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.__7__ __X__
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 8 ......................................... 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 _________________
pursuant to paragraph (b) _X_ 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
Balanced Fund
Prospectus
April 30, 2000
WESMARK BALANCED FUND
A Portfolio of WesMark Funds
A mutual fund seeking capital appreciation and income by investing primarily in
equity and debt securities.
SHARES OF THE WESMARK BALANCED FUND, LIKE SHARES OF ALL MUTUAL FUNDS, ARE NOT
BANK DEPOSITS, FEDERALLY INSURED, OR GUARANTEED, AND MAY LOSE VALUE.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
CONTENTS
Fund Goal, Strategies, and Risks 1
Performance Summary 2
What are the Fund's Fees and Expenses? 3
What are the Principal Securities in Which the Fund Invests? 4
What are the Specific Risks of Investing in the Fund? 7
What do Shares Cost? 8
How is the Fund Sold? 9
How to Purchase Shares 9
How to Redeem and Exchange Shares 11
Account and Share Information 13
Who Manages the Fund? 13
Financial Information 15
April 30, 2000
FUND GOAL, STRATEGIES AND RISKS
WHAT IS THE FUND'S GOAL?
The Fund's goal (investment objective) is capital appreciation and income.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The 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 investment adviser, WesBanco Wheeling
(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.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
As with all mutual funds, the Fund's investments are subject to risks that could
cause their value to go down. Since the Fund invests in a wide variety of
securities, the Fund is subject to the risks of both stock market volatility and
the risks of debt securities.
The value of the securities in the Fund's portfolio will go up and down, and
therefore the value of your Fund shares will also change. These changes could be
a long-term trend or drastic, short-term movement. The Fund's portfolio will
reflect changes in the prices of individual portfolio securities or general
changes in security valuations. The prices of fixed-rate debt securities change
in the opposite direction as interest rates. Therefore, if interest rates
increase, the value of the Fund's portfolio securities, and therefore the Fund's
shares, may go down. Consequently, the Fund's share price could decline and you
could lose money. Other factors that may reduce the Fund's returns include
defaults, an increase in the risk of defaults on portfolio securities, or early
redemptions or "calls".
The Fund's shares are not deposits or obligations of any bank, are not
endorsed or guaranteed by any bank and are not insured or guaranteed by the U.S.
government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other government agency.
PERFORMANCE SUMMARY
RISK/RETURN BAR CHART AND TABLE*
[Graphic]
THE BAR CHART SHOWS THE VARIABILITY OF THE FUND'S TOTAL RETURNS ON A YEARLY
BASIS. THE FUND'S SHARES ARE NOT SOLD SUBJECT TO A SALES CHARGE (LOAD). THE
TOTAL RETURNS DISPLAYED ABOVE ARE BASED UPON NET ASSET VALUE.
THE FUND'S YEAR-TO-DATE TOTAL RETURN AS OF THE MOST RECENT CALENDAR QUARTER
(MARCH 31, 1999) WAS 1.62%. 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 AVERAGE ANNUAL TOTAL RETURN AS OF THE
YEAR ENDED DECEMBER 31, 1998.
AVERAGE ANNUAL TOTAL RETURN*
1 5 10
YEAR YEARS YEARS
Fund1 13.4913.78%12.64%
LBGCI 9.47% 7.30% 9.33%
LBFA 7.34%13.87%13.32%
1 THE START OF PERFORMANCE DATE FOR THE PREDECESSOR COMMON TRUST FUND WAS
OCTOBER 31, 1961.
THE TABLE SHOWS THE FUND'S TOTAL RETURNS AVERAGED OVER A PERIOD OF YEARS
RELATIVE TO LEHMAN BROTHERS GOVERNMENT/CORPORATE (TOTAL) INDEX, A BROAD-BASED
MARKET INDEX COMPRISED OF APPROXIMATELY 5,000 BOND ISSUES WITH AN APPROXIMATE
AVERAGE MATURITY OF NINE YEARS AND LIPPER BALANCED FUND AVERAGE (LBFA), AN
AVERAGE OF FUNDS WITH SIMILAR INVESTMENT OBJECTIVES.
PAST PERFORMANCE DOES NOT NECESSARILY PREDICT FUTURE PERFORMANCE. THIS
INFORMATION PROVIDES YOU WITH HISTORICAL PERFORMANCE INFORMATION SO THAT YOU CAN
ANALYZE WHETHER THE FUND'S INVESTMENT RISKS ARE BALANCED BY ITS POTENTIAL
REWARDS. * 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 STATEMENT
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.
WHAT ARE THE FUND'S FEES AND EXPENSES?
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES
FEES PAID DIRECTLY FROM YOUR INVESTMENT
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage 4.75%
of offering price)
Maximum Deferred Sales Charge (Load) (as a percentage of original None purchase
price or redemption proceeds, as applicable) Maximum Sales Charge (Load) Imposed
on Reinvested Dividends (and None other Distributions) (as a percentage of
offering price). Redemption Fee (as a percentage of amount redeemed, if
applicable) None Exchange Fee None
ANNUAL FUND OPERATING EXPENSES (BEFORE WAIVER)1
EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
Management Fee2 0.75%
Distribution (12b-1) Fee3 0.25%
Shareholder Services Fee4 0.25%
Other Expenses 0.49%
Total Annual Fund Operating Expenses 1.74%
1 Although not contractually obligated to do so, the adviser,
shareholder services agent, and distributor waived certain amounts. These are
shown below along with the net expenses the Fund ACTUALLY PAID for the fiscal
year endedJanuary 31, 1999.
Total Waiver of Fund Expenses 0.59%
Total Annual Fund Operating Expenses (after waiver) 1.15%
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
the Fund (after the voluntary waiver) was 0.66% for the year ended January 31,
1999.
3 The Fund did not pay or accrue the distribution (12b-1) fee during the year
ended January 31, 1999. The Fund has no present intention of paying or
accruing the distribution (12b-1) fee during the year ended January 31, 2000.
4 The Fund did not pay or accrue the shareholder services fee during the year
ended January 31, 1999. The Fund has no present intention of paying or
accruing the shareholder services fee during the year ended January 31, 2000.
EXAMPLE
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. Expenses assuming no
redemption are also shown. The Example also assumes that your investment has a
5% return each year and that the Fund operating expenses are BEFORE WAIVERS as
shown in the Table and remain the same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
1 YEAR3 5 10
YEARS YEARS YEARS
$643 $997$1,374 $2,429
WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?
EQUITY SECURITIES
Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities. The 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 Fund may invest.
COMMON STOCKS
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
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. The Fund may also treat
such redeemable preferred stock as a fixed income security when the stock is
held for dividend income.
DEPOSITARY RECEIPTS
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.
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 the 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 Fund treats 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. The 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.
MORTGAGE BACKED SECURITIES
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.
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.
IOS AND POS
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
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.
CONVERTIBLE SECURITIES
Convertible securities are fixed income securities that the Fund has the option
to exchange for equity securities at a specified conversion price. The option
allows the Fund to realize additional returns if the market price of the equity
securities exceeds the conversion price. For example, the 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, the 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 the
Fund to realize some of the potential appreciation of the underlying equity
securities with less risk of losing its initial investment.
The Fund treats convertible securities as both fixed income and equity
securities for purposes of its investment policies and limitations, because of
their unique characteristics.
INVESTMENT RATINGS FOR INVESTMENT GRADE SECURITIES
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, the Fund must rely entirely upon the Adviser's credit assessment that
the security is comparable to investment grade.
TEMPORARY DEFENSIVE INVESTMENTS
The Fund may temporarily depart from its principal investment strategies by
investing its assets in cash, cash items, and shorter-term, higher-quality debt
securities and similar obligations. It may do this to minimize potential losses
and maintain liquidity to meet shareholder redemptions during adverse market
conditions. This may cause the Fund to give up greater investment returns to
maintain the safety of principal, that is, the original amount invested by
shareholders.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
STOCK MARKET RISKS
o.....The value of stocks in the Fund's portfolio will rise and fall. These
fluctuations could be a sustained trend or a drastic movement. The Fund's
portfolio will reflect changes in prices of individual portfolio stocks or
general changes in stock valuations. Consequently, the Fund's share price may
decline.
o The Adviser attempts to manage market risk by limiting the amount the Fund
invests in each company's equity securities. However, diversification will
not protect the Fund against widespread or prolonged declines in the stock
market.
INTEREST RATE RISKS
o 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.
o 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
o 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, the
Fund will lose money.
o 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, the Fund must rely entirely upon the Adviser's credit
assessment.
o 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.
o Credit risk includes the possibility that a party to a transaction (such as a
repurchase agreement) involving the Fund will fail to meet its obligations.
This could cause the Fund to lose the benefit of the transaction or prevent
the Fund from selling or buying other securities to implement its investment
strategy.
CALL AND PREPAYMENT RISKS
o 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.
o If a fixed income security is called, the Fund may have to reinvest the
proceeds in other fixed income securities with lower interest rates, higher
credit risks, or other less favorable characteristics.
o Generally, homeowners have the option to prepay their mortgages at any time
without penalty. Homeowners frequently refinance high interest rate mortgages
when mortgage rates fall. This results in the prepayment of mortgage backed
securities with higher interest rates. Conversely, prepayments due to
refinancings decrease when mortgage rates increase. This extends the life of
mortgage backed securities with lower interest rates. As a result, increases
in prepayments of high interest rate mortgage backed securities, or decreases
in prepayments of lower interest rate mortgage backed securities, may reduce
their yield and price. This relationship between interest rates and mortgage
prepayments makes the price of mortgage backed securities more volatile than
most other types of fixed income securities with comparable credit risks.
INVESTMENT STYLE RISKS
o Due to their relatively high valuations, growth stocks are typically more
volatile than value stocks. For instance, the price of a growth stock may
experience a larger decline on a forecast of lower earnings, a negative
fundamental development, or an adverse market development. Further, growth
stocks may not pay dividends or may pay lower dividends then value stocks.
This means they depend more on price changes for returns and may be more
adversely affected in a down market compared to value stocks that pay higher
dividends.
o Due to their relatively low valuations, value stocks are typically less
volatile than growth stocks. For instance, the price of a value stocks may
experience a smaller increase on a forecast of higher earnings, a positive
fundamental development, or positive market development. Further, value
stocks tend to have higher dividends than growth stocks. This means they
depend less on price changes for returns and may lag behind growth stocks in
an up market.
WHAT DO SHARES COST?
You can purchase, redeem, or exchange shares any day the New York Stock Exchange
(NYSE) and Federal Reserve wire system are open. When the Fund receives your
transaction request in proper form, it is processed at the next determined net
asset value (NAV) plus 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 required minimum initial investment for Fund shares is $1,000, unless the
investment is in an Individual Retirement Account, in which case the minimum
initial investment is $500. Subsequent investments 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
membe`rs of their immediate family. The 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.
The following table summarizes the minimum required investment amount and the
maximum sales charge, if any, that you will pay on an investment in the Fund.
Keep in mind that investment professionals may charge you fees for their
services in connection with your Share transactions.
SALES CHARGE WHEN YOU PURCHASE
Sales Charge as a Sales Charge as a
Amount of Investment Percentage Percentage of NAV
of Public Offering
Price
Less than $50,000 4.75% 4.99%
$50,000 but less than 3.50% 3.63%
$100,000
$100,000 but less than 2.50% 2.56%
$250,000
$250,000 but less than 1.50% 1.52%
$500,000
$500,000 but less than 1.00% 1.01%
$1,000,000
$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:
o trust and fiduciary accounts of WesBanco;
o certain defined benefit/contribution plans;
o employees, directors and officers of WesBanco, Federated Investors and their
affiliates, and members of their immediate families;
o investments made after signing a Letter of Intent;
o investments of $1,000,000 or more; and
o exchanges between WesMark Funds
In addition, if your account was opened prior to October 1, 1999, all subsequent
purchases will not be subject to the sales charge. Contact WesBanco Securities,
Inc. for further information on reducing or eliminating the sales charge.
HOW IS THE FUND SOLD?
Edgewood Services, Inc. (Distributor) markets the shares described in this
prospectus to customers of WesBanco Bank Wheeling and its affiliates and
institutions or individuals, directly from the 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).
RULE 12B-1 PLAN
The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to
the Distributor and investment professionals for the sale, distribution and
customer servicing of the Fund's 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 Fund is
not currently paying or accruing fees under the Plan.
HOW TO PURCHASE SHARES
You may purchase shares directly from the Fund by calling WesMark Funds
Shareholder Services at 1-800-368-3369, through WesBanco Securities, Inc. or
through an investment professional. Texas residents must purchase shares of the
Fund through the Distributor at 1-888-898-0600. The Fund reserves the right to
reject any request to purchase or exchange shares.
DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and
o Send your payment to the Fund by Federal Reserve wire or check. 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 the
Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the Fund
and the Shares will be priced at the next calculated NAV after the Fund receives
the order.
BY WIRE
To purchase shares by Federal Reserve wire, contact your account officer for
wiring instructions. Wire orders will only be accepted on days on which the
Fund, WesBanco and the Federal Reserve Banks are open for business.
BY CHECK
Make your check payable to "WesMark Balanced Fund", note your account number on
the check (for existing shareholders only), and mail it to:
WesMark Funds Shareholder Services
WesBanco Bank Wheeling
One Bank Plaza
Wheeling, WV 26003
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third-party checks (checks originally payable to someone other than
you or the Fund).
THROUGH WESBANCO SECURITIES, INC.
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) to receive the next calculated NAV (plus applicable
sales charge), if the investment professional forwards the order to the Fund on
the same day and the Fund receives payment within three business days. You will
become the owner of shares and receive dividends when the Fund receives your
payment.
THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and
o Submit your purchase order to the 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 if the investment professional forwards the
order to the Fund on the same day and the Fund receives payment within
three business days. You will become the owner of shares and receive
dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
THROUGH AN EXCHANGE
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.
BY SYSTEMATIC INVESTMENT PROGRAM
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 the Fund or your investment
professional. The minimum investment amount for SIPs is $100.
BY AUTOMATED CLEARINGHOUSE (ACH)
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.
RETIREMENT INVESTMENTS
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.
HOW TO REDEEM AND EXCHANGE SHARES
You should redeem or exchange shares:
o directly from the Fund if you purchased shares directly from the Fund; or
o through an investment professional if you purchased shares through an
investment professional.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem or exchange shares by calling your account officer or WesMark
Funds Shareholder Services at 1-800-368-3369 once you have completed the
appropriate authorization form for telephone transactions or by calling your
account officer. 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.
BY MAIL
You may redeem or exchange shares by mailing a written request to the Fund. You
will receive a redemption amount based on the next calculated NAV after the
Fund receives your written request in proper form.
Send requests by mail to:
WesMark Funds Shareholder Services
WesBanco Bank Wheeling
One Bank Plaza
Wheeling, WV 26003 All requests must include:
o Fund Name, account number and account registration;
o amount to be redeemed or exchanged;
o signatures of allshareholders exactly as registered; and
o IF EXCHANGING, the Fund Name, account number and account registration into
which you are exchanging.
Call the Fund or your investment professional if you need special instructions.
THROUGH WSI 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) to receive the next calculated NAV (plus applicable
sales charge), you will receive a redemption amount based on that day's NAV.
THROUGH AN 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
the Fund receives the order from your investment professional.
SIGNATURE GUARANTEES Signatures must be guaranteed if:
o your redemption will be sent to an address other than the address of record; o
your redemption will be sent to an address of record that was changed within
the last 30 days;
o a redemption is payable to someone other than the shareholder(s) of
record; or
o IF EXCHANGING (TRANSFERRING) into another fund with a different shareholder
registration.
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.
PAYMENT METHODS FOR REDEMPTIONS
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:
o an electronic transfer to your account at a financial institution that is an
ACH member; or
o wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
REDEMPTION IN KIND
Although the Fund intends to pay share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
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: o
to allow your purchase to clear; o during periods of market volatility; or o
when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
REDEMPTIONS FROM RETIREMENT ACCOUNTS
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in the Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
EXCHANGE PRIVILEGES
You may exchange shares of the Fund into shares of another WesMark Fund. To do
this, you must: o ensure that the account registrations are identical; o meet
any minimum initial investment requirements; and o receive a prospectus for the
fund into which you wish to exchange. An exchange is treated as a redemption and
a subsequent purchase, and is a taxable transaction.
The Fund may modify or terminate the exchange privilege at any time. The
Fund's management or investment adviser may determine from the amount, frequency
and pattern of exchanges that a shareholder is engaged in excessive trading that
is detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other WesMark Funds.
SYSTEMATIC WITHDRAWAL/ EXCHANGE PROGRAM
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.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund does not issue share certificates.
ACCOUNT AND SHARE INFORMATION
CONFIRMATIONS AND ACCOUNT STATEMENTS
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 AND CAPITAL GAINS
The Fund declares and pays any dividends monthly to shareholders. Dividends are
paid to all shareholders invested in the Fund 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 Fund pays 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 the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.
ACCOUNTS WITH LOW BALANCES
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.
TAX INFORMATION
The Fund sends 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 the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.
Fund distributions are expected to be both dividends and capital gains.
Redemptions and exchanges are taxable sales. Please consult your tax adviser
regarding your federal, state, and local tax liability.
WHO MANAGES THE FUND?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, WesBanco Bank Wheeling. The Adviser manages the Fund's assets,
including buying and selling portfolio securities. The Adviser's address is One
Bank Plaza, Wheeling, WV 26003.
ADVISER'S BACKGROUND
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 59 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 $685 million as of December 31, 1998. 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 departments of the Corporation are valued at $2.8
billion.
THE FUND'S PORTFOLIO MANAGERS ARE:
JEROME B. SCHMITT
Jerome B. Schmitt has been a co-portfolio manager for the Fund since its
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
David B. Ellwood has been a co-portfolio manager for the Fund since its
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.
ADVISORY FEES
The Adviser receives an annual investment advisory fee of 0.75% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.
FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
The Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the 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 the Fund, assuming reinvestment of all dividends and capital
gains.
This information has been audited by Deloitte & Touche LLP, whose report,
along with the Fund's audited financial statements, is included in the Annual
Report.
FINANCIAL HIGHLIGHTS
(For A share outstanding throughout the period)
PERIOD ENDED JANUARY 31 19991 2000
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.24
Net realized and unrealized gain on investments 0.30
Total from investment operations 0.54
LESS DISTRIBUTIONS:
Distributions from net investment income (0.24)
Distributions from net realized gain on investments (0.49)
Total distributions (0.73)
NET ASSET VALUE, END OF PERIOD $9.81
TOTAL RETURN2 5.50%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.15% 4
Net investment income 3.03% 4
Expense waiver/reimbursement3 0.09% 4
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $60,88
7
Portfolio turnover 57%
1 REFLECTS OPERATIONS FOR THE PERIOD FROM APRIL 20, 1998 (DATE OF INITIAL PUBLIC
INVESTMENT) TO JANUARY 31, 2000.
2 BASED ON NET ASSET VALUE, WHICH DOES NOT REFLECT THE SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE, IF APPLICABLE.
3 THIS VOLUNTARY EXPENSE DECREASE IS REFLECTED IN BOTH THE EXPENSE AND NET
INVESTMENT INCOME RATIOS SHOWN ABOVE.
4 COMPUTED ON AN ANNUALIZED BASIS.
Futher information about the Fund's performance is contained in the Fund's
Annual Report, dated January 31, 2000, which can be obtained free of charge.
Prospectus
Dated April 30, 2000
A Statement of Additional Information (SAI) dated April 30, 2000, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Fund's annual and semi-annual reports to
shareholders. The annual and semi-annual reports discuss market conditions and
investment strategies that significantly affected the Fund's performance during
its last fiscal year. To obtain the SAI, the annual and semi-annual reports and
other information without charge call your investment professional or the Fund
at 1-800-368-3369.
You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.
WesMark Balanced Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7010
Edgewood Services, Inc., Distributor
Investment Company Act File No. 811-7925
Cusip 951025303
G01970-09 (4/00)
STATEMENT OF ADDITIONAL INFORMATION
WESMARK BALANCED FUND
A Portfolio of WesMark Funds
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for WesMark Balanced Fund (Fund), dated
April 30, 2000. This SAI incorporates by reference the Fund's Annual Report.
Obtain the prospectus or the Annual Report without charge by calling
1-800-368-3369.
April 30, 2000
CONTENTS
How is the Fund Organized?
Securities in Which the Fund Invests
What do Shares Cost?
How is the Fund Sold?
Exchanging Securities for Shares
Subaccounting Services
Redemption in Kind
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Financial Information
Investment Ratings
Addresses
G01970-10(4/00)
HOW IS THE FUND ORGANIZED?
The Fund is a diversified portfolio of WesMark Funds (Trust). The 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 Fund is a portfolio of the Trust and was declared effective on March 24,
1998. The Fund's investment adviser is WesBanco Bank Wheeling (Adviser).
SECURITIES IN WHICH THE FUND INVESTS
In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.
SECURITIES DESCRIPTIONS AND TECHNIQUES
EQUITY SECURITIES
Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities. The 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 Fund 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 the 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). The 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.
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.
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, the 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 the 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.
The Fund may also trade derivative contracts over-the-counter (OTC) in
transactions negotiated directly between the 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 the 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 the Fund's exposure to interest
rate and currency risks, and may also expose the Fund to liquidity and leverage
risks. OTC contracts also expose the Fund to credit risks in the event that a
counterparty defaults on the contract.
The 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.
The 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 the 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 the Fund may be
required to take delivery of the underlying asset when its current market
price is lower than the exercise price; When the 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.
The 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 the 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.
The 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 the Fund may be required to take delivery of the underlying asset when its
current market price is lower than the exercise price.
When the Fund writes options on futures contracts, it will be subject to margin
requirements similar to those applied to futures contracts.
SPECIAL TRANSACTIONS
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the 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 the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
The Fund's 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 the 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 the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the 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 the 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, the Fund agrees to accept
any security that meets specified terms. For example, in a TBA
mortgage-backed transaction, the 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 the 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
The 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 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
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, the 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 the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below. Bond Market Risks
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, the 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, the 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
the Fund will fail to meet its obligations. This could cause the Fund to lose
the benefit of the transaction or prevent the 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, the Fund may have to reinvest the proceeds in
other fixed income securities with lower interest rates, higher credit risks,
or other less favorable characteristics.
INVESTMENT LIMITATIONS
BORROWING MONEY AND ISSUING SENIOR SECURITIES
The Fund 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 its total assets, the
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.
UNDERWRITING
The Fund may not underwrite the securities of other issuers, except that the
Fund may engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.
INVESTING IN REAL ESTATE
The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund 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 Fund may exercise its 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 Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.
LENDING CASH OR SECURITIES
The Fund may not make loans, provided that this restriction does not prevent the
Fund 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 Fund will not make investments that will result in the concentration of its
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.
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. 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 Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities, and further provided that the Fund may make margin deposits in
connection with its use of financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any of its 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 Fund 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 the Fund's net assets.
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 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.'"
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.
For purposes of its policies and limitations, the Fund considers 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 the Fund's portfolio securities are determined as follows:
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; 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; 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; 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 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?
The Fund's net asset value (NAV) per Share fluctuates and is based on the market
value of all securities and other assets of the 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
Federated 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 Fund's 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
The following individuals and their immediate family members may buy Shares at
NAV without any sales charge because there are nominal sales efforts associated
with their purchases the Trustees, employees, directors and officers of
WesBanco, Federated Investors and sales representatives of the Fund, the
Adviser, the Distributor and their affiliate, 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 IS THE FUND SOLD?
Under the Distributor's Contract with the Fund, 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 Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and Share redemptions. In
addition, the Fund's service providers that receive asset-based fees also
benefit from stable or increasing Fund assets.
The Fund may compensate the Distributor more or less than its actual marketing
expenses. In no event will the Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.
SHAREHOLDER SERVICES
The Fund 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 Fund 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 Fund reserves the right to determine
whether to accept your securities and the minimum market value to accept. The
Fund will value your securities in the same manner as it values its 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 Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is 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 Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's 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 the 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 _____, the following shareholder(s) owned of record, beneficially, or
both, 5% or more of outstanding shares of the Fund: _____
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 Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The 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.
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 _____, the Fund's Board and Officers as a group owned less than 1% of the
Fund's outstanding shares.
- ------------------------------------------------------------------------------
NAME
BIRTH DATE AGGREGATE
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
POSITION WITH TRUST FOR PAST FIVE YEARS 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.
- ---------------------
THOMAS G. BIGLEY Director or Trustee of the Federated
Birth Date: Fund Complex; Director, Member of $
February 3, 1934 Executive Committee, Children's
15 Old Timber Trail Hospital of Pittsburgh; Director,
Pittsburgh, PA Robroy Industries, Inc. (coated steel
TRUSTEE conduits/computer storage equipment);
formerly: Senior Partner, Ernst &
Young LLP; Director, MED 3000 Group,
Inc. (physician practice management);
Director, Member of Executive
Committee, University of Pittsburgh.
- ---------------------
JOHN T. CONROY, JR. Director or Trustee of the Federated
Birth Date: June Fund Complex; President, Investment $
23, 1937 Properties Corporation; Senior Vice
Grubb & President, John R. Wood and
Ellis/Investment Associates, Inc., Realtors; Partner or
Properties Trustee in private real estate
Corporation ventures in Southwest Florida;
3201 Tamiami Trail formerly: President, Naples Property
North Management, Inc. and Northgate Village
Naples, FL Development Corporation.
TRUSTEE
- ---------------------
NICHOLAS P. Director or Trustee of the Federated
CONSTANTAKIS Fund Complex; Director, Michael Baker $
Birth Date: Corporation (engineering,
September 3, 1939 construction, operations and technical
175 Woodshire Drive services); formerly: Partner, Andersen
Pittsburgh, PA Worldwide SC.
TRUSTEE
- ---------------------
JOHN F. CUNNINGHAM++ Director or Trustee of some of the
Birth Date: March Federated Fund Complex; Chairman, $
5, 1943 President and Chief Executive Officer,
353 El Brillo Way Cunningham & Co., Inc. (strategic
Palm Beach, FL business consulting); Trustee
TRUSTEE Associate, Boston College; Director,
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.
- ---------------------
LAWRENCE D. ELLIS, Director or Trustee of the Federated
M.D.* Fund Complex; Professor of Medicine, $
Birth Date: October University of Pittsburgh; Medical
11, 1932 Director, University of Pittsburgh
3471 Fifth Avenue Medical Center - Downtown;
Suite 1111 Hematologist, Oncologist, and
Pittsburgh, PA Internist, University of Pittsburgh
TRUSTEE Medical Center; Member, National Board
of Trustees, Leukemia Society of
America.
- ---------------------
PETER E. MADDEN Director or Trustee of the Federated
Birth Date: March Fund Complex; formerly: $
16, 1942 Representative, Commonwealth of
One Royal Palm Way Massachusetts General Court;
100 Royal Palm Way President, State Street Bank and Trust
Palm Beach, FL Company and State Street Corporation.
TRUSTEE
Previous Positions: Director, VISA USA
and VISA International; Chairman and
Director, Massachusetts Bankers
Association; Director, Depository
Trust Corporation; Director, The
Boston Stock Exchange.
- ---------------------
CHARLES F. Director or Trustee of some of the
MANSFIELD, JR.++ Federated Fund Complex; Executive Vice $
Birth Date: April President, Legal and External Affairs,
10, 1945 Dugan Valva Contess, Inc. (marketing,
80 South Road communications, technology and
Westhampton Beach, consulting).; formerly Management
NY Consultant.
TRUSTEE
Previous Positions: Chief Executive 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.
- ---------------------
JOHN E. MURRAY, Director or Trustee of the Federated
JR., J.D., S.J.D.# Fund Complex; President, Law $
Birth Date: Professor, Duquesne University;
December 20, 1932 Consulting Partner, Mollica & Murray;
President, Duquesne Director, Michael Baker Corp.
University (engineering, construction, operations
Pittsburgh, PA and technical services).
TRUSTEE
Previous Positions: Dean and Professor
of Law, University of Pittsburgh
School of Law; Dean and Professor of
Law, Villanova University School of
Law.
- ---------------------
MARJORIE P. SMUTS Director or Trustee of the Federated
Birth Date: June Fund Complex; Public $
21, 1935 Relations/Marketing/Conference
4905 Bayard Street Planning.
Pittsburgh, PA
TRUSTEE Previous Positions: National
Spokesperson, Aluminum Company of America; television
producer; business owner.
- ---------------------
JOHN S. WALSH++ Director or Trustee of some of the
Birth Date: Federated Fund Complex; President and $
November 28, 1957 Director, Heat Wagon, Inc.
2007 Sherwood Drive (manufacturer of construction
Valparaiso, IN temporary heaters); President and
TRUSTEE Director, Manufacturers Products, Inc.
(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.
- ---------------------
J. CHRISTOPHER President or Executive Vice President
DONAHUE+ of the Federated Fund Complex; $0
Birth Date: April Director or Trustee of some of the
11, 1949 Funds in the Federated Fund Complex;
Federated Investors President, Chief Executive Officer and
Tower Director, Federated Investors, Inc.;
1001 Liberty Avenue President and Trustee, Federated
Pittsburgh, PA Investment Management Company;
EXECUTIVE VICE President and Trustee, Federated
PRESIDENT Investment Counseling; President and
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; $0
22, 1930 President, Executive Vice President
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.
- ---------------------
JOHN W. MCGONIGLE Executive Vice President and Secretary
Birth Date: October of the Federated Fund Complex; $0
26, 1938 Executive Vice President, Secretary
Federated Investors and Director, Federated Investors,
Tower Inc.; Trustee, Federated Investment
1001 Liberty Avenue Management Company and Federated
Pittsburgh, PA Investment Counseling; Director,
EXECUTIVE VICE Federated Global Investment Management
PRESIDENT AND Corp., Federated Services Company and
SECRETARY Federated Securities Corp.
- ---------------------
RICHARD B. FISHER President or Vice President of some of
Birth Date: May 17, the Funds in the Federated Fund $0
1923 Complex; Director or Trustee of some
Federated Investors of the Funds in the Federated Fund
Tower Complex; Executive Vice President,
1001 Liberty Avenue Federated Investors, Inc.; Chairman
Pittsburgh, PA and Director, Federated Securities
VICE PRESIDENT Corp.
* AN ASTERISK DENOTES A TRUSTEE WHO IS DEEMED TO BE AN INTERESTED PERSON AS
DEFINED IN THE INVESTMENT COMPANY ACT OF 1940.
# 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 FUND.
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 Fund, 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.
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 Fund
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 Fund's 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.
For the fiscal year ended January 31, 2000, the Fund's Adviser directed
brokerage transactions to certain brokers due to research services they
provided. The total amount of these transactions was $193,858,477 for which the
Fund paid $46,602 in brokerage commissions.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the 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 Fund 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 the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the 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 Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets as
specified below:
MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE DAILY
FEE 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 Fund for expenses.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.
CUSTODIAN
WesBanco Bank Wheeling, Wheeling, West Virginia, is custodian for the securities
and cash of the Fund.
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 Fund pays the transfer agent a fee based on the size, type, and
number of accounts and transactions made by shareholders.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, Pittsburgh, Pennsylvania, is the independent auditors for
the Fund.
FEES PAID BY THE FUND FOR SERVICES
FOR THE YEAR ENDED 2000
JANUARY 31
Advisory Fee Earned $339,662
Advisory Fee Reduction $39,892
Brokerage Commissions $46,602
Administrative Fee $64,592
12B-1 FEE N/A
SHAREHOLDER SERVICES FEE N/A
HOW DOES THE FUND MEASURE PERFORMANCE?
The Fund 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
Fund's 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 ended
January 31, 2000.
Yield is given for the 30-day period ended January 31, 2000.
FUND 1 SINCE
YEAR INCEPTION
ON
APRIL 20,
1998
Total Return __ 5.50%
Yield 2.50%
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, the 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.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
references to ratings, rankings, and financial publications and/or performance
comparisons of shares to certain indices; charts, graphs and illustrations
using the Fund's returns, or returns in general, that demonstrate investment
concepts such as tax-deferred compounding, dollar-cost averaging and
systematic investment; 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
information about the mutual fund industry from sources such as the Investment
Company Institute.
The 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.
The 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 Fund uses 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 "balanced 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 S & P figures.
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.
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 $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.
FINANCIAL INFORMATION
The Financial Statements for the Fund for the fiscal year ended January 31,
2000, are incorporated herein by reference to the Annual Report to Shareholders
of WesMark Balanced Fund (To be filed by amendment).
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 Balanced 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 Bank Wheeling
One Bank Plaza
Wheeling, WV 26003
CUSTODIAN
WesBanco Bank Wheeling
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
2500 One PPG Place
Pittsburgh, PA 15222
[wesmark logo]
Bond Fund
Prospectus
April 30, 2000
[WESMARK LOGO]
WESMARK BOND FUND
A Portfolio of WesMark Funds
A mutual fund seeking high current income consistent with preservation of
capital by investing primarily in investment grade bonds.
SHARES OF THE WESMARK BOND FUND, LIKE SHARES OF ALL MUTUAL FUNDS, ARE NOT BANK
DEPOSITS, FEDERALLY INSURED, OR GUARANTEED, AND MAY LOSE VALUE.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
CONTENTS
Fund Goal, Strategies, and Risk 11
What are the Fund's Fees and Expenses? 22
What are the Principal Securities in Which the Fund Invests? 33
What are the Specific Risks of Investing in the Fund? 66
What do Shares Cost? 77
How is the Fund Sold? 78
How to Purchase Shares 89
How to Redeem and Exchange Shares 911
Account and Share Information 1114
Who Manages the Fund? 1215
Financial Information 1316
April 30, 2000
FUND GOAL, STRATEGIES AND RISKS
WHAT IS THE FUND'S GOAL?
The Fund's goal (investment objective) is high current income consistent with
preservation of capital.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The 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 investment adviser, WesBanco Wheeling (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).
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
As with all mutual funds, the Fund's investments are subject to risks that could
cause their value to go down. The prices of fixed-rate debt securities change in
the opposite direction as interest rates. Therefore, if interest rates increase,
the value of the Fund's portfolio securities (and therefore the Fund's shares)
may go down. Risks of prepayment on asset- backed and mortgage-backed securities
will also affect fund returns. Other factors that may reduce the Fund's returns
include defaults or increase in the risk of defaults on portfolio securities, or
early redemptions or "calls".
The Fund's shares are not deposits or obligations of any bank, are not endorsed
or guaranteed by any bank and are not insured or guaranteed by the U.S.
government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other government agency.
PERFORMANCE SUMMARY
RISK/RETURN BAR CHART AND TABLE
WHAT ARE THE FUND'S FEES AND EXPENSES?
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES
FEES PAID DIRECTLY FROM YOUR INVESTMENT
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage 3.75%
of offering price)
Maximum Deferred Sales Charge (Load) (as a percentage of original None purchase
price or redemption proceeds, as applicable) Maximum Sales Charge (Load) Imposed
on Reinvested Dividends (and None other Distributions) (as a percentage of
offering price) Redemption Fee (as a percentage of amount redeemed, if
applicable) None Exchange Fee None
ANNUAL FUND OPERATING EXPENSES (Before Waivers)1
EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
Management Fee2 0.60%
Distribution (12b-1) Fee3 0.25%
Shareholder Services Fee4 0.25%
Other Expenses 0.37%
Total Annual Fund Operating Expenses 1.47%
1 Although not contractually obligated to do so, the adviser,
shareholder servicing agent, and distributor waived certain amounts. These
areshown below along with the net expenses the Fund ACTUALLY paid for the
fiscal year ended January31,1999.
Total Waiver of Fund Expenses 0.57%
Total Annual Fund Operating Expenses (after waiver) 0.90%
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 the Fund (after the voluntary waiver) was 0.53% for the year ended
January 31, 1999.
3 The Fund did not pay or accrue the distribution (12b-1) fee during the year
ended January 31, 1999. The Fund has no present intention of paying or
accruing the distribution (12b-1) fee during the year ended January 31, 2000.
4 The Fund did not pay or accrue the shareholder services fee during the year
ended January 31, 1999. The Fund has no present intention of paying or
accruing the shareholder services fee during the year ended January 31, 2000.
EXAMPLE
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.
Expenses assuming no redemption are also shown. The Example also assumes that
your investment has a 5% return each year and that the Fund operating expenses
are BEFORE WAIVERS as shown in the Table and remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
1 3 5 10
YEAR YEARS YEARS YEARS
$519 $822 $1,148 $2,066
WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?
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 the 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 Fund treats 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. The 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.
MORTGAGE BACKED SECURITIES
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.
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.
IOS AND POS
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 market risks.
ASSET BACKED SECURITIES
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
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 market 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 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
Convertible securities are fixed income securities that the Fund has the option
to exchange for equity securities at a specified conversion price. The option
allows the Fund to realize additional returns if the market price of the equity
securities exceeds the conversion price. For example, the 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, the 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 the
Fund to realize some of the potential appreciation of the underlying equity
securities with less risk of losing its initial investment.
The Fund treats convertible securities as fixed income securities for purposes
of its investment policies and limitations, because of their unique
characteristics.
INVESTMENT RATINGS FOR INVESTMENT GRADE SECURITIES
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 (default) when due on each security. Lower
credit ratings correspond to higher credit risk. If a security has not received
a rating, the Fund must rely entirely upon the Adviser's credit assessment that
the security is comparable to investment grade.
TEMPORARY DEFENSIVE INVESTMENTS
The Fund may temporarily depart from its principal investment strategies by
investing its assets in cash, cash items, and shorter-term, higher-quality debt
securities and similar obligations. It may do this to minimize potential losses
and maintain liquidity to meet shareholder redemptions during adverse market
conditions. This may cause the Fund to give up greater investment returns to
maintain the safety of principal, that is, the original amount invested by
shareholders.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
INTEREST RATE RISKS
o 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.
o 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
o 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, the
Fund will lose money.
o 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, the Fund must rely entirely upon the Adviser's credit
assessment.
o 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.
o Credit risk includes the possibility that a party to a transaction (such as
a repurchase agreement) involving the Fund will fail to meet its
obligations. This could cause the Fund to lose the benefit of the
transaction or prevent the Fund from selling or buying other securities to
implement its investment strategy.
CALL AND PREPAYMENT RISKS
o 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.
o If a fixed income security is called, the Fund may have to reinvest the
proceeds in other fixed income securities with lower interest rates, higher
credit risks, or other less favorable characteristics.
o Generally, homeowners have the option to prepay their mortgages at any time
without penalty. Homeowners frequently refinance high interest rate mortgages
when mortgage rates fall. This results in the prepayment of mortgage backed
securities with higher interest rates. Conversely, prepayments due to
refinancings decrease when mortgage rates increase. This extends the life of
mortgage backed securities with lower interest rates. As a result, increases
in prepayments of high interest rate mortgage backed securities, or decreases
in prepayments of lower interest rate mortgage backed securities, may reduce
their yield and price. This relationship between interest rates and mortgage
prepayments makes the price of mortgage backed securities more volatile than
most other types of fixed income securities with comparable credit risks.
WHAT DO SHARES COST?
You can purchase, redeem, or exchange shares any day the New York Stock Exchange
(NYSE) and Federal Reserve wire system are open. When the 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 required minimum initial investment for Fund shares is $1,000, unless the
investment is in an Individual Retirement Account, in which case the minimum
initial investment is $500. Subsequent investments 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. The 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.
The following table summarizes the minimum required investment amount and the
maximum sales charge, if any, that you will pay on an investment in the Fund.
Keep in mind that investment professionals may charge you fees for their
services in connection with your Share transactions.
SALES CHARGE WHEN YOU PURCHASE
Sales Charge as a Sales Charge as a
Amount of Investment Percentage Percentage of NAV
of Public Offering
Price
Less than $25,000 3.75% 3.90%
$25,000 but less than $50,0003.50% 3.63%
$50,000 but less than 3.00% 3.09%
$100,000
$100,000 but less than 2.50% 2.56%
$250,000
$250,000 but less than 1.50% 1.52%
$500,000
$500,000 but less than 1.00% 1.01%
$1,000,000
$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:
o trust and fiduciary accounts of WesBanco;
o certain defined benefit/contribution plans;
o employees, directors and officers of WesBanco, Federated Investors and their
affiliates, and members of their immediate families;
o investments made after signing a Letter of Intent;
o investments of $1,000,000 or more; and
o exchanges between WesMark Funds
In addition, if your account was opened prior to October 1, 1999, all subsequent
purchases will not be subject to the sales charge. Contact WesBanco Securities,
Inc. for further information on reducing or eliminating the sales charge.
HOW IS THE FUND SOLD?
Edgewood Services, Inc. (Distributor) markets the shares described in this
prospectus to customers of WesBanco Bank Wheeling and its affiliates and
institutions or individuals, directly from the 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).
RULE 12B-1 PLAN
The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to
the Distributor and investment professionals for the sale, distribution and
customer servicing of the Fund's 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 Fund is
not currently paying or accruing fees under the Plan.
HOW TO PURCHASE SHARES
You may purchase shares directly from the Fund by calling WesMark Funds
Shareholder Services at 1-800-368-3369, through WesBanco Securities, Inc. or
through an investment professional. Texas residents must purchase shares of the
Fund through the Distributor at 1-888-898-0600. The Fund reserves the right to
reject any request to purchase or exchange shares.
DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and
o Send your payment to the Fund by Federal Reserve wire or check. You will
become the owner of shares and your Shares will be priced at the next
calculated NAV plus applicable sales charge 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 the Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the Fund
and the Shares will be priced at the next calculated NAV after the Fund receives
the order.
BY WIRE
To purchase shares by Federal Reserve wire, contact your account officer for
wiring instructions. Wire orders will only be accepted on days on which the
Fund, WesBanco and the Federal Reserve Banks are open for business.
BY CHECK
Make your check payable to "WesMark Bond Fund", note your account number on the
check (for existing shareholders only), and mail it to:
WesMark Funds Shareholder Services
WesBanco Bank Wheeling
One Bank Plaza
Wheeling, WV 26003
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third- party checks (checks originally payable to someone other than
you or the Fund).
THROUGH WESBANCO SECURITIES, INC.
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) to receive the next calculated NAV (plus applicable
sales charge), if the investment professional forwards the order to the Fund on
the same day and the Fund receives payment within three business days. You will
become the owner of shares and receive dividends when the Fund receives your
payment.
THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and
o Submit your purchase order to the 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 applicable sales charge) if the
investment professional forwards the order to the Fund on the same day and
the Fund receives payment within three business days. You will become the
owner of shares and receive dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
THROUGH AN EXCHANGE
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.
BY SYSTEMATIC INVESTMENT PROGRAM
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 the Fund or your investment
professional. The minimum investment amount for SIPs is $100.
BY AUTOMATED CLEARINGHOUSE (ACH)
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.
RETIREMENT INVESTMENTS
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.
HOW TO REDEEM AND EXCHANGE SHARES
You should redeem or exchange shares:
o directly from the Fund if you purchased shares directly from the Fund; or
o through an investment professional if you purchased shares through an
investment professional.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem or exchange shares by calling your account officer or WesMark
Funds Shareholder Services at 1-800-368-3369 once you have completed the
appropriate authorization form for telephone transactions or by calling your
account officer. 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.
BY MAIL
You may redeem or exchange shares by mailing a written request to the Fund. You
will receive a redemption amount based on the next calculated NAV after the
Fund receives your written request in proper form. Send requests by mail to:
WesMark Funds Shareholder Services
WesBanco Bank Wheeling
One Bank Plaza
Wheeling, WV 26003 All requests must include:
o Fund Name, account number and
account registration;
o amount to be redeemed or exchanged;
o signatures of all shareholders exactly as registered; and
o IF EXCHANGING, the Fund Name, account number and account registration into
which you are exchanging.
Call the Fund or your investment professional if you need special instructions.
THROUGH WSI
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) to receive the next calculated NAV (plus applicable
sales charge), you will receive a redemption amount based on that day's NAV.
THROUGH AN 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
the Fund receives the order from your investment professional.
SIGNATURE GUARANTEES Signatures must be guaranteed if:
o your redemption will be sent to an address other than the address of record; o
your redemption will be sent to an address of record that was changed within
the last 30 days;
o a redemption is payable to someone other than the shareholder(s) of record;
or
o IF EXCHANGING (TRANSFERRING) into another fund with a different shareholder
registration.
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.
PAYMENT METHODS FOR REDEMPTIONS
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:
o an electronic transfer to your account at a financial institution that is
an ACH member; or
o wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
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: o
to allow your purchase to clear; o during periods of market volatility; or o
when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
REDEMPTIONS FROM RETIREMENT ACCOUNTS
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in the Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
EXCHANGE PRIVILEGES
You may exchange shares of the Fund into shares of another WesMark Fund. To do
this, you must: o ensure that the account registrations are identical; o meet
any minimum initial investment requirements; and o receive a prospectus for the
fund into which you wish to exchange. An exchange is treated as a redemption and
a subsequent purchase, and is a taxable transaction.
The Fund may modify or terminate the exchange privilege at any time. The
Fund's management or investment adviser may determine from the amount, frequency
and pattern of exchanges that a shareholder is engaged in excessive trading that
is detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other WesMark Funds.
SYSTEMATIC WITHDRAWAL/ EXCHANGE PROGRAM
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.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund does not issue share certificates.
ACCOUNT AND SHARE INFORMATION
CONFIRMATIONS AND ACCOUNT STATEMENTS
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 AND CAPITAL GAINS
The Fund declares dividends daily and pays any dividends monthly to
shareholders. Dividends are paid to all shareholders invested in the Fund 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 Fund pays 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 the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.
ACCOUNTS WITH LOW BALANCES
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.
TAX INFORMATION
The Fund sends 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 the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.
Fund distributions are expected to be both dividends and capital gains.
Redemptions and exchanges are taxable sales. Please consult your tax adviser
regarding your federal, state, and local tax liability.
WHO MANAGES THE FUND?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, WesBanco Bank Wheeling. The Adviser manages the Fund's assets,
including buying and selling portfolio securities. The Adviser's address is One
Bank Plaza, Wheeling, WV 26003.
ADVISER'S BACKGROUNDThe 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 59 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 $685 million as of December 31, 1998. 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 departments of the Corporation are valued at $2.8
billion.
THE FUND'S PORTFOLIO MANAGERS ARE:
JEROME B. SCHMITT
Jerome B. Schmitt has been a co-portfolio manager for the Fund since its
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
David B. Ellwood has been a co-portfolio manager for the Fund since its
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.
ADVISORY FEES
The Adviser receives an annual investment advisory fee of 0.60% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.
FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
The Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the 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 the Fund, assuming reinvestment of all dividends and capital
gains.
This information has been audited by Deloitte & Touche LLP, whose report,
along with the Fund's audited financial statements, is included in the Annual
Report.
FINANCIAL HIGHLIGHTS
(For A share outstanding throughout the period)
PERIOD ENDED JANUARY 31 199912000
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.43
Net realized and unrealized gain on investments 0.13
Total from investment operations 0.56
LESS DISTRIBUTIONS:
Distributions from net investment income (0.43)
Distributions from net realized gains (0.02)
Total distributions (0.45)
NET ASSET VALUE, END OF PERIOD $10.11
TOTAL RETURN2 5.70%
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.90%4
Net investment income 5.47%4
Expense waiver/reimbursement3 0.07%4
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $117,646
Portfolio turnover 39%
1 REFLECTS OPERATIONS FOR THE PERIOD FROM APRIL 20, 1998 (DATE OF INITIAL PUBLIC
INVESTMENT) TO JANUARY 31, 2000.
2 BASED ON NET ASSET VALUE, WHICH DOES NOT REFLECT THE SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE, IF APPLICABLE.
3 THIS VOLUNTARY EXPENSE DECREASE IS REFLECTED IN BOTH THE EXPENSE AND NET
INVESTMENT INCOME RATIOS SHOWN ABOVE.
4 COMPUTED ON AN ANNUALIZED BASIS.Further information about the Fund's
performance is contained in the Fund's Annual Report, dated January 31, 2000,
which can be obtained free of charge.
[wesmark logo]
Prospectus
Dated April 30, 2000
A Statement of Additional Information (SAI) dated April 30, 2000, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Fund's annual and semi-annual reports to
shareholders. The annual and semi-annual reports discuss market conditions and
investment strategies that significantly affected the Fund's performance during
its last fiscal year. To obtain the SAI, the annual and semi-annual reports and
other information without charge call your investment professional or the Fund
at 1-800-368-3369. You can obtain information about the Fund (including the SAI)
by visiting or writing the Public Reference Room of the Securities and Exchange
Commission in Washington, DC 20549-6009 or from the Commission's Internet site
at http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.
WesMark Bond Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7010
Edgewood Services, Inc., Distributor
[wesBanco logo]
Investment Company Act File No. 811-7925
Cusip 951025402
G01970-11 (4/00)
STATEMENT OF ADDITIONAL INFORMATION
WESMARK BOND FUND
A Portfolio of WesMark Funds
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for WesMark Bond Fund (Fund), dated April
30, 2000 . This SAI incorporates by reference the Fund's Annual Report. Obtain
the prospectus or the Annual Report without charge by calling 1-800-368-3369.
APRIL 30, 2000
CONTENTS
How is the Fund Organized?Securities in Which the Fund InvestsWhat do Shares
Cost?How is the Fund Sold?Exchanging Securities for SharesSubaccounting
ServicesRedemption in KindAccount and Share InformationTax InformationWho
Manages and Provides Services to the Fund?How Does the Fund Measure
Performance?Financial InformationInvestment RatingsAddresses
G01970-12 (4/00)
HOW IS THE FUND ORGANIZED?
The Fund is a diversified portfolio of WesMark Funds (Trust). The 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 Fund is a portfolio of the Trust and was declared effective on March 24,
1998. The Fund's investment adviser is WesBanco Bank Wheeling (Adviser).
SECURITIES IN WHICH THE FUND INVESTS
SECURITIES DESCRIPTIONS AND TECHNIQUES
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.
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 interest rate 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 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.
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, the 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 the 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.
The Fund may also trade derivative contracts over-the-counter (OTC) in
transactions negotiated directly between the 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 the 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 the Fund's exposure to interest
rate and currency risks, and may also expose the Fund to liquidity and leverage
risks. OTC contracts also expose the Fund to credit risks in the event that a
counterparty defaults on the contract.
The 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.
The 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 the 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 the Fund
may be required to take delivery of the underlying asset when its current
market price is lower than the exercise price;
When the 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.
The 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 the 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.
The 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 the Fund may be required to take delivery of the underlying asset when its
current market price is lower than the exercise price. When the Fund writes
options on futures contracts, it will be subject to margin requirements similar
to those applied to futures contracts.
SPECIAL TRANSACTIONS
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the 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 the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
The Fund's 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 the 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 the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the 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 the 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, the Fund agrees to accept
any security that meets specified terms. For example, in a TBA
mortgage-backed transaction, the 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 the 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
The 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, the 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 the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below. Bond Market Risks
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, the 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, the 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
the Fund will fail to meet its obligations. This could cause the Fund to lose
the benefit of the transaction or prevent the 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, the Fund may have to reinvest the proceeds in
other fixed income securities with lower interest rates, higher credit risks,
or other less favorable characteristics.
INVESTMENT LIMITATIONS
BORROWING MONEY AND ISSUING SENIOR SECURITIES
The Fund 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 its total assets, the
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.
UNDERWRITING
The Fund may not underwrite the securities of other issuers, except that the
Fund may engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.
INVESTING IN REAL ESTATE
The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund 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 Fund may exercise its 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 Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.
LENDING CASH OR SECURITIES
The Fund may not make loans, provided that this restriction does not prevent the
Fund 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 Fund will not make investments that will result in the concentration of its
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.
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. 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 Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities, and further provided that the Fund may make margin deposits in
connection with its use of financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any of its 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 Fund 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 the Fund's net assets.
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 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.'"
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.
For purposes of its policies and limitations, the Fund considers 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 the Fund's portfolio securities are determined as follows:
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; 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; 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 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?
The Fund's net asset value (NAV) per Share fluctuates and is based on the market
value of all securities and other assets of the 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
Federated 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 Fund's 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
The following individuals and their immediate family members may buy Shares at
NAV without any sales charge because there are nominal sales efforts associated
with their purchases the Trustees, employees, directors and officers of
WesBanco, Federated Investors and sales representatives of the Fund, the
Adviser, the Distributor and their affiliate, 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 IS THE FUND SOLD?
Under the Distributor's Contract with the Fund, 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 Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and Share redemptions. In
addition, the Fund's service providers that receive asset-based fees also
benefit from stable or increasing Fund assets.
The Fund may compensate the Distributor more or less than its actual marketing
expenses. In no event will the Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.
SHAREHOLDER SERVICES
The Fund 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 Fund 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 Fund reserves the right to determine
whether to accept your securities and the minimum market value to accept. The
Fund will value your securities in the same manner as it values its 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 Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is 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 Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's 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 the 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 _____, the following shareholder(s) owned of record, beneficially, or
both, 5% or more of outstanding shares of the Fund: _____
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 Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The 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.
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 _____, the Fund's Board and Officers as a group owned less than 1% of the
Fund's outstanding shares.
- ------------------------------------------------------------------------------
NAME
BIRTH DATE AGGREGATE
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
POSITION WITH TRUST FOR PAST FIVE YEARS 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.
- ---------------------
THOMAS G. BIGLEY Director or Trustee of the Federated
Birth Date: Fund Complex; Director, Member of $
February 3, 1934 Executive Committee, Children's
15 Old Timber Trail Hospital of Pittsburgh; Director,
Pittsburgh, PA Robroy Industries, Inc. (coated steel
TRUSTEE conduits/computer storage equipment);
formerly: Senior Partner, Ernst &
Young LLP; Director, MED 3000 Group,
Inc. (physician practice management);
Director, Member of Executive
Committee, University of Pittsburgh.
- ---------------------
JOHN T. CONROY, JR. Director or Trustee of the Federated
Birth Date: June Fund Complex; President, Investment $
23, 1937 Properties Corporation; Senior Vice
Grubb & President, John R. Wood and
Ellis/Investment Associates, Inc., Realtors; Partner or
Properties Trustee in private real estate
Corporation ventures in Southwest Florida;
3201 Tamiami Trail formerly: President, Naples Property
North Management, Inc. and Northgate Village
Naples, FL Development Corporation.
TRUSTEE
- ---------------------
NICHOLAS P. Director or Trustee of the Federated
CONSTANTAKIS Fund Complex; Director, Michael Baker $
Birth Date: Corporation (engineering,
September 3, 1939 construction, operations and technical
175 Woodshire Drive services); formerly: Partner, Andersen
Pittsburgh, PA Worldwide SC.
TRUSTEE
- ---------------------
JOHN F. CUNNINGHAM++ Director or Trustee of some of the
Birth Date: March Federated Fund Complex; Chairman, $
5, 1943 President and Chief Executive Officer,
353 El Brillo Way Cunningham & Co., Inc. (strategic
Palm Beach, FL business consulting); Trustee
TRUSTEE Associate, Boston College; Director,
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.
- ---------------------
LAWRENCE D. ELLIS, Director or Trustee of the Federated
M.D.* Fund Complex; Professor of Medicine, $
Birth Date: October University of Pittsburgh; Medical
11, 1932 Director, University of Pittsburgh
3471 Fifth Avenue Medical Center - Downtown;
Suite 1111 Hematologist, Oncologist, and
Pittsburgh, PA Internist, University of Pittsburgh
TRUSTEE Medical Center; Member, National Board
of Trustees, Leukemia Society of
America.
- ---------------------
PETER E. MADDEN Director or Trustee of the Federated
Birth Date: March Fund Complex; formerly: $
16, 1942 Representative, Commonwealth of
One Royal Palm Way Massachusetts General Court;
100 Royal Palm Way President, State Street Bank and Trust
Palm Beach, FL Company and State Street Corporation.
TRUSTEE
Previous Positions: Director, VISA USA
and VISA International; Chairman and
Director, Massachusetts Bankers
Association; Director, Depository
Trust Corporation; Director, The
Boston Stock Exchange.
- ---------------------
CHARLES F. Director or Trustee of some of the
MANSFIELD, JR.++ Federated Fund Complex; Executive Vice $
Birth Date: April President, Legal and External Affairs,
10, 1945 Dugan Valva Contess, Inc. (marketing,
80 South Road communications, technology and
Westhampton Beach, consulting).; formerly Management
NY Consultant.
TRUSTEE
Previous Positions: Chief Executive 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.
- ---------------------
JOHN E. MURRAY, Director or Trustee of the Federated
JR., J.D., S.J.D.# Fund Complex; President, Law $
Birth Date: Professor, Duquesne University;
December 20, 1932 Consulting Partner, Mollica & Murray;
President, Duquesne Director, Michael Baker Corp.
University (engineering, construction, operations
Pittsburgh, PA and technical services).
TRUSTEE
Previous Positions: Dean and Professor
of Law, University of Pittsburgh
School of Law; Dean and Professor of
Law, Villanova University School of
Law.
- ---------------------
MARJORIE P. SMUTS Director or Trustee of the Federated
Birth Date: June Fund Complex; Public $
21, 1935 Relations/Marketing/Conference
4905 Bayard Street Planning.
Pittsburgh, PA
TRUSTEE Previous Positions: National
Spokesperson, Aluminum Company of America; television
producer; business owner.
- ---------------------
JOHN S. WALSH++ Director or Trustee of some of the
Birth Date: Federated Fund Complex; President and $
November 28, 1957 Director, Heat Wagon, Inc.
2007 Sherwood Drive (manufacturer of construction
Valparaiso, IN temporary heaters); President and
TRUSTEE Director, Manufacturers Products, Inc.
(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.
- ---------------------
J. CHRISTOPHER President or Executive Vice President
DONAHUE+ of the Federated Fund Complex; $0
Birth Date: April Director or Trustee of some of the
11, 1949 Funds in the Federated Fund Complex;
Federated Investors President, Chief Executive Officer and
Tower Director, Federated Investors, Inc.;
1001 Liberty Avenue President and Trustee, Federated
Pittsburgh, PA Investment Management Company;
EXECUTIVE VICE President and Trustee, Federated
PRESIDENT Investment Counseling; President and
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; $0
22, 1930 President, Executive Vice President
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.
- ---------------------
JOHN W. MCGONIGLE Executive Vice President and Secretary
Birth Date: October of the Federated Fund Complex; $0
26, 1938 Executive Vice President, Secretary
Federated Investors and Director, Federated Investors,
Tower Inc.; Trustee, Federated Investment
1001 Liberty Avenue Management Company and Federated
Pittsburgh, PA Investment Counseling; Director,
EXECUTIVE VICE Federated Global Investment Management
PRESIDENT AND Corp., Federated Services Company and
SECRETARY Federated Securities Corp.
- ---------------------
RICHARD B. FISHER President or Vice President of some of
Birth Date: May 17, the Funds in the Federated Fund $0
1923 Complex; Director or Trustee of some
Federated Investors of the Funds in the Federated Fund
Tower Complex; Executive Vice President,
1001 Liberty Avenue Federated Investors, Inc.; Chairman
Pittsburgh, PA and Director, Federated Securities
VICE PRESIDENT Corp.
* AN ASTERISK DENOTES A TRUSTEE WHO IS DEEMED TO BE AN INTERESTED PERSON AS
DEFINED IN THE INVESTMENT COMPANY ACT OF 1940.
# 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 FUND.
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 Fund, 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.
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 Fund
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 Fund's 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.
For the fiscal year ended January 31, 2000, the Fund's Adviser directed
brokerage transactions to certain brokers due to research services they
provided. The total amount of these transactions was $360,600,074 for which the
Fund paid $0 in brokerage commissions.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the 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 Fund 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 the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the 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 Fund. 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 Fund for expenses. Federated Services Company also
provides certain accounting and recordkeeping services with respect to the
Fund's portfolio investments for a fee based on Fund assets plus out-of-pocket
expenses.
CUSTODIAN
WesBanco Bank Wheeling, Wheeling, West Virginia, is custodian for the securities
and cash of the Fund.
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 Fund pays the transfer agent a fee based on the size, type, and
number of accounts and transactions made by shareholders.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, Pittsburgh, Pennsylvania, is the independent auditors for
the Fund.
FEES PAID BY THE FUND FOR SERVICES
FOR THE YEAR ENDED 2000
JANUARY 31
Advisory Fee Earned $
Advisory Fee Reduction $
Brokerage Commissions $0
Administrative Fee $
12B-1 FEE N/A
SHAREHOLDER SERVICES FEE N/A
HOW DOES THE FUND MEASURE PERFORMANCE?
The Fund 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
Fund's 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 ended
January 31, 2000.
Yield is given for the 30-day period ended January 31, 2000.
FUND 1 SINCE
YEAR INCEPTION
APRIL 20,
1998
Total Return __ 5.70%
Yield 4.92%
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, the 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.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
references to ratings, rankings, and financial publications and/or performance
comparisons of shares to certain indices; charts, graphs and illustrations
using the Fund's returns, or returns in general, that demonstrate investment
concepts such as tax-deferred compounding, dollar-cost averaging and
systematic investment; 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
information about the mutual fund industry from sources such as the Investment
Company Institute.
The 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.
The 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 Fund uses 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 "intermediate government 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.
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.
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 Fund for the fiscal year ended January 31,
2000, are incorporated herein by reference to the Annual Report to Shareholders
of WesMark Bond Fund. (To be filed by amendment).
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 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 Bank Wheeling
One Bank Plaza
Wheeling, WV 26003
CUSTODIAN
WesBanco Bank Wheeling
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
2500 One PPG Place
Pittsburgh, PA 15222
[WesMark logo]
Growth
Fund
Prospectus
April 30, 2000
[WesMark logo]
WESMARK GROWTH FUND
A Portfolio of WesMark Funds
A mutual fund seeking appreciation of capital by investing primarily in equity
securities of companies with prospects for above-average growth in earnings and
dividends.
SHARES OF THE WESMARK GROWTH FUND, LIKE SHARES OF ALL MUTUAL FUNDS, ARE NOT BANK
DEPOSITS, FEDERALLY INSURED, OR GUARANTEED, AND MAY LOSE VALUE.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
CONTENTS
Fund Goal, Strategies, and Risks 1
Performance Summary 2
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 4
What are the Specific Risks of Investing in the Fund? 5
What do Shares Cost? 6
How is the Fund Sold? 6
How to Purchase Shares 6
How to Redeem and Exchange Shares 8
Account and Share Information 9
Who Manages the Fund? 10
Financial Information 11
april 30, 2000
FUND GOAL, STRATEGIES AND RISKS
WHAT IS THE FUND'S GOAL?
The Fund's goal (investment objective) is appreciation of capital.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The 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 Wheeling
(Adviser), its stock price is excessively overvalued.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
As with all mutual funds, the Fund's investments are subject to risks that could
cause their value to go down. The value of the stocks in the Fund's portfolio
will go up and down, and therefore the value of your Fund shares will also
change. These changes could be a long-term trend or drastic, short-term
movement. The Fund's portfolio will reflect changes in the prices of individual
portfolio stocks or general changes in stock valuations. Growth stocks in
particular may experience a larger decline on a forecast of lower earnings, a
negative fundamental development or an adverse market development. Consequently,
the Fund's share price could decline and you could lose money.
The Fund's shares are not deposits or obligations of any bank, are not endorsed
or guaranteed by any bank and are not insured or guaranteed by the U.S.
government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other government agency.
PERFORMANCE SUMMARY
RISK/RETURN BAR CHART AND TABLE
[graph appears here]
THE BAR CHART SHOWS THE FUND'S TOTAL RETURN FOR CALENDAR YEAR-END DECEMBER 31,
1999. THE FUND'S SHARES ARE NOT SOLD SUBJECT TO A SALES CHARGE (LOAD). THE TOTAL
RETURN DISPLAYED ABOVE IS BASED UPON NET ASSET VALUE.
THE FUND'S YEAR-TO-DATE TOTAL RETURN AS OF THE MOST RECENT CALENDAR QUARTER
(MARCH 31, 1999) WAS 10.38%. 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 AVERAGE ANNUAL TOTAL RETURN AS OF THE
YEAR ENDED DECEMBER 31, 1999.
AVERAGE ANNUAL TOTAL RETURN
START OF 1
PERFORMANCYEAR
Fund 20.32% 14.19%
S&P 500 Index 36.21% 28.58%
LGFA 31.68% 25.69%
1 THE FUND'S START OF PERFORMANCE DATE WAS APRIL 14, 1997.
THE TABLE SHOWS THE FUND'S TOTAL RETURNS AVERAGED OVER A PERIOD OF YEARS
RELATIVE TO 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. PAST PERFORMANCE DOES NOT NECESSARILY
PREDICT FUTURE PERFORMANCE. THIS INFORMATION PROVIDES YOU WITH HISTORICAL
PERFORMANCE INFORMATION SO THAT YOU CAN ANALYZE WHETHER THE FUND'S INVESTMENT
RISKS ARE BALANCED BY ITS POTENTIAL REWARDS.
WHAT ARE THE FUND'S FEES AND EXPENSES?
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUND.
SHAREHOLDER FEES
FEES PAID DIRECTLY FROM YOUR INVESTMENT
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage 4.75%
of offering price)
Maximum Deferred Sales Charge (Load) (as a percentage of original None
purchase price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and None
other Distributions) (as a percentage of offering price).
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee 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%
Distribution (12b-1) Fee3 0.25%
Shareholder Services Fee4 0.25%
Other Expenses 0.30%
Total Annual Fund Operating Expenses 1.55%
1 Although not contractually obligated to do so, the adviser,
shareholder services agent, and distributor waived certain amounts. These are
shown below along with the net expenses the Fund ACTUALLY PAID for the fiscal
year endedJanuary 31, 1999.
Total Waiver of Fund Expenses 0.51%
Total Annual Fund Operating Expenses (after waiver) 1.04%
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 the Fund (after the voluntary waiver) was 0.74% for the year ended
January 31, 1999.
3 The Fund did not pay or accrue the distribution (12b-1) fee during the year
ended January 31, 1999. The Fund has no present intention of paying or
accruing the distribution (12b-1) fee during the year ended January 31, 2000.
4 The Fund did not pay or accrue the shareholder services fee during the year
ended January 31, 1999. The Fund has no present intention of paying or
accruing the shareholder services fee during the year ended January 31, 2000.
EXAMPLE
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.
Expenses assuming no redemption are also shown. The Example also assumes that
your investment has
a 5% return each year and that the Fund operating expenses are BEFORE WAIVERS as
shown in the Table and remain the same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
1 3 5 10
YEAR YEARS YEARS YEARS
$625 $941 $1,280 $2,233
WHAT ARE THE FUND'S INVESTMENT STRATEGIES?
The Fund pursues its investment objective by investing in a professionally
managed portfolio consisting primarily of equity securities of companies with
prospects for above-average growth in earnings and dividends. 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.
WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?
EQUITY SECURITIES
Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities. The 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 Fund may invest.
COMMON STOCKS
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
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. The Fund may also treat
such redeemable preferred stock as a fixed income security.
DEPOSITARY RECEIPTS
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.
TEMPORARY DEFENSIVE INVESTMENTS
The Fund may temporarily depart from its principal investment strategies by
investing its assets in cash, cash items, and shorter-term, higher-quality debt
securities and similar obligations. It may do this to minimize potential losses
and maintain liquidity to meet shareholder redemptions during adverse market
conditions. This may cause the Fund to give up greater investment returns to
maintain the safety of principal, that is, the original amount invested by
shareholders.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
STOCK MARKET RISKS
o.....The value of equity securities in the Fund's portfolio will rise and fall.
These fluctuations could be a sustained trend or a drastic movement. The
Fund's portfolio will reflect changes in prices of individual portfolio
stocks or general changes in stock valuations. Consequently, the Fund's share
price may decline.
o The Adviser attempts to manage market risk by limiting the amount the Fund
invests in each company's equity securities. However, diversification will
not protect the Fund against widespread or prolonged declines in the stock
market.
SECTOR RISKS
o Companies with similar characteristics may be grouped together in broad
categories called sectors. Sector risk is the possibility that a certain
sector may underperform other sectors or the market as a whole. As the
Adviser allocates more of the Fund's portfolio holdings to a particular
sector, the Fund's performance will be more susceptible to any economic,
business or other developments which generally affect that sector.
RISKS RELATED TO INVESTING FOR GROWTH
o Due to their relatively high valuations, growth stocks are typically more
volatile than value stocks. For instance, the price of a growth stock may
experience a larger decline on a forecast of lower earnings, a negative
fundamental development, or an adverse market development. Further, growth
stocks may not pay dividends or may pay lower dividends than value stocks.
This means they depend more on price changes for returns and may be more
adversely affected in a down market compared to value stocks that pay higher
dividends.
RISKS RELATED TO COMPANY SIZE
o Generally, the smaller the market capitalization of a company, the fewer the
number of shares traded daily, the less liquid its stock and the more
volatile its price. Market capitalization is determined by multiplying the
number of its outstanding shares by the current market price per share.
o Companies with smaller market capitalizations also tend to have unproven
track records, a limited product or service base and limited access to
capital. These factors also increase risks and make these companies more
likely to fail than larger, well capitalized companies.
RISKS OF FOREIGN INVESTING
o Foreign securities pose additional risks because foreign economic or
political conditions may be less favorable than those of the United States.
Securities in foreign markets may also be subject to taxation policies that
reduce returns for U.S. investors.
o Foreign companies may not provide information (including financial
statements) as frequently or to as great an extent as companies in the United
States. Foreign companies may also receive less coverage than United States
companies by market analysts and the financial press. In addition, foreign
countries may lack uniform accounting, auditing and financial reporting
standards or regulatory requirements comparable to those applicable to U.S.
companies. These factors may prevent the Fund and its Adviser from obtaining
information concerning foreign companies that is as frequent, extensive and
reliable as the information available concerning companies in the United
States.
o Foreign countries may have restrictions on foreign ownership of securities or
may impose exchange controls, capital flow restrictions or repatriation
restrictions which could adversely affect the liquidity of the Fund's
investments.
WHAT DO SHARES COST?
You can purchase, redeem, or exchange shares any day the New York Stock Exchange
(NYSE) and Federal Reserve wire system are open. When the 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 required minimum initial investment for Fund shares is $1,000, unless the
investment is in an Individual Retirement Account, in which case the minimum
initial investment is $500. Subsequent investments 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. The 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.
The following table summarizes the minimum required investment amount and the
maximum sales charge, if any, that you will pay on an investment in the Fund.
Keep in mind that investment professionals may charge you fees for their
services in connection with your Share transactions.
SALES CHARGE WHEN YOU PURCHASE
Sales Charge as a Sales Charge as a
Amount of Investment Percentage Percentage of NAV
of Public Offering
Price
Less than $50,000 4.75% 4.99%
$50,000 but less than 3.50% 3.63%
$100,000
$100,000 but less than 2.50% 2.56%
$250,000
$250,000 but less than 1.50% 1.52%
$500,000
$500,000 but less than 1.00% 1.01%
$1,000,000
$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:
o trust and fiduciary accounts of WesBanco;
o certain defined benefit/contribution plans;
o employees, directors and officers of WesBanco, Federated Investors and
their affiliates, and members of their immediate families;
o investments made after signing a Letter of Intent;
o investments of $1,000,000 or more; and
o exchanges between WesMark Funds
In addition, if your account was opened prior to October 1, 1999, all subsequent
purchases will not be subject to the sales charge. Contact WesBanco Securities,
Inc. for further information on reducing or eliminating the sales charge.
HOW IS THE FUND SOLD?
Edgewood Services, Inc. (Distributor) markets the shares described in this
prospectus to customers of WesBanco Bank Wheeling and its affiliates and
institutions or individuals, directly from the 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).
RULE 12B-1 PLAN
The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to
the Distributor and investment professionals for the sale, distribution and
customer servicing of the Fund's 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 Fund is
not currently paying or accruing fees under the Plan.
HOW TO PURCHASE SHARES
You may purchase shares directly from the Fund by calling WesMark Funds
Shareholder Services at 1-800-368-3369, through WesBanco Securities, Inc. or
through an investment professional. Texas residents must purchase shares of the
Fund through the Distributor at 1-888-898-0600. The Fund reserves the right to
reject any request to purchase or exchange shares.
DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and
o Send your payment to the Fund by Federal Reserve wire or check. 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 the
Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the Fund
and the Shares will be priced at the next calculated NAV after the Fund receives
the order.
BY WIRE
To purchase shares by Federal Reserve wire, contact your account officer for
wiring instructions. Wire orders will only be accepted on days on which the
Fund, WesBanco and the Federal Reserve Banks are open for business.
BY CHECK
Make your check payable to "WesMark Growth Fund", note your account number on
the check (for existing shareholders only), and mail it to:
WesMark Funds Shareholder Services
WesBanco Bank Wheeling
One Bank Plaza
Wheeling, WV 26003
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third- party checks (checks originally payable to someone other than
you or the Fund).
THROUGH WESBANCO SECURITIES, INC.
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) to receive the next calculated NAV (plus applicable
sales charge), if the investment professional forwards the order to the Fund on
the same day and the Fund receives payment within three business days. You will
become the owner of shares and receive dividends when the Fund receives your
payment.
THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and
o Submit your purchase order to the 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 if the investment professional forwards the
order to the Fund on the same day and the Fund receives payment within
three business days. You will become the owner of shares and receive
dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
THROUGH AN EXCHANGE
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.
BY SYSTEMATIC INVESTMENT PROGRAM
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 the Fund or your investment
professional. The minimum investment amount for SIPs is $100.
BY AUTOMATED CLEARING HOUSE (ACH)
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.
RETIREMENT INVESTMENTS
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.
HOW TO REDEEM AND EXCHANGE SHARES
You should redeem or exchange shares:
o directly from the Fund if you purchased shares directly from the Fund; or
o through an investment professional if you purchased shares through an
investment professional.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem or exchange shares by calling your account officer or WesMark
Funds Shareholder Services at 1-800-368-3369 once you have completed the
appropriate authorization form for telephone transactions or by calling your
account officer. 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.
BY MAIL
You may redeem or exchange shares by mailing a written request to the Fund. You
will receive a redemption amount based on the next calculated NAV after the
Fund receives your written request in proper form. Send requests by mail to:
WesMark Funds Shareholder Services
WesBanco Bank Wheeling
One Bank Plaza
Wheeling, WV 26003 ALL REQUESTS MUST INCLUDE:
o Fund Name, account number and account registration;
o amount to be redeemed or exchanged;
o signatures of all shareholders exactly as registered; and
o IF EXCHANGING, the Fund Name, account number and account registration into
which you are exchanging.
Call the Fund or your investment professional if you need special instructions.
THROUGH WSI
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) to receive the next calculated NAV (plus applicable
sales charge), you will receive a redemption amount based on that day's NAV.
THROUGH AN 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
the Fund receives the order from your investment professional.
SIGNATURE GUARANTEES Signatures must be guaranteed if:
o your redemption will be sent to an address other than the address of record; o
your redemption will be sent to an address of record that was changed within
the last 30 days;
o a redemption is payable to someone other than the shareholder(s) of record;
or
o IF EXCHANGING (TRANSFERRING) into another fund with a different shareholder
registration.
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.
PAYMENT METHODS FOR REDEMPTIONS
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:
o an electronic transfer to your account at a financial institution that is
an ACH member; or
o wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
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: o
to allow your purchase to clear; o during periods of market volatility; or o
when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
REDEMPTIONS FROM RETIREMENT ACCOUNTS
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in the Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
EXCHANGE PRIVILEGES
You may exchange shares of the Fund into shares of another WesMark Fund. To do
this, you must: o ensure that the account registrations are identical; o meet
any minimum initial investment requirements; and o receive a prospectus for the
fund into which you wish to exchange. An exchange is treated as a redemption and
a subsequent purchase, and is a taxable transaction.
The Fund may modify or terminate the exchange privilege at any time. The
Fund's management or investment adviser may determine from the amount, frequency
and pattern of exchanges that a shareholder is engaged in excessive trading that
is detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other WesMark Funds.
SYSTEMATIC WITHDRAWAL/ EXCHANGE PROGRAM
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.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund does not issue share certificates.
ACCOUNT AND SHARE INFORMATION
CONFIRMATIONS AND ACCOUNT STATEMENTS
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 AND CAPITAL GAINS
The Fund declares and pays any dividends quarterly to shareholders. Dividends
are paid to all shareholders invested in the Fund 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 Fund pays 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 the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.
ACCOUNTS WITH LOW BALANCES
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.
TAX INFORMATION
The Fund sends 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 the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.
Fund distributions are expected to be both dividends and capital gains.
Redemptions and exchanges are taxable sales. Please consult your tax adviser
regarding your federal, state, and local tax liability.
WHO MANAGES THE FUND?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, WesBanco Bank Wheeling. The Adviser manages the Fund's assets,
including buying and selling portfolio securities. The Adviser's address is One
Bank Plaza, Wheeling, WV 26003.
ADVISER'S BACKGROUND
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 59 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 $685 million as of December 31, 1998. 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 departments of the Corporation are valued at $2.8
billion.
THE FUND'S PORTFOLIO MANAGERS ARE:
JEROME B. SCHMITT
Jerome B. Schmitt has been a co-portfolio manager for the Fund since its
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
David B. Ellwood has been a co-portfolio manager for the Fund since its
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.
ADVISORY FEES
The Adviser receives an annual investment advisory fee of 0.75% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.
FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
The Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the 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 the Fund, assuming reinvestment of all dividends and capital
gains.
This information has been audited by Deloitte & Touche LLP, whose report, along
with the Fund's audited financial statements, is included in the Annual Report.
FINANCIAL HIGHLIGHTS
(For A share outstanding throughout each period)
YEAR ENDED JANUARY 31 2000 1999 19981
NET ASSET VALUE, BEGINNING OF PERIOD $11.15 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.06 0.09
Net realized and unrealized gains 2.38 1.71
Total from investment operations 2.44 1.80
LESS DISTRIBUTIONS:
Distributions from net investment income (0.06) (0.08)
Distributions from net realized gains (0.79) (0.57)
Total distributions (0.85) (0.65)
NET ASSET VALUE, END OF PERIOD $12.74 $11.15
TOTAL RETURN2 22.58% 18.24%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.04% 1.14%5
Net investment income 0.50% 0.99%5
Expense waiver/reimbursement3 0.01% 0.00%4
5
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $135,078 $114,142
Portfolio turnover 58% 58%
1 REFLECTS OPERATIONS FOR THE PERIOD FROM APRIL 14, 1997 (DATE OF INITIAL PUBLIC
INVESTMENT) TO JANUARY 31, 2000.
2 BASED ON NET ASSET VALUE, WHICH DOES NOT REFLECT THE SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE, IF APPLICABLE.
3 THIS VOLUNTARY EXPENSE DECREASE IS REFLECTED IN BOTH THE EXPENSE AND NET
INVESTMENT INCOME RATIOS SHOWN ABOVE.
4 AMOUNT REPRESENTS LESS THAN 0.01%.
5 COMPUTED ON AN ANNUALIZED BASIS.
Further information about the Fund's performance is contained in the Fund's
Annual Report, dated January 31, 2000, which can be obtained free of charge.
[WesMark logo]
Prospectus
Dated April 30, 2000
A Statement of Additional Information (SAI) dated April 30, 2000, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Fund's annual and semi-annual reports to
shareholders. The annual and semi-annual reports discuss market conditions and
investment strategies that significantly affected the Fund's performance during
its last fiscal year. To obtain the SAI, the annual and semi-annual reports and
other information without charge call your investment professional or the Fund
at 1-800-368-3369. You can obtain information about the Fund (including the SAI)
by visiting or writing the Public Reference Room of the Securities and Exchange
Commission in Washington, DC 20549-6009 or from the Commission's Internet site
at http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.
WesMark Growth Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7010
Edgewood Services, Inc., Distributor
[wesBanco logo]
Investment Company Act File No. 811-7925
Cusip 951025204
G01912-01 (4/00)
STATEMENT OF ADDITIONAL INFORMATION
WESMARK GROWTH FUND
A PORTFOLIO OF WESMARK FUNDS
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for WesMark Growth Fund (Fund), dated
April 30, 2000. This SAI incorporates by reference the Fund's Annual Report.
Obtain the prospectus or the Annual Report without charge by calling
1-800-368-3369.
APRIL 30, 2000
CONTENTS
How is the Fund Organized?
Securities in Which the Fund Invests
What do Shares Cost?
How is the Fund Sold?
Exchanging Securities for Shares
Subaccounting Services
Redemption in Kind
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Financial Information
Investment Ratings
Addresses
G01912-02 (4/00)
HOW IS THE FUND ORGANIZED?
The Fund is a diversified portfolio of WesMark Funds (Trust). The 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 Fund is a portfolio of the Trust and was declared effective on March 12,
1997. The Fund's investment adviser is WesBanco Bank Wheeling (Adviser).
SECURITIES IN WHICH THE FUND INVESTS
SECURITIES DESCRIPTIONS AND TECHNIQUES
EQUITY SECURITIES
Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities. The 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 Fund 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 the 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). The 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 the 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 Fund treats 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.
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.
CONVERTIBLE SECURITIES
Convertible securities are fixed income securities that the Fund has the option
to exchange for equity securities at a specified conversion price. The option
allows the Fund to realize additional returns if the market price of the equity
securities exceeds the conversion price. For example, the 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, the 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 the
Fund to realize some of the potential appreciation of the underlying equity
securities with less risk of losing its initial investment.
The Fund treats convertible securities as both fixed income and equity
securities for purposes of its 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, the 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 the 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.
The Fund may also trade derivative contracts over-the-counter (OTC) in
transactions negotiated directly between the 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 the 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 the Fund's exposure to interest
rate and currency risks, and may also expose the Fund to liquidity and leverage
risks. OTC contracts also expose the Fund to credit risks in the event that a
counterparty defaults on the contract.
The 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.
The 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 the 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 the Fund may be
required to take delivery of the underlying asset when its current market
price is lower than the exercise price; When the 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.
The 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 the 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.
The 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 the Fund may be required to take delivery of the underlying asset when its
current market price is lower than the exercise price.
When the Fund writes options on futures contracts, it will be subject to margin
requirements similar to those applied to futures contracts.
SPECIAL TRANSACTIONS
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the 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 the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
The Fund's 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 the 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 the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the 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 the 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, the Fund agrees to accept
any security that meets specified terms. For example, in a TBA
mortgage-backed transaction, the 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 the 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 raterisks and credit risks.
SECURITIES LENDING
The 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, the 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 the Fund. The Fund's
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, the 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, the 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
the Fund will fail to meet its obligations. This could cause the Fund to lose
the benefit of the transaction or prevent the 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, the Fund may have to reinvest the proceeds in
other fixed income securities with lower interest rates, higher credit risks,
or other less favorable characteristics.
INVESTMENT LIMITATIONS
BORROWING MONEY AND ISSUING SENIOR SECURITIES
The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.
UNDERWRITING
The Fund may not underwrite the securities of other issuers, except that the
Fund may engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.
INVESTING IN REAL ESTATE
The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund 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 Fund may exercise its 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 Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.
LENDING CASH OR SECURITIES
The Fund may not make loans, provided that this restriction does not prevent the
Fund 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 Fund will not make investments that will result in the concentration of its
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.
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. 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 Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities, and further provided that the Fund may make margin deposits in
connection with its use of financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any of its 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 Fund 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 the Fund's net assets.
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 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.'"
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.
For purposes of its policies and limitations, the Fund considers 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 the Fund's portfolio securities are determined as follows:
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; 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; 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; 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 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?
The Fund's net asset value (NAV) per Share fluctuates and is based on the market
value of all securities and other assets of the 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
Federated 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 Fund's 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
The following individuals and their immediate family members may buy Shares at
NAV without any sales charge because there are nominal sales efforts associated
with their purchases the Trustees, employees, directors and officers of
WesBanco, Federated Investors and sales representatives of the Fund, the
Adviser, the Distributor and their affiliate, 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 IS THE FUND SOLD?
Under the Distributor's Contract with the Fund, 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 Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and Share redemptions. In
addition, the Fund's service providers that receive asset-based fees also
benefit from stable or increasing Fund assets.
The Fund may compensate the Distributor more or less than its actual marketing
expenses. In no event will the Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.
SHAREHOLDER SERVICES
The Fund 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 Fund 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 Fund reserves the right to determine
whether to accept your securities and the minimum market value to accept. The
Fund will value your securities in the same manner as it values its 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 Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is 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 Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's 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 the 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 _____, the following shareholder(s) owned of record, beneficially, or
both, 5% or more of outstanding shares of the Fund: _____
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 Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The 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.
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 _____, the Fund's Board and Officers as a group owned less than 1% of the
Fund's outstanding shares.
- ------------------------------------------------------------------------------
NAME
BIRTH DATE AGGREGATE
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
POSITION WITH TRUST FOR PAST FIVE YEARS 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.
- ---------------------
THOMAS G. BIGLEY Director or Trustee of the Federated
Birth Date: Fund Complex; Director, Member of $
February 3, 1934 Executive Committee, Children's
15 Old Timber Trail Hospital of Pittsburgh; Director,
Pittsburgh, PA Robroy Industries, Inc. (coated steel
TRUSTEE conduits/computer storage equipment);
formerly: Senior Partner, Ernst &
Young LLP; Director, MED 3000 Group,
Inc. (physician practice management);
Director, Member of Executive
Committee, University of Pittsburgh.
- ---------------------
JOHN T. CONROY, JR. Director or Trustee of the Federated
Birth Date: June Fund Complex; President, Investment $
23, 1937 Properties Corporation; Senior Vice
Grubb & President, John R. Wood and
Ellis/Investment Associates, Inc., Realtors; Partner or
Properties Trustee in private real estate
Corporation ventures in Southwest Florida;
3201 Tamiami Trail formerly: President, Naples Property
North Management, Inc. and Northgate Village
Naples, FL Development Corporation.
TRUSTEE
- ---------------------
NICHOLAS P. Director or Trustee of the Federated
CONSTANTAKIS Fund Complex; Director, Michael Baker $
Birth Date: Corporation (engineering,
September 3, 1939 construction, operations and technical
175 Woodshire Drive services); formerly: Partner, Andersen
Pittsburgh, PA Worldwide SC.
TRUSTEE
- ---------------------
JOHN F. CUNNINGHAM++ Director or Trustee of some of the
Birth Date: March Federated Fund Complex; Chairman, $
5, 1943 President and Chief Executive Officer,
353 El Brillo Way Cunningham & Co., Inc. (strategic
Palm Beach, FL business consulting); Trustee
TRUSTEE Associate, Boston College; Director,
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.
- ---------------------
LAWRENCE D. ELLIS, Director or Trustee of the Federated
M.D.* Fund Complex; Professor of Medicine, $
Birth Date: October University of Pittsburgh; Medical
11, 1932 Director, University of Pittsburgh
3471 Fifth Avenue Medical Center - Downtown;
Suite 1111 Hematologist, Oncologist, and
Pittsburgh, PA Internist, University of Pittsburgh
TRUSTEE Medical Center; Member, National Board
of Trustees, Leukemia Society of
America.
- ---------------------
PETER E. MADDEN Director or Trustee of the Federated
Birth Date: March Fund Complex; formerly: $
16, 1942 Representative, Commonwealth of
One Royal Palm Way Massachusetts General Court;
100 Royal Palm Way President, State Street Bank and Trust
Palm Beach, FL Company and State Street Corporation.
TRUSTEE
Previous Positions: Director, VISA USA
and VISA International; Chairman and
Director, Massachusetts Bankers
Association; Director, Depository
Trust Corporation; Director, The
Boston Stock Exchange.
- ---------------------
CHARLES F. Director or Trustee of some of the
MANSFIELD, JR.++ Federated Fund Complex; Executive Vice $
Birth Date: April President, Legal and External Affairs,
10, 1945 Dugan Valva Contess, Inc. (marketing,
80 South Road communications, technology and
Westhampton Beach, consulting).; formerly Management
NY Consultant.
TRUSTEE
Previous Positions: Chief Executive 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.
- ---------------------
JOHN E. MURRAY, Director or Trustee of the Federated
JR., J.D., S.J.D.# Fund Complex; President, Law $
Birth Date: Professor, Duquesne University;
December 20, 1932 Consulting Partner, Mollica & Murray;
President, Duquesne Director, Michael Baker Corp.
University (engineering, construction, operations
Pittsburgh, PA and technical services).
TRUSTEE
Previous Positions: Dean and Professor
of Law, University of Pittsburgh
School of Law; Dean and Professor of
Law, Villanova University School of
Law.
- ---------------------
MARJORIE P. SMUTS Director or Trustee of the Federated
Birth Date: June Fund Complex; Public $
21, 1935 Relations/Marketing/Conference
4905 Bayard Street Planning.
Pittsburgh, PA
TRUSTEE Previous Positions: National
Spokesperson, Aluminum Company of America; television
producer; business owner.
- ---------------------
JOHN S. WALSH++ Director or Trustee of some of the
Birth Date: Federated Fund Complex; President and $
November 28, 1957 Director, Heat Wagon, Inc.
2007 Sherwood Drive (manufacturer of construction
Valparaiso, IN temporary heaters); President and
TRUSTEE Director, Manufacturers Products, Inc.
(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.
- ---------------------
J. CHRISTOPHER President or Executive Vice President
DONAHUE+ of the Federated Fund Complex; $0
Birth Date: April Director or Trustee of some of the
11, 1949 Funds in the Federated Fund Complex;
Federated Investors President, Chief Executive Officer and
Tower Director, Federated Investors, Inc.;
1001 Liberty Avenue President and Trustee, Federated
Pittsburgh, PA Investment Management Company;
EXECUTIVE VICE President and Trustee, Federated
PRESIDENT Investment Counseling; President and
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; $0
22, 1930 President, Executive Vice President
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.
- ---------------------
JOHN W. MCGONIGLE Executive Vice President and Secretary
Birth Date: October of the Federated Fund Complex; $0
26, 1938 Executive Vice President, Secretary
Federated Investors and Director, Federated Investors,
Tower Inc.; Trustee, Federated Investment
1001 Liberty Avenue Management Company and Federated
Pittsburgh, PA Investment Counseling; Director,
EXECUTIVE VICE Federated Global Investment Management
PRESIDENT AND Corp., Federated Services Company and
SECRETARY Federated Securities Corp.
- ---------------------
RICHARD B. FISHER President or Vice President of some of
Birth Date: May 17, the Funds in the Federated Fund $0
1923 Complex; Director or Trustee of some
Federated Investors of the Funds in the Federated Fund
Tower Complex; Executive Vice President,
1001 Liberty Avenue Federated Investors, Inc.; Chairman
Pittsburgh, PA and Director, Federated Securities
VICE PRESIDENT Corp.
* AN ASTERISK DENOTES A TRUSTEE WHO IS DEEMED TO BE AN INTERESTED PERSON AS
DEFINED IN THE INVESTMENT COMPANY ACT OF 1940.
# 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 FUND.
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 Fund, 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.
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 Fund
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 Fund's 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.
For the fiscal year ended January 31, 2000, the Fund's Adviser directed
brokerage transactions to certain brokers due to research services they
provided. The total amount of these transactions was $351,903,435 for which the
Fund paid $144,550 in brokerage commissions.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the 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 Fund 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 the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the 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 Fund. 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 Fund for expenses. Federated Services Company also
provides certain accounting and recordkeeping services with respect to the
Fund's portfolio investments for a fee based on Fund assets plus out-of-pocket
expenses.
CUSTODIAN
WesBanco Bank Wheeling, Wheeling, West Virginia, is custodian for the securities
and cash of the Fund.
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 Fund pays the transfer agent a fee based on the size, type, and
number of accounts and transactions made by shareholders.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, Pittsburgh, Pennsylvania, is the independent auditors for
the Fund.
FEES PAID BY THE FUND FOR SERVICES
FOR THE YEAR ENDED 1999
JANUARY 31 2000
Advisory Fee Earned $927,701
Advisory Fee Reduction $8,076
Brokerage Commissions $144,550
Administrative Fee $178,406
12B-1 FEE N/A
SHAREHOLDER SERVICES FEE N/A N/A
HOW DOES THE FUND MEASURE PERFORMANCE?
The Fund 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
Fund's 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 ended
January 31, 1999.
Yield is given for the 30-day period ended January 31, 1999.
SINCE
FUND 1 INCEPTION
YEAR ON
APRIL 14,
1997
Total Return 22.58% 22.86%
Yield 0.10%
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, the 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.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
references to ratings, rankings, and financial publications and/or performance
comparisons of shares to certain indices;
charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;
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
information about the mutual fund industry from sources such as the Investment
Company Institute.
The 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.
The 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 Fund uses 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.
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 Fund for the fiscal year ended January 31,
2000, are incorporated herein by reference to the Annual Report to Shareholders
of WesMark Growth Fund (To be filed by amendment.)
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 Growth 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 Bank Wheeling
One Bank Plaza
Wheeling, WV 26003
CUSTODIAN
WesBanco Bank Wheeling
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
2500 One PPG Place
Pittsburgh, PA 15222
WESMARK WEST VIRGINIA MUNICIPAL BOND FUND
A Portfolio of WesMark Funds
A mutual fund seeking current income which is exempt from federal income tax and
the income taxes imposed by the State of West Virginia. The Fund
investsprimarily in securities issued by or on behalf of the State of West
Virginia and its political subdivisions, authorities and agencies, and
securities issued by other states, territories, and possessions of the United
States which are exempt from federal income tax and the income taxes imposed by
the State of West Virginia.
SHARES OF THE WESMARK WEST VIRGINIA MUNICIPAL BOND FUND, LIKE SHARES OF ALL
MUTUAL FUNDS, ARE NOT BANK DEPOSITS, FEDERALLY INSURED, OR GUARANTEED, AND MAY
LOSE VALUE.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
CONTENTS
Fund Goal, Strategies, and Risks 1
Performance Summary 2
What are the Fund's Fees and Expenses? 3
What are the Principal Securities in Which the Fund Invests? 4
What are the Specific Risks of Investing in the Fund? 6
What do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 7
How to Redeem and Exchange Shares 9
Account and Share Information 10
Who Manages the Fund? 11
Financial Information 12
april 30, 2000
FUND GOAL, STRATEGIES, AND RISKS
WHAT IS THE FUND'S GOAL?
The Fund's goal (investment objective) is current income which is exempt from
federal income tax and the income taxes imposed by the State of West Virginia.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
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.
WesBanco Wheeling, the Fund's investment adviser (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.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
As with all mutual funds, the Fund's investments are subject to risks that could
cause their value to go down. The prices of fixed-rate debt securities change in
the opposite direction as interest rates. Therefore, if interest rates increase,
the value of the Fund's portfolio securities, and therefore the Fund's shares,
may go down. Other factors that may reduce the Fund's returns include defaults,
an increase in the risk of defaults on portfolio securities, or early
redemptions or "calls". Since the Fund invests primarily in issuers from a
single state, the Fund may be subject to additional risks compared to funds that
invest in multiple states. West Virginia's economy is heavily dependent upon
certain industries, such as coal mining, manufacturing and tourism. Any downturn
in these and other industries may adversely affect the economy of the state.
The 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.
The Fund's shares are not deposits or obligations of any bank, are not
endorsed or guaranteed by any bank and are not insured or guaranteed by the U.S.
government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other government agency.
PERFORMANCE SUMMARY
RISK/RETURN BAR CHART AND TABLE*
[GRAPH]
THE BAR CHART SHOWS THE VARIABILITY OF THE FUND'S ACTUAL TOTAL RETURN ON A
YEARLY BASIS. THE FUND'S SHARES ARE NOT SOLD SUBJECT TO A SALES CHARGE (LOAD).
THE TOTAL RETURN DISPLAYED ABOVE IS BASED UPON NET ASSET VALUE.
THE FUND'S YEAR-TO-DATE TOTAL RETURN AS OF THE MOST RECENT CALENDAR QUARTER
(MARCH 31, 1999) WAS 0.56%. 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 (1.36%) (QUARTER ENDED DECEMBER 31, 1994). THE FOLLOWING
TABLE REPRESENTS THE FUND'S AVERAGE ANNUAL TOTAL RETURN AS OF THE YEAR ENDED
DECEMBER 31, 1998.
AVERAGE ANNUAL TOTAL RETURN
START OF 1 YEAR 5 YEARS
PERFORMANCE1
Fund 5.53% 5.37% 4.66%
LB5GO Index 7.16% 5.84% 5.36%
LIMDFA 9.99% 7.87% 6.59%
* 1 THE START OF PERFORMANCE DATE FOR THE PREDECESSOR COMMON TRUST FUND 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.
THE TABLE SHOWS THE FUND'S TOTAL RETURNS AVERAGED 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. PAST PERFORMANCE DOES NOT
NECESSARILY PREDICT FUTURE PERFORMANCE. THIS INFORMATION SO THAT YOU CAN ANALYZE
WHETHER THE FUND'S INVESTMENT RISKS ARE BALANCED BY ITS POTENTIAL REWARDS.
WHAT ARE THE FUND'S FEES AND EXPENSES?
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. SHAREHOLDER FEES FEES PAID DIRECTLY FROM YOUR INVESTMENT
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price) 3.75% Maximum Deferred Sales Charge (Load) (as a percentage of original
purchase price or redemption None
proceeds, asapplicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other
Distributions) (as a None percentage of offeringprice) Redemption Fee (as a
percentage of amount redeemed, if applicable) None Exchange Fee None
ANNUAL FUND OPERATING EXPENSES (Before Waivers)1
EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS (AS A PERCENTAGE OF AVERAGE NET
ASSETS) Management Fee2 0.60% Distribution (12b-1) Fee3 0.25% Shareholder
Services Fee4 0.25% Other Expenses 0.43% Total Annual Fund Operating Expenses
1.53% 1Although not contractually obligated to do so, the adviser, shareholder
services agent, and distributor
waived certain amounts. These are shown below along with the net expenses the
Fund ACTUALLY PAID for the fiscal year endedJanuary 31, 1999.
Total Waiver of Fund Expenses 0.79% Total Annual Fund Operating Expenses (after
waivers) 0.74% 2The adviser voluntarily waived a portion of the management fee.
The adviser can terminate this voluntary
waiver at any time. The management fee paid by the Fund (after the voluntary
waiver) was 0.31% for the year ended January 31, 1999.
3The Fund did not pay or accrue the distribution (12b-1) fee during the year
ended January 31, 1999. The Fund has no present intention of paying or
accruing the distribution (12b-1) fee during the year ended January 31, 2000.
- --------------------------------------------------------------------------------
4The Fund did not pay or accrue the shareholder services fee during the year
ended January 31, 1999. The Fund has no present intention of paying or
accruing the shareholder services fee during the year ended January 31, 2000.
- --------------------------------------------------------------------------------
EXAMPLE
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.
Expenses assuming no redemption are also shown. The Example also assumes that
your investment has a 5% return each year and that the Fund operating expenses
are BEFORE waivers as shown in the Table 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
$519 $822 $1,148 $2,066
WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?
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.
TAX EXEMPT SECURITIES
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
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
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
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 BONDS
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
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
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 Fund
treats 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.
MUNICIPAL LEASES
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.
The 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.
CREDIT ENHANCEMENT
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.
INVESTMENT RATINGS FOR INVESTMENT GRADE SECURITIES
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, the Fund must rely entirely upon the Adviser's credit assessment that
the security is comparable to investment grade.
TEMPORARY DEFENSIVE INVESTMENTS
The Fund may temporarily depart from its principal investment strategies by
investing its assets in cash, cash items, and shorter-term, higher-quality debt
securities and similar taxable obligations. It may do this to minimize potential
losses and maintain liquidity to meet shareholder redemptions during adverse
market conditions. This may cause the Fund to give up greater investment returns
and tax-free income to maintain the safety of principal, that is, the original
amount invested by shareholders.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
INTEREST RATE RISKS
o 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.
o 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
o 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, the
Fund will lose money.
o 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, the Fund must rely entirely upon the Adviser's credit
assessment.
o 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.
o Credit risk includes the possibility that a party to a transaction (such as
a repurchase agreement) involving the Fund will fail to meet its
obligations. This could cause the Fund to lose the benefit of the
transaction or prevent the Fund from selling or buying other securities to
implement its investment strategy.
CALL RISKS
o 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.
o If a fixed income security is called, the Fund may have to reinvest the
proceeds in other fixed income securities with lower interest rates, higher
credit risks, or other less favorable characteristics.
SECTOR RISKS
o Most of the Fund's assets will be invested in issuers in West Virginia. As
a result, any adverse economic or political developments affecting the
State of West Virginia or its political subdivisions may effect the value
of the Fund's securities. In addition, a substantial part of the Fund's
portfolio may be comprised of securities issued or credit enhanced by
companies in similar businesses or with other similar characteristics. As a
result, the Fund will be more susceptible to any economic, business,
political, or other developments which generally affect these issuers.
TAX RISKS
o In order to be tax-exempt, municipal securities must meet certain legal
requirements. Failure to meet such requirements may cause the interest
received and distributed by the Fund to shareholders to be taxable.
o Changes or proposed changes in federal tax laws may cause the prices of
municipal securities to fall.
o Income from the Fund may be subject to the AMT.
WHAT DO SHARES COST?
You can purchase, redeem, or exchange shares any day the New York Stock Exchange
(NYSE) and Federal Reserve wire system are open. When the 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 required minimum initial investment for Fund shares is $1,000, unless the
investment is in an Individual Retirement Account, in which case the minimum
initial investment is $500. Subsequent investments 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. The 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.
The following table summarizes the minimum required investment amount and the
maximum sales charge, if any, that you will pay on an investment in the Fund.
Keep in mind that investment professionals may charge you fees for their
services in connection with your Share transactions.
<TABLE>
<CAPTION>
<S> <C> <C>
SALES CHARGE WHEN YOU PURCHASE
Sales Charge as a Sales Charge as
a
Amount of Investment Percentage Percentage of
NAV
of Public Offering Price
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%
</TABLE>
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:
o trust and fiduciary accounts of WesBanco;
o certain defined benefit/contribution plans;
o employees, directors and officers of WesBanco, Federated Investors and
their affiliates, and members of their immediate families;
o investments made after signing a Letter of Intent;
o investments of $1,000,000 or more; and
o exchanges between WesMark Funds
In addition, if your account was opened prior to October 1, 1999, all subsequent
purchases will not be subject to the sales charge. Contact WesBanco Securities,
Inc. for further information on reducing or eliminating the sales charge.
HOW IS THE FUND SOLD?
Edgewood Services, Inc. (Distributor) markets the shares described in this
prospectus to customers of WesBanco Bank Wheeling and its affiliates and
institutions or individuals, directly from the 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).
RULE 12B-1 PLAN
The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to
the Distributor and investment professionals for the sale, distribution and
customer servicing of the Fund's 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 Fund is
not currently paying or accruing fees under the Plan.
HOW TO PURCHASE SHARES
You may purchase shares directly from the Fund by calling WesMark Funds
Shareholder Services at 1-800-368-3369, through WesBanco Securities, Inc. or
through an investment professional. Texas residents must purchase shares of the
Fund through the Distributor at 1-888-898-0600. The Fund reserves the right to
reject any request to purchase or exchange shares.
DIRECTLY FROM THE FUND
o Establish your account with the Fund by submitting a completed New Account
Form; and o Send your payment to the Fund by Federal Reserve wire or check. You
will become the owner of Shares and your shares will be priced at the next
calculated NAV (plus applicable sales charge) 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 the Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the
Fund and the Shares will be priced at the next calculated NAV after the Fund
receives the order.
BY WIRE
To purchase shares by Federal Reserve wire, contact your account officer for
wiring instructions. Wire orders will only be accepted on days on which the
Fund, WesBanco and the Federal Reserve Banks are open for business.
BY CHECK
Make your check payable to "WesMark West Virginia Municipal Bond Fund", note
your account number on the check (for existing shareholders only), and mail it
to:
WesMark Funds Shareholder Services
WesBanco Bank Wheeling
One Bank Plaza
Wheeling, WV 26003
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third- party checks (checks originally payable to someone other than
you or the Fund).
THROUGH WESBANCO SECURITIES, INC.
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) to receive the next calculated NAV (plus applicable
sales charge), if the investment professional forwards the order to the Fund on
the same day and the Fund receives payment within three business days. You will
become the owner of shares and receive dividends when the Fund receives your
payment.
THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and
o Submit your purchase order to the 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 if the investment professional forwards the
order to the Fund on the same day and the Fund receives payment within
three business days. You will become the owner of shares and receive
dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
THROUGH AN EXCHANGE
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.
BY SYSTEMATIC INVESTMENT PROGRAM
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 the Fund or your investment
professional. The minimum investment amount for SIPs is $100.
BY AUTOMATED CLEARINGHOUSE (ACH)
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.
RETIREMENT INVESTMENTS
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.
HOW TO REDEEM AND EXCHANGE SHARES
You should redeem or exchange shares:
o directly from the Fund if you purchased shares directly from the Fund; or
o through an investment professional if you purchased shares through an
investment professional.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem or exchange shares by calling your account officer or WesMark
Funds Shareholder Services at 1-800-368-3369 once you have completed the
appropriate authorization form for telephone transactions or by calling your
account officer. 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.
BY MAIL
You may redeem or exchange shares by mailing a written request to the Fund.
You will receive a redemption amount based on the next calculated NAV after
the Fund receives your written request in proper form.
Send requests by mail to:
WesMark Funds Shareholder Services
WesBanco Bank Wheeling
One Bank Plaza
Wheeling, WV 26003 All requests must include:
o Fund Name, account number and account registration;
o amount to be redeemed or exchanged;
o signatures of all shareholders exactly as registered; and
o IF EXCHANGING, the Fund Name, account number and account registration
into which you are exchanging.
Call the Fund or your investment professional if you need special instructions.
THROUGH WSI 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) to receive the next calculated NAV (plus applicable
sales charge), you will receive a redemption amount based on that day's NAV.
THROUGH AN 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
the Fund receives the order from your investment professional.
SIGNATURE GUARANTEES Signatures must be guaranteed if:
o your redemption will be sent to an address other than the address of record; o
your redemption will be sent to an address of record that was changed within the
last 30 days; o a redemption is payable to someone other than the shareholder(s)
of record; or o IF EXCHANGING (TRANSFERRING) into another fund with a different
shareholder registration. 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.
PAYMENT METHODS FOR REDEMPTIONS
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:
o an electronic transfer to your account at a financial institution that is an
ACH member; or o wire payment to your account at a domestic commercial bank that
is a Federal Reserve System
member.
REDEMPTION IN KIND
Although the Fund intends to pay share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
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: o
to allow your purchase to clear; o during periods of market volatility; or o
when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its
assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
REDEMPTIONS FROM RETIREMENT ACCOUNTS
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in the Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
EXCHANGE PRIVILEGES
You may exchange shares of the Fund into shares of another WesMark Fund. To do
this, you must: o ensure that the account registrations are identical; o meet
any minimum initial investment requirements; and o receive a prospectus for the
fund into which you wish to exchange. An exchange is treated as a redemption and
a subsequent purchase, and is a taxable transaction.
The Fund may modify or terminate the exchange privilege at any time. The
Fund's management or investment adviser may determine from the amount, frequency
and pattern of exchanges that a shareholder is engaged in excessive trading that
is detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other WesMark Funds.
SYSTEMATIC WITHDRAWAL/ EXCHANGE PROGRAM
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.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund does not issue share certificates.
ACCOUNT AND SHARE INFORMATION
CONFIRMATIONS AND ACCOUNT STATEMENTS
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 AND CAPITAL GAINS
The Fund declares dividends daily and pays any dividends monthly to
shareholders. Dividends are paid to all shareholders invested in the Fund 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 Fund pays 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 the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.
ACCOUNTS WITH LOW BALANCES
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.
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. It is anticipated that
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. 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 West
Virginia personal income taxes. Capital gains and non-exempt dividends are
taxable whether paid in cash or reinvested in the Fund. Redemptions and
exchanges are taxable sales. Fund distributions may be subject to AMT. Please
consult your tax adviser regarding your federal, state, and local tax liability.
WHO MANAGES THE FUND?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, WesBanco Bank Wheeling. The Adviser manages the Fund's assets,
including buying and selling portfolio securities. The Adviser's address is One
Bank Plaza, Wheeling, WV 26003.
ADVISER'S BACKGROUND
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 59 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 $685 million as of December 31, 1998. 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 departments of the Corporation are valued at $2.8
billion.
THE FUND'S PORTFOLIO MANAGERS ARE:
JEROME B. SCHMITT
Jerome B. Schmitt has been a co-portfolio manager for the Fund since its
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
David B. Ellwood has been a co-portfolio manager for the Fund since its
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.
ADVISORY FEES
The Adviser receives an annual investment advisory fee of 0.60% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.
FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
The Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the 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 the Fund, assuming reinvestment of all dividends and capital
gains.
This information has been audited by Deloitte & Touche LLP, whose report,
along with the Fund's audited
financial statements, is included in the Annual Report.
FINANCIAL HIGHLIGHTS
(For A share outstanding throughout each period)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED JANUARY 31 2000 1999 1998
1
NET ASSET VALUE, BEGINNING OF
PERIOD $10.30 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income
0.43 0.35
Net realized and unrealized gain on
investments 0.12 0.31
Total from investment
operations 0.55
0.66
LESS DISTRIBUTIONS:
Distributions from net investment
income (0.43) (0.35)
Distributions from net realized gain on
investments (0.01) (0.01)
Total
distributions
(0.44) (0.36)
NET ASSET VALUE, END OF
PERIOD $10.41
$10.30
TOTAL
RETURN2
5.46% 6.64%
RATIOS TO AVERAGE NET ASSETS:
Expenses
0.74% 0.74%4
Net investment
income
4.20% 4.26%4
Expense
waiver/reimbursement3
0.29% 0.30%4
SUPPLEMENTAL DATA:
Net assets, end of period (000
omitted) $67,434 $66,381
Portfolio
turnover
17% 6%
</TABLE>
1 REFLECTS OPERATIONS FOR THE PERIOD FROM APRIL 14, 1997 (DATE OF INITIAL
PUBLIC INVESTMENT) TO JANUARY 31, 2000..
2 BASED ON NET ASSET VALUE, WHICH DOES NOT REFLECT THE SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE, IF APPLICABLE.
3 THIS VOLUNTARY EXPENSE DECREASE IS REFLECTED IN BOTH THE EXPENSE AND NET
INVESTMENT INCOME RATIOS SHOWN ABOVE.
4 COMPUTED ON AN ANNUALIZED BASIS.
Further information about the Fund's performance is contained in the Fund's
Annual Report, dated January 31, 2000, which can be obtained free of charge.
[Logo of WesMark]
Prospectus
April 30, 2000
A Statement of Additional Information (SAI) dated April 30, 2000, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Fund's annual and semi-annual reports to
shareholders. The annual and semi-annual reports discuss market conditions and
investment strategies that significantly affected the Fund's performance during
its last fiscal year. To obtain the SAI, the annual and semi-annual reports and
other information without charge call your investment professional or the Fund
at 1-800-368-3369.
You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.
WesMark West Virgina Municipal Bond Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Edgewood Services, Inc., Distributor
Investment Company Act File No. 811-7925
Cusip 951025105
G01913-01 (4/99)
STATEMENT OF ADDITIONAL INFORMATION
WESMARK WEST VIRGINIA MUNICIPAL
BOND FUND
A Portfolio of WesMark Funds
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for WesMark West Virginia Municipal Bond
Fund (Fund), dated April 30, 2000. This SAI incorporates by reference the Fund's
Annual Report. Obtain the prospectus or the Annual Report without charge by
calling 1-800-368-3369.
april 30, 2000
CONTENTS
How is the Fund Organized?
Securities in Which the Fund Invests
What do Shares Cost?
How is the Fund Sold?
Exchanging Securities for Shares
Subaccounting Services
Redemption in Kind
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Financial Information
Investment Ratings
Addresses
G01913-02 (4/00)
HOW IS THE FUND ORGANIZED?
The Fund is a diversified portfolio of WesMark Funds (Trust). The 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 Fund is a portfolio of the Trust and was declared effective on March 12,
1997. The Fund's investment adviser is WesBanco Bank Wheeling (Adviser).
SECURITIES IN WHICH THE FUND INVESTS
SECURITIES DESCRIPTIONS AND TECHNIQUES
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, the 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 the 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.
The Fund may also trade derivative contracts over-the-counter (OTC) in
transactions negotiated directly between the 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 the 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 the Fund's exposure to interest
rate and currency risks, and may also expose the Fund to liquidity and leverage
risks. OTC contracts also expose the Fund to credit risks in the event that a
counterparty defaults on the contract.
The 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.
The 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 the 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 the Fund may be
required to take delivery of the underlying asset when its current market
price is lower than the exercise price; When the 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.
The 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 the 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.
The 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 the Fund may be required to take delivery of the underlying asset when its
current market price is lower than the exercise price.
When the Fund writes options on futures contracts, it will be subject to margin
requirements similar to those applied to futures contracts.
MUNICIPAL BOND INSURANCE
The 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 the 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 the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
The Fund's 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 the 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 the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the 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 the 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 market
risks for the Fund. Delayed delivery transactions also involve credit risks in
the event of a counterparty default. These transactions create leverage risks.
SECURITIES LENDING
The 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 RISKS
There are many factors which may effect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.
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 investment s 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
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.
UNDERWRITING
The Fund may not underwrite the securities of other issuers, except that the
Fund may engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.
INVESTING IN REAL ESTATE
The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund 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 Fund may exercise its 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 Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.
LENDING CASH OR SECURITIES
The Fund may not make loans, provided that this restriction does not prevent the
Fund 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 Fund will not make investments that will result in the concentration of its
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.
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. 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 Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities, and further provided that the Fund may make margin deposits in
connection with its use of financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any of its 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 Fund 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 the Fund's net assets.
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 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.'"
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.
For purposes of its policies and limitations, the Fund considers 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 the Fund's portfolio securities are determined as follows:
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; 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; 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 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?
The Fund's net asset value (NAV) per share fluctuates and is based on the market
value of all securities and other assets of the 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
Federated 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 Fund's 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
The following individuals and their immediate family members may buy Shares at
NAV without any sales charge because there are nominal sales efforts associated
with their purchases the Trustees, employees, directors and officers of
WesBanco, Federated Investors and sales representatives of the Fund, the
Adviser, the Distributor and their affiliate, 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 IS THE FUND SOLD?
Under the Distributor's Contract with the Fund, 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 Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and Share redemptions. In
addition, the Fund's service providers that receive asset-based fees also
benefit from stable or increasing Fund assets.
The Fund may compensate the Distributor more or less than its actual marketing
expenses. In no event will the Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.
SHAREHOLDER SERVICES
The Fund 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 Fund 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 Fund reserves the right to determine
whether to accept your securities and the minimum market value to accept. The
Fund will value your securities in the same manner as it values its 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 Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is 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 Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's 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 the 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 _____, the following shareholder(s) owned of record, beneficially, or
both, 5% or more of outstanding shares of the Fund:_____
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 Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The 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.
STATE TAXES
Under existing West Virginia laws, distributions made by the 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 _____, the Fund's Board and Officers as a group owned less than 1% of the
Fund's outstanding shares.
- ------------------------------------------------------------------------------
NAME
BIRTH DATE AGGREGATE
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
POSITION WITH TRUST FOR PAST FIVE YEARS 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.
- ---------------------
THOMAS G. BIGLEY Director or Trustee of the Federated
Birth Date: Fund Complex; Director, Member of $
February 3, 1934 Executive Committee, Children's
15 Old Timber Trail Hospital of Pittsburgh; Director,
Pittsburgh, PA Robroy Industries, Inc. (coated steel
TRUSTEE conduits/computer storage equipment);
formerly: Senior Partner, Ernst &
Young LLP; Director, MED 3000 Group,
Inc. (physician practice management);
Director, Member of Executive
Committee, University of Pittsburgh.
- ---------------------
JOHN T. CONROY, JR. Director or Trustee of the Federated
Birth Date: June Fund Complex; President, Investment $
23, 1937 Properties Corporation; Senior Vice
Grubb & President, John R. Wood and
Ellis/Investment Associates, Inc., Realtors; Partner or
Properties Trustee in private real estate
Corporation ventures in Southwest Florida;
3201 Tamiami Trail formerly: President, Naples Property
North Management, Inc. and Northgate Village
Naples, FL Development Corporation.
TRUSTEE
- ---------------------
NICHOLAS P. Director or Trustee of the Federated
CONSTANTAKIS Fund Complex; Director, Michael Baker $
Birth Date: Corporation (engineering,
September 3, 1939 construction, operations and technical
175 Woodshire Drive services); formerly: Partner, Andersen
Pittsburgh, PA Worldwide SC.
TRUSTEE
- ---------------------
JOHN F. CUNNINGHAM++ Director or Trustee of some of the
Birth Date: March Federated Fund Complex; Chairman, $
5, 1943 President and Chief Executive Officer,
353 El Brillo Way Cunningham & Co., Inc. (strategic
Palm Beach, FL business consulting); Trustee
TRUSTEE Associate, Boston College; Director,
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.
- ---------------------
LAWRENCE D. ELLIS, Director or Trustee of the Federated
M.D.* Fund Complex; Professor of Medicine, $
Birth Date: October University of Pittsburgh; Medical
11, 1932 Director, University of Pittsburgh
3471 Fifth Avenue Medical Center - Downtown;
Suite 1111 Hematologist, Oncologist, and
Pittsburgh, PA Internist, University of Pittsburgh
TRUSTEE Medical Center; Member, National Board
of Trustees, Leukemia Society of
America.
- ---------------------
PETER E. MADDEN Director or Trustee of the Federated
Birth Date: March Fund Complex; formerly: $
16, 1942 Representative, Commonwealth of
One Royal Palm Way Massachusetts General Court;
100 Royal Palm Way President, State Street Bank and Trust
Palm Beach, FL Company and State Street Corporation.
TRUSTEE
Previous Positions: Director, VISA USA
and VISA International; Chairman and
Director, Massachusetts Bankers
Association; Director, Depository
Trust Corporation; Director, The
Boston Stock Exchange.
- ---------------------
CHARLES F. Director or Trustee of some of the
MANSFIELD, JR.++ Federated Fund Complex; Executive Vice $
Birth Date: April President, Legal and External Affairs,
10, 1945 Dugan Valva Contess, Inc. (marketing,
80 South Road communications, technology and
Westhampton Beach, consulting).; formerly Management
NY Consultant.
TRUSTEE
Previous Positions: Chief Executive 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.
- ---------------------
JOHN E. MURRAY, Director or Trustee of the Federated
JR., J.D., S.J.D.# Fund Complex; President, Law $
Birth Date: Professor, Duquesne University;
December 20, 1932 Consulting Partner, Mollica & Murray;
President, Duquesne Director, Michael Baker Corp.
University (engineering, construction, operations
Pittsburgh, PA and technical services).
TRUSTEE
Previous Positions: Dean and Professor
of Law, University of Pittsburgh
School of Law; Dean and Professor of
Law, Villanova University School of
Law.
- ---------------------
MARJORIE P. SMUTS Director or Trustee of the Federated
Birth Date: June Fund Complex; Public $
21, 1935 Relations/Marketing/Conference
4905 Bayard Street Planning.
Pittsburgh, PA
TRUSTEE Previous Positions: National
Spokesperson, Aluminum Company of America; television
producer; business owner.
- ---------------------
JOHN S. WALSH++ Director or Trustee of some of the
Birth Date: Federated Fund Complex; President and $
November 28, 1957 Director, Heat Wagon, Inc.
2007 Sherwood Drive (manufacturer of construction
Valparaiso, IN temporary heaters); President and
TRUSTEE Director, Manufacturers Products, Inc.
(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.
- ---------------------
J. CHRISTOPHER President or Executive Vice President
DONAHUE+ of the Federated Fund Complex; $0
Birth Date: April Director or Trustee of some of the
11, 1949 Funds in the Federated Fund Complex;
Federated Investors President, Chief Executive Officer and
Tower Director, Federated Investors, Inc.;
1001 Liberty Avenue President and Trustee, Federated
Pittsburgh, PA Investment Management Company;
EXECUTIVE VICE President and Trustee, Federated
PRESIDENT Investment Counseling; President and
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; $0
22, 1930 President, Executive Vice President
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.
- ---------------------
JOHN W. MCGONIGLE Executive Vice President and Secretary
Birth Date: October of the Federated Fund Complex; $0
26, 1938 Executive Vice President, Secretary
Federated Investors and Director, Federated Investors,
Tower Inc.; Trustee, Federated Investment
1001 Liberty Avenue Management Company and Federated
Pittsburgh, PA Investment Counseling; Director,
EXECUTIVE VICE Federated Global Investment Management
PRESIDENT AND Corp., Federated Services Company and
SECRETARY Federated Securities Corp.
- ---------------------
RICHARD B. FISHER President or Vice President of some of
Birth Date: May 17, the Funds in the Federated Fund $0
1923 Complex; Director or Trustee of some
Federated Investors of the Funds in the Federated Fund
Tower Complex; Executive Vice President,
1001 Liberty Avenue Federated Investors, Inc.; Chairman
Pittsburgh, PA and Director, Federated Securities
VICE PRESIDENT Corp.
* AN ASTERISK DENOTES A TRUSTEE WHO IS DEEMED TO BE AN INTERESTED PERSON AS
DEFINED IN THE INVESTMENT COMPANY ACT OF 1940.
# 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 FUND.
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 Fund, 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.
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 Fund
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 Fund's 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.
For the fiscal year ended January 31, 2000, the Fund's Adviser directed
brokerage transactions to certain brokers due to research services they
provided. The total amount of these transactions was $54,766,272 for which the
Fund paid $0 in brokerage commissions.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the 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 Fund 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 the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the 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 Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets as
specified below:
AVERAGE AGGREGATE
MAXIMUM ADMINISTRATIVE DAILY
FEE NET ASSETS OF THE
TRUST
0.150of 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 Fund for expenses.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.
CUSTODIAN
WesBanco Bank Wheeling, Wheeling, West Virginia, is custodian for the securities
and cash of the Fund.
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 Fund pays the transfer agent a fee based on the size, type, and
number of accounts and transactions made by shareholders.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, Pittsburgh, Pennsylvania, is the independent auditors for
the Fund.
FEES PAID BY THE FUND FOR SERVICES
FOR THE YEAR ENDED 2000 1999
JANUARY 31
Advisory Fee Earned $396,975
Advisory Fee Reduction $191,388
Brokerage Commissions $0
Administrative Fee $95,429
12B-1 FEE N/A
SHAREHOLDER SERVICES FEE N/A
HOW DOES THE FUND MEASURE PERFORMANCE?
The Fund 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
Fund's 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 given for the one- and since inception periods ended January 31,
1999.
Yield given for the 30-day period ended January 31, 2000.
SINCE
FUND 1 INCEPTION
YEAR ON
APRIL 14,
1997
Total Return 5.46% 6.73%
Yield 3.36%
Tax-Equivalent 4.67%
Yield
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, the 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 is a sample of a tax-equivalency table that may be used in
advertising and sales literature. This table is for illustrative purposes only
and is not representative of past or future performance of the Fund. The
interest earned by the municipal securities owned by the Fund generally remains
free from federal regular income tax and is often free from West Virginia taxes
as well. However, some of the Fund's income may be subject to the federal
alternative minimum tax and state and/or local taxes.
TAX EQUIVALENCY TABLE
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:
references to ratings, rankings, and financial publications and/or performance
comparisons of shares to certain indices; charts, graphs and illustrations
using the Fund's returns, or returns in general, that demonstrate investment
concepts such as tax-deferred compounding, dollar-cost averaging and
systematic investment; 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
information about the mutual fund industry from sources such as the Investment
Company Institute.
The 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.
The 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 Fund uses 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 "intermediate debt 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.
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.
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 Fund for the fiscal year ended January 31,
1999, are incorporated herein by reference to the Annual Report to Shareholders
of WesMark West Virginia Municipal Bond Fund. (To be filed by amendment).
INVESTMENT RATINGS
STANDARD AND POOR'S BOND 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 SERVICEBOND 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. BOND 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 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 Bank Wheeling
One Bank Plaza
Wheeling, WV 26003
CUSTODIAN
WesBanco Bank Wheeling
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
2500 One PPG Place
Pittsburgh, PA 15222
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; (6) (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) Not applicable;
(p) Conformed copy of Powers of Attorney (5)
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).
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).
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed September 25, 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).
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed February 26, 1999 (File Nos. 333-16157
and 811-7925).
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed April 27, 1999 (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.
<TABLE>
<CAPTION>
<S> <C> <C>
(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
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
(1) (2) (3)
Other Substantial
Position with Business, Profession,
NAME THE ADVISER VOCATION OR EMPLOYMENT
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
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
(1) (2) (3)
Other Substantial
Position with Business, Profession,
NAME THE ADVISER VOCATION OR EMPLOYMENT
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
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
(1) (2) (3)
Other Substantial
Position with Business, Profession,
NAME THE ADVISER VOCATION OR EMPLOYMENT
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
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.
(1) (2) (3)
Other Substantial
Position with Business, Profession,
NAME THE ADVISER VOCATION OR EMPLOYMENT
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.
</TABLE>
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 Bank Wheeling 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, 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 6th day of March, 2000.
WESMARK FUNDS
BY: /s/ C. Todd Gibson
C. Todd Gibson, Assistant Secretary
Attorney in Fact for John F. Donahue
March 6, 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 March 6, 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
