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Previous: LOU HOLLAND TRUST, 485BPOS, 2000-04-28 |
Next: WESMARK FUNDS, AW, 2000-04-28 |
1933 Act File No. 333-16157
1940 Act File No. 811-07925
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933..... X
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Pre-Effective Amendment No. ...........................
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Post-Effective Amendment No.__8__ __X__
- -
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 9 ......................................... X
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WESMARK FUNDS
(Exact name of Registrant as Specified in Charter)
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) ___ on APRIL 30, 2000
pursuant to paragraph (b) ___ 60 days after filing pursuant to paragraph (a) (i)
_ _ on _ __ pursuant to paragraph (a) (i) ___ 75 days after filing pursuant to
paragraph (a) (ii)
___ on _________________ pursuant to paragraph (a) (ii) 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.
Copies To:
Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037
WesMark Growth Fund
WesMark Balanced Fund
WesMark Bond Fund
WesMark West
Virginia Municipal Bond Fund
WesMark Funds (the "Trust") is an open-end, management investment company. The Trust has four separate investment portfolios (mutual funds). Each fund offers its own Shares and has a distinct investment goal to meet specific investor needs.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Fund Goals, Strategies, and Risks 1
What are the Funds' Fees and Expenses? 8
What are the Principal Securities in Which the Funds Invest? 9
What are the Specific Risks of Investing in the Funds? 14
What do Shares Cost? 16
How are the Funds Sold? 17
How to Purchase Shares 18
How to Redeem and Exchange Shares 19
Account and Share Information 21
Who Manages the Funds? 22
Financial Information 23
To achieve capital appreciation.
The Fund ("WesMark Growth Fund") strives to meet its investment goal by selecting growth-oriented stocks of companies that are expected to achieve higher than average profitability ratios such as operating profit margin or return on equity. These stocks are purchased by the Fund only when their price-earnings ratio in relation to market averages such as the Standard & Poor's 500 Index is within historical ranges.
Although a company's earnings may be continually growing, the Fund may sell such a company if, in the judgment of the investment adviser, WesBanco Trust and Investment Services (Adviser), its stock price is excessively overvalued.
Most often, these companies will be classified as "large-" or "mid-" capitalization companies. The Adviser generally considers companies with market capitalizations over $1 billion to fall within these classifications. The Fund's investment approach is based on the conviction that, over the long term, the economy will continue to expand and develop and that this economic growth will be reflected in the growth of the revenues and earnings of publicly held corporations. Under normal market conditions, the Fund will invest at least 65% of its assets in equity securities of U.S. companies. Equity securities include common stocks, preferred stocks, and securities (including debt securities) that are convertible into common stocks.
[Graphic Representation Omitted - See Appendix]
The bar chart shows the variability of the Fund's shares total returns on a calendar year-end basis.
The total returns displayed for the Fund do not reflect the payment of any sales charges or recurring shareholder account fees. If these charges or fees had been included, the returns shown would have been lower.
The Fund's total return for the three-month period from January 1, 2000 to March 31, 2000 was 8.63%.
Within the period shown in the Chart, the Fund's highest quarterly return was 21.67% (quarter ended December 31, 1998). Its lowest quarterly return was (14.00%) (quarter ended September 30, 1998).
The following table represents the Fund's shares Average Annual Total Return for the calendar periods ended December 31, 1999. The table shows the Fund's shares total returns over a period of years relative to the S&P 500 Index (S&P 500), a broad-based market index and Lipper Growth Funds Average (LGFA), an average of the total returns for 580 growth funds with similar investment objectives. Total returns for the indices shown do not reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund's performance. Indexes are unmanaged, and it is not possible to invest directly in an index.
| Calendar Period | Fund | S&P 500 | LGFA | |||
| 1 Year | 35.26% | 21.05% | 29.25% | |||
| Start of Performance1 | 25.58% | 30.42% | 28.31% |
1 The Fund's shares start of performance date was April 14, 1997.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
To achieve capital appreciation and income.
The Fund ("WesMark Balanced Fund") invests in a diversified portfolio of equity and debt securities. Under normal circumstances, the asset mix of the Fund will range between 30-70% of its total assets in common stocks and convertible securities, 30-70% in preferred stock and bonds, and 0-40% in money market instruments. In order to achieve its goal of capital appreciation and income (i.e., total return), the Fund's assets will be invested mostly in stocks. The Adviser will decide how the Fund's portfolio will be allocated among equity, debt, and money market securities based on economic and market conditions. However, the Fund will invest at least 25% of its assets in fixed income senior securities.
The Fund will include stocks which pay dividends and will attempt to maintain an above average dividend yield. The Adviser may use a blend of styles of selecting stocks, i.e., stocks may be selected for either their growth characteristics or value characteristics, or both. The Fund may invest in bonds of any maturity (i.e., short, intermediate, or long term). By combining bonds and stocks with above average yield, the Fund expects to dampen market volatility, provide above average income return, and achieve long-term growth higher than the rate of inflation.
The Fund will invest in debt securities rated at least investment grade.
[Graphic Representation Omitted - See Appendix]
The bar chart shows the variability of the Fund's shares total returns on a calendar year-end basis.
The total returns displayed for the Fund do not reflect the payment of any sales charges or recurring shareholder account fees. If these charges or fees had been included, the returns shown would have been lower.
The Fund's total return for the three-month period from January 1, 2000 to March 31, 2000 was 6.67%.
Within the period shown in the Chart, the Fund's highest quarterly return was 8.85% (quarter ended June 30, 1997). Its lowest quarterly return was (4.79%) (quarter ended March 31, 1994).
The following table represents the Fund's shares Average Annual Total Return for the calendar periods ended December 31, 1999. The table shows the Fund's shares total returns over a period of years relative to the Lehman Brothers Government/Corporate (Total) Index (LBGCI), a broad-based market index comprised of approximately 5,000 bond issues with an approximate average maturity of nine years and Lipper Balanced Funds Average (LBFA), an average of funds with similar investment objectives. Total returns for the indices shown do not reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund's performance. Indexes are unmanaged, and it is not possible to invest directly in an index.
| Calendar Period | Fund | LBGCI | LBFA | ||||
| 1 Year | 7.53% | (2.15 | %) | 8.71% | |||
| 5 Years | 15.93% | 7.61 | % | 16.24% | |||
| 10 Years | 11.34% | 7.65 | % | 11.82% | |||
* The Fund is the successor to the portfolio of a common trust fund (CTF) managed by the Adviser. At the Fund's commencement of operations, the CTF's assets were transferred to the Fund in exchange for Fund shares. The quoted performance data includes performance for periods before the Fund's registration became effective on March 24, 1998, as adjusted to reflect the Fund's expenses. The CTF was not registered under the Investment Company Act of 1940 ("1940 Act") and was therefore not subject to the restrictions under the 1940 Act. If the CTF had been registered under the 1940 Act, the performance may have been adversely affected.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
To achieve high current income consistent with preservation of capital.
The Fund ("WesMark Bond Fund") invests primarily in a professionally managed, diversified portfolio of bonds, which includes all permitted types of debt instruments. Under normal circumstances, at least 65% of the Fund's net assets will be invested in investment grade securities, including repurchase agreements collateralized by such investment grade securities. Investment grade securities are securities rated in one of the top four ratings categories by a nationally recognized statistical rating organization or securities that are unrated but are determined by the Fund's Adviser to be of comparable quality. (See "Investment Ratings for Investment Grade Securities"). Downgraded securities will be evaluated on a case-by-case basis by the Adviser. The Adviser will determine whether or not the security continues to be an acceptable investment.
The Fund will invest in those sectors of the bond market that offer the highest yield in relation to historical yield spreads. By recognizing changing relative yields and allocating the assets of the Fund into the most attractive market and maturity sectors, the Fund will attempt to achieve above average returns. The Fund may invest in bonds of any maturity (i.e., short, intermediate, or long term).
[Graphic Representation Omitted - See Appendix]
The bar chart shows the variability of the Fund's shares total returns on a calendar year-end basis.
The total returns displayed for the Fund do not reflect the payment of any sales charges or recurring shareholder account fees. If these charges or fees had been included, the returns shown would have been lower.
The Fund's total return for the three-month period from January 1, 2000 to March 31, 2000 was 1.45%.
Within the period shown in the Chart, the Fund's highest quarterly return was 0.56% (quarter ended September 30, 1999). Its lowest quarterly return was (1.75%) (quarter ended June 30, 1999).
The following table represents the Fund's shares Average Annual Total Return for the calendar periods ended December 31, 1999. The table shows the Fund's shares total returns over a period of years relative to Lehman Brothers Intermediate Government/Corporate Index (LBIGCI), a broad-based market index comprised of approximately 5,000 bond issues with an approximate average maturity of nine years. Total returns for the indices shown do not reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund's performance. Indexes are unmanaged, and it is not possible to invest directly in an index.
| Calendar Period | Fund | LBIGCI | LIGFA | |||
| 1 Year | (5.88%) | 0.39% | (1.63%) | |||
| Start of Performance1 | (0.64%) | 4.17% | 2.47% |
1 The Fund's shares start of performance date was April 20, 1998.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
To achieve current income which is exempt from federal income tax and the income taxes imposed by the State of West Virginia.
The Fund attempts to achieve its investment objective by investing in a professionally managed portfolio consisting primarily of investment grade securities issued by the State of West Virginia and its political subdivisions, agencies, and authorities, and other issuers (such as possessions or territories of the U.S.), the interest of which is exempt from federal and West Virginia income tax ("West Virginia Municipal Securities"). As a matter of fundamental investment policy which may not be changed without shareholder approval, at least 80% of the Fund's net assets will be invested in West Virginia Municipal Securities. For purposes of this policy, the tax-free interest must not be a preference item for purposes of computing the federal alternative minimum tax.
The Adviser will attempt to minimize market volatility by selecting intermediate term securities (securities with an average maturity generally between five and seven years). The Fund will buy and sell securities to take advantage of opportunities to enhance yield. These transactions may generate capital gains (losses) which have different tax treatment than tax-exempt interest income.
[Graphic Representation Omitted - See Appendix]
The bar chart shows the variability of the Fund's shares total returns on a calendar year-end basis.
The total returns displayed for the Fund do not reflect the payment of any sales charges or recurring shareholder account fees. If these charges or fees had been included, the returns would have been lower.
The Fund's total return for the three-month period from January 1, 2000 to March 31, 2000 was 1.89%.
Within the period shown in the Chart, the Fund's highest quarterly return was 3.76% (quarter ended March 31, 1995). Its lowest quarterly return was (1.39%) (quarter ended June 30, 1999).
The following table represents the Fund's shares Average Annual Total Return for the calendar periods ended December 31, 1999. The table shows the Fund's shares total returns over a period of years relative to Lehman Brothers 5 Year General Obligation Bond Index (LB5GO), a broad-based market index which measures total return performance for the municipal bond market on municipal bonds with maturities of five years and Lipper Intermediate Municipal Debt Funds Average (LIMDFA), an average of funds with similar investment objectives and invest at least 65% of assets in municipal debt issued in the top four credit ratings. Total returns for the indices shown do not reflect sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indices are unmanaged, and it is not possible to invest directly in an index.
| Calendar Period | Fund | LB5GO | LIMDFA | |||
| 1 Year | (5.40%) | 0.71% | (1.64%) | |||
| 5 Years | 3.78% | 5.78% | 5.55% | |||
| Start of Performance1 | 4.25% | 6.04% | 5.84% |
1 The predecessor common trust fund's start of performance date was December 31, 1990.
* The Fund is the successor to the portfolio of a common trust fund (CTF) managed by the Adviser. At the Fund's commencement of operations, the CTF's assets were transferred to the Fund in exchange for Fund shares. The quoted performance data includes performance for periods before the Fund's registration became effective on March 12, 1997, as adjusted to reflect the Fund's expenses. The CTF was not registered under the Investment Company Act of 1940 ("1940 Act") and was therefore not subject to the restrictions under the 1940 Act. If the CTF had been registered under the 1940 Act, the performance may have been adversely affected.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
In addition to the risks set forth below that are specific to an investment in a particular Fund, there are risks common to all mutual funds.
For example, a Fund's Share price may decline and an investor could lose money. Also, there is no assurance that a Fund will achieve its investment objective. The Shares offered by this prospectus are not deposits or obligations of any bank, including WesBanco Bank, ("WesBanco"), are not endorsed or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency.
| Risks | Growth Fund |
Balanced Fund | Bond Fund | West Virginia Municipal Bond Fund |
||||
| Stock Market Risks1 | X | X | ||||||
| Credit Risks2 | X | X | X | |||||
| Interest Rate Risks3 | X | X | X | |||||
| Risks Related to Investing for Value4 | X | |||||||
| Risks Related to Investing for Growth5 | X | X | ||||||
| Risks Related to Company Size6 | X | |||||||
| Call Risks7 | X | X | X | |||||
| Prepayment Risks8 | X | X | ||||||
| Sector Risks9 | X | X | ||||||
| Tax Risks10 | X | |||||||
| Diversification Risks11 | X | |||||||
| West Virginia Risks12 | X |
1 The value of equity securities rise and fall.
2 The possibility that an issuer will default on a security by failing to pay interest or principal when due.
3 Prices of fixed income securities rise and fall in response to interest rate changes.
4 Value stocks depend less on price changes for returns and may lag behind growth stocks in an up market.
5 Growth stocks depend more on price changes for returns and may be more adversely affected in a down market compared to value stocks.
6 The smaller the capitalization of a company, the less liquid its stock and the more volatile its price.
7 An issuer may redeem a fixed income security before maturity at a price below its current market price.
8 The relative volatility of mortgage-backed securities is due to the likelihood of prepayments which increase in a declining interest rate environment and decrease in a rising interest rate environment.
9 Market sectors may underperform other sectors or the market as a whole.
10 Changes in federal tax laws may cause the prices of municipal securities to fall.
11 The West Virginia Municipal Bond Fund is non-diversified. Compared to diversified mutual funds, it may invest a higher percentage of its assets among fewer issuers of portfolio securities. This increases the Fund's risk by magnifying the impact (positively or negatively) that any one issuer has on the Fund's Share price and performance.
12 Because the Municipal Bond Fund's portfolio may be comprised of securities issued or credit enhanced by issuers located in West Virginia, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these issuers.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Funds.
| Shareholder Fees | WesMark Growth Fund |
WesMark Balanced Fund |
WesMark Bond Fund |
West Virginia Municipal Bond Fund |
|||||
| Fees Paid Directly From Your Investment | |||||||||
| Maximum Sales Charge
(Load) Imposed on Purchases (as a percentage of offering price) |
4.75% | 4.75% | 3.75% | 3.75% | |||||
| Maximum Deferred Sales
Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
None | None | None | None | |||||
| Maximum Sales Charge
(Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
None | None | None | None | |||||
| Redemption Fee (as a percentage of amount redeemed, if applicable) | None | None | None | None | |||||
| Exchange Fee | None | None | None | None | |||||
| Annual Fund Operating Expenses (Before Waivers)1 | |||||||||
| Expenses That are Deducted From Fund Assets (as a percentage of average net assets) | |||||||||
| Management Fee2 | 0.75% | 0.75% | 0.60% | 0.60% | |||||
| Distribution (12b-1) Fee3 | 0.25% | 0.25% | 0.25% | 0.25% | |||||
| Shareholder Services Fee4 | 0.25% | 0.25% | 0.25% | 0.25% | |||||
| Other Expenses | 0.21% | 0.30% | 0.22% | 0.35% | |||||
| Total Annual Fund Operating Expenses | 1.46% | 1.55% | 1.32% | 1.45% | |||||
| 1 Although not contractually obligated to do so, the adviser, distributor and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ending January 31, 2000. | |||||||||
| Total Waiver of Fund Expenses | 0.51% | 0.65% | 0.60% | 0.80% | |||||
| Total Actual Annual Fund Operating Expenses (After Waivers) | 0.95% | 0.90% | 0.72% | 0.65% | |||||
| 2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by WesMark Growth Fund, WesMark Balanced Fund , WesMark Bond Fund and WesMark West Virginia Municipal Income Fund (after the voluntary waiver) was 0.74%, 0.60%, 0.50% and 0.30%, respectively, for the year ended January 31, 2000. | |||||||||
| 3 The Funds did not pay or accrue the distribution (12b-1) fee during the fiscal year ended January 31, 2000. The Funds have no present intention of paying or accruing the distribution (12b-1) fee during the fiscal year ending January 31, 2001. | |||||||||
| 4 The Funds did not pay or accrue the shareholder services fee during the fiscal year ended January 31, 2000. The Funds have no present intention of paying or accruing the shareholder services fee during the fiscal year ending January 31, 2001. | |||||||||
The following Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses are before waivers as shown above and remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
|
|
1 Year |
|
3 Years |
|
5 Years |
|
10 Years |
|---|---|---|---|---|---|---|---|---|
|
WesMark Growth |
|
$617 |
|
$915 |
|
$1,235 |
|
$2,138 |
|
WesMark Balanced |
|
$625 |
|
$941 |
|
$1,280 |
|
$2,233 |
|
WesMark Bond |
|
$504 |
|
$778 |
|
$1,071 |
|
$1,906 |
|
WesMark West |
|
$517 |
|
$816 |
|
$1,137 |
|
$2,045 |
Equity securities represent a share of an issuer's earnings and assets, after the issuer pays its liabilities. A Fund cannot predict the income it will receive from equity securities because issuers generally have discretion as to the payment of any dividends or distributions. However, equity securities offer greater potential for appreciation than many other types of securities, because their value increases directly with the value of the issuer's business. The following describes the types of equity securities in which a Fund may invest.
Common stocks are the most prevalent type of equity security. Common stocks receive the issuer's earnings after the issuer pays its creditors and any preferred stockholders. As a result, changes in an issuer's earnings directly influence the value of its common stock.
Preferred stocks have the right to receive specified dividends or distributions before the issuer makes payments on its common stock. Some preferred stocks also participate in dividends and distributions paid on common stock. Preferred stocks may also permit the issuer to redeem the stock. A Fund may also treat such redeemable preferred stock as a fixed income security.
Fixed income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer of a fixed income security must repay the principal amount of the security, normally within a specified time. Fixed income securities provide more regular income than equity securities. However, the returns on fixed income securities are limited and normally do not increase with the issuer's earnings. This limits the potential appreciation of fixed income securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a percentage of its price. A security's yield will increase or decrease depending upon whether it costs less (a discount) or more (a premium) than the principal amount. If the issuer may redeem the security before its scheduled maturity, the price and yield on a discount or premium security may change based upon the probability of an early redemption. Securities with higher risks generally have higher yields.
The following describes the types of fixed income securities in which the Funds may invest.
Treasury securities are direct obligations of the federal government of the United States. Treasury securities are generally regarded as having the lowest credit risks.
Agency securities are issued or guaranteed by a federal agency or other government sponsored entity acting under federal authority (a GSE). The United States supports some GSEs with its full faith and credit. Other GSEs receive support through federal subsidies, loans or other benefits. A few GSEs have no explicit financial support, but are regarded as having implied support because the federal government sponsors their activities. Agency securities are generally regarded as having low credit risks, but not as low as Treasury securities.
The Funds treat mortgage backed securities guaranteed by GSEs as agency securities. Although a GSE guarantee protects against credit risks, it does not reduce the interest rate and prepayment risks of these mortgage backed securities.
Corporate debt securities are fixed income securities issued by businesses. Notes, bonds, debentures and commercial paper are the most prevalent types of corporate debt securities. A Fund may also purchase interests in bank loans to companies. The credit risks of corporate debt securities vary widely among issuers.
In addition, the credit risk of an issuer's debt security may vary based on its priority for repayment. For example, higher ranking (senior) debt securities have a higher priority than lower ranking (subordinated) securities. This means that the issuer might not make payments on subordinated securities while continuing to make payments on senior securities. In addition, in the event of bankruptcy, holders of senior securities may receive amounts otherwise payable to the holders of subordinated securities. Some subordinated securities, such as trust preferred and capital securities notes, also permit the issuer to defer payments under certain circumstances. For example, insurance companies issue securities known as surplus notes that permit the insurance company to defer any payment that would reduce its capital below regulatory requirements.
Commercial paper is an issuer's obligation with a maturity of less than nine months. Companies typically issue commercial paper to pay for current expenditures. Most issuers constantly reissue their commercial paper and use the proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue to obtain liquidity in this fashion, its commercial paper may default. The short maturity of commercial paper reduces both the market and credit risks as compared to other debt securities of the same issuer.
Mortgage backed securities represent interests in pools of mortgages. The mortgages that comprise a pool normally have similar interest rates, maturities and other terms. Mortgages may have fixed or adjustable interest rates. Interests in pools of adjustable rate mortgages are known as ARMs.
Mortgage backed securities come in a variety of forms. Many have extremely complicated terms. The simplest form of mortgage backed securities are pass-through certificates. An issuer of pass-through certificates gathers monthly payments from an underlying pool of mortgages. Then, the issuer deducts its fees and expenses and passes the balance of the payments on to the certificate holders once a month. Holders of pass-through certificates receive a pro rata share of all payments and pre-payments from the underlying mortgages. As a result, the holders assume all the prepayment risks of the underlying mortgages.
CMOs, including interests in real estate mortgage investment conduits (REMICs), allocate payments and prepayments from an underlying pass-through certificate among holders of different classes of mortgage backed securities. This creates different prepayment and market risks for each CMO class.
CMOs may allocate interest payments to one class (Interest Only or IOs) and principal payments to another class (Principal Only or POs). POs increase in value when prepayment rates increase. In contrast, IOs decrease in value when prepayments increase, because the underlying mortgages generate less interest payments. However, IOs tend to increase in value when interest rates rise (and prepayments decrease), making IOs a useful hedge against interest rate risks.
Asset backed securities are payable from pools of obligations other than mortgages. Most asset backed securities involve consumer or commercial debts with maturities of less than ten years. However, almost any type of fixed income assets (including other fixed income securities) may be used to create an asset backed security. Asset backed securities may take the form of commercial paper, notes, or pass through certificates. Asset backed securities have prepayment risks. Like CMOs, asset backed securities may be structured like floating rate securities, IOs and POs.
Zero coupon securities do not pay interest or principal until final maturity unlike debt securities that provide periodic payments of interest (referred to as a coupon payment). Investors buy zero coupon securities at a price below the amount payable at maturity. The difference between the purchase price and the amount paid at maturity represents interest on the zero coupon security. Investors must wait until maturity to receive interest and principal, which increases the interest rate and credit risks of a zero coupon security.
There are many forms of zero coupon securities. Some are issued at a discount and are referred to as zero coupon or capital appreciation bonds. Others are created from interest bearing bonds by separating the right to receive the bond's coupon payments from the right to receive the bond's principal due at maturity, a process known as coupon stripping. Treasury STRIPs, IOs and POs are the most common forms of stripped zero coupon securities. In addition, some securities give the issuer the option to deliver additional securities in place of cash interest payments, thereby increasing the amount payable at maturity. These are referred to as pay-in-kind or PIK securities.
Convertible securities are fixed income securities that a Fund has the option to exchange for equity securities at a specified conversion price. The option allows a Fund to realize additional returns if the market price of the equity securities exceeds the conversion price. For example, a Fund may hold fixed income securities that are convertible into shares of common stock at a conversion price of $10 per share. If the market value of the shares of common stock reached $12, a Fund could realize an additional $2 per share by converting its fixed income securities.
Convertible securities have lower yields than comparable fixed income securities. In addition, at the time a convertible security is issued the conversion price exceeds the market value of the underlying equity securities. Thus, convertible securities may provide lower returns than non-convertible fixed income securities or equity securities depending upon changes in the price of the underlying equity securities. However, convertible securities permit a Fund to realize some of the potential appreciation of the underlying equity securities with less risk of losing its initial investment.
The Funds treat convertible securities as both fixed income and equity securities for purposes of its investment policies and limitations, because of their unique characteristics.
Tax exempt securities are fixed income securities that pay interest that is not subject to regular federal and/or state income taxes. Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
General obligation bonds are supported by the issuer's power to impose property or other taxes. The issuer must impose and collect taxes sufficient to pay principal and interest on the bonds. However, the issuer's authority to impose additional taxes may be limited by its charter or state law.
Special revenue bonds are payable solely from specific revenues received by the issuer such as specific taxes, assessments, tolls, or fees. Special revenue bondholders may not collect from the municipality's general taxes or revenues. For example, a municipality may issue bonds to build a toll road, and pledge the tolls to repay the bonds. Therefore, a shortfall in the tolls could result in a default on the bonds.
Private activity bonds are special revenue bonds used to finance private entities. For example, a municipality may issue bonds to finance a new factory to improve its local economy. The municipality would lend the proceeds from its bonds to the company using the factory, and the company would agree to make loan payments sufficient to repay the bonds. The bonds would be payable solely from the company's loan payments, not from any other revenues of the municipality. Therefore, any default on the loan normally would result in a default on the bonds.
The interest on many types of private activity bonds is subject to the federal alternative minimum tax (AMT). The Fund may invest to a limited extent in bonds subject to AMT.
Tax increment financing (TIF) bonds are payable from increases in taxes or other revenues attributable to projects financed by the bonds. For example, a municipality may issue TIF bonds to redevelop a commercial area. The TIF bonds would be payable solely from any increase in sales taxes collected from merchants in the area. The bonds could default if merchants' sales, and related tax collections, failed to increase as anticipated.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Funds treat demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond thirteen months.
Municipalities may enter into leases for equipment or facilities. In order to comply with state public financing laws, these leases are typically subject to annual appropriation. In other words, a municipality may end a lease, without penalty, by not providing for the lease payments in its annual budget. After the lease ends, the lessor can resell the equipment or facility but may lose money on the sale.
A Fund may invest in securities supported by pools of municipal leases. The most common type of lease backed securities are certificates of participation (COPs). However, the Fund may also invest directly in individual leases.
Foreign securities are securities of issuers based outside the United States. The Funds consider an issuer to be based outside the United States if:
Foreign securities are primarily denominated in foreign currencies. Along with the risks normally associated with domestic securities of the same type, foreign securities are subject to currency risks and risks of foreign investing. Trading in certain foreign markets is also subject to liquidity risks.
Depositary receipts represent interests in underlying shares issued by a foreign company. Depositary receipts are not traded in the same market as the underlying security. American Depositary Receipts (ADRs) are also traded in U.S. dollars, eliminating the need for foreign exchange transactions. The foreign securities underlying European Depositary Receipts (EDRs), Global Depositary Receipts (GDRs), and International Depositary Receipts (IDRs), are traded globally or outside the United States. Depositary receipts involve many of the same risks of investing directly in foreign securities, including currency risks and risks of foreign investing.
The Funds may temporarily depart from their principal investment strategies by investing their assets in cash, cash items, and shorter-term, higher-quality debt securities and similar obligations. They may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause a Fund to give up greater investment returns to maintain the safety of principal, that is, the original amount invested by shareholders.
The Adviser will determine whether a security is investment grade based upon the credit ratings given by one or more nationally recognized rating services. For example, Standard and Poor's, a rating service, assigns ratings to investment grade securities (AAA, AA, A, and BBB) based on their assessment of the issuer's ability to pay interest or principal when due on each security. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, a Fund must rely entirely upon the Adviser's credit assessment that the security is comparable to investment grade.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
Common types of credit enhancement include guarantees, letters of credit, bond insurance and surety bonds. Credit enhancement also includes arrangements where securities or other liquid assets secure payment of a fixed income security. If a default occurs, these assets may be sold and the proceeds paid to security's holders. Either form of credit enhancement reduces credit risks by providing another source of payment for a fixed income security.
You can purchase, redeem, or exchange Shares any day the New York Stock Exchange (NYSE) and Federal Reserve wire system are open. When a Fund receives your transaction request in proper form, it is processed at the next determined net asset value (NAV) plus the applicable sales charge (public offering price).
NAV is determined at the end of regular trading (normally 4:00 p.m. Eastern time) each day the NYSE is open. The Funds generally value equity securities according to the last sale price in the market in which they are primarily traded (either a national securities exchange or the over-the-counter market. Fixed income securities are generally valued at the last sale price on a national securities exchange, if available, otherwise, as determined by an independent pricing service. Short-term obligations are valued according to the mean between bid and asked prices as furnished by an independent pricing service, except that short-term obligations with remaining maturities of less than 60 days at the time of purchase may be valued at amortized cost or at fair market value as determined by the Board.
The required minimum initial investment in each Fund is $1,000, unless the investment is in an Individual Retirement Account, in which case the minimum initial investment is $500. Subsequent investments in each Fund must be in amounts of at least $100. These minimums may be waived for purchase by the Trust Division of WesBanco for its fiduciary or custodial accounts and WesBanco employees and members of their immediate family. A Fund may waive the initial minimum investment from time to time.
An institutional investor's minimum investment is calculated by combining all accounts it maintains with the Trust. Accounts established through investment professionals may be subject to a smaller minimum investment amount. Keep in mind that investment professionals may charge you fees for their services in connection with your Share transactions.
| Amount of Investment |
Sales Charge as a Percentage of Public Offering Price |
Sales Charge as a Percentage of NAV |
||
| Less than $50,000 | 4.75% | 4.99% | ||
| $50,000 but less than $100,000 |
3.50% | 3.63% | ||
| $100,000 but less than $250,000 |
2.50% | 2.56% | ||
| $250,000 but less than $500,000 |
1.50% | 1.52% | ||
| $500,000 but less than $1,000,000 |
1.00% | 1.01% | ||
| $1,000,000 or greater | 0.00% | 0.00% |
| Amount of Investment |
Sales Charge as a Percentage of Public Offering Price |
|
Sales Charge as a Percentage of NAV |
|
| Less than $25,000 |
|
3.75% | 3.90% | |
| $25,000 but less than $50,000 |
|
3.50% | 3.63% | |
| $50,000 but less than $100,000 |
|
3.00% | 3.09% | |
| $100,000 but less than $250,000 |
|
2.50% | 2.56% | |
| $250,000 but less than $500,000 |
|
1.50% | 1.52% | |
| $500,000 but less than $1,000,000 |
|
1.00% | 1.01% | |
| $1,000,000 or greater |
|
0.00% | 0.00% |
Certain investors, including trust customers of WesBanco, are not subject to the sales charge.
The sales charge at purchase will be eliminated when Shares are purchased by:
Edgewood Services, Inc. (Distributor) markets the Shares described in this prospectus to customers of WesBanco, Inc. and its affiliates and institutions or individuals, directly from a Fund or through investment professionals. When the Distributor receives marketing fees, it may pay some or all of them to investment professionals. The Distributor and its affiliates may pay out of their assets other amounts (including items of material value) to investment professionals for marketing and servicing Shares. The Distributor is a subsidiary of Federated Investors, Inc. (Federated).
The Funds have adopted a Rule 12b-1 Plan, which allows them to pay marketing fees to the Distributor and investment professionals for the sale, distribution and customer servicing of the Funds' Shares. Because these Shares could pay marketing fees on an ongoing basis, your investment cost may be higher over time than other Shares with different sales charges and marketing fees. The Funds are not currently paying or accruing fees under the Plan.
You may purchase Shares directly from a Fund by calling WesMark Funds Shareholder
Services at
1-800-864-1013, through WesBanco Securities, Inc. or through an
investment professional. The Funds reserve the right to reject any request to
purchase or exchange Shares.
You will become the owner of Shares and your Shares will be priced at the next calculated NAV after the Fund receives your payment. If your check does not clear, your purchase will be canceled and you could be liable for any losses or fees a Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling a Fund and the Shares will be priced at the next calculated NAV after a Fund receives the order.
To purchase Shares by Federal Reserve wire, contact your account officer for wiring instructions. Wire orders will only be accepted on days on which a Fund, WesBanco and the Federal Reserve Banks are open for business.
Make your check payable to "Fund Name", note your account number on the check (for existing shareholders only), and mail it to:
WesMark Funds Shareholder Services
WesBanco Trust and Investment Services
One Bank Plaza
Wheeling, WV 26003
Payment should be made in U.S. dollars and drawn on a U.S. bank. A Fund will not accept third-party checks (checks originally payable to someone other than you or a Fund).
Shares can be purchased through WesBanco Securities, Inc. (WSI), by visiting a WSI investment professional or by calling 1-800-368-3369. Once you have established your account with WSI, you may submit your purchase order to a WSI investment professional before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). You will receive the next calculated NAV plus the applicable sales charge if the investment professional forwards the order to a Fund on the same day and a Fund receives payment within three business days. You will become the owner of Shares and receive dividends when a Fund receives your payment.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By Check."
You may purchase Shares through an exchange from another WesMark Fund. You must meet the minimum initial investment requirement for purchasing Shares and both accounts must have identical registrations.
Once you have opened an account, you may automatically purchase additional Shares on a regular basis by completing the Systematic Investment Program (SIP) section of the New Account Form or by contacting a Fund or your investment professional. The minimum investment amount for SIPs is $100.
Once you have opened an account, you may purchase additional Shares through a depository institution that is an ACH member. This purchase option can be established by completing the appropriate sections of the New Account Form.
You may purchase Shares as retirement investments (such as qualified plans and IRAs or transfer or rollover of assets). Call the Fund or your investment professional for information on retirement investments. We suggest that you discuss retirement investments with your tax adviser. You may be subject to an annual IRA account fee.
You should redeem or exchange Shares:
You may redeem or exchange Shares by calling your account officer or WesMark Funds Shareholder Services at 1-800-864-1013 once you have completed the appropriate authorization form for telephone transactions. If you call before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time) you will receive a redemption amount based on that day's NAV.
You may redeem or exchange Shares by mailing a written request to a Fund.
You will receive a redemption amount based on the next calculated NAV after a Fund receives your written request in proper form.
Send requests by mail to:
WesMark Funds Shareholder Services
WesBanco Trust and Investment Services
One Bank Plaza
Wheeling, WV 26003
All requests must include:
Call the Fund or your investment professional if you need special instructions.
Shares can be redeemed or exchanged through WSI by visiting a WSI investment professional or by calling 1-800-368-3369. Once you have established your account with WSI, you may submit your redemption or exchange order to a WSI investment professional before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). The redemption amount you will receive is based upon the next calculated NAV after a Fund receives the order from the investment professional.
Submit your redemption or exchange request to your investment professional by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). The redemption amount you will receive is based upon the next calculated NAV after a Fund receives the order from your investment professional.
Signatures must be guaranteed if:
A signature guarantee is designed to protect your account from fraud. Obtain a signature guarantee from a bank or trust company, savings association, credit union, or broker, dealer, or securities exchange member. A notary public cannot provide a signature guarantee.
Your redemption proceeds will be mailed by check to your address of record. The following payment options are available if you complete the appropriate section of the New Account Form or an Account Service Options Form. These payment options require a signature guarantee if they were not established when the account was opened:
Although the Funds intend to pay Share redemptions in cash, they reserve the right to pay the redemption price in whole or in part by a distribution of a Fund's portfolio securities.
Redemption proceeds normally are wired or mailed within one business day after receiving a request in proper form. Payment may be delayed up to seven days:
You will not accrue interest or dividends on uncashed checks from a Fund if those checks are undeliverable and returned to the Fund.
In the absence of your specific instructions, 10% of the value of your redemption from a retirement account in a Fund may be withheld for taxes. This withholding only applies to certain types of retirement accounts.
You may exchange Shares of a Fund into Shares of another WesMark Fund. To do this, you must:
An exchange is treated as a redemption and a subsequent purchase, and is a taxable transaction.
A Fund may modify or terminate the exchange privilege at any time. The Funds' management or Adviser may determine from the amount, frequency and pattern of exchanges that a shareholder is engaged in excessive trading that is detrimental to a Fund and other shareholders. If this occurs, a Fund may terminate the availability of exchanges to that shareholder and may bar that shareholder from purchasing other WesMark Funds.
Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must be $10,000. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income. Generally, it is not advisable to continue to purchase Shares subject to a sales charge while redeeming Shares using this program.
The Funds will record your telephone instructions. If a Fund does not follow reasonable procedures, it may be liable for losses due to unauthorized or fraudulent telephone instructions.
The Funds do not issue share certificates.
You will receive confirmation of purchases, redemptions and exchanges (except for systematic transactions). In addition, you will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
Dividends of the Growth Fund, if any, are declared and paid quarterly. Dividends of the Balanced Fund are declared and paid monthly, and dividends of the Bond Fund and Municipal Bond Fund are declared daily and paid monthly. Dividends are paid to all shareholders invested in the Funds on the record date. The record date is the date on which a shareholder must officially own Shares in order to earn a dividend.
In addition, the Funds pay any capital gains at least annually. Your dividends and capital gains distributions will be automatically reinvested in additional Shares without a sales charge, unless you elect cash payments.
If you purchase Shares just before a Fund declares a dividend or capital gain distribution, you will pay the full price for the Shares and then receive a portion of the price back in the form of a taxable distribution, whether or not you reinvest the distribution in Shares. Therefore, you should consider the tax implications of purchasing Shares shortly before a Fund declares a dividend or capital gain. Contact your investment professional or a Fund for information concerning when dividends and capital gains will be paid.
Due to the high cost of maintaining accounts with low balances, non-retirement accounts may be closed if redemptions or exchanges cause the account balance to fall below $1,000. Before an account is closed, you will be notified and allowed 30 days to purchase additional Shares to meet the minimum.
The Funds send an annual statement of your account activity to assist you in completing your federal, state and local tax returns. Fund distributions of dividends and capital gains are taxable to you whether paid in cash or reinvested in a Fund. Dividends are taxable as ordinary income; capital gains are taxable at different rates depending upon the length of time a Fund holds its assets.
The Growth Fund, Balanced Fund and Bond Fund distributions are expected to be both dividends and capital gains.
It is anticipated that Municipal Bond Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes. The Fund's dividends will be exempt from West Virginia state personal income tax to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund.
Redemptions and exchanges are taxable sales. Please consult your tax adviser regarding your federal, state, and local tax liability.
The Board of Trustees governs the Funds. The Board selects and oversees the Adviser, WesBanco Trust and Investment Services. The Adviser manages the Funds' assets, including buying and selling portfolio securities. The Adviser's address is One Bank Plaza, Wheeling, WV 26003.
The Adviser is a wholly owned subsidiary of WesBanco, Inc. (Corporation), a registered bank holding company headquartered in Wheeling, WV. The Corporation and its subsidiaries provide a broad range of financial services to individuals and businesses in West Virginia and Ohio with 62 banking locations. The Adviser is a state chartered bank which offers financial services that include commercial and consumer loans, corporate, institutional and personal trust services, and demand and time deposit accounts. The Adviser employs an experienced staff of professional investment analysts, portfolio managers and traders. The staff manages the bond portfolios of the Corporation and its subsidiaries which include government, corporate, mortgage and municipal securities with a total value of $567 million as of December 31, 1999. In addition, the Adviser provides investment management services to the Trust Department of WesBanco and three other affiliate banks with trust powers. The total assets of the trust department s of the Corporation are valued at $3.1 billion.
Jerome B. Schmitt has been a co-portfolio manager of the Funds since their inception. He has been employed by the Adviser since 1972 and served as Senior Vice President of Trust and Investments from 1991 to 1996, and has been Executive Vice President of Trust and Investments since June 1996. Mr. Schmitt is a Chartered Financial Analyst and received his M.A. in Economics from Ohio University. Mr. Schmitt is responsible for supervising the activities of the Trust and Investment Departments of the Adviser.
David B. Ellwood has been a co-portfolio manager of the Funds since their inception. He has been employed by the Adviser since 1982 and has been Vice President--Investments since May 1997. Mr. Ellwood is a Chartered Financial Analyst and received a B.S. degree in Business Administration from Wheeling Jesuit College. Mr. Ellwood is responsible for portfolio management, investment research and assisting in the supervision of the investment activities of the Investment Department.
The Adviser receives an annual investment advisory fee equal to a percentage of each Fund's average daily net assets at the following rates: 0.75% of the Growth Fund and Balanced Fund, and 0.60% of the Bond Fund and Municipal Bond Fund. The Adviser may voluntarily waive a portion of its fee or reimburse a Fund for certain operating expenses.
The Financial Highlights will help you understand the Funds' financial performance for the past five fiscal years, or since inception, if the life of a Fund is shorter. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in a Fund, assuming reinvestment of all dividends and capital gains.
This information has been audited by Deloitte & Touche LLP, whose report, along with the Funds' audited financial statements, is included in the Annual Report.
| Year Ended January 31, |
Net Asset Value, beginning of period |
Net Investment Income |
Net Realized and Unrealized Gain (Loss) on Investments |
Total From Investment Operations |
Distributions From Net Investment Income |
Distributions From Net Realized Gain on Investments |
||||||||
| Balanced Fund | ||||||||||||||
| 2000 | $ | 9.81 | 0.25 | 1.07 | 1.32 | (0.25) | (0.24) | |||||||
| 1999(a) | $ | 10.00 | 0.24 | 0.30 | 0.54 | (0.24) | (0.49) | |||||||
| Bond Fund | ||||||||||||||
| 2000 | $ | 10.11 | 0.56 | (0.89) | (0.33) | (0.56) | (0.01) | |||||||
| 1999(a) | $ | 10.00 | 0.43 | 0.13 | 0.56 | (0.43) | (0.02) | |||||||
| Growth Fund | ||||||||||||||
| 2000 | $ | 12.74 | 0.01 | 3.95 | 3.96 | (0.01) | (1.60) | |||||||
| 1999 | $ | 11.15 | 0.06 | 2.38 | 2.44 | (0.06) | (0.79) | |||||||
| 1998(d) | $ | 10.00 | 0.09 | 1.71 | 1.80 | (0.08) | (0.57) | |||||||
| West Virginia Municipal Bond Fund | ||||||||||||||
| 2000 | $ | 10.41 | 0.44 | (0.72) | (0.28) | (0.44) | (0.03) | |||||||
| 1999 | $ | 10.30 | 0.43 | 0.12 | 0.55 | (0.43) | (0.01) | |||||||
| 1998(d) | $ | 10.00 | 0.35 | 0.31 | 0.66 | (0.35) | (0.01) | |||||||
* Computed on an annualized basis.
(a) Reflects operations for the period from April 20, 1998 (date of initial public investment) to January 31, 1999.
(b) Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
(d) Reflects operations for the period from April 14, 1997 (date of initial public investment) to January 31, 1998.
(e) Amount represents less than 0.01%.
Further information about the Fund's performance is contained in each Fund's Annual Report, dated January 31, 2000, which can be obtained free of charge.
|
|
|
|
|
|
Ratios to Average Net Assets | ||||||||||||||||
|
Year Ended January 31, |
Total Distributions |
Net Asset Value, End of period |
Total Return(b) |
Expenses |
Net |
|
Expenses |
|
Net Assets, |
|
Portfolio |
||||||||||
|
Balanced Fund |
|
|
|
|
|
|
|
||||||||||||||
|
2000 |
(0.49) | $ |
10.64 |
13.52% |
0.90% |
2.38% |
0.15% |
|
$ |
73,864 |
|
|
|
44% |
|||||||
|
1999(a) |
|
(0.73) |
|
$ |
9.81 |
|
|
5.50% |
|
1.15%* |
|
3.03%* |
|
0.09%* |
|
$ |
60,887 |
|
|
|
57% |
|
Bond Fund |
|
|
|
|
|
|
|
||||||||||||||
|
2000 |
(0.57) |
$ |
9.21 |
(3.41%) |
0.72% |
5.85% |
0.10% |
$ |
125,123 |
26% |
|||||||||||
|
1999(a) |
(0.45) |
$ |
10.11 |
5.70% |
0.90%* |
5.47%* |
0.07%* |
$ |
117,646 |
39% |
|||||||||||
|
Growth Fund |
|
|
|
|
|
|
|
||||||||||||||
|
2000 |
(1.61) |
$ |
15.09 |
31.22% |
0.95% |
0.10% |
0.01% |
|
$ |
183,304 |
|
|
|
71% |
|||||||
|
1999 |
(0.85) |
$ |
12.74 |
22.58% |
1.04% |
0.50% |
0.01% |
|
$ |
135,078 |
|
|
|
58% |
|||||||
|
1998(d) |
|
(0.65) |
|
$ |
11.15 |
|
|
18.24% |
|
1.14%* |
|
0.99%* |
|
0.00%*(e) |
|
$ |
114,142 |
|
|
|
58% |
|
West Virginia Municipal Bond Fund |
|||||||||||||||||||||
|
2000 |
(0.47) |
$ |
9.66 |
(2.77%) |
0.65% |
4.37% |
0.30% |
$ |
64,057 |
30% |
|||||||||||
|
1999 |
(0.44) |
$ |
10.41 |
5.46% |
0.74% |
4.20% |
0.29% |
$ |
67,434 |
17% |
|||||||||||
|
1998(d) |
|
(0.36) |
|
$ |
10.30 |
|
|
6.64% |
|
0.74%* |
|
4.26%* |
|
0.30%* |
|
$ |
66,381 |
|
|
|
6% |
A Statement of Additional Information (SAI) dated April 30, 2000, is incorporated by reference into this prospectus. Additional information about the Funds and their investments is contained in the Funds' SAI and Annual and Semi-Annual Reports to shareholders as they become available. The Annual Report's Management Discussion and Analysis discusses market conditions and investment strategies that significantly affected the Funds' performance during their last fiscal year. To obtain the SAI, Annual Report, Semi-Annual Report and other information without charge, and make inquiries, call your investment professional or the Funds at 1-800-864-1013.
You can obtain information about the Funds (including the SAI) by writing to or visiting the Public Reference Room in Washington, DC. You may also access fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at [email protected] or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Investment Company Act File No. 811-7925
Cusip 951025204
Cusip
951025303
Cusip 951025402
Cusip 951025105
25314 (4/00)
Investment Adviser
A Division of WesBanco Bank, Inc.
Edgewood Services, Inc., Distributor
Cusip 951025204
Cusip 951025303
Cusip 951025402
Cusip 951025105
25314 (4/00)
WESMARK FUNDS
WESMARK GROWTH FUND
WESMARK BALANCED FUND
WESMARK BOND FUND
WESMARK WEST VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 2000
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus of the WesMark Funds dated April 30,
2000.
This SAI incorporates by reference the Funds' Annual Report. Obtain the
Prospectus or the Annual Report without charge by calling 1-800-864-1013.
=======================================================================================
CONTENTS
HOW ARE THE FUNDS ORGANIZED?-------------------------------------------
SECURITIES IN WHICH THE FUNDS INVEST----------------------------------- WHAT DO
SHARES COST?--------------------------------------------------- HOW ARE THE
FUNDS SOLD?------------------------------------------------ EXCHANGING
SECURITIES FOR SHARES--------------------------------------- REDEMPTION IN
KIND----------------------------------------------------- MASSACHUSETTS
PARTNERSHIP LAW------------------------------------------ ACCOUNT AND SHARE
INFORMATION------------------------------------------ TAX
INFORMATION-------------------------------------------------------- WHO MANAGES
AND PROVIDES SERVICES TO THE FUNDS?------------------------ FEES PAID BY THE
FUNDS FOR SERVICES------------------------------------ HOW DO THE FUNDS MEASURE
PERFORMANCE?---------------------------------- FINANCIAL
INFORMATION--------------------------------------------------
ADDRESSES--------------------------------------------------------------
Edgewood Services, Inc., Distributor,
subsidiary of Federated Investors, Inc.
25370 (4/00)
HOW ARE THE FUNDS ORGANIZED?
WesMark Funds (Trust) is an open-end, management investment company that was
established under the laws of the Commonwealth of Massachusetts on March 1,
1996. The Trust may offer separate series of shares representing interests in
separate portfolios of securities. The Trust currently offers three diversified
portfolios: WesMark Growth Fund (Growth Fund), WesMark Balanced Fund (Balanced
Fund), and WesMark Bond Fund (Bond Fund), and one non-diversified portfolio,
WesMark West Virginia Municipal Bond Fund (Municipal Bond Fund). The Funds'
investment adviser is WesBanco Trust and Investment Services (Adviser).
SECURITIES IN WHICH THE FUNDS INVEST
In pursuing their investment strategy, the Funds may invest in the following
securities for any purpose that is consistent with their investment objective.
Following table indicates which types of securities are: o-----P = Principal
investment of a Fund; o-----A = Acceptable (but not principal) investment of a
Fund; or o-----N = Not an acceptable investment of a Fund.
-------------------------------------------------------------------------------
SECURITIES GROWTH BALANCED BOND FUND MUNICIPAL
FUND FUND BOND FUND
-------------------------------------------------------------------------------
COMMON STOCKS P P N N
-------------------------------------------------------------------------------
PREFERRED STOCKS P P N N
-------------------------------------------------------------------------------
REITS A A N N
-------------------------------------------------------------------------------
WARRANTS A A N N
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TREASURY SECURITIES A P P A
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
AGENCY SECURITIES A P P A
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CORPORATE DEBT SECURITIES A P P N
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
COMMERCIAL PAPER A P A N
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
BANK INSTRUMENTS A A A A
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
MORTGAGE BACKED SECURITIES N P P N
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE N P P N
OBLIGATIONS
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
ASSET BACKED SECURITIES N P P N
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
ZERO COUPON SECURITIES N P A N
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CREDIT ENHANCEMENT N A A P
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CONVERTIBLE SECURITIES A P P N
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TAX EXEMPT SECURITIES N P A P
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
GENERAL OBLIGATION BONDS N A A P
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
SPECIAL REVENUE BONDS N A A P
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
PRIVATE ACTIVITY BONDS N A A P
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TAX INCREMENT FINANCING BONDS N A A P
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
MUNICIPAL NOTES N A A P
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
VARIABLE RATE DEMAND INSTRUMENTS N A A P
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
MUNICIPAL LEASES N N N A
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
DEPOSITARY RECEIPTS P P N N
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DERIVATIVE CONTRACTS A A A A
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FUTURES A A A A
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OPTIONS A A A A
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REPURCHASE AGREEMENTS A A A A
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REVERSE REPURCHASE AGREEMENTS A A A A
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DELAYED DELIVERY TRANSACTIONS A A A A
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TO BE ANNOUNCED SECURITIES A A A N
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DOLLAR ROLLS A A A N
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SECURITIES DESCRIPTIONS AND TECHNIQUES
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EQUITY SECURITIES
Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities. A Fund cannot predict the income it will
receive from equity securities because issuers generally have discretion as to
the payment of any dividends or distributions. However, equity securities offer
greater potential for appreciation than many other types of securities, because
their value increases directly with the value of the issuer's business. The
following describes the types of equity securities in which the Funds may
invest.
REAL ESTATE INVESTMENT TRUSTS (REITS)
REITs are real estate investment trusts that lease, operate and finance
commercial real estate. REITs are exempt from federal corporate income tax if
they limit their operations and distribute most of their income. Such tax
requirements limit a REIT's ability to respond to changes in the commercial
real estate market.
WARRANTS
Warrants give a Fund the option to buy the issuer's equity securities at a
specified price (the exercise price) at a specified future date (the
expiration date). A Fund may buy the designated securities by paying the
exercise price before the expiration date. Warrants may become worthless if
the price of the stock does not rise above the exercise price by the
expiration date. This increases the market risks of warrants as compared to
the underlying security. Rights are the same as warrants, except companies
typically issue rights to existing stockholders.
FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.
The following describes the types of fixed income securities in which a Fund may
invest.
TREASURY SECURITIES
Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the
lowest credit risks.
AGENCY SECURITIES
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The
United States supports some GSEs with its full, faith and credit. Other GSEs
receive support through federal subsidies, loans or other benefits. A few
GSEs have no explicit financial support, but are regarded as having implied
support because the federal government sponsors their activities. Agency
securities are generally regarded as having low credit risks, but not as low
as treasury securities.
The Funds treat mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks, it does not
reduce the interest rate and prepayment risks of these mortgage backed
securities.
CORPORATE DEBT SECURITIES
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. A Fund may also purchase interests in bank loans to
companies. The credit risks of corporate debt securities vary widely among
issuers.
In addition, the credit risk of an issuer's debt security may vary based on its
priority for repayment. For example, higher ranking (senior) debt securities
have a higher priority than lower ranking (subordinated) securities. This means
that the issuer might not make payments on subordinated securities while
continuing to make payments on senior securities. In addition, in the event of
bankruptcy, holders of senior securities may receive amounts otherwise payable
to the holders of subordinated securities. Some subordinated securities, such as
trust preferred and capital securities notes, also permit the issuer to defer
payments under certain circumstances. For example, insurance companies issue
securities known as surplus notes that permit the insurance company to defer any
payment that would reduce its capital below regulatory requirements.
COMMERCIAL PAPER
Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use
the proceeds (or bank loans) to repay maturing paper. If the issuer cannot
continue to obtain liquidity in this fashion, its commercial paper may
default. The short maturity of commercial paper reduces both the market and
credit risks as compared to other debt securities of the same issuer.
BANK INSTRUMENTS
Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit
and banker's acceptances. Yankee instruments are denominated in U.S. dollars
and issued by U.S. branches of foreign banks. Eurodollar instruments are
denominated in U.S. dollars and issued by non-U.S. branches of U.S. or
foreign banks.
COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)
CMOs, including interests in real estate mortgage investment conduits (REMICs),
allocate payments and prepayments from an underlying pass-through certificate
among holders of different classes of mortgage backed securities. This creates
different prepayment and market risks for each CMO class.
SEQUENTIAL CMOS
In a sequential pay CMO, one class of CMOs receives all principal payments
and prepayments. The next class of CMOs receives all principal payments
after the first class is paid off. This process repeats for each sequential
class of CMO. As a result, each class of sequential pay CMOs reduces the
prepayment risks of subsequent classes.
PACS, TACS AND COMPANION CLASSES
More sophisticated CMOs include planned amortization classes (PACs) and
targeted amortization classes (TACs). PACs and TACs are issued with
companion classes. PACs and TACs receive principal payments and prepayments
at a specified rate. The companion classes receive principal payments and
prepayments in excess of the specified rate. In addition, PACs will receive
the companion classes' share of principal payments, if necessary, to cover a
shortfall in the prepayment rate. This helps PACs and TACs to control
prepayment risks by increasing the risks to their companion classes.
FLOATERS AND INVERSE FLOATERS
Another variant allocates interest payments between two classes of CMOs. One
class (Floaters) receives a share of interest payments based upon a market
index such as the London Interbank Offered Rate (LIBOR). The other class
(Inverse Floaters) receives any remaining interest payments from the
underlying mortgages. Floater classes receive more interest (and Inverse
Floater classes receive correspondingly less interest) as interest rates
rise. This shifts prepayment and interest rate risks from the Floater to the
Inverse Floater class, reducing the price volatility of the Floater class
and increasing the price volatility of the Inverse Floater class.
Z CLASSES AND RESIDUAL CLASSES
CMOs must allocate all payments received from the underlying mortgages to
some class. To capture any unallocated payments, CMOs generally have an
accrual (Z) class. Z classes do not receive any payments from the underlying
mortgages until all other CMO classes have been paid off. Once this happens,
holders of Z class CMOs receive all payments and prepayments. Similarly,
REMICs have residual interests that receive any mortgage payments not
allocated to another REMIC class.
The degree of increased or decreased prepayment risks depends upon the
structure of the CMOs. However, the actual returns on any type of mortgage
backed security depend upon the performance of the underlying pool of
mortgages, which no one can predict and will vary among pools.
CONVERTIBLE SECURITIES
Convertible securities are fixed income securities that a Fund has the option to
exchange for equity securities at a specified conversion price. The option
allows a Fund to realize additional returns if the market price of the equity
securities exceeds the conversion price. For example, a Fund may hold fixed
income securities that are convertible into shares of common stock at a
conversion price of $10 per share. If the market value of the shares of common
stock reached $12, a Fund could realize an additional $2 per share by converting
its fixed income securities.
Convertible securities have lower yields than comparable fixed income
securities. In addition, at the time a convertible security is issued the
conversion price exceeds the market value of the underlying equity securities.
Thus, convertible securities may provide lower returns than non-convertible
fixed income securities or equity securities depending upon changes in the price
of the underlying equity securities. However, convertible securities permit a
Fund to realize some of the potential appreciation of the underlying equity
securities with less risk of losing its initial investment.
The Funds treat convertible securities as both fixed income and equity
securities for purposes of their investment policies and limitations, because of
their unique characteristics.
DERIVATIVE CONTRACTS
Derivative contracts are financial instruments that require payments based upon
changes in the values of designated (or underlying) securities, currencies,
commodities, financial indices or other assets. Some derivative contracts (such
as futures, forwards and options) require payments relating to a future trade
involving the underlying asset. Other derivative contracts (such as swaps)
require payments relating to the income or returns from the underlying asset.
The other party to a derivative contract is referred to as a counterparty.
Many derivative contracts are traded on securities or commodities exchanges. In
this case, the exchange sets all the terms of the contract except for the price.
Investors make payments due under their contracts through the exchange. Most
exchanges require investors to maintain margin accounts through their brokers to
cover their potential obligations to the exchange. Parties to the contract make
(or collect) daily payments to the margin accounts to reflect losses (or gains)
in the value of their contracts. This protects investors against potential
defaults by the counterparty. Trading contracts on an exchange also allows
investors to close out their contracts by entering into offsetting contracts.
For example, a Fund could close out an open contract to buy an asset at a future
date by entering into an offsetting contract to sell the same asset on the same
date. If the offsetting sale price is more than the original purchase price, the
Fund realizes a gain; if it is less, the Fund realizes a loss. Exchanges may
limit the amount of open contracts permitted at any one time. Such limits may
prevent a Fund from closing out a position. If this happens, the Fund will be
required to keep the contract open (even if it is losing money on the contract),
and to make any payments required under the contract (even if it has to sell
portfolio securities at unfavorable prices to do so). Inability to close out a
contract could also harm the Fund by preventing it from disposing of or trading
any assets it has been using to secure its obligations under the contract.
A Fund may also trade derivative contracts over-the-counter (OTC) in
transactions negotiated directly between a Fund and the counterparty. OTC
contracts do not necessarily have standard terms, so they cannot be directly
offset with other OTC contracts. In addition, OTC contracts with more
specialized terms may be more difficult to price than exchange traded contracts.
Depending upon how a Fund uses derivative contracts and the relationships
between the market value of a derivative contract and the underlying asset,
derivative contracts may increase or decrease a Fund's exposure to interest rate
and currency risks, and may also expose a Fund to liquidity and leverage risks.
OTC contracts also expose a Fund to credit risks in the event that a
counterparty defaults on the contract.
A Fund may trade in the following types of derivative contracts.
FUTURES CONTRACTS
Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of an underlying asset at a specified price,
date, and time. Entering into a contract to buy an underlying asset is commonly
referred to as buying a contract or holding a long position in the asset.
Entering into a contract to sell an underlying asset is commonly referred to as
selling a contract or holding a short position in the asset. Futures contracts
are considered to be commodity contracts. Futures contracts traded OTC are
frequently referred to as forward contracts.
OPTIONS
Options are rights to buy or sell an underlying asset for a specified price (the
exercise price) during, or at the end of, a specified period. A call option
gives the holder (buyer) the right to buy the underlying asset from the seller
(writer) of the option. A put option gives the holder the right to sell the
underlying asset to the writer of the option. The writer of the option receives
a payment, or premium, from the buyer, which the writer keeps regardless of
whether the buyer uses (or exercises) the option.
A Fund may:
|_| Buy put options on portfolio securities, securities indices, and listed put
options on futures contracts in anticipation of a decrease in the value of the
underlying asset; |_| Write covered call options on portfolio securities and
listed call options on futures contracts to generate income from premiums, and
in anticipation of a decrease or only limited increase in the value of the
underlying asset. If a call written by a Fund is exercised, the Fund foregoes
any possible profit from an increase in the market price of the underlying asset
over the exercise price plus the premium received; |_| Write secured put options
on portfolio securities (to generate income from premiums, and in anticipation
of an increase or only limited decrease in the value of the underlying asset).
In writing puts, there is a risk that a Fund may be required to take delivery of
the underlying asset when its current market price is lower than the exercise
price; |_| When a Fund writes options on futures contracts, it will be subject
to margin requirements similar to those applied to futures contracts; and |_|
Buy or write options to close out existing options positions.
A Fund may also write call options on financial futures contracts to generate
income from premiums, and in anticipation of a decrease or only limited increase
in the value of the underlying asset. If a call written by a Fund is exercised,
the Fund foregoes any possible profit from an increase in the market price of
the underlying asset over the exercise price plus the premium received.
A Fund may also write put options on financial futures contracts to generate
income from premiums, and in anticipation of an increase or only limited
decrease in the value of the underlying asset. In writing puts, there is a risk
that a Fund may be required to take delivery of the underlying asset when its
current market price is lower than the exercise price.
When a Fund writes options on futures contracts, it will be subject to margin
requirements similar to those applied to futures contracts.
MUNICIPAL BOND INSURANCE
The Municipal Bond Fund may purchase municipal securities covered by insurance
which guarantees the timely payment of principal at maturity and interest on
such securities ("Policy" or "Policies"). These insured municipal securities are
either (1) covered by an insurance policy applicable to a particular security,
whether obtained by the issuer of the security or by a third party
("Issuer-Obtained Insurance") or (2) insured under master insurance policies
issued by municipal bond insurers, which may be purchased by the Fund. The
premiums for the Policies may be paid by the Fund and the yield on the Fund's
portfolio may be reduced thereby.
The Fund may require or obtain municipal bond insurance when purchasing
municipal securities which would not otherwise meet the Fund's quality
standards. The Fund may also require or obtain municipal bond insurance when
purchasing or holding specific municipal securities, when, in the opinion of the
Fund's investment adviser, such insurance would benefit the Fund (for example,
through improvement of portfolio quality or increased liquidity of certain
securities). The Fund's investment adviser anticipates that between 30% and 70%
of the Fund's net assets will be invested in municipal securities which are
insured.
Issuer-Obtained Insurance policies are non-cancellable and continue in force as
long as the municipal securities are outstanding and their respective insurers
remain in business. If a municipal security is covered by Issuer-Obtained
Insurance, then such security need not be insured by the Policies purchased by a
Fund.
The Fund may purchase two types of Policies issued by municipal bond insurers.
One type of Policy covers certain municipal securities only during the period in
which they are in the Fund's portfolio. In the event that a municipal security
covered by such a Policy is sold from a Fund, the insurer of the relevant Policy
will be liable for those payments of interest and principal which are due and
owing at the time of the sale.
The other type of Policy covers municipal securities not only while they remain
in the Fund's portfolio but also until their final maturity if they are sold out
of the Fund's portfolio, so that the coverage may benefit all subsequent holders
of those municipal securities. The Fund will obtain insurance which covers
municipal securities until final maturity even after they are sold out of the
Fund's portfolio only if, in the judgment of the investment adviser, the Fund
would receive net proceeds from the sale of those securities, after deducting
the cost of such permanent insurance and related fees, significantly in excess
of the proceeds it would receive if such municipal securities were sold without
insurance. Payments received from municipal bond issuers may not be tax-exempt
income to shareholders of the Fund.
The Fund may purchase municipal securities insured by Policies from MBIA Corp.
("MBIA"), AMBAC Indemnity Corporation ("AMBAC"), Financial Guaranty Insurance
Company ("FGIC"), or any other municipal bond insurer which is rated AAA by S&P
or Aaa by Moody's. Each Policy guarantees the payment of principal and interest
on those municipal securities it insures. The Policies will have the same
general characteristics and features. A municipal security will be eligible for
coverage if it meets certain requirements set forth in the Policy. In the event
interest or principal on an insured municipal security is not paid when due, the
insurer covering the security will be obligated under its Policy to make such
payment not later than 30 days after it has been notified by the Fund that such
non-payment has occurred. MBIA, AMBAC, and FGIC will not have the right to
withdraw coverage on securities insured by their Policies so long as such
securities remain in the Fund's portfolio, nor may MBIA, AMBAC, or FGIC cancel
their Policies for any reason except failure to pay premiums when due.
MBIA, AMBAC, and FGIC will reserve the right at any time upon 90 days' written
notice to the Fund to refuse to insure any additional municipal securities
purchased by the Fund after the effective date of such notice. The Fund reserves
the right to terminate any of the Policies if they determine that the benefits
to a Fund of having its portfolio insured under such Policy are not justified by
the expense involved.
Additionally, the Fund reserves the right to enter into contracts with insurance
carriers other than MBIA, AMBAC, or FGIC if such carriers are rated AAA by S&P
or Aaa by Moody's.
SPECIAL TRANSACTIONS
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which a Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting a Fund's
return on the transaction. This return is unrelated to the interest rate on the
underlying security. A Fund will enter into repurchase agreements only with
banks and other recognized financial institutions, such as securities dealers,
deemed creditworthy by the Adviser.
The Funds' custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements are repurchase agreements in which a Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by a Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because a Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.
DELAYED DELIVERY TRANSACTIONS
Delayed delivery transactions, including when issued transactions, are
arrangements in which a Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records the transaction when it
agrees to buy the securities and reflects their value in determining the price
of its shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for the Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default. These transactions create leverage
risks.
TO BE ANNOUNCED SECURITIES (TBAS)
As with other when-issued transactions, a seller agrees to issue a TBA
security at a future date. However, the seller does not specify the
particular securities to be delivered. Instead, a Fund agrees to accept any
security that meets specified terms. For example, in a TBA mortgage-backed
transaction, a Fund and the seller would agree upon the issuer, interest
rate and terms of the underlying mortgages. However, the seller would not
identify the specific underlying mortgages until it issues the security.
TBA mortgage-backed securities increase interest rate risks because the
underlying mortgages may be less favorable than anticipated by the Fund.
DOLLAR ROLLS
Dollar rolls are transactions where a Fund sells mortgage backed securities
with a commitment to buy similar, but not identical, mortgage-backed
securities on a future date at a lower price. Normally, one or both
securities involved are TBA mortgage-backed securities. Dollar rolls are
subject to interest rate risks and credit risks.
SECURITIES LENDING
A Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, the Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if the
market value of the loaned securities increases. Also, the borrower must pay the
Fund the equivalent of any dividends or interest received on the loaned
securities.
The Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to the
borrower for the use of cash collateral.
Loans are subject to termination at the option of the Fund or the borrower. The
Fund will not have the right to vote on securities while they are on loan, but
it will terminate a loan in anticipation of any important vote. The Fund may pay
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash collateral to a securities
lending agent or broker.
Securities lending activities are subject to interest rate risks and credit
risks. These transactions create leverage risks.
INVESTMENT RATINGS FOR INVESTMENT GRADE SECURITIES
The Adviser will determinate whether a security is investment grade based upon
the credit ratings given by one or more nationally recognized rating services.
For example, Standard and Poor's, a rating service, assigns ratings to
investment grade securities (AAA, AA, A, and BBB) based on their assessment of
the likelihood of the issuer's inability to pay interest or principal (default)
when due on each security. Lower credit ratings correspond to higher credit
risk. If a security has not received a rating, a Fund must rely entirely upon
the Adviser's credit assessment that the security is comparable to investment
grade.
INVESTMENT RISKS
There are many factors which may effect an investment in a Fund. The Funds'
principal risks are described in its prospectus. Additional risk factors are
outlined below.
INTEREST RATE RISKS
|_| Prices of fixed income securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise, prices of
fixed income securities fall. However, market factors, such as the demand for
particular fixed income securities, may cause the price of certain fixed income
securities to fall while the prices of other securities rise or remain
unchanged. |_| Interest rate changes have a greater effect on the price of fixed
income securities with longer durations. Duration measures the price sensitivity
of a fixed income security to changes in interest rates.
CREDIT RISKS
|_| Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, a Fund
will lose money.
|_| Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services. These services assign ratings
to securities by assessing the likelihood of issuer default. Lower credit
ratings correspond to higher credit risk. If a security has not received a
rating, a Fund must rely entirely upon the Adviser's credit assessment. |_|
Fixed income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of a security and
the yield of a U.S. Treasury security with a comparable maturity (the spread)
measures the additional interest paid for risk. Spreads may increase generally
in response to adverse economic or market conditions. A security's spread may
also increase if the security's rating is lowered, or the security is perceived
to have an increased credit risk. An increase in the spread will cause the price
of the security to decline.
|_| Credit risk includes the possibility that a party to a transaction involving
a Fund will fail to meet its obligations. This could cause a Fund to lose the
benefit of the transaction or prevent a Fund from selling or buying other
securities to implement its investment strategy.
CALL RISKS
|_| Call risk is the possibility that an issuer may redeem a fixed income
security before maturity (a call) at a price below its current market price. An
increase in the likelihood of a call may reduce the security's price. |_| If a
fixed income security is called, a Fund may have to reinvest the proceeds in
other fixed income securities with lower interest rates, higher credit risks, or
other less favorable characteristics.
WEST VIRGINIA INVESTMENT RISKS
The economy of West Virginia is heavily dependent upon coal mining,
manufacturing, the government sector, tourism and retail trade, among other
industries. West Virginia's economy has come to benefit from a developing
tourism industry. The Governor's Office and the State Legislature have placed
great emphasis upon developing the tourism industry in the State and the
Legislature has enacted a number of statutes designed to foster the growth in
tourism.
Data compiled by the State of West Virginia Bureau of Employment Programs
indicates that unemployment in West Virginia during 1998 (annual average) was
6.5%, down from 6.9% in 1997. This represents the lowest annual rate during the
1980s and 1990s but is still above the national unemployment rate of 4.5%. The
State's economic development efforts have been aided by the location of
significant manufacturing and service facilities in West Virginia, including,
for example, Toyota Motor Corporation's $400 million engine plant in Putnam
County which is expected to employ approximately 300 people and the FBI
Fingerprint Center in Harrison County which is expected to employ approximately
3,000 people. In 1997 the State Legislature created further tax incentives to
stimulate economic development in manufacturing, including, specifically,
consumer-ready wood product manufacturing.
West Virginia's economy continues to be enhanced by the construction and
improvement of roadways in the State, including a $6.0 billion program to
complete the Appalachian Corridor highway system from 1992-2001. In 1997, the
State approved the sale of $550 million in general obligation road bonds over
the next few years. In 1996, the State began sales of infrastructure bonds as
part of a $300 million program aimed at local water and sewer projects as well
as economic development projects.
In 1997 the State Legislature did not enact any significant new taxes or
increase the scope or amount of existing taxes. The State Legislature in 1997
enacted legislation which will exempt from ad valorem property taxes all
intangible personal property with tax situs in West Virginia. This exemption
will be phased in gradually from 1998 to 2003.
Significant attention has been directed in recent years towards altering the
State's current system of obtaining approximately twenty-five percent of
statewide funding for primary and secondary public education from ad valorem
property tax revenues. Litigation is pending in circuit court on the issue, and
it is anticipated that the court will review proposals expected to be submitted
by the Governor's Commission on Fair Taxation and others before a decision is
rendered.
In 1995, the State Legislature substantially reformed the State's workers'
compensation program. The reform, aimed primarily at enforcing employers'
premium obligations and strengthening requirements for permanent total
disability awards, is intended to decrease the program's unfunded liability and
make the State's business climate more attractive.
State pension plans and investments have drawn the attention of the courts in
recent years. The West Virginia Supreme Court of Appeals' opinion in Booth v.
Sims, 456 S.E. 2d 167, (W.Va. 1995) will likely affect various State pension
plans. In this case, the Court ruled that the State Legislature could not reduce
the state troopers' retirement annual cost of living adjustment. The Legislature
had approved such reductions in 1994 due to concerns regarding the actuarial
soundness of the troopers' pension plan. The Court found the Legislature's
reduction of benefits unconstitutional as applied to troopers who have
participated in the plan long enough to have detrimentally relied on expected
pension benefits. State lawmakers speculate that the Court's ruling may affect
the State's budget by restricting the Legislature's ability to amend State
pension plans which are inadequately funded. In 1995, the West Virginia Supreme
Court of Appeals ruled in the matter of State of West Virginia ex rel. Gainer v.
West Virginia Board of Investments, 459 S.E. 2d 531 (W. Va. 1995) that a state
statute granting the West Virginia Board of Investments authority to invest a
portion of public employee pension funds in corporate stocks violated a state
constitution prohibition against the State becoming a stockholder in any company
or association. In 1997, the West Virginia Supreme Court of Appeals similarly
ruled in the matter of West Virginia Trust Fund, Inc. v. Bailey 485 S.E. 2d 407
(W. Va. 1997) that a state statute granting the West Virginia Trust Fund, Inc.,
as trustee of the funds of five state employee pension funds and the state
workers' compensation and coal workers' pneumoconiosis funds, authority to place
such funds in an irrevocable trust which invests in part in corporate equities
also violated the state constitutional prohibition against the State becoming a
stockholder in any company or association. In response, the State Legislature in
1997 proposed an amendment to the State constitution which would eliminate the
current prohibition against investment of state funds in common stocks and other
equity investments. This proposed constitutional amendment has been approved by
West Virginia's voters.
INVESTMENT LIMITATIONS
BORROWING MONEY AND ISSUING SENIOR SECURITIES
The Funds may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.
DIVERSIFICATION OF INVESTMENTS
With respect to securities comprising 75% of the value of their total assets,
the Balanced Fund and Bond Fund will not purchase securities of any one issuer
(other than cash; cash items; securities issued or guaranteed by the government
of the United States or its agencies or instrumentalities and repurchase
agreements collateralized by such U.S. government securities; and securities of
other investment companies) if, as a result, more than 5% of the value of each
Fund's total assets would be invested in the securities of that issuer, or each
Fund would own more than 10% of the outstanding voting securities of that
issuer.
UNDERWRITING
The Funds may not underwrite the securities of other issuers, except that the
Funds may engage in transactions involving the acquisition, disposition or
resale of its portfolio securities, under circumstances where they may be
considered to be an underwriter under the Securities Act of 1933.
INVESTING IN REAL ESTATE
The Funds may not purchase or sell real estate, provided that this restriction
does not prevent the Funds from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests therein.
The Funds may exercise their rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner.
INVESTING IN COMMODITIES
The Funds may not purchase or sell physical commodities, provided that the Funds
may purchase securities of companies that deal in commodities.
LENDING CASH OR SECURITIES
The Funds may not make loans, provided that this restriction does not prevent
the Funds from purchasing debt obligations, entering into repurchase agreements,
lending its assets to broker/dealers or institutional investors and investing in
loans, including assignments and participation interests.
CONCENTRATION OF INVESTMENTS
The Funds will not make investments that will result in the concentration of
their investments in the securities of issuers primarily engaged in the same
industry. Government securities, municipal securities and bank instruments will
not be deemed to constitute an industry. To conform to the current view of the
SEC staff that only domestic bank instruments may be excluded from industry
concentration limitations, as a matter of non-fundamental policy, the Fund will
not exclude foreign bank instruments from industry concentration limitation
tests so long as the policy of the SEC remains in effect. In addition,
investments in bank instruments, and investments in certain industrial
development bonds funded by activities in a single industry, will be deemed to
constitute investment in an industry, except when held for temporary defensive
purposes. The investment of more than 25% of the value of the Fund's total
assets in any one industry will constitute "concentration."
THE ABOVE INVESTMENT LIMITATIONS CANNOT BE CHANGED UNLESS AUTHORIZED BY THE
BOARD OF TRUSTEES (BOARD) AND BY THE "VOTE OF A MAJORITY OF ITS OUTSTANDING
VOTING SECURITIES," AS DEFINED BY THE INVESTMENT COMPANY ACT OF 1940 (1940 ACT).
THE FOLLOWING INVESTMENT LIMITATIONS, HOWEVER, MAY BE CHANGED BY THE BOARD
WITHOUT SHAREHOLDER APPROVAL. SHAREHOLDERS WILL BE NOTIFIED BEFORE ANY MATERIAL
CHANGE IN THESE LIMITATIONS BECOMES EFFECTIVE.
BUYING ON MARGIN
The Funds will not purchase securities on margin, provided that the Funds may
obtain short-term credits necessary for the clearance of purchases and sales of
securities, and further provided that the Funds may make margin deposits in
connection with their use of financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments.
PLEDGING ASSETS
The Funds will not mortgage, pledge, or hypothecate any of their assets,
provided that this shall not apply to the transfer of securities in connection
with any permissible borrowing or to collateral arrangements in connection with
permissible activities.
INVESTING IN ILLIQUID SECURITIES
The Funds will not purchase securities for which there is no readily available
market, or enter into repurchase agreements or purchase time deposits maturing
in more than seven days, if immediately after and as a result, the value of such
securities would exceed, in the aggregate, 15% of each Fund's net assets.
WRITING COVERED CALL OPTIONS AND PURCHASING PUT OPTIONS
With respect to the Bond Fund and the Balanced Fund, the Fund will not write
call options on securities unless the securities are held in the Fund's
portfolio or unless the Fund is entitled to them in deliverable form without
further payment or after segregating cash in the amount of any further payment.
The Fund will not purchase put options on securities unless the securities are
held in the Fund's portfolio
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction.
As a matter of non-fundamental policy, for purposes of concentration policy, (a)
utility companies will be divided according to their services (for example, gas,
gas transmission, electric and telephone will be considered a separate
industry); (b) financial service companies will be classified according to the
end users of their services (for example, automobile finance, bank finance and
diversified finance will each be considered a separate industry); and (c)
asset-backed securities will be classified according to the underlying assets
securing such securities. To conform to the current view of the SEC staff that
only domestic bank instruments may be excluded from industry concentration
limitations, as a matter of non-fundamental policy, the Funds will not exclude
foreign bank instruments from industry concentration limitation tests so long as
the policy of the SEC remains in effect. In addition, investments in bank
instruments, and investments in certain industrial development bonds funded by
activities in a single industry, will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of each Fund's total assets in any one industry will
constitute "concentration."
As a matter of non-fundamental policy, for purposes of the commodities policy,
investments in transactions involving futures contracts and options, forward
currency contracts, swap transactions and other financial contracts that settle
by payment of cash are not deemed to be investments in commodities.
As a matter of non-fundamental policy, with respect to securities comprising 75%
of the value of its total assets, the Growth Fund will not purchase securities
of any one issuer (other than cash; cash items; securities issued or guaranteed
by the government of the United States or its agencies or instrumentalities and
repurchase agreements collateralized by such U.S. government securities; and
securities of other investment companies) if, as a result, more than 5% of the
value of its total assets would be invested in the securities of that issuer, or
the Fund would own more than 10% of the outstanding voting securities of that
issuer.
For purposes of its policies and limitations, the Funds consider certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic bank
or savings association having capital, surplus, and undivided profits in excess
of $100,000,000 at the time of investment to be "cash items."
DETERMINING MARKET VALUE OF SECURITIES
Market values of each Fund's portfolio securities are determined as follows:
o for equity securities, according to the last sale price in the market in
which they are primarily traded (either a national securities exchange or the
over-the-counter market), if available; in the absence of recorded sales for
equity securities, according to the mean between the last closing bid and
asked prices;
o for bonds and other fixed income securities, at the last sale price on a
national securities exchange, if available, otherwise, as determined by an
independent pricing service;
o futures contracts and options are valued at market values established by the
exchanges on which they are traded at the close of trading on such exchanges.
Options traded in the over-the-counter market are valued according to the
mean between the last bid and the last asked price for the option as provided
by an investment dealer or other financial institution that deals in the
option. The Board may determine in good faith that another method of valuing
such investments is necessary to appraise their fair market value;
o for short-term obligations, according to the mean between bid and asked
prices as furnished by an independent pricing service, except that short-term
obligations with remaining maturities of less than 60 days at the time of
purchase may be valued at amortized cost or at fair market value as
determined in good faith by the Board; and
o for all other securities at fair value as determined in good faith by the Board.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider institutional trading in
similar groups of securities, yield, quality, stability, risk, coupon rate,
maturity, type of issue, trading characteristics, and other market data or
factors. From time to time, when prices cannot be obtained from an independent
pricing service, securities may be valued based on quotes from broker-dealers or
other financial institutions that trade the securities.
WHAT DO SHARES COST?
Each Fund's net asset value (NAV) per Share fluctuates and is based on the
market value of all securities and other assets of each Fund.
ELIMINATING THE FRONT-END SALES CHARGE
You can eliminate the applicable front-end sales charge, as follows:
QUANTITY DISCOUNTS
Larger purchases of the WesMark Funds eliminate or reduce the sales charge you
pay. You can combine purchases of Shares made on the same day by you, your
spouse and your children under age 21. In addition, purchases made at one time
by a trustee or fiduciary for a single trust estate or a single fiduciary
account can be combined.
ACCUMULATED PURCHASES
If you make an additional purchase of Shares, you can count previous Share
purchases still invested in the Fund in calculating the applicable sales charge
on the additional purchase.
CONCURRENT PURCHASES
You can combine concurrent purchases of the same share class of two or more
WesMark Funds in calculating the applicable sales charge.
LETTER OF INTENT
You can sign a Letter of Intent committing to purchase a certain amount of the
WesMark Funds Shares within a 13-month period to combine such purchases in
calculating the sales charge. The Funds' custodian will hold Shares in escrow
equal to the maximum applicable sales charge. If you complete the Letter of
Intent, the custodian will release the Shares in escrow to your account. If you
do not fulfill the Letter of Intent, the custodian will redeem the appropriate
amount from the Shares held in escrow to pay the sales charges that were not
applied to your purchases.
REINVESTMENT PRIVILEGE
You may reinvest, within 120 days, your Share redemption proceeds at the next
determined NAV without any sales charge.
PURCHASES BY AFFILIATES OF THE FUND
Because there are nominal sales efforts associated with their purchases, the
following individuals and their immediate family members may buy Shares at NAV
without any sales charge: Trustees, employees, directors and officers of
WesBanco, Federated Investors, Inc. and sales representatives of the Funds, the
Adviser, the Distributor and their affiliates, and members of their immediate
families; any associated person of an investment dealer who has a sales
agreement with the Distributor; and trusts, pension or profit-sharing plans for
these individuals.
HOW ARE THE FUNDS SOLD?
Under the Distributor's Contract with the Funds, the Distributor (Edgewood Services,
Inc.) offers Shares on a continuous, best-efforts basis.
The Distributor receives a front-end sales charge on certain Share sales. The
Distributor generally pays up to 90% (and as much as 100%) of this charge to
investment professionals (including WesBanco Securities, Inc.) for sales and/or
administrative services. Any payments to investment professionals in excess of
90% of the front-end sales charge are considered supplemental payments. The
Distributor retains any portion not paid to an investment professional.
RULE 12B-1 PLAN
As a compensation type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professional such as banks,
broker/dealers, trust departments of bank, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professionals) to promote
sales of Shares so that overall Fund assets are maintained or increased. This
helps the Funds achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and Share redemptions. In
addition, the Funds' service providers that receive asset-based fees also
benefit from stable or increasing Fund assets.
The Funds may compensate the Distributor more or less than its actual marketing
expenses. In no event will a Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.
SHAREHOLDER SERVICES
The Funds may pay WesBanco for providing shareholder services and maintaining
shareholder accounts. WesBanco may select others to perform these services for
their customers and may pay them fees.
SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees out of the assets of the Distributor
and/or WesBanco (but not out of Fund assets). The Distributor and/or WesBanco
may be reimbursed by the Adviser or its affiliates.
Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Funds or other
special events at recreational-type facilities, or items of material value.
These payments will be based upon the amount of shares the investment
professional sells or may sell and/or upon the type and nature of sales or
marketing support furnished by the investment professional.
EXCHANGING SECURITIES FOR SHARES
You may contact your investment professional to request a purchase of shares in
an exchange for securities you own. The Funds reserve the right to determine
whether to accept your securities and the minimum market value to accept. The
Funds will value your securities in the same manner as they value their assets.
This exchange is treated as a sale of your securities for federal tax purposes.
SUBACCOUNTING SERVICES
Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.
REDEMPTION IN KIND
Although the Funds intend to pay Share redemptions in cash, they reserve the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Funds' portfolio securities.
Because the Funds have elected to be governed by Rule 18f-1 under the 1940 Act,
the Funds are obligated to pay Share redemptions to any one shareholder in cash
only up to the lesser of $250,000 or 1% of the net assets represented by such
Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash
unless the Funds' Board determines that payment should be in kind. In such a
case, the Funds will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as each Fund determines its NAV.
The portfolio securities will be selected in a manner that the Funds' Board
deems fair and equitable and, to the extent available, such securities will be
readily marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.
ACCOUNT AND SHARE INFORMATION
VOTING RIGHTS
Each Share of each Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All Shares of the Trust have
equal voting rights, except that in matters affecting only a particular Fund,
only Shares of that Fund are entitled to vote.
Trustees may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding shares
of all series entitled to vote.
As of April 3, 2000, the following shareholder(s) owned of record, beneficially,
or both, 5% or more of outstanding shares of the Growth Fund: Dolling & Co.,
Wheeling, WV, owned approximately 11,932,362 Shares (94.61%).
As of April 3, 2000, the following shareholder(s) owned of record, beneficially,
or both, 5% or more of outstanding shares of the Balanced Fund: Dolling & Co.,
Wheeling, WV, owned approximately 6,857,445 Shares (97.14%).
As of April 3, 2000, the following shareholder(s) owned of record, beneficially,
or both, 5% or more of outstanding shares of the Bond Fund: Dolling & Co.,
Wheeling, WV, owned approximately 12,827,795 Shares (91.59%); and Saxon and Co.,
Philadelphia, PA, owned approximately 1,045,784 Shares (7.47%).
As of April 3, 2000, the following shareholder(s) owned of record, beneficially,
or both, 5% or more of outstanding shares of the Municipal Bond Fund: Dolling &
Co., Wheeling, WV, owned approximately 6,094,942 Shares (93.13%).
Shareholders owning 25% or more of outstanding shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.
TAX INFORMATION
FEDERAL INCOME TAX
The Funds intend to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, they will not receive special tax treatment and will pay federal income
tax.
Each Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.
FOREIGN INVESTMENTS
If the Growth Fund or the Balanced Fund purchase foreign securities, their
investment income may be subject to foreign withholding or other taxes that
could reduce the return on these securities. Tax treaties between the United
States and foreign countries, however, may reduce or eliminate the amount of
foreign taxes to which the Funds would be subject. The effective rate of foreign
tax cannot be predicted since the amount of Fund assets to be invested within
various countries is uncertain. However, the Funds intend to operate so as to
qualify for treaty-reduced tax rates when applicable.
Distributions from a Fund may be based on estimates of book income for the year.
Book income generally consists solely of the coupon income generated by the
portfolio, whereas tax-basis income includes gains or losses attributable to
currency fluctuation. Due to differences in the book and tax treatment of
fixed-income securities denominated in foreign currencies, it is difficult to
project currency effects on an interim basis. Therefore, to the extent that
currency fluctuations cannot be anticipated, a portion of distributions to
shareholders could later be designated as a return of capital, rather than
income, for income tax purposes, which may be of particular concern to simple
trusts.
If a Fund invests in the stock of certain foreign corporations, they may
constitute Passive Foreign Investment Companies (PFIC), and the Funds may be
subject to Federal income taxes upon disposition of PFIC investments.
If more than 50% of the value of a Fund's assets at the end of the tax year is
represented by stock or securities of foreign corporations, the Fund intends to
qualify for certain Code stipulations that would allow shareholders to claim a
foreign tax credit or deduction on their U.S. income tax returns. The Code may
limit a shareholder's ability to claim a foreign tax credit. Shareholders who
elect to deduct their portion of a Fund's foreign taxes rather than take the
foreign tax credit must itemize deductions on their income tax returns.
WEST VIRGINIA TAXES
Under existing West Virginia laws, distributions made by the Municipal Bond Fund
will not be subject to the West Virginia personal income tax to the extent that
such distributions qualify as exempt-interest dividends under the Internal
Revenue Code of 1986, as amended, and represent (i) interest income from
obligations of the United States and its possessions; or (ii) interest or
dividend income from obligations of any authority, commission or instrumentality
of the United States or the State of West Virginia exempt from state income
taxes under the laws of the United States or of the State of West Virginia. For
purposes of the West Virginia corporate income tax, a special formula is used to
compute the extent to which Fund distributions are exempt.
The Secretary of the Department of Tax and Revenue has indicated on an informed
basis that Fund shares should be exempt from personal property taxes.
Shareholders should consult their own tax adviser for more information on the
application of personal property taxes on Fund shares.
WHO MANAGES AND PROVIDES SERVICES TO THE FUND?
BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and other notable positions held,
total compensation received as a Trustee from the Trust for its most recent
fiscal year. The Trust is comprised of four funds.
As of April 3, 2000, the Fund's Board and Officers as a group owned less than 1%
of the Fund's outstanding shares.
----------------------------------------------------------------------------
NAME
BIRTH DATE -----------
ADDRESS PRINCIPAL OCCUPATIONS AGGREGATE
POSITION WITH TRUST FOR PAST FIVE YEARS COMPENSATION
FROM TRUST
JOHN F. DONAHUE*+# Chief Executive Officer and Director $0
Birth Date: July or Trustee of the Federated Fund
28, 1924 Complex; Chairman and Director,
Federated Investors Federated Investors, Inc.; Chairman
Tower and Trustee, Federated Investment
1001 Liberty Avenue Management Company; Chairman and
Pittsburgh, PA Director, Federated Investment
TRUSTEE AND CHAIRMAN Counseling and Federated Global
Investment Management Corp.; Chairman,
Passport Research, Ltd.
-------------------- Director or Trustee of the Federated
THOMAS G. BIGLEY Fund Complex; Director, Member of -----------
Birth Date: Executive Committee, Children's $1,239.19
February 3, 1934 Hospital of Pittsburgh; Director,
15 Old Timber Trail Robroy Industries, Inc. (coated steel
Pittsburgh, PA conduits/computer storage equipment);
TRUSTEE formerly: Senior Partner, Ernst &
Young LLP; Director, MED 3000 Group,
Inc. (physician practice management);
Director, Member of Executive
Committee, University of Pittsburgh.
-------------------- Director or Trustee of the Federated
JOHN T. CONROY, JR. Fund Complex; President, Investment -----------
Birth Date: June Properties Corporation; Senior Vice $1,363.36
23, 1937 President, John R. Wood and
Grubb & Associates, Inc., Realtors; Partner or
Ellis/Investment Trustee in private real estate
Properties ventures in Southwest Florida;
Corporation formerly: President, Naples Property
3201 Tamiami Trail Management, Inc. and Northgate Village
North Development Corporation.
Naples, FL
TRUSTEE
-------------------- Director or Trustee of the Federated
NICHOLAS P. Fund Complex; Director, Michael Baker -----------
CONSTANTAKIS Corporation (engineering, $1,239.19
Birth Date: construction, operations and technical
September 3, 1939 services); formerly: Partner, Andersen
175 Woodshire Drive Worldwide SC.
Pittsburgh, PA
TRUSTEE
-------------------- Director or Trustee of some of the
JOHN F. CUNNINGHAM++ Federated Fund Complex; Chairman, -----------
Birth Date: March President and Chief Executive Officer, $1,239.20
5, 1943 Cunningham & Co., Inc. (strategic
353 El Brillo Way business consulting); Trustee
Palm Beach, FL Associate, Boston College; Director,
TRUSTEE Iperia Corp.
(communications/software); formerly:
Director, Redgate Communications and EMC Corporation
(computer storage systems).
Previous Positions: Chairman of the
Board and Chief Executive Officer,
Computer Consoles, Inc.; President and
Chief Operating Officer, Wang
Laboratories; Director, First National
Bank of Boston; Director, Apollo
Computer, Inc.
-------------------- Director or Trustee of the Federated
LAWRENCE D. ELLIS, Fund Complex; Professor of Medicine, -----------
M.D.* University of Pittsburgh; Medical $1,239.19
Birth Date: October Director, University of Pittsburgh
11, 1932 Medical Center - Downtown;
3471 Fifth Avenue Hematologist, Oncologist, and
Suite 1111 Internist, University of Pittsburgh
Pittsburgh, PA Medical Center; Member, National Board
TRUSTEE of Trustees, Leukemia Society of
America.
-------------------- Director or Trustee of the Federated
PETER E. MADDEN Fund Complex; formerly: -----------
Birth Date: March Representative, Commonwealth of $1,162.74
16, 1942 Massachusetts General Court; One Royal Palm Way President, State Street
Bank and Trust 100 Royal Palm Way Company and State Street Corporation.
Palm Beach, FL
TRUSTEE Previous Positions: Director, VISA USA
and VISA International; Chairman and
Director, Massachusetts Bankers
Association; Director, Depository
Trust Corporation; Director, The
Boston Stock Exchange.
-------------------- Director or Trustee of some of the
CHARLES F. Federated Fund Complex; Executive Vice -----------
MANSFIELD, JR.++ President, Legal and External Affairs, $1,302.47
Birth Date: April Dugan Valva Contess, Inc. (marketing,
10, 1945 communications, technology and
80 South Road consulting).; formerly Management
Westhampton Beach, Consultant.
NY
-------------------- Previous Positions: Chief Executive
TRUSTEE Officer, PBTC International Bank;
Partner, Arthur Young & Company (now Ernst & Young LLP);
Chief Financial Officer of Retail Banking Sector, Chase
Manhattan Bank; Senior Vice President, Marine Midland
Bank; Vice President, Citibank; Assistant Professor of
Banking and Finance, Frank G. Zarb School of Business,
Hofstra University.
-------------------- Director or Trustee of the Federated
JOHN E. MURRAY, Fund Complex; President, Law -----------
JR., J.D., S.J.D.# Professor, Duquesne University; $1,363.36
Birth Date: Consulting Partner, Mollica & Murray;
December 20, 1932 Director, Michael Baker Corp.
President, Duquesne (engineering, construction, operations University and
technical services).
Pittsburgh, PA
TRUSTEE Previous Positions: Dean and Professor
of Law, University of Pittsburgh
School of Law; Dean and Professor of
Law, Villanova University School of
Law.
-------------------- Director or Trustee of the Federated
MARJORIE P. SMUTS Fund Complex; Public -----------
Birth Date: June Relations/Marketing/Conference $1,239.19
21, 1935 Planning.
4905 Bayard Street
Pittsburgh, PA Previous Positions: National
TRUSTEE Spokesperson, Aluminum Company of
America; television producer; business owner.
-------------------- Director or Trustee of some of the
JOHN S. WALSH++ Federated Fund Complex; President and -----------
Birth Date: Director, Heat Wagon, Inc. $1,239.19
November 28, 1957 (manufacturer of construction
2007 Sherwood Drive temporary heaters); President and
Valparaiso, IN Director, Manufacturers Products, Inc.
TRUSTEE (distributor of portable construction
heaters); President, Portable Heater
Parts, a division of Manufacturers
Products, Inc.; Director, Walsh &
Kelly, Inc. (heavy highway
contractor); formerly: Vice President,
Walsh & Kelly, Inc.
-------------------- President or Executive Vice President
J. CHRISTOPHER of the Federated Fund Complex; -----------
DONAHUE+ Director or Trustee of some of the $0
Birth Date: April Funds in the Federated Fund Complex;
11, 1949 President, Chief Executive Officer and
Federated Investors Director, Federated Investors, Inc.;
Tower President and Trustee, Federated
1001 Liberty Avenue Investment Management Company;
Pittsburgh, PA President and Trustee, Federated
EXECUTIVE VICE Investment Counseling; President and
PRESIDENT Director, Federated Global Investment
Management Corp.; President, Passport
Research, Ltd.; Trustee, Federated
Shareholder Services Company;
Director, Federated Services Company.
--------------------
----------------------------------------------------------------------------
EDWARD C. GONZALES* Trustee or Director of some of the
Birth Date: October Funds in the Federated Fund Complex; -----------
22, 1930 President, Executive Vice President $0
Federated Investors and Treasurer of some of the Funds in
Tower the Federated Fund Complex; Vice
1001 Liberty Avenue Chairman, Federated Investors, Inc.;
Pittsburgh, PA Vice President, Federated Investment
TRUSTEE, PRESIDENT Management Company and Federated
and TREASURER Investment Counseling, Federated
Global Investment Management Corp. and
Passport Research, Ltd.; Executive
Vice President and Director, Federated
Securities Corp.; Trustee, Federated
Shareholder Services Company.
-------------------- Executive Vice President and Secretary
JOHN W. MCGONIGLE of the Federated Fund Complex; -----------
Birth Date: October Executive Vice President, Secretary $0
26, 1938 and Director, Federated Investors,
Federated Investors Inc.; Trustee, Federated Investment
Tower Management Company and Federated
1001 Liberty Avenue Investment Counseling; Director,
Pittsburgh, PA Federated Global Investment Management
EXECUTIVE VICE Corp., Federated Services Company and
PRESIDENT AND Federated Securities Corp.
SECRETARY
-------------------- President or Vice President of some of
RICHARD B. FISHER the Funds in the Federated Fund -----------
Birth Date: May 17, Complex; Director or Trustee of some $0
1923 of the Funds in the Federated Fund
Federated Investors Complex; Executive Vice President,
Tower Federated Investors, Inc.; Chairman
1001 Liberty Avenue and Director, Federated Securities
Pittsburgh, PA Corp.
VICE PRESIDENT
-------------------- Vice President, Federated Services
BETH S. BRODERICK Company since 1999; Client Services -----------
Birth Date: August Officer, Federated Services Company $0
2, 1965 from 1992 to 1997.
Federated Investors
Tower
1001 Liberty Avenue
Pittsburgh, PA
VICE PRESIDENT
* AN ASTERISK DENOTES A TRUSTEE WHO IS DEEMED TO BE AN INTERESTED PERSON AS
DEFINED IN THE 1940 ACT. # A POUND SIGN DENOTES A MEMBER OF THE BOARD'S
EXECUTIVE COMMITTEE, WHICH HANDLES THE BOARD'S RESPONSIBILITIES BETWEEN ITS
MEETINGS.
+ MR. DONAHUE IS THE FATHER OF J. CHRISTOPHER DONAHUE, EXECUTIVE VICE PRESIDENT OF
THE TRUST.
++ MESSRS. CUNNINGHAM, MANSFIELD AND WALSH BECAME MEMBERS OF THE BOARD OF TRUSTEES ON
JANUARY 1, 2000. THEY DID NOT EARN ANY FEES FOR SERVING THE FUND COMPLEX SINCE THESE
FEES ARE REPORTED AS OF THE END OF THE LAST CALENDAR YEAR. THEY DID NOT RECEIVE ANY
FEES AS OF THE FISCAL YEAR END OF THE FUNDS.
INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund.
The Adviser is a wholly owned subsidiary of WesBanco, Inc.
The Adviser shall not be liable to the Trust, the Funds, or any Fund shareholder
for any losses that may be sustained in the purchase, holding, or sale of any
security or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.
CODE OF ETHICS RESTRICTIONS ON PERSONAL TRADING
As required by SEC rules, the Fund, its Adviser, and its Distributor have
adopted codes of ethics. These codes govern securities trading activities of
investment personnel, Fund Trustees, and certain other employees. Although they
do permit these people to trade in securities, including those that the Fund
could buy, they also contain significant safeguards designed to protect the Fund
and its shareholders from abuses in this area, such as requirements to obtain
prior approval for, and to report, particular transactions.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. The Adviser may select brokers and dealers
based on whether they also offer research services (as described below). In
selecting among firms believed to meet these criteria, the Adviser may give
consideration to those firms which have sold or are selling shares of the Funds
and other funds distributed by the Distributor and its affiliates. The Adviser
makes decisions on portfolio transactions and selects brokers and dealers
subject to review by the Funds' Board.
RESEARCH SERVICES
Research services may include advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry studies;
receipt of quotations for portfolio evaluations; and similar services. Research
services may be used by the Adviser in advising other accounts. To the extent
that receipt of these services may replace services for which the Adviser or its
affiliates might otherwise have paid, it would tend to reduce their expenses.
The Adviser and its affiliates exercise reasonable business judgment in
selecting those brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage and
research services provided.
Investment decisions for the Funds are made independently from those of other
accounts managed by the Adviser. When a Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Funds and the account(s) in
a manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit a Fund, it is possible
that this procedure could adversely impact the price paid or received and/or the
position obtained or disposed of by a Fund.
ADMINISTRATOR
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Funds. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets as
specified below:
MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE FEE DAILY
NET ASSETS OF THE
TRUST
0.150 of 1% on the first
$250 million
0.125 of 1% on the next
$250 million
0.100 of 1% on the next
$250 million
0.075 of 1% on assets in excess
of $750 million
The administrative fee received during any fiscal year shall be at least $75,000
per portfolio. Federated Services Company may voluntarily waive a portion of its
fee and may reimburse the Funds for expenses. Federated Services Company also
provides certain accounting and recordkeeping services with respect to the
Funds' portfolio investments for a fee based on Fund assets plus out-of-pocket
expenses.
---------------------------------------------------------------------------------------
CUSTODIAN
WesBanco Trust and Investment Services, Wheeling, West Virginia, is custodian
for the securities and cash of the Funds.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Funds pay the transfer agent a fee based on the size, type, and
number of accounts and transactions made by shareholders.
INDEPENDENT AUDITORS
The independent auditor for the Funds, Deloitte & Touche LLP, plans and performs
its audit so that it may provide an opinion as to whether the Funds' financial
statements and financial highlights are free of material misstatement.
FEES PAID BY THE FUNDS FOR SERVICES
---------------------------------------------------------------------------------------
FUND ADVISORY FEE PAID/ BROKERAGE COMMISSIONS ADMINISTRATIVE FEE
ADVISORY FEE WAIVED PAID PAID/
ADMINISTRATIVE FEE
WAIVED
-----------------------------------------------------------------------------
FOR THE FISCAL YEAR ENDED FOR THE FISCAL YEAR ENDED FOR THE FISCAL YEAR
JANUARY 31, JANUARY 31, ENDED
JANUARY 31,
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
2000 1999 1998 2000 1999 1998 2000 1999 1998
---------------------------------------------------------------------------------------
GROWTH $1,229,625$927,701$629,221/ $0 $0 $117,867$229,18$178,406/$125,848/
FUND $8,076 $2,725 $195,88$144,550 $0 $0
$19,910
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
BALANCED $530,435 $339,662N/A $0 $0 N/A $98,891$64,592/ N/A
FUND $39,892 $43,868 $46,602 $0 $0
$106,091
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
BOND FUND $725,072 $504,656N/A $0 $0 N/A $169,01$119,961 N/A
$55,469 $0 $0 $0
$120,845
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
WEST $396,498 $396,975$305,555/ $0 $0 $0 $92,443$95,429 $76,435
VIRGINIA $191,388$152,777 $0
MUNICIPAL $198,249
BOND FUND
---------------------------------------------------------------------------------------
12B-1 FEES AND SHAREHOLDER SERVICES FEES
The Funds did not pay or accrue 12b-1 fees or shareholder services fees during
the fiscal year ended January 31, 2000. The Funds have no present intention of
paying or accruing these fees during the fiscal year ending January 31, 2001.
HOW DO THE FUNDS MEASURE PERFORMANCE?
The Funds may advertise Share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.
Unless otherwise stated, any quoted Share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. The performance of shares depends upon such
variables as: portfolio quality; average portfolio maturity; type and value of
portfolio securities; changes in interest rates; changes or differences in the
Funds' or any class of shares' expenses; and various other factors.
Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.
AVERAGE ANNUAL TOTAL RETURNS AND YIELD
Total returns are given for the one-year and since inception periods. Yield is
given for the 30-day period ended January 31, 2000.
SINCE
GROWTH FUND 1 INCEPTION
YEAR ON
APRIL 14,
1997
Total Return 24.94% 23.61%
Yield 0.58%
SINCE
-------------------------------10 YEARSINCEPTION
BALANCED FUND* 1 5 ON
YEAR YEARS APRIL 20,
1998
Total Return 8.12%15.28% 11.51% 10.83%
Yield 2.62%
SINCE
BOND FUND 1 INCEPTION
YEAR ON
APRIL 20,
1998
Total Return (7.00%) (0.98%)
Yield 6.66%
WEST VIRGINIA SINCE
MUNICIPAL BOND 1 ------- INCEPTION
FUND* YEAR 5 ON
YEARS APRIL 14,
1997
Total Return (6.453.48% 4.19%
Yield 4.56%
Tax-Equivalent 8.46%
Yield
* THE FUND IS THE SUCCESSOR TO THE PORTFOLIO OF A COMMON TRUST FUND (CTF)
MANAGED BY THE ADVISER. AT THE FUND'S COMMENCEMENT OF OPERATIONS, THE CTF'S
ASSETS WERE TRANSFERRED TO THE FUND IN EXCHANGE FOR FUND SHARES. THE QUOTED
PERFORMANCE DATA INCLUDES PERFORMANCE FOR PERIODS BEFORE EACH OF THE FUND'S
REGISTRATION BECAME EFFECTIVE ON MARCH 24, 1998, FOR THE WESSMARK BALANCED FUND,
AND MARCH 12, 1997, FOR THE WESMARK WEST VIRGINIA MUNICIPAL BOND FUND, AS
ADJUSTED TO REFLECT THE FUND'S EXPENSES. THE CTF WAS NOT REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940 ("1940 ACT") AND WAS THEREFORE NOT SUBJECT TO THE
RESTRICTIONS UNDER THE 1940 ACT. IF THE CTF HAD BEEN REGISTERED UNDER THE 1940
ACT, THE PERFORMANCE MAY HAVE BEEN ADVERSELY AFFECTED.
---------------------------------------------------------------------------------------
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period by
the NAV per Share at the end of the period. The number of shares owned at the
end of the period is based on the number of shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional shares, assuming the annual reinvestment of all
dividends and distributions.
When shares of a Fund are in existence for less than a year, a Fund may
advertise cumulative total return for that specific period of time, rather than
annualizing the total return.
YIELD
The yield of shares is calculated by dividing: (i) the net investment income per
Share earned by the shares over a 30-day period; by (ii) the maximum offering
price per Share on the last day of the period. This number is then annualized
using semi-annual compounding. This means that the amount of income generated
during the 30-day period is assumed to be generated each month over a 12-month
period and is reinvested every six months. The yield does not necessarily
reflect income actually earned by shares because of certain adjustments required
by the SEC and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.
To the extent investment professional and broker/dealers charge fees in
connection with services provided in conjunction with an investment in shares,
the Share performance is lower for shareholders paying those fees.
TAX EQUIVALENCY TABLE
Set forth below are samples of tax-equivalency tables that may be used in
advertising and sales literature. These tables are for illustrative purposes
only and are not representative of past or future performance of the Municipal
Bond Fund. The interest earned by the municipal securities owned by the
Municipal Bond Fund generally remains free from federal regular income tax and
is often free from West Virginia taxes as well. However, some of the Municipal
Bond Fund's income may be subject to the federal alternative minimum tax and
state and/or local taxes.
TAXABLE YIELD EQUIVALENT FOR 2000 - STATE OF WEST VIRGINIA
COMBINED FEDERAL AND STATE
INCOME TAX BRACKET: 19.50% 34.50% 37.50% 42.50% 46.10%
---------------------------------------------------------------------------------
Single Return $1-26,25$26,251-63,5$63,551-132,6$132,601-288Over
288,350
TAX EXEMPT YIELD: TAXABLE YIELD EQUIVALENT:
1.00% 1.24% 1.53% 1.60% 1.74% 1.86%
1.50% 1.86% 2.29% 2.40% 2.61% 2.78%
2.00% 2.48% 3.05% 3.20% 3.48% 3.71%
2.50% 3.11% 3.82% 4.00% 4.35% 4.64%
3.00% 3.73% 4.58% 4.80% 5.22% 5.57%
3.50% 4.35% 5.34% 5.60% 6.09% 6.49%
4.00% 4.97% 6.11% 6.40% 6.96% 7.42%
4.50% 5.59% 6.87% 7.20% 7.83% 8.35%
5.00% 6.21% 7.63% 8.00% 8.70% 9.28%
5.50% 6.83% 8.40% 8.80% 9.57% 10.20%
6.00% 7.45% 9.16% 9.60% 10.43% 11.13%
6.50% 8.07% 9.92% 10.40% 11.30% 12.06%
7.00% 8.70% 10.69% 11.20% 12.17% 12.99%
7.50% 9.32% 11.45% 12.00% 13.04% 13.91%
8.00% 9.94% 12.21% 12.80% 13.91% 14.84%
8.50% 10.56% 12.98% 13.60% 14.78% 15.77%
9.00% 11.18% 13.74% 14.40% 15.65% 16.70%
NOTE: THE MAXIMUM MARGINAL TAX RATE FOR EACH BRACKET WAS USED IN CALCULATING THE
TAXABLE YIELD EQUIVALENT. FURTHERMORE, ADDITIONAL STATE AND LOCAL TAXES PAID ON
COMPARABLE TAXABLE INVESTMENTS WERE NOT USED TO INCREASE FEDERAL DEDUCTIONS.
---------------------------------------------------------------------------------------
TAXABLE YIELD EQUIVALENT FOR 2000 - STATE OF WEST VIRGINIA
COMBINED FEDERAL AND STATE
INCOME TAX BRACKET: 21.00% 34.50% 37.50% 42.50% 46.10%
---------------------------------------------------------------------------------
Joint Return $1-43,85$43,851-105,$105,951-161,$161,451-288Over
288,350
TAX EXEMPT YIELD: TAXABLE YIELD EQUIVALENT:
1.00% 1.27% 1.53% 1.60% 1.74% 1.86%
1.50% 1.90% 2.29% 2.40% 2.61% 2.78%
2.00% 2.53% 3.05% 3.20% 3.48% 3.71%
2.50% 3.16% 3.82% 4.00% 4.35% 4.64%
3.00% 3.80% 4.58% 4.80% 5.22% 5.57%
3.50% 4.43% 5.34% 5.60% 6.09% 6.49%
4.00% 5.06% 6.11% 6.40% 6.96% 7.42%
4.50% 5.70% 6.87% 7.20% 7.83% 8.35%
5.00% 6.33% 7.63% 8.00% 8.70% 9.28%
5.50% 6.96% 8.40% 8.80% 9.57% 10.20%
6.00% 7.59% 9.16% 9.60% 10.43% 11.13%
6.50% 8.23% 9.92% 10.40% 11.30% 12.06%
7.00% 8.86% 10.69% 11.20% 12.17% 12.99%
7.50% 9.49% 11.45% 12.00% 13.04% 13.91%
8.00% 10.13% 12.21% 12.80% 13.91% 14.84%
8.50% 10.76% 12.98% 13.60% 14.78% 15.77%
9.00% 11.39% 13.74% 14.40% 15.65% 16.70%
NOTE: THE MAXIMUM MARGINAL TAX RATE FOR EACH BRACKET WAS USED IN CALCULATING THE
TAXABLE YIELD EQUIVALENT. FURTHERMORE, ADDITIONAL STATE AND LOCAL TAXES PAID ON
COMPARABLE TAXABLE INVESTMENTS WERE NOT USED TO INCREASE FEDERAL DEDUCTIONS.
---------------------------------------------------------------------------------------
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
o references to ratings, rankings, and financial publications and/or performance
comparisons of Shares to certain indices;
o charts, graphs and illustrations using the Funds' returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;
o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and
o information about the mutual fund industry from sources such as the Investment
Company Institute.
A Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.
A Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Funds use in advertising may include:
LIPPER ANALYTICAL SERVICES, INC.
Ranks funds in various fund categories by making comparative calculations using
total return. Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change in net
asset value over a specified period of time. From time to time, the Fund will
quote its Lipper ranking in the "growth funds" category in advertising and sales
literature.
MORNINGSTAR, INC.
An independent rating service, is the publisher of the bi-weekly Mutual Fund
Values, which rates more than 1,000 NASDAQ-listed mutual funds of all types,
according to their risk-adjusted returns. The maximum rating is five stars, and
ratings are effective for two weeks.
STANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS (S&P 500)
Composite index of common stocks in industry, transportation, and financial and
public utility companies. Can be used to compare to the total returns of funds
whose portfolios are invested primarily in common stocks. In addition, the S & P
500 assumes reinvestments of all dividends paid by stocks listed on its index.
Taxes due on any of these distributions are not included, nor are brokerage or
other fees calculated in the S & P figures.
RUSSELL 1000 GROWTH INDEX
Consists of those Russell 2000 securities with a greater-than-average growth
orientation. Securities in this index tend to exhibit higher price-to-book and
price-earnings ratios, lower dividend yields and higher forecasted growth rates.
RUSSELL 2000 INDEX
A broadly diversified index consisting of approximately 2,000 small
capitalization common stocks that can be used to compare to the total returns of
funds whose portfolios are invested primarily in small capitalization common
stocks.
LEHMAN BROTHERS FIVE-YEAR STATE GENERAL OBLIGATION BONDS
Index comprised of all state general obligation debt issues with maturities
between four and six years. These bonds are rated A or better and represent a
variety of coupon ranges. Index figures are total returns calculated for one,
three, and twelve month periods as well as year-to-date. Total returns are also
calculated as of the index inception, December 31, 1979.
LEHMAN BROTHERS GOVERNMENT/CORPORATE (TOTAL) INDEX
Index comprised of approximately 5,000 issues which include: non-convertible
bonds publicly issued by the U.S. government or its agencies; corporate bonds
guaranteed by the U.S. government and quasi-federal corporations; and publicly
issued, fixed rate, non-convertible domestic bonds of companies in industry,
public utilities, and finance. The average maturity of these bonds approximates
nine years. Tracked by Lehman Brothers, Inc., the index calculates total returns
for one-month, three-month, twelve-month, and ten-year periods and year-to-date.
CONSUMER PRICE INDEX
Generally considered to be a measure of inflation.
DOW JONES INDUSTRIAL AVERAGE ("DJIA")
An unmanaged index representing share prices of major industrial corporations,
public utilities, and transportation companies. Produced by the Dow Jones &
Company, it is cited as a principal indicator of market conditions.
BANK RATE MONITOR NATIONAL INDEX
A financial reporting service which publishes weekly average rates of 50 leading
bank and thrift institution money market deposit accounts. The rates published
in the index are an average of the personal account rates offered on the
Wednesday prior to the date of publication by ten of the largest banks and
thrifts in each of the five largest Standard Metropolitan Statistical Areas.
Account minimums range upward from $2,500 in each institution and compounding
methods vary. If more than one rate is offered, the lowest rate is used. Rates
are subject to change at any time specified by the institution.
THE S&P/BARRA VALUE INDEX AND THE S&P/BARRA GROWTH INDEX
Constructed by Standard & Poor's and BARRA, Inc., an investment technology and
consulting company, by separating the S&P 500 Index into value stocks and growth
stocks. The S&P/BARRA Growth and S&P/BARRA Value Indices are constructed by
dividing the stocks in the S&P 500 Index according to their price-to-book
ratios. The S&P/BARRA Growth Index, contains companies with higher
price-to-earnings ratios, low dividends yields, and high earnings growth
(concentrated in electronics, computers, health care, and drugs). The Value
Index contains companies with lower price-to-book ratios and has 50% of the
capitalization of the S&P 500 Index. These stocks tend to have lower
price-to-earnings ratios, high dividend yields, and low historical and predicted
earnings growth (concentrated in energy, utility and financial sectors). The
S&P/BARRA Value and S&P/BARRA Growth Indices are capitalization-weighted and
rebalanced semi-annually. Standard & Poor's/BARRA calculates these total return
indices with dividends reinvested.
STANDARD & POOR'S MIDCAP 400 STOCK PRICE INDEX
A composite index of 400 common stocks with market capitalizations between $200
million and $7.5 billion in industry, transportation, financial, and public
utility companies. The Standard & Poor's index assumes reinvestment of all
dividends paid by stocks listed on the index. Taxes due on any of these
distributions are not included, nor are brokerage or other fees calculated in
the Standard & Poor's figures.
MUTUAL FUND MARKET
Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $4 trillion to the more than 6,700 funds available,
according to the Investment Company Institute.
FINANCIAL INFORMATION
The Financial Statements for the Funds for the fiscal year ended January 31,
2000, are incorporated herein by reference to the Annual Report to Shareholders
of the WesMark Funds dated January 31, 2000.
INVESTMENT RATINGS
STANDARD AND POOR'S LONG-TERM DEBT RATING DEFINITIONS
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong. AA--Debt rated
AA has a very strong capacity to pay interest and repay principal and differs
from the higher rated issues only in small degree.
A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB--Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB--Debt rated BB has less near-term, vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB-rating. B--Debt rated B has a greater
vulnerability to default but currently has the capacity to meet interest
payments and principal repayments. Adverse business, financial, or economic
conditions will likely impair capacity or willingness to pay interest and repay
principal. The B rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied BB or BB- rating. CCC--Debt rated CCC
has a currently identifiable vulnerability to default, and is dependent upon
favorable business, financial, and economic conditions to meet timely payment of
interest and repayment of principal. In the event of adverse business,
financial, or economic conditions, it is not likely to have the capacity to pay
interest and repay principal. The CCC rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied B or B-rating.
CC--The rating CC typically is applied to debt subordinated to senior debt that
is assigned an actual or implied CCC debt rating.
C--The rating C typically is applied to debt subordinated to senior debt which
is assigned an actual or implied CCC-debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
MOODY'S INVESTORS SERVICE LONG-TERM BOND RATING DEFINITIONS
AAA--Bonds which are rated AAA are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as gilt
edged. Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA--Bonds which are rated AA are judged to be of high quality by all standards.
Together with the AAA group, they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in AAA securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in AAA securities.
A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
BAA--Bonds which are rated BAA are considered as medium grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA--Bonds which are BA are judged to have speculative elements; their future
cannot be considered as well assured. Of ten the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class. B--Bonds which are rated B generally lack characteristics
of the desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
CAA--Bonds which are rated CAA are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest. CA--Bonds which are rated CA represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C--Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
FITCH IBCA, INC. LONG-TERM DEBT RATING DEFINITIONS
AAA--Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA--Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated F-1+.
A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB--Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
BB--Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business and financial alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.
B--Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.
CCC--Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC--Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C--Bonds are imminent default in payment of interest or principal. MOODY'S
INVESTORS SERVICE COMMERCIAL PAPER RATINGS PRIME-1--Issuers rated Prime-1 (or
related supporting institutions) have a superior capacity for repayment of
short-term promissory obligations. Prime-1 repayment capacity will normally be
evidenced by the following characteristics:
|_| Leading market positions in well established industries. |_| High rates of
return on funds employed.
|_| Conservative capitalization structure with moderate reliance on debt and
ample asset protection. |_| Broad margins in earning coverage of fixed financial
charges and high internal cash generation.
|_| Well established access to a range of financial markets and assured sources
of alternate liquidity. PRIME-2--Issuers rated Prime-1 (or related supporting
institutions) have a strong capacity for repayment of short-term promissory
obligations. This will normally be evidenced by many of the characteristics
cited above but to a lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained. STANDARD AND POOR'S COMMERCIAL PAPER RATINGS A-1--This
designation indicates that the degree of safety regarding timely payment is
strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1. FITCH IBCA, INC. COMMERCIAL PAPER RATING DEFINITIONS
FITCH-1--(Highest Grade) Commercial paper assigned this rating is regarded as
having the strongest degree of assurance for timely payment.
FITCH-2--(Very Good Grade) Issues assigned this rating reflect an assurance of
timely payment only slightly less in degree than the strongest issues.
ADDRESSES
WESMARK FUNDS
WesMark Growth Fund
WesMark Balanced Fund
WesMark Bond Fund
WesMark West Virginia Municipal Bond Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7010
DISTRIBUTOR
Edgewood Services, Inc.
Clearing Operations
P.O. Box 897
Pittsburgh, PA 15230-0897
INVESTMENT ADVISER
WesBanco Trust and Investment Services
One Bank Plaza
Wheeling, WV 26003
CUSTODIAN
WesBanco Trust and Investment Services
One Bank Plaza
Wheeling, WV 26003
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
INDEPENDENT AUDITORS
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116
APPENDIX 1: WESMARK GROWTH FUND The graphic presentation displayed here consists of a bar chart representing the annual total returns of WesMark Growth Fund as of the calendar year-end for each of two years. The `y' axis reflects the "% Total Return" beginning with "0" and increasing in increments of 12% up to 48%. The `x' axis represents calculation periods from the earliest first full calendar year-end of the Fund's start of business through the calendar year ended December 31, 1999. The light gray shaded chart features two distinct vertical bars, each shaded in charcoal, and each visually representing by height the total return percentages for the calendar year stated directly at its base. The calculated total return percentage for the Fund for each calendar year is stated directly at the top of each respective bar, for the calendar years 1998 through 1999, The percentages noted are: 14.19% and 41.99%, respectively. APPENDIX 2: WESMARK BALANCED FUND The graphic presentation displayed here consists of a bar chart representing the annual total returns of WesMark Balanced Fund as of the calendar year-end for each of ten years. The `y' axis reflects the "% Total Return" beginning with "-10" and increasing in increments of 10% up to 30%. The `x' axis represents calculation periods for the last ten calendar years of the Fund, beginning with the earliest year. The light gray shaded chart features ten distinct vertical bars, each shaded in charcoal, and each visually representing by height the total return percentages for the calendar year stated directly at its base. The calculated total return percentage for the Fund for each calendar year is stated directly at the top of each respective bar, for the calendar years 1990 through 1999. The percentages noted are: 5.15%, 14.58%, 5.57%, 11.99%, -1.93%, 26.27%, 14.32%, 18.72%, 13.49% and 12.91%, respectively. APPENDIX 3: WESMARK BOND FUND The graphic presentation displayed here consists of a bar chart representing the annual total returns of WesMark Bond Fund as of the calendar year-end for one year. The `y' axis reflects the "% Total Return" beginning with "-3" and increasing in increments of 1% up to 3%. The `x' axis represents calculation periods from the earliest first full calendar year-end of the Fund's start of business through the calendar year ended December 31, 1999. The light gray shaded chart features one distinct vertical bar, shaded in charcoal, and visually representing by height the total return percentages for the calendar year stated directly at its base. The calculated total return percentage for the Fund for each calendar year is stated directly at the top of the bar, for the calendar year 1999. The percentage noted is: -2.25%. APPENDIX 4: WESMARK WEST VIRGINIA MUNICIPAL BOND FUND The graphic presentation displayed here consists of a bar chart representing the annual total returns of WesMark West Virginia Municipal Bond Fund as of the calendar year-end for each of nine years. The `y' axis reflects the "% Total Return" beginning with "-3" and increasing in increments of 3% up to 12%. The `x' axis represents calculation periods from the earliest first full calendar year-end of the Fund's start of business through the calendar year ended December 31, 1999. The light gray shaded chart features nine distinct vertical bars, each shaded in charcoal, and each visually representing by height the total return percentages for the calendar year stated directly at its base. The calculated total return percentage for the Fund for each calendar year is stated directly at the top of each respective bar, for the calendar years 1991 through 1999. The percentages noted are: [7.34%, 5.69%, 8.01%, -1.30%, 10.26%, 3.75%, 5.53%, 5.37% and -1.74%, respectively.
PART C. OTHER INFORMATION.
Item 23. Exhibits:
(a) Conformed Copy of Declaration of Trust of the Registrant; (1)
(i) Form of Amendment No. 1 to the Declaration of Trust; (2)
(b) Copy of By-Laws of the Registrant; (1)
(c) Not applicable;
(d) Conformed Copy of Investment Advisory Contract of the Registrant;
(1)
(i) Conformed Copy of Exhibit B to the Investment Advisory
Contract; (2)
(ii) Conformed Copy of Exhibits C & D to the Investment Advisory
Contract; (4)
(e) Conformed Copy of Distributor's Contract of the Registrant;
(1)
(i) Conformed Copy of Exhibit B to the Distributor's
Contract; (2)
(ii) Conformed Copy of Exhibits C & D to the Distributor's Contract; (4)
(iii) Conformed Copy of Sales Agreement with Edgewood Services, Inc.;
(7)
(f) Not applicable;
(g) Conformed Copy of Custodian Contract of the Registrant; (1)
(i) Conformed Copy of Exhibit 1 to the Custody Contract
(Schedule of Fees); (4)
(h) (i) Conformed Copy of Agreement for Fund Accounting,
Administrative Services, and Transfer Agency Services of
the Registrant; (1)
(ii) Conformed Copy of Schedule A (Fund Accounting Fees) of the
Registrant; (4)
(iii) Conformed Copy of Schedule B (Fees and Expenses of Transfer
Agency) of the Registrant; (4)
-------------------------------------
1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed November 14, 1996 (File Nos. 333-16157 and 811-7925).
2. Response is incorporated by reference to Registrant's Pre-Effective Amendment No. 1 on
Form N-1A filed February 4, 1997 (File Nos. 333-16157 and 811-7925).
4. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 2 on Form N-1A filed January 8, 1998 (File Nos. 333-16157 and 811-7925).
7. Response is incorporated by reference to Registrant's Post-Effective Amendment No.
6 on Form N-1A filed February 22, 2000 (File Nos. 333-16157 and 811-7925).
(iv) Conformed Copy of Shareholder Services Agreement of the
Registrant; (1)
(v) Copy of Amendment No. 1 to Schedule A of the Shareholder
Services Agreement; (1)
(vi) Copy of Amendment No. 2 to Schedule A of the Shareholder
Services Agreement; (4)
(vii) Conformed Copy of Electronic Communications and
Recordkeeping Agreement; (2)
(i) Conformed Copy of Opinion and Consent of Counsel as to
legality of shares being registered; (2) (j) Conformed
Copy of Consent of Independent Auditors; + (k) Not applicable;
(l) Conformed Copy of Initial Capital Understanding;(2) (m)
(i) Conformed Copy of Distribution Plan; (1)
(ii) Conformed Copy of Exhibit B to the Distribution
Plan; (2) (iii)Conformed Copy of Exhibits C & D to the
Distribution
Plan; (4)
(n) Not applicable;
(o) (i) Conformed copy of Power of Attorney of
the Registrant; +
(ii) Conformed copy of Power of Attorney of
Trustee of the Registrant +
(iii) Conformed copy of Power of Attorney of
Trustee of the Registrant +
(iv) Conformed copy of Power of Attorney of
Trustee of the Registrant +
(v) Conformed copy of Power of Attorney of Trustee of
the Registrant; +
(p) (i) Code of Ethics for Access Persons +
(ii) WesBanco Bank Inc. Code of Ethics +
------------------------------------
+ All exhibits filed electronically
1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed November 14, 1996 (File Nos. 333-16157 and 811-7925).
2. Response is incorporated by reference to Registrant's Pre-Effective Amendment No. 1 on
Form N-1A filed February 4, 1997 (File Nos. 333-16157 and 811-7925).
4. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 2 on Form N-1A filed January 8, 1998 (File Nos. 333-16157 and 811-7925).
Item 24. Persons Controlled by or Under Common Control with Registrant
None
Item 25. Indemnification: (1)
------------------------------------
1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed November 14, 1996 (File Nos. 333-16157 and 811-7925).
Item 26. Business and Other Connections of Investment Adviser:
For a description of the other business of the investment adviser,
see the section entitled "Who Manages the Fund - Adviser's
Background" in Part A.
The principal executive officers and directors of the Trust's
Investment Adviser are set forth in the following tables. Unless
otherwise noted, the position listed under other Substantial
Business, Profession, Vocation, or Employment is with WesBanco Bank
Wheeling.
(1) (2) (3)
Other Substantial
Position with Business, Profession,
NAME THE ADVISER VOCATION OR EMPLOYMENT
Edward M. George Chairman of the President and CEO,
Board/Director WesBanco, Inc.
Paul M. Limbert Vice Chairman of the
Board/Director
Dennis P. Yaeger Vice Chairman of the Board
Kristine N. Molnar President, CEO, and Director
Mari R. Gessler Secretary
Donald K. Jebbia President, Elm Former President and
Grove Branch CEO, WesBanco Bank Elm
Grove
David L. Mendenhall President - Wetzel/Tyler
County Division, WesBanco
Bank Wheeling
Jon M. Rogers Executive Vice President,
New Martinsville Office
(1) (2) (3)
Other Substantial
Position with Business, Profession,
NAME THE ADVISER VOCATION OR EMPLOYMENT
Jerome B. Schmitt Executive Vice President,
Trusts and Investment
Stephen E. Hannig Senior Vice President,
Branch Administration
Thomas B. McGaughy Senior Vice President,
Assistant Secretary, Trusts
John W. Moore, Jr. Senior Vice President,
Human Resources
David L. Pell Senior Vice President/
Senior Loan Officer
Edward G. Sloane, Sr. Senior Vice President/MIS
Bernard Easley Senior Vice President -
Retail Lending
Lloyd E. Walker, Jr. Senior Vice President-
Loans & Assistant Compliance
Officer, Elm Grove Branch
Peter W. Jaworski Senior Vice President - Credit
Administration
Edward G. Sloane, Jr. Senior Vice President and
Controller
Gregory W. Adkins Vice President
Paul J. Becka Vice President,
Information Technology
J. Kevin Diserio Vice President
John D. Faulkner Vice President
Lawrence P. Finneran Vice President/Manager,
Hancock County
Wyatt K. Hoffman Vice President - Credit
Quality
W. Taylor McCluskey Vice President & Senior
Trust Officer
(1) (2) (3)
Other Substantial
Position with Business, Profession,
NAME THE ADVISER VOCATION OR EMPLOYMENT
Kevin D. McFarland Vice President
Michael E. Klick Vice President - Manager -
Consumer Credit Dept.
James G. Thompson Vice President - and
Assistant Controller
Roanne M. Burech Vice President -
Branch Administration
David B. Dalzell, Jr. Vice President &
Senior Trust Officer
David B. Ellwood Vice President
Patricia A. Lowe Vice President - Human Resources
D. Reeed Burke Vice President - Branch Manager,
Barnesville Office
Linda Miller Vice President, Operations,
McMechen Office
Michael Schwarz Vice President - Credit Risk
Management
R. Bruce Bandi Assistant Vice President &
Senior Trust Officer and
Assistant Secretary
Janet D. Campeti Assistant Vice President -
Operations
Mary Ruth Cilles Assistant Vice President -
Operations
Jeff Grandstaff Assistant Vice President -
Check Processing
John M. McGee Assistant Vice President -
Assistant Manager - Consumer
Credit Dept.
Thomas A. Medovic Assistant Vice President
W. Terrence Naughton Assistant Vice President -
Technology Services
(1) (2) (3)
Other Substantial
Position with Business, Profession,
NAME THE ADVISER VOCATION OR EMPLOYMENT
Cynthia M. Perring Assistant Vice President &
Senior Trust Officer
Robert F. Pretulovich Assistant Vice President/
Branch Manager, Weirton Main
Street Office
Matthew W. Pribus Assistant Vice President -
Operations
Frederick J. Quinn Assistant Vice President/
Loans, Weirton Main
Street Office
George P. Schramm Assistant Vice President
Gregory Shirak Assistant Vice President/Branch
Manager - Woodsfield and
Barnesville Offices
Roger E. Winters Assistant Vice President &
Senior Trust Officer
Judith M. Yaeger Assistant Vice President -
Steelton Office
James E. Altmeyer Director President, Altmeyer
Funeral Homes, Inc.
Ray A. Byrd Director Partner, Schrader,
Byrd & Companion PLLC
Fred T. Chambers Director Funeral Director,
Chambers and James Funeral Homes
D. Duane Cummins, Ph.D. Director President, Bethany
College
Donald R. Donell Director President, Starvaggi
Industries, Inc.
James C. Gardill Director Chairman of the Board,
WesBanco, Inc.;
Partner, Phillips, Gardill, Kaiser &
Altmeyer
(1) (2) (3)
Other Substantial
Position with Business, Profession,
NAME THE ADVISER VOCATION OR EMPLOYMENT
Thomas M. Hazlett Director Partner, Harper &
Hazlett
James D. Hesse Director President and CEO,
Wheeling-Nisshin, Inc.
Roland L. Hobbs Director Chairman, Wheeling Park
Commission; Former Chairman, President and
CEO, WesBanco, Inc.
John M. Karras Director President, Karras
Painting Company, Inc.
James B. Kepner Director Vice President, Kepner
Funeral Homes, Inc.
David L. Mendenhall Director President, Wetzel/Tyler
County Division,
WesBanco Bank Wheeling
George M. Molnar Director Retired; Formerly,
President, Weirton Office, WesBanco Bank
Wheeling
Rizal V. Pangilinan Director Ophthalmologist
F.M. Dean Rohrig Director Lawyer
C. Jack Savage Director President, Savage
Construction Company
James G. Squibb, Jr. Director President and General
Manager, WTRF-TV
Joan C. Stamp Director
Carter W. Strauss Director President, Strauss
Industries, Inc.
Gary E. West Director Chairman, Valley
National Gases, Inc.
William E. Witschey Director President, Witschey's
Market, Inc.
John E. Wright, III Director Retired President and
COO, Wheeling-Nisshin, Inc.
Item 27. Principal Underwriters:
(a) Edgewood Services, Inc. the Distributor for shares of the Registrant,
acts as principal underwriter for the following open-end investment
companies, including the Registrant: Excelsior Funds, Excelsior Funds,
Inc., (formerly, UST Master Funds, Inc.), Excelsior Institutional Trust,
Excelsior Tax-Exempt Funds, Inc. (formerly, UST Master Tax-Exempt Funds,
Inc.), FTI Funds, FundManager Portfolios, Great Plains Funds, Old
Westbury Funds, Inc., The Riverfront Funds, Robertsons Stephens
Investment Trust, WesMark Funds, WCT Funds.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
------------------ ------------------------ ----------------
Lawrence Caracciolo Director, President, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Arthur L. Cherry Director, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
J. Christopher Donahue Director, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Thomas R. Donahue Director and Executive --
5800 Corporate Drive Vice President,
Pittsburgh, PA 15237-7002 Edgewood Services, Inc.
Christine Johnson Vice President, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Ernest L. Linane Vice President, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Denis McAuley, III Treasurer, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Timothy S. Johnson Secretary, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Victor R. Siclari Assistant Secretary, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
(c) Not applicable
Item 28. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Registrant Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Federated Shareholder P.O. Box 8600
Services Company("Transfer Agent, Boston, MA 02266-8600
Dividend Agent and Dividend
dispersing Agent")
Federated Administrative Services Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
WesBanco Trust and Investment Services One Bank Plaza
("Adviser" and "Custodian") Wheeling, WV 26003
Item 29. Management Services: Not applicable.
Item 30. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, WESMARK FUNDS, certifies that it
meets all of the requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 28th day of April, 2000.
WESMARK FUNDS
BY: /s/ C. Todd Gibson
C. Todd Gibson, Assistant Secretary
Attorney in Fact for John F. Donahue
April 28, 2000
Pursuant to the requirements of the Securities Act of 1933, Registration
Statement has been signed below by the following person in the capacity and on
the date indicated:
NAME TITLE DATE
---- ----- ----
By: /s/ C. Todd Gibson
C. Todd Gibson Attorney In Fact April 28, 2000
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Edward C. Gonzales* President and Treasurer
(Principal Financial and
Accounting Officer)
J. Christopher Donahue* Executive Vice President and Trustee
John W McGonigle* Executive Vice President and Secretary
Richard B. Fisher Vice President
Thomas G. Bigley* Trustee
Nicholas P. Constantakis* Trustee
John T. Conroy, Jr.* Trustee
John F. Cunningham* Trustee
Lawrence D. Ellis, M.D.* Trustee
Peter E. Madden* Trustee
Charles F. Mansfield, Jr.* Trustee
John E. Murray, Jr.* Trustee
Marjorie P. Smuts* Trustee
John S. Walsh* Trustee
* By Power of Attorney
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