File No. 333-03531
811-07585
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. 7 [X]
-----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 8 [X]
WWW TRUST
(Exact name of registrant as specified in charter)
131 Prosperous Place, Suite 17, Lexington,
Kentucky 40509 (Address of principal
executive offices)
Registrant's Telephone Number: 606-263-2204
Lawrence S. York, 131 Prosperous Place, Suite 17, Lexington, Kentucky 40509
(Name and address of agent for service)
Copy to:
William G. Strench, Esq.
Brown, Todd & Heyburn PLLC
400 W. Market Street, Suite 3200, Louisville, Kentucky 40202
It is proposed that this filing will become effective (check
appropriate box):
____ immediately upon filing pursuant to paragraph (b) of Rule 485.
____ on (date) pursuant to paragraph (b) of Rule 485.
____ 60 days after filing pursuant to paragraph (a) of Rule 485.
X 75 days after filing pursuant to paragraph (a)(2) of Rule 485.
----
<PAGE>
PROSPECTUS
WWW INTERNET FUND
WWW GLOBAL INTERNET FUND
____________, 2000
WWW Internet Fund (the "WWW Internet Fund") and WWW Global Internet
Fund (the "WWW Global Internet Fund", and WWW Internet Fund each a "Fund" and
collectively, the "Funds") are mutual funds which invest to produce long term
growth through capital appreciation. WWW Internet Fund invests primarily in
common stock of companies that are designing, developing or manufacturing
hardware or software products or services for the Internet. WWW Global Internet
Fund invests primarily in common stocks of companies throughout the world
involved in these same activities.
As with all mutual funds, the Securities and Exchange Commission has
not approved or disapproved these securities or passed upon the adequacy of this
Prospectus. Any representation to the contrary is a criminal offense.
TABLE OF CONTENTS
PAGE
----
WWW Internet Fund Risk/Return Summary....................................3
WWW Global Internet Fund Risk/Return Summary.............................5
Fees and Expenses of the Funds...........................................7
Who Manages the Funds....................................................9
How to Buy Shares.......................................................10
How to Sell Shares......................................................12
Dividends, Distributions and Taxes......................................13
Financial Highlights....................................................15
<PAGE>
WWW INTERNET FUND
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
INVESTMENT OBJECTIVE. WWW Internet Fund is a mutual fund whose
investment objective is long term growth through capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES. WWW Internet Fund will seek to achieve
its objective by investing primarily, under normal conditions, at least 70% of
its total assets in common stock of companies that are designing, developing or
manufacturing hardware or software products or services for the Internet. WWW
Internet Fund will strive to achieve a balanced mix of (1) Mature companies
(large, established companies that have successfully implemented Internet
strategies), (2) Mid-Life companies (companies which have captured a leadership
position in an established part of the Internet sector) and (3) Adolescent
companies (IPO's and small, growing companies that are experiencing
unprecedented valuations and are expected to achieve leadership in emerging
market segments of the Internet sector). Generally, WWW Internet Fund will
attempt to achieve a balance of its assets invested by invested approximately
one-third of such assets in the three above mentioned tiers of companies;
however, WWW Internet Fund has the discretion to alter this allocation from time
to time as market conditions may warrant. By diversifying among these three
tiers of companies, WWW Internet Fund seeks to reduce loss to principal normally
associated with investing in the Internet sector, however, this strategy may not
reduce the market volatility of share prices that can occur with investing in
the Internet sector.
The Internet is an emerging global communication, information and
distribution system. WWW Internet Fund believes that the Internet is the new
frontier interlinking computers, telecommunications and broadcast. Consequently,
there are opportunities for continued growth in demand for components, products,
media, services, and systems to assist, facilitate, enhance, store, process,
record, reproduce, retrieve and distribute information, products and services
for use by businesses, institutions and consumers. Companies engaged in these
efforts are the central focus of WWW Internet Fund. However, older technologies
such as telephone, broadcast, cable, print and photography may also be
represented when WWW Internet Fund believes that these companies may
successfully integrate existing technology with new emerging technologies.
Products and services identified for investment include, but are not limited to,
servers, routers, search engines, portals, bridge and switches, network
applications, agent software, modems, carriers, firewall and security, e-mail,
electronic commerce, video and publishing. `
SELECTION OF STOCKS FOR PURCHASE OR SALE. WWW Internet Fund emphasizes
a "growth" style of investing. WWW Internet Fund attempts to select fast-growing
companies at the right prices. For mature and mid-life companies, extensive
research is performed to identify companies based upon their earnings and
price/earnings ratios. For adolescent companies, WWW Internet Fund evaluates the
company's business plan and ability to generate earnings in a reasonable time
frame and compares the company's ongoing progress to that of other Internet
companies in the same general business. Among all three tiers of companies, WWW
Internet Fund favors Internet companies with proprietary technology (or other
barriers to entry by competitors), a dominant market share, a relatively liquid
trading market, and/or strong management with a defined commitment to the
Internet.
In deciding what stocks to sell, WWW Internet Fund considers the
factors set forth above as well as other criteria, including (1) excess
valuation due to price appreciation; (2) declining revenues or earnings growth;
(3) a change in key management; (4) a loss of market share; and/or (5) the
opportunity to offset gains for tax advantages.
DEFENSIVE POSITIONS. Under normal market conditions, WWW Internet Fund
expects to have less than 15% of its assets invested in money market
instruments. However, when WWW Internet Fund determines that adverse market
conditions exist, WWW Internet Fund may adopt a temporary defensive posture and
invest all of its assets in money market instruments. The taking of such a
temporary defensive posture may adversely affect the ability of this Fund to
achieve its investment objective.
PORTFOLIO TURNOVER
WWW Internet Fund is not restricted with regard to portfolio turnover
and will make changes in its investment portfolio from time to time as business
and economic conditions and market prices may dictate and its investment
policies may require. A high rate of portfolio turnover in any year will
increase brokerage commissions paid by WWW Internet Fund, thus reducing WWW
Internet Fund's total return, and could result in high amounts of realized
investment gain subject to the payment of taxes by shareholders.
MAIN RISKS
GENERAL RISKS. Investing for capital appreciation ordinarily exposes
capital to added risk. Shares of WWW Internet Fund are intended for you only if
you are able and willing to take such risk. There can be no assurance that WWW
Internet Fund's investment objective will be attained. WWW Internet Fund's share
price may decline and you could lose money.
STOCK MARKET RISKS. The stock market is subject to significant
fluctuations in value as a result of political, economic and market
developments. If the stock market declines in value, WWW Internet Fund's share
price is likely to decline in value.
3
<PAGE>
GROWTH STOCK RISKS. There is no assurance that WWW Internet Fund's
"growth" style of investing will achieve its desired result. In fact, WWW
Internet Fund may decline in value as a result of emphasizing this style of
investing. "Growth" stocks generally are more expensive relative to their
earnings or assets than other types of stocks. Consequently, these stocks are
more volatile than other types of stocks. In particular, growth stocks are very
sensitive to changes in their earnings. Negative developments in this regard
could cause a stock to decline dramatically, resulting in a decrease in WWW
Internet Fund's share price.
SECTOR RISKS. Because of its narrow sector focus, WWW Internet Fund's
performance is closely tied to, and affected by, the sector in which it invests.
Companies in the same or similar sectors are often faced with the same
obstacles, issues or regulatory burdens, and their securities may react
similarly and move in unison to these and other market conditions. As a result
of these factors, shares of WWW Internet Fund are more volatile than shares of
mutual funds which do not have such a narrow sector focus.
INTERNET SPECIFIC RISKS. Internet and Internet-related companies are
generally subject to the rate of change in technology, which is higher than
other industries. In addition, many products and services of companies engaged
in the Internet and Internet-related activities are also subject to relatively
high risks of rapid obsolescence caused by progressive scientific and
technological advance. The Internet and Internet-related activities may be
subject to greater governmental regulation than many other areas, and changes in
governmental policies and the need for regulatory approvals may have a material
adverse effect on those areas. Additionally, companies in those areas may be
subject to risks of developing technologies, competitive pressures and other
factors and are dependent upon consumer and business acceptance as new
technologies evolve. In addition, competitive pressures and changing demand may
have a significant effect on the financial condition of Internet and
Internet-related companies. Such companies spend heavily on research and
development, as well as sales and marketing, and are especially sensitive to the
risk of market acceptance and product obsolescence due to competitive pressures
and rapid technological changes.
In addition, competitive pressures and changing demand may have a
significant effect on the financial condition of internet and internet-related
companies. Such companies spend heavily on research and development and are
especially sensitive to the risk of product obsolescence due to rapid
technological changes.
SMALLER COMPANY RISKS. Although securities of large and
well-established companies in the information technology industries will be held
in WWW Internet Fund's portfolio, WWW Internet Fund will also invest in medium,
small and new IPO companies which may be subject to greater share price
fluctuations and declining growth, particularly in the event of rapid changes in
technology and increased competition. Securities of those smaller and less
seasoned companies may therefore expose shareholders of WWW Internet Fund to
above-average risk.
ILLIQUID SECURITIES RISKS. WWW Internet Fund may invest up to 15% of
the value of its net assets in securities as to which a liquid trading market
does not exist, provided such investments are consistent with WWW Internet
Fund's investment objective. Such securities may include securities that are not
readily marketable, such as common stocks that are subject to legal or
contractual restrictions on resale. As to these securities, WWW Internet Fund is
subject to a risk that should WWW Internet Fund desire to sell them when a ready
buyer is not available at a price WWW Internet Fund deems representative of
their value, the value of WWW Internet Fund's net assets could be adversely
affected.
BAR CHART AND PERFORMANCE TABLE
The bar chart and table shown below provide an indication of the risks
of investing in WWW Internet Fund by showing changes in WWW Internet Fund's
performance from year to year over the life of WWW Internet Fund and by showing
how WWW Internet Fund's average annual returns for a one year period and the
life of WWW Internet Fund compare to those of a broad-based securities market
index. How WWW Internet Fund has performed in the past is not necessarily an
indication of how WWW Internet Fund will perform in the future.
[Bar Chart showing 1997, 1998 and 1999 calendar year returns.]
<PAGE>
During the life of WWW Internet Fund, the highest return for a quarter
was 79.26% (QUARTER ENDING DECEMBER 31, 1999) and the lowest return for a
quarter was -14.97% (QUARTER ENDING MARCH 31, 1997).
Average Annual Total Returns PAST LIFE
(FOR THE PERIODS ENDING DECEMBER 31, 1999) ONE YEAR OF FUND*
------------------------------------------ -------- --------
WWW INTERNET FUND _____% _____%
Standard & Poor's 500 Index _____% _____%
*Since inception date of August 1, 1996.
5
<PAGE>
WWW GLOBAL INTERNET FUND
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
INVESTMENT OBJECTIVE. WWW Global Internet Fund is a mutual fund whose
investment objective is long term growth through capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES. WWW Global Internet Fund will seek to
achieve its objective by investing primarily (under normal conditions, at least
70% of its total assets) in common stock of foreign companies that are
designing, developing or manufacturing hardware or software products or services
for the Internet. WWW Global Internet Fund will strive to achieve a balanced mix
of (1) Mature companies (large, established companies that have successfully
implemented Internet strategies), (2) Mid-Life companies (companies which have
captured a leadership position in an established part of the Internet sector)
and (3) Adolescent companies (Recent IPO's and small, growing companies that are
experiencing unprecedented valuations and are expected to achieve leadership in
emerging market segments of the Internet sector). Generally, WWW Global Internet
Fund will attempt to achieve a balance of its assets invested by investing
approximately one-third of such assets in the three above mentioned tiers of
companies; however, WWW Global Internet Fund has the discretion to alter this
allocation from time to time as market conditions may warrant. By diversifying
among these three tiers of companies, WWW Global Internet Fund seeks to reduce
loss to principal normally associated with investing in the Internet sector,
however, this strategy may not reduce the market volatility of share prices that
can occur with investing in the Internet sector.
The Internet is an emerging global communication, information and
distribution system. WWW Global Internet Fund believes that the Internet is the
new frontier interlinking computers, telecommunications and broadcast that is
rapidly spreading around the world. Consequently, there are opportunities for
continued growth in demand for components, products, media, services, and
systems to assist, facilitate, enhance, store, process, record, reproduce,
retrieve and distribute information, products and services for use by
businesses, institutions and consumers. Companies engaged in these efforts are
the central focus of WWW Global Internet Fund. However, older technologies such
as telephone, broadcast, cable, print and photography may also be represented
when WWW Global Internet Fund believes that these companies may successfully
integrate existing technology with new emerging technologies. Products and
services identified for investment include, but are not limited to, servers,
routers, search engines, portals, bridge and switches, network applications,
agent software, modems, carriers, firewall and security, e-mail, electronic
commerce, video and publishing.
SELECTION OF STOCKS FOR PURCHASE OR SALE. WWW Global Internet Fund
emphasizes a "growth" style of investing. WWW Global Internet Fund attempts to
select fast-growing foreign companies at the right prices. For mature and
mid-life companies, extensive research is performed to identify companies based
upon their earnings and price/earnings ratios. For adolescent companies, WWW
Global Internet Fund evaluates the company's business plan and ability to
generate earnings in a reasonable time frame and compares the company's ongoing
progress to that of other Internet companies in the same general business. Among
all three tiers of companies, WWW Global Internet Fund favors Internet companies
with proprietary technology (or other barriers to entry by competitors), a
dominant market share, a relatively liquid trading market, and/or strong
management with a defined commitment to the Internet.
In deciding what stocks to sell, WWW Global Internet Fund considers the
factors set forth above as well as other criteria, including (1) excess
valuation due to price appreciation; (2) declining revenues or earnings growth;
(3) political and economic risks related to foreign countries; (4) a change in
key management; (5) a loss of market share; and/or (6) the opportunity to offset
gains for tax advantages.
DEFENSIVE POSITIONS. Under normal market conditions, WWW Global
Internet Fund expects to have less than 15% of its assets invested in money
market instruments. However, when WWW Global Internet Fund determines that
adverse market conditions exist, WWW Global Internet Fund may adopt a temporary
defensive posture and invest all of its assets in money market instruments. The
taking of such a temporary defensive posture may adversely affect the ability of
WWW Global Internet Fund to achieve its investment objective.
PORTFOLIO TURNOVER
WWW Global Internet Fund is not restricted with regard to portfolio
turnover and will make changes in its investment portfolio from time to time as
business and economic conditions and market prices may dictate and its
investment policies may require. A high rate of portfolio turnover in any year
will increase brokerage commissions paid by WWW Global Internet Fund, thus
reducing WWW Global Internet Fund's total return, and could result in high
amounts of realized investment gain subject to the payment of taxes by
shareholders.
6
<PAGE>
MAIN RISKS
GENERAL RISKS. Investing for capital appreciation ordinarily exposes
capital to added risk. Shares of WWW Global Internet Fund are intended for you
only if you are able and willing to take such risk. There can be no assurance
that WWW Global Internet Fund's investment objective will be attained. WWW
Global Internet Fund's share price may decline and you could lose money.
STOCK MARKET RISKS. The stock market is subject to significant
fluctuations in value as a result of political, economic and market
developments. If the stock market declines in value, WWW Global Internet Fund's
share price is likely to decline in value.
GROWTH STOCK RISKS. There is no assurance that WWW Global Internet
Fund's "growth" style of investing will achieve its desired result. In fact, WWW
Global Internet Fund may decline in value as a result of emphasizing this style
of investing. "Growth" stocks generally are more expensive relative to their
earnings or assets than other types of stocks. Consequently, these stocks are
more volatile than other types of stocks. In particular, growth stocks are very
sensitive to changes in their earnings. Negative developments in this regard
could cause a stock to decline dramatically, resulting in a decrease in WWW
Global Internet Fund's share price.
INTERNET SPECIFIC RISKS. Internet and Internet-related companies are
generally subject to the rate of change in technology, which is higher than
other industries. In addition, many products and services of companies engaged
in the Internet and Internet-related activities are also subject to relatively
high risks of rapid obsolescence caused by progressive scientific and
technological advance. The Internet and Internet-related activities may be
subject to greater governmental regulation than many other areas, and changes in
governmental policies and the need for regulatory approvals may have a material
adverse effect on those areas. Additionally, companies in those areas may be
subject to risks of developing technologies, competitive pressures and other
factors and are dependent upon consumer and business acceptance as new
technologies evolve. In addition, competitive pressures and changing demand may
have a significant effect on the financial condition of Internet and
Internet-related companies. Such companies spend heavily on research and
development, as well as sales and marketing and are especially sensitive to the
risk of marketing acceptance and product obsolescence due to competitive
pressures and rapid technological changes.
In addition, competitive pressures and changing demand may have a
significant effect on the financial condition of internet and internet-related
companies. Such companies spend heavily on research and development and are
especially sensitive to the risk of product obsolescence due to rapid
technological changes.
FOREIGN SECURITIES RISKS. WWW Global Internet Fund invests primarily in
foreign securities, which can carry higher returns but involve more risks than
those associated with domestic investments. These risks include political and
economic instability, fluctuations in foreign currencies, differences in
financial reporting standards, withholding or other taxes, trading risks, other
operational risks and less stringent investor protection and disclosure
standards in some foreign markets. All of these factors can make foreign
investments, especially those in emerging markets, more volatile and potentially
less liquid, reducing WWW Global Internet Fund's ability to buy and sell shares.
Since WWW Global Internet Fund invests in foreign securities, there are
different risks than if it invested only in obligations of U.S. corporations.
The amount of income available for distribution may be affected by WWW Global
Internet Fund's foreign currency gain or losses and certain hedging activities
of WWW Global Internet Fund. Foreign markets, especially those in developing
countries, are often more volatile than U.S. markets and are generally not
subject to regulatory requirements comparable to U.S. issues. In addition,
changes in currency exchange rates can reduce or increase market performance.
SECTOR RISKS. Because of its narrow sector focus, WWW Global Internet
Fund's performance is closely tied to, and affected by, the sector in which it
invests. Companies in the same or similar sectors are often faced with the same
obstacles, issues or regulatory burdens, and their securities may react
similarly and move in unison to these and other market conditions. As a result
of these factors, shares of WWW Global Internet Fund are more volatile than
shares of mutual funds which do not have such a narrow sector focus.
SMALLER COMPANY RISKS. Although securities of large and
well-established companies in the information technology industries will be held
in WWW Global Internet Fund's portfolio, WWW Global Internet Fund also will
invest in medium, small and/or newly-public companies which may be subject to
greater share price fluctuations and declining growth, particularly in the event
of rapid changes in technology and/or increased competition. Securities of those
smaller and/or less seasoned companies may therefore expose shareholders of WWW
Global Internet Fund to above-average risk.
ILLIQUID SECURITIES RISKS. WWW Global Internet Fund may invest up to
15% of the value of its net assets in securities as to which a liquid trading
market does not exist, provided such investments are consistent with WWW Global
Internet Fund's investment objective. Such securities may include securities
that are not readily marketable, such as common stocks that are subject to legal
or contractual restrictions on resale. As to these securities, WWW Global
Internet Fund is subject to a risk that should WWW Global Internet Fund desire
to sell them when a ready buyer is not available at a price WWW Global Internet
Fund deems representative of their value, the value of WWW Global Internet
Fund's net assets could be adversely affected.
7
<PAGE>
BAR CHART AND PERFORMANCE TABLE
WWW Global Internet Fund began operations October 31, 2000 and,
therefore, has no performance history. There will be risks of investing in the
WWW Global Internet Fund because returns would be expected to vary from year to
year. Because WWW Global Internet Fund is new, there is no table which shows how
WWW Global Internet Fund's returns have deviated from the broad market.
FEES AND EXPENSES OF THE FUNDS
This table describes the fees and expenses that you may pay if you buy
and hold shares in either of the Funds.
<TABLE>
<CAPTION>
WWW
WWW GLOBAL
INTERNET INTERNET
FUND FUND
---- ----
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<S> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage
of offering price) None None
Redemption Fee (as a percentage of the amount subject to charge) 1.00%* 1.00%*
(payable only if shares are redeemed within one year of purchase)
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees** 1.42%*** ____%***
Distribution and Service (12b-1) Fees .50% .50%
Other Expenses** 1.73% ____%
Total Annual Fund Operating Expenses** 3.65% ____%
<FN>
* In addition, a fee of $15.00 is charged for each wire redemption.
** WWW Internet Fund has undertaken, until such time as it gives investors
60 days' notice to the contrary, to waive its investment advisory fee
to the extent Total Annual Fund Operating Expenses (other than
interest, taxes, brokerage fees and extraordinary items) exceed 2.50%,
except that the amount of such obligation will not exceed the amount of
fees received by WWW Internet Fund for the applicable period. Such
waiver was made for WWW Internet Fund for the fiscal year ended June
30, 2000. Figures in the above table do not take such fee waiver into
account. With such waiver, for such fiscal year, Management Fees for
WWW Internet Fund were .27%, Distribution (12b-1) Fees were .50%, Other
Expenses of WWW Internet Fund were 1.73% and Total Annual Fund
Operating Expenses of WWW Internet Fund were 2.50%. [ WWW Global
Internet Fund disclosure to be inserted].
*** The Management Fee is payable at an annual rate equal to 1% of each of
the Fund's average daily net assets, subject to increase or decrease by
up to 0.50% annually depending on such Fund's performance. See
"Management Services."
</FN>
</TABLE>
EXAMPLES: THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF
INVESTING IN THE FUNDS WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS.
THE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN A FUND FOR THE TIME
PERIODS INDICATED AND THEN REDEEM ALL OF YOUR SHARES AT THE END OF THOSE
PERIODS. THE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR
AND THAT SUCH 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>
1 YEAR* 3 YEARS* 5 YEARS* 10 YEARS*
------ -------- ------- ---------
<S> <C> <C> <C> <C>
WWW INTERNET FUND $383 $1,163 $1,962 $4,040
WWW GLOBAL INTERNET FUND $____ $____ $____ $____
<FN>
* The above figures do not take into account the management fee waiver
described above. Taking such waiver into account, you would pay the
following expenses for WWW Internet Fund: 1 year - $263; 3 years -
$806; 5 years - $1,376; and 10 years - $2,924; and for WWW Global
Internet Fund: 1 year - $______; 3 years - $_______; 5 years - $_____;
and 10 years - $________.
</FN>
</TABLE>
8
<PAGE>
WHO MANAGES THE FUNDS
THE MANAGER. WWW Advisors, Inc. (the "Manager") manages the investments
of each Fund and is responsible for the overall management of the business
affairs of each Fund.
The Manager was founded in April 1996 by Lawrence S. York and James D.
Greene. Mr. York, the Chairman of the Board and President of the Trust, is the
President of the Manager and owns 76% of its outstanding shares. Since 1991, Mr.
York also has been President of Capital Advisors Group, Inc. a financial
planning and investment advisory firm. Mr. York and these companies provide
investment management advice to individual, business and institutional accounts
having an aggregate value of more than $75 million. Mr. York is lead portfolio
manager of each Fund, responsible for fundamental financial research and stock
selection. Mr. York holds a B.A. degree from Berea College and an M.B.A. degree
from the University of Kentucky.
Mr. Greene, the Vice President and Treasurer of the Trust, is the
Executive Senior Vice President of the Manager and owns 7% of its outstanding
shares. Since 1997, Mr. Greene has been a Senior Product Manager for NCR Corp.,
a manufacturer of retail point-of-sale systems. From 1991 to 1997, he was a
marketing strategist with Lexmark International, Inc., a manufacturer of network
personal computer and office electronics, and previously held marketing and
strategist positions with other computer companies such as Tandy, Computerland
and Texas Instruments. Mr. Greene is a co-portfolio manager of each Fund,
responsible for providing each Fund with technology assessments and for
identifying promising internet technology trends of significance to the Fund.
Mr. Greene holds a B.A. degree from the University of Kentucky.
MANAGEMENT FEES. Under the terms of the Management Agreement, each Fund
has agreed to pay the Manager a base monthly management fee at the annual rate
of 1.00% of such Fund's average daily net assets (the "Base Fee") which will be
adjusted monthly (the "Monthly Performance Adjustment") depending on the extent
by which the investment performance of such Fund, after expenses, exceeded or
was exceeded by the percentage change of the Applicable Index. With respect to
WWW Internet Fund, the "Applicable Index" is the S&P 500 Index; with respect to
WWW Global Internet Fund, the "Applicable Index" is the EAFE Index. Under terms
of the Management Agreement, the monthly performance adjustment may increase or
decrease the total management fee payable to the Manager (the "Total Management
Fee") by up to .50% per year of the value of each Fund's average daily net
assets.
The monthly total Management Fee is calculated as follows: (a)
one-twelfth of 1.0% annual Base Fee rate (0.083%) is applied to a Fund's average
daily net assets over the most recent calendar month, giving a dollar amount
which is the Base Fee for that month; (b) one-twelfth of the applicable
performance adjustment rate from the table below is applied to a Fund's average
daily net assets over the most recent calendar month, giving a dollar amount
which is the Monthly Performance Adjustment; and (c) the Monthly Performance
Adjustment is then added to or subtracted from the Base Fee and the result is
the amount payable by a Fund to the Manager as the Total Management Fee for that
month.
The full range of Total Management Fee on an annualized basis is as
follows:
<TABLE>
<CAPTION>
PERFORMANCE
PERCENTAGE POINT DIFFERENCE BETWEEN FUND PERFORMANCE (NET OF EXPENSES BASE ADJUSTMENT TOTAL
INCLUDING ADVISORY FEES) AND PERCENTAGE CHANGE IN THE APPLICABLE INDEX FEE(%) RATE(%) FEE(%)
---------------------------------------------------------------------- ------ ------- ------
<S> <C> <C> <C>
+3.00 percentage points or more 1% .50% 1.50%
+2.75 percentage points or more but less than +3.00 percentage points 1% .40% 1.40%
+2.50 percentage points or more but less than +2.75 percentage points 1% .30% 1.30%
+2.25 percentage points or more but less than +2.50 percentage points 1% .20% 1.20%
+2.00 percentage points or more but less than +2.25 percentage points 1% .10% 1.10%
Less than +2.00 percentage points but more than -2.00 percentage points 1% 0% 1.00%
-2.00 percentage points or less but more than -2.25 percentage points 1% -.10% .90%
-2.25 percentage points or less but more than -2.50 percentage points 1% -.20% .80%
-2.50 percentage points or less but more than -2.75 percentage points 1% -.30% .70%
-2.75 percentage points or less but more than -3.00 percentage points 1% -.40% .60%
-3.00 percentage points or less 1% -.50% .50%
</TABLE>
The period over which performance is measured is a rolling twelve-month period
and the performance of the Applicable Index is calculated as the sum of the
change in the level of the Applicable Index during the period, plus the value of
any dividends or distributions made by the companies whose securities comprise
the Applicable Index. No Monthly Performance Adjustment will be made during the
first 12 months of operation of WWW Global Internet Fund.
9
<PAGE>
Because the maximum Monthly Performance Adjustment for a Fund applies
whenever such Fund's performance exceeds the Applicable Index by 3.00% or more,
the Manager could receive a maximum Monthly Performance Adjustment even if the
performance of the Fund is negative.
FEE WAIVER. The Manager has undertaken, until such time as it gives
investors 60 days' notice to the contrary, to waive its Management Fee in the
amount, if any, by which the total expenses of a Fund for any fiscal year,
including amortization of organizational expenses and amounts paid by a Fund
under the Plan (but excluding interest, taxes, brokerage fees and commissions
and extraordinary expenses), exceed 2.50% of average annual net assets of a
Fund, except that the amount of such fee waiver shall not exceed the amount of
fees received by the Manager under the Management Agreement for such fiscal
year. The fee waiver, if any, is subject to year-end adjustment.
In addition, in prior years the Manager voluntarily reimbursed WWW
Internet Fund for all other operating expenses to the extent that total
operating expenses would have exceeded 2.50%. For the year ended June 30, 2000,
the Manager reimbursed WWW Internet Fund $_______ for its total operating
expenses. It is not anticipated that it will be necessary to reimburse WWW
Internet Fund for the current fiscal year. The Manager, in its discretion, may
make such reimbursements in the future if total operating expenses of a Fund
would otherwise exceed 2.50%. If such reimbursements are made, they may be
discontinued at any time without notice.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN. Under a plan adopted by
the Funds' Board of Trustees pursuant to Rule 12b-1 under the 1940 Act (the
"Plan"), each Fund pays the Manager a shareholder servicing and distribution fee
at the annual rate of .50% of the average daily net assets of such Fund. Such
fee will be used in its entirety by the Manager to make payments for
administration, shareholder services, marketing and distribution assistance.
Because these fees are paid out of each Fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
HOW TO BUY SHARES
GENERAL. By this Prospectus, each Fund is offering shares. The minimum
initial investment is $2,000. Subsequent investments ordinarily must be at least
$100. A Fund reserves the right to reject any purchase order. A Fund reserves
the right to vary or waive the initial and subsequent investment minimum
requirements at any time.
The purchase price of a share of a Fund is the net asset value of a
share (as defined in "Net Asset Value" below).
Purchase orders received in proper form before the close of regular
trading on the New York Stock Exchange (currently 4:00 p.m., New York time) on
any day a Fund calculates its net asset value are priced based upon the net
asset value determined on that date. Purchase orders received in proper form
after the close of trading on the New York Stock Exchange are priced as of the
time the net asset value is next determined.
Shareholders receive a confirmation of their share purchases and
quarterly statements of their accounts.
INITIAL PURCHASE.
BY MAIL--You may purchase shares of a Fund by completing and signing
the application form which accompanies this Prospectus and mailing it, in proper
form, together with a check (subject to the above minimum amounts) made payable
to WWW Internet Fund or WWW Global Internet Fund, and sent to the address listed
below. If you prefer overnight delivery, use the overnight address listed below.
U.S. MAIL: WWW Trust OVERNIGHT: WWW Trust
P.O. Box 55089 131 Prosperous Place
Lexington, Kentucky 40555 Suite 17
Lexington, Kentucky 40509-1804
BY WIRE--You may also purchase shares of a Fund by wiring federal funds
from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call American Data Services, Inc., the Transfer Agent for each
Fund, at (888) 999-8331 to set up your account and obtain an account number. You
should be prepared to provide the information on the application form to the
Transfer Agent. Then, you should provide your bank with the following
information for purposes of wiring your investment:
Firstar Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: WWW Trust
D.D.A. # 485777098
Account Name (write in your account registration name)
For the Account # (write in your account # assigned by Transfer Agent)
10
<PAGE>
You are required to mail a signed application to the Transfer Agent at
the following address in order to complete your initial purchase by wire:
WWW Trust
c/o American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, New York 11788
Wire orders will be accepted only on a day on which a Fund and the Custodian and
Transfer Agent are open for business. A wire purchase will not be considered
made until the wired money is received and the purchase is accepted by the Fund.
Any delays which may occur in wiring money, including delays which may occur in
processing by the banks, are not the responsibility of WWW Internet Fund, WWW
Global Internet Fund or the Transfer Agent. The custodian may charge
shareholders for the receipt of wired funds.
ADDITIONAL INVESTMENTS. You may purchase additional shares of WWW
Internet Fund or WWW Global Internet Fund at any time (minimum of $100) by mail
or wire. Each additional mail purchase request must contain the additional
investment portion of your shareholder statement or a letter containing your
name, the name of your account, your account number and the name of the Fund.
Checks should be made payable to WWW Internet Fund or WWW Global Internet Fund
and should be sent to the address as set forth above under "INITIAL PURCHASE--BY
MAIL". A bank wire should be sent as set forth above under "INITIAL PURCHASE--BY
WIRE".
PURCHASES THROUGH PROCESSING ORGANIZATIONS. Shares of WWW Internet Fund
or WWW Global Internet Fund may also be purchased through a "Processing
Organization," which is a third-party plan administrator, broker-dealer, bank or
other financial institution that purchases shares for its customers. When shares
are purchased this way, the Processing Organization, rather than its customer,
may be the shareholder of record of the shares. Such shares may be transferred
into the investor's name following procedures established by the Processing
Organization and the Transfer Agent. The minimum initial and subsequent
investments in WWW Internet Fund or WWW Global Internet Fund for shareholders
who invest through a Processing Organization generally will be set by the
Processing Organization. Processing Organizations may also impose other charges
and restrictions in addition to or different from those applicable to investors
who remain the shareholder of record of their shares. Certain Processing
Organizations may receive compensation from the Manager pursuant to the Funds'
Distribution and Shareholder Servicing Plan. An investor contemplating investing
with WWW Internet Fund or WWW Global Internet Fund through a Processing
Organization should read materials provided by the Processing Organization in
conjunction with this Prospectus.
TAX SHELTERED RETIREMENT PLANS. Since each Fund is oriented to longer
term investments, shares of each Fund may be an appropriate investment medium
for tax sheltered retirement plans, including: individual retirement plans
(IRAs); simplified employee pensions (SEPs); 401(k) plans; qualified corporate
pension and profit sharing plans (for employees); tax deferred investment plans
(for employees of public school systems and certain types of charitable
organizations); and other qualified retirement plans. You should contact the
Manager for the procedure to open an IRA or SEP plan. For more specific
information regarding these retirement plan options, consult with your tax
advisor. Custodial fees and other processing fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of a Fund from the IRA account
unless the fees are paid directly to the IRA custodian (Firstar Bank, N.A.). You
can obtain information about IRA fees charged by the IRA custodian by calling
the Manager at (888) 263-2204.
SYSTEMATIC INVESTMENT PLAN. The Systematic Investment Plan permits
investors to purchase shares of a Fund (minimum initial investment of $1,000 and
minimum subsequent investments of $50 per transaction) at regular intervals.
Provided the investor's bank or other financial institution allows automatic
withdrawals, shares may be purchased by transferring funds from the account
designated by the investor. At the investor's option, the account designated
will be debited in the specified amount, and shares will be purchased once a
month, on or about the twentieth day. Only an account maintained at a domestic
financial institution which is an Automated Clearing House member may be so
designated. Investors desiring to participate in the Systematic Investment Plan
should call the Manager at (888) 263-2204 to obtain the appropriate forms. The
Systematic Investment Plan does not assure a profit and does not protect against
loss in declining markets. Since the Systematic Investment Plan involves the
continuous investment in a Fund regardless of fluctuating price levels of such
Fund's shares, investors should consider their financial ability to continue to
purchase through periods of low price levels. A Fund may modify or terminate the
Systematic Investment Plan at any time. Each Fund charges a $5.00 set-up fee for
enrolling an investor in the Systematic Investment Plan, which must be sent to
such Fund together with the initial minimum investment. If this fee is not sent,
it may be deducted from the shareholder's account.
NET ASSET VALUE. Shares of each Fund are sold on a continuous basis.
Net asset value per share is determined as of the close of regular trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York time) on
each business day. The net asset value per share of a Fund is computed by
dividing the value of such Fund's net assets by the total number of shares of
the Fund outstanding. A Fund's investments are valued based on market value or,
where market quotations are not readily available, based on fair value as
determined in good faith by, or in accordance with procedures established by,
the Trust's Board of Trustees.
11
<PAGE>
ADDITIONAL INFORMATION. Federal regulations require that investors
provide a certified Taxpayer Identification Number (a "TIN") upon opening or
reopening an account. See "Dividends, Distributions and Taxes." Failure to
furnish a certified TIN to a Fund could subject the investor to a $50 penalty
imposed by the Internal Revenue Service (the "IRS").
The Funds do not issue share certificates. All shares are held in
non-certificate form registered on the books of the Transfer Agent of the Funds
for the account of the shareholder. The rights to limit the amount of purchases
and to refuse to sell to any person are reserved by the Funds. If your check or
wire does not clear, you will be responsible for any loss incurred by a Fund. If
you are already a shareholder, a Fund can redeem shares from any identically
registered account in such Fund as reimbursement for any loss incurred and you
may be prohibited or restricted from making future purchases in such Fund.
HOW TO SELL SHARES
GENERAL. Investors may request redemption of Fund shares at any time.
Redemption requests may be made as described below. When a request is received
in proper form, a Fund will redeem the shares at the next determined net asset
value.
Each Fund ordinarily will make payment for all shares redeemed within
three days after receipt by the Transfer Agent of a redemption request in proper
form, but a Fund may take up to seven days to process redemptions if making
sooner payment would adversely affect a Fund. However, if an investor has
purchased Fund shares by check and subsequently submits a redemption request,
the redemption proceeds will not be transmitted until the check used for
investment has cleared, which may take up to 15 days. This procedure does not
apply to shares purchased by wire payment.
Redemptions may be suspended or payment dates postponed when the New
York Stock Exchange ("NYSE") is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the Securities and
Exchange Commission.
Redemption proceeds may be paid in securities or other assets rather
than in cash if the Board of Trustees determines it is in the best interest of a
Fund.
Each Fund reserves the right to redeem investor accounts at its option
upon not less than 60 days' written notice if the account's net asset value is
$2,000 or less, for reasons other than market conditions, and remains so during
the notice period.
CONTINGENT REDEMPTION FEE. Except in circumstances described below, a
redemption fee of 1% payable to and retained by a Fund is imposed on any
redemption of shares within one year of the date of purchase. The 1% fee is
imposed on the net asset value of the redeemed shares at the time of purchase.
This fee is designed to offset the market impact and other costs associated with
fluctuations in Fund asset levels and cash flow caused by short-term shareholder
trading.
No redemption fee will be imposed on shares acquired through
reinvestment of dividends or capital gain distributions or on increases in the
net asset value of an investor's shares above the net asset value at the time of
purchase. With respect only to shares of WWW Internet Fund purchased before
October 31, 1999, if the aggregate value of shares redeemed has declined below
their original cost as a result of WWW Internet Fund's performance, the
applicable redemption fee will be applied to the then-current net asset value
rather than the purchase price.
In determining whether a redemption fee is applicable to a redemption,
the calculation will be made in a manner that results the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing
shares acquired pursuant to the reinvestment of dividends and distributions;
then of amounts representing the increase in net asset value of shares above the
total amount of payments for the purchase of shares made during the preceding
year; then of amounts representing shares purchased more than one year prior to
the redemption; and finally, of amounts representing the cost of shares
purchased within one year prior to the redemption.
12
<PAGE>
REDEMPTION PROCEDURES. Shareholders who wish to redeem shares must do
so through the Transfer Agent by mail or telephone.
BY MAIL--Redemption requests by mail must include your letter of
instruction (including the Fund's name, account number, account name(s), address
and the dollar amount or number of shares you wish to redeem) and should be
addressed to:
WWW Trust
c/o American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, New York 11788
13
<PAGE>
Written redemption instructions must be received by the Transfer Agent
in proper form and signed exactly as the shares are registered. All signatures
must be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature guarantees in proper form generally will be accepted
from domestic banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock Exchange
Medallion Signature Program, the Stock Exchange Medallion Program and the
Securities Transfer Agents Medallion Program ("STAMP"). Such guarantees must be
signed by an authorized signatory thereof with "Signature Guaranteed" appearing
with the shareholder's signature. Signature-guarantees may not be provided by
notaries public. Redemption requests by corporate and fiduciary shareholders
must be accompanied by appropriate documentation establishing the authority of
the person seeking to act on behalf of the account. Investors may obtain from a
Fund or the Transfer Agent forms of resolutions and other documentation which
have been prepared in advance to assist compliance with such Fund's procedures.
Any questions with respect to signature guarantees should be directed to the
Transfer Agent by calling (888) 999-8331.
BY TELEPHONE--Shareholders that have elected the telephone redemption
option on the shareholder application form may make a telephone redemption
request by calling the Transfer Agent at (888) 999-8331. The Transfer Agent may
act on telephone instructions from any person representing himself or herself to
be a shareholder and reasonably believed by the Transfer Agent to be genuine.
Each Fund will require the Transfer Agent to employ reasonable procedures, such
as requiring a form of personal identification, to confirm that instructions are
genuine and, if it does not follow such procedures, the Transfer Agent or such
Fund may be liable for any losses due to unauthorized or fraudulent
instructions. A Fund and the Transfer Agent will not be liable for following
telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, investors may
experience difficulty in contacting the Transfer Agent by telephone to request a
redemption of Fund shares. In such cases, investors should consider using the
other redemption procedures described herein. Use of these other redemption
procedures may result in the redemption request being processed at a later time
than it would have been if telephone redemption had been used. During the delay,
a Fund's net asset value may fluctuate.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS. A shareholder may have
redemption proceeds of $500 or more wired to the shareholder's brokerage account
or a commercial bank account designated by the shareholder. A transaction fee of
$15.00 will be charged for payments by wire. Questions about this option, or
redemption requirements generally, should be referred to the Transfer Agent at
(888) 999-8331.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund declares and pays any dividends at least annually to
shareholders. Dividends are paid to all shareholders invested in the Fund on the
record date. The record date is the date on which a shareholder must officially
own shares in order to earn a dividend.
In addition, each Fund pays any capital gains at least annually. Your
dividends and capital gains distributions will be automatically reinvested in
additional shares, unless you elect cash payments when completing the
application at time of purchase.
If you purchase shares just before a Fund declares a dividend or
capital gain distribution, you may receive a taxable distribution (with a
corresponding reduction in the net asset value of your shares), whether or not
you reinvest the distribution in shares. Therefore, you should consider the tax
implications of purchasing shares shortly before the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.
Each Fund sends an annual statement of your account activity to assist
you in completing your federal, state and local tax returns. Fund distributions
of dividends and capital gains are taxable to you whether paid in cash or
reinvested in a Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.
Fund distributions are taxable to you as either ordinary income or
capital gains. This is true whether you reinvest your distributions in
additional Fund shares or receive them in cash. Generally, distributions from a
Fund are expected to be primarily capital gains distributions, and are taxable
to you as long term capital gains no matter how long you have held your shares.
Redemptions and exchanges of shares are taxable sales. Please consult your tax
adviser regarding your federal, state and local tax liability.
14
<PAGE>
From time to time, reference may be made in advertising or promotional
material to performance information, including mutual fund rankings, prepared by
Morningstar, Inc., Lipper Analytical Service, Inc., The Wall Street Journal and
other independent reporting services which monitor the performance of mutual
funds. In calculating the total return of a Fund's shares, these analyses
generally assume investment of all dividends and distributions paid. A Fund may
also refer in advertisements or in other promotional material to articles,
comments listings and columns in the financial press pertaining to such Fund's
performance.
FOR THE YEAR ENDED JUNE 30, 2000, WWW INTERNET FUND HAD A TOTAL RETURN
OF [___%. ] FOR THE LIFE OF WWW INTERNET FUND (AUGUST 1, 1996 THROUGH JUNE 30,
2000), WWW INTERNET FUND HAS HAD AN AVERAGE ANNUAL TOTAL RETURN OF [_____%.]
15
<PAGE>
WWW INTERNET FUND FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand WWW
Internet Fund's financial performance for the period of WWW Internet Fund's
operations. Certain information reflects financial results for a single WWW
Internet Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in WWW Internet Fund
(assuming reinvestment of all dividends and distributions). The information with
respect to the fiscal years ended June 30, 2000, 1999 and 1998 has been audited
by Berge & Company, Ltd., whose report, along with WWW Internet Fund's financial
statements, are included in the SAI, which is available upon request.
<TABLE>
<CAPTION>
FISCAL YEAR FISCAL YEAR FISCAL YEAR PERIOD
ENDED ENDED ENDED ENDED
JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 1998 JUNE 30, 1997**
------------- ------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $10.95 $10.99 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.37) (0.21) (0.16)
Net Gains or Losses on Securities 12.39 1.70 1.36
------- ------ ------
(realized or unrealized)
Total from Investment Operations 12.02 1.49 1.20
------- ------ ------
LESS DISTRIBUTIONS
Distributions (from capital gains) (0.33) (1.53) (0.21)
------- ------ ------
Net Asset Value, End of Period $22.64 $10.95 $10.99
======= ====== ======
Total Return 112.01% 15.96% 13.08%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands) $33,318 $2,628 $1,472
Ratio of Expenses to Average Net Assets
(before fee waiver and expense reimbursement) 3.65% 5.10% 7.23%*
Ratio of Expenses to Average Net Assets
(after fee waiver and expense reimbursement) 2.50% 2.50% 2.50%*
Ratio of Net Income (Loss) to
Average Net Assets (before fee
waiver and expense reimbursement) (3.07%) (4.47%) (1.62%)*
Ratio of Net Income (Loss) to Average Net Assets
(after fee waiver and expense reimbursement) (1.90%) (1.89%) (0.62%)*
Portfolio Turnover Rate 48.03% 70.52% 109.52%
<FN>
* Annualized
** From inception (August 1, 1996)
</FN>
</TABLE>
Notes to Financial Statements appear in the Statement of Additional Information.
16
<PAGE>
A Statement of Additional Information (SAI) dated _________________,
2000 is incorporated by reference into this prospectus. Additional information
about the Funds' investments is available in the Funds' annual and semi-annual
reports to shareholders. The annual report discusses market conditions and
investment strategies that significantly affected each Fund's performance during
its last fiscal year. To obtain the SAI, the annual report, semi-annual report
and other information without charge and to make shareholder inquiries, call the
Fund Manager at 1-888-263-2204.
Information about each Fund (including the SAI) can be reviewed and
copied at the Public Reference Room of the Securities and Exchange Commission in
Washington, D.C. Reports and other information about each Fund are available on
the Commission's Internet site at http://www.sec.gov and copies of this
information may be obtained, upon payment of a duplicating fee, by writing the
Public Reference Section of the Commission, Washington, D.C. 20549-6009. You can
call 1-800-SEC-0330 for information on the Public Reference Room's operations
and copying charges.
INVESTMENT MANAGER
WWW Advisors, Inc.
131 Prosperous Place, Suite 17
Lexington, KY 40509
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING AND
TRANSFER AGENT
American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
PORTFOLIO SECURITIES CUSTODIAN
Firstar Bank, N.A.
425 Walnut Street
Cincinnati, OH 45201
LEGAL COUNSEL Brown, Todd & Heyburn PLLC 400 West Market, 32nd Floor
Louisville, KY 40202-3363
INDEPENDENT AUDITORS
Berge & Company LTD
20 West Ninth Street
Cincinnati, OH 45202
EXISTING ACCOUNTS AND REDEMPTIONS ONLY
(888) 999-8331
LITERATURE REQUESTS AND NEW ACCOUNTS
SECURITIES DEALERS AND
FINANCIAL INSTITUTIONS
(888) 263-2204
NASDAQ TRADING SYMBOL: WWIFX
Investment Company Act File No. 811-07585
17
<PAGE>
INVESTING IN THE FASTEST
GROWING SEGMENT OF
TECHNOLOGY
[WWW.INTERNETFUND.COM]
1-(888)263-2204
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
WWW INTERNET FUND
WWW GLOBAL INTERNET FUND
__________________, 2000
This Statement of Additional Information, which is not a prospectus,
expands upon and supplements the information contained in the current Prospectus
of WWW Internet Fund and WWW Global Internet Fund (WWW Internet Fund and WWW
Global Internet Fund collectively, the "Funds") of WWW Trust (the "Trust") dated
__________________, 2000. It should be read in conjunction with the Prospectus,
which may be obtained without charge by calling the Manager at (888) 263-2204.
WWW Advisors, Inc. (the "Manager") is the Funds' investment manager.
TABLE OF CONTENTS
PAGE
----
History of the Funds........................................................2
Investments and Risks-- WWW Internet Fund...................................2
Investments and Risks-- WWW Global Internet Fund............................6
Management of the Funds....................................................14
Ownership of Shares........................................................15
Investment Advisory and Other Services.....................................17
Distribution and Shareholder Servicing Plan................................17
Calculation of Investment Performance......................................18
Taxes ..................................................................19
Portfolio Transactions.....................................................20
Valuation..................................................................20
General Information........................................................21
General Information........................................................21
Financial Statements.......................................................22
<PAGE>
HISTORY OF THE FUNDS
WWW Internet Fund and WWW Global Internet Fund (the "Funds") are
separate open-end diversified portfolios of WWW Trust (the "Trust") an open-end
management investment company. The Trust was organized as a business trust under
the laws of the State of Ohio on April 23, 1996.
INVESTMENTS AND RISKS
CLASSIFICATION
The Trust is a diversified, open-end management investment company.
INVESTMENT STRATEGIES AND RISKS - WWW INTERNET FUND
WWW Internet Fund has an investment objective of obtaining long-term
growth through capital appreciation. The principal investment strategies used by
WWW Internet Fund to pursue this objective, together with the principal risks of
investing in WWW Internet Fund, are described in the Prospectus under the
heading "Risk/Return Summary."
Described below are (i) certain other investment strategies (including
strategies to invest in particular types of securities) which are not principal
strategies and (ii) the risks of those strategies:
OPTIONS
WWW Internet Fund may write (sell) "covered" put and call options and
buy put and call options, including securities index options. A call option is a
contract that gives to the holder the right to buy a specified amount of the
underlying security at a fixed or determinable price (called the exercise or
strike price) upon exercise of the option. A put option is a contract that gives
the holder the right to sell a specified amount of the underlying security at a
fixed or determinable price upon exercise of the option. In the case of index
options, exercises are settled through the payment of cash rather than the
delivery of property. A call option is covered if, for example, WWW Internet
Fund owns the underlying security covered by the call or, in the case of a call
option on an index, holds securities the price changes of which are expected to
substantially correlate with the movement of the index. A put option is covered
if, for example, WWW Internet Fund segregates cash or liquid securities with a
value equal to the exercise price of the put option.
WWW Internet Fund may write call options on securities or securities
indexes for the purpose of providing a partial hedge against a decline in the
value of its portfolio securities. WWW Internet Fund may write put options on
securities or securities indexes in order to earn additional income or (in the
case of put options written on individual securities) to purchase the underlying
security at a price below the current market price. If WWW Internet Fund writes
an option which expires unexercised or is closed out by WWW Internet Fund at a
profit, it will retain all or part of the premium received for the option, which
will increase its gross income. If the price of the underlying security moves
adversely to WWW Internet Fund's position, the option may be exercised and WWW
Internet Fund will be required to sell or purchase the underlying security at a
disadvantageous price, or, in the case of index options, deliver an amount of
cash, which loss may only be partially offset by the amount of premium received.
WWW Internet Fund may also purchase put or call options on securities
and securities indexes in order to hedge against changes in interest rates or
stock prices which may adversely affect the prices of securities that WWW
Internet Fund wants to purchase at a later date, to hedge its existing
investments against a decline in value, or to attempt to reduce the risk of
missing a market or industry segment advance or decline. In the event that the
expected changes in interest rates or stock prices occur, WWW Internet Fund may
be able to offset the resulting adverse effect on WWW Internet Fund by
exercising or selling the options purchased. The premium paid for a put or call
option plus any transaction costs will reduce the benefit, if any, realized by
WWW Internet Fund upon exercise or liquidation of the option. Unless the price
of the underlying security or level of the securities index changes by an amount
in excess of the premium paid, the option may expire without value to WWW
Internet Fund.
WWW Internet Fund may also purchase and write options in combination
with each other to adjust the risk and return characteristics of certain
portfolio security positions. This technique is commonly referred to as a
"collar."
Options purchased or written by WWW Internet Fund may be traded on the
national securities exchanges or negotiated with a dealer. Options traded in the
over-the-counter market may not be as actively traded as those on an exchange,
so it may be more difficult to value such options. In addition, it may be
difficult to enter into closing transactions with respect to such options. Such
options and the securities used as "cover" for such options, unless otherwise
indicated, would be considered illiquid securities.
2
<PAGE>
In instances in which WWW Internet Fund has entered into agreements
with primary dealers with respect to the over-the-counter options it has
written, and such agreements would enable WWW Internet Fund to have an absolute
right to repurchase at a pre-established formula price the over-the-counter
option written by it, WWW Internet Fund would treat as illiquid only securities
equal in amount to the formula price described above less the amount by which
the option is "in-the-money," i.e., the price of the option exceeds the exercise
price.
Options are subject to certain risks, including the risk of imperfect
correlation between the option and WWW Internet Fund's other investments and the
risk that there may not be a liquid secondary market for the option when WWW
Internet Fund seeks to hedge against adverse market movements. This may cause
WWW Internet Fund to lose the entire premium on purchased options or reduce its
ability to effect closing transactions at favorable prices.
WWW Internet Fund will not write options if, immediately after such
sale, the aggregate value of the securities or obligations underlying the
outstanding options exceeds 50% of WWW Internet Fund's total assets. WWW
Internet Fund will not purchase options if, at the time of the investment, the
aggregate premiums paid for outstanding options will exceed 20% of WWW Internet
Fund's total assets.
LENDING PORTFOLIO SECURITIES
From time to time, WWW Internet Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to borrow
securities to complete certain transactions. Such loans may not exceed 33 1/3%
of the value of WWW Internet Fund's total assets. In connection with such loans,
WWW Internet Fund will receive collateral consisting of cash, U.S. Government
securities or irrevocable letters of credit which will be maintained at all
times in an amount equal to at least 100% of the current market value of the
loaned securities. WWW Internet Fund can increase its income through the
investment of such collateral. WWW Internet Fund continues to be entitled to
payments in amounts equal to the interest, dividends and other distributions
payable on the loaned security and receives interest on the amount of the loan.
Such loans will be terminable at any time upon specified notice. WWW Internet
Fund might experience risk of loss if the institution with which it has engaged
in a portfolio loan transaction breaches its agreement with WWW Internet Fund.
BORROWING MONEY
As a fundamental policy, WWW Internet Fund is permitted to borrow to
the extent permitted under the 1940 Act. The 1940 Act permits an investment
company to borrow in an amount up to 33 1/3% of the value of such company's
assets. Within such limitation, when the Manager believes that securities prices
are depressed and may increase in value, WWW Internet Fund may borrow money from
banks for the purpose of increasing the amount of its portfolio investments
above 100% of WWW Internet Fund's net assets and may pledge portfolio securities
as collateral for such borrowings. The "leverage" created by such borrowing will
increase the volatility of the price of WWW Internet Fund's shares by magnifying
losses when WWW Internet Fund's portfolio decreases in value and magnifying
gains when the portfolio increases in value.
PREFERRED STOCK
WWW Internet Fund may invest in preferred stocks of companies in the
industries described in the Prospectus. The preferred stocks in which WWW
Internet Fund may invest will be rated at least investment grade by a nationally
recognized statistical rating organization at the time of purchase, but WWW
Internet Fund may continue to hold such securities if their rating falls below
investment grade after the time of purchase. Securities rated in the lowest
investment grade rating may be considered to have speculative characteristics.
CONVERTIBLE SECURITIES
WWW Internet Fund may invest in convertible securities of companies in
the industries described in the Prospectus. Convertible securities are
fixed-income securities that may be converted at either a stated price or stated
rate into underlying shares of common stock. Convertible securities have general
characteristics similar to both fixed-income and equity securities. Although to
a lesser extent than with fixed-income securities generally, the market value of
convertible securities tends to decline as interest rates increase and,
conversely, tends to increase as interest rates decline. In addition, because of
the conversion feature, the market value of convertible securities tends to vary
with fluctuations in the market value of the underlying common stock, and,
therefore, also will react to variations in the general market for equity
securities. A unique feature of convertible securities is that as the market
price of the underlying common stock declines, convertible securities tend to
trade increasingly on a yield basis, and so may not experience market value
declines to the same extent as the underlying common stock. When the market
price of the underlying common stock increases, the prices of the convertible
securities tend to rise as a reflection of the value of the underlying common
stock. While no securities investments are without risk, investments in
convertible securities generally entail less risk than investments in common
stock of the same issuer.
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As fixed-income securities, convertible securities are investments that
provide for a stable stream of income with generally higher yields than common
stocks. Of course, like all fixed-income securities, there can be no assurance
of current income because the issuers of the convertible securities may default
on their obligations. Convertible securities, however, generally offer lower
interest or dividend yields than non-convertible securities of similar quality
because of the potential for capital appreciation. A convertible security, in
addition to providing fixed income, offers the potential for capital
appreciation through the conversion feature, which enables the holder to benefit
from increases in the market price of the underlying common stock. There can be
no assurance of capital appreciation, however, because securities prices
fluctuate.
Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock, of the
same issuer. Because of the subordination feature, however, convertible
securities typically have lower ratings than similar non-convertible securities.
MONEY MARKET INSTRUMENTS
WWW Internet Fund may invest, in the circumstances described in the
Prospectus under "Risk/Return Summary," in the following types of money market
instruments.
U.S. GOVERNMENT SECURITIES. WWW Internet Fund may purchase securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, which include U.S. Treasury securities that differ in their
interest rates, maturities and times of issuance. Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial maturities of one to
ten years; and Treasury Bonds generally have initial maturities of greater than
ten years. Some obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrower from the U.S. Treasury; others, such as those
issued by the Federal National Mortgage Association, by discretionary authority
of the U.S. Government to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the Student Loan Marketing
Association, only by the credit of the agency or instrumentality. These
securities bear fixed, floating or variable rates of interest. Principal and
interest may fluctuate based on generally recognized reference rates or the
relationship of rates. While the U.S. Government provides financial support to
such U.S. Government-sponsored agencies or instrumentalities, no assurance can
be given that it will always do so, since it is not so obligated by law.
BANK OBLIGATIONS. WWW Internet Fund may invest in bank obligations,
including certificates of deposit, time deposits, bankers' acceptances and other
short-term obligations of banks, savings and loan associations and other banking
institutions.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by WWW Internet Fund will not benefit from insurance
from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation. WWW Internet Fund
will not invest more than 15% of the value of its net assets in time deposits
maturing in more than seven days and in other securities that are illiquid.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
REPURCHASE AGREEMENTS. Repurchase agreements involve the acquisition by
WWW Internet Fund of an underlying debt instrument, subject to an obligation of
the seller to repurchase, and WWW Internet Fund to resell, the instrument at a
fixed price usually not more than one week after its purchase. Certain costs may
be incurred by WWW Internet Fund in connection with the sale of the securities
if the seller does not repurchase them in accordance with the repurchase
agreement. In addition, if bankruptcy proceedings are commenced with respect to
the seller of the securities, realization on the securities by WWW Internet Fund
may be delayed or limited.
COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS. Commercial
paper consists of short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial paper purchased by WWW Internet Fund
will consist only of direct obligations which, at the time of their purchase,
are (a) rated not lower than Prime-1 by Moody's Investors Service Inc.
("Moody's"), A-1 by Standard & Poor's Corporation ("S&P"), F-1 by Fitch
Investors Service, Inc. ("Fitch") or Duff-1 by Duff & Phelps, Inc. ("Duff"), (b)
issued by companies having an outstanding unsecured debt issue currently rated
not lower than Aa3 by Moody's or AA- by S&P, Fitch or Duff, or (c) if unrated,
determined by the Manager to be of comparable quality to those rated obligations
which may be purchased by WWW Internet Fund. WWW Internet Fund may purchase
floating and variable rate demand notes and bonds, which are obligations
ordinarily having stated maturities in excess of one year, but which permit the
holder to demand payment of principal at any time or at specified intervals.
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WARRANTS
WWW Internet Fund may invest up to 5% of its net assets in warrants,
except that this limitation does not apply to warrants acquired in units or
attached to securities. Included in such amount, but not to exceed 2% of the
value of WWW Internet Fund's net assets, may be warrants which are not listed on
the New York or American Stock Exchange. A warrant is an instrument issued by a
corporation which gives the holder the right to subscribe to a specified amount
of the corporation's capital stock at a set price for a specified period of
time.
FOREIGN SECURITIES
WWW Internet Fund may invest up to 20% of its assets in securities of
foreign issuers directly or through American Depository Receipts ("ADRs").
Foreign investments may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations. There may be less information
available about a foreign company than about a U.S. company and foreign
companies may not be subject to reporting standards and requirements comparable
to those applicable to U.S. companies. Foreign securities may not be as liquid
as U.S. securities. Securities of foreign companies may involve greater market
risk than securities of U.S. companies, and foreign brokerage commissions and
custody fees are generally higher than in the United States. Investments in
foreign securities may also be subject to local economic or political risks,
political instability and possible nationalization of issuers.
SHORT SALES
Short sales are transactions in which WWW Internet Fund sells a
security it does not own in anticipation of a decline in the market value of
that security. To complete such a transaction, WWW Internet Fund must borrow the
security to make delivery to the buyer. WWW Internet Fund then is obligated to
replace the security borrowed by purchasing it at the market price at the time
of replacement. The price at such time may be more or less than the price at
which the security was sold by WWW Internet Fund.
Until WWW Internet Fund replaces a borrowed security in connection with
a short sale, WWW Internet Fund will: (a) maintain daily a segregated account,
containing cash, cash equivalents or U.S. Government securities, at such a level
that (i) the amount deposited in the account plus the amount deposited with the
broker as collateral will equal the current value of the security sold short and
(ii) the amount deposited in the segregated account plus the amount deposited
with the broker as collateral will not be less than the market value of the
security at the time it was sold short; or (b) otherwise cover its short
position in accordance with positions taken by the Staff of the Securities and
Exchange Commission.
WWW Internet Fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short sale and the
date on which WWW Internet Fund replaces the borrowed security. WWW Internet
Fund will realize a gain if the security declines in price between those dates.
This result is the opposite of what one would expect from a cash purchase of a
long position in a security. The amount of any gain will be decreased, and the
amount of any loss increased, by the amount of any premium or amounts in lieu of
interest WWW Internet Fund may be required to pay in connection with a short
sale.
WWW Internet Fund anticipates that the frequency of short sales will
vary substantially in different periods, and it does not intend that any
specified portion of its assets, as a matter of practice, will be invested in
short sales. However, no securities will be sold short if, after effect is given
to any such short sale, the total market value of all securities sold short
would exceed 20% of the value of WWW Internet Fund's net assets. WWW Internet
Fund may not sell short the securities of any single issuer listed on a national
securities exchange to the extent of more than 5% of the value of its net
assets. WWW Internet Fund may not sell short the securities of any class of an
issuer to the extent, at the time of the transaction, of more than 2% of the
outstanding securities of that class.
FUND POLICIES - WWW INTERNET FUND
WWW Internet Fund has adopted the following fundamental investment
policies and restrictions. These policies cannot be changed without approval by
the holders of a majority of the outstanding voting securities of WWW Internet
Fund. As defined in the Investment Company Act of 1940 (the "Act"), the "vote of
a majority of the outstanding voting securities" means the lesser of the vote of
(a) 67% of the shares of WWW Internet Fund at a meeting where more than 50% of
the outstanding shares are present in person or by proxy or (b) more than 50% of
the outstanding shares of WWW Internet Fund. WWW Internet Fund may not:
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1. Purchase or retain any securities of an issuer if any of the
officers or Trustees of WWW Internet Fund or its investment adviser owns
beneficially more than 1/2 of 1% of the securities of such issuer and together
own more than 5% of the securities of such issuer.
2. Invest in commodities, except that WWW Internet Fund may purchase
and sell options, forward contracts, futures contracts, including those relating
to indexes, and options on future contracts or indexes.
3. Purchase, hold or deal in real estate, real estate limited
partnership interests, or oil, gas or other mineral leases or exploration or
development programs, but WWW Internet Fund may purchase and sell securities
that are secured by real estate or issued by companies that invest or deal in
real estate or real estate investment trusts.
4. Borrow money, except to the extent permitted under the 1940 Act. The
1940 Act permits an investment company to borrow in an amount up to 33 1/3% of
the value of such company's total assets. For purposes of this Investment
Restriction, the entry into options, forward contracts, futures contracts,
including those relating to indexes, and options on futures or indexes shall not
constitute borrowing.
5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, WWW Internet Fund
may lend its portfolio securities in an amount not to exceed 33 1/3% of the
value of its total assets.
6. Act as an underwriter of securities of other issuers, except to the
extent WWW Internet Fund may be deemed an underwriter under the Securities Act
of 1933, as amended, by virtue of disposing of portfolio securities.
7. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act).
8. Purchase securities on margin, but WWW Internet Fund may make margin
deposits in connection with transactions in options, forward contracts, futures
contracts, including those relating to indexes, and options on futures contracts
or indexes.
9. Invest more than 25% of the value of its total assets in any one
industry, except that WWW Internet Fund will invest at least 70% of the value of
its total assets in securities of companies that are designing, developing or
manufacturing hardware or software products or services for the Internet and/or
World Wide Web.
10. Invest in the securities of a company for the purpose of exercising
management or control, but WWW Internet Fund will vote the securities it owns in
its portfolio as a shareholder in accordance with its views.
11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with respect
to options, forward contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes.
12. Purchase, sell or write puts, calls or combinations thereof, except
as described in WWW Internet Fund's Prospectus or Statement of Additional
Information.
13. Engage in short sales of securities, except as described in WWW
Internet Fund's Prospectus or Statement of Additional Information.
14. Invest more than 20% of its assets in securities of foreign issuers
(whether directly or through American Depository Receipts).
15. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if, in
the aggregate, more than 15% of the value of its net assets would be so
invested.
16. Purchase securities of other investment companies, except by
purchase in the open market where no commission or profit to a sponsor or dealer
results from the purchase other than the customary broker's commission or except
when the purchase is part of a plan of merger, consolidation, reorganization or
acquisition, and provided that any such purchase is permitted under the 1940
Act, or except shares of funds advised by the Manager or an affiliate thereof.
It is expected that the WWW Internet Fund would purchase shares of such funds
only if arrangements are made to eliminate duplicate advisory and distributive
fees.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.
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INVESTMENT STRATEGIES AND RISKS - WWW GLOBAL INTERNET FUND
WWW Global Internet Fund has an investment objective of obtaining
long-term growth through capital appreciation. The principal investment
strategies used by WWW Global Internet Fund to pursue this objective, together
with the principal risks of investing in WWW Global Internet Fund, are described
in the Prospectus under the heading "Risk/Return Summary."
Described below are (i) certain other investment strategies (including
strategies to invest in particular types of securities) which are not principal
strategies and (ii) the risks of those strategies:
FOREIGN SECURITIES
WWW Global Internet Fund has an unlimited right to buy securities in
any foreign country, developed or developing, if they are listed on a stock
exchange, as well as a limited right to buy such securities if they are
unlisted. Investors should consider carefully the substantial risks involved in
securities of companies and governments of foreign nations, which are in
addition to the usual risks inherent in domestic investments. There may be less
publicly available information about foreign companies comparable to the reports
and ratings published about companies in the United States. Foreign companies
are not generally subject to uniform accounting or financial reporting
standards, and auditing practices and requirements may not be comparable to
those applicable to U.S. companies. WWW Global Internet Fund, therefore, may
encounter difficulty in obtaining market quotations for purposes of valuing its
portfolio and calculating its net asset value. Foreign markets have
substantially less volume than the New York Stock Exchange and securities of
some foreign companies are less liquid and more volatile than securities of
comparable U.S. companies. Commission rates in foreign countries, which are
generally fixed rather than subject to negotiation as in the United States, are
likely to be higher. In many foreign countries there is less government
supervision and regulation of stock exchanges, brokers, and listed companies
than in the United States. Furthermore, the economies of developing countries
generally are heavily dependent on international trade and, accordingly, have
been, and may continue to be, adversely affected by trade barriers, exchange
controls, managed adjustments in relative currency values and other protective
measures imposed or negotiated by the countries with which they trade. These
economies also have been, and may continue to be, adversely affected by economic
conditions in the countries with which they trade.
WWW Global Internet Fund may be required to obtain prior governmental
approval for foreign investments in some countries under certain circumstances.
Governments may require approval to invest in certain issuers or industries
deemed sensitive to national interests, and the extent of foreign investment in
certain debt securities and domestic companies may be subject to limitation.
Individual companies may also limit foreign ownership to prevent, among other
things, violation of foreign investment limitations.
Some foreign investments may risk being subject to repatriation
controls that could render such securities illiquid. Other countries might
undergo nationalization, expropriation, political changes, governmental
regulation, social instability or diplomatic developments (including war) that
could adversely affect the economies of such countries or the value of the
investments in those countries. For this reason, funds that invest primarily in
the securities of a single country will be greatly impacted by any political,
economic or regulatory developments affecting the value of the securities.
Additional risks include currency fluctuations, political and economic
instability, differences in financial reporting standards and less stringent
regulation of securities markets.
EMERGING MARKETS.
Investments in companies domiciled in developing countries may be
subject to potentially higher risks than investments in developed countries.
These risks include (i) less social, political and economic stability; (ii) the
small current size of the markets for such securities and the currently low or
nonexistent volume of trading, which result in a lack of liquidity and in
greater price volatility; (iii) certain national policies that may restrict WWW
Global Internet Fund's investment opportunities, including restrictions on
investment in issuers or industries deemed sensitive to national interests; (iv)
foreign taxation; (v) the absence of developed legal structures governing
private or foreign investment or allowing for judicial redress for injury to
private property; (vi) the absence, until recently in many developing countries,
of a capital market structure or market-oriented economy; and (vii) the
possibility that recent favorable economic developments in some developing
countries may be slowed or reversed by unanticipated political or social events
in such countries. In addition, many countries in which WWW Global Internet Fund
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may invest have experienced substantial, and in some periods extremely high,
rates of inflation for many years. Inflation and rapid fluctuations in inflation
rates have had and may continue to have negative effects on the economies and
securities markets of certain countries. Moreover, the economies of some
developing countries may differ favorably or unfavorably from the U.S. economy
in such respects as growth of gross domestic product, rate of inflation,
currency depreciation, capital reinvestment, resource self-sufficiency and
balance of payments position. Investments in developing countries may involve
risks of nationalization, expropriation and confiscatory taxation. For example,
the Communist governments of a number of Eastern European countries expropriated
large amounts of private property in the past, in many cases without adequate
compensation, and there can be no assurance that such expropriation will not
occur in the future. In the event of expropriation, WWW Global Internet Fund
could lose a substantial portion of any investments it has made in the affected
countries. Further, no accounting standards exist in certain developing
countries. Finally, even though the currencies of some developing countries,
such as certain Eastern European countries may be convertible into U.S. dollars,
the conversion rates may be artificial to the actual market values and may be
adverse to WWW Global Internet Fund's shareholders.
FOREIGN COMPANIES
Foreign companies are not subject to the same disclosure, accounting,
auditing and financial reporting standards and practices as U.S. companies and
their securities may not be as liquid as securities of similar U.S. companies.
Foreign stock exchanges, trading systems, brokers and companies generally have
less government supervision and regulation than in the United States. WWW Global
Internet Fund may have greater difficulty voting proxies, exercising shareholder
rights, pursuing legal remedies and obtaining judgments with respect to foreign
investments in foreign courts than with respect to U.S. companies in U.S.
courts.
POLITICAL AND ECONOMIC FACTORS
Individual foreign economies of certain countries may differ favorably
or unfavorably from the United States' economy in such respects as: growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency, diversification and balance of payments position. The internal
politics of certain foreign countries may not be as stable as those of the
United States. Governments in certain foreign countries also continue to
participate in their respective economies to a significant degree, through
ownership interest or regulation. Action by these governments could include:
restrictions on foreign investment, nationalization, expropriation of goods or
imposition of taxes, and could have a significant effect on market prices of
securities and the payment of interest. The economies of many foreign countries
are heavily dependent upon international trade and are accordingly affected by
the trade policies and economic conditions of their trading partners. Enactment
by these trading partners of protectionist trade legislation could have a
significant adverse effect upon the securities markets of such countries.
CURRENCY
Many of WWW Global Internet Fund's investments are denominated in
foreign currencies. Changes in foreign currency exchange rates may affect the
value of what WWW Global Internet Fund owns and the fund's share price.
Generally, when the U.S. dollar rises in value against a foreign currency, an
investment in that country loses value because that currency is worth fewer U.S.
dollars. Devaluation of a currency by a country's government or banking
authority also will have a significant impact on the value of any securities
denominated in that currency. Currency markets generally are not as regulated as
securities markets.
EURO
On January 1, 1999, the European Monetary Union ("EMU") introduced a
new single currency, the euro, which will replace the national currency for
participating member countries. Because this change to a single currency is new
and untested, it is not possible to predict the impact of the euro on the
business or financial condition of European issuers which WWW Global Internet
Fund may hold in its portfolio, and their impact on WWW Global Internet Fund's
performance. To the extent WWW Global Internet Fund holds non-U.S. dollar (euro
or other) denominated securities, it will still be exposed to currency risk due
to fluctuations in those currencies versus the U.S. dollar.
OPTIONS
WWW Global Internet Fund may write (sell) "covered" put and call
options and buy put and call options, including securities index options. A call
option is a contract that gives to the holder the right to buy a specified
amount of the underlying security at a fixed or determinable price (called the
exercise or strike price) upon exercise of the option. A put option is a
contract that gives the holder the right to sell a specified amount of the
underlying security at a fixed or determinable price upon exercise of the
option. In the case of index options, exercises are settled through the payment
of cash rather than the delivery of property. A call option is covered if, for
example, WWW Global Internet Fund owns the underlying security covered by the
call or, in the case of a call option on an index, holds securities the price
changes of which are expected to substantially correlate with the movement of
the index. A put option is covered if, for example, WWW Global Internet Fund
segregates cash or liquid securities with a value equal to the exercise price of
the put option.
WWW Global Internet Fund may write call options on securities or
securities indexes for the purpose of providing a partial hedge against a
decline in the value of its portfolio securities. WWW Global Internet Fund may
write put options on securities or securities indexes in order to earn
additional income or (in the case of put options written on individual
securities) to purchase the underlying security at a price below the current
market price. If WWW Global Internet Fund writes an option which expires
unexercised or is closed out by WWW Global Internet Fund at a profit, it will
retain all or part of the premium received for the option, which will increase
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its gross income. If the price of the underlying security moves adversely to WWW
Global Internet Fund's position, the option may be exercised and WWW Global
Internet Fund will be required to sell or purchase the underlying security at a
disadvantageous price, or, in the case of index options, deliver an amount of
cash, which loss may only be partially offset by the amount of premium received.
WWW Global Internet Fund may also purchase put or call options on
securities and securities indexes in order to hedge against changes in interest
rates or stock prices which may adversely affect the prices of securities that
WWW Global Internet Fund wants to purchase at a later date, to hedge its
existing investments against a decline in value, or to attempt to reduce the
risk of missing a market or industry segment advance or decline. In the event
that the expected changes in interest rates or stock prices occur, WWW Global
Internet Fund may be able to offset the resulting adverse effect on WWW Global
Internet Fund by exercising or selling the options purchased. The premium paid
for a put or call option plus any transaction costs will reduce the benefit, if
any, realized by WWW Global Internet Fund upon exercise or liquidation of the
option. Unless the price of the underlying security or level of the securities
index changes by an amount in excess of the premium paid, the option may expire
without value to WWW Global Internet Fund.
WWW Global Internet Fund may also purchase and write options in
combination with each other to adjust the risk and return characteristics of
certain portfolio security positions. This technique is commonly referred to as
a "collar."
Options purchased or written by WWW Global Internet Fund may be traded
on the national securities exchanges or negotiated with a dealer. Options traded
in the over-the-counter market may not be as actively traded as those on an
exchange, so it may be more difficult to value such options. In addition, it may
be difficult to enter into closing transactions with respect to such options.
Such options and the securities used as "cover" for such options, unless
otherwise indicated, would be considered illiquid securities.
In instances in which WWW Global Internet Fund has entered into
agreements with primary dealers with respect to the over-the-counter options it
has written, and such agreements would enable WWW Global Internet Fund to have
an absolute right to repurchase at a pre-established formula price the
over-the-counter option written by it, WWW Global Internet Fund would treat as
illiquid only securities equal in amount to the formula price described above
less the amount by which the option is "in-the-money," i.e., the price of the
option exceeds the exercise price.
Options are subject to certain risks, including the risk of imperfect
correlation between the option and WWW Global Internet Fund's other investments
and the risk that there may not be a liquid secondary market for the option when
WWW Global Internet Fund seeks to hedge against adverse market movements. This
may cause WWW Global Internet Fund to lose the entire premium on purchased
options or reduce its ability to effect closing transactions at favorable
prices.
WWW Global Internet Fund will not write options if, immediately after
such sale, the aggregate value of the securities or obligations underlying the
outstanding options exceeds 50% of WWW Global Internet Fund's total assets. WWW
Global Internet Fund will not purchase options if, at the time of the
investment, the aggregate premiums paid for outstanding options will exceed 20%
of WWW Global Internet Fund's total assets.
LENDING PORTFOLIO SECURITIES
From time to time, WWW Global Internet Fund may lend securities from
its portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. Such loans may not exceed 33
1/3% of the value of WWW Global Internet Fund's total assets. In connection with
such loans, WWW Global Internet Fund will receive collateral consisting of cash,
U.S. Government securities or irrevocable letters of credit which will be
maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. WWW Global Internet Fund can increase its
income through the investment of such collateral. WWW Global Internet Fund
continues to be entitled to payments in amounts equal to the interest, dividends
and other distributions payable on the loaned security and receives interest on
the amount of the loan. Such loans will be terminable at any time upon specified
notice. WWW Global Internet Fund might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction breaches
its agreement with WWW Global Internet Fund.
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BORROWING MONEY
As a fundamental policy, WWW Global Internet Fund is permitted to
borrow to the extent permitted under the 1940 Act. The 1940 Act permits an
investment company to borrow in an amount up to 33 1/3% of the value of such
company's assets. Within such limitation, when the Manager believes that
securities prices are depressed and may increase in value, WWW Global Internet
Fund may borrow money from banks for the purpose of increasing the amount of its
portfolio investments above 100% of WWW Global Internet Fund's net assets and
may pledge portfolio securities as collateral for such borrowings. The
"leverage" created by such borrowing will increase the volatility of the price
of WWW Global Internet Fund's shares by magnifying losses when WWW Global
Internet Fund's portfolio decreases in value and magnifying gains when the
portfolio increases in value.
PREFERRED STOCK
WWW Global Internet Fund may invest in preferred stocks of companies in
the industries described in the Prospectus. The preferred stocks in which WWW
Global Internet Fund may invest will be rated at least investment grade by a
nationally recognized statistical rating organization at the time of purchase,
but WWW Global Internet Fund may continue to hold such securities if their
rating falls below investment grade after the time of purchase. Securities rated
in the lowest investment grade rating may be considered to have speculative
characteristics.
CONVERTIBLE SECURITIES
WWW Global Internet Fund may invest in convertible securities of
companies in the industries described in the Prospectus. Convertible securities
are fixed-income securities that may be converted at either a stated price or
stated rate into underlying shares of common stock. Convertible securities have
general characteristics similar to both fixed-income and equity securities.
Although to a lesser extent than with fixed-income securities generally, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the underlying
common stock, and, therefore, also will react to variations in the general
market for equity securities. A unique feature of convertible securities is that
as the market price of the underlying common stock declines, convertible
securities tend to trade increasingly on a yield basis, and so may not
experience market value declines to the same extent as the underlying common
stock. When the market price of the underlying common stock increases, the
prices of the convertible securities tend to rise as a reflection of the value
of the underlying common stock. While no securities investments are without
risk, investments in convertible securities generally entail less risk than
investments in common stock of the same issuer.
As fixed-income securities, convertible securities are investments that
provide for a stable stream of income with generally higher yields than common
stocks. Of course, like all fixed-income securities, there can be no assurance
of current income because the issuers of the convertible securities may default
on their obligations. Convertible securities, however, generally offer lower
interest or dividend yields than non-convertible securities of similar quality
because of the potential for capital appreciation. A convertible security, in
addition to providing fixed income, offers the potential for capital
appreciation through the conversion feature, which enables the holder to benefit
from increases in the market price of the underlying common stock. There can be
no assurance of capital appreciation, however, because securities prices
fluctuate.
Convertible securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock, of the
same issuer. Because of the subordination feature, however, convertible
securities typically have lower ratings than similar non-convertible securities.
MONEY MARKET INSTRUMENTS
WWW Global Internet Fund may invest, in the circumstances described in
the Prospectus under "Risk/Return Summary," in the following types of money
market instruments.
U.S. GOVERNMENT SECURITIES. WWW Global Internet Fund may purchase
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, which include U.S. Treasury securities that differ in their
interest rates, maturities and times of issuance. Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial maturities of one to
ten years; and Treasury Bonds generally have initial maturities of greater than
ten years. Some obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrower from the U.S. Treasury; others, such as those
issued by the Federal National Mortgage Association, by discretionary authority
of the U.S. Government to purchase certain obligations of the agency or
10
<PAGE>
instrumentality; and others, such as those issued by the Student Loan Marketing
Association, only by the credit of the agency or instrumentality. These
securities bear fixed, floating or variable rates of interest. Principal and
interest may fluctuate based on generally recognized reference rates or the
relationship of rates. While the U.S. Government provides financial support to
such U.S. Government-sponsored agencies or instrumentalities, no assurance can
be given that it will always do so, since it is not so obligated by law.
BANK OBLIGATIONS. WWW Global Internet Fund may invest in bank
obligations, including certificates of deposit, time deposits, bankers'
acceptances and other short-term obligations of banks, savings and loan
associations and other banking institutions.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by WWW Global Internet Fund will not benefit from
insurance from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation. WWW Global Internet
Fund will not invest more than 15% of the value of its net assets in time
deposits maturing in more than seven days and in other securities that are
illiquid.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
REPURCHASE AGREEMENTS. Repurchase agreements involve the acquisition by
WWW Global Internet Fund of an underlying debt instrument, subject to an
obligation of the seller to repurchase, and WWW Global Internet Fund to resell,
the instrument at a fixed price usually not more than one week after its
purchase. Certain costs may be incurred by WWW Global Internet Fund in
connection with the sale of the securities if the seller does not repurchase
them in accordance with the repurchase agreement. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the securities,
realization on the securities by WWW Global Internet Fund may be delayed or
limited.
COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS. Commercial
paper consists of short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial paper purchased by WWW Global Internet
Fund will consist only of direct obligations which, at the time of their
purchase, are (a) rated not lower than Prime-1 by Moody's Investors Service Inc.
("Moody's"), A-1 by Standard & Poor's Corporation ("S&P"), F-1 by Fitch
Investors Service, Inc. ("Fitch") or Duff-1 by Duff & Phelps, Inc. ("Duff"), (b)
issued by companies having an outstanding unsecured debt issue currently rated
not lower than Aa3 by Moody's or AA- by S&P, Fitch or Duff, or (c) if unrated,
determined by the Manager to be of comparable quality to those rated obligations
which may be purchased by WWW Global Internet Fund. WWW Global Internet Fund may
purchase floating and variable rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of one year, but which
permit the holder to demand payment of principal at any time or at specified
intervals.
WARRANTS
WWW Global Internet Fund may invest up to 5% of its net assets in
warrants, except that this limitation does not apply to warrants acquired in
units or attached to securities. Included in such amount, but not to exceed 2%
of the value of WWW Global Internet Fund's net assets, may be warrants which are
not listed on the New York or American Stock Exchange. A warrant is an
instrument issued by a corporation which gives the holder the right to subscribe
to a specified amount of the corporation's capital stock at a set price for a
specified period of time.
FOREIGN TAXES
Foreign governments may withhold taxes on dividends and interest paid,
while imposing taxes on other payments or gains, with respect to foreign
securities. If you meet certain holding period requirements an offsetting tax
credit or deduction may be available. If you do not meet these requirements, you
may still be entitled to a deduction for certain foreign taxes.
WWW Global Internet Fund distributions and gains from the sale or
exchange of your shares generally will be subject to state and local income tax.
Any foreign taxes WWW Global Internet Fund pays on its investments may be passed
through to you as a foreign tax credit. Non-U.S. investors may be subject to
U.S. withholding and estate tax. You should consult your tax advisor about the
federal, state, local or foreign tax consequences of your investment in WWW
Global Internet Fund.
The interest and dividends payable on certain foreign securities
comprising an ADR may be subject to foreign withholding taxes, thus reducing the
net amount of income to be paid to WWW Global Internet Fund and that may,
ultimately, be available for distribution to WWW Global Internet Fund's
shareholders.
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<PAGE>
SHORT SALES
Short sales are transactions in which WWW Global Internet Fund sells a
security it does not own in anticipation of a decline in the market value of
that security. To complete such a transaction, WWW Global Internet Fund must
borrow the security to make delivery to the buyer. WWW Global Internet Fund then
is obligated to replace the security borrowed by purchasing it at the market
price at the time of replacement. The price at such time may be more or less
than the price at which the security was sold by WWW Global Internet Fund.
Until WWW Global Internet Fund replaces a borrowed security in
connection with a short sale, WWW Global Internet Fund will: (a) maintain daily
a segregated account, containing cash, cash equivalents or U.S. Government
securities, at such a level that (i) the amount deposited in the account plus
the amount deposited with the broker as collateral will equal the current value
of the security sold short and (ii) the amount deposited in the segregated
account plus the amount deposited with the broker as collateral will not be less
than the market value of the security at the time it was sold short; or (b)
otherwise cover its short position in accordance with positions taken by the
Staff of the Securities and Exchange Commission.
WWW Global Internet Fund will incur a loss as a result of the short
sale if the price of the security increases between the date of the short sale
and the date on which WWW Global Internet Fund replaces the borrowed security.
WWW Global Internet Fund will realize a gain if the security declines in price
between those dates. This result is the opposite of what one would expect from a
cash purchase of a long position in a security. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of any premium or
amounts in lieu of interest WWW Global Internet Fund may be required to pay in
connection with a short sale.
WWW Global Internet Fund anticipates that the frequency of short sales
will vary substantially in different periods, and it does not intend that any
specified portion of its assets, as a matter of practice, will be invested in
short sales. However, no securities will be sold short if, after effect is given
to any such short sale, the total market value of all securities sold short
would exceed 20% of the value of WWW Global Internet Fund's net assets. WWW
Global Internet Fund may not sell short the securities of any single issuer
listed on a national securities exchange to the extent of more than 5% of the
value of its net assets. WWW Global Internet Fund may not sell short the
securities of any class of an issuer to the extent, at the time of the
transaction, of more than 2% of the outstanding securities of that class.
FUND POLICIES -- WWW GLOBAL INTERNET FUND
WWW Global Internet Fund has adopted the following fundamental
investment policies and restrictions. These policies cannot be changed without
approval by the holders of a majority of the outstanding voting securities of
WWW Global Internet Fund. As defined in the Investment Company Act of 1940 (the
"Act"), the "vote of a majority of the outstanding voting securities" means the
lesser of the vote of (a) 67% of the shares of WWW Global Internet Fund at a
meeting where more than 50% of the outstanding shares are present in person or
by proxy or (b) more than 50% of the outstanding shares of WWW Global Internet
Fund. WWW Global Internet Fund may not:
1. Purchase or retain any securities of an issuer if any of the
officers or Trustees of WWW Global Internet Fund or its investment adviser owns
beneficially more than 1/2 of 1% of the securities of such issuer and together
own more than 5% of the securities of such issuer.
2. Invest in commodities, except that WWW Global Internet Fund may
purchase and sell options, forward contracts, futures contracts, including those
relating to indexes, and options on future contracts or indexes.
3. Purchase, hold or deal in real estate, real estate limited
partnership interests, or oil, gas or other mineral leases or exploration or
development programs, but WWW Global Internet Fund may purchase and sell
securities that are secured by real estate or issued by companies that invest or
deal in real estate or real estate investment trusts.
4. Borrow money, except to the extent permitted under the 1940 Act. The
1940 Act permits an investment company to borrow in an amount up to 33 1/3% of
the value of such company's total assets. For purposes of this Investment
Restriction, the entry into options, forward contracts, futures contracts,
including those relating to indexes, and options on futures or indexes shall not
constitute borrowing.
5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, WWW Global
12
<PAGE>
Internet Fund may lend its portfolio securities in an amount not to exceed 33
1/3% of the value of its total assets.
6. Act as an underwriter of securities of other issuers, except to the
extent WWW Global Internet Fund may be deemed an underwriter under the
Securities Act of 1933, as amended, by virtue of disposing of portfolio
securities.
7. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act).
8. Purchase securities on margin, but WWW Global Internet Fund may make
margin deposits in connection with transactions in options, forward contracts,
futures contracts, including those relating to indexes, and options on futures
contracts or indexes.
9. Invest more than 25% of the value of its total assets in any one
industry, except that WWW Global Internet Fund will invest at least 70% of the
value of its total assets in securities of foreign companies that are designing,
developing or manufacturing hardware or software products or services for the
Internet and/or World Wide Web.
10. Invest in the securities of a company for the purpose of exercising
management or control, but WWW Global Internet Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with respect
to options, forward contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes.
12. Purchase, sell or write puts, calls or combinations thereof, except
as described in WWW Global Internet Fund's Prospectus or Statement of Additional
Information.
13. Engage in short sales of securities, except as described in WWW
Global Internet Fund's Prospectus or Statement of Additional Information.
14. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if, in
the aggregate, more than 15% of the value of its net assets would be so
invested.
15. Purchase securities of other investment companies, except by
purchase in the open market where no commission or profit to a sponsor or dealer
results from the purchase other than the customary broker's commission or except
when the purchase is part of a plan of merger, consolidation, reorganization or
acquisition, and provided that any such purchase is permitted under the 1940
Act, or except shares of funds advised by the Manager or an affiliate thereof.
It is expected that the WWW Global Internet Fund would purchase shares of such
funds only if arrangements are made to eliminate duplicate advisory and
distributive fees.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.
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<PAGE>
MANAGEMENT OF THE FUNDS
The Board of Trustees provides broad supervision over the affairs of
the Funds. Trustees and officers of the Trust, together with their ages and
information as to their principal business occupations during the past five
years, are shown below. Each Trustee who is an "interested person" of the Trust,
as defined in the 1940 Act, is indicated by an asterisk.
<TABLE>
<CAPTION>
<S> <C>
Lawrence S. York* (48) Trustee, Chairman of the Board and President of the Trust;
131 Prosperous Place, Suite 17 President, Capital Advisors Group, Inc. (financial planning
Lexington, Kentucky 40509 and investment advisory firm); President, WWW Advisors, Inc.
(investment advisor); Director, Guthrie York & Co., Inc.
(financial services); Director, Visual Net, Inc.
(developmental internet software); President and licensed
sales representative, Interactive Planning Corp.
(broker-dealer) since January 1, 1999; licensed sales
representative, B.D. Holdings, Inc. (broker-dealer)
(September-December 1998); President (until June 1997) and
licensed sales representative (until August 1998) of RH York &
Company, Inc. (broker-dealer).
James D. Greene* (42) Trustee, Vice President and Treasurer of the Trust; Senior
312 Breezewood Court Product Manager, NCR Corp. (manufacturer of retail
Suwanee, Georgia 30024 point-of-sale systems) (1997 to present); Executive Senior
Vice President of WWW Advisors, Inc. (investment advisor);
formerly Marketing Strategist, Lexmark International, Inc.
(manufacturer of network personal computer and office
electronics) (1991-1997).
Charles F. Haywood (72) Trustee of the Trust; National City Bank Professor of Finance,
348 Business & Economics University of Kentucky; Member, Board of Directors, The
University of Kentucky Pittston Company.
Lexington, Kentucky 40506
Robert C. Thurmond (48) Trustee of the Trust; Director, Telecommunications Research
Quality Communications, Inc. Center, University of Louisville, until 1997; Manager,
9931 Corporate Campus Drive Knowledge Creation Group, Quality Communications, Inc. since
Suite 1000 1998.
Louisville, KY 40223
Diane Snapp (36) Secretary of the Trust; Secretary of Interactive Planning
131 Prosperous Place, Suite 17 Corp. since 1999; Operations Administrator, Capital Advisors
Lexington, Kentucky 40509 Group, Inc. (administrative and accounting services) since
1996; previously, Office Manager, Harrison Tobacco Warehouse.
</TABLE>
For so long as the Plan described in the section captioned
"Distribution and Shareholder Servicing Plan" remains in effect, the Trust's
Trustees who are not "interested persons" of the Trust, as defined in the 1940
Act, will be selected and nominated by the Trustees who are not "interested
persons" of the Trust.
No meetings of shareholders of the Trust will be held for the purpose
of electing Trustees unless and until such time as less than a majority of the
Trustees holding office have been elected by shareholders, at which time the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Under the 1940 Act, shareholders of record of not less than two-thirds
of the outstanding shares of the Trust may remove a Trustee through a
declaration in writing or by vote cast in person or by proxy at a meeting called
for that purpose. Under the Trust's Declaration of Trust, the Trustees are
required to call a meeting of shareholders for the purpose of voting upon the
question of removal of any such Trustee when required in writing to do so by the
shareholders of record of not less than 10% of the Trust's outstanding shares.
14
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
PENSION OR ESTIMATED
AGGREGATE RETIREMENT PENSION OR ANNUAL ESTIMATED ANNUAL
AGGREGATE COMPENSATION BENEFITS THE RETIREMENT BENEFITS FROM BENEFITS FROM
COMPENSATION FROM WWW WWW INTERNET BENEFITS WWW WWW INTERNET WWW GLOBAL TOTAL
NAME OF PERSON, FROM WWW GLOBAL FUND INTERNET FUND UPON INTERNET FUND COMPENSATION
POSITION INTERNET FUND INTERNET FUND EXPENSES FUND EXPENSES RETIREMENT UPON RETIREMENT FROM THE TRUST
-------- ------------- ------------- -------- ------------- ---------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence S. York, $0 $0 $0 $0 $0 $0 $0
Trustee, Chairman
of the Board and
President
James D. Greene, $0 $0 $0 $0 $0 $0 $0
Trustee, Vice
President,
Secretary and
Treasurer
Charles F. Haywood, $4,000* $_____ $0 $0 $0 $0 $_______
Trustee
Robert C. Thurmond, $4,000* $_____ $0 $0 $0 $0 $_______
Trustee
<FN>
* Payments for the fiscal year ended June 30, 2000.
</FN>
</TABLE>
The Trust does not compensate its officers. The Trust pays each Trustee
who is not an officer or employee of the Manager a fee of $1,000 per quarter and
reimbursement for travel and out-of-pocket expenses.
OWNERSHIP OF SHARES
The only persons known by WWW Internet Fund to be holder of record or
beneficially of 5% or more of the Fund as of __________, 2000, are as follows:
PERCENTAGE
NAME AND ADDRESS HELD
---------------- ----
[National Investor Services Corp.* ____%
55 Water Street 32nd Floor
New York, NY 10041]
[Donaldson Lufkin Jenrette* ____%
Mutual Fund Trading
P.O. Box 2052
Jersey City, NJ 07303]
* Shares held in "street name" for benefit of others.
15
<PAGE>
As of _______________, 2000, all officers and Trustees as a group
beneficially owned less than 1% of the outstanding shares of WWW Internet Fund.
The only persons known by WWW Global Internet Fund to be holder of
record or beneficially of 5% or more of the Fund as of __________, 2000, are as
follows:
PERCENTAGE
NAME AND ADDRESS HELD
---------------- ----
As of _______________, 2000, all officers and Trustees as a group
beneficially owned less than 1% of the outstanding shares of WWW Global Internet
Fund.
16
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE PROSPECTUS ENTITLED "WHO MANAGES THE FUND."
Under the Management Agreement dated July 10, 1996, subject to the
control of the Board of Trustees, WWW Advisors, Inc. (the "Manager"), manages
the investment of the assets of each Fund, including making purchases and sales
of portfolio securities consistent with the Fund's investment objectives and
policies, and administers its business and other affairs. The Manager provides
the Fund with such office space, administrative and other services and executive
and other personnel as are necessary for Fund operations. The Manager pays all
of the compensation of Trustees of the Trust who are employees or consultants of
the Manager and of the officers and employees of the Fund.
All expenses incurred in the operation of each Fund will be borne by
such Fund, except to the extent specifically assumed by the Manager. The
expenses to be borne by each Fund will include: organizational costs, taxes,
interest, brokerage fees and commissions, fees of board members who are not
officers, directors or employees of the Manager or its affiliates, Securities
and Exchange Commission fees, state Blue Sky qualification fees, advisory,
administrative and fund accounting fees, charges of custodians, transfer and
dividend disbursing agents' fees, insurance premiums, industry association fees,
outside auditing and legal expenses, costs of maintaining each Fund's existence,
costs of independent pricing services, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
shareholders' reports and meetings, costs of preparing and printing prospectuses
and statements of additional information, amounts payable under the Trust's
Distribution and Shareholder Servicing Plan and any extraordinary expenses.
The Management Agreement is subject to annual approval by (i) the
Trust's Board of Trustees or (ii) vote of a majority (as defined in the 1940
Act) of the outstanding voting securities of the Fund, provided that in either
event the continuance also is approved by a majority of the Board of Trustees
who are not "interested persons" (as defined in the 1940 Act) of the Trust or
the Manager, by vote cast in person at a meeting called for the purpose of
voting on such approval. The Board of Trustees, including a majority of the
Trustees who are not "interested persons" of any party to the Agreement, voted
to continue the Agreement at a meeting held on August 16, 1999. The Agreement is
terminable, without penalty, on 60 days' notice, by the Trust's Board of
Trustees or by vote of the holders of a majority of the Trust's shares, or, on
not less than 90 days' notice, by the Manager. As to the Trust, the Agreement
will terminate automatically in the event of its assignment (as defined in the
1940 Act).
After giving effect to the management fee waiver arrangement described
in the Prospectus under "Who Manages the Fund--Fee Waiver," management fees paid
by WWW Internet Fund to the Manager were $__________ for the fiscal year ended
June 30, 2000, $31,223 for the fiscal year ended June 30, 1999, $0 for the
fiscal year ended June 30, 1998 and $0 for the fiscal year ended June 30, 1997.
The Trust is a party to a Fund Accounting Service Agreement and a
Transfer Agency Agreement with American Data Services, Inc. ("ADS"). Under these
agreements, ADS has agreed to provide the following services for each Fund: (a)
timely calculate and transmit each Fund's daily net asset value, (b) maintain
and keep current certain books and records (including shareholder accounts) of
each Fund, and (c) provide each Fund and the Manager with daily portfolio
valuation, net asset value calculation and other standard operational reports as
requested from time to time. In consideration for these services, WWW Internet
Fund has paid to ADS $________ for the fiscal year ended June 30, 2000, $65,000
for the fiscal year ended June 30, 1999, $36,528 for the fiscal year ended June
30, 1998 and $36,759 for the period ended June 30, 1997.
DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the 1940 Act provides, among other things, that an investment
company may bear expenses of distributing its shares only pursuant to a plan
adopted in accordance with the Rule. The Trust's Trustees have adopted such a
plan (the "Plan") for each Fund. The Trust's Trustees believe that there is a
reasonable likelihood that the Plan will benefit each Fund and its shareholders.
Under the Plan, each Fund pays the Manager a shareholder servicing and
distribution fee at the annual rate of .50% of the average daily net assets of
such Fund. Such fee will be used in its entirety by the Manager to make payments
for administration, shareholder services and distributions assistance,
including, but not limited to (i) compensation to securities dealers and other
organizations (each, a "Service Organization" and collectively, the "Service
Organizations") for providing distribution assistance with respect to assets
invested in the Fund, (ii) compensation to Service Organizations for providing
administration, accounting and other shareholder services with respect to Fund
shareholders, and (iii) otherwise promoting the sale of shares of the Fund,
including paying for the preparation of advertising and sales literature and the
printing and distribution of such promotional materials to prospective
17
<PAGE>
investors. The fees paid to the Manager under the Plan are in addition to the
fees payable under the Management Agreement. The plan is a "compensation" plan;
that is, the fees paid to the Manager under the Plan are payable without regard
to actual expenses incurred. Each Fund understands that third parties also may
charge fees to their clients who are beneficial owners of Fund shares in
connection with their client accounts. These fees would be in addition to any
amounts which may be received by them from the Manager under the Plan.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the Trustees
for their review. In addition, the Plan provides that it may not be amended to
increase materially the costs which shareholders may bear pursuant to the Plan
without approval of such shareholders and that other material amendments of the
Plan must be approved by the Board of Trustees, and by the Trustees who are
neither "interested persons" (as defined in the 1940 Act) of the Trust nor have
any direct or indirect financial interest in the operation of the Plan or in the
related Plan agreements, by vote cast in person at a meeting called for the
purpose of considering such amendments. The Plan and related agreements are
subject to annual approval by such vote cast in person at a meeting called for
the purpose of voting on the Plan. Continuation of the Plan was approved by the
Trustees, on August 16, 1999. The Plan is terminable at any time by vote of a
majority of the Trustees who are not "interested persons" and who have no direct
or indirect financial interest in the operation of the Plan or in the Plan
agreements or by vote of holders of a majority of the Fund's shares. A Plan
agreement is terminable, without penalty, at any time, by such vote of the
Trustees, upon not more than 60 days' written notice to the parties to such
agreement or by vote of the holders of a majority of each Fund's shares. A Plan
agreement will terminate automatically in the event of its assignment (as
defined in the 1940 Act). During the year ended June 30, 2000, $________ was
expended by the Manager although WWW Internet Fund paid the Manager only
$_________ pursuant to the Plan. During the fiscal year ended June 30, 1999,
$60,722 (.5% of average net assets) was paid by WWW Internet Fund pursuant to
the Plan. During such fiscal year, the following amounts were expended by the
Manager: $485 for advertising, $4,530 for compensation to broker-dealers, and
$26 for printing and mailing prospectuses to other from current stockholders.
During the fiscal year ended June 30, 1998, $15,319 was expended by the Manager
although WWW Internet Fund paid the Manager only $12,228 pursuant to the Plan.
During the fiscal year ended June 30, 1997, $47,474 was expended by the Manager
although WWW Internet Fund paid the Manager only $6,489 pursuant to the Plan.
CALCULATION OF INVESTMENT PERFORMANCE
From time to time each Fund advertises its "total return" and "average
annual total return". These figures are based on historical earnings and are not
intended to indicate future performance. The "total return" shows what an
investment in shares of a Fund would have earned over a specified period of time
(for example, one and five year periods or since inception) assuming that all
distributions and dividends paid by a Fund were reinvested on the reinvestment
dates during the period. The "average annual total return" is the annual rate
required for the initial payment to grow to the amount which would be received
at the end of the specified period; i.e., the average annual compound rate of
return. Total return and average annual total return may be presented without
the effect of the redemption fee.
The Funds' "average annual total return" figures described in the
Prospectus are computed according to a formula prescribed by the SEC. The
formula can be expressed as follows:
P(1+T)n=ERV
Where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = Ending Redeemable Value of a hypothetical
$1,000 investment made at the beginning of
a 1, 5, or 10-year period at the end of a
1, 5, or 10-year period (or fractional
portion thereof), assuming reinvestment of
all dividends and distributions.
Each Fund's performance will vary from time to time depending upon
market conditions, the composition of its portfolio and its operating expenses.
Consequently, any given performance calculation should not be considered
representative of each Fund's performance for any specified period in the
future. In addition, because the performance fluctuates, it may not provide a
basis for comparing an investment in the Fund with certain bank deposits or
other investments that pay a fixed yield for a stated period of time. Investors
comparing the Fund's performance with that of other mutual funds should give
18
<PAGE>
consideration to the quality and maturity of the respective investment
companies' portfolio securities.
The table below provides investment results for WWW Internet Fund for
one year and since inception. The results shown represent "total return"
investment performance, which assumes the reinvestment of all capital gains and
income dividends for the indicated periods. The tables do not make any allowance
for federal, state or local income taxes, which shareholders must pay on a
current basis.
AVERAGE ANNUAL RETURN FOR WWW INTERNET FUND
PERCENTAGE CHANGE
-----------------
FISCAL PERIODS ENDED JUNE 30, 2000
1 Year
Since Inception
The results should not be considered a representation of the total return from
an investment made in WWW Internet Fund today. This information is provided to
help investors better understand the Funds and may not provide a basis for
comparison with other investments or mutual funds which use a different method
to calculate performance.
TAXES
NET INVESTMENT INCOME. Each Fund receives income generally in the form
of dividends and interest on its investments. This income, less expenses
incurred in the operation of such Fund, constitutes the net investment income of
such Fund from which dividends may be paid to you. Any distributions by such
Fund from such income will be taxable to you as ordinary income, whether you
take them in cash or in additional shares.
CAPITAL GAINS. Each Fund may derive capital gains and losses in
connection with sales or other dispositions of its portfolio securities.
Distributions from net short-term capital gains will be taxable to you as
ordinary income. Distributions from net long-term capital gains will be taxable
to you as a long-term capital gain, regardless of how long you have held your
shares in such Fund. Net capital gains realized by each Fund generally will be
distributed once each year, and may be distributed more frequently, if
necessary, to reduce or eliminate excise or income taxes on such Fund.
EFFECT OF FOREIGN INVESTMENTS. Most foreign exchange gains realized on
the sale of debt securities are treated as ordinary income by each Fund.
Similarly, foreign exchange losses realized by such Fund on the sale of debt
securities are generally treated as ordinary losses by such Fund. These gains
when distributed will be taxable to you as ordinary dividends, and any losses
will reduce the ordinary income of such Fund otherwise available for
distribution to you. This treatment could increase or decrease the ordinary
income distributions from such Fund to you and may cause some or all of the
previously distributed income of such Fund to be classified as a return of
capital.
Each Fund will be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% of the total assets of such
Fund at the end of a fiscal year are invested in securities of foreign
corporations, such Fund then may elect to pass through to you your pro-rata
share of foreign taxes paid by such Fund. If this election is made, the year-end
statement you receive from such Fund will show more taxable income than was
actually distributed to you. However, you will be entitled to either deduct your
share of such taxes in computing your taxable income or (subject to limitations)
claim a foreign tax credit for such taxes against your U.S. federal income tax.
Each Fund will provide you with the information necessary to complete your
individual income tax return if it makes this election.
INFORMATION ON THE TAX CHARACTER OF DISTRIBUTION. Each Fund will inform
you of the amount of your ordinary income dividends and capital gains
distributions at the time they are paid, and will advise you of their tax status
for federal income tax purposes shortly after the close of each calendar year.
19
<PAGE>
If you have not held Fund shares for a full year, such Fund may designate and
distribute to you, as ordinary income or capital gain, a percentage of income
that is not equal to the actual amount of such income earned during the period
of your investment in such Fund.
EXCISE TAX DISTRIBUTION REQUIREMENTS. To avoid federal excise taxes,
the Internal Revenue Code requires each Fund to distribute to you by December 31
of each year, at a minimum, the following amounts: 98% of its taxable ordinary
income earned during the calendar year; 98% of its capital gain net income
earned during the 12-month period ending October 31; and 100% of any
undistributed amounts from the prior year. Each Fund intends to declare and pay
these distributions in December (or to pay them in January, in which case you
must treat them as received in December) but can give no assurances that its
distributions will be sufficient to eliminate all taxes.
REDEMPTION OF FUND SHARES. Redemptions (including redemptions in kind)
and exchanges of Fund shares are taxable transactions for federal and state
income tax purposes. If you redeem your Fund shares, the IRS will require that
you report any gain or loss on your redemption or exchange. If you hold your
shares as a capital asset, the gain or loss that you realize will be capital
gain or loss and will be long-term or short-term, generally depending on how
long you hold your shares.
Beginning after the year 2000, certain shareholders may be subject to a
reduced rate of tax on gains from each Fund's sale of securities held for more
than five years. Other shareholders will not benefit from a reduced rate until
after the year 2005.
Any loss incurred on the redemption or exchange of shares held for six
months or less will be treated as long-term capital loss to the extent of any
long-term capital gains distributed to you by each Fund on those shares. All or
a portion of any loss that you realize upon the redemption of your Fund shares
will be disallowed to the extent that you buy other shares in such Fund (through
re-investment of dividends or otherwise) within thirty days before or after your
share redemption. Any loss disallowed under these rules will be added to your
tax basis in the new shares you buy.
PORTFOLIO TRANSACTIONS
The Management Agreement recognizes that in the purchase and sale of
portfolio securities the Manager will seek the most favorable price and
execution, and, consistent with that policy, may give consideration to the
research, statistical and other services furnished by brokers or dealers to the
Manager for their use, as well as to the general attitude toward and support of
investment companies demonstrated by such brokers or dealers. Such services
include supplemental investment research, analysis and reports concerning
issuers, industries and securities deemed by the Manager to be beneficial to
each Fund. In addition, the Manager is authorized to place orders with brokers
who provide supplemental investment and market research and statistical and
economic analysis although the use of such brokers may result in a higher
brokerage charge to each Fund than the use of brokers selected solely on the
basis of seeking the most favorable price and execution and although such
research and analysis may be useful to the Manager in connection with its
services to clients other than the Funds.
In over-the-counter markets, each Fund deals with primary market makers
unless a more favorable execution or price is believed to be obtainable. Each
Fund may buy securities from or sell securities to dealers acting as principal,
except dealers with which its directors and/or officers are affiliated.
Consistent with these considerations, the Manager may consider sales of
shares of the Fund as a factor in the selection of brokers or dealers to execute
portfolio transactions for the Funds.
During the fiscal years ended June 30, 2000, 1999, 1998 and 1997, WWW
Internet Fund paid brokerage commissions in the aggregate amounts of
$_____________, $5,704, $2,103 and $4,354, respectively. Of these amounts, (1)
$____________, $22, $1,833 and $4,287, respectively, was paid to R.H. York &
Company, Inc. (2) $_____________, $4,511, $0 and $0, respectively, was paid to
Interactive Planning Corp and (3) $_____________, $1,231, $0 and $0,
respectively, was paid to B.D. Holdings, Inc. Lawrence S. York, Chairman of each
Fund, has been President and licenses sales representative of Interactive
Planning Corp. since January 1, 1999, was President (until June 1997) and
licensed sales representative (until August 1998) of R.H. York & Company, Inc.
and was a licensed sales representative at B D. Holdings, Inc. from September
through December, 1998. During the fiscal year ended June 30, 2000, 1999, 1998
and 1997 the percentage of WWW Internet Fund's aggregate brokerage commissions
paid to R.H. York & Company, Inc., Interactive Planning Corp. and B.D. Holdings,
Inc. was ___%, .38%, 78% and 21%, respectively, and the percentage of WWW
Internet Fund's aggregate dollar amount of transactions involving payment of
commissions effected through R.H. York & Company, Inc., Interactive Planning
Corp. and B.D. Holdings, Inc. was ___%, .64%, 77% and 22%, respectively.
VALUATION
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "HOW TO BUY SHARES."
20
<PAGE>
Portfolio securities, including covered call options written by each
Fund, are valued at the last sale price on the securities exchange or national
securities market on which such securities primarily are traded. Securities not
listed on an exchange or national securities market, or securities in which
there were no transactions, are valued at the average of the most recent bid and
asked prices, except in the case of open short positions where the asked price
is used for valuation purposes. Bid price is used when no asked price is
available. Short-term investments are carried at amortized cost, which
approximates value. Any securities or other assets for which recent market
quotations are not readily available are valued at fair value as determined in
good faith by the Trust's Board of Trustees. Expenses and fees, including the
management fee and distribution and service fees, are accrued daily and taken
into account for the purpose of determining the net asset value of each Fund's
shares.
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, are valued at fair value as
determined in good faith by the Board of Trustees. The Board of Trustees will
review the method of valuation on a current basis. In making their good faith
valuation of restricted securities, the Trustees generally will take the
following factors into consideration: restricted securities which are, or are
convertible into, securities of the same class of securities for which a public
market exists usually will be valued at market value less the same percentage
discount at which purchased. This discount will be revised periodically by the
Board of Trustees if the Trustees believe that it no longer reflects the value
of the restricted securities. Restricted securities not of the same class as
securities for which a public market exists usually will be valued initially at
cost. Any subsequent adjustment from cost will be based upon considerations
deemed relevant by the Board of Trustees.
GENERAL INFORMATION
Each Fund is an open-end diversified portfolio of the Trust.
The Trust's Board has authority to create additional portfolios of
shares without shareholder approval. All consideration received by the Trust for
shares of one of the portfolios and all assets in which such consideration is
invested will belong to that portfolio (subject only to the rights of creditors
of the Trust) and will be subject to the liabilities related thereto. The assets
attributable to, and the expenses of, one portfolio are treated separately from
those of the other portfolios. Each portfolio is treated as a separate entity
for certain matters under the 1940 Act, and for other purposes, and a
shareholder of one portfolio is not deemed to be a shareholder of any other
portfolio. For certain matters, Trust shareholders vote together as a group; as
to others, they vote separately by portfolio. Shares of WWW Internet Fund and
WWW Global Internet Fund are being offered through the Prospectus.
The Funds' Declaration of Trust authorizes the Board of Trustees, to
among other things:
(i) Invest and reinvest cash and to hold cash uninvested;
(ii) Vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute
and deliver proxies or powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(iii) Hold any security or property in a form not indicating any trust
whether in bearer, unregistered or other negotiable form or in
the name of the Trust or a custodian, subcustodian or other
depository or a nominee or nominees or otherwise;
(iv) Join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection
to deposit any security with, or transfer any security to, any
such committee, depositary or trustee, and to delegate to them
such power and authority with relation to any security (whether
or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper; and
(v) Subject to certain provisions of the Funds' Declaration of Trust
to allocate assets, liabilities, income and expenses of the
Trust to a particular series of shares or to apportion the same
among two or more series, provided that any liabilities or
expenses incurred by a particular series of shares shall be
payable solely out of the assets of that series; and to the
extent necessary or appropriate to give effect to the
preferences and special or relative rights and privileges of any
classes of shares, to allocate assets, liabilities, income and
expenses of a series to a particular class of shares of that
series or to apportion the same among two or more classes of
shares of that series.
21
<PAGE>
INDEPENDENT AUDITORS REPORT
[Accountants to Provide]
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits
(1) Amended and Restated Declaration of Trust.*
(2) By-laws.*
(5) Management Agreement between Registrant and WWW Advisors,
Inc.*
(5b) Amendment to Management Agreement between Registrant and WWW
Advisors, Inc.
(8) Custody Agreement.
(9a) Transfer Agency and Service Agreement.*
(9b) Fund Accounting Service Agreement.*
(9c) Administrative Service Agreement.
(10) Opinion and Consent of Counsel.
(11) Consent of Independent Auditors.
(13) Purchase Agreement for Initial Capital between Registrant and
WWW Advisors, Inc.*
(15) Distribution and Shareholder Servicing Plan.*
(15b) Amendment to Distribution and Shareholder Servicing Plan.
(16) Code of Ethics.
(27) Financial Data Schedule meeting the requirements of Rule 483
under the Securities Act of 1933.
* Previously filed.
Item 24. Persons Controlled by or Under Common Control with Registrant
- None.
Item 25. Indemnification
Reference is made to Article VIII of the Registrant's Amended and
Restated Declaration of Trust filed as Exhibit 1. The application of
these provisions is limited by Article 10 of the Registrant's By-laws
filed as Exhibit 2 and by the following undertaking set forth in the
rules promulgated by the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a trustee, officer or controlling
person of the registrant in the successful defense of any
action, suite or proceeding) is asserted by such trustee,
officer or controlling person in connection with the
securities being registered, the registrant 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 such Act and will be
governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
Reference is made to the section in the Prospectus entitled "Management
Services".
C-1
<PAGE>
Item 27. Principal Underwriters
The Registrant does not have a principal underwriter.
Item 28. Location of Accounts and Records
1. WWW Advisors, Inc.
Suite 17
131 Prosperous Place
Lexington, Kentucky 40509
2. Firstar Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45201-1118
3. American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, New York 11788
4. American Data Services, Inc.
World Trade Center
1675 Broadway
Suite 2050
Denver, Colorado 80202
Item 29. Management Services
Not Applicable.
Item 30 Undertakings - The Registrant undertakes (1) to furnish a copy of
the Registrant's latest annual report, upon request and without charge,
to every person to whom a Prospectus is delivered, (2) to file a
post-effective amendment, using reasonably current financial statements
which need not be certified, within four to six months from the
effective date of the Registrant's Registration Statement under the
Securities Act of 1933, and (3) to call a meeting of shareholders for
the purpose of voting upon the question of removal of a trustee or
trustees when requested in writing to do so by the holders of at least
10% of the Registrant's outstanding shares of beneficial interest and
in connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
C-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Lexington, State of Kentucky, on the 25 day of
August, 2000.
WWW Trust
By: /S/ LAWRENCE S. YORK
--------------------------
Lawrence S. York
Chairman of the Board and President
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Act of 1940, this Amendment to Registration Statement has been signed
below by the following persons in the capacities indicated on August 25, 2000.
SIGNATURE TITLE
--------- -----
/S/ LAWRENCE S. YORK Chairman of the Board (Principal executive
Lawrence S. York officer, financial officer and accounting officer)
and Trustee
/S/ JAMES D. GREENE Trustee, Vice President and Treasurer
James D. Greene
/S/ CHARLES F. HAYWOOD Trustee
Charles F. Haywood
/S/ ROBERT C. THURMOND Trustee
Robert C. Thurmond
C-3
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT
----------------
1 Amended and Restated Declaration of Trust*
2 By-laws*
5 Management Agreement between Registrant and WWW Advisors, Inc.*
5b Amendment to Management Agreement between Registrant and WWW Advisors,
Inc.
8 Custody Agreement *
9a Transfer Agency and Service Agreement*
9b Fund Accounting Service Agreement*
9c Administrative Service Agreement*
10 Opinion and Consent of Counsel*
11 Consent of Independent Auditors
13 Purchase Agreement for Initial Capital between Registrant and WWW
Advisors, Inc.*
15 Distribution and Shareholder Servicing Plan*
15b Amendment to Distribution and Shareholder Servicing Plan
27 Financial Data Schedule meeting the requirements of Rule 483 under the
Securities Act of 1933
* Previously filed
