(a) of the
Code. Each of the Municipal Bond Fund and Tax Free Money Market Fund intends to
satisfy this 50% requirement in order to permit its distributions of tax-exempt
interest to be treated as exempt-interest dividends under the Code.
Distributions to shareholders of tax-exempt interest earned by Municipal Bond
Fund and Tax Free Money Market Fund for the taxable year are therefore not
subject to regular federal income tax, although they may be subject to the
individual and corporate alternative minimum taxes described below.
A portion of the income that Tax Free Money Market Fund and Municipal
Bond Fund receive and distribute to shareholders may be subject to regular
federal, alternative minimum, state and local income taxes. Investments or
transactions that produce taxable income or gain would include options or
futures transactions, securities loans, repurchase agreements and when-issued or
forward- commitment transactions disposed of at a gain. Accrued market discount
that is required to be included in income with respect to securities acquired at
a market discount, e.g., upon a disposition of these securities, and a portion
of the discount from certain stripped tax-exempt obligations or their coupons is
also taxable.
Interest on indebtedness incurred by shareholders to purchase or carry
shares of the Tax Free Money Market Fund or Municipal Bond Fund will not be
deductible for federal income tax purposes to the extent it is deemed related to
exempt-interest dividends paid by such funds. Under rules used by the internal
revenue service to determine when borrowed funds are used for the purpose of
purchasing or carrying particular assets, the purchase of shares may be
considered to have been made with borrowed funds even though the borrowed funds
are not directly traceable to the purchase of shares.
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Section 147(a) of the Code prohibits exemption from taxation of interest
on certain governmental obligations to persons who are "substantial users" (or
persons related thereto) of facilities financed by such obligations. Neither Tax
Free Money Market Fund nor Municipal Bond Fund has undertaken or will undertake
any investigation as to the users of the facilities financed by bonds in their
respective portfolios, and these funds may not be appropriate investments for
substantial users (or related persons) of such facilities.
Distributions of tax exempt income are taken into account in computing
the portion, if any, of social security and railroad retirement benefits subject
to federal and, in some cases, state taxes.
Several provisions of federal tax law were enacted principally in the
1970's and 1980's that may affect the supply of, and the demand for, tax-exempt
bonds, as well as the tax-exempt nature of interest paid thereon. For example:
(i) Interest on certain private activity bonds issued after August 15,
1986 (or, in certain cases, on or after September 1, 1986) is generally not
exempt from regular federal income tax, although it might have been exempt under
prior law. These include bonds the proceeds of which are used to finance sports
facilities, convention facilities, industrial parks and nuclear waste disposal
facilities;
(ii) Interest (including exempt-interest dividends attributable to such
interest) on all private activity bonds issued on or after August 8, 1986 (or,
in certain cases, September 1, 1986) other than qualified Section 501(c)(3)
bonds or refundings of bonds originally issued before such dates is an item of
tax preference that is subject to the individual alternative minimum tax and the
alternative minimum tax on corporations;
(iii) Interest (including exempt-interest dividends attributable to such
interest) on all tax-exempt bonds, regardless of when issued, may increase
liability for the corporate alternative minimum tax because 75% of the excess of
adjusted current earnings over alternative minimum taxable income is an
adjustment that, except to the extent already taken into account as private
activity bond interest, increases the alternative minimum taxable income subject
to the corporate alternative minimum tax; and
(iv) Due to the substantial number and range of requirements to be
satisfied by tax-exempt bonds after their issuance, the risk of retroactive
revocation of the tax-exempt status of bonds due to acts or omissions on the
part of issuers after the date of issuance is in general greater than under
prior law but varies for different types of bonds.
It is not possible to predict with certainty the effect of these tax law
changes upon the tax-exempt bond market, including the availability of
obligations appropriate for investment by the tax free money market fund or the
municipal bond fund.
Different tax treatment, including a penalty on certain distributions,
excess contributions or other transactions is accorded to accounts maintained as
IRAs or other retirement plans. Investors should consult their tax advisors for
more information. See also Appendix B.
All or a portion of a loss realized upon the redemption or other
disposition of shares of a fund may be disallowed under "wash sale" rules to the
extent shares of the same fund are purchased (including shares acquired by means
of reinvested dividends) within a 61-day period beginning 30 days before and
ending 30 days after such redemption or other disposition. Any loss realized
upon a shareholder's sale, redemption or other disposition of shares with a tax
holding period of six months or less will be disallowed, in the case of a
disposition of shares of tax free money fund or municipal bond fund, to the
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extent of the amount of any exempt-interest dividends paid with respect to such
shares and, for such shares of all funds, any portion of such loss that is not
disallowed will be treated as a long-term capital loss to the extent of any
capital gain dividend paid with respect to such shares. Exchanges and
withdrawals under the systematic withdrawal plan are treated as redemptions for
federal income tax purposes. Shareholders should consult their own tax advisers
regarding their particular circumstances to determine whether a disposition of
the shares of a fund is properly treated as a sale for tax purposes, as is
assumed in the foregoing discussion.
The funds may be required to pay state taxes in states that have
jurisdiction to tax them, except to the extent an exemption may be available,
but the funds do not anticipate that their state tax liabilities will be
substantial.
The foregoing discussion of U.S. Federal income tax law relates solely to
the application of that law to U.S. persons, i.e., U.S. citizens and residents
and U.S. domestic corporations, partnerships, trusts and estates subject to tax
under such law. The discussion does not address the special tax rules applicable
to certain classes of investors, such as tax-exempt entities, financial
institutions, and insurance companies. Each shareholder who is not a u.S. Person
should consider the U.S. and foreign tax consequences of ownership of shares of
the funds, including the possibility that such a shareholder may be subject to a
U.S. withholding tax at a rate of 30% (or at a lower rate under an applicable
income tax treaty) on fund distributions treated as ordinary dividends and,
unless an effective irs form W-8BEN or other authorized withholding certificate
is on file, to 31% backup withholding on certain other payments from a fund.
This discussion of the federal income tax treatment of the fund and its
shareholders is based on the federal income tax law in effect as of the date of
this SAI. Shareholders should consult their tax advisers about the application
of the provisions of tax law described in this SAI and about the possible
application of state, local and foreign taxes in light of their particular tax
situations.
PORTFOLIO BROKERAGE
It is the general policy of the Adviser not to employ any broker in the
purchase or sale of securities for a fund's portfolio unless the Adviser
believes that the broker will obtain the best results for the fund, taking into
consideration such relevant factors as price, the ability of the broker to
effect the transaction and the broker's facilities, reliability and financial
responsibility. Commission rates, being a component of price, are considered
together with such factors.
U.S. Government and debt securities are traded primarily in the
over-the-counter market. Transactions in the over-the-counter market are
generally principal transactions with dealers and the costs of such transactions
involve dealer spreads rather than brokerage commissions. With respect to
over-the-counter transactions, the funds, where possible, deal directly with the
dealers who make a market in the securities involved except in those
circumstances where better prices and execution are available elsewhere. Under
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the 1940 Act, persons affiliated with a fund are prohibited from dealing with
the fund as a principal in the purchase and sale of securities. Since
transactions in the over-the-counter market usually involve transactions with
dealers acting as principal for their own account, affiliated persons of the
funds, including WPG, may not serve as a fund's dealer in connection with such
transactions. However, affiliated persons of a fund may serve as its broker in
transactions conducted on an exchange or over-the-counter transactions conducted
on an agency basis. Subject to the foregoing, where transactions are effected on
securities exchanges, the funds employ WPG as principal broker. A fund is not
obligated to deal with any broker or group of brokers in the execution of
transactions in portfolio securities. On occasion, certain money market
instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid.
The commission rate on all U.S. exchange orders is subject to negotiation.
Section 17(e) of the 1940 Act limits to "the usual and customary broker's
commission" the amount which can be paid by a fund to an affiliated person, such
as WPG, acting as broker in connection with transactions effected on a
securities exchange. The Board, including a majority of the Trustees who are not
"interested persons" of the fund or the Adviser, has adopted procedures designed
to comply with the requirements of Section 17(e) of the 1940 Act and Rule 17e-1
thereunder to ensure that a broker's commission is "reasonable and fair compared
to the commission, fee or other remuneration received by other brokers in
connection with comparable transactions involving similar securities being
purchased or sold on a securities exchange during a comparable period of time
...." Rule 17e-1 also requires the Boards, including a majority of the
non-Interested Trustees, to adopt procedures reasonably designed to provide that
the commission paid is consistent with the above standard, review those
procedures at least annually to determine that they continue to be appropriate
and determine at least quarterly that transactions have been effected in
compliance with those procedures. The Boards, including a majority of the
non-Interested Trustees, have adopted procedures designed to comply with the
requirements of Rule 17e-1.
Pursuant to these procedures, commissions paid to WPG must be at least as
favorable as those believed to be contemporaneously charged by other brokers in
connection with comparable transactions involving similar securities being
purchased or sold on a securities exchange. A transaction is not placed with WPG
if a fund would have to pay a commission rate less favorable than WPG's
contemporaneous charges for comparable transactions for its other most favored,
but unaffiliated, customers except for accounts for which WPG acts as a clearing
broker for another brokerage firm, and any customers of WPG determined by a
majority of the non-Interested Trustees not to be comparable to the funds. With
regard to comparable customers, in isolated situations, subject to the approval
of a majority of the non-Interested Trustees, exceptions may be made. Since WPG,
as investment adviser to the funds, is obligated to provide management, which
includes elements of research and related skills, such research and related
skills will not be used by WPG as a basis for negotiating commissions at a rate
higher than that determined in accordance with the above criteria. When
appropriate, orders for the account of the funds are combined with orders for
other investment companies advised by WP in order to obtain a more favorable
commission rate. When the same security is purchased for two or more funds or
accounts on the same day, each fund or account pays the average price and
commissions paid are allocated in direct proportion to the number of shares
purchased.
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In selecting brokers other than WPG to effect transactions on securities
exchanges, the funds consider the factors set forth in the first paragraph under
this heading and any investment products or services provided by such brokers,
subject to the criteria of Section 28(e) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). When more than one firm is believed to meet the
factors set forth in the first paragraph under this heading, preference may be
given to firms that also sell shares of the respective fund. Section 28(e)
specifies that a person with investment discretion shall not be "deemed to have
acted unlawfully or to have breached a fiduciary duty" solely because such
person has caused the account to pay a higher commission than the lowest rate
available. To obtain the benefit of Section 28(e), the person so exercising
investment discretion must make a good faith determination that the commissions
paid are "reasonable in relation to the value of the brokerage and research
services provided viewed in terms of either that particular transaction or his
overall responsibilities with respect to the accounts as to which he exercises
investment discretion." Accordingly, if the Adviser determines in good faith
that the amount of commissions charged by a broker is reasonable in relation to
the value of the brokerage and research products and services provided by such
broker, the Adviser may cause the funds to pay commissions to such broker in an
amount greater than the amount another firm might charge. Research services may
include (i) furnishing advice as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities or purchasers or sellers of securities, (ii) furnishing seminars,
information, analyses and reports concerning issuers, industries, securities,
trading markets and methods, legislative developments, changes in accounting
practices, economic factors and trends, portfolio strategy, access to research
analysts, corporate management personnel, industry experts and economists,
comparative performance evaluation and technical measurement services and
quotation services, and products and other services (such as third party
publications, reports and analysis, and computer and electronic access,
equipment, software, information and accessories that deliver, process or
otherwise utilize information, including the research described above) providing
lawful and appropriate assistance to the Adviser (and its affiliates) in
carrying out their decision-making responsibilities and (iii) effecting
securities transactions and performing functions incidental thereto (such as
clearance and settlement). The investment advisory fees paid by the funds under
the advisory agreements will not be reduced as a result of the Adviser's receipt
of research services.
Each year, the Adviser considers the amount and nature of the research
products and services provided by other brokers as well as the extent to which
such products and services are relied upon, and attempts to allocate a portion
of the brokerage business of its clients, such as the funds, on the basis of
that consideration. In addition, brokers sometimes suggest a level of business
they would like to receive in return for the various services they provide.
Actual brokerage business received by any broker may be less than the suggested
allocations, but can (and often does) exceed the suggestions, because total
brokerage is allocated on the basis of all the considerations described above.
For the fiscal year ended December 31, 1998, the International Fund paid
commissions in the amount of $43,000 to unaffiliated brokers on the basis of
research services they afforded to such fund. The foregoing amounts do not
include or take into account any profits or losses realized by such brokers on
"net" transactions for the account of a fund such as transactions in U.S.
Government securities and transactions executed through market makers and in the
third market. In no instance is a broker excluded from receiving business
because it has not been identified as providing research services. As permitted
by Section 28(e), the investment information received from other brokers may be
used by the Adviser (and its affiliates) in servicing all of its accounts and
not all such information may be used by the Adviser in connection with the fund
generating the brokerage credits. Nonetheless, the
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<PAGE>
funds believe that such investment information provides the funds with benefits
by supplementing the research otherwise available to the Adviser.
As set forth above, each fund employs WPG, a member firm of the NYSE, as
its principal broker on U.S. exchange transactions. Section 11(a) of the
Exchange Act provides that a member firm of a national securities exchange (such
as WPG) may not effect transactions on such exchange for the account of an
investment company (such as a fund) of which the member firm or its affiliate is
the investment adviser unless certain conditions are met. These conditions
require that the investment company authorize the practice and that the
investment company receive from the member firm at least annually a statement of
all commissions paid in connection with such transactions. WPG's transactions on
behalf of the funds are effected in compliance with these conditions.
In certain instances there may be securities which are suitable for a
fund's portfolio as well as for that of another fund or one or more of the other
clients of the Adviser. Investment decisions for a fund and for the Adviser's
other clients are made with a view to achieving their respective investment
objectives. It may develop that a particular security is bought or sold for only
one client even though it might be held by, or bought or sold for, other
clients. Likewise, a particular security may be bought for one or more clients
when one or more other clients are selling that same security. Some simultaneous
transactions are inevitable when several clients receive investment advice from
the same investment adviser, particularly when the same security is suitable for
the investment objectives of more than one client. When two or more clients are
simultaneously engaged in the purchase or sale of the same security, the
securities are allocated among clients in a manner believed to be equitable to
each. It is recognized that in some cases this system could have a detrimental
effect on the price or volume of the security in a particular transaction as far
as a fund is concerned. The funds believe that over time their ability to
participate in volume transactions will produce better executions for the funds.
WPG furnishes to the funds at least quarterly statements setting forth
the total amount of all compensation retained by it or any associated person of
it in connection with effecting transactions for the account of the funds, and
the Boards review and approve all fund portfolio transactions and the
compensation received by WPG in connection therewith.
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<PAGE>
BROKERAGE COMMISSIONS
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE DOLLAR
AMOUNT OF
TRANSACTIONS
INVOLVING THE
PERCENTAGE OF PAYMENT OF
AGGREGATE COMMISSIONS
COMMISSIONS EFFECTED THROUGH
AGGREGATE BROKERAGE PAID TO WPG WPG
COMMISSIONS DURING 1998 DURING 1998
----------- -----------
FUND 1996 1997 1998
- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Government Money Market $0 $0 $0 N/A N/A
Tax Free Money Market 0 0 0 N/A N/A
Municipal Fund 0 0 0 N/A N/A
Core Bond Fund 0 0 0 N/A N/A
Growth and Income Fund 110,111 125,690 262,000 78% 78%
Tudor Fund 400,178 258,048 508,000 30% 30%
International Fund 82,181 58,693 43,000 0% 0%
Quantitative Fund 157,358 215,632 160,000 60% 60%
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF AGGREGATE DOLLAR
AMOUNT OF TRANSACTIONS
INVOLVING THE PAYMENT OF
PERCENTAGE OF AGGREGATE COMMISSIONS EFFECTED DURING
COMMISSIONS PAID DURING 1998 TO 1998 THROUGH LLOYDS BANK
FUND LLOYDS BANK STOCKBROKERS STOCKBROKERS
- ---- ------------------------ ------------
<S> <C> <C>
International Fund 0% 0%
</TABLE>
The foregoing amounts do not include any profits of losses realized by
brokers or dealers on "net" transactions for the account of any fund (such as
transactions in U.S. Government securities and transactions executed through
market makers and in the over-the-counter market).
WPG does not knowingly participate in commissions paid by the funds to
other brokers or dealers and does not seek or knowingly receive any reciprocal
business as the result of the payment of such commissions. In the event that WPG
at any time learns that it has knowingly received reciprocal business, it will
so inform the boards.
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<PAGE>
To the extent that wpg receives brokerage commissions on a fund's portfolio
transactions, officers and trustees of a fund who are also managing directors of
WPG may receive indirect compensation from the fund through their participation
in such brokerage commissions.
Subject to the supervision of the Boards, all investment decisions of the
funds are executed through WPG's trading department.
PORTFOLIO TURNOVER
See "Financial Highlights" in the prospectus for the funds' portfolio
turnover rates.
In determining such portfolio turnover, U.S. Government securities and
all other securities (including options) which have maturities at the time of
acquisition of one year or less ("short-term securities") are excluded. The
annual portfolio turnover rate is calculated by dividing the lesser of the cost
of purchases or proceeds from sales of portfolio securities for the year by the
monthly average of the value of the portfolio securities owned by the applicable
fund during the year. The monthly average is calculated by totalling the values
of the portfolio securities as of the beginning and end of the first month of
the year and as of the end of the succeeding 11 months and dividing the sum by
13. A turnover rate of 100% would occur if all of a fund's portfolio securities
(other than short-term securities) were replaced once in a period of one year.
It should be noted that if a fund were to write a substantial number of options
which are exercised, the portfolio turnover rate of that fund would increase.
Increased portfolio turnover results in increased brokerage costs which a fund
must pay and the possibility of more short-term gains, distributions of which
are taxable as ordinary income.
The non-Money Market Funds will trade their portfolio securities without
regard to the length of time for which they have been held. To the extent that a
fund's portfolio is traded for short-term market considerations and portfolio
turnover rate exceeds 100%, the annual portfolio turnover rate of the fund could
be higher than most mutual funds.
Although the Money Market Funds intend normally to hold securities
purchased until maturity, at which time they will be redeemable at their full
principal value plus accrued interest, either fund may, at times, sell portfolio
securities prior to maturity based on a revised evaluation of the issuer, to
meet redemptions, or in anticipation of a change in short-term interest rates.
In the event there are unusually heavy redemption requests due to changes in
interest rates or otherwise, a Money Market Fund may have to sell a portion of
its investment portfolio at a time when it may be disadvantageous to do so.
However, the Adviser believes that a fund's ability to borrow money to
accommodate redemption requests may mitigate the necessity for such portfolio
sales during these periods.
ORGANIZATION
(See "Organization and Capitalization," "How to Purchase Shares," and
"Redemption of Shares" in the prospectus.)
Government Money Market Fund, Tax Free Money Market Fund, Municipal Fund,
Core Bond Fund and Quantitative Fund are each separate investment portfolios of
Weiss, Peck & Greer Funds Trust ("Funds Trust"). Each fund in Funds Trust
represents a separate series of shares in Funds Trust having different
objectives, programs, policies, and restrictions. Funds Trust was organized as a
business trust under the laws of the Commonwealth of Massachusetts
("Massachusetts business trust") on September 11, 1985. Prior to January 20,
1998, the Core Bond Fund was named WPG Government Securities Fund. Each share of
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<PAGE>
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 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. 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. 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. 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.
Each fund, including each of the five funds in Funds Trust, currently
issues one class of shares all of which have equal rights with regard to voting,
redemptions, dividends and distributions.
Each fund's Declaration of Trust ("Declaration of Trust") was amended and
restated on May 1, 1993 and further amended from time to time.
Under Massachusetts law, shareholders of a business trust, unlike
shareholders of a corporation, could be held personally liable as partners for
the obligations of the trust under certain circumstances. The Declarations of
Trust, however, provide that fund shareholders shall not be subject to any
personal liability for the acts or obligations of the funds and that every
written obligation, contract, instrument or undertaking made by the funds may
contain a provision to that effect. The Boards intend to conduct the operations
of the funds, with the advice of counsel, in such a way so as to avoid, to the
extent possible, ultimate liability of the shareholders for liabilities of the
funds.
The Declarations of Trust further provide that no Trustee, officer,
employee or agent of a fund is liable to the fund or to a shareholder, nor is
any Trustee, officer, employee or agent liable to any third persons in
connection with the affairs of the fund, except as such liability may arise from
his or its own bad faith, willful misfeasance, gross negligence or reckless
disregard of his or its duties. They each also provide that all third parties
shall look solely to the property of the particular fund for satisfaction of
claims arising in connection with the affairs of that fund. With the exceptions
stated, the Declarations of Trust permit the Boards to provide for the
indemnification of Trustees, officers, employees or agents of the funds against
all liability in connection with the affairs of the funds. All persons dealing
with a fund must look solely to the property of that fund for the enforcement of
any claims against that fund as neither the Trustees, officers, agents or
shareholders assume any personal liability for obligations entered into on
behalf of the funds. No fund is liable for the obligations of any other fund.
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<PAGE>
Under the Declarations of Trust, the funds are not required to hold
annual meetings to elect Trustees or for other purposes. It is not anticipated
that the funds will hold shareholders' meetings unless required by law or the
Declarations of Trust. Nevertheless, special meetings may be called for purposes
such as electing or removing Trustees, changing fundamental policies, or
approving an investment advisory agreement. A fund will be required to hold a
meeting to elect Trustees to fill any existing vacancies on its Board if, at any
time, fewer than a majority of the Trustees have been elected by the
shareholders of the fund. The Boards are required to call a meeting for the
purpose of considering the removal of persons serving as Trustee if requested in
writing to do so by the holders of not less than 10 percent of the outstanding
shares of a fund.
Fund shares do not have cumulative voting rights, so that the holders of
more than 50% of the outstanding shares may elect all of the Trustees. Each fund
share is entitled to such dividends and distributions out of the income earned
on the assets belonging to that fund as are declared in the discretion of the
Board. In the event of the liquidation or dissolution of a fund, fund shares are
entitled to receive their proportionate share of the assets which are available
for distribution as the Trustees in their sole discretion may determine.
Shareholders are not entitled to any preemptive or subscription rights. All
shares, when issued, will be fully paid and non-assessable by the funds.
Pursuant to the Declarations of Trust, the Boards may create additional
funds by establishing additional series of shares. The establishment of
additional series would not affect the interests of current shareholders in the
existing funds. Also pursuant to the Declarations of Trust, the Boards may
establish and issue multiple classes of shares. Also pursuant to the
Declarations of Trust, the Boards may also authorize a fund to invest all or
part of its investable assets in a single open-end investment company that has
substantially the same investment objectives, policies and restrictions as the
fund.
Upon the initial purchase of shares, the shareholder agrees to be bound
by the applicable fund's Declaration of Trust, as amended from time to time. The
Declarations of Trust are on file at the Office of the Secretary of State of The
Commonwealth of Massachusetts in Boston, Massachusetts.
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 Funds Trust) might become
liable for a misstatement or omission in the prospectus regarding another fund.
The Trustees for each fund and Funds Trust have considered this factor in
approving the use of a combined prospectus.
CUSTODIAN
The Custodian for the funds is Boston Safe Deposit and Trust Company at
One Exchange Place, Boston, Massachusetts 02109. In its capacity as Custodian,
Boston Safe Deposit and Trust Company performs accounting services, holds the
assets of the funds and is responsible for calculating the net asset value per
share. The custodian may appoint subcustodians from time to time to hold certain
securities purchased by a fund in foreign countries and to hold cash and
currencies for the funds.
- 86 -
<PAGE>
TRANSFER AGENT
First Data Investor Services Group, Inc., P.O. Box 61503, King of
Prussia, PA 19406-0903 acts as transfer agent for the funds and in such
capacity, processes purchases, transfers and redemptions of shares, acts as
dividend disbursing agent, and maintains records and handles correspondence with
respect to shareholder accounts.
LEGAL COUNSEL
Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109, serves
as legal counsel to each fund.
INDEPENDENT AUDITORS
KPMG LLP, 345 Park Avenue, New York, New York 10154, serves as
the funds' independent accountants and in that capacity audits the fund's annual
financial statements.
CALCULATION OF PERFORMANCE
DATA
TOTAL RETURN
NON-MONEY MARKET FUNDS
Each Non-Money Market Fund, may calculate current return for a
twelve-month period by determining the "net change in value" of a hypothetical
account having a balance of one share at the beginning of the period, dividing
the net change in value by the value of the account at the end of the base
period, with the resulting return figure carried to the nearest hundredth of one
percent. "Net change in value" of an account will consist of the value of
additional shares purchased with dividends from the original share and dividends
declared on both the original share and any such additional shares (not
including long-term realized gains or losses and unrealized appreciation or
depreciation) less applicable expenses of a fund.
The average annual total return of each fund is determined for a
particular period by calculating the actual dollar amount of the investment
return on a $1,000 investment in the fund made at the maximum public offering
price (i.e., net asset value) at the beginning of the period, and then
calculating the annual compounded rate of return which would produce that
amount. Total return of a fund for a period of one year is equal to the actual
return of the fund during that period. This calculation assumes that all
dividends and distributions are reinvested at net asset value on the
reinvestment dates during the period.
Total return information for each of the non-Money Market Funds is set
forth on the following page.
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<PAGE>
<TABLE>
<CAPTION>
TOTAL RETURN
ONE YEAR FIVE YEARS TEN YEARS
ENDEd ENDED 12/31/98 ENDED 12/31/98
FUND 12/31/98 ANNUALIZED CUMULATIVE ANNUALIZED CUMULATIVE
- ---- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Municipal Fund(1) 5.72% 5.40% 30.09% 5.55% 34.61%
Core Bond Fund(2) 9.26% 4.72% 25.96% 7.67% 109.48%
Tudor Fund -22.03% 5.56% 31.10% 10.46% 170.28%
International Fund(3) 16.28% 5.40% 30.11% 5.05% 60.41%
Quantitative Fund(4) 26.71% 20.30% 152.11% 19.22% 187.16%
Growth and Income Fund 27.51% 22.08% 171.27% 18.45% 444.31%
<FN>
- -------------
(1) The Municipal Fund commenced operations on July 1, 1993. The Municipal
Fund's advisory fee was not imposed, in whole or in part, and the Adviser
reimbursed certain operating expenses during various periods since inception of
the fund. Had the Adviser imposed its entire fee, the Municipal Fund's total
returns for the periods ended December 31, 1998 would be lower. Prior to October
19, 1994, the Municipal Fund paid an advisory fee at a different rate.
(2) The Core Bond Fund's management fee was increased by 0.10% of the fund's
average daily net assets effective July 31, 1991. The performance data set forth
herein includes periods during which the lower management fee was in effect. The
Core Bond Fund's advisory fee was not imposed, in whole or in part, and the
Adviser reimbursed certain operating expenses during various periods. Had the
Adviser imposed its entire fee, the Core Bond Fund's total returns for the
period ended December 31, 1998 would be lower.
(3) The International Fund commenced operations on June 1, 1989. The
International Fund's advisory fee was not imposed, in whole or in part, during
various periods since inception of the fund. Had the Adviser imposed its entire
fee, the International Fund's total returns for the periods ended December 31,
1998 would be lower.
(4) The Quantitative Fund commenced operations on January 1, 1993.
</FN>
</TABLE>
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<PAGE>
YIELD
MUNICIPAL FUND, CORE BOND FUND AND GROWTH AND INCOME FUND
The 30-day yield quotation of Municipal Fund, Core Bond Fund and Growth and
Income Fund is computed by dividing the net investment income for the period by
the maximum offering price per share on the last day of the period, according to
the following formula:
YIELD=2[(a - b +1) 6-1]
-----
cd
Where:
a = Dividends and interest earned during the period.
b = Expenses accrued for the period.
c = The average daily number of
shares outstanding during the
period that were entitled to
receive dividends.
d = The maximum offering price (i.e.,
net asset value) per share on the
last day of the period.
YIELD FOR
30-DAY PERIOD
ENDED 12/31/98
1. Municipal Fund 3.84%
2. Core Bond Fund 5.34%
3. Growth and Income Fund 0.37%
THE MONEY MARKET FUNDS
The Money Market Funds' yield quotations are calculated by a standard
method prescribed by the rules of the SEC. Under this method, the yield
quotation is based on a hypothetical account having a balance of exactly one
share at the beginning of a seven-day period.
The yield quotation is computed as follows: the net change, exclusive of
capital changes (i.e., realized gains and losses from the sale of securities and
unrealized appreciation and depreciation), in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the base
period is determined by dividing the net change in account value by the value of
the account at the beginning of the base period. This base period return is then
multiplied by 365/7 with the resulting yield figure carried to the nearest 100th
of 1%. The determination of net change in account value reflects the value of
additional shares purchased with dividends from the original share, dividends
declared on both the original share and any such additional shares, and all fees
that are charged to that fund, in proportion to the length of the base period
and that fund's average account size.
The Money Market Funds also may advertise quotations of effective yield
for a 7 calendar day period. Effective yield is computed by compounding the
unannualized base period return determined as described in the preceding
paragraph by adding 1 to that return, raising the sum to the 365/7 power and
subtracting one from the result, according to the following formula:
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<PAGE>
Effective Yield = [(Base Period Return + 1) (365/7-1)
YIELD
7-DAY PERIOD
ENDED 12/31/98
--------------
SEVEN
SEVEN DAY
DAY EFFECTIVE
YIELD YIELD
----- -----
Government Money Market Fund 4.17% 4.26%
Tax Free Money Market Fund 3.16% [___]%
HYPOTHETICAL TAX EQUIVALENT YIELD
TAX FREE MONEY MARKET FUND AND MUNICIPAL FUND
- ---------------------------------------------
Tax Free Money Market Fund and Municipal Fund may also publish their
tax-equivalent yield, which is the net annualized taxable yield needed to
produce a specified tax-exempt yield at a given tax rate based on a specified 7
day period in the case of Tax Free Money Market Fund, and a specified 30-day
period in the case of Municipal Fund. Tax-equivalent yield is calculated by
dividing that portion of the fund's yield which is tax-exempt by one minus a
stated income tax rate and adding that quotient to the remaining portion, if
any, of the yield of the fund which is not tax-exempt.
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<PAGE>
<TABLE>
<CAPTION>
A TAX-EXEMPT YIELD OF
5%, 7% AND 9% IS EQUIVALENT TO
A FULLY TAXABLE YIELD OF*
-------------------------
1999 TAXABLE INDIVIDUAL 1999 FEDERAL TAX
- ----------------------- ----------------
RETURN INCOME BRACKET 5% 7% 9%
------------- ------- -- -- --
<S> <C> <C> <C> <C>
$ 0- 25,750 15.0% 5.88% 8.24% 10.59%
$ 25,751- 62,450 28.0% 6.94% 9.72% 12.50%
$ 62,451-130,250 31.0% 7.25% 10.14% 13.04%
$130,251-283,150 36.0% 7.81% 10.94% 14.06%
Over $283,150 39.6% 8.28% 11.59% 14.90%
JOINT RETURN
------------
$ 0- 43,050 15.0% 5.88% 8.24% 10.59%
$ 43,051-104,050 28.0% 6.94% 9.72% 12.50%
$104,051-158,550 31.0% 7.25% 10.14% 13.04%
$158,551-283,150 36.0% 7.81% 10.94% 14.06%
Over $283,150 39.6% 8.28% 11.59% 14.90%
<FN>
- --------------
* These illustrations assume the Federal alternative minimum tax is not
applicable and that an individual is not a "head of household," a "married
individual filing a separate return," or a "surviving spouse." Note also that
these Federal income tax brackets and rates do not take into account the effects
of (i) a reduction in the deductibility of itemized deductions for taxpayers
whose federal adjusted gross income exceeds $126,600 (or, in the case of a
separate return by a married individual, $63,300), or (ii) the gradual phase-out
of the personal exemption amount for taxpayers whose federal adjusted gross
income exceeds $126,600 (for single individuals) or $189,950 (for married
individuals filing jointly). The effective federal tax rates and equivalent
yields for such taxpayers would be higher than those shown above.
</FN>
</TABLE>
<TABLE>
<CAPTION>
TAX-EQUIVALENT YIELD (1)
ENDED DECEMBER 31, 1998
-----------------------
SEVEN DAY 30-DAY
SEVEN DAY TAX EQUIVALENT TAX
TAX EQUIVALENT EFFECTIVE EQUIVALENT
YIELD YIELD YIELD
----- ----- -----
<S> <C> <C> <C>
Tax Free Money Market Fund [___]% [___]% N/A
Municipal Fund N/A N/A [___]%
<FN>
- -----------
(1) Assumes a 39.6% Federal marginal tax rate.
</FN>
</TABLE>
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<PAGE>
GENERAL
Each fund may from time to time advertise comparative performance as
measured by various independent sources, including, but not limited to, Lipper
Analytical Services, Inc., Donaghues Money Fund Report, Barron's, The Wall
Street Journal, Weisenberger Investment Companies Service, Business Week,
Changing Times, Financial World, Forbes, Fortune, Morningstar Mutual Funds, The
New York Times, Personal Investor, Sylvia Porter's Personal Finance and Money.
Each fund may from time to time advertise its performance relative to
certain indices and benchmark investments, including: (a) the Lipper Analytical
Services, Inc. Mutual Fund Performance Analysis, Fixed Income Analysis and
Mutual Fund Indices (which measure total return and average current yield for
the mutual fund industry and rank mutual fund performance); (b) the CDA Mutual
Fund Report published by CDA Investment Technologies, Inc. (which analyzes
price, risk and various measures of return for the mutual fund industry); (c)
the Consumer Price Index published by the U.S. Bureau of Labor Statistics (which
measures changes in the price of goods and services); (d) Stocks, Bonds, Bills
and Inflation published by Ibbotson Associates (which provides historical
performance figures for stocks, government securities and inflation); (e) the
Standard & Poor's Indices; (f) other taxable investments including certificates
of deposit (CDs), money market deposit accounts (MMDAs), checking accounts,
savings accounts, money market mutual funds and repurchase agreements; and (g)
historical investment data supplied by the research departments of various
research and brokerage firms. In addition, each fund may from time to time
advertise its performance relative to the following benchmark indices: Core Bond
Fund -- Lehman Aggregate Index; Municipal Fund -- Lipper Intermediate Municipal
Bond Funds Average and Lehman Brothers 3-10 Year Municipal Bond Index;
Quantitative Fund -- S&P 500 Index; Growth and Income Fund -- S&P 500 and Lipper
Capital Growth and Income Funds Average; Tudor Fund -- Lipper Capital
Appreciation Index and Russell 2500 Growth Index; and International Fund --
Morgan Stanley Europe, Australia, Far East (EAFE) Index.
The composition of the investments in the above-referenced indices and the
characteristics of a fund's benchmark investments are not identical to, and in
some cases may be very different from, those of a fund's portfolio. These
indices and averages are generally unmanaged and the items included in the
calculations of such indices and averages may not be identical to the formulas
used by a fund to calculate its performance figures.
From time to time advertisements or communications to shareholders may
summarize the substance of information contained in shareholder reports
(including the investment composition of a fund), as well as the views of the
Adviser as to current market, economic, trade and interest rate trends,
legislative, regulatory and monetary developments, investment strategies and
regulated matters believed to be of relevance to a fund.
In addition, from time to time, advertisements or information may include a
discussion of asset allocation models developed by the Adviser and/or its
affiliates, certain attributes or benefits to be derived from asset allocation
strategies and the WPG mutual funds that may be offered as investment options
for the strategic asset allocations. Such advertisements and information may
also include the Adviser's current economic outlook and domestic and
international market views to suggest periodic tactical modifications to current
asset allocation strategies. Such advertisements and information may include
other materials which highlight or summarize the services provided in support of
an asset allocation program.
In addition, advertisements or shareholder communications may include a
discussion of certain attributes or benefits to be derived by an investment in a
fund. Such advertisements or information may include symbols, headlines or other
material which highlight or summarize the information discussed in more detail
therein.
Performance data is based on historical results and is not intended to
indicate future performance. Total return, thirty-day yield, 7-day yield and
7-day effective yield, tax equivalent yield and distribution rate will vary
based on changes in market conditions, portfolio expenses, portfolio investments
and other factors. The value of a fund's shares will fluctuate and an investor's
shares may be worth more or less than their original cost upon redemption. Each
fund may also, at its discretion, from time to time make a list of its portfolio
holdings available to investors upon request. Performance information of a fund
may not provide a basis for comparison with other investments using a different
method of calculating performance.
- 92 -
<PAGE>
Return for a fund will fluctuate from time to time, unlike bank deposits or
other investments which pay a fixed yield or return for a stated period of time,
and do not provide a basis for determining future returns.
FINANCIAL STATEMENTS
Each fund's audited financial statements and related report of KPMG LLP,
independent auditors, included in the Annual Report to Shareholders of the funds
for the year ended December 31, 1998, is attached hereto and hereby incorporated
by reference into this SAI.
- 93 -
<PAGE>
APPENDIX A
Description of Bond Ratings Moody's
Investors Service, Inc.
AAA: Bonds which are rated AAA are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA: Bonds which are rated AA are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuations of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA: Bonds which are rated BAA are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA: Bonds rated BA are judged to have speculative elements; their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Moody's also provides credit ratings for preferred stocks. It should be
borne in mind that preferred stock occupies a junior position to bonds within a
particular capital structure and that these securities are rated within the
universe of preferred stocks.
AAA: An issue which is rated "AAA" is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks.
AA: An issue which is rated "AA" is considered a high-grade preferred stock.
This rating indicates that there is a reasonable assurance that earnings and
asset protection will remain relatively well maintained in the foreseeable
future.
A: An issue which is rated "A" is considered to be an upper-medium grade
preferred stock. While risks are judged to be somewhat greater than in the "aaa"
and "aa" classifications, earnings and asset protections are, nevertheless,
expected to be maintained at adequate levels.
BAA: An issue which is rated "BAA" is considered to be a medium grade preferred
stock, neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any great
length of time.
BA: An issue which is rated "BA" is considered to have speculative elements and
its future cannot be considered well assured. Earnings and asset protection may
be very moderate and not well safeguarded during adverse periods. Uncertainty of
position characterizes preferred stocks in this class.
B: An issue which is rated "B" generally lacks the characteristics of a
desirable investment. Assurance of dividend payments and maintenance of other
terms of the issue over any long period of time may be small.
A-1
<PAGE>
Moody's ratings for municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the differences between short-term and long-term credit risk. Loans bearing the
designation MIG 1 are of the best quality, enjoying strong protection by
establishing cash flows of funds for their servicing or by established and
broad-based access to the market for refinancing, or both. Loans bearing the
designation MIG 2 are of high quality, with margins of protection ample although
not so large as in the preceding group. A short term issue having a demand
feature (i.e. payment relying on external liquidity and usually payable on
demand rather than fixed maturity dates) is differentiated by Moody's with the
use of the Symbol VMIG, instead of MIG.
Moody's also provides credit ratings for tax-exempt commercial paper. These
are promissory obligations (1) not having an original maturity in excess of nine
months, and (2) backed by commercial banks. Notes bearing the designation P-1
have a superior capacity for repayment. Notes bearing the designation P-2 have a
strong capacity for repayment.
STANDARD & POOR'S RATINGS GROUP
- -------------------------------
AAA: Bonds rated AAA have the higher rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A: Bonds rated A have a very strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay interest
and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher rated categories.
Bonds rated BB, B, CCC and CC are regarded, on balance, as predominantly
speculative with respect to the issuer's capacity to pay interest and repay
interest or principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and CC the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures.
BB: Debt rated BB has less near-term vulnerability to default that other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B: Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BB or BB-rating.
S&P's top ratings for municipal notes issued after July 29, 1984 are SP-1
and SP-2. The designation SP-1 indicates a very strong capacity to pay principal
and interest. A"+" is added for those issues determined to possess overwhelming
safety characteristics. An "SP-2" designation indicates a satisfactory capacity
to pay principal and interest.
Commercial paper rated A-2 or better by S&P is described as having a very
strong degree of safety regarding timeliness and capacity to repay.
Additionally, as a precondition for receiving an S&P commercial paper rating, a
bank credit line and/or liquid assets must be present to cover the amount of
commercial paper outstanding at all times.
The Moody's Prime-2 rating and above indicates a strong capacity for
repayment of short-term promissory obligations.
A-2
<PAGE>
GLOSSARY
--------
Commercial Paper: Short-term promissory notes of large corporations with
excellent credit ratings issued to finance their current operations.
Certificates of Deposit: Negotiable certificates representing a commercial
bank's obligations to repay funds deposited with it, earning specified rates of
interest over given periods.
Bankers' Acceptances: Negotiable obligations of a bank to pay a draft which has
been drawn on it by a customer. These obligations are backed by large banks and
usually are backed by goods in international trade.
Time Deposits: Non-negotiable deposits in a banking institution earning a
specified interest rate over a given period of time.
Corporate Obligations: Bonds and notes issued by corporations and other business
organizations in order to finance their long-term credit needs.
A - 3
<PAGE>
APPENDIX B
ADDITIONAL INVESTOR SERVICES
(Each fund other than Tax Free Money
Market Fund and Municipal Fund)
PROTOTYPE RETIREMENT PLAN FOR EMPLOYERS
AND SELF-EMPLOYED INDIVIDUALS
Prototype retirement plans (the "Retirement Plan") are available for those
entities or self-employed individuals who wish to purchase shares in a fund
(other than the Tax Free Money Market Fund and the Municipal Fund) in connection
with a money purchase plan or a profit sharing plan maintained by their
employer. The Retirement Plans were designed to conform to the requirements of
the Code and the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). The Retirement Plans received opinion letters from the Internal
Revenue Service (the "IRS") on March 29, 1990 that the form of the Retirement
Plans is acceptable under Section 401 of the Code.
Annual tax-deductible contributions to the Retirement Plan may be made up
to the lesser of $30,000 or 25% of the participant's earned income (disregarding
any compensation in excess of $160,000 (as adjusted by the IRS for inflation)).
Under the terms of the Retirement Plan, contributions by or on behalf of
participants may be invested in a fund's shares with the designated custodian
under the Retirement Plan (the "Retirement Plan's Custodian"). Investment in
other mutual funds advised by the Adviser or one of its affiliates may also be
available. Employers adopting the Retirement Plan may elect either that a
participant shall specify the investments to be made with contributions by or on
behalf of such participant or that the employer shall specify the investments to
be made with all such contributions. Since no fund is intended as a complete
investment program it is important, in connection with such election, that
employers give careful consideration to the fiduciary obligation requirements of
ERISA.
All dividends and distributions received by the Retirement Plan's Custodian
on the funds' shares held by the Plan's Custodian will be reinvested in the
applicable fund's shares at net asset value. Distributions of benefits to
participants, when made, will be paid first in cash, to the extent that any
amount credited to a participant's account is not invested in the applicable
fund's shares, and then in full fund shares (and cash in lieu of fractional
shares).
Boston Safe Deposit and Trust Company serves as the Retirement Plan's
Custodian under a Custodial Agreement. Custodian fees which are payable by the
employer to the Retirement Plan's Custodian under such Custodial Agreement are a
$10 application fee for processing the Retirement Plan application, an annual
maintenance fee of $15 per participant, and a distribution fee of $10 for each
distribution from a participant's account. Such fees may be altered from time to
time by agreement of the employer and the Retirement Plan's Custodian. For
further details see the terms of the Retirement Plan which are available from
the Trust.
Distributions must be made pursuant to the terms of the Retirement Plan and
generally may not commence before retirement, disability, death, termination of
employment, or termination of the Retirement Plan and must commence no later
than April 1 of the year following the year in which the participant attains age
70 1/2 (the "required beginning date"). Distributions are taxed as ordinary
income when received, except the portion, if any, considered a return of a
participant's nondeductible contributions. Certain distributions before age 59
1/2 may be subject to a 10% nondeductible penalty on the taxable portion of the
distribution. Failure to make minimum required distributions by the required
beginning date may be subject to a 50% excise tax.
It should be noted that the Retirement Plan is a retirement investment
program involving commitments covering future years. In deciding whether to
utilize the Retirement Plan, it is important that the employer consider his or
her needs and those of the Retirement Plan participants and whether the
investment objectives of the funds are likely to fulfill such needs. Termination
or curtailment of the Retirement Plan for other than business reasons within a
few years after its adoption may result in adverse tax consequences.
B-1
<PAGE>
Employers who contemplate adoption of the Retirement Plan should consult an
attorney or financial adviser regarding all aspects of the Plan as a retirement
plan vehicle (including fiduciary obligations under ERISA).
INDIVIDUAL RETIREMENT ACCOUNT
Persons with earned income, whether or not they are active participants in
a pension, profit-sharing or stock bonus plan described in Code Section 401(a),
Federal, state or local pension plan, an annuity plan described in Code Section
403(a), an annuity contract or custodial account described in Code Section
403(b), a simplified employee pension plan described in Code Section 408(k), or
a trust described in Code Section 501(c)(18) ("active participant"), generally
are eligible to establish an Individual Retirement Account ("IRA"). An
individual may make a deductible IRA contribution only if (i) the individual is
not an active participant, or (ii) the individual has an adjusted gross income
below a certain level ($50,000 for married individuals filing a joint return,
with a phase-out for adjusted gross income between $50,000 and $60,000; $30,000
for a single individual, with a phase-out for adjusted gross income between
$30,000 and $40,000). The phase-out ranges for deductibility are increased in
years after 1998 until they reach $50,000 to $60,000 for single taxpayers for
the year 2005 and thereafter and $80,000 to $100,000 for married taxpayers
filing jointly for the years 2007 and thereafter. The phase-out range of $0 to
$10,000 of AGI for an active participant, married and filing separately does not
increase. An individual whose spouse is an active participant may still be able
to make a deductible contribution if he or she is not an active participant,
subject to a phase-out range of $150,000 to $160,000 of modified AGI if filing
jointly. An individual who is not permitted to make a deductible contribution to
an IRA for a taxable year may nonetheless make annual nondeductible
contributions to an IRA up to the lesser of 100% of the individual's earned
income or $2,000 to an IRA (up to $4,000 to IRAs for an individual and his or
her spouse) for that year. There are special rules for determining how
withdrawals are to be taxed if an IRA contains both deductible and nondeductible
amounts. In general, a proportionate amount of each withdrawal will be deemed to
be made from nondeductible contributions; amounts treated as a return of
nondeductible contributions will not be taxable. Also, annual contributions may
be made to a spousal IRA even if the spouse has no earnings in a given year.
Withdrawals from the IRA (other than the portion treated as a return of
nondeductible contributions) are taxed as ordinary income when received, may be
made without penalty after the participant reaches age 59 1/2 and must commence
no later than the required beginning date (see discussion of Prototype
Retirement Plans above). Withdrawals before age 59 1/2 may involve the payment
of a 10% nondeductible penalty on the taxable portion of the amount withdrawn.
The time and rate of withdrawal must conform with Code requirements in order to
avoid adverse tax consequences. All dividends and distributions on shares held
in IRA accounts are reinvested in full and fractional shares and are not subject
to federal income tax until withdrawn from the IRA. Investors should consult
their tax advisers for further tax information, including information with
respect to the imposition of state and local income taxes and the effects of tax
law changes.
The funds have arranged for Boston Safe Deposit and Trust Company to
furnish the required custodial services for IRAs using any of a fund's shares as
the underlying investment. The Bank will charge an acceptance fee of $10 for
each new IRA and an annual maintenance fee of $15 for each year that an IRA is
in existence. There is a $10 fee for processing a premature distribution. These
fees will be deducted from the IRA account and may be changed by the Custodian
upon 30 days' prior notice.
To establish an IRA for investment in a fund's shares, an investor must
complete an application and a custodial agreement that includes IRS Form 5305-A
(which has been supplemented to provide certain additional custodial provisions)
and must make an initial cash contribution to the IRA, subject to the limitation
on contributions described above. Pursuant to IRS regulations, an investor may
for seven days following establishment of an IRA revoke the IRA. Detailed
information on IRAs, together with the necessary form of application and
custodial agreement, is available from the Trust and should be studied carefully
by persons interested in utilizing a fund for IRA investments. Such persons
should also consult their own advisers regarding all aspects of the funds as an
appropriate IRA investment vehicle.
B-2
<PAGE>
ROTH INDIVIDUAL RETIREMENT ACCOUNT
Like the traditional IRA described above, a Roth Individual Retirement
Account ("Roth IRA") is a program through which taxpayers may obtain certain
income tax benefits for themselves. Unlike a traditional IRA, contributions to a
Roth IRA are not deductible. However, a Roth IRA is a tax-sheltered account and,
if certain conditions are met, distributions from a Roth IRA will be tax free.
Annual contributions to a Roth IRA must be in cash and (other than rollover
or conversion contributions) when combined with contributions to both
traditional IRAs and other Roth IRAs may not exceed the lesser of $2,000 or 100
percent of compensation. The $2,000 maximum amount is reduced and phased out for
a single taxpayer with modified adjusted gross income (AGI) between $95,000 and
$110,000, and for a husband and wife who file joint returns and have AGIs
between $150,000 and $160,000. The $2,000 maximum is reduced and phased out for
married taxpayers filing separately with AGIs between zero and $10,000.
Participation in a Roth IRA contribution is not limited by participation in
a retirement plan or program other than a traditional IRA, as discussed above.
In addition, unlike traditional IRAs, contributions to a Roth IRA may be made
after age 70 1/2 so long as the IRA owner has compensation and an AGI below the
maximum thresholds discussed above.
Provided that all of the applicable rollover rules are followed, a Roth IRA
may be rolled over to another Roth IRA, or may receive rollover contributions
from either a traditional IRA or Roth IRA.
If AGI is less than $100,000, an individual may rollover (or convert) all
or any portion of any existing traditional IRA into a Roth IRA. The conversion
amount or the amount of the rollover from the traditional IRA to the Roth IRA is
treated as a distribution for income tax purposes and is includible in gross
income (except for any nondeductible contributions). Although the rollover
amount is generally included in income, the 10 percent early distribution excise
tax does not apply to rollovers or conversions from a traditional IRA to a Roth
IRA.
For a rollover of assets from a traditional IRA to a Roth IRA prior to
January 1, 1999, the taxable amount of the distribution is included in gross
income ratably over a four year period beginning with 1998.
Qualified distributions from a Roth IRA are NOT includable in income.
Qualified distributions are distributions made AFTER the five taxable year
period beginning with the first taxable year for which a contribution (or
conversion from a traditional IRA) was made to the Roth IRA, and which is made
after age 59 1/2, death, disability, or for first-time home buyer expenses.
SIMPLIFIED EMPLOYEE PENSION PLAN
A simplified employee pension (a "SEP") allows an employer to make
contributions toward his or her own (if a self-employed individual) and his or
her employees' retirement and, for certain SEPs established prior to 1997, may
permit the employees to make elective deferrals by salary reduction. A SEP
requires an Individual Retirement Account (a "SEP-IRA") to be established for
each "qualifying employee," although the employer may include additional
employees if it wishes. A qualifying employee is one who: (a) is at least age
21, (b) has worked for the employer during at least 3 of 5 years immediately
preceding the tax year, and (c) has received at least $400 for 1998 (as indexed
for inflation) in compensation in the tax year.
An employer is not required to make any contribution to the SEP-IRA.
However, if the employer does make a contribution, the contribution must be
based on a written allocation formula and must not discriminate in favor of
highly compensated employees, as defined in Code Section 414(q). The employer
may make annual contributions on behalf of each qualifying employee, provided
that the contributions, when combined with the employee's elective deferrals, do
not exceed 15% of the employee's compensation or $30,000, whichever is less.
B-3
<PAGE>
A SEP-IRA that is part of a SEP established before 1997 may include a
salary reduction arrangement under which the employee can choose to have the
employer make contributions ("elective deferrals") to his or her SEP-IRA out of
his or her salary. However, employees may make elective deferrals only if (i) at
least 50% of the employer's eligible employees choose elective deferrals; (ii)
the employer did not have more than 25 eligible employees at any time during the
preceding year; and (iii) the amount deferred each year by each eligible highly
compensated employee as a percentage of pay is no more than 125% of the average
deferral percentage of all other eligible employees. An elective deferral
arrangement is not available for a SEP maintained by a state or local
government, or any of their political subdivisions, agencies, or
instrumentalities, or to exempt organizations.
In general, the total income which an employee can defer under a salary
reduction arrangement included in a SEP and certain other elective deferral
arrangements is limited to $10,000 (indexed annually for inflation). This dollar
limit applies only to the elective deferrals, not to any contributions from
employer funds. The Code may require that contributions be further limited to
prevent discrimination in favor of highly compensated employees. An employee may
also make regular IRA contributions to his or her SEP-IRA (see discussion of
IRAs, above).
Under the terms of the SEP-IRA, contributions by or on behalf of
participants may be invested in fund shares (or shares of other funds designated
by the Adviser as eligible investments), as specified by the participant. All
dividends and distributions on shares held in SEP-IRAs are reinvested in full
and fractional shares. Since no fund is intended as a complete investment
program it is important, in connection with the adoption of a SEP-IRA, that
employers give careful consideration to the fiduciary obligation requirements of
ERISA, particularly those pertaining to diversification of investments.
Withdrawals before age 59 1/2 may involve the payment of a 10%
nondeductible penalty on the amount withdrawn. Withdrawals must commence no
later than the required beginning date (see discussions of Prototype Retirement
Plans, above). The time and rate of withdrawal must conform with Code
requirements in order to avoid adverse tax consequences. Contributions to a
SEP-IRA by an employer are excluded from the employee's income rather than
deducted from it. Elective deferrals made to an employee's SEP-IRA generally are
excluded from his income in the year of deferral, but are included in wages for
social security (FICA) and unemployment (FUTA) tax purposes. However, if the
employee makes regular IRA contributions to his SEP-IRA, (other than elective
deferrals), he can deduct them the same way as contributions to a regular IRA,
up to the amount of his deduction limit. Investors should consult their tax
advisers for further tax information including information with respect to the
imposition of state and local income taxes and the effects of tax law changes.
The funds have arranged for Boston Safe Deposit and Trust Company to
furnish the required custodial services for SEP-IRAs using the fund's shares as
the underlying investment. Boston Safe Deposit and Trust Company will charge an
acceptance fee of $10 for each new SEP-IRA and an annual maintenance fee of $15
for each year that a SEP-IRA is in existence. There is a $10 fee for each
premature distribution. These fees will be deducted from the SEP-IRA account and
may be changed by the Custodian upon 30 days' prior written notice.
To establish a SEP-IRA, an employer and employee should complete the Weiss,
Peck & Greer IRA application materials, as well as IRS Form 5305-SEP. Pursuant
to IRS regulations, an investor may for seven days following establishment of a
SEP-IRA revoke the SEP-IRA. Detailed information on SEP-IRAs, together with the
necessary form of application and custodial agreement, is available from the
fund and should be studied carefully by persons interested in utilizing the fund
for SEP-IRA investments. Such persons should also consult their own advisers
regarding all aspects of the fund as an appropriate SEP-IRA investment vehicle.
B - 4
<PAGE>
SIMPLE RETIREMENT PLANS
Effective for plan years after 1996, an employer may establish a SIMPLE
retirement plan under new Section 408(p) of the Code. Under such plan, the
employer may make contributions to individual retirement accounts established
for each employee. Such individual retirement accounts must, by their terms, be
limited to contributions under a SIMPLE retirement program. THE WEISS, PECK &
GREER IRA IS NOT SO LIMITED AND MAY NOT BE USED TO FUND A SIMPLE RETIREMENT
PROGRAM.
B - 5
<PAGE>
WEISS, PECK & GREER
MUTUAL FUNDS
ANNUAL REPORT
DECEMBER 31, 1998
WPG TUDOR FUND
WPG GROWTH AND INCOME FUND
WPG QUANTITATIVE EQUITY FUND
WEISS, PECK & GREER INTERNATIONAL FUND
WPG CORE BOND FUND
WPG INTERMEDIATE MUNICIPAL BOND FUND
WPG GOVERNMENT MONEY MARKET FUND
WPG TAX FREE MONEY MARKET FUND
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
800 223-3332
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
TABLE OF CONTENTS
Chairman's Letter ......................................................... 1
Major Portfolio Changes - Equity Funds .................................... 3
Average Annual Total Returns .............................................. 4
Ten Largest Holdings ...................................................... 9
Schedules of Investments:
WPG Tudor Fund ....................................................... 11
WPG Growth and Income Fund ........................................... 12
WPG Quantitative Equity Fund ......................................... 13
Weiss, Peck & Greer International Fund ............................... 14
WPG Core Bond Fund ................................................... 17
WPG Intermediate Municipal Bond Fund ................................. 19
WPG Government Money Market Fund ..................................... 23
WPG Tax Free Money Market Fund ....................................... 23
Statements of Assets and Liabilities ...................................... 30
Statements of Operations .................................................. 32
Statements of Changes in Net Assets ....................................... 34
Notes to Financial Statements ............................................. 36
Financial Highlights ...................................................... 42
Independent Auditors Report ............................................... 45
International
Objective: Long-term growth of capital.
Tudor
Objective: Capital appreciation.
Growth and Income
Objective: Long-term growth of capital and current income.
Quantitative Equity
Objective: Seeks to provide investment results that exceed the S & P 500.
Intermediate Municipal Bond
Objective: High current income consistent with relative stability of
principal
Exempt from Federal Income Tax.
Core Bond
Objective: High current income consistent with capital preservation.
* Tax Free Money Market
Objective: Maximize current income with preservation of capital and
liquidity.
Exempt from Federal Income Tax.
* Government Money Market
Objective: Maximize current income with preservation of capital and
liquidity.
* Although these Funds are money market funds and attempt to maintain a stable
$1.00 net asset value per share, investments in these Funds are neither
insured or guaranteed by the FDIC or any other Government agency. Although the
Funds seek to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Funds.
<PAGE>
DEAR SHAREHOLDER:
DOMESTIC MARKETS
- ----------------
The greatest bull market of our lifetime! This statement is certainly true
if measured by the large capitalization weighted major stock indices. The S&P
500 Index, up 28.8% for 1998, has now delivered greater than 20% gains for four
years in a row. The Dow Jones Industrial Average was up 18.2% this year, its
fourth double-digit return in a row. NASDAQ, the popular over-the-counter stock
index, rose 39.6% in 1998 and has, over the last four years, returned an
incredible annualized return of 30.7%.
However, not every segment of the stock market delivered performance as
well as the major indices. Value issues and small stocks dramatically
underperformed. Growth stocks performed better than economically sensitive
securities. The S&P Small Cap Index was down 2.6%. Approximately 60% of all New
York Stock Exchange issues were down in 1998. The S&P 500 Index's remarkable
returns throughout the year were dominated by a handful of the largest stocks in
the Index. In fact, if every stock in the Index had been equally weighted,
rather than capitalization weighted, the S&P 500 would have risen only 5%.
After an approximate 20% decline from mid-July 1998 to early October 1998
for the major indices, a very powerful rally ensued through year-end. The
decline was set off by a Russian currency devaluation, which created a dramatic
sell-off in foreign bonds and lower quality credit. This eventually led to a
world banking system that backed away from less than high quality loans, and a
credit squeeze concern started. Several hedge funds (notably Long-Term Capital
Management), leveraged with derivative securities, teetered on the edge of
bankruptcy. The Federal Reserve Board quickly came to the rescue by lowering key
interest rates two times during the fall, and the dramatic rally began.
Low inflation continues to provide the dominant pleasant economic
statistic. The Consumer Price Index increased 1.6% in 1998, slightly lower than
1.7% reported in 1997 and the lowest report since 1986.
1998 will be remembered by bond market participants as a difficult year, as
global financial turmoil resulted in dramatic changes in the valuations of
various types of fixed income securities. Yields rose during the fourth quarter
in spite of the two rate cuts by the Federal Reserve. The flattening of the
yield curve (i.e., yields on short maturities rising more than yields on long
maturities) was the result of financial turmoil subsiding, recession fears
easing, and the aggressive expectations for further Federal Reserve rate cuts
reversing.
Corporate bonds began the fourth quarter in the same fashion as the third
quarter - under pressure and with relatively low liquidity. Investor sentiment
turned more optimistic in November, however, largely in response to Federal
Reserve rate cuts, which calmed the financial markets and allowed liquidity to
return to much of the corporate market. The mortgage and asset-backed securities
sectors also began the quarter under pressure due to overall financial market
turmoil. In addition, mortgage securities were influenced by fears of a large
refinancing wave, which pushed spreads wider in early October. As with the
corporate market, asset-backed and particularly mortgage securities dramatically
outperformed Treasuries in November as market turmoil subsided, yields rose and
prepayment fears eased.
The outlook for the near-term direction of the U.S. economy and interest
rates remains unclear. The U.S economy has performed extremely well in the face
of ongoing financial turmoil in other parts of the world. If this solid economic
performance continues and the U.S. equity market continues its meteoric rise,
the Federal Reserve will have no reason to lower interest rates further and may
even have to consider a modest rate increase. On the other hand, if the U.S.
economy were to slow, the Federal Reserve would be in a position to lower rates,
particularly with inflation remaining well contained.
Page 1
<PAGE>
INTERNATIONAL MARKETS
- ---------------------
Over the summer months foreign equity markets suffered steep declines as
concern increased that the world economy would not only slow sharply but would
perhaps decline in 1999. This fear abated in the fall as interest rates began to
decline around the world. With over sixty rate cuts globally in the last quarter
of the year, investors began to regain their poise. Equity prices rallied
strongly in the fourth quarter of 1998. The EAFE index rose by 20.8%, compared
with a third quarter fall of 14.2%.
In Europe, the run-up to the introduction of the Euro on the 1st of January
1999 was accomplished without problems and the last convergence of interest
rates was coordinated in December (except for Italy). Equity markets were
supported by corporate restructuring driving mergers and acquisitions as
companies prepared for the new Europe. The greatest area of economic concern
remained in the Far East, where the Japanese economy suffered a deepening
recession and economic weakness continued to pervade most of the Asian rim.
Looking forward, the pace of economic growth in Europe is expected to
decelerate in 1999, and the prospect of recession is considered to be very small
as domestic demand remains firm. In Asia, while most remain cautious, there are
hopes of more stable economic conditions, and some signs of investors returning
to the region.
We are grateful for your confidence in Weiss, Peck & Greer over the past
year. We look forward to serving our shareholders' investment needs throughout
the end of the 1999 and long into the next millennium.
Sincerely,
/S/ ROGER J. WEISS
---------------------
Roger J. Weiss
Chairman of the Board
January 19, 1999
Page 2
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
MAJOR PORTFOLIO CHANGES - EQUITY FUNDS - QUARTER ENDING DECEMBER 31,1998 -
UNAUDITED
TUDOR FUND GROWTH AND INCOME FUND
- ---------- ----------------------
ADDITIONS ADDITIONS
- --------- ---------
Airgas Inc. AMBAC Inc
Burlington Coat Factory Federal Home Loan Mortgage Corp.
Hexcel Corp. Halliburton
Invacare Corp. HEALTHSOUTH Corp.
KOMAG Inc. Infinity Broadcasting
Pillowtex Corp. PepsiCo, Inc.
Primark Corp. Unilever NV ADR
Structural Dynamics Research
Technology Solutions
Waddell & Reed Financial
DELETIONS DELETIONS
- --------- ---------
Aspect Telecommunications BankAmerica Corp.
GTECH Holding Corp. Columbia/HCA Healthcare Co.
Pathogenesis Corp. Cornerstone Properties Inc.
Segue Software Inc. Energen Corp.
SFX Entertainment Cl A Gap Inc.
Trident International Inc. Linear Technology Corp.
Vesta Insurance Group Inc. Mills Corp.
PeopleSoft Inc.
ProLogis Trust
Travelers Group Inc.
QUANTITATIVE EQUITY FUND INTERNATIONAL FUND
- ------------------------ ------------------
ADDITIONS ADDITIONS
- --------- ---------
Aluminum Company of America Alliance & Leicester
Apache Corp. DaimlerChrysler AG
International Business Machines Corp. Elf Aquitaine
National City Corp. Fujitsu Ltd.
Philips Petroleum Co. Hoechst AG
Proctor & Gamble Co. Imperial Chemical Industries
Sara Lee Corp. Kansai Electric Power Co. Inc.
US West Inc. RWE AG
Viad Corp. Telefonica S.A.
Wal Mart Stores Inc. Zeneca Group
DELETIONS DELETIONS
- --------- ---------
Chrysler Corp. Compass Group PLC
Cisco Systems Fiat Spa
Dayton Hudson Corp. Groupe Danone
Dean Foods Mitsui Fudosan Co.
Household International Inc. Nintendo Co. Ltd.
Lockheed Martin Corp. Pennon Group PLC
Mobil Corp. Roche Holding AG
NationsBank Corp. Schweiz Rueckvers-Gesell
Newell Co. Total SA - B
Royal Dutch Petroleum Co. ADR
Page 3
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
AVERAGE ANNUAL TOTAL RETURN
TUDOR FUND
Last year was a very difficult year for small cap stocks, which is Tudor's area
of emphasis. While the Dow Jones and S&P 500 indices rose sharply during the
year, the majority of listed and over the counter shares declined in price, with
those of smaller companies generally declining the most.
Tudor Fund underperformed its benchmarks for the fourth quarter and the full
year. A new research and portfolio management team assumed responsibility for
Tudor at the end of 1997 and the Fund underwent a major restructuring. The
number of holdings was greatly reduced, more intensive research efforts were
initiated, and foreign stocks were eliminated from the portfolio. This turnover
and repositioning impacted performance in 1998, but we believe that we have
improved the quality of our holdings.
Contributing to the underperformance was an overweight position and unfavorable
stock selection in the industrial sector, especially aerospace suppliers. Health
care was another area of underperformance, due to both an underweight position
and unfavorable stock selection. An underweight position in retail stocks also
hurt relative performance, especially during the fourth quarter.
Areas of positive performance in 1998 included technology and transportation,
especially regional airlines. Overweight positions and favorable stock selection
in the financial and telecommunications sectors also contributed positively to
fourth quarter results. Fourth quarter appreciation was limited by a large cash
position which resulted from transactions undertaken to minimize shareholder's
tax liabilities which resulted from the portfolio restructuring in the first
half of 1998.
[GRAPH OMITTED]
WPG TUDOR FUND COMPARISON WITH RUSSELL 2000 GROWTH
RUSSELL 2500 GROWTH
LIPPER CAPITAL APPRECIATION INDEX
<TABLE>
<CAPTION>
DATE TUDOR R2000 LIPPER R2500
- ---- ----- ----- ------ -----
<S> <C> <C> <C> <C>
1988 10,000 10,000 10,000 10,000
1989 12,504 11,624 12,830 12,451
1990 11,858 9,356 11,832 10,932
1991 17,291 13,665 16,276 16,947
1992 18,176 16,180 17,506 17,928
1993 20,608 19,240 20,264 20,104
1994 18,586 18,890 19,765 19,847
1995 26,240 24,262 26,009 26,504
1996 31,178 28,275 28,897 30,498
1997 34,642 34,600 35,835 34,999
1998 27,018 33,711 42,995 36,084
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
(FOR THE PERIODS ENDED DECEMBER 31, 1998)
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
TUDOR ...................................... -22.01% 5.57% 10.45%
Lipper Cap. Appreciation Index ............. 19.98% 16.26% 15.71%
Russell 2500 Growth Index .................. 3.10% 12.41% 13.69%
</TABLE>
Page 4
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
AVERAGE ANNUAL TOTAL RETURN
GROWTH & INCOME FUND
The 1998 total return for the WPG Growth & Income Fund of 27.51% exceeded that
of the Lipper Growth & Income Fund average by over 10%. Consumer cyclical,
health care and technology sectors contributed heavily to positive performance
during the year. Carnival Corp., Gap Inc. and Home Depot provided the greatest
returns among the consumer cyclical issues in the Fund's portfolio.
Bristol-Myers Squibb, Pfizer, Schering-Plough and Warner-Lambert outperformed
within the health care group, while BMC Software, Compaq Computer, Computer
Associates and Xerox led our technology holdings. During the latter half of 1998
McDonald's and Philip Morris were key performers when the investment environment
became more volatile. Subdued economic growth and restrained inflation should
characterize the 1999 backdrop. This expected economic environment should be
beneficial for the stocks held by the Fund.
[GRAPH OMITTED]
WPG GROWTH & INCOME FUND COMPARISON WITH S & P 500 INDEX
LIPPER CAPITAL APPRECIATION INDEX
<TABLE>
<CAPTION>
DATE GROWTH & INCOME S&P 500 LIPPER
- ---- --------------- ------- ------
<S> <C> <C> <C>
1988 10,000 10,000 10,000
1989 12,764 13,143 12,390
1990 11,442 12,724 11,860
1991 16,101 16,611 15,339
1992 18,323 17,887 16,758
1993 20,071 19,675 18,803
1994 18,975 19,937 18,664
1995 25,185 27,413 24,511
1996 31,335 33,787 29,675
1997 42,701 45,065 37,685
1998 54,448 58,025 43,567
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
(FOR THE PERIODS ENDED DECEMBER 31, 1998)
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
GROWTH AND INCOME .................... 27.51% 22.09% 18.47%
S&P 500 Stock Index .................. 28.76% 24.15% 19.22%
Lipper Growth & Income
Funds Average ....................... 15.61% 18.53% 15.76%
</TABLE>
QUANTITATIVE EQUITY FUND
Two overriding trends of the 1998 market presented a significant challenge to
the WPG Quantitative Equity Fund model. Specifically, the largest cap stocks in
the S&P 500 dominated the index's return, with the top 50 stocks in terms of
capitalization delivering the most significant portion of the total return.
Further, growth stocks significantly outperformed value stocks throughout the
entire year. In fact, traditional measures of favorable stock valuation such as
low price earnings ratios have actually been correlated with negative relative
returns during the year. This combination of the very narrow market and the
disregard for valuation or the growth at any price perspective that existed
during 1998 has made it very difficult for the Quantitative Equity Fund model to
outperform the market. However, sound risk control and strategic portfolio
turnover has allowed the Quantitative Equity Fund to deliver a 26.71% return and
to be more favorably positioned for 1999.
[GRAPH OMITTED]
WPG QUANTITATIVE EQUITY COMPARISON WITH S&P 500
<TABLE>
<CAPTION>
DATE QUANTITATIVE EQUITY S & P
- ---- ------------------- -----
<S> <C> <C>
1/1993 10,000 10,000
1993 11,390 11,008
1994 11,429 11,153
1995 15,242 15,345
1996 18,064 18,868
1997 22,665 25,162
1998 28,719 32,399
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
(FOR THE PERIODS ENDED DECEMBER 31, 1998)
FROM
1 YEAR 5 YEARS 1/1/93 +
------ ------- --------
<S> <C> <C> <C>
QUANTITATIVE EQUITY ............... 26.71% 20.31% 19.22%
S&P 500 Stock Index ............... 28.76% 24.15% 21.67%
</TABLE>
Page 5
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
AVERAGE ANNUAL TOTAL RETURN
INTERNATIONAL FUND
1998 was a turbulent year for the world's equity markets. Investor euphoria
pushed most markets sharply higher initially - the exceptions were Japan and
Asia - only for share prices to fall dramatically over the summer and then stage
a remarkable recovery in the fourth quarter. Asset allocation has focused on
western markets rather than eastern markets, a policy that benefited performance
in the first half of the year but was a drag on performance in the second half.
Despite economic conditions clearly favoring Europe throughout the year, returns
from Japan were boosted in the fourth quarter by an unexpected and large rebound
in the yen, while Asian markets began to see evidence that international
investors were returning to the region. Stock selection was positive in
continental Europe but disappointing in the UK and the Far East.
[GRAPH OMITTED]
WPG INTERNATIONAL FUND COMPARISON WITH EAFE
<TABLE>
<CAPTION>
DATE WPG INTERN'TL EAFE
- ---- ------------- ----
<S> <C> <C>
6/1989 10,000 10,000
1989 11,054 11,567
1990 9,415 8,883
1991 9,510 9,994
1992 8,984 8,810
1993 12,329 11,711
1994 11,550 12,655
1995 12,812 14,117
1996 13,406 15,015
1997 13,793 15,324
1998 16,039 18,440
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
(FOR THE PERIODS ENDED DECEMBER 31, 1998)
FROM
1 YEAR 5 YEARS 6/1/89 +
------ ------- --------
<S> <C> <C> <C>
INTERNATIONAL (a) ................... 16.28% 5.41% 5.06%
EAFE Index .......................... 20.33% 9.50% 6.59%
<FN>
+ Inception of Fund
(a) The Adviser waived its fee from inception of the Fund through 2/28/90 and
has waived a portion of its fee from the date through October 19, 1994. Had
the Adviser not done so, the total return for the five years ended 12/31/98
and from inception through 12/31/98 would have been lower.
</FN>
</TABLE>
INTERMEDIATE MUNICIPAL BOND FUND
Intermediate municipal yields declined somewhat during 1998. As was the case in
the taxable fixed income market, the best performance of the year was found in
high-quality, liquid securities.
The Fund benefited from this market environment by emphasizing high-quality,
general obligation bonds. For the year, the total return of the Fund exceeded
the Lipper average by 38 basis points. The fund trailed the unmanaged index
return by 31 basis points.
[GRAPH OMITTED]
WPG INTERMEDIATE MUNI BOND COMPARISON WITH LEHMAN 3-10 YR. MUNI BOND INDEX
LIPPER INTERMEDIATE MUNI FUND
<TABLE>
<CAPTION>
DATE INTERMDT. MUNI BOND LEHMAN LIPPER
- ---- ------------------- ------ ------
<S> <C> <C> <C>
1993 10,000 10,000 10,000
1993 10,348 10,414 10,344
1994 10,111 10,138 9,970
1995 11,329 11,536 11,284
1996 11,805 12,041 11,700
1997 12,732 12,937 12,538
1998 13,460 13,717 13,207
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
(FOR THE PERIODS ENDED DECEMBER 31, 1998)
FROM
1 YEAR 5 YEARS 7/1/93 +
------ ------- --------
<S> <C> <C> <C>
INTERMEDIATE MUNI BOND (b) ................. 5.72% 5.40% 5.55%
Lehman Brothers 3-10 Year
Municipal Bond Index ..................... 6.03% 5.66% 5.92%
Lipper Intermediate Muni Funds ............. 5.34% 5.18% 5.19%
<FN>
+ Inception of Fund
(b) The Adviser waived its fee from inception of the Fund through October 19,
1994 and has waived a portion of its fee from March 1, 1997 though December
31, 1998 and has also reimbursed certain other expenses from inception date
through February 28, 1997. Had the Adviser not done so, the total return of
the Fund for the one year ended 12/31/98, five years ended 12/31/98, and
from inception through 12/31/98 would have been lower.
</FN>
</TABLE>
Page 6
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
Average Annual Total Return
WPG CORE BOND Fund
For the year ended December 31, 1998, WPG's Core Bond Fund total return exceeded
that of the Lehman Aggregate Index by 57 basis points. This is the first year
that the Fund has operated with the broader investment strategy described in
last year's letter. Under the new strategy pursued throughout 1998, the Fund now
can purchase Treasury, Agency, corporate, Agency mortgage-backed, and
asset-backed securities. Under the former strategy, the Fund (formerly called
the WPG Government Securities Fund) purchased only Government, Agency, and
Agency mortgage-backed securities. The Fund is also being managed with a
slightly longer duration (41/4 to 43/4 years versus 3 to 31/2 years). These
changes coincide with the structure of the new benchmark.
1998 was characterized by extreme volatility in the fixed income markets, as
events overseas triggered a "flight to quality," primarily during the third
quarter. By the end of the quarter, corporate bonds, mortgage-backed securities
and asset-backed securities became very attractive relative to Treasuries, and
the allocation to these sectors was increased significantly. During the fourth
quarter, these sectors outperformed, and by the end of the year, the Fund's
allocations to these sectors were reduced to a modest overweight. The allocation
to these sectors during the year was a major contributor to the Fund's strong
performance for the year. In addition, yield curve positioning was also a
significant contributor to performance, being slightly "barbelled" during much
of the second and third quarter, and then moving to a neutral position during
much of the fourth quarter.
[GRAPH OMITTED]
WPG GOVERNMENT SECURITIES FUND COMPARISON WITH LEHMAN AGGREGATE INDEX
MORNINGSTAR INTERMEDIATE TERM
BOND INDEX
LEHMAN INTMD GOV'T/MBS
MORNINGSTAR GENERAL GOV'T BOND
INDEX
<TABLE>
<CAPTION>
DATE GOV'T SEC. LEHMAN A MORN. INTER. LEHMAN I MORN. G
- ---- ---------- -------- ------------ -------- -------
<S> <C> <C> <C> <C> <C>
12/1998 10,000 10,000 10,000 10,000 10,000
1989 11,389 11,453 11,134 11,374 11,173
1990 12,407 12,479 11,868 12,518 12,124
1991 14,139 14,476 13,839 14,368 13,818
1992 15,255 15,547 14,840 15,367 14,663
1993 16,622 17,063 16,381 16,535 15,822
1994 15,176 16,565 15,762 16,257 15,266
1995 17,186 19,624 18,505 18,761 17,558
1996 17,848 20,337 19,093 19,627 18,007
1997 19,163 22,299 20,764 21,213 19,423
1998 20,938 24,237 22,294 22,857 20,848
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
(FOR THE PERIODS ENDED DECEMBER 31, 1998)
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
CORE BOND (c) ................................. 9.26% 4.72% 7.67%
Lehman Aggregate Index ........................ 8.69% 7.27% 9.26%
Lehman Intermed. Gov/MBS ...................... 7.75% 6.68% 8.62%
Morningstar Intermediate-
Term Bond ................................... 7.37% 6.36% 8.35%
Morningstar Gen'l Gov. Bond Index ............. 7.34% 5.68% 7.62%
<FN>
(c) The Adviser waived a portion of its fee since January 1, 1998. Had the
Adviser not done so, the total return for the one year ended 12/31/98, five
years ended 12/31/98 and ten years ended 12/31/98 would have been lower.
</FN>
</TABLE>
Page 7
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
AVERAGE ANNUAL TOTAL RETURN
Performance represents historical data. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Each Fund's
results and the indices (except as noted below) assume the reinvestment of all
capital gain distributions and income dividends. Each Fund's past performance is
not indicative of future performance and should be considered in light of each
Fund's investment policy and objectives, the characteristics and quality of its
portfolio securities, and the periods selected. The S&P 500 Stock Index is a
broad based measurement of changes in stock market conditions based on the
average performance of 500 widely held common stocks. The Russell 2500 Growth
Index is a measurement of changes in stock market conditions based on the
average performance of small U.S. growth oriented securities with a median
market weighted capitalization of approximately $1.5 billion. Lipper Analytical
Services ("Lipper") and Morningstar compare mutual funds according to overall
performance, investment objectives, investment policies, assets, expense levels,
periods of existence and other factors. The Lehman Brothers Aggregate Index is a
market weighted blend of all investment grade corporate issues, all mortgage
securities and all government issues. The Lehman Brothers Intermediate
Government/Mortgage Backed Securities Index is a market weighted blend of all
intermediate government issues (3-10 year maturities) and all mortgage
securities. The Lehman Brothers 3-10 year Muni Bond Index is a broad based index
which contains all securities in the Lehman Municipal Bond Index with maturities
from 3-10 years. The Morgan Stanley Capital International Europe, Australia, Far
East ("EAFE") is an index of more than 800 companies in Europe, Australia and
the Far East. Indices are unmanaged group of securities.
Page 8
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
TEN LARGEST HOLDINGS AT DECEMBER 31, 1998 *
<TABLE>
<CAPTION>
PERCENT
VALUE OF NET
TUDOR FUND (000'S) ASSETS
- ---------- ------- ------
<S> <C> <C>
Aurora Foods Inc. ............................... $ 3,990 4.6%
Skytel Communications ........................... 3,496 4.0%
Western Wireless Corp. Cl A ..................... 3,300 3.8%
ADVO Inc. ....................................... 2,938 3.4%
Hollinger International Corp. Cl A .............. 2,926 3.4%
American Italian Pasta Co Cl A .................. 2,598 3.0%
Orion Capital Corp. ............................. 2,506 2.9%
CalMat Co. ...................................... 2,482 2.8%
Del Webb Corp. .................................. 2,414 2.8%
Washington Federal Inc. ......................... 2,376 2.7%
------- -----
$29,026 33.4%
======= =====
PERCENT
VALUE OF NET
GROWTH AND INCOME FUND (000'S) ASSETS
- ---------------------- ------- ------
McDonald's Corp. ................................ $ 6,896 4.3%
Bank of New York Inc. ........................... 6,842 4.3%
Bristol-Myers Squibb Co. ........................ 6,691 4.2%
Philip Morris Companies Inc. .................... 6,687 4.2%
Carnival Corp. .................................. 6,480 4.0%
Pfizer Inc. ..................................... 5,645 3.5%
Schering-Plough Corp. ........................... 5,525 3.4%
Federal National Mortgage
Association ................................. 5,550 3.4%
Compaq Computer Corp. ........................... 5,452 3.4%
Baxter International ............................ 5,145 3.2%
------- -----
$60,913 37.9%
======= =====
PERCENT
VALUE OF NET
QUANTITATIVE EQUITY FUND (000'S) ASSETS
- ------------------------ ------- ------
General Electric Co. ............................ $ 3,378 4.6%
Microsoft Corp. ................................. 2,926 4.0%
Exxon Corp. ..................................... 2,771 3.8%
BellSouth Corp. ................................. 2,594 3.5%
Intel Corp ...................................... 2,116 2.9%
Schering-Plough Corp. ........................... 1,953 2.6%
Wal Mart Stores Inc. ............................ 1,792 2.4%
Bristol-Myers Squibb Co. ........................ 1,786 2.4%
Sun Microsystems Inc. ........................... 1,558 2.1%
International Business
Machines Corp. ............................. 1,404 1.9%
------- -----
$22,278 30.2%
======= =====
PERCENT
VALUE OF NET
INTERNATIONAL FUND (000'S) ASSETS
- ------------------ ------- ------
AXA UAP ......................................... $ 227 3.6%
Novartis AG ..................................... 199 3.1%
Telecom Italia SPA .............................. 147 2.3%
Vivendi ......................................... 144 2.3%
Elf Aquitaine ................................... 142 2.2%
Nippon Telegraph & Telephone
Corp ....................................... 139 2.2%
Preussag AG ..................................... 116 1.8%
DaimlerChrysler AG .............................. 115 1.8%
Fortis AG ....................................... 112 1.8%
Commerzbank AG .................................. 111 1.7%
------- -----
$ 1,452 22.8%
======= =====
</TABLE>
Page 9
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
TEN LARGEST HOLDINGS AT DECEMBER 31, 1998 * - CONTINUED
<TABLE>
<CAPTION>
PERCENT
VALUE OF NET
CORE BOND FUND (000'S) ASSETS
- -------------- ------- ------
<S> <C> <C>
Federal National Mortgage Association 7.000% Due 1/1/29 ........................ $14,698 10.5%
Federal National Mortgage Association 6.500% Due 12/1/12 ....................... 12,388 8.9%
United States Treasury Note 6.125% Due 12/31/01 ................................ 12,029 8.6%
United States Treasury Note 6.125% Due 8/15/07 ................................. 8,082 5.8%
Federal National Mortgage Association 6.500% Due 1/1/29 ........................ 6,595 4.7%
United States Treasury Note 5.875% Due 7/31/99 ................................. 6,332 4.6%
Federal National Mortgage Association Discount Note Due 1/14/99 ................ 5,485 3.9%
United States Treasury Bond 5.500% Due 8/15/28 ................................. 5,166 3.7%
Federal Home Loan Mortgage Corp. 7.500% Due 6/1/12 - 9/1/12 .................... 5,141 3.7%
United States Treasury Bond 6.125% Due 11/15/27 ................................ 4,382 3.2%
------- -----
$80,298 57.6%
======= =====
INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------
Seattle Washington General Obligation 5.500% Due 3/1/09 ........................ $ 1,109 4.4%
Ephrata Area School District General Obligation 4.750% Due 10/15/12 ............ 1,090 4.3%
San Francisco California City & County Refunding Series 1 (FGIC Insured)
5.000% Due 6/15/10 .................................................... 1,055 4.2%
Port of Houston Texas General Obligation Bond 5.100% Due 10/1/11 ............... 1,049 4.1%
San Marino Unified School District Series B 4.700% Due 7/1/11 .................. 1,033 4.1%
De Kalb County Georgia Housing Authority Multi-Family Housing Revenue
4.700% Due 12/1/28 .................................................... 1,005 4.0%
Lancaster County Pennsylvania General Obligation Bond Series B (AMBAC Insured)
4.100% Due 11/1/03 .................................................... 716 2.8%
Oklahoma County Oklahoma Home Finance Authority Single Family
Refunding Prerefunded Zero Coupon Due 7/1/12 .......................... 687 2.7%
Mercedes Texas Independent School District 4.900% Due 8/15/10 .................. 599 2.4%
Cypress-Fairbanks Texas General Obligation Independent School District
7.300% Due 2/15/07..................................................... 598 2.3%
------- -----
$ 8,941 35.3%
======= =====
<FN>
* The composition of the largest securities in each portfolio is subject to change.
</FN>
</TABLE>
Page 10
<PAGE>
WEISS, PECK & GREER MUTUALL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
TUDOR
<C> <S> <C>
COMMON STOCKS (99.6%)
CAPITAL GOODS
COMMUNICATION (2.1%)
100,000 o+ Powerwave Technologies Inc. $ 1,863
-------
COMPUTER SOFTWARE &
SERVICES (7.8%)
124,000 + Maxtor Corp. 1,736
73,500 + Rational Software Corp. 1,948
55,500 + Remedy Corp. 774
118,458 + Structural Dynamics Research 2,354
-------
6,812
-------
OTHER CAPITAL GOODS (8.3%)
110,800 + BE Aerospace Inc. 2,327
89,400 + Gardner Denver Machinery 1,319
69,451 + Stoneridge Inc. ADR. 1,580
110,797 + Unova Inc. 2,008
-------
7,234
-------
SEMICONDUCTORS (6.1%)
104,300 + ADE Corp. . 1,356
64,000 + Hadco Corp. 2,240
164,600 + KOMAG Inc. 1,708
-------
5,304
-------
21,213
-------
CONSUMER
Biotechnology (0.7%)
56,794 + Myriad Genetics Inc. 568
-------
FOOD (7.6%)
98,500 + American Italian Pasta Co. - Cl A 2,598
201,400 + Aurora Foods Inc. 3,990
-------
6,588
-------
MEDIA (3.4%)
209,955 Hollinger International Corp. Cl A 2,926
-------
MEDIA - COMMUNICATION (9.7%)
344,200 + Paging Network Inc. 1,613
158,000 + Skytel Communications 3,496
150,000 + Western Wireless Corp. Cl A 3,300
-------
8,409
-------
MEDICAL EQUIPMENT (2.5%)
64,740 + Acuson Corp. 963
50,000 Invacare Corp. 1,200
-------
2,163
-------
NONDURABLE GOODS (2.3%)
75,000 Pillowtex Corp. 2,006
-------
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
TUDOR (CONTINUED)
RETAIL (3.5%)
93,600 + Burlington Coat Factory $1,527
45,000 + Micro Warehouse Inc. 1,521
-------
3,048
-------
25,708
-------
ENERGY
Oil & Gas Exploration (3.2%)
93,700 Cross Timbers Oil Co. 709
463,500 + Gulf Canada Resources Ltd. 1,361
58,500 + Nuevo Energy Co. 673
-------
2,743
-------
INTERMEDIATE GOODS & SERVICES
BASIC INDUSTRIES (10.7%)
67,440 + Airgas Inc. 603
80,397 CalMat Co. 2,482
157,100 + Hexcel Corp. 1,316
70,000 Lyondell Petrochemical Co. 1,260
60,800 OM Group Inc. 2,219
79,000 + UCAR International Inc. 1,407
-------
9,287
-------
BUSINESS SERVICES (7.6%)
111,387 + ADVO Inc. 2,938
77,394 o+ Emcor Group Inc. 1,248
53,800 + Primark Corp. 1,459
85,000 + Technology Solutions 911
-------
6,556
-------
TRANSPORTATION (3.2%)
64,400 + America West Holdings Corp. Cl B 1,095
52,349 Skywest Inc. 1,711
-------
2,806
-------
18,649
-------
INTEREST SENSITIVE
BANKS (7.3%)
167,700 + BankUnited Financial Corp. Cl A 1,342
89,050 Coastal Bancorp Inc. 1,558
36,033 Seacoast Banking 1,022
89,014 Washington Federal Inc. 2,376
-------
6,298
-------
HOMEBUILDING (2.8%)
87,600 Del Webb Corp. 2,414
-------
Insurance (6.8%)
74,500 + Amerin Corp. 1,760
129,650 o Frontier Insurance Group Inc. 1,669
62,935 Orion Capital Corp. 2,506
-------
5,935
-------
</TABLE>
See notes to financial statements
Page 11
<PAGE>
WEISS, PECK & GREER MUTUALL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
TUDOR
<C> <S> <C>
OTHER (4.0%)
76,000 + Affiliated Managers Group $2,271
51,322 Waddell & Reed Financial 1,216
--------
3,487
--------
18,134
--------
TOTAL COMMON STOCKS
(Cost $79,109) 86,447
--------
Principal
Amount
(000's)
- ---------
EURODOLLAR DEPOSIT (1.7%)
(Cost $1,462)
$1,462 SBC Warburg, Inc.
4.250% Due 1/4/99 1,462
--------
TOTAL INVESTMENTS (101.3%)
(Cost $80,571) 87,909
LIABILITIES IN EXCESS OF
OTHER ASSETS (-1.3%) (1,092)
--------
TOTAL NET ASSETS (100.0%) $86,817
========
+ Non-income producing security.
o Security out on loan.
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
GROWTH & INCOME
COMMON STOCKS (97.1%)
CAPITAL GOODS
BROADCASTING / ADVERTISING (0.4%)
25,000 + Infinity Broadcasting $684
--------
COMPUTER SOFTWARE & SERVICES (11.5%)
65,000 + BMC Software Inc. 2,897
100,000 Cadence Design Systems Inc. 2,975
45,000 + Cisco Systems Inc. 4,177
75,000 + Computer Sciences Corp. 4,833
100,000 + Storage Technology Corp. 3,556
--------
18,438
--------
FOOD (2.6%)
50,000 Unilever N.V. ADR 4,147
--------
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
GROWTH & INCOME (CONTINUED)
OTHER CAPITAL GOODS (7.0%)
60,000 Emerson Electric Co. $3,630
34,500 General Electric Co. 3,521
35,000 Xerox Corp. 4,130
--------
11,281
--------
TECHNOLOGY (7.5%)
130,000 Compaq Computer Corp. 5,452
75,000 Computer Associates
International 3,197
50,500 Hewlett-Packard Co. 3,450
--------
12,099
--------
46,649
--------
CONSUMER
HEALTH CARE (20.6%)
80,000 Baxter International 5,145
50,000 Bristol-Myers Squibb Co. 6,691
100,000 + HEALTHSOUTH Corp. 1,544
25,000 Merck & Co. 3,692
45,000 Pfizer Inc. 5,645
100,000 Schering - Plough Corp. 5,525
65,000 Warner Lambert Co. 4,887
--------
33,129
--------
RESTAURANTS (4.3%)
90,000 McDonald's Corp. 6,896
OTHER CONSUMER (17.8%)
80,000 + Autozone Inc. 2,635
135,000 Carnival Corp. 6,480
93,800 Harcourt General 4,995
60,000 Home Depot 3,671
100,000 PepsiCo Inc. 4,094
125,000 Philip Morris Companies Inc. 6,687
--------
28,562
--------
68,587
--------
OTHER CONSUMER
CONSUMER NON-DURABLES (1.6%)
30,000 Johnson & Johnson 2,516
--------
INTERMEDIATE GOODS & SERVICES
NATURAL RESOURCES
Energy & Related (3.2%)
100,000 Halliburton 2,962
50,000 Schlumberger Ltd. 2,306
--------
5,268
--------
See notes to financial statements
Page 12
</TABLE>
<PAGE>
WEISS, PECK & GREER MUTUALL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
GROWTH & INCOME (CONTINUED)
<C> <S> <C>
REAL ESTATE INVESTMENT TRUSTS
COMMERCIAL & INDUSTRIAL (2.7%)
36,200 Bedford Property Investors,200 $ 611
80,000 Crescent Real Estate
Equities Inc. 1,840
80,000 Duke Realty Investments Inc.00 1,860
-------
4,311
-------
HEALTH CARE (0.3%)
25,400 LTC Properties Inc. 25,400 422
-------
4,733
-------
INTEREST SENSITIVE
BANKS (4.3%)
170,000 Bank of New York Inc. 170,000 6,842
-------
INSURANCE (4.6%)
51,500 + AMBAC Inc. 3,100
45,000 American International Group Inc. 4,348
-------
7,448
-------
OTHER (8.7%)
35,000 American Express Co. 3,579
75,000 Federal Home Loan Mortgage Corp. 4,833
75,000 Federal National Mortgage Association 5,550
-------
13,962
-------
28,252
-------
TOTAL COMMON STOCKS
(Cost $98,760) 156,005
-------
PRINCIPAL
AMOUNT
(000's)
- ---------
EURODOLLAR DEPOSIT (2.8%)
(Cost $4,469)
$4,469 SBC Warburg Inc. 4.250% Due 1/4/99 4,469
-------
TOTAL INVESTMENTS (99.9%)
(Cost $103,229) 160,474
OTHER ASSETS IN EXCESS OF LIABILITIES (0.1%) 224
--------
TOTAL NET ASSETS (100.0%) $160,698
========
+ Non-income producing security.
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
QUANTITATIVE EQUITY
COMMON STOCKS (99.7%)
BASIC MATERIALS (2.8%)
4,950 Aluminum Company of America $369
17,350 Kimberly Clark Corp. 946
11,000 Praxair Inc. 388
17,600 Solutia Inc. 394
--------
2,097
--------
COMMERCIAL SERVICES (0.5%)
13,150 + Viad Corp. 399
--------
CONSUMER CYCLICALS (7.4%)
18,200 Ford Motor Co. 1,068
11,250 Gap Inc. 633
49,750 + K Mart Stores 762
11,800 Lowe's Companies Inc. 604
21,200 TJX Companies Inc. 615
22,000 Wal Mart Stores inc. 1,792
--------
5,474
--------
CONSUMER NON-CYCLICALS (10.1%)
14,200 Anheuser- Busch Companies Inc. 932
13,150 Conagra Inc. 414
18,400 Dial Corp. 530
10,600 General Mills Inc. 824
16,200 Heinz H J Co. 917
18,600 Philip Morris Companies Inc. 995
14,800 Premark International. 512
5,950 Proctor & Gamble Co. 543
13,500 + Safeway Inc. 823
12,600 Sara Lee Corp. 355
22,900 Universal Foods Corp. 628
--------
7,473
--------
CONSUMER SERVICES (4.8%)
34,800 Darden Restaurants Inc. 626
7,100 Eastman Kodak Co. 511
14,700 + King World Productions Inc. 433
15,500 Marriott International Inc. - Cl A 450
13,800 + MediaOne Group Inc. 649
25,200 New York Times Co. - Cl A 874
--------
3,543
--------
ENERGY (4.8%)
17,200 Coastal Corp. 601
37,900 Exxon Corp. 2,771
5,700 Halliburton 169
--------
3,541
--------
</TABLE>
See notes to financial statements
Page 13
<PAGE>
WEISS, PECK & GREER MUTUALL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
QUANTITATIVE EQUITY (CONTINUED)
<C> <S> <C>
FINANCE (15.9%)
20,800 Allstate Corp. $803
6,800 AMBAC Inc. 409
8,500 American General Corp. 663
13,200 AmSouth Bancorp 602
19,050 Bank of New York Inc. 767
17,000 Chase Manhattan Corp. 1,157
12,000 Comerica Inc. 818
14,100 Federal National Mortgage Association 1,043
14,000 First Union Corp. 851
22,600 Fleet Financial Group 1,010
9,000 Morgan Stanley Dean Witter Discover 639
7,500 + National City Corp. 540
15,400 Old Republic International 347
5,650 PMI Group. 279
14,700 PNC Bank 796
13,425 Providian Financial Corp. 1,007
--------
11,731
--------
HEALTH CARE (13.2%)
15,950 Abbott Laboratories 782
8,900 + Amgen Inc. 931
13,350 Bristol-Myers Squibb Co. 1,786
9,300 du Pont E I de Nemours & Co. 524
5,600 Guidant Corp. 617
8,800 Lilly (Eli) & Co. 782
3,400 Merck & Co. 502
35,350 Schering-Plough Corp. 1,953
17,750 Warner Lambert Co. 1,335
5,800 + Wellpoint Health Networks 505
--------
9,717
--------
INDUSTRIAL (6.4%)
33,100 General Electric Co. 3,378
8,900 Ingersoll Rand Co. 418
11,900 Tyco International Ltd 898
--------
4,694
--------
INDUSTRIAL SERVICES (0.7%)
8,300 Omnicom Group Inc. 481
--------
TECHNOLOGY (20.4%)
7,000 + Compuware Corp. 547
17,200 + Dell Computer Corp. 1,259
15,700 + EMC Corp. 1,335
7,700 Honeywell Inc. 580
17,850 Intel Corp. 2,116
7,600 International Business Machines Corp. 1,404
5,800 + Litton Industries Inc. 379
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
QUANTITATIVE EQUITY (CONTINUED)
12,500 Lucent Technologies $1,375
21,100 + Microsoft Corp. 2,926
18,200 + Sun Microsystems Inc. 1,558
7,900 United Technologies Corp. 859
12,050 + US West Inc. 779
--------
15,117
--------
TELECOMMUNICATIONS (7.6%)
6,200 + Airtouch Communications, Inc. 447
20,800 Ameritech Corp. 1,318
16,700 A T & T Corp. 1,257
52,000 BellSouth Corp. 2,594
--------
5,616
--------
TRANSPORTATION (0.9%)
5,250 + AMR Corp. 312
11,200 Burlington Northern Santa Fe 378
--------
690
--------
UTILITIES (4.2%)
15,500 Apache Corp. 392
31,100 Baltimore Gas & Electric Co. 956
14,000 FPL Group Inc. 863
20,600 + Phillips Petroleum Co. 878
--------
3,089
--------
TOTAL INVESTMENTS (99.7%)
(Cost $53,211) 73,662
OTHER ASSETS IN EXCESS OF LIABILITIES (0.3%) 222
--------
TOTAL NET ASSETS (100.0%) $73,884
========
+ Non-income producing security.
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
INTERNATIONAL
COMMON STOCKS (94.7%)
AUSTRALIA (2.7%)
1,800 Brambles Industries, Ltd $44
4,000 Broken Hill Proprietary Co. 29
6,600 National Australia Bank, Ltd. 99
--------
172
--------
AUSTRIA (0.8%)
515 OMV AG 49
--------
</TABLE>
See notes to financial statements
Page 14
<PAGE>
WEISS, PECK & GREER MUTUALL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
INTERNATIONAL (CONTINUED)
<C> <S> <C>
BELGIUM (1.8%)
310 + Fortis AG $112
210 + Fortis AG-CVG 1
--------
113
--------
FINLAND (0.9%)
490 Nokia 60
--------
FRANCE (13.7%)
380 + Alcatel Alsthom 46
1,569 + AXA-UAP 227
72 + Carrefour SA 54
452 + Christian Dior 50
1,230 Elf Aquitaine 142
1,145 + Lafarge 109
621 + Societe Generale 101
554 + Vivendi 144
--------
873
--------
GERMANY (11.9%)
3,500 + Commerzbank AG 111
1,164 + DaimlerChrysler AG 115
545 + Deutshe Bank AG 32
1,450 + Hoechst AG 60
355 + Mannesmann AG 41
960 + Metro AG 77
256 Preussag AG 116
1,000 + RWE AG 55
850 + Siemems AG 55
265 + Thyssen AG 49
80 Viag AG 47
--------
758
--------
HONG KONG (2.8%)
26,000 + China Telecom 45
96,000 Cosco Pacific LTD 40
13,000 Hutchison Whampoa 92
--------
177
--------
ITALY (2.3%)
17,235 + Telecom Italia SPA 147
--------
JAPAN (19.6%)
4,000 + Bank of Tokyo-Mitsubishi 41
4,000 Canon Inc. 85
440 Canon Sales Co. 6
88 Circle K Japan Co. 4
2,000 Fuji Photo Film Ltd. 74
6,000 Fujitsu Ltd. 80
5,000 + Hitachi Ltd. 31
3,000 + Jusco Ltd. 61
4,200 + Kansai Electric Power Co. Inc. 92
1,000 Meitec 25
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
INTERNATIONAL (CONTINUED)
5,000 + Minebea Co. LTD $57
1,000 Nabuchi Motor Co. Ltd. 77
18 Nippon Telegraph & Telephone Corp. 139
190 + Nippon Television Network 56
4,000 Nomura Securities Co. 35
14,000 OJI Paper Co. 73
1,000 Secom Co. Ltd. 83
900 SMC Corp. 72
2,000 Takeda Chemical Industries 77
3,000 Toyota Motor Corp. 81
--------
1,249
--------
NETHERLANDS (5.7%)
2,001 + ABN-AMRO Holding NV 42
840 + Akzo Nobel 38
3,910 Elsevier 55
975 + ING Groep NV 59
1,332 Philips Electronics 89
1,600 + Royal Dutch Petroleum 80
--------
363
--------
SPAIN (3.8%)
4,100 + Corp. Bancaria De Espana 106
3,340 Endesa SA 88
1,100 + Telefonica SA 49
--------
243
--------
SWEDEN (2.8%)
2,426 Ericsson Tele B 58
899 Pharmacia & Upjohn 50
2,820 + Stora Kopparberg Cl A 31
1,830 + Volvo AB Cl B 42
--------
181
--------
SWITZERLAND (5.0%)
33 Nestle 72
101 Novartis AG 199
170 + UBS AG Registered 52
--------
323
--------
UNITED KINGDOM (20.9%)
3,500 Alliance & Leicester 51
9,000 Bank of Scotland 107
2,560 Barclays 55
11,942 BBA Group 74
30,000 Billington Inc. 59
8,000 British Energy 91
7,017 British Petroleum Co. 105
6,156 Diageo 70
3,100 Glaxo Wellcome 107
4,352 Granada Group 77
11,000 + Imperial Chemical Industries 95
</TABLE>
See notes to financial statements
Page 15
<PAGE>
WEISS, PECK & GREER MUTUALL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES SECURITY (000'S)
- --------- -------- -------
INTERNATIONAL (CONTINUED)
<C> <S> <C>
3,500 Pennon Group $68
4,604 Prudential Corp. 69
2,400 + Sage Group 63
5,100 Smithkline Beecham 71
3,500 Standard Chartered 40
3,200 Whitbread 41
2,000 Zeneca Group 87
--------
1,330
--------
TOTAL COMMON STOCKS
(Cost $5,247) 6,038
--------
NUMBER
OF RIGHTS
- ---------
RIGHTS (0.0%)
(Cost $0)
SPAIN (0.0%)
1,100 + Telefonica SA 1
--------
NUMBER OF
WARRANTS
- ----------
WARRANTS (0.0%)
(Cost $1)
FRANCE (0.0%)
1,134 Eaux (CIE Generale Des) Expires 5/2/01 3
--------
PRINCIPAL
AMOUNT
(000'S)
- ---------
CONVERTIBLE BONDS (1.0%)
(Cost $51)
JAPAN (1.0%)
$62 Sumitomo Bank International Finance 0 .75% Due 5/31/01 61
--------
TOTAL INVESTMENTS (95.7%)
(Cost $5,299) 6,103
OTHER ASSETS IN EXCESS OF LIABILITIES (4.3%) 272
--------
TOTAL NET ASSETS (100.0%) $6,375
========
</TABLE>
+ Non-income producing security
See notes to financial statements
Page 16
<PAGE>
INTERNATIONAL (CONTINUED)
INTERNATIONAL FUND
INDUSTRY CONCENTRATIONS
% OF NET VALUE
ASSETS (000'S)
------ -------
14.1% Banking ........................................ $ 899
9.3% Health & Personal Care ......................... 591
7.5% Telecommunications ............................. 478
6.4% Business & Public Services ..................... 410
6.4% Insurance ...................................... 409
5.9% Utilities - Electric & Gas ..................... 374
5.1% Energy Sources ................................. 324
4.5% Multi-Industry ................................. 284
4.2% Electrical & Electronics ....................... 268
3.7% Automobiles .................................... 238
3.0% Chemicals ...................................... 194
3.0% Merchandising .................................. 192
2.6% Data Processing &
Reproduction ................................... 165
2.1% Broadcasting & Publishing ...................... 136
2.1% Industrial Components .......................... 132
1.9% Recreation - Other Consumer .................... 124
1.8% Machinery & Engineering ........................ 113
1.7% Building Materials & Components ................ 109
1.7% Metals - Steel ................................. 109
1.6% Forest Products & Paper ........................ 104
1.5% Financial Services ............................. 94
1.4% Appliances & Household
Durables ....................................... 89
1.3% Energy Equipment & Services .................... 80
1.1% Food & Household Products ...................... 72
1.1% Beverages & Tobacco ............................ 70
0.6% Leisure & Tourism .............................. 41
0.1% Retail ......................................... 4
------ ------
95.7% Total Investments .............................. 6,103
Other Assets in Excess of Liabilities .......... 272
------ ------
100.0% Total Net Assets ............................... $6,375
======= ======
See notes to financial statements
Page 16
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
CORE BOND
<C> <S> <C>
LONG-TERM SECURITIES
ASSET BACKED SECURITIES (2.4%)
(Cost $3,300)
CREDIT CARDS (2.4%)
$3,255 Chase Manhattan Corp.
Series 1998-3 Class A 6.000% Due 8/15/05 $3,300
------
CORPORATE DEBENTURES (27.1%)
BANKS (3.9%)
550 Chase Manhattan Corp. 9.750% Due 11/1/01 610
2,025 CitiGroup 7.750% Due 6/15/06 2,251
1,500 CitiGroup 7.250% Due 9/1/08 1,653
550 First Interstate Bancorp 9.900% Due 11/15/01 615
370 NationsBank Corp. 6.090% Due 12/14/01 374
------
5,503
------
CONSUMER CYCLICALS (1.1%)
1,500 Saks Inc. 7.250% Due 12/1/04 1,501
------
Finance (11.2%)
3,000 American General Finance Corp. 5.750% Due 11/01/03 3,008
50 Aristar Inc. 6.000% Due 8/1/01 55
200 Associates Corp. NA 6.500% Due 10/15/02 207
105 Bear Stearns Co. Inc. 6.500% Due 7/5/00 106
350 Beneficial Corp. 6.270% Due 1/9/02 356
1,735 Beneficial Corp. 6.250% Due 2/18/03 1,765
440 CIT Group Inc. 5.750% Due 11/01/03 441
620 Commercial Credit Corp. 8.250% Due 11/1/01 665
50 Commercial Credit Corp. 6.875% Due 5/1/02 52
1,445 Commercial Credit Corp. 6.500% Due 8/1/04 1,504
2,000 Conseco Inc. 7.875% Due 12/15/00 2,016
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
CORE BOND (CONTINUED)
$ 200 Merrill Lynch & Co. 6.375% Due 10/1/01 $204
2,800 Merrill Lynch & Co. 6.875% Due 11/15/18 2,903
2,240 Newcourt Credit Group 7.125% Due 12/17/03 (B) 2,226
50 Salomon Smith Barney Holdings 5.875% Due 2/1/01 50
-------
15,558
-------
INDUSTRIAL (5.8%)
1,480 Cendant Corp. 7.500% Due 12/01/00 1,486
1,905 Ford Motor Co. 6.625% Due 10/1/28 2,055
1,900 Occidental Petroleum Corp. 7.375% Due 11/15/08 1,939
2,500 Service Corp. International 7.375% Due 4/15/04 2,633
-------
8,113
-------
REAL ESTATE INVESTMENT TRUST (4.4%)
3,590 CarrAmerica Realty Corp. 6.250% Due 10/1/00 3,581
425 Colonial Realty LP 6.980% Due 9/26/05 409
2,255 Health Care Properties 6.875% Due 6/8/05 (D) 2,132
-------
6,122
-------
TELEPHONE (0.7%)
950 Sprint Capital Corp. 6.875% Due 11/15/28 987
-------
TOTAL CORPORATE DEBENTURES
(Cost $37,667) 37,784
-------
U.S GOVERNMENT OBLIGATIONS (29.0%)
U.S. TREASURY BOND (6.8%)
3,915 6.125% Due 11/15/27 4,382
4,935 o 5.500% Due 8/15/28 5,166
-------
9,548
-------
U.S. TREASURY NOTES (19.9%)
6,290 5.875% Due 7/31/99 6,332
200 5.750% Due 9/30/99 202
655 5.625% Due 11/30/99 661
11,560 6.125% Due 12/31/01 12,029
360 6.375% Due 8/15/02 380
7,400 6.125% Due 8/15/07 8,082
-------
27,686
-------
</TABLE>
See notes to financial statements
Page 17
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
CORE BOND (CONTINUED)
<C> <S> <C>
U.S. TREASURY STRIPS (2.3%)
$ 8,785 Zero Coupon Due 5/15/17 $3,192
-------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $40,439) 40,426
-------
MORTGAGE PASS THROUGH SECURITIES (34.8%)
FEDERAL HOME LOAN MORTGAGE CORPORATION (FREDDIE MAC) (5.6%)
2,585 7.000% Due 1/15/08 - 3/15/08. 2,694
5,000 7.500% Due 6/1/12 - 9/1/12 5,141
-------
7,835
-------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) (27.6%)
210 7.000% Due 5/25/07 217
1,095 9.000% Due 11/1/10 1,153
12,217 6.500% Due 12/1/12 12,388
6,550 6.500% Due 1/1/29 (C) 6,595
14,405 7.000% Due 1/1/29 (C) 14,698
3,385 7.500% Due 2/1/29 (C) 3,476
-------
38,527
-------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) (1.6%)
2,196 7.500% Due 9/15/07 2,277
-------
OTHER (0.0%)
3 Household International Finance Co. Series 1993-2 Class A3
4.650% Due 12/20/08 3
-------
TOTAL MORTGAGE PASS THROUGH SECURITIES
(Cost $48,534) 48,642
-------
NON-MORTGAGE PASS THROUGH NOTES (6.4%)
FEDERAL HOME LOAN MORTGAGE CORPORATION (FREDDIE MAC) (4.0%)
2,615 5.750% Due 7/15/03. 2,682
2,800 6.625% Due 3/12/08 (E) 2,842
-------
5,524
-------
Federal National Mortgage Association (FNMA) (2.4%)
705 6.480% Due 12/24/07 (E) 727
2,715 6.010% Due 9/24/08 (E) 2,703
-------
3,430
-------
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
CORE BOND (CONTINUED)
Total Non-Mortgage Pass Through Notes
(Cost $8,981) $8,954
-------
NUMBER
OF SHARES
- ---------
PREFERRED STOCK (1.1%)
(Cost $1,575)
BANKS (1.1%)
28,500 CitiGroup Series G 1,511
-------
PRINCIPAL
AMOUNT
000'S
- ---------
SHORT-TERM SECURITIES
ASSET BACKED SECURITIES (11.1%)
AUTOMOBILE LEASES (1.7%)
$ 2,425 World Omni Auto Lease Series 1998 Class A1 5.614%
Due 12/15/04 (a) 2,425
CREDIT CARDS (9.4%)
1,290 Capital One Master Trust Series 1995-1 Class A
5.725% Due 10/15/03 (a) 1,288
610 First Deposit Master Trust Series 1995-1 Class A
5.725% Due 8/15/04 (a) 610
1,540 First USA Bank Master Trust Series 1995-5 Class A
5.733% Due 4/15/03 (a) 1,539
2,170 First USA Bank Master Trust Series 1997-10 Class A
5.634% Due 9/17/03 (a) 2,165
2,545 MBNA Credit Card Trust Series 1995-I Class A
5.705% Due 3/15/03 (a) 2,544
1,760 MBNA Credit Card Trust Series 1996-D Class A
5.685% Due 9/15/03 (a) 1,758
1,070 MBNA Credit Card Trust Series 1998-I Class A
5.795% Due 10/15/03 (a) 1,071
1,045 People's Master Credit Card Trust Series 1998-I Class A
5.675% Due 11/15/05 (a) 1,038
1,005 Signet Credit Card Master Trust Series 1994-3 Class A
5.735% Due 9/16/02 (a) 1,005
75 Standard Credit Card Master Trust 6.800% Due 4/7/99 75
-------
13,093
-------
</TABLE>
See notes to financial statements
Page 18
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
CORE BOND (CONTINUED)
<C> <S> <C>
TOTAL ASSET BACKED SECURITIES
(Cost $15,552) $15,518
-------
U.S. GOVERNMENT AGENCY
DISCOUNT NOTES (3.9%)
$ 5,495 FEDERAL NATIONAL
Mortgage Association (FNMA)
(Cost $5,485)
Discount Note Due 1/14/99 5,485
-------
REPURCHASE AGREEMENT (2.3%)
3,156 SBC Warburg Inc. 4.750% Due 1/4/99 with maturity value of $3,158
(Collateralized by $3,233 U.S. Treasury Bond
9.250% Due 2/15/16) 3,156
-------
TOTAL INVESTMENTS (118.2%)
(Cost $164,689) 164,776
LIABILITIES IN EXCESS OF
OTHER ASSETS (-18.2%) (25,313)
--------
TOTAL NET ASSETS (100.0%) $139,463
--------
SECURITIES SOLD SHORT
(Cost $4,853)
4,725 Federal National Mortgage Association (FNMA) (3.5%)
7.500% Due 2/15/14 (C) $4,857
--------
(a) Adjustable rate security.
(B) SEC Rule 144A Security. Such security has limited markets and is
traded among "qualified institutional buyers." (C) When issued
security.
(D) Puttable security.
(E) Callable security.
o Securities out on loan.
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
INTERMEDIATE MUNICIPAL BOND
CALIFORNIA (14.9%)
$ 565 California Educational Facilities Authority Revenue Refunding
College of Chiropractic 4.700% Due 11/1/01 $576
400 California Health Facilities Finance Authority Revenue
Northern Presbyterian Hospital 4.500% Due 7/1/04 405
200 Corona California Public Finance Authority, Public Improvement
Revenue Refunding 5.950% Due 7/1/07 210
1,000 San Francisco California City & County Refunding
Series 1 (FGIC Insured) 5.000% Due 6/15/10 1,055
1,000 San Marino Unified School District Series B
4.700% Due 7/1/11 1,033
480 Simi Valley USA California University School District
Certificates of Participation Refunding & Capital
Improvement Projects (AMBAC Insured) 4.800% Due 8/1/10. 500
COLORADO (2.4%)
100 Adams County Colorado School District No. 12 Series D
General Obligation (MBIA Insured ) 5.450% Due 12/15/06. 109
45 Brighton Colorado General Obligation (FGIC Insured )
Zero Coupon Due 12/1/00. 42
300 Superior Metropolitan District Number 2 Boulder County Colorado
General Obligation Series 1998 Zero Coupon Due 12/1/13 303
</TABLE>
See notes to financial statements
Page 19
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
INTERMEDIATE MUNICIPAL BOND (CONTINUED)
<C> <S> <C>
$ 150 Westminster Colorado Multifamily Revenue Refunding Housing
Oasis Wexford Apartments Project 5.350% Due 12/1/25. $158
CONNECTICUT (1.4%)
85 Connecticut State Health & Education Facilities Authority Revenue
Sacred Heart University Series D 4.800% Due 7/1/99 86
95 Connecticut State Health & Education Facilities Authority Revenue
Sacred Heart University Series D 5.200% Due 7/1/01 98
100 Connecticut State Health & Education Facilities Authority Revenue
Sacred Heart University Series D 5.300% Due 7/1/02. 105
50 Stratford Connecticut General Obligation Bond (FGIC Insured)
7.000% Due 6/15/04 57
DISTRICT OF COLUMBIA (1.2%)
15 District of Columbia General Obligation Bond Prerefunded Revenue
5.000% Due 6/1/01 15
285 District of Columbia General Obligation Bond
5.000% Due 6/1/01. 290
FLORIDA (5.1%)
250 Jacksonville Florida Electric Authority Revenue
6.000% Due 7/1/01 257
455 Pace Property Finance Authority Florida Utility System Revenue
Refunding & Improvement (AMBAC Insured)
5.100% Due 9/1/09. 489
500 St. John's County Florida Water & Sewer Revenue
(MBIA Insured) 5.250% Due 6/1/10. 543
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
INTERMEDIATE MUNICIPAL BOND (CONTINUED)
$ 10 St. Lucie County School Board Certificates of Participation
Series A (AMBAC Insured) 7.250% Due 7/1/04 $11
GEORGIA (5.9%)
1,000 De Kalb County Georgia Housing Authority Multi- Family
Housing Revenue 4.700% Due 12/1/28 1,005
400 Georgia State Series D General Obligation
6.700% Due 8/1/10 488
ILLINOIS (1.8%)
100 Cook County Illinois School District School District Number 99
(FGIC Insured) 8.400% Due 1/1/01. 109
100 Cook & DuPage Counties, Illinois Combined School District - B
(FGIC Insured) Zero Coupon Due 12/1/05. 75
265 Illinois Health Facilities Authority Revenue Series A
(MBIA Insured) 7.900% Due 8/15/03 269
INDIANA (2.7%)
395 La Porte Indiana Economic Development Revenue
Boise Cascade Corp. Project Escrowed to Maturity
7.375% Due 6/1/01. 416
250 Marion County Indiana Hospital Authority Hospital Facility Revenue
Methodist Hospital of Indiana Escrowed to Maturity
6.501% Due 9/1/08. 259
IOWA (0.4%)
100 Iowa Student Loan Liquidity Corporation Student Loan Revenue
6.450% Due 3/1/02. 106
</TABLE>
See notes to financial statements
Page 20
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
INTERMEDIATE MUNICIPAL BOND (CONTINUED)
<C> <S> <C>
KENTUCKY (2.2%)
$ 155 Dayton Kentucky Elderly Housing Speers Court
(FHA Insured) 5.350% Due 9/1/05 $163
385 Kentucky State Turnpike Authority
Toll Road Revenue Series A 8.500% Due 7/1/04 387
MASSACHUSETTS (5.2%)
250 Massachusetts Bay Transportation Authority General
Transportation System 5.300% Due 3/1/05 268
500 Massachusetts State Consolidated Loan Series D
General Obligation 5.250% Due 11/1/12 524
500 New England Education Loan Marketing Corp. Series A
6.500% Due 9/1/02 539
MICHIGAN (1.6%)
110 Ferris State College Special Obligation
7.500% Due 8/15/03. 118
240 Michigan State Building Authority Chippewa
Correctional Facilities Escrowed to Maturity
7.250% Due 10/1/04 281
MINNESOTA (0.4%)
100 St. Paul Minnesota Port Authority Commercial Development
General Revenue Fort Road Med/Irvine (Asset Guaranty Insured)
7.500% Due 9/1/02 103
NEBRASKA (1.0%)
245 Nebraska Investment Finance Authority Multi Family Revenue
Refunding Housing Wycliffe West 5.500% Due 12/1/25. 260
NEVADA (1.3%)
160 Nevada Housing Division Single Family Program
5.500% Due 10/1/02 166
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
INTERMEDIATE MUNICIPAL BOND (CONTINUED)
$ 150 Nevada State Muni Bond Bank Project 38-39A
Escrowed to Maturity Refunded 6.400% Due 7/1/05 $164
NEW JERSEY (2.3%)
335 Arlington Arms Financing Corp. New Jersey Mortgage Revenue
Arlington Arms Apartments (FHA Insured)
10.250% Due 3/1/25 341
240 Gateway New Jersey Housing Development Corporation
Revenue Bond Section 8 (FHA Insured)
10.500% Due 8/1/25 246
NEW YORK (3.7%)
100 Hempstead Town New York General Obligation, Series B
(AMBAC Insured) 6.500% Due 1/1/12. 121
505 New York State Environmental Facility Corp., Pollution
Control Revenue Series B 5.300% Due 12/15/10. 547
250 Onondaga County New York General Obligation Bond
5.875% Due 2/15/09. 283
NORTH CAROLINA (1.8%)
400 Surry County North Carolina Pollution Control Finance Authority
9.250% Due 12/1/02 445
OHIO (0.1%)
70 Ohio Housing Financing Agency Single Family Mortgage
Series 1985A (FGIC Insured) Zero Coupon Due 1/15/15 14
OKLAHOMA (3.6%)
1,625 Oklahoma County Oklahoma Home Finance Authority
Single Family Refunding Prerefunded
Zero Coupon Due 7/1/12 687
</TABLE>
See notes to financial statements
Page 21
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
INTERMEDIATE MUNICIPAL BOND (CONTINUED)
<C> <S> <C>
$ 200 Tulsa Oklahoma Metropolitan Utility Authority Revenue
7.000% Due 2/1/03 $219
PENNSYLVANIA (9.1%)
1,085 Ephrata Area School District General Obligation
4.750% Due 10/15/12 1,090
500 Hempfield Pennsylvania School District Refunding
6.700% Due 10/15/99. 501
710 Lancaster County Pennsylvania General Obligation Bond
Series B (AMBAC Insured) 4.100% Due 11/1/03 716
SOUTH CAROLINA (1.4%)
70 Piedmont Municipal Power Agency South Carolina Electric Revenue
Series A Escrowed to Maturity (FGIC Insured)
6.125% Due 1/1/07. 80
230 Piedmont Municipal Power Agency South Carolina Electric Refunding
Escrowed to Maturity (MBIA Insured) 6.250% Due 1/1/09 268
TEXAS (18.8%)
500 Cypress-Fairbanks Texas General Obligation
Independent School District 7.300% due 2/15/07 598
500 Deer Park Texas Independent School District School Building
6.375% Due 2/15/07 578
570 Edgewood Texas Independent School District Lease Revenue
4.700% Due 8/15/05. 574
805 Harris County Texas Flood District General Obligation
Zero Coupon Due 10/1/06 499
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
INTERMEDIATE MUNICIPAL BOND (CONTINUED)
$ 265 Lower Colorado River Authority Prerefunded Revenue
6.250% Due 5/1/07 $302
550 Mercedes Texas Independent School District
4.800% Due 8/15/09 568
580 Mercedes Texas Independent School District
4.900% Due 8/15/10 599
1,000 Port of Houston Texas General Obligation Bond
5.100% Due 10/1/11 1,049
UTAH (1.2%)
275 Salt Lake City Utah Water Conservancy District Revenue
Refunding Series A Escrowed to Maturity
(MBIA Insured) 10.875% Due 10/1/02 314
VIRGINIA (2.2%)
500 Brunswick County Virginia Industrial Development Authority
Correctional Facilities Lease (MBIA Insured)
5.650% Due 7/1/09. 550
30 Virginia State Housing Development Authority
Multi Family Series A Zero Coupon Due 11/1/17 6
WASHINGTON (6.9%)
250 Lynnwood Washington Water & Sewer Revenue Refunding
(FGIC Insured) 6.000% Due 12/1/07 283
1,000 Seattle Washington General Obligation
5.500% Due 3/1/09 1,109
300 Washington State Motor Vehicle Tax General Obligation
6.200% Due 3/1/08. 346
</TABLE>
See notes to financial statements
Page 22
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
INTERMEDIATE MUNICIPAL BOND (CONTINUED)
<C> <S> <C>
WISCONSIN (0.0%)
$ 5 Wisconsin State Clean Water Revenue
5.000% Due 6/1/08 $5
-------
TOTAL INVESTMENTS (98.6%)
(Cost $24,013) 24,980
OTHER ASSETS IN EXCESS OF LIABILITIES (1.4%). 361
-------
TOTAL NET ASSETS (100.0%) $25,341
-------
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
GOVERNMENT MONEY MARKET
U.S. GOVERNMENT AGENCY OBLIGATIONS (89.5%)
FEDERAL FARM CREDIT BANK (24.4%)
$ 5,000 Discount Note Due 1/4/99 $ 4,998
10,000 Discount Note Due 1/8/99 9,990
10,000 Discount Note Due 1/11/99 9,986
10,000 Discount Note Due 1/12/99 9,985
10,000 Discount Note Due 1/13/99 9,983
15,000 Discount Note Due 1/21/99 14,958
5,000 Discount Note Due 1/28/99 4,981
5,000 Discount Note Due 2/1/99 4,979
10,000 Discount Note Due 2/2/99 9,956
10,000 Discount Note Due 2/19/99 9,932
5,000 Discount Note Due 3/10/99 4,954
4,820 Discount Note Due 3/22/99 4,767
5,000 Discount Note Due 4/27/99 4,922
--------
104,391
--------
FEDERAL HOME LOAN BANK (65.1%)
30,000 Discount Note Due 1/4/99 29,989
5,000 Discount Note Due 1/5/99 4,997
15,000 Discount Note Due 1/6/99 14,990
10,000 Discount Note Due 1/7/99 9,991
15,000 Discount Note Due 1/8/99 14,986
5,000 Discount Note Due 1/14/99 4,991
15,000 Discount Note Due 1/15/99 14,972
10,000 Discount Note Due 1/19/99 9,976
25,000 Discount Note Due 1/20/99 24,935
15,000 Discount Note Due 1/22/99 14,956
5,000 Discount Note Due 1/26/99 4,983
15,000 Discount Note Due 1/27/99 14,947
15,000 Discount Note Due 1/29/99 14,942
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
GOVERNMENT MONEY MARKET (CONTINUED)
$10,000 Discount Note Due 2/3/99 $9,955
15,000 Discount Note Due 2/5/99 14,927
20,000 Discount Note Due 2/10/99 19,888
10,000 Discount Note Due 2/12/99 9,942
10,000 Discount Note Due 2/17/99 9,935
5,000 Discount Note Due 2/19/99 4,967
5,000 Discount Note Due 2/24/99 4,963
10,000 Discount Note Due 3/3/99 9,915
5,000 Discount Note Due 3/5/99 4,957
5,000 Discount Note Due 3/17/99 4,949
5,000 Discount Note Due 3/26/99 4,942
--------
278,995
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $383,386). 383,386
--------
REPURCHASE AGREEMENT (10.0%)
(Cost $42,827)
42,827 SBC Warburg Inc. 4.750% Due 1/4/99 with maturity value
of $42,850 (Collateralized by $43,864
U.S. Treasury Bond 9.250% Due 2/15/16) 42,827
--------
TOTAL INVESTMENTS (99.5%)
(Cost $426,213) 426,213
OTHER ASSETS IN EXCESS OF LIABILITIES (0.5%) 2,230
--------
TOTAL NET ASSETS (100.0%). $428,443
=======
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET
ARIZONA (0.1%)
$ 100 Tucson Industrial Development Tucson City Center Parking
Garage Authority 4.125% Due 6/1/15 (a) $100
COLORADO (3.3%)
100 Colorado Housing Finance Authority Multi-Family Housing Revenue
(Grant's Plaza) 4.125% Due 11/1/09 (a) 100
</TABLE>
See notes to financial statements
Page 23
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
<C> <S> <C>
$ 4,000 Denver Colorado City & County Multi-Family Housing Revenue
(Ogden Residence Project) 5.250% Due 12/1/09 (a) $4,000
125 Summit County Colorado Recreational Facilities Revenue Refunding
(Copper Mountain) 3.450% Due 4/1/17 (a) 125
125 Summit County Colorado Recreational Facilities Revenue Refunding
(Copper Mountain) 3.450% Due 4/1/17 (a) 125
FLORIDA (0.6%)
300 Broward County Florida Housing Finance Authority
Multi-Family Housing Revenue (Sanctuary Apts Project)
4.200% Due 2/1/09(a) 300
500 Florida State Board of Education Capital Outlay Series A
4.000% Due 1/1/00 504
GEORGIA (7.5%)
1,000 Cobb County Georgia Housing Authority Multi Family Housing
(Post Bridge Project) 4.000% Due 6/1/25 (a) 1,000
5,170 Effingham County Georgia Development Authority Pollution
Control Revenue (Savannah Electric and
Power Co. Project) 5.100% Due 4/1/37 (a) 5,170
180 Floyd County Georgia Development Authority Pollution
Control Revenue Georgia Power Co.
(PLT Hammond Project) 5.100% Due 9/1/26 (a) 180
1,000 Fulton County Development Authority Revenue-Woodward
Academy Income Project 4.000% Due 12/1/12 (a) 1,000
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
$ 200 Gwinnet County Georgia Development Authority Revenue
(Wesleyan School Project) 4.000% Due 3/1/17 (a) $200
1,000 Marietta Georgia Housing Authority Multifamily Revenue
(Falls at Bells Ferry) 3.950% Due 1/15/09 (a) 1,000
350 Savannah Georgia Housing Authority Multifamily Housing Revenue
Somerset Wharf Project B 4.000% Due 6/15/26 (a) 350
1,000 Smyrna Georgia Housing Authority Multifamily Housing Revenue
F & M Villages Project 4.000% Due 6/1/25 (a) 1,000
ILLINOIS (14.0%)
200 Darien Industrial Development Authority Kinder Care Centers
Series C 4.150% Due 2/1/01 (a) 200
200 Illinois Development Finance Authority Industrial Development
Refunding Bond (Field Container Corp.)
4.050% Due 12/1/99 (a) 200
800 Illinois Development Finance Authority Industrial Development
Refunding Bond (Dart Container) 3.500% Due 8/1/25 (a) 800
1,300 Illinois Development Finance Limited (Dart Container Corp)
4.146% Due 12/1/09 (a) 1,300
4,000 Illinois Health Facilities Authority Revenue-Advocate
Healthcare Network Series B 4.000% Due 8/15/22 (a) 4,000
4,000 Illinois State Toll Highway Authority
Highway Priority Revenue Refunding Series B
3.850% Due 1/1/10 (a) 4,000
</TABLE>
See notes to financial statements
Page 24
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
<C> <S> <C>
$ 3,550 St. Clair County Illinois Industrial Development Board
(Winchester Apartments Project Ser 94)
4.200% Due 10/1/15 (a) $3,550
2,300 Village of Troy Grove Illinois (Unimin Corp.)
4.573% Due 5/1/10 (a) 2,300
2,000 Winnebago & Boone Counties Rockford School District #205
Tax Anticipation Warrants 5.400% Due 10/29/99 (a) 2,014
INDIANA (4.9%)
1,200 Fall Creek Industrial Waste District Sewer Works Revenue
3.950% Due 1/30/99 1,200
720 GAF Tax-Exempt Bond Grantor Trust Series A
4.100% Due 4/1/08 (a) 720
1,000 Indianapolis Indiana Economic Development
(Joint & Clutch Series 1984) 3.643% Due 12/1/14 (a) 1,000
400 LaGrange Economic Development Revenue Sealed Power Corp.
3.350% Due 10/1/15 (a) 400
1,925 Marion County Metro School District of Wayne Township
Series 1998 Bond Anticipation Notes
4.250% Due 1/1/99 (a) 1,925
1,200 Mishawaka Indiana Waterworks Revenue Bond Anticipation Notes
Series A 4.200% Due 8/12/99 1,200
KANSAS (1.5%)
2,000 Salina Kansas Central Mall (Salina Central Mall Dillard)
4.250% Due 12/1/04 (a) 2,000
KENTUCKY (3.3%)
760 Boone County Kentucky Industrial Development Bond Revenue
(Jamike/Hemmer Project) 3.750% Due 2/1/06 (a) 760
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
$ 430 Elva-New Harmony Oak Level Fire Protection District
4.350% Due 12/1/31 (a) $430
170 Florence Kentucky Industrial Building Revenue
(Florence Commercial Project) 3.500% Due 6/1/07 (a) 170
2,030 Fort Thomas Kentucky Industrial Buildings Revenue
(Carmel Manor Project) 3.550% Due 10/1/14 (a) 2,030
490 Harvey Brewers Fire Protection District Kentucky Lease Revenue
Program 4.350% Due 12/1/31 (a) 490
490 Muhlenberg County Airport District
Development Area Financial Trust 4.350% Due 12/1/31 (a) 490
LOUISIANA (0.8%)
1,000 Calcasieu Parish Industrial Development Board
Pollution Control Revenue Citgo Petroleum Corp.
4.300% Due 8/1/04 (a) 1,000
MARYLAND (1.9%)
1,500 Howard County Maryland Revenue Owen Brown Joint Venture Facility
3.500% Due 5/1/11(a) 1,500
1,000 Maryland Health & Higher Education Facilities Authority Revenue
Pooled LN Program B 4.150% Due 4/1/35 (a) 1,000
MASSACHUSETTS (0.8%)
1,000 Brockton Massachusetts Bank Anticipation Notes
4.000% Due 5/18/99 1,001
MICHIGAN (11.8%)
945 Birmingham Michigan Economic Development Corporation Radnor
Corp. (Brown Street Project 83) 4.375% Due 12/1/18 (a) 945
</TABLE>
See notes to financial statements
Page 25
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
<C> <S> <C>
$ 1,055 Cedar Springs Michigan Public
Schools State Anticipation Notes 4.500% Due 8/23/99 $1,058
2,100 Lansing Michigan Economic Development Corp.
(Atrium Office Building) 3.350% Due 5/1/15 (a) 2,100
835 Leelanau County Michigan Economic Development Corp.
Revenue (American Community Mutual Insurance Co. Project)
3.250% Due 6/15/06 (a) 835
900 Livonia Michigan Economic Development Corporation
(American Community Mutual Insurance)
3.250% Due 11/15/04 (a) 900
185 McDonald Tax-Exempt Mortgage Trust #1
4.100% Due 1/15/09 (a) 186
200 Michigan State Job Development Authority Revenue
(Kentwood Residence) 3.050% Due 11/1/14 (a) 200
255 Michigan State Strategic Fund (Tawas Bay
Association Project) 3.250% Due 12/1/01 (a) 255
495 Michigan State Strategic Fund Limited Obligation Revenue
Refunding (Woodbridge Commercial Properties)
3.500% Due 10/15/05 (a) 495
2,145 Oakland County Michigan Economic Development Corporation
(Corners Shopping Center) 3.700% Due 8/1/15 (a) 2,145
3,500 Plainwell Michigan Economic Development Corporation
(Plainwell Paper Co. Inc. Project) 4.500% Due 11/1/07 (a) 3,500
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
$ 2,900 Royal Oak Hospital Finance Authority William Beaumont
Hospital Series L 5.000% Due 1/1/27 (a) $2,900
MINNESOTA (6.3%)
5,920 Minnesota Capital Realty Tax Exempt Limited, Series 96-1
4.280% Due 12/1/04 (b) 5,920
1,330 Hutchinson Minnesota Economic Development Authority
Revenue Refunding (Developers Diversified)
3.700% Due 8/15/06 (a) 1,330
1,019 International Falls Minnesota Economic Development Revenue
(Developers Diversified Limited Project)
3.570% Due 7/1/06 (a) 1,019
MISSISSIPPI (0.4%)
575 Desoto County Mississippi Industrial Development Revenue
(American Soap Company Project)
4.573% Due 12/1/08 (a) 575
MISSOURI (6.1%)
500 Clayton Industrial Development Authority Industrial Development
Revenue Refunding Bailey Court Project
4.280% Due 1/1/09 (a) 500
2,900 Kansas City Industrial Development
Authority Multifamily Housing Revenue Cloverset
Apartments Project 4.300% Due 10/1/15 (a) 2,900
3,700 Missouri Health & Educational
Facilities Authority-Francis Medical Center A
5.100% Due 6/1/26 (a) 3,700
900 St. Charles County Industrial Development Authority
Revenue Sun River Village 4.100% Due 12/1/27 (a) 900
</TABLE>
See notes to financial statements
Page 26
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
<C> <S> <C>
NEBRASKA (1.3%)
$ 1,750 Nebraska Public Power District Revenue Mun Tr CERTS PG - MCT
No 2-A 3.600% Due 1/11/99 (a) $1,750
NEW JERSEY (2.3%)
1,700 Atlantic City NJ Special Emergency Notes
Bank Anticipation Notes 3.625% Due 12/9/99 1,705
1,220 New Brunswick City Guaranteed Parking Revenue
Series B 7.200% Due 9/1/15 (c) 1,266
NEVADA (1.0%)
500 Clark County Nevada Series A
5.600% Due 6/1/99 505
805 Washoe County Nevada Hospital Facilities Revenue Washoe
Medical Center Project Series A
7.600% Due 6/1/19 (c) 834
NEW YORK (5.3%)
300 Municipal Assistance Corporation for the City of NY Series 68
7.200% Due 7/1/02 (c) 312
360 New York City Cultural Resources Revenue Trust (Modern Museum)
Series A 4.500% Due 1/1/99 360
2,135 New York State Job Development Authority, Series C-1 to C-30
3.150% Due 3/1/99 (a) 2,135
900 New York State Dormitory Authority
Revenues FHA Mortgage Hospital United Health Service
4.100% Due 2/1/99 900
570 New York State Job Development Authority, Series F-1 to F-17
3.150% Due 3/1/99 (a) 570
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
$ 2,735 New York State Urban Development Corporation Floats PT 210
3.575% Due 1/14/99 (a) $2,735
NORTH CAROLINA (0.1%)
100 Beaufort County Industri 4.100% Due 12/1/00 (a) 100
OHIO (9.3%)
125 Brooklyn Ohio Industrial Development Revenue Refunding
(Clinton Road Project A) 3.800% Due 12/1/00 (a) 125
595 Buckeye Ohio Tax Exempt Mortgage Bond Trust Series C
4.050% Due 2/1/05 (a) 595
910 Cincinnati & Hamilton County Ohio Port Authority Revenue
Refunding (Tri State Building) 3.300% Due 9/1/99 (a) 910
480 Clermont County Ohio Economic Development Revenue
(John Q. Hammons Project) 3.400% Due 5/1/12 (a) 480
215 Franklin County Ohio Industrial Development Revenue
(GSW Building Association Ltd.) 3.250% Due 11/1/15 (a) 215
2,030 Lakewood Ohio Hospital Revenue (Hospital
Improvement Series 1983) 3.410% Due 11/1/10 (a) 2,030
865 McDonald Tax Exempt Mortgage Trust # 1
4.100% Due 1/15/09 (a) 866
1,390 Riverside Ohio Economic Development Revenue
(Riverside Association Project) 3.600% Due 9/1/12 (a) 1,390
</TABLE>
See notes to financial statements
Page 27
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
<C> <S> <C>
$ 890 Riverside Ohio Economic Development Revenue
(Wright Point Association) 3.600% Due 9/1/10 (a) $890
540 Stark County Ohio Health Care Facilities
(Canton Christian Home) 3.650% Due 9/15/16 (a) 540
1,935 Stark County Ohio Health Care Facilities
(Canton Christian Home PJ ) Series 90
3.650% Due 9/1/15 (a) 1,935
245 Stark County Ohio Industrial Development Revenue
(Belpar Professional Building) 3.500% Due 10/1/04 (a) 245
1,960 Stark County Ohio Industrial Development Revenue
(Newmarket Parking Ltd.) 3.400% Due 11/1/14 (a) 1,960
OKLAHOMA (1.7%)
1,000 Oklahoma State Industrial Authority Revenue Baptist
Medical Center - B 3.350% Due 8/15/23 (a) 1,000
1,250 Tulsa County Oklahoma Industrial Development Authority
Healthcare Revenue Laureate Psychiatric Center
3.200% Due 12/15/08 (a) 1,250
PENNSYLVANIA (0.6%)
575 Commonwealth Tax-Exempt Mortgage Bond Trust Series A
3.250% Due 11/1/05 (a) 575
185 McDonald Tax Exempt Mortgage Trust # 1
4.100% Due 1/15/09 (a) 186
TENNESSEE (6.6%)
2,600 Franklin County Tennessee Health & Educational Facilities Revenue
(University of the South Sewanee) 3.650% Due 9/1/10 (a) 2,600
1,280 GAF Tax Exempt Bond Grantor Trust Series A
4.250% Due 4/1/08 (a) 1,280
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
$ 3,000 Greystone Tax Exempt 1998-1 Certificate
4.130% Due 5/1/28 (a) $3,000
600 Jacksonville Tennessee Industrial Development Revenue
Esselte Project Series B 5.100% Due 8/1/15 (a) 600
1,150 Knoxville Tennessee Industrial Development Board
Toys R Us Project 4.250% Due 5/1/14 (a) 1,150
TEXAS (6.1%)
2,415 Harris County Texas Multifamily Housing Revenue
(Greenhouse Development) 4.375% Due 4/1/07 (a) 2,415
2,100 Harris County Texas Multifamily Housing Revenue
(Country Scape Development) 4.375% Due 4/1/07 (a) 2,100
165 San Antonio Texas Electric and Gas Revenue
7.000% Due 2/1/00 (c) 168
700 Texas Health Facilities Development Corp.
Aces North Texas Pooled Health Series 1985B
4.350% Due 5/31/25 (a) 700
2,650 Waxahachie Texas Industrial Development Authority
(Dart Container Project Series 1985)
3.487% Due 4/1/06 (a) 2,650
UTAH (0.8%)
1,000 Intermountain Power Agency Utah Power Supply Revenue
Refunding Series B 7.200% Due 7/1/99 1,020
VERMONT (0.4%)
535 Vermont Industrial Development Authority
Hydroelectric Revenue Bond Central Vermont Public Service Corp.
3.500% Due 12/1/13 (a) 535
</TABLE>
See notes to financial statements
Page 28
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
<C> <S> <C>
VIRGINIA (1.5%)
$ 1,000 Rockingham County Virginia Industrial Development Authority
(Merck & Company Inc. Project)
4.500% Due 10/1/22 (a) $1,000
1,000 Rockingham County Virginia Industrial Development Authority
4.500% Due 10/1/22 (a) 1,000
WASHINGTON (1.5%)
1,800 Washington State Housing Finance Community Non-Profit Housing
(Emerald Heights Project) 5.150% Due 1/1/21 (a) 1,800
100 Washington State Housing Finance Community Non-Profit
Housing Revenue (Panorama City Project)
4.800% Due 1/1/27 (a) 100
WISCONSIN (4.0%)
2,500 DC Everest Area School District
Tax and Revenue Anticipation Notes 3.930% Due 8/26/99 2,500
1,000 Lake Geneva Genoa City Electric
Wisconsin High School District 3.450% Due 9/30/99 1,001
1,100 Rosedale Brandon School District Tax and Revenue Promissory
Notes 3.810% Due 9/27/99 1,101
700 Weyauwega-Freemont School District Tax and Revenue
Anticipation Notes 4.040% Due 8/25/99 701
WYOMING (0.9%)
1,130 Cheyenne County Wyoming Economic Development
Revenue Bonds (Holiday Inn) 3.550% Due 10/1/10 (a) 1,130
PRINCIPAL
AMOUNT VALUE
(000'S) SECURITY (000'S)
- ------- -------- -------
TAX FREE MONEY MARKET (CONTINUED)
TOTAL INVESTMENTS (106.7%)
(Cost $140,112) $140,112
LIABILITIES IN EXCESS OF OTHER ASSETS (-6.7%) (8,844)
--------
TOTAL NET ASSETS (100.0%) $131,268
========
<FN>
(a) Interest rate subject to change approximately every 1 to 397 days. Principal
payable on demand at periodic intervals at the Fund's option.
(b) Coupon fluctuates with the Prime Rate (Prime is the rate on corporate loans
posted by at least 75% of the nations 30 largest banks.)
(c) Coupon fluctuates with remarket values.
</FN>
</TABLE>
See notes to financial statements
Page 29
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
GROWTH AND QUANTITATIVE
$ IN THOUSANDS TUDOR INCOME EQUITY
- ------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C>
Investments at value # .................................... $87,909 $160,474 $73,662
Investments in Repurchase Agreements,at value # ........... 0 0 0
Cash ...................................................... 1 1 176
Proceeds from securities sold short ....................... 0 0 0
Receivable for securities sold ............................ 0 1,092 0
Receivable for Fund shares sold ........................... 110 360 23
Dividends and interest receivable ......................... 64 194 91
Other assets .............................................. 7 5 11
------- -------- -------
88,091 162,126 73,963
------- -------- -------
LIABILITIES
Distributions payable ..................................... 6 8 0
Payable to custodian bank ................................. 0 0 0
Payable for investment securities purchased ............... 0 0 0
Payable for Fund shares redeemed .......................... 1,134 1,273 1
Market value of securities sold short ..................... 0 0 0
Accrued investment advisory fee payable - Note 4 .......... 66 99 45
Accrued administration fee payable - Note 4 ............... 3 8 4
Accrued expenses .......................................... 65 40 29
------- -------- -------
1,274 1,428 79
------- -------- -------
NET ASSETS .............................. 86,817 160,698 73,884
======= ======== =======
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, at par ..................... 1,838 3,954 13
Paid-in surplus ........................................... 76,694 97,971 52,137
Accumulated undistributed net investment income/
(distributions in excess of net investment income) 0 90 177
Undistributed realized gains on investments,
futures, options and currencies/(Distributions
in excess of realized gains on investments,
futures, options and currencies) ................. 947 1,438 1,107
Net unrealized appreciation on investments,
futures, options and currencies .................. 7,338 57,245 20,450
------- -------- -------
NET ASSETS APPLIED TO OUTSTANDING SHARES .................. 86,817 160,698 73,884
======= ======== =======
CAPITAL SHARES (AUTHORIZED SHARES UNLIMITED)
Outstanding (000's) ....................................... 5,515 3,954 12,761
======== ======== ========
Par Value ................................................. $ 0.33 $ 1.00 $ 0.001
======== ======== ========
Net asset value per share ................................. $ 15.74 $ 40.64 $ 5.79
======== ======== ========
# Investments at cost ..................................... 80,571 103,229 53,211
======== ======== ========
UNREALIZED APPRECIATION/(DEPRECIATION): *
Gross appreciation ............................... 13,677 57,793 21,406
Gross depreciation ............................... (6,339) (548) (956)
-------- ------- -------
NET UNREALIZED APPRECIATION ............................... 7,338 57,245 20,450
======== ======== ========
<FN>
* Based on cost of securities for book purposes which does not differ
significantly from Federal income tax cost.
</FN>
</TABLE>
See notes to financial statements
Page 30
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE
MUNICIPAL GOVERNMENT TAX FREE
INTERNATIONAL CORE BOND BOND MONEY MONEY
MARKET MARKET
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C>
Investments at value # .................................... $ 6,103 $ 161,620 $24,980 $383,386 $ 140,112
Investments in Repurchase Agreements,at value # ........... 0 3,156 0 42,827 0
Cash ...................................................... 47 0 34 2 0
Proceeds from securities sold short ....................... 0 4,853 0 0 0
Receivable for securities sold ............................ 231 0 0 0 2,810
Receivable for Fund shares sold ........................... 5 8,913 0 9,223 0
Dividends and interest receivable ......................... 20 1,289 408 6 1,037
Other assets .............................................. 0 8 1 7 5
--------- --------- -------- -------- --------
6,406 179,839 25,423 435,451 143,964
--------- --------- -------- -------- --------
LIABILITIES
Distributions payable ..................................... 0 104 52 3 15
Payable to custodian bank ................................. 0 1 0 0 35
Payable for investment securities purchased ............... 0 35,332 0 0 11,284
Payable for Fund shares redeemed .......................... 0 8 0 6,675 1,270
Market value of securities sold short ..................... 0 4,857 0 0 0
Accrued investment advisory fee payable - Note 4 .......... 8 29 11 189 55
Accrued administration fee payable - Note 4 ............... 0 0 0 15 6
Accrued expenses .......................................... 23 45 19 126 31
--------- --------- -------- -------- --------
31 40,376 82 7,008 12,696
--------- --------- -------- -------- --------
NET ASSETS .............................. 6,375 139,463 25,341 428,443 131,268
========= ========= ======== ======== ========
NET ASSETS REPRESENTED BY:
Shares of beneficial interest, at par ..................... 7 14 2 429 131
Paid-in surplus ........................................... 5,481 174,936 24,407 430,029 131,157
Accumulated undistributed net investment income/
(distributions in excess of net investment income) (29) 0 (31) 0 0
Undistributed realized gains on investments,
futures, options and currencies/(Distributions
in excess of realized gains on investments,
futures, options and currencies) ................. 113 (35,570) (4) (2,015) (20)
Net unrealized appreciation on investments,
futures, options and currencies .................. 803 83 967 0 0
--------- --------- -------- -------- --------
NET ASSETS APPLIED TO OUTSTANDING SHARES .................. 6,375 139,463 25,341 428,443 131,268
========= ========= ======== ======== ========
CAPITAL SHARES (AUTHORIZED SHARES UNLIMITED)
Outstanding (000's) ....................................... 689 14,465 2,403 428,716 131,288
========= ========= ======== ======== ========
Par Value ................................................. $ 0.01 $ 0.001 $ 0.001 $ 0.001 $ 0.001
========= ========= ======== ======== ========
Net asset value per share ................................. $ 9.25 $ 9.64 $ 10.55 $ 1.00 $ 1.00
========= ========= ======== ======== ========
# Investments at cost ..................................... 5,299 164,689 24,013 426,213 140,112
========= ========= ======== ======== ========
UNREALIZED APPRECIATION/(DEPRECIATION): *
Gross appreciation ............................... 1,071 535 972 0 0
Gross depreciation ............................... (268) (452) (5) 0 0
--------- --------- ------- -------- --------
NET UNREALIZED APPRECIATION ............................... 803 83 967 0 0
========= ========= ======== ======== ========
</TABLE>
See notes to financial statements
Page 31
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
STATEMENTS OF OPERATIONS FOR YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
GROWTH AND QUANTITATIVE
$ IN THOUSANDS TUDOR INCOME EQUITY
- --------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends (net of withholding taxes) ......................... $ 574 $ 2,236 $ 1,216
Interest ..................................................... 582 227 48
Income from securities loaned - Note 3 ....................... 18 0 0
Other ........................................................ 184 7 0
-------- -------- --------
1,358 2,470 1,264
-------- -------- --------
EXPENSES:
Investment advisory fee - Note 4 ............................. 1,155 1,058 613
Transfer agent fees and expenses ............................. 196 96 47
Administration fees - Note 4 ................................. 64 85 46
Custodian fees and expenses .................................. 34 24 28
Fund accounting fees and expenses ............................ 55 59 35
Professional fees ............................................ 68 63 50
Trustees' fees and expenses .................................. 21 21 19
Registration fees ............................................ 20 18 12
Shareholders' reports ........................................ 14 14 10
Other expenses ............................................... 20 28 11
1,647 1,466 871
-------- -------- --------
Less fees waived by adviser .................................. 0 0 0
Less expenses paid indirectly - Note 6 ....................... (2) 0 (4)
-------- -------- --------
1,645 1,466 867
-------- -------- --------
NET INVESTMENT INCOME/(LOSS) ................................. (287) 1,004 397
-------- -------- --------
REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS, FUTURES, OPTIONS AND CURRENCIES:
Net realized gain on investments, futures and options 4,537 15,119 19,699
Net realized gain/(loss) on currencies .............. 5 0 0
Change in unrealized appreciation/(depreciation) on
investments, futures and options ........... (33,554) 17,402 (522)
Net change in unrealized appreciation on currencies . 0 0 0
-------- -------- --------
NET GAIN/(LOSS) ON INVESTMENTS, FUTURES, OPTIONS
AND CURRENCIES ...................................... (29,012) 32,521 19,177
-------- -------- --------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........................... ($29,299) $ 33,525 $ 19,574
======== ======== ========
</TABLE>
See notes to financial statements
Page 32
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT TAX FREE
MUNICIPAL MONEY MONEY
INTERNATIONAL CORE BOND BOND MARKET MARKET
- -----------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C>
Dividends (net of withholding taxes) ......................... $ 197 $ 44 $ 0 $ 0 $ 0
Interest ..................................................... 1 7,483 1,279 13,685 4,502
Income from securities loaned - Note 3 ....................... 0 13 0 0 0
Other ........................................................ 2 52 2 0 14
-------- -------- -------- -------- --------
200 7,592 1,281 13,685 4,516
-------- -------- -------- -------- --------
EXPENSES:
Investment advisory fee - Note 4 ............................. 41 733 126 1,280 602
Transfer agent fees and expenses ............................. 36 53 35 180 75
Administration fees - Note 4 ................................. 0 61 0 102 56
Custodian fees and expenses .................................. 27 38 6 37 22
Fund accounting fees and expenses ............................ 13 57 24 100 48
Professional fees ............................................ 36 67 28 61 49
Trustees' fees and expenses .................................. 18 21 18 22 20
Registration fees ............................................ 16 21 13 74 16
Shareholders' reports ........................................ 8 19 7 10 7
Other expenses ............................................... 3 13 11 14 15
-------- -------- -------- -------- --------
198 1,083 268 1,880 910
Less fees waived by adviser .................................. 0 (457) (52) 0 0
Less expenses paid indirectly - Note 6 ....................... (3) (14) (2) (9) (11)
-------- -------- -------- -------- --------
195 612 214 1,871 899
-------- -------- -------- -------- --------
NET INVESTMENT INCOME/(LOSS) ................................. 5 6,980 1,067 11,814 3,617
-------- -------- -------- -------- --------
REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS, FUTURES, OPTIONS AND CURRENCIES:
Net realized gain on investments, futures and options 1,666 4,280 171 0 0
Net realized gain/(loss) on currencies .............. (159) 0 0 0 0
Change in unrealized appreciation/(depreciation) on
investments, futures and options ........... (490) (411) 136 0 0
Net change in unrealized appreciation on currencies . 17 0 0 0 0
-------- -------- -------- -------- --------
NET GAIN/(LOSS) ON INVESTMENTS, FUTURES, OPTIONS
AND CURRENCIES ...................................... 1,034 3,869 307 0 0
-------- -------- -------- -------- --------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........................... $ 1,039 $ 10,849 $ 1,374 $11,814 $ 3,617
======== ======== ======== ======= ========
</TABLE>
See notes to financial statements
Page 33
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1998 AND 1997 $ IN THOUSANDS
<TABLE>
<CAPTION>
QUANTITATIVE
TUDOR GROWTH & INCOME EQUITY
------------------------------------------------------------------------
1998 1997 1998 1997 1998 1997
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income/
(loss) ..................... ($ 287) ($ 778) $ 1,004 $ 867 $ 397 $ 1,078
Net realized gain/
(loss) on
investments,
futures, options,
and currencies ............. 4,542 27,732 15,119 12,903 19,699 18,088
Net change in unrealized
appreciation/ (depreciation)
on investments, futures,
options and currencies ..... (33,554) (6,932) 17,402 16,703 (522) 4,604
Net Increase/(Decrease) in Net
Assets Resulting
from Operations ............ (29,299) 20,022 33,525 30,473 19,574 23,770
Distributions to
Shareholders:
From net investment
income ..................... 0 0 (942) (735) (601) (1,032)
From distributions
in excess
of net investment
income ..................... 0 0 0 0 0 0
From realized gains ............. (6,581) (26,044) (14,032) (13,500) (15,035) (18,970)
Net Decrease Due to
Distributions .............. (6,581) (26,044) (14,974) (14,235) (15,636) (20,002)
Transactions in Shares of
Beneficial Interest:
Received on issuance:
Shares sold ................ 122,415 398,240 41,323 19,356 5,515 10,292
Distributions
reinvested ................. 6,026 24,010 13,922 12,892 15,301 19,631
Shares redeemed ............ (172,203) (431,139) (30,244) (14,277) (46,925) (40,086)
Net Increase/(Decrease) from
Capital Share
Transactions ............... (43,762) (8,889) 25,001 17,971 (26,109) (10,163)
Total Increase/(Decrease)
in Net Assets .............. (79,642) (14,911) 43,552 34,209 (22,171) (6,395)
Net Assets:
Beginning of year ............... 166,459 181,370 117,146 82,937 96,055 102,450
End of year * ................... $ 86,817 $ 166,459 $ 160,698 $ 117,146 $ 73,884 $ 96,055
* Includes undistributed
net investment
income/ (distributions
in excess of net
investment income) ......... $ 0 $ 98 $ 90 $ 243 $ 177 $ 382
Transactions in shares
of the funds
(in thousands):
Sold ....................... 5,745 16,664 1,048 549 864 1,618
Reinvestment of
distributions ............. 403 1,115 343 368 2,727 3,361
Redeemed ................... (8,234) (17,969) (733) (410) (7,282) (5,933)
Net increase/
(decrease) ................. (2,086) (190) 658 507 (3,691) (954)
</TABLE>
See notes to financial statements
Page 34
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE
MUNICIPAL
INTERNATIONAL CORE BOND BOND
1998 1997 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income/
(loss) ............................ $ 5 $ 1 $ 6,980 $ 6,502 $ 1,067 $ 950
Net realized gain/
(loss) on
investments,
futures, options,
and currencies .................... 1,507 (285) 4,280 1,562 171 34
Net change in unrealized
appreciation/ (depreciation)
on investments, futures,
options and currencies ............ (473) 672 (411) 307 136 652
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS ................... 1,039 388 10,849 8,371 1,374 1,636
Distributions to
Shareholders:
From net investment
income ............................ 0 (7) (6,936) (6,446) (1,099) (950)
From distributions
in excess
of net investment
income ............................ 0 0 (48) 0 0 0
From realized gains .................... (1,380) (348) 0 0 (67) 0
NET DECREASE DUE TO
DISTRIBUTIONS ..................... (1,380) (355) (6,984) (6,446) (1,166) (950)
Transactions in Shares of
Beneficial Interest:
Received on issuance:
Shares sold ....................... 575 1,504 49,376 9,057 8,028 13,254
Distributions
reinvested ...................... 1,372 353 5,426 4,387 702 564
Shares redeemed ............(3,786) (6,496) (27,647) (7,105) (6,210) (1,573,014) (3,786)
NET INCREASE/(DECREASE) FROM
CAPITAL SHARE
TRANSACTIONS ...................... (1,839) (4,639) 27,155 (14,286) 1,625 7,608
Total Increase/(Decrease)
in Net Assets ..................... (2,180) (4,606) 31,020 (12,361) 1,833 8,294
Net Assets:
Beginning of year ...................... 8,555 13,161 108,443 120,804 23,508 15,214
End of year * .......................... $ 6,375 $ 8,555 $ 139,463 $ 108,443 $ 25,341 $ 23,508
* Includes undistributed
net investment
income/ (distributions
in excess of net
investment income) ................ ($ 29) ($ 23) $ 0 $ 3 $ (31) $ 1
Transactions in shares
of the funds
(in thousands):
Sold .............................. 52 142 5,189 989 763 1,301
Reinvestment of
distributions .................... 148 35 570 476 67 55
Redeemed .......................... (353) (613) (2,905) (3,003) (676) (607)
Net increase/
(decrease) ........................ (153) (436) 2,854 (1,538) 154 749
GOVERNMENT TAX FREE
MONEY MARKET MONEY MARKET
1997 1998 1997 1998
- --------------------------------------------------------------------------------------------------------
Operations:
Net investment income/
(loss) ............................ $ 11,814 $ 7,321 $ 3,617 $ 4,125
Net realized gain/
(loss) on
investments,
futures, options,
and currencies .................... 0 0 0 (4)
Net change in unrealized
appreciation/ (depreciation)
on investments, futures,
options and currencies ............ 0 0 0 0
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS ................... 11,814 7,321 3,617 4,121
Distributions to
Shareholders:
From net investment
income ............................ (11,814) (7,321) (3,617) (4,125)
From distributions
in excess
of net investment
income ............................ 0 0 0 0
From realized gains .................... 0 0 0 0
NET DECREASE DUE TO
DISTRIBUTIONS ..................... (11,814) (7,321) (3,617) (4,125)
Transactions in Shares of
Beneficial Interest:
Received on issuance:
Shares sold ....................... 1,782,122 1,653,080 1,109,476 1,058,249
Distributions
reinvested ...................... 11,518 7,078 3,457 3,978
Shares redeemed ............ (1,605,127) (1,111,748) (1,049,563)
NET INCREASE/(DECREASE) FROM
CAPITAL SHARE
TRANSACTIONS ...................... 220,626 55,031 1,185 12,664
Total Increase/(Decrease)
in Net Assets ..................... 220,626 55,031 1,185 12,660
Net Assets:
Beginning of year ...................... 207,817 152,786 130,083 117,423
End of year * .......................... $ 428,443 $ 207,817 $ 131,268 $ 130,083
* Includes undistributed
net investment
income/ (distributions
in excess of net
investment income) ................ $ 0 $ 0 $ 0 $ 0
Transactions in shares
of the funds
(in thousands):
Sold .............................. 1,782,123 1,653,080 1,109,476 1,058,249
Reinvestment of
distributions .................... 11,517 7,078 3,457 3,978
Redeemed .......................... (1,573,014) (1,605,127) (1,111,748) (1,049,563)
Net increase/
(decrease) ........................ 220,626 55,031 1,185 12,664
</TABLE>
See notes to financial statements
Page 35
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
- ------------
The following are open-end management investment companies (the "Funds")
registered under the Investment Company Act of 1940 (the "Act"):
WPG Tudor Fund ("Tudor")
WPG Growth and Income Fund ("Growth and Income") Weiss, Peck & Greer
Funds Trust ("WPG Funds Trust"):
WPG Quantitative Equity Fund ("Quantitative Equity") WPG Core
Bond Fund ("Core Bond") WPG Intermediate Municipal Bond Fund
("Municipal Bond") WPG Government Money Market Fund
("Government Money Market") WPG Tax Free Money Market Fund
("Tax Free Money Market")
Weiss, Peck & Greer International Fund ("International")
Each fund is diversified.
Government Money Market and Tax Free Money Market are money market funds
that seek to maintain continuous net asset values of $1.00. The following
is a summary of the significant accounting policies followed by the funds
in the preparation of the financial statements. These policies are in
conformity with generally accepted accounting principles.
PORTFOLIO VALUATION
- -------------------
COMMON STOCK -- Securities listed or admitted to trading on a national
securities exchange, including options, are valued at the last sale price,
on such exchange, as of the close of regular trading on the New York Stock
Exchange ("NYSE") on the day the net asset value calculation is made.
Unlisted securities and listed securities for which there are no sales
reported on the valuation date are valued at the mean between the most
recent bid and asked prices.
BONDS -- Bonds and other fixed income securities (other than short-term
obligations but including listed issues) are valued by a pricing service
which utilizes both dealer-supplied valuations and electronic data
processing techniques which take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other
market data, without exclusive reliance upon quoted prices, exchanges or
over-the-counter prices, when such valuations are believed to reflect the
market value of such securities.
MONEY MARKET SECURITIES -- Securities are valued at amortized cost, which
has been determined by the Funds' Board of Trustees to represent the fair
value of the Funds' investments.
FOREIGN SECURITIES -- Securities listed or admitted to trading on an
international securities exchange, including options, are valued at the
last sale price, at the close of the primary international exchange on the
day the net asset value calculation is made. Unlisted securities and listed
securities for which there are no sales reported on the valuation date are
valued at the mean between the most recent bid and ask prices.
OTHER SECURITIES -- Other securities and assets for which market quotations
are not readily available are valued at their fair value as determined, in
good faith, by the Funds' Valuation Committee as authorized by the Funds'
Board of Trustees.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME
- ---------------------------------------------
Securities transactions are recorded on a trade date basis. Realized gains
and losses from securities transactions are recorded utilizing the specific
identification method. Dividend income is recognized on the ex-dividend
date and interest income is recognized on an accrual basis. Discounts on
fixed income securities are accreted to interest income over the life of
the security or until an applicable call date if sooner, with a
corresponding increase in cost basis; premiums are amortized on municipal
securities only, with a corresponding decrease in cost basis.
Page 36
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEDERAL INCOME TAXES
- --------------------
The Funds intend to comply with the requirements of the Internal Revenue
Code that pertain to regulated investment companies and to distribute all
of their taxable income to their shareholders. No federal income tax or
excise tax provision is required. As of December 31, 1998, the following
funds had capital loss carryforwards:
(in thousands)
Year of Expiration
------------------
Fund 2001 2002 2003 2004 2005 2006
---- ---- ---- ---- ---- ---- ----
Core Bond -- 14,662 20,113 753 -- --
Government Money Market -- -- 2,014 -- -- --
Tax Free Money Market 11 -- 1 3 4 1
DISTRIBUTION TO SHAREHOLDERS
- ----------------------------
Dividends from Net Investment Income -- Distributions are recorded on the
ex-dividend date. Dividends from net investment income are declared and
paid annually when available for the Tudor, Quantitative Equity and
International Funds and quarterly for the Growth & Income Fund. Dividends
from net investment income are declared daily and paid monthly for the Core
Bond, Municipal Bond, Government Money Market and Tax Free Money Market
Funds.
DISTRIBUTIONS FROM NET REALIZED GAINS -- Distributions from net realized
gains are declared and paid by December 31 of the year in which they are
earned. To the extent that net realized capital gains can be offset by
capital loss carryovers, if any, it is the policy of the Funds not to
distribute such gains.
The character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are due to differing
treatments for items such as mortgage backed securities, net operating
losses, deferral of wash sale losses, options and futures, and post October
losses.
REPURCHASE AGREEMENTS (TUDOR, CORE BOND, GOVERNMENT MONEY MARKET)
- -----------------------------------------------------------------
It is each Funds' policy to take possession of securities or other assets
purchased under agreements to resell. The securities purchased under
agreements to resell are marked to market every business day to ensure that
the value of the "collateral" is at least equal to the value of the loan,
including the accrued interest earned thereon, plus sufficient additional
market value as is considered necessary to provide a margin of safety.
FUTURES (TUDOR, QUANTITATIVE EQUITY, INTERNATIONAL, CORE BOND)
- --------------------------------------------------------------
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a
contract, a Fund is required to pledge to the broker an amount of cash
and/or securities equal to the minimum "initial margin" requirements of the
exchange. Pursuant to the contract, the Fund agrees to receive from, or pay
to the broker, an amount of cash equal to the daily fluctuation in value of
the contract. Such a receipt or payment is known as a "variation margin"
and is recorded by each Fund as an unrealized gain or loss. When the
contract is closed, the Fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and
the value at the time it was closed. The Fund is also required to fully
collateralize futures contracts purchased. The Fund only enters into
futures contracts which are traded on exchanges.
OPTIONS WRITING (TUDOR, GROWTH & INCOME, QUANTITATIVE EQUITY,
INTERNATIONAL, CORE BOND)
- -------------------------------------------------------------
A Fund may write covered options to protect against adverse movements in
the price of securities in the investment portfolio. When a Fund writes an
option, an amount equal to the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire
unexercised are recorded by the Fund on the expiration date as realized
gains from options transactions. The difference between the premium and the
amount paid on effecting a closing purchase transaction, including
Page 37
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
brokerage commissions, is also treated as a realized gain, or if the
premium is less than the amount paid for the closing purchase transaction,
as a realized loss. If a call is exercised, the premium is added to the
proceeds from the sale of the underlying securities or currencies in
determining whether the Fund has realized a gain or loss. If a put is
exercised, the premium reduces the cost basis of the securities or
currencies purchased by the Fund. In writing an option, the Fund bears the
market risk of an unfavorable change in the price of the security
underlying the written option. Exercise of an option written by the Fund
could result in the selling or buying of a security or currency at a price
different from the current market value. The Fund only enters into options
which are traded on exchanges except for Tudor which can enter into
non-exchange options with counterparties as authorized by the Board of
Trustees.
FOREIGN SECURITIES (TUDOR, GROWTH AND INCOME, INTERNATIONAL)
- ------------------------------------------------------------
Certain risks result from investing in foreign securities in addition to
the usual risks inherent in domestic investments. Such risks include future
political, economic and currency exchange developments including investment
restrictions and changes in foreign laws.
FORWARD CURRENCY CONTRACTS (TUDOR, GROWTH AND INCOME, INTERNATIONAL)
- --------------------------------------------------------------------
A Fund may enter into forward contracts. Such contracts may be utilized in
connection with planned purchases or sales of securities or to hedge the
U.S. dollar value of portfolios denominated in foreign currencies.
Fluctuations in the value of the forward contracts are recorded for book
purposes as unrealized gains or losses by the Fund. Risks may arise upon
entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of the foreign currency relative to the U.S. dollar.
Upon entering into such a contract, the Fund is required to segregate
assets with its custodian at least equal to the value of the Fund's assets
committed to fulfilling the forward currency contract.
FOREIGN CURRENCY TRANSACTIONS (TUDOR, GROWTH AND INCOME, INTERNATIONAL)
- -----------------------------------------------------------------------
The books and records of each Fund are maintained in U.S. dollars. Foreign
currencies, investments and other assets or liabilities, denominated in
foreign currencies, are translated into U.S. dollars at the exchange rates
prevailing on the close of trading on the primary foreign market. The Fund
does not isolate that portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations
are included with the net realized and unrealized gain or loss from
investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short term securities, sales of foreign currencies, currency
gains or losses realized between the trade and settlement dates on
securities transactions, the difference between the amounts of dividends,
interest, and foreign withholding taxes recorded on the Fund's books, and
the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at
year end, resulting from changes in the exchange rate.
SHORT SALES (CORE BOND)
- -----------------------
The Fund may sell a security it does not own in anticipation of a decline
in the fair value of that security. When the Fund sells a security short,
it must borrow the security sold short and deliver it to the broker-dealer
through which it made the short sale as collateral for its obligation to
deliver the security upon conclusion of the sale. A gain, limited to the
price at which the Fund sold the security short, or a loss, unlimited in
size, will be recognized upon the termination of a short sale.
INVESTMENTS IN RESTRICTED SECURITIES
- ------------------------------------
Certain of the Funds may from time to time purchase restricted securities.
The only restricted security held in any of the Funds as of December 31,
1998 was Newcourt Credit Group 7.125% due 12/17/03 in the Core Bond Fund.
This security was purchased at a price of $99.74 and valued at $99.88 on
the date of purchase. The unit price of the security on December 31, 1998
was $99.375, with a total market value of $2,225,998 which represented 1.6%
of net assets on that date.
USE OF ESTIMATES
- ----------------
Estimates and assumptions are required to be made regarding assets,
liabilities and changes in net assets resulting from operations when
financial statements are prepared. Changes in the economic environment,
financial markets and any other parameters used in determining these
estimates could cause actual results to differ.
Page 38
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
2 - SECURITIES TRANSACTIONS
For the year ended December 31, 1998, sales proceeds, cost of securities
purchased, (other than short term investments and options written), total
commissions and commissions received by Weiss, Peck & Greer ("WPG"), the Fund's
investment adviser or Hill Samuel Investment Management Limited, the
International Fund's sub-adviser, on such transactions were as follows:
PROCEEDS OF COST OF COMMISSIONS
SECURITIES SECURITIES TOTAL RECEIVED BY
SOLD PURCHASED COMMISSIONS WPG OR HSIM
(000'S) (000'S) (000'S) (000'S)
------- ------- ------- -------
Tudor $204,630 $ 173 $ 508 $ 154
Growth and Income 99,000 109,677 262 205
Quantitative Equity 85,808 71,245 160 96
International 12,572 7,993 43 0
Core Bond 681,185 733,994 0 0
Municipal Bond 13,328 13,568 0 0
OPTIONS WRITING ACTIVITY
- ------------------------
During 1998 Tudor Fund wrote 30 options contracts, receiving premiums of
$215,993. All of these contracts were exercised. There were no open contracts as
of December 31, 1998.
3 - SECURITIES LENDING (TUDOR, CORE BOND)
At December 31, 1998, the Tudor Fund loaned securities valued at $1,941,023. For
collateral, the Tudor Fund received a letter of credit in an amount equal to
$2,000,000. At December 31, 1998 the Core Bond Fund loaned securities valued at
$4,163,250. For collateral, the Core Bond Fund received U.S. Government
securities with a fair value of $4,333,963. During the year the Tudor Fund and
Core Bond Fund earned $15,369 and $12,404 in securities lending fees, net of
custodian expenses, respectively.
4 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
WPG serves as the Funds' investment adviser. In September of 1998, WPG was
acquired by Robeco Group N.V. ("Robeco"), a Dutch investment management firm. As
required by the Investment Company Act of 1940, each advisory agreement,
sub-advisory agreement and 12b-1 distribution plan was renewed through a proxy
statement. The advisory fees of each Fund are as follows, and are paid monthly
except for the International Fund which is paid quarterly:
Tudor .90% of net assets up to $300 million
.80% of net assets $300 million to $500 million
.75% of net assets in excess of $500 million
Growth and Income .75% of net assets
Quantitative Equity .75% of net assets
International .50% while net assets under $15 million
.85% while net assets $15 million to $20 million
1.00% while net assets in excess of $20 million
Core Bond .60% of net assets up to $300 million
.55% of net assets $300 million to $500 million
.50% of net assets in excess of $500 million
Page 39
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
MunicipalBond .00% while net assets under $17 million
.50% while net assets in excess of $17 million
Government Money .50% of net assets up to $500 million &
Market .45% of net assets $500 million to $1 billion
Tax Free Money .40% of net assets $1 billion to $1.5 billion
.35% of net assets in excess of $1.5 billion
Pursuant to authority granted under its Investment Advisory Agreement with the
International Fund, WPG has selected HSIM as sub-adviser to the International
Fund. Pursuant to a sub-advisory agreement, HSIM has overall responsibility for
the management of the International Fund's assets invested in non-US securities.
Lloyds Investment Management Limited, the parent of HSIM, was a non-managing
member of WPG until the above referenced sale to Robeco in September 1998.
Each Fund has entered into an Administration Agreement with WPG. For the period
January 1, 1998 through April 30, 1998 WPG was entitled to receive the following
fees based upon a percentage of average daily net assets: Tudor .05%, Growth and
Income .06%, Quantitative Equity .05%, International .06% while assets exceed
$25 million, Core Bond .05%, Intermediate Municipal Bond .12% while assets
exceed $50 million, Government Money Market .04%, and Tax Free Money Market
.04%. Effective May 1, 1998, the following fees were in effect: Core Bond Fund
0.0%, Tax Free Money Market .05%. The fees for all of the other Funds remained
unchanged.
5 - DISTRIBUTION PLAN (CORE BOND)
The Trust has adopted a plan of Distribution (the "Plan") under Section 12 (b)
of the 1940 Act and Rule 12b-1 thereunder. The Fund may pay up to 0.25% of its
average daily net assets under any one agreement but is limited to an aggregate
of 0.05% of its average annual net assets for activities primarily intended to
result in the sale of its shares.
For the year ended December 31, 1998, expenses incurred under the Plan were
$310. Under the terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of a majority of those
Trustees who are not "interested persons" of the Trust and who have no direct or
indirect financial interest in the operation of the Plan or in any agreement
related to the Plan.
6 - CUSTODIAN FEES
Each Fund has entered into an expense offset agreement with its custodian
wherein it receives credit toward the reduction of custodian fees whenever there
are uninvested cash balances. For the year ended December 31, 1998 the Funds'
custodian fees and related offset were as follows:
CUSTODIAN OFFSET
FEE CREDIT
--- ------
Tudor $34,838 $ 2,604
Growth and Income 24,775 484
Quantitative Equity 28,613 4,293
International 27,068 2,827
Core Bond 37,860 13,762
Intermediate Municipal Bond 5,750 1,636
Government Money Market 37,379 9,727
Tax Free Money Market 22,281 11,295
Page 40
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
The Funds could have invested their cash balances elsewhere if they had not
agreed to a reduction in fees under the expense offset agreement with their
custodian.
7 - RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with the adoption of Statement of Position 93-2 "Determination,
Disclosure and Financial Statement Presentation of Income, Capital Gain and
Return of Capital Distributions by Investment Companies", reclassifications were
made to the Funds' capital accounts to reflect permanent book/tax differences
and income and gains available for distributions under income tax regulations.
Net investment income, net realized gains and net assets were not affected by
this change. At December 31, 1998, the amounts reclassified were as follows:
UNDISTRIBUTED UNDISTRIBUTED ADDITIONAL
NET INVESTMENT NET REALIZED PAID-IN
INCOME GAINS SURPLUS
(000's) (000's) (000's)
------- ------- -------
Tudor $ 189 $ 369 $ (558)
Growth and Income (215) 215 --
Quantitative Equity -- (5,519) 5,519
International (11) 154 (143)
Core Bond 1 48 (49)
Municipal Bond 19 (19) --
8 - FEDERAL INCOME TAX STATUS OF DIVIDENDS (UNAUDITED)
The Tax Free Money Market and Municipal Bond Funds have determined that all
dividends paid during the year ended December 31, 1998 were paid from investment
income and are exempt from Federal income. None of these dividends are subject
to the Alternative Minimum Tax.
The Funds have distributed long-term capital gains to shareholders during the
fiscal year ended December 31, 1998 in the following amounts:
LONG-TERM CAP GAINS
-------------------
Tudor $ 5,702,574
Growth & Income 13,667,501
Quantitative Equity 13,531,493
International 1,379,528
Municipal Bond 66,770
The percentage of investment company taxable income eligible for the dividends
received deduction and for certain corporate shareholders with respect to the
fiscal year ended December 31, 1998, is 100% for the Growth and Income Fund and
the Quantitative Equity Fund.
The above figures may differ from those cited elsewhere in the report due to
differences in the calculation of income and capital gains for Securities and
Exchange Commission (financial reporting) purposes and Internal Revenue Service
(tax) purposes.
Page 41
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
Financial Highlights
<TABLE>
<CAPTION>
(for the years ended December 31)
$ per share RATIOS
NET TOTAL RATIO OF
REALIZED INCOME/ DISTRI- NET
NET NET AND LOSS DIVIDENDS BUTIONS NET NET INVESTMENT
ASSET INVEST- UNREAL- FROM IN- FROM FROM ASSET ASSETS AT RATIO INCOME/
VALUE AT MENT IZED VESTMENT NET NET TOTAL CONTRI- VALUE AT END OF EXPENSES (LOSS) PORTFOLIO
BEGINNING INCOME GAINS OR OPERA- INVEST- REALIZED DISTRI- BUTIONS END OF TOTAL YEAR TO TO TURNOVER
OF YEAR (LOSS) (LOSSES) TIONS MENT GAINS TIONS CAPITAL YEAR RETURN (000'S) AVERAGE AVERAGE T RATE
ON INCOME NET NET
SECURITIES ASSETS ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
TUDOR
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $21.90 ($0.02) ($4.86) ($4.88) $0.00 ($1.28) ($1.28) $0.00 $15.74 (22.01%) $86,817 1.28% (0.22%) 143.6%
1997 23.28 0.06 2.46 2.52 0.00 (3.90) (3.90) 0.00 21.90 11.11 166,459 1.24 (0.44) 106.3
1996 22.95 (0.14) 4.41 4.27 0.00 (3.94) (3.94) 0.00 23.28 18.82 181,370 1.25 (0.57) 105.4
1995 19.34 (0.10) 8.03 7.93 0.00 (4.32) (4.32) 0.00 22.95 41.18 165,534 1.30 (0.47) 123.1
1994 23.40 (0.13) (2.14) (2.27) 0.00 (1.79) (1.79) 0.00 19.34 (9.81) 144,207 1.28 (0.62) 109.1
GROWTH AND INCOME
1998 35.11 0.26 9.38 9.64 (0.26) (3.85) (4.11) 0.00 40.64 27.51 160,698 1.04 0.71 64.6
1997 29.32 0.24 10.30 10.54 (0.24) (4.51) (4.75) 0.00 35.11 36.27 117,146 1.06 0.88 69.6
1996 26.02 0.24 6.11 6.35 (0.39) (2.66) (3.05) 0.00 29.32 24.42 82,937 1.15 1.50 75.8
1995 21.36 0.51 6.44 6.95 (0.53) (1.76) (2.29) 0.00 26.02 32.73 67,357 1.22 2.10 79.4
1994 23.34 0.56 (1.83) (1.27) (0.62) (0.09) (0.71) 0.00 21.36 (5.47) 61,045 1.23 2.49 71.9
QUANTITATIVE EQUITY
1998 5.84 0.05 1.46 1.51 (0.06) (1.50) (1.56) 0.00 5.79 26.71 73,884 1.06 0.49 89.4
1997 5.89 0.08 1.42 1.50 (0.08) (1.47) (1.55) 0.00 5.84 25.47 96,055 1.03 1.03 77.7
1996 6.85 0.16 1.13 1.29 (0.15) (2.10) (2.25) 0.00 5.89 18.51 102,450 0.95 1.52 60.8
1995 5.44 0.13 1.70 1.83 (0.12) (0.30) (0.42) 0.00 6.85 33.37 133,201 1.00 2.00 26.1
1994 5.58 0.13 (0.11) 0.02 (0.11) (0.05) (0.16) 0.00 5.44 0.34 73,484 1.14 2.36 46.8
INTERNATIONAL
1998 10.15 0.00 1.65 1.65 0.00 (2.55) (2.55) 0.00 9.25 16.28 6,375 2.35 0.06 98.8
1997 10.29 0.01 0.29 0.30 (0.01) (0.43) (0.44) 0.00 10.15 2.89 8,555 1.89 0.02 55.1
1996 11.01 (0.07) 0.57 0.50 (0.04) (1.18) (1.22) 0.00 10.29 4.64 13,161 1.71 0.31 85.2
1995 10.93 0.04 1.15 1.19 (0.15) (0.96) (1.11) 0.00 11.01 10.92 14,194 1.74 0.39 55.9
1994 11.72 0.01 (0.75) (0.74) 0.00 (0.05) (0.05) 0.00 10.93 (6.32) 17,102 1.95 0.12 69.8
</TABLE>
Page 42
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(for the years ended December 31)
$ per share RATIOS
NET TOTAL RATIO OF
REALIZED INCOME/ DISTRI- NET
NET NET AND LOSS DIVIDENDS BUTIONS NET NET INVESTMENT
ASSET INVEST- UNREAL- FROM IN- FROM FROM ASSET ASSETS AT RATIO INCOME/
VALUE AT MENT IZED VESTMENT NET NET TOTAL CONTRI- VALUE AT END OF EXPENSES (LOSS) PORTFOLIO
BEGINNING INCOME GAINS OR OPERA- INVEST- REALIZED DISTRI- BUTIONS END OF TOTAL YEAR TO TO TURNOVER
OF YEAR (LOSS) (LOSSES) TIONS MENT GAINS TIONS CAPITAL YEAR RETURN (000'S) AVERAGE AVERAGE T RATE
ON INCOME NET NET
SECURITIES ASSETS ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
CORE BOND
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $9.34 $0.54 $0.30 $0.84 ($0.54) $0.00 ($0.54) $0.00 $9.64 9.26% $139,463 0.50% 5.71% 684.9%
1997 9.19 0.51 0.15 0.66 (0.51) 0.00 (0.51) 0.00 9.34 7.37 108,443 0.86 5.56 330.3
1996 9.38 0.64 (0.29) 0.35 (0.54) 0.00 (0.54) 0.00 9.19 3.85 120,804 0.81 5.87 333.1
1995 8.83 0.60 0.54 1.14 (0.59) 0.00 (0.59) 0.00 9.38 13.25 171,578 0.82 6.52 375.0
1994 10.37 0.68 (1.56) (0.88) (0.64) (0.02) (0.66) 0.00 8.83 (8.70) 216,364 0.80 7.18 115.9
INTERMEDIATE MUNICIPAL BOND
1998 10.45 0.45 0.14 0.59 (0.47) (0.02) (0.49) 0.00 10.55 5.72 25,341 0.85 4.23 45.7
1997 10.14 0.47 0.31 0.78 (0.47) 0.00 (0.47) 0.00 10.45 7.85 23,508 0.85 4.55 39.8
1996 10.20 0.48 (0.06) 0.42 (0.48) 0.00 (0.48) 0.00 10.14 4.20 15,214 0.85 4.72 44.4
1995 9.51 0.44 0.69 1.13 (0.44) 0.00 (0.44) 0.00 10.20 12.05 12,730 0.85 4.38 51.2
1994 10.15 0.41 (0.64) (0.23) (0.41) 0.00 (0.41) 0.00 9.51 (2.29) 14,005 0.85 4.20 30.9
GOVERNMENT MONEY MARKET
1998 1.00 0.05 0.00 0.05 (0.05) 0.00 (0.05) 0.00 1.00 4.80 428,443 0.73 4.62 N/A
1997 1.00 0.05 0.00 0.05 (0.05) 0.00 (0.05) 0.00 1.00 4.76 207,817 0.81 4.68 N/A
1996 1.00 0.04 0.00 0.04 (0.04) 0.00 (0.04) 0.00 1.00 4.56 152,786 0.83 4.48 N/A
1995 1.00 0.05 0.00 0.05 (0.05) 0.00 (0.05) 0.00 1.00 5.16 131,210 0.82 5.06 N/A
1994 1.00 0.04 (0.01) 0.03 (0.04) 0.00 (0.04) 0.01 1.00 3.58 188,197 0.80 3.54 N/A
TAX FREE MONEY MARKET
1998 1.00 0.03 0.00 0.03 (0.03) 0.00 (0.03) 0.00 1.00 3.05 131,268 0.75 3.01 N/A
1997 1.00 0.03 0.00 0.03 (0.03) 0.00 (0.03) 0.00 1.00 3.23 130,083 0.74 3.17 N/A
1996 1.00 0.03 0.00 0.03 (0.03) 0.00 (0.03) 0.00 1.00 3.14 117,423 0.72 3.10 N/A
1995 1.00 0.04 0.00 0.04 (0.04) 0.00 (0.04) 0.00 1.00 3.63 121,754 0.76 3.56 N/A
1994 1.00 0.03 0.00 0.03 (0.03) 0.00 (0.03) 0.00 1.00 2.61 152,501 0.73 2.59 N/A
</TABLE>
Page 43
<PAGE>
WEISS, PECK & GREER MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
The Advisor agreed to reimburse other operating expenses and not to impose
its full fee f5or certain periods. Had the Adviser not so agreed, and had
the Funds not received a custody fee earnings credit, the total return
would have been lower and the ratio of expenses to average net assets and
ratio of net investment income to average net assets would have been:
Ratio of
Net
Ratio of Investment
Expenses Income
to Average to Average
Net Assets Net Assets
QUANTITATIVE EQUITY
1998 1.07% 0.48%
INTERNATIONAL
1998 2.38% 0.03%
1997 1.92% (0.01%)
1996 1.76% 0.26%
1995 1.76% 0.39%
1994 2.35% (0.28%)
CORE BOND
1998 0.89% 5.32%
INTERMEDIATE MUNICIPAL BOND
1998 1.06% 4.02%
1997 1.15% 4.25%
1996 1.01% 4.56%
1995 0.97% 4.25%
1994 1.45% 3.60%
TAX FREE MONEY MARKET
1998 0.76% 3.00%
For the Tudor, Growth and Income, Government Money Market Funds custody fee
earnings credit had an effect of less than 0.01% per share on the above
ratios. The custody fee earnings credit had an effect of less than 0.01% on
the above ratios in 1994, 1995, 1996 and 1997 for the Quantitatvie Equity,
Core Bond, Intermediate Municipal Bond and Tax Free Money Market Funds.
See notes to financial statements
Page 44
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Shareholders and Board of Trustees of:
WPG Tudor Fund
WPG Growth and Income Fund
WPG Quantitative Equity Fund
Weiss, Peck & Greer International Fund
WPG Core Bond Fund
WPG Intermediate Municipal Bond Fund
WPG Government Money Market Fund
WPG Tax Free Money Market Fund
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments of WPG Tudor Fund, WPG Growth and Income Fund, WPG
Quantitative Equity Fund, Weiss, Peck & Greer International Fund, WPG Core Bond
Fund, WPG Intermediate Municipal Bond Fund, WPG Government Money Market Fund and
WPG Tax Free Money Market Fund (the "Funds") as of December 31, 1998, and the
related statements of operations for the year then ended, statements of changes
in net assets for each of the years in the two-year period then ended, and
financial highlights for each of the years in the five-year period then ended.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1998, by correspondence with the custodian and the performance of
other appropriate audit procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of WPG
Tudor Fund, WPG Growth and Income Fund, WPG Quantitative Equity Fund, Weiss,
Peck & Greer International Fund, WPG Core Bond Fund, WPG Intermediate Municipal
Bond Fund, WPG Government Money Market Fund and WPG Tax Free Money Market Fund
as of December 31, 1998, the results of their operations for the year then
ended, the changes in their net assets for each of the years in the two-year
period then ended, and their financial highlights for each of the years in the
five-year period then ended, in conformity with generally accepted accounting
principles.
KPMG LLP
New York, New York
January 19, 1999
Page 45
<PAGE>
WEISS, PECK & GREER
ONE NEW YORK PLAZA, NEW YORK, NY 10004
INDEPENDENT TRUSTEES AND MEMBERS
OF AUDIT COMMITTEE
Raymond R. Herrmann, Jr. Paul Meek
Lawrence J. Israel William B. Ross
Graham E. Jones Robert A. Straniere
OFFICERS
ROGER J. WEISS
Chairman of the Board and Trustee - all funds
President - Weiss, Peck & Greer International Fund
ADAM STARR
President - WPG Tudor Fund
JAY C. NADEL
Executive Vice President and Secretary - all funds
FRANCIS H. POWERS
Executive Vice President and Treasurer - all funds
JOSEPH J. REARDON
Vice President - all funds
A. ROY KNUTSEN
President - WPG Growth and Income Fund
DANIEL S. VANDIVORT
President - WPG Funds Trust
DANIEL CARDELL
Vice President - WPG Quantitative Equity Fund
R. SCOTT RICHTER
Vice President - WPG Intermediate Municipal Bond Fund
JANET A. FIORENZA
Vice President - WPG Tax Free Money Market Fund
S. BLAKE MILLER
Vice President - WPG Intermediate Municipal Bond Fund
INVESTMENT ADVISER
Weiss, Peck & Greer, LLC
One New York Plaza
New York, NY 10004
CUSTODIAN
Boston Safe Deposit and Trust Company
One Exchange Place
Boston, MA 02109
DIVIDEND DISBURSING AND
TRANSFER AGENT
First Data Investor Services Group
P.O. Box 60448
King of Prussia, PA 19406-0448
LEGAL COUNSEL
Hale and Dorr
60 State Street
Boston, MA 02109
INDEPENDENT AUDITORS
KPMG LLP
345 Park Avenue
New York, NY 10154
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein is to be considered an
offer of sale or solicitation of an offer to buy shares of the Weiss, Peck &
Greer Funds. Such offering is made only by prospectus, which includes details as
to offering and other material information.
<PAGE>
WPG TUDOR FUND
PART C. OTHER INFORMATION
Item 23. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
(a) (1) Amended and Restated Declaration of Trust dated
May 1, 1993 of Registrant. (Previously filed with
Post-Effective Amendment No. 47 on April 30, 1998)
(2) Certificate of Amendment dated October 28, 1993 to the
Amended and Restated Declaration of Trust.
(Previously filed with Post-Effective Amendment No. 47
on April 30, 1998)
(b) By-Laws of Registrant. (Previously filed
with Post-Effective Amendment No. 47 on
April 30, 1998)
(c) Not Applicable.
(d) (1) Form of Investment Advisory Agreement between
Registrant and Weiss, Peck & Greer, L.L.C. (Previously
filed with Post-Effective Amendment No. 48 on June 12,
1998)
(e) Principal Underwriting Agreement. (Filed herewith)
(f) Not Applicable.
(g) Custodian Agreement between Registrant
and The Boston Safe Deposit and Trust
Company dated as of March 20, 1989.
(Previously filed with Post-Effective
Amendment No. 47 dated April 30, 1998)
(h) Service Agreement between Registrant and First Data
Investor Services, Inc. (Filed herewith)
C-1
<PAGE>
(i) Opinion and Consent of Hale and Dorr LLP. (Previously
filed with Post-Effective Amendment No. 47 dated
April 30, 1998)
(j) Consent of KPMG LLP. (Filed herewith)
(k) Not Applicable.
(l) Not Applicable.
(m) Not Applicable.
(n) Financial Data Schedule. (Filed herewith)
(o) Not Applicable.
(p) Powers of Attorney. (Previously filed
with Post-Effective Amendment No. 47
dated April 30, 1998)
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not Applicable.
Item 25. INDEMNIFICATION.
Reference is made to Article VIII of the Registrant's
Declaration of Trust and Article V of the Registrant's
By-Laws.
Nothing in the By-Laws of the Trust may be construed to be in
derogation of the provisions of Section 17(h) of the
Investment Company Act of 1940 (the "1940 Act") which provides
that the by-laws of a registered investment company shall not
contain any provision which protects or purports to protect
any director or officer of such company against any liability
of the company or to its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office ("disabling conduct").
The Registrant understands that in the opinion of the
Securities and Exchange Commission (the "Commission") an
indemnification provision
C-2
<PAGE>
does not violate Section 17(h) of the 1940 Act if it precludes
indemnification for any liability whether or not there is an
adjudication of liability, arising by reason of disabling
conduct. Reasonable and fair means for determining whether
indemnification shall be made include (1) a final decision on
the merits by a court or other body before whom the proceeding
was brought that the person to be indemnified (the
"indemnitee") was not liable by reason of disabling conduct
or, (2) in the absence of such a decision, a reasonable
determination, based upon a review of the facts that the
indemnitee was not liable by reason of disabling conduct by
(a) the vote of a majority of a quorum of trustees who are
neither "interested persons" of the Registrant as defined in
Section 2(a)(19) of the 1940 Act nor parties to the preceding
("disinterested non-party trustees"), or (b) an independent
legal counsel in a written opinion. The Registrant further
understanding that in a Commission's view the dismissal of
either a court action or an administrative proceeding against
an indemnitee for insufficiency of evidence of any disabling
conduct with which he has been charged would provide
reasonable assurance that he was not liable by reason of
disabling conduct. A determination by the vote of a majority
of a quorum of disinterested nonparty trustees would also
provide reasonable assurance that the indemnitee was not
liable by reason of disabling conduct.
The Registrant further understands that the Commission
believes that an indemnification provision does not violate
Section 17(h) of the 1940 Act simply because it requires or
permits the Registrant to advance attorney's fees or other
expenses incurred by its trustees, officers or investment
adviser in defending a proceeding, upon the undertaking by or
on behalf of the indemnitee to repay the advance unless it is
ultimately determined that he is entitled to indemnification,
so long as the provision also requires at least one of the
following as a condition to the advance: (1) the indemnitee
shall provide security for his undertaking, (2) the Registrant
shall be insured against losses arising by reason of any
lawful advances, or (3) a majority of a quorum of the
disinterested nonparty trustees of the Registrant, or an
independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to
believe that the indemnitee ultimately will be found entitled
to indemnification. The Registrant is also aware that the
Commission believes that an improper indemnification payment
or advance of legal expenses could constitute a breach of
fiduciary duty involving personal misconduct under Section 36
of the 1940 Act or an unlawful and willful conversion of an
investment company's assets under Section 37 of the 1940 Act.
C-3
<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted
to trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant understands that in the opinion of the
commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer
or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
Weiss, Peck & Greer, L.L.C. carries for itself and its
subsidiaries Directors and Officers Liability Insurance.
Coverage under this policy has been extended to directors and
officers of the investment companies managed by Weiss, Peck &
Greer, L.L.C. Under this policy, outside directors would be
covered up to the limits specified for any claim against them
for acts committed in their capacities as members of the
Board. A pro rata share of the premium for this coverage is
charged to each investment company.
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The business and other connections of the officers and
directors of Weiss, Peck & Greer, L.L.C. are listed on the
Form ADV of Weiss, Peck & Greer, L.L.C. as currently on file
with the Commission (File No. 801-6604), the text of which is
hereby incorporated by reference.
Item 27. PRINCIPAL UNDERWRITERS.
(a) First Data Distributors, Inc., the principal underwriter of
Shares of the Registrant (the "Principal Underwriter"), acts as
principal underwriter to each investment company in the Weiss,
Peck & Greer Group of Mutual Funds. These mutual funds include:
Weiss, Peck & Greer Funds Trust, which consists of WPG Government
Money Market Fund, WPG Tax-Free Money Market Fund, WPG Core Bond
Fund, WPG Intermediate-Term Municipal Bond Fund and WPG
Quantitative Equity Fund; Weiss, Peck & Greer International Fund;
WPG Growth and Income Fund;
C-4
<PAGE>
RWB/WPF U.S. Large Stock Fund; and Tomorrow Funds
Retirement Trust.
(b) Directors and Officers of First Data Distributors, Inc.:
Positions and Offices
Name and Principal with Underwriter Positions and Offices
Business Address ------------------------- with Registrant
- ------------------------- ---------------------------
Robert Guillocheau Director None
4400 Computer Drive
Westboro, MA
Francis Koudelka Director, President and None
4400 Computer Drive Chief Executive Officer
Westboro, MA
Jack Kutner Director None
4400 Computer Drive
Westboro, MA
Barbara Worthen Director None
4400 Computer Drive
Westboro, MA
Scott Hacker Vice President, None
4400 Computer Drive Treasurer and
Westboro, MA Chief Compliance Officer
Bruno DiStefano Vice President None
4400 Computer Drive
Westboro, MA
Sue Moscaritolo Vice President None
4400 Computer Drive
Westboro, MA
Bernard Rothman Vice President - Tax None
4400 Computer Drive
Westboro, MA
Christine Ritch Chief Legal Officer None
4400 Computer Drive and Clerk
Westboro, MA
Bradley Stearns Assistant Clerk None
4400 Computer Drive
Westboro, MA
(c) The Principal Underwriter does not receive compensation from the
Registrant for serving as the
Registrant's principal underwriter.
Item 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of
1940 and the rules thereunder are maintained at the following
locations:
NAME ADDRESS
---- -------
WPG Tudor Fund One New York Plaza
New York, NY 10004
The Boston Safe Deposit One Boston Place
and Trust Company Boston, MA 02109
First Data Investor P.O. Box 60448
Services Group, Inc. King of Prussia, PA
19406-0448
Item 29. MANAGEMENT SERVICES.
Not Applicable.
Item 30. UNDERTAKINGS.
Not Applicable.
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
and State of New York on the 26th day of February, 1999.
WPG TUDOR FUND
/S/ FRANCIS H. POWERS
---------------------
Francis H. Powers,
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registrant's Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
/S/ ROGER J. WEISS Chairman of the February 26, 1999
Roger J. Weiss Board (Principal
Executive Officer)
and Trustee
/S/ FRANCIS H. POWERS Executive Vice February 26, 1999
- ---------------------
Francis H. Powers President and
Treasurer
(Principal
Financial and
Accounting Officer)
RAYMOND R. HERRMANN, JR.* Trustee February 26, 1999
- -------------------------
Raymond R. Herrmann, Jr.
LAWRENCE J. ISRAEL* Trustee February 26, 1999
Lawrence J. Israel
C-6
<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
GRAHAM E. JONES* Trustee February 26, 1999
Graham E. Jones
PAUL MEEK* Trustee February 26, 1999
Paul Meek
WILLIAM B. ROSS* Trustee February 26, 1999
William B. Ross
ROBERT A. STRANIERE* Trustee February 26, 1999
Robert A. Straniere
* By: /S/ FRANCIS H. POWERS February 26, 1999
----------------------
Francis H. Powers
Attorney-in-fact
C-7
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
(e) Principal Underwriting Agreement.
(h) Service Agreement.
(j) Consent of KPMG LLP.
(n) Financial Data Schedule.
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 25th day of August, 1998 (the
"Agreement") by and between each of open-end investment companies or series
thereof listed on Schedule A hereto (each, a "Fund") and First Data
Distributors, Inc. (the "Distributor"), a Massachusetts corporation.
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and is currently offering its shares of beneficial interest to the public
pursuant to the Fund's Registration Statement on Form N-1A (the "Registration
Statement"); and
WHEREAS, the Fund desires to retain the Distributor as distributor to
provide for the sale and distribution of the Shares and for such additional
classes or series as the Fund may issue, and the Distributor is prepared to
provide such services commencing on the date first written above.
NOW THEREFORE, in consideration of the premises and mutual covenants
set forth herein and intending to be legally bound hereby the parties hereto
agree as follows:
1. SERVICE AS DISTRIBUTOR
1.1 The Distributor will act as the Fund's Principal Underwriter (as
defined in the 1940 Act) for the distribution of the Shares covered by
the Registration Statement under the Securities Act of 1933, as amended
(the "1933 Act"). The Distributor shall offer Shares at the net asset
value per Share to be calculated as described in the Registration
Statement. To the extent that the Distribution receives payment for
Shares, the Fund shall receive the applicable net asset value on all
sales of Shares by the Distributor. Except as provided in the previous
sentence, the Distributor will have no liability to the Fund for
payment for the purchase of Shares sold pursuant to this Agreement or
with respect to redemptions or repurchases of Shares.
1.2 The Distributor agrees to use efforts deemed appropriate by the
Distributor to solicit orders for the sale of the Shares and will
undertake such advertising and promotion as it believes reasonable in
connection with such solicitation. To the extent that the Distributor
receives fees under any plan adopted by the Fund pursuant to Rule 12b-1
under the 1940 Act, the Distributor agrees to furnish and/or enter into
arrangements with others for the furnishing of marketing or sales
services with respect to the Shares as may be required pursuant to such
plan. To the extent that the Distributor receives shareholder services
fees under any shareholder services plan adopted by the Fund, the
Distributor agrees to furnish and/or enter into arrangements with
others for the furnishing of, personal and/or account maintenance
services with respect to the relevant shareholders of the Fund as may
be required pursuant to such plan. It is contemplated that the
Distributor will, at the Fund's direction, enter into sales or
<PAGE>
servicing agreements with securities dealers, financial institutions
and other industry professionals, such as investment advisers,
accountants and estate planning firms.
1.3 The Fund understands that the Distributor is now, and may in the future
be, the distributor of the shares of several investment companies or
series (collectively, the "Investment Entities"), including Investment
Entities having investment objectives similar to those of the Fund. The
fund further understands that investors and potential investors in the
Fund may invest in shares of such other Investment Entities. The Fund
agrees that the Distributor's duties to such Investment Entities shall
not be deemed in conflict with its duties to the Fund under this
Section 1.3.
1.4 The Distributor shall not utilize any materials in connection with the
sale or offering of Shares except the fund's then-current prospectus
and statement of additional information and such other materials as the
Fund shall provide or approve.
1.5 All activities by the Distributor and its employees, as distributor of
the Shares, shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations
made or adopted by the Securities and Exchange Commission (the "SEC")
or the National Association of Securities Dealers ("NASD"), including
without limitation the NASD Conduct Rules.
1.6 The Distributor will promptly transmit any orders received by it for
purchase or redemption of the Shares to the transfer agent for the
Fund.
1.7 Whenever in its judgment such action is warranted by unusual market,
economic or political conditions or abnormal circumstances of any kind,
the Fund may decline to accept any orders for, or make any sales of,
the Shares until such time as the Fund deems it advisable to accept
such orders and to make such sales, and the Fund advises the
Distributor of such determination.
1.8 The Distributor shall not have any responsibility for any costs and
expenses in connection with the registration of the Shares under the
1933 Act and all expenses in connection with maintaining facilities for
the issue and transfer of Shares and for supplying information, prices
and other data to be furnished by the Fund hereunder, and all expenses
in connection with the preparation and printing of the Fund's
prospectuses and statements of additional information for regulatory
purposes and for distribution to current shareholders.
1.9 The fund agrees at its own expense to execute any and all documents and
to furnish any and all information and otherwise to take all actions
that may be reasonably necessary in connection with the qualification
of the Shares for sale in such states as the Distributor may designate
and as may be agreed to by the Fund. The Fund shall notify the
Distributor in writing of the states in which the Shares may be sold
and shall notify the Distributor in writing of any changes to the
information contained in the previous notification.
1.10 The fund shall furnish from time to time, for use in connection with
the sale of the Shares, such information with respect to the Fund and
the Shares as the Distributor may reasonably request; and the Fund
warrants that the statements contained in any such information shall
fairly show or represent what they purport to show or represent. The
Fund shall also furnish the Distributor upon request with: (a) the
Fund's audited annual statements and unaudited semi-annual statements
of the Fund's books and accounts prepared by the Fund, and (b) from
time to time such additional information regarding the financial
condition of the fund as the Distributor may reasonably request.
1.11 Except as to information included in the Registration Statement in
reliance upon information provided to the Fund by the distributor or
any affiliate of the Distributor that the Distributor or such affiliate
should reasonably expect to be used in the Registration Statement, the
fund represents and warrants to the Distributor that any Registration
Statement filed by the Fund with the SEC, when such Registration
Statement become effective, will contain statements required to be
stated therein to be in material conformity with the 1933 Act and the
rules and regulations of the SEC; that all statements of material fact
contained in any such Registration Statement will be true and correct
when such Registration Statement becomes effective; and that no
Registration Statement when such Registration Statement becomes
effective will include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading to a purchaser of the Shares
in light of the circumstances in which they were made. The Distributor
may but shall not be obligated to propose to the Fund from time to time
such amendment or amendments to any Registration Statement and such
supplement or supplements to any prospectus as, in the light of future
developments, may, in the opinion of the Distributor's counsel, be
necessary or advisable. The Distributor shall promptly notify the Fund
of any advice given to it by its counsel regarding the necessity or
advisability of amending or supplementing such Registration Statement.
If the Fund shall not propose such amendment or amendments and/or
supplement or supplements within fifteen days after receipt by the Fund
of a written request from the Distributor to do so, the Distributor
may, at its option, terminate this Agreement. The fund shall not file
any amendment to any Registration Statement or supplement to any
prospectus without giving the Distributor reasonable notice thereof in
advance; provided, however, that nothing contained in this Agreement
shall in any way limit the Fund's right to file at any time such
amendments to any Registration Statements and/or supplements to any
prospectus, of whatever character, as the Fund may deem advisable, such
right being in all respects absolute and unconditional.
-3-
<PAGE>
1.12 (a) The Fund authorizes the Distributor to use its then-current
prospectus or statement of additional information in the form furnished
from time to time in connection with the sale of the Shares.
(b) The Fund agrees to indemnify and hold harmless the Distributor, its
officers, directors, and employees, and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act, from and
against any and all claims, costs, expenses (including reasonable
attorneys' fees), losses, damages, charges, payments and liabilities of
any sort of kind ("Losses") which the Distributor, its officers,
directors, employees or any such controlling person may incur under the
1933 Act, under any other statute, at common law or otherwise, arising
out of or based upon: (i) any untrue statement, or alleged untrue
statement, of a material fact contained in the Fund's Registration
Statement, prospectus, statement of additional information, or sales
literature (including amendments and supplements thereto), or (ii) any
omission, or alleged omission, to state a material fact required to be
stated in the Fund's Registration Statement, prospectus, statement of
additional information or sales literature (including amendments or
supplements thereto), necessary to make the statements therein not
misleading; provided, however, that insofar as Losses arise out of or
are based upon any such untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with
information furnished to the Fund by the Distributor or its affiliated
persons for use in the Fund's Registration Statement, prospectus, or
statement of additional information or sales literature (including
amendments or supplements thereto) or arise by reason of the
Distributor's willful misfeasance, bad faith or negligence in the
performance of the Distributor's duties hereunder, such indemnification
is not applicable.
(c) The Fund acknowledges and agrees that in the event that the
Distributor, at the request of the Fund, are required to give
indemnification comparable to that set forth in clause (b) of this
Section 1.12 to any broker-dealer selling Shares of the Fund or
servicing agent servicing the shareholders of the Fund and such
broker-dealer servicing agent shall make a claim for indemnification
against the Distributor, the Distributor shall make a similar claim for
indemnification against the Fund.
1.13 The Distributor agrees to indemnify and hold harmless the Fund, its
officers, trustees and employees each person, if any, who controls the
Fund within the meaning of Section 15 of the 1933 Act against any and
all Loses which the Fund, its officers, trustees and employees or any
such controlling person may incur under the 1933 Act, under any other
statute, at common law or otherwise, but only to the extent that such
Losses incurred by the Fund, its officers, trustees and employees, or
any controlling person (i) arose out of the acquisition of any Shares
by any person which may be based upon any untrue statement, or alleged
untrue statement, of a material fact contained in the Fund's
Registration Statement, prospectus or statement of additional
information (including amendments and supplements thereto), or any
omission, or alleged
-4-
<PAGE>
omission, to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such
statement or omission was made in reliance upon information furnished
or confirmed in writing to the Fund by the Distributor or its
affiliated persons (as defined in the 1940 Act) or (ii) arose out of
the Distributor's willful misfeasance, bad faith or negligence in the
performance of its duties hereunder.
1.14 In any case in which one party hereto (the "Indemnifying "Party") may
be asked to indemnify or hold the other party hereto (the "Indemnified
Party") harmless, the Indemnified Party will notify the Indemnifying
party promptly after identifying any situation which it believes
presents or appears likely to present a claim for indemnification (an
"Indemnification Claim") against the Indemnifying Party, although the
failure to do so shall not prevent recovery by the Indemnified Party,
and shall keep the Indemnifying Party advised with respect to all
material developments concerning such situation. The Indemnifying Party
shall have the option to defend the Indemnified Party against any
Indemnification Claim which may be the subject of this indemnification,
and, in the event that the Indemnifying Party so elects, such defense
shall be conducted by counsel chosen by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party, and thereupon the
Indemnifying Party shall take over complete defense of the
Indemnification Claim and the Indemnified Party shall sustain no
further legal or other expenses in respect of such Indemnification
Claim. The Indemnified party will not confess any Indemnification Claim
or make any compromise in any case in which the Indemnifying Party will
be asked to provide indemnification, except with the Indemnifying
party's prior written consent (written shall not unreasonably be
withheld). The obligations of the parties hereto under this Section
1.14 and Section 3.1 shall survive the termination of this Agreement.
1.15 No Shares shall be offered by either the Distributor or the fund under
any of the provisions of this Agreement and no orders for the purchase
of sale of Shares hereunder shall be accepted by the Fund if and so
long as effectiveness of the Registration Statement then in effect or
any necessary amendments thereto shall be suspended under any of the
provisions of the 1933 Act, or if and so long as a current prospectus
as required by Section 5(b)(2) of the 1933 Act is not on file with the
SEC; provided, however, that nothing contained in this Section 1.15
shall in any way restrict or have any application to or bearing upon
the Fund's obligation to redeem Shares tendered for redemption by any
shareholder in accordance with the provisions of the Fund's
Registration Statement, declaration of trust, or bylaws.
1.16 The Fund agrees to advise the Distributor as soon as reasonably
practical by a notice in writing delivered to the Distributor in the
event of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement, prospectus or statement of
additional information then in effect or in the initiation by service
of process on the Fund of any proceeding for that purpose.
-5-
<PAGE>
1.17 The Fund represents and warrants to the Distributor that the Fund is,
or is a series of, an investment company, registered under the 1940 Act
and the Shares sold by the Fund are, and will be registered under the
1933 Act.
2. TERM
----
2.1 This Agreement shall become effective on the date first written above,
and unless sooner terminated as provided herein, shall continue for an
initial two-year term and thereafter shall be renewed for successive
one-year terms, provided such continuance is specifically approved at
least annually by (i) the Fund's Board of Trustees or (ii) by a vote of
a majority of the outstanding voting securities (as defined in the 1940
Act and Rule 18f-2 thereunder) of the Fund, provided that in either
event the continuance is also approved by a majority of the Fund's
Trustees who are not parties to this Agreement and who are not
interested persons (as defined in the 1940 Act) of any party to this
Agreement ("Independent Trustees"), by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agreement is
terminable without penalty, on at least sixty days' written notice, by
the Fund's Board of Trustees, by vote of a majority of the outstanding
voting securities (as defined in the 1940 Act and Rule of 18f-2
thereunder) of the Fund, or by the Distributor. This agreement will
also terminate automatically in the event of its assignment (as defined
in the 1940 Act and the rules thereunder). Finally, this Agreement may
also be terminated by the Fund upon 5 days' written notice to the
Distributor if the NASD has expelled the Distributor or suspended its
membership in that organization.
2.2 In the event a termination notice is given by the Fund, all reasonable
expenses associated with movement of records and materials and
conversion thereof will be borne by the Fund.
<PAGE>
3. LIMITATION OF LIABILITY
-----------------------
3.1 The Distributor shall not be liable to the Fund for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with the performance of its obligations and duties under
this Agreement, except a loss resulting from the Distributor's willful
misfeasance, a bad faith or negligence in the performance of such
obligations and duties, or by reason of its reckless disregard thereof.
The Fund will indemnify the Distributor against and hold it harmless
from any and all Losses which may be asserted against the Distributor
for which the Distributor may be held to be liable in connection with
this Agreement or the Distributor's performance hereunder (a "Section
3.1 Claim"), unless such Section 3.1 Claim resulted from a negligent
act or omission to act or bad faith by the Distributor in the
performance of its duties hereunder; provided, however, that as to any
matter disposed of by a compromised payment by the Distributor,
pursuant to a consent decree or otherwise, no indemnification either
for such payments or for any other expenses shall be provided
-6-
<PAGE>
unless there has been a determination that the Distributor did not
engage in willful misfeasance, bad faith or gross negligence or a
reckless disregard of the performance of its obligations and duties (i)
by the court or other body approving the settlement or other
disposition, (ii) based upon a review of readily available facts (as
opposed to a full trial-type inquiry), by written opinion from
independent legal counsel approved by the Fund's Board of Trustees or
(iii) by a majority of the Independent Trustees based upon a review of
readily available facts (as opposed to a full trial-type inquiry). The
provisions of paragraph (a) of Section 1.12 shall apply to any
indemnification provided by the Fund pursuant to this Section 3.1. The
obligations of the parties hereto under this Section 3.1 shall survive
termination of this Agreement.
3.2 Notwithstanding any provision in this Agreement to the contrary, each
party's cumulative liability (to the other party) for all Losses for
any cause whatsoever, except a Loss resulting from the gross negligence
in the performance of its obligations and duties under their Agreement,
and regardless of the form of action or legal theory, shall not exceed
$2,000,000. The parties understand the limitation on damages to be a
reasonable allocation of risk and the parties expressly consent with
respect to such allocation of risk.
3.3 To the extent consistent with the provisions of this Agreement, each
party shall have the duty to mitigate damages for which the other party
may become responsible.
3.4 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS,
TRUSTEES, OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE UNDER
THIS AGREEMENT UNDER ANY THEORY OF TORT, CONTRACT, STRICT LIABILITY OF
OTHER LEGAL OR EQUITABLE THEORY FOR LOST PROFITS, EXEMPLARY, PUNITIVE,
SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EACH OF WHICH
IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER
SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY ENTITY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
4. EXCLUSION OF WARRANTIES
-----------------------
THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, THE DISTRIBUTOR DISCLAIMS ALL OTHER REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, MADE TO THE FUND OR ANY OTHER PERSON,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY,
SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
OTHERWISE (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF
TRADE) OF ANY SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO SERVICES
PROVIDED UNDER THIS AGREEMENT.
-7-
<PAGE>
5. MODIFICATIONS AND WAIVERS
-------------------------
No change, termination, modification, or waiver of any term or
condition of the Agreement shall be valid unless in writing signed by
each party. A party's waiver of a breach of any term or condition in
the Agreement shall not be deemed a waiver of any subsequent breach of
the same or another term or condition.
6. PUBLICITY
---------
Neither the Distributor nor the Fund shall release or publish news
releases, public announcements, advertising or other publicity relating
to this Agreement or to the transactions contemplated by it without
prior review and written approval of the other party; provided,
however, that either party may make such disclosures as are required by
legal, accounting or regulatory requirements after making reasonable
efforts in the circumstances to consult in advance with the other
party.
7. SEVERABILITY
-----------
The parties intend every provision of this Agreement to be severable.
If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or
invalidity shall not affect the validity of the remainder of this
Agreement. In such case, the parties shall in good faith modify or
substitute such provision consistent with the original intent of the
parties. Without limiting the generality of this paragraph, if a court
determines that any remedy stated in this Agreement has failed of its
essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall
remain fully effective.
8. FORCE MAJEURE
-------------
No party shall be liable for any default or delay in the performance of
its obligations under this Agreement if and to the extent such default
or delay is caused, directly or indirectly, by (i) fire, flood,
elements of nature or other acts of God; (ii) any outbreak or
escalation of hostilities, war, riots or civil disorders in any
country; or (iii) any act or omission of the other party or any
governmental authority. In any such event, the non-performing party
shall be excused from any further performance and observance of the
obligations so affected only for so long as such circumstances prevail
and such party continues to use commercially reasonable efforts to
recommence performance or observance as soon as practicable.
-8-
<PAGE>
9. MISCELLANEOUS
-------------
9.1 Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Fund or the Distributor shall be
sufficiently given if addressed to the party and received by it at its
office set forth below or at such other place as it may from time to
time designate in writing.
To the Fund:
c/o Weiss Peck & Greer, L.L.C.
One New York Plaza
New York, New York 10004
Attention: Jay S. Nadel, Managing Director
To the Distributor:
First Data Distributors, Inc.
4400 Cmputer Drive
Westboro, Massachusetts 01581
Attention: President
with a copy to the Distributor's Chief Legal Officer
9.2 The laws of the Commonwealth of Massachusetts, excluding the laws on
conflicts of laws, and the applicable provisions of the 1940 Act shall
govern the interpretation, validity, and enforcement of this Agreement.
To the extent the provisions of Massachusetts law or the provisions
hereof conflict with the 1940 Act, the 1940 Act shall control. All
actions arising from or related to this Agreement shall be brought in
the state and federal courts sitting in the City of Boston, and the
Distributor and the Fund hereby submit themselves to the exclusive
jurisdiction of those courts.
9.3 This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
9.4 The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
9.5 This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and is not intended
to confer upon any other person any rights or remedies hereunder and
shall not affect in any way the rights,
-9-
<PAGE>
obligations and liabilities of either party hereto with the other party
or any of its affiliates under any other agreement.
10. CONFIDENTIALITY
---------------
10.1 The parties agree that the Proprietary Information (defined below) is
confidential information of the parties and their respective licensers.
The Fund and the Distributor shall exercise reasonable care to
safeguard the confidentiality of the Proprietary Information of the
other. The Fund and the Distributor may each use the Proprietary
Information of the other party only to exercise its rights or perform
its duties under this Agreement. The Fund and the Distributor shall not
duplicate, sell or disclose to others the Proprietary Information of
the other, in whole or in part, without the prior written permission of
the other party. The Fund and the Distributor may, however, disclose
Proprietary Information to its employees who have a need to know the
Proprietary Information to perform work for the other, provided that
each shall use reasonable efforts to ensure that the Proprietary
Information is not duplicated or disclosed by its employees in breach
of this Agreement. The Fund and the Distributor may also disclose the
Proprietary Information to independent contractors, auditors and
professional advisors, provided that they use such information in a
manner not inconsistent with this Section 10. Notwithstanding the
previous sentence, in no event shall either the Fund or the Distributor
disclose the Proprietary Information to any competitor of the other
without specific, prior written consent.
10.2 Proprietary Information means:
(a) any data or information that is completely sensitive material, and
not generally known to the public, including, but not limited to,
information about product plans, marketing strategies, finance,
operations, customer relationships, customer profiles (including
without limitation information regarding prior, present or potential
shareholders of the Fund), sales estimates, business plans, and
internal performance results relating to the past, present or future
business activities of the Fund or the Distributor, their respective
subsidiaries and affiliated companies and the customers, clients and
suppliers of any of them;
(b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and
secret in the sense that its confidentiality affords the Fund or the
Distributor a competitive advantage over its competitors; and
(c) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow
charts, databases, inventions, know-how, show-how and trade secrets,
whether or not patentable or copyrightable.
-10-
<PAGE>
10.3 Each party acknowledges that breach of the restrictions on use,
dissemination or disclosure of any Proprietary Information would result
in immediate and irreparable harm, and money damages would be
inadequate to compensate the other party for that harm. The parties
shall be entitled to equitable relief, in addition to all other
available remedies, to redress any such breach.
10.4 The obligations of confidentiality and restriction on use herein shall
not apply to any Proprietary Information that a party proves:
(a) Was in the public domain prior to the date of this Agreement or
subsequently came into the public domain through no fault of such
party; or
(b) Was lawfully received by the party from a third party free of any
obligation of confidence to such third party; or
(c) Was already in the possession of the party prior to receipt
thereof, directly or indirectly, from the other party; or
(d) Is required to be disclosed in a judicial or administrative
proceeding after all reasonable legal remedies for maintaining such
information in confidence have been exhausted including, but not
limited to, giving the other party as much advance notice of the
possibility of such disclosure as practical so the other party may
attempt to stop such disclosure or obtain a protective order concerning
such disclosure; or
(e) Is subsequently and independently developed by employees,
consultants or agents of the party without reference to the Proprietary
Information disclosed under this Agreement.
10.5 The Distributor shall keep and maintain on behalf of the Fund all books
and records which the Fund and the Distributor are, or may be, required
to keep and maintain in connection with the services to be provided
hereunder pursuant to any applicable statutes, rules and regulations,
including without limitation Rules 31a-1 and 31a-2 under the Act. The
Distributor further agrees that all such books and records shall be the
property of the Fund and to make such books and records available for
inspection by or upon the request of the Fund or, upon prior notice by
the Distributor to the Fund, by the SEC at reasonable times.
10.6 The provisions of this Section 10 shall survive the termination of this
Agreement.
11. ENTIRE AGREEMENT
----------------
This Agreement, including all Schedules hereto, constitutes the entire
agreement between the parties with respect to the subject matter hereof
and supersedes all prior and contemporaneous proposals, agreements,
contracts, representations, and understandings, whether written or
-11-
<PAGE>
oral, between the parties with respect to the subject matter hereof. It
is recognized that the Fund is an intended third party beneficiary of
the Consulting Agreement, dated of even date herewith, between the
Distributor and Weiss, Peck & Greer, L.L.C.
12. TRUSTEE LIABILITY
-----------------
The Fund and the Distributor agree that the obligations of the Fund
under the Agreement shall not be binding upon any of the Fund's
Trustees, shareholders, nominees, officers, employees or agents,
whether past, present or future, of the Fund individually, but are
binding only upon the assets and property of the Fund, as provided in
the Fund's declaration of trust. The execution and delivery of this
Agreement have been authorized by the Fund's Trustees, and signed by an
authorized officer of the Fund, acting as such, and neither such
authorization by such trustees nor such execution and delivery by such
officer shall be deemed to have been made by any of them or any
shareholder of the Fund individually or to impose any liability on any
of them or any shareholder of the Fund personally, but shall bind only
the assets and property of the Fund as provided in the Fund's
declaration of trust. No series of a Fund that is a multi-series
investment company shall be liable for the obligations of any other
series of such Fund.
It is agreed that for purposes of this Agreement, that each of the
entities listed below, individually and not jointly, shall be deemed to
be a Fund. It is also understood that each of such entities shall be
deemed to be entered into a separate agreement with the Distributor so
that it is as if each of such entities had signed a separate agreement
and that a single document is being signed simply to facilitate the
execution and administration of this Agreement. None of such entities
is responsible for any of the obligations of, or liabilities of, or is
entitled to any of the rights of, any other entity. The entities
referred to above in this paragraph are as follows: WPG Government
Money Market Fund, WPG Tax Free Money Market Fund, WPG Intermediate
Municipal Bond Fund, WPG Core Bond Fund and WPG Quantitative Equity
Fund, Weiss, Peck & Greer International Fund, WPG Growth Fund, WPG
Growth and Income Fund, WPG Tudor Fund, RWB/WPG U.S. Large Stock Fund,
and Tomorrow Funds Retirement Trust, composed of the following series
investment companies: Tomorrow Short-Term Retirement Fund, Tomorrow
Medium-Term Retirement Fund, Tomorrow Long-Term Retirement Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
-12-
<PAGE>
EACH OF THE FUNDS SET FORTH ON THE
SCHEDULE A HERETO
By: /s/ Jay C. Nadel
Name: Managing Director
Title: Jay C. Nadel
FIRST DATA DISTRIBUTORS, INC.
By: /s/ Scott M. Hacker
Name: Scott M. Hacker
Title: V.P. and Treasurer
-13-
<PAGE>
SCHEDULE A
NAME OF FUNDS
Weiss, Peck & Greer Funds Trust
WPG Government Money Market Fund
WPG Tax Free Money Market Fund
WPG Intermediate Municipal Bond Fund
WPG Core Bond Fund
WPG Quantitative Equity Fund
Weiss, Peck & Greer International Fund
WPG Growth Fund
WPG Growth and Income Fund
WPG Tudor Fund
RWB/WPG U.S. Large Stock Fund
Tomorrow Funds Retirement Trust
Tomorrow Short-Term Retirement Fund
Tomorrow Medium-Term Retirement Fund
Tomorrow Long-Term Retirement Fund
-14-
SERVICES AGREEMENT
THIS AGREEMENT, dated as of this day of November 13, 1998 between WPG
Tudor Fund (the "Fund"), organized under the laws of Massachusetts and having
its principal place of business at One New York Plaza, New York, New York and
First Data Investor Services Group, Inc. (the "Investor Services Group"), a
Massachusetts corporation with principal offices at 4400 Computer Drive
Westborough, Massachusetts 01581.
WITNESSETH
----------
WHEREAS, the Fund desires to appoint Investor Services Group as its
fund accounting agent, transfer agent, dividend disbursing agent and agent in
connection with certain other activities and Investor Services Group desires to
accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Fund and Investor Services Group agree as follows:
Article 1 DEFINITIONS
1.1 Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar organizational
document as the case may be, of the Fund as the same may be amended
from time to time.
(b) "Authorized Person" shall be deemed to include (i) any
authorized officer of the Fund; or (ii) any person, whether or not such
person is an officer or employee of the Fund, duly authorized to give
Oral Instructions or Written Instructions on behalf of the Fund as
indicated in writing to Investor Services Group from time to time.
(c) "Board of Directors" shall mean the Board of Directors or
Board of Trustees of the Fund, as the case may be.
(d) "Commission" shall mean the Securities and Exchange
Commission.
(e) "Custodian" refers to any custodian or subcustodian of
securities and other property which the Fund may from time to time
deposit, or cause to be deposited or held under the name or account of
such a custodian pursuant to a Custodian Agreement.
(f) "1934 Act" shall mean the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder, all as amended from time
to time.
(g) "1940 Act" shall mean the Investment Company Act of 1940
and the rules and regulations promulgated thereunder, all as amended
from time to time.
<PAGE>
(h) "Oral Instructions" shall mean instructions, other than
Written Instructions, actually received by Investor Services Group from
a person reasonably believed by Investor Services Group to be an
Authorized Person;
(i) "Prospectus" shall mean the most recently dated Fund
Prospectus and Statement of Additional Information, including any
supplements thereto if any, which has become effective under the
Securities Act of 1933 and the 1940 Act.
(j) "Shares" refers collectively to such shares of capital
stock or beneficial interest, as the case may be, or class thereof, of
the Fund as may be issued from time to time.
(k) "Shareholder" shall mean a record owner of Shares of the
Fund.
(l) "Written Instructions" shall mean a written communication
signed by a person reasonably believed by Investor Services Group to be
an Authorized Person and actually received by Investor Services Group.
Written Instructions shall include manually executed originals and
authorized electronic transmissions, including telefacsimile of a
manually executed original or other process.
Article 2 APPOINTMENT OF INVESTOR SERVICES GROUP
2.1 The Fund hereby appoints and constitutes Investor Services Group as
fund accounting agent, transfer agent and dividend disbursing agent for Shares
of the Fund and as shareholder servicing agent for the Fund and Investor
Services Group hereby accepts such appointments and agrees to perform the duties
hereinafter set forth.
Article 3 DUTIES OF INVESTOR SERVICES GROUP
3.1 As transfer agent Investor Services Group shall be responsible for:
(a) Administering and/or performing the customary services of
a transfer agent; acting as service agent in connection with dividend
and distribution functions; and for performing shareholder account and
administrative agent functions in connection with the issuance,
transfer and redemption or repurchase (including coordination with the
Custodian) of Shares of the Fund, as more fully described in the
written schedule of Duties of Investor Services Group annexed hereto as
Schedule A and incorporated herein, and in accordance with the terms of
the Prospectus of the Fund, applicable law and the procedures
established from time to time between Investor Services Group and the
Fund.
(b) Recording the issuance of Shares and maintaining pursuant
to Rule 17Ad-10(e) of the 1934 Act a record of the total number of
Shares of the Fund which are authorized, based upon data provided to it
by the Fund, and issued and outstanding. Investor Services Group shall
provide the Fund on a regular basis with the total number of Shares of
the Fund which are authorized and issued and outstanding and shall have
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<PAGE>
no obligation, when recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any laws relating to
the issue or sale of such Shares, which functions shall be the sole
responsibility of the Fund.
(c) Notwithstanding any of the foregoing provisions of this
Agreement, Investor Services Group shall be under no duty or obligation
to inquire into, and shall not be liable for: (i) the legality of the
issuance or sale of any Shares or the sufficiency of the amount to be
received therefor; (ii) the legality of the redemption of any Shares,
or the propriety of the amount to be paid therefor; (iii) the legality
of the declaration of any dividend by the Board of Directors, or the
legality of the issuance of any Shares in payment of any dividend; or
(iv) the legality of any recapitalization or readjustment of the
Shares.
3.2 As fund accounting agent, shall be responsible for performing the
customary services of a fund accounting agent, including those services as more
fully described in the written schedule of Duties of Investor Services Group
annexed hereto as Schedule A and incorporated herein, and subject to the
supervision and direction of the Board of Directors of the Fund.
3.3 As the Fund's print/mail services provider, Investor Services Group
agrees to perform print/mail services with respect to those items listed in
Schedule B for the fees also identified in Schedule B.
3.4 The Fund's Blue Sky Filing Agent shall (i) identify to Investor
Services Group in writing those transactions and assets to be treated as exempt
from blue sky reporting for each State and (ii) verify the establishment of
transactions for each State on the system prior to activation and thereafter
monitor the daily activity for each State. The responsibility of Investor
Services Group for the Fund's blue sky State registration status is solely
limited to the initial establishment of transactions subject to blue sky
compliance by the Fund and the reporting of such transactions to the Fund as
provided above. For so long as Investor Services Group serves as the Fund's blue
sky registration agent this provision shall be inoperative.
3.5 Investor Services Group agrees to undertake certain development
efforts as more fully described in the written schedule of Related Services
annexed hereto as Schedule E and incorporated herein. The parties hereto
acknowledge that Investor Services Group shall be providing the foregoing with
respect to all of the Weiss Peck & Greer affiliated mutual funds for which
Investor Services Group provides transfer agent services and accounting and/or
administration services.
3.6 In addition to the duties set forth herein, Investor Services Group
shall perform such other duties and functions, and shall be paid such amounts
therefor, as may from time to time be agreed upon in writing between the Fund
and Investor Services Group.
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<PAGE>
Article 4 RECORDKEEPING AND OTHER INFORMATION
4.1 Investor Services Group shall create and maintain all records
required of it pursuant to its duties hereunder and as set forth in Schedule A
in accordance with all applicable laws, rules and regulations, including without
limitation, records required by Section 31(a) of the 1940 Act and by applicable
tax laws and regulations. All records shall be available during regular business
hours for inspection and use by the Fund. Where applicable, such records shall
be maintained by Investor Services Group for the periods and in the places
required by Rule 31a-2 under the 1940 Act.
4.2 To the extent required by Section 31 of the 1940 Act and
notwithstanding Articles 8 and 15 of this Agreement, Investor Services Group
agrees that all such records prepared or maintained by Investor Services Group
relating to the services to be performed by Investor Services Group hereunder
are the property of the Fund and will be preserved, maintained and made
available in accordance with such section, and will be surrendered promptly to
the Fund on and in accordance with the Fund's request.
4.3 In case of any requests or demands for the inspection of
Shareholder records of the Fund, Investor Services Group will endeavor to notify
the Fund of such request and secure Written Instructions as to the handling of
such request. Investor Services Group reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its counsel that
it may be held liable for the failure to comply with such request.
Article 5 FUND INSTRUCTIONS
5.1 Investor Services Group will have no liability when acting upon
Written or Oral Instructions believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any notice of
any change of authority of any person until receipt of a Written Instruction
thereof from the Fund. Investor Services Group will also have no liability when
processing Share certificates which it reasonably believes to bear the proper
manual or facsimile signatures of the officers of the Fund and the proper
countersignature of Investor Services Group.
5.2 At any time, Investor Services Group may request Written
Instructions from the Fund and may seek advice from legal counsel for the Fund,
or its own legal counsel, with respect to any matter arising in connection with
this Agreement, and it shall not be liable for any action taken or not taken or
suffered by it in good faith in accordance with such Written Instructions or in
accordance with the opinion of counsel for the Fund or for Investor Services
Group. Written Instructions requested by Investor Services Group will be
provided by the Fund within a reasonable period of time.
5.3 Investor Services Group, its officers, agents or employees, shall
accept Oral Instructions or Written Instructions given to them by any person
representing or acting on behalf of the Fund only if said representative is an
Authorized Person. The Fund agrees that all Oral Instructions shall be followed
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<PAGE>
within one business day by confirming Written Instructions, and that the Fund's
failure to so confirm shall not impair in any respect Investor Services Group's
right to rely on Oral Instructions.
Article 6 COMPENSATION
6.1 The Fund will compensate Investor Services Group for the
performance of its obligations hereunder in accordance with the fees set forth
in the written Fee Schedule annexed hereto as Schedule B and incorporated
herein.
6.2 In addition to those fees set forth in Section 6.1 above, the Fund
agrees to pay, and will be billed separately for, reasonable out-of-pocket
expenses incurred by Investor Services Group in the performance of its duties
hereunder. Out-of-pocket expenses shall include, but shall not be limited to,
the items specified in the written schedule of out-of-pocket charges annexed
hereto as Schedule C and incorporated herein. Schedule C may be modified by
written agreement between the parties. Unspecified out-of-pocket expenses shall
be limited to those out-of-pocket expenses reasonably incurred by Investor
Services Group in the performance of its obligations hereunder.
6.3 The Fund agrees to pay all fees and out-of-pocket expenses within
fifteen (15) days following the receipt of the respective invoice.
6.4 Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule B, a revised Fee Schedule executed and dated by
the parties hereto.
Article 7 DOCUMENTS
7.1 In connection with the appointment of Investor Services Group, the
Fund shall, on or before the date this Agreement goes into effect, but in any
case within a reasonable period of time for Investor Services Group to prepare
to perform its duties hereunder, deliver or caused to be delivered to Investor
Services Group the documents set forth in the written schedule of Fund Documents
annexed hereto as Schedule D. Investor Services Group acknowledges receipt of
such documents.
Article 8 INVESTOR SERVICES GROUP SYSTEM
8.1 Investor Services Group shall retain title to and ownership of any
and all data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions, discoveries,
patentable or copyrightable matters, concepts, expertise, patents, copyrights,
trade secrets, and other related legal rights utilized by Investor Services
Group in connection with the services provided by Investor Services Group to the
Fund herein (the "Investor Services Group System").
8.2 Investor Services Group hereby grants to the Fund a limited license
to Investor Services Group System for the sole and limited purpose of having
Investor Services Group provide the services contemplated hereunder and nothing
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contained in this Agreement shall be construed or interpreted otherwise and such
license shall immediately terminate with the termination of this Agreement.
Article 9 REPRESENTATIONS AND WARRANTIES OF INVESTOR SERVICES GROUP
9.1 Investor Services Group represents and warrants to the Fund that:
(a) It is a corporation duly organized an existing and in good
standing under the laws of the Commonwealth of Massachusetts;
(b) It is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement;
(c) All requisite corporate proceedings have been taken to
authorized it to enter into this Agreement;
(d) It is duly registered with its appropriate regulatory
agency as a transfer agent and such registration will remain in effect
for the duration of this Agreement;
(e) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
9.2 YEAR 2000 COMPLIANCE. (a) For purposes of this Agreement,
"Year 2000 Compliant" means:
(i) date data will process without error or interruption due
solely to the change in century, in any level of computer hardware or
software Investor Services Group provides/uses in performing its
services hereunder, including, but not limited to, microcode, firmware,
system and application programs, files and databases; and
(ii) there will be no loss of any functionality of the
Investor Services Group System due solely to the change in century,
with respect to the introduction, processing or output of date records.
(b) Investor Services Group represents and warrants that:
(i) The Investor Services Group System will be Year 2000
Compliant by December 31, 1998; provided, however, that Investor
Services Group will be in a process of testing the Investor Services
Group System in regard to Year 2000 Compliance throughout calendar year
1999 and any temporary and immaterial loss of functionality occurring
during the ordinary course of this testing and fixing process shall not
be considered a failure of Investor Services Group to be Year 2000
Compliant.
(ii) The Investor Services Group System will continue to be
interoperable, in the same manner as it is prior to January 1, 2000,
with software and hardware which may deliver records to, receive
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records from or interact with the Investor Services Group System in the
course of processing data, provided that such other software and
hardware is Year 2000 Compliant as defined herein and complies with the
interface and format standards specified by Investor Services Group.
(c) The Fund agrees to cooperate fully with Investor Services
Group to ensure the interoperability of the Investor Services Group
System with hardware and software used by Fund. Investor Services Group
shall have the right, at its discretion, to reject any data file which
it in good faith believes will interfere with the ability of the
Investor Services Group System to be Year 2000 Compliant.
Article 10 REPRESENTATIONS AND WARRANTIES OF THE FUND
10.1 The Fund represents and warrants to Investor Services Group that:
(a) It is duly organized and existing and in good standing
under the laws of the jurisdiction in which it is organized;
(b) It is empowered under applicable laws and by its Article
of Incorporation and By-Laws to enter into this Agreement;
(c) All corporate proceedings required by said Articles of
Incorporation, By-Laws and applicable laws have been taken to
authorized it to enter into this Agreement;
(d) A registration statement under the Securities Act of 1933,
as amended, and the 1940 Act on behalf of the Fund is currently
effective and will remain effective with respect to all Shares of the
Fund being offered for sale;
(e) Except to the extent that Investor Services Group serves
as the Fund's Blue Sky Filing Agent, all appropriate state securities
law filings have been made and will continue to be made, with respect
to all Shares of the Fund being offered for sale; and
(f) All outstanding Shares are validly issued, fully paid and
non-assessable. When Shares are hereafter issued in accordance with the
terms of the Fund's Articles of Incorporation and its Prospectus with
respect to the Fund, such Shares shall be validly issued, fully paid
and non-assessable.
Article 11 INDEMNIFICATION
11.1 Investor Services Group shall not be responsible for and the Fund
shall indemnify and hold Investor Services Group harmless from and against any
and all claims, costs, expenses (including reasonable attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or kind which may be
asserted against Investor Services Group or for which Investor Services Group
may be held to be liable (a "Claim") arising out of or attributable to any of
the following:
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(a) Any actions of Investor Services Group required to be
taken pursuant to this Agreement unless such Claim resulted from a
negligent act or omission to act or bad faith by Investor Services
Group in the performance of its duties hereunder;
(b) Investor Services Group's reasonable reliance on, or
reasonable use of information, data, records and documents (including
but not limited to magnetic tapes, computer printouts, hard copies and
microfilm copies) received by Investor Services Group from the Fund, or
any authorized third party acting on behalf of the Fund, including but
not limited to the prior transfer agent for the Fund, in the
performance of Investor Services Group's duties and obligations
hereunder;
(c) The reliance on, or the implementation of, any Written or
Oral Instructions or any other instructions or requests of the Fund
reasonably believed by Investor Services Group to be genuine and to be
signed, countersigned or executed or orally communicated by an
Authorized Person;
(d) The offer or sale of shares in violation of any
requirement under the federal securities laws or regulations or in
violation of any stop order or other determination or ruling by federal
regulators with respect to the offer or sale of such shares, unless
Investor Services Group is properly notified and has a reasonable
amount of time to act on such notification;
(e) Except to the extent that Investor Services Group serves
as the Fund's Blue Sky Filing Agent, the offer or sales of shares in
violation of any requirement under the securities laws or regulations
of any state that such shares be registered in such state or in
violation of any stop order or other determination or ruling by any
state with respect to the offer or sale of such shares in such state;
and
(f) The Fund's refusal or failure to comply with the terms of
this Agreement, or any Claim which arises out of the Fund's negligence
or misconduct or the breach of any representation or warranty of the
Fund made herein.
11.2 In any case in which the Fund may be asked to indemnify or hold
Investor Services Group harmless, Investor Services Group will notify the Fund
promptly after identifying any situation which it believes presents or appears
likely to present a claim for indemnification against the Fund although the
failure to do so shall not prevent recovery by Investor Services Group and shall
keep the Fund advised with respect to all developments concerning such
situation. The Fund shall have the option to defend Investor Services Group
against any Claim which may be the subject of this indemnification, and, in the
event that the Fund so elects, such defense shall be conducted by counsel chosen
by the Fund and reasonably satisfactory to Investor Services Group, and
thereupon the Fund shall take over complete defense of the Claim and Investor
Services Group shall sustain no further legal or other expenses in respect of
such Claim. Investor Services Group will not confess any Claim or make any
compromise in any case in which the Fund will be asked to provide
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indemnification, except with the Fund's prior written consent. The obligations
of the parties hereto under this Article 11 shall survive the termination of
this Agreement.
Article 12 STANDARD OF CARE
12.1 Investor Services Group shall at all times act in good faith and
agrees to use its best efforts within commercially reasonable limits to ensure
the accuracy of all services performed under this Agreement, but assumes no
responsibility for loss or damage to the Fund unless said errors are caused by
Investor Services Group's own negligence, bad faith or willful misconduct or
that of its employees.
12.2 Notwithstanding the foregoing Section 12.1 or anything else
contained in this Agreement to the contrary, Investor Services Group's entire
liability to the Fund, to the extent not covered by Investor Services Group's
liability insurance and fidelity bond coverage and without giving effect to any
deductible, for any loss or damage, direct or indirect for any cause whatsoever
(including but not limited to those arising out of this Agreement), and
regardless of the form of action, shall be limited to the Fund's actual direct
out-of-pocket expenses which are reasonably incurred by the Fund, but shall not
under any circumstances exceed two-million dollars ($2,000,000) over any three
(3) year rolling period.
Article 13 CONSEQUENTIAL DAMAGES
13.1 In no event and under no circumstances shall either party to this
Agreement be liable to the other party for consequential or indirect loss of
profits, reputation or business or any other special damages under any provision
of this Agreement or for any act or failure to act hereunder.
Article 14 TERM AND TERMINATION
14.1 This Agreement shall be effective on the date first written above
and shall continue through November 13, 2003 (the "Initial Term"), unless
earlier terminated pursuant to the terms of this Agreement. Thereafter, this
Agreement shall automatically be renewed for successive terms of three (3) years
("Renewal Terms") each.
14.2 Either party may terminate this Agreement at the end of the
Initial Term or any subsequent Renewal Term upon not less than thirty (30) days
or more than one-hundred eighty (180) days prior written notice to the other
party.
14.3 In the event a termination notice is given by the Fund, all
expenses associated with movement of records and materials and conversion
thereof to a successor transfer agent will be borne by the Fund. Upon such
termination and payment by the Fund of all outstanding, undisputed fees owed to
Investor Services Group, Investor Services Group will deliver to such successor
transfer agent a certified list of shareholders of the Fund (with names and
addresses), and all other relevant books, records, correspondence and other Fund
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records or data in the possession of Investor Services Group, and Investor
Services Group will cooperate with the Fund and any successor transfer agent in
the substitution process.
14.4 If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting Party,
and if such material breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of such termination to
the Defaulting Party. If Investor Services Group is the Non-Defaulting Party,
its termination of this Agreement shall not constitute a waiver of any other
rights or remedies of Investor Services Group with respect to services performed
prior to such termination or rights of Investor Services Group to be reimbursed
for out-of-pocket expenses. In all cases, termination by the Non-Defaulting
Party shall not constitute a waiver by the Non-Defaulting Party of any other
rights it might have under this Agreement or otherwise against the Defaulting
Party. In addition to the foregoing, if the Board of Trustees of the Fund
instructs the Fund to terminate this Agreement in connection with and after a
material failure by Investor Services Group to perform its duties and
obligations hereunder, the Fund may terminate this Agreement by giving thirty
(30) days written notice of such termination to Investor Services Group
irrespective of whether the material breach has been remedied.
Article 15 CONFIDENTIALITY
15.1 In connection with the services provided by Investor Services
Group hereunder, certain confidential and proprietary information regarding
Investor Services Group and the Fund may be disclosed to the other. In
connection therewith, the parties agree as follows:
(a) Confidential Information disclosed under this Agreement
shall mean:
(i) any data or information that is competitively sensitive
material, and not generally known to the public, including,
but not limited to, information about product plans, marketing
strategies, finance, operations, customer relationships,
customer profiles, sales estimates, business plans, and
internal performance results relating to the past, present or
future business activities of Investor Services Group or the
Fund, their respective parent corporation, their respective
subsidiaries and affiliated companies and the customers,
clients and suppliers of any of the foregoing;
(ii) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially
valuable and secret in the sense that its confidentiality
affords Investor Services Group or the Fund a competitive
advantage over its competitors; and
(iii) all confidential or proprietary concepts, documentation,
reports, data, specifications, computer software, source code,
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object code, flow charts, databases, inventions, know-how,
show-how and trade secrets, whether or not patentable or
copyrightable.
(b) Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory
notebooks, drawings, diagrams, specifications, bills of material,
equipment, prototypes and models, and any other tangible manifestation
of the foregoing which now exist or come into the control or possession
of the party.
15.2 Except as expressly authorized by prior written consent of the
disclosing party ("Discloser"), the party receiving Confidential Information
("Recipient") shall:
(a) limit access to Discloser's Confidential Information to
Recipient's employees who have a need-to-know in connection with the
subject matter thereof;
(b) advise those employees who have access to the Confidential
Information of the proprietary nature thereof and of the obligations
set forth in this Confidentiality Agreement;
(c) take appropriate action by instruction or agreement with
the employees having access to Discloser's Confidential Information to
fulfill Recipient's obligations under this Confidentiality Agreement;
(d) safeguard all of Discloser's Confidential Information by
using a reasonable degree of care, but not less than that degree of
care used by Recipient in safeguarding its own similar information or
material;
(e) use all of Discloser's Confidential Information solely for
purposes that it was intended;
(f) not disclose any of Discloser's Confidential Information
to third parties; and
(g) not disclose the existence of the discussions to any third
party.
15.3 Upon Discloser's request, Recipient shall surrender to Discloser
all memoranda, notes, records, drawings, manuals, records, and other documents
or materials (and all copies of same) relating to or containing Discloser's
Confidential Information. When Recipient returns the materials, Recipient shall
certify in writing that it has returned all materials containing or relating to
the Confidential Information.
15.4 The obligations of confidentiality and restriction on use in this
Article 15 shall not apply to any Confidential Information that Recipient
proves:
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(a) was in the public domain prior to the date of this
Agreement or subsequently came into the public domain through no fault
of Recipient; or
(b) was lawfully received by Recipient from a third party free
of any obligation of confidence to the third party; or
(c) was already in Recipient's possession prior to receipt
from Discloser; or
(d) is required to be disclosed in a judicial or
administrative proceeding after all reasonable legal remedies for
maintaining such information in confidence have been exhausted
including, but not limited to, giving Discloser as much advance notice
as practical of the possibility of disclosure to allow Discloser to
stop such disclosure or obtain a protective order concerning such
disclosure; or
(e) is subsequently and independently developed by Recipient's
employees, consultants or agents without reference to Confidential
Information.
15.5 The Fund and Investor Services Group agree that money damages
would not be a sufficient remedy for breach of this Article 15. Accordingly, in
addition to all other remedies that either party may have, a party shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy for any breach of this Agreement. The parties agree to waive any
requirement for a bond in connection with any such injunctive or other equitable
relief.
Article 16 FORCE MAJEURE
16.1 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, or by circumstances
beyond its reasonable control, including strikes, labor difficulties, mechanical
breakdowns, equipment or transmission failure or damage, such party shall not be
liable for damages to the other for any damages resulting from such failure to
perform or otherwise from such causes.
Article 17 AMENDMENTS
17.1 This Agreement may only be amended or modified by a written
instrument executed by both parties.
Article 18 SUBCONTRACTING
18.1 The Fund agrees that Investor Services Group may, in its
discretion, subcontract for certain of the services described under this
Agreement or the Schedules hereto; provided that the appointment of any such
Investor Services Group shall not relieve Investor Services Group of its
responsibilities hereunder.
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Article 19 ARBITRATION
19.1 Any claim or controversy arising out of or relating to this
Agreement, or breach hereof, shall be settled by arbitration administered by the
American Arbitration Association in Boston, Massachusetts in accordance with its
applicable rules, except that the Federal Rules of Evidence and the Federal
Rules of Civil Procedure with respect to the discovery process shall apply.
19.2 The parties hereby agree that judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction.
19.3 The parties acknowledge and agree that the performance of the
obligations under this Agreement necessitates the use of instrumentalities of
interstate commerce and, notwithstanding other general choice of law provisions
in this Agreement, the parties agree that the Federal Arbitration Act shall
govern and control with respect to the provisions of this Article 19.
Article 20 NOTICE
20.1 Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or Investor Services Group, shall
be sufficiently given if addressed to that party and received by it at its
office set forth below or at such other place as it may from time to time
designate in writing.
To the Fund:
WPG Tudor Fund
One New York Plaza
New York, New York 10004
Attention: Jay C. Nadel
To Investor Services Group:
First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, MA 01581
Attention: President
with a copy to Investor Services Group's General Counsel
Article 21 SUCCESSORS
21.1 This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns, provided, however,
that this Agreement shall not be assigned to any person other than a person
controlling, controlled by or under common control with the assignor without the
written consent of the other party, which consent shall not be unreasonably
withheld.
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Article 22 GOVERNING LAW
22.1 This Agreement shall be governed exclusively by the laws of the
Commonwealth of Massachusetts without reference to the choice of law provisions
thereof. Each party hereto hereby (i) consents to the personal jurisdiction of
the Commonwealth of Massachusetts courts over the parties hereto, hereby waiving
any defense of lack of personal jurisdiction; and (ii) appoints the person to
whom notices hereunder are to be sent as agent for service of process.
Article 23 COUNTERPARTS
23.1 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument.
Article 24 CAPTIONS
24.1 The captions of this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
Article 25 USE OF INVESTOR SERVICES GROUP/FUND NAME
25.1 The Fund shall not use the name of Investor Services Group in any
Prospectus, Statement of Additional Information, Shareholders' report, sales
literature or other material relating to the Fund in a manner not approved prior
thereto; provided, that Investor Services Group need not receive notice of all
reasonable uses of its name which merely refer in accurate terms to its
appointment hereunder or which are required by any government agency or
applicable law or rule.
25.2 Investor Services Group shall not use the name of the Fund or
material relating to the Fund on any documents or forms for other than internal
use in a manner not approved prior thereto; provided, that the Fund need not
receive notice of all reasonable uses of its name which merely refer in accurate
terms to the appointment of Investor Services Group or which are required by any
government agency or applicable law or rule.
Article 26 RELATIONSHIP OF PARTIES
26.1 The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be interpreted or
construed otherwise.
Article 27 ENTIRE AGREEMENT; SEVERABILITY
27.1 This Agreement and the Exhibits and Schedules attached hereto
constitute the entire agreement of the parties hereto relating to the matters
covered hereby and supersede any previous agreements. If any provision is held
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to be illegal, unenforceable or invalid for any reason, the remaining provisions
shall not be affected or impaired thereby.
27.2 This Agreement relates only to the subject matter hereof. Nothing
in this Agreement shall effect the relationship, rights, duties or other
obligations of the parties hereto governed by any other agreement.
Article 28 LIMITATION OF LIABILITY
28.1 It is understood and expressly stipulated that neither the
Shareholders nor the Trustees or officers of the Fund shall be personally liable
hereunder. All persons dealing with the Fund must look solely to the property of
the Fund for enforcement of any claims against the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
WPG TUDOR FUND
By: _______________________
Title: _______________________
FIRST DATA INVESTOR SERVICES GROUP, INC.
By: _______________________
Title: _______________________
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Schedule A
DUTIES OF INVESTOR SERVICES GROUP
---------------------------------
A. TRANSFER AGENT SERVICES
1. SHAREHOLDER INFORMATION. Investor Services Group shall maintain a
record of the number of Shares held by each Shareholder of record which shall
include name, address, taxpayer identification and which shall indicate whether
such Shares are held in certificates or uncertificated form.
2. SHAREHOLDER SERVICES. Investor Services Group shall respond as
appropriate to all inquiries and communications from Shareholders relating to
Shareholder accounts with respect to its duties hereunder and such other
correspondence as may be from time to time mutually agreed upon between Investor
Services Group and the Fund.
3. SHARE CERTIFICATES.
(a) At the expense of the Fund, the Fund shall supply Investor
Services Group with an adequate supply of blank share certificates to meet
Investor Services Group requirements therefor. Such Share certificates shall be
properly signed by facsimile. The Fund agrees that, notwithstanding the death,
resignation, or removal of any officer of the Fund whose signature appears on
such certificates, Investor Services Group or its agent may continue to
countersign certificates which bear such signatures until otherwise directed by
Written Instructions.
(b) Investor Services Group shall issue replacement Share
certificates in lieu of certificates which have been lost, stolen or destroyed,
upon receipt by Investor Services Group of properly executed affidavits and lost
certificate bonds, in form satisfactory to Investor Services Group, with the
Fund and Investor Services Group as obligees under the bond.
(c) Investor Services Group shall also maintain a record of
each certificate issued, the number of Shares represented thereby and the
Shareholder of record. With respect to Shares held in open accounts or
uncertificated form (i.e., no certificate being issued with respect thereto)
Investor Services Group shall maintain comparable records of the Shareholders
thereof, including their names, addresses and taxpayer identification. Investor
Services Group shall further maintain a stop transfer record on lost and/or
replaced certificates.
4. MAILING COMMUNICATIONS TO SHAREHOLDERS; PROXY MATERIALS. Investor
Services Group will address and mail to Shareholders of the Fund, all reports to
Shareholders, dividend and distribution notices and proxy material for the
Fund's meetings of Shareholders. In connection with meetings of Shareholders,
Investor Services Group will prepare Shareholder lists, mail and certify as to
the mailing of proxy materials, process and tabulate returned proxy cards,
report on proxies voted prior to meetings, act as inspector of election at
meetings and certify Shares voted at meetings.
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5. SALES OF SHARES
(a) Investor Services Group shall not be required to issue any
Shares of the Fund where it has received a Written Instruction from the Fund or
official notice from any appropriate authority that the sale of the Shares of
the Fund has been suspended or discontinued. The existence of such Written
Instructions or such official notice shall be conclusive evidence of the right
of Investor Services Group to rely on such Written Instructions or official
notice.
(b) In the event that any check or other order for the payment
of money is returned unpaid for any reason, Investor Services Group will
endeavor to: (i) give prompt notice of such return to the Fund or its designee;
(ii) place a stop transfer order against all Shares issued as a result of such
check or order; and (iii) take such actions as Investor Services Group may from
time to time deem appropriate.
6. TRANSFER AND REPURCHASE
(a) Investor Services Group shall process all requests to
transfer or redeem Shares in accordance with the transfer or repurchase
procedures set forth in the Fund's Prospectus.
(b) Investor Services Group will transfer or repurchase Shares
upon receipt of Oral or Written Instructions or otherwise pursuant to the
Prospectus and Share certificates, if any, properly endorsed for transfer or
redemption, accompanied by such documents as Investor Services Group reasonably
may deem necessary.
(c) Investor Services Group reserves the right to refuse to
transfer or repurchase Shares until it is satisfied that the endorsement on the
instructions is valid and genuine. Investor Services Group also reserves the
right to refuse to transfer or repurchase Shares until it is satisfied that the
requested transfer or repurchase is legally authorized, and it shall incur no
liability for the refusal, in good faith, to make transfers or repurchases which
Investor Services Group, in its good judgement, deems improper or unauthorized,
or until it is reasonably satisfied that there is no basis to any claims adverse
to such transfer or repurchase.
(d) When Shares are redeemed, Investor Services Group shall,
upon receipt of the instructions and documents in proper form, deliver to the
Custodian and the Fund or its designee a notification setting forth the number
of Shares to be repurchased. Such repurchased shares shall be reflected on
appropriate accounts maintained by Investor Services Group reflecting
outstanding Shares of the Fund and Shares attributed to individual accounts.
(e) Investor Services Group, upon receipt of the monies paid
to it by the Custodian for the repurchase of Shares, pay such monies as are
received from the Custodian, all in accordance with the procedures described in
the written instruction received by Investor Services Group from the Fund.
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(f) Investor Services Group shall not process or effect any
repurchase with respect to Shares of the Fund after receipt by Investor Services
Group or its agent of notification of the suspension of the determination of the
net asset value of the Fund.
7. DIVIDENDS
(a) Upon the declaration of each dividend and each capital
gains distribution by the Board of Directors of the Fund with respect to Shares
of the Fund, the Fund shall furnish or cause to be furnished to Investor
Services Group Written Instructions setting forth the date of the declaration of
such dividend or distribution, the ex-dividend date, the date of payment
thereof, the record date as of which Shareholders entitled to payment shall be
determined, the amount payable per Share to the Shareholders of record as of
that date, the total amount payable to Investor Services Group on the payment
date and whether such dividend or distribution is to be paid in Shares at net
asset value.
(b) On or before the payment date specified in such resolution
of the Board of Directors, the Fund will pay to Investor Services Group
sufficient cash to make payment to the Shareholders of record as of such payment
date.
(c) If Investor Services Group does not receive sufficient
cash from the Fund to make total dividend and/or distribution payments to all
Shareholders of the Fund as of the record date, Investor Services Group will,
upon notifying the Fund, withhold payment to all Shareholders of record as of
the record date until sufficient cash is provided to Investor Services Group.
8. CASH MANAGEMENT SERVICES. Investor Services Group shall establish
and maintain various demand deposit accounts ("DDA's") with a third party cash
management services provider in order to facilitate the services being provided
by Investor Services Group hereunder. Investor Services Group shall retain any
and all interest income and/or related earnings credits which may be derived
from maintaining such DDA's.
9. LOST SHAREHOLDERS. Investor Services Group shall perform such
services as are required in order to comply with Rules 17a-24 and 17Ad-17 of the
34 Act (the Lost Shareholder Rules"), including, but not limited to those set
forth below. Investor Services Group may, in its sole discretion, use the
services of a third party to perform the some or all such services.
(a) documentation of electronic search policies and procedures;
(b) execution of required searches;
(c) creation and mailing of confirmation letters;
(d) taking receipt of returned verification forms;
(e) providing confirmed address corrections in batch via
electronic media;;
(f) tracking results and maintaining data sufficient to comply
with the Lost Shareholder Rules; and
(g) preparation and submission of data required under the Lost
Shareholder Rules.
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10. In addition to and neither in lieu nor in contravention of the
services set forth above, Investor Services Group shall: (i) perform all the
customary services of a transfer agent, registrar, dividend disbursing agent and
agent of the dividend reinvestment and cash purchase plan as described herein
consistent with those requirements in effect as at the date of the performance
of such services. The detailed definition, frequency, limitations and associated
costs (if any) set out in the attached fee schedule, include but are not limited
to: maintaining all Shareholder accounts, preparing Shareholder meeting lists,
mailing proxies, tabulating proxies, mailing Shareholder reports to current
Shareholders, withholding taxes on U.S. resident and non-resident alien accounts
where applicable, preparing and filing U.S. Treasury Department Forms 1099 and
other appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders.
B. FUND ACCOUNTING SERVICES
Performing fund accounting and bookkeeping services (including the
maintenance of such accounts, books and records of the Fund as may be required
by Section 31(a) of the 1940 Act) as follows:
Daily, Weekly, and Monthly Reporting
Portfolio and General Ledger Accounting
Daily Valuation of all Portfolio Securities
Daily Valuation and NAV Calculation
Comparison of NAV to market movement
Review research of price tolerance/fluctuation report to market
movements and events
Research of items appearing on the price exception report
Weekly cost monitoring along with market-to-market valuations in
accordance with Rule 2a-7
Security trade processing
Daily cash and position reconciliation with the custodian bank
Daily updating of price and distribution rate information to the
Transfer Agent/Insurance Agent
Daily support and report delivery to Portfolio Management
-19-
<PAGE>
Daily calculation of Portfolio adviser fees and waivers
Daily calculation of distribution rates
Daily investable cash call
Monitor and research aged receivables
Collect aged income items and perform reclaims
Update NASDAQ reporting
Daily maintenance of each Portfolio's general ledger including expense
accruals
Daily NAV per share notification to other vendors as required
Calculation of 30-day SEC yields and total returns
Preparation of month-end reconciliation package
Monthly reconciliation of Portfolio expense records
Application of monthly pay down gain/loss
Preparation of all annual and semi-annual audit work papers
C. DCXCHANGE(SM) SERVICES
1. Investor Services Group has developed a recordkeeping service link
("DCXCHANGE(sm)") between investment companies and benefit plan consultants (the
"Recordkeepers") which administer employee benefit plans under Section 401(a) of
the Internal Revenue Code (the "Plans").
2. Investor Services Group has entered into agreements with various
Recordkeepers relating to the recordkeeping and related services performed on
behalf of such Plans in connection with daily valuation and processing of orders
for investment and reinvestment of assets of the Plans in various investment
options available to the participants under such Plans (the "Participants").
3. The Fund desires to participate in the DCXCHANGE(sm) Program and
retain Investor Services Group to perform such services with respect to shares
of the Funds ("Shares") held by or on behalf of the Participants as further
described herein and Investor Services Group is willing and able to furnish such
services on the terms and conditions hereinafter set forth.
-20-
<PAGE>
4. Investor Services Group agrees to perform recordkeeping and related
services for the benefit of the Plan Participants that maintain shares of the
Fund through Plans administered by certain Recordkeepers. Investor Services
Group shall subcontract with Recordkeepers to link the Investor Services Group
recordkeeping system with the Recordkeepers, in order for the Recordkeepers to
maintain Fund shares positions for each Participant.
-21-
<PAGE>
Schedule B
FEE SCHEDULE
------------
1. Transfer Agent Fees:
(a) Open Account Fees: Annual Monthly
Minimum
$17.64 $2,170
(b) Closed Accounts: $3 per account per year
(c) Retirement Plan Accounts (In addition to open/closed account fees):
Setup fee: $10 per account
Maintenance Fee: $15 per plan account per year
Premature Distribution: $10 per transaction
(d) Cost Basis Accounting: $0.25 per account/per month
(e) NSCC: $.15 per transaction
$.10 per same day confirm
(f) Voice Response Usage: $.23 per minute
$.10 per call
$500 per month /line charge
(g) In-Bound Teleservicing: $.08 per call/digital recording
$100,000 annual ($8,333.33 per month) total charge for all
WP&G affiliated funds for which Investor Services Group
provides TA services.
(h) Transmission Fees: $500 per month total
charge for all WP&G affiliated funds for which Investor
Services Group provides TA services.
(i) Lost Shareholder Search/Reporting: $2.75 per account search*
* The per account search fee shall be waived until June 2000
so long as the Fund retains Keane Tracers, Inc. ("KTI") to
provide the Fund with KTI's "In-Depth Research Program"
services.
2. Fund Accounting Fees: 4bp per year
-22-
<PAGE>
3. DCXCHANGE(sm) : Fund positions of the Participants shall constitute
open accounts for which the Fund shall pay to Investor Services Group
the Transfer Agent - Open Account Fee specified above.
4. Print Mail Fees:
(a) Standards Fees:
TESTING APPLICATION OR DATA REQUIREMENTS: $3.00 / fax to client or
Record Keeper
DAILY WORK (CONFIRMS):
HAND: $55/K with $50.00 minimum (includes 1 insert)
$0.06/each additional insert
MACHINE: $32/K with $50.00 minimum (includes 1 insert)
$0.02/each additional insert
DAILY CHECKS:
HAND: $55/K with $100.00 minimum daily (includes 1 insert)
$0.07/each additional insert
MACHINE: $32/K with $75.00 minimum (includes 1 insert)
$0.02/each additional insert
* There is a $3.00 charge for each 3606 Form sent.
-23-
<PAGE>
STATEMENTS:
HAND: $60/K with $75.00 minimum (includes 1 insert)
$0.06/each additional insert
$125/K for intelligent inserting
MACHINE: $40/K with $75.00 minimum (includes 1 insert)
$0.02 each additional insert
$45/K for intelligent inserting
PERIODIC CHECKS:
HAND: $91/K with $100.00 minimum (includes 1 insert)
$0.08/each additional insert
MACHINE: $52/K with $100.00 minimum (includes 1 insert)
$0.01/each additional insert
PRINTING CHARGES: (price ranges dependent on volumes)
$0.08/per confirm/statement/page
$0.10/per check
FOLDING (MACHINE): $18/K
FOLDING (HAND): $.12 each
PRESORT CHARGE: $0.277 postage rate
$0.035 per piece
COURIER CHARGE: $15.00 for each on call courier trip/or actual cost
for on demand
OVERNIGHT CHARGE: $3.50 per package service charge plus Federal
Express/Airborne charge
INVENTORY STORAGE: $20.00 for each inventory location as of
the 15th of the month
INVENTORY RECEIPT: $20.00 for each SKU / Shipment
HOURLY WORK; SPECIAL PROJECTS, OPENING ENVELOPES, ETC...: $24.00
per hour
SPECIAL PULLS: $2.50 per account pull
BOXES/ENVELOPES: Shipping boxes $0.70 each
Oversized Envelopes $0.35 each
FORMS DEVELOPMENT/PROGRAMMING FEE: $100/hr
CUTTING CHARGES: $8.00/K
-24-
<PAGE>
(b) Special Mailing Fees:
This pricing is based on appropriate notification (standard of 30 day
notification) and scheduling for special mailings. Scheduling
requirements include having collateral arrive at agreed upon times in
advance of deadlines. Mailings which arise with shorter time frames and
turns will be billed at a maximum premium of 50% based on turn around
requirements.
DAILY WORK (CONFIRMS):
HAND: $125.00 to create an admark tape
$8.00/K to zip + 4 data enhance with $125.00 minimum
$75.00/hr for any data manipulation
$6.00/K combo charge
ADMARK & MACHINE INSERT
#10, #11, 6x9: $44/K to admark envelope and machine insert 1
piece, with $125.00 min
$2.50/K for each additional insert
$34/K to admark only with $75.00 minimum
$25.00/K hand sort
9x12: $100/K to admark envelope and machine insert
1 piece, with $125.00 min
$5.00/K for each additional insert
$38/K to admark only with $75.00 minimum
$0.08 for each hand insert
ADMARK & HAND INSERT
#10, #11, 6x9: $0.08 for each hand insert
$25.00/K hand sort
9x12: $0.09 for each hand insert
$25.00/K hand sort
PRESSURE/SENSITIVE LABELS:
$0.26 each to create, affix and hand insert 1 piece, with a
$75.00 minimum
$0.06 for each hand insert
$0.10 to affix labels only
$0.10 to create labels only
LEGAL DROP: $150.00 / compliant legal drop per job and
processing fees
CREATE MAILING LIST: $0.30 per entry with $50.00 minimum
PRESORT FEE: $0.035 per piece
4. Fee Adjustments:
After the one year anniversary of the effective date of this Agreement,
Investor Services Group may adjust the above fees once per calendar
year, upon thirty (30) days prior written notice in an amount not to
exceed the cumulative percentage increase in the Consumer Price Index
for All Urban Consumers (CPI-U) U.S. City Average, All items
(unadjusted) - (1982-84=100), published by the U.S. Department of Labor
-25-
<PAGE>
since the last such adjustment in the Client's monthly fees (or the
Effective Date absent a prior such adjustment). Notwithstanding the
foregoing, Investor Services Group agrees that there shall be no
increase to the above referenced Transfer Agent Fees or Fund Accounting
Fees during the Initial Term.
-26-
<PAGE>
Schedule C
OUT-OF-POCKET EXPENSES
----------------------
The Fund shall reimburse Investor Services Group monthly for applicable
out-of-pocket expenses, including, but not limited to the following items:
Microfiche/microfilm production
Magnetic media tapes and freight
Printing costs, including certificates, envelopes, checks and
stationery
Postage (bulk, pre-sort, ZIP+4, barcoding, first class)
direct pass through to the Fund
Due diligence mailings
Telephone and telecommunication costs, including all lease,
maintenance and line costs
Ad hoc reports
Proxy solicitations, mailings and tabulations
Daily & Distribution advice mailings
Shipping, Certified and Overnight mail and insurance
Year-end form production and mailings
Terminals, communication lines, printers and other equipment
and any expenses incurred in connection with such terminals
and lines, as approved by the Fund
Duplicating services
Courier services
Incoming and outgoing wire charges
Federal Reserve charges for check clearance and other fund
related banking charges
Overtime, as approved by the Fund
Temporary staff, as approved by the Fund
Travel and entertainment, as approved by the Fund
Record retention, retrieval and destruction costs, including,
but not limited to exit fees charged by third party record
keeping vendors
Third party audit reviews
All conversion costs: including System start up costs
All Systems enhancements after the conversion at the rate of
$150.00 per hour (except as otherwise stated)
Insurance
Pricing services (or services used to determine Fund NAV)
Forms and supplies for the preparation of Board meetings and
other materials for the Fund
SAS 70
Cold Storage
Vendor pricing comparison
-27-
<PAGE>
Manual pricing
Such other miscellaneous expenses reasonably incurred by
Investor Services Group in performing its duties and
responsibilities under this Agreement.
The Fund agrees that postage and mailing expenses will be paid on the
day of or prior to mailing as agreed with Investor Services Group. In addition,
the Fund will promptly reimburse Investor Services Group for any other
unscheduled expenses incurred by Investor Services Group whenever the Fund and
Investor Services Group mutually agree that such expenses are not otherwise
properly borne by Investor Services Group as part of its duties and obligations
under the Agreement.
-28-
<PAGE>
Schedule D
Fund Documents
- Certified copy of the Articles of Incorporation of the Fund,
as amended
- Certified copy of the By-laws of the Fund, as amended
- Copy of the resolution of the Board of Directors authorizing
the execution and delivery of this Agreement
- Specimens of the certificates for Shares of the Fund, if
applicable, in the form approved by the Board of Directors of
the Fund, with a certificate of the Secretary of the Fund as
to such approval
- All account application forms and other documents relating to
Shareholder accounts or to any plan, program or service
offered by the Fund
- Certified list of Shareholders of the Fund with the name,
address and taxpayer identification number of each
Shareholder, and the number of Shares of the Fund held by
each, certificate numbers and denominations (if any
certificates have been issued), lists of any accounts against
which stop transfer orders have been placed, together with the
reasons therefore, and the number of Shares redeemed by the
Fund
- All notices issued by the Fund with respect to the Shares in
accordance with and pursuant to the Articles of Incorporation
or By-laws of the Fund or as required by law and shall perform
such other specific duties as are set forth in the Articles of
Incorporation including the giving of notice of any special or
annual meetings of shareholders and any other notices required
thereby.
-29-
<PAGE>
Schedule E
Systems Development
DEVELOPMENT EFFORTS
- -------------------
Investor Services Group agrees to undertake the development efforts listed
below. All programming will be completed in accordance with documented and
approved business requirements. All such documentation and business
requirement shall be mutually agree to in writing prior to the start of any
development work. Investor Services Group agrees to provide a total of 1700
programming hours for the automation projects listed below at no cost to
the Fund and to use all commercially reasonable efforts to ensure that such
development work shall be completed within twelve months of the execution
of the Agreement. The expense of any programming required to be undertaken
in excess of the 1700 hours will be borne by Weiss Peck & Greer.
Development Efforts:
- Dividend sweep to another mutual fund as defined in the WPG
Transmission Enhancement Referral Business Requirements dated July
21, 1998 Section III, Issue VII.
- Transmission enhancement from WPG Margin Department according to
the WPG Transmission Enhancement Referral Business Requirements
dated July 21, 1998.
- PC link to PC link for transmission enhancement.
- Permit sweep accounts to reinvest dividends into accounts that
have a zero balance.
- Full automation of the Trust's December position file.
- Suppression of all December statements except for December 31st
statements.
-30-
INDEPENDENT AUDITORS' CONSENT
To the Shareholders and Board of Trustees of:
WPG Government Money Market Fund
WPG Tax Free Money Market Fund
WPG Intermediate Municipal Bond Fund
WPG Core Bond Fund
WPG Growth and Income Fund
WPG Tudor Fund
Weiss, Peck & Greer International Fund
WPG Quantitative Equity Fund
We consent to the use of our report dated January 19, 1999 with respect to the
WPG Government Money Market Fund, WPG Tax Free Money Market Fund, WPG
Intermediate Municipal Bond Fund, WPG Core Bond Fund, WPG Growth and Income
Fund, WPG Tudor Fund, Weiss, Peck & Greer International Fund, and WPG
Quantitative Equity Fund incorporated herein by reference and to the references
to our Firm under the headings "Financial Highlights" in the Prospectus and
"Independent Auditors" and "Financial Statements" in the Statement of Additional
Information.
KPMG LLP
New York, New York
February 26, 1999
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000100132
<NAME> WPG TUDOR FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 80571
<INVESTMENTS-AT-VALUE> 87909
<RECEIVABLES> 174
<ASSETS-OTHER> 8
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 88091
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1274
<TOTAL-LIABILITIES> 1274
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 78532
<SHARES-COMMON-STOCK> 5515
<SHARES-COMMON-PRIOR> 7601
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 947
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7338
<NET-ASSETS> 86817
<DIVIDEND-INCOME> 574
<INTEREST-INCOME> 582
<OTHER-INCOME> 202
<EXPENSES-NET> (1645)
<NET-INVESTMENT-INCOME> (287)
<REALIZED-GAINS-CURRENT> 4542
<APPREC-INCREASE-CURRENT> (33554)
<NET-CHANGE-FROM-OPS> (29299)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (6581)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 122415
<NUMBER-OF-SHARES-REDEEMED> (172203)
<SHARES-REINVESTED> 6026
<NET-CHANGE-IN-ASSETS> (79642)
<ACCUMULATED-NII-PRIOR> 98
<ACCUMULATED-GAINS-PRIOR> 2617
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1155
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1647
<AVERAGE-NET-ASSETS> 128378
<PER-SHARE-NAV-BEGIN> 21.90
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> (4.86)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.28)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.74
<EXPENSE-RATIO> 1.28
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
