As filed with The Securities and Exchange Commission on March
,1999 Securities Act of 1933 Registration No. 033-98980
Investment Company Act of 1940 Registration No. 811-09124
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No.[ ]
Post-Effective Amendment No.5 [ x ]
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 9 [ x ]
WEST UNIVERSITY FUND, INC.
3030 University Blvd.
Houston, Texas 77005
Telephone Number 713-666-1652
Agent for Service:
Richard P. Cancelmo, Jr.
3030 University Blvd.
Houston, Texas 77005
It is proposed that this filing will become effective
(check the appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on pursuant to paragraph (b)
[ x ] 60 days after filing pursuant to paragraph (a) (1)
[ ] on (date) pursuant to paragraph (a) (1)
[ ] 75 days after filing pursuant to paragraph (a) (2)
[ ] on (date) pursuant to paragraph (a) (2) of Rule 485
If appropriate, check the following box:
<PAGE>2
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
FRONT COVER
Fund Logo
The West University Fund
PROSPECTUS May , 1999
The Securities and Exchange Commission has not approved or disapproved that
the information in this prospectus is accurate or complete. It is a criminal
offense to state otherwise.
TABLE OF CONTENTS
Page
Objective of the Fund . . . . . . . . . . . . .
Principal investment strategies of the Fund . . . . . . .
Principal risks of investing in the Fund. . . . .. . . . . .
Performance history. . . . . . . . . . . . . . . . . . . . . .
Cost of investing in the Fund . . . . . . . . .
More Information about Investment
Srategies and Related Risk
Covered Option Writing . . . . . . . . . . . . . . .
Risks of Option Writing . . . . . . . . . . . . . . .
Other Investments . . . . . .. . . . . . . . . . . . . .
Year 2000
About The Investment Adviser . . . . . . . . .
Portfolio Manager Profile. . . . . . . . . . . . . . .
Shareholder Information . . . . . . . . . . . . . .
Dividends And Distributions . . . . . . . .
Tax Issues . . . . . . . . . . . . . . . . . . . . . . . . . ..
How To Purchase Shares . . . . . . . . . . . . . . . . . . . .
How To Redeem Shares
Shareholder Accounts . . . . . . . . . . . . . . . . . . . . .
IRA Plan . . . . . . . . . . . . . . . . . . . . . . . .. . .
Financial Highlights
<PAGE>3
THE FUND
The Objective of the Fund
The Fund's investment objective is income.
The Principal Investment Strategy
of the Fund
The Fund's principal investment strategy is Covered Call Writing.
Covered Call Writing is the name given to the strategy by which one
sells a call option while owning the obligated number of shares of the
underlying stock.
The Fund will invest in any size companies. Extensive study
will be made of their income statements as well as their balance
sheets.The Fund can then better appraise the fundamental worth of each
investment. A guiding principle is the purchase of these stocks when
their price appears low compared to the value of the total
enterprise. The Fund's strategy is to create a well-diversified
portfolio using stock and options positions.
Income will be obtained from the following sources:
1) premiums from expired options
2) net profits, if any from closing purchase transactions
3) dividends received on the securities in the Fund's portfolio
4) net realized capital gains, if any
5) net changes in unrealized capital appreciation, if any
6) interest income from money market instruments, and U.S.
Government Securities.
During unusual market conditions or in the event of exceptional
redemption requests, the Fund may hold cash or cash equivalents and
invest in obligations of the U.S. Government and its agencies and in
money market funds, short term debt securities, Commercial Paper, and
Demand Notes. Under these circumstances, the Fund may not participate in
stock market advances and declines to the same extent it would, had it
remained more fully invested in common stocks. As a result, the Fund
may not achieve its investment objective.
PRINCIPAL RISKS
The Fund's stock portfolio is subject to market risk. Stock prices may
decline over short or even extended periods of time.
<PAGE>4
The protective qualities inherent in covered call writing are partial
and will not protect the position if the underlying stock price falls by an
amount greater than the original call premium. The Fund's covered call
strategy may not fully protect it against declines in the value of its stock
portfolio. The Fund could experience a loss in both the stock and
option portions of its portfolio.
When it sells covered call options, the Fund receives cash but limits its
opportunity to profit from an increase in the market value of its stock
portfolio. The value of your investment in the Fund may go up or
down which means that you could lose money. Furthermore, because
the Fund has a long term investment objective it is not appropriate
for short term investments.
The Fund's strategy of Covered Call Writing can produce significant
turnover if a large number of options are exercised. Higher turnover
involves greater commissions and other transaction costs.
The Fund invests in companies of any size. Small companies are more
vulnerable to financial and other risks than larger companies. Small
company investments may involve a higher degree of risk and price
volatility than investments in the general equity markets.
PERFORMANCE HISTORY
The bar chart and table below show the variability of the Fund's returns,
which is one indicator of the risks of investing in the Fund. The bar chart
shows the Fund's performance together with the best and worst quarters
since inception.The table compares the Fund's performance over time to that
of the S&P 500 Index, the Lehman Intermediate Government / Corporate Bond
Index, and the Russell 2000 index. The S&P 500 and the Russell 2000 indices
are popular indicators of the performance of the large and small
capitalization sectors, respectively, of the U.S. stock market. These
indices were chosen for comparison because they reflect the broad spectrum
of U.S. equity markets. The Lehman Intermediate Government / Corporate Bond
Index reflects the performance of the U.S. bond market, and was chosen
for comparison because its risk characteristics are similar to those of the
Fund. Both the chart and the table assume reinvestment of dividends
and distributions.Historical results do not necessarily indicate
how the Fund will perform in the future.
<TABLE>
<CAPTION>
(Insert Bar Chart)
(Plot points for Bar Chart)
West University Fund
Annual Total Return
Since Inception
February 1, 1996-
December 31, 1998
<PAGE>5
VERTICLE BAR CHART
<C>
4.55
<CAPTION>
QUARTERLY RETURNS 1996 THROUGH 1998
BEST QUARTER - SECOND QUARTER 1997 --- 5.54%
WORST QUARTER - THIRD QUARTER 1998 --- (-9.84%)
AVERAGE ANNUAL TOTAL RETURNS
AS OF DECEMBER 31, 1998
1 YEAR LIFE OF THE FUND
<S> <C> <C>
West University Fund (-4.70%) 4.55%
Lehman Int. G/C Bond Index 8.44% 6.89%
S&P 500 Index 28.58% 33.22%
Russell 2000 Index (-2.55%) 11.10%
COSTS OF INVESTING IN THE FUND
FEE TABLE
The following table illustrates the expenses and fees that a shareholder
of the Fund will incur.
Shareholder Transaction Expenses
None
<PAGE>6
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management Fees . . . . . . . . . . . . . . . . . . . 1.00 %
Distribution [and/or Service] (12 b-1) Fees . .. . . . . . None
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . 0.57 %
Total Fund Operating Expenses . . . . . . . . . . . . . . 1.57 %
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods.
The Example also assumes that your investment has a 5% return each year and
that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
1 year 3 years 5 years 10 years
$157 $485 $833 $1,795
MORE INFORMATION ABOUT INVESTMENT
STRATEGIES AND RELATED RISKS
COVERED OPTION WRITING. Covered call options will be written on the Fund's
portfolio in order to achieve income by receiving the option premiums
(the sale price of the option). The premium received represents an increase
in income to the stockholder. The option writer is giving up potentially
unlimited price appreciation in exchange for the immediate option premium.
There are risks involved in the writing of covered options -- see Risks of
Option Writing below. A call option gives the purchaser of the option the
right to buy the underlying securities at the exercise price
during the option period (before the expiration date). The writer of the
call option has the obligation to sell those securities at the exercise
price during the option period.The Fund, as the writer of the option,
receives the premium from the purchaser of the call option. During the
option period, the broker-dealer through which the call option was sold,
may give the option writer an exercise notice. The writer is then obligated
to deliver to the buyer the underlying security against payment of the
exercise price. The writer's obligation only ends when the option expires or
if the writer enters into a closing purchase transaction (buying and
delivering the same securities as those underlying the option, so the option
writer's position is canceled).The Fund can no longer enter into a closing
purchase transaction once an exercise notice has been given. As long as the
Fund is obligated as the writer of a call option,it will own the securities
involved in the option.
PAGE>8
As long as a covered call option is in effect, the writer gives up the
opportunity to profit from a price increase beyond the agreed upon option
price. Therefore, in some periods, fulfilling an option will generate less
than the securities' total return; and other times, the Fund will receive
greater total return from its call options than it would have received from
the Fund's underlying securities unoptioned.
The Fund will write options on its portfolio in whatever amounts the
management believes is appropriate is achieving it investment objective. The
Fund will write options when management believes there is a liquid secondary
market on a national securities exchange for options of the same series. In
that way, the Fund can enter into a closing purchase transaction if it sees
fit. Consistent with the investment policies of the Fund, the Fund will
initiate a closing purchase transaction when a profit can be made on an
outstanding option. By entering into a closing purchase transaction, the Fund
prevents the underlying security from being sold. Then a new option on that
security with a different strike price, expiration date, or both, can
be written.
The premium the Fund receives for writing an option will reflect several
things.The current market price of the underlying security, and the
relationship of the exercise price to the underlying security's market price
will be part of the calculation for determining the premium paid. The
history of the price fluctuations of the underlying security, the option
period, supply and demand as well as interest rates will also be taken into
consideration. Therefore, the exercise price of an option may be below,
equal to or above the current market value of the underlying security when
the option is written. From time to time, for tax purposes as well as for
other reasons, the Fund may purchase an underlying security for delivery
in accordance with an exercise notice assigned to it, rather than delivering
such security from its portfolio.
RISKS OF OPTION WRITING. In return for the premium received,
the writer of a covered call option gives up the potential of the value of the
underlying security climbing above the strike price of the option.This limit
on potential gain extends through the entire option period. The writer also
has no control over when the buyer exercises their option rights. Once an
option writer has received an exercise notice he cannot effect a closing
purchase transaction.
<PAGE>9
If a call option expires without being exercised by the buyer, the writer of
the covered option makes a profit in the amount of the premium received.
During the option period, there may be either an increase or decline in the
market price of the underlying security. If the market price of an
underlying security should fall by more than the option premium received
there will be a loss on the overall position. Therefore, the protective
qualities inherent in selling an option are partial and will not protect
the position if the underlying stock price falls by an amount
greater than the call option premium that was originally paid for it.
If the covered writer has to sell the underlying security because the
call is exercised, the writer will realize a gain or loss from the sale
of the underlying security with the gain increased or the loss decreased
by the amount of the premium.
Other Investments
The Fund may invest its cash reserves in securities of the U.S. Government
and its agencies or the following cash equivalents: deposits in domestic banks,
bankers' acceptances (a commercial letter of credit that may be traded on the
secondary market), certificates of deposit, demand notes and commercial
paper (bills drawn to finance commercial trade). Commercial paper
investments will be limited to investment grade issues, rated A-1 or A-2 by
Standard & Poor's Corporation,or Prime 1 or Prime 2 by Moody's Investors
Service, Inc.
The Fund may place part or all of its assets in cash or the cash reserves
described above during unusual market conditions..
The Fund may, at times, invest in the securities of other investment
companies.This is done in order to provide an investment for some or all of
the Fund's cash,without committing those monies to a more risky investment.
The Fund may invest up to 35% of its total assets in securities such as
money market funds.However, the Investment Company Act of 1940 places
restrictions on the investment in other companies. The Fund may only
purchase or otherwise acquire the shares of another investment company as
long as immediately after the share are acquired, that the Fund and all
those affiliated with the Fund do not together own more than 3% of the
total owned voting shares of that company.
Sometimes, investing in shares of another registered investment company
may mean a greater transaction cost to the Fund than buying the same shares of
stock directly. However,the Fund may be able to acquire a more diversified
investment this way that could not be economically done in a direct fashion.
Shareholders will bear a proportionate amount of the management fees, and
other operating expenses charged to the Fund on purchasing shares of other
investment companies, as well as
<PAGE>10
management fees paid by the Fund. The 1940 Act also states that no investment
company is required to redeem more than 1% of its outstanding voting shares
owned by one company during any 30-day period of time.
Year 2000
Like all mutual funds and financial services operations worldwide, the
Fund could be adversely affected by computer system problems
associated with the Year 2000. The Adviser has evaluated its portfolio of
investments and its internal systems, and has not identified any problems
that could affect the operations of the Fund. The Adviser is also working
with third party suppliers to obtain satisfactory assurances regarding
their state of preparedness for the Year 2000. At this time
there can be no assurance that these steps will be sufficient
to avoid any adverse impact on the Fund.
ABOUT THE INVESTMENT ADVISER
The overall business and affairs of the Company are the responsibility
of the Company's Board of Directors, who are elected by the shareholders.
The Company's President manages the day-to-day operations of the Company.
He is under the authority of the bylaws of the Company and review by the Board
of Directors. Information relating to the directors and officers of the
Company is provided in the "Statement of Additional Information."
The Company has entered into an Investment Advisory Contract
(the "Contract") with Cancelmo Capital Management, Inc. (the "Adviser"),
3030 University Boulevard, Houston, Texas 77005. The Adviser, which is
registered with the SEC under the Investment Advisers Act of 1940, manages
the investment and reinvestment of the assets of the Company in according to
the Company's investment objective, policies, and restrictions. Richard Peter
Cancelmo, Jr.is the sole shareholder of the Adviser and is responsible for
all its investment decisions. This includes the daily management decisions
for the Company's portfolio. Mr. Cancelmo also serves as the President and
Director of the Company.
PORTFOLIO MANAGER PROFILE
Richard P. Cancelmo, Jr.
Portfolio Manager from 1996
Previous
Investment Executive
Paine Webber,Inc.
BA Washington and Lee University
Age 40
SHAREHOLDER INFORMATION
<PAGE>11
HOW FUND SHARES ARE PRICED
The net asset value of the Fund is computed once daily at 4:30
p.m. Eastern Time after the close of the New York Stock Exchange
and the various option exchanges (shares will not be priced on the days on
which the New York Sock Exchange is closed for trading). The net asset value
per share is the sum of total value of the Fund's assets minus all
liabilities, then dividing the result by the number of Fund shares currently
owned. Securities traded on the New York Stock Exchange are valued at their
price at the close of regular trading on that Exchange. Options traded on one
or more exchanges are valued at their closing prices on whatever
exchange the last sale occurred. All other securities held by the Fund
are valued at their last price from whatever exchange on which
they were traded. In all cases, when there is no sale on that day or
if the last sale is unrepresentative of the actual value of the security, the
value is taken to be the mid-point between the last current bid and asked
prices. All other securities not traded in this fashion will be valued at the
mid-point between the last current bid and asked prices if market
quotations so the security are available. When market quotations are
unavailable, fair values are determined by the Fund's Board of Directors,
or under their direction, using a specific set of predetermined guidelines.
Money market securities are valued at the most recent bid price
or yield equivalent gotten from dealers that make markets in these securities.
Securities with a remaining maturity of 60 days or less are valued on an
amortized cost basis. This involves valuing a portfolio security starting
with its initial cost. Then a constant amortization to maturity of any
discount or premium is assumed.
DIVIDENDS AND DISTRIBUTIONS
The Fund normally declares a dividend at the end of December.
Shareholders may receive distributions either in cash or in additional
shares of the Fund at no charge. If the Fund has net capital gains,
it normally declares a capital gain distribution at the end of December.
The capital gain distribution has varied considerably from year to year.
TAX ISSUES
The Fund distributes substantially all of its income and realized
capital gains and these distributions may be taxable to you.
In addition, gains on any sale of Fund shares may be taxable
to you.
<PAGE>12
If you buy Fund shares just before a distribution is declared, you
will pay the full price for the shares and then receive a portion of
the price back as a taxable distribution. The distribution paid
to you would generally be included in your gross income for tax
purposes, whether or not you reinvested it. For this reason, you
should carefully consider the tax consequences of buying shares
of the Fund immediately before distributions are made,
especially in late December.
<PAGE>13
HOW TO PURCHASE SHARES
Shares of the Fund are purchased directly from the Fund at net asset
value next computed after an order and payment are received by the Fund.
No sales charge or commission fee is paid on purchases, redemptions,
exchanges or transfers. Any order received after 4:30 p.m. Eastern Standard
Time will be processed at the next day's closing net asset value. There is no
minimum on initial or additional purchases of Fund shares by tax deferred
retirement plans (these include IRAs, SEP-IRAs and profit-sharing and money
purchase plans) or Uniform Gifts to Minors Act accounts. For other investors
the minimum is $1,000 for an initial purchase and there is no minimum amount
for additional purchases.
The Fund reserves the right to reject any purchase order. The Fund also
maintains the right to temporarily stop selling its shares or to change the
continuous offering of its shares.
PURCHASE BY MAIL. You may make initial purchases of Fund shares by mail.
Simply send the Fund a completed and signed application. Include with the
properly completed application a check made payable to the Fund. Later
additional purchases may also be made by mail without an additional
application. Shares will be purchased at the next determined net asset
value per share after the Fund receives an order and payment.
PURCHASE BY PHONE. Fund shares may also be purchased by existing shareholders
by phone. The purchase will be effective at the NAV next calculated after
your order is received.
All shares (including reinvested dividends and capital gains distributions)
are issued or redeemed in full and fractional shares rounded to the third
decimal place. This is done at net asset value, with no fees or charges.
No share certificates will be issued except for the investors whose
regulators require them to hold certificates. Instead, the Fund will hold
all shares in book entry form in each account.A letter or statement of
confirmations will be sent to the shareholder showing the details for each
transaction in an account. This includes purchases, redemptions,
and transfers; as well as the reinvestment of dividends and capital gains
distributions. (See "Shareholder Accounts.")
HOW TO REDEEM SHARES
REDEMPTIONS BY WRITTEN INSTRUCTIONS. A shareholder
may redeem all of his shares or a portion by written request to the Fund. The
written request must be signed by the registered owner(s) exactly as the
account is registered, this includes any special capacity that the registered
owner(s) may have. If the owner or owners of an account have not previously
arranged for the Fund to send redemption proceeds to a predesignated bank
account, then their signature(s) be guaranteed. Fiduciaries, corporations and
other entities may also be required to provide certain supporting documents.
The Fund will normally pay you within seven days after receiving a proper
redemption request. However, the Fund will not mail any proceeds unless your
investment check has cleared the bank, which may take up to 15 calender days.
<PAGE >14
SIGNATURE GUARANTEES. To protect the shareholder's account
and the Fund from fraud, signature guarantees are required for certain
redemptions. The purpose of a signature guarantee is to verify the identity
of the party who has authorized the redemption. A commercial bank or trust
company that is a member of the Federal Deposit Insurance Corporation, a
member firm of a national securities exchange or another eligible guarantor
institution must guarantee the signature.Notaries public are not acceptable
guarantors. Signature guarantees are required for:
1. any redemption request for an account where the owner(s) have not
previously arranged with the Fund for redemption proceeds to be remitted to
a predesignated bank account;
2. transfers or exchanges between account that are not identically
registered;
3. the addition of or change in wiring instructions for the designated
financial institution to receive redemptions or proceeds directly into a
shareholders
account; and
4. procedures involving disputed or deceased shareholder accounts.
Shares are redeemed without charge at the next computed net asset
value after instructions and required documents are received in proper form.
Any instruction received after 4:30 p.m. Eastern Standard Time will be
processed at the next day's closing net asset value. Payment will be made
as promptly as possible. It is required by law for redemption requests to be
honored within three business days after instructions are received, as long
as instructions are made properly and proper documents are included. Any
letter of instruction must be signed exactly as the account is registered,
including any special capacity of the registered owner. Under the Interest
and Dividend Tax Compliance Act of 1983, the Fund may be required to
withhold 31% of the proceeds from a shareholder's dividends, capital gains
distributions and redemptions for tax purposes. This is done when they have
not complied with the rules of the Tax Compliance Act regarding the
furnishing of taxpayer identification numbers and dividend reporting.
A request for a distribution from a Fund-held IRA, SEP-IRA or other
tax deferred retirement account may be delayed until the Fund has determined
the tax withholding requirements to be applied to the distribution.
Investors may send withholding instructions to the Fund or Internal Revenue
Service ("IRS")Form W-4P along with the distribution request. The Form is
available from the IRS or by calling the Fund. If an investor does not want
any tax withheld from their distributions, the investor may state in the
distribution request (instead of using Form W-4P) that he does not want any
tax withheld. The investor must
<PAGE>15
also indicate understand there may be a liability for income tax on the
distribution, including penalties for failure to pay estimated taxes.
SHAREHOLDER ACCOUNTS
When an investor makes his initial purchase of shares, an account will
be opened for him. Each account will be maintained on the books of the Fund.
The shareholder will receive an account opening confirmation. Thereafter,
whenever a transaction takes place in the account, he will receive a statement
confirming any transaction made. This includes purchases, redemptions,
transfers, changes of address, reinvestment of income or capital gain
distributions, or the withdrawal of share certificates. In addition,
shareholders will receive quarterly statements giving complete details of
all transactions during the quarter.
A shareholder may make additional investments in his account by sending
a check, money order or wired funds made payable to the Fund. All income
distributions (dividends, as well as net short-term and long-term capital
gains distributions), if any, will be reinvested in full and fractional
shares. The reinvestment calculation will be rounded to the third decimal
place, and made at the net asset value per share determined on the payment
date. A shareholder may make a written request to the Fund to have
distributions sent to them in cash.The shareholder may also have his
distributions sent to a predesignated bank account, with the proper
documentation.
IRA PLAN
The Fund has a master individual retirement account (IRA) plan that
allows you to invest in the Fund. There is no minimum investment. Income and
capital gains earned by an IRA are tax deferred. This means the investor does
not pay taxes on the earnings until the funds are withdrawn from the account.
IRA withdrawals are then taxed at the then current rate for the taxpayer.
Premature withdrawals (before age 59-1/2) may incur additional taxes
and penalties.
<PAGE>16
The Fund's IRA plan also permits you to "roll over" a lump sum
distribution from a qualified pension or profit-sharing plan to a West
University Fund IRA. A direct transfer from the plan trustee may also
be "rolled over." Rollovers postpone your federal income tax on the
distribution if the roll over is accomplished within sixty days of the
distribution. Many distributions from qualified plans are subject to
income tax withholding unless transferred directly from the plan to an IRA
or another plan.
If your employer has a Simplified Employee Pension Plan (SEP), you
may establish an IRA with the Fund. Through the SEP-IRA your employer may
contribute up to the lesser of 15% of your earned income or $30,000 each year.
SEP-IRA contributions are subject to special rules designed to avoid
discrimination.
Detailed information about the IRA, including related documents and
charges of Firstar, as custodian, may be obtained from the Fund.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 3 years. The total returns
in the table represent the rate an investor would have earned (or lost)
on an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Simonton, Kutac &
Barnidge L.L.P., whose report, along with the Fund's financial statements,
are included in the Fund's annual report, which is available upon request.
1998 1997 1996
NET ASSET VALUE, BEGINNING OF PERIOD $10.35 $10.21 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income .16 0.12 0.09
Distributions from Net Investment Income(.16) (0.12) (0.09)
Net Realized and Unrealized Gain (Loss)
on Securities (.65) 0.82 0.80
Distribution from Realized Gains on Securities--- (0.64) (0.59)
NET ASSET VALUE AT END OF YEAR $10.70 $10.35 $ 10.21
TOTAL RETURN (4.70) % 9.73 % 9.71%*
RATIOS / SUPPLEMENTAL DATA:
Net asset, end of period (in thousands) $3,437 $3,541 $2,037
Expenses to average net assets 1.57 1.75 1.82
Net investment income before taxes
to average net assets (%) 1.53 1.36 1.19
Portfolio Turnover Rate 218.49 % 188.53 % 101.38%
*Annualized
BACK COVER PAGE OF PROSPECTUS
More information on the West University Fund is available free
upon request, including the following:
ANNUAL AND SEMI-ANNUAL REPORTS
The Fund's Annual and Semi-Annual Reports list the holdings of the Fund,
describe the Fund's performance, include financial statements for the Fund,
and discuss the market conditions and strategies that significantly affected
the Fund's performance.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The Statement of Additional Information provides more details
about the Fund and is considered to be a part of this prospectus.
THERE ARE TWO WAYS TO GET A COPY OF THESE DOCUMENTS:
1. Call or write for one, and a copy will be sent without charge.
Cancelmo Capital Management, Inc.
3030 University Boulevard
Houston, Texas 77005.
(800) 465-5657.
[email protected]
2. You may also obtain information about the Fund (including the SAI and
other reports) from The Securities and Exchange Commission on their Internet
site at http://www.sec.gov or at their Public Reference Room in
Washington, D.C. Call the SEC at 800-SEC-0330 for room hours and operation.
You may also obtain Fund information by sending a written request and
duplicating fee to the Public Reference Section of the SEC, Washington,
D.C. 20549-6609
<PAGE>17
PART B
WEST UNIVERSITY FUND, INC.
3030 UNIVERSITY BOULEVARD
HOUSTON, TEXAS 77005
713-666-1652
800-465-5657
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a Prospectus but should
be read in conjunction with the Prospectus for West University Fund, Inc.
(the "Fund") dated April , 1999. A copy of the Prospectus may be
obtained by writing or telephoning the Fund at the address or telephone
number shown above.
TABLE OF CONTENTS
Page
1. Investment Objective and Policies 2
Covered Option Writing 2
Factors Which May Adversely Affect
Transactions in Options 3
Position Limitations 4
2. Investment Restrictions and Other Investment
Policies 4
3. Management of the Fund 6
4. Brokerage 8
5. Tax Information and Option Accounting Principles 9
6. Calculation of Performance Data and Other
Performance Comparisons and Statistics 10
7. Description of Common Stock 13
8. Principal Shareholders 13
9. Tax Status 13
10. Pricing and Redemption of Fund Shares 14
11. Custodian 15
12. Transfer, Dividend Disbursing and Shareholder
Servicing Agent 15
13. Independent Auditors 15
<PAGE>18
INVESTMENT OBJECTIVE AND POLICIES
The Prospectus discusses the Fund's investment objective and the policies
it employs to achieve this objective. The following information supplements
the discussion in the Prospectus.
COVERED OPTION WRITING. In return for the premium received,
a covered call option writer during the term of the option is subject to the
risk of losing the potential for capital appreciation above the exercise
price. The writer has no control over the time when he has to fulfill his
obligation as a writer of the option. Once an option writer has received an
exercise notice he cannot effect a closing purchase transaction.
If a call option expires unexercised, the covered option writer
realizes a gain in the amount of the premium received although there may
have been a decline (unrealized loss) in the market value of the underlying
security during the option period which may exceed such gain. If the
covered option writer has to sell the underlying security because of the
exercise of a call option, the writer will realize a gain or loss from the
sale of the underlying security with the proceeds being increased by the
amount of the premium.
A call option gives the purchaser of the option the right to buy, and
the writer the obligation to sell, the underlying security at the exercise
price during the option period. So long as the obligation of the writer
continues, he may be assigned an exercise notice by the broker-dealer
through whom such option was sold,requiring him to deliver the underlying
security against payment of the exercise price. This obligation terminates
upon expiration of the option, or such earlier time at which the writer
effects a closing purchase transaction by purchasing an option of the same
series as he previously sold. Once a writer has been assigned an exercise
notice in respect of an option, he is thereafter not allowed to effect a
closing purchase transaction. To secure his obligation to deliver the
underlying security in the case of a call option, a covered writer is
required to deposit in escrow the underlying security or other assets in
accordance with the rules of the Options Clearing Corporation (the
"Clearing Corporation")and of the Exchanges.
The principal reason for writing options on a securities portfolio is to
attempt to realize income, through the receipt of premiums. The covered
call option writer has, in return for the premium, given up the opportunity
for profit from a price increase in the underlying security above the exercise
price so long as his obligation as a writer continues, but has retained the
risk of loss should the price of the security decline. The call option
writer has no control over when he may be required to sell his securities
since he may be assigned an exercise notice at any time prior to the
termination of his<PAGE>19
obligation as writer. If an option expires unexercised, the writer realizes a
gain in the amount of the premium. Such a gain, of course, may, in the case
of a covered call option, be offset by a decline the market value of the
underlying security during the option period. If a call option is exercised,
the writer realizes a gain or loss from the sale of the underlying security.
Options written by the Fund will normally have expiration dates not more
than nine months from the date written. The exercise price of the options
may be below, equal to, or above the current market prices of the
underlying securities at the times the options are written.
FACTORS WHICH MAY ADVERSELY AFFECT TRANSACTIONS
IN OPTIONS.
An option position may be closed out only on an Exchange which provides
a secondary market for an option of the same series. Although the Fund
will generally purchase or write only those options for which there appears
to be an active secondary market, there is no assurance that a liquid
secondary market on an Exchange will exist for any particular option, or
at any particular time, and for some options no secondary market on an
Exchange may exist. In such event, it might not be possible to effect
closing transactions in particular options. If as a covered call option writer
the Fund is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the option
expires or it delivers the underlying security upon exercise.
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 or underlying securities; (iv) unusual or unforeseen
circumstances may interrupt normal operations on an Exchange; (v) the
facilities of an Exchange or the 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 thereon would cease to exist,
although outstanding options on that Exchange which have been issued by
the Clearing Corporation as a result of trades on that Exchange would
continue to be exercisable in accordance with their terms.
There can be no assurance that higher than anticipated trading activity or
order flow or other unforeseen events might not, at time,render certain of the
facilities of the Clearing Corporation and the Exchanges inadequate. Such
<PAGE>20
events have in the past resulted, and may again result, in the institution
by an Exchange of special procedures, such as trading rotations,
restrictions on certain types of orders, or trading halts or suspensions,
with respect to one or more options, or may otherwise interfere with the
timely execution of customers orders.
In the event that NASDAQ options are traded, it is anticipated that many
of the factors which may adversely affect transactions in Exchange listed
options may also adversely affect NASDAQ options.
The size of the premiums which the Fund may receive may be adversely
affected as new or existing institutions, including other investment companies,
engage in or increase their option writing activities.
POSITION LIMITATIONS. Each of the Exchanges has established
limitations governing the maximum number of calls (whether or not covered)
which may be written by a single investor, or group of investors acting in
concert, (regardless of whether the options are written on the same or
different Exchanges or are held or written in one or more accounts or through
one or more brokers). An Exchange may order the liquidation of positions
found to be in violation of these limits, and it may impose certain other
sanctions. At the date of this Prospectus, the only such limits which may
affect the operations of the Fund are those which limit the writing of call
options on the same underlying security by an investor or such group to
4,500 options (450,000 shares), 7,500 options (750,000 shares) or 10,500
options (1,050,000 shares) in each class regardless of expiration date.
Whether the applicable limit is 4,500, 7,500, or 10,500 options is
determined by the most recent six-month trading volume of the underlying
security. Every six months each Exchange reviews the status of underlying
securities to determine which limit should apply. These position
limits may limit the number of options which the Fund can write on a
particular security.
INVESTMENT RESTRICTIONS AND OTHER
INVESTMENT POLICIES
The following restrictions are fundamental policies for the protection
of the Fund's shareholders and cannot be changed without the approval
of the holders representing a majority of the Fund's outstanding voting
securities, which for purposes of such approval shall be the lesser of
(i) 67% or more of the shares present at a meeting of shareholders if
the holders of more than 50% of the outstanding voting securities of the
Fund are present or represented by proxy or (ii) more than 50% of the
outstanding voting securities of the Fund. The Fund may not:
<PAGE>21
(1) With respect to 75 percent of its total assets, invest in securities
of any one issuer if immediately after and as a result of such investment
more than 5 percent of the total assets of the Company, taken at market
value, would be invested in the securities of such issuer. This restriction
does not apply to investments in obligations of, or guaranteed by, the
United States Government, its agencies or instrumentalities (U.S.
Government Securities).
(2) Invest more than 25 percent of its total assets in securities or
issuers in any one particular industry. This restriction does not apply
to investments in U.S. Government Securities.
(3) Purchase more than 10 percent of the outstanding voting securities,
or any class of securities, of any one issuer.
(4) Purchase securities on margin (but the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases
and sales of securities). (The deposit or payment by the Fund of initial
or variation margin in connection with related options is not considered
the purchase of a security on margin.)
(5) Engage in any option strategy except that the Fund may write
covered call options with respect to all of its portfolio securities, and
enter into closing purchase transactions with respect to such options.
(6) Make short sales of securities, maintain a short position, or
participate in a joint or a joint and several basis in any trading
account in securities.
(7) Invest in real estate, or real estate limited partnerships, although
the Fund may invest in marketable securities which are secured by real
estate and securities of companies which invest in or deal in real estate.
The Fund will not invest more than 15% of the value of its total net
assets in illiquid securities, including real estate interests.
(8) Borrow money, except that the Company may borrow money on
a secured or unsecured basis from banks as a temporary measure for
extraordinary or emergency purposes including, but not limited to, the
purchase of its own common stock. Such temporary borrowings may
not exceed 5 percent of the value of the Company's total assets at the
time any loan is made. No more than 10 percent of the value of the
Company's total assets at the time any loan is made may be pledged as
collateral for such temporary borrowings.
<PAGE>22
(9) Buy or sell commodities, commodities futures contracts or
commodities options contracts.
(10) Make loan of money, except by the purchase of debt obligations
in which the Company may invest consistent with its investment
objective and policies.
(11) Issue senior securities, as defined in the Investment Company Act
of 1940, or mortgage, pledge, hypothecate or in any manner transfer, as
security for indebtedness, any securities owned or held by the Company
except as may be necessary in connection with borrowings mentioned in
number 8 above, and then only to the extent there mentioned.
(12) Invest more than 5 percent of the value of the Company's total
assets in securities of issuers which have been in continuous operation
less than three years.
(13) Purchase or retain the securities of any issuer if, to the knowledge
of the Fund, any of the officers or directors of the Fund or its investment
adviser owns individually more than one-half of one percent of the securities
of such issuer and together own more than 5% of the securities of such issuer.
(14) Underwrite securities of others except to the extent the Fund may
be deemed to be an underwriter, under the federal securities laws, in
connection with the disposition of portfolio securities.
(15) Purchase securities of other investment companies, except as
permitted under the Investment Company Act of 1940.
(16) Invest for the purpose of exercising control or management of
another company.
(17) Invest in interests in oil, gas or other mineral exploration or
development programs, although the Fund may invest in the common
stock of companies which invest in or sponsor such programs.
(18) Invest in securities restricted as to disposition under the Federal
securities laws.
(19) Invest in warrants.
MANAGEMENT OF THE COMPANY
<PAGE>23
The overall business and affairs of the Company are the
responsibility of the Company's Board of Directors, the
members of which are elected by the shareholders. The day
to-day operations of the Company are managed by the Company's
President subject to the bylaws of the Company and review by
the Board of Directors. The following persons are directors
and/or officers of the Company.
Name, Age, Company, Address, Principal Occupation
Position with Company For Last Five Years
Richard Peter Cancelmo, Jr.* (40) Founder of the Adviser.
3030 University Boulevard Former Investment
Houston, Texas 77005 Executive, Paine Webber, Inc.
President, Treasurer & Director He earned a B.A. from Washington
and Lee University.
James Barry Kendrick (37) Construction Manager,
3514 Dumbarton St. Hanscomb, Inc.
Houston, Texas 77025 Former Project Manager,
Director and Secretary Brown and Root, Inc.
He earned a B.S. from
Texas A & M University.
M.B.A. Rice University.
J. Brinton Davis (38) Senior Vice President
2043 S. Washington St. Alliance Commercial Partners
Denver, Colorado 80210 Former Vice President,
Director Tramell Crow Corp.
He earned a B.A. from
Bucknell University
M.S. M.I.T.
*Indicates an "interested person" as defined in the
Investment Company Act of 1940.
Directors and Officers as a group were beneficial owners of 8.33%
of the outstanding shares of the company as of December 31, 1998.
The Fund has entered into an Investment Advisory Contract
(the "Contract") with Cancelmo Capital Management, Inc., 3030
University Blvd., Houston, Texas 77005. The Adviser, which is
registered with the Securities and Exchange Commission under the
<PAGE>24
Investment Advisers Act of 1940, manages the investment and
reinvestment of the assets of the Fund in accordance with the
Fund's investment objective, policies, and restrictions. Richard
P. Cancelmo, Jr. is the sole shareholder of the Adviser and is
responsible for all its investment decisions, including the day-to-day
management of the Fund's portfolio. There can be no assurance
that the Adviser could find a suitable replacement for Mr. Cancelmo
in the event of his death or disability. Mr. Cancelmo also serves as
the President and a Director of the Fund. Prior to forming the
Adviser in 1995, Mr. Cancelmo was affiliated from 1982 with a
securities firm. The "Management of the Company" section of the
Prospectus contains further information about the Adviser.
Under the Management Agreement, any liability of the Adviser to the
Fund and its shareholders is limited to situations involving its own willful
misfeasance, bad faith, gross negligence or reckless disregard of its duties
and obligations under the Management Agreement.
The Management Agreement may not be assigned by the Adviser and
will terminate automatically upon assignment. It may be terminated without
penalty upon 60-days' written notice by either party or by a vote of a
majority of the Fund's outstanding voting securities (as defined in the 1940
Act). The Management Agreement may be amended by a vote of a majority of the
Directors of the Fund, including a majority of the disinterested directors,
cast in person at a meeting called for that purpose, subject to approval by
the vote of a majority of the Fund's outstanding voting securities. "A
majority of the Fund's outstanding voting securities" as used herein, is
defined in the first paragraph of "Investment Restrictions and Other
Investment Policies."
BROKERAGE
Under the terms of the Advisory Agreement, the Adviser is authorized
to employ brokers and dealers to execute orders for the purchase and sale
of the Fund's portfolio securities, including the writing of option contracts,
who, in its best judgment, can provide "best execution" (prompt and reliable
execution at a reasonably competitive price).
In determining the abilities of the broker-dealer to provide best
execution of a particular portfolio transaction, the Adviser considers all
relevant factors including the execution capabilities required by the
transaction or transactions;the ability and willingness of the broker-dealer
to facilitate each transaction by participation therein for its own account;
the importance to the Fund of speed,efficiency, or confidentiality; the
broker-dealer's apparent familiarity with sources from or to whom particular
securities might be purchased or sold; and the quality <PAGE>25
and continuity of service rendered by the broker-dealer with regard to the
Fund's other transactions; and any other factors relevant to the selection
of a broker-dealer for particular and related portfolio transactions of the
Fund. Subject to the foregoing obligation to seek best execution, the
Adviser may consider as a factor in the allocation of portfolio transactions
to a broker-dealer the broker-dealer's provision of research services to the
Adviser. The aggregate amount of brokerage commissions paid by the Fund for
the year ending December 31,1998 was $46,094.
If the Fund effects a closing purchase transaction with respect to an
option written by it, normally such transaction will be executed by the same
broker-dealer who executed the sale of the option, except where the Fund
utilizes a clearing agent with respect to certain call options. Likewise,
if an option written by the Fund is exercised, normally the sale of the
underlying securities will be executed by the same broker-dealer or clearing
agent who executed the sale of the option.
The Fund may purchase or sell listed securities in the over-the- counter
market ("the third market"). Where transactions are executed in the third
market, the Fund generally will deal with the primary market makers;
however, if it is to the advantage of the Fund, the services of other brokers
may be utilized.
TAX INFORMATION AND OPTION
ACCOUNTING PRINCIPLES
When the Fund writes an option, an amount equal to the premium
received is recorded by the Fund as an asset and an equivalent liability.
The liability is thereafter valued to reflect the current value of the option
which is either the last sale price, or, in the absence of a sale, the mean
between the last current bid and asking price. If the option is not exercised
and expires, or if the Fund effects a closing purchase transaction, the Fund
will realize a gain (or a loss in the case of a closing purchase transaction
where the cost exceeds the original premium received) and the liability
related to the option will be extinguished. Any such gain or loss is a short-
term capital gain or loss for Federal income tax purposes, except that a
short-term loss realized when the Fund closes certain in-the-money covered
call options involving portfolio equity securities will be converted to a long-
term capital loss if the hypothetical sale of the underlying security on the
date of such transaction would have given rise to a long-term capital gain.
If a call option which the Fund has written on any equity security is
exercised, the Fund realizes a capital gain or loss (long-term or
short-term, depending on the holding period of the underlying security) from
the sale of the underlying security and the proceeds from such sale are
increased by the premium originally received.
<PAGE>26
SPECIAL TAX RULES APPLICABLE TO "STRADDLES" - Section
1092 of the Code may affect the taxation of options on equity securities.
Section 1092 defines a "straddle" as offsetting positions with respect to
personal property. A position in personal property is generally defined as
any interest, including an option, in personal property. A position in
personal property includes certain options written thereon and also includes
a stock position and "deep-in-the-money" options (as defined in the Code)
written thereon.
Section 1092 generally provides that in the case of a straddle, any loss
from the disposition of a position in the straddle can only be deducted to
the extent that the loss exceeds the unrealized gains on all offsetting
straddle positions. Section 1092 also provides that "wash sale" rules are
applicable to transactions where a position is sold at a loss and a new
offsetting position is acquired within a prescribed period. These rules are
applicable to the Fund's "deep-in-the-money" stock option positions. In
addition, Section 1092 will suspend or terminate the Fund holding period in
certain stocks with respect to which the Fund writes options, including
non-"deep-in-the money" options which are "qualified covered call options,"
and subject stocks to restrictions comparable to the "wash sale rules" of
Code Section 1091. Losses which the Fund realizes on certain transactions
involving certain in-the-money covered call options may be converted from
short-term to long-term capital loss. Management will manage the Fund to take
into account Section 1092 and such Regulations.
CALCULATION OF PERFORMANCE DATA AND OTHER
PERFORMANCE COMPARISONS AND STATISTICS
From time to time the Fund may report its "total return" in prospectuses,
the Fund's annual reports, shareholder communications, and advertising.
Total return for a performance period is calculated by assuming a
hypothetical initial investment ("p") in the Fund at the beginning of the
period. Then, assuming reinvestment of all distributions into new Fund
shares, a redeemable value at the end of the performance period ("ERV")
is calculated based on actual Fund performance. The percentage change
between the ending value and initial investment is the "cumulative total
return." The "average annual total compound return" (growth rate) expresses
the total return as an annual rate, which if compounded annually over the
period ("n" is <PAGE>27
the number of years), would increase or decrease the initial investment to the
ending value (Formula for calculating average annual total compound return:
(ERV/p)1/n-1)).
VOLATILITY. Occasionally statistics may be used to specify the Fund's
volatility or risk. Measures of volatility or risk are generally used to
compare the Fund's net asset value or performance relative to a market
index. One measure of volatility is beta. Beta is the volatility of the Fund
relative to the total market as represented by the Standard & Poor's 500
Stock Index. A beta of more than 1.00 indicates volatility greater than the
market, and a beta of less than 1.00 indicates volatility less than the
market. Sometimes beta may be calculated relative to a different market
index. Another measure of volatility or risk is standard deviation.
Standard deviation is used to measure variability of net asset value or
total return around an average, over a specified period of time. The premise
is that greater volatility connotes greater risk undertaken in achieving
performance.
OTHER PERFORMANCE QUOTATIONS. One measure of performance
that adjusts for risk is alpha. Alpha is a measure of the difference between
the Fund's performance and a market index portfolio with the same beta.
For example, suppose the Fund's beta is approximately 0.5 over a
historical period. Then, a similar risk market index portfolio can be
constructed with a beta of 0.5 by creating an index with a weight of 50% in
the S & P 500 Index and 50% in U.S. Treasury Bills. The Fund's return is
then compared to the return of the market index.
Sales literature referring to the use of the Fund as a potential
investment for Individual Retirement Accounts (IRAs), Business Retirement
Plans, and other tax-advantaged retirement plans may quote a total return
based upon compounding of dividends on which it is presumed no federal
income tax applies.
Regardless of the method used, past performance is not necessarily
indicative of future results, but is an indication of the return to
shareholders only for the limited historical period used.
COMPARISONS. To help investors better evaluate how an investment
in the Fund might satisfy their investment objective, advertisements and other
materials regarding the Fund may discuss various measures of the Fund's
performance as reported by various financial publications. Materials may
also compare performance (as calculated above) to performance as reported
by other investments, indices, and averages. The following publications,
indices, and averages, among others, may be used:
<PAGE>28
a) The Dow Jones Composite Average or its component averages
- -an unmanaged index composed of 30 blue-chip industrial corporation
stocks (Dow Jones Industrial Average), 15 utilities company stocks
(Dow Jones Utilities Average), and 20 transportation company stocks.
Comparisons of performance assume reinvestment of dividends.
b) Standard & Poor's 500 Stock Index or its component indices
- - an unmanaged index composed of 400 industrial stocks, 40 financial stocks,
40 utilities stocks, and 20 transportation stocks. Comparisons of performance
assume reinvestment of dividends.
c) The New York Stock Exchange composite or component indices -
unmanaged indices of all industrial, utilities, transportation, and finance
stocks listed on the New York Stock Exchange.
d) Wilshire 5000 Equity Index -represents the return on the market
value of all common equity securities for which daily pricing is available.
Comparisons of performance assume reinvestment of dividends.
e) Mixtures of indexes and U.S. Treasury Bills which approximate the
historical risk level of the Fund. In particular: mixtures of the S & P 500
Stock Index and U.S. Treasury Bills such as the 50%/50% mixture
discussed under "Other Performance Quotations."
f) Lipper -Mutual Fund Performance Analysis and Lipper -Fixed Income
Fund Performance Analysis -measure total return and average current yield
for the mutual fund industry, and rank individual mutual fund performance
over specified time periods, assuming reinvestment of all distributions,
exclusive of any applicable sales charges.
g) CDA Mutual Fund Report, published by CDA Investment
Technologies, Inc. - analyzes price, current yield, risk, total return,
and average rate of return (average annual compounded growth rate)
over specified time periods for the mutual fund industry.
h) Financial publications: The Wall Street Journal and Business
Week, Changing Times, Financial World, Forbes, Fortune, and Money
magazines - provide performance statistics over specified time periods.
i) Consumer Price Index (or Cost of Living Index), published by the
U.S. Bureau of Labor Statistics - a statistical measure of change, over
time, in the price of goods and services, in major expenditure groups.
<PAGE>29
j) Stocks, Bonds Bills, and Inflation, published by Ibbotson Associates -
historical measure of yield, price, and total return for common and small
company stock, long-term government bonds, Treasury bills, and inflation.
k) Savings and Loan Historical Interest Rates - as published in the
U.S. Savings & Loan League Fact Book.
l) Historical data supplied by the research departments of major
brokerage firms.
m) Standard & Poor's 100 Stock Index -an unmanaged index
based on the prices of 100 blue-chip stocks, including 92 industrials,
one utility, two transportation companies, and five financial institutions.
The S & P 100 Stock Index is a smaller more flexible index for
options trading.
In assessing such comparisons of performance an investor should
keep in mind that the composition of the investments in the reported
indices and averages is not identical to the Fund, and that the averages
are generally unmanaged. In addition there can be no assurance that
the Fund will continue this performance as compared to such other averages.
DESCRIPTION OF COMMON STOCK. The Company was
incorporated in Texas on October 25, 1995 with 10,000,000 authorized
shares of common stock, $1.00 par value. There were 354,215 shares
issued and outstanding as of December 31, 1998. All the outstanding
shares are, and the shares to be issued as contemplated herein will be,
duly authorized, fully paid and nonassessable. Each issued and
outstanding share has full voting rights and is entitled to one vote on all
matters submitted to the shareholders, including the right to vote at the
annual meeting of shareholders on the election of directors and the
selection of independent certified public accountants. No shareholder
is entitled to cumulative voting rights or to any preemptive right to
acquire securities of the Company. Each share has equal dividend,
distribution, and liquidation rights.
PRINCIPAL SHAREHOLDERS. As of December 31, 1998,
the following individuals each owned beneficiary and of record 5%
or more of the 354,215 outstanding shares of the company.
Owner # of Shares % Total
HIS Trust 65,397.974 18.46
<PAGE> 30
R. P. Cancelmo, M.D.
IRA Rollover 41,394.751 11.69
VLA 1993 Trust 27,325.992 7.72
J.L. and S.J. Hochenedel 24,825.707 7.00
James P. Jackson 20,991.137 5.93
Peggy D. Cancelmo 20,777.082 5.87
Richard P. Cancelmo, Jr.
and Martha H. Cancelmo 20,509.041 5.79
TAX STATUS
As of the date of this Prospectus, the Fund intends to qualify as a
regulated investment company under Subchapter M of the internal
Revenue Code of 1986, as amended, and the Fund intends to continue
to qualify under said Subchapter M. As a result of such qualification
the Fund will not be subject to Federal income taxes to the extent that
it distributes not less than 98% of its investment company taxable
income and its capital gains net income. Investment company taxable
income includes net income from dividends, interest and net short-term
capital gain. Premiums from expired options written by the Fund and
net gains, if any, from closing purchase transactions are treated as short-
term capital gains for Federal income tax purposes. In order to qualify
under Subchapter M, the Fund, among other things must derive less
than 30% of its gross income from the sale or other disposition of
securities held less than three months; as a result the Fund may be
restricted in the writing of options which expire in less than three
months or in effecting closing purchase transactions in options
written less than three months before such transactions.
PRICING AND REDEMPTION OF FUND SHARES
The Fund's net asset value per share is calculated by taking the
total value of the Fund's assets, deducting total liabilities and dividing
the result by the number of shares outstanding. Portfolio securities
which are traded on a national securities exchange are valued at the
last sale price or if there is no recent sale, at the mean between the
last current bid and asked prices. All other securities not so traded are
valued at the mean between the last current bid and asked prices if
market quotations are available. Other securities and assets are
valued at fair value in accordance with methods determined in good
faith by the Fund's Board of Directors.
The Fund may suspend the right of redemption or delay payment
more than three (3) business days: (a) during any period when the
<PAGE>31
New York Stock Exchange is closed (other than customary weekend
and holiday closings); (b) when trading on the New York Stock Exchange
is restricted; (c) when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable; or (d)
for such other periods as the Securities and Exchange Commission by
order may permit for protection of the Fund's shareholders. The amount
received by a shareholder upon redemption may be more or less than he
paid for his shares depending on the market value of the Fund's portfolio
securities at the time.
Shares of the Fund may be transferred upon delivery to the Fund of (1)
a letter of instructions, signed by each registered owner exactly as the shares
are registered, which clearly identifies the exact names in which the account
is presently registered, the account number, the number of shares to be
transferred, and the names, addresses and social security or tax identification
number of the account to which the shares are to be transferred, (2) stock
certificates, if any, which are the subject of the transfer, and (3) an
instrument of assignment ("stock power"), which should specify the total
number of shares to be transferred and on which the signature(s) of the
registered owner(s) have been guaranteed by a commercial bank or trust
company which is a member of the Federal Deposit Insurance Corporation, or
by a member firm of a national securities exchange. Additional documents are
required for transfers by corporation, executors, administrators, trustees
and guardians; if a shareholder is in doubt as to what documents are
required, he should contact the Fund. The Fund is not bound to record any
transfer on the stock transfer books until the Fund has received all
required documents.
CUSTODIAN
The Fund's custodian is Firstar Trust Company. Pursuant to the terms
of the Custodian Agreement the Fund will forward to the Custodian the
proceeds of each purchase of Fund shares. The Custodian will hold such
proceeds and make disbursements therefrom in accordance with the terms
of the Custodian Agreement. It will retain possession of the securities
purchased with such proceeds and maintain appropriate records with
respect to receipt and disbursements of money, receipt and release of
securities, and all other transactions of the Custodian with respect to the
securities and other assets of the Fund.
TRANSFER, DIVIDEND DISBURSING AND
SHAREHOLDER SERVICING AGENT
The Fund serves as its own Transfer, Dividend Disbursing
<PAGE>31
and Shareholder Service Agent.
INDEPENDENT AUDITORS
Simonton, Kutac & Barnidge, L.L.P., Certified Public Accountants,
1010 Lamar, Suite 850, Houston, Texas 77002-6312 serves as independent
auditors to the Fund. The services provided by the firm include the audit of
the financial statements of the Fund included in the Statement of Additional
Information and services related to other filings made with the Securities
and Exchange Commission.
Independent Auditors Report
January 14, 1999
To the Shareholders and Board of Directors,
West University Fund, Inc.
Houston, Texas
We have audited the accompanying statement of assets and
liabilities of West University Fund, Inc., (a Texas
corporation), including the schedule of portfolio
investments, as December 31, 1998, and the related statement
of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period
then ended, and the selected per share data and ratios for
the year then ended. These financial statements and per
share data and ratios are the responsibility of the Company s
management. Our responsibility is to express an opinion on
these financial statements and per share data and ratios
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 per share data and
ratios 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,
<PAGE>33
1998, by correspondence with the custodian and brokers. 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 selected per
share data and ratios referred above present fairly, in all
material respects, the financial position of West University
Fund, Inc. at December 31, 1998, the results of its
operations for the year then ended, the changes in its net
assets for each of the two years in the period ended, and the
selected per share data and ratios for the year then ended,
in conformity with generally accepted accounting principles.
Simonton, Kutac and Barnidge, L.L.P.
WEST UNIVERSITY FUND, INC.
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
Common Stocks
Basic Materials-9.48%
A. Schulman 2,500 shares
Market value $56,719
Options written
25 March 15 calls
Market value $19,375
Exp. 03-99
Asarco 2,000 shares
Market value $30,125
Options written
20 June 15 calls
Market value $3,125
Exp. 06-99
Morton International 2,000 shares
<PAGE>34
Market value $49,000
Options written
20 May 20 calls
Market value $10,250
Exp. 05-99
Newmont Mining 5,000 shares
Market value $90,000
Options written
20 March 17.5 calls
Market value $5,875
Exp. 03-99
30 March 20 calls
Market value $6,000
Exp. 03-99
Worthington Ind. 8,000 shares
Market value $100,000
Options written
40 March 12.5 calls
Market value $3,750
Exp. 03-99
40 June 10 calls
Market value $12,250
Exp. 06-99
Basic Materials
Total Market value stocks $325,844
Total Market value calls $60,625
Capital Goods-7.02%
AMP Inc. 1,500 shares
Market value $78,094
Options written
15 Feb. 25 calls
Market value $40,687
Exp. 02-99
Aviall, Inc.*. 4,000 shares
Market value $47,000
<PAGE>35
Options written
30 June 10 calls
Market value $7,875
Exp. 06-99
Crown Cork & Co. 2,000 shares
Market value $61,625
Options written
20 April 25 calls
Market value $13,000
Exp. 04-99
Federal Signal Corp. 2,000 shares
Market value $54,750
Options written
20 May. 20 calls
Market value $15,000
Exp. 15-99
Capital Goods
Total Market value stocks $241,469
Total Market value calls $76,562
Consumer Cyclicals-9.63%
Dress Barn* 3,000 shares
Market value $45,562
Options written
30 April 10 calls
Market value $16,125
Exp. 04-99
Enesco Group, Inc. 2000 shares
Market value $46,375
Options written
20 Feb. 22.5 calls
Market value $4,250
Exp. 02-99
Jackpot Enterprises 4,000 shares
Market value $37,750
Options written
40 Mar. 10 calls
<PAGE>36
Market value $1,750
Exp. 03-99
Pep Boys 2,500 shares
Market value $39,219
Options written
25 July 12.5 calls
Market value $9,219
Exp. 07-99
TBC Corp* 18,000 shares
Market value $128,250
Toy's R Us* 2,000 shares
Market value $33,750
20 June 15 calls
Market value $6,875
Exp. 06-99
Consumer Cyclicals
Total Market value stocks $330,906
Total Market value calls $38,219
Consumer Staples-14.40%
AMC Entertainment* 8,000 shares
Market value $168,500
Options written
40 March 12.5 calls
Market value $36,000
Exp. 03-99
Chris Craft Inc. 1,500 shares
Market value $72,281
Options written
15 Jan. 45 calls
Market value $5,062
Exp. 01-99
International Flavors & Fragrances 1,500 shares
Market value $67,125
<PAGE>37
Options written
15 May 30 calls
Market value $22,406
Exp. 05-99
Kelly Services Inc. 3,000 shares
Market value $95,250
Options written
30 May 22.5 calls
Market value $27,750
Exp. 05-99
*Non-Income Producing Security
The accompanying notes are an integral
part of these financial statements
WEST UNIVERSITY FUND, INC.
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
Common Stocks (continued)
Sbarro, Inc. 1,500 shares
Market value $39,188
Options written
15 March 17.5 calls
Market value $13,500
Exp. 03-99
Wallace Computer Services 2,000 shares
Market value $52,625
Options written
20 March 15 calls
Market value $22,750
Exp. 03-99
Consumer Staples
Total Market value stocks $494,969
Total Market value options $127,468
Energy-3.45%
<PAGE>38
Bellwether Exp.* 8,000 shares
Market value $39,500
Options written
80 Jan. 7.5 calls
Market value $750
Exp. 01-99
Helmerich & Payne 2,000 shares
Market value $38,500
Options written
20 June 20 calls
Market value $4,375
Exp. 06-99
Nabors Ind.* 3,000 shares
Market value $40,500
Options written
30 June 10 calls
Market value $13,688
Exp. 06-99
Energy
Total Market value stocks $118,500
Total Market value calls $18,813
Financials-8.34%
Leucadia National 6,000 shares
Market value $188,250
Options written
30 June 25 calls
Market value $23,625
Exp. 06-99
30 March 30 calls
Market value $9,188
Exp. 03-99
Loews Corp. 1,000 shares
Market value $98,500
Options written
<PAGE>39
10 March 80 calls
Market value $19,250
Exp. 03-99
Financials
Total Market value stocks $286,750
Total Market value calls $52,063
Mutual Funds-1.19%
MFS Int. Income Fund 6000 shares
Market value $40,875
Real Estate-2.30%
Kimco Realty Corp. 2,000 shares
Market value $79,125
Options written
20 March 35 calls
Market value $10,625
Exp. 03-99
Technology-3.67%
Compaq Computer 3,000 shares
Market value $126,188
Options written
30 Jan. 20 calls
Market value $66,750
Exp. 01-99
*Non Income Producing Security
The accompanying notes are an
integral part of these financial statements
WEST UNIVERSITY FUND, INC
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
(Common Stocks Continued)
<PAGE>40
Transportation-1.54%
Werner Enterprises* 3,000 shares
Market value $53,062
Options written
30 June 12.5 calls
Market value $16,875
Exp. 06-99
Utilities-4.26%
MCN Energy 2,000 shares
Market value $38,125
Options written
20 Feb. 15 calls
Market value $8,375
Exp. 02-99
Northern States Power 2,000 shares
Market value $55,500
Options written
20 June 25 calls
Market value $7,125
Exp. 06-99
Pacific Corp. 2,500 shares
Market value $52,656
Options written
25 May 17.5 calls
Market value $9,844
Exp. 05-99
Utilities
Total Market value stocks $146,281
Total Market value calls $25,344
Total Equities-65.28%
(Cost $2,113,215)
Market value $2,243,969
Total Option Contracts Written-(14.35%)
<PAGE>41
Premiums received: ($327,316)
Market value ($493,344)
Short Term Investments
Variable Demand Notes
American Family-4.65% $160,000
(cost: $160,000)
Firstar-4.65% $160,000
(cost: $160,000)
General Mills-4.65% $160,000
(cost: $160,000)
Pitney Bowes-4.65% $160,000
(cost: $160,000)
Sara Lee-4.65% $160,000
(cost: $160,000)
Warner Lambert-1.74% $59,846
(cost: $59,846)
*Non Income Producing Security
The accompanying notes are an
integral part of these financial statements
WEST UNIVERSITY FUND, INC.
PORTFOLIO OF INVESTMENTS
DECEMBER 31,1998
(continued)
Wisconsin Corp. C. U.-4.65% $160,000
(cost: $160,000)
Total Variable Demand Notes $1,019,846
Commercial Paper
<PAGE>42
Ford Motor- 4.62% $158,733
(cost: $158,733)
GE- 4.62% $158,703
(cost: $158,703)
General Motors- 5.23% $179,708
(cost: $179,708)
Paine Webber- 5.07% $174,186
(cost: $174,186)
Total Commercial Paper $671,330
Total Short Term Investments -49.19% $1,691,176
(cost: $1,691,176)
Other Assets and Liabilities Net -(.13%) ($4,440)
Net Assets -100% $3,437,361
The accompanying notes are an
integral part of these financial statements
WEST UNIVERSITY FUND, INC.
STATEMENT OF ASSETS AND
LIABILITIES
DECEMBER 31, 1998
ASSETS
Investments in securities, at market value $2,243,969
(cost: $2,113,215)
Variable demand notes and
commercial paper at market value $1,691,176
(cost: $1,691,176)
Receivables:
Dividends $3,400
Interest $3,609
<PAGE>43
Total Assets $3,942,154
LIABILITIES
Covered call options written, at market value $493,344
(Premiums received: $327,316)
Accrued expenses $11,449
Total Liabilities $504,793
NET ASSETS $3,437,361
Net asset value per share ($3,437,361 / 354,215 shares outstanding)
COMPONENTS OF NET ASSETS
Common stock, $1.00 par value; 10,000,000 shares authorized,
354,215 shares issued and outstanding $354,215
Paid-in capital $3,315,425
Net investment losses ($197,005)
Net unrealized (depreciation)
on investments ($35,274)
NET ASSETS $3,437,361
The accompanying notes are an integral part of
these financial statements.
WEST UNIVERSITY FUND, INC.
STATEMENT OF OPERATIONS
DECEMBER 31, 1998
INCOME:
Interest $82,688
Dividends $33,027
EXPENSES:
Management fee $37,097
Accounting fee $8,475
Audit and tax consulting fees $7,300
Custodian fees $5,986
Total Expenses $58,858
Net Investment Income $56,857
<PAGE>44
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized loss on investments ($198,767)
Net decrease in unrealized appreciation ($52,429)
Net loss on investments ($251,196)
Net decrease in net assets
resulting from operations ($194,339)
The accompanying notes are an integral
part of these financial statements.
WEST UNIVERSITY FUND, INC.
STATEMENT OF CHANGES
IN NET ASSETS
DECEMBER 31,1998
Year ended Year ended
12-31-98 12-31-97
OPERATIONS:
Net investment income $56,857 $41,592
Net realized (loss) gain on investments ($198,767) $234,551
Net (decrease) increase in
unrealized appreciation ($52,429) ($6,062)
Net (decrease) increase in net assets
resulting from operations ($194,339) $270,081
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($56,868) ($41,590)
Distributions from net realized gains $0 ($232,779)
Total distributions ($56,868) ($274,369)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued (40,865 and
158,253, respectively) $437,033 $1,675,696
Increase from shares issued in
reinvested distributions $42,325 $209,797
Cost of shares redeemed ($332,021) ($377,425)
Net increase in net assets derived from
capital share transactions $147,337 $1,508,068
Net (decrease) increase in net assets ($103,870) $1,503,780
<PAGE>45
NET ASSETS AT BEGINNING
OF YEAR $3,541,231 $2,037,451
NET ASSETS AT
END OF YEAR $3,437,361 $3,541,231
The accompanying notes are an integral part of these financial statements
WEST UNIVERSITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
West University Fund, Inc. (the"fund"), was incorporated under the laws
of the State of Texas on October 25,1995 and commenced investment
activity in February 1996. The fund is registered under the Investment
Company Act of 1940, as amended, as a diversified, no-load, open-end
management investment company. The following is a summary of the fund's
significant accounting policies.
Basis of Accounting- The accounting records of the fund and its financial
statements are maintained and prepared on the accrual basis under generally
accepted accounting principles. The preparation of financial statements
in conformity with generally accepted accounting principles requires manage-
ment to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
Securities Valuation- Investments and outstanding options (collectively
referred to as securities) are stated at market value. Securities traded
on securities exchanges are valued at the last sale price on the day, at
the mean between the last current bid and asked prices.
Investment Income and Securities Transactions- Dividend income is
recorded on the ex-dividend date and interest income is accrued as
earned. Securities transactions are accounted for on the trade date
(the date the order to buy or sell is executed). Realized gains and
losses from securities transactions and unrealized appreciation or
depreciation of securities are reported on an identified cost basis
for both financial statement and Federal income tax purposes.
<PAGE>46
Option Accounting Principles- When the fund writes a call option,
an amount equal to the premium received by the fund is included
in the fund's Statement of Assets and Liabilities as an asset and an
equivalent liability. The amount of the liability will be subsequently
marked-to-market to reflect the current market value of the option
written. The current market value of a traded option is the last sales
price or, in the absence of a sale, the mean between the last current
bid and asked prices.
When a call expires on its stipulated expiration date, or if the fund
enters into a closing purchase transaction, the fund will realize a gain
(or loss if the cost of a closing purchase transaction exceeds the
premium received when the call option was written) without
regard to any unrealized gain or loss on the underlying security,
and the liability related to such option will be extinguished. When a
call option is exercised, the fund will realize a gain or loss from the
sale of the underlying security and the proceeds of the sale
are increased by the premium originally received.
Fund Share Valuation- Fund shares are sold and redeemed on a
continuing basis at net asset value. Net asset value per share is
determined daily as of the close of trading of the New York
Stock Exchange on each day the Exchange is open for trading
by dividing the total value of the fund's investments and other assets,
less the sum of liabilities and the value of outstanding call options,
by the number of fund shares outstanding.
Federal Income Taxes- It is the fund's intention to comply with
the provisions of the Internal Revenue Code enabling it to qualify
as a regulated investment company and, in the manner provided therein,
to distribute all of its taxable income to its shareholders. Accordingly,
no provision for income taxes has been made.
Custodian- The fund's custodian is Firstar Trust Company. Pursuant
to the terms of the Custodian Agreement the fund will forward to the
Custodian the proceeds of each purchase of fund shares. The Custodian
will hold such proceeds and make disbursements therefrom in accordance
with the terms of the Custodian Agreement. It will retain possession of the
securities purchased with such proceeds and maintain appropriate records
with respect to receipt and disbursements of money, receipt and release of
securities, and all other transactions of the Custodian with respect to the
securities and other assets of the fund.
NOTE 2.- INVESTMENT ADVISORY AGREEMENT
AND "AFFILIATED PERSONS"
<PAGE>47
Cancelmo Capital Management, Inc. (the "Adviser") is the investment
adviser of the fund. The Adviser, subject to the control and direction of
the Fund's board of directors, manages and supervises the investment
operations of the Fund and the composition of its portfolio, including
the writing of all options and making recommendations to the Fund's
board of directors as to investment policies.
As compensation for furnishing investment advisory, management, and
other services, and costs and expenses assumed, pursuant to the
Investment Management Agreement, the Fund pays the Adviser an
annual fee equal to 1.0% of average daily net assets. The Adviser
will reduce its fees to limit the total annual expenses of the Company
(including the Adviser's fee, but excluding interest, taxes, fees incurred
in acquiring and disposing of portfolio securities and certain extraordinary
expenses) to 2.0% of the first $10,000,000 of average daily assets,
1.5% of the next $20,000,000 of such assets, and 1.0% of such assets
over $30,000,000.
NOTE 3- CAPITAL SHARE TRANSACTIONS
As of December 31, 1998, there were
354,215 shares of $1.00 par value capital stock authorized and capital
paid-in aggregated $3,315,425.
Transactions in capital stock were as follows:
1998 1997
Shares Amounts
Shares sold 40,865 158,253 $437,033 $1,675,696
Shares issued
in reinvestment
of dividends 4,382 20,310 $42,325 $209,797
45,247 178,563 $479,358 $1,885,493
Shares
redeemed 11,307 35,773 $332,021 $377,425
<PAGE>48
Net increase 33,940 142,790 $147,337 $1,508,068
NOTE 4.- INVESTMENT ACTIVITY
For the years ended December 31,1998, purchases of investment
securities (excluding short term investments) totaled $5,816,417
and proceeds from sales totaled $5,251,589.
As of December 31, 1998, and 1997, portfolio securities valued at
$1,978,844 and $2,497,163 respectively were held in escrow by
the custodian in connection with covered call options
written by the Fund.
Number of Contracts Premiums
Outstanding at beginning of year 1,199 $367,343
Call options written 3,095 $1,032,179
Call options terminated in closing
purchase transactions (1,205) ($462,464)
Call options expired (964) ($238,156)
Call options exercised (1,230) ($371,586)
Outstanding at December 31, 1998 895 $327,316
WEST UNIVERSITY FUND, INC.
SUPPLEMENTARY INFORMATION
DECEMBER 31,1998
SELECTED PER SHARE DATA AND RATIOS
1998 1997 1996
Net asset value at
beginning of period $10.35 $10.21 $10.00
Income from investment operations:
Net investment income $.16 $.12 $.09
Distributions from net
investment income ($.16) ($.12) ($.09)
<PAGE>49
Net realized and unrealized gain
(loss) on securities ($.65) $.82 $.80
Distributions from realized
gains on securities $0 ($.64) ($.59)
Net asset value at
end of year $9.70 $10.35 $10.21
Total return (4.70)% 9.73% 9.71%*
Ratios/Supplemental Data:
Net assets at end of
year(in thousands) $3,437 $3,541 $2,037
Expenses to average
net assets 1.59 1.75 1.82
Net investment income before
taxes to average net assets 1.53 1.36 1.19
Portfolio turnover rate 218.49% 188.53% 101.38%
*Annualized
WEST UNIVERSITY FUND, INC.
3030 UNIVERSITY BLVD.
HOUSTON, TEXAS 77005
713-666-1652
PART C
Item 23. Financial Statements and Exhibits
<PAGE>50
(a) Articles of Incorporation.
Copy of Registrant's Articles of Incorporation,
which was filed as an Exhibit to Pre-Effective
Amendment No.1, is hereby incorporated by reference.
(b) By-laws of the Company.
Copy of Registrant's By-laws which was filed
as an Exhibit to Pre-Effective Amendment No.1
is hereby incorporated by reference.
(c) Instruments Defining Rights of Security Holders.
None (other than in the Articles of Incorporation.)
(d) Investment Advisory Contract. Copy of Registrant's
Investment Advisory Agreement with Cancelmo Capital
Management, Inc., which was filed as an exhibit to
Pre-Effective Amendment No. 1, is hereby incorporated
by reference.
(e) Underwriting Contracts. None.
(f) Bonus or Profit Sharing Contracts. None.
(g) Custodian Agreements. Copy of Registrant's agreement
with the Custodian, Firstar Trust which was filed
as an Exhibit to Pre-Effective Amendment No. 1
is hereby incorporated by reference.
(h) Other Material Contracts. None.
(i) Legal Opinion. Opinion and Consent of Ben B. Turner
& Associates, P.C., which was filed as an Exhibit
to Pre-Effective Amendment No.1 is hereby
incorporated by reference.
(j) Other Opinions. Consent of Simonton, Kutac & Barnidge
LLP is filed herewith .
(k) Omitted Financial Statements. None.
(l) Initial Capital Agreements. Agreement which was filed
as an Exhibit to Pre-Effective Amendment No. 1 is
hereby incorporated by reference.
(m) Rule 12b-1 Plan. None.
(n) Financial Data Schedule. None.
(o) Rule 18f-3 Plan. None.
Item 24. Control Persons. None.
Item 25 Indemnification. The Bylaws of the Company deny
indemnification to any Officer or director for "reason
of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in
the conduct of his office."
Item 26. Business and Other Connections of the Investment Adviser.
None.
Item 27. Principal Underwriters. None.
<PAGE>51
Item 28. Location of Accounts and Records. The accounts, books and
other documents required by Section 31(a) of the 1940 Act
and the rules promulgated thereunder are maintained at the
office of the Company, 3030 University Blvd.,
Houston, Texas 77005.
Item 29. Management Services. None.
Item 30. Undertakings. None.
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 Registrant's Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized,
in the city of Houston and the State of Texas on the 23rd
day of March 1999.
West University Fund, Inc.
BY /s/ Richard P. Cancelmo, Jr.
Richard P. Cancelmo, Jr.
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 date indicated.
Dated: March 23, 1999 /s/ J. Barry Kendrick
J. Barry Kendrick
Dated: March 23,1999 /s/ J. Brinton Davis
<PAGE>52
J. Brinton Davis
</TABLE>
