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Registration No. 33-80195
811-9142
Filed April 30, 1997
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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/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 ___
Amendment No. 5 /X/
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THE NAVELLIER PERFORMANCE FUNDS
One East Liberty, Third Floor
Reno, Nevada 89501
1-800-887-8671
Agent for Service:
SAMUEL KORNHAUSER
155 Jackson Street, Suite 1807
San Francisco, California 94111
It is proposed that this filing will become effective (check appropriate box)
|X| immediately upon filing pursuant to Rule 485 paragraph (b)(1)(vii)
|_| 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
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Registrant has declared that it has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Investment Company Act
Rule 24f-2 and that the Rule 24f-2 Notice for Registrant's fiscal year 1997 will
be filed on or before February 28, 1998.
Page 1 of ___ pages sequentially numbered.
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
CONTENTS
This Registration Statement on Form N-1A consists of the following:
1. Facing Sheet
2. Contents
3. Cross-Reference Sheet
4. Part A - Prospectus for all shares of The Navellier Performance
Funds
5. Part B - Statement of Additional Information for all shares of The
Navellier Performance Funds
6. Part C - Other Information
7. Signature Sheet
8. Exhibits
<PAGE>
CROSS-REFERENCE SHEET
Part A
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Form N-1A Item Number Prospectus Caption
- --------------------- ------------------
1. Cover Page Cover Page
2. Synopsis Summary of Fund Expenses
3. Condensed Financial Information Condensed Financial Information -
Financial Highlights
4. General Description of Registrant Investment Objectives and Policies,
General Information, Risk
Considerations
5. Management of Registrant Management of the Fund
5A. Management's Discussion of Fund Financial Highlights; Performance
Performance
6. Capital Stock and Other Securities General Information
7. Purchases of Securities Management of the Fund
Being Offered
How to Buy Shares
Dividend Reinvestment
Distribution Fees
8. Redemption or Repurchase How to Redeem Shares
9. Legal Proceedings N/A
<PAGE>
Part B - Statement of Additional Information
--------------------------------------------
Form N-1A Item Number
- ---------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History N/A
13. Investment Objectives and Policies Investment Objective and Policies
Investment Restrictions
14. Management of the Fund Management
15. Control Persons and Principal Management
Holders of Securities
16. Investment Advisory Management of the Fund
and Other Services Management
Distribution Plan
Other Information
17. Brokerage Allocation and Portfolio Transactions
Other Practices Management of the Fund
18. Capital Stock and Other General Information
Securities
19. Purchase, Redemption and Pricing How to Buy Shares
of Securities Being Offered Net Asset Value
20. Tax Statutes Dividends, Distributions, and Taxes
21. Underwriters Management
Distribution Plan
22. Calculation of Performance Data Performance Information
23. Financial Statements Financial Statements
<PAGE>
Part C
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Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
The Navellier Performance Funds (the "Fund") is an open-end management
investment company which offers its shares in a series of no load
non-diversified and diversified portfolios. The Fund is presently offering its
shares in three Portfolios: the Navellier Aggressive Growth Portfolio
("Aggressive Growth") - a non-diversified open-end management company portfolio
(See p. __); the Navellier Mid Cap Growth Portfolio ("Mid Cap Growth"), a
diversified open-end management company portfolio investing in mid cap growth
securities (See p. __); and the Navellier Aggressive Small Cap Portfolio
("Aggressive Small Cap"), a diversified open-end management company portfolio
investing in small cap growth securities (See p. __). Additional non-diversified
or diversified portfolios may be added to the Fund in the future. There can be
no assurance that the Portfolios of the Fund will achieve their investment
objectives.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing and should be read and
retained for future reference.
A Statement of Additional Information about the Fund has been filed with
the Securities and Exchange Commission and is available upon request and without
charge by calling or writing The Navellier Performance Funds c/o Navellier
Securities Corp., One East Liberty, Third Floor, Reno, Nevada 89501; Telephone:
1-800-887-8671. The Statement of Additional Information bears the same date as
this Prospectus and is incorporated by reference into this Prospectus in its
entirety.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
No dealer, salesman, or other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Fund, its investment
adviser, or its distributor. This Prospectus does not constitute an offer to buy
any of the securities offered hereby in any state to any person to whom it is
unlawful to make such an offer in such state.
Distributor and Sales Information
---------------------------------
Navellier Securities Corp.
One East Liberty, Third Floor
Reno, Nevada 89501
1-800-887-8671
The date of this Prospectus is April 30, 1997
<PAGE>
TABLE OF CONTENTS
SHAREHOLDER TRANSACTION EXPENSES
AND ANNUAL FUND OPERATING EXPENSES..................................... 1
SUMMARY...................................................................... 6
INVESTMENT OBJECTIVES AND POLICIES........................................... 8
SPECIAL INVESTMENT METHODS AND RISKS......................................... 11
INVESTMENT RESTRICTIONS...................................................... 12
RISK FACTORS................................................................. 13
PERFORMANCE.................................................................. 16
MANAGEMENT OF THE FUND....................................................... 19
EXPENSES OF THE FUND......................................................... 21
REPORTS AND INFORMATION...................................................... 23
DESCRIPTION OF SHARES........................................................ 24
DIVIDENDS AND DISTRIBUTIONS.................................................. 25
TAXES........................................................................ 26
PURCHASE AND PRICING OF SHARES............................................... 28
REDEMPTION OF SHARES......................................................... 31
CERTAIN SERVICES PROVIDED TO SHAREHOLDERS.................................... 34
ADDITIONAL INFORMATION....................................................... 35
ASSENT TO TRUST INSTRUMENT................................................... 36
<PAGE>
SHAREHOLDER TRANSACTION EXPENSES
AND ANNUAL FUND OPERATING EXPENSES
Navellier Navellier Navellier
Aggressive Mid Cap Aggressive
Growth Growth Small Cap
Portfolio Portfolio Portfolio
--------- --------- ---------
Shareholder Transaction Expenses(1)
- ---------------------------------
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) .... 0% 0% 0%
Maximum Sales Load Imposed on
Reinvested Dividends .................. None None None
Redemption Fees ........................... None None None
Exchange Fee(3) ........................... 0-$5 0-$5 0-$5
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees(4) ........................ 1.25% 1.25% 1.15%
12b-1 Fees(2) ............................. 0.25% 0.25% None
Other Expenses (after waivers)(5)......... 0.50% 0.50% 0.40%
---- ---- ----
Total Fund Operating Expenses
(after waivers)(6) 2.00% 2.00% 1.55%
==== ==== ====
- ----------
(1) The above table of fees and other expenses is provided to assist you
in understanding the various potential costs and expenses that an investor in
the Fund may bear directly or indirectly . The Investment Adviser may, but is
under no obligation to, reimburse the Fund's expenses now or in the future. The
Navellier Aggressive Growth Portfolio has been in existence and has an operating
history beginning December 28, 1995. The Navellier Mid Cap Growth Portfolio has
been in existence and has an operating history beginning November 26, 1996. The
Navellier Aggressive Small Cap Portfolio has been in existence since November
26, 1996 but had no assets, expenses or operating history during the period
November 26, 1996 through December 31, 1996.
(2) The Aggressive Growth Portfolio, and the Mid Cap Growth Portfolio do
not charge an initial sales load but do pay an annual 0.25% 12b-1 fee to the
distributor or brokers who have signed a selling agreement with the Fund. The
applicable Portfolio of the Fund pays these brokers or the distributor annually
0.25% of the value of the assets of the applicable Portfolio of the Fund which
were obtained by said broker or distributor. The fee is paid to the broker or
distributor for continuous personal services and distribution services by such
broker or distributor to investors in the applicable Portfolio. Investors may
also be charged a transaction fee if they effect transactions in fund shares
through a broker or agent. Long-term shareholders in the Fund may pay more than
the economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers ("NASD"). There is no 12b-1 fee
charged to shareholders of the Navellier Aggressive Small Cap Portfolio.
(3) Shares of the Aggressive Growth Portfolio or the Mid Cap Growth
Portfolio or the Aggressive Small Cap Portfolio may be exchanged for shares of
each other at net asset value without charge (up to five (5) exchanges per
account). There is a charge of $5 per exchange thereafter.
(4) Represents the advisory fee paid to Navellier Management, Inc. (See
"Expenses of the Fund - Compensation of the Investment Adviser".)
(5) Before the Investment Advisor waived reimbursement of costs advanced,
"Other Expenses" of the Aggressive Growth Portfolio were 0.72% of the
Portfolio's average net assets for the period January 1, 1996 through December
31, 1996. Before the Investment Advisor waived reimbursement of costs advanced,
"Other Expenses" of the Mid Cap Growth Portfolio were 113.02% of the Portfolio's
average net assets for the period November 26, 1996 through December 31, 1996 or
10.87% on an annualized basis. The Investment Advisor has agreed to waive
reimbursement of all operating expenses for the Aggressive Growth Portfolio
advanced by it in excess of a 2% operating expense ratio for the fiscal year
ended December 31, 1997. The Investment Advisor has agreed to waive
reimbursement of all operating
1
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expenses for the Mid Cap Growth Portfolio advanced by it in excess of a 2%
operating expense ratio for the fiscal year ended December 31, 1997. The
Investment Advisor has agreed to waive reimbursement of all operating expenses
for the Aggressive Small Cap Portfolio advanced by it in excess of a 1.55%
operating expense ratio for the fiscal year ended December 31, 1997.
(6) This includes the annual 0.25% 12b-1 fee for the Aggressive Growth
Portfolio and the Mid Cap Growth Portfolio (there is no 12b-1 fee for the
Aggressive Small Cap Portfolio), which has the effect of increasing annual
operating expenses. Before waiver of reimbursement of costs advanced, "Total
Fund Operating Expenses" of the Aggressive Growth Portfolio were 2. 22% of
average net assets.Before waiver of reimbursement of costs advanced, "Total Fund
Operating Expenses" of the Mid Cap Growth Portfolio for the short period of
November 26, 1996 through December 31, 1996 were 113.02% of average net assets.
There were no waivers of reimbursement of costs advanced and no actual "Total
Fund Operating Expenses" of the Aggressive Small Cap Portfolio for the short
period of November 26, 1996 through December 31, 1996 since it had no assets and
no expenses during that initial period. The Investment Advisor has agreed to
waive reimbursement of all operating expenses for the Aggressive Growth
Portfolio advanced by it in excess of a 2% operating expense ratio for the
fiscal year ended December 31, 199 7. The Investment Advisor has agreed to waive
reimbursement of all operating expenses for the Mid Cap Growth Portfolio
advanced by it in excess of a 2% operating expense ratio for the fiscal year
ended December 31, 1997. The Investment Advisor has agreed to waive
reimbursement of all operating expenses for the Aggressive Small Cap Portfolio
advanced by it in excess of a 1.55% operating expense ratio for the fiscal year
ended December 31, 1997.
2
<PAGE>
EXAMPLES:
The following example indicates the direct and indirect expenses an investor
(maintaining an average annual investment of $1,000) could expect to incur in a
single year, three-year, five year and ten year period for the applicable
portfolio:
Navellier Navellier
Aggressive Mid Cap
Growth Growth
Portfolio PortfolioNavellier
--------- ---------
Aggressive
Small Cap
Portfolio
---------
One-Year .......................$21 $21 $21
Three-Year .....................$64 $64 $64
Five-Year .....................$112 $__* $__*
Ten-Year .......................$238 $__* $__*
The foregoing examples assume (a) that an investor maintains an average of
$1,000 invested in the Portfolio; (b) no sales load; (c) a 5% annual return; (d)
percentage amounts listed above for Annual Fund Operating Expenses remain
constant (for all periods shown above); (e) reinvestment of all dividends and
distributions; and (f) no exchanges between Portfolios.
The examples shown above should not be considered a representation of past
or future expenses. Actual expenses of each Portfolio of the Fund may be greater
or less than those shown above.
* No estimates because the Portfolio had an operating history of less than 10
months.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables set forth the financial histories for the Aggressive
Growth Portfolioand the Mid Cap Growth Portfolio. The distribution of the
Aggressive Growth Portfolio Shares commenced on December 28, 1995. The
distribution of the Mid Cap Growth Portfolio Shares commenced on November 26,
1996.
There is a short financial history (from November 26, 1996 through
December 31, 1996) for the Mid Cap Growth Portfolio. There is no financial
history for the Aggressive Small Cap Portfolio for the period November 26, 1996
- - December 31, 1996 because there were no assets or expenses..
Deloitte & Touche LLP, the Fund's independent auditor, has audited the
financial information for the Aggressive Growth Portfolio for the period
December 28, 1995 - December 31, 1995 and for the year ended 1996. Deloitte &
Touche LLP has also audited the financial information for the Mid Cap Growth
Portfolio for the period November 26, 1996 - December 31, 1996. The report for
the Aggressive Growth Portfolio for the period January 1, 1996 - December 31,
1996 is audited and is included in the Annual Report of the Fund. The report for
the Mid Cap Growth Portfolio for the period November 26, 1996 - December 31,
1996 is also audited and is also included in the Annual Report of the Fund.
Those reports are available upon request and are incorporated by reference into
the Statement of Additional Information.
Navellier Aggressive Growth Portfolio
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<TABLE>
<CAPTION>
Audited Audited
For the Fiscal For the
Year Ended Fiscal Year Ended
December 31, 1996 December 31, 1995*
<S> <C> <C>
Per Share Operating Performance:
Net Asset Value - Beginning of Year $9.99 $10.00
------ ------
Income from Investment Operations:
Net Investment Income (Loss) (0.120) 0.002
Net Realized and Unrealized Gains (Losses) on Securities 2.380 (0.008)
Total from Investment Operations 2.260 (0.006)
Distributions to Shareholders:
From Net Investment Income -- --
From Net Realized Capital Gains -- --
------ ------
Total Distributions to Shareholders -- --
------ ------
Net Increase (Decrease) in Net Asset Value 2.26 (0.01)
---- -----
Net Asset Value - End of Year $ 12.25 $ 9.99
========= ======
Total Investment Return(1) 22.62 % (0.10) %
</TABLE>
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(1)Total returns for period of less than one year are not annualized.
5
<PAGE>
Navellier Aggressive Growth Portfolio (Continued)
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<TABLE>
<CAPTION>
Audited Audited
For the Fiscal For the Fiscal
Year Ended Year Ended
December 31, 1995* December 31, 1996
----------------- -----------------
<S> <C> <C>
Ratios to Average Net Assets:
Expenses After Reimbursement(2),(3) 2.00 % 2.00 %
Expenses Before Reimbursement(2),(3) 2.22 % 27.25 %
Net Investment Income (Loss)(2) (1.57) % 2.59 %
Supplementary Data:
Portfolio Turnover Rate 169.0 % --
Net Assets at End of Year (000's omitted) $ 95,246 $300
Number of Shares Outstanding
at End of Year (000's omitted) 7,774 30
Average Commission Rate Paid Per Share(4) $ .0389 ____
* From Commencement of Operations December 28, 1995.
</TABLE>
- --------
(2) Annualized.
(3) The Aggressive Growth Portfolio has only been in existence since
December 28, 1995. During the three days it was in existence during 1995, it had
substantial start-up expenses in relation to the small amount of total initial
investments in the Portfolio during those first three days and therefore would
have had an operating expense ratio of 27.25% for that three day period if the
Investment Advisor had not agreed to waive reimbursement of operating expenses
which it had advanced during that period. The Investment Advisor was entitled to
reimbursement of costs advanced during that three day period but agreed to waive
reimbursement which resulted in an actual operating expense ratio for 1995 of
2%.
During the twelve month period ended December 31, 1996, the Aggressive
Growth Portfolio had operating expenses of 2% after the Investment Advisor
agreed to waive reimbursement of $127,403.00 of expenses advanced. If the
Investment Advisor had not waived reimbursement of such amounts, the operating
expense ratio during that twelve month period would have been 2.22%.
(4) The average commission paid for securities purchased during the period
01/01/96 to 12/31/96 was $.0389 per share. Commissions are paid for listed
trades, soft dollar trades or trades on crossing networks (i.e. Instinet).
6
<PAGE>
Navellier Mid Cap Growth Portfolio
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Audited For the Fiscal
Year Ended December 31, 1996*
-----------------------------
Per Share Operating Performance:
Net Asset Value - Beginning of Period $10.00
------
Income from Investment Operations:
Net Investment Income (Loss) 0.005
Net Realized and Unrealized Gains (Losses) on Securities 0.270
------
Total from Investment Operations 0.275
------
Distributions to Shareholders:
From Net Investment Income (0.005)
From Net Realized Capital Gains --
------
Total Distributions to Shareholders (0.005)
------
Net Increase (Decrease) in Net Asset Value 0.27
------
Net Asset Value - End of Period $ 10.27
======
Total Investment Return1 2.75 %
Ratios to Average Net Assets:
Expenses After Reimbursement(2),(3) 2.00 %
Expenses Before Reimbursement(2),(3) 113.02 %
Net Investment Income (Loss)(2) 0.87 %
Supplementary Data:
Portfolio Turnover Rate --
Net Assets at End of Period (000's omitted) $1,642
Number of Shares Outstanding at End of Period (000's omitted) 160
Average Commission Rate Paid Per Share(4) $0.03
* From Commencement of Operations December 28, 1995.
- -----------------------------------------------------------
- --------
(1)Total returns for periods of less than one year are not annualized.
(2)Annualized.
(3) The Mid Cap Growth Portfolio has only been in existence since November
26, 1996. During the 37 days it was in existence during 1996, it had substantial
start-up expenses in relation to the small amount of total initial investments
in the Portfolio during those first 37 days and therefore would have had an
operating expense ratio of 113.02% for that 37 day period if the Investment
Advisor had not agreed to waive reimbursement of operating expenses which it had
advanced during that period. The Investment Advisor was entitled to
reimbursement of costs advanced during that 37 day period but agreed to waive
reimbursement which resulted in an actual operating expense ratio for 1996 of
2%.
During the 37 day period ended December 31, 1996, the Mid Cap Growth
Portfolio had operating expenses of 2% after the Investment Advisor agreed to
waive reimbursement of all expenses advanced. If the Investment Advisor had not
waived reimbursement of such amounts, the operating expense ratio during that 37
day period would have been 113.02%.
(4) The average commission paid for securities purchased during the period
11/26/96 to 12/31/96 was $0.03 per share. Commissions are paid for listed
trades, soft dollar trades or trades on crossing networks (i.e. Instinet).
7
<PAGE>
SUMMARY
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing and should be read and
retained for future reference. Each of the Portfolios of the Fund is designed
for long term investors and not as trading vehicles and are not intended to
present a complete investment program for the investor. An investment in any of
the Portfolios of the Fund involves certain speculative considerations; see
"Risk Factors". The Aggressive Growth Portfolio employs an aggressive investment
strategy that has the potential for yielding high returns. However, share prices
of the Aggressive Growth Portfolio may also experience substantial fluctuations
including declines so that your shares may be worth less than when you
originally purchased them. The Aggressive Growth Portfolio seeks long term
growth, does not attempt to maintain a balanced Portfolio, and its performance
may fluctuate due to the possibility of greater investment of the Portfolio's
assets in a single issuer. (See p. __ for greater detail.)
The Mid Cap Growth and the Aggressive Small Cap Portfolios also employ
aggressive investment strategies and can experience substantial fluctuations,
including declines, so that shares may be worth less than when originally
purchased. However, because these Portfolios can only invest up to 5% of their
assets in the securities of any single issuer, in theory they should not pose as
great a risk of fluctuation as the Aggressive Growth Portfolio, although there
can be no such assurance (See pp. __ for greater detail).
A Statement of Additional Information about the Fund has been filed with
the Securities and Exchange Commission and is available upon request and without
charge by calling or writing The Navellier Performance Funds c/o Navellier
Securities Corp., One East Liberty, Third Floor, Reno, Nevada 89501; Telephone:
1-800-887-8671. The Statement of Additional Information bears the same date as
this Prospectus and is incorporated by reference into this Prospectus in its
entirety.
Investment Adviser
Navellier Management, Inc. (the "Investment Advisor") administers the
assets of each of the existing three Portfolios of the Fund and determines which
securities will be selected as investments for each of the existing Portfolios
of the Fund. Louis Navellier, the President and CEO of the Investment Advisor,
refined the Modern Portfolio Theory investment strategy which is applied in
managing the assets of each Portfolio. He sets the strategies and guidelines for
each Portfolio and oversees the Portfolio Manager's activities. Louis Navellier
and Alan Alpers are the Portfolio Managers involved in the day-to-day investment
activities of the Aggressive Growth Portfolio. Alan Alpers has been an analyst
and portfolio manager for Navellier & Associates, Inc. since 1989 and is
responsible along with Mr. Navellier for day-to-day management of over $1.5
billion in individual accounts for Navellier & Associates, Inc. Louis Navellier
and Alan Alpers are also the Portfolio Managers involved in the day-to-day
investment activities of the Mid Cap Growth Portfolio and the Aggressive Small
Cap Portfolio. The Investment Advisor receives an annual advisory fee, equal to
1.25% of the average daily net asset value of assets under management for the
Aggressive Growth Portfolio and the Mid Cap Growth Portfolio and receives a fee
equal to 1.15% of the average daily net asset value of assets under management
for the Aggressive Small Cap Portfolio. The advisory fee for each Portfolio is
payable monthly, based upon a percentage of that Portfolio's average
8
<PAGE>
daily net assets. The advisory fees paid to the Investment Advisor are higher
than those generally paid by most other investment companies. The existing
Portfolios of the Fund are paying these higher advisory fees based on their
desire to retain Navellier Management, Inc.'s specific application of Modern
Portfolio Theory, its particular method of analyzing securities and its
investment advisory services.
Distribution of Shares
Navellier Securities Corp. (the "Distributor") acts as the sole
underwriter for the shares of each of the Portfolios of the Fund. The
Distributor is a corporation wholly owned by Louis Navellier, who also owns 100%
of Navellier Management, Inc., the Fund's Investment Advisor. The Distributor
may sell shares of each Portfolio of the Fund directly to investors or shares
may be purchased through a network of broker-dealers selected by the
Distributor. The Distributor will compensate these selected dealers for
shareholder services by paying them directly, or by allowing them to receive
annually all or a portion of the 0.25% annual 12b-1 fee paid on the Aggressive
Growth Portfolio and on the Mid Cap Growth Portfolio. No 12b-1 fee is paid on
the Aggressive Small Cap Portfolio.
How to Invest
Shares of each Portfolio of the Fund are continuously offered for sale by
the Distributor and through selected broker-dealers. The daily purchase price
for the Aggressive Growth Portfolio, the Mid Cap Growth Portfolio and the
Aggressive Small Cap Portfolio is the net asset value next computed after
receipt of your order. Initial purchases must be at least $2,000 ($500 in the
case of IRA and other retirement plans or qualifying group plans) and subsequent
investments must be $100 or more.
Risk Factors
Investment in any Portfolio of the Fund involves special risks and there
can be no guarantee of profitability. Some of those risks are briefly described
here. Because the Aggressive Growth Portfolio is allowed to invest up to 10% of
its assets in any single company and/or up to 25% of its total assets in any
single industry, there is potentially a greater risk of loss or fluctuation in
value of this portfolio. Some of the small cap securities which the Portfolios
may purchase may be difficult to liquidate on short notice or, on occasion, only
a portion of the shares of a company in which the Investment Advisor intends to
trade may be available to be bought or sold by a Portfolio. There can be no
assurance of profitability or of what the percentage of any of the Portfolios'
total annual operating expenses will be. Investments, if any, in securities of
foreign issuers may pose greater risks. The Investment Advisor's investment
style could result in above average portfolio turnover which could result in
higher brokerage expenses. As with any equity fund, the investments may decline,
resulting in a loss of value to the shareholder. (For more detail, see "Risk
Factors".)
9
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
Navellier Aggressive Growth Portfolio
The investment objective of the Navellier Aggressive Growth Portfolio is to
achieve long term growth of capital primarily through investments in stocks of
companies with appreciation potential.
The Navellier Aggressive Growth Portfolio is a non-diversified Portfolio,
which means it may invest a larger than normal percentage of its total assets in
the equity (including convertible debt) securities of any one company or
companies which the Investment Adviser believes represents an opportunity for
significant capital appreciation. The Investment Adviser will not invest more
than 10% of the Portfolio's assets in the securities of any single company or
25% or more of the Portfolio's assets in securities issued by companies in any
one industry. Since the Investment Adviser can invest more of the Portfolio's
assets in the stock of a single company, this Portfolio should be considered to
offer greater potential for capital appreciation as well as greater risk of loss
due to the potential increased investment of assets in a single company. This
Portfolio, because of its non-diversification, also poses a greater potential
for volatility. This Portfolio should not be considered suitable for investors
seeking current income. This Portfolio may invest its assets in the securities
of a broad range of companies without restriction on their capitalization. Under
normal circumstances, the Aggressive Growth Portfolio will invest at least 65%
of its total assets in securities of companies. However, that projected minimum
percentage could be lowered during adverse market conditions or for defensive
purposes and is not a fundamental policy of the Portfolio. Securities of issuers
include, but are not limited to, common and preferred stock, and convertible
preferred stocks that are convertible into common stock. While this Portfolio
intends to operate as a non-diver- sified open end management investment company
for the purposes of the 1940 Act, it also intends to qualify as a regulated
investment company under the Internal Revenue Code ("Code"). As a
non-diversified investment company under the 1940 Act, the Fund may invest more
than 5% and up to 25% of its assets in the securities of any one issuer at the
time of purchase. However, for purposes of the Internal Revenue Code, as of the
last day of any fiscal quarter, this Portfolio may not have more than 25% of its
total assets invested in any one issuer, and, with respect to 50% of its total
assets, the Portfolio may not have more than 5% of its total assets invested in
any one issuer, nor may it own more than 10% of the outstanding voting
securities of any one issuer. These limitations do not apply to investments in
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities or the securities of investment companies that qualify as
regulated investment companies under the Code.
Investors in the Aggressive Growth Portfolio pay no initial sales charge
(load) but do pay an annual 0.25% fee ("12b-1 fee") which over a period of years
could result in higher overall expenses than payment of an initial sales load.
Investment Objective of the Navellier Mid Cap Growth Portfolio
The Investment Objective of the Mid Cap Growth Portfolio is to achieve
long-term growth of capital primarily through investment in mid cap companies
with appreciation potential. The Mid Cap Growth Portfolio invests in equity
securities traded in all United States markets including dollar denominated
foreign securities traded in United States markets. It is a
10
<PAGE>
diversified portfolio, meaning it limits its investment in the securities of any
single company (issuer) to a maximum of 5% of the Portfolio assets and further
limits its investments to less than 25% of the Portfolio's assets in any one
industry group. The Mid Cap Growth Portfolio seeks long term capital
appreciation through investments in securities of mid cap companies (companies
with market capitalization of between $1 Billion and $5 Billion) which the
Investment Advisor feels are undervalued in the marketplace. Investors in the
Mid Cap Growth Portfolio pay no initial sales charge (load) but do pay an annual
0.25% fee ("12b-1 fee") which over a period of years could result in higher
overall expenses than payment of an initial sales load. Navellier Management,
Inc. is the Investment Advisor for the Mid Cap Growth Portfolio. Navellier
Securities Corp. is the principal distributor for the Mid Cap Growth Portfolio's
shares. This Portfolio should not be considered suitable for investors seeking
current income.
Investment Objective of the Navellier Aggressive Small Cap Portfolio
The Investment Objective of the Navellier Aggressive Small Cap Portfolio
is to achieve long-term growth of capital primarily through investment in small
cap companies with appreciation potential. The Aggressive Small Cap Portfolio
invests in equity securities traded in the United States securities markets of
domestic issuers and of foreign issuers. The sole objective of the Aggressive
Small Cap Portfolio will be to seek to achieve long term growth of capital
primarily through investments in securities of small cap companies (companies
with market capitalization of less than $1 Billion) with appreciation potential.
There can be no assurance that the Portfolio will achieve its investment
objectives. The Portfolio's investment objectives may not be changed without
shareholder approval. This Portfolio should not be considered suitable for
investors seeking current income. Investors in this Portfolio pay no sales
charge and no 12b-1 fee.
Other Investments
Each of the Portfolios may, for temporary defensive purposes or to
maintain cash or cash equivalents to meet anticipated redemptions, also invest
in debt securities and money market funds if, in the opinion of the Investment
Adviser, such investment will further the cash needs or temporary defensive
needs of the Portfolio. In addition, when the Investment Adviser feels that
market or other conditions warrant it, for temporary defensive purposes each
Portfolio may retain cash or invest all or any portion of its assets in cash
equivalents, including money market mutual funds. Under normal conditions, a
Portfolio's holdings in such non-equity securities should not exceed 35% of the
total assets of the Portfolio. If a Portfolio's assets, or a portion thereof,
are retained in cash or money market funds or money market mutual funds, such
cash will, in all probability, be deposited in interest-bearing or money market
accounts or Rushmore's money market mutual funds. Rushmore Trust & Savings, FSB
is also the Fund's Transfer Agent and Custodian. Cash deposits by the Fund in
interest bearing instruments issued by Rushmore Trust & Savings ("Transfer
Agent") will only be deposited with the Transfer Agent if its interest rates,
terms, and security are equal to or better than could be received by depositing
such cash with another savings institution. Money market investments have no
FDIC protection and deposits in Rushmore Trust & Savings accounts have only
$100,000 protection.
It is anticipated that, for each of the Portfolios, all of their
investments in corporate debt securities (other than commercial paper) and
preferred stocks will be represented by debt securities and preferred stocks
which have, at the time of purchase, a rating within the four
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highest grades as determined by Moody's Investors Service, Inc. (Aaa, Aa, A,
Baa) or by Standard & Poor's Corporation (AAA, AA, A, BBB; securities which are
rated BBB/Baa have speculative characteristics). Although investment-quality
securities are subject to market fluctuations, the risk of loss of income and
principal is generally expected to be less than with lower quality securities.
In the event the rating of a debt security or preferred stock in which the
Portfolio has invested drops below investment grade, the Portfolio will promptly
dispose of such investment. When interest rates go up, the market value of debt
securities generally goes down and long-term debt securities tend to be more
volatile than short term debt securities.
In determining the types of companies which will be suitable for
investment by the Aggressive Growth Portfolio, the Mid Cap Growth Portfolio and
the Aggressive Small Cap Portfolio, the Investment Adviser will screen over
7,000 stocks and will take into account various factors and base its stock
selection on its own model portfolio theory concepts. Each Portfolio invests
primarily in what the Investment Adviser believes are undervalued common stocks
believed to have long-term growth potential. Stocks are selected on the basis of
an evaluation of factors such as earnings growth, expanding profit margins,
market dominance and/or factors that create the potential for market dominance,
sales growth, and other factors that indicate a company's potential for growth.
There are no limitations on the Aggressive Growth Portfolio as to the type,
operating history, or dividend paying record of companies or industries in which
the Aggressive Growth Portfolio may invest; the principal criteria for
investment is that the securities provide opportunities for capital growth. The
Mid Cap Growth Portfolio will invest at least 65% of its total assets in equity
securities of companies defined as Mid Cap (companies with capitalization of
between $1 Billion and $5 Billion). The Aggressive Small Cap Portfolio will
invest at least 65% of its total assets in equity securities of companies
defined as small cap (companies with capitalization of less than $1 Billion).
The Portfolios will invest up to 100% of their capital in equity securities
selected for their capital growth potential. The Investment Adviser will
typically (but not always) purchase common stocks of issuers which have records
of profitability and strong earnings momentum. When selecting such stocks for
investment by the Portfolios, the issuers may be lesser known companies moving
from a lower to a higher market share position within their industry groups
rather than the largest and best known companies in such groups. The Investment
Adviser, when investing for the Aggressive Growth Portfolio, may also purchase
common stocks of well known, highly researched, large companies if the
Investment Adviser believes such common stocks offer opportunity for long-term
capital growth.
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SPECIAL INVESTMENT METHODS AND RISKS
"Short Sales Against the Box"
Any Portfolio of the Fund is permitted to make short sales if at the time
of the short sale the Portfolio owns or has the right to acquire a security
equal in kind and amount to the security being sold short, at no additional
cost. This investment technique is known as a "short sale against the box."
In a short sale, the seller does not immediately deliver the securities
sold and is said to have a short position in those securities until delivery
occurs. To make delivery to the purchaser, the executing broker borrows the
securities being sold short on behalf of the seller. While the short position is
maintained, the seller collateralizes its obligation to deliver the securities
sold short in an amount equal to the proceeds of the short sale plus an
additional margin amount established by the Board of Governors of the Federal
Reserve. If the Fund engages in a short sale, the collateral account will be
maintained by the Fund's custodian. While the short sale is open, the Fund will
maintain, in a segregated custodial account, an amount of securities equal in
kind and amount to the securities sold short or securities convertible into or
exchangeable for such equivalent securities at no additional cost. These
securities would constitute the Fund's long position.
Any Portfolio may make a short sale against the box, when it believes that
the price of a security may decline, causing a decline in the value of a
security owned by the Portfolio (or a security convertible into or exchangeable
for such security), or when the Portfolio desires to sell the security it owns
at a current attractive price, but also wishes to defer recognition of gain or
loss for federal income tax purposes and for purposes of satisfying certain
tests applicable to regulated investment companies under the Internal Revenue
Code. In such a case, any future losses in the Portfolio's long position should
be reduced by a gain in the short position. The extent to which such gains or
losses are reduced would depend upon the amount of the security sold short
relative to the amount the Portfolio owns. There will be certain additional
transaction costs associated with short sales against the box, but the Portfolio
will endeavor to offset theses costs with income from the investment of the cash
proceeds of short sales.
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INVESTMENT RESTRICTIONS
The Aggressive Growth Portfolio can invest up to 10% of its assets in
securities of a single issuer and up to 25% of its assets in securities of
companies in a single industry. The Mid Cap Growth Portfolio and the Aggressive
Small Cap Portfolio can each invest up to 5% of their assets in the securities
of a single issuer and each can invest up to 25% of its assets in the securities
of a single industry. None of the Portfolios of the Fund may make investments in
real estate or commodities or commodity contracts, including futures contracts,
but may purchase securities of issuers which deal in real estate or commodities.
Each of the existing Portfolios of the Fund are also prohibited from investing
in or selling puts, calls, straddles (or any combination thereof). Each of the
existing Portfolios of the Fund are prohibited from investing in derivatives.
Each of the existing Portfolios may borrow money only from banks for temporary
or emergency (not leveraging) purposes provided that, after each borrowing,
there is an asset coverage in the borrowing Portfolio of at least 300%. The
Aggressive Growth Portfolio, the Mid Cap Growth Portfolio and the Aggressive
Small Cap Portfolio will not purchase securities if the amount of borrowing by
any one of these three named Portfolios respectively exceeds 5% of total assets
of the Portfolio. In order to secure any such borrowing, the borrowing Portfolio
may pledge, mortgage, or hypothecate up to 10% of the market value of the assets
of the Portfolio. The investment by the Portfolio in securities, including
American Depository Receipts, of issuers or any governmental entity or political
subdivision thereof, located, incorporated or organized outside of the United
States is limited to 25% of the net asset value of the Portfolio, provided that
no such foreign securities may be purchased unless they are traded on United
States securities markets.
The Fund may not purchase for any Portfolio "restricted securities" (as
defined in Rule 144(a)(3) of the Securities Act of 1933) if, as a result of such
purchase, more than 10% of the net assets (taken at market value) of such
Portfolio would be invested in such securities nor will the Fund invest in
illiquid or unseasoned securities if as a result of such purchase more than 5%
of the net assets of such portfolio would be invested in either illiquid or
unseasoned securities. The Board of Trustees will determine whether these
securities are liquid and will monitor liquidity on an ongoing basis.
In addition to the investment restrictions described above, the investment
program of each Portfolio is subject to further restrictions which are described
in the Statement of Additional Information. The restrictions for each Portfolio
are fundamental and may not be changed without shareholder approval.
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RISK FACTORS
Lack of Operating History and Experience
The Aggressive Growth Portfolio went effective December 28, 1995 and has
just over one year of operations. The Mid Cap Growth Portfolio and the
Aggressive Small Cap Portfolio both of which went effective November 26, 1996
are recently organized investment company portfolios with very short histories
of operations. The Investment Adviser was organized on May 28, 1993 . Although
the Investment Adviser sub-contracts a substantial portion of its
responsibilities for administrative services of the Fund's operations to various
agents, including the Transfer Agent and the Custodian, the Investment Adviser
still has overall responsibility for the administration of each of the
Portfolios and oversees the administrative services performed by others as well
as servicing customer's needs and, along with each Portfolio's Trustees, is
responsible for the selection of such agents and their oversight. The Investment
Advisor is also responsible for the selection of securities for investment. None
of the principals, officers, legal counsel, or directors of the Investment
Adviser (including such of those persons who are also controlling persons or
legal counsel of the Fund) had, before June 1993 ever registered, operated, or
supervised the operations of investment companies in the past, and there is no
assurance that their past business experiences or their experience with The
Navellier Series Fund will enable them to successfully manage the assets of the
Fund in the future. The owner of the Investment Adviser has been in the business
of rendering advisory services to significant pools of capital such as
retirement plans and large investors since 1987.
The owner of the Investment Adviser is also the owner of another
investment advisory firm, Navellier & Associates Inc., which presently manages
over $1.5 billion in investor funds. The owner of the Investment Adviser is also
the owner of another investment advisory firm, Navellier Fund Management, Inc.,
and controls other investment advisory entities which manage assets and/or act
as sub-advisors, all of which firms employ the same basic modern portfolio
theories and select many of the same over-the-counter stocks and other
securities which the Investment Adviser intends to employ and invest in while
managing the Portfolios of the Fund. Because many of the over-the-counter and
other securities which Investment Adviser intends to, or may, invest in have a
smaller number of shares available to trade than more conventional companies,
lack of shares available at any given time may result in one or more of the
Portfolios of the Fund not being able to purchase or sell all shares which
Investment Adviser desires to trade at a given time or period of time, thereby
creating a potential liquidity problem which could adversely affect the
performance of the Fund portfolios. Since the Investment Adviser will be trading
on behalf of the various Portfolios of the Fund in some or all of the same
securities at the same time that Navellier & Associates Inc., Navellier Fund
Management, Inc., other Navellier controlled investment entities are trading,
the potential liquidity problem could be exacerbated. In the event the number of
shares available for purchase or sale in a security or securities is limited and
therefore the trade order cannot be fully executed at the time it is placed,
i.e., where the full trade orders of Navellier & Associates Inc., Navellier Fund
Management, Inc., and other Navellier controlled investment entities and the
Fund cannot be completed at the time the order is made, Navellier & Associates,
Inc., and the
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<PAGE>
other Navellier controlled investment entities and the Investment Adviser will
allocate their purchase or sale orders in proportion to the dollar value of the
order made by the other Navellier entities, and the dollar value of the order
made by the Fund. For example, if Navellier & Associates Inc., and Navellier
Fund Management, Inc., each place a $25,000 purchase order and Investment
Adviser on behalf of the Fund places a $50,000 purchase order for the same stock
and only $50,000 worth of stock is available for purchase, the order would be
allocated $12,500 each of the stock to Navellier & Associates Inc., and
Navellier Fund Management, Inc., and $25,000 of the stock to the Fund. As the
assets of each Portfolio of the Fund increase the potential for shortages of
buyers or sellers increases, which could adversely affect the performance of the
various Portfolios. While the Investment Adviser generally does not anticipate
liquidity problems (i.e., the possibility that the Portfolio cannot sell shares
of a company and therefore the value of those shares drops) unless the Fund has
assets in excess of two billion dollars (although liquidity problems could still
occur when the Fund has assets of substantially less than two billion dollars),
each investor is being made aware of this potential risk in liquidity and should
not invest in the Fund if he, she, or it is not willing to accept this
potentially adverse risk, and by investing, acknowledges that he, she or it is
aware of the risks.
An investment in shares of any Portfolio of the Fund involves certain
speculative considerations. There can be no assurance that any of the Portfolios
objectives will be achieved or that the value of the investment will increase.
An investment in shares of the Aggressive Growth Portfolio may also involve a
higher degree of risk than an investment in shares of a more traditional
open-end diversified investment company because the Aggressive Growth Portfolio
may invest up to 10% of its assets in the securities of any single issuer and up
to 25% of its assets in the securities of any single industry, thereby
potentially creating greater volatility or increasing the chance of losses. As a
non-diversified investment Portfolio, the Aggressive Growth Portfolio may be
subject to greater fluctuation in the total market value of the Portfolio, and
economic, political or regulatory developments may have a greater impact on the
value of this Portfolio than would be the case if the Portfolio were diversified
among a greater number of issuers. All Portfolios intend to comply with the
diversification and other requirements applicable to regulated investment
companies under the Internal Revenue Code.
All securities in which any of the Fund's Portfolios may invest are
inherently subject to market risk, and the market value of the Fund's
investments will fluctuate. From time to time the Fund may choose to close a
portfolio or portfolios to new investors.
Investing in Securities of Foreign Issuers
Investments in foreign securities, particularly those of non-governmental
issuers, involve considerations which are not ordinarily associated with
investing in domestic issuers. These considerations include, among others,
changes in currency rates, currency exchange control regulations, the
possibility of expropriation, the unavailability of financial information, the
difficulty of interpreting financial information prepared under laws applicable
to foreign securities markets, the impact of political, social, or diplomatic
developments, difficulties in invoking legal process abroad, and the difficulty
of assessing economic trends in foreign countries. The Investment Adviser will
use the same basic selection criteria for investing in foreign securities as it
uses in selecting domestic securities as described in the Investment Objectives
and Policies section of this Prospectus.
While to some extent the risks to the Fund of investing in foreign
securities may be limited, since each Portfolio may not invest more than 25% of
its net asset value in such
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securities and each Portfolio of the Fund may only invest in foreign securities
which are traded in the United States securities markets, the risks nonetheless
exist.
Net Asset Value
The net asset value of each of the Portfolios is determined by adding the
values of all securities and other assets of that specific Portfolio,
subtracting liabilities, and dividing by the number of outstanding shares of
that Portfolio. (See "Purchase and Pricing of Shares Valuation of Shares" and
the Statement of Additional Information.)
Portfolio Turnover
The Portfolio turnover rate for the first twelve months of operation for
the Navellier Aggressive Growth Portfolio was 169%. The annual rate of portfolio
turnover for the Mid Cap Growth and the Aggressive Small Cap Portfolios is
unknown since neither of these two Portfolios has an operating history of more
than a year and therefore no actual portfolio turnover rate presently exists.
The Investment Adviser estimates that the portfolio turnover rate for the Mid
Cap Growth Portfolio and for the Aggressive Small Cap Portfolio will not exceed
300% per annum respectively. However, these are not restrictions on the
Investment Adviser and if in the Investment Adviser's judgment a higher annual
portfolio turnover rate is required in order to attempt to achieve a higher
overall Portfolio performance, then the Investment Adviser is permitted to do
so. However, high portfolio turnover (100% or more) will result in increased
brokerage commissions, dealer mark-ups, and other transaction costs on the sale
of securities and on reinvestment in other securities and could therefore
adversely affect Portfolio performance. To the extent that increased portfolio
turnover results in sales at a profit of securities held less than three months,
the Fund's ability to qualify as a "regulated investment company" under the
Internal Revenue Code may be affected. (See the Statement of Additional
Information, "Taxes".)
Special Risk Considerations Relating to Securities of the Portfolio
For a description of certain other factors, including certain risk
factors, which investors should consider relating to the securities in which the
Portfolio will invest, see "Investment Objectives and Policies".
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<PAGE>
PERFORMANCE
From time to time the Fund may include the performance history of each
Portfolio (and if appropriate, the performance history of the Investment Advisor
and/or the Portfolio Manager in managing comparable asset accounts) in
advertisements, sales literature, or reports to current or prospective
shareholders. Navellier Management, Inc., which is the Investment Advisor to
this Fund's Navellier Aggressive Small Cap Portfolio, was, until March 15, 1997,
also the Investment Advisor to the Navellier Aggressive Small Cap Equity
Portfolio of the Navellier Series Fund which charges a variable sales load. Both
Portfolios had, until March 15, 1997, the same investment objectives and
restrictions and Navellier Management, Inc., managed both Portfolios in the same
way (except that no "load" will be charged to investors of this Fund's
Aggressive Small Cap Portfolio). The Investment Advisor's total return (average
annual compounded rate of return) on investment in the Navellier Series Fund's
Aggressive Small Cap Equity Portfolio from inception (April 1, 1994) through
December 31, 1996 was 24.81% per annum. The S&P 500 increased during this period
by 23.37% per annum. The total return on investment in the Navellier Series
Fund's Aggressive Small Cap Equity Portfolio from January 1, 1996 through
December 31, 1996 was 11.98%. The S&P 500 increased during this period by
22.31%. (The total return percentages for the Navellier Aggressive Small Cap
Equity Portfolio represent the returns net of any sales charge.)
Louis Navellier's wholly owned investment advisory firm, Navellier &
Associates, Inc., has also managed, on an individual basis, accounts for
individuals and institutions since 1987 employing a modern portfolio theory
style of stock analysis which uses substantially the same investment objectives,
policies and strategies that are employed by Navellier Management, Inc. for the
Aggressive Growth Portfolio and the Mid Cap Growth Portfolio.
The basic difference between the investment style used by Navellier &
Associates, Inc. and the style used for the Aggressive Growth Portfolio is that
the Aggressive Growth Portfolio can invest a greater percentage of assets (up to
10% of the Portfolio's assets) in the securities of a single company and that
the securities are intended to be held for at least three (3) months, whereas
investments for private accounts managed by Navellier & Associates, Inc. tend
not to have as great a percentage of assets invested in the securities of a
single company and can be held for less than three (3) months (although the
average holding period for securities is eight months).
The basic difference between the investment style used by Navellier &
Associates, Inc. and the style used by the Mid Cap Growth Portfolio is that
Navellier & Associates, Inc. is not restricted to investing in companies with
capitalization between $1 Billion and $5 Billion and is not required to hold
securities for at least three (3) months, whereas the Mid Cap Growth Portfolio
is so restricted in its investments and intends to hold all securities for at
least three (3) months. The basic investment style is a proprietary system of
computer based screens to anaylyze over 7,000 stocks in order to determine which
stocks to buy and sell (the "Navellier system"). Louis Navellier and his staff
at Navellier & Associates, Inc. have used the Navellier system since 1987 to
manage the private accounts under management.
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<PAGE>
The following tables set forth composite performance data for Navellier &
Associates, Inc. for all private accounts under its management during the dates
indicated. The data is provided to illustrate the past performance of Navellier
& Associates, Inc. in managing the private accounts based on the Navellier
system, as measured against the S&P 500 Index.
Navellier & Associates, Inc. S&P 500
Index
1985 . . . . . . . . . . . . . . . 49.95% 31.84%
1986 . . . . . . . . . . . . . . 31.2 18.66
1987 . . . . . . . . . . . . . . . 8.05 5.24
1988 . . . . . . . . . . . . . . 11.40 16.51
1989 . . . . . . . . . . . . . . . 22.20 31.58
1990 . . . . . . . . . . . . . . . 12.51 -3.15
1991 . . . . . . . . . . . . . . . 66.43 30.50
1992 . . . . . . . . . . . . . . . 3.12 7.61
1993 . . . . . . . . . . . . . . . 16.83 10.09
1994 . . . . . . . . . . . . . . . 1.53 1.31
1995 . . . . . . . . . . . . . . . 43.80 37.89
1996 . . . . . . . . . . . . . . . 10.68 22.31
Navellier & Associates, Inc. S&P 500
Index
One Year 10.68% 22.31%
Three Years 17.33 19.44
Five Years 14.25 15.10
Ten Years 18.28 15.21
Since Inception 23.09 18.99
The following table sets forth the performance data for the Navellier
Series Fund, Aggressive Small Cap Equity Portfolio. Performance figures for the
Navellier Series Fund, Aggressive Small Cap Equity Portfolio are net of the
maximum load of 3%.
Navellier Series Fund S&P 500
Aggressive Small Cap Equity Portfolio Index
1994* 13.52% 5.31%
1995 39.48 37.89
1996 11.98 22.31
* For the period beginning April 1, 1994 through December 31, 1994
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Performance information about the Portfolio manager or the Investment Advisor is
based on its past performance only and is not an indication of future
performance. Performance history may be expressed as total return of each
Portfolio.
The "total return" of each Portfolio refers to the average annual
compounded rate of return of the Portfolio over some representative period that
would equate an initial payment of $1,000 at the beginning of a stated period to
the ending redeemable value of the investment, after giving effect to the
reinvestment of all dividends and distributions and deductions of expenses
during the period.
For more information about calculation of the investment performance of
each Portfolio, see the Statement of Additional Information.
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MANAGEMENT OF THE FUND
The Board of Trustees
The Fund's Board of Trustees directs the business and affairs of each
Portfolio of the Fund as well as supervises the Investment Adviser, Distributor,
Transfer Agent and Custodian, as described below.
The Investment Adviser
Navellier Management, Inc. acts as the Investment Adviser to each of the
three existing Portfolios of the Fund. The Investment Adviser is registered as
an investment adviser under the Investment Advisers Act of 1940. The Investment
Adviser is responsible for selecting the securities which will constitute the
pool of securities which will be selected for investment for each Portfolio.
Pursuant to a separate Administrative Services Agreement, the Investment Adviser
provides each Portfolio of the Fund with certain administrative services,
including accounting and bookkeeping services and supervising the Custodian's
and Transfer Agent's activities and each Portfolio's compliance with its
reporting obligations. The Investment Adviser may contract (and pay for out of
its own resources including the administrative fee it receives) for the
performance of such services to the Custodian, Transfer Agent, or others, and
may retain all of its 0.25% administrative services fee or may share some or all
of its fee with such other person(s). The Investment Adviser also provides each
Portfolio of the Fund with a continuous investment program based on its
investment research and management with respect to all securities and
investments. The Investment Adviser will determine from time to time what
securities and other investments will be selected to be purchased, retained, or
sold by the Fund.
The Investment Adviser is owned and controlled by its sole shareholder,
Louis G. Navellier (a 100% stockholder). In 1987, Louis Navellier was in
litigation with a business partner and on the advice of his then legal counsel,
as part of a legal strategy, filed a personal bankruptcy petition in connection
with that litigation. The bankruptcy petition was voluntarily dismissed by Mr.
Navellier less than two months later with all creditors being paid in full.
Louis G. Navellier is an affiliated person of the Fund and is also the sole
owner of the Distributor, Navellier Securities Corp. Louis Navellier is also the
sole shareholder of Navellier & Associates Inc. (See the Statement of Additional
Information.) Navellier & Associates Inc., is registered as an investment
adviser with the Securities and Exchange Commission and with all states which
require investment adviser registration. Louis Navellier is registered as an
investment adviser representative or agent in all states requiring such
registration. Louis Navellier and Navellier & Associates Inc., without admitting
liability, did in the past agree to a two-week suspension in California and
agreed to pay civil penalties to the States of California, Connecticut, and
Maryland for allegedly not being properly registered as an investment adviser.
Navellier Management, Inc. is also and has been since January 1994, the
investment adviser to The Navellier Series Fund, an open-end diversified
investment company. Louis Navellier is, and has been, in the business of
rendering investment advisory services to significant pools of capital since
1987.
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<PAGE>
For information regarding the Fund's expenses and the fees paid to the
Investment Adviser see "Expenses of the Fund".
Control Persons and Principal Holders of Securities
On October 17, 1995, in order to fulfill the requirements of Section
14(a)(1) of the Investment Company Act of 1940, one hundred percent (100%) of
the issued and outstanding shares of the only existing Portfolio of the Fund
(the Navellier Aggressive Growth Portfolio) was subscribed to for purchase by
Louis Navellier under an agreement dated October 17, 1995. Such subscription was
made for an aggregate of $100,000 allocated 100% for the Navellier Aggressive
Growth Portfolio (to purchase 10,000 shares). Louis Navellier is no longer a
control person of the Navellier Aggressive Growth Portfolio; nor is he a control
person of the Mid Cap Growth Portfolio or the Aggressive Small Cap Portfolio.
The Distributor
Navellier Securities Corp., acts as the Fund's Distributor and is
registered as a broker-dealer under the Securities Exchange Act of 1934 and is a
member of the National Association of Securities Dealers ("NASD"). The
Distributor renders its services to the Fund pursuant to a distribution
agreement under which it serves as the principal underwriter of the shares of
each existing Portfolio of the Fund. The Distributor may sell certain of the
Fund's Portfolio shares by direct placements. Through a network established by
the Distributor, each of the Fund's Portfolio shares may also be sold through
selected broker-dealers. (For information regarding the Fund's expenses and the
fees it pays to the Distributor, see "Expenses of the Fund" following.) Louis G.
Navellier, an affiliate of the Fund and the Investment Adviser, is an officer,
director, and sole shareholder of the Distributor.
The Custodian and the Transfer Agent
Rushmore Trust & Savings, FSB, 4922 Fairmont Avenue, Bethesda, Maryland,
20814, telephone: (301) 657-1510 or (800) 622-1386, is Custodian for the Fund's
securities and cash and Transfer Agent for the Fund shares. The Distributor
shall be responsible for the review of applications in order to guarantee that
all requisite and statistical information has been provided with respect to the
establishment of accounts.
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EXPENSES OF THE FUND
General
Each Portfolio is responsible for the payment of its own expenses. These
expenses are deducted from that Portfolio's investment income before dividends
are paid. These expenses include, but are not limited to: fees paid to the
Investment Adviser, the Custodian and the Transfer Agent; Trustees' fees; taxes;
interest; brokerage commissions; organization expenses; securities registration
("blue sky") fees; legal fees; auditing fees; printing and other expenses which
are not directly assumed by the Investment Adviser under its investment advisory
or expense reimbursement agreements with the Fund. General expenses which are
not associated directly with a specific Portfolio (including fidelity bond and
other insurance) are allocated to each Portfolio based upon their relative net
assets. The Investment Advisor may, but is not obligated to, from time to time
advance funds, or directly pay, for expenses of the Fund and may seek
reimbursement of or waive reimbursement of those advanced expenses.
Compensation of the Investment Adviser
The Investment Adviser receives an annual 1.25% fee for investment
management of The Aggressive Growth Portfolio, an annual 1.25% fee for
investment management of the Mid Cap Growth Portfolio and an annual 1.15% fee
for investment management of the Aggressive Small Cap Portfolio. Each fee is
payable monthly, based upon each Portfolio's average daily net assets. These
advisory fees are higher than those generally paid by most other investment
companies. The Investment Adviser also receives a 0.25% annual fee for rendering
administrative services to the Fund pursuant to an Administrative Services
Agreement and is entitled to reimbursement for operating expenses it advances
for the Fund.
Distribution Plans
The Aggressive Growth Portfolio Distribution Plan
The Aggressive Growth Portfolio has adopted a Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"), whereby it reimburses Distributor or others in
an amount up to 0.25% per annum of the average daily net assets of the
Aggressive Growth Portfolio for expenses incurred for the promotion and
distribution of the shares of such Portfolio of the Fund, including, but not
limited to, the printing of prospectuses, statements of additional information
and reports used for sales purposes, expenses (including personnel of
Distributor) of preparation of sales literature and related expenses,
advertisements and other distribution-related expenses, including a prorated
portion of Distributor's overhead expenses attributable to the distribution of
such Portfolio Fund shares. Such payments are made monthly. The 12b-1 fee
includes, in addition to promotional activities, amounts the Aggressive Growth
Portfolio may pay to Distributor or others as a service fee to reimburse such
parties for personal services provided to shareholders of the Aggressive Growth
Portfolio and/or the maintenance of shareholder accounts. The total amount of
12b-1 fees paid for such personal services and promotional services shall not
exceed 0.25% per year of the average daily net assets of the Aggressive
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Growth Portfolio. The Distributor can keep all of said 12b-1 fees it receives to
the extent it is not required to pay others for such services. Such Rule 12b-1
fees are made pursuant to the distribution plan(s) and distribution agreements
entered into between such service providers and Distributor or the Fund
directly. Payments in excess of reimbursable expenses under the plan in any year
must be refunded. The Rule 12b-1 expenses and fees in excess of 0.25% per year
of the Aggresive Growth Portfolio's average net assets that otherwise qualify
for payment may not be carried forward into successive annual periods. The Plan
also covers payments by certain parties to the extent such payments are deemed
to be for the financing of any activity primarily intended to result in the sale
of shares issued by the Aggressive Growth Portfolio within the context of Rule
12b-1. The payments under the Plan are included in the maximum operating
expenses which may be borne by the Aggressive Growth Portfolio.
The Mid Cap Growth Portfolio Distribution Plan
The Mid Cap Growth Portfolio has adopted a Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"), whereby such Portfolio compensates Distributor
or others in the amount of 0.25% per annum of the average daily net assets of
the Mid Cap Growth Portfolio for expenses incurred and services rendered for the
promotion and distribution of the shares of the Mid Cap Growth Portfolio of the
Fund, including, but not limited to, the printing of prospectuses, statements of
additional information and reports used for sales purposes, expenses (including
personnel of Distributor) of preparation of sales literature and related
expenses, advertisements and other distribution-related expenses, including a
prorated portion of Distribu- tor's overhead expenses attributable to the
distribution of the Mid Cap Growth Portfolio Fund shares. Such payments are made
monthly. The 12b-1 fee includes, in addition to promotional activities, amounts
such Portfolio pays to Distributor or others as a service fee to compensate such
parties for personal services provided to shareholders of such Portfolio and/or
the maintenance of shareholder accounts. The total amount of 12b-1 fees paid for
such personal services and promotional services shall be 0.25% per year of the
average daily net assets of the Mid Cap Growth Portfolio. The Distributor can
keep all of said 12b-1 fees it receives to the extent it is not required to pay
others for such services. Such Rule 12b-1 fees are made pursuant to the
distribution plan and distribution agreements entered into between such service
providers and Distributor or the Mid Cap Growth Portfolio directly. The 12b-1
Plan for the Mid Cap Growth Portfolio also covers payments by the Distributor
and Investment Advisor to the extent such payments are deemed to be for the
financing of any activity primarily intended to result in the sale of shares
issued by such Portfolio within the context of Rule 12b-1. The payments under
the 12b-1 Plan for the Mid Cap Growth Portfolio are included in the maximum
operating expenses which may be borne by the Mid Cap Growth Portfolio. Payments
under the 12b-1 Plan for the Mid Cap Growth Portfolio may exceed actual expenses
incurred by the Distributor, Investment Advisor or others.
Brokerage Commissions
The Investment Adviser may select selected broker-dealers to execute
portfolio transactions for the Portfolios of the Fund, provided that the
commissions, fees, or other remuneration received by such party in exchange for
executing such transactions are reasonable and fair compared to those paid to
other brokers in connection with comparable transactions. In addition, when
selecting broker-dealers for Fund portfolio transactions, the Investment Adviser
may consider the record of such broker-dealers with respect to the sale of
shares of the Fund. (See the Statement of Additional Information.)
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REPORTS AND INFORMATION
The Fund will distribute to the shareholders of each Portfolio semi-annual
reports containing unaudited financial statements and information pertaining to
matters of each Portfolio of the Fund. An annual report containing financial
statements for each Portfolio, together with the report of the independent
auditors for each Portfolio of the Fund is distributed to shareholders each
year. Shareholder inquiries should be addressed to The Navellier Performance
Funds, at One East Liberty, Third Floor, Reno, Nevada 89501; Tel: (800) 887-
8671, or to the Transfer Agent, Rushmore Trust & Savings, FSB, 4922 Fairmont
Avenue, Bethesda, Maryland, 20814, Telephone: (301) 657-1510 or (800) 622-1386.
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DESCRIPTION OF SHARES
The Fund is a Delaware business trust organized on October 17, 1995. The
Declaration of Trust permits the Trustees to issue an unlimited number of shares
of beneficial interest. The Board of Trustees has the power to designate one or
more classes ("Portfolios") of shares of beneficial interest and to classify or
reclassify any unissued shares with respect to such classes. Presently the Fund
is offering shares of three Portfolios - the Navellier Aggressive Growth
Portfolio, the Navellier Mid Cap Growth Portfolio and the Navellier Aggressive
Small Cap Portfolio, each of which is described above.
The shares of each Portfolio, when issued, are fully paid and
non-assessable, are redeemable at the option of the holder, are fully
transferable, and have no conversion or preemptive rights. Shares are also
redeemable at the option of each Portfolio of the Fund when a shareholder's
investment, as a result of redemptions in the Fund, falls below the minimum
investment required by the Fund (see "Redemption of Shares"). Each share of a
Portfolio is equal as to earnings, expenses, and assets of the Portfolio and, in
the event of liquidation of the Portfolio, is entitled to an equal portion of
all of the Portfolio's net assets. Shareholders of each Portfolio of the Fund
are entitled to one vote for each full share held and fractional votes for
fractional shares held, and will vote in the aggregate and not by Portfolio
except as otherwise required by law or when the Board of Trustees determines
that a matter to be voted upon affects only the interest of the shareholders of
a particular Portfolio. Voting rights are not cumulative, so that the holders of
more than 50% of the shares voting in any election of Trustees can, if they so
choose, elect all of the Trustees. While the Fund is not required, and does not
intend, to hold annual meetings of shareholders, such meetings may be called by
the Trustees at their discretion, or upon demand by the holders of 10% or more
of the outstanding shares of any Portfolio for the purpose of electing or
removing Trustees.
All shares (including reinvested dividends and capital gain distributions)
are issued or redeemed in full or fractional shares rounded to the second
decimal place. No share certificates will be issued. Instead, an account will be
established for each shareholder and all shares purchased will be held in
book-entry form by the Fund.
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DIVIDENDS AND DISTRIBUTIONS
All dividends and distributions with respect to the shares of any
Portfolio will be payable in shares at net asset value or, at the option of the
shareholder, in cash. Any shareholder who purchases shares of the Portfolio
prior to the close of business on the record date for a dividend or distribution
will be entitled to receive such dividend or distribution. Dividends and
distributions (whether received in shares or in cash) are treated either as
return of capital, ordinary income or long-term capital gain for federal income
tax purposes. Between the record date and the cash payment date, each Portfolio
retains the use and benefits of such monies as would be paid as cash dividends.
Each Portfolio will distribute all of its net investment income and net
realized capital gains, if any, annually in December.
If a cash payment is requested with respect to the Portfolio, a check will
be mailed to the shareholder. Unless otherwise instructed, the Transfer Agent
will mail checks or confirmations to the shareholder's address of record.
The federal income tax laws impose a four percent (4%) nondeductible
excise tax on each regulated investment company with respect to the amount, if
any, by which such company does not meet distribution requirements specified in
the federal income tax laws. Each Portfolio intends to comply with the
distribution requirements and thus does not expect to incur the four percent
(4%) nondeductible excise tax, although the imposition of such excise tax may
possibly occur.
Shareholders will have their dividends and/or capital gain distributions
reinvested in additional shares of the applicable Portfolio(s) unless they elect
in writing to receive such distributions in cash. Shareholders whose shares are
held in the name of a broker or nominee should contact such broker or nominee to
determine whether they want dividends reinvested or distributed.
The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be
withheld) on dividends and distributions. (See "Taxes" following.)
In the case of foreign participants whose dividends are subject to U.S.
income tax withholding and in the case of any participants subject to 31%
federal backup withholding, the Transfer Agent will reinvest dividends after
deduction of the amount required to be withheld.
Experience may indicate that changes in the automatic reinvestment of
dividends are desirable. Accordingly, the Fund reserves the right to amend or
terminate this provision as applied to any dividend or distribution paid
subsequent to written notice of the change sent to shareholders at least 90 days
before the record date for such dividend or distribution.
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<PAGE>
TAXES
Federal Taxes
Each Portfolio of the Fund is a separate taxpayer and intends to meet the
requirements of Subchapter M of the Internal Revenue Code of 1986 (relating to
regulated investment companies) with respect to diversification of assets,
sources of income, and distributions of taxable income and will elect to be
taxed as a regulated investment company for federal income tax purposes.
However, the Code contains a number of complex tests relating to
qualification which a Portfolio might not meet in any particular year. For
example, if a Portfolio derives 30% or more of its gross income from the sale of
securities held for less than three months, it may fail to qualify. If a
Portfolio did not so qualify, it would be treated for tax purposes as an
ordinary corporation and receive no tax deduction for payments made to
shareholders.
Because each Portfolio of the Fund intends to distribute all of its net
investment income and net realized capital gains at least annually, it is not
expected that any Portfolio of the Fund will be required to pay federal income
tax for any year throughout which it was a regulated investment company nor, for
this reason, is it expected that any Portfolio will be required to pay the 4%
federal excise tax imposed on regulated investment companies that fail to
satisfy certain minimum distribution requirements. However, the possibility of
federal or state income tax and/or imposition of the federal excise tax does
exist.
If a Portfolio pays a dividend in January of any year which was declared
in the last three months of the previous year and was payable to shareholders of
record on a specified date in such a month, the dividend will be treated as
having been paid and received in the previous year.
Dividends (other than capital gains dividends) will be taxable to
shareholders as ordinary income, whether received in shares or cash and will, in
the case of corporate shareholders, generally qualify for the dividends-received
deduction to the extent paid out of qualifying dividends received by the
Portfolio.
Capital gains dividends will ordinarily be taxable to shareholders as
long-term capital gain, regardless of how long they have held their shares. A
dividend is a capital gains dividend if it is so designated by the Portfolio and
is paid out of the Portfolio 's net capital gain (that is, the excess of the
Portfolio's net long-term capital gain over its net short-term capital loss).
Any dividends paid shortly after a purchase by an investor may have the
effect of reducing the per share net asset value of the investor's shares by the
per share amount of dividends. Furthermore, such dividends, although in effect a
return of capital, are subject to federal income taxes. Therefore, prior to
purchasing shares of the Fund, the investor should carefully consider the impact
of dividends, including capital gains distributions, which are expected to be or
have been announced.
If the Fund redeems some or all of the shares held by any shareholder, the
transaction will generally be treated as a sale or exchange unless the
redemption fails to substantially reduce the shareholder's percentage ownership
interest in the Fund (determined for this purpose using
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certain specific rules of constructive ownership). If a redemption of shares is
not treated as a sale or exchange, the amount paid for the shares will be
treated as a dividend.
If a redemption is treated as a sale or exchange, the shareholder will
generally recognize gain or loss measured by the difference between the
redemption price and the basis of the shares. This gain or loss will generally
be treated as capital gain (long-term or short-term, depending upon the holding
period for the redeemed shares).
Shareholders will be subject to information reporting with respect to
dividends and redemptions, and may be subject to backup withholding with respect
to dividends at the rate of 31% unless (a) they are corporations or come within
other exempt categories or (b) they provide correct taxpayer identification
numbers, certify as to no loss of exemption from backup withholding, and
otherwise comply with applicable requirements of the law relating to backup
withholding. Any amounts paid as backup withholding will be creditable against
the federal income tax liabilities of the affected shareholders.
The Fund may pay taxes to foreign countries with respect to dividends or
interest it receives from foreign issuers or from domestic issuers that derive a
substantial amount of their revenues in foreign countries, or such taxes may be
withheld at the source by such issuers. The Fund will generally be entitled to
deduct such taxes in computing its taxable income.
State and Local Taxes
Each Portfolio of the Fund may be subject to state or local taxation in
jurisdictions in which it may be deemed to be doing business. Taxable income of
each Portfolio of the Fund and its shareholders for state and local purposes may
be different from taxable income calculated for federal income tax purposes.
Each prospective investor is advised to consult his or her tax adviser for
advice as to the federal, state, and local taxation which may be applicable to
such investor in connection with an investment in the Fund.
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<PAGE>
PURCHASE AND PRICING OF SHARES
Purchase of Shares
The Fund's various portfolio shares are sold to the general public on a
continuous basis through the Distributor, the Transfer Agent and the
Distributor's network of broker-dealers.
Purchase by Mail
Investments in the Fund can be made directly to the Distributor or through
the transfer agent - Rushmore Trust & Savings, FSB - or through selected
securities dealers who have the responsibility to transmit orders promptly and
who may charge a processing fee.
To Invest By Mail: Fill out an application designating which Portfolio you are
investing in and make a check payable to "The Navellier Performance Funds." Mail
the check along with the application to:
The Navellier Performance Funds
c/o Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
Purchases by check will be credited to an account as of the date the
Portfolio's net asset value is next determined after receipt of payment and a
properly completed account application. Foreign checks will not be accepted. Be
certain to specify which Portfolio or Portfolios you are investing in.
Purchase orders which do not specify the Portfolio in which an investment
is to be made will be returned. (See "Purchase and Pricing of Shares - General
Purchasing Information".) Net asset value per share is calculated once daily as
of 4 p.m. E.S.T. on each business day. (See "Purchase and Pricing of Shares -
Valuation of Shares".)
The Navellier Performance Funds' Portfolios
The shares of each Portfolio are sold at their net asset value per share
next determined after an order in proper form (i.e., a completely filled out
application form) is received by the Transfer Agent.
If an order for shares of a Portfolio is received by the Transfer Agent by
4:00 p.m. on any business day, such shares will be purchased at the net asset
value determined as of 4:00 p.m. New York Time on that day. Otherwise, such
shares will be purchased at the net asset value determined as of 4:00 p.m New
York Time on the next business day. However, orders received by the Transfer
Agent from the Distributor or from dealers or brokers after the net asset value
is determined that day will receive such net asset value price if the orders
were received by the Distributor or broker or dealer from its customer prior to
such determination and were transmitted to and received by the Transfer Agent
prior to its close of business on that day (normally 4:00 p.m. New York Time).
Shares are entitled to receive any declared dividends on the day following the
date of purchase.
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<PAGE>
Purchases Through Selected Dealers
Shares purchased through Selected Dealers will be effected at the net
asset value next determined after the Selected Dealer receives the purchase
order, provided that the Selected Dealer transmits the order to the Transfer
Agent and the Transfer Agent accepts the order by 4:00 p.m. New York Time on the
day of determination. See "Valuation of Shares". If an investor's order is not
transmitted and accepted by 4:00 p.m. New York Time, the investor must settle
his or her entitlement to that day's net asset value with the Selected Dealer.
Investors may also purchase shares of the Fund by telephone through a Selected
Dealer by having the Selected Dealer telephone the Transfer Agent with the
purchase order. Investors may be charged a transaction fee if they effect
transactions in Fund shares through a broker or agent.
Certain selected Dealers may effect transactions in shares of the
Portfolios through the National Securities Clearing Corporation's Fund/SERV
system.
Purchases of shares through Selected Dealers not utilizing the National
Securities Clearing Corporation's Fund/SERV system will be effected when
received in proper form by the Transfer Agent, as described above, in the same
manner and subject to the same terms and conditions as are applicable to shares
purchased directly through the Transfer Agent. There is no sales load charged to
the investor on purchases of the Fund's Portfolios, whether purchased through a
Selected Dealer or directly through the Transfer Agent; there is however an
ongoing Rule 12b-1 fee (except as to the Aggressive Small Cap Portfolio).
Shareholders who wish to transfer Fund shares from one broker-dealer to
another should contact the Fund at (800) 621-7874.
To Invest By Bank Wire: Request a wire transfer to:
Rushmore Federal Savings Bank
Bethesda, MD
Routing Number 0550 71084
For Account of The Navellier Performance Funds
Account Number 029 385770
AFTER INSTRUCTING YOUR BANK TO TRANSFER MONEY BY WIRE, YOU MUST TELEPHONE
THE FUND AT (800) 622-1386 OR (301) 657-1510 BETWEEN 8:30 A.M. AND 4:00 P.M. NEW
YORK TIME AND TELL US THE AMOUNT YOU TRANSFERRED AND THE NAME OF THE BANK
SENDING THE TRANSFER. YOUR BANK MAY CHARGE A FEE FOR SUCH SERVICES. IF THE
PURCHASE IS CANCELLED BECAUSE YOUR WIRE TRANSFER IS NOT RECEIVED, YOU MAY BE
LIABLE FOR ANY LOSS THE FUND MAY INCUR.
Such wire should identify the name of the Portfolio, the account number,
the order number (if available), and your name.
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To Invest By Automatic Monthly Investment Plan:
Shareholders may make automatic monthly purchases of a Portfolio's shares
by executing an automatic monthly withdrawal application authorizing his/her/its
bank to transfer money from his/her/its checking account to the Transfer Agent
for the automatic monthly purchase of shares of the Portfolio for the
shareholder. There is no charge by the Portfolio for this automatic monthly
investment plan and the shareholder can discontinue the service at any time.
General Purchasing Information
Each of the existing Portfolios of the Fund has established a minimum
initial investment of $2,000 ($500 in the case of IRA and other retirement plans
or qualifying group plans) and $100 for subsequent investments in any Portfolio.
Orders for shares may be made by mail by completing the Account Application
included with this Prospectus and mailing the completed application and the
payment for shares to the Transfer Agent. Documentation in addition to the
information required by the Account Application may be required when deemed
appropriate by the Fund and/or the Transfer Agent and the Account Application
will not be deemed complete until such additional information has been received.
The Fund reserves the right to not accept an applicant's proposed investment in
any of the Fund's shares.
Valuation of Shares
The net asset value of the shares of each Portfolio of the Fund are
determined once daily as of 4 p.m. New York Time, on days when the New York
Stock Exchange is open for trading. In the event that the New York Stock
Exchange or the national securities exchanges on which Portfolio stocks are
traded adopt different trading hours on either a permanent or temporary basis,
the Trustees of the Fund will reconsider the time at which net asset value is to
be computed. The net asset value is determined by adding the values of all
securities and other assets of the Portfolio, subtracting liabilities, and
dividing by the number of outstanding shares of the Portfolio. The price at
which a purchase is effected is based on the next calculation of net asset value
after the order is received.
In determining the value of the assets of each Portfolio, the securities
for which market quotations are readily available are valued at market value.
Debt securities (other than short-term obligations) are normally valued on the
basis of valuations provided by a pricing service when such prices are believed
to reflect the fair value of such securities. All other securities and assets
are valued at their fair value as determined in good faith by the Trustees,
although the actual calculations may be made by persons acting pursuant to the
direction of the Trustees.
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REDEMPTION OF SHARES
General
A shareholder may redeem shares of each Portfolio at the net asset value
next determined after receipt of a notice of redemption in accordance with the
procedures set forth below and compliance with the further redemption
information and/or additional documentation requirements described in this
Section. As used in this Prospectus, the term "business day " refers to those
days on which stock exchanges trading stocks held by the Fund are open for
business. The Fund may change the following procedures at its discretion.
The shareholder will not be credited with dividends on those shares being
redeemed for the day on which the shares are redeemed by the Portfolio (but will
be credited with dividends on the day such shares were purchased). A check for
the proceeds of redemption will normally be mailed within seven days of receipt
of any redemption request received by the Transfer Agent. If shares to be
redeemed were purchased by check, the Fund may delay transmittal of redemption
proceeds only until such times as it is reasonably assured that good payment has
been collected for the purchase of such shares, which may be up to 15 days from
purchase date. Such delays can be avoided by wiring Federal Funds in effecting
share purchases.
If a shareholder wishes to redeem his or her entire shareholdings in a
Portfolio, he or she will receive, in addition to the net asset value of shares,
all declared but unpaid dividends thereon. The net asset value of the shares may
be more or less than a shareholder's cost depending on the market value of the
Portfolio securities at the time of the redemption.
Redemption by Mail
A shareholder may redeem shares by mail on each day that the New York
Stock Exchange is open by submitting a written redemption request to:
The Navellier Performance Funds
c/o Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
The request for redemption should include the name of the Portfolio, the
account name and number, and should be signed by all registered owners of the
shares in the exact names in which they are registered. Each request should
specify the number or dollar amount of shares to be redeemed or that all shares
in the account are to be redeemed.
Redemptions by Telephone
If you have indicated on your Account Application that you wish to
establish telephone redemption privileges, you may redeem shares by calling the
Transfer Agent at 1-800-622-1286 by 4:00 p.m. New York Time on any day the New
York Stock Exchange is open for business.
If any account has more than one owner, the Transfer Agent may rely on the
instructions of any one owner. Each Portfolio of the Fund employs reasonable
procedures in an effort to confirm the authenticity of telephone instructions,
which may include giving some form of
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<PAGE>
personal identification prior to acting on the telephone instructions. If these
procedures are not followed, the Fund and the Transfer Agent may be responsible
for any losses because of unauthorized or fraudulent instructions. By requesting
telephone redemption privileges, you authorize the Transfer Agent to act upon
any telephone instructions it believes to be genuine, (1) to redeem shares from
your account and (2) to mail or wire transfer the redemption proceeds. You
cannot redeem shares by telephone until 30 days after you have notified the
Transfer Agent of any change of address.
Telephone redemption is not available for shares held in IRAs. Each
Portfolio may change, modify, or terminate its telephone redemption services at
any time upon 30 days' notice.
Further Redemption Information
Additional documentation (i.e., signature guarantee for redemptions in
excess of $1,000 or verification identification when redemption is by telephone)
regarding a redemption by any means may be required when deemed appropriate by
the Fund and/or the Transfer Agent, and the request for such redemption will not
be considered to have been received in proper form until such additional
documentation has been received. An investor should contact the Fund or the
Transfer Agent to inquire what, if any, additional documentation may be
required.
The Fund reserves the right to modify any of the methods of redemption
upon 30 days' written notice to shareholders.
Due to the high cost of maintaining accounts of less than $2,000 ($500 for
IRA or other qualifying plan accounts), the Fund reserves the right to redeem
shares involuntarily in any such account at their then current net asset value.
Shareholders will first be notified and allowed 30 days to make additional share
purchases to bring their accounts to more than $2,000 ($500 for IRA or other
qualifying plan accounts). An account will not be redeemed involuntarily if the
balance falls below $2,000 ($500 for IRA or other qualifying plan accounts) by
virtue of fluctuations in net asset value rather than through investor
redemptions.
Under certain circumstances (i.e., when the applicable exchange is closed
or trading has been restricted, etc.), the right of redemption may be suspended
or the redemption may be satisfied by distribution of portfolio securities
rather than cash if a proper election pursuant to Rule 18F-1 of the Investment
Company Act has been made by the Fund. Information as to those matters is set
forth in the Statement of Additional Information.
Investors may redeem their shares and instruct the Fund or Transfer Agent,
in writing or by telephone, to either deposit the redemption proceeds in the
money market mutual fund Fund for Government Investors, Inc. - a regulated
investment company custodied by Rushmore Trust & Savings, FSB, pending further
instructions as to the investor's desire to subsequently reinvest in the Fund or
the investor may direct some other disposition of said redemption proceeds.
Option to Make Systematic Withdrawals
The owner of $25,000 or more worth of the shares of any Portfolio may
provide for the payment from his/her account of any requested dollar amount (but
not less than $1,000) to
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him/her or his/her designated payee monthly, quarterly, or annually. Shares will
be redeemed on the last business day of each month. Unless otherwise instructed,
the Transfer Agent will mail checks to the shareholder at his/her address of
record. A sufficient number of shares will be redeemed to make the designated
payment.
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CERTAIN SERVICES PROVIDED TO SHAREHOLDERS
Statements of Account
Statements of Account for each Portfolio will be sent to each shareholder
at least quarterly.
Dividend Election
A shareholder may elect to receive dividends in shares or in cash. If no
election is made, dividends will automatically be credited to a shareholder's
account in additional shares of the Portfolio to which such dividend relates.
Exchange Privileges
Shares of each Portfolio in this Fund may be exchanged for one another at
net asset value. Exchanges among portfolios of the Fund may be made only in
those states where such exchanges may legally be made. The total value of shares
being exchanged must at least equal the minimum investment requirement of the
Portfolio into which they are being exchanged. Exchanges are made based on the
net asset value next determined of the shares involved in the exchange. Only one
exchange in any 30-day period is permitted. The Fund reserves the right to
restrict the frequency or otherwise modify, condition, terminate, or impose
charges upon the exchange, upon 60 days' prior written notice to shareholders.
Exchanges between Portfolios will be subject to a $5 exchange fee after five (5)
exchanges per year. There is a limit of ten (10) exchanges per year. Exchanges
will be effected by the redemption of shares of the Portfolio held and the
purchase of shares of the other Portfolio. For federal income tax purposes, any
such exchange constitutes a sale upon which a gain or loss, if any, may be
realized, depending upon whether the value of the shares being exchanged is more
or less than the shareholder's adjusted cost basis. For this purpose, however, a
shareholder's cost basis may not include the sales charge, if any, if the
exchange is effectuated within 90 days of the acquisition of the shares.
Shareholders wishing to make an exchange should contact the Transfer Agent.
Exchange requests in the form required by the Transfer Agent and received by the
Transfer Agent prior to 4:00 p.m. New York Time will be effected at the next
determined net asset value.
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<PAGE>
ADDITIONAL INFORMATION
The Statement of Additional Information, available upon request, without
charge from the Fund, provides a further discussion of certain sections of the
Prospectus and other information which may be of interest to certain investors.
This Prospectus and the Statement of Additional Information do not contain all
the information included in the Registration Statement filed with the Securities
and Exchange Commission with respect to the securities being sold, certain
portions of which have been omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. The Registration Statement, including the
exhibits filed therewith, may be examined at the office of the Securities and
Exchange Commission in Washington, D.C.
Statements contained in this Prospectus as to the contents of any contract
or other document referred to are not necessarily complete, and, in each
instance, reference is made to the Statement of Additional Information and the
copy of such contract or other document filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, each such statement being
qualified in all respects by such reference.
37
<PAGE>
ASSENT TO TRUST INSTRUMENT
Every Shareholder, by virtue of having purchased a Share or Interest shall
become a Shareholder and shall be held to have expressly assented and agreed to
be bound by the terms hereof.
38
<PAGE>
Investment Adviser
Navellier Management, Inc.
One East Liberty, Third Floor
Reno, NV 89501
(800) 887-8671
Distributor THE NAVELLIER PERFORMANCE FUNDS
Navellier Securities Corp.
One East Liberty, Third Floor
Reno, NV 89501
(800) 887-8671
Independent Auditors
Deloitte & Touche LLP
1900 M Street
Washington, D.C. 20036
(202) 955-4000
Transfer Agent and Custodian
Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
(800) 622-1386
Counsel
Samuel Kornhauser
Law Offices of Samuel Kornhauser
155 Jackson Street, Suite 1807
San Francisco, CA 94111
(415) 981-6281
Sales Information
Navellier Securities Corp.
One East Liberty, Third Floor
Reno, NV 89501
(800) 887-8671
Shareholder Inquiries
Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
(800) 622-1386 April 30, 1997
39
<PAGE>
<TABLE>
<CAPTION>
NAVELLIER New Account Application For a retirement account application call 800-887-8671
=================================================================================================
<S> <C>
PERFORMANCE 800-887-8671
FUNDS
Mail Application & Checks to:
The Navellier Performance Funds
c/o Rushmore Trust & Savings
4922 Fairmont Ave.
Bethesda, MD 20814
800-622-1386
- ------------------------ =================================================================================================
Registration 1. Individual___________________________________________________________________________________
|_| Individual Name Initial Last Name
Use lines 1 & 3
2. Joint Tenant_________________________________________________________________________________
|_| Joint Account with First
Rights of Survivor Name Initial Last Name
Lines 1, 2 & 3 Rights of
survivor will be applied unless otherwise indicated
|_| Joint Account with
Tenancy in Common 3. Social Security No.___________________________________ Date of Birth_________________________
Lines 1, 2 & 3 S.S.# to be used for tax purposes
|_| Gift to Minor 4. Uniform Gift to Minor________________________________________________________________________
Lines 4 & 5
OR Custodian's Name / State
|_| Corporations,
Partnerships, 5.______________________________________________________________________________________________
Trusts & Others Minor's Name Minor's Social Security No. Date of Birth
Lines 6 & 7
6.______________________________________________________________________________________________
Name of Corporation or Entity Tax ID Number
7. Registration Type: ___ Corporation ___ Partnership ___ Unincorporated Association
___ Trust
- Date of Trust _______________
Please include a copy of the first and last pages of your trust agreement.
- ------------------------ =================================================================================================
Mailing Address Street or P.O. Box______________________________________________________________________________
Complete if different from City____________________________________________ State______________________________ Zip________
above address label
Telephone: Home__________________________________ Work________________________________________
Your Residency: |_| U.S. |_| Resident Alien |_| Non-Resident Alien
Specify Country_________________________________________________________________________________
- ------------------------ =================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------ ======================================================================================
<S> <C>
Investment Portfolio Amount
|_| Navellier Aggressive Growth Portfolio
Make check payable to: $_____________
The Navellier Performance |_| Navellier Mid Cap Growth Portfolio
Funds $_____________
|_| Navellier Aggressive Small Cap Portfolio
$-------------
|_| By check $____________________________ |_| By wire $_________________________
Account No.__________________________________________________________________________
Minimum initial investment is $2,000 ($500 for IRAs, call 800-887-8671 for an IRA
application).Make checks payable to The Navellier Performance Funds. Call 800-622-1386
for wiring instructions or see the prospectus.
- ------------------------ ======================================================================================
Dividends |_| Reinvest dividends and capital gains. |_|
and Capital Gains Reinvest dividends, pay capital gains.
Distributions |_| Pay dividends and capital gains in cash. |_| Pay dividends, reinvest capital gains.
All dividends and capital gains distributions will be reinvested if no box is checked.
All distributions will be reinvested if a withdrawal plan is elected.
- ------------------------ ======================================================================================
Investor Financial Annual Income: $____________________________ Net Worth: $____________________________
& Investment Info.
Required by NASD Investment Objective: |_| Growth
- ------------------------ ======================================================================================
Shareholder Telephone/Expedited Redemption - please check all that apply. These privileges are
Privileges subject to the terms set forth in the Prospectus.
|_| Yes, I would like to be able to redeem shares by telephone.
|_| Deposit redemption proceeds in the money market mutual fund, Fund for Government
Investors, Inc., custodied by Rushmore Trust & Savings, FSB.
|_| Wire redemption proceeds to:_____________________________________________________
Name of Bank
_____________________________________ _____________________________________
Type of Account Account Number
|_| Mail a check to my address indicated above.
- ------------------------ ======================================================================================
Systematic |_| Yes A Systematic Withdrawal Plan is available for accounts with an underlying share value of
$25,000 or more. If this plan is elected, all distributions will be automatically reinvested.
Minimum withdrawal is $1,000.
Withdrawal |_| No
Plan
Amount of payment $
Optional Payments made: |_| Monthly |_| Quarterly |_| Annually
Payments to commence the 2nd business day of:___________________________
Year
If checks are to be sent to another address or paid to someone other than the registered
owner shown on application, please provide the following:
Name:________________________________________________________________________________
Address:_____________________________________________________________________________
- ------------------------ ======================================================================================
Broker Firm_________________________________________________________________________________
Information Mailing Address______________________________________________ City___________________
State_________________________________________ Zip_____________ Phone________________
If shares are being purchased Dealer Code__________________________ Office Code____________________ Rep. Number____
through a Service Agent, Agent Name_________________________________ Agent Signature:_________________________
Agent should complete this
section.
- ------------------------ ======================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------- =======================================================================
<S> <C>
Signatures I/We authorize Rushmore Trust & Savings, FSB, as custodian
& Certification and transfer agent for The Navellier Performance Funds, to honor
any requests made in accordance with the terms of this
Confirmation of application, and I/we further affirm that, subject to any
Account Establishment: limitations imposed by applicable law, neither Rushmore Trust &
Soon after all essential Savings, FSB, nor The Navellier Performance Funds shall be held
items are received by the liable by me/us for any loss, liability, cost, or expense for
custodian, a confirmation acting in accordance with this application, or any section
statement(s) showing thereof. I/We understand that all of the shareholder options
account number(s), amount described in this application are subject to the terms set forth
received, shares in the Prospectus.
purchased, and paid per
share will be sent to the I/WE CERTIFY THAT WE HAVE FULL RIGHT, POWER,
registered shareholder. AUTHORITY, AND LEGAL CAPACITY TO PURCHASE AND REDEEM SHARES
AND AFFIRM THAT I/WE HAVE RECEIVED AND READ THE PROSPECTUS,
Subsequent Payments: AGREE TO ITS TERMS, AND HAVE NOT RELIED ON OR MADE MY/OUR
A new application DECISION TO INVEST IN THE NAVELLIER PERFORMANCE FUNDS ON ANY
need not be WRITTEN OR ORAL INFORMATION OTHER THAN THE WRITTEN
submitted with INFORMATION CONTAINED IN THE PROSPECTUS, REGISTRATION
additional payments STATEMENT AND STATEMENT OF ADDITIONAL INFORMATION. Under
to an existing penalties of perjury, I/we certify (i) that the number shown
account if a current on this form is my/our correct Social Security Number or
application is on Taxpayer Identification Number and (ii) that (1) I/we are
file with the not subject to backup withholding either because I/we have
custodian. not been notified by the Internal Revenue Service that I/we
Subsequent purchases are subject to backup withholding as a result of a failure
should be identified to report all interest or dividends, or (2) the IRS has
by account number notified me/us that I am/we are no longer subject to backup
and account withholding. If you have been notified by the IRS that you
registration name. are currently subject to backup withholding strike out
phrase (2) above.
X___________________________________ X___________________________________
Signature as it appears on Date Joint Signature Date
Line No. 1 (if applicable)
</TABLE>
<PAGE>
PART B
THE NAVELLIER PERFORMANCE FUNDS
STATEMENT OF ADDITIONAL INFORMATION
DATED APRIL 30, 1997
This Statement of Additional Information, which is not a prospectus,
should be read in conjunction with the Prospectus of The Navellier Performance
Funds (the "Fund"), dated April 30, 1997, a copy of which Prospectus may be
obtained, without charge, by contacting the Fund, at its mailing address c/o
Navellier Securities, Corp., One East Liberty, Third Floor, Reno, Nevada 89501;
Tel: 1-800-887-8671.
TABLE OF CONTENTS
GENERAL INFORMATION AND HISTORY............................................1
INVESTMENT OBJECTIVES AND POLICIES.........................................1
TRUSTEES AND OFFICERS OF THE FUND..........................................5
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES....................... 8
THE INVESTMENT ADVISER, DISTRIBUTOR,
CUSTODIAN AND TRANSFER AGENT............................................ 9
BROKERAGE ALLOCATION AND OTHER PRACTICES................................. 14
CAPITAL STOCK AND OTHER SECURITIES....................................... 16
PURCHASE, REDEMPTION, AND PRICING OF SHARES.............................. 17
TAXES.................................................................... 18
UNDERWRITERS............................................................. 21
CALCULATION OF PERFORMANCE DATA.......................................... 22
FINANCIAL STATEMENTS..................................................... 23
APPENDIX................................................................. 24
<PAGE>
GENERAL INFORMATION AND HISTORY
The Fund is a business trust company organized under the laws of the State
of Delaware on October 17, 1995.
INVESTMENT OBJECTIVES AND POLICIES
Investment Policies. The investment objectives and policies of each
Portfolio are described in the "Investment Objectives and Policies" section of
the Prospectus. The following general policies supplement the information
contained in that section of the Prospectus.
Certificates of Deposit. Certificates of deposit are generally short-term,
interest-bearing, negotiable certificates issued by banks or savings and loan
associations against funds deposited in the issuing institution.
Time Deposits. Time deposits are deposits in a bank or other financial
institution for a specified period of time at a fixed interest rate for which a
negotiable certificate is not received.
Banker's Acceptances. A banker's acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international
commercial transaction (to finance the import, export, transfer, or storage of
goods). The borrower, as well as the bank, is liable for payment, and the bank
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
secondary markets prior to maturity.
Commercial Paper. Commercial paper refers to short-term, unsecured
promissory notes issued by corporations to finance short-term credit needs.
Commercial paper is usually sold on a discount basis and has a maturity at the
time of issuance not exceeding nine months.
Corporate Debt Securities. Corporate debt securities with a remaining
maturity of less than one year tend to become liquid and can sometimes be traded
as money market securities.
United States Government Obligations. Securities issued or guaranteed as
to principal and interest by the United States government include a variety of
Treasury securities, which differ only in their interest rates, maturities, and
times of issuance. Treasury bills have a maturity of one year or less. Treasury
notes have maturities of one to seven years, and Treasury bonds generally have a
maturity of greater than five years.
1
<PAGE>
Agencies of the United States government which issue or guarantee
obligations include, among others, export-import banks of the United States,
Farmers' Home Administration, Federal Housing Administration, Government
National Mortgage Association, Maritime Administration, Small Business
Administration, the Defense Security Assistance Agency of the Department of
Defense, and the Tennessee Valley Authority. Obligations of instrumentalities of
the United States government include securities issued or guaranteed by, among
others, the Federal National Mortgage Associates, Federal Intermediate Credit
Banks, Banks for Cooperatives, and the United States Postal Service. Some of the
securities are supported by the full faith and credit of the United States
government; others are supported by the right of the issuer to borrow from the
Treasury, while still others are supported only by the credit of the
instrumentality.
Investment Restrictions. The Fund's fundamental policies as they affect a
Portfolio cannot be changed without the approval of a vote of a majority of the
outstanding securities of such Portfolio. A proposed change in fundamental
policy or investment objective will be deemed to have been effectively acted
upon with respect to any Portfolio if a majority of the outstanding voting
securities of that Portfolio votes for the matter. Such a majority is defined as
the lesser of (a) 67% or more of the voting shares of the Fund present at a
meeting of shareholders of the Portfolio, if the holders of more than 50% of the
outstanding shares of the Portfolio are present or represented by proxy or (b)
more than 50% of the outstanding shares of the Portfolio. For purposes of the
following restrictions (except the percentage restrictions on borrowing and
illiquid securities -- which percentage must be complied with) and those
contained in the Prospectus: (i) all percentage limitations apply immediately
after a purchase or initial investment; and (ii) any subsequent change in any
applicable percentage resulting from market fluctuations or other changes in the
amount of total assets does not require elimination of any security from the
Portfolio.
The following investment restrictions are fundamental policies of the Fund
with respect to all Portfolios (unless otherwise specified below) and may not be
changed except as described above. The Fund may not:
1. Purchase any securities or other property on margin; provided, however,
that the Fund may obtain short-term credit as may be necessary for the clearance
of purchases and sales of securities.
2. Make cash loans, except that the Fund may purchase bonds, notes,
debentures, or similar obligations which are customarily purchased by
institutional investors whether publicly distributed or not.
3. Make securities loans, except that the Fund may make loans of the
portfolio securities of any Portfolio, provided that the market value of the
securities subject to any such loans does not exceed 33-1/3% of the value of the
total assets (taken at market value) of such Portfolio.
2
<PAGE>
4. Make investments in real estate or commodities or commodity contracts,
including futures contracts, although the Fund may purchase securities of
issuers which deal in real estate or commodities although this is not a primary
objective of the Portfolio.
5. Invest in oil, gas, or other mineral exploration or development
programs, although the Fund may purchase securities of issuers which engage in
whole or in part in such activities.
6. Purchase securities of companies for the purpose of exercising
management or control.
7. Participate in a joint or joint and several trading account in
securities.
8. Issue senior securities or borrow money, except that the Fund may (i)
borrow money only from banks for any Portfolio for temporary or emergency (not
leveraging) purposes, including the meeting of redemption requests, that might
otherwise require the untimely disposition of securities, provided that any such
borrowing does not exceed 10% of the value of the total assets (taken at market
value) of such Portfolio, and (ii) borrow money only from banks for any
Portfolio for investment purposes, provided that (a) after each such borrowing,
when added to any borrowing described in clause (i) of this paragraph, there is
an asset coverage of at least 300% as defined in the Investment Company Act of
1940, and (b) is subject to an agreement by the lender that any recourse is
limited to the assets of that Portfolio with respect to which the borrowing has
been made. As an operating policy, no Portfolio may invest in portfolio
securities while the amount of borrowing of the Portfolio exceeds 5% of the
total assets of such Portfolio.
9. Pledge, mortgage, or hypothecate the assets of any Portfolio to an
extent greater than 10% of the total assets of such Portfolio to secure
borrowings made pursuant to the provisions of Item 8 above.
10. Purchase for any Portfolio "restricted securities" (as defined in Rule
144(a)(3) of the Securities Act of 1933), if, as a result of such purchase, more
than 10% of the net assets (taken at market value) of such Portfolio would then
be invested in such securities nor will the Fund invest in illiquid or
unseasoned securities if as a result of such purchase more than 5% of the net
assets of such portfolio would be invested in either illiquid or unseasoned
securities.
11. Invest more than 10% of the Aggressive Growth Portfolio's assets in
the securities of any single company or 25% or more of any portfolio's total
assets in a single industry; invest more than 5% of the assets of the Mid Cap
Growth Portfolio or Aggressive Small Cap Portfolio in securities of any single
issuer.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage beyond the specified limit resulting
from a change in values of port-
3
<PAGE>
folio securities or amount of net assets shall not be considered a violation of
the restrictions, except as to the 5%, 10% and 300% percentage restrictions on
borrowing specified in Restriction Number 8 above.
Portfolio Turnover. Each Portfolio has a different expected annual rate of
portfolio turnover which is calculated by dividing the lesser of purchases or
sales of portfolio securities during the fiscal year by the monthly average of
the value of the Portfolio's securities (excluding from the computation all
securities, including options, with maturities at the time of acquisition of one
year or less). A high rate of portfolio turnover generally involves
correspondingly greater expenses to the Portfolio, including brokerage
commission expenses, dealer mark-ups, and other transaction costs on the sale of
securities, which must be borne directly by the Portfolio. Turnover rates may
vary greatly from year to year as well as within a particular year and may also
be affected by cash requirements for redemptions of each Portfolio's shares and
by requirements which enable the Fund to receive certain favorable tax
treatment. The portfolio turnover rate for the Navellier Aggressive Growth
Portfolio for the period January 1, 1996 through December 31, 1996 was 169%.
Because the Navellier Mid Cap Growth Portfolio and the Navellier Aggressive
Small Cap Portfolio are new fund portfolios which have not been in operation for
a year, no actual turnover rates can be given at this time. The Fund will
attempt to limit the annual portfolio turnover rate of each Portfolio to 300% or
less, however, this rate may be exceeded if in the Investment Adviser's
discretion securities are or should be sold or purchased in order to attempt to
increase the Portfolio's performance. In Wisconsin an annual portfolio turnover
rate of 300% or more is considered a speculative activity and under Wisconsin
statutes could involve relatively greater risks or costs to the Fund.
4
<PAGE>
TRUSTEES AND OFFICERS OF THE FUND
The following information, as of April 30, 1997, is provided with respect
to each trustee and officer of the Fund:
Name and Address
- ----------------
Louis Navellier(1)
One East Liberty
Third Floor
Reno, NV 89501
Position(s) Held with
Registrant and Its Affiliates
- -----------------------------
Trustee, President and Treasurer of The Navellier Performance Funds. Mr.
Navellier is also the CEO, President, Secretary, and Treasurer of Navellier
Management, Inc., a Delaware corporation which is the Investment Adviser to the
Fund. Mr. Navellier is also CEO, President, Secretary, and Treasurer of
Navellier Securities Corp., the principal underwriter of the Fund's shares.
Principal Occupation(s)
During Past Five Years
- ----------------------
Mr. Navellier is and has been the CEO and President of Navellier & Associates
Inc., an investment management company since 1988; CEO and President of
Navellier Management, Inc., an investment management company since May 10, 1993
; CEO and President of Navellier International Management, Inc., an investment
management company, since May 10, 1993; CEO and President of Navellier
Securities Corp. since May 10, 1993; CEO and President of Navellier Fund
Management, Inc., an investment management company, since November 30, 1995; and
has been publisher and editor of MPT Review from August 1987 to the present and
was publisher and editor of the predecessor investment advisory newsletter OTC
Insight, which he began in 1980 and wrote through July 1987.
Name and Address
- ----------------
Arnold Langsen(2)
The Langsen Group,
Inc. of California
637 Silver Lake Dr.
Danville, CA 94526
Position(s) Held with
Registrant and Its Affiliates
- -----------------------------
Trustee (however, Professor Langsen is the President and a shareholder of The
Langsen Group, Inc. of California, which corporation provides consulting
services to Navellier & Associates Inc.;
Principal Occupation(s)
During Past Five Years
- ----------------------
Professor Langsen is Professor Emeritus of Financial Economics, School of
Business, California State University at Hayward (1973-1992); Visiting
Professor, Financial Economics, University of California at Berkeley
(1984-1987).
Name and Address
- ----------------
Barry Sander
695 Mistletoe Rd., #2
Ashland, OR 97520
Position(s) Held with
Registrant and Its Affiliates
- -----------------------------
Trustee
Principal Occupation(s)
During Past Five Years
- ----------------------
Currently the President and CEO of Ursa Major Inc., a stencil manufacturing firm
and has been for the past eight years.
5
<PAGE>
Name and Address
- ----------------
Joel Rossman
Personal Stamp
Exchange, Inc.
360 Sutton Place
Santa Rosa, CA
95407
Position(s) Held with
Registrant and Its Affiliates
- -----------------------------
Trustee
Principal Occupation(s)
During Past Five Years
- ----------------------
Currently President and CEO of Personal Stamp Exchange, Inc., a manufacturer,
designer and distributor of rubber stamp products. He has been President and CEO
of Personal Stamp Exchange for the past 10 years.
Name and Address
- ----------------
Jacques Delacroix
University of
Santa Clara
Santa Clara, CA
Position(s) Held with
Registrant and Its Affiliates
- -----------------------------
Trustee
Principal Occupation(s)
During Past Five Years
- ----------------------
Professor of Business Administration, Leavy School of Business, Santa Clara
University (1983-present).
- ----------
(1) This person is an interested person affiliated with the Investment Adviser.
(2) This person, although technically not an interested person affiliated with
the Investment Adviser, does own a company which provides consulting services to
Navellier & Associates Inc., a company owned by Louis Navellier.
6
<PAGE>
OFFICERS
The officers of the Fund are affiliated with the Investment Adviser and
receive no salary or fee from the Fund. The Fund's disinterested Trustees are
each compensated by the Fund with an annual fee, payable quarterly (calculated
at an annualized rate), of $7,500. The Trustees' fees may be adjusted according
to increased responsibilities if the Fund's assets exceed one billion dollars.
In addition, each disinterested Trustee receives reimbursement for actual
expenses of attendance at Board of Trustees meetings.
The Fund does not expect, in its current fiscal year, to pay aggregate
remuneration in excess of $60,000 for services in all capacities to any (a)
Trustee, (b) officer, (c) affiliated person of the Fund (other than the
Investment Adviser), (d) affiliated person of an affiliate or principal
underwriter of the Fund, or (e) all Trustees and officers of the Fund as a
group.
The Board of Trustees is permitted by the Fund's By-Laws to appoint an
advisory committee which shall be composed of persons who do not serve the Fund
in any other capacity and which shall have no power to dictate corporate
operations or to determine the investments of the Fund. The Fund currently has
no advisory committee.
--------------------------------------------------------------------
REMUNERATION TABLE
--------------------------------------------------------------------
Aggregate
Remuneration
Name Capacity In Which From
Remuneration Received Registrant and
Fund Complex
--------------------------------------------------------------------
Louis G. Navellier Trustee, President, $ 0.00
Chief Executive Officer,
and Treasurer
--------------------------------------------------------------------
Barry Sander Trustee $ 7,500.00(1)
--------------------------------------------------------------------
Arnold Langsen Trustee $ 7,500.00(1)
--------------------------------------------------------------------
Joel Rossman Trustee $ 7,500.00(1)
--------------------------------------------------------------------
Jacques Delacroix Trustee $ 7,500.00(1)
--------------------------------------------------------------------
(1) Includes $7,500 annual salary and any reimbursement for out-of-pocket
expenses . There were no out of pocket expense for fiscal 1996.
7
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
On October 17, 1995, in order to fulfill the requirements of Section
14(a)(1) of the Investment Company Act of 1940, one hundred percent (100%) of
the issued and outstanding shares of the only existing Portfolio of the Fund was
purchased by Louis Navellier under a subscription agreement dated October 17,
1995. Such subscription for acquisition was made for an aggregate of $100,000
allocated 100% for the Navellier Aggressive Growth Portfolio (to purchase 10,000
shares). Louis Navellier is no longer a control person of the Fund or any
Portfolio.
8
<PAGE>
THE INVESTMENT ADVISER, DISTRIBUTOR,
CUSTODIAN AND TRANSFER AGENT
(a) The Investment Adviser
The offices of the Investment Adviser (Navellier Management, Inc.) are
located at One East Liberty, Third Floor, Reno, Nevada 89501. The Investment
Adviser began operation in May 1993 and only advises this Fund and The Navellier
Series Fund.
(i) The following individuals own the enumerated shares of
outstanding stock of the Investment Adviser and, as a result, maintain
control over the Investment Adviser:
Shares of Outstanding Stock Percentage of
Name of the Investment Adviser Outstanding Shares
- ---- ------------------------- ------------------
Louis G. Navellier 1,000 100%
(ii) The following individuals are affiliated with the Fund, the
Investment Adviser, and the Distributor in the following capacities:
Name
- ----
Louis G. Navellier
Position
- --------
Trustee, President, and Treasurer of The Navellier Series Fund; Director, CEO,
President, Secretary, and Treasurer of Navellier Management, Inc.,; Director,
President, CEO, Secretary, and Treasurer of Navellier Securities Corp.; one of
the Portfolio Managers of the Aggressive Growth Portfolio, the Mid Cap Growth
Portfolio, the Aggressive Small Cap Portfolio .
Name
- ----
Alan Alpers
Position
- --------
Trustee and Secretary of The Navellier Series Fund; one of the Portfolio
Managers of the Aggressive Growth Portfolio, the Mid Cap Growth Portfolio, the
Aggressive Small Cap Portfolio .
(iii) The management fee payable to the Investment Adviser under the terms
of the Investment Advisory Agreement (the "Advisory Agreement") between the
Investment Adviser and the Fund is payable monthly and is based upon 1.25% of
the Aggressive Growth Portfolio's and of the Mid Cap Growth Portfolio's and
1.15% of the Aggressive Small Cap Portfolio's average daily net assets. The
Investment Adviser has the right, but not the obligation, to waive any portion
or all of its management fee, from time to time.
9
<PAGE>
Expenses not expressly assumed by the Investment Adviser under the
Advisory Agreement are paid by the Fund. The Advisory Agreement lists examples
of expenses paid by the Fund for the account of the applicable Portfolio, the
major categories of which relate to taxes, fees to Trustees, legal, accounting,
and audit expenses, custodian and transfer agent expenses, certain printing and
registration costs, and non-recurring expenses, including litigation.
In the event that the annual operating expenses of any Portfolio,
including amounts payable to the Investment Adviser, paid or payable by such
Portfolio for any fiscal year, exceed the expense limitations applicable to the
Portfolio imposed by state securities laws or regulations thereunder, as such
limitations may be adjusted from time to time, the Investment Adviser shall
reduce its management fee to the extent of such excess and, if required,
pursuant to any such laws or regulations (unless otherwise waived), will
reimburse the applicable Portfolio for annual operating expenses in excess of
any such expense limitation. Presently, California has the most restrictive
state expense limitations applicable to the Fund. Generally, these limitations
provide that the Fund's aggregate annual expenses shall not normally exceed
2-1/2% of the first $30 million of average net assets, 2% of the next $70
million of average net assets, and 1-1/2% of the remaining average net assets of
the Fund for any fiscal year.
The Advisory Agreement provides that the Investment Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund or its investors except for losses (i) resulting from the willful
misfeasance, bad faith, or gross negligence on its part, (ii) resulting from
reckless disregard by it of its obligations and duties under the Advisory
Agreement, or (iii) a loss for which the Investment Adviser would not be
permitted to be indemnified under the Federal Securities laws.
(iv) Pursuant to an Administrative Services Agreement, the Investment
Adviser receives an annual fee of .25% of the value of the assets under
management and provides or is responsible for the provision of certain
administrative services to the Fund, including, among others, the preparation
and maintenance of certain books and records required to be maintained by the
Fund under the Investment Company Act of 1940. The Administrative Services
Agreement permits the Investment Adviser to contract out for all of its duties
there- under; however, in the event of such contracting, the Investment Adviser
remains responsible for the performance of its obligations under the
Administrative Services Agreement. The Investment Adviser has entered into an
agreement with Rushmore Trust & Savings, FSB, to perform, in addition to
custodian and transfer agent services, some or all administrative services and
may contract in the future with other persons or entities to perform some or all
of its administrative services. All of these contracted services are and will be
paid for by the Investment Advisor out of its fees or assets.
In exchange for its services under the Administrative Services Agreement,
the Fund reimburses the Investment Adviser for certain expenses incurred by the
Investment Adviser in connection therewith but does not reimburse Investment
Advisor (over the amount of
10
<PAGE>
0.25% annual Administrative Services Fee) to reimburse it for fees Investment
Advisor pays to others for administrative services. The agreement also allows
Investment Adviser to pay to its delegate part or all of such fees and
reimbursable expense payments incurred by it or its delegate.
The Investment Adviser Agreement permits the Investment Adviser to act as
investment adviser for any other person, firm, or corporation, and designates
the Investment Adviser as the owner of the name "Navellier" or any use or
derivation of the word Navellier. If the Investment Adviser shall no longer act
as investment adviser to the Fund, the right of the Fund to use the name
"Navellier" as part of its title may, solely at the Investment Adviser's option,
be withdrawn.
The Investment Adviser is advancing the Fund's organizational expenses
which were $126,000. The Fund has agreed to reimburse the Investment Adviser for
the organizational and other expenses it advances, without interest, on a date
or dates to be chosen at the sole discretion of Navellier Management, Inc., or
the Investment Advisor can elect to waive reimbursement of some or all of such
advances. No Portfolio shall be responsible for the reimbursement of more than
its proportionate share of expenses.
(b) The Distributor
The Fund's Distributor is Navellier Securities Corp., a Delaware
Corporation organized and incorporated on May 10, 1993. Navellier Securities
Corp. is registered as a broker-dealer with the Securities Exchange Commission
and National Association of Securities Dealers and the various states in which
this Fund's securities will be offered for sale and will be registered with such
agencies and governments before any Fund shares are sold. The Fund's shares will
be continuously distributed by Navellier Securities Corp. (the "Distributor")
located at One East Liberty, Third Floor, Reno, Nevada 89501, pursuant to a
Distribution Agreement, dated October 17, 1995. The Distribution Agreement
obligates the Distributor to pay certain expenses in connection with the
offering of the shares of the Fund. The Distributor is responsible for any
payments made to its registered representatives as well as the cost in excess of
the 12b-1 fee (discussed below under "Distribution Plan") of printing and
mailing Prospectuses to potential investors and of any advertising incurred by
it in connection with the distribution of shares of the Fund.
Distribution Plans
The Aggressive Growth Portfolio Distribution Plan
The Aggressive Growth Portfolio has adopted a Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"), whereby it reimburses Distributor or others in
an amount up to 0.25% per annum of the average daily net assets of the
Aggressive Growth Portfolio for expenses incurred for the promotion and
distribution of the shares of such Portfolio of the Fund, including, but not
limited to, the printing of prospectuses, statements of additional
11
<PAGE>
information and reports used for sales purposes, expenses (including personnel
of Distributor) of preparation of sales literature and related expenses,
advertisements and other distribution- related expenses, including a prorated
portion of Distributor's overhead expenses attributable to the distribution of
such Portfolio Fund shares. Such payments are made monthly. The 12b-1 fee
includes, in addition to promotional activities, amounts the Aggressive Growth
Portfolio may pay to Distributor or others as a service fee to reimburse such
parties for personal services provided to shareholders of the Aggressive Growth
Portfolio and/or the maintenance of shareholder accounts. The total amount of
12b-1 fees paid for such personal services and promotional services shall not
exceed 0.25% per year of the average daily net assets of the Aggressive Growth
Portfolio. The Distributor can keep all of said 12b-1 fees it receives to the
extent it is not required to pay others for such services. Such Rule 12b-1 fees
are made pursuant to the distribution plan(s) and distribution agreements
entered into between such service providers and Distributor or the Fund
directly. Payments in excess of reimbursable expenses under the plan in any year
must be refunded. The Rule 12b-1 expenses and fees in excess of 0.25% per year
of the Aggresive Growth Portfolio's average net assets that otherwise qualify
for payment may not be carried forward into successive annual periods. The Plan
also covers payments by certain parties to the extent such payments are deemed
to be for the financing of any activity primarily intended to result in the sale
of shares issued by the Aggressive Growth Portfolio within the context of Rule
12b- 1. The Distributor was paid $147,832 in 12b-1 fees during the twelve month
period ended December 31, 1996. The payments under the Plan are included in the
maximum operating expenses which may be borne by the Aggressive Growth
Portfolio.
The Mid Cap Growth Portfolio Distribution Plan
The Mid Cap Growth Portfolio has adopted a Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"), whereby such Portfolio compensates Distributor
or others in the amount of 0.25% per annum of the average daily net assets of
the Mid Cap Growth Portfolio for expenses incurred and services rendered for the
promotion and distribution of the shares of the Mid Cap Growth Portfolio of the
Fund, including, but not limited to, the printing of prospectuses, statements of
additional information and reports used for sales purposes, expenses (including
personnel of Distributor) of preparation of sales literature and related
expenses, advertisements and other distribution-related expenses, including a
prorated portion of Distributor's overhead expenses attributable to the
distribution of the Mid Cap Growth Portfolio Fund shares. Such payments are made
monthly. The 12b-1 fee includes, in addition to promotional activities, amounts
such Portfolio pays to Distributor or others as a service fee to compensate such
parties for personal services provided to shareholders of such Portfolio and/or
the maintenance of shareholder accounts. The total amount of 12b-1 fees paid for
such personal services and promotional services shall be 0.25% per year of the
average daily net assets of the Mid Cap Growth Portfolio. The Distributor can
keep all of said 12b-1 fees it receives to the extent it is not required to pay
others for such services. Such Rule 12b-1 fees are made pursuant to the
distribution plan and distribution agreements entered into between such service
providers and Distributor or the Mid Cap Growth Portfolio directly. The 12b-1
Plan for the Mid Cap Growth Portfolio also covers payments by the
12
<PAGE>
Distributor and Investment Advisor to the extent such payments are deemed to be
for the financing of any activity primarily intended to result in the sale of
shares issued by such Portfolio within the context of Rule 12b-1. The payments
under the 12b-1 Plan for the Mid Cap Growth Portfolio are included in the
maximum operating expenses which may be borne by the Mid Cap Growth Portfolio.
Payments under the 12b-1 Plan for the Mid Cap Growth Portfolio may exceed actual
expenses incurred by the Distributor, Investment Advisor or others.
The Distributor was paid $221 in 12b-1 fees during the twelve month period
ended December 31, 1996. Investors may also be charged a transaction fee if they
effect transactions in fund shares through a broker or agent.
(c) The Custodian and Transfer Agent
Rushmore Trust & Savings, FSB, 4922 Fairmont Avenue, Bethesda, Maryland
20814, serves as the custodian of the Fund's portfolio securities and as the
Fund's transfer agent and, in those capacities, maintains certain accounting and
other records of the Fund and processes requests for the purchase or the
redemption of shares, maintains records of ownership for shareholders, and
performs certain other shareholder and administrative services on behalf of the
Fund.
(d) Legal Counsel
The Law Offices of Samuel Kornhauser is legal counsel to the Fund, to the
Investment Adviser and to the Distributor.
13
<PAGE>
BROKERAGE ALLOCATION AND OTHER PRACTICES
In effecting portfolio transactions for the Fund, the Investment Adviser
adheres to the Fund's policy of seeking best execution and price, determined as
described below, except to the extent it is permitted to pay higher brokerage
commissions for "brokerage and research services," as defined herein. The
Investment Adviser may cause the Fund to pay a broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission which another broker or dealer would have charged for effecting the
transaction if the Investment Adviser determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer or that any offset of direct
expenses of a Portfolio yields the best net price. As provided in Section 28(e)
of the Securities Exchange Act of 1934, "brokerage and research services"
include giving advice as to the value of securities, the advisability of
investing in, purchasing, or selling securities, and the availability of
securities; furnishing analysis and reports concerning issuers, industries,
economic facts and trends, portfolio strategy and the performance of accounts;
and effecting securities transactions and performing functions incidental
thereto (such as clearance and settlement). Brokerage and research services
provided by brokers to the Fund or to the Investment Adviser are considered to
be in addition to and not in lieu of services required to be performed by the
Investment Adviser under its contract with the Fund and may benefit both the
Fund and other clients of the Investment Adviser or customers of or affiliates
of the Investment Adviser. Conversely, brokerage and research services provided
by brokers to other clients of the Investment Adviser or its affiliates may
benefit the Fund.
If the securities in which a particular Portfolio of the Fund invests are
traded primarily in the over-the-counter market, where possible, the Fund will
deal directly with the dealers who make a market in the securities involved
unless better prices and execution are available elsewhere. Such dealers usually
act as principals for their own account. On occasion, securities may be
purchased directly from the issuer. Bonds and money market instruments are
generally traded on a net basis and do not normally involve either brokerage
commissions or transfer taxes.
The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations including, without limitation, the overall direct net economic
result to the Fund (involving both price paid or received and any net
commissions and other costs paid), the efficiency with which the transaction is
effected, the ability to effect the transaction at all where a large block is
involved, the availability of the broker to stand ready to execute possibly
difficult transactions in the future, and the financial strength and stability
of the broker. Such considerations are judgmental and are weighed by the
Investment Adviser in determining the overall reasonableness of brokerage
commissions paid by the Fund. Some portfolio transactions are subject to the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.,
and subject to obtaining best prices and executions, effected through dealers
who sell shares of the Fund.
14
<PAGE>
The Board of Trustees of the Fund will periodically review the performance
of the Investment Adviser of its respective responsibilities in connection with
the placement of portfolio transactions on behalf of the Fund and review the
commissions paid by the Fund over representative periods of time to determine if
they are reasonable in relation to the benefits to the Fund.
The Board of Trustees will periodically review whether the recapture for
the benefit of the Fund of some portion of the brokerage commissions or similar
fees paid by the Fund on portfolio transactions is legally permissible and
advisable. At present, no recapture arrangements are in effect. The Board of
Trustees will review whether recapture opportunities are available and are
legally permissible, and, if so, will determine, in the exercise of their
business judgment, whether it would be advisable for the Fund to seek such
recapture.
15
<PAGE>
CAPITAL STOCK AND OTHER SECURITIES
The rights and preferences attached to the shares of each Portfolio are
described in the Prospectus. (See "Description of Shares".) The Investment
Company Act of 1940 requires that where more than one class or series of shares
exists, each class or series must be preferred over all other classes or series
in respect of assets specifically allocated to such class or series. Rule 18f-2
under the Act provides that any matter required to be submitted by the
provisions of the Investment Company Act or applicable state law, or otherwise,
to the holders of the outstanding voting securities of an investment company
such as the Fund shall not be deemed to have been effectively acted upon unless
approved by the holders of a majority of the outstanding shares of each series
affected by such matter. Rule 18f-2 further provides that a series shall be
deemed to be affected by a matter unless the interests of each series in the
matter are substantially identical or that the matter does not affect any
interest of such series. However, the Rule exempts the selection of independent
public accountants, the approval of principal distribution contracts, and the
election of Trustees from the separate voting requirements of the Rule.
16
<PAGE>
PURCHASE, REDEMPTION, AND PRICING OF SHARES
Redemption of Shares. The Prospectus, under "Redemption of Shares"
describes the requirements and methods available for effecting redemption. The
Fund may suspend the right of redemption or delay payment more than seven days
(a) during any period when the New York Stock Exchange or any other applicable
exchange, is closed (other than a customary weekend and holiday closing), (b)
when trading on the New York Stock Exchange, or any other applicable exchange,
is restricted, or an emergency exists as determined by the Securities and
Exchange Commission ("SEC") or the Fund so that disposal of the Fund's
investments or a fair determination of the net asset values of the Portfolios is
not reasonably practicable, or (c) for such other periods as the SEC by order
may permit for protection of the Portfolio's shareholders.
The Fund normally redeems shares for cash. However, the Board of Trustees
can determine that conditions exist making cash payments undesirable. If they
should so determine (and if a proper election pursuant to Rule 18F-1 of the
Investment Company Act has been made by the Fund), redemption payments could be
made in securities valued at the value used in determining net asset value.
There generally will be brokerage and other costs incurred by the redeeming
shareholder in selling such securities.
Determination of Net Asset Value. As described in the Prospectus under
"Purchase and Pricing of Shares - Valuation of Shares," the net asset value of
shares of each Portfolio of the Fund is determined once daily as of 4 p.m. New
York time on each day during which the New York Stock Exchange, or other
applicable exchange, is open for trading. The New York Stock Exchange is
scheduled to be closed for trading on the following days: New Year's Day,
Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. The Board of Trustees of the Exchange
reserves the right to change this schedule. In the event that the New York Stock
Exchange or the national securities exchanges on which small cap equities are
traded adopt different trading hours on either a permanent or temporary basis,
the Board of Trustees of the Fund will reconsider the time at which net asset
value is to be computed.
Valuation of Assets. In determining the value of the assets of any
Portfolio of the Fund, the securities for which market quotations are readily
available are valued at market value, which is currently determined using the
last reported sale price, or, if no sales are reported - as is the case with
many securities traded over-the-counter - the last reported bid price. Debt
securities (other than short-term obligations, i.e., obligations which have 60
days or less left to maturity, which are valued on the basis of amortized cost)
are normally valued on the basis of valuations provided by a pricing service
when such prices are believed to reflect the fair value of such securities.
Prices provided by a pricing service may be determined without exclusive
reliance on quoted prices and take into account appropriate factors such as
institution-size trading in similar groups of securities, yield, quality of
issue, trading characteristics, and other market data. All other securities and
assets are valued at their fair value as determined in good faith by the Board
of Trustees, although the actual calculations may be made by persons acting
pursuant to the direction of the Board of Trustees.
17
<PAGE>
TAXES
In the case of a "series fund" (that is, a regulated investment company
having more than one segregated portfolio of investments the beneficial
interests in which are owned by the holders of a separate series of stock), each
investment portfolio is treated as a separate corporation for federal income tax
purposes. The Fund will be deemed a series fund for this purpose and, thus, each
Portfolio will be deemed a separate corporation for such purpose.
Each Portfolio of the Fund intends to qualify as a regulated investment
company for federal income tax purposes. Such qualification requires, among
other things, that each Portfolio (a) make a timely election to be a regulated
investment company, (b) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, and gains from the sale or
other disposition of stock or securities (including options and futures) or
foreign currencies, (c) derive less than 30% of its gross income from the sale
or other disposition within three months of purchase of (i) stock or securities,
(ii) options, futures, or forward contracts (other than options, futures, or
forward contracts on foreign currencies), or (iii) foreign currencies or
options, futures, or forward contracts on foreign currencies that are not
directly related to its principal business of investing in stocks or securities
(or options and futures with respect to stocks or securities), and (d) diversify
its holdings so that at the end of each fiscal quarter (i) 50% of the market
value of its assets is represented by cash, government securities, securities of
other regulated investment companies, and securities of one or more other
issuers (to the extent the value of the securities of any one such issuer owned
by the Portfolio does not exceed 5% of the value of its total assets and 10% of
the outstanding voting securities of such issuer) and (ii) not more than 25% of
the value of its assets is invested in the securities (other than government
securities and securities of other regulated investment companies) of any one
industry. These requirements may limit the ability of the Portfolios to engage
in transactions involving options and futures contracts.
If each Portfolio qualifies as a regulated investment company, it will not
be subject to federal income tax on its "investment company taxable income"
(calculated by excluding the amount of its net capital gain, if any, and by
excluding the dividends-received and net operating loss deductions) or "net
capital gain" (the excess of its long-term capital gain over its net short-term
capital loss) which is distributed to shareholders. In determining taxable
income, however, a regulated investment company holding stock on the record date
for a dividend is required to include the dividend in income on the later of the
ex-dividend date or the date of acquisition.
Dividends paid out of net investment income and net short-term capital
gains of a Portfolio will be taxable to shareholders as ordinary income
regardless of whether such distributions are reinvested in additional shares or
paid in cash. If a portion of a Portfolio's net investment income is derived
from dividends from domestic corporations, a corresponding portion of the
dividends paid out of such income may be eligible for the dividends-received
deduction. Corporate shareholders will be informed as to the portion, if any, of
dividends received by them which will qualify for the dividends-received
deduction.
18
<PAGE>
Dividends paid out of the net capital gain of a Portfolio that are
designated as capital gain dividends by the Fund will be taxable to shareholders
as long-term capital gains regardless of how long the shareholders have held
their shares. Such dividends will not be eligible for the dividends-received
deduction. If shares of the Fund to which such capital gains dividends are
attributable are held by a shareholder for less than 31 days and there is a loss
on the sale or exchange of such shares, then the loss, to the extent of the
capital gain dividend or undistributed capital gain, is treated as a long-term
capital loss.
All distributions, whether received in shares or cash, must be reported by
each shareholder on his federal income tax return. Taxable dividends declared in
October, November, or December of any year and payable to shareholders of record
on a specified date in such a month will be deemed to have been paid by the Fund
and received by such shareholders on December 31 of the year if such dividend is
actually paid by the Fund during January of the following year.
Any dividends paid shortly after a purchase by an investor may have the
effect of reducing the per share net asset value of the investor's shares by the
per share amount of the dividends. Furthermore, such dividends, although in
effect a return of capital, are subject to federal income taxes. Therefore,
prior to purchasing shares of the Fund, the investor should carefully consider
the impact of dividends, including capital gains distributions, which are
expected to be or have been announced.
The redemption of all or part of the shares of a series held by any
shareholder will generally be treated as a sale or exchange unless the
redemption fails to substantially reduce the shareholder's percentage ownership
interest in the related Portfolio (determined for this purpose using certain
specific rules of constructive ownership). Any redemption that does not
substantially reduce a shareholder's percentage ownership interest in a
Portfolio may be treated as a dividend.
If a redemption is treated as a sale or exchange, the shareholder will
generally recognize gain or loss measured by the difference between the
redemption price and the basis of the shares. This gain will generally be
treated as capital gain (long-term or short-term, depending upon the
shareholder's holding period for the redeemed shares).
The exchange of the shares in one Portfolio for shares in another
Portfolio will be treated as a taxable exchange for federal income tax purposes.
If the exchange occurs within 90 days of the acquisition of the original shares,
however, the shareholder's basis in the original shares will not include the
sales charge, if any, to the extent such charge does not exceed the amount that
would have been charged on the acquisition of the second-acquired shares if such
shares were acquired directly. To the extent that the sales charge, if any, paid
upon acquisition of the original shares is not taken into account in determining
the share- holder's gain or loss from the disposition of the original shares, it
is added to the basis of the newly acquired shares.
19
<PAGE>
On or before January 31 of each year, the Fund will issue to each person
who was a shareholder at any time in the prior year a statement of the federal
income tax status of all distributions made to such shareholder.
Shareholders who fail to provide correct taxpayer identification numbers
or fail to certify as to no loss of exemption from backup withholding or
otherwise fail to comply with applicable requirements of the law relating to
backup withholding will be subject to backup withholding with respect to
dividends at the rate of 31% unless they are corporations or come within other
exempt categories. Any amounts paid as backup withholding will be creditable
against the federal income tax liabilities of the affected shareholders. All
shareholders should consult their own tax advisers with regard to the tax
consequences applicable to their respective investments in the Fund.
The foregoing discussion relates solely to United States federal income
tax laws as applicable to United States persons (that is, citizens and residents
of the United States and domestic corporations, partnerships, trusts, and
estates). Each shareholder who is not a United States person should consult his
tax adviser regarding the United States and nonUnited States tax consequences of
ownership of shares, including the possibility that distributions by the Fund
may be subject to a United States withholding tax at the rate of 30% (or at a
lower rate under an applicable United States income tax treaty).
Each Portfolio will be subject to a nondeductible excise tax for any year
equal to 4% of the "required distribution" for the year over the "distributed
amount" for the year. For this purpose, the term "required distribution" means,
with respect to any year, the sum of (a) 98% of the Portfolio's "ordinary
income" (that is, its taxable income determined by excluding its net capital
gain, if any, by disallowing the dividends-received and net operating loss
deductions, and by not taking into account any capital gain or loss), (b) 98% of
its net capital gain income (that is, the excess of capital gains over capital
losses) for the one-year period ending on December 31 of the year, and (c) the
"prior year shortfall" (that is, the excess, if any, of the "grossed-up required
distribution" for the prior year over the "distributed amount" for such year).
For this purpose, the term "grossed-up required distribution" means, with
respect to any year, the required distribution for the year (determined by
including 100% of the Portfolio's ordinary income and capital gain net income)
and the term "distributed amount" means, with respect to any year, the sum of
(a) the amount of dividends-paid or deemed paid during the year, (b) any amount
on which the Portfolio is required to pay corporate tax for the year, and (c)
the excess, if any, of the distributed amount for the prior year over the
required distribution for such year.
The individual Portfolios will not be subject to tax in Delaware for any
year in which they each qualify as a regulated investment company. They may,
however, be subject to such tax for any year in which they do not so qualify and
may be subject to tax in certain other states where they are deemed to be doing
business. Moreover, distributions may be subject to state and local taxes. In
those states which have income tax laws, the tax treatment of such Portfolios
and the tax treatment of shareholders with respect to distributions may be
different from the federal income tax treatment of such persons.
20
<PAGE>
UNDERWRITERS
The Fund's shares will be continuously distributed through Navellier
Securities Corp. (the "Distributor") located at One East Liberty, Third Floor,
Reno, Nevada 89501, pursuant to a distribution agreement dated October 17, 1995.
The Distributor has a two year business history but only a nine month history of
selling this Fund's shares.
The Distributor acts as the sole principal underwriter of the Fund's
shares. Through a network established by the Distributor, the Fund's shares may
also be sold through selected investment brokers and dealers. For a description
of the Distributor's obligations to distribute the Fund's securities, see "The
Investment Adviser, Distributor, Custodian and Transfer Agent - Distributor."
21
<PAGE>
CALCULATION OF PERFORMANCE DATA
Performance information for each Portfolio may appear in advertisements,
sales literature, or reports to shareholders or prospective shareholders.
Performance information in advertisements and sales literature may be expressed
as total return on the applicable Portfolio.
The average annual total return on such Portfolios represents an
annualization of each Portfolio's total return ("T" in the formula below) over a
particular period and is computed by finding the current percentage rate which
will result in the ending redeemable value ("ERV" in the formula below) of a
$1,000 payment* ("P" in the formula below) made at the beginning of a one-,
five-, or ten-year period, or for the period from the date of commencement of
the Portfolio's operation, if shorter ("n" in the formula below). The following
formula will be used to compute the average annual total return for the
Portfolio:
P (1 + T) n = ERV
In addition to the foregoing, each Portfolio may advertise its total
return over different periods of time by means of aggregate, average,
year-by-year, or other types of total return figures.
The Navellier Aggressive Growth Portfolio had a total return of 30.63% for
the six months ending June 30, 1996. Since the Mid Cap Growth Portfolio and the
Aggressive Small Cap Portfolio are newly formed portfolios and therefore have no
history of operation, no performance figures for these portfolios are included.
Performance information for the Portfolios shall reflect only the
performance of a hypothetical investment in the Portfolios during the particular
time period on which the calculations are based. Performance information should
be considered in light of the investment objectives and policies,
characteristics and quality of the particular Portfolio, and the market
conditions during the given time period, and should not be considered as a
representation of what may be achieved in the future.
Each Portfolio may, from time to time, include in advertisements
containing total return the ranking of those performance figures relative to
such figures for groups of mutual funds categorized by Lipper Analytical
Services, or other services, as having the same investment objectives. The total
return may also be used to compare the performance of the Portfolio against
certain widely acknowledged outside standards or indices for stock and bond
market performance. The Standard & Poor's Composite Index of 500 stocks ("S&P
500") is a market value-weighted and unmanaged index showing the changes in the
aggregate market value of 500 stocks relative to the base period 1941-43. The
S&P 500 is composed almost entirely of common stocks of companies listed on the
New York Stock Exchange, although the common stocks of a few companies listed on
the American Stock Exchange or traded over-the-counter are included.
As summarized in the Prospectus under the heading "Performance and Yield," the
total return of each Portfolio may be quoted in advertisements and sales
literature.
22
<PAGE>
FINANCIAL STATEMENTS
December 31, 1996 Audited Financial Statement
23
<PAGE>
DECEMBER 31, 1996 THE NAVELLIER PERFORMANCE FUNDS
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
AGGRESSIVE GROWTH PORTFOLIO
- ------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ------------------------------------------------------
COMMON STOCKS
AEROSPACE AND DEFENSE -- 1.38%
40,000 Oregon Metallurgical Corp.* $ 1,290,000
-------------
BUSINESS/MANAGEMENT SERVICES -- 2.92%
100,000 FPA Medical Management,
Inc.* 2,237,500
34,293 Sitel Corp.* 484,389
-------------
2,721,889
-------------
CHEMICALS -- 0.80%
27,000 MacDermid, Inc. 742,500
-------------
COMPUTER HARDWARE -- 5.70%
70,000 ENCAD, Inc.* 2,887,500
50,000 QLogic Corp.* 1,287,500
20,000 Western Digital Corp.* 1,137,500
-------------
5,312,500
-------------
COMPUTER SOFTWARE -- 3.04%
20,500 Aspen Technology, Inc.* 1,645,125
30,000 Rational Software Corp.* 1,186,875
-------------
2,832,000
-------------
DATA COMMUNICATIONS/NETWORKING -- 3.32%
75,000 Davox Corp.* 3,093,750
-------------
DIVERSIFIED TECHNOLOGY -- 1.48%
38,000 Zoltek Companies, Inc.* 1,382,250
-------------
ELECTRONICS -- 3.11%
50,000 Inacom Corp.* 2,000,000
84,000 Zytec* 892,500
-------------
2,892,500
-------------
HEALTHCARE -- 2.62%
50,000 Safeskin Corp.* 2,437,500
-------------
HEAVY MACHINERY/CONSTRUCTION -- 3.76%
78,000 Smith International, Inc.* 3,500,250
-------------
HOME FURNISHINGS -- 1.07%
50,000 Stanley Furniture Co., Inc.* 993,750
-------------
- ------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ------------------------------------------------------
COMMON STOCKS (CONTINUED)
INDUSTRIAL AND COMMERCIAL SERVICES -- 7.50%
100,000 DT Industries, Inc. $ 3,500,000
90,000 SPX Corp. 3,487,500
-------------
6,987,500
-------------
METALS -- 2.27%
35,000 Olympic Steel, Inc.* 888,125
35,000 Reliance Steel and Aluminum
Co. 1,225,000
-------------
2,113,125
-------------
NATURAL GAS -- 1.45%
46,800 North Carolina Natural Gas
Corp. 1,351,350
-------------
OIL -- 10.80%
22,000 Cliffs Drilling Co.* 1,391,500
140,000 Comstock Resources, Inc.* 1,820,000
39,000 Ensco International, Inc.* 1,891,500
30,000 KCS Energy, Inc. 1,072,500
130,000 Swift Energy Co.* 3,883,750
-------------
10,059,250
-------------
OIL AND GAS EXPLORATION -- 11.92%
110,300 Global Industries, Ltd.* 2,054,338
180,000 Marine Drilling Companies,
Inc.* 3,543,750
20,000 Seacor Holdings, Inc.* 1,260,000
120,000 UTI Energy Corp.* 4,245,000
-------------
11,103,088
-------------
PHARMACEUTICALS -- 10.04%
103,600 Herbalife International,
Inc. 3,379,950
60,800 Jones Medical Industries,
Inc. 2,226,800
85,000 Medicis Pharmaceutical
Corp.* 3,740,000
-------------
9,346,750
-------------
REAL ESTATE -- 1.99%
75,000 Fairfield Communities, Inc.* 1,856,250
-------------
* NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
DECEMBER 31, 1996 THE NAVELLIER PERFORMANCE FUNDS
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
AGGRESSIVE GROWTH PORTFOLIO
- ------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ------------------------------------------------------
COMMON STOCKS (CONTINUED)
RETAILERS -- 17.24%
90,000 Eagle Hardware and Garden,
Inc.* $ 1,867,500
100,000 Equity Marketing, Inc.* 1,850,000
150,000 Finish Line, Inc.* 3,168,750
200,000 Paul Harris Stores, Inc.* 3,550,000
61,500 Ross Stores, Inc. 3,075,000
42,700 West Marine, Inc.* 1,206,275
62,500 Wet Seal, Inc.* 1,335,937
-------------
16,053,462
-------------
SEMICONDUCTORS AND RELATED -- 2.44%
50,000 Vitesse Semiconductor Corp.* 2,275,000
-------------
TECHNICAL SERVICES -- 1.34%
30,000 Technology Solutions Co.* 1,245,000
-------------
- ------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ------------------------------------------------------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS -- 1.96%
60,000 Pairgain Technologies, Inc.* $ 1,826,250
-------------
VEHICLE PARTS AND EQUIPMENT -- 1.29%
60,000 Miller Industries, Inc.* 1,200,000
-------------
TOTAL COMMON STOCKS -- 99.44%
(COST $82,787,597) 92,615,914
-------------
MUTUAL FUNDS -- 0.56%
520,346 Fund for Government Investors
(Cost $520,346) 520,346
-------------
TOTAL INVESTMENTS -- 100.00%
(COST $83,307,943) $ 93,136,260
-------------
-------------
* NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
DECEMBER 31, 1996 THE NAVELLIER PERFORMANCE FUNDS
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
MID CAP GROWTH PORTFOLIO
- ------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ------------------------------------------------------
COMMON STOCKS
AGRICULTURAL -- 1.77%
1,500 Grupo Industrial Maseca (ADR) $ 28,687
------------
AIRLINES -- 1.44%
1,000 USAir Group, Inc.* 23,375
------------
APPAREL/FABRIC -- 2.54%
1,100 Jones Apparel Group, Inc.* 41,113
------------
AUTO/TRUCK MANUFACTURING -- 1.26%
300 Paccar, Inc. 20,400
------------
BANKING -- 7.43%
500 Commerce Bancshares, Inc. 23,125
500 Greenpoint Financial Corp. 23,625
600 Provident Bancorp, Inc. 20,400
500 Regions Financial Corp. 25,844
300 Star Banc Corp 27,562
------------
120,556
------------
BEVERAGES -- 1.73%
600 Panamerican Beverages, Inc. 28,125
------------
BUSINESS/MANAGEMENT SERVICES -- 1.70%
800 Robert Half International,
Inc.* 27,500
------------
CASINOS/GAMING -- 1.46%
1,300 International Game Technology 23,725
------------
CHEMICALS -- 1.50%
600 Cytec Industries, Inc.* 24,375
------------
COMPUTER HARDWARE -- 3.94%
700 Cognos, Inc.* 19,688
400 Gateway 2000, Inc.* 21,425
400 Western Digital Corp.* 22,750
------------
63,863
------------
CONTAINERS AND PACKAGING -- 1.98%
2,000 Jefferson Smurfit Corp.* 32,125
------------
COSMETICS/PERSONAL CARE -- 1.48%
500 Alberto Culver Co. 24,000
------------
- ------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ------------------------------------------------------
COMMON STOCKS (CONTINUED)
DIVERSIFIED TECHNOLOGY -- 3.88%
1,200 BMC Industries, Inc. $ 37,800
400 Diebold, Inc. 25,150
------------
62,950
------------
ELECTRIC UTILITIES -- 1.29%
500 Portland General Corp. 21,000
------------
ELECTRONICS -- 1.60%
600 Hubbell, Inc. 25,950
------------
ENERGY -- 3.15%
2,200 NGC Corp. 51,150
------------
FINANCIAL SERVICES -- 2.90%
800 Alliance Capital Management,
LP 21,300
400 Finova Financial Trust 25,700
------------
47,000
------------
FOODS -- 2.99%
500 Interstate Bakeries Corp. 24,562
400 Vons Companies, Inc.* 23,950
------------
48,512
------------
HEALTHCARE -- 1.91%
700 Mallinckrodt, Inc. 30,887
------------
HEAVY MACHINERY -- 1.66%
600 Smith International, Inc.* 26,925
------------
HOUSEHOLD PRODUCTS -- 3.57%
1,100 Fort Howard Corp.* 30,456
800 US Industries, Inc.* 27,500
------------
57,956
------------
INDUSTRIAL AND COMMERCIAL
SERVICES -- 1.40%
400 Valspar Corp. 22,650
------------
INSURANCE -- 6.33%
400 Ace, Ltd. 24,050
400 Conseco, Inc. 25,500
* NON-INCOME PRODUCING.
ADR -- AMERICAN DEPOSITORY RECEIPT
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
DECEMBER 31, 1996 THE NAVELLIER PERFORMANCE FUNDS
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
MID CAP GROWTH PORTFOLIO
- ------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ------------------------------------------------------
COMMON STOCKS (CONTINUED)
500 Mid Ocean, Ltd. $ 26,250
400 Progressive Corp. 26,950
------------
102,750
------------
NATURAL GAS -- 3.63%
700 Nicor, Inc. 25,025
2,200 Noram Energy Corp. 33,825
------------
58,850
------------
OFFICE EQUIPMENT/SUPPLIES -- 1.31%
600 Avery Dennison Corp. 21,225
------------
OIL -- 3.38%
600 Ensco International, Inc.* 29,100
700 Parker and Parsley Petroleum
Co. 25,725
------------
54,825
------------
OIL AND GAS EXPLORATION -- 6.29%
500 Camco International, Inc. 23,063
1,500 Global Marine, Inc.* 30,937
500 Louisiana Land and
Exploration 26,813
800 Reading and Bates Corp.* 21,200
------------
102,013
------------
POWER SUPPLY -- 1.51%
900 American Power Conversion
Corp.* 24,525
------------
- ------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ------------------------------------------------------
COMMON STOCKS (CONTINUED)
RETAILERS -- 2.99%
400 Ross Stores, Inc. $ 20,000
600 TJX Companies, Inc. 28,425
------------
48,425
------------
TELECOMMUNICATIONS -- 3.65%
600 Andrew Corp.* 31,838
900 Pairgain Technologies, Inc.* 27,394
------------
59,232
------------
TOBACCO -- 1.58%
800 Universal Corp. 25,700
------------
UTILITIES -- 1.53%
600 National Fuel Gas Co. 24,750
------------
TOTAL COMMON STOCKS -- 84.78% (COST
$1,339,675) 1,375,119
------------
MUTUAL FUNDS -- 15.22%
246,952 Fund for Government Investors
(Cost $246,952) 246,952
------------
TOTAL INVESTMENTS -- 100.00%
(COST $1,586,627) $ 1,622,071
============
* NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
DECEMBER 31, 1996 THE NAVELLIER PERFORMANCE FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AGGRESSIVE MID CAP
GROWTH GROWTH
PORTFOLIO PORTFOLIO
------------ -----------
<S> <C> <C>
ASSETS
Securities at Value (Note 1, see portfolios for cost information).................. $ 93,136,260 $ 1,622,071
Receivable for Securities Sold..................................................... 1,904,357 --
Receivable for Shares Sold......................................................... 919,126 29,100
Interest Receivable................................................................ 15,266 29
Dividends Receivable............................................................... 7,921 1,330
Unamortized Organizational Costs (Note 1).......................................... 100,590 --
------------ -----------
Total Assets..................................................................... 96,083,520 1,652,530
------------ -----------
LIABILITIES
Payable for Shares Redeemed........................................................ 366,219 8,740
Payable for Securities Purchased................................................... 204,376 --
Investment Advisory Fee Payable (Note 2)........................................... 103,779 1,107
Administrative Fee Payable (Note 2)................................................ 20,756 221
Distribution Plan Fee Payable (Note 4)............................................. 20,756 221
Other Payables and Accrued Expenses................................................ 20,756 221
Organizational Expenses Payable to Adviser (Note 1)................................ 100,590 --
------------ -----------
Total Liabilities................................................................ 837,232 10,510
------------ -----------
NET ASSETS........................................................................... $ 95,246,288 $ 1,642,020
============ ===========
SHARES OUTSTANDING................................................................... 7,773,720 159,948
============ ===========
NET ASSET VALUE PER SHARE............................................................ $12.25 $10.27
====== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
AGGRESSIVE MID CAP
GROWTH GROWTH
PORTFOLIO PORTFOLIO
------------- -------------
FOR THE YEAR FOR THE
ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31,
1996 1996*
------------- -------------
<S> <C> <C>
INVESTMENT INCOME
Interest (Note 1)..................................................... $ 187,721 $ 1,188
Dividends (Note 1).................................................... 67,395 1,354
------------- -------------
Total Investment Income............................................. 255,116 2,542
------------- -------------
EXPENSES
Investment Advisory Fee (Note 2)...................................... 739,162 1,107
Administrative Fee (Note 2)........................................... 147,832 221
Distribution Plan Fees (Note 4)....................................... 147,832 221
Transfer Agent and Custodian Fee (Note 3)............................. 123,286 785
Registration Fees..................................................... 36,699 22,694
Trustees' Fees (Note 2)............................................... 30,000 --
Organizational Expense (Note 1)....................................... 25,200 --
Shareholder Reports and Notices....................................... 21,997 --
Legal Fees............................................................ 15,179 75,000
Audit Fees............................................................ 4,250 --
Other Expenses........................................................ 18,625 --
------------- -------------
Total Expenses...................................................... 1,310,062 100,028
Less Expenses Reimbursed by Investment Adviser (Note 2)............. (127,403) (98,258)
------------- -------------
Net Expenses...................................................... 1,182,659 1,770
------------- -------------
NET INVESTMENT INCOME (LOSS)............................................ (927,543) 772
------------- -------------
Net Realized Loss on Investment Transactions............................ (12,055,596) --
Net Change in Unrealized Appreciation of Investments.................... 9,828,401 35,444
------------- -------------
NET GAIN (LOSS) ON INVESTMENTS.......................................... (2,227,195) 35,444
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......... $ (3,154,738) $ 36,216
============= =============
</TABLE>
*FROM COMMENCEMENT OF OPERATIONS NOVEMBER 26, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MID CAP
AGGRESSIVE GROWTH GROWTH
PORTFOLIO PORTFOLIO
-------------------------- ------------
FOR THE YEAR FOR THE FOR THE
ENDED PERIOD ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995* 1996**
------------ ------------ ------------
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Income (Loss)............................. $ (927,543) $ 21 $ 772
Net Realized Loss on Investment Transactions............. (12,055,596) -- --
Net Change in Unrealized Appreciation (Depreciation) of
Investments............................................ 9,828,401 (84) 35,444
------------ ------------ ------------
Net Increase (Decrease) in Net Assets Resulting from
Operations........................................... (3,154,738) (63) 36,216
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income............................... -- -- (772)
From Net Realized Capital Gains.......................... -- -- --
------------ ------------ ------------
Total Distributions to Shareholders.................... -- -- (772)
------------ ------------ ------------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares........................ 172,216,916 200,000 1,614,544
Reinvestment of Distributions............................ -- -- 772
Cost of Shares Redeemed.................................. (74,115,827) -- (8,740)
------------ ------------ ------------
Net Increase in Net Assets Resulting from Share
Transactions......................................... 98,101,089 200,000 1,606,576
------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS........................... 94,946,351 199,937 1,642,020
NET ASSETS -- Beginning of Year............................ 299,937 100,000 --
------------ ------------ ------------
NET ASSETS -- End of Year.................................. $95,246,288 $ 299,937 $1,642,020
============ ============ ============
SHARES
Sold..................................................... 13,842,072 20,020 160,724
Issued in Reinvestment of Distributions.................. -- -- 75
Redeemed................................................. (6,098,372) -- (851)
------------ ------------ ------------
Net Increase in Shares................................. 7,743,700 20,020 159,948
============ ============ ============
</TABLE>
*FROM COMMENCEMENT OF OPERATIONS DECEMBER 28, 1995.
**FROM COMMENCEMENT OF OPERATIONS NOVEMBER 26, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH MID CAP GROWTH
PORTFOLIO PORTFOLIO
------------------------------- --------------
FOR THE FOR THE FOR THE
YEAR ENDED PERIOD ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995* 1996**
------------ ------------ --------------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C>
Net Asset Value -- Beginning of Year...................... $9.99 $10.00 $10.00
------------ ------------ -------
Income from Investment Operations:
Net Investment Income (Loss)............................ (0.120) 0.002 0.005
Net Realized and Unrealized Gains (Losses) on
Securities............................................ 2.380 (0.008) 0.270
------------ ------------ -------
Total from Investment Operations...................... 2.260 (0.006) 0.275
------------ ------------ -------
Distributions to Shareholders:
From Net Investment Income.............................. -- -- (0.005)
From Net Realized Capital Gains......................... -- -- --
------------ ------------ -------
Total Distributions to Shareholders................... -- -- (0.005)
------------ ------------ -------
Net Increase (Decrease) in Net Asset Value................ 2.26 (0.01) 0.27
------------ ------------ -------
Net Asset Value -- End of Year............................ $12.25 $9.99 $10.27
============ ============ =======
TOTAL INVESTMENT RETURN..................................... 22.62% (0.10)%(A) 2.75%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement (Note 2)..................... 2.00% 2.00%(B) 2.00%(B)
Expenses Before Reimbursement (Note 2).................... 2.22% 27.25%(B) 113.02%(B)
Net Investment Income (Loss).............................. (1.57)% 2.59%(B) 0.87%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate................................... 169.0% -- --
Net Assets at End of Year (000's omitted)................. $95,246 $300 $1,642
Number of Shares Outstanding at End of Year (000's
omitted)................................................ 7,774 30 160
Average Commission Rate Paid (C).......................... $0.0389 $0.0300
</TABLE>
- --------------------------------------------------------
(A) Total returns for periods of less than one year are not annualized.
(B) Annualized.
(C) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged. This amount may vary from period to period
and fund to fund depending on the mix of trades executed in various markets
where trading practices and commission rate structures may differ.
* FROM COMMENCEMENT OF OPERATIONS DECEMBER 28, 1995
**FROM COMMENCEMENT OF OPERATIONS NOVEMBER 26, 1996
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
DECEMBER 31, 1996 THE NAVELLIER PERFORMANCE FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
The Navellier Performance Funds (the "Fund") is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, (the "Act") as an open-end investment company which offers its shares
in a series of no-load, non-diversified and diversified portfolios. The Fund is
authorized to issue an unlimited number of shares of capital stock with no
stated par value. The Fund presently consists of three separate portfolios each
with its own investment objectives and policies. These financial statements
report on two of the three portfolios: Aggressive Growth Portfolio, a
non-diversified open-end management company portfolio, and Mid Cap Growth
Portfolio, a diversified open-end management company portfolio. The Aggressive
Small Cap Portfolio, has been inactive since November 26, 1996, the date of its
commencement of operations. The financial statements have been prepared in
conformity with generally accepted accounting principles which permit management
to make certain estimates and assumptions at the date of the financial
statements. The following is a summary of significant accounting policies which
the Fund follows:
(a) Listed securities are valued at the last sales price of the New York
Stock Exchange and other major exchanges. Over-the-Counter securities are
valued at the last sales price. If market quotations are not readily
available, the Board of Trustees will value the Fund's securities in good
faith. The Trustees will periodically review this method of valuation and
recommend changes which may be necessary to assure that the Fund's instruments
are valued at fair value.
(b) Security transactions are recorded on the trade date (the date the
order to buy or sell is executed). Interest income is accrued on a daily
basis. Dividend income is recorded on the ex-dividend date. Realized gains and
losses from securities transactions are computed on an identified cost basis.
(c) Dividends from net investment income are declared and paid annually.
Dividends are re-invested in additional shares unless shareholders request
payment in cash. Net capital gains, if any, are distributed annually.
(d) The Fund intends to comply with the provisions of the Internal Revenue
Code applicable to regulated investment companies and will distribute all net
investment income to its shareholders. Therefore, no Federal income tax
provision is required.
(e) Organizational expenses of the Fund totaling $126,000 are being
deferred and amortized over 60 months beginning with the public offering of
shares. Any redemption by an initial investor during the amortization period
will be reduced by a prorata portion of any of the unamortized organization
expenses. Such proration is to be calculated by dividing the number of initial
shares redeemed by the number of initial shares outstanding at the date of
redemption. At December 31, 1996, unamortized organization costs were
$100,590.
2. Investment Advisory Fees and Other Transactions With Affiliates
Investment advisory services are provided by Navellier Management, Inc.
("Adviser"). Under an agreement with the Adviser, each portfolio of the Fund
pays a fee for such services at the annual rate of 1.25% of the daily net assets
of the portfolio. The Adviser also receives an annual fee equal to 0.25% of the
Fund's average daily net assets in connection with the rendering of services
under the administrative services agreement and is reimbursed by the Fund for
operating expenses incurred on behalf of the Fund. An officer and trustee of the
Fund is also an officer and director of the Adviser.
Under an agreement between the Fund and the Adviser related to payment of
operating expenses, the Adviser has reserved the right to seek reimbursement for
the past, present and future operating expenses of the Fund paid by the Adviser,
at any time upon notice to the Fund. At December 31, 1995, the Adviser
voluntarily agreed not to seek future reimbursement of all unreimbursed past
expense incurred on behalf of the Fund. During the year ended
12
<PAGE>
DECEMBER 31, 1996 THE NAVELLIER PERFORMANCE FUNDS
- --------------------------------------------------------------------------------
December 31, 1996, the Adviser paid operating expenses of the Aggressive Growth
Portfolio totaling $275,236. Under the operating expense agreement, the Adviser
requested, and the Aggressive Growth Portfolio reimbursed, $147,833 of such
expenses. The Adviser voluntarily agreed not to seek future reimbursement of
$127,403 of such 1996 expenses. During the period November 26, 1996
(commencement of operations) to December 31, 1996, the Adviser voluntarily
waived reimbursement for substantially all the operating expenses which were
paid on behalf of the Mid Cap Growth Portfolio. Accordingly, at December 31,
1996, there were no prior expenses which could be reimbursed in the future under
the agreement.
Navellier Securities Corp. (the "Distributor") acts as the Fund's
Distributor and is registered as a broker-dealer under the Securities and
Exchange Act of 1934. The Distributor, which is the principal underwriter of the
Fund's shares, renders its services to the Fund pursuant to a distribution
agreement. An officer and trustee of the Fund is also an officer and director of
the Distributor.
The Fund pays each of its Trustees not affiliated with the Adviser $7,500
annually. For the year ended December 31, 1996, Trustees' fees totaled $30,000.
3. Transfer Agent and Custodian
Rushmore Trust and Savings, FSB ("Rushmore Trust"), provides transfer
agency, dividend disbursing and other shareholder services to the Fund. In
addition, Rushmore Trust serves as custodian of the Fund's assets. Fees paid to
Rushmore Trust are based upon a fee schedule approved by the Board of Trustees.
4. Distribution Plan
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act, whereby it reimburses the Distributor or others in an amount not
to exceed 0.25% per annum of the average daily net assets of each portfolio for
expenses incurred in the promotion and distribution of shares of the portfolio.
These expenses include, but are not limited to, the printing of prospectuses,
statements of additional information, and reports used for sales purposes,
expenses of preparation of sales literature and related expenses (including
Distributor personnel), advertisements and other distribution-related expenses,
including a prorated portion of the Distributor's overhead expenses attributable
to the distribution of shares. Such payments are made monthly. The 12b-1 fee
includes, in addition to promotional activities, the amount the Fund may pay to
the Distributor or others as a service fee to reimburse such parties for
personal services provided to shareholders of the Fund and/or the maintenance of
shareholder accounts. Such Rule 12b-1 fees are made pursuant to the Plan and
distribution agreements entered into between such service providers and the
Distributor or the Fund directly.
5. Securities Transactions
For the year ended December 31, 1996, purchases and sales (including
maturities) of securities (excluding short-term securities) were as follows:
AGGRESSIVE MID CAP
GROWTH GROWTH
PORTFOLIO PORTFOLIO
------------- -----------
Purchases........................................ $ 187,396,704 $ 1,339,676
------------- -----------
Sales............................................ $ 92,784,752 $ --
------------- -----------
13
<PAGE>
DECEMBER 31, 1996 THE NAVELLIER PERFORMANCE FUNDS
- ------------------------------------------------------------------
6. Net Unrealized Appreciation/Depreciation of Investments
Unrealized appreciation (depreciation) as of December 31, 1996, based on the
cost for Federal income tax purposes is as follows:
AGGRESSIVE MID CAP
GROWTH GROWTH
PORTFOLIO PORTFOLIO
------------ -----------
Gross Unrealized Appreciation........................ $ 13,557,766 $ 51,729
Gross Unrealized Depreciation........................ (3,791,976) (16,285)
------------ -----------
Net Unrealized Appreciation.......................... $ 9,765,790 $ 35,444
------------ -----------
------------ -----------
Cost of Investments for Federal Income Tax Purposes.. $ 83,370,470 $ 1,586,627
============ ===========
7. Net Assets
At December 31, 1996, net assets consisted of the following:
AGGRESSIVE MID CAP
GROWTH GROWTH
PORTFOLIO PORTFOLIO
------------- -----------
Paid-in-Capital.................................. $ 97,473,567 $ 1,606,576
Undistributed Net Investment Income.............. -- --
Accumulated Net Realized Loss on Investments..... (12,055,596) --
Net Unrealized Appreciation of Investments....... 9,828,317 35,444
------------- -----------
NET ASSETS....................................... $ 95,246,288 $ 1,642,020
============= ===========
8. Federal Income Tax
Permanent differences between tax and financial reporting of net investment
income and realized gains/(losses) are reclassified to paid-in-capital. As of
December 31, 1996, net investment losses were reclassified to paid-in-capital as
follows:
AGGRESSIVE MID CAP
GROWTH GROWTH
PORTFOLIO PORTFOLIO
------------ ------------
Reduction of paid-in-capital.................. $ 927,543 --
At December 31, 1996, for Federal income tax purposes, the following Funds
had capital loss carryovers which may be applied against future net taxable
realized gains of each succeeding year until the earlier of its utilization or
its expiration:
AGGRESSIVE MID CAP
GROWTH GROWTH
EXPIRES DECEMBER 31, PORTFOLIO PORTFOLIO
- ---------------------------------------------- ------------ ------------
2004.......................................... $ 11,993,069 --
14
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
of The Navellier Performance Funds:
We have audited the statements of assets and liabilities, including the
portfolios of investments of the Aggressive Growth and the Mid Cap Portfolios
(two of the portfolios) of The Navellier Performance Funds (the Fund) as of
December 31, 1996, the related statements of operations, changes in net assets,
and financial highlights for the periods presented. These financial statements
and financial highlights are the responsibility of the Fund's 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 at December
31, 1996 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Aggressive
Growth and Mid Cap Portfolios of The Navellier Performance Funds at December 31,
1996, the results of their operations, the changes in their net assets, and
financial highlights for the presented periods in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Washington, DC
January 31, 1997
15
<PAGE>
APPENDIX
A-1 and P-1 Commercial Paper Ratings
Each of the Portfolios will invest only in commercial paper which, at the
date of investment, is rated A-1 by Standard & Poor's Corporation ("S&P") or P-1
by Moody's Investors Services, Inc. ("Moody's"), or, if not rated, is issued or
guaranteed by companies which at the date of investment have an outstanding debt
issue rated AA or higher by Standard & Poor's or Aa or higher by Moody's.
Commercial paper rated A-1 by S&P has the following characteristics: (1)
liquidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically, the
issuer's industry is well established and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are
unquestioned.
The rating P-1 is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the following:
(1) evaluation of the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; (3) evaluation of the issuer's products in
relation to competition and customer acceptance; (4) liquidity; (5) amount and
quality of long-term debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationship which exists with
the issuer; and (8) recognition by the management of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations.
24
<PAGE>
PART C
OTHER INFORMATION
Item 24 FINANCIAL STATEMENTS AND EXHIBITS
1. Financial Statements:
(a) N/A
(b) Included in Part B of this Registration Statement:
(i) Annual Report as of December 28, 1995.
(c) Included in Part C of this Registration Statement: none
All other statements and schedules have been omitted because they are not
applicable or the information is shown in the Financial Statements or Financial
Highlights or notes thereto.
2. Exhibits:
Exhibit Number Description
-------------- -----------
1.1 Certificate of Trust of Registrant [initial N-1A
filed December 8, 1995] *
1.2 Declaration of Trust of Registrant [initial N-1A
filed December 8, 1995] *
2 By-Laws of Registrant [initial N-1A filed
December 8, 1995] *
3 None
4 None
5 Investment Management Agreement between Registrant
and Navellier Management, Inc., dated October 17,
1995 [initial N-1A filed December 8, 1995]*
5.1 Investment Management Agreement between the
Navellier Mid Cap Growth Portfolio and Navellier
Management, Inc., dated October 30, 1996 [Post-
Effective Amendment No. 4 filed November 26,
1996]*
5.2 Investment Management Agreement between the
Navellier Aggressive Small Cap Portfolio and
Navellier Management, Inc., dated October 30,
1996 [Post- Effective Amendment No. 4 filed
November 26, 1996]*
6.1 Distribution Agreement dated October 17,
1995 [initial N-1A filed December 8, 1995] *
25
<PAGE>
6.2 Selected Dealer Agreement (specimen) [initial
N-1A filed December 8, 1995] *
7 None
8.1 Administrative Services, Custodian, Transfer
Agreement with Rushmore Trust & Savings, FSB
[initial N-1A filed December 8, 1995] *
8.2 Navellier Administrative Services Agreement
[initial N-1A filed December 8, 1995] *
9.0 Trustee Indemnification Agreements [initial N-1A
filed December 8,1995] *
10 Opinion and Consent of Counsel [initial N-1A filed
December 8, 1995] *
11 Consent of Independent Auditors dated April 28,
1997
12 None
13 Subscription Agreement between The Navellier
Performance Funds and Louis Navellier, dated
October 17, 1995 [initial N-1A filed December 8,
1995] *
13.1 Investment Adviser Operating Expense Reimbursement
Agreement [initial N-1A filed December 8, 1995] *
14 None
15 12b-1 Distribution Plan for the Navellier
Aggressive Growth Portfolio [initial N-1A filed
December 8, 1995] *
15.1 12b-1 Distribution Plan for the Navellier Mid Cap
Growth Portfolio dated October 30, 1996
[Post-Effective Amendment No. 4 filed November
26, 1996]*
16 N/A
17 Financial Data Schedule [filed November 19, 1996]*
* Denotes the document is incorporated herein by reference.
26
<PAGE>
Item 25 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
WITH REGISTRANT
(a) As is described in the Statement of Additional Information
("Control Persons and Principal Holders of Securities") the Fund was initially
but no longer is controlled by Louis Navellier, the sole stockholder, officer,
and director of the Investment Adviser, who also serves as Trustee and in
various officer positions with the Fund (as described more fully under "The
Investment Adviser, Distributor, Custodian and Transfer Agent" in the Statement
of Additional Information).
(b) The Distributor Navellier Securities Corp. (incorporated under
the laws of the State of Delaware) is wholly-owned by Louis G. Navellier, who is
also a stockholder, director, and officer of the Investment Adviser and a
Trustee and officer of the Fund.
Item 26 NUMBER OF HOLDERS OF SECURITIES
As of March 31, 1997 the Aggressive Growth Portfolio had 4,367
shareholders; the Mid Cap Growth Portfolio had 255 shareholders; and the
Aggressive Small Cap Portfolio had 38 shareholders.
Item 27 INDEMNIFICATION
The Fund shall indemnify each of its Trustees, officers, employees, and
agents (including persons who serve at its request as directors, officers, or
trustees of another organization in which it has any interest, as a shareholder,
creditor, or otherwise) against all liabilities and expenses (including amounts
paid in satisfaction of judgments, in compromise, as fines and penalties, and as
counsel fees) reasonably incurred by him in connection with the defense or
disposition of any action, suit, or other proceeding, whether civil or criminal,
in which he may be involved or with which he may be threatened, while in office
or thereafter, by reason of his being or having been such a Trustee, officer,
employee, or agent, except with respect to any matter as to which he shall have
been adjudicated to have acted in bad faith, willful misfeasance, gross
negligence, or reckless disregard of his duties; provided, however, that as to
any matter disposed of by a compromise payment by such Person, pursuant to a
consent decree or otherwise, no indemnification either for said payment or for
any other expenses shall be provided unless there has been a determination that
such person did not engage in bad faith, willful misfeasance, gross negligence,
or reckless disregard of his duties involved in the conduct of his office by the
court or other body approving the settlement or other disposition or by a
reasonable determination, based upon review of readily available facts (as
opposed to a full trial-type inquiry), that he did not engage in such conduct by
written opinion from independent legal counsel approved by a majority of a
quorum of trustees who are neither interested persons nor parties to the
proceedings. The rights accruing to any person under these provisions shall not
exclude any other right to which he may be lawfully entitled; provided that no
person may satisfy any right of indem-
27
<PAGE>
nity or reimbursement granted herein or to which he may otherwise be entitled
except out of the Fund Property. A majority of a quorum of disinterested
non-party Trustees may make advance payments in connection with indemnification
under this section, provided that the indemnified person shall have given a
written undertaking adequately secured to reimburse the Fund in the event it is
subsequently determined that he is not entitled to such indemnification, or a
majority of a quorum of disinterested non-party Trustees or independent counsel
determine, after a review of readily available facts, that the person seeking
indemnification will probably be found to be entitled to indemnification.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to the Trustees, officers, and controlling persons of
the Fund pursuant to the provisions described under this Item 27, or otherwise,
the Fund has been advised that, in the opinion of the SEC, such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Fund of expenses incurred or paid by
a Trustee, officer, or controlling person of the Fund in the successful defense
of any action, suit, or proceeding) is asserted by such Trustee, officer, or
controlling person in connection with the securities being registered, the Fund
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 of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The Fund may purchase and maintain insurance on behalf of an officer,
Trustee, employee, or agent protecting such person, to the full extent permitted
by applicable law, from liability incurred by such person as officer, Trustee,
employee, or agent of the Fund or arising from his activities in such capacity.
Section 9 of the Distribution Agreement between the Fund and Navellier
Securities Corp., provides for indemnification of the parties thereto under
certain circumstances.
28
<PAGE>
Item 28 BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Set forth below is a description of any other business, profession,
vocation, or employment of a substantial nature in which each investment adviser
of the Fund and each director, officer, or partner of any such investment
adviser, is or has been at any time during the past two fiscal years, engaged
for his own account or in the capacity of director, officer, employee, partner,
or trustee:
Name and
- --------
Principal
- ---------
Business Address
- ----------------
Louis Navellier
One East
Liberty
Third Floor
Reno,
NV 89501
Positions Held with Registrant
- ------------------------------
and Its Affiliates
- ------------------
Trustee, President, and Treasurer of The Navellier Performance Funds, one of
Portfolio Managers of the Aggressive Growth Portfolio, the Mid Cap Growth
Portfolio and the Aggressive Small Cap Portfolio. Mr. Navellier is also the CEO,
President, Treasurer, and Secretary of Navellier Management, Inc., a Delaware
Corporation which is the Investment Adviser to the Fund. Mr. Navellier is also
CEO, President, Secretary, and Treasurer of Navellier & Associates Inc.,
Navellier Publications, Inc., MPT Review Inc., and Navellier International
Management, Inc.
Principal Occupations During Past
- ---------------------------------
Two Years
- ---------
Mr. Navellier is and has been the CEO and President of Navellier & Associates
Inc., an investment management company since 1988; is and has been CEO and
President of Navellier Management, Inc.; one of the Portfolio Managers for the
Investment Adviser to this Fund and was one of Portfolio Managers to The
Navellier Series Fund; President and CEO of Navellier Securities Corp., the
principal Underwriter to this Fund and The Navellier Series Fund; CEO and
President of Navellier Fund Management, Inc. and investment advisory company,
since November 30, 1995; and has been publisher and editor of MPT Review from
August 1987 to the present, and was publisher and editor of the predecessor
investment advisory newsletter OTC Insight, which he began in 1980 and wrote
through July 1987.
29
<PAGE>
Item 29 PRINCIPAL UNDERWRITERS
(a) The Distributor does not currently act as principal underwriter,
depositor, or investment adviser for any investment company other than the Fund
and The Navellier Series Fund.
(b) The following information is provided, as of the date hereof, with
respect to each director, officer, or partner of each principal underwriter
named in response to Item 21:
Name and Principal
Business Address
- ----------------
Louis Navellier
One East Liberty,
Third Floor
Reno, NV 89501
Position and Offices
with Underwriter
- ----------------
CEO, President, Director,
Treasurer, and Secretary
Positions and Offices
with Registrant
- ---------------
Trustee, President, CEO,
Treasurer
(c) As of the date hereof, no principal underwriter who is not an
affiliated person of the Fund has received any commissions or other compensation
during the Fund's last fiscal year.
Item 30 LOCATION OF ACCOUNTS AND RECORDS
All accounts, records, and other documents required to be maintained under
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained at the office of The Navellier Performance Funds located at One East
Liberty, Third Floor, Reno, Nevada 89501, and the offices of the Fund's
Custodian and Transfer agent at 4922 Fairmont Avenue, Bethesda, MD 20814.
Item 31 MANAGEMENT SERVICES
Other than as set forth in Part A and Part B of this Registration
Statement, the Fund is not a party to any management-related service contract.
Item 32 UNDERTAKINGS
The Fund hereby undertakes to furnish each person to whom a prospectus is
delivered a copy of the latest annual report to shareholders, upon request and
without change.
The Fund hereby undertakes that if it is requested by the holders of at
least 10% of its outstanding shares to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee, it will do so and
will assist in communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
30
<PAGE>
The Fund hereby undertakes, as to the Navellier Mid Cap Growth Portfolio
and as to the Navellier Aggressive Small Cap Portfolio, to file a post-effective
amendment using unaudited financial statements, which need not be certified,
within four (4) to six (6) months from the effective date of such portfolio's
1933 Act Registration Statement.
31
<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 No. 5 to Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Reno, and
State of Nevada on the 30th day of April, 1997.
THE NAVELLIER PERFORMANCE FUNDS
By:
----------------------------------
Louis Navellier
President and Trustee
The Navellier Performance Funds, and each person whose signature appears
below hereby constitutes and appoints Louis Navellier as such person's true and
lawful attorney-in-fact, with full power to sign for such person and in such
person's name, in the capacities indicated below, any and all amendments to this
Registration Statement, hereby ratifying and confirming such person's signature
as it may be signed by said attorney-in-fact to any and all amendments to said
Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons or their
attorneys-in-fact pursuant to authorization given on October 17, 1995, in the
capacities and on the date indicated:
- ---------------------- Trustee and President
Louis Navellier(1) (Principal Executive April 30, 1997
Officer), Treasurer
- ------------------------ Trustee
Joel Rossman April 30, 1997
- ------------------------ Trustee
Barry Sander April 30, 1997
- ------------------------ Trustee
Arnold Langsen(2) April 30, 1997
- ------------------------ Trustee and Secretary
Jacques Delacroix April 30, 1997
- --------
(1) These persons are interested persons affiliated with the Investment
Advisor.
(2) This person, although technically not an interested person affiliated
with the Investment Adviser, does own a company which provides consulting
services to Navellier & Associates Inc., a company owned by Louis Navellier.
32
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<NAME> NAVELLIER AGGRESSIVE GROWTH PORTFOLIO
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<DIVIDEND-INCOME> 67,395
<INTEREST-INCOME> 187,721
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<NET-INVESTMENT-INCOME> (927,543)
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<PER-SHARE-GAIN-APPREC> 2.380
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<PERIOD-START> NOV-26-1996
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<INVESTMENTS-AT-VALUE> 1,622,071
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<APPREC-INCREASE-CURRENT> 35,444
<NET-CHANGE-FROM-OPS> 36,216
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<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 160,724
<NUMBER-OF-SHARES-REDEEMED> (851)
<SHARES-REINVESTED> 75
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<PERIOD-START> NOV-26-1996
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<PER-SHARE-NAV-BEGIN> 0.000
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CONSENT OF INDEPENDENT AUDITORS
The Navellier Performance Funds:
We consent to the incorporation by reference in this Post-effective Amendment
No. 5 to Registration Statement No. 33-80195 of our report dated January 31,
1997 appearing in the Annual Report of The Navellier Performance Funds for the
year ended December 31, 1996 and to the reference to us under the caption
"Financial Highlights" appearing in the Prospectus, which is also a part of such
Registration Statement.
Deloitte & Touche LLP
Washington D.C.
April 28, 1997
