TIP FUNDS
(formerly, Turner Funds)
Investment Adviser:
TURNER INVESTMENT PARTNERS, INC.
TIP Funds (formerly, Turner Funds) (the "Trust") provides a convenient and
economical means of investing in professionally managed portfolios of
securities. This Prospectus offers shares of the following mutual funds (each a
"Fund" and, together, the "Funds"), each of which is a separate series of the
Trust:
TURNER ULTRA LARGE CAP GROWTH FUND
TURNER GROWTH EQUITY FUND
TURNER MIDCAP GROWTH FUND
TURNER SMALL CAP GROWTH FUND
This Prospectus concisely sets forth the information about the Trust and the
Funds that a prospective investor should know before investing. Investors are
advised to read this Prospectus and retain it for future reference. A Statement
of Additional Information dated January 31, 1997, supplemented on August 15,
1997, has been filed with the Securities and Exchange Commission, and is
available without charge by calling 1-800-224-6312. The Statement of Additional
Information is incorporated into this Prospectus by reference.
Effective on August 30, 1997 the Small Cap Growth Fund will be closed to most
new investors. Shareholders of the Small Cap Growth Fund as of that date may
continue to make investments in the Fund, and may open additional accounts with
the Fund, provided the new account is registered in the same name or has the
same taxpayer identification or social security number assigned to it. In
addition, certain classes of new investors may also purchase shares. See
"Purchase and Redemption of Shares."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
January 31, 1997
Supplemented on
August 15, 1997
<PAGE>
TABLE OF CONTENTS
Summary................................................................... 3
Expense Summary........................................................... 5
Financial Highlights...................................................... 7
The Trust and the Funds................................................... 11
Investment Objectives..................................................... 11
Investment Policies....................................................... 11
Risk Factors.............................................................. 12
Investment Limitations.................................................... 13
The Adviser............................................................... 13
The Administrator......................................................... 14
The Transfer Agent........................................................ 14
The Distributor........................................................... 14
Portfolio Transactions.................................................... 14
Purchase and Redemption of Shares......................................... 15
Performance............................................................... 18
Taxes..................................................................... 18
General Information....................................................... 19
Description of Permitted Investments and Risk Factors..................... 21
2
<PAGE>
SUMMARY
The following provides basic information about the Turner Ultra Large Cap
Growth Fund (formerly, Turner Ultra Large Cap Fund) (the "Ultra Large Cap Growth
Fund"), Turner Growth Equity Fund (the "Growth Equity Fund"), Turner Midcap
Growth Fund (formerly, Turner Midcap Fund) (the "Midcap Growth Fund") and Turner
Small Cap Growth Fund (formerly, Turner Small Cap Fund) (the "Small Cap Growth
Fund") (each a "Fund" and, collectively, the "Funds"). The Funds are four of the
twelve mutual funds comprising TIP Funds (formerly, Turner Funds) (the "Trust").
This summary is qualified in its entirety by reference to the more detailed
information provided elsewhere in this Prospectus and in the Statement of
Additional Information.
What are each Fund's investment objective and primary policies?
The Ultra Large Cap Growth Fund seeks capital appreciation. It invests
primarily in a diversified portfolio of common stocks of issuers with, at the
time of purchase, market capitalizations in excess of $10 billion that the
Adviser believes offer strong earnings growth potential.
The Growth Equity Fund seeks capital appreciation. It invests primarily in
a diversified portfolio of common stocks that, in the Adviser's opinion, have
strong earnings growth potential.
The Midcap Growth Fund seeks capital appreciation. It invests primarily in
a diversified portfolio of common stocks of issuers with, at the time of
purchase, market capitalizations between $500 million and $6 billion that the
Adviser believes offer strong earnings growth potential.
The Small Cap Growth Fund seeks capital appreciation. It invests primarily
in a diversified portfolio of common stocks of issuers with market
capitalizations of not more than $1 billion that the Adviser believes offer
strong earnings growth potential.
What are the risks involved with investing in the Funds? The investment
policies of each Fund entail certain risks and considerations of which investors
should be aware. Each Fund invests in securities that fluctuate in value, and
investors should expect each Fund's net asset value per share to fluctuate in
value. The value of equity securities may be affected by the financial markets
as well as by developments impacting specific issuers. The values of fixed
income securities tend to vary inversely with interest rates and may be affected
by market and economic factors as well as by developments impacting specific
issuers. The Funds may enter into futures and options transactions and may
purchase zero coupon securities. Each of the Funds, other than the Ultra Large
Cap Growth Fund and the Midcap Growth Fund, may purchase mortgage-backed
securities, and certain of the Funds may purchase securities of foreign issuers.
Investments in these securities involve certain other risks.
For more information about each Fund, see "Investment Objectives,"
"Investment Policies," "Risk Factors," and "Description of Permitted Investments
and Risk Factors."
Who is the Adviser? Turner Investment Partners, Inc. (the "Adviser") serves
as the investment adviser to each Fund. See "Expense Summary" and "The Adviser."
Who is the Administrator? SEI Fund Resources (the "Administrator") serves
as the administrator and shareholder servicing agent for the Funds. See "Expense
Summary" and "The Administrator."
3
<PAGE>
Who is the Distributor? SEI Investments Distribution Co. (the
"Distributor") serves as the distributor of the Funds' shares. See "The
Distributor."
Who is the Transfer Agent? DST Systems, Inc. serves as the transfer agent
and dividend disbursing agent for the Trust. See "The Transfer Agent."
Is there a sales load? No, shares of each Fund are offered on a no-load
basis.
Is there a minimum investment? The Funds require a minimum initial
investment of $2,500 ($2,000 for IRAs), which the Distributor may waive at its
discretion. Subsequent purchases must be at least $500.
How do I purchase and redeem shares? Purchases and redemptions may be made
through the Transfer Agent on each day that the New York Stock Exchange is open
for business ("Business Day"). A purchase order will be effective as of the
Business Day received by the Transfer Agent if the Transfer Agent (or its
authorized agent) receives the order and payment, by check or in readily
available funds, prior to 4:00 p.m. Eastern time. Redemption orders received by
the Transfer Agent prior to 4:00 p.m. Eastern time on any Business Day will be
effective that day. The purchase and redemption price for shares is the net
asset value per share determined as of the end of the day the order is
effective. See "Purchase and Redemption of Shares."
How are distributions paid? Each Fund distributes substantially all of its
net investment income (exclusive of capital gains) in the form of periodic
dividends. Any capital gain is distributed at least annually. Distributions are
paid in additional shares unless the shareholder elects to take the payment in
cash. See "Dividends and Distributions."
4
<PAGE>
EXPENSE SUMMARY
SHAREHOLDER TRANSACTION EXPENSES
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Sales Load Imposed on Purchases.......................................... None
Sales Load Imposed on Reinvested Dividends............................... None
Deferred Sales Load...................................................... None
Redemption Fees(1)....................................................... None
Exchange Fees............................................................ None
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- -------------------------------------------------------------------------------
(1) A wire redemption charge, currently $10.00, is deducted from the amount of
a Federal Reserve wire redemption payment made at the request of a
shareholder.
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ULTRA GROWTH MIDCAP SMALL CAP
LARGE CAP EQUITY GROWTH GROWTH
GROWTH FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Advisory Fees (after fee waivers or reimbursements if
applicable)(1).......................................... .75% .75% .75% .92%
12b-1 Fees................................................ None None None None
Other Expenses (2)(3)..................................... .25% .25% .50% .33%
- ------------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers or
reimbursements)(4) ..................................... 1.00% 1.00% 1.25% 1.25%
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Adviser has agreed, on a voluntary basis, to waive its advisory fee for
the Ultra Large Cap Growth, Growth Equity, Midcap Growth and Small Cap
Growth Funds to the extent necessary to keep the "Total Operating Expenses"
of the Funds during the current fiscal year from exceeding 1.00%, 1.00%,
1.25% and 1.25%, respectively. The Advisory Fee for the Midcap Growth and
Small Cap Growth Funds have been restated to reflect the effect of current
and anticipated advisory fee waivers and/or reimbursements. The Adviser
reserves the right to terminate its waivers at any time in its sole
discretion. Absent such waivers, Advisory Fees for the Midcap Growth Fund
and Small Cap Growth Fund would be .75% and 1.00%, respectively.
(2) "Other Expenses" for the current fiscal year do not reflect the value of
arrangements whereby certain broker-dealers have agreed to pay certain
expenses of the Ultra Large Cap Growth, Growth Equity, Midcap Growth and
Small Cap Growth Funds in return for the direction of a percentage of the
Funds' brokerage transactions. As a result of these arrangements, the
amount of "Other Expenses" and "Total Operating Expenses" deducted from the
Ultra Large Cap Growth Fund's assets is expected to be .23% and 1.00%,
respectively, and pursuant to the Adviser's guarantee, will not exceed .25%
and 1.00%, respectively. As a result of these arrangements, the amount of
"Other Expenses" and "Total Operating Expenses" deducted from the Growth
Equity Fund's assets in the most recent fiscal year was .16% and .94%,
respectively, the amount of "Other Expenses" and "Total Operating Expenses"
expected to be deducted from Midcap Growth Fund's assets is .50% and 1.25%,
respectively, and the amount of "Other Expenses" and "Total Operating
Expenses" expected to be deducted from the Small Cap Growth Fund's assets
are anticipated to be .29% and 1.25%, respectively.
(3) "Other Expenses" for the Ultra Large Cap Growth Fund are estimated for the
current fiscal year.
(4) Absent fee waivers, expense reimbursements, and assuming that certain
expenses were not paid for by certain broker-dealers in return for the
direction to them, of brokerage transactions, "Total Operating Expenses"
for the Growth Equity, Midcap Growth and Small Cap Growth would be 1.02%,
5.67% and 1.31%, respectively. The Funds amounts for Growth Equity and
Small Cap Growth Funds have been restated to reflect current expectations
and assumptions.
5
<PAGE>
EXAMPLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment in a
Fund assuming (1) a 5% annual return and (2) redemption at the end
of each time period.
Ultra Large Cap Growth Fund........................................... $10 $32 -- --
Growth Equity Fund.................................................... $10 $32 $55 $122
Midcap Growth Fund.................................................... $13 $40 -- --
Small Cap Growth Fund................................................. $13 $40 $69 $151
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE IS BASED UPON TOTAL OPERATING EXPENSES OF EACH FUND AFTER WAIVERS
AND REIMBURSEMENTS, IF ANY, AS SHOWN IN THE EXPENSE TABLE. THE EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose of the expense table and
example is to assist the investor in understanding the various costs and
expenses that may be directly or indirectly borne by shareholders of the Funds.
Additional information may be found under "The Adviser" and "The Administrator."
6
<PAGE>
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period-Unaudited:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
ULTRA LARGE CAP
GROWTH FUND (1)
02/01/97
TO
03/31/97
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 10.00
- ------------------------------------------------------------------------------------------------------
Income From Investment Operations:
Net Investment Income (Loss).................................................... 0.01
Net Realized and Unrealized Gain (Loss) on Investments.......................... (0.59)
- ------------------------------------------------------------------------------------------------------
Total From Investment Operations.................................................. $ (0.58)
- ------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends From Net Investment Income..............................................
Distributions from Capital Gains.................................................. $ (0.11)
Total Distributions......................................................... $ (0.11)
- ------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD.................................................... $ 9.42
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN...................................................................... (5.80)%
- ------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End Of Period (000)................................................... $ 304
Ratios Of Expenses To Average Net Assets*......................................... 1.00%
Ratio Of Net Investment Income To Average Net Assets*............................. 0.82%
Ratio Of Expenses To Average Net Assets (Excluding Waivers and Contributions)*.... 39.85%
Ratio Of Net Investment Income to Average Net Assets (Excluding Waivers and
Contributions)*................................................................. (38.03)%
Portfolio Turnover Rate........................................................... 101.53%
Average Commission Rate(2)........................................................ $0.0600
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(1) Commenced operations February 1, 1997.
(2) Average commission rate paid per share for the security purchases and sales
during the period. Presentation of the rate is required for fiscal years
beginning after September 1, 1995.
7
<PAGE>
FINANCIAL HIGHLIGHTS
The following information for the fiscal year ended September 30, 1996 with
respect to the Growth Equity Fund has been audited by Ernst & Young LLP, the
Fund's independent auditors, whose report dated November 1, 1996 was
unqualified. On April 30, 1996, the Growth Equity Fund acquired all of the
assets and liabilities of the Turner Growth Equity Portfolio of The Advisors'
Inner Circle Fund. The information prior to that date relates to the Turner
Growth Equity Portfolio. The financial statements of the Turner Growth Equity
Portfolio of The Advisors' Inner Circle Fund were audited by Arthur Andersen
LLP. The following table should be read in conjunction with the Fund's financial
statements and the notes thereto. Additional performance information is set
forth in the Trust's 1996 Annual Report to Shareholders, which is available upon
request and without charge by calling 1-800-224-6312. All references herein to
the Growth Equity Fund shall be deemed to include the Turner Growth Equity
Portfolio.
For a Share Outstanding Throughout the Period:
GROWTH EQUITY FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
11/01/95 11/01/94 11/01/93 11/01/92 03/11/92(1)
TO TO TO TO TO
9/30/96 10/31/95 10/31/94 10/31/93 03/31/92
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...... $ 14.97 $ 12.46 $ 13.12 $ 10.40 $10.00
Income From Investment Operations:
Net Investment Income................... 0.02 0.10 0.10 0.09 0.03
Net Realized and Unrealized
Gain (Loss) on Investments............ 2.91 2.52 (0.66) 2.72 0.40
- ------------------------------------------------------------------------------------------------------------------
Total From Investment Operations.......... 2.93 2.62 (0.56) 2.81 0.43
- ------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends From Net Investment Income...... (0.02) (0.11) (0.10) (0.09) (0.03)
Distributions from Capital Gains.......... (0.85) -- -- -- --
Total Distributions................. (0.87) (0.11) (0.10) (0.09) (0.03)
- ------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............ $ 17.03 $ 14.97 $ 12.46 $ 13.12 $10.40
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN.............................. 20.61% 21.15% (4.28)% 27.08% 6.95%
- ------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End Of Period (000)........... $96,164 $115,819 $112,959 $53,327 $7,781
Ratios Of Expenses To Average Net
Assets.................................. 1.06%(2)* 1.03%(2) 0.95% 1.00% 1.44%*
Ratio Of Expenses To Average Net Assets
Excluding Fee Waivers................... 1.06%(2)* 1.03%(2) 1.08% 1.52% 2.55%*
Ratio Of Net Investment Income To Average
Net Assets.............................. 0.03%(2)* 0.69%(2) 0.86% 0.80% 0.73%*
Ratio Of Net Investment Income to Average
Net Assets Excluding Fee Waivers........ 0.03%(2)* 0.69%(2) 0.73% 0.28% (0.38)%*
Portfolio Turnover Rate................... 147.79% 177.86% 164.81% 88.35% 205.00%
Average Commission Rate(3)................ $ 0.06 -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(1) The Turner Growth Equity Portfolio commenced operations on March 11, 1992.
(2) The Ratios of Expenses to Average Net Assets (with and without waivers) and
Net Investment Income to Average Net Assets do not reflect the use of
Advisor's use of arrangements whereby certain broker-dealers have agreed to
pay certain expenses of the Turner Growth Equity Fund in return for the
direction of a percentage of the Fund's brokerage transactions. As a result
of these arrangements, the Ratio of Expenses to Average Net Assets was
0.94% for both the year ended 10/31/95 and the year ended 9/30/96, and the
Ratios of Net Income to Average Net Assets were 0.78% and 0.15% for the
same periods described.
(3) Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is required for fiscal years
beginning after September 1, 1995.
8
<PAGE>
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period-Unaudited:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
MIDCAP
GROWTH FUND(1)
10/01/96
TO
12/31/96
(UNAUDITED)
- -----------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......................................... $10.00
- -----------------------------------------------------------------------------------------------
Income From Investment Operations:
Net Investment Income (Loss)................................................ (0.01)
Net Realized and Unrealized Gain (Loss) on Investments...................... 0.34
- -----------------------------------------------------------------------------------------------
Total From Investment Operations.............................................. $ 0.33
- -----------------------------------------------------------------------------------------------
Less Distributions:
Dividends From Net Investment Income..........................................
Distributions from Capital Gains.............................................. $(0.11)
Total Distributions..................................................... $(0.11)
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD................................................ $10.22
- -----------------------------------------------------------------------------------------------
TOTAL RETURN.................................................................. 3.33%
- -----------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End Of Period (000)............................................... $1,713
Ratios Of Expenses To Average Net Assets...................................... 1.25%
Ratio Of Expenses To Average Net Assets Excluding Fee Waivers................. 5.67%
Ratio Of Net Investment Loss To Average Net Assets............................ (0.53)%
Ratio Of Net Investment Loss to Average Net Assets Excluding Fee Waivers...... (4.95)%
Portfolio Turnover Rate....................................................... 70.27%
Average Commission Rate(2).................................................... $ 0.06
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(1) Commenced operations October 1, 1996.
(2) Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is required for fiscal years
beginning after September 1, 1995.
9
<PAGE>
FINANCIAL HIGHLIGHTS
The following information for the fiscal year ended September 30, 1996 with
respect to the Small Cap Growth Fund has been audited by Ernst & Young LLP, the
Fund's independent auditors, whose report dated November 1, 1996 was
unqualified. On April 30, 1996, the Small Cap Growth Fund acquired all of the
assets and liabilities of the Turner Small Cap Portfolio of The Advisors' Inner
Circle Fund. The information prior to that date relates to the Turner Small Cap
Portfolio. The financial statements of the Turner Small Cap Portfolio of The
Advisors' Inner Circle Fund were audited by Arthur Andersen LLP. The following
table should be read in conjunction with the Fund's financial statements and the
notes thereto. Additional performance information is set forth in the Trust's
1996 Annual Report to Shareholders, which is available upon request and without
charge by calling 1-800-224-6312. All references herein to the Small Cap Growth
Fund shall be deemed to include the Turner Small Cap Portfolio.
For a Share Outstanding Throughout the Period:
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
11/01/95 11/01/94 02/07/94(1)
TO TO TO
9/30/96 10/31/95 10/31/94
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................................. $ 16.08 $ 10.90 $ 10.00
- --------------------------------------------------------------------------------------------------------------
Income From Investment Operations:
Net Investment Income (Loss)....................................... (0.08) (0.06) (0.02)
Net Realized and Unrealized Gain (Loss) on Investments............. 8.17 5.24 0.92
- --------------------------------------------------------------------------------------------------------------
Total From Investment Operations..................................... 8.09 $ 5.18 .90
- --------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends From Net Investment Income................................. -- -- --
Distributions from Capital Gains..................................... (1.04) -- --
Total Distributions............................................ (1.04) -- --
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD....................................... $ 23.13 $ 16.08 $ 10.90
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN......................................................... 52.90% 47.52% 12.35%
- --------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End Of Period (000)...................................... $67,425 $13,072 $ 4,806
Ratios Of Expenses To Average Net Assets............................. 1.25%* 1.25% 1.09%*
Ratio Of Expenses To Average Net Assets Excluding Fee Waivers........ 1.54%* 2.39% 4.32%*
Net Assets........................................................... (0.88)%* (0.68)% (0.27)%*
Ratio Of Net Investment Income to Average Net Assets Excluding Fee
Waivers............................................................ (1.17)%* (1.82)% (3.50)%*
Portfolio Turnover Rate.............................................. 149.00% 183.49% 173.92%
Average Commission Rate(2)........................................... $ 0.06 -- --
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(1) The Turner Small Cap Portfolio commenced operations on February 7, 1994.
(2) Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is required for fiscal years
beginning after September 1, 1995.
10
<PAGE>
THE TRUST AND THE FUNDS
TIP Funds (formerly, Turner Funds) (the "Trust") offers shares in twelve
separately-managed mutual funds, each of which is a separate series of the
Trust. Each share of each mutual fund represents an undivided, proportionate
interest in that mutual fund. This Prospectus offers shares of the Trust's
Turner Ultra Large Cap Growth Fund (formerly, Turner Ultra Large Cap Fund) (the
"Ultra Large Cap Growth Fund"), Turner Growth Equity Fund (the "Growth Equity
Fund"), Turner Midcap Growth Fund (formerly, Turner Midcap Fund) (the "Midcap
Growth Fund") and Turner Small Cap Growth Fund (formerly, Turner Small Cap Fund)
(the "Small Cap Growth Fund"), (each a "Fund" and, together, the "Funds").
INVESTMENT OBJECTIVES
ULTRA LARGE CAP GROWTH FUND -- The Turner Ultra Large Cap Growth Fund seeks
capital appreciation.
GROWTH EQUITY FUND -- The Growth Equity Fund seeks capital appreciation.
MIDCAP GROWTH FUND -- The Midcap Growth Fund seeks capital appreciation.
SMALL CAP GROWTH FUND -- The Small Cap Growth Fund seeks capital appreciation.
There can be no assurance that any Fund will achieve its investment objective.
INVESTMENT POLICIES
ULTRA LARGE CAP GROWTH FUND
The Ultra Large Cap Growth Fund invests primarily (and, under normal conditions,
at least 65% of its total assets) in a diversified portfolio of common stocks of
issuers that, at the time of purchase, have market capitalizations in excess of
$10 billion that the Adviser believes to have strong earnings growth potential.
The Fund seeks to purchase securities that are well diversified across economic
sectors and to maintain sector concentrations that approximate the economic
sector weightings comprising the Russell 200 Growth Index (or such other
appropriate index selected by the Adviser). Any remaining assets may be invested
in securities issued by smaller capitalization companies, warrants and rights to
purchase common stocks, and they may invest up to 10% of its total assets in
ADRs. The Fund only will purchase securities that are traded on registered
exchanges or the over-the-counter market in the United States. The Fund may
purchase shares of other investment companies and foreign securities.
GROWTH EQUITY FUND
The Growth Equity Fund invests as fully as practicable (and, under normal
conditions, at least 65% of its total assets) in a portfolio of common stocks
that Turner Investment Partners, Inc. (the "Adviser"), believes to have
potential for strong growth in earnings and to be reasonably valued at the time
of purchase. The Fund seeks to purchase securities that are well diversified
across economic sectors and to maintain sector concentrations that approximate
the economic sector weightings of the Russell 1000 Growth Index (or such other
appropriate index selected by the Adviser). The Fund may invest in warrants and
rights to purchase common stocks, and may invest up to 10% of its total assets
in American Depository Receipts ("ADRs"). The Fund only will purchase securities
that are traded on registered exchanges or the over-the-counter market in the
United States.
MIDCAP GROWTH FUND
The Midcap Growth Fund invests primarily (and, under normal conditions, at least
65% of its total assets) in a diversified portfolio of common stocks of issuers
that, at the time of purchase, have market capitalizations between $500 million
and $6 billion that the Adviser believes to have strong earnings growth
potential. The Fund seeks to purchase securities that are well diversified
across economic sectors and to maintain sector concentrations that approximate
the economic sector weightings comprising the Russell Midcap Growth Index (or
such other appropriate index selected by the Adviser). Any remaining assets may
be invested in securities issued by smaller capitalization companies and larger
capitalization companies, warrants and rights to purchase common stocks, and it
may invest up to 10% of its total assets in ADRs. The Fund only will purchase
securities that are traded on registered exchanges or the over-the-counter
market in the United States. The Fund may purchase shares of other investment
companies.
11
<PAGE>
SMALL CAP GROWTH FUND
The Small Cap Growth Fund invests primarily (and, under normal conditions, at
least 65% of its total assets) in a diversified portfolio of common stocks of
issuers with market capitalizations of not more than $1 billion that the Adviser
believes to have strong earnings growth potential. Under normal market
conditions, the Fund will maintain a weighted average market capitalization of
less than $1 billion. The Fund seeks to purchase securities that are well
diversified across economic sectors and to maintain sector concentrations that
approximate the economic sector weightings comprising the Russell 2500 Index (or
such other appropriate index selected by the Adviser), the Fund may invest in
warrants and rights to purchase common stocks, and may invest up to 10% of its
total assets in ADRs. The Fund only will purchase securities that are traded on
registered exchanges or the over-the-counter market in the United States.
ALL FUNDS
Each Fund may purchase securities on a when-issued basis.
Each Fund may enter into futures and options transactions.
Each Fund may invest up to 15% of its net assets in illiquid securities.
Each Fund, except the Ultra Large Cap Growth Fund and Midcap Growth Fund, may
purchase convertible securities.
Each Fund may borrow money consistent with the limitation on borrowing set forth
in the Statement of Additional Information.
Each Fund may, for temporary defensive purposes, invest up to 100% of its total
assets in money market instruments (including U.S. Government securities, bank
obligations, commercial paper rated in the highest rating category by an NRSRO,
repurchase agreements involving the foregoing securities), shares of money
market investment companies and cash.
For a further description of these types of instruments see "Description of
Permitted Investments and Risk Factors" in the Statement of Additional
Information.
RISK FACTORS
EQUITY SECURITIES -- Investments in equity securities in general are subject to
market risks that may cause their prices to fluctuate over time. The value of
securities convertible into equity securities, such as warrants or convertible
debt, is also affected by prevailing interest rates, the credit quality of the
issuer and any call provision. Fluctuations in the value of equity securities in
which a fund invests will cause the net asset value of that fund to fluctuate.
An investment in such funds may be more suitable for long-term investors who can
bear the risk of short-term principal fluctuations.
The Small Cap Growth Fund invests to a significant degree, and the Midcap Growth
Fund may invest to a lesser degree, in equity securities of smaller companies.
In addition, the Ultra Large Cap Growth Fund may invest in the securities of
medium capitalization companies. Any investment in smaller or medium
capitalization companies involves greater risk than that customarily associated
with investments in larger, more established companies. This increased risk may
be due to the greater business risks of smaller size, limited markets and
financial resources, narrow product lines and lack of depth of management. The
securities of smaller companies are often traded in the over-the-counter market
and if listed on a national securities exchange may not be traded in volumes
typical for that exchange. Thus, the securities of smaller-sized companies are
likely to be less liquid, and subject to more abrupt or erratic market movements
than securities of larger, more established growth companies.
FIXED INCOME SECURITIES -- The market value of fixed income investments will
change in response to interest rate changes and other factors. During periods of
falling interest rates, the values of outstanding fixed income securities
generally rise. Conversely, during periods of rising interest rates, the values
of such securities generally decline. Moreover, while securities with longer
maturities tend to produce higher yields, the prices of longer maturity
securities are also subject to greater market fluctuations as a result of
changes in interest rates. Changes by recognized agencies in the rating of any
fixed income security and in the ability of an issuer to make payments of
interest and principal also affect the value of these investments. Changes in
the value of these securities will not necessarily affect cash income derived
from these securities, but will affect the investing Fund's net asset value.
SECURITIES OF FOREIGN ISSUERS -- Investments in the securities of foreign
issuers may subject a Fund to investment risks that differ in some respects from
those related to investments in securities of U.S.
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issuers. Such risks include future adverse political and economic developments,
possible imposition of withholding taxes on income, possible seizure,
nationalization or expropriation of foreign deposits, possible establishment of
exchange controls or taxation at the source or greater fluctuation in value due
to changes in exchange rates. Foreign issuers of securities often engage in
business practices different from those of domestic issuers of similar
securities, and there may be less information publicly available about foreign
issuers. In addition, foreign issuers are, generally speaking, subject to less
government supervision and regulation than are those in the United States.
Investments in securities of foreign issuers are frequently denominated in
foreign currencies and the value of the Fund's assets measured in U.S. dollars
may be affected favorably or unfavorably by changes in currency rates and in
exchange control regulations, and the Fund may incur costs in connection with
conversions between various currencies.
PORTFOLIO TURNOVER -- The annual portfolio turnover rate for the Growth Equity
Fund for the fiscal period ended September 30, 1996, was 147.79%. The annual
portfolio turnover rate for the Small Cap Growth Fund for the fiscal period
ended September 30, 1996, was 149.00%. Under normal circumstances, the portfolio
turnover rate for the Ultra Large Cap Growth Fund and the Midcap Growth Fund is
not expected to exceed 150% and 175%, respectively. An annual portfolio turnover
rate in excess of 100% may result from the Adviser's investment strategy of
focusing on earnings potential and disposing of securities when the Adviser
believes that their earnings potential has diminished, or may result from the
Adviser's maintenance of appropriate issuer diversification. Portfolio turnover
rates in excess of 100% may result in higher transaction costs, including
increased brokerage commissions, and higher levels of taxable capital gain. See
"Taxes."
INVESTMENT LIMITATIONS
The investment objective of each Fund and certain of the investment limitations
set forth here and in the Statement of Additional Information are fundamental
policies of that Fund. Fundamental policies cannot be changed with respect to a
Fund without the consent of the holders of a majority of that Fund's outstanding
shares.
1. No Fund may (i) purchase securities of any issuer (except securities issued
or guaranteed by the United States Government, its agencies or instrumentalities
and repurchase agreements involving such securities) if, as a result, more than
5% of the total assets of the Fund would be invested in the securities of such
issuer; or (ii) acquire more than 10% of the outstanding voting securities of
any one issuer. This restriction applies to 75% of each Fund's total assets.
2. No Fund may purchase any securities which would cause 25% or more of the
total assets of the Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry, provided
that this limitation does not apply to investments in obligations issued or
guaranteed by the U.S. Government or its agencies and instrumentalities and
repurchase agreements involving such securities.
The foregoing percentages will apply at the time of the purchase of a security.
THE ADVISER
Turner Investment Partners, Inc., is a professional investment management firm
founded in March, 1990. Robert E. Turner is the Chairman and controlling
shareholder of the Adviser. As of June 30, 1997, the Adviser had discretionary
management authority with respect to approximately $2.23 billion of assets. The
Adviser has provided investment advisory services to investment companies since
1992. The principal business address of the Adviser is 1235 Westlakes Drive,
Suite 350, Berwyn, Pennsylvania 19312.
The Adviser serves as the investment adviser for each Fund under an investment
advisory agreement (the "Advisory Agreement"). Under the Advisory Agreement, the
Adviser makes the investment decisions for the assets of each Fund and
continuously reviews, supervises and administers each Fund's investment program,
subject to the supervision of, and policies established by, the Trustees of the
Trust.
For its services, the Adviser is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate of .75% of the average daily net assets of
the Ultra Large Cap Growth, Growth Equity and Midcap Growth Funds, and 1.00% of
those of the Small Cap Growth Fund. The Adviser has voluntarily agreed to waive
all or a portion of its fee and to reimburse expenses of the
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Ultra Large Cap Growth, Growth Equity, Midcap Growth and Small Cap Growth Funds
in order to limit their total operating expenses (as a percentage of average
daily net assets on an annualized basis) to not more than 1.00%, 1.00%, 1.25%
and 1.25%, respectively. The Adviser received .75% for the Growth Equity Fund
and .71% for its advisory services to the Small Cap Growth Fund for the fiscal
year ended September 30, 1996. The Ultra Large Cap Growth Fund and Midcap Growth
Fund had not commenced operations as of September 30, 1996. The Adviser reserves
the right, in its sole discretion, to terminate these voluntary fee waivers and
reimbursements at any time.
Robert E. Turner, CFA, Chairman and Chief Investment Officer of the Adviser, has
managed the Growth Equity Fund since its inception, and is co-manager of the
Ultra Large Cap Growth Fund. Mr. Turner founded Turner Investment Partners, Inc.
in 1990. Prior to 1990, he was Senior Investment Manager with Meridian
Investment Company. He has 15 years of investment experience.
John Hammerschmidt, Senior Equity Portfolio Manager, is a co-manager of the
Ultra Large Cap Growth Fund. Mr. Hammerschmidt joined the Adviser in 1992. Prior
to 1992, he was a Vice President in Government Securities Trading at S.G.
Warburg. He has 13 years of investment experience.
Christopher K. McHugh, Equity Portfolio Manager, is a co-manager of the Midcap
Growth Fund. Mr. McHugh joined the Adviser in 1990. Prior to 1990, he was a
Performance Specialist with Provident Capital Management. He has 10 years of
investment experience.
William H. Chenoweth, CFA, Senior Equity Portfolio Manager of the Adviser, has
managed the Small Cap Growth Fund since its inception and is co-manager of the
Midcap Growth Fund. Mr. Chenoweth joined Turner Investment Partners, Inc. in
1993. Prior to 1993, he was Second Vice President with Jefferson-Pilot
Corporation. He has 11 years of investment experience.
THE ADMINISTRATOR
SEI Fund Resources (the "Administrator") provides the Trust with administrative
services, including regulatory reporting and all necessary office space,
equipment, personnel, and facilities.
For these administrative services, the Administrator is entitled to a fee from
each Fund, which is calculated daily and paid monthly, at an annual rate of .12%
of that Fund's average daily net assets up to $75 million, .10% on the next $75
million of such assets, .09% on the next $150 million of such assets, .08% of
the next $300 million of such assets, and .075% of such assets in excess of $600
million. In respect to the Ultra Large Cap Growth and Midcap Growth Funds, for
the first 6 months of operations, the Funds will pay no fee to the
Administrator. For the second 6 months of operations, the Ultra Large Cap Growth
and Midcap Growth Funds will pay to the Administrator 25% of the $75,000 minimum
annual administration fee. Once each of the Fund's net assets exceed $62.5
million, the Administrator will receive asset-based fees in accordance with the
schedule set forth above.
The Administrator also serves as shareholder servicing agent for the Trust under
a shareholder servicing agreement with the Trust.
THE TRANSFER AGENT
DST Systems, Inc., 1004 Baltimore Avenue, Kansas City, Missouri 64105 (the
"Transfer Agent") serves as the transfer agent and dividend disbursing agent for
the Trust under a transfer agency agreement with the Trust.
THE DISTRIBUTOR
SEI Investments Distribution Co. (the "Distributor"), Oaks, Pennsylvania 19456,
a wholly-owned subsidiary of SEI Investments Company, acts as the Trust's
distributor pursuant to a distribution agreement (the "Distribution Agreement").
No compensation is paid to the Distributor for its distribution services.
PORTFOLIO TRANSACTIONS
Each Fund may execute brokerage or other agency transactions through the
Distributor for which the Distributor may receive usual and customary
compensation. The Adviser may direct commission business for the Ultra Large Cap
Growth, Growth
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Equity, Midcap Growth and Small Cap Growth Funds to designated broker-dealers
(including the Distributor) in connection with such broker-dealers' payment of
certain Ultra Large Cap Growth, Growth Equity, Midcap Growth and Small Cap
Growth Fund expenses.
Since shares of the Funds are not marketed through intermediary broker-dealers,
no Fund has a practice of allocating brokerage or effecting principal
transactions with broker-dealers on the basis of sales of shares which may be
made through such firms. However, the Adviser may place orders for any Fund with
qualified broker-dealers who refer clients to that Fund.
Some securities considered for investment by a Fund may also be appropriate for
other accounts and/or clients served by the Advisor. If the purchase or sale of
securities consistent with the investment policies of a Fund and another of the
Adviser's accounts and/or clients are considered at or about the same time,
transactions in such securities will be allocated among the fund and the other
accounts and/or clients in a manner deemed equitable by the Advisor.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions may be made through the Transfer Agent on each day
that the New York Stock Exchange is open for business ("Business Day").
Investors may purchase and redeem shares of each Fund directly through the
Transfer Agent at: TIP Funds, P.O. Box 419805, Kansas City, Missouri 64141-6805,
by mail or wire transfer. All shareholders may place orders by telephone; when
market conditions are extremely busy, it is possible that investors may
experience difficulties placing orders by telephone and may wish to place orders
by mail. Purchases and redemptions of shares of the Fund may be made on any
Business Day. Shares of each Fund are offered only to residents of states in
which such shares are eligible for purchase.
The minimum initial investment in the Funds is $2,500 ($2,000 for IRAs) and
subsequent purchases must be at least $500. The Distributor may waive these
minimums at its discretion. No minimum applies to subsequent purchases effected
by dividend reinvestment.
Minimum Account Size -- Due to the relatively high cost of maintaining smaller
accounts, the Fund reserves the right to redeem shares in any account if, as the
result of redemptions, the value of that account drops below $2,500. You will be
allowed at least 60 days, after notice by the Fund, to make an additional
investment to bring your account value up to at least $2,500 before the
redemption is processed.
Certain brokers assist their clients in the purchase or redemption of shares and
charge a fee for this service in addition to a Fund's public offering price.
PURCHASES BY MAIL
An account may be opened by mailing a check or other negotiable bank draft
(payable to the name of the appropriate Fund) for $2,500 ($2,000 for IRAs) or
more, together with a completed Account Application to: TIP Funds, P.O. Box
419805, Kansas City, Missouri 64141-6805. Third-Party checks, credit cards,
credit card checks and cash will not be accepted. When purchases are made by
check (including certified or cashier's checks), redemption proceeds will not be
forwarded until the investment being redeemed has been in the account for 15
days. Subsequent investments may also be mailed directly to the Transfer Agent.
PURCHASES BY WIRE TRANSFER
Shareholders having an account with a commercial bank that is a member of the
Federal Reserve System may purchase shares of the Fund by requesting their bank
to transmit funds by wire to: United Missouri Bank of Kansas, N.A.; ABA
#10-10-00695; for Account Number 98-7060-116-8; Further Credit: [___________
Fund]. The shareholder's name and account number must be specified in the wire.
Initial Purchases: Before making an initial investment by wire, an investor must
first telephone 1-800-224-6312 to be assigned an account number. The investor's
name, account number, taxpayer identification number or Social Security number,
and address must be specified in the wire. In addition, an Account Application
should be promptly forwarded to: TIP Funds, P.O. Box 419805, Kansas City,
Missouri 64141-6805.
Subsequent Purchases: Additional investments may be made at any time through the
wire procedures described above, which must include a shareholder's name and
account number. The investor's bank may
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impose a fee for investments by wire. Subsequent purchases may also be made by
wire through the Automated Clearing House ("ACH").
GENERAL INFORMATION REGARDING PURCHASES
A purchase request will be effective as of the day received by the Transfer
Agent if the Transfer Agent (or its authorized agent) receives the purchase
request in good order and payment before 4:00 p.m., Eastern time. A purchase
request is in good order if it is complete and accompanied by the appropriate
documentation, including an Account Application and additional documentation
required. Purchase requests in good order received after 4:00 p.m., Eastern
time, will be effective the next Business Day. Payment may be made by check or
readily available funds. The purchase price of shares of any Fund is that Fund's
net asset value per share next determined after a purchase order is effective.
Purchases will be made in full and fractional shares of each Fund calculated to
three decimal places. The Trust will not issue certificates representing shares
of any Fund.
If a check received for the purchase of shares does not clear, the purchase will
be canceled, and the investor could be liable for any losses or fees incurred.
The Trust reserves the right to reject a purchase order when the Trust
determines that it is not in the best interest of the Trust or its shareholders
to accept such order.
Systematic Investment Plan -- A shareholder may also arrange for periodic
additional investments in a Portfolio through automatic deductions by Automated
Clearing House ("ACH") transactions from a checking or savings account by
completing the Systematic Investment Plan form. This Systematic Investment Plan
is subject to account minimum initial purchase amounts and a minimum
pre-authorized investment amount of $100 per month. An application form for the
Systematic Investment Plan may be obtained by calling 1-800-224-6312.
WHO IS ELIGIBLE TO INVEST IN THE SMALL CAP GROWTH FUND NOW THAT THE FUND IS
CLOSED TO NEW INVESTORS?
Effective on August 30, 1997, the Board of Trustees will close the Small Cap
Growth Fund to new investors. If you are a shareholder of the Small Cap Growth
Fund when it closes, you will still be able to make additional investments in
the Fund and reinvest your dividends and capital gain distributions. Since the
Fund is closed, you may open a new account only if:
o your business or other organization is already a shareholder of the Fund
and you are opening an account for an employee benefit plan sponsored by
that organization or an affiliated organization;
o you are a current Fund trustee or officer, or an employee of Turner
Investment Partners, Inc., or a member of the immediate family of any of
those people;
o you are an existing advisory client of Turner Investment Partners, Inc.; or
o you are a client of a financial adviser or planner who has client assets
invested in TIP Funds as of the date of any proposed new investment in the
Fund.
In addition, an employee benefit plan which is a Fund shareholder may continue
to buy shares in the ordinary course of the plan's operations, even for new plan
participants.
EXCHANGES
Shareholders of each Fund may exchange their shares for shares of the other
Funds that are then offering their shares to the public. Exchanges are made at
net asset value. An exchange is considered a sale of shares and may result in
capital gain or loss for federal income tax purposes. The shareholder must have
received a current prospectus for the new Fund before any exchange will be
effected, and the exchange privilege may be exercised only in those states where
shares of the new Fund may legally be sold. If the Transfer Agent (or its
authorized agent) receives exchange instructions in writing or by telephone (an
"Exchange Request") in good order by 4:00 p.m., Eastern time, on any Business
Day, the exchange will be effected that day. The liability of the Fund or the
Transfer Agent for fraudulent or unauthorized telephone instructions may be
limited as described below. The Trust reserves the right to modify or terminate
this exchange offer on 60 days' notice.
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REDEMPTIONS
Redemption requests in good order received by the Transfer Agent (or its
authorized agent) prior to 4:00 p.m., Eastern time on any Business Day will be
effective that day. To redeem shares of the Fund, shareholders must place their
redemption orders with the Transfer Agent (or its authorized agent) prior to
4:00 p.m., Eastern time, on any Business Day. The redemption price of shares of
any Fund is the net asset value per share of that Fund next determined after the
redemption order is effective. Payment of redemption proceeds will be made as
promptly as possible and, in any event, within seven days after the redemption
order is received, provided, however, that redemption proceeds for shares
purchased by check (including certified or cashier's checks) will be forwarded
only upon collection of payment for such shares; collection of payment may take
up to 15 days. Shareholders may not close their accounts by telephone.
Shareholders may receive redemption payments in the form of a check or by
Federal Reserve or ACH wire transfer. There is no charge for having a check for
redemption proceeds mailed. The Custodian will deduct a wire charge, currently
$10.00, from the amount of a Federal Reserve wire redemption payment made at the
request of a shareholder. Shareholders cannot redeem shares of a Fund by Federal
Reserve wire on Federal holidays restricting wire transfers. The Fund does not
charge for ACH wire transactions; however, such transactions will not be posted
to a shareholder's bank account until the second Business Day following the
transaction.
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of instructions received by telephone if they reasonably believe
those instructions to be genuine. The Trust and the Transfer Agent will each
employ reasonable procedures to confirm that telephone instructions are genuine.
Such procedures may include the taping of telephone conversations.
The right of redemption may be suspended or the date of payment of redemption
proceeds postponed during certain periods as set forth more fully in the
Statement of Additional Information.
A signature guarantee is a widely accepted way to protect shareholders by
verifying the signature on certain redemption requests. The Trust requires
signature guarantees to be provided in the following circumstances: (1) written
requests for redemptions in excess of $50,000; (2) all written requests to wire
redemption proceeds to a bank other than the bank previously designated on the
account application; and (3) redemption requests that provide that the
redemption proceeds should be sent to an address other than the address of
record or to a person other than the registered shareholder(s) for the account.
Signature guarantees can be obtained from any of the following institutions: a
national or state bank, a trust company, a federal savings and loan association,
or a broker-dealer that is a member of a national securities exchange. The Trust
does not accept guarantees from notaries public or from organizations that do
not provide reimbursement in the case of fraud.
Systematic Withdrawal Plan -- Each Fund offers a Systematic Withdrawal Plan
("SWP") for shareholders who wish to receive regular distributions from their
account. Upon commencement of the SWP, the account must have a current value of
$2,500 or more. Shareholders may elect to receive automatic payments via ACH
wire transfers of $100 or more on a monthly, quarterly, semi-annual or annual
basis. An application form for SWP may be obtained by calling 1-800-224-6312.
Shareholders should realize that if withdrawals exceed income dividends, their
invested principal in the account will be depleted. Thus, depending on the
frequency and amounts of the withdrawal payments and/or any fluctuations in the
net asset value per share, their original investment could be exhausted
entirely. To participate in the SWP, shareholders must have their dividends
automatically reinvested. Shareholders may change or cancel the SWP at any time,
upon written notice to the Transfer Agent.
VALUATION OF SHARES
The net asset value per share of each Fund is determined by dividing the total
market value of that Fund's investments and other assets, less any liabilities,
by the total number of outstanding shares of that Fund. Net asset value per
share is determined daily as of the close of business of the New York Stock
Exchange (currently, 4:00 p.m., Eastern time) on any Business Day.
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PERFORMANCE
From time to time, each Fund may advertise its yield and total return. These
figures will be based on historical earnings and are not intended to indicate
future performance. No representation can be made regarding actual future yields
or returns. The yield of a Fund refers to the annualized income generated by an
investment in the Fund over a specified 30-day period. The yield is calculated
by assuming that the same amount of income generated by the investment during
that period is generated in each 30-day period over one year and is shown as a
percentage of the investment.
The total return of a Fund refers to the average compounded rate of return on a
hypothetical investment, for designated time periods (including but not limited
to the period from which the Fund commenced operations through the specified
date), assuming that the entire investment is redeemed at the end of each period
and assuming the reinvestment of all dividend and capital gain distributions. A
Fund may periodically compare its performance to that of other mutual funds
tracked by mutual fund rating services (such as Lipper Analytical Services,
Inc.), financial and business publications and periodicals, broad groups of
comparable mutual funds, unmanaged indices, which may assume investment of
dividends but generally do not reflect deductions for administrative and
management costs, or other investment alternatives. A Fund may quote
Morningstar, Inc., a service that ranks mutual funds on the basis of
risk-adjusted performance, and Ibbotson Associates of Chicago, Illinois, which
provides historical returns of the capital markets in the U.S. A Fund may also
quote the Frank Russell Company or Wilshire Associates, consulting firms that
compile financial characteristics of common stocks and fixed income securities,
regarding non-performance-related attributes of a Fund's portfolio. The Fund may
use long term performance of these capital markets to demonstrate general
long-term risk versus reward scenarios and could include the value of a
hypothetical investment in any of the capital markets. The Fund may also quote
financial and business publications and periodicals as they relate to fund
management, investment philosophy, and investment techniques.
A Fund may quote various measures of volatility and benchmark correlation in
advertising and may compare these measures to those of other funds. Measures of
volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.
TAXES
The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal income tax treatment of a Fund or its shareholders.
Shareholders are urged to consult their tax advisors regarding specific
questions as to federal, state and local income taxes. Further information
concerning taxes is set forth in the Statement of Additional Information.
TAX STATUS OF THE FUNDS:
Each Fund is treated as a separate entity for federal income tax purposes and is
not combined with the Trust's other portfolios. Each Fund intends to qualify or
to continue to qualify for the special tax treatment afforded regulated
investment companies as defined under Subchapter M of the Internal Revenue Code
of 1986, as amended. So long as a Fund qualifies for this special tax treatment,
it will be relieved of federal income tax on that part of its net investment
income and net capital gain (the excess of net long-term capital gain over net
short-term capital loss) which it distributes to shareholders.
TAX STATUS OF DISTRIBUTIONS:
Each Fund will distribute all of its net investment income (including, for this
purpose, net short-term capital gain) to shareholders. Dividends from net
investment income will be taxable to shareholders as ordinary income whether
received in cash or in additional shares. Distributions from net investment
income will qualify for the dividends-received deduction for corporate
shareholders only to the extent such distributions are derived from dividends
paid by domestic corporations; however, such distributions which do qualify for
the dividends-received deduction may be subject to the corporate alternative
minimum tax. It can be expected that none of the dividends paid by the Fixed
Income Fund will qualify for that deduction. Any net capital gains will be
distributed annually and will be taxed to shareholders as long-term capital
gains, regardless of how long the
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shareholder has held shares. Each Fund will make annual reports to shareholders
of the federal income tax status of all distributions, including the amount of
dividends eligible for the dividends-received deduction.
Certain securities purchased by a Fund are sold with original issue discount and
thus do not make periodic cash interest payments. Each Fund will be required to
include as part of its current income the accrued discount on such obligations
even though the Fund has not received any interest payments on such obligations
during that period. Because each Fund distributes all of its net investment
income to its shareholders, a Fund may have to sell portfolio securities to
distribute such accrued income, which may occur at a time when the Adviser would
not have chosen to sell such securities and which may result in a taxable gain
or loss.
The Funds may, in certain circumstances, accept securities that are appropriate
investments as payment for Fund shares (an "In-Kind Purchase"). An In-Kind
Purchase may result in adverse tax consequences under certain circumstances to
either the investors transferring securities for shares (an "In-Kind Investors")
or to investors who acquire shares of the Funds after a transfer ("new
shareholders"). As a result of an In-Kind Purchase, the Funds may acquire
securities that have appreciated in value or depreciated in value from the date
they were acquired. If appreciated securities were to be sold after an In-Kind
Purchase, the amount of the gain would be taxable to new shareholders as well as
to In-Kind Investors. The effect of this for new shareholders would be to tax
them on a distribution that represents a return of the purchase price of their
shares rather than an increase in the value of their investment. The effect on
In-Kind Investors would be to reduce their potential liability for tax on
capital gains by spreading it over a larger asset base. The opposite may occur
if the Funds acquire securities having an unrealized capital loss. In that case,
In-Kind Investors will be unable to utilize the loss to offset gains, but,
because an In-Kind Purchase will not result in any gains, the inability of
In-Kind Investors to utilize unrealized losses will have no immediate tax
effect. For new shareholders, to the extent that unrealized losses are realized
by the Funds, new shareholders may benefit by any reduction in net tax liability
attributable to the losses. The Adviser cannot predict whether securities
acquired in any In-Kind Purchase will have unrealized gains or losses on the
date of the In-Kind Purchase. Consistent with its duties as investment adviser,
the Adviser will, however, take tax consequences to investors into account when
making decisions to sell portfolio assets, including the impact of realized
capital gains on shareholders of the Funds.
Dividends declared by a Fund in October, November or December of any year and
payable to shareholders of record on a date in one of those months will be
deemed to have been paid by the Fund and received by the shareholders on
December 31 in the year declared, if paid by the Fund at any time during the
following January. Each Fund intends to make sufficient distributions prior to
the end of each calendar year to avoid liability for the federal excise tax
applicable to regulated investment companies.
Income received on direct U.S. obligations is exempt from income tax at the
state level when received directly by a Fund and may be exempt, depending on the
state, when received by a shareholder from a Fund provided certain
state-specific conditions are satisfied. The Funds will inform shareholders
annually of the percentage of income and distributions derived from direct U.S.
obligations. Shareholders should consult their tax advisers to determine whether
any portion of the income dividends received from a Fund is considered tax
exempt in their particular state. Income derived by a Fund from securities of
foreign issuers may be subject to foreign withholding taxes. The Funds will not
be able to elect to treat shareholders as having paid their proportionate share
of such foreign taxes.
Each sale, exchange or redemption of a Fund's shares is a taxable event to the
shareholder.
GENERAL INFORMATION
THE TRUST
The Trust, an open-end management investment company, was organized under
Massachusetts law as a business trust under a Declaration of Trust dated January
26, 1996, and amended on February 21, 1997. The Declaration of Trust permits the
Trust to offer separate series ("portfolios") of shares. All consideration
received by the Trust for shares of any portfolio and all assets of such
portfolio belong to that portfolio and would be subject to liabilities related
thereto. The Trust reserves the right to create and issue shares of additional
portfolios.
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The Trust pays its operating expenses, including fees of its service providers,
audit and legal expenses, expenses of preparing prospectuses, proxy solicitation
material and reports to shareholders, costs of custodial services and
registering the shares under federal and state securities laws, pricing and
insurance expenses, and pays additional expenses including litigation and other
extraordinary expenses, brokerage costs, interest charges, taxes and
organization expenses.
TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trustees have approved contracts
under which, as described above, certain companies provide essential management
services to the Trust.
VOTING RIGHTS
Each share held entitles the Shareholder of record to one vote for each dollar
invested. In other words, each shareholder of record is entitled to one vote for
each dollar of net asset value of the shares held on the record date for the
meeting. Shareholders of each Fund will vote separately on matters pertaining
solely to that Fund. As a Massachusetts business trust, the Trust is not
required to hold annual meetings of Shareholders, but approval will be sought
for certain changes in the operation of the Trust and for the election of
Trustees under certain circumstances.
In addition, a Trustee may be removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually for each Fund. The Trust also furnishes periodic
reports and, as necessary, proxy statements to shareholders of record.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to TIP Funds, P.O. Box 419805, Kansas
City, Missouri 64141-6805, or by calling 1-800-224-6312. Purchases, exchanges
and redemptions of shares should be made through the Transfer Agent by calling
1-800-224-6312.
DIVIDENDS AND DISTRIBUTIONS
Substantially all of the net investment income (excluding capital gains) of the
Growth Equity Fund is distributed in the form of quarterly dividends, and that
of the Ultra Large Cap Growth Fund, Midcap Growth Fund and the Small Cap Growth
Fund are distributed in the form of dividends at least annually. Shareholders of
record of the Growth Equity Fund on the second to last Business Day of each
quarter or month, respectively, will be entitled to receive the quarterly or
monthly dividend distribution. If any capital gain is realized, substantially
all of it will be distributed at least annually.
Shareholders automatically receive all income dividends and capital gain
distributions in additional shares, unless the shareholder has elected to take
such payment in cash. Shareholders may change their election by providing
written notice to the Transfer Agent at least 15 days prior to the distribution.
Shareholders may receive payments for cash distributions in the form of a check
or by Federal Reserve or ACH wire transfer.
Dividends and other distributions of each Fund are paid on a per share basis.
The value of each share will be reduced by the amount of the payment. If shares
are purchased shortly before the record date for a distribution of ordinary
income or capital gains, a shareholder will pay the full price for the shares
and receive some portion of the price back as a taxable distribution or
dividend.
COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Ernst & Young LLP
serves as the independent public accountants for the Trust.
CUSTODIAN
CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box 7618, Philadelphia,
Pennsylvania 19101 acts as the custodian (the "Custodian") of the Trust. The
Custodian holds cash, securities and other assets
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of the Trust as required by the Investment Company Act of 1940, as amended (the
"1940 Act").
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS
The following is a description of permitted investments for one or more of the
Funds:
AMERICAN DEPOSITARY RECEIPTS ("ADRs") -- ADRs are securities, typically issued
by a U.S. financial institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a foreign issuer and
deposited with the depositary. ADRs may be available through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the security underlying the receipt and a depositary, whereas an
unsponsored facility may be established by a depositary without participation by
the issuer of the underlying security. Holders of unsponsored depositary
receipts generally bear all the costs of the unsponsored facility. The
depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through, to the holders of the receipts, voting rights with
respect to the deposited securities.
DERIVATIVES -- Derivatives are securities that derive their value from other
securities, financial instruments or indices. The following are considered
derivative securities: options on futures, futures, options (e.g., puts and
calls), swap agreements, mortgage-backed securities (e.g., CMOs, REMICs, IOs and
POs), when issued securities and forward commitments, floating and variable rate
securities, convertible securities, "stripped" U.S. Treasury securities (e.g.,
Receipts and STRIPs), privately issued stripped securities (e.g., TGRs, TRs, and
CATs). See elsewhere in the "Description of Permitted Investments and Risk
Factors" and in the Statement of Additional Information for discussions of these
various instruments.
ILLIQUID SECURITIES -- Illiquid securities are securities that cannot be
disposed of within seven business days at approximately the price at which they
are being carried on the Fund's books. Illiquid securities include demand
instruments with demand notice periods exceeding seven days, securities for
which there is no active secondary market, and repurchase agreements with
durations or maturities over 7 days in length.
MONEY MARKET INSTRUMENTS -- Money market securities are high-quality,
dollar-denominated, short-term debt instruments. They consist of: (i) bankers'
acceptances, certificates of deposits, notes and time deposits of highly-rated
U.S. banks and U.S. branches of foreign banks; (ii) U.S. Treasury obligations
and obligations issued or guaranteed by the agencies and instrumentalities of
the U.S. Government; (iii) high-quality commercial paper issued by U.S. and
foreign corporations; (iv) debt obligations with a maturity of one year or less
issued by corporations with outstanding high-quality commercial paper ratings;
and (v) repurchase agreements involving any of the foregoing obligations entered
into with highly-rated banks and broker-dealers.
REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a Fund
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. Repurchase
agreements are considered loans under the 1940 Act.
U.S. GOVERNMENT AGENCY OBLIGATIONS -- Certain Federal agencies, such as the
Government National Mortgage Association ("GNMA"), have been established as
instrumentalities of the United States Government to supervise and finance
certain types of activities. Issues of these agencies, while not direct
obligations of the United States Government, are either backed by the full faith
and credit of the United States (e.g., GNMA securities) or supported by the
issuing agencies' right to borrow from the Treasury. The issues of other
agencies are supported by the credit of the instrumentality (e.g., Fannie Mae
securities).
U.S. GOVERNMENT SECURITIES -- Bills, notes and bonds issued by the U.S.
Government and backed by the full faith and credit of the United States.
U.S. TREASURY OBLIGATIONS -- Bills, notes and bonds issued by the U.S. Treasury,
and separately traded interest and principal component parts of such obligations
that are transferable through the Federal book-entry system known as Separately
Traded Registered Interested and Principal Securities ("STRIPS") and Coupon
Under Book Entry Safekeeping ("CUBES").
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WARRANTS -- Warrants are instruments giving holders the right, but not the
obligation, to buy equity or fixed income securities of a company at a given
price during a specified period.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES -- When-issued or delayed delivery
transactions involve the purchase of an instrument with payment and delivery
taking place in the future. Delivery of and payment for these securities may
occur a month or more after the date of the purchase commitment. The Fund will
maintain with the Custodian a separate account with liquid securities or cash in
an amount at least equal to these commitments. The interest rate realized on
these securities is fixed as of the purchase date, and no interest accrues to
the Fund before settlement.
ZERO COUPON SECURITIES -- Zero coupon obligations are debt securities that do
not bear any interest, but instead are issued at a deep discount from par. The
value of a zero coupon obligation increases over time to reflect the interest
accreted. Such obligations will not result in the payment of interest until
maturity, and will have greater price volatility than similar securities that
are issued at par and pay interest periodically.
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PROSPECTUS
JANUARY 31, 1997
AS SUPPLEMENTED,
AUGUST 15, 1997
Trust:
Turner Funds
P.O. Box 419805
Kansas, City, MO 64141-6805
Investment Advisor:
Turner Investment Partners, Inc.
Distributor:
SEI Financial Services Company
Administrator:
SEI Fund Resources
Legal Counsel:
Morgan, Lewis & Bockius LLP
Independent Public Accountants:
Ernst & Young LLP
[LOGO]
T U R N E R
- -----------------------------
Investment Partners,
Inc.
To open an account,
receive account information,
make inquiries or
request literature:
1-800-224-6312
TUR-F-024-01
TIP FUNDS
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Trusted Institutional Partners
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TURNER GROWTH EQUITY FUND
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TURNER SMALL CAP GROWTH FUND
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TURNER MIDCAP GROWTH FUND
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TURNER ULTRA LARGE CAP GROWTH FUND
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