<PAGE>
As Filed with the Securities and Exchange Commission
on September 4, 1998
Registration Nos. 333 - _____________________
810 - _____________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. __ |_|
Post-Effective Amendment No. __ |_|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. __ |_|
INDUSTRY LEADERS FUND
--------------------------------------------------
(Exact name of Registrant as specified in charter)
104 Summit Avenue, Box 80, Summit, New Jersey 07902-0080
--------------------------------------------
(Address of Principal Executive Offices)
(908) 273-5440
-------------------------------
(Registrant's telephone number)
Gerald P. Sullivan
Claremont Investment Partners, L.L.C.
104 Summit Avenue, Box 80, Summit, NJ 07902-0080
--------------------------------------------
(Name and address for agent for service)
Copies of all correspondence to:
Travis L. Gering, Esq.
Wuersch & Gering LLP
330 Madison Avenue - 14th Floor
New York, NY 10017
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
Title of Securities Being Registered: Shares of Beneficial Interest of the
Industry Leaders Fund.
Registrant hereby declares its intention to register an indefinite number of
shares of beneficial interest pursuant to Rule 24f-2 under the Investment
Company Act of 1940, as amended.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
CROSS REFERENCE SHEET
PURSUANT TO RULE 404(a)
UNDER THE SECURITIES ACT OF 1933
The enclosed prospectus and Statement of Additional Information ("SAI") for the
Industry Leaders Fund(R) relate to Class A, Class D and Class I shares.
PART A
ITEM PROSPECTUS CROSS REFERENCE/CAPTION
1 (a) Front Cover Page
(b) Back Cover Page
2 (a) Overview of the Industry Leaders
Fund(R) - Risk/Return Summary - Investment Objective of The Fund
(b) Overview of the Industry Leaders
Fund(R) - Risk/Return Summary - Principal Investment Strategy of the
Fund
(c) Overview of the Industry Leaders
Fund(R) - Risk/Return Summary - Principal Risks of Investing in the
Fund
3 Overview of the Industry Leaders
Fund(R) - Risk/Return Summary - Fees and Expenses of the Fund
4 (a) Investments - Principal Investment Objectives
(b) Investment Strategy
(c) Important Risk Considerations
5 Not Applicable
6 (a) Management of the Fund
(b) Not Applicable
7 (a) Shareholder Information
(b) How You Can Invest With The Industry Leaders Fund(R)
(c) How You Can Invest With The Industry Leaders Fund(R)
(d) Dividends, Distributions
(e) Taxes
(f) Not Applicable
8 (a) Overview of the Industry Leaders
Fund(R) - Risk/Return Summary - Fees and Expenses of the Fund;
Distribution and Service Arrangements; How You Can Invest With The
Industry Leaders Fund(R)
(b) Distribution and Service Arrangements - 12b-1 Distribution Plan
(c) Not Applicable
9 Not Applicable
PART B
ITEM STATEMENT OF ADDITIONAL INFORMATION CROSS REFERENCE/CAPTION
10 (a) Front Cover Page
(b) Table of Contents
11 (a) Overview Of The Statement Of Additional Information;
Description Of Fund Shares
(b) Not Applicable
ii
<PAGE>
12 (a) Overview Of The Statement Of Additional Information
(b) Fundamental Investment Restrictions; Non-Fundamental Investment
Restrictions; Instruments in which the Fund Can Invest
(c) Investment Objectives and Policies; Fundamental Investment
Restrictions; Non-Fundamental Investment Restrictions; Instruments in
which the Fund Can Invest
(d) Not Applicable
(e) Not Applicable
13 Trustees and Officers of the Fund
14 (a) Control Persons and Principal Holders of Securities
(b) Control Persons and Principal Holders of Securities
(c) Trustees and Officers
15 (a) Investment Management and Other Services
(b) Distributor
(c) Investment Management and Other Services
(d) Distributor; Administrator; Transfer Agent and Fund Accounting
Services; Class A Distribution and Shareholder Service Plan; Class D
Shareholder Service Plan; Fund Custodian And Dividend Paying Agent
(e) Not Applicable
(f) Additional Purchase and Redemption Information
(g) Class A Distribution and Shareholder Service Plan
(h) Distributor; Administrator; Transfer Agent and Fund Accounting
Services; Class A Distribution and Shareholder Service Plan; Class D
Shareholder Service Plan; Fund Custodian And Dividend Paying Agent
16 (a) Portfolio Transactions and Brokerage
(b) Not Applicable
(c) Portfolio Transactions and Brokerage
(d) Not Applicable
(e) Not Applicable
17 (a) Description of Fund Shares
(b) Not Applicable
18 (a) Net Asset Valuation; Additional Purchase and Redemption Information
(b) Not Applicable
(c) Additional Purchase and Redemption Information
(d) Additional Purchase, Exchange, and Redemption Information
19 Taxes
20 (a) Distributor
(b) Not Applicable
(c) Not Applicable
21 Not Applicable
22 Not Applicable
PART C
The information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C in the Registration Statement.
iii
<PAGE>
THE INDUSTRY LEADERS FUND(R)
3435 Stelzer Road, Columbus, Ohio 43219
Toll Free: (877) 280-1952
[Industry Leaders Fund(R) Logo Graphic]
PROSPECTUS ______ __, 1998
The Industry Leaders Fund(R) Serves Direct, Advised, and Institutional Investors
The Industry Leaders Fund(R) is an open-end, diversified mutual fund. The
Industry Leaders Fund(R) seeks long-term capital appreciation through a
proprietary method of investing in the common stocks of companies having the
highest book value in their respective industries. This method produces a
diversified portfolio, classified as "large value", consisting of approximately
100 companies in 84 different industries.
The Adviser to The Industry Leaders Fund(R) is Claremont Investment Partners(R)
L.L.C.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold, nor may
offers to buy be accepted, prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or
solicitation of any offer to buy, nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state.
THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT INVESTING IN THE INDUSTRY
LEADERS FUND(R). PLEASE CAREFULLY READ THE PROSPECTUS BEFORE YOU INVEST AND
KEEP IT FOR FUTURE REFERENCE. YOUR INVESTMENT IN THE INDUSTRY LEADERS FUND(R)
IS AFFECTED BY MARKET FLUCTUATIONS AND THERE IS NO GUARANTEE THAT THE FUND WILL
ACHIEVE ITS OBJECTIVES. AS TRUE OF ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
For your convenience, a glossary of terms used in this Prospectus
may be found on the inside back cover.
Overview of the Industry Leaders Fund(R)
Risk/Return Summary:
Objective of the Fund
Principal Investment Strategy of the Fund
Principal Risks of Investing in the Fund
Who May Want to Invest in the Fund
Fees and Expenses
Principal Investment Objectives
Investment Strategy
Investment Policies
Important Risk Considerations
Hypothetical Performance of
the Industry Leaders Strategy Model(TM)
Management of the Fund
Shareholder Information
Distribution and Service Arrangements
How You Can Invest with the Industry Leaders Fund(R)
How to Redeem Your Shares
Special Services
Dividends and Distributions
Taxes
Additional Information
Glossary of Terms
<PAGE>
OVERVIEW OF THE INDUSTRY LEADERS FUND(R)
RISK/RETURN SUMMARY
OBJECTIVE OF THE FUND
- ---------------------
The objective of the Fund is to obtain long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGY OF THE FUND
- -----------------------------------------
The principal investment strategy of the Fund is two-fold:
(1) To invest in the common stock of companies that, as a function of
their book value, are industry leaders; and
(2) To manage the Fund portfolio in a systematic and highly disciplined
manner.
To implement this investment approach, the Fund utilizes the Adviser's
proprietary Industry Leaders Strategy Model(TM). The general aspects of the
"Strategy Model" are as follows:
. Companies that are listed in the Value Line Investment Survey(R) form
the universe analyzed by the Strategy Model.
. Inclusion in the Strategy Model universe also requires that a
company's shares be traded in the United States.
. Value Line Investment Survey(R) sorts the companies into various
industries and the Strategy Model follows these categories to
structure the Fund's portfolio.
. The Strategy Model allocates a percentage of the Fund's portfolio to
each industry.
. The Strategy Model determines the Fund portfolio allocation
percentage by analyzing the book value of companies within each
industry.
. From each industry, the Strategy Model selects the common stock of
one or more companies with the highest book value.
. The Strategy Model, in this way, creates and maintains a broadly
diversified Fund portfolio of companies that are industry leaders
with respect to book value.
3
<PAGE>
The discipline of the Fund's strategy includes the following:
. The Fund will adhere to the Strategy Model regardless of the
performance of the economy or stock market generally.
. The Fund will not engage in market-timing investment strategies.
. The Fund will not make defensive investments in cash or cash
equivalents.
. The Fund will not interrupt its portfolio strategy for short term
profit-taking.
PRINCIPAL RISKS OF INVESTING IN THE FUND
- ----------------------------------------
The Fund is subject to the same risks common to all mutual funds that invest in
equity securities. You could lose money by investing in the Fund, if any of the
following occur:
. The stock market goes down (known as a "bear market").
. Fees and expenses are greater than investment returns.
The following risks of loss are particular to investing in the Fund:
. The Strategy Model may not perform as expected.
. "Large Value" stocks may fall out of favor with investors.
A detailed discussion of risks is set forth below under the heading, "Important
Risk Considerations."
Before investing in the Fund, you should read this Prospectus in its entirety
and keep in mind all of the following:
. Mutual fund shares are subject to risks, including possible loss of
your principal investment.
. Mutual fund shares are not insured by the Federal Deposit Insurance
Corporation (FDIC) or any other government or private agency.
. Mutual fund shares are not deposit obligations of any bank, nor are
they guaranteed, endorsed, or insured by any bank or other
institution.
4
<PAGE>
WHO MAY WANT TO INVEST IN THE FUND
- --------------------------------------------------------------------
The Fund may be a suitable investment if you are:
. Seeking a potential for growth of investment over the long term
. Seeking investment mainly in U.S. companies
. Seeking a systematic and disciplined "large value" strategy.
However, the Fund is NOT appropriate if you are:
. Seeking short-term gains or current income
. Seeking absolute predictability and stability of investment principal
. Not willing to take any risk of losing money on an investment.
Three classes of shares are available for prospective investors who wish to
invest in the Fund:
. Class A Shares - For purchase through a financial adviser or broker
. Class D Shares - For purchase by self-directed investors
. Class I Shares - For purchase by institutional investors.
5
<PAGE>
FEES AND EXPENSES OF THE FUND
- -----------------------------
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)
<TABLE>
<CAPTION>
Class A Class D Class I
<S> <C> <C> <C>
Maximum Sales Charge (Load) imposed on initial
purchases (as a percentage of offering 4.75% None None
price)(1)
Maximum Deferred Sales Charge (Load) None None None
Maximum Sales Charge (Load) imposed on
Reinvested Dividends None None None
Contingent Redemption Fees (as a percentage of
amount redeemed) (2) 0.40% 0.40% 0.20%
Account Fee (3) $20.00 $20.00 None
Maximum Annual Account Fees (3) $20.00 $20.00 None
</TABLE>
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
<TABLE>
<CAPTION>
Class A Class D Class I
<S> <C> <C> <C>
Management Fees 0.30% 0.30% 0.30%
Class A Service and Distribution (12b-1) Fees 0.25% None None
Class D Service Fees (4) None 0.35% None
Other Fund Expenses (5) 0.35% 0.35% 0.35%
-------------- -------------- --------------
Total Annual Fund Operating Expenses (6) 0.90% 1.00% 0.65%
</TABLE>
(1) "Load" is another name for a sales charge. The sales charge declines with
larger purchases. See below, "Distribution and Service Arrangements."
(2) Redemption fees are charged if you redeem Class A or Class D Shares held
for less than 180 days, or Class I Shares held for less than 90 days.
(3) The Annual Account Fee is imposed only on Class A accounts of less than
$20,000 and Class D accounts of less than $10,000. Annual account fees are
waived on Class D accounts if an initial share purchase of $5,000 or more
is made with a subscription for an automatic purchase plan of $100 or more
per month. See below, "Special Services - Systematic Investment Program."
(4) Under the Class D Shareholder Service Plan, the Fund may charge Class D
Shares a minimum of .25% and maximum of .35% per year. The Fund
anticipates that the average annual charge for these services will be less
than .35% per year.
(5) Other Fund Expenses are based on estimated amounts for the current fiscal
year, ending June 30, 1998.
6
<PAGE>
(6) After Waivers and Reimbursement of Fees. The Adviser has voluntarily
agreed to waive its management fees and/or to reimburse expenses, including
12b-1 Fees and Shareholder Service Fees, until October 1, 2001, so that
total annual Fund expenses do not exceed 0.90% for Class A Shareholders,
1.00% for Class D Shareholders and 0.65% for Class I Shareholders. The
Adviser's current intention is to continue such waivers and reimbursement
policy indefinitely, but the Adviser reserves the right to discontinue or
modify any waiver or reimbursement at its discretion after October 1, 2001,
without further notice to shareholders. The Adviser's waivers and
reimbursements have the effect of lowering the expense ratio and thus of
increasing the Fund's overall return to all Classes of Fund Shareholders.
Example
This 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 below and then redeem all of your shares at the end of those periods.
The example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
Class A Class D Class I
- ----------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C>
1 year 3 years 1 year 3 years 1 year 3 years
$_________ $_________ $_________ $_________ $_________ $_________
</TABLE>
You would pay the same expenses if you did not redeem your shares (redemption
fees apply only to redemptions occurring within 180 days of purchase for Class A
and D Shares, and 90 days for Class I Shares).
7
<PAGE>
PRINCIPAL INVESTMENT OBJECTIVES
-------------------------------
The Industry Leaders Fund(R) objective is to obtain long-term capital
appreciation.
INVESTMENT STRATEGY
-------------------
The strategy of the Fund is two-fold:
(1) To invest in the common stock of companies that, as a function of
their book value, are industry leaders, and
(2) To manage the Fund portfolio in a systematic and highly disciplined
manner.
To implement this investment approach, the Fund utilizes the Adviser's
proprietary Industry Leaders Strategy Model(TM). The general aspects of the
Strategy Model are as follows. Companies that are listed in the Value Line
Investment Survey(R) form the universe analyzed by the Strategy Model.
Inclusion in the Strategy Model universe also requires that a company's shares
be directly traded in the United States. The Value Line Investment Survey(R)
sorts the companies into various industries and the Strategy Model follows these
categories to structure the Fund's portfolio. The Strategy Model allocates a
percentage of the Fund's portfolio to each industry. The Strategy Model
determines the Fund portfolio allocation percentage by analyzing the book value
of companies within each industry. From each industry, the Strategy Model
selects the common stock of one or more companies with the highest book value.
The Strategy Model, in this way, creates and maintains a broadly diversified
Fund portfolio of industry leading companies with respect to book value.
The Fund has chosen to restrict its portfolio investments to companies having
adequate data available concerning book valuation. As a result of this
threshold requirement, most of the stocks included in the Fund portfolio will be
those of U.S. companies.
The fundamental concept underlying the Strategy Model is to select and maintain
the Fund portfolio in a systematic and highly disciplined manner. The Fund
intends to adhere to the Strategy Model regardless of the performance of the
economy or stock market generally. The Fund will not engage in market-timing
investment strategies, nor will the Adviser intervene in operation of the
Strategy Model for speculative, defensive or short term profit-taking reasons.
The Strategy Model has been tested by comparative retroactive application to
data from the past ten years. Such application suggests that the Fund portfolio
will perform well in the future. However, there can be no assurance of success
with respect to any future performance of the Fund.
8
<PAGE>
The Industry Leaders Fund(R), The Industry Leaders Strategy Model(TM) and
Claremont Investment Partners(R), L.L.C., have no affiliation with The Value
Line Investment Survey(R). The Value Line Investment Survey(R) is a registered
trademark of Value Line Publishing, Inc. The Value Line Investment Survey(R)
makes no representation regarding the advisability of investing in the Industry
Leaders Fund(R).
The Industry Leaders Fund(R) and The Industry Leaders Strategy Model(TM) are
trademarks of Claremont Investment Partners(R), L.L.C.
INVESTMENT POLICIES
-------------------
The Strategy Model currently includes 84 industries and approximately 1600
companies in its universe for purposes of analysis, stock selection and Fund
portfolio allocation.
Under normal market conditions, at any given time, the Fund portfolio:
. Will be comprised of approximately 90 to 115 industry-leading companies
. Will be primarily comprised of U.S. common stocks
. Will not have more than 14% of Fund portfolio assets in any one industry
. Will not have more than 3% of Fund portfolio assets in any one company
. Will not have its top 10 holdings exceed 25% of the Fund portfolio.
The Fund will not:
. Invest in debt securities or preferred stocks
. Hedge investments by engaging in speculative asset management, such as
short sales, puts, calls, warrants or stock option contracts
. Make Fund portfolio decisions based on short-term performance goals
. Invest "defensively" against particular market or economic conditions,
such as shift a substantial portion of Fund portfolio assets to cash or
cash equivalents
. Otherwise make investments that are inconsistent with the Fund's
principal long term strategy.
The Strategy Model re-allocates the Fund portfolio monthly. Due to cash inflows
and outflows (from purchases and redemptions of Fund shares), the Fund portfolio
may be re-balanced more often. However, the Fund may not always be fully
invested for several reasons, including, but not limited to, obtaining economic
efficiency with respect to brokerage costs. The Adviser may use short term cash
management instruments to
9
<PAGE>
temporarily hold uninvested Fund assets. The maturity of any such instruments
will not exceed seven days.
IMPORTANT RISK CONSIDERATIONS
-----------------------------
Investing in the Industry Leaders Fund(R) involves risks common to the risks of
investing in any equity mutual fund:
. The Fund invests in common stocks that may increase or decrease in
value. Therefore, the value of your investment in the Fund may also
increase or decrease.
. Declines in the market as a whole (i.e., a "bear market"), may cause
you to lose some or all of your investment.
. The Fund could lose money if the stocks selected for the Fund's
portfolio are experiencing financial difficulty, or are out of favor
in the market because of weak performance, poor earnings forecasts,
negative publicity or industry-specific market cycles.
. It can take many months or possibly years to recover a loss.
Historically, some stock market declines have ended quickly while
others have continued for sustained periods of time, as indicated by
the following:
Commencement of Period To Recover Loss
Market Decline From Market High
-------------- ----------------
July 1990 1 year
October 1987 18 months
1973 10 years
1929 24 years
. It is impossible to predict either the timing or severity of a
downward-trend market.
. Periods of unusually high returns have, historically, increased the
risk of stock investing for subsequent periods. The recent upward
trend market (i.e., a "bull market") has been an unusual growth
period for most major stock market indexes, producing substantial
average annual returns. However, these returns may not continue in
the future.
In addition to risks common to all equity mutual funds, the following risks are
particular to investing in the Fund:
. There can be no assurance that the Strategy Model will perform as
expected or that the Fund will be successful in replicating the
results indicated by retroactive application of the Strategy Model.
10
<PAGE>
. The Fund has no operating history and therefore no actual past
performance record to guide prospective investors in their decision
whether or not to invest in shares of the Fund.
. There is also a risk that the Fund, its service providers and/or
exchanges on which stocks of the Fund portfolio trade, could be
disrupted by computer systems that cannot accurately process date-
related information after December 31, 1999. This failure, often
referred to as the "Year 2000 Issue," might adversely affect
securities trades, pricing and account servicing for the Fund. The
Adviser has taken steps that it reasonably believes will address the
Year 2000 Issue. In addition, the Fund's major service providers have
informed the Adviser that they taken similar steps. However, neither
the Adviser nor the Fund's service providers can assure that these
steps will be sufficient to avoid any adverse effects from the Year
2000 Issue.
Each prospective investor must assess all of the risks of investing in a stock-
based mutual fund in general, and the risks of investing in the Fund in
particular. It is important that you understand your financial-risk tolerance.
The impact of a downward-trend market also depends not only upon the extent of a
decline, but also upon your individual time horizon. For instance, a downward-
trend market may be harder to tolerate if you are retired or nearing retirement.
Ask yourself these questions: What can you tolerate to lose? If your
investment incurs a loss, how long can you wait for a market rebound? What are
your other financial resources?
Before investing in the Fund, you should be willing to accept the risks of loss
inherent in stock investing and the risk of stock market declines generally.
Investors should also remember that an investment in the Fund is not a deposit
in a bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation (the FDIC) or any other private organization or government agency.
As a result, investment losses are not covered by any kind of insurance.
11
<PAGE>
HYPOTHETICAL PERFORMANCE OF
THE INDUSTRY LEADERS STRATEGY MODEL(TM)
---------------------------------------
The following graph and table compares the actual performance of the Standard
and Poor's 500 Index(R), the Dow Jones Industrial Average(R) and the Standard
and Poor's Barra Value Index(R), with the retroactive application of the
Strategy Model for various historical periods (as indicated in the graph and
table below). Total returns of the Strategy Model are returns on a hypothetical
portfolio composed of stocks selected by the Strategy Model and re-balanced
monthly.
BECAUSE THE HYPOTHETICAL RETURNS ARE DERIVED BY RETROACTIVE APPLICATION OF THE
STRATEGY MODEL, THEY DO NOT REPRESENT ACTUAL TRADING. All returns contained in
the graph and chart below reflect reinvestment of dividends and other earnings,
and do not reflect any charges, management fees or other expenses, such as
brokerage commissions. Of course, retroactive performance of the Strategy Model
does not necessarily indicate future performance of the Strategy Model or
earnings of the Fund.
COMPARATIVE HYPOTHETICAL TOTAL RETURN PERFORMANCE OF
THE INDUSTRY LEADERS STRATEGY MODEL(TM) (ANNUALIZED)
[Line Graph of Table Data]
<TABLE>
<CAPTION>
Dow Jones S&P Barra
Strategy Industrial Value
Period Model S&P 500 Average Index
<S> <C> <C> <C> <C>
9 Months
Jan. - Sept. 1998 __.__% __.__% __.__% __.__%
1 Year 1997 32.87% 33.28% 24.91% 29.98%
3 Years 133.59% 125.39% 120.50% 117.23%
5 Years 172.03% 151.35% 170.88% 156.02%
10 Years 435.72% 424.35% 452.44% 395.79%
</TABLE>
12
<PAGE>
MANAGEMENT OF THE FUND
----------------------
INVESTMENT ADVISER
Claremont Investments Partners(R) L.L.C. is the Adviser to the Fund. The
Adviser manages the Fund's investments and business affairs subject to the
supervision of the Fund Board of Trustees. The Adviser is a registered
investment adviser. The Adviser intends in the future to offer investment
advisory services to clients other than the Fund.
The Adviser began conducting business in 1996. Since then, its principal
business has been the development of the Strategy Model. The Adviser has not
previously advised or managed a mutual fund. The Adviser's principal address is
104 Summit Avenue, P.O. Box 80, Summit, New Jersey 07902-0080.
PORTFOLIO MANAGERS
The Adviser's portfolio managers for the Fund are Gerald P. Sullivan and
Barry F. Sullivan.
.. Gerald P. Sullivan, President of the Fund, has been associated with the
Adviser since 1996. Previous to that he was a Vice President of First
Fidelity Bancorporation, a Managing Director of Hilliard Farber & Co., and a
Management Analyst for The Atlanta Committee for the Olympic Games. Mr.
Sullivan obtained his undergraduate degree from Columbia University and holds
an M.B.A. from the University of Chicago Graduate School of Business.
.. Barry F. Sullivan, CEO of the Fund, is currently Vice Chairman of Sithe
Energies, Inc. He has been affiliated with the Adviser since 1996. Mr.
Sullivan currently serves on the Boards of Directors of Merrill Lynch
International Bank and The Guardian Life Insurance Company of America. Mr.
Sullivan has served as Chairman and CEO of First Chicago Corporation, the
parent company of First National Bank of Chicago. Mr. Sullivan served in
various executive capacities at Chase Manhattan Bank, N.A., including
Executive Vice President and Member of the Management Committee, from June
1957 through 1980. Mr. Sullivan served as an active member of the Board of
Trustees of the University of Chicago from August 1980 to June 1995, and was
Chairman of the Board of Trustees from July 1987 to April 1991. Mr. Sullivan
also served as Chief Operating Officer of the New York City Board of
Education from October 1994 to October 1995, and as Deputy Mayor for The City
of New York from May 1992 through December 1993. From January through October
1994, Mr. Sullivan served as President and Chief Executive Officer of the New
York City Partnership in conjunction with the Chamber of Commerce. Mr.
Sullivan graduated from Columbia University and obtained an M.B.A. from the
University of Chicago Graduate School of Business. Mr. Sullivan is presently
a candidate for a Ph.D. from Fordham University. Mr. Sullivan holds honorary
doctoral degrees
13
<PAGE>
awarded by De Paul University and the University of Chicago. Barry F.
Sullivan is the father of Gerald P. Sullivan.
ADVISORY MANAGEMENT FEES
As an annual management fee, the Fund pays the Adviser .30% of the Fund
portfolio's average daily net asset value, computed daily and payable monthly.
SHAREHOLDER INFORMATION
-----------------------
HOW THE FUND'S SHARES ARE PRICED
The net asset value ("NAV"), multiplied by the number of Fund shares you own,
gives you the value of your investment.
The Fund calculates the NAV each business day, as of the close of the New York
Stock Exchange, which is normally 4:00 p.m. Eastern Time. Any shares that you
purchase or redeem are valued at the next share price calculated after the Fund
receives and accepts your investment instructions. A business day is a day on
which the NYSE is open for trading or any day in which enough trading has
occurred in the securities held by the Fund to affect the NAV materially.
The Fund calculates the NAV by adding up the total value of the Fund's
investments and other assets, subtracting Fund liabilities, and then dividing
that figure by the number of the Fund's outstanding shares. The value of an
investment in a mutual fund is based upon the NAV determined by that mutual
fund. The formula is expressed as follows:
Total Assets Less Liabilities
NAV = --------------------------------
Number of Shares Outstanding
You can find the NAV of most mutual funds every day in The Wall Street Journal
and other newspapers. However, newspapers do not normally publish information
about a particular mutual fund until it has a minimum number of shareholders or
minimum level of assets. In the event you redeem shares, any applicable
redemption fees are subtracted from your account after calculation of the NAV.
DISTRIBUTION AND SERVICE ARRANGEMENTS
-------------------------------------
CLASS A 12B-1 DISTRIBUTION AND SERVICING PLAN
14
<PAGE>
The Fund has adopted a plan under Rule 12b-1 under the Investment Company Act of
1940, as amended, which allows the Fund to pay distribution and other fees for
the sale and distribution of Class A shares and for services provided on behalf
of Class A shareholders. The fee is 0.25% of the Fund's average daily net
assets and is charged only on Class A shares. Because these fees are paid out
of the Fund's assets on an on-going basis, these fees will increase the cost of
Class A Share investment and may cost you more than paying other types of sales
charges.
CLASS A FRONT-END SALES CHARGES
Class A shares of the Industry Leaders Fund(R) are available at the public
offering price. The term "offering price" includes the front-end sales charge.
The sales charge declines with larger purchases as follows:
Front End % of Net Amount
Amount Invested Sales Charge Invested
$0 to 49,999 4.75% 4.99%
$50,000 to 99,999 4.50% 4.71%
$100,000 to 249,999 3.50% 3.63%
$250,000 to 499,999 2.50% 2.56%
$500,000 to 999,999 2.00% 2.04%
$1,000,000 and up 0.25% 0.25%
CLASS D SHAREHOLDER SERVICING PLAN
The Fund, on behalf of its Class D Shares, has adopted a plan for shareholder
services relating to maintenance of investor accounts and for administrative
support services to customers who may from time to time beneficially own
Class D Shares. Under the shareholder servicing plan, Class D Shareholders may
pay shareholder servicing agents (which may include affiliates of the Adviser,
other financial institutions and/or mutual fund vendors), an annual fee of up to
..35% of average Class D daily net assets. The mutual fund vendors may include,
but are not limited to, mutual fund supermarkets and/or no transaction fee
programs that make available Fund shares and provide certain services for
shareholders who purchase shares from such programs. Because these fees are paid
out of the Fund's assets on an on-going basis, these fees will increase the cost
of Class D investment.
REDEMPTION FEES
The Fund incurs brokerage fees in connection with its portfolio transactions.
Short-term "market timers" who engage in frequent purchases and redemption of
Fund shares can disrupt the Fund's investment program and create additional
transaction costs that all shareholders must bear. If you sell your Class A or
Class D Shares within 180 days of purchase, or the Class I Shares within 90 days
of purchase, you will pay a redemption fee
15
<PAGE>
to the Fund to help offset such transaction costs. Redemption fees are charged
at an amount equal to the lesser of the net asset value at the time of purchase
of the shares being redeemed or the net asset value of such shares at the time
of redemption. The redemption fee calculations are made in the manner that
results in the lowest possible charge being assessed. The Fund will use the
"first-in, first-out" method to determine the holding periods. The date of the
redemption will be compared with the earliest purchase date of shares held in
the account. In this regard, it will be assumed that the redemption is first of
shares held for more than one year or shares acquired pursuant to reinvestment
of dividends or distributions. You will pay a redemption fee if this holding
period is less than 180 days for Class A or Class D Shares, or less than 90 days
for Class I Shares. The redemption fee is waived upon the occurrence of certain
events, including, (a) death or disability of a shareholder; (b) minimum
required distributions from IRA or custodial accounts to persons 70-1/2 years of
age or older; and (c) minimum required retirement plan distributions. Please
contact the Fund for further information concerning redemption fee waivers.
HOW YOU CAN INVEST WITH THE INDUSTRY LEADERS FUND(R)
----------------------------------------------------
This section tells you how to open an account and how to buy shares after your
account is open. Below is a description of the minimum investment requirements
for the Fund, expenses and sales charges applied to each Class of shares, and
the procedures to follow if you decide to buy shares of the Fund. Please read
the entire Prospectus carefully before buying shares of the Fund.
HOW TO BUY SHARES
. PURCHASES THROUGH FINANCIAL ADVISORS OR BROKERS: You may invest in
Class A Shares of the Fund through your financial adviser or
brokerage account. Simply tell your adviser or broker that you wish
to purchase Class A Shares of the Industry Leaders Fund(R) and he or
she will take care of the necessary documentation.
. SELF DIRECTED PURCHASES: You may invest in Class D Shares by opening
an account directly with the Fund. To do this, simply complete and
return an Industry Leaders Fund(R) application with proper payment.
. INSTITUTIONAL PURCHASES: Institutions may invest directly in Class I
Shares. To do this, simply complete and return an Industry Leaders
Fund(R) application with proper payment.
Minimum Investments:
. Class A Shares: $250 minimum initial investment and $100 for all
purchases after your initial investment
16
<PAGE>
. Class D Shares: $3,000 minimum initial investment and $100 for all
purchases after your initial investment
. Class I Shares: $1,000,000 minimum initial investment and
no incremental minimum for additional investments.
PURCHASE CLASS A SHARES THROUGH YOUR FINANCIAL ADVISER OR BROKER
You can make initial and additional purchases of Class A Shares of the Fund
through your financial adviser or broker who will provide instructions to you.
PURCHASE CLASS D AND CLASS I SHARES BY MAIL
You can purchase Class D and Class I Shares by mail. For an initial purchase,
complete a Fund application. Be sure to indicate the share class into which you
intend to invest. Enclose a check for at least the minimum investment amount of
the class you wish to purchase (Class D: $3,000; Class I $1,000,000) made out in
the full name and share class of the Fund (for example, "The Industry Leaders
Fund, Class D").
For additional share purchases by mail, make a check payable to the full name
and share class of the Fund (for example, "The Industry Leaders Fund, Class D").
In the case of Class D, additional purchases must be for at least $100. Be sure
to write your account number on the check as well. Enclose the payment
stub/card from your statement, if available.
PURCHASE ADDITIONAL CLASS D AND CLASS I SHARES BY WIRE
To purchase additional Class D or Class I Shares by wire transfer, you must have
an existing account which has been previously established by mail.
Instruct your wiring bank to transmit at least $100 to:______________________.
Be sure to have the wiring bank include your current account number and the name
in which your account is registered.
CLASS A REDUCED SALES CHARGES. Reduced sales charges are available for
purchases of $50,000 or more of Class A Shares of the Fund. The Class A Front-
End Sales Charge Reduction Schedule may be found above under the caption,
"Distribution and Shareholder Services." To obtain the reduction of the sales
charge, you or the authorized broker-dealer through whom you are purchasing
shares must notify the Fund's Transfer Agent at the time of purchase whenever a
quantity discount is applicable to your purchase.
CLASS D ACCOUNT FEE WAIVERS. The annual account fees are waived on Class D
accounts if an initial share purchase of $5,000 or more is made with a
subscription for an automatic purchase plan of $100 or more per month. See
below, "Special Services -Systematic Investment Program."
17
<PAGE>
The Fund does not currently provide for exchange privileges between different
classes of the Fund.
HOW TO REDEEM YOUR SHARES
-------------------------
This section explains how you can sell your Fund shares.
REDEEM THROUGH YOUR FINANCIAL ADVISER OR BROKER
You may request to sell Class A Shares through your financial adviser or broker.
Ask your selling financial adviser or broker for redemption procedures. Your
adviser and/or broker may have transaction minimums and/or transaction times
which will affect your redemption.
REDEEM BY MAIL
Write a letter to the Fund, stating your account registration, your account
number, the Fund Class you wish to redeem, and the dollar amount ($100 or more)
of the redemption you wish to receive (or write "Full Redemption", if you wish
to sell all of your investment in the Fund). Make sure all the account owners
sign the request. You may request that redemption proceeds be sent to you by
check, by ACH transfer into a bank account, or by wire (a wire requires a $5,000
minimum).
Signature guarantees are required for mailed redemption requests over $5,000.
You can obtain a signature guarantee at a bank or brokerage house. The Fund
does not accept notarized signatures.
REDEEM BY PHONE
Call the Fund to request a redemption of at least $100. Be prepared to provide
your account number, Taxpayer Identification Number (or your social security
number if you are an individual) and other personal identification information.
Unless you have instructed otherwise, only one account owner needs to call in
redemption requests. You may request that redemption proceeds be sent to you by
check, by transfer into an ACH-linked bank account, or by wire (a wire requires
a $5,000 minimum).
The Fund makes telephone privileges available to you automatically unless you
specifically decline them on your application or subsequently in writing.
Telephone privileges allow for transactional instructions by shareholders who
provide reasonable confirmation of their identity, such as providing their
Taxpayer Identification Number or social security number on the account. All
proceeds from telephone redemptions must be delivered only to the address of
record for such account. The Fund will not be liable for any losses incurred if
it follows telephone instructions which it reasonably believes are genuine.
REDEMPTION PAYMENT POLICIES
18
<PAGE>
Although it is not the Fund's policy to delay redemption payments, the Fund
reserves the right to delay payment of a redemption for up to five business
days. The Fund may also delay payment of redemptions under extraordinary
circumstances or as the Securities and Exchange Commission permits in order to
protect remaining shareholders.
Although no fees are currently in effect for wiring funds, the Fund reserves the
right to pass through to shareholders any third-party surcharges incurred by the
Fund.
The Fund does not provide for waiver of any fees in connection with re-
investments in the Fund after redeeming shares.
SPECIAL SERVICES
----------------
The Fund has certain programs to help you to purchase or redeem shares
conveniently each month.
SYSTEMATIC INVESTMENT PROGRAM: You may automatically buy additional Fund shares
each month with a minimum purchase of at least $100. Money from your linked
bank account can, each month, be automatically transferred to purchase
additional Fund shares. The Fund will transfer the amount on or about the day
you specify, or on or about the 20th of each month if you have not specified a
day. If you wish to change or add linked accounts, please call the Fund toll-
free at (877) 280-1952.
SYSTEMATIC WITHDRAWAL PROGRAM: The Fund can automatically redeem enough shares
to equal a specified dollar amount of at least $100, on or about the fifth
business day prior to the end of each month, and either send you the proceeds by
check or transfer them into your linked bank account. In order to set up a
Systematic Withdrawal Program, you must:
. Have a Fund account valued at $25,000 or more
. Have distributions reinvested
. Not simultaneously participate in the Fund Systematic Investment Program.
Once the Fund has received your instructions, it generally takes about ten
business days to set up either of the automatic plans. It generally takes the
Fund about five business days to change or cancel participation in either plan.
The Fund automatically cancels your program if the linked account you have
specified is closed.
19
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
----------------------------
DIVIDEND AND CAPITAL GAIN DISTRIBUTION OPTIONS
The Fund passes along to your account your share of investment earnings in the
form of dividends. Fund dividend distributions are the net dividends earned on
investments after Fund expenses. The Fund will at least annually declare and
pay dividends from its net investment income and distribute any net capital
gains obtained through Fund investment transactions. Shares issued pursuant to
automatic reinvestment of income dividends or capital gains distributions are
not subject to a front-end sales load.
You may select one of the following ways for the Fund to make your
distributions:
. AUTOMATIC REINVESTMENT OPTION: You may automatically buy new shares
of your Fund class. The new shares are purchased at NAV generally on
the day the income is paid. This option is implemented automatically
for your Fund account unless you instruct the Fund otherwise.
. DIRECT DEPOSIT OPTION: You may have your dividends and capital gains
deposited into any bank account you link to your Fund account if it
is part of the ACH system. If your specified bank account is closed,
the Fund will automatically reinvest your distributions.
. CHECK PAYMENT OPTION: You may receive checks for distributions mailed
to your address of record or to another name and address which you
have specified in written, signature-guaranteed instructions. If
checks remain uncashed for six months, or the Post Office cannot
deliver them, the Fund will automatically reinvest your
distributions.
You may change your distribution option at any time by calling or writing to the
Fund. The Fund must receive any change five business days (ten business days
for electronic fund transfers) prior to a dividend or capital gain distribution
payment date, in order for the change to be effective for that payment.
20
<PAGE>
TAXES
------
The Fund intends to continue to qualify as a regulated investment company. This
status exempts the Fund from paying federal income tax on the earnings or
capital gains it distributes to its shareholders.
In general, your investment in the Fund will be subject to the following tax
consequences:
. Ordinary dividends received by the Fund and passed through to shareholders
are taxable as ordinary income (you are subject to taxation on
automatically reinvested dividends, as well as on dividends which are
distributed in cash).
. Dividends from the Fund's capital gains are taxable as capital gain (which
may be taxed at different rates depending on the length of time the Fund
holds its assets).
. Dividends may also be subject to state and local taxes.
. Certain dividends paid to you in January will be taxable as if they had
been paid the previous December.
. After the end of each calendar year, you will receive a statement (Form
1099) of the federal income tax status of all dividends and other
distributions paid (or deemed paid) during the year.
. When you sell (i.e., redeem) shares of a Fund, you will be subject to
taxation for any gain or loss.
For the foregoing reasons, you should keep all of your Fund statements for
accurate tax-accounting purposes.
The tax information above is for your general information. A more detailed
discussion of federal income tax considerations may be found in the Fund's
Statement of Additional Information. The foregoing information is not intended
to provide complete tax planning advice. Please consult with your own tax
professional prior to investing in the Fund.
21
<PAGE>
GLOSSARY OF TERMS
-----------------
Adviser Claremont Investment Partners, L.L.C.(R)
Bear Market Prolonged period of falling stock prices.
Book Value The common stockholders' equity value of a
company.
Bull Market Prolonged period of rising stock prices.
Capital Appreciation Growth of an investment
Common stock Units of ownership of a public corporation,
also referred to as common equity.
Defensive Investing Shift of portfolio assets during periods of
market and/or economic uncertainty.
Diversified The spread of risk by investing in more than
one category.
Equity securities Units of ownership of a public corporation.
Fund The Industry Leaders Fund(R).
Large Value A portfolio of companies having a median market
capitalization similar to the Standard & Poor's
500 Index but with lower price-earnings and
price-book ratios.
Market Timing Speculative investment strategy based on
prediction of future movement of the stock
market.
NAV Net asset value.
Offering price The price at which Fund shares are sold,
including front-end sales charges.
Open End Mutual Fund A mutual fund which stands ready to redeem (buy
back) its shares from investors.
Portfolio Combined holding of more than one investment.
SAI Statement of Additional Information
Strategy Model The Industry Leaders Strategy Model(TM), a
proprietary portfolio allocation and stock
selection model developed and owned by the
Adviser.
Value Line Investment Survey(R) Independent investment advisory service that
analyzes approximately 1700 companies.
Year 2000 Issue Concern that computer systems cannot accurately
process date-related information after December
31, 1999.
22
<PAGE>
[Prospectus back cover page]
ADDITIONAL INFORMATION
----------------------
The Industry Leaders Fund(R) is an open-end, diversified mutual fund which
serves direct, advised, and institutional investors. The Industry Leaders
Fund(R) seeks long-term capital appreciation through a proprietary method of
investing in the common stocks of companies having the highest book value in
their respective industries.
To request additional information about the Fund, contact your financial adviser
or contact the Fund by mail, telephone or the internet:
The Industry Leaders Fund(R)
3435 Stelzer Road
Columbus, Ohio 43219,
Toll Free: (877) 280-1952
Device for the Hearing Impaired: (800) ___ - ____
http://www.industry-leaders.com
The Statement of Additional Information (the "SAI") provides a more complete
discussion of certain matters contained in this Prospectus. The Securities and
Exchange Commission (the "SEC") allows the Fund to "incorporate by reference"
information the Fund files with the SEC, which means that the Fund can make
important disclosures by referring you to those documents. The information
incorporated by reference is an important part of this Prospectus, and
information that the Fund later files with the SEC will automatically update and
supersede this information. This Prospectus incorporates by reference the SAI.
Information on how to obtain a copy of the SAI is set forth below.
.. You may obtain a free copy of the SAI and the current annual or semi-annual
reports, by contacting the Fund as set forth above.
.. You may also obtain copies of the SAI or financial reports for free by
calling or writing your Authorized Securities Dealer.
.. You may review the SAI and/or other reports at the Public Reference Room of
the Securities Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.
.. Information on the operation of the Securities Exchange Commission's public
reference room may be obtained by calling the Commission at 1-800-SEC-0330.
.. You may obtain copies of the Fund's prospectus, the SAI and the financial
reports for a fee by calling or writing the SEC's Public Reference Room at
the SEC's address or phone number listed above, or without a fee by visiting
the SEC's Worldwide Web site at http://www.sec.gov.
File Nos. 333-___________
810-___________
<PAGE>
INDUSTRY LEADERS FUND(R)
3435 Stelzer Road
Columbus, Ohio 43219
(Toll Free (877) 280-1952)
STATEMENT OF ADDITIONAL INFORMATION
___________ __, 1998
SUBJECT TO COMPLETION
THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND
MAY BE CHANGED. THE FUND MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
STATEMENT OF ADDITIONAL INFORMATION IS NOT AN OFFER TO SELL THESE SECURITIES AND
IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
This Statement of Additional Information, which should be kept for future
reference, is not a prospectus and should be read in conjunction with the
Industry Leaders Fund(R) Prospectus, dated ___________ __, 1998 (the
"Prospectus"). The Prospectus can be obtained without cost by contacting your
financial adviser or by calling toll-free (877) 280-1952, or by writing to the
Fund at the address referenced above. This Statement of Additional Information
is incorporated by reference in its entirety into the Prospectus. This
Statement of Additional Information is intended to provide you with further
information about the Fund.
INVESTMENT ADVISER
Claremont Investment Partners, L.L.C.
DISTRIBUTOR
Industry Leaders Fund Distributors, Inc.
ADMINISTRATOR, TRANSFER AGENT and FUND ACCOUNTING AGENT
BISYS Fund Services Ohio, Inc.
CUSTODIAN
___________________
INDEPENDENT ACCOUNTANTS
___________________
COUNSEL
Wuersch & Gering, LLP
<PAGE>
TABLE OF CONTENTS
Overview of the Statement of Additional Information.............................
Investment Objectives and Policies..............................................
Fundamental Investment Restrictions.............................................
Non-Fundamental Investment Restrictions.........................................
Instruments in which the Fund Can Invest........................................
Domestic Common Stocks.....................................................
Foreign Company Stocks.....................................................
Repurchase Agreements......................................................
Other Investment Companies.................................................
Net Asset Valuation.............................................................
Performance Information.........................................................
Average Annual Total Return................................................
Cumulative Total Return....................................................
Comparative Performance Information........................................
Additional Purchase and Redemption Information..................................
Distributor Concessions and Dealer Reallowances............................
Redemption Fee Waivers.....................................................
Additional Dividend And Distribution Information................................
Taxes...........................................................................
Subchapter M...............................................................
Diversification............................................................
Excise Tax.................................................................
Taxation of Fund Shareholders..............................................
Treatment of Capital Gains.................................................
Distribution of Capital Gains..............................................
Dividends Received Deduction...............................................
Alternative Minimum Tax Considerations.....................................
Foreign Source Income......................................................
Other Income...............................................................
Treatment of Distributions.................................................
Timing of Distributions....................................................
Shareholder Purchases before a Distribution................................
Additional Withholding Requirements........................................
Sale or Redemption of Shares...............................................
Foreign Shareholders.......................................................
Additional Tax Considerations..............................................
Trustees and Officers of The Fund...............................................
Control Persons and Principal Holders of Securities.............................
Investment Management and Other Services........................................
Portfolio Transactions and Brokerage............................................
Distributor.....................................................................
Administrator...................................................................
Transfer Agent and Fund Accounting Services.....................................
Class A Distribution and Shareholder Service Plan...............................
Class D Shareholder Service Plan................................................
Fund Custodian And Dividend Paying Agent........................................
Independent Accountants.........................................................
Legal Counsel...................................................................
Fund Expenses...................................................................
Description of Fund Shares......................................................
Shareholder and Trustee Liability...............................................
Registration Statement..........................................................
ii
<PAGE>
OVERVIEW OF THE STATEMENT OF ADDITIONAL INFORMATION
The Industry Leaders Fund(R) (the "Trust") is a diversified, open-end management
investment company. The Trust is organized as a Delaware business trust which
was formed on December 13, 1995. The Trust consists of a diversified fund (the
"Fund") of units of beneficial interest ("shares"). The Fund has three classes
of shares, Class A Shares, Class D Shares, and Class I Shares. The outstanding
shares of all classes represent interests in the Fund investment portfolio.
This SAI relates to all shares of the Fund. Some of the information contained
in this SAI explains in further detail subjects which are discussed in the
Prospectus. Capitalized terms not otherwise defined herein are used as defined
in the Prospectus. You should carefully read the Prospectus before investing in
the Fund.
If you have any questions or comments prior to investing in the Fund, please do
not hesitate to call the Fund toll-free at (877) 280-1952.
INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objectives, policies and permitted investments are
described in the Prospectus under the headings "Overview of Industry Leaders
Fund(R)", "Principal Investment Objectives", "Investment Strategy", "Investment
Policies" and "Important Risk Considerations." Set forth below is additional
information with respect to the Fund's investment policies. The Fund's
investment objective is fundamental and may not be changed without a vote of the
holders of a majority of the Fund's outstanding voting securities, as described
below. There can be no assurance that the Fund will achieve its investment
objective. Except for the fundamental investment restrictions set forth below,
the policies of the Fund may be changed without shareholder approval.
The phrases "shareholder approval" and "vote of a majority of the outstanding
voting securities", as used in the Prospectus or in this Statement of Additional
Information means the affirmative vote of the lesser of (i) 67% or more of the
Fund's voting securities present at a meeting of shareholders provided that the
holders of more than 50% of the Fund's outstanding voting securities are present
in person or by proxy, or (ii) more than 50% of the Fund's outstanding voting
securities. Shares of the Fund have voting power based on dollar value and are
thus allocated in proportion to the value of each shareholder's investment on
the record date.
Unless otherwise noted, whenever an investment policy or limitation states a
maximum percentage of the Fund's assets that may be invested in any security or
other asset, or sets forth a policy regarding quality standards, such standard
or percentage limitation will be determined immediately after and as a result of
the Fund's acquisition of such security or other asset except in the case of
borrowing (or other activities that may be deemed to result in the issuance of a
"senior security" under the Investment Company Act of 1940, as amended (the
"1940 Act"). Accordingly, any subsequent change in values, net assets, or other
circumstances will not be considered when determining whether the investment
3
<PAGE>
complies with the Fund's investment policies and limitations.
FUNDAMENTAL INVESTMENT RESTRICTIONS
The following policies and limitations supplement the Fund investment policies
set forth in the Prospectus. The first 7 investment restrictions set forth below
are fundamental policies of the Fund. These fundamental restrictions cannot be
changed without approval by a majority of the outstanding voting securities of
the Fund.
The Fund may not:
1. Purchase the securities of any one issuer, if, immediately after such
purchase, more than 3% of the value of the Fund's total assets would be invested
in such issuer, or the Fund would hold more than 10% of any class of securities
of the issuer.
2. Purchase any securities which would cause more than 14% of the value of
the Fund's total assets at the time of purchase to be invested in securities of
one or more issuers conducting their principal business activities in the same
industry.
3. Borrow money in excess of 2% of the Fund's total assets taken at cost
or at market value, whichever is lower, which may not be made in excess of
commercially reasonable rates, and with respect to any borrowings of 1% or more,
then only as a temporary measure for extraordinary or emergency purposes, and if
such borrowings exceed 1% of the Fund's total assets, the Fund will make no
further investments until such borrowing is repaid;
4. Issue senior securities;
5. Act as an underwriter, except that the Fund technically may be deemed
to be an underwriter in a registration under the Securities Act of 1933 to
resell restricted securities;
6. Invest in real estate, provided that this limitation shall not prohibit
the purchase of securities issued by companies that invest in real estate or
interests therein, including real estate investment trusts; and
7. Make loans from Fund assets.
4
<PAGE>
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
The following investment restrictions and policies are non-fundamental and can
be changed by the Board of Trustees without shareholder approval.
Currently, the Fund may not:
8. Invest in companies whose stock is not domestically traded in the
United States;
9. Invest in bonds or other debt securities, convertible securities,
warrants or options for the purchase of common stock, or physical commodities;
10. Maintain a short position or sell securities short;
11. Purchase securities which are not readily marketable, such as
securities subject to legal or contractual restrictions on resale or securities
which are otherwise illiquid;
12. Invest in repurchase agreements having more than seven business days
remaining to maturity;
13. Pledge its assets in an amount greater than 2% of the value of its
total assets, and then only to secure borrowings permitted by Restriction 8;
14. Purchase securities on margin;
15. Participate in a joint or a joint and several basis in any trading
account in securities (the bunching of orders for the sale or purchase of
portfolio securities of two or more accounts managed by the Adviser or its
affiliates, shall not be considered participation in a joint securities trading
account);
16. Purchase commodity futures contracts, options on commodities futures
stock index contracts and options thereon.
Although not currently permitted, the Fund Trustees have reserved the right at a
future date to permit the Fund to enter into futures contracts for the purposes
of maintaining a higher percentage of Fund assets invested and reducing
transaction costs. The Trustees intend to permit the Fund to enter into such
contracts only in the event that a replicated index of the Industry Leaders
Strategy Model(TM) becomes publicly traded as a commodities future and/or stock
index contract. The Fund will not trade in any other type of commodities future
or stock index contract.
INSTRUMENTS IN WHICH THE FUND CAN INVEST
DOMESTIC COMMON STOCKS. The Fund may invest in the common equity securities of
5
<PAGE>
companies which are domestically traded in the United States. The risks of
investing in equity securities are discussed in detail in the Prospectus under
the caption, "Overview of Industry Leaders Fund(R), Risk Return Summary -
Principal Risks" and also under the caption, "Important Risk Considerations."
FOREIGN COMPANY STOCKS. Under the Fundamental Policy of the Fund, a stock must
be domestically traded in the United States to be eligible for inclusion in the
Fund portfolio. This requirement eliminates foreign companies whose equity is
only traded abroad or traded in the U.S. only as an American Depository Receipt
(commonly referred to as an "ADR"). Other foreign companies, typically through
a U.S. subsidiary, have registered their stock with the Securities and Exchange
Commission (the "Commission" and the "SEC") and listed such stock for trading on
U.S. exchanges. Therefore, some foreign companies may be included in the Fund
portfolio if they are selected by the Industry Leaders Strategy Model(TM) (the
"Strategy Model"). The Prospectus contains a complete discussion of the
operation of the Strategy Model under the captions, "Overview of Industry
Leaders Fund(R), Risk Return Summary" and " Investment Strategy." The Adviser
believes it unlikely that the Fund portfolio will at any time be comprised of a
statistically significant percentage of foreign stocks.
There are risks inherent in investments in foreign companies that are different
from, and additional to, those related to investments in obligations of U.S.
domestic issuers. For example, the value of dividends from such securities,
which may be denominated in or indexed to foreign currencies, can change
significantly when foreign currencies strengthen or weaken relative to the U.S.
dollar. Foreign companies with substantial operations abroad may also be
affected by actions of foreign governments adverse to the interests of U.S.
investors, including the possibility of expropriation or nationalization of
assets, confiscatory taxation, restrictions on U.S. investment or on the ability
to repatriate assets or convert currency into U.S. dollars, or other government
intervention. Investments in foreign countries also involve a risk of local
political, economic, or social instability, military action or unrest, or
adverse diplomatic developments. There is no assurance that the Adviser will be
able to anticipate these potential events or counter their effects. The
considerations noted above are generally intensified for investments in
developing countries.
REPURCHASE AGREEMENTS. In a repurchase agreement transaction, the Fund agrees
to purchase and resell, and the seller also agrees to buy back, usually on the
next business day, a security at a fixed time and price which reflects an
agreed-upon market rate. Repurchase agreements may be thought of as loans to
the seller collateralized by the security to be repurchased. The risk to the
Fund is the ability of the seller to pay the agreed-upon sum on the repurchase
date. In the event of default, the repurchase agreement provides that the Fund
is entitled to sell the collateral. If the seller defaults when the value of
the underlying collateral is less than the repurchase price, the Fund could
incur a loss of both principal and interest. The Adviser monitors the value of
the collateral daily during the term of the repurchase agreement to determine
that the value of the collateral equals or exceeds the agreed-upon repurchase
price. If a defaulting seller
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<PAGE>
were to be subject to a Federal bankruptcy proceeding, the ability of the Fund
to liquidate the collateral could be delayed or impaired because of certain
provisions of the bankruptcy laws. The Fund may enter into repurchase agreements
which will mature in a period not to exceed seven business days primarily as a
tool for purposes of Fund cash management with respect to (i) anticipated
redemptions, and/or (ii) aggregation of purchases for the Fund portfolio in
order to obtain economic efficiencies in Fund brokerage costs.
OTHER INVESTMENT COMPANIES. The Fund may purchase other open-end mutual funds
and closed-end mutual funds, subject to certain limitations. Unlike open-end
investment companies, like the Fund, closed-end funds issue a fixed number of
shares that trade on major stock exchanges or over-the-counter. Also unlike
open-end funds, closed-end funds do not continually issue and redeem shares.
Under the Fund's own fundamental investment restrictions, the Fund may not
invest more than 3% of its total assets in any one mutual fund. In addition,
the Fund's investment in other funds is subject to the 1940 Act's limits on
investment in other mutual funds. Under the 1940 Act, the Fund may not own more
than 5% of any one mutual fund or invest more than 10% of its total assets in
mutual funds as a group.
NET ASSET VALUATION
The net asset value per share of each class of shares of the Fund is determined
as of the close of regular trading on the NYSE, on each day that the NYSE is
open. The closed days are set forth below in this SAI under the caption,
"Additional Purchase and Redemption Information."
The Fund subtracts the non-class specific liabilities of the Fund from the
Fund's assets to determine its total net assets. The Fund then determines each
class's proportionate interest in the Fund's net assets. The liabilities
attributable to that class, including its distribution and/or shareholder
services fees, are then deducted and the resulting amount is divided by the
number of shares of that class outstanding to produce its net asset value per
share.
Stocks are valued at the closing prices reported on recognized securities
exchanges or if no sale was reported, and for unlisted securities, at the mean
between the last-reported bid and asked prices. Although the Fund does not
anticipate holding securities for which market quotations are not readily
available, such securities will be valued at fair value as determined in good
faith by or under the direction of the Board of Trustees.
PERFORMANCE INFORMATION
The Fund will include performance data for Class A, Class D and Class I Shares
of the Fund in its advertisements, sales literature and other information
distributed to the public that includes performance data of the Fund. Such
performance information will be based on investment "average annual total
return" or "cumulative total return" the Fund. An explanation of how such
returns are calculated for each class is set forth below.
7
<PAGE>
Total return information may be useful to investors in reviewing the Fund's
performance. The Fund's advertisement of its performance must, under applicable
SEC rules, include the average annual total returns for each class of shares of
the Fund for the 1, 5, and 10-year period (or the life of the class, if less) as
of the most recently ended calendar quarter. This enables an investor to
compare the Fund's performance to the performance of other funds for the same
periods. Investors should also consider other relevant factors before using
such information as a basis for comparison with other investments, such as
comparative risks and investment time horizons.
AVERAGE ANNUAL TOTAL RETURN. Total return represents the average annual
compounded rate of return on an investment of $1,000 at the maximum public
offering price (in the case of Class A Shares). All data are based on past
investment results. Average annual total return for a given period is computed
by finding the average annual compounded rate of return over the period that
would equate the initial amount invested to the ending redeemable value,
according to the following formula:
P(1 + T)n = ERV
Where:
P = a hypothetical initial investment in the Fund of $1,000
T = average annual total return
n = number of years in period
ERV = ending redeemable value, at the end of the period, of a
hypothetical $1,000 investment in the Fund made at the beginning of
the period.
The investment results of Shares of the Fund will tend to fluctuate over time,
so that historical yields, current distributions and total returns should not be
considered representations of what an investment may earn in any future period.
Investments in the Fund are not insured and its total return is not guaranteed.
Actual dividends will tend to reflect changes in the market as a whole, and will
also depend upon the level of a class's or the Fund's expenses, realized or
unrealized investment gains and losses, and the results of the Fund's investment
policies. When redeemed, an investor's shares may be worth more or less than
their original cost. Total return for any given past period are not a
prediction or representation by the Fund of future rates of return on its
shares. Thus, at any point in time, investment yields, current distributions or
total returns may be either higher or lower than past results.
8
<PAGE>
CUMULATIVE TOTAL RETURN. The cumulative total return calculation (or "total
return") measures the change in value of a hypothetical investment of $1,000
over an entire period of years. Its calculation uses some of the same factors
as average annual total return, but it does not average the rate of return on an
annual basis. Cumulative total return is determined as follows:
ERV - P
------- = Cumulative Total Return
P
In calculating total returns for the Fund, the current maximum sales charge (as
a percentage of the offering price) is deducted from the initial investment
("P"). Total returns also assume that all Fund dividends and net capital gains
distributions during the period are reinvested to buy additional shares at net
asset value per share, and that the investment is redeemed at the end of the
period.
COMPARATIVE PERFORMANCE INFORMATION. The total return on an investment made in
the Fund may be compared with the performance for the same period of one or more
of the following indices: the Consumer Price Index, the Standard & Poor's 500(R)
Index, the Standard & Poor's Barra Value(R) Index and the Dow Jones Industrial
Average(R). Other indices may be used from time to time. The Consumer Price
Index generally is considered to be a measure of inflation. The Standard &
Poor's 500 Index is a composite index of 500 common stocks generally regarded as
an index of U.S. stock market performance. The Standard & Poor's Barra Value(R)
Index is a capitalization-weighted index of all the stocks in the Standard &
Poor's 500 that have low price-to-book ratios. The Dow Jones Industrial Average
is the price-weighted average of 30 actively traded blue chip stocks, primarily
industrials but including other service oriented firms, prepared and published
by Dow Jones & Co., which represents between 15% and 20% of the market value of
NYSE stocks. The foregoing indices are unmanaged indices of securities that do
not reflect reinvestment of capital gains or take investment costs into
consideration, as these items are not applicable to indices.
The Fund may also be quoted in and compared to other mutual funds with similar
investment objectives in advertisements, shareholder reports or other
communications to shareholders. The Fund may include in these communications
calculations that describe retroactive application of the Industry Leaders
Strategy Model(TM) and hypothetical investment results. These performance
examples are based on an express set of assumptions and are not indicative of
future performance of the Fund. These calculations may include discussions or
illustrations of the effects of compounding. "Compounding" means that, if
dividends or other distributions on the Fund's investment are reinvested by
being paid in additional Fund shares, any future income or capital appreciation
of the Fund would increase the value, not only of the original Fund investment,
but also of the
9
<PAGE>
additional Fund shares received through reinvestment. As a result, the value of
the Fund investment would increase more quickly than if dividends or other
distributions had been paid in cash. The Fund may also include discussions or
illustrations of the potential investment goals of a hypothetical investor.
These may include, but are not limited to, tax and/or retirement planning,
investment management techniques, policies or investment suitability of the
Fund. The Fund may discuss such factors as general economic conditions,
legislative developments (including pending legislation), the effects of
inflation and historical performance of various types of investments, including,
but not limited to, stocks, bonds and U.S. Government Treasury Bills.
Fund advertisements or other communications to shareholders may also summarize
certain information contained in shareholder reports (including portfolio
composition), as well as the Adviser's views as to current economic indicators,
such as overall market performance, economic, trade and interest rate trends,
legislative, regulatory and monetary developments, investment strategies and
related matters believed to be of relevance to Fund investors.
The Fund may also include in advertisements, charts, graphs or drawings which
illustrate the potential risks and rewards of investment in comparative
investment vehicles, including but not limited to stock, bonds, and Treasury
bills, against an investment in shares of the Fund. The Fund may also include
charts or graphs that illustrate strategies such as dollar cost averaging.
Advertisements or shareholder communications may also include discussions of
certain beneficial characteristics of an investment in the Fund. Advertisements
and other communications may contain symbols, headlines or other material which
highlight or summarize information which is included in such communication. The
Fund may reprint (in whole or in part) articles reporting on the Fund and, after
obtaining permission from the respective publisher, provide these articles to
current and/or prospective shareholders. Performance information with respect
to the Fund is generally available by calling toll-free (877) 280-1952.
Advertisements and sales literature may include discussions of the Industry
Leaders Strategy Model(TM), including, but not limited to, descriptions of
security selection and analysis. Advertisements may also include descriptive
information about the Adviser, including, but not limited to, its status within
the industry, other services and products it makes available, total assets under
management, and its investment philosophy.
When comparing total return and investment risk of an investment in shares of
the Fund with other investments, investors should keep in mind that certain
other investments have very different risk characteristics than an investment in
shares of the Fund. For example, CDs may have fixed rates of return and may be
insured for both principal and interest by the FDIC, while the Fund's returns
will fluctuate and its share values and returns are not guaranteed. U.S.
Treasury securities are guaranteed as to principal and interest by the full
faith and credit of the U.S. Government.
The Fund also may include in its advertisements data from the American
Association of
10
<PAGE>
Retired Persons, American Banker, Barron's, Business Week, Forbes, Fortune,
Institutional Investor, Business Week, Lipper Analytical Services, Inc., Money,
Morningstar Mutual Funds, The New York Times, Smart Money, StarFunds, USA Today,
U.S. News & World Report, The Wall Street Journal, Worth and other publications.
In addition to performance information, general information about the Fund that
appears in a publication, such as those mentioned above, may also be quoted or
reproduced in advertisements or in reports to current or prospective
shareholders.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The Fund does not issue share certificates. Instead, an account is established
for each investor and all shares purchased or received, including those obtained
through reinvestment of distributions, are credited to such account on the books
of the Fund.
Reference is made to the materials in the Prospectus under the captions,
"Overview of Industry Leaders Fund(R) Risk Return Summary: Who May Want to
Invest in the Fund", "How You Can Invest With The Industry Leaders Fund(R) " and
"How to Redeem Your Fund Shares", which describe the methods of purchase and
redemption of the Fund's shares. If you invest through an investment firm,
financial adviser or agent, which may have its own service features, transaction
charges and fees. This SAI and the accompanying Prospectus should be read in
conjunction with such firms' material regarding their fees and services. If you
wish for a referral to an investment professional, please call the Fund at (877)
280-1952.
The NYSE is currently scheduled to be closed on New Year's Day, Dr. Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day, or, when one of these
holidays fall on a Saturday or Sunday, the preceding Friday or subsequent
Monday. The closing schedule is subject to change.
When the NYSE is closed, or when trading is restricted for any reason other than
its customary weekend or holiday closings, or under emergency circumstances as
determined by the SEC to warrant such action, the Fund will determine its net
asset value as of the daily NAV valuation time.
If the Board of Trustees should determine that it is advisable in the interest
of the remaining shareholders of the Fund or a particular class to make payment
wholly or partly in cash, the Fund may pay redemption proceeds in whole or in
part by a distribution in kind of securities from the portfolio of the fund, in
lieu of cash, in conformity with the applicable rules of the Commission. If
shares are redeemed in kind, the redeeming shareholder might incur brokerage
costs in converting the assets into cash. Where the Fund makes a redemption in
kind, such redemption will be made in readily marketable securities whose value
is easily ascertainable. The method of valuing portfolio securities for this
purpose is described herein under the caption, "Net Asset Value." The Fund has,
however, elected to be governed by Rule 18f-1 under the 1940 Act pursuant to
which it is obligated to redeem shares solely in cash up to the lesser of
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<PAGE>
$250,000 or 1% of its net assets during any 90-day period for any one
shareholder.
DISTRIBUTOR CONCESSION AND DEALER REALLOWANCES. The Fund pays distribution
concessions and dealer reallowances in connection with the distribution of the
Fund's Class A Shares. The following table shows the amount of Distributor
concession and dealer reallowances as a percentage of the offering price of the
Fund's Class A Shares which is paid from the Class A front end sales load.
<TABLE>
<CAPTION>
Class A Sales Charge Distributor Concession Dealer Reallowance
Amount of Purchase as % of Offering Price as % of Offering Price as % of Offering Price
- --------------------- ------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
Less than $50,000 4.75% 0.25 4.50
$50,000 to $99,999 4.50% 0.25 4.25
$100,000 to $249,999 3.50% 0.25 3.25
$250,000 to $499,999 2.50% 0.25 2.25
$500,000 to $999,999 2.00% 0.25 1.75
$1,000,000 and over 0.25% 0.25 0.00
</TABLE>
REDEMPTION FEE WAIVERS. The redemption fee on Class A and Class D Shares
redeemed within 180 days of purchase, and the Class I Shares redeemed within 90
days of purchase, may be waived upon the following events: (a) death or
disability (as defined in the Internal Revenue code of 1986, as amended) the
"Code")) of a shareholder; (b) minimum required distributions from an IRA or a
custodial account under Code Section 403(b)(7) to a shareholder who has reached
age 70-1/2 years of age; and (c) to the extend the redemption represents the
minimum distribution from retirement plans under code Section 401(a) where such
redemptions are necessary to make distributions to plan participants.
ADDITIONAL DIVIDEND AND DISTRIBUTION INFORMATION
To the extent necessary for the Fund to obtain favorable federal tax treatment,
the Fund distributes net investment income and net capital gains, if any, to
shareholders within each calendar year as well as on a fiscal year basis. The
Fund intends to distribute any net investment income and any net realized
capital gains at least annually.
The amount of the Fund's distributions may vary from time to time depending on
the composition of the Fund's portfolio, dispositions of portfolio assets and
expenses borne by the Fund.
The net income of the Fund, from the period of the immediately preceding
determination
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<PAGE>
thereof, shall consist primarily of dividend income, if any, and realized
capital gains and losses on Fund's assets, less all expenses and liabilities of
the Fund chargeable against income. To a lesser extent, net income will include
any incidental interest income accrued on the portfolio assets during periods in
which the Adviser has held cash for purposes of anticipated redemptions and/or
for reasons of minimizing brokers' commissions by grouping portfolio purchase
orders and sales.
Expenses, including the compensation payable to the Adviser, are accrued each
day. The expenses and liabilities of the Fund include those appropriately
allocable to the Fund, as well as general expenses and liabilities of the Trust.
TAXES
The following is only a summary of certain additional federal income tax
considerations generally affecting the Fund and its shareholders which are not
described in the Prospectus. This summary does not attempt to provide a
detailed explanation of the tax treatment of the Fund or its shareholders, and
the discussions here and in the Prospectus are not intended as substitutes for
legal and/or professional accounting advice with respect to tax planning.
Prospective shareholders are urged to consult their own tax professional prior
to investing in the Fund.
SUBCHAPTER M. The Fund has elected to be taxed as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As a regulated investment company, the Fund will not be subject to
federal income tax on the portion of its net investment income (i.e., taxable
interest, dividends and other taxable ordinary income, net of expenses) and
capital gain net income (i.e., the excess of capital gains over capital losses)
that it distributes to shareholders, provided that it distributes at least 90%
of its investment company taxable income (i.e., net investment income and the
excess of net short-term capital gain over net long-term capital loss) for the
taxable year (the "Distribution Requirement"), and satisfies certain other
requirements of the Code that are described below. Distributions by the Fund
made with respect to the taxable year will be considered distributions of income
and gains of the taxable year and will therefore count towards the satisfaction
of the Distribution Requirement. Since the Fund intends to distribute
substantially all of its investment company taxable income and its net capital
gain income in compliance with the Distribution Requirement, the Fund does not
expect to be subject to income or excise taxes otherwise applicable to
undistributed income of a regulated investment company. If the Fund were to fail
to distribute all its income and gains, it would be subject to income tax and,
in certain circumstances, a nondeductible 4% excise tax, as discussed in further
detail below.
DIVERSIFICATION. In addition to satisfying the requirements described above,
the Fund must satisfy an asset diversification test in order to qualify as a
regulated investment company. Under this test, at the close of each quarter of
the Fund's taxable year, at least 50% of the value of the Fund's assets must
consist of securities of other issuers (as to which the Fund has not invested
more than 5% of the value of the Fund's total assets in
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<PAGE>
securities of such issuer and does not hold more than 10% of the outstanding
voting securities of such issuer), cash and cash items, U.S. Government
securities, securities of other regulated investment companies, and no more than
25% of the value of its total assets may be invested in the securities of any
one issuer (other than U.S. Government securities and securities of other
regulated investment companies), or in two or more issuers which the Fund
controls and which are engaged in the same or similar trades or businesses. If
for any taxable year the Fund does not qualify as a regulated investment
company, all of its taxable income (including its net capital gain) will be
subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to the
shareholders as ordinary dividends to the extent of the Fund's current and
accumulated earnings and profits. Such distributions generally will be eligible
for the dividends-received deduction in the case of corporate shareholders.
EXCISE TAX. A 4% non-deductible excise tax is imposed on a regulated investment
company that fails to distribute in each calendar year an amount equal to 98% of
its ordinary income for such calendar year and 98% of capital gain net income
for the one-year period ended on October 31 of such calendar year. The balance
of such income must be distributed during the next calendar year. A regulated
investment company is treated as having distributed any amount on which it is
subject to income tax for any taxable year ending in such calendar year. For
purposes of the excise tax, the Fund would be obligated to reduce its capital
gain net income (but not below its net capital gain) by the amount of any net
ordinary loss for the calendar year. The Fund intends to make sufficient
distributions of its ordinary taxable income and capital gain net income prior
to the end of each calendar year to avoid liability for the excise tax.
However, investors should keep in mind that the Fund may in certain
circumstances be required to liquidate portfolio investments to make sufficient
distributions to avoid excise tax liability. Treasury Regulations permit a
regulated investment company, in determining its investment company taxable
income and net capital gain for any taxable year, to elect to treat all or any
part of any net capital loss and any net long-term capital loss incurred after
October 31 as if it had been incurred in the succeeding year.
TAXATION OF FUND SHAREHOLDERS. Dividends from net investment income and
distributions from short-term capital gains are taxable to shareholders as
ordinary income. The Fund anticipates distributing substantially all of its
investment company taxable income for each taxable year. Dividend distributions
represent dividends on stocks (and interest income, if any) that the Fund
receives. Such distributions will be taxable to shareholders as ordinary income
and treated as dividends for federal income tax purposes. Such dividends paid
by the Fund will qualify for the 70% dividends-received deduction for corporate
shareholders to the extent discussed below.
TREATMENT OF CAPITAL GAINS. The characterization of whether capital gains are
long-term or short-term does not depend on how long a shareholder has held
shares in the Fund, but rather on the period the Fund has held the securities
sold. Regardless of how long the Fund shares have been held, distributions of
long-term gains realized by the Fund upon the sale of capital assets are subject
to a maximum tax rate for noncorporate
14
<PAGE>
taxpayers: if held for more than 18 months, 20% (10% for individuals in the 15%
tax bracket); if held more than 12 months but not more than 18 months, 28% (15%
for individuals in the 15% tax bracket). Any loss realized by a shareholder upon
the disposition of Fund shares held for six months or less will be treated as
long-term capital loss to the extent of any amounts treated as distributions of
long-term capital gain held for more than one year during such six-month period.
Distributions by the Fund out of dividend income from domestic corporations may
qualify in whole or in part for the deduction if the distributing Fund does not
sell the stock in respect of which it received such dividends before satisfying
a 46-day holding period requirement, and the corporate shareholder holds Fund
shares for at least 46 days.
DISTRIBUTION OF CAPITAL GAINS. The Fund may either retain or distribute to
shareholders its net capital gain for each taxable year. The Fund currently
intends to distribute all such amounts. Net capital gain that is distributed
and designated as a capital gain dividend will be taxable to shareholders as
long-term capital gain, regardless of the length of time the shareholder has
held his or her Fund shares or whether such gain was recognized by the Fund
prior to the date on which the shareholder acquired his or her shares.
DIVIDENDS RECEIVED DEDUCTION. With respect to each taxable year, ordinary
income dividends paid by the Fund will qualify for the 70% dividends-received
deduction generally available to corporations (other than corporations, such as
S corporations, which are not eligible for the deduction because of their
special characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding company tax) to the extent of
the amount of qualifying dividends received by the Fund from domestic
corporations for the taxable year. Generally, provided that the Fund adheres to
its fundamental investment policies, a dividend received by the Fund will not be
treated as a qualifying dividend if it has been received with respect to any
share of stock that the Fund has held for less than 46 days. The 46-day holding
period must be satisfied during the 90-day period beginning 45 days prior to
each applicable ex-dividend date. Moreover, the dividends-received deduction
for a corporate shareholder may be disallowed or reduced (1) if the corporate
shareholder fails to satisfy the foregoing requirements with respect to its
shares of the Fund or (2) by application of Code section 246(b) which in general
limits the dividends-received deduction to 70% of the shareholder's taxable
income (determined without regard to the dividends-received deduction and
certain other items). Since an insignificant portion, if any, of the Fund's
assets will be invested in stock of foreign corporations, the ordinary dividends
distributed by the Fund generally will qualify for the dividends-received
deduction for corporate shareholders.
ALTERNATIVE MINIMUM TAX CONSIDERATIONS. Alternative minimum tax ("AMT") is
imposed in addition to, but only to the extent it exceeds, the regular tax and
is computed at a maximum marginal rate of 28% for noncorporate taxpayers and 20%
for corporate taxpayers on the excess of the taxpayer's alternative minimum
taxable income ("AMTI") over an exemption amount. For purposes of the corporate
AMT, the corporate dividends-received deduction is not itself an item of tax
preference that must be added back to
15
<PAGE>
taxable income or is otherwise disallowed in determining a corporation's AMTI.
However, a corporate shareholder will generally be required to take the full
amount of any dividend received from the Fund into account, without a dividends-
received deduction, in determining its adjusted current earnings, which are used
in computing an additional corporate preference item (i.e., 75% of the excess of
a corporate taxpayer's adjusted current earnings over its AMTI (determined
without regard to this item and the AMT net operating loss deduction))
includable in AMTI.
FOREIGN SOURCE INCOME. Investment income that may be received by the Fund from
sources within foreign countries may be subject to foreign taxes withheld at the
source. The United States has entered into tax treaties with many foreign
countries which entitle the Fund to a reduced rate of, or exemption from, taxes
on such income. It is impossible to determine the effective rate of foreign tax
in advance since the amount of the Fund's assets to be invested in various
countries is not known. As the Fund does not expect to have more than 50% of
the value of its total assets at the close of its taxable year in the stock or
securities of foreign corporations, the Fund anticipates that it will not elect
to "pass through" to the Fund's shareholders the amount of foreign taxes paid by
the Fund.
OTHER INCOME. Distributions by the Fund that do not constitute ordinary income
dividends or capital gain dividends will be treated as a return of capital to
the extent of (and in reduction of) the shareholder's tax basis in his or her
shares; any excess will be treated as gain from the sale of his or her shares,
as discussed below.
TREATMENT OF DISTRIBUTIONS. The tax implications arising from distributions by
the Fund will be treated in the manner described above regardless of whether
such distributions are paid in cash or reinvested in additional shares of the
Fund. Shareholders receiving a distribution in the form of additional shares
will be treated as receiving a distribution in an amount equal to the fair
market value of the shares received, determined as of the reinvestment date. In
addition, if the net asset value at the time a shareholder purchases shares of
the Fund reflects undistributed net investment income or recognized capital gain
net income, or unrealized appreciation in the value of the assets of the Fund,
distributions of such amounts will be taxable to the shareholder in the manner
described above, although such distributions economically constitute a return of
capital to the shareholder.
TIMING OF DISTRIBUTIONS. Ordinarily, shareholders are required to take
distributions by the Fund into account in the year in which the distributions
are made. However, dividends declared in October, November or December of any
year and payable to shareholders of record on a specified date in such a month
will be deemed to have been received by the shareholders (and made by the Fund)
on December 31 of such calendar year if such dividends are actually paid in
January of the following year. Shareholders will be advised annually as to the
U.S. federal income tax consequences of distributions made (or deemed made)
during the year.
SHAREHOLDER PURCHASES BEFORE A DISTRIBUTION. Investors who purchase shares
shortly before the record date for a distribution will pay a share price that
includes the value of
16
<PAGE>
the anticipated distribution and will be taxed on the distribution when it is
received even though, with respect to themselves, the distribution in effect
represents a return of a portion of their purchase price. Any loss realized on a
sale or exchange of shares will be disallowed if the shares disposed of are
replaced within a period of 61 days beginning 30 days before being acquired.
ADDITIONAL WITHHOLDING REQUIREMENTS. The Fund will be required in certain cases
to withhold and remit to the U.S. Treasury 31% of ordinary income dividends and
capital gain dividends, and the proceeds of redemption of shares, paid to any
shareholder (1) who has failed to provide a correct taxpayer identification
number, (2) who is subject to backup withholding for failure to properly report
the receipt of interest or dividend income properly, or (3) who has failed to
certify to the Fund that it is not subject to backup withholding or that it is a
corporation or other "exempt recipient."
SALE OR REDEMPTION OF SHARES. A shareholder will recognize gain or loss on the
sale or redemption of shares of the Fund in an amount equal to the difference
between the proceeds of the sale or redemption and the shareholder's adjusted
tax basis in the shares. All or a portion of any loss so recognized may be
disallowed if the shareholder purchases other shares of the Fund within 30 days
before or after the sale or redemption. In general, any gain or loss arising
from (or treated as arising from) the sale or redemption of shares of the Fund
will be considered capital gain or loss and will be long-term capital gain or
loss if the shares were held for longer than one year. Long-term capital gain
recognized by an individual shareholder will be taxed at the lowest rate
applicable to capital gains if the holder has held such shares for more than 18
months at the time of the sale. However, any capital loss arising from the sale
or redemption of shares held for six months or less will be treated as a long-
term capital loss to the extent of the amount of capital gain dividends received
on such shares. Capital losses in any year are deductible only to the extent of
capital gains plus, in the case of a noncorporate taxpayer, $3,000 of ordinary
income.
FOREIGN SHAREHOLDERS. Taxation of a shareholder who, with respect to the United
States government, is a nonresident alien individual, foreign trust or estate,
foreign corporation, or foreign partnership ("foreign shareholder"), depends on
whether the income from the Fund is "effectively connected" with a U.S. trade or
business carried on by such shareholder.
If the income from the Fund is not effectively connected with a U.S. trade or
business carried on by a foreign shareholder, ordinary income dividends paid to
a foreign shareholder will be subject to U.S. withholding tax at the rate of 30%
(or lower applicable treaty rate) upon the gross amount of the dividend.
Furthermore, such foreign shareholder may be subject to U.S. withholding tax at
the rate of 30% (or lower applicable treaty rate) on the gross income resulting
from the Fund's election to treat any foreign taxes paid by it as paid by its
shareholders, but may not be allowed a deduction against this gross income or a
credit against this U.S. withholding tax for the foreign shareholder's pro rata
share of such foreign taxes which it is treated as having paid. Such
17
<PAGE>
a foreign shareholder would generally be exempt from U.S. federal income tax on
gains realized on the sale of shares of the Fund, capital gain dividends and
amounts retained by the Fund that are designated as undistributed capital gains.
If the income from the Fund is effectively connected with a U.S. trade or
business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends, and any gains realized upon the sale of shares of the
Fund will be subject to U.S. federal income tax at the rates applicable to U.S.
citizens or domestic corporations. In the case of a foreign shareholder other
than a corporation, the Fund may be required to withhold U.S. federal income tax
at a rate of 31% on distributions that are otherwise exempt from withholding tax
(or taxable at a reduced treaty rate) unless such shareholder furnishes the Fund
with proper notification of his or her foreign status.
The tax consequences to a foreign shareholder entitled to claim the benefits of
an applicable tax treaty may be different from those described herein. Foreign
shareholders are urged to consult their own tax advisers with respect to the
particular tax consequences to them of an investment in the Fund, including the
applicability of foreign taxes.
ADDITIONAL TAX CONSIDERATIONS. In addition to the Federal income tax
consequences described above relating to an investment in the Fund, there may be
other Federal, state, local or foreign tax considerations that depend upon the
circumstances of each particular investor. The foregoing general discussion of
U.S. federal income tax consequences is based on the Code and the Treasury
Regulations issued thereunder as in effect on the date of this SAI. Future
legislative or administrative changes or court decisions may significantly alter
the information above, and any such changes or decisions may have a retroactive
effect. Shareholders should maintain contact with their own tax professional
concerning investment in the Fund.
TRUSTEES AND OFFICERS OF THE FUND
Overall responsibility for management of the Trust rests with the Board of
Trustees, who are elected by the shareholders of the Fund. The Fund is managed
by the Trustees in accordance with the laws of the State of Delaware. There are
currently _____ Trustees, _______ of whom are not "interested persons" of the
Trust within the meaning of that term under the 1940 Act. The Trustees, in
turn, elect the officers of the Trust to supervise actively its day-to-day
operations.
The officers and Trustees of the Trust, addresses, and their business
affiliations for the past five years are as follows:
<TABLE>
<CAPTION>
Principal Occupation
Name, Address and Age Position(s) With the Trust During Past 5 Years
- --------------------- -------------------------- --------------------
<S> <C> <C>
Barry F. Sullivan*(1), age 67 Chief Executive Officer
</TABLE>
18
<PAGE>
and Trustee
Gerald P. Sullivan*(1), age 38 President and Trustee
Mark S. Kaufmann*, age 65 Chairman, Board of Trustees
*Designates a Trustee who is an "interested person" of the Trust within the
meaning of the 1940 Act.
(1) Mr. Barry F. Sullivan is the father of Gerald P. Sullivan.
Trustees of the Fund who are officers of the Adviser are not separately
compensated for their services as Trustees of the Fund. The Trustees and
officers of the Fund are not affiliated with the distributor of the Fund's
shares. The Fund currently pays each of its non-officer Trustees a fee of
$______ per year, plus $______ per meeting attended ($______ per phone meeting)
and reimburses Trustee expenses for attendance at meetings.
The Trust does not provide pension or retirement benefits to Trustees or Trust
officers.
The following table indicates the compensation each Trustee is expected to
receive from the Trust for the 12 month period ending ___________ __, 1999.
<TABLE>
<CAPTION>
Pension or Retirement Aggregate Total Compensation
Benefits Accrued as Compensation from the From Fund Paid to
Name, Position Portfolio Expenses Trust Trustees
<S> <C> <C> <C>
Barry F. Sullivan
CEO and Trustee -
Gerald P. Sullivan
President and Trustee -
Mark S. Kaufmann
Chairman, Board of -
Trustees
</TABLE>
Trustees may be removed from office at any meeting of shareholders by a vote of
two-thirds of the outstanding shares of the Trust. Except as set forth above,
the Trustees shall continue to hold office and may appoint their successors.
In addition to the modest compensation provided to Fund Trustees, the Trust
provides elimination of Fund sales Loads and minimum purchase thresholds for
Trustees as a form of additional benefit to the Trustees. The purpose of this
waiver of Loads and purchase minimums is also provided, in part, to ensure that
the Trustees remain fully objective in regard to an equal basis for
representation of all classes of the Fund. In addition to the
19
<PAGE>
foregoing, third party dealers, brokers and/or financial advisors, may, at their
sole discretion, waive all or a portion of their dealer reallowances derived
from Fund sales Loads with respect to purchases of Fund shares by persons
affiliated and/or unaffiliated with the Fund.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Until its initial public offering, all shares of the fund will be held by the
Adviser, Claremont Investment Partners, L.L.C. a Delaware limited liability
company, which may be deemed to control the Fund. The Adviser is controlled by
RoadHouse Capital LLC ("RoadHouse Capital"), a Delaware limited liability
company, which is jointly controlled by Gerald S. Sullivan, President and
Trustee of the Fund, and Barry F. Sullivan, CEO and Trustee of the Fund, through
two special purpose family investment entities (as defined below, the "Family
Interests"). The "Family Interests" controlling RoadHouse Capital are RoadHouse
Group LLC, a Delaware limited liability company, and Sullvesco NJ 1998-II LLC, a
New Jersey limited liability company. Each of the Adviser, RoadHouse Capital
and the Family Interests are located at 104 Summit Avenue, Box 80, Summit, New
Jersey 07902-0080.
As of _________ __, 1998, holders of more than 5% ownership of Fund Shares
included the following persons:
<TABLE>
<CAPTION>
Percentage Ownership of
Name Address Fund Shares
<S> <C> <C>
_______________________ ___________________________________ _____________________________
</TABLE>
As of _________ __, 1998, the officers and Trustees of the Fund as a group owned
___% of outstanding Fund shares.
INVESTMENT MANAGEMENT AND OTHER SERVICES
The Fund and the Adviser have entered into an investment management agreement,
dated ___________ __, 1998, (the "Management Agreement" ) pursuant to which the
Adviser manages the portfolio of securities and investments of the Fund in
accordance with the Fund's investment objectives, strategies and policies, and
advises and assists the Fund with respect to the selection, acquisition, holding
or disposal of securities. In addition to managing the investments, the Adviser
also makes recommendations with respect to other aspects and affairs of the
Fund. The Adviser also furnishes the Fund with certain administrative services,
office space and equipment, and permits its officers and
20
<PAGE>
employees who may be elected Trustees or officers of the Fund to serve in the
capacities to which they are elected without additional compensation from the
Fund. All other expenses incurred in the operation of the Fund are borne by the
Fund.
The Fund pays the Adviser for its services pursuant to the Management Agreement
an annual fee at the annual rate of .30% of the average daily net assets of the
Fund. The Adviser has voluntarily undertaken to limit the aggregate expenses of
the Fund, including 12b-1 and shareholder service fees, until October 1, 2001,
to an annual maximum as a function of average daily net assets of no more than
..90% for Class A Shares, 1.00% for Class D Shares and 0.65% for Class I Shares.
The Adviser reserves the right to discontinue this policy after October 1, 2001.
The Management Agreement will continue in effect from year to year if
specifically approved annually by a majority of the Board of Trustees who are
not parties to such contract or "interested persons" of any such party. The
Management Agreement may be terminated without penalty by either party on 60
days' written notice and must terminate in the event of its assignment.
The Management Agreement provides that the Adviser is liable only for its acts
or omissions caused by its willful misfeasance, bad faith or gross negligence in
the performance of its duties or reckless disregard of its obligations under the
Management Agreement. The Management Agreement permits the Adviser to render
services to others and to engage in other activities.
The Adviser may draw upon the resources of the Fund distributor and its
qualified affiliates in rendering its services to the Fund. The distributor or
its affiliates may provide the Adviser (without charge to the Fund) with
investment information and recommendations that may serve as the principal basis
for investment decisions with respect to the Fund.
The Adviser has adopted a Code of Ethics (the "Ethics Code") that requires all
persons subject to the Ethics Code to pre-clear any proposed non-exempt personal
securities transaction. Permission for any proposed transaction will be granted
provided it is determined that such transaction would not negatively impact
activity in client accounts. In the event that a client of Adviser's affiliates
also owns such security, or it is proposed that such client purchase such
security, available investments or opportunities for sales will be allocated in
a manner deemed to be equitable by the Adviser.
As set forth above under the caption, "Control Persons and Principal Holders of
Securities", the Adviser is controlled jointly through the Family Interests by
Barry F. Sullivan, who serves as CEO and Trustee of the Fund, and as an officer
and director of the Adviser, and Gerald P. Sullivan, who serves as President of
the Fund and as an officer and director of the Adviser. In addition, the
Prospectus, under the caption, "Management of the Fund", provides detailed
business information concerning the Adviser and Messrs. Sullivan and Sullivan.
21
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Officers and Trustees of the Fund and officers of the Adviser are not officers
or directors of the Fund distributor or its affiliates, or any broker which
engages in the purchase and sale of portfolio securities on behalf of the Fund.
The Officers and Trustees of the Fund do not receive any direct or indirect
benefits from the Fund as a result of the usual and customary brokerage
commissions paid by the Fund in connection with the purchase and sale of
portfolio securities. The Management Agreement does not provide for a reduction
of the advisory fee by any portion of the fees generated by portfolio
transactions of the Fund which the Fund distributor or any broker may receive.
Allocation of transactions, including their frequency, to various dealers is
determined by the Adviser in its best judgment and in a manner deemed fair and
reasonable to shareholders. The primary consideration is prompt and efficient
execution of orders in an effective manner at the most favorable price. Subject
to this consideration, dealers who provide supplemental investment research,
statistical or other services to the Adviser may receive orders for transactions
by the Fund. Information so received will enable the Adviser to supplement its
own research and analysis with the views and information of other securities
firms. Such information may be useful and of value to the Adviser and its
affiliates in servicing other clients as well as the Fund; in addition,
information obtained by the Adviser and its affiliates in servicing other
clients may be useful and of value to the Adviser in servicing the Fund. No
principal transactions are effected with any companies affiliated with the
Adviser. Consideration may be given to research provided and payment may be
made of a fee higher than that charged by another broker-dealer which does not
furnish research services or which furnishes research services deemed to be of
lesser value, so long as the criteria of Section 28(e) of the Securities
Exchange Act of 1934, as amended (the "1934 Act") are met. Section 28(e) of the
1934 Act specifies that a person with investment discretion shall not be "deemed
to have acted unlawfully or to have breached a fiduciary duty" solely because
such person has caused the account to pay a higher commission than the lowest
available under certain circumstances. To obtain the benefit of Section 28(e),
the person so exercising investment discretion must make a good faith
determination that the commissions paid are reasonable in relation to the value
of the brokerage and research services provided viewed in terms of either that
particular transaction or his or her overall responsibilities with respect to
the accounts as to which he exercises investment discretion. Currently, it is
not possible to determine the extent to which commissions that reflect an
element of value for research services might exceed commissions that would be
payable for execution alone, nor generally can the value of research services be
measured.
There are no fixed limitations regarding the turnover rates of the Fund's
portfolio. In computing the portfolio turnover rate, all repurchase agreements
are excluded. Subject to this exclusion, the turnover rate is calculated by
dividing (A) the lesser of purchases or sales of securities in the Fund's long
portfolio for the fiscal year by (B) the monthly average of the value of
portfolio securities owned by the portfolio during the fiscal year.
22
<PAGE>
DISTRIBUTOR
Pursuant to its Distribution Agreement with the Fund (the "Distribution
Agreement"), Industry Leaders Fund Distributors, Inc. (referred to as "ILFD" and
the "Distributor"), acts as distributor of the Fund's shares. ILFD is a wholly
owned subsidiary of the Adviser and therefore an affiliate of the Adviser. The
Distribution Agreement was approved by the vote of the Trustees on _______ __,
1998. The adoption of the Distribution Agreement included approval by more than
a majority of the Board who are neither "interested persons" of the Fund (as
defined in the 1940 Act) nor have any direct or indirect financial interest in
the operation of the Distribution Agreement (the "Qualified Trustees"), by vote
cast in person at a meeting called for the purpose of considering the
Distribution Agreement. Under the Distribution Agreement, the Distributor is
entitled to receive .25% from the front-end sales commission (the "Load") on
Class A Shares, and shall pass through the balance of such Load to the selling
broker or financial adviser. The front-end Load is described in the Prospectus
under "Overview of Industry Leaders Fund(R) - Risk Return Summary - Fees and
Expenses" and under "The Class A Front-End Sales Charge Reduction Schedule"
under the Prospectus caption, "How You Can Invest With The Industry Leaders
Fund(R)." The Distribution Agreement is subject to annual approval by the Board
of Trustees as a whole and by a majority of the Qualified Trustees. Pursuant to
the Distribution Agreement, the Distributor shall act as agent for the
distribution of Fund shares and make a continuous offering of the Fund's shares
during the term of the Distribution Agreement. The Distributor shall make
appropriate efforts to solicit orders for the sale of the Fund shares and will
undertake such promotion as it believes reasonable in connection with such
solicitation. The Distributor shall, at its own expense, finance appropriate
activities which it deems reasonable, which are primarily intended to result in
the sale of the Fund shares, including, but not limited to, advertising,
compensation of underwriters, dealers and sales personnel, printing and mailing
of Fund prospectuses to other than current Fund shareholders, and printing and
mailing of sales literature. The initial term of the Distribution Agreement
ends on September 1, 2002. The Distribution Agreement provides for
indemnification by the Fund of the Distributor against substantially all types
of claims and/or other liabilities incurred in the course of its duties. The
Distributor shall receive as its fee amounts so authorized under the Fund's
Class A Plan and Class D Plan, each of which is described in detail below.
ADMINISTRATOR
BISYS Fund Services Ohio, Inc. (referred to as "BISYS" and the "Administrator")
serves as the Fund administrator pursuant to an agreement, dated _________ __,
1998 (the "Administration Agreement"). The Administrator assists in supervising
all operations of the Fund (other than those performed by the Adviser under the
Investment Adviser Agreement), subject to the supervision of the Board. BISYS
also provides a current security position report, a summary report of
transactions, a current cash position report, calculates the dividend and
capital gain distribution, if any, and the yield, and maintains the general
ledger accounting records for the Fund.
23
<PAGE>
Unless sooner terminated, the Administration Agreement will continue in effect
as to the Fund until September 1, 2002, and for consecutive two-year terms
thereafter, provided that such renewal is ratified at least annually by the
Trustees or by vote of a majority of the outstanding shares of Fund, and in
either case by a majority of the Trustees who are not parties to the
Administration Agreement or interested persons (as defined in the 1940 Act) of
any party to the Administration Agreement, by votes cast in person at a meeting
called for such purpose.
The Administration Agreement provides that BISYS shall not be liable for any
error of judgment or mistake of law or any loss suffered by the Trust in
connection with the matters to which the Administration Agreement relates,
except a loss resulting from willful misfeasance, bad faith, or gross negligence
in the performance of its duties, or from the reckless disregard by it of its
obligations and duties thereunder.
Under the Administration Agreement, BISYS assists in the Fund's administration
and operation, including providing statistical and research data, clerical
services, internal compliance and various other administrative services,
including among other responsibilities, completing certain purchase and
redemption requests in its capacity as Transfer Agent, participation in the
updating of the Prospectus, coordinating the preparation, filing, printing and
dissemination of reports to shareholders, coordinating the preparation of income
tax returns, arranging for the maintenance of books and records and providing
the office facilities necessary to carry out the duties thereunder. Under the
Administration Agreement, BISYS may delegate all or any part of its
responsibilities thereunder.
The Fund has entered into an Omnibus Fee Agreement with BISYS, dated as of ____
__, 1998. The Omnibus Fee Agreement covers services rendered by BISYS for Fund
accounting, administration and transfer agency services. BISYS is also entitled
to receive an account maintenance fee of $20.00 per year for each account which
is in existence during each month in which payment of the foregoing fee is made.
The Fund pays BISYS an annual fee, computed daily and paid monthly, at an annual
rate of .13% based on the Fund's average daily net assets. The annual fee rate
is subject to reduction to .11% when the Fund's daily net asset value exceeds
$50 million, and reduction to .09% when the Fund's daily net asset value exceeds
$100 million. The foregoing fee is subject to an annual aggregate minimum fee
of $125,000 per year. In addition, the Fund pays all out-of-pocket expenses
incurred by BISYS related to the undertaking of its obligations pursuant to the
foregoing agreements.
TRANSFER AGENT AND FUND ACCOUNTING SERVICES
BISYS serves as transfer and dividend disbursing agent for the Fund pursuant to
a Transfer Agency and Service Agreement dated as of ___________ __, 1998.
Under its agreement with the Trust, BISYS has agreed (1) to issue and redeem
shares of the Fund; (2) to address and mail all communications by the Trust to
its shareholders, including reports to shareholders, dividend and distribution
notices, and proxy material for its
24
<PAGE>
meetings of shareholders; (3) to respond to correspondence or inquiries by
shareholders and others relating to its duties; (4) to maintain shareholder
accounts and certain sub-accounts; and (5) to make periodic reports to the
Trustees concerning the Fund's operations.
In addition, BISYS provides certain Fund accounting services under a Fund
Accounting Agreement, dated as of _____________ __, 1998, pursuant to which
BISYS maintains all Fund books and records, performs daily accounting services,
and provides additional Fund reporting and record keeping functions.
The fees paid by the Fund for services rendered by BISYS under the foregoing
agreements are covered by the Omnibus Fee Agreement discussed above in this SAI
under the caption, "Administrator."
CLASS A DISTRIBUTION AND SHAREHOLDER SERVICE PLAN
The Fund has adopted a distribution and shareholder services plan with respect
to Class A shares in accordance with Rule 12b-1 under the Act (the "Class A
Plan"), (1) to compensate the Distributor for the services it provides and for
shareholder expenses it bears under the Distribution Agreement, and (2) to pay
for other distribution and shareholder service costs and expenses with respect
to Class A Shareholders. The Class A Shares pay a distribution and service fee
at a rate of 0.25% per annum of the average daily net assets of such class.
A report of the amounts expended under the Class A Plan must be made to, and
reviewed by, the Board of Trustees at least quarterly.
The Class A Plan is subject to annual approval by a majority of the Board of
Trustees, including a majority of the Qualified Trustees, by vote cast in person
at a meeting called for the purpose of voting on the Class A Plan. The Class A
Plan is terminable at any time by vote of a majority of the Qualified Trustees
or, with respect to Class A Shareholders, by vote of a majority of the shares of
such class. Pursuant to the Class A Plan, any new Trustees who are not
"interested persons" must be nominated by existing Trustees who are not
"interested persons". In addition, the Class A Plan provides that it may not be
amended to increase materially the costs which Class A of the Fund may bear for
distribution pursuant to the Class A Plan without shareholder approval and that
other material amendments to the Class A Plan must be approved by a majority of
the Board, including a majority of the Qualified Trustees, by vote cast in
person at a meeting called for the purpose of considering such amendments.
Because all amounts paid pursuant to the Class A Plan are paid to the
Distributor, the Distributor, its officers, directors and employees, may all be
deemed to have a direct or indirect financial interest in the operation of the
Class A Plan. None of the Trustees who is not an "interested person" of the
Fund has a direct or indirect financial interest in the operation of the Class A
Plan.
Benefits from the Class A Plan may accrue to the Fund and its Class A
shareholders from the growth in assets due to sales of shares to the public
pursuant to the Class A Plan.
25
<PAGE>
Increases in the Fund's net assets from sales pursuant to its Class A Plan may
benefit shareholders by reducing per share expenses, permitting increased
investment flexibility and diversification of the Fund's assets, and
facilitating economies of scale (e.g., block purchases) in the Fund's securities
transactions. Under its terms, the Class A Plan will continue from year to year,
provided that such continuance is approved annually by a vote of the Trustees in
the manner described above.
The adoption of the Class A Plan was approved by the Board of Trustees,
including a majority of the Qualified Trustees, at a meeting called for such
purpose on _______ __, 1998. Prior to approving the adoption of the Class A
Plan, the Board requested and received from the Distributor all the information
which it deemed necessary to arrive at an informed determination as to such
continuance and adoption of the Class A Plan. In making its determination to
adopt the Plan, the Board considered, among other factors: (1) comparable plans
in similarly situated mutual funds; (2) the benefits the Fund would be likely to
obtain under the Plan; including the fact that the Plan is necessary to permit
the Fund to operate at its contemplated low management overhead; (3) the
services to be provided under the Plan by the Distributor to the Fund and its
shareholders; and (4) the reasonableness of the fees to be paid to the
Distributor for its services under the Plan. Based upon their review, the
Board, including each of the Qualified Trustees, determined that the adoption of
the Plan would be in the best interest of the Fund, and that there was a
reasonable likelihood that the Plan would benefit the Fund and its shareholders.
In the Board's quarterly review of the Plan, the Trustees will consider its
continued appropriateness and the level of compensation provided therein.
The Board of Trustees has the right to terminate the Rule 12b-1 Plan for the
Class A Shares, and in the event of such termination, no further payments would
be made thereunder. Termination of the Rule 12b-1 Plan for the Class A Shares
or the Distribution Agreement does not affect the obligation of the Class A
shareholders to pay other fees and charges. The Adviser may periodically
reimburse the Fund for all or a portion of Class A Plan fees in order to
increase the net income of the Fund available for distribution to Class A
Shareholders.
The Board of Trustees has also adopted on _______ __, 1998, a Rule 18f-3 multi-
class share plan permitting the issuance of shares in multiple classes.
CLASS D SHAREHOLDER SERVICE PLAN
The Board has adopted a shareholder services plan on behalf of the Class D
shareholders (the "Class D Plan"), the approval of which included a majority of
Qualified Trustees by votes cast in person at a meeting called for such purpose
on _______ __, 1998. Payments made under the Class D Plan to various
shareholder servicing agents (which may include affiliates of the Adviser) are
for administrative support services to customers who may from time to time
beneficially own shares, which services may include: (1) aggregating and
processing purchase and redemption requests for shares from customers and
transmitting promptly net purchase and redemption orders to our distributor or
transfer
26
<PAGE>
agent; (2) providing customers with a service that invests the assets
of their accounts in shares pursuant to specific or pre-authorized instructions;
(3) processing dividend and distribution payments on behalf of customers; (4)
providing information periodically to customers showing their positions in
shares; (5) arranging for bank wires; (6) responding to customer inquiries; (7)
providing subaccounting with respect to shares beneficially owned by customers
or providing the information to the Fund as necessary for subaccounting; (8) if
required by law, forwarding shareholder communications from the Fund (such as
proxies, shareholder reports, annual and semi-annual financial statements and
dividend, distribution and tax notices) to customers; (9) forwarding to
customers proxy statements and proxies containing any proposals which require a
shareholder vote; and (10) providing such other similar services as the Trust
may reasonably request to the extent permitted under applicable statutes, rules
or regulations. For further information about the Class D Plan, see the
discussion in the Prospectus under the caption, "Distribution and Service
Arrangements."
For the services rendered to Class D Shareholders and related expenses borne by
Class D Plan shareholder services agents, the Board has authorized payment from
Class D assets, computed daily and paid monthly, at an annual rate of up to .35%
based on the Class D Shares average daily net assets. The Adviser may
periodically reimburse the Fund for all or a portion of Class D Plan fees in
order to increase the net income of the Fund available for distribution to Class
D shareholders.
FUND CUSTODIAN AND DIVIDEND PAYING AGENT
The Fund has appointed ______________ (the "Custodian"), located at _________
___________ to serve as the Fund custodian and dividend paying agent for the
Fund, pursuant to an agreement dated ___________ __, 1998 (the "Custody
Agreement"). In consideration of its custodial services, the Fund pays the
Custodian ____ per annum. Under the Custody Agreement, the Custodian (1)
maintains a separate account or accounts in the name of the Fund; (2) makes
receipts and disbursements of money on behalf of the Fund;(3) collects and
receives all income and other payments and distributions on account of portfolio
securities; and (4) responds to correspondence from security brokers and others
relating to its duties. The Custodian may, with the approval of the Fund and at
the custodian's own expense, open and maintain a sub-custody account or accounts
on behalf of the Fund, provided that the Custodian shall remain liable for the
performance of all of its duties under the Custody Agreement.
INDEPENDENT ACCOUNTANTS
The Fund has appointed ______________ as independent accountants for the Fund.
In addition to reporting annually on the Fund's financial statements, the Fund's
accountants also review certain filings of the Fund with the Securities and
Exchange Commission.
LEGAL COUNSEL
Wuersch & Gering LLP, 330 Madison Avenue, 14th floor, New York, New York 10017,
27
<PAGE>
is counsel to the Fund. The firm also acts as counsel to the Adviser.
FUND EXPENSES
The Fund is responsible for the following expenses relating to its operations:
interest, taxes, fees and commissions of every kind; expenses of issue,
repurchase or redemption of shares; SEC fees, state notification and
qualification fees, other costs of registering or qualifying shares for sale
(including printing costs, legal fees and other expenses relating to the
preparation and filing of the Fund's registration statement with the appropriate
regulatory authorities and the production and filing of the Fund's Prospectus);
costs of insurance; association membership dues; all charges of custodians,
including fees as custodian, escrow agent, and fees for keeping books and
performing portfolio valuations; all charges of transfer agents, registrars,
pricing services, fees and expenses of independent accountants and legal
counsel; other advisory and administrative fees, expenses of preparing, printing
and distributing prospectuses and all proxy materials, reports and notices to
shareholders; expenses of distribution of Class A shares pursuant to the Class A
Plan, expenses of shareholder services pursuant to the Class A Plan and the
Class D Plan; out-of-pocket expenses of Trustees and fees, costs and expenses
related to meetings of the Trustees; fees of Trustees who are not officers of
the Fund; costs of shareholders' reports and meetings, other costs incident to
the Fund's existence as a business trust and any extraordinary expenses incurred
in the Fund's operation.
DESCRIPTION OF FUND SHARES
The Trust is a Delaware business trust that was formed on December 13, 1995.
The Trust Instrument authorizes the Board to issue an unlimited number of
shares, which are units of beneficial interest, without par value. The Trust
presently has three classes of shares which represent interests in the Fund.
The Trust Instrument authorizes the Board to divide or redivide any unissued
shares of the Trust into one or more additional series by setting or changing in
any one or more aspects their respective preferences, conversion or other
rights, voting power, restrictions, limitations as to dividends, qualifications,
and terms and conditions of redemption. The Fund currently offers three share
classes: (1) Class A, designed to be sold primarily to individuals through
financial advisers or brokers, (2) Class D, designed to be sold primarily to
self-directed investors, and (3) Class I, designed to be sold primarily to
institutions investing at least $1,000,000. The Fund may, in its discretion,
instruct the Distributor to sell Class I Shares to individuals who invest at
least $1,000,000.
Shares have no subscription or preemptive rights and only such conversion or
exchange rights as the Board may grant in its discretion. When issued for
payment as described in the Prospectus and this SAI, the Trust's shares will be
fully paid and non-assessable. In the event of a liquidation or dissolution of
the Trust, shares of the Fund are entitled to receive the assets available for
distribution belonging to the Fund.
Shares of the Trust are entitled to one vote per share (with proportional voting
for
28
<PAGE>
fractional shares) on such matters as shareholders are entitled to vote.
Shareholders vote as a single class on all matters except (1) when required by
the 1940 Act, shares shall be voted by individual class, and (2) when the
Trustees have determined that the matter affects only the interests of one or
more classes, then only shareholders of such class shall be entitled to vote
thereon. There will normally be no meetings of shareholders for the purpose of
electing Trustees unless and until such time as less than a majority of the
Trustees have been elected by the shareholders, at which time the Trustees then
in office will call a shareholders' meeting for the election of Trustees within
60 days. A meeting shall be held for such purpose upon the written request of
the holders of not less than 10% of the outstanding shares. Upon written
request by ten or more shareholders meeting the qualifications of Section 16(c)
of the 1940 Act (i.e., persons who have been shareholders for at least six
months, and who hold shares having a net asset value of at least $25,000 or
constituting 1% of the outstanding shares) stating that such shareholders wish
to communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a Trustee, the
Trust will provide a list of shareholders or disseminate appropriate materials
(at the expense of the requesting shareholders). Except as set forth above, the
Trustees shall continue to hold office and may appoint their successors.
Rule 18f-2 under the 1940 Act provides that any matter required to be submitted
to the holders of the outstanding voting securities of an investment company
such as the Trust shall not be deemed to have been effectively acted upon unless
approved by the holders of a majority of the outstanding shares of each class
affected by the matter. For purposes of determining whether the approval of a
majority of the outstanding shares of a class will be required in connection
with a matter, the class will be deemed to be affected by a matter unless it is
clear that the interests of each class in the matter are identical, or that the
matter does not affect any interest of the class. Under Rule 18f-2, the
approval of an investment advisory agreement or any change in investment policy
would be effectively acted upon with respect to a class only if approved by a
majority of the outstanding shares of such class. However, Rule 18f-2 also
provides that the ratification of independent accountants, the approval of
principal underwriting contracts, and the election of Trustees may be
effectively acted upon by shareholders of the Trust voting without regard to
class.
SHAREHOLDER AND TRUSTEE LIABILITY
The Trust is organized as a Delaware business trust. The Delaware Business
Trust Act provides that a shareholder of a Delaware business trust shall be
entitled to the same limitation of personal liability extended to shareholders
of Delaware corporations, and the Trust Instrument provides that shareholders of
the Trust shall not be liable for the obligations of the Trust. The Trust
Instrument also provides for indemnification out of Trust property of any
shareholder held personally liable solely by reason of his or her being or
having been a shareholder. The Trust Instrument also provides that the Trust
shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust, and shall satisfy any
judgment thereon. Therefore, it is unlikely that a shareholder bears any
significant risk of financial loss with respect to
29
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shareholder liability.
The Trust Instrument states further that no Trustee, officer, or agent of the
Trust shall be personally liable in connection with the administration or
preservation of the assets of the Fund or the conduct of the Trust's business;
nor shall any Trustee, officer, or agent be personally liable to any person for
any action or failure to act except for his or her own bad faith, willful
misfeasance, gross negligence, or reckless disregard of his or her duties. The
Trust Instrument also provides that all persons having any claim against the
Trustees or the Trust shall look solely to the assets of the Trust for payment.
30
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[BACK-COVER OF SAI]
The Trust is registered with the SEC as an open-end management investment
company. The SEC does not supervise the management or policies of the Trust.
The Prospectus and this SAI do not include certain information contained in the
registration statement filed with the SEC. Copies of such information may be
obtained from the SEC upon payment of the prescribed fee.
THE PROSPECTUS AND THIS SAI DO NOT CONSTITUTE AN OFFERING OF THE SECURITIES
DESCRIBED IN THESE DOCUMENTS IN ANY STATE IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE. NO SALESPERSON, DEALER, OR ANY OTHER PERSON IS AUTHORIZED TO
GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN
THE PROSPECTUS AND THIS SAI.
REGISTRATION STATEMENT
This Statement of Additional Information and the Prospectus do not contain all
the information included in the Registration Statement filed with the Commission
under the 1933 Act with respect to the securities offered by the Prospectus.
The Registration Statement, including the exhibits filed therewith, may be
examined at the office of the Commission in Washington, D.C.
Statements contained in this Statement of Additional Information and the
Prospectus as to the contents of any contract or other document are not complete
and, in each instance, reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement of which this
Statement of Additional Information and the Prospectus form a part, each such
statement being qualified in all respects by such reference.
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<PAGE>
PART C OTHER INFORMATION
ITEM 23. EXHIBITS
(a)(1) Certificate of Trust*
(a)(2) Trust Instrument*
(b) By-laws of the Trust*
(c) Not Applicable
(d) Investment Adviser Agreement between Registrant and Claremont Investment
Partners, L.L.C.*
(e) Distribution Agreement between Registrant and Industry Leaders Fund
Distributors, Inc. *
(f) Not Applicable
(g) Custody Agreement*
(h)(1) Transfer Agency Agreement between the Registrant and BISYS Fund Services
Ohio, Inc.*
(h)(2) Fund Accounting Agreement between the Registrant and BISYS Fund Services
Ohio, Inc.*
(h)(3) Administration Agreement between the Registrant and BISYS Fund Services
Ohio, Inc.*
(h)(4) Omnibus Fee Agreement between the Registrant and BISYS Fund Services
Ohio, Inc.*
(i) Opinion and consent of counsel.*
(j) Consent of ____________________, Independent Accountants for
Registrant.*
(k) Not Applicable
(l) Subscription Agreement for Shares of the Industry Leaders Fund(R).*
(m) Rule 12b-1 Distribution Plan.*
(n) Financial Data Schedule*
(o) Rule 18f-3 Plan.*
(p) Class D Shareholder Services Plan*
Notes to Item 23.
* To be filed by amendment.
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ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE TRUST
The Trust does not control and is not under common control with any other
person.
ITEM 25. INDEMNIFICATION
All officers, Trustees, employees and agents of the Trust are to be indemnified
as set forth in Trust Instrument. To this end, the Trust intends to obtain an
Officers' and Trustees' Errors and Omissions Insurance Policy.
Insofar as indemnification for liability arising under the Securities Act of
1933, as amended (the "1933 Act") may be permitted for Trustees, officers and
controlling persons of the Trust pursuant to the foregoing provisions, or
otherwise, the Trust has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Trust of
expenses incurred or paid by a Trustee, officer or controlling person of the
Trust in the successful defense of any action, suit or proceeding) is asserted
by such Trustee, officer or controlling person in connection with the securities
being registered, the Trust will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The investment manager of the Fund is Claremont Investment Partners, LLC (the
"Adviser"), located at 104 Summit Avenue, Box 80, Summit, New Jersey 07902-0080,
engages in no business other than that of investment counseling for clients,
including the Fund.
During the past two years, Mr. Gerald P. Sullivan, President of the Fund and
Trustee, has worked only as the principal developer of the Industry Leaders
Strategy Model(TM) (the "Strategy Model") on behalf of the Adviser. Mr.
Sullivan also serves as an officer and director of the Adviser. A portion of
his development of the Strategy Model was sponsored by RoadHouse Capital LLC,
104 Summit Avenue, Box 80, Summit, New Jersey 07902-0080, the parent company of
the Adviser.
During the past two years, Mr. Barry F. Sullivan, an officer and director of the
Adviser, has served as Vice-Chairman of Sithe Energies, Inc., a private energy
resources firm located at 450 Lexington Avenue, New York, NY 10017.
Additional information concerning the respective business activities of Messrs.
Sullivan and Sullivan is set forth in the Prospectus under the caption,
"Management of the Fund - Portfolio Managers."
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ITEM 27. PRINCIPAL UNDERWRITERS
(a) Industry Leaders Fund Distributors, Inc., 3435 Stelzer Road, Columbus, Ohio
43219, is the Fund's principal underwriter. ILFD does not act as an underwriter,
depositor or investment adviser for any other investment companies.
(b) There are no officers and directors of the Distributor who also serve on
behalf of the Trust.
(c) None.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books or other documents required to be maintained by Section
31(a) of the 1940 Act and the rules promulgated thereunder are maintained on
behalf of the Industry Leaders Fund(R) by the Fund Administrator, 3435 Stelzer
Road, Columbus, Ohio 43219.
ITEM 29. MANAGEMENT SERVICES
The Trust has not entered into any management-related service contracts other
than as described in Part A and B of this Registration Statement.
ITEM 30. UNDERTAKINGS
The Registrant undertakes to call a meeting of shareholders for the purpose of
voting upon the question of removal of a Trustee or Trustees if requested to do
so by the holders of at least 10% of Registrant's outstanding voting securities,
and to assist in communications with other shareholders, as required by Section
16(c) of the 1940 Act.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereunto duly authorized, in Summit, New Jersey, on the 1st day of
September, 1998.
INDUSTRY LEADERS FUND(R)
By:
/s/ Gerald P. Sullivan
--------------------------------------
Gerald P. Sullivan, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this to
the Registration Statement of the Trust on Form N-1A has been signed below by
the following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Barry F. Sullivan Chief Executive Officer and Trustee September 1, 1998
- ----------------------------
Barry F. Sullivan
/s/ Gerald P. Sullivan President and Trustee September 1, 1998
- ----------------------------
Gerald P. Sullivan
/s/ Mark S. Kaufmann Chairman, Board of Trustees September 1, 1998
- ----------------------------
Mark S. Kaufmann
</TABLE>
<PAGE>
EXHIBIT INDEX TO
TO THE REGISTRATION STATEMENT
ON FORM N-1A
(a)(1) Certificate of Trust*
(a)(2) Trust Instrument*
(b) By-laws of the Trust*
(c) Not Applicable
(d) Investment Adviser Agreement between Registrant and Claremont Investment
Partners, L.L.C.*
(e) Distribution Agreement between Registrant and Industry Leaders Fund
Distributors, Inc. *
(f) Not Applicable.
(g) Custody Agreement*
(h)(1) Transfer Agency Agreement between the Registrant and BISYS Fund Services
Ohio, Inc.*
(h)(2) Fund Accounting Agreement between the Registrant and BISYS Fund Services
Ohio, Inc.*
(h)(3) Administration Agreement between the Registrant and BISYS Fund Services
Ohio, Inc.*
(h)(4) Omnibus Fee Agreement between the Registrant and BISYS Fund Services
Ohio, Inc.*
(i) Opinion and consent of counsel.*
(j) Consent of ____________________, Independent Accountants for
Registrant.*
(k) Not Applicable
(l) Subscription Agreement for Shares of the Industry Leaders Fund(R).*
(m) Rule 12b-1 Distribution Plan.*
(n) Financial Data Schedule*
(o) Rule 18f-3 Plan.*
(p) Class D Shareholder Services Plan*
* To be filed by amendment.
