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Registration Nos. 33-80195
811-9142
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 16 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 15 [X]
(Check appropriate box or boxes.)
THE NAVELLIER PERFORMANCE FUNDS
(The Navellier Aggressive Small Cap Equity Portfolio)
---------------------------------
(Exact name of registrant as specified in charter)
One East Liberty, Third Floor
Reno, Nevada 89501
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (800) 887-8671
Arjen Kuyper
The Navellier Performance Funds
One East Liberty, Third Floor
Reno, Nevada 89501
(Name and Address of Agent For Service)
Copy to:
Samuel Kornhauser, Esq.
Law Offices of Samuel Kornhauser
155 Jackson Street, Suite 1807
San Francisco, CA 94111
(415) 981-6281
It is proposed that this filing will become effective:
_X_ immediately upon filing pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
___ on (date) pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
___ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Title of Securities Being Registered:
Investment Company Shares
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CROSS REFERENCE SHEET
(required by Rule 495)
Item No. Location
- -------- ----------------------------
PART A
Item 1. Front and Back Cover Pages............. Front and Back Cover Pages
Item 2. Risk/Return Summary: Investments,
Risks and Performance.................. The Principal Risks; How the Portfolio
Has Performed
Item 3. Risk/Return Summary: Fee Table......... Fees and Expenses of the Portfolio
Item 4. Investment Objectives, Principal
Investment Strategies, and Related
Risks.................................. Our Principal Strategy
Item 5. Management's Discussion of Fund
Performance............................ Not Applicable
Item 6. Management, Organization, and
Capital Structure...................... Who is Responsible for the Portfolios
Item 7. Shareholder Information................ Account Policies; How to Buy, Sell and
Exchange Shares; Understanding Taxes;
Understanding Earnings
Item 8. Distribution Arrangements.............. How to Buy, Sell and Exchange Shares
Item 9. Financial Highlights Information........ Financial Highlights
</TABLE>
PART B
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PART C
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
EXPLANATORY NOTE
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The purpose of this filing is to separate the prospectus of the Navellier
Aggressive Small Cap Equity Portfolio from Part A of the Registration
Statement of the Navellier Performance Funds. A separate Prospectus for the
Navellier Aggressive Small Cap Equity Portfolio is provided in Part A of
Post Effective Amendment 16 to this Registration Statement. A Statement of
Additional Information for all portfolios of the Fund, including the
Navellier Aggressive Small Cap Equity Portfolio is included in the
Registration Statement of the Navellier Performance Funds as amended by Post
Effective Amendments 15 filed May 1, 2000.
The Registrant undertakes to update this Explanatory Note, as needed, each time
a Post-Effective Amendment is filed.
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[LOGO]
THE NAVELLIER
PERFORMANCE FUNDS
THE NAVELLIER AGGRESSIVE SMALL CAP
EQUITY PORTFOLIO
INVESTING FOR
LONG-TERM CAPITAL GROWTH
Prospectus dated May 1, 2000
THIS PROSPECTUS CONTAINS INFORMATION
PERTAINING ONLY TO THE NAVELLIER AGGRESSIVE
SMALL CAP EQUITY PORTFOLIO
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY
OTHER MUTUAL FUND PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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(THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY)
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TABLE OF CONTENTS
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INTRODUCING OUR PORTFOLIO................................... 1
THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO......... 2
FINANCIAL HIGHLIGHTS........................................ 5
WHO IS RESPONSIBLE FOR THE PORTFOLIO........................ 6
Investment advisor...................................... 6
Distributor............................................. 6
ACCOUNT POLICIES............................................ 6
UNDERSTANDING EARNINGS...................................... 7
UNDERSTANDING TAXES......................................... 7
HOW TO BUY, SELL, AND EXCHANGE SHARES....................... 8
Buying shares........................................... 9
Selling or exchanging shares............................ 10
Buying or selling through selected broker-dealers....... 11
NEED TO KNOW MORE? (BACK COVER)............................. 12
</TABLE>
More detailed information on subjects covered in this prospectus are
contained within the Statement of Additional Information (SAI) dated May 1,
2000. Investors seeking more in-depth explanations of this Portfolio should
request the SAI to review it before purchasing shares of the Portfolio.
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INTRODUCING OUR PORTFOLIO
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WHO SHOULD INVEST IN OUR PORTFOLIO?
The Navellier Aggressive Small Cap Equity Portfolio, like the other
Navellier Performance Portfolios uses an aggressive investment style
suitable for investors willing to accept more risk and tolerate more price
fluctuations while seeking higher than average returns. This Portfolio is
for investors who can keep their money invested for longer periods,
preferably at least five years, without needing to rely on this money for
other purposes. The Navellier Aggressive Small Cap Equity Portfolio is not
suitable for investors seeking current income.
ONE INVESTMENT GOAL FOR ALL OUR PORTFOLIOS
All Navellier Performance Portfolios including the Navellier Aggressive
Small Cap Equity Portfolio have the same investment goal: to achieve
long-term capital growth -- in other words, to increase the value of your
investment over time. The investment goal of each Portfolio can only be
changed with shareholder approval.
WHAT KIND OF FUND ARE WE?
The Navellier Small Cap Equity Portfolio is "no-load." This means there is
no initial sales charge for buying or selling shares.
KEY DEFINITIONS
"We", "Us" and "Our" -- means the Navellier Performance Fund.
"You" and "Your" -- mean the prospective investor.
"Fund" -- means all eight Navellier Performance Portfolios.
"Portfolio" -- refers to The Navellier Aggressive Small Cap Equity Portfolio
of the Fund.
"Market capitalization" -- means the number of shares available for trading
multiplied by the price per share.
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LIMITED FEDERAL GUARANTEES.
THE PORTFOLIO WILL NORMALLY HOLD LESS THAN 35% OF ITS TOTAL ASSETS IN CASH OR
CASH EQUIVALENTS (SUCH AS MONEY MARKET SECURITIES). THE ASSETS WILL MOST LIKELY
BE DEPOSITED IN INTEREST BEARING ACCOUNTS, MONEY MARKET ACCOUNTS, OR MONEY
MARKET MUTUAL FUNDS WITH RUSHMORE TRUST & SAVINGS, FSB. AN INVESTMENT IN THE
PORTFOLIO IS NOT A BANK DEPOSIT. PLEASE BE AWARE THAT MONEY MARKET INVESTMENTS
HAVE NO FDIC PROTECTION AND THE RUSHMORE INTEREST BEARING ACCOUNT IS PROTECTED
ONLY UP TO $100,000.
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CUSTOMER ASSISTANCE PHONE NUMBER: 1-800-887-8671
SHAREHOLDER AND ACCOUNT INQUIRIES: 1-800-622-1386
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THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
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THIS PORTFOLIO SEEKS LONG-TERM CAPITAL GROWTH BY INVESTING MAINLY IN STOCKS
OF SMALL CAPITALIZATION COMPANIES WHICH HAVE THE POTENTIAL TO RISE IN PRICE.
OUR PRINCIPAL STRATEGY
This Portfolio is designed to achieve the highest possible returns while
minimizing risk. Our selection process focuses on small, fast-growing
companies that offer innovative products, services, or technologies to a
rapidly expanding marketplace. We use an objective, "bottom-up,"
quantitative screening process designed to identify and select inefficiently
priced growth stocks with superior returns compared to their risk
characteristics.
We mainly buy stocks of companies which we believe are poised to rise in
price. Our investment process focuses on "growth" variables including, but
not limited to, earnings growth, reinvestment rate, and operating margin
expansion.
We attempt to uncover stocks with strong return potential and acceptable
risk characteristics. To do this, we use our proprietary computer model to
calculate and analyze a "reward/risk ratio." The reward/risk ratio is
designed to identify stocks with above market average returns and risk
levels which are reasonable for higher return rates.
Our research team then applies two or more sets of criteria to identify the
most attractive stocks. Examples of these criteria include earnings growth,
profit margins, reasonable price/earnings ratios based on expected future
earnings, and various other fundamental criteria.
Stocks with the best combination of growth ratios are blended into a
diversified portfolio.
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EVERY QUARTER, WE EVALUATE OUR TESTS AND REWEIGHT THEIR INFLUENCE ON THE
COMPUTER MODELS AS NECESSARY. THIS ALLOWS US TO CONTINUOUSLY MONITOR WHICH
FACTORS APPEAR TO BE CURRENTLY IN FAVOR IN THE FINANCIAL MARKETS.
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WHAT WE INVEST IN
Under normal conditions, the Portfolio invests at least 65% of its total
assets in companies with market capitalization under $2 billion. The
remaining 35% may be invested in other types of securities, such as:
- bonds, cash, or cash equivalents, for temporary defensive purposes, if we
believe it will help protect the Portfolio from potential losses, or to
meet shareholder redemptions; and,
- up to 25% of its total assets in foreign securities traded on the United
States market.
THE PRINCIPAL RISKS
As with any mutual fund, there are risks of investing. We cannot guarantee
we will meet our investment goals. Furthermore, it is possible that you may
lose some or all of your money.
MARKET RISK. Investment in common stocks is subject to the risks of changing
economic, stock market, industry, and company conditions which could cause
the Portfolio's stocks to decrease in value. The companies in this Portfolio
are generally in a rapid growth phase and their stocks tend to fluctuate in
value more often than most securities. Because we invest aggressively, the
Portfolio could experience more price volatility than less aggressive funds.
LIQUIDITY. Small capitalization stocks trade fewer shares than larger
capitalization stocks. This may make shares more difficult to sell if there
are not enough buyers. Although we do not anticipate liquidity problems, the
potential risk exists. You should not invest in this Portfolio unless you
are willing to accept this risk.
SPECIAL RISKS. The former Trustees of the Navellier Series Fund, which was
merged into the Navellier Aggressive Small Cap Equity Portfolio
("Portfolio") on July 24, 1998 have made a demand to be indemnified for
their attorneys fees and costs which they claim to be approximately
$4 million, in connection with a class action lawsuit filed against them by
shareholders of the Portfolio. The lawsuit against the former trustees was
brought, in part, to
2
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recover for the Fund, Fund monies which the former trustees used in their
proxy solicitation to retain an investment advisor which the Fund
shareholders never approved and ultimately rejected. Because of the lawsuit,
the trial court issued an injunction ordering the former trustees to cease
their attempts to prevent dissemination of opposing proxy materials. The
current Trustees of the Navellier Performance Funds (the "Fund") and the
legal counsel to the Fund do not believe the former Trustees have a valid
claim. However, if such claim is ultimately determined by a court to be
valid, only the assets of the Portfolio would be subject to such claim and
not the assets of any other Portfolio of the Fund. However, even then,
Navellier Management, Inc. ("NMI") has agreed that, if any such claim were
ultimately determined to be valid, NMI, not the Portfolio, would pay such
claim.
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PORTFOLIO TURNOVER.
THE MORE OFTEN STOCKS ARE TRADED, THE MORE A PORTFOLIO WILL BE CHARGED BROKERAGE
COMMISSIONS, DEALER MARK-UPS, AND OTHER TRANSACTION COSTS THAT LOWER
PERFORMANCE. IN ADDITION, SALES OF STOCKS MAY GENERATE CAPITAL GAINS TAXES. WE
DO NOT EXPECT THIS PORTFOLIO TO HAVE A TURNOVER RATE OF MORE THAN 300% EACH
YEAR, AND IT MAY BE LOWER. WE WILL GO HIGHER IF IT WILL IMPROVE A PORTFOLIO'S
PERFORMANCE.
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FEES AND EXPENSES OF THE PORTFOLIO
This section will help you understand the fees and operating expenses of
this Portfolio and how they may affect you. You pay the fees shown below
directly to us when you buy or sell shares. Operating expenses are paid each
year by the Portfolio.
FEES. This table describes the fees you may pay if you buy and hold shares
of this Portfolio. You pay no initial sales charges to buy or sell shares of
the Aggressive Small Cap Equity Portfolio.
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Exchange Fee (1)........................ 0-$5
</TABLE>
(1) Shares of this portfolio may be exchanged for shares of the other
Navellier Performance Portfolios at net asset value without charge (up
to five (5) exchanges per account). There is a charge of $5 per exchange
thereafter.
OPERATING EXPENSES PAID EACH YEAR BY THE PORTFOLIO. This table describes
the operating expenses you may pay if you buy and hold shares of this
Portfolio. Expenses are deducted from the Portfolio's income before
dividends are paid. Some expenses are shared by all the Portfolios and are
allocated on a pro rata basis.
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(as a % of average daily net assets)
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Management Fees................................. 0.84%
Distribution (and/or service)(12b-1) Fees....... 0.25%
Other Expenses.................................. 0.76%
Administration Fees................. 0.25%
Other Operating Expenses............ 0.51%
Annual Portfolio Operating Expenses............. 1.85%
Expense Reimbursement (2)....................... 0.36%
Net Annual Portfolio Operating Expenses......... 1.49%
</TABLE>
(2) Reflects Navellier's contractual waiver reimbursement of a portion of
the portfolio's operating expenses.
FEE EXAMPLE. This example is intended to help you compare the cost of
investing in the Portfolio with the cost of investing in other mutual
funds.
The example assumes that you invest $10,000 in the Portfolio for the time
periods indicated and then redeem all of your shares at the end of those
periods. The example also assumes that your investment has a 5% return each
year and that the Portfolio's operating expenses remain the same. This
example uses net annual operating expenses for the first year and total
operating expenses for 3 years, 5 years and 10 years. Assuming the Advisor
continues to reimburse the Portfolio, your actual expenses could be lower.
Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
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1 year.................................. $ 152
3 years................................. $ 621
5 years................................. $1,068
10 years................................ $2,306
</TABLE>
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EXPENSES PAID TO THE DISTRIBUTOR.
THE PORTFOLIO IS ALLOWED TO PAY FEES TO THE DISTRIBUTOR AND OTHERS FOR
PROMOTING, SELLING, AND DISTRIBUTING ITS SHARES. THESE ARE COMMONLY CALLED
"12b-1 FEES." BECAUSE THESE FEES ARE PAID OUT OF THE PORTFOLIO'S ASSETS ON AN
ONGOING BASIS, OVER TIME THESE FEES WILL INCREASE THE COST OF YOUR INVESTMENT
AND MAY COST YOU MORE THAN PAYING OTHER TYPES OF SALES CHARGES, SUCH AS A SALES
COMMISSION AT THE TIME OF PURCHASE ("FRONT END LOAD") OR SALE ("BACK END LOAD").
PAYMENTS ARE MADE MONTHLY AND CAN BE UP TO 0.25% OF THE PORTFOLIO'S AVERAGE
DAILY NET ASSETS.
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HOW THE PORTFOLIO HAS PERFORMED
The charts below give some indication of the risks of investing in the
Aggressive Small Cap Equity Portfolio.
AGGRESSIVE SMALL CAP EQUITY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
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1994* 9.80%
1995 43.80%
1996 15.44%
1997 11.24%
1998 -0.06%
1999 28.34%
</TABLE>
* FROM COMMENCEMENT OF OPERATIONS JANUARY 3, 1994
YEAR BY YEAR TOTAL RETURN. This chart shows how the Portfolio's performance
has changed from year to year. Fees are not included in this chart. If they
were, the Portfolio's returns would be less than those shown.
1994 9.80%
1995 43.80%
1996 15.44%
1997 11.24%
1998 (0.06%)
1999 28.34%
HIGHEST AND LOWEST QUARTERLY RETURNS. This chart shows the range of returns
experienced by the Portfolio since it began operations on January 3, 1994.
4TH QUARTER 1999 - up 32.33%
3RD QUARTER 1998 - down 21.33%
AVERAGE ANNUAL RETURNS. This chart compares the Portfolio's average annual
returns to the Russell 2000 Growth Index for the same time period. This
information may help provide an indication of the Portfolio's risks and
potential rewards. All figures assume reinvestment of dividends and
distributions. The Portfolio's past performance is not a guarantee of how it
will perform in the future.
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ONE YEAR SINCE INCEPTION (1)
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Aggressive Small Cap Equity Portfolio... 28.34% 18.89%
Russell 2000 Growth Index............... 43.09% 16.66%
</TABLE>
(1) The effective date of the Aggressive Small Cap Equity Portfolio was
January 3, 1994. Performance was measured against the Russell 2000
Growth Index as of January 3, 1994.
4
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FINANCIAL HIGHLIGHTS
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The financial highlights are intended to help you understand the Portfolio's
financial performance to date. Certain information reflects financial results
for a single Portfolio share. The total returns in the table represent the
rate you would have earned (or lost) on an investment in the Portfolio
(assuming reinvestment of all dividends and distributions). Prior to 1997,
Deloitte and Touche audited the Portfolios' financial information. After
1997, this information has been audited by Tait, Weller and Baker, whose
report, along with the Portfolio's financial statements, are included in the
SAI or annual report, available upon request.
<TABLE>
<CAPTION>
AGGRESSIVE SMALL CAP EQUITY PORTFOLIO**
FOR THE YEARS ENDED DECEMBER 31,
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1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
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FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR:
Net Asset Value -- Beginning of
Year............................. $ 15.99 $ 16.00 $ 17.79 $ 15.41 $ 10.98
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss................ (0.24) (0.15) (0.30) (0.23) (0.16)
Net Realized and Unrealized Gain on
Investments...................... 4.71 0.14 2.30(C) 2.61 4.97
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Total From Investment Operations... 4.47 (0.01) 2.00 2.38 4.81
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DISTRIBUTIONS TO SHAREHOLDERS:
From Net Realized Gain............. (0.20) -- (3.79) -- (0.38)
Net Increase (Decrease) in Net
Asset Value...................... 4.27 (0.01) (1.79) 2.38 4.43
Net Asset Value -- End of Year..... $ 20.26 $ 15.99 $ 16.00 $ 17.79 $ 15.41
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TOTAL INVESTMENT RETURN............ 28.34% (0.06%) 11.24% 15.44% 43.80%
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RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement (Note
2)............................... 1.49% 1.63% 2.33% 1.75% 1.75%
Expenses Before Reimbursement (Note
2)............................... 1.85% 1.98% 2.62% 1.86% 2.10%
Net Investment Loss After
Reimbursement (Note 2)........... (1.21%) (0.79%) (1.37%) (1.33%) (1.15%)
Net Investment Loss Before
Reimbursement (Note 2)........... (1.57%) (1.13%) (1.64%) (1.44%) (1.50%)
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SUPPLEMENTARY DATA:
Portfolio Turnover Rate............ 240% 145% 184% 137% 170%
Net Assets at End of Year (in
thousands)....................... $38,626 $47,259 $72,879 $190,035 $105,299
Number of Shares Outstanding at End
of Year (in thousands)........... 1,906 2,955 4,555 10,683 6,831
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</TABLE>
(C) The per share amount does not coincide with the net realized and
unrealized loss for the year because of the timing of sales and
redemptions of Fund shares and the amount of per share realized and
unrealized gain and loss at such time.
** Financial Highlights include the performance of the Navellier Aggressive
Small Cap Equity Portfolio, a series of the Navellier Series Fund, which
reorganized on July 24, 1998, as a series of the Navellier Performance
Funds.
5
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WHO IS RESPONSIBLE FOR THE PORTFOLIO
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INVESTMENT ADVISOR
Navellier Management, Inc. is the Investment Advisor to the Portfolio.
Navellier is located at One East Liberty, Third Floor, Reno, Nevada, 89501.
LOUIS G. NAVELLIER has been the CEO and President of Navellier Management,
Inc. since 1994. He has an aggressive investment style suitable only for
investors willing to accept a little more risk and who can hold stocks
long-term. Mr. Navellier developed a computer model based on an existing
proven model, which identifies attractive stocks to meet the goals of each
Portfolio. He has been advising Portfolio Managers based on his investment
technique since 1987. Mr. Navellier has the final decision making authority
on stock purchases and sales and is ultimately responsible for all decisions
regarding the Portfolios.
ALAN ALPERS has been the Senior Portfolio Manager and Analyst for Navellier
Management, Inc. since 1994. Mr. Alpers is the portfolio manager of and is
responsible for the daily activities of the Portfolio. He believes that with
Navellier's quantitative and fundamental analysis he can select stocks that
will outperform the overall stock market without exposing investors to
excessive risk.
DISTRIBUTOR
Navellier Securities Corp. is the Distributor for the Portfolio and is
responsible for the sale and distribution of shares to individual
shareholders and broker-dealers. Mr. Navellier is 100% owner of the
Distributor.
ACCOUNT POLICIES
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Here are some important details to know before investing in the Navellier
Aggressive Small Cap Equity Portfolio:
HOW WE PRICE SHARES.
Shares are priced at net asset value (NAV). The net asset value is
calculated by adding the values of all securities and other assets of the
Portfolio, subtracting liabilities, and dividing by the number of
outstanding shares.
WHEN SHARES ARE PRICED.
NAV calculations are made once each day, after the close of trading (4:00
p.m. Eastern Time). Shares are not priced on any national holidays or other
days when the New York Stock Exchange (NYSE) is closed.
IMPORTANT INFORMATION ABOUT FOREIGN STOCK TRADES.
Foreign stock trades may occur on days when the NYSE is closed. As a
result, share values may change when you are unable to buy or sell shares.
NOTIFICATION OF CHANGES.
You will be notified of any significant changes to the Portfolio in writing
at least 90 days before the changes take effect.
WHEN STATEMENTS ARE SENT.
We will send you an account statement at least quarterly.
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UNDERSTANDING EARNINGS
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The Portfolio may pay you dividends or distributions. Here are some specifics
about these earnings:
THREE KINDS OF DIVIDENDS.
Dividends paid to you could be:
- a return of capital (a repayment of the money you invested);
- dividends or interest earned by shares of the stocks in a Portfolio;
- capital gains earned by selling shares of stocks at a profit.
WHEN DIVIDENDS AND DISTRIBUTIONS ARE PAID.
The Portfolio will distribute all of its net investment income and net
realized capital gains (if any) once a year, usually in December.
YOUR CHOICE: SHARES OR CASH.
You may choose to receive dividends or distributions in one of two ways:
- We will automatically reinvest your dividends and distributions in
additional shares of the Portfolio, priced at the net asset value, unless
you ask to be paid in cash. We have the right to alter this policy as long
as we notify you at least 90 days before the record date for a dividend or
distribution; or
- To be paid in cash, you must notify us in writing. Cash payments will be
made by check, mailed to the same address as statements and confirmations,
unless you instruct us otherwise in writing.
WHO RECEIVES A DIVIDEND.
You are entitled to a dividend or distribution if you buy shares before the
close of business (4 p.m. Eastern Time) on the record date (the day the
dividend or distribution is declared). The Portfolio has the right to use
this money until the date of payment to you.
UNDERSTANDING TAXES
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Distributions received in cash or additional shares of the Portfolio may be
subject to federal income tax. The following are general rules concerning the
tax consequences of investing in the Portfolio. Be sure to consult your tax
advisor about the specific tax implications of your investments.
TAX CONSEQUENCES OF DIVIDENDS.
Your dividends are taxable in the following ways:
- A return of capital is not taxable to you.
- Dividends and interest earned by the Portfolio are taxable to you as
ordinary income.
- Capital gains distributions are taxable as long-term capital gains,
regardless of how long you have held the shares. When you sell or exchange
shares you will realize a capital gain or loss, depending on the
difference between what your shares cost you and what you receive for
them. A capital gain or loss will be long-term or short-term, depending on
the length of time you held the shares.
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WHEN DIVIDENDS ARE TAXABLE.
Dividends are taxable in the year they are declared. You could, therefore,
receive a dividend payment in January that is taxable in the previous year
because it was declared in the previous year.
TAX EXCEPTIONS.
Dividends will not be taxable in the year they are paid if the Portfolio is
being held in a tax-advantaged account, such as an IRA.
GAINS AND LOSSES.
If you sell or exchange shares, you will usually receive either a gain or a
loss (based on the difference between what you paid for the shares and the
price at which you sold or exchanged them). These gains and losses may be
subject to federal income tax, are usually treated as capital gains, and
will be either long-term or short-term depending on how long you held the
shares.
REPORTING.
You must report all dividends and redemptions. You may be subject to a 31%
backup withholding, as required by law. (See the bottom of the back side of
our application.) This amount will be credited against your federal income
tax liabilities.
STATE AND LOCAL TAXES.
Dividends may be subject to state and local taxes.
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BE CAREFUL: TIMING CAN MAKE A DIFFERENCE.
CAPITAL GAINS AND DIVIDENDS REDUCE THE NET ASSET VALUE (NAV) OF EACH PORTFOLIO
SHARE. BEFORE BUYING SHARES, BE AWARE WHEN DIVIDENDS, INCLUDING CAPITAL GAINS
DISTRIBUTIONS, ARE EXPECTED TO BE PAID. IF THEY ARE PAID SHORTLY AFTER YOU
PURCHASE SHARES, THE VALUE OF YOUR SHARES WILL BE REDUCED AND THE DIVIDEND OR
DISTRIBUTION WILL BE TAXABLE TO YOU, EVEN THOUGH THE ACCOUNT WILL HAVE THE SAME
VALUE BEFORE AND AFTER THE DISTRIBUTION.
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HOW TO BUY, SELL, AND EXCHANGE SHARES
- -----------------------------------------------------------------
Here are some general rules to consider:
THREE WAYS TO PLACE ORDERS.
You may place an order with:
- the Distributor, Navellier Securities Corp.;
- the Transfer Agent, Rushmore Trust & Savings, FSB; or
- one of our selected broker-dealers.
PURCHASE MINIMUMS.
You may buy the Portfolio for:
- an initial amount of at least $2,000 (at least $500 for an IRA or other
tax qualified retirement plan); and,
- additional investments of at least $100.
MINIMUM ACCOUNT BALANCES.
Accounts of less than $2,000 ($500 for IRAs) are expensive to maintain.
Therefore, if you sell an amount of shares that brings your account balance
below the minimum, we may ask you to add
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to the account to raise it above the minimum. If, 30 days later, the
balance is still below the minimum, we have the right to sell the shares
and close the account without your consent. (We will not close accounts if
the balance falls because of market price fluctuations.)
PRICING.
You receive the next NAV calculated after your properly completed order is
received.
DIVIDENDS.
You will be credited with dividends for shares on the day you purchase
them, but you will not be credited with dividends for shares on the day you
sell them.
WHEN YOU RECEIVE YOUR MONEY.
You may instruct us to deposit the proceeds of a sale into your Rushmore
money market account, or to mail the proceeds. Normally, we will mail your
check within seven days of the redemption. If you sell all your shares, you
will receive an amount equal to the total value of the shares plus all
declared but unpaid dividends. If you buy shares by check and sell them
within the next 15 days, we may delay paying you until after the 15th day
from the purchase date or until the check clears, whichever occurs first.
You can avoid this delay if you wire money to buy shares.
RESTRICTIONS ON PHONE ORDERS.
You may only sell by phone if you have requested telephone redemption
privileges on your original application. Shares held in an IRA may not be
redeemed by phone. Furthermore, you must wait to sell shares by phone for
at least 30 days after notifying Rushmore Trust & Savings of a change of
address.
CHANGING THE TERMS.
We can change any of the methods of buying or selling after giving you 30
days' written notice.
EXCHANGING SHARES.
You may instruct us to exchange shares in one Navellier Portfolio for
shares in another Navellier Portfolio (unless your state doesn't allow
exchanges). We will do this by selling the shares in one Portfolio and
buying shares in another. There are certain limitations:
- The amount must be at least $2,000 ($500 for IRAs) if you're exchanging
into a Portfolio for the first time; or $100 if you have already bought
shares in that Portfolio.
- You may make only one exchange within any 30-day period.
- You may make up to 10 exchanges per year; after the fifth one, there will
be a $5 fee per exchange.
BUYING SHARES
BY MAIL
FILL OUT AN APPLICATION. Complete an application naming the Navellier
Aggressive Small Cap Equity Portfolio as the Portfolio in which you are
investing and how much money is to be invested.
WRITE A CHECK. Make the check payable to "The Navellier Performance Funds."
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SEND THE CHECK AND APPLICATION. Mail the check and application to:
The Navellier Performance Funds
c/o Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
Once your check and properly completed application are received, your shares
will be bought at the next determined NAV. For example, if we receive your
check after 4 p.m. Eastern time, the purchase will be made based on the
shares' NAV of the next trading day. If additional information is required,
your application will be considered incomplete until we have received it.
PLEASE NOTE: No foreign checks are accepted.
BY WIRE
CALL YOUR BANK. Tell your bank to send wiring instructions including:
- the Portfolio in which you are investing, and how much is to be invested;
- your Navellier account number;
- the order number (if available);
- your name.
GIVE THE BANK WIRING INSTRUCTIONS. Send the wire transfer to:
Rushmore Federal Savings Bank
Bethesda, MD
Routing number 0550 71084
For account of The Navellier Performance Funds
Account number 029 385770
FOLLOW UP WITH A PHONE CALL. You must follow up the wire with a phone call
to us at 1-800-622-1386 or 1-301-657-1510 and tell us the amount you wired
and the bank sending the wire.
PLEASE NOTE: You are responsible for any wiring charges from your bank. If
we purchase shares based on your wiring instructions and have to cancel the
purchase because your wire is not received, you may be liable for any loss
the Portfolio may incur.
BY AUTOMATIC PLAN
MAKE MONTHLY PURCHASES. You may make automatic monthly purchases of
Portfolio shares directly from your bank account. Simply complete the
automatic monthly withdrawal application authorizing your bank to transfer
money from your checking account to Rushmore Savings & Trust. This is a free
service, and you may discontinue it at any time.
SELLING OR EXCHANGING SHARES
BY MAIL
SEND THE FOLLOWING INFORMATION. Send a written request including the:
- name of the Portfolio;
- account name and number;
- exact names of each registered account owner;
- number or dollar amount of shares to be sold (or that all shares are to be
sold).
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The mailing address is:
The Navellier Performance Funds
c/o Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
BY PHONE
MAKE A PHONE CALL. Call Rushmore Trust & Savings at 1-800-622-1386 by 4 p.m.
Eastern Time to have your shares sold that day.
HAVE YOUR INFORMATION READY. Provide the proper personal identification
information requested of you. We reserve the right to refuse the order if we
cannot reasonably confirm the authenticity of the instructions.
BY AUTOMATIC PLAN
MAKE REGULAR WITHDRAWALS. If you have a total of $25,000 or more invested in
Navellier Portfolios, you may instruct us to make monthly, quarterly, or
annual payments of any amount above $1,000 to anyone you name. Shares will
be sold on the last business day of each month. Contact us to arrange this
service.
BUYING OR SELLING THROUGH SELECTED BROKER-DEALERS
You may buy or sell shares through selected broker-dealers. The shares will
be bought at the next determined NAV after receiving the order. If you think
an order should have been delivered to us before 4 p.m. Eastern time but it
was not, you must resolve the issue directly with your broker-dealer. The
broker-dealer is responsible for sending your order in promptly.
BROKER COMPENSATION. Brokers will be paid a service fee depending on the
average net assets in the Portfolio in which they purchase shares. These
fees are paid from the 12b-1 fee deducted from the Portfolio. In addition to
covering the cost of commissions and service fees, the 12b-1 fee is used to
pay for other expenses such as sales literature, prospectus printing and
distribution and compensation to the distributor and its wholesalers. For
more information on the 12b-1 fees for the Portfolio, see the detailed
description of the Portfolio beginning on page .
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NEED TO KNOW MORE?
- -----------------------------------------------------------------
THE NAVELLIER PERFORMANCE PORTFOLIOS
Additional information is available free of charge in the Fund's
Annual/Semi-Annual Report and the Statement of Additional Information (SAI).
In our Annual Report, you will find a discussion of the market conditions
and investment strategies that significantly affected the Fund's performance
during the past fiscal year. The SAI is incorporated by reference (legally
considered part of this document). Documents will be sent within 3 business
days of receipt of request.
The Navellier Performance Portfolios
c/o Navellier Securities Corp.
One East Liberty, Third Floor
Reno, Nevada 89501
1-800-887-8671
Internet address: http://www.navellier.com
Copies can also be viewed at the SEC's Public Reference Room in Washington,
D.C. (1-800-SEC-0330), or on the Commission's Internet site
(http://www.sec.gov), or by written request (including duplicating fee) to
the Public Reference Section of the Commission, Washington, D.C. 20549-6009.
SEC File Number - 811-9142
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PART B
THE NAVELLIER PERFORMANCE FUNDS
(THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO)
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 2000
This Statement of Additional Information, which is not a prospectus,
incorporates by reference the Statement of Additional Information of the
Registration Statement of the Navellier Performance Funds filed May 1, 2000.
<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 OBJECTIVE OF THE 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 Advisor believes represents an opportunity for
significant capital appreciation. The Investment Advisor 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 Advisor 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-diversified 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 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 $2 Billion and $10 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 MICRO CAP PORTFOLIO
The Investment Objective of the Navellier Aggressive Micro Cap Portfolio is
to achieve long-term growth of capital primarily through investment in companies
with appreciation potential. The Aggressive Micro 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 Micro Cap
Portfolio will be to seek to achieve long term growth of capital primarily
through investments in securities of micro 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 initial sales charge 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 charge.
INVESTMENT OBJECTIVE OF THE NAVELLIER SMALL CAP VALUE PORTFOLIO
The Investment Objective of the Small Cap Value Portfolio is to achieve
long-term growth of capital primarily through investment in small cap
companies which the Investment Advisor believes are undervalued and which the
Investment Advisor believes have appreciation potential. This Portfolio seeks
to achieve its investment objective by investing in equities of small cap
issuers with superior fundamentals, including but not limited to, high
dividend yields, and positive quarterly earnings changes and other value type
screens. The Small Cap Value Portfolio invests in equity securities traded in
all United States markets including dollar denominated foreign securities
traded in United States markets. It is a 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 Small
Cap Value Portfolio seeks long term capital appreciation through investments
in securities of small cap companies (companies with market capitalization of
less than $2 Billion) which the Investment Advisor feels are undervalued in
the marketplace. Investors in the Small Cap Value 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 Small Cap Value Portfolio. Navellier Securities Corp. is the principal
distributor for the Small Cap Value Portfolio's shares. This Portfolio should
not be considered suitable for investors seeking current income.
INVESTMENT OBJECTIVE OF THE NAVELLIER LARGE CAP GROWTH PORTFOLIO
The investment objective of the Navellier Large Cap Growth Portfolio is to
achieve long term growth of capital primarily through investments in stocks of
companies with appreciation potential.
The Navellier Large Cap 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 Advisor believes represents an opportunity for
significant capital appreciation. The Investment Advisor 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 Advisor 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 with market
capitalization in excess of five billion dollars. Under normal circumstances,
this Portfolio will invest at least 65% of its total assets in securities of
companies with market capitalizations in excess of $5 Billion. 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-diversified
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, this Portfolio 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,
this 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 Navellier Large Cap Growth Portfolio pay no initial sales
charge 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 charge.
INVESTMENT OBJECTIVE OF THE NAVELLIER LARGE CAP VALUE PORTFOLIO
The investment objective of the Navellier Large Cap Value Portfolio is to
achieve a long-term increase in capital, primarily through investments in stocks
of large cap companies which the Investment Advisor believes are undervalued.
The Large Cap Value Portfolio invests in equity securities traded in all
United States markets, including dollar-denominated foreign securities traded in
the United States markets. It is a 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 Large Cap Value Portfolio
seeks long term capital appreciation through investments in securities of large
cap companies (companies with market capitalization of over $5 Billion) which
the Investment Advisor feels are undervalued in the marketplace. Investors in
the Large Cap Value 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 Large Cap Value Portfolio.
Navellier Securities Corp. is the principal distributor for the Large Cap Value
Portfolio's shares. This Portfolio should not be considered suitable for
investors seeking current income.
INVESTMENT OBJECTIVE OF THE NAVELLIER INTERNATIONAL EQUITY PORTFOLIO
The Investment Objective of the Navellier International Equity Portfolio
is to achieve long-term growth of capital primarily through investment in the
securities of foreign companies which have growth opportunities and which can
be acquired at a reasonable price. The Navellier International Equity
Portfolio invests in equity securities of foreign issuers in developed and
developing markets (constituent members of the Morgan Stanley World Equity
Index, the Dow Jones World Equity Index, or the Financial Times/S&P Actuaries
World Equity Index, excluding the United States of America) and will invest
at least 65% of its total assets in securities of foreign companies and will
invest in equity securities of at least three (3) foreign countries. The sole
objective of the Navellier International Equity Portfolio will be to seek to
achieve long term growth of capital primarily through investments in
securities of foreign companies which the Sub-advisor believes have growth
opportunities and which can be acquired at a reasonable price. There can be
no assurance that this Portfolio will achieve its investment objectives. This
Portfolio's investment objectives may not be changed without shareholder
approval. Navellier Securities Corp. is the Distributor for this Portfolio's
shares. This Portfolio should not be considered suitable for investors
seeking current income. Investors in this Portfolio pay no initial sales
charge but do pay an annual 0.25% 12b-1 fee which over a period of years
could result in higher overall expenses than payment of an initial sales
charge. Global Value Investors, Inc. is the Sub-advisor to this Portfolio and
Ram Kolluri is the Portfolio Manager.
INVESTMENT OBJECTIVE OF THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
The Investment Objective of the Navellier Aggressive Small Cap Equity
Portfolio is to achieve long-term growth of capital primarily through investment
in small cap companies with appreciation potential. The Aggressive Small Cap
Equity 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 Equity 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 $2
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 an annual 0.25% 12b-1 fee which over a period of
years could result in higher overall expenses than payment of an initial sales
charge.
OTHER INVESTMENTS
While under normal circumstances each of the Portfolios will invest at least
65% of its total assets in equity securities, 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 Advisor, such investment will further the
cash needs or temporary defensive needs of the Portfolio. In addition, when the
Investment Advisor 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 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, the Aggressive
Small Cap Portfolio, the Small Cap Value Portfolio, the Large Cap Growth
Portfolio, the Large Cap Value Portfolio, and the Aggressive Small Cap Equity
Portfolio, the Investment Advisor will screen over 9,000 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 Advisor believes are undervalued common stocks believed to have
long-term appreciation 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 or
increased value. There are no limitations on the Aggressive Growth Portfolio or
the Large Cap Growth Portfolio as to the type, operating history, or dividend
paying record of companies or industries in which these two Portfolios may
invest; the principal criteria for investment is that the securities provide
opportunities for capital growth. The Mid Cap Growth Portfolio invests at least
65% of its total assets in equity securities of companies defined as Mid Cap
(companies with capitalization of between $2 Billion and $10 Billion). The
Aggressive Micro Cap Portfolio invests at least 65% of its total assets in
equity securities of companies defined as micro cap (companies with
capitalization of less than $1 Billion.) The Small Cap Value Portfolio and the
Aggressive Small Cap Equity Portfolio invest at least 65% of their total assets
in equity securities of companies defined as small cap (companies with
capitalization of less than $2 Billion). The Large Cap Growth Portfolio and the
Large Cap Value Portfolio invest at least 65% of their total assets in equity
securities of companies defined as large cap (companies with capitalization over
$5 Billion). These Portfolios will invest up to 100% of their capital in equity
securities selected for their growth or value potential. The Investment Advisor
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 Advisor, when investing for the Aggressive Growth Portfolio, the
Large Cap Growth Portfolio and the Large Cap Value Portfolio may also purchase
common stocks of well known, highly researched, large companies if the
Investment Advisor believes such common stocks offer opportunity for long-term
capital appreciation.
LACK OF OPERATING HISTORY AND EXPERIENCE
The Aggressive Growth Portfolio went effective December 28, 1995 and has
over three years of operations. The Mid Cap Growth Portfolio and the
Aggressive Micro Cap Portfolio both went effective November 26, 1996 (however
The Aggressive Micro Cap Portfolio was not actively marketed to the public
until March 17, 1997). The Large Cap Growth, The Small Cap Value, The Large
Cap Value and The International Equity Portfolios are all investment
company portfolios which went effective December 18, 1997. The Aggressive
Small Cap Equity Portfolio was originally organized as an investment company
under The Navellier Series Fund which went effective April 1, 1994. The
Investment Advisor was organized on May 28, 1993. Although the Investment
Advisor 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 Advisor 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
also has overall responsibility for the selection of securities for
investment for each of the Portfolios, although the Investment Advisor has a
sub-advisory arrangement with Global Value Investors, Inc. ("GVI") whereby
Ram Kolluri, the Portfolio Manager for GVI, is responsible for the day-to-day
investments for The International Equity Portfolio. The Investment Advisor
also has a consulting agreement with Robert Barnes, Ph.D, whereby Mr. Barnes
provides analysis and consults with the Investment Advisor regarding large
cap equity securities as possible investments for The Large Cap Growth
Portfolio.
Louis Navellier, the owner of the Investment Advisor, is also the owner
of another investment advisory firm, Navellier & Associates Inc., which
presently manages over $5 billion in investor funds. Louis Navellier, the
owner of the Investment Advisor, is also the owner of another investment
advisory firm, Navellier Fund Management, Inc., and owns 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
Advisor 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 Advisor 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
Advisor 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 Advisor 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. and 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
1
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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 other
Navellier controlled investment entities and the Investment Advisor 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 Advisor 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 Advisor 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
and/or the Large Cap 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 and the Large Cap
Growth Portfolio may each 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 non-diversified investment Portfolios, the Aggressive
Growth Portfolio and the Large Cap Growth Portfolio may each be subject to
greater fluctuation in the total market value of such Portfolio, and
economic, political or regulatory developments may have a greater impact on
the value of these Portfolios than would be the case if these Portfolios 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.
As part of a merger of the Aggressive Small Cap Equity Portfolio of the
Navellier Series Fund ("Series Portfolio") into the Aggressive Small Cap
Equity Portfolio of this Fund ("Performance Portfolio"), the Performance
Portfolio has agreed to accept all assets and to assume all valid liabilities
of the Series Portfolio. There were approximately $70 million in assets
transferred to the Performance Portfolio. The former Trustees of the
Navellier Series Fund, which was merged into the Aggressive Small Cap Equity
Portfolio ("Portfolio") on July 24, 1998 have made a demand to be indemnified
for their attorneys fees and costs which they claim to be approximately $4
million, in connection with a class action lawsuit filed against them by
shareholders of the Portfolio. The current Trustees of the Navellier
Performance Funds (the "Fund") and the legal counsel to the Fund do not
believe the former Trustees have a valid claim. However, if such claim is
ultimately determined by a court to be valid, only the assets of the
Portfolio would be subject to such claim and not the assets of any other
Portfolio of the Fund. However, even then, Navellier Management, Inc. ("NMI")
has agreed that, if any such claim were ultimately determined to be valid,
NMI, not the Portfolio, would pay such claim.
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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. Also following are other types
of investments in which the various Portfolios may invest.
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.
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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.
STOCK INDEX FUTURES. A stock index futures contract (an "Index Future") is
a contract to buy an integral number of units of the relevant index at a
specified future date at a price agreed upon when the contract is made. A unit
is the value at a given time of the relevant index.
In connection with the International Equity Portfolio's investment in
securities or common stocks of foreign issuers, the International Equity
Portfolio may invest in Index Futures of foreign countries while the Sub-advisor
seeks favorable terms from brokers to effect transactions in common stocks
selected for purchase. The International Equity Portfolio may also invest in
Index Futures when the Sub-advisor believes that there are not enough attractive
common stocks available to maintain the standards of diversity and liquidity set
for the International Equity Portfolio pending investment in such stocks when
they do become available. Through the use of Index Futures, the International
Equity Portfolio may maintain a portfolio with diversified risk without
incurring the substantial brokerage costs which may be associated with
investment in multiple issuers. This may permit the International Equity
Portfolio to avoid potential market and liquidity problems (e.g., driving up or
forcing down the price by quickly purchasing or selling shares of a portfolio
security) which may result from increases or decreases in positions already held
by the International Equity Portfolio. Certain provisions of the Internal
Revenue Code may limit this use of Index Futures. The International Equity
Portfolio may also invest in Index Futures in order to hedge its equity
positions.
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INVESTING IN SECURITIES OF FOREIGN ISSUERS
Investments in foreign securities (those which are traded principally in
markets outside of the United States), 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. Furthermore, issuers of
foreign securities are subject to different, and often less comprehensive,
accounting, reporting and disclosure requirements than domestic issuers. The
laws of some foreign countries may limit a Fund's ability to invest in
securities of certain issuers located in those countries. The securities of some
foreign issuers and securities traded principally in foreign securities markets
are less liquid and at times more volatile than securities of comparable U.S.
issuers and securities traded principally in U.S. securities markets. Foreign
brokerage commissions and other fees are also generally higher than those
charged in the United States. There are also special tax considerations which
apply to securities of foreign issuers and securities traded principally in
foreign securities markets.
The risks of investing in foreign securities may be intensified in the
case of investments in emerging markets or countries with limited or
developing capital markets. Prices of securities of companies in emerging
markets can be significantly more volatile than prices of securities of
companies in the more developed nations of the world, reflecting the greater
uncertainties of investing in less developed markets and economies. In
particular, countries with emerging markets may have relatively unstable
governments, present the risk of nationalization of businesses, restrictions
on foreign ownership, or prohibitions of repatriation of assets, and may have
less protection of property rights than more developed countries. The
economies of countries with emerging markets may be predominantly based on
only a few industries or dependent on revenues from particular commodities or
on international aid or development assistance, may be highly vulnerable to
changes in local or global trade conditions, and may suffer from extreme and
volatile debt burdens or inflation rates. Local securities markets may trade
a small number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
substantial holdings difficult or impossible at times. Consequently,
securities of issuers located in countries with emerging markets may have
limited marketability and may be subject to more abrupt or erratic price
movements. Also, such local markets typically offer less regulatory
protections for investors.
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While to some extent the risks to the Fund of investing in foreign
securities may be limited, since each Portfolio (except for The International
Equity Portfolio (which may be fully invested in such securities)) may not
invest more than 25% of its net asset value in such securities and each
Portfolio of the Fund (except for The International Equity Portfolio) may only
invest in foreign securities which are traded in the United States securities
markets, the risks nonetheless exist.
The Investment Advisor 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
and for the International Equity Portfolio, will use the criteria described in
the Investment Objectives and Policies for the International Equity Portfolio
described in this Prospectus.
FOREIGN EXCHANGE TRANSACTIONS. The International Equity Portfolio does not
intend to actively hedge the foreign currency risks that may be associated with
investments in securities denominated in foreign currencies. However, in order
to possibly better protect against severe swings in currency markets, the
International Equity Portfolio reserves the right to buy or sell foreign
currency contracts, that is, to agree to buy or sell a specified currency at a
specified price and future date. The International Equity Portfolio also
reserves the right to invest in currency futures contracts and related options
thereon for similar purposes. For example, if the Sub-advisor anticipates that
the value of the yen will rise relative to the dollar, it could purchase a
currency futures contract or a call option thereon or purchase a put option on
such futures contract as a hedge. In utilizing the hedging strategies, futures
contracts or related options will only be used to neutralize the foreign
currency exposure on existing securities in the portfolio on a covered basis,
and not for investment or speculative purposes in foreign currencies. The
International Equity Portfolio is not permitted to utilize leverage in either
purchasing or selling futures contracts, or call or put options on the futures
for the above mentioned hedging
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transactions. These practices, if utilized, may present risks different from or
in addition to the risks associated with investments in foreign currencies.
STOCK INDEX FUTURES. A stock index futures contract (an "Index Future") is
a contract to buy an integral number of units of the relevant index at a
specified future date at a price agreed upon when the contract is made. A unit
is the value at a given time of the relevant index. The only Portfolio which may
possibly use the Stock Index Futures is the International Equity Portfolio.
In connection with the International Equity Portfolio's investment in
foreign common stocks, it may invest in Index Futures while the Sub-advisor
seeks favorable terms from brokers to effect transactions in foreign common
stocks selected for purchase. The International Equity Portfolio may also invest
in Index Futures when the Sub-advisor believes that there are not enough
attractive foreign common stocks available to maintain the standards of
diversity and liquidity set for the International Equity Portfolio pending
investment in such stocks when they do become available. Through the use of
Index Futures, the International Equity Portfolio may maintain a portfolio with
diversified risk without incurring the substantial brokerage costs which may be
associated with investment in multiple issuers. This may permit the
International Equity Portfolio to avoid potential market and liquidity problems
(e.g., driving up or forcing down the price by quickly purchasing or selling
shares of a portfolio security) which may result from increases or decreases in
positions already held by the International Equity Portfolio. Certain provisions
of the Internal Revenue Code may limit this use of Index Futures. The
International Equity Portfolio may also invest in Index Futures in order to
hedge its equity positions.
In contrast to purchases of common stock, no price is paid or received by
the International Equity Portfolio upon the purchase of a futures contract. Upon
entering into a futures contract, the International Equity Portfolio will be
required to deposit with its custodian in a segregated account in the name of
the futures broker a specified amount of cash or securities. This is known as
initial margin. Variation margin will be paid to and received from the broker on
a daily basis as the contracts are marked to market. For example, when the
International Equity Portfolio has purchased an Index Future and the price of
the relevant Index has risen, that position will have increased in value and the
International Equity Portfolio will receive from the broker a variation margin
payment equal to that increase in value. Conversely, when the International
Equity Portfolio has purchased an Index Future and the price of the relevant
Index has declined, the position would be less valuable and the International
Equity Portfolio would be required to make a variation margin payment to the
broker.
The price of Index futures may not correlate perfectly with movement in the
underlying Index due to certain market distortions. First, all participants in
the futures market are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may close
futures contracts through offsetting transactions which could distort the normal
relationship between the Index and futures markets. Secondly, the deposit
requirements in the futures market are less onerous than margin requirements in
the securities market, and as a result, the
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futures market may attract more speculators than does the securities market.
Increased participation by speculators in the futures market may also cause
temporary price distortions. In addition, trading hours for Index Futures may
not correspond perfectly to hours of trading on foreign exchanges. This may
result in a disparity between the price of Index Futures and the value of the
underlying Index due to the lack of continuous arbitrage between the Index
Futures price and the value of the underlying Index.
FOREIGN CURRENCY TRANSACTIONS. The International Equity Portfolio does not
intend to actively hedge the foreign currency risks that may be associated with
investments in securities denominated in foreign currencies. However, to
possibly protect the investments in the International Equity Portfolio against
severe swings in currency markets, the International Equity Portfolio reserves
the right to buy or sell foreign currency contracts, that is, to agree to keep
or sell a specified currency at a specified price and future date. The
International Equity Portfolio will not engage in currency futures transactions
for leveraging purposes. A put option on a futures contract gives the
International Equity Portfolio the right to assume a short position in the
futures contract until the expiration of the option. A call option on a futures
contract gives the International Equity Portfolio the right to assume a long
position on the futures contract until the expiration of the option.
CURRENCY FORWARD CONTRACTS. A forward foreign currency exchange contract
involves an obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract as agreed by
the parties at a price set at the time of the contract. In the case of a
cancelable forward contract, the holder has the unilateral right to cancel the
contract at maturity by paying a specified fee. The contracts traded in the
interbank market are negotiated directly between currency traders (usually large
commercial banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage for trades.
CURRENCY FUTURES TRANSACTIONS. A currency futures contract sale creates an
obligation by the seller to deliver the amount of currency called for in the
contract in a specified delivery month for a stated price. A currency futures
contract purchase creates an obligation by the purchaser to take delivery of the
underlying amount of currency in a specified delivery month at a stated price.
Futures contracts are traded only on commodity exchanges--known as "contract
markets"--approved for such trading by the Commodity Futures Trading Commission
("CFTC"), and must be executed through a futures commission merchant, or
brokerage firm, which is a member of the relevant contract market.
Although futures contracts by their terms call for actual delivery or
acceptance, in most cases the contracts are closed out before the settlement
date without the making or taking of delivery. Closing out a futures contract
sale is effected by purchasing a futures contract for the same aggregate amount
of the specific type of financial instrument or commodity and the same delivery
date. If the price of the initial sale of the futures contract exceeds the price
of the offsetting purchase, the seller is paid the difference and realizes a
gain. Conversely, if the price of the offsetting purchase
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exceeds the price of the initial sale, the seller realizes a loss. Similarly,
the closing out of a futures contract purchase is effected by the purchaser
entering into a futures contract sale. If the offsetting sale price exceeds
the purchase price, the purchaser realizes a gain and if the purchase price
exceeds the offsetting sale price, he realizes a loss.
The purchase or sale of a futures contract differs from the purchase or sale
of a security, in that no price or premium is paid or received. Instead, an
amount of cash or U.S. Treasury bills generally not exceeding 5% of the contract
amount must be deposited with the broker. This amount is known as initial
margin. Subsequent payments to and from the broker, known as variation margin,
are made on a daily basis as the price of the underlying futures contract
fluctuates making the long and short positions in the futures contract more or
less valuable, a process known as "marking to the market." At any time prior to
the settlement date of the futures contract, the position may be closed out by
taking an opposite position which will operate to terminate the position in the
futures contract. A final determination of variation margin is then made,
additional cash is required to be paid to or released by the broker, and the
purchaser realizes a loss or gain. In addition, a commission is paid on each
completed purchase and sale transaction.
Unlike a currency futures contract, which requires the parties to buy and
sell currency on a set date, an option on a futures contract entitles its holder
to decide on or before a future date whether to enter into such a contract. If
the holder decides not to enter into the contract, the premium paid for the
option is lost. Since the value of the option is fixed at the point of sale,
there are no daily payments of cash in the nature of "variation" on
"maintenance" margin payments to reflect the change in the value of the
underlying contract as there are by a purchaser or seller of a currency futures
contract.
The ability to establish and close out positions on options on futures will
be subject to the development and maintenance of a liquid secondary market. It
is not certain that this market will develop or be maintained.
The International Equity Portfolio may write (sell) only covered put and
call options on currency futures. This means that the International Equity
Portfolio will provide for its obligations upon exercise of the option by
segregating sufficient cash or short-term obligations or by holding an
offsetting position in the option or underlying currency future, or a
combination of the foregoing.
The International Equity Portfolio may not enter into currency futures
contracts or related options thereon if immediately thereafter the amount
committed to margin plus the amount paid for premiums for unexpired options on
currency futures contracts exceeds 5% of the market value of the International
Equity Portfolio's total assets.
LIMITATIONS ON THE USE OF CURRENCY FUTURES CONTRACTS. The International
Equity Portfolio's ability to engage in the currency futures transactions
described above will depend on the availability of liquid markets in such
instruments. Markets in currency
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futures are relatively new and still developing. It is impossible to predict the
amount of trading interest that may exist in various types of currency futures.
Therefore no assurance can be given that the International Equity Portfolio will
be able to utilize these instruments effectively for the purposes set forth
above. Furthermore, the International Equity Portfolio's ability to engage in
such transactions may be limited by tax considerations.
RISK FACTORS IN CURRENCY FUTURES TRANSACTIONS. Investment in currency
futures contracts involves risk. Some of that risk may be caused by an imperfect
correlation between movements in the price of the futures contract and the price
of the currency being hedged. The hedge will not be fully effective where there
is such imperfect correlation. To compensate for imperfect correlations, the
International Equity Portfolio may purchase or sell futures contracts in a
greater amount than the hedged currency if the volatility of the hedged currency
is historically greater than the volatility of the futures contract. Conversely,
the International Equity Portfolio may purchase or sell fewer contracts if the
volatility of the price of the hedged currency is historically less than that of
the futures contracts. The risk of imperfect correlation generally tends to
diminish as the maturity date of the futures contract approaches.
The successful use of transactions in futures and related options also
depends on the ability of the Sub-advisor to forecast correctly the direction
and extent of exchange rate and stock price movements within a given time frame.
It is impossible to forecast precisely what the market value of securities the
International Equity Portfolio anticipates buying will be at the expiration or
maturity of a currency forward or futures contract. Accordingly, in cases where
the International Equity Portfolio seeks to protect against an increase in value
of the currency in which the securities are denominated through a foreign
currency transaction, it may be necessary for the International Equity Portfolio
to purchase additional foreign currency on the spot market (and bear the expense
of such currency purchase) if the market value of the securities to be purchased
is less than the amount of foreign currency the International Equity Portfolio
contracted to purchase. Conversely, it may be necessary to sell on the spot
market some of the foreign currency received upon the sale of the portfolio
security or securities if the market value of such security or securities
exceeds the value of the securities purchased. When the International Equity
Portfolio purchases forward or futures contracts (or options thereon) to hedge
against a possible increase in the price of currency in which is denominated the
securities the International Equity Portfolio anticipates purchasing, it is
possible that the market may instead decline. If the International Equity
Portfolio does not then invest in such securities because of concern as to
possible further market decline or for other reasons, the International Equity
Portfolio may realize a loss on the forward or futures contract that is not
offset by a reduction in the price of the securities purchased. As a result, the
International Equity Portfolio's total return for such period may be less than
if it had not engaged in the forward or futures transaction.
Foreign currency transactions that are intended to hedge the value of
securities the International Equity Portfolio contemplates purchasing do not
eliminate fluctuations in the underlying prices of those securities. Rather,
such currency transactions
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simply establish a rate of exchange which can be used at some future point in
time. Additionally, although these techniques could possibly minimize the risk
of loss due to change in the value of the currency involved, they tend to limit
any potential gain that might result from the increase in the value of such
currency.
The amount of risk the International Equity Portfolio assumes when it
purchases an option on a currency futures contract is the premium paid for the
option plus related transaction costs. In addition to the correlation risks
discussed above, the purchase of an option also entails the risk that changes in
the value of the underlying futures contract will not be fully reflected in the
value of the option purchased.
The liquidity of a secondary market in a currency futures contract may be
adversely affected by "daily price fluctuation limits" established by commodity
exchanges which limit the amount of fluctuation in a futures contract price
during a single trading day. Once the daily limit has been reached in the
contract, no trades may be entered into at a price beyond the limit, thus
preventing the liquidation of open futures positions. Prices have in the past
exceeded the daily limit on a number of consecutive trading days.
The International Equity Portfolio's ability to engage in currency forward
and future transactions may be limited by tax considerations.
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
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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 various Portfolios of the
Fund except as otherwise specified herein may not:
1. Purchase any securities on margin (except the International Equity
Portfolio which may invest in stock index futures and currency futures
transactions); PROVIDED, HOWEVER, that the Portfolios of the Fund may obtain
short-term credit as may be necessary for the clearance of purchases and
sales of securities. The International Equity Portfolio may also, as noted
in the Prospectus under the heading "Investing in Securities of Foreign
Issuers" purchase Stock Index Futures and currency futures contracts on a
limited basis.
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.
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. The International Equity Portfolio may, as
necessary, invest in futures contracts including Stock Index Futures and
currency futures contracts.
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)
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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 or of the
Large Cap 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, the Aggressive Micro Cap
Portfolio, the Small Cap Value Portfolio, the Large Cap Value Portfolio and the
International Equity 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 portfolio 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.
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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 Micro Cap Portfolio for the period January 1,
1999 through December 31, 1999 was 190%. The portfolio turnover rate for the
Navellier Small Cap Value Portfolio for the period January 1, 1999 through
December 31, 1999 was 91%. The portfolio turnover rate for the Navellier
Large Cap Growth Portfolio for the period January 1, 1999 through December
31, 1999 was 75%. The portfolio turnover rate for the Navellier International
Equity Portfolio for the period January 1, 1999 through December 31, 1999 was
84%. The portfolio turnover rate for the Navellier Aggressive Growth
Portfolio for the period January 1, 1999 through December 31, 1999 was 702%.
The portfolio turnover rate for the Navellier Mid Cap Growth Portfolio for
the period January 1, 1999 through December 31, 1999 was 208%. The portfolio
turnover rate for the Navellier Aggressive Small Cap Equity Portfolio for the
period January 1, 1999 through December 31, 1999 was 240%. The portfolio
turnover rate for Navellier Large Cap Value Portfolio was 90%. 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 Advisor'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.
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TRUSTEES AND OFFICERS OF THE FUND
The Fund's Board of Trustees directs the business and affairs of each
Portfolio of the Fund as well as supervises the Investment Advisor,
Distributor, Transfer Agent and Custodian, as described below.
The following information, as of December 31, 1999, is provided with
respect to each trustee and officer of the Fund:
<TABLE>
<CAPTION>
POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS REGISTRANT AND ITS AFFILIATES DURING PAST FIVE YEARS
- ---------------- ----------------------------- ----------------------
<S> <C> <C>
Louis Navellier(1) Trustee and President of The Mr. Navellier is and has been
One East Liberty Navellier Performance Funds. the CEO and President of Navellier
Third Floor Mr. Navellier is also the CEO, & Associates Inc., an investment
Reno, NV 89501 President, Secretary, and Treasurer management company since 1988;
of Navellier Management, Inc., a CEO and President of Navellier
Delaware corporation which is the Management, Inc., an investment
Investment Advisor to the Fund. management company since May 10,
Mr. Navellier is also CEO, President, 1993; CEO and President of Navellier
Secretary, and Treasurer of Navellier International Management, Inc.,
Securities Corp., the principal an investment management company,
underwriter of the Fund's shares. 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.
Arnold Langsen(2) Trustee (however, Professor Langsen Professor Langsen is currently retired.
The Langsen Group, Inc. is the President and a shareholder of He was Professor Emeritus of Financial
of California The Langsen Group, Inc. of California, Economics, School of Business, California
637 Silver Lake Dr. which corporation provides consulting State University at Hayward (1973-1992);
Danville, CA 94526 services to Navellier & Associates Visiting Professor, Financial Economics,
Inc.) University of California at Berkeley
(1984-1987).
Barry Sander Trustee Currently retired as of December 1, 1998,
695 Mistletoe Rd., #2 formerly he was the President and CEO of Ursa
Ashland, OR 97520 Major Inc., a stencil manufacturing firm
and had been for the past nine years.
Joel Rossman Trustee Currently retired as of March 15, 1998.
6 Spanish Bay Court Formerly he was President and CEO of
Petaluma, CA 94954 Personal Stamp Exchange, Inc., a
manufacturer, designer and
distributor of rubber stamp products.
He had been President and CEO of
Personal Stamp Exchange for the
preceding 10 years.
</TABLE>
15
<PAGE>
<TABLE>
<S> <C> <C>
Jacques Delacroix Trustee Professor of Business Administration,
University of Leavy School of Business, Santa Clara
Santa Clara University (1983-present)
Santa Clara, CA
Arjen Kuyper(1) Treasurer Mr. Kuyper is and has been an operations
One East Liberty manager for Navellier & Associates, Inc.
Third Floor since 1992 and operations manager
Reno, NV 89501 for Navellier Management, Inc.
and for Navellier Securities Corp.,
since 1993.
</TABLE>
- ------------------------------
(1) This person is an interested person affiliated with the Investment Advisor.
(2) This person, although technically not an interested person affiliated with
the Investment Advisor, does own a company which provides consulting services to
Navellier & Associates Inc., a company owned by Louis Navellier.
16
<PAGE>
OFFICERS
The officers of the Fund are affiliated with the Investment Advisor 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 Advisor), (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
- --------------------------------------------------------------------------------
Name Capacity In Which Aggregate
Remuneration Received Remuneration
From
Registrant and
Fund Complex
for the fiscal
year ended
December 31,
1999
- --------------------------------------------------------------------------------
Louis G. Navellier Trustee, President, $ 0.00
Chief Executive Officer,
and Treasurer
- --------------------------------------------------------------------------------
Barry Sander Trustee $ 7,500.00
- --------------------------------------------------------------------------------
Arnold Langsen Trustee $ 0.00
- --------------------------------------------------------------------------------
Joel Rossman Trustee $ 7,500.00
- --------------------------------------------------------------------------------
Jacques Delacroix Trustee $ 7,500.00
- --------------------------------------------------------------------------------
17
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Louis Navellier is not a control person of the Fund or of any Portfolio.
18
<PAGE>
THE INVESTMENT ADVISOR, DISTRIBUTOR,
CUSTODIAN AND TRANSFER AGENT
THE INVESTMENT ADVISOR
Navellier Management, Inc. acts as the Investment Advisor to each of the
eight existing Portfolios of the Fund although it retains Global Value
Investors, Inc. as a Sub-advisor and Ram Kolluri as Portfolio Manager for the
day-to-day investments of the Navellier International Equity Portfolio.
Navellier Management, Inc. is the Investment Advisor to the Navellier Large
Cap Growth Portfolio and has a consulting agreement with Robert Barnes, Ph.D.
for analysis regarding large cap stocks. (See discussion below.) The
Investment Advisor is registered as an investment adviser under the
Investment Advisors Act of 1940. The Investment Advisor is responsible for
selecting the securities which will constitute the pool of securities which
will be selected for investment for each Portfolio except the International
Equity Portfolio. The selection of securities for the International Equity
Portfolio is made by the Sub-advisor Global Value Investors, Inc.'s Portfolio
Manager, Ram Kolluri. Pursuant to a separate Administrative Services
Agreement, the Investment Advisor 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
Advisor 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 Advisor 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
Advisor will determine from time to time what securities and other
investments will be selected to be purchased, retained, or sold by the
various portfolios of the Fund, except that the Sub-advisor, Global Value
Investors, Inc.'s Portfolio Manager, Ram Kolluri, will determine what
securities and other investments will be selected for purchase, retention or
sale by the International Equity Portfolio.
The Investment Advisor is owned and controlled by its sole shareholder,
Louis G. Navellier (a 100% stockholder). 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. Louis Navellier is, and has
19
<PAGE>
been, in the business of rendering investment advisory services to significant
pools of capital since 1987.
SUB-ADVISOR
Global Value Investors, Inc. ("GVI") is the Sub-advisor to Navellier
Management, Inc. in the investment management of the Navellier International
Equity Portfolio. GVI is a New Jersey corporation of which Ram Kolluri is a
principal, President and Chief Investment Officer. Mr. Kolluri has been
managing investment portfolios since 1982. His investment approach to the
International Equity Portfolio may be described as "growth at a reasonable
price." This is carried out by purchasing securities that, in the opinion of
the sub-advisor, demonstrate the potential for improving sales and earnings,
and selling at reasonable prices (based upon traditional fundamental
analyses) at the time of purchase. However, no guarantee can be made that
either the sales or the earnings of the companies in the portfolio will
actually be increasing during the period following the purchase.
The sub-advisor utilizes the "Global Tactical Asset Allocation (GTAA)", a
quantitative methodology that is actively used by institutional investors in
the United States and abroad to manage pension and other investment
portfolios in fiduciary capacity. GTAA was developed by academicians and
practitioners of the modern portfolio theory (MPT) in the 1980s, as an
advancement of the investment management process. It seeks to detect relative
under valuation in the global equity and bond markets by carefully examining
the macroeconomic factors that impact each market in the local currency.
After several years of research and modeling, Mr. Kolluri developed a
proprietary algorithm that enables him to rank the countries by
attractiveness in terms of intrinsic value at the time of purchase or sale.
He uses this information to select countries as a starting point for
individual stock selections in the individual countries. Mr. Kolluri uses
additional quantitative screens to purchase stocks in each country that meet
his "growth at a reasonable price" criteria. The stocks are held until Mr.
Kolluri believes there has been a market recognition of value.
Mr. Kolluri is responsible for the day-to-day selection of the securities
for investment in the Navellier International Equity Portfolio. Mr. Kolluri
earned his B.S. in Mathematics from Andhra University in India and an MBA in
Finance from Pace University in New York, NY. He holds designations of a
Chartered Accountant from India and a Certified Financial Planner from the
College of Financial Planning, Denver, Colorado. Mr. Kolluri is a member of
the Alpha Group, a nationally recognized peer group of asset managers.
CONSULTANT
Robert Barnes, Ph.D., is a consultant to Navellier Management, Inc. in the
management of the Navellier Large Cap Growth Portfolio. Mr. Barnes has over 25
years experience as a trader and business analyst. He has authored twelve books
and
20
<PAGE>
many articles on quantitative trading methods. He has developed customized
computer programs for trading strategies and portfolio management. He is
qualified as a mathematician and statistician for modeling, forecasting and
simulating investment, government and other industry operations. He has acted
as liaison between programmers and traders for investment companies. He has
developed theories on price behavior, risk/reward statistics, derivatives,
arbitrage strategies, forecasting functions and forensic techniques. Mr.
Barnes earned his B.S. in mathematics with a minor in Economics at Rensselaer
Polytechnic Institute and his M.S. in mathematics at Lehigh University. He
taught price discovery modeling strategies and portfolio management at The
New School from 1981--1985.
Mr. Barnes' investment approach is comprised of a two part trading style:
1) selection and 2) timing of entry and exit of stock positions. He selects
stocks for trade by examining their growth rates in past trends, choosing
those that have exhibited superior performance in the past in order to
maximize return for the portfolio. He then uses a number of timing methods in
order to enter and exit positions for those chosen stocks. These timing
methods are continuously updated and optimized in order to maximize return
and to reduce risk (by variation of timing points and diversifying across
many stocks) in the portfolio.
For information regarding the Fund's expenses and the fees paid to the
Investment Advisor see "Expenses of the Fund".
21
<PAGE>
(a) THE INVESTMENT ADVISOR
The offices of the Investment Advisor (Navellier Management,
Inc.) are located at One East Liberty, Third Floor, Reno, Nevada
89501. The Investment Advisor began operation in May 1993 and only
advises this Fund.
(i) The following individuals own the enumerated shares of
outstanding stock of the Investment Advisor and, as a result,
maintain control over the Investment Advisor:
Shares of Outstanding Stock Percentage of
Name of the Investment Advisor Outstanding Shares
- ---- ------------------------- ------------------
Louis G. Navellier 1,000 100%
(ii) The following individuals are affiliated with the Fund,
the Investment Advisor, and the Distributor in the following
capacities:
Name Position
- ---- --------
Louis G. Navellier Trustee and President 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 Micro Cap
Portfolio, the Large Cap Growth Portfolio,
the Large Cap Value Portfolio, the Small
Cap Value Portfolio and the Aggressive Small
Cap Equity Portfolio.
Alan Alpers One of the Portfolio Managers of
the Aggressive Growth Portfolio,
the Mid Cap Growth Portfolio,
the Aggressive Micro Cap Portfolio,
the Large Cap Growth Portfolio,
the Large Cap Value Portfolio, the Small
Cap Value Portfolio and the Aggressive Small
Cap Equity Portfolio.
Ram Kolluri Portfolio Manager for Global Value
Investors, Inc. - the Sub-advisor in
charge of the day-to-day investments of
the Navellier International Equity
Portfolio of The Navellier Performance
Funds.
Robert Barnes, Ph.D. Consultant to Navellier Management,
Inc., the Investment Advisor for the
Large Cap Growth Portfolio of The
Navellier Performance Funds.
Arjen Kuyper Treasurer of The Navellier Performance Funds.
22
<PAGE>
(iii) The management fees payable to the Investment Advisor under the
terms of the Investment Advisory Agreements (the "Advisory Agreements")
between the Investment Advisor and the Fund are payable monthly and are based
upon 0.84% of the average daily net assets of the Aggressive Growth
Portfolio, the Mid Cap Growth Portfolio, the Aggressive Micro Cap Portfolio,
the Small Cap Value Portfolio, the Large Cap Growth Portfolio and the
Aggressive Small Cap Equity Portfolio. The management fee payable to the
Investment Advisor under the terms of the Advisory Agreement applicable to
the Large Cap Value Portfolio is 0.75% of that Portfolio's average daily net
assets. The management fees payable to the Investment Advisor under the
terms of the Investment Advisory Agreement applicable to the International
Equity Portfolio is 1.0% of that Portfolio's average daily net assets. The
Investment Advisor has the right, but not the obligation, to waive any
portion or all of its management fee, from time to time.
The Investment Advisor pays Global Value Investors, Inc.
("Sub-advisor") an annual sub-advisory fee of 0.50% of the average
daily net assets of the International Equity Portfolio. Such
sub-advisory fee is paid by the Investment Advisor and is not paid by
the Fund or by the International Equity Portfolio.
The Investment Advisor also pays Robert Barnes a consulting fee
for consulting services and analysis of large cap securities in
connection with the Large Cap Growth Portfolio. Investment Advisor
pays Mr. Barnes an annual fee of 0.11% of the average daily net assets
of the Large Cap Growth Portfolio. Such consulting fee is paid by the
Investment Advisor and is not paid by the Fund or by the Large Cap
Growth Portfolio.
Navellier Management, Inc. was paid investment advisory fees for
the following Portfolios in the following amounts for the following
fiscal years:
Navellier Aggressive Growth Portfolio
-------------------------------------
1999 $ 649,922
---------
Navellier Mid Cap Growth Portfolio
----------------------------------
1999 $ 314,987
---------
Navellier Aggressive Micro Cap Portfolio
----------------------------------------
1999 $ 53,691
---------
Navellier Aggressive Small Cap Equity Portfolio
-----------------------------------------------
1999 $ 317,862
---------
Navellier Small Cap Value Portfolio
-----------------------------------------------
1999 $ 8,762
---------
Navellier Large Cap Growth Portfolio
-----------------------------------------------
1999 $ 54,872
---------
Navellier Large Cap Value Portfolio
-----------------------------------------------
1999 $ 6,968
---------
Navellier International Equity Portfolio
-----------------------------------------------
1999 $ 90,992
---------
23
<PAGE>
The Investment Advisor has agreed to waive reimbursement of all
or a portion of the expenses advanced by it on behalf of the following
portfolios for the following years if total operating expenses exceed
the following amounts:
Portfolio Expense Limit Year(s)
--------- ------------- -------
Aggressive Growth Portfolio 1.49% 2000
Mid Cap Growth Portfolio 1.49% 2000
Aggressive Micro Cap Portfolio 1.49% 2000
Small Cap Value Portfolio 1.49% 2000
Large Cap Growth Portfolio 1.49% 2000
Large Cap Value Portfolio 1.40% 2000
International Equity Portfolio 1.75% 2000
Aggressive Small Cap Equity Portfolio 1.49% 2000
During the twelve month period ended December 31, 1999, the Investment
Advisor paid operating expenses of $193,668; $269,204; $140,443; $85,319;
$82,591; $93,128; $82,695 and $140,977 for the Aggressive Small Cap Equity,
Aggressive Growth, Mid Cap Growth, Aggressive Micro Cap, Small Cap Value,
Large Cap Growth, Large Cap Value and the International Equity Portfolios,
respectively. Under the operating expense agreement, the Adviser requested,
and the Aggressive Small Cap Equity Portfolio, the Aggressive Growth
Portfolio, the Mid Cap Growth Portfolio, the Aggressive Micro Cap Portfolio,
the Small Cap Value Portfolio, the Large Cap Growth Portfolio, the Large Cap
Value Portfolio and the International Equity Portfolio reimbursed, $56,761,
$116,058, $56,247, $9,600, $1,565, $9,798, $1,394 and $22,748, respectively,
of such expenses. Effective May 1, 1998, the Adviser agreed to limit the
total normal expense of each Portfolio to 1.49% of average annual net assets,
except for the Large Cap Value Portfolio's expense limitation of 1.40% and
the International Equity Portfolio's expense limitation of 1.75%.
Expenses not expressly assumed by the Investment Advisor under the
Advisory Agreement are paid by the Fund. The Advisory Agreements list
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.
The Advisory Agreement provides that the Investment Advisor 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 Advisor would not be
permitted to be indemnified under the Federal Securities laws.
24
<PAGE>
(iv) Pursuant to an Administrative Services Agreement, the Investment
Advisor 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 Advisor to contract out for all of its
duties thereunder; however, in the event of such contracting, the Investment
Advisor remains responsible for the performance of its obligations under the
Administrative Services Agreement. The Investment Advisor 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 Advisor for certain expenses incurred by
the Investment Advisor in connection therewith but does not reimburse
Investment Advisor (over the amount of 0.25% annual Administrative Services
Fee) to reimburse it for fees Investment Advisor pays to others for
administrative services. The agreement also allows Investment Advisor to pay
to its delegate part or all of such fees and reimbursable expense payments
incurred by it or its delegate.
The Investment Advisory Agreements permit the Investment Advisor to act
as investment adviser for any other person, firm, or corporation, and
designates the Investment Advisor as the owner of the name "Navellier" or any
use or derivation of the word Navellier. If the Investment Advisor 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
Advisor's option, be withdrawn.
The Investment Advisor advanced the Fund's organizational expenses which
were $126,000. The Fund has agreed to reimburse the Investment Advisor 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 by
Distributor and will be registered with such agencies and governments before
any Fund shares are sold by it. The Fund's shares will be continuously
distributed by Navellier
25
<PAGE>
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
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 Aggressive
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 $194,117 for the Aggressive Growth Portfolio
in 12b-1 fees during the twelve month period ended December 31, 1999. The
payments under the Plan are included in the maximum operating expenses which
may be borne by the Aggressive Growth Portfolio.
Navellier Securities Corp. ("NSC") was paid $194,117 for the Aggressive
Growth Portfolio in 12b-1 fees during fiscal 1999 and spent $16,552.61 for
advertising, $8,025.51 for printing, $22,070.15 for mailing (including
mailing of prospectuses to other than current shareholders), $0 to
underwriters, $76,146.68 to compensate dealers, $6,616.39 to compensate NSC
sales and other personnel, $0 for interest and $64,705.67 in other expenses
during fiscal 1999.
26
<PAGE>
Louis Navellier, the sole owner of Navellier Management, Inc. and the
sole owner of Navellier Securities Corp., received a direct financial
interest in the operation of the 12b-1 Plan.
The Distribution Plans for The Mid Cap Growth Portfolio, the Aggressive
Micro Cap Portfolio, the Small Cap Value Portfolio, the Large Cap Growth
Portfolio, the Large Cap Value Portfolio, the International Equity
Portfolio and the Aggressive Small Cap Equity Portfolio
--------------------------------------------------------------------------
The Mid Cap Growth Portfolio, the Aggressive Micro Cap Portfolio, the
Small Cap Value Portfolio, the Large Cap Growth Portfolio, the Large Cap
Value Portfolio, the International Equity and the Aggressive Cap Equity
Portfolio Portfolio have each adopted a Plan pursuant to Rule 12b-1 under the
1940 Act (the "Plan"), whereby each such Portfolio compensates Distributor or
others in the amount of 0.25% per annum of the average daily net assets of
each such Portfolio for expenses incurred and services rendered for the
promotion and distribution of the shares of each 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 each such Portfolio's Fund shares. Such payments are
made monthly. Each 12b-1 fee includes, in addition to promotional
activities, amounts that each 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 each such 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 each of the Portfolios directly. Each 12b-1 Plan for each
such 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 each
such Portfolio within the context of Rule 12b-1. The payments under each
such 12b-1 Plan for each Portfolio are included in the maximum operating
expenses which may be borne by each such Portfolio. Payments under each such
12b-1 Plan for each such Portfolio may exceed actual expenses incurred by the
Distributor, Investment Advisor or others.
The Distributor was paid $249,041 in 12b-1 fees during the twelve month
period ended December 31, 1999 for services in connection with the Mid Cap
Growth Portfolio, Aggressive Micro Cap Portfolio, Small Cap Value Portfolio,
Aggressive Small Cap Equity Portfolio, Large Cap Growth Portfolio, Large Cap
Value Portfolio and International Equity Portfolio, and spent $21,236.05 for
advertising, $10,296.27 for printing, $28,314.74 for mailing (including
mailing of prospectuses to other than current shareholders), $0 to
underwriters, $91,203.55 to compensate dealers, $14,976.73 to compensate NSC
sales and other personnel, $0 for interest and $83,013.67 in other expenses
during fiscal 1999. Investors may also be charged a transaction fee if they
effect transactions in fund shares through a broker or agent. Louis
Navellier has a direct financial interest in the operation of each of these
12b-1 Plans.
27
<PAGE>
(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. 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.
(d) LEGAL COUNSEL
The Law Offices of Samuel Kornhauser is legal counsel to the Fund, to the
Investment Advisor and to the Distributor.
28
<PAGE>
BROKERAGE ALLOCATION AND OTHER PRACTICES
In effecting portfolio transactions for the Fund, the Investment Advisor
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 Advisor 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 Advisor 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 Advisor are considered to
be in addition to and not in lieu of services required to be performed by the
Investment Advisor under its contract with the Fund and may benefit both the
Fund and other clients of the Investment Advisor or customers of or affiliates
of the Investment Advisor. Conversely, brokerage and research services provided
by brokers to other clients of the Investment Advisor 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 Advisor 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.
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The Board of Trustees of the Fund will periodically review the performance
of the Investment Advisor 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.
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 Advisor (fees paid to the Sub-advisor and Consultant are paid by the
Investment Advisor from its fees and are NOT paid by the Fund or the applicable
Portfolio or by the shareholders), 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 Advisor
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 ADVISOR
The Investment Advisor presently receives an annual 0.84% fee for investment
management of The Aggressive Growth Portfolio, the Mid Cap Growth Portfolio, the
Aggressive Micro Cap Portfolio; the Small Cap Value Portfolio, the Large Cap
Growth Portfolio and the Aggressive Small Cap Equity Portfolio and receives an
annual 0.75% fee for investment management of the Large Cap Value Portfolio, and
an annual 1.00% fee for investment management of the International Equity
Portfolio. Each fee is payable monthly, based upon each Portfolio's average
daily net assets. The Investment Advisor 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
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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 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 Aggressive 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 DISTRIBUTION PLANS FOR THE MID CAP GROWTH, THE AGGRESSIVE MICRO CAP, THE
SMALL CAP VALUE, THE LARGE CAP GROWTH, THE LARGE CAP VALUE, THE INTERNATIONAL
EQUITY AND THE AGGRESSIVE SMALL CAP EQUITY PORTFOLIOS
The Mid Cap Growth Portfolio, the Aggressive Micro Cap Portfolio, the Small
Cap Value Portfolio, the Large Cap Growth Portfolio, the Large Cap Value
Portfolio, the International Equity Portfolio and the Aggressive Small Cap
Equity Portfolio have each adopted a Plan pursuant to Rule 12b-1 under the 1940
Act (the "Plan"), whereby each Portfolio compensates Distributor or others in
the amount of 0.25% per annum of the average daily net assets of the applicable
Portfolio for expenses incurred and services rendered for the promotion and
distribution of the shares of that particular 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
each particular portfolio's shares. Such payments are made monthly. Each 12b-1
fee includes, in addition to promotional activities, amounts each 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 for each such portfolio shall be
0.25% per year of the average daily net assets of each
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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 each particular Portfolio
directly. The 12b-1 Plan for each of these Portfolios 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 each such Portfolio within the context of Rule 12b-1. The
payments under the 12b-1 Plan for each of these Portfolios are included in the
maximum operating expenses which may be borne by each of these Portfolios.
Payments under the 12b-1 Plan for each of these Portfolios may exceed actual
expenses incurred by the Distributor, Investment Advisor or others.
BROKERAGE COMMISSIONS
The Investment Advisor 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 Advisor
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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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.
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 eight Portfolios--the Navellier Aggressive Growth
Portfolio, the Navellier Mid Cap Growth Portfolio, the Navellier Aggressive
Micro Cap Portfolio, the Navellier Small Cap Value Portfolio, the Navellier
Large Cap Growth Portfolio, the Navellier Large
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Cap Value Portfolio, the Navellier International Equity Portfolio and the
Aggressive Small Cap Equity 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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PURCHASE, REDEMPTION, AND PRICING 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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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 applicable to all portfolios.
Shareholders who wish to transfer Fund shares from one broker-dealer to
another should contact the Fund at (800) 622-1386.
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.
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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 1-800-622-1386 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 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.
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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.
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.
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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.
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, and (c) 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.
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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.
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.
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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 shareholder's gain or loss from the disposition of the original
shares, it is added to the basis of the newly acquired shares.
41
<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 non-United 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.
42
<PAGE>
If more than 50% of the International Equity Portfolio's assets at fiscal
year-end is represented by debt and equity securities of foreign
corporations, the International Equity Portfolio may elect to permit
shareholders who are U.S. citizens or U.S. corporations to claim a foreign
tax credit or deduction (but not both) on their U.S. income tax returns for
their PRO RATA portion of qualified taxes paid by the International Equity
Portfolio to foreign countries. As a result, the amounts of foreign income
taxes paid by such Portfolio would be treated as additional income to
shareholders of such Portfolio for purposes of the foreign tax credit. Each
such shareholder would include in gross income from foreign sources its PRO
RATA share of such taxes. Certain limitations imposed by the Internal Revenue
Code may prevent shareholders from receiving a full foreign tax credit or
deduction for their allocable amount of such taxes.
The foregoing is a general summary of the federal income tax consequences
of investing in the Fund to shareholders who are U.S. citizens or U.S.
corporations. Shareholders should consult their own tax advisors about the
tax consequences of an investment in the Fund in light of each shareholder's
particular tax situation. Shareholders should also consult their own tax
advisors about consequences under foreign, state, local or other applicable
tax laws.
43
<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 been selling this Fund's shares since December 28, 1995.
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 Advisor, Distributor, Custodian and Transfer Agent - Distributor."
The following table sets forth the remuneration received by Navellier
Securities Corp. ("NSC"), the Distributor, (which is wholly owned by Louis
Navellier) for the following years:
<TABLE>
<CAPTION>
Underwriting
Discounts and Compensation Brokerage Other
Year Commissions on Redemptions Commissions Compensation*
---- ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
1995 $ 0 $ 0 $ 0 $ 0
1996 $ 0 $ 0 $ 0 $147,832
1997 $ 0 $ 0 $ 0 $258,601
1998 $ 0 $ 0 $ 0 $354,814
1999 $ 0 $ 0 $ 0 $443,158
</TABLE>
* These "other compensation" amounts are 12b-1 fees paid to NSC.
44
<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:
n
P (1 + T) = 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.
For the fiscal year 1999, the Navellier Aggressive Growth Portfolio had a
total return of 46.11%; The Navellier Mid Cap Growth Portfolio had a total
return of 126.97%. The Navellier Aggressive Micro Cap Portfolio had a total
return of 14.79%. The Small Cap Value Portfolio had a total return of 0.44%;
the Large Cap Growth Portfolio had a total return of 63.03%; the Large Cap
Value Portfolio had a total return of 4.24%; the International Equity
Portfolio had a total return of 26.39% and the Aggressive Small Cap Equity
Portfolio had a total return of 28.34%.
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.
45
<PAGE>
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.
46
<PAGE>
FINANCIAL STATEMENTS*
* (References in these financial statements to the Aggressive Small Cap
Portfolio refer to the Navellier Performance Funds portfolio which is now
named the Navellier Aggressive Micro Cap Portfolio)
47
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
<TABLE>
- ----------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 96.6%
BIOTECHNOLOGY AND DRUGS -- 2.4%
22,000 Andrx Corp.* $ 930,875
-----------
BUSINESS SERVICES -- 5.1%
77,100 PDS Financial Corp.* 130,106
41,000 Zomax, Inc.* 1,855,250
-----------
1,985,356
-----------
COMMUNICATION EQUIPMENT AND
SERVICES -- 11.7%
24,000 CommScope, Inc.* 967,500
20,000 Polycom, Inc.* 1,273,750
40,000 Lightbridge, Inc.* 1,110,000
20,000 Powerwave
Technologies, Inc.* 1,167,500
-----------
4,518,750
-----------
COMPUTER EQUIPMENT -- 8.8%
20,000 Emulex Corp.* 2,250,000
50,000 In Focus Systems,
Inc.* 1,159,375
-----------
3,409,375
-----------
COMPUTER SOFTWARE AND
PROGRAMMING -- 8.2%
54,700 Harbinger Corp.* 1,740,144
35,000 Radiant Systems, Inc.* 1,406,563
-----------
3,146,707
-----------
CONSUMER GOODS -- 2.4%
34,000 Church & Dwight Co.,
Inc. 907,375
-----------
ELECTRONICS -- 24.1%
24,300 Audiovox Corp.* 738,113
20,000 CTS Corp. 1,507,500
18,800 DSP Group, Inc.* 1,748,400
41,700 InterTAN, Inc.* 1,089,412
27,300 KEMET Corp.* 1,230,206
36,800 LTX Corp.* 823,400
15,000 Orbotech, Ltd.* 1,162,500
40,000 Ultimate Electronics,
Inc.* 990,000
-----------
9,289,531
-----------
- ----------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
INDUSTRIAL MACHINERY -- 8.0%
53,000 Applied Science and
Technology, Inc.* $ 1,761,423
30,000 Helix Technology Corp. 1,344,375
-----------
3,105,798
-----------
INSTRUMENTS -- 1.5%
14,900 Photon Dynamics, Inc.* 577,375
-----------
MEDICAL EQUIPMENT AND SUPPLIES -- 2.6%
25,000 Datascope Corp. 1,000,000
-----------
SEMICONDUCTORS AND RELATED -- 16.7%
34,000 Power Integrations,
Inc.* 1,629,875
6,000 QLogic Corp.* 959,250
46,655 Three Five Systems,
Inc.* 1,912,855
35,000 Zoran Corp.* 1,951,250
-----------
6,453,230
-----------
TOYS AND CHILDREN'S PRODUCTS -- 2.3%
48,000 JAKKS Pacific, Inc.* 897,000
-----------
UTILITIES -- 2.8%
17,000 Calpine Corp.* 1,088,000
-----------
TOTAL COMMON STOCKS
(COST $26,974,972) 37,309,372
-----------
MONEY MARKET FUNDS -- 7.0%
2,702,025 Fund for Government
Investors
(Cost $2,702,025) 2,702,025
-----------
TOTAL INVESTMENTS -- 103.6%
(COST $29,676,997) $40,011,397
Liabilities in Excess of Other
Assets -- (3.6%) (1,385,757)
-----------
NET ASSETS -- 100.0% $38,625,640
===========
NET ASSET VALUE PER SHARE
(BASED ON 1,906,257 SHARES
OUTSTANDING) $20.26
===========
NET ASSETS CONSIST OF:
Paid-in-Capital $25,324,986
Accumulated Net Realized Gain on
Investments 2,966,254
Net Unrealized Appreciation of
Investments 10,334,400
-----------
NET ASSETS $38,625,640
===========
</TABLE>
48
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
AGGRESSIVE GROWTH PORTFOLIO
<TABLE>
- ----------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 97.5%
BUSINESS SERVICES -- 8.7%
150,000 Learning Tree
International, Inc.* $ 4,200,000
80,000 Zomax, Inc.* 3,620,000
-----------
7,820,000
-----------
COMMERCIAL SERVICES -- 1.5%
111,000 ICT Group, Inc.* 1,359,750
-----------
COMMUNICATION EQUIPMENT AND
SERVICES -- 10.7%
65,000 CommScope, Inc.* 2,620,312
40,000 Harmonic, Inc.* 3,797,500
185,000 Performance
Technologies, Inc.* 3,214,375
-----------
9,632,187
-----------
COMPUTER SOFTWARE AND
PROGRAMMING -- 5.3%
150,000 Harbinger Corp.* 4,771,875
-----------
DATA PROCESSING -- 2.9%
147,600 CAM Data Systems,
Inc.* 2,638,350
-----------
ELECTRONIC COMPONENTS/
EQUIPMENT -- 23.7%
100,000 Audiovox Corp.* 3,037,500
141,100 California Amplifier,
Inc.* 3,712,694
40,000 DSP Group, Inc.* 3,720,000
130,000 Park Electrochemical
Corp. 3,453,125
50,000 Power Integrations,
Inc.* 2,396,875
60,000 Power-One, Inc.* 2,748,750
50,000 Xilinx, Inc.* 2,273,440
-----------
21,342,384
-----------
HEALTHCARE -- 1.1%
250,000 I-Flow Corp.* 992,200
-----------
MACHINERY -- 8.3%
100,000 Helix Technology Corp. 4,481,250
90,000 Imation Corp.* 3,020,625
-----------
7,501,875
-----------
MANUFACTURING -- 9.1%
154,700 Meade Instruments
Corp.* 4,408,950
201,600 Scott Technologies,
Inc.* 3,805,200
-----------
8,214,150
-----------
- ----------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
PAPER & RELATED PRODUCTS -- 2.8%
40,000 Champion International
Corp. $ 2,477,500
-----------
PLASTICS -- 3.2%
90,000 Spartech Corp. 2,902,500
-----------
SEMICONDUCTORS AND RELATED -- 3.5%
25,000 Applied Micro Circuits
Corp.* 3,181,250
-----------
RETAIL -- 2.9%
100,000 InterTAN, Inc.* 2,612,500
-----------
TELECOMMUNICATIONS -- 11.1%
120,000 Price Communications
Corp.* 3,337,500
25,000 Rural Cellular Corp.* 2,262,500
65,000 Western Wireless
Corp.* 4,338,750
-----------
9,938,750
-----------
TRANSPORTATION -- 2.7%
50,000 USFreightways Corp. 2,393,750
-----------
TOTAL COMMON STOCKS
(COST $73,605,903) 87,779,021
-----------
MONEY MARKET FUNDS -- 0.3%
250,025 Fund for Government
Investors
(Cost $250,025) 250,025
-----------
TOTAL INVESTMENTS -- 97.8%
(COST $73,855,928) $88,029,046
Other Assets Less Liabilities -- 2.2% 1,999,401
-----------
NET ASSETS -- 100.0% $90,028,447
===========
NET ASSET VALUE PER SHARE
(BASED ON 4,735,814 SHARES
OUTSTANDING) $19.01
===========
NET ASSETS CONSIST OF:
Paid-in-Capital $66,265,484
Accumulated Net Realized Gain on
Investments 9,589,845
Net Unrealized Appreciation of
Investments 14,173,118
-----------
NET ASSETS $90,028,447
===========
</TABLE>
49
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
MID CAP GROWTH PORTFOLIO
<TABLE>
- ----------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 95.3%
BIOTECHNOLOGY & DRUGS -- 3.5%
28,200 Affymetrix, Inc.* $ 4,785,187
------------
BROADCASTING -- 5.8%
39,500 Cox Radio, Inc.* 3,940,125
39,300 Univision
Communications
Inc.* 4,015,969
------------
7,956,094
------------
COMMUNICATION EQUIPMENT AND
SERVICES -- 14.4%
70,700 Adaptec, Inc.* 3,526,162
51,800 Ancor Communications,
Inc.* 3,515,925
89,900 CommScope, Inc.* 3,624,094
41,000 Emulex Corp.* 4,612,500
47,000 Harmonic Inc.* 4,462,062
------------
19,740,743
------------
COMPUTER SERVICES -- 9.2%
66,000 BEA Systems, Inc.* 4,615,875
20,000 Check Point Software
Technologies Ltd.* 3,975,000
69,000 Symantec Corp.* 4,045,125
------------
12,636,000
------------
COMPUTER SOFTWARE AND
PROGRAMMING -- 5.5%
55,900 Adobe Systems, Inc. 3,759,275
45,000 Electronic Arts Inc.* 3,780,000
------------
7,539,275
------------
ELECTRONIC COMPONENTS -- 8.4%
73,300 AVX Corp. 3,660,419
60,000 Sawtek Inc.* 3,993,750
123,700 Vishay
Intertechnology,
Inc.* 3,912,013
------------
11,566,182
------------
FINANCIAL SERVICES -- 3.0%
90,000 Knight/Trimark Group,
Inc.* 4,140,000
------------
FOOD -- 1.1%
36,600 Hormel Foods Corp. 1,486,875
------------
OIL & GAS SERVICES -- 2.7%
88,300 BJ Services Company* 3,692,044
------------
- ----------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
RETAIL -- 3.7%
35,400 BJ's Wholesale Club,
Inc.* $ 1,292,100
42,600 Tiffany & Co. 3,802,050
------------
5,094,150
------------
SEMICONDUCTORS AND RELATED -- 26.5%
42,600 Analog Devices, Inc.* 3,961,800
36,100 Applied Micro
Circuits Corp.* 4,593,725
126,400 Atmel Corp.* 3,736,700
127,300 Integrated Device
Technology, Inc.* 3,691,700
65,000 Micrel, Inc.* 3,700,938
26,600 PMC-Sierra, Inc.* 4,264,312
27,100 QLogic Corp.* 4,332,612
18,900 SDL, Inc.* 4,120,200
86,400 Xilinx, Inc.* 3,928,504
------------
36,330,491
------------
TELECOMMUNICATIONS -- 11.5%
40,000 Powertel, Inc.* 4,015,000
66,300 Scientific-Atlanta,
Inc. 3,687,938
37,500 United States
Cellular Corp.* 3,785,156
63,000 Western Wireless
Corp.* 4,205,250
------------
15,693,344
------------
TOTAL COMMON STOCKS
(COST $94,985,380) 130,660,385
------------
MONEY MARKET FUNDS -- 4.8%
6,597,458 Fund for Government
Investors
(Cost $6,597,458) 6,597,458
------------
TOTAL INVESTMENTS -- 100.1%
(COST $101,582,838) $137,257,843
Liabilities in Excess of Other Assets --
(0.1%) (150,281)
------------
NET ASSETS -- 100.0% $137,107,562
============
NET ASSET VALUE PER SHARE
(BASED ON 4,540,047 SHARES
OUTSTANDING) $30.20
============
NET ASSETS CONSIST OF:
Paid-in-Capital $ 97,674,774
Accumulated Net Realized Gain on
Investments 3,757,783
Net Unrealized Appreciation of
Investments 35,675,005
------------
NET ASSETS $137,107,562
============
</TABLE>
50
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
AGGRESSIVE MICRO CAP PORTFOLIO
<TABLE>
- ----------------------------------------------------------------
MARKET
VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 97.4%
APPAREL -- 4.3%
12,000 Braun's Fashions Corp.* $ 252,000
----------
CASINOS AND GAMING -- 5.6%
21,000 Argosy Gaming Company* 326,812
----------
COMMUNICATION EQUIPMENT AND
SERVICES -- 9.9%
11,000 LodgeNet Entertainment
Corp.* 273,625
11,000 Lightbridge, Inc.* 305,250
----------
578,875
----------
COMPUTER HARDWARE AND
PERIPHERALS -- 5.0%
26,000 NUR Macroprinters Ltd.* 294,125
----------
CONTAINERS -- 5.4%
14,700 Mobile Mini, Inc.* 316,050
----------
ELECTRONICS -- 18.9%
21,000 Merix Corp.* 231,000
8,000 Park Electrochemical
Corp. 212,500
9,331 Three-Five Systems,
Inc.* 382,571
7,000 Watkins-Johnson Company 280,000
----------
1,106,071
----------
HEALTHCARE -- 11.5%
23,000 Taro Pharmaceutical
Industries Ltd.* 333,500
9,000 Zoll Medical Corp.* 343,688
----------
677,188
----------
HOUSEHOLD APPLIANCES -- 6.3%
11,000 Salton, Inc.* 367,812
----------
- ----------------------------------------------------------------
MARKET
VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
INDUSTRIAL -- 4.3%
10,000 The Shaw Group, Inc.* $ 253,125
----------
MANUFACTURING -- 5.3%
11,000 Meade Instruments
Corp.* 313,500
----------
RETAIL STORES -- 16.5%
15,000 1-800 CONTACTS, INC.* 405,938
8,000 REX Stores Corp.* 280,000
8,000 Tweeter Home
Entertainment Group,
Inc.* 284,000
----------
969,938
----------
TOYS AND CHILDREN'S PRODUCTS -- 4.4%
13,950 JAKKS Pacific, Inc.* 260,691
----------
TOTAL COMMON STOCKS
(COST $4,514,136) 5,716,187
----------
MONEY MARKET FUNDS -- 1.7%
101,364 Fund for Government
Investors
(Cost $101,364) 101,364
----------
TOTAL INVESTMENTS -- 99.1%
(COST $4,615,500) $5,817,551
Other Assets Less Liabilities -- 0.9% 51,809
----------
NET ASSETS -- 100.0% $5,869,360
==========
NET ASSET VALUE PER SHARE
(BASED ON 262,655 SHARES
OUTSTANDING) $22.35
==========
NET ASSETS CONSIST OF:
Paid-in-Capital $4,040,429
Net Investment Loss (11,483)
Accumulated Net Realized Gain on
Investments 638,363
Net Unrealized Appreciation of
Investments 1,202,051
----------
NET ASSETS $5,869,360
==========
</TABLE>
51
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
SMALL CAP VALUE PORTFOLIO
<TABLE>
- ----------------------------------------------------------------
MARKET
VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 96.0%
AEROSPACE AND DEFENSE -- 1.1%
1,000 Kaman Corp. $ 12,875
----------
AUTO AND TRUCK PARTS -- 5.0%
2,190 Arvin Industries, Inc. 62,141
----------
AUTOMOBILES -- 3.7%
2,570 Lithia Motors, Inc.* 45,939
----------
CASINOS AND GAMING -- 3.7%
2,030 Hollywood Park, Inc.* 45,548
----------
CHEMICALS -- 3.6%
800 H.B. Fuller Co. 44,750
----------
COMMERCIAL SERVICES -- 3.1%
1,350 Quanta Services, Inc.* 38,137
----------
COMPUTER PRODUCTS -- 5.5%
1,400 Advanced Digital
Information* 68,075
----------
CONTAINERS AND PACKAGING -- 2.5%
2,110 Rock-Tenn Co. 31,123
----------
DISTRIBUTION AND WHOLESALE -- 4.9%
2,110 United Stationers Inc.* 60,267
----------
ELECTRONICS -- 5.3%
900 Electro Scientific
Industries* 65,700
----------
ENGINEERING AND CONSTRUCTION -- 3.7%
3,350 Chicago Bridge & Iron
Co. 46,063
----------
FINANCIAL SERVICES -- 6.1%
1,550 WFS Financial, Inc.* 32,744
2,900 Westcorp 42,050
----------
74,794
----------
HOMEBUILDING -- 3.7%
1,440 D.R. Horton, Inc. 19,890
1,610 MDC Holdings, Inc. 25,257
----------
45,147
----------
INDUSTRIAL MACHINERY -- 6.8%
1,610 Ampco-Pittsburgh Corp. 16,301
1,400 Gerber Scientific, Inc. 30,712
1,100 Imation Corp.* 36,919
----------
83,932
----------
REAL ESTATE -- 1.4%
800 Prentiss Properties
Trust 16,800
----------
RECREATIONAL VEHICLES -- 8.2%
1,852 Monaco Coach Corp.* 47,342
2,690 Winnebago Industries,
Inc. 53,968
----------
101,310
----------
- ----------------------------------------------------------------
MARKET
VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
RENTAL AND LEASING -- 5.3%
1,070 Avis Rent A Car, Inc.* $ 27,352
1,600 Dollar Thrifty
Automotive Group,
Inc.* 38,300
----------
65,652
----------
RESTAURANTS -- 4.7%
2,010 Buffets, Inc.* 20,100
1,810 Jack in the Box, Inc.* 37,444
----------
57,544
----------
RETAIL -- 6.7%
3,210 Genesco, Inc.* 41,730
3,220 Haverty Furniture
Companies 40,652
----------
82,382
----------
TELECOMMUNICATIONS -- 3.2%
800 NICE Systems Ltd., ADR* 39,350
----------
TRANSPORTATION -- 6.7%
1,400 America West Holdings
Corp.* 29,050
1,470 American Freightways* 23,796
1,740 Yellow Corp.* 29,254
----------
82,100
----------
UTILITIES -- 1.1%
400 CH Energy Group, Inc. 13,200
----------
TOTAL COMMON STOCKS
(COST $1,112,401) 1,182,829
----------
MONEY MARKET FUNDS -- 3.6%
44,612 Fund for Government
Investors
(Cost $44,612) 44,612
----------
TOTAL INVESTMENTS -- 99.6%
(COST $1,157,013) $1,227,441
Other Assets Less Liabilities -- 0.4% 4,581
----------
NET ASSETS -- 100.0% $1,232,022
==========
NET ASSET VALUE PER SHARE
(BASED ON 135,940 SHARES
OUTSTANDING) $9.06
==========
NET ASSETS CONSIST OF:
Paid-in-Capital $1,340,117
Undistributed Net Investment Income 2,976
Accumulated Net Realized Loss on
Investments (181,499)
Net Unrealized Appreciation of
Investments 70,428
----------
NET ASSETS $1,232,022
==========
</TABLE>
52
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
LARGE CAP GROWTH PORTFOLIO
<TABLE>
- ----------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 88.9%
BIOTECHNOLOGY AND DRUGS -- 7.9%
5,900 Amgen, Inc. * $ 354,369
2,200 Biogen, Inc.* 185,900
2,750 MedImmune, Inc.* 456,156
-----------
996,425
-----------
COMMUNICATION EQUIPMENT AND
SERVICES -- 23.0%
2,500 Comverse Technology,
Inc.* 361,875
3,950 Nokia Corp., ADR 750,500
4,000 QUALCOMM Inc.* 704,500
4,750 Scientific-Atlanta,
Inc. 264,219
2,600 Telephone and Data
Systems, Inc. 327,600
3,250 United States Cellular
Corp.* 328,047
3,625 Vodafone Group, ADR 179,438
-----------
2,916,179
-----------
COMPUTER HARDWARE AND
PERIPHERALS -- 6.5%
5,180 EMC Corp. * 565,915
2,400 International Business
Machines Corp. 259,200
-----------
825,115
-----------
COMPUTER NETWORKS -- 4.2%
5,014 Cisco Systems, Inc. * 537,125
-----------
COMPUTER SOFTWARE AND
SERVICES -- 12.8%
5,500 America Online, Inc.* 414,906
3,530 Microsoft Corp. * 412,127
4,650 Siebel Systems, Inc.* 390,600
5,150 Sun Microsystems,
Inc.* 398,803
-----------
1,616,436
-----------
ELECTRONICS -- 3.3%
4,400 Solectron Corp.* 418,550
-----------
FOOD DISTRIBUTORS -- 2.9%
9,170 SYSCO Corp. 362,788
-----------
MEDIA AND BROADCASTING -- 2.2%
5,000 Tribune Company 275,313
-----------
- ----------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
MEDICAL EQUIPMENT -- 1.6%
1,750 MiniMed, Inc.* $ 128,188
1,550 VISX, Inc.* 80,212
-----------
208,400
-----------
OFFICE EQUIPMENT AND SUPPLIES -- 3.0%
4,250 Lexmark International
Group, Inc.* 384,625
-----------
RECREATIONAL VEHICLES -- 2.0%
4,000 Harley Davidson, Inc. 256,250
-----------
RETAIL -- 3.3%
6,067 The Home Depot, Inc. 415,969
-----------
SEMICONDUCTORS -- 14.4%
2,100 Broadcom Corp.* 571,987
3,300 Qlogic Corp.* 527,588
3,500 Texas Instruments,
Inc. 339,062
8,500 Xilinx Inc.* 386,485
-----------
1,825,122
-----------
UTILITIES -- 1.8%
5,000 Enron Corp. 221,875
-----------
TOTAL COMMON STOCKS
(COST $7,024,918) 11,260,172
-----------
MONEY MARKET FUNDS -- 9.2%
1,168,992 Fund for Government
Investors
(Cost $1,168,992) 1,168,992
-----------
TOTAL INVESTMENTS -- 98.1%
(COST $8,193,910) $12,429,164
Other Assets Less Liabilities -- 1.9% 237,578
-----------
NET ASSETS -- 100.0% $12,666,742
===========
NET ASSET VALUE PER SHARE
(BASED ON 536,888 SHARES
OUTSTANDING) $23.59
===========
NET ASSETS CONSIST OF:
Paid-in-Capital $ 8,323,520
Accumulated Net Realized Gain on
Investments 107,968
Net Unrealized Appreciation of
Investments 4,235,254
-----------
NET ASSETS $12,666,742
===========
</TABLE>
53
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
LARGE CAP VALUE PORTFOLIO
<TABLE>
- ----------------------------------------------------------------
MARKET
VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 93.7%
AEROSPACE AND DEFENSE -- 1.6%
300 Northrop Grumman Corp. $ 16,219
----------
AIRLINES -- 4.3%
275 British Airways plc,
ADR 17,703
325 UAL Corp.* 25,208
----------
42,911
----------
AUTO PARTS AND EQUIPMENT -- 5.3%
900 Dana Corporation 26,944
600 Magna International
Inc. 25,425
----------
52,369
----------
BANKS -- 8.3%
800 First Union Corp. 26,250
975 Golden West Financial
Corp. 32,663
600 UnionBanCal Corp. 23,662
----------
82,575
----------
BEVERAGES -- 1.9%
1,575 Bass PLC, ADR 18,605
----------
COMMERCIAL SERVICES -- 1.5%
600 R. R. Donnelley & Sons
Co. 14,887
----------
INSTRUMENTS -- 1.7%
300 Johnson Controls, Inc. 17,062
----------
INSURANCE -- 20.6%
600 Aetna, Inc. 33,487
890 The Allstate Corp. 21,360
1,350 Conseco, Inc. 24,131
250 Hartford Financial
Services Group, Inc. 11,844
1,050 SAFECO Corp. 26,119
800 The St. Paul Companies,
Inc. 26,950
840 Travelers Property
Casualty Corp. 28,770
850 Unitrin, Inc. 31,981
----------
204,642
----------
INVESTMENT SERVICES -- 7.5%
450 A.G. Edwards, Inc. 14,428
725 The Bear Stearns
Companies, Inc. 30,994
340 Lehman Brothers
Holdings, Inc. 28,794
----------
74,216
----------
MANUFACTURING -- 1.4%
950 Tomkins F H PLC, ADR 13,953
----------
- ----------------------------------------------------------------
MARKET
VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<C> <S> <C>
METALS AND MINERALS -- 3.0%
1,150 Corus Group plc, ADR $ 29,756
----------
MOTOR VEHICLES -- 11.5%
585 Ford Motor Co. 31,261
350 General Motors Corp. 25,441
400 Navistar International
Corp.* 18,950
300 PACCAR, Inc. 13,294
1,000 Volvo AB, ADR 25,250
----------
114,196
----------
REAL ESTATE -- 3.7%
2,200 Trizec Hahn Corp. 37,125
----------
RETAIL -- 2.6%
2,600 Kmart Corp.* 26,162
----------
UTILITIES -- 18.8%
625 American Electric Power
Company, Inc. 20,078
590 Constellation Energy
Group, Inc. 17,110
500 DTE Energy Co. 15,687
1,100 Entergy Corp. 28,325
1,150 FirstEnergy Corp. 26,091
850 GPU, Inc. 25,447
850 Public Service
Enterprise Group,
Inc. 29,591
1,050 Reliant Energy, Inc. 24,019
----------
186,348
----------
TOTAL COMMON STOCKS
(COST $980,704) 931,026
----------
MONEY MARKET FUNDS -- 6.2%
61,375 Fund for Government
Investors
(Cost $61,375) 61,375
----------
TOTAL INVESTMENTS -- 99.9%
(COST $1,042,079) $ 992,401
Other Assets Less Liabilities -- 0.1% 1,229
----------
NET ASSETS -- 100.0% $ 993,630
==========
NET ASSET VALUE PER SHARE
(BASED ON 95,222 SHARES
OUTSTANDING) $10.43
==========
NET ASSETS CONSIST OF:
Paid-in-Capital $1,068,162
Undistributed Net Investment Income 2,779
Accumulated Net Realized Loss on
Investments (27,633)
Net Unrealized Depreciation of
Investments (49,678)
----------
NET ASSETS $ 993,630
==========
</TABLE>
54
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------
MARKET VALUE
SHARES COUNTRY (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS -- 97.3%
AIRLINES -- 0.02%
67 Konin Luchtvaart Mij NV Netherlands $ 1,712
-----------
AUTO AND TRUCK MANUFACTURERS -- 1.9%
4,000 Toyota Motor Corp. Japan 193,426
-----------
CHEMICALS -- 2.1%
3,760 Aventis ADR 213,850
-----------
COMPUTERS -- 13.3%
440 Cap Gemini SA* France 111,135
5,580 CMG Plc United Kingdom 412,432
2,880 Getronics NV Netherlands 228,620
7,115 Logica United Kingdom 182,329
15,100 Sema Group Plc United Kingdom 269,650
1,000 TDK Corp. Japan 137,840
-----------
1,342,006
-----------
COMPUTER SOFTWARE -- 8.1%
10,300 Sage Group United Kingdom 125,500
610 SAP AG Germany 298,976
400 Softbank Corp.* Japan 386,000
-----------
810,476
-----------
DIVERSIFIED FINANCIAL SERVICES -- 3.8%
15,000 Daiwa Securities Group, Inc. Japan 234,310
5,000 Nomura Securities Ltd. Japan 90,119
6,100 WEBS Index Fund, Inc. Singapore 56,044
-----------
380,473
-----------
ELECTRICAL MACHINERY -- 4.2%
1,000 Matsushita Communications Japan 263,763
7,000 Omron Corp. Japan 161,042
-----------
424,805
-----------
ELECTRONIC EQUIPMENT -- 9.7%
300 Keyence Corp. Japan 121,624
1,000 Murata MFG Japan 234,456
7,000 Sharp Corp. Japan 178,821
1,545 Sony Corp. Japan 439,939
-----------
974,840
-----------
HOUSEHOLD PRODUCTS/WARES -- 0.01%
40 Celanese AG* Germany 725
-----------
MEDIA / BROADCASTING -- 4.4%
6,350 British Sky Broadcasting United Kingdom 102,036
18 Fuji Television Japan 246,179
</TABLE>
55
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
INTERNATIONAL EQUITY PORTFOLIO (CONTINUED)
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------
MARKET VALUE
SHARES COUNTRY (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
</TABLE>
COMMON STOCKS (CONTINUED)
<TABLE>
<C> <S> <C> <C>
1,175 Reuters Group, ADR United Kingdom $ 94,955
-----------
443,170
-----------
OFFICE SUPPLIES AND EQUIPMENT -- 1.7%
9,000 Ricoh Co. Japan 169,336
-----------
PRECISION INSTRUMENTS -- 1.2%
4,000 Nikon Corp. Japan 117,228
-----------
RETAIL -- 6.3%
2,000 Seven-Eleven Co. Japan 316,516
1,200 Pinault-Printemps-Redo France 315,123
-----------
631,639
-----------
SEMICONDUCTORS -- 6.3%
800 Rohm Co. Japan 328,239
1,075 STMicroelectronics NV Netherlands 162,795
1,000 Toyko Electron Japan 136,766
-----------
627,800
-----------
TELECOMMUNICATION EQUIPMENT -- 10.8%
3,300 Alcatel Alsthom, ADR France 148,500
3,570 Ericsson LM Telephone Co. Class B, ADR Sweden 234,504
100 Hikari Tsushin Inc. Japan 200,265
2,630 Nokia Corp. Finland 499,700
-----------
1,082,969
-----------
TELECOMMUNICATIONS -- 14.6%
925 Nippon Telegraph & Telephone Japan 79,666
4 Nippon Telegraph & Telephone, ADR Japan 68,383
12 NTT Mobile Communications Japan 460,706
500 Orange Plc, ADR* United Kingdom 82,750
51,500 T.I.M. SPA Italy 572,449
4,200 Vodafone Airtouch PLC, ADR United Kingdom 207,900
-----------
1,471,854
-----------
UTILITIES -- 8.9%
17 DDI Corp. Japan 232,502
2,380 Deutsche Telekom AG, ADR Germany 168,980
650 France Telecom, ADR France 86,775
1200 Royal PTT Nederland NV, ADR Netherlands 115,350
5,070 Swisscom AG, ADR Switzerland 205,335
1,122 Telefonica SA, ADR* Spain 88,428
-----------
897,370
-----------
TOTAL COMMON STOCKS
(COST $6,937,143) 9,783,679
-----------
</TABLE>
56
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
INTERNATIONAL EQUITY PORTFOLIO (CONTINUED)
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------
MARKET VALUE
SHARES COUNTRY (NOTE 1)
- -------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
MONEY MARKET FUNDS -- 2.8%
276,581 Fund for Government Investors
(Cost $276,581) United States $ 276,581
-----------
TOTAL INVESTMENTS -- 100.1%
(COST $7,213,724) $10,060,260
Liabilities in Excess of Other Assets -- (0.1%) (5,163)
-----------
NET ASSETS -- 100.0% $10,055,097
===========
NET ASSET VALUE PER SHARE
(BASED ON 763,012 SHARES OUTSTANDING) $13.18
NET ASSETS CONSIST OF:
Paid-in-Capital $ 8,162,982
Accumulated Net Realized Loss on Investments and Foreign
Currency Transactions (954,276)
Net Unrealized Depreciation of Investments and Foreign
Currency Transactions 2,846,391
-----------
NET ASSETS $10,055,097
===========
</TABLE>
- --------------------------
* NON-INCOME PRODUCING
ADR AMERICAN DEPOSITORY RECEIPTS
SEE NOTES TO FINANCIAL STATEMENTS.
57
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
AGGRESSIVE AGGRESSIVE MID CAP AGGRESSIVE
SMALL CAP EQUITY GROWTH GROWTH MICRO CAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest (Note 1)...................... $ 67,087 $ 213,936 $ 112,269 $ 8,964
Dividends (Note 1)..................... 38,060 165,776 65,592 18,707
---------- ----------- ----------- ----------
Total Investment Income.............. 105,147 379,712 177,861 27,671
---------- ----------- ----------- ----------
EXPENSES
Investment Advisory Fee (Note 2)....... 317,862 649,922 314,987 53,691
Administrative Fee (Note 2)............ 94,602 193,429 93,746 15,979
Distribution Plan Fees (Note 4)........ 94,677 194,117 94,291 15,963
Transfer Agent and Custodian Fee
(Note 3)............................. 99,604 145,824 88,676 48,144
Shareholder Reports and Notices........ 41,240 36,449 10,446 6,893
Registration Fees...................... 17,418 16,139 20,705 15,117
Organizational Expense (Note 1)........ -- 25,200 -- --
Audit Fees............................. 15,000 9,000 8,000 8,000
Trustees' Fees and Expenses
(Note 2)............................. 2,958 2,958 2,958 2,958
Other Expenses......................... 17,448 33,634 9,658 4,207
---------- ----------- ----------- ----------
Total Expenses....................... 700,809 1,306,672 643,467 170,952
Less Expenses Reimbursed by
Investment
Adviser (Note 2)................... (136,907) (153,146) (84,196) (75,719)
---------- ----------- ----------- ----------
Net Expenses....................... 563,902 1,153,526 559,271 95,233
---------- ----------- ----------- ----------
NET INVESTMENT LOSS...................... (458,755) (773,814) (381,410) (67,562)
---------- ----------- ----------- ----------
Net Realized Gain on Investment
Transactions........................... 7,084,090 27,161,572 7,146,986 1,285,026
Change in Net Unrealized Appreciation
of Investments......................... 1,710,135 3,761,122 33,944,862 (766,596)
---------- ----------- ----------- ----------
NET GAIN ON INVESTMENTS.................. 8,794,225 30,922,694 41,091,848 518,430
---------- ----------- ----------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS............................. $8,335,470 $30,148,880 $40,710,438 $ 450,868
========== =========== =========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
58
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- ---------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
SMALL CAP LARGE CAP LARGE CAP INTERNATIONAL
VALUE GROWTH VALUE EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- ---------- --------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest (Note 1)............................. $ 2,268 $ 10,993 $ 2,201 $ 31,305
Dividends (Note 1)............................ 38,534 21,194 30,379 128,058
-------- ---------- --------- ----------
Total Investment Income..................... 40,802 32,187 32,580 159,363
-------- ---------- --------- ----------
EXPENSES
Investment Advisory Fee (Note 2).............. 8,762 54,872 6,968 90,992
Administrative Fee (Note 2)................... 2,608 16,331 2,322 22,748
Distribution Plan Fees (Note 4)............... 2,613 16,412 2,322 22,763
Transfer Agent and Custodian Fee (Note 3)..... 37,038 42,675 36,874 101,915
Organizational Expense (Note 1)............... 18,360 18,360 18,360 18,360
Registration Fees............................. 14,545 14,545 14,545 9,298
Audit Fees.................................... 8,000 8,000 8,000 3,000
Trustees' Fees and Expenses (Note 2).......... 2,958 2,958 2,958 2,958
Shareholder Reports and Notices............... 1,050 3,975 1,331 1,316
Other Expenses................................ 639 2,615 627 4,130
-------- ---------- --------- ----------
Total Expenses.............................. 96,573 180,743 94,307 277,480
Less Expenses Reimbursed by Investment
Adviser (Note 2).......................... (81,026) (83,330) (81,301) (118,229)
-------- ---------- --------- ----------
Net Expenses.............................. 15,547 97,413 13,006 159,251
-------- ---------- --------- ----------
NET INVESTMENT INCOME (LOSS).................... 25,255 (65,226) 19,574 112
-------- ---------- --------- ----------
Net Realized Gain (Loss) on Investment
Transactions.................................. (132,236) 159,827 90,722 (949,623)
Net Realized Loss on Foreign Currency
Transactions.................................. -- -- -- (41,691)
Change in Net Unrealized Appreciation/
Depreciation of Investments................... 117,015 3,684,106 (104,502) 3,049,013
-------- ---------- --------- ----------
NET GAIN (LOSS) ON INVESTMENTS.................. (15,221) 3,843,933 (13,780) 2,057,699
-------- ---------- --------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS.................................... $ 10,034 $3,778,707 $ 5,794 $2,057,811
======== ========== ========= ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
59
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
AGGRESSIVE SMALL CAP EQUITY AGGRESSIVE GROWTH
PORTFOLIO PORTFOLIO
--------------------------- -----------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- -----------------------------
1999 1998 1999 1998
------------ ------------ ------------- -------------
FROM INVESTMENT ACTIVITIES
<S> <C> <C> <C> <C>
Net Investment Loss........................ $ (458,755) $ (432,412) $ (773,814) $ (807,971)
Net Realized Gain (Loss) on Investment
Transactions............................. 7,084,090 (338,976) 27,161,572 10,857,763
Change in Net Unrealized Appreciation of
Investments.............................. 1,710,135 686,288 3,761,122 262,591
------------ ------------ ------------- -------------
Net Increase (Decrease) in Net Assets
Resulting from Operations.............. 8,335,470 (85,100) 30,148,880 10,312,383
------------ ------------ ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Realized Gain..................... (461,494) -- (11,023,982) --
------------ ------------ ------------- -------------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares.......... 51,183,189 69,506,803 136,256,553 267,578,704
Reinvestment of Distributions.............. 446,173 -- 10,759,472 --
Cost of Shares Redeemed.................... (68,137,080) (95,041,562) (157,516,582) (298,233,289)
------------ ------------ ------------- -------------
Net Decrease in Net Assets Resulting from
Share Transactions..................... (16,507,718) (25,534,759) (10,500,557) (30,654,585)
------------ ------------ ------------- -------------
TOTAL DECREASE IN NET ASSETS............. (8,633,742) (25,619,859) 8,624,341 (20,342,202)
NET ASSETS -- Beginning of Year.............. 47,259,382 72,879,241 81,404,106 101,746,308
------------ ------------ ------------- -------------
NET ASSETS -- End of Year.................... $ 38,625,640 $ 47,259,382 $ 90,028,447 $ 81,404,106
============ ============ ============= =============
SHARES
Sold....................................... 3,131,803 4,515,915 7,808,792 20,345,331
Issued in Reinvestment of Distributions.... 28,748 -- 574,758 --
Redeemed................................... (4,209,380) (6,115,945) (9,139,184) (22,510,476)
------------ ------------ ------------- -------------
Net Decrease in Shares................... (1,048,829) (1,600,030) (755,634) (2,165,145)
============ ============ ============= =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
60
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- ---------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
MID CAP GROWTH AGGRESSIVE MICRO CAP
PORTFOLIO PORTFOLIO
--------------------------- --------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- --------------------------
1999 1998 1999 1998
------------ ------------ ----------- ------------
FROM INVESTMENT ACTIVITIES
<S> <C> <C> <C> <C>
Net Investment Loss........................... $ (381,410) $ (34,943) $ (67,562) $ (67,090)
Net Realized Gain (Loss) on Investment
Transactions................................ 7,146,986 600,569 1,285,026 (593,873)
Change in Net Unrealized Appreciation of
Investments................................. 33,944,862 485,817 (766,596) 938,282
------------ ------------ ----------- ------------
Net Increase in Net Assets Resulting from
Operations................................ 40,710,438 1,051,443 450,868 277,319
------------ ------------ ----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Realized Gain........................ (3,369,098) (174,079) (261,332) --
------------ ------------ ----------- ------------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares............. 116,509,706 14,064,660 3,539,007 16,347,179
Reinvestment of Distributions................. 3,250,780 170,002 258,260 --
Cost of Shares Redeemed....................... (28,117,930) (15,360,950) (7,768,889) (17,163,447)
------------ ------------ ----------- ------------
Net Increase (Decrease) in Net Assets
Resulting from Share Transactions......... 91,642,556 (1,126,288) (3,971,622) (816,268)
------------ ------------ ----------- ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..... 128,983,896 (248,924) (3,782,086) (538,949)
NET ASSETS -- Beginning of Year................. 8,123,666 8,372,590 9,651,446 10,190,395
------------ ------------ ----------- ------------
NET ASSETS -- End of Year....................... $137,107,562 $ 8,123,666 $ 5,869,360 $ 9,651,446
============ ============ =========== ============
SHARES
Sold.......................................... 5,156,724 1,082,352 171,557 825,396
Issued in Reinvestment of Distributions....... 108,658 12,658 11,929 --
Redeemed...................................... (1,320,305) (1,173,434) (393,474) (852,387)
------------ ------------ ----------- ------------
Net Increase (Decrease) in Shares........... 3,945,077 (78,424) (209,988) (26,991)
============ ============ =========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
61
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- ---------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
SMALL CAP VALUE LARGE CAP GROWTH
PORTFOLIO PORTFOLIO
----------------------- ------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
DECEMBER 31, DECEMBER 31,
----------------------- ------------------------
1999 1998 1999 1998
---------- ---------- ----------- ----------
FROM INVESTMENT ACTIVITIES
<S> <C> <C> <C> <C>
Net Investment Income (Loss)........................ $ 25,255 $ 6,650 $ (65,226) $ (3,965)
Net Realized Gain (Loss) on Investment
Transactions...................................... (132,236) (49,214) 159,827 (51,859)
Change in Net Unrealized Appreciation of
Investments....................................... 117,015 (47,797) 3,684,106 548,665
---------- ---------- ----------- ----------
Net Increase in Net Assets Resulting from
Operations...................................... 10,034 (90,361) 3,778,707 492,841
---------- ---------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income.......................... (25,255) (6,650) -- --
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares................... 847,356 1,107,661 12,367,626 2,553,343
Reinvestment of Distributions....................... 25,255 6,650 -- --
Cost of Shares Redeemed............................. (482,464) (261,412) (5,881,138) (747,178)
---------- ---------- ----------- ----------
Net Increase in Net Assets Resulting from Share
Transactions.................................... 390,147 852,899 6,486,488 1,806,165
---------- ---------- ----------- ----------
TOTAL INCREASE IN NET ASSETS...................... 374,926 755,888 10,265,195 2,299,006
NET ASSETS -- Beginning of Year....................... 857,096 101,208 2,401,547 102,541
---------- ---------- ----------- ----------
NET ASSETS -- End of Year............................. $1,232,022 $ 857,096 $12,666,742 $2,401,547
========== ========== =========== ==========
SHARES
Sold................................................ 93,218 109,516 725,134 216,274
Issued in Reinvestment of Distributions............. 2,787 722 -- --
Redeemed............................................ (53,134) (27,174) (354,236) (60,290)
---------- ---------- ----------- ----------
Net Increase in Shares............................ 42,871 83,064 370,898 155,984
========== ========== =========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
62
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- ---------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
LARGE CAP VALUE INTERNATIONAL EQUITY
PORTFOLIO PORTFOLIO
--------------------- -------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
DECEMBER 31, DECEMBER 31,
--------------------- -------------------------
1999 1998 1999 1998
--------- --------- ----------- -----------
FROM INVESTMENT ACTIVITIES
<S> <C> <C> <C> <C>
Net Investment Income (Loss)........................ $ 19,574 $ 8,851 $ 112 $ (9,344)
Net Realized Gain (Loss) on Investment
Transactions...................................... 90,722 18,166 (949,623) 232,783
Net Realized Gain (Loss) on Foreign Currency
Transactions...................................... -- -- (41,691) 282
Change in Net Unrealized Appreciation of
Investments....................................... (104,502) 53,686 3,049,013 (202,622)
--------- --------- ----------- -----------
Net Increase in Net Assets Resulting from
Operations...................................... 5,794 80,703 2,057,811 21,099
--------- --------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income.......................... (19,574) (8,851) -- --
From Net Realized Gain.............................. (102,701) (33,820) (1,644) (226,731)
--------- --------- ----------- -----------
Total Distributions to Shareholders............... (122,275) (42,671) (1,644) (226,731)
--------- --------- ----------- -----------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares................... 691,527 844,096 1,794,445 11,259,013
Reinvestment of Distributions....................... 121,787 42,522 1,644 226,731
Cost of Shares Redeemed............................. (358,642) (370,425) (4,123,605) (963,665)
--------- --------- ----------- -----------
Net Increase (Decrease) in Net Assets Resulting
from Share Transactions......................... 454,672 516,193 (2,327,516) 10,522,079
--------- --------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS........... 338,191 554,225 (271,349) 10,316,447
NET ASSETS -- Beginning of Year....................... 655,439 101,214 10,326,446 9,999
--------- --------- ----------- -----------
NET ASSETS -- End of Year............................. $ 993,630 $ 655,439 $10,055,097 $10,326,446
========= ========= =========== ===========
SHARES
Sold................................................ 56,283 75,563 174,257 1,063,405
Issued in Reinvestment of Distributions............. 11,519 3,723 126 21,738
Redeemed............................................ (30,133) (31,741) (401,454) (96,060)
--------- --------- ----------- -----------
Net Increase (Decrease) in Shares................. 37,669 47,545 (227,071) 989,083
========= ========= =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
63
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
AGGRESSIVE SMALL CAP EQUITY
PORTFOLIO**
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR:
Net Asset Value -- Beginning of Year........ $15.99 $16.00 $17.79 $15.41 $ 10.98
------- ------- ------- -------- --------
Income from Investment Operations:
Net Investment Loss....................... (0.24) (0.15) (0.30) (0.23) (0.16)
Net Realized and Unrealized Gain on
Investments............................. 4.71 0.14 2.30(C) 2.61 4.97
------- ------- ------- -------- --------
Total from Investment Operations........ 4.47 (0.01) 2.00 2.38 4.81
------- ------- ------- -------- --------
Distributions to Shareholders:
From Net Realized Gain.................... (0.20) -- (3.79) -- (0.38)
------- ------- ------- -------- --------
Net Increase (Decrease) in Net Asset
Value..................................... 4.27 (0.01) (1.79) 2.38 4.43
------- ------- ------- -------- --------
Net Asset Value -- End of Year.............. $20.26 $15.99 $16.00 $17.79 $15.41
======= ======= ======= ======== ========
TOTAL INVESTMENT RETURN....................... 28.34% (0.06)% 11.24% 15.44% 43.80%
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement (Note 2)....... 1.49% 1.63% 2.33% 1.75% 1.75%
Expenses Before Reimbursement (Note 2)...... 1.85% 1.98% 2.62% 1.86% 2.10%
Net Investment Loss After Reimbursement
(Note 2).................................. (1.21)% (0.79)% (1.37)% (1.33)% (1.15)%
Net Investment Loss Before Reimbursement
(Note 2).................................. (1.57)% (1.13)% (1.64)% (1.44)% (1.50)%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate..................... 240% 145% 184% 137% 170%
Net Assets at End of Year (in thousands).... $38,626 $47,259 $72,879 $190,035 $105,299
Number of Shares Outstanding at End of Year
(in thousands)............................ 1,906 2,955 4,555 10,683 6,831
</TABLE>
- ---------------------------------------------
(C) The per share amount does not coincide with the net realized and unrealized
loss for the year because of the timing of sales and redemptions of Fund
shares and the amount of per share realized and unrealized gain and loss at
such time.
** Financial Highlights include the performance of the Navellier Aggressive
Small Cap Equity Portfolio, a series of the Navellier Series Fund, which
reorganized on July 24, 1998, as a series of the Navellier Performance Funds.
SEE NOTES TO FINANCIAL STATEMENTS.
64
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- ---------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
AGGRESSIVE GROWTH
PORTFOLIO
--------------------------------------------------------------
FOR THE
PERIOD
FOR THE YEARS ENDED DECEMBER 31, ENDED
--------------------------------------------- DECEMBER 31,
1999 1998 1997 1996 1995*
-------- -------- --------- -------- -------------
<S> <C> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD:
Net Asset Value -- Beginning of Period... $14.82 $13.29 $12.25 $9.99 $10.00
------- ------- -------- ------- -------
Income from Investment Operations:
Net Investment Loss.................... (0.16) (0.15) (0.14) (0.12) --
Net Realized and Unrealized Gain (Loss)
on Investments....................... 6.95 1.68 1.34 2.38(C) (0.01)
------- ------- -------- ------- -------
Total from Investment Operations..... 6.79 1.53 1.20 2.26 (0.01)
------- ------- -------- ------- -------
Distributions to Shareholders:
From Net Realized Gain................. (2.60) -- (0.16) -- --
------- ------- -------- ------- -------
Net Increase (Decrease) in Net Asset
Value.................................. 4.19 1.53 1.04 2.26 (0.01)
------- ------- -------- ------- -------
Net Asset Value -- End of Period......... $19.01 $14.82 $13.29 $12.25 $9.99
======= ======= ======== ======= =======
TOTAL INVESTMENT RETURN.................... 46.11% 11.51% 9.77% 22.62% (0.10)%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement (Note 2).... 1.49% 1.68% 2.00% 2.00% 2.00%(B)
Expenses Before Reimbursement (Note 2).. 1.68% 1.89% 2.15% 2.22% 27.25%(B)
Net Investment Income (Loss) After
Reimbursement (Note 2)................. (1.00)% (0.92)% (1.07)% (1.57)% 2.59%(B)
Net Investment Income (Loss) Before
Reimbursement (Note 2)................. (1.20)% (1.13)% (1.22)% (1.77)% (12.66)%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate.................. 702% 237% 247% 169% --
Net Assets at End of Period (in
thousands)............................. $90,028 $81,404 $101,746 $95,246 $300
Number of Shares Outstanding at End of
Period (in thousands).................. 4,736 5,491 7,657 7,774 30
</TABLE>
- ------------------------------------------
(A) Total returns for periods of less than one year are not annualized.
(B) Annualized
(C) The per share amount does not coincide with the net realized and unrealized
loss for the year because of the timing of sales and redemptions of Fund
shares and the amount of per share realized and unrealized gain and loss at
such time.
* FROM COMMENCEMENT OF OPERATIONS DECEMBER 28, 1995
SEE NOTES TO FINANCIAL STATEMENTS.
65
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- ---------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
MID CAP GROWTH
PORTFOLIO
------------------------------------------------------
FOR THE
FOR THE YEARS ENDED PERIOD
DECEMBER 31, ENDED
----------------------------------- DECEMBER 31,
1999 1998 1997 1996*
--------- ------- ------- -------------
<S> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
Net Asset Value -- Beginning of Period......... $13.65 $12.43 $10.27 $10.00
-------- ------ ------ -------
Income from Investment Operations:
Net Investment Income (Loss)................. (0.08) (0.06) (0.06) 0.01
Net Realized and Unrealized Gain on
Investments................................ 17.40 1.59 2.75 0.27
-------- ------ ------ -------
Total from Investment Operations........... 17.32 1.53 2.69 0.28
-------- ------ ------ -------
Distributions to Shareholders:
From Net Investment Income................... -- -- -- (0.01)
From Net Realized Gain....................... (0.77) (0.31) (0.53) --
-------- ------ ------ -------
Total Distributions to Shareholders........ (0.77) (0.31) (0.53) (0.01)
-------- ------ ------ -------
Net Increase in Net Asset Value................ 16.55 1.22 2.16 0.27
-------- ------ ------ -------
Net Asset Value -- End of Period............... $30.20 $13.65 $12.43 $10.27
======== ====== ====== =======
TOTAL INVESTMENT RETURN.......................... 126.97% 12.31% 26.18% 2.75%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement (Note 2).......... 1.49% 1.66% 2.00% 2.00%(B)
Expenses Before Reimbursement (Note 2)......... 1.69% 2.56% 3.27% 113.02%(B)
Net Investment Income (Loss) After
Reimbursement (Note 2)....................... (1.00)% (0.38)% (0.69)% 0.87%(B)
Net Investment Income (Loss) Before
Reimbursement (Note 2)....................... (1.23)% (1.27)% (1.96)% (110.15)%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate........................ 208% 211% 163% --
Net Assets at End of Period (in thousands)..... $137,108 $8,124 $8,373 $1,642
Number of Shares Outstanding at End of Period
(in thousands)............................... 4,540 595 673 160
</TABLE>
- ------------------------------------------------
(A) Total returns for periods of less than one year are not annualized.
(B) Annualized
* FROM COMMENCEMENT OF OPERATIONS NOVEMBER 26, 1996
SEE NOTES TO FINANCIAL STATEMENTS.
66
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- ---------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
AGGRESSIVE MICRO CAP
PORTFOLIO
---------------------------------------
FOR THE YEARS FOR THE
ENDED PERIOD
DECEMBER 31, ENDED
-------------------- DECEMBER 31,
1999 1998 1997*
------- ------- -------------
<S> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
Net Asset Value -- Beginning of Period.................... $20.42 $20.40 $15.64
------ ------ -------
Income from Investment Operations:
Net Investment Loss..................................... (0.28) (0.14) (0.05)
Net Realized and Unrealized Gain on Investments......... 3.27 0.16 5.17
------ ------ -------
Total from Investment Operations...................... 2.99 0.02 5.12
------ ------ -------
Distributions to Shareholders:
From Net Realized Gain.................................. (1.06) -- (0.36)
------ ------ -------
Net Increase in Net Asset Value........................... 1.93 0.02 4.76
------ ------ -------
Net Asset Value -- End of Period.......................... $22.35 $20.42 $20.40
====== ====== =======
TOTAL INVESTMENT RETURN..................................... 14.79% 0.10% 32.76%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement (Note 2)..................... 1.49% 1.51% 1.55%(B)
Expenses Before Reimbursement (Note 2).................... 2.68% 2.50% 3.21%(B)
Net Investment Loss After Reimbursement (Note 2).......... (1.06)% (0.71)% (0.54)%(B)
Net Investment Loss Before Reimbursement (Note 2)......... (2.24)% (1.70)% (2.20)%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate................................... 190% 196% 86%
Net Assets at End of Period (in thousands)................ $5,869 $9,651 $10,190
Number of Shares Outstanding at End of Period (in
thousands).............................................. 263 473 500
</TABLE>
- -------------------------------------------------------------
(A) Total returns for periods of less than one year are not annualized.
(B) Annualized
* FROM COMMENCEMENT OF OPERATIONS MARCH 17, 1997
SEE NOTES TO FINANCIAL STATEMENTS.
67
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- ---------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
SMALL CAP VALUE LARGE CAP GROWTH
PORTFOLIO PORTFOLIO
--------------------------------- ----------------------------------
FOR THE YEARS FOR THE FOR THE YEARS FOR THE
ENDED PERIOD ENDED PERIOD
DECEMBER 31, ENDED DECEMBER 31, ENDED
----------------- DECEMBER 31, ------------------ DECEMBER 31,
1999 1998 1997* 1999 1998 1997*
------- ------- ------------- -------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD:
Net Asset Value -- Beginning of
Period......................... $9.21 $10.12 $10.00 $14.47 $10.25 $10.00
------ ------ ------ ------- ------ ------
Income from Investment
Operations:
Net Investment Income (Loss)... 0.19 0.07 0.01 (0.12) (0.02) 0.01
Net Realized and Unrealized
Gain (Loss) on Investments... (0.15) (0.91) 0.12 9.24 4.24 0.25
------ ------ ------ ------- ------ ------
Total from Investment
Operations................. 0.04 (0.84) 0.13 9.12 4.22 0.26
------ ------ ------ ------- ------ ------
Distributions to Shareholders:
From Net Investment Income..... (0.19) (0.07) (0.01) -- -- (0.01)
------ ------ ------ ------- ------ ------
Net Increase (Decrease) in Net
Asset Value.................... (0.15) (0.91) 0.12 9.12 4.22 0.25
------ ------ ------ ------- ------ ------
Net Asset Value -- End of
Period......................... $9.06 $9.21 $10.12 $23.59 $14.47 $10.25
====== ====== ====== ======= ====== ======
TOTAL INVESTMENT RETURN............ 0.44% (8.28)% 1.25%(A) 63.03% 41.17% 2.56%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement
(Note 2)....................... 1.49% 1.53% 1.75%(B) 1.49% 1.54% 1.90%(B)
Expenses Before Reimbursement
(Note 2)....................... 9.25% 13.01% 7.74%(B) 2.75% 9.11% 6.66%(B)
Net Investment Income (Loss)
After Reimbursement
(Note 2)....................... 2.42% 1.12% 1.94%(B) (0.99)% (0.43)% 2.40%(B)
Net Investment Income (Loss)
Before Reimbursement
(Note 2)....................... (5.34)% (10.36)% (4.03)%(B) (2.26)% (8.00)% (2.36)%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate.......... 91% 85% 2% 75% 80% --
Net Assets at End of Period (in
thousands)..................... $1,232 $857 $101 $12,667 $2,402 $103
Number of Shares Outstanding at
End of Period (in thousands)... 136 93 10 537 166 10
</TABLE>
- ----------------------------------
(A) Total returns for periods of less than one year are not annualized.
(B) Annualized
* FROM COMMENCEMENT OF OPERATION DECEMBER 19, 1997
SEE NOTES TO FINANCIAL STATEMENTS.
68
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- ---------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
LARGE CAP VALUE INTERNATIONAL EQUITY
PORTFOLIO PORTFOLIO
---------------------------------- -----------------------------------
FOR THE YEARS FOR THE FOR THE YEARS FOR THE
ENDED PERIOD ENDED PERIOD
DECEMBER 31, ENDED DECEMBER 31, ENDED
------------------ DECEMBER 31, ------------------- DECEMBER 31,
1999 1998 1997* 1999 1998 1997**
------- -------- ------------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD:
Net Asset Value -- Beginning of
Period....................... $11.39 $10.11 $10.00 $10.43 $10.00 $10.00
------ ------- ------ ------- ------- ------
Income from Investment
Operations:
Net Investment Income
(Loss)..................... 0.21 0.16 0.01 -- (0.01) --
Net Realized and Unrealized
Gain on Investments........ 0.27 1.91 0.11 2.75 0.67 --
------ ------- ------ ------- ------- ------
Total from Investment
Operations............... 0.48 2.07 0.12 2.75 0.66 --
------ ------- ------ ------- ------- ------
Distributions to Shareholders:
From Net Investment Income... (0.21) (0.16) (0.01) -- -- --
From Net Realized Gain....... (1.23) (0.63) -- -- (0.23) --
------ ------- ------ ------- ------- ------
Total Distributions to
Shareholders............. (1.44) (0.79) (0.01) -- (0.23) --
------ ------- ------ ------- ------- ------
Net Increase (Decrease) in Net
Asset Value.................. (0.96) 1.28 0.11 2.75 0.43 --
------ ------- ------ ------- ------- ------
Net Asset Value -- End of
Period....................... $10.43 $11.39 $10.11 $13.18 $10.43 $10.00
====== ======= ====== ======= ======= ======
TOTAL INVESTMENT RETURN.......... 4.24% 20.48% 1.18%(A) 26.39% 6.64% --(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement
(Note 2)..................... 1.40% 1.42% 1.50%(B) 1.75% 1.75% 1.75%(B)
Expenses Before Reimbursement
(Note 2)..................... 10.14% 14.34% 5.03%(B) 3.05% 3.29% 5.48%(B)
Net Investment Gain (Loss)
After Reimbursement
(Note 2)..................... 2.10% 1.69% 3.09%(B) -- (0.14)% (1.75)%(B)
Net Investment Loss Before
Reimbursement (Note 2)....... (6.63)% (11.22)% (0.45)%(B) (1.30)% (1.68)% (5.48)%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate........ 90% 256% -- 84% 41% --
Net Assets at End of Period (in
thousands)................... $994 $655 $101 $10,055 $10,326 $10
Number of Shares Outstanding at
End of Period (in
thousands)................... 95 58 10 763 990 1
</TABLE>
- --------------------------------
(A) Total returns for periods of less than one year are not annualized.
(B) Annualized
* FROM COMMENCEMENT OF OPERATION DECEMBER 19, 1997
** FROM COMMENCEMENT OF OPERATION DECEMBER 26, 1997
SEE NOTES TO FINANCIAL STATEMENTS.
69
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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's
objective is to achieve long-term capital growth. The Fund is authorized to
issue an unlimited number of shares of capital stock with no stated par value.
The Fund currently consists of eight separate portfolios each with its own
investment objectives and policies: the Aggressive Small Cap Equity Portfolio, a
diversified open-end management company portfolio, the Aggressive Growth
Portfolio, a non-diversified open-end management company portfolio, the Mid Cap
Growth Portfolio, a diversified open-end management company portfolio, the
Aggressive Micro Cap Portfolio (formerly the Aggressive Small Cap Portfolio), a
diversified open-end management company portfolio, the Small Cap Value
Portfolio, a diversified open-end management company portfolio, the Large Cap
Growth Portfolio, a non-diversified open-end management company portfolio, the
Large Cap Value Portfolio, a diversified open-end management company portfolio,
and the International Equity Portfolio, a diversified open-end management
company portfolio. 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 gain and
loss from securities transactions are computed on an identified cost basis.
(c) Dividends from net investment income, if any, are declared and paid
annually. Dividends are reinvested 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 and capital gains to its shareholders. Therefore, no Federal
income tax provision is required.
(e) Organizational expenses of the Aggressive Growth Portfolio, the Small
Cap Value Portfolio, the Large Cap Growth Portfolio, the Large Cap Value
Portfolio, and the International Equity Portfolio totaling $126,000, $91,800,
$91,800, $91,800, and $91,800, respectively, are being deferred and amortized
over 60 months beginning with public offering of shares in the portfolios. Any
redemption by an initial investor during the amortization period will be
reduced by a pro rata 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, 1999, the unamortized organization costs of the
Aggressive Growth Portfolio, the Small Cap Value Portfolio, the Large Cap
Growth Portfolio, the Large Cap Value Portfolio, and the International Equity
Portfolio were $24,990, $55,080, $55,080, $55,080 and $55,080, respectively.
70
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
2. Investment Advisory Fees and Other Transactions with Affiliates
Investment advisory services are provided by Navellier Management, Inc. (the
"Adviser"). Effective May 1, 1998, under an agreement with the Adviser, the Fund
pays a fee at the annual rate of 0.84% of the daily net assets of the Aggressive
Small Cap Equity Portfolio, the Aggressive Growth Portfolio, the Mid Cap Growth
Portfolio, the Aggressive Micro Cap Portfolio, the Small Cap Value Portfolio,
and the Large Cap Growth Portfolio, 0.75% of the daily net assets of the Large
Cap Value Portfolio, and 1.00% of the daily net assets of the International
Equity Portfolio. The Adviser receives an annual fee equal to 0.25% of the Funds
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, 1998, the Adviser
voluntarily agreed not to seek future reimbursement of all unreimbursed past
expense incurred on behalf of the Fund. During the year ended December 31, 1999,
the Adviser paid operating expenses of the Aggressive Small Cap Portfolio, the
Aggressive Growth Portfolio, the Mid Cap Growth Portfolio, the Aggressive Micro
Cap Portfolio, the Small Cap Value, the Large Cap Growth Portfolio, the Large
Cap Value Portfolio and the International Equity Portfolio totaling $193,668,
$269,204, $140,443, $85,319, $82,591, $93,128, $82,695, and $140,977,
respectively. Under the operating expense agreement, the Adviser requested, and
the Aggressive Small Cap Portfolio, the Aggressive Growth Portfolio, the Mid Cap
Growth Portfolio, the Aggressive Micro Cap Portfolio, the Small Cap Value
Portfolio, the Large Cap Growth Portfolio, the Large Cap Value Portfolio and the
International Equity Portfolio reimbursed, $56,761, $116,058, $56,247, $9,600,
$1,565, $9,798, $1,394, and $22,748 respectively, of such expenses. Effective
May 1, 1998, the Adviser agreedto limit the total normal expenses of each
Portfolio to 1.49% of average annual net assets, except for the Large Cap Value
Portfolio's expense limitation of 1.40% and the International Equity Portfolio's
expense limitation of 1.75%.
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 in
fees annually. For the year ended December 31, 1999, Trustees' fees and expenses
totaled $23,664.
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 the Aggressive
Small Cap Equity Portfolio, the Aggressive Growth Portfolio, the Mid Cap Growth
Portfolio, the Aggressive Micro Cap Portfolio, the Small Cap Value Portfolio,
the Large Cap Growth Portfolio, the Large Cap Value Portfolio, and, the
International Equity Portfolio for expenses incurred in the promotion and
distribution of shares of the Fund. 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
71
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
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, 1999, the cost of purchases and proceeds
from sales (including maturities) of securities (excluding short-term
securities) were as follows:
<TABLE>
<CAPTION>
AGGRESSIVE AGGRESSIVE MID CAP AGGRESSIVE
SMALL CAP EQUITY GROWTH GROWTH MICRO CAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Purchases....................... $ 86,025,402 $514,118,553 $160,334,786 $11,902,051
============ ============ ============ ===========
Sales........................... $101,209,495 $533,017,807 $ 78,554,042 $16,083,700
============ ============ ============ ===========
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP INTERNATIONAL
SMALL CAP VALUE GROWTH LARGE CAP EQUITY
PORTFOLIO PORTFOLIO VALUE PORTFOLIO PORTFOLIO
--------------- ------------ --------------- -------------
<S> <C> <C> <C> <C>
Purchases....................... $ 1,290,197 $ 9,852,874 $ 1,085,090 $ 6,987,816
============ ============ ============ ===========
Sales........................... $ 900,561 $ 4,758,647 $ 771,943 $ 8,829,567
============ ============ ============ ===========
</TABLE>
6. Unrealized Appreciation and Depreciation of Investments
Unrealized appreciation and depreciation as of December 31, 1999, based on
the cost for Federal income tax purposes is as follows:
<TABLE>
<CAPTION>
AGGRESSIVE AGGRESSIVE MID CAP AGGRESSIVE
SMALL CAP EQUITY GROWTH GROWTH MICRO CAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
Gross Unrealized Appreciation.... $11,110,823 $17,105,898 $ 37,461,938 $1,281,911
Gross Unrealized Depreciation.... (776,423) (3,224,340) (1,835,049) (79,860)
----------- ----------- ------------ ----------
Net Unrealized Appreciation...... $10,334,400 $13,881,558 $ 35,626,889 $1,202,051
=========== =========== ============ ==========
Cost of Investments for Federal
Income Tax Purposes............. $29,676,997 $74,147,488 $101,630,954 $4,615,500
=========== =========== ============ ==========
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP LARGE CAP LARGE CAP INTERNATIONAL
VALUE GROWTH VALUE EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Gross Unrealized Appreciation.... $ 140,983 $ 4,375,343 $ 46,230 $2,916,445
Gross Unrealized Depreciation.... (70,555) (140,089) (95,908) (69,909)
----------- ----------- ------------ ----------
Net Unrealized Appreciation...... $ 70,428 $ 4,235,254 $ (49,678) $2,846,536
=========== =========== ============ ==========
Cost of Investments for Federal
Income Tax Purposes............. $ 1,157,013 $ 8,193,910 $ 1,042,079 $7,213,724
=========== =========== ============ ==========
</TABLE>
72
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
- -----------------------------------------------------------------
7. Federal Income Tax
Permanent differences between tax and financial reporting of net investment
income and net realized gain/loss are reclassified. As of December 31, 1999, net
investment losses were reclassified to paid-in-capital and accumulated net
realized gain/loss on investment transactions as follows:
<TABLE>
<CAPTION>
AGGRESSIVE
SMALL CAP AGGRESSIVE MID CAP AGGRESSIVE
EQUITY GROWTH GROWTH MICRO CAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Reduction of paid-in capital........... $458,755 $ 47,893 $381,410 $68,065
Reduction of accumulated net realized
gain.................................. -- $748,614 -- --
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP INTERNATIONAL
SMALL CAP VALUE GROWTH VALUE EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------- --------- --------- -------------
<S> <C> <C> <C> <C>
Reduction of paid-in-capital........... $2,976 $65,226 $2,779 $41,579
</TABLE>
Additionally, as of December 31, 1999, the Aggressive Growth Portfolio
reclassified $14,605,906 of accumulated net realized gain on investments to
paid-in-capital.
At December 31, 1999, 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:
<TABLE>
<CAPTION>
SMALL CAP INTERNATIONAL
VALUE EQUITY
EXPIRES DECEMBER 31, PORTFOLIO PORTFOLIO
-------------------- --------- -------------
<S> <C> <C>
2005........................................................ $ 50 --
2006........................................................ 32,877 $422,735
2007........................................................ 140,648 --
-------- --------
173,525 422,735
======== ========
</TABLE>
8. Litigation
The former Trustees of the Navellier Series Fund, which was merged into the
Aggressive Small Cap Equity Portfolio ("Portfolio") on July 24, 1998 have made a
demand to be indemnified for their attorneys fees and costs which they claim to
be approximately $4 million, in connection with a class action lawsuit filed
against them by shareholders of the Portfolio. The current Trustees of the
Navellier Performance Funds (the "Fund") and the legal counsel to the Fund do
not believe the former Trustees have a valid claim. However, if such claim is
determined by a court to be valid, only the assets of the Portfolio would be
subject to such claim and not the assets of any other Portfolio of the Fund.
However, even then, Navellier Management, Inc. ("NMI") has agreed that, if any
such claim were determined to be valid, NMI, not the Portfolio, would pay such
claim.
73
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
THE NAVELLIER PERFORMANCE FUNDS
RENO, NEVADA
We have audited the accompanying statements of net assets of Navellier Small Cap
Equity Portfolio, Navellier Aggressive Growth Portfolio, Navellier Mid Cap
Growth Portfolio, Navellier Aggressive Micro Cap Portfolio, Navellier Small Cap
Value Portfolio, Navellier Large Cap Growth Portfolio, Navellier Large Cap Value
Portfolio and Navellier International Equity Portfolio, each a series of shares
of The Navellier Performance Funds as of December 31, 1999, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for the periods indicated therein. These financial statements are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights presented for the year ended December 31, 1996
and prior were audited by other auditors whose report dated January 31, 1997,
expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1999, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Navellier Small Cap Equity Portfolio, Navellier Aggressive Growth Portfolio,
Navellier Mid Cap Growth Portfolio, Navellier Aggressive Micro Cap Portfolio,
Navellier Small Cap Value Portfolio, Navellier Large Cap Growth Portfolio,
Navellier Large Cap Value Portfolio and Navellier International Equity Portfolio
as of December 31, 1999, the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended, and the financial highlights for the periods referred to above, in
conformity with generally accepted accounting principles.
[SIGNATURE]
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
February 18, 2000
74
<PAGE>
PART C
OTHER INFORMATION
Information required to be included in Part C is included and incorporated
herein by reference to Part C of the Registration Statement of the Navellier
Performance Funds filed May 1, 2000.
C-1
<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. 16 to the 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 1st day of May, 2000.
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 May 1, 2000
Officer), Treasurer
________________________ Trustee
Joel Rossman May 1, 2000
________________________ Trustee
Barry Sander May 1, 2000
________________________ Trustee
Arnold Langsen(2) May 1, 2000
________________________ Trustee and Secretary
Jacques Delacroix May 1, 2000
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.
C-2