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):
X 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.
____ 75 days after filing pursuant to paragraph (a)(2) of Rule 485.
<PAGE>
PROSPECTUS
WWW INTERNET FUND
WWW GLOBAL INTERNET FUND
November 1, 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.............................6
Fees and Expenses of the Funds...........................................8
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 domestic 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 investing 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, bridges, hubs 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 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.
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.
4
<PAGE>
1997 0.43%
1998 70.58%
1999 166.86%
1 The total return of WWW Internet Fund's shares from January 1, 2000 to
September 30, 2000 was -19.23%.
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 -17.39% (quarter ending June 30, 2000).
<TABLE>
<CAPTION>
------------------------------------------------------------------------- ------------------------- ------------------------
Average Annual Total Returns Past Life
(for the periods ending DECEMBER 31, 1999) One Year of Fund*
------------------------------------------ -------- -------
------------------------------------------------------------------------- ------------------------- ------------------------
------------------------------------------------------------------------- ------------------------- ------------------------
<S> <C> <C>
WWW INTERNET FUND 166.86% 61.64%
------------------------------------------------------------------------- ------------------------- ------------------------
------------------------------------------------------------------------- ------------------------- ------------------------
Standard & Poor's 500 Index 21.04% 29.57%
------------------------------------------------------------------------- ------------------------- ------------------------
*Since inception date of August 1, 1996.
</TABLE>
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. The WWW
Global Internet Fund will commence its investment operations no later than
January 1, 2001. (See--"How To Buy Shares").
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 and domestic
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 throughout the world 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, bridges, hubs 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 and domestic 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 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.
FOREIGN SECURITIES RISKS. Foreign securities 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.
BAR CHART AND PERFORMANCE TABLE
WWW Global Internet Fund became effective November 1, 2000 and,
therefore, has no performance history. There will be risks of investing in the
WWW Global Internet Fund because returns are 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 compare to the broad market.
7
<PAGE>
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>
<S> <C> <C> <C> <C> <C> <C>
WWW
WWW Global
Internet Internet
Fund Fund
<S> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
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) 1.00%(1)
(payable only if shares are redeemed within one year of purchase)
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 1.50%(2)(3) 1.00%(4)
Distribution and Service (12b-1) Fees 0.50% 0.50%
Other Expenses 0.51% 1.00%(5)
Total Annual Fund Operating Expenses 2.51% 2.50%(6)
<FN>
(1) In addition, a fee of $15.00 is charged for each wire redemption.
(2) 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 1.48%, Distribution (12b-1) Fees were .50%,
Other Expenses of WWW Internet Fund were 0.51% and Total Annual Fund
Operating Expenses of WWW Internet Fund were 2.49%.
(3) 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."
(4) The Management Fee is based on estimated amounts for the current fiscal
year.
(5) Other Expenses are based on estimated amounts for the current fiscal year.
(6) Total Annual Fund Operating Expenses are based on estimated amounts for
the current fiscal year.
</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 $263 $809 $1,381 $2,934
------------------------------ ---------------------- --------------------- --------------------- --------------------------
------------------------------ ---------------------- --------------------- --------------------- --------------------------
WWW GLOBAL INTERNET FUND $263 $806 $1,376 $2,924
------------------------------ ---------------------- --------------------- --------------------- --------------------------
<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 - $261; 3 years -
$803; 5 years - $1,371; and 10 years - $2,913.
</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 73% 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 $150 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 6% of its outstanding
shares. Currently, Mr. Greene serves as Senior Strategy Consultant for i2
Technologies. From 1997 to 2000, Mr. Greene was 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 consulting adviser to
Lawrence York, and provides technology assessments and identifies promising
Internet technology trends of significance to the Funds. 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.
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. The Manager fee
waiver for the years ended June 30, 2000 and 1999 were $17,367 and $142,977
respectively.
9
<PAGE>
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%. Due to the growth of the Fund,
such reimbursement was not necessary for the year ended June 30, 1999 and it is
not anticipated that it will be necessary to reimburse 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 0.50% 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.
Under the Plan, any fees not expended during the Funds' fiscal year will be
rolled over into the following fiscal year. 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. Investments
paid into the WWW Global Internet Fund will be held in a non-interest bearing
account pending commencement of the WWW Global Internet Fund investment
operations. It is anticipated that the WWW Global Internet Fund will commence
its investment operations prior to January 1, 2001. Therefore, until such time
as the WWW Global Internet Fund investment operations begin, the value of your
investment in WWW Global Internet Fund will remain the same. Upon commencement
of the WWW Global Internet Fund investment operations, investors will be
notified.
The minimum initial investment for each of the Funds 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). The initial offering price for
shares of the WWW Global Internet Fund is $10.00.
Purchase orders received in proper form by WWW Trust or a Processing
Organization (See--"Purchases through Processing Organizations") 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.
In order to reduce mailing costs, the Funds have adopted the following
mail policy:
-Duplicate mailings of prospectuses, annual and semi-annual reports will
be eliminated to multiple accounts listing the same
recordholder even if different addresses are listed.
- Duplicate mailings of annual and semi-annual reports will be
eliminated to shareholders holding as joint tenants or tenants
in common and having the same address.
- Shareholders may receive duplicate mailings by contacting us
toll-free at (888) 263-2204, or by writing to us at 131
Prosperous Place, Suite 17, Lexington, Kentucky 40509.
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 Trust and sent to the address listed below. If you prefer overnight
delivery, use the overnight address listed below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
U.S. MAIL: WWW Trust OVERNIGHT: WWW Trust
P.O. Box 55089 131 Prosperous Place
Lexington, Kentucky 40555 Suite 17
Lexington, Kentucky 40509-1804
</TABLE>
10
<PAGE>
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 the
Funds, 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 (INSERT THE NAME OF A FUND OR BOTH FUNDS AND SPECIFY
THE AMOUNT INVESTED PER FUND)
D.D.A. # 485777098
Account Name (write in your account registration name)
For the Account # (write in your account # assigned by Transfer Agent)
11
<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 Trust 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 Trust 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 "Processing
Organizations," which are a third-party plan administrator, broker-dealer, bank
or other financial institution that purchases shares for its customers and may
designate other intermediaries to receive purchase and redemption orders on the
Fund's behalf. 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.
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").
12
<PAGE>
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.
EXCHANGING SHARES. You may exchange shares of the same class between
the Funds. In making an exchange, you must meet minimum purchase requirements
for the Fund that you purchase by exchange. If you are exchanging into shares of
a Fund with a higher sales charge, you must pay the difference at the time of
the exchange. A share exchange is a taxable event and, accordingly, you may
realize a taxable gain or loss. Before making an exchange request, read the
prospectus of the Fund you wish to purchase by exchange. You can obtain a
prospectus for any Fund by contacting the Fund Manager at 1-888-263-2204.
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 the exchange of shares between
Funds. 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.
REDEMPTION AND EXCHANGE PROCEDURES. Shareholders who wish to redeem or
exchange shares must do so through the Transfer
Agent by mail or telephone.
BY MAIL--Redemption and exchange 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 or
exchange) 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 and exchange 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 and exchange 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 or
exchange 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 or exchange of Fund shares. In such cases, investors should consider
using the other redemption and exchange procedures described herein. Use of
these other redemption and exchange procedures may result in the redemption or
exchange request being processed at a later time than it would have been if
telephone redemption or exchange 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.
Redemptions and exchanges of shares are taxable sales. Please consult
your tax adviser regarding your federal, state and local tax liability.
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 63.56%. 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 46.87%.
14
<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> <C>
Net Asset Value, Beginning of Period $22.64 $10.95 $10.99 $10.00
Income from Investment Operations
Net Investment Income (Loss) (0.52) (0.37) (0.21) (0.16)
Net Gains or Losses on Securities 14.91 12.39 1.70 1.36
(realized or unrealized) ----- ------- ------ ------
Total from Investment Operations 14.39 12.02 1.49 1.20
----- ------- ---- ----
Less Distributions
Distributions (from capital gains) (0.40) (0.33) (1.53) (0.21)
------ ------ ------ ------
Net Asset Value, End of Period $36.63 $22.64 $10.95 $10.99
====== ======= ======= =======
Total Return 63.56% 112.01% 15.96% 13.08%
====== ======= ====== ======
Ratios/Supplemental Data
Net Assets, End of Period (Thousands) $102,226 $33,318 $2,628 $1,472
Ratio of Expenses to Average Net Assets
(before fee waiver and expense reimbursement) 2.51% 3.65% 5.10% 7.23%*
Ratio of Expenses to Average Net Assets
(after fee waiver and expense reimbursement) 2.49% 2.50% 2.50% 2.50%*
Ratio of Net Income (Loss) to
Average Net Assets (before fee
waiver and expense reimbursement) (2.13%) (3.07%) (4.47%) (1.62%)*
Ratio of Net Income (Loss) to Average Net Assets
(after fee waiver and expense reimbursement) (2.11%) (1.90%) (1.89%) (0.62%)*
Portfolio Turnover Rate 229.28% 48.03% 70.52% 109.52%
<FN>
* Annualized
** From inception (August 1, 1996)
Notes to Financial Statements appear in the Statement of Additional Information.
</FN>
</TABLE>
15
<PAGE>
A Statement of Additional Information (SAI) dated November 1, 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. 20549-0102 or by
electronic request at the following email address: [email protected]. You can
call (202) 942-8090 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
Investment Company Act File No. 811-07585
16
<PAGE>
[LOGO] WWW TRUST
ACCOUNT APPLICATION
MAIL TO: WWW TRUST
If you need assistance in completing this P.O. BOX 55089
application, please call 1-888-263-2204. LEXINGTON, KY 40555
1. YOUR WWW TRUST ACCOUNT REGISTRATION (PLEASE PRINT)
(CHECK ONLY ONE BOX AND COMPLETE ONLY ONE REGISTRATION TYPE.)
|_| INDIVIDUAL
OR
JOINT TENANT*
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Owner's First Name Initial Last Name |__| MR. |__| MS.
|__|__|__| - |__|__| - |__|__|__|__| |__|__| - |__|__| - |__|__|
Owner's Social Security Number Date of Birth
(Used for tax reporting)
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Owner's First Name Initial Last Name |__| MR. |__| MS.
*The account will be registered "Joint Tenants with Rights
of Survivorship", unless you check a box below.
|__| Tenants in Common |__| Tenants by Entirety |__| Community Property
|_| GIFT/TRANSFER
TO A MINOR
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Custodian's First Name Initial Last Name |__| MR. |__| MS.
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Minor's First Name Initial Last Name
|__|__|__| - |__|__| - |__|__|__|__| |__|__| - |__|__| - |__|__| |__|__|
Minor's Social Security Number Minor's Date of Birth State of
Residence
|_| TRUST
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|___|__|__|__|__|__|__|__|__|__|
Name of Trustee |__| MR. |__| MS.
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
For the Benefit of (Name of Trust)
<PAGE>
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Name of Trustee |__| MR. |__| MS.
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Name of Trustee |__| MR. |__| MS.
|__|__| - |__|__|__|__|__|__|__| |__|__| - |__|__| - |__|__|
Trust's Taxpayer Identification Number Date of Trust Agreement
|_| CORPORATION,
PARTNERSHIP
OR OTHER
ENTITY
CHECK ONE:
|__| Corporation |__| Partnership |__| Other |__|__|-|__|__|__|__|__|__|
Taxpayer Identification Number
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Name of Corporation, Partnership, Other Business Entity or Organization
CORPORATE RESOLUTION
--------------------
To authorize corporate account transactions, corporations must complete the
Corporate Resolution below, or attach a certified copy of a comparable
resolution in a format acceptable to WWW Trust.
Be it resolved that the President ____________________________________________,
Vice President _______________________________________________________________,
Treasurer ________________________________________________________________, and
_____________________________________________________ or any one of them acting
(Name and Title)
individually, is / are hereby authorized to sell, transfer and / or deliver any
and all Fund shares, now or hereafter registered in the name of this
Corporation. I, ______________________________, Secretary of
_______________________________, hereby certify that the foregoing is a true and
complete copy of a resolution duly adopted by the Board of Directors of the said
Corporation at a meeting held on the ______ day of ______________, 19_____, at
which a quorum was present and voting throughout and that same has not been
repealed or amended, and remains in full force and effect and does not conflict
with the by-laws of said Corporation.
_______________________________________ ________________________
Secretary Date
<PAGE>
2. YOUR MAILING ADDRESS OF RECORD (PLEASE PRINT)
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__||__|__|__|__|__|__|__|__|
Street Address
|__|__|__|__|__|__|__|__|__|__|__| |__|__| |__||__|__|__|__ - |__|__|__|__|
City State Zip
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__||__|__|__|__|__|__|__|__|
Country of Residence for Province Foreign Routing or Postal Code
Mailing Outside of the U.S.
__________________________________ |__|__|__|__|__|__|__|__|__|__|__|__|__|__|
E-Mail Address Home Phone Number
|__|__|__|__|__|__|__|__|__|__| |__|__|__|__|__|__|__|__|
Work Phone Number Fax Phone Number
3. ACCOUNT STATUS (CHECK ONLY ONE BOX)
NOTE: IRA AND RETIREMENT ACCOUNTS REQUIRE BOTH THIS APPLICATION AND THE
APPROPRIATE IRA OR RETIREMENT PLAN APPLICATION.
CALL 1-888-263-2204 TO OBTAIN AN IRA OR RETIREMENT PLAN APPLICATION
|_| Regular Investment Account. (Minimum initial investment $2,000)*
|_| Traditional IRA Account. (Minimum initial investment $2,000)*
|_| Roth IRA Account. (Minimum initial investment $2,000)*
|_| SEP Retirement Account. (Minimum initial investment $2,000)*
* $1,000 MINIMUM IF PARTICIPATING IN THE SYSTEMATIC INVESTMENT PLAN.
<PAGE>
4. SYSTEMATIC INVESTMENT PLAN (CHECK ONLY ONE BOX)
a $5.00 SET UP FEE IS REQUIRED TO OPEN ALL SYSTEMATIC INVESTMENT ACCOUNTS
(SEE THE PROSPECTUS)
The Systematic Investment Plan is a service available to shareholders of WWW
Trust for making regular systemic purchases of WWW Trust, allowing for dollar
cost averaging. On or about the 20th day of each month, WWW Trust's Transfer
Agent can arrange for the amount of money you specify ($50 minimum per draft) to
be deducted from your checking or savings account and used to purchase shares of
WWW Trust. You will receive a confirmation from WWW Trust's Transfer Agent
reflecting each purchase, and your bank or financial institution statement will
reflect the amount of the draft.
|_| YES, I wish to participate in the Systematic Investment Plan and
authorize WWW Trust to withdraw the amount indicated below ($50 minimum
per draft) from my checking or savings account at the bank or financial
institution shown below on or about the 20th day of each month and
invest this amount in shares of WWW Trust.
PLEASE WITHDRAW $_________ ($50 MINIMUM) FROM MY __ CHECKING ACCOUNT __
SAVINGS ACCOUNT AND INVEST SAID AMOUNT AS FOLLOWS:
|_| WWW INTERNET FUND. In the amount of $_______________ ($25 minimum)
|_| WWW GLOBAL FUND. In the amount of $_______________ ($25 minimum)
I understand that my ACH debit will be dated on or about the 20th day of each
month. I agree that if such debit is not honored upon presentation, the Transfer
Agent may discontinue this service and any share purchase made upon deposit of
such debit may be cancelled. I further agree that if the net asset value of the
shares purchased with such debit is less when said purchase is cancelled than
when the purchase was made, the Transfer Agent shall be authorized to liquidate
other shares or fractions thereof held in my account to make up any deficiency.
If for any reason the debit is not honored upon presentation, a $20 dishonored
debit charge will be made against my account. This Systematic Investment Plan
may be discontinued by WWW Trust upon 30-days written notice or at any time by
the investor by written notice to WWW Trust, in care of the Fund's Transfer
Agent, which is received not later than 5 business days prior to the 20th day of
the month.
NOTE: Your bank must be able to accept ACH transactions and/or be a member of an
ACH association in order for you to use this service. As soon as your bank or
financial institution accepts your authorization, debits will be generated and
your Systematic Investment Plan started. We can not guarantee acceptance by your
bank or financial institution. Please allow one month for processing before the
first debit occurs.
BANK OR FINANCIAL INSTITUTION INFORMATION (Systematic Investment Plan):
PLEASE ATTACH A VOIDED CHECK OR SAVINGS DEPOSIT SLIP.
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__||__|__|__|__|__|__|__|__|
Name of Bank or Financial Institution
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__||__|__|__|__|__|__|__|__|
Street Address
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__||__|__|__|__|__|__|__|__|
City State Zip Bank Routing ID Number
(9 digit number located
on lower left of check
or deposit slip)
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__||__|__|__|__|__|__|__|__|
Name of Checking or Savings Account Holder Checking or Savings
Account Number
|_| NO, I do not wish to participate in the Systematic Investment Plan at this
time.
<PAGE>
NOTE: Should you fail to complete this section, redemptions will be made upon
written instruction only.
|_| TELEPHONE REDEMPTION. Yes, I authorize the Transfer Agent to accept
telephone instructions to redeem shares in my WWW Trust account.
|_| WRITTEN REDEMPTION. Shares in my WWW Trust account are to be redeemed by
written instructions only. Signature guarantee is required for all written
redemption instructions.
--------------------------------------------------------------------------------
NOTE: You may authorize both, the check and wire redemption options. If so, be
sure to specify which redemption option you are exercising when placing
redemption instructions with the Transfer Agent.
|_| REDEMPTION PAYABLE BY CHECK. U.S. funds will be sent by check via U.S. Mail
to the address of record. No minimum is required.
|_| REDEMPTION PAYABLE BY WIRE (ONLY FOR REDEEMED AMOUNTS OF $500 OR MORE).
U.S. funds will be sent by wire to the bank or financial institution of
record. A $15.00 wire transfer fee will be imposed on your account for each
wire redemption transaction.
BANK OR FINANCIAL INSTITUTION OF RECORD:
PLEASE ATTACH A VOIDED CHECK OR SAVINGS DEPOSIT SLIP.
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Name of Bank or Financial Institution
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Street Address
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
City State Zip Bank Routing ID Number
(9 digit number located
on lower left of check
or deposit slip)
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Name of Checking or Savings Account Holder Checking or Savings Account Number
REDEMPTIONS MAY BE SUBJECT TO THE 1% CONTINGENT REDEMPTION FEE.
<PAGE>
6. DIVIDENDS AND CAPITAL GAINS PAYMENTS (CHECK ONLY ONE BOX)
NOTE: Should you fail to complete this section, all dividends and capital gains
will be reinvested. Dividends and capital gains payable in cash will be
mailed to the address of record.
|_| Reinvest all dividends and capital gains in the same WWW Trust Fund.
|_| Pay all dividends and capital gains to me by check.
|_| Pay all dividends by check and reinvest all capital gains in the same WWW
Trust Fund.
|_| Pay all capital gains by check and reinvest all dividends in the same WWW
Trust Fund.
7. YOUR INVESTMENT
|_| Enclosed is a check payable to the WWW Trust. In the amount of
$_____________________
|_| By Wire: Call 1-888-999-8331 to obtain account number and wiring
instructions. $__________
WWW Trust Account(s)_____________________________ Date of Wire ___________
Bank or Financial Institution where wire originated ______________________
YOU MUST INDICATE WHICH FUND(S) AND THE INVESTMENT AMOUNT(S).
|_| WWW INTERNET FUND. In the amount of $_______________
|_| WWW GLOBAL FUND. In the amount of $_______________
ANTICIPATED HOLDING PERIOD, ____ 1 YEAR, ____1-3 YEARS, ____ LONG-TERM.
HOW DID YOU LEARN ABOUT US?
|_| Internet
|_| TV
|_| Magazine
|_| Newspaper
|_| Radio
|_| Friend
|_| Other ___________________________________________________
<PAGE>
8. YOUR ACCOUNT CERTIFICATION AND AUTHORIZATION
(ALL REGISTERED OWNERS MUST SIGN)
I warrant that I have full authority and, if a natural person, I am of legal age
to purchase shares of WWW Trust pursuant to this Account Application, and have
received and read a current prospectus for WWW Trust. I agree to all terms and
conditions set forth in the prospectus and further agree that this purchase of
shares and all future purchases of shares will be subject to the terms and
conditions set forth in such prospectus as they are in effect from time to time.
I acknowledge that WWW Trust will not be liable for acting upon instructions it
believes to be genuine.
WITHHOLDING INFORMATION: I certify under penalties of perjury, that
(YOU MUST CHECK ONE BOX)
|_| I AM A U.S. CITIZEN or a resident alien, and that (1) the Taxpayer
Identification Number shown in Section 1 is correct or a number has been or
soon will be applied for (if a number is not provided to WWW Trust within
sixty days, I understand that all payments (including redemptions) are
subject to withholding under Federal tax law, until a number is provided)
(2) I am not subject to backup withholding because (a) I am exempt from
backup withholding or (b) I have not been notified by the Internal Revenue
Service that I am subject to backup withholding as a result of a failure to
report all interest and dividends, or (c) the IRS has notified me that I am
no longer subject to backup withholding.
|_| I AM NOT A CITIZEN OF THE U.S. OR RESIDENT ALIEN, and have completed and
attached U.S. Internal Revenue Service Form W-8 to this Account
Application.
MY SIGNATURE BELOW indicates that I have read and understand the foregoing
Application. In addition, I certify that the information, which is included
within the Application is accurate, including but not limited to the
representations contained in the Withholding Information Section of this
Application.
If a Corporation or Partnership: I hereby certify that each of the persons
listed below has been duly elected, and is now legally holding the office set
forth opposite his/her name and has the authority to make this authorization.
Please print title below if signing on behalf of a corporation or partnership to
establish this account.
--------------------------- ----------------------------- ------------
Signature Title Date
--------------------------- ----------------------------- ------------
Signature Title Date
PLEASE MAKE CHECKS PAYABLE TO: WWW Trust. We reserve the right to reject any
application or payment.
Please mail your check and application to:
REGULAR MAIL OVERNIGHT MAIL
------------ ---------------
WWW Trust WWW Trust
P.O. Box 55089 131 Prosperous Place
Lexington, KY 40555 Suite 17
Lexington, KY 40509-1804
You will receive written confirmation following the establishment of your
account.
THANK YOU, FOR INVESTING WITH WWW TRUST.
<PAGE>
WWW TRUST 24 HOUR AUTOMATED INVESTOR LINE 1-888-999-8331
The WWW Trust Investor Line allows you 24-hour toll-free access to your mutual
fund account information. A transfer agent is on duty to serve you, Monday
through Friday from 8:00 AM until 5:00 PM, EST. Your account information can
also be accessed on-line at the WWW Trust website, WWW.WEBFUND.COM. Please have
your account numbers and Social Security number handy.
Watching the Markets
Weighing the Opportunities
Working for You!
[logo]
<PAGE>
INVESTING IN THE FASTEST
GROWING SEGMENT OF
TECHNOLOGY
[WWW.INTERNETFUND.COM]
1-(888)263-2204
<PAGE>
File No. 333-03531
STATEMENT OF ADDITIONAL INFORMATION
WWW INTERNET FUND
WWW GLOBAL INTERNET FUND
November 1, 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
November 1, 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................................7
Management of the Funds.......................................................13
Ownership of Shares...........................................................15
Investment Advisory and Other Services........................................16
Distribution and Shareholder Servicing Plan...................................17
Calculation of Investment Performance.........................................17
Taxes .....................................................................18
Portfolio Transactions........................................................19
Valuation.....................................................................20
Code of Ethics................................................................20
Advertising the Fund's Performance............................................20
General Information...........................................................21
Financial Statements.........................................................F-1
<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.
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.
2
<PAGE>
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.
3
<PAGE>
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.
4
<PAGE>
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 and domestic 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 and domestic 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:
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.
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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, exept through the purchase of debt obligations
and the entry into repurchase agreements. However, WWW Global Internet Fund may
lend its portfolio securities in an amount not te exceed 33 1/3% of 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.
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 and domestic companies
comparable to the reports and ratings published about companies in the United
States. Foreign companies and domestic 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 and domestic 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
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.
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FOREIGN COMPANIES AND DOMESTIC COMPANIES
Foreign companies and domestic 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
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.
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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.
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.
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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
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.
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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.
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.
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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, except as permitted under the 1940 Act and the rules
thereunder, as amended from time to time.
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.
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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 and domestic
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 as
permitted under the 1940 Act and the rules thereunder, as amended from time to
time.
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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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>
------------------------------------ ----------------------------------------------------------------
<S> <C>
Lawrence S. York* (49) 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* (43) Trustee, Vice President and Treasurer of the Trust; Senior
312 Breezewood Court Strategy Consultant, i2 Technologies; Senior Product Manager,
Suwanee, Georgia 30024 NCR Corp. (manufacturer of retail point-of-sale systems)
(1997 to 2000); 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 (73) 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 (49) 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* (37) Secretary of the Trust; Secretary of WWW Advisors, Inc.
131 Prosperous Place, Suite 17 (the Manager) since 2000; Secretary of Interactive Planning
Lexington, Kentucky 40509 Corp. since 1999; Operations Administrator, Capital Advisors
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.
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<TABLE>
<CAPTION>
COMPENSATION TABLE
--------------------- ----------------- ---------------- -------------- -------------- --------------- ------------------ ----------
PENSION OR ESTIMATED
RETIREMENT PENSION OR ANNUAL ESTIMATED ANNUAL
AGGREGATE BENEFITS THE RETIREMENT BENEFITS FROM BENEFITS FROM
AGGREGATE COMPENSATION WWW INTERNET BENEFITS WWW WWW INTERNET WWW GLOBAL TOTAL
NAME OF PERSON, COMPENSATION FROM WWW FUND INTERNET FUND UPON INTERNET FUND COMPENSATION
POSITION FROM WWW GLOBAL EXPENSES FUND EXPENSES RETIREMENT UPON RETIREMENT FROM THE TRUST
INTERNET FUND INTERNET FUND
------------------ --------------- ---------------- -------------- -------------- --------------- ---------------------------------
<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 $5,000* $0 $0 $0 $0 $0 $5,000
Trustee
------------------ --------------- ---------------- -------------- -------------- --------------- ---------------------------------
Robert C. Thurmond $5,000* $0 $0 $0 $0 $0 $5,000
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 $2,000 per quarter and
reimbursement for travel and out-of-pocket expenses.
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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 October 17, 2000, are as follows:
PERCENTAGE
NAME AND ADDRESS HELD
---------------- ----
National Investor Services Corp.* 15.28%
55 Water Street 32nd Floor
New York, NY 10041
* Shares held in "street name" for benefit of others.
As of October 17, 2000, all officers and Trustees as a group
beneficially owned less than 1% of the outstanding shares of WWW Internet Fund.
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 $1,167,370 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 $145,000 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.
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<PAGE>
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
investors. Under the Plan, any fees not expended during the Funds' fiscal year
will be rolled over into the following fiscal year. 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, $174,601 was
expended by the Manager although WWW Internet Fund paid the Manager only
$393,780 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.
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<PAGE>
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
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
===========================================
FISCAL PERIODS ENDED JUNE 30, 2000
-------------------------------------------
-------------------------------------------
1 Year 63.56%
-------------------------------------------
Since Inception 46.87%
===========================================
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.
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<PAGE>
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.
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.
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<PAGE>
During the fiscal years ended June 30, 2000, 1999, 1998 and 1997, WWW
Internet Fund paid brokerage commissions in the aggregate amounts of $245,738,
$5,704, $2,103 and $4,354, respectively. Of these amounts, (1) $0, $22, $1,833
and $4,287, respectively, was paid to R.H. York & Company, Inc. (2) $9,035,
$4,511, $0 and $0, respectively, was paid to Interactive Planning Corp and (3)
$0, $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 3.68%, .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 0%, .64%,
77% and 22%, respectively.
20
<PAGE>
VALUATION
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION
WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "HOW TO BUY SHARES."
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.
CODE OF ETHICS
Both the Trust, the Manager and Capital Advisors Group, Inc. ("Capital
Advisors") its affiliate company, have adopted a Code of Ethics (the "Code")
that governs the conduct of employees of the Fund, the Manager and Capital
Advisors who may have access to information about the Fund's securities
transactions. The Code recognizes that such persons owe a fiduciary duty to the
Fund's shareholders and must place the interests of shareholders ahead of their
own interests. Under the Code, Board members, officers of the Trust, Capital
Advisors, the Manager and employees of the Manager are permitted to make
personal securities transactions, including transactions in securities that may
be purchased or held by the Funds. Violations of the Code are subject to review
by the Trustees and could result in severe penalties.
ADVERTISING THE FUNDS' 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.
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. In addition, the Manager may make comments from time to time
regarding the economic conditions of markets which may influence the Fund's
performance.
FOR THE YEAR ENDED JUNE 30, 1999, WWW INTERNET FUND HAD A TOTAL RETURN
OF 63.56%. FOR THE LIFE OF WWW INTERNET FUND (AUGUST 1, 1996 THROUGH JUNE 30,
1999), WWW INTERNET FUND HAS HAD AN AVERAGE ANNUAL TOTAL RETURN OF 46.87%.
GENERAL INFORMATION
Each Fund is an open-end diversified portfolio of the Trust.
21
<PAGE>
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.
22
<PAGE>
WWW INTERNET FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at value (cost $85,506,306) $ 102,837,073
Receivable for fund shares sold 39,468
Receivable for securities sold 5,242,637
Dividends and interest receivable 17,472
Prepaid expenses and other assets 16,374
-------------
Total assets 108,153,024
LIABILITIES
Payable to custodian bank 4,671,176
Payables for fund shares redeemed 74,420
Payables for securities purchased 964,650
Accrued fees payable to investment advisor 87,477
Other accrued expenses 129,687
-------------
Total liabilities 5,927,410
-------------
NET ASSETS $ 102,225,614
=============
NET ASSETS CONSIST OF
Capital shares $ 78,393,580
Accumulated net investment loss (1,897,184)
Accumulated net realized gains from investment transactions 8,398,451
Net unrealized appreciation on investments 17,330,767
-------------
NET ASSETS $ 102,225,614
=============
Net asset value, offering price and redemption price per share $ 36.63
=============
Fund shares outstanding 2,790,716
=============
</TABLE>
See accompanying Notes To Financial Statements
F-1
<PAGE>
WWW TRUST
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 2000
<TABLE>
<CAPTION>
COMMON STOCKS: 100.06%
SHARES VALUE
------ -----
APPLICATION/CRM & XML - SOFTWARE: 7.10%
<S> <C> <C>
Art Technology Group* 43,000 $ 4,340,312
Bluestone Software* 8,000 205,500
E. Piphany Inc.* 5,000 535,938
Microsoft Corp.* 16,000 1,280,000
Prime Response Inc.* 50,000 343,750
Quest Software Inc.* 10,000 553,750
-----------
7,259,250
BROADCAST & INFORMATION RESOURCES: 3.20%
ACTV Inc.* 30,000 448,125
Charter Communications Corp.* 52,000 854,750
Gemstar International Group* 32,000 1,966,500
-----------
3,269,375
COMMUNICATION & NETWORKING EQUIPMENT: 12.74%
3Com Corp.* 10,000 576,250
Accelerated Networks Inc.* 11,000 464,062
Advanced Fibre Communications* 15,000 679,687
Airnet Communications Corp.* 30,000 783,750
Efficient Networks Inc.* 10,000 735,625
Extreme Networks Inc.* 20,000 2,110,000
Nortel Networks Corp. 25,000 1,706,250
Redback Networks Inc.* 30,000 5,373,750
Virata Corp.* 10,000 596,250
-----------
13,025,624
ECOMMERCE/EBUSINESS SOFTWARE: 11.26%
Ariba, Inc.* 30,000 2,941,406
BEA Systems Inc.* 15,000 741,562
BroadVision Inc.* 50,000 2,540,625
Commerce One, Inc.* 25,000 1,134,766
Free Markets Inc.* 11,000 521,813
12 Technologies Inc.* 15,000 1,563,984
Owens Direct LLC(1) 750 75,000
Tibco Software Inc.* 6,500 697,023
Vignette Corp.* 25,000 1,300,391
-----------
11,516,570
</TABLE>
See accompanying Notes To Financial Statements
F-2
<PAGE>
WWW TRUST
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 2000
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
ELECTRONIC MEASURING SOFTWARE & EQUIPMENT: 3.53%
<S> <C> <C>
Agilent Technologies Inc.* 42,000 $ 3,097,500
Applied Digital Solutions Inc.* 150,060 506,452
-----------
3,603,952
FIBRE OPTIC COMPONENTS & SUB SYSTEMS: 10.08%
Bookham Technology* 20,000 1,185,000
Corning Inc. 20,000 5,397,500
Ditech Communication Corp.* 7,000 661,937
Finisar Corp.* 92,000 2,409,250
Standford Microdevices Inc.* 15,000 651,562
-----------
10,305,249
FINANCIAL SERVICES/BANKING & BROKERAGES:3.46%
Chase Manhattan Corp. 21,000 967,313
Checkfree Holdings Corp.* 3,000 154,688
Intuit Inc.* 45,000 1,861,875
Wit Soundview Group Inc.* 51,500 552,820
-----------
3,536,696
FIREWALL & INTERNET SECURITY: 10.76%
Check Point Software Technologies Ltd.* 15,000 3,176,250
Entrust Technologies Inc.* 60,000 4,965,000
ISS Group Inc.* 29,000 2,863,297
-----------
11,004,547
INTERNET CONTENT & HOSTING PROVIDERS: 9.03%
Akamai Technologies* 2,800 332,456
America Online Inc.* 20,000 1,055,000
Digital Island Inc.* 20,500 996,813
Exodus Communications Inc.* 40,000 1,842,500
F5 Networks* 11,000 600,188
Hongkong.Com Corp.* 250,000 33,034
iHigh.com Inc.*(1) 3,280 1,000,400
Infospace.com Inc.* 30,000 1,657,500
Pacific Century* 400,000 788,000
VerticalNet Inc.* 25,000 923,438
-----------
9,229,329
</TABLE>
See accompanying Notes To Financial Statements
F-3
<PAGE>
WWW TRUST
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 2000
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
NETWORK PRINTERS: 0.53%
<S> <C> <C>
Lexmark International Group* 8,000 $ 538,000
VENTURE CAPITAL:2.05%
Internet Capital Group Inc.* 14,000 518,219
London Pacific Group Ltd, ADR 92,000 1,196,000
Safeguard Scientific Inc.* 12,000 384,750
-----------
2,098,969
SEMICONDUCTORS: 12.68%
Applied Micro Circuits Corp.* 5,000 493,750
Celeritek Inc.* 14,000 571,375
Intersil Holding Corp.* 70,000 3,784,375
Motorola Inc. 33,000 959,063
Numerical Technologies Inc.* 11,000 534,875
PLX Technology Inc.* 51,000 2,116,500
PMC_Sierra Inc.* 11,000 1,954,562
Triquint Semiconductor Inc.* 8,000 765,500
Texas Instruments Inc. 26,000 1,785,875
-----------
12,965,875
STORAGE AREA NETWORKS: 3.64%
Brocade Communications System* 10,000 1,834,844
Crossroads Systems Inc.* 30,000 757,500
Veritas Software* 10,000 1,130,156
-----------
3,722,500
INTERNET TRAINING: 0.02%
Prosoft Training.com* 931 15,652
PIPELINES: 1.26%
Enron Corp. 20,000 1,290,000
</TABLE>
See accompanying Notes To Financial Statements
F-4
<PAGE>
WWW TRUST
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 2000
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
VOICE/TELCO & WIRELESS SERVICES: 8.72%
360Networks Inc.* 35,000 $ 533,750
Ericsson Telecommunication ADR 72,000 1,440,000
Internap Network Services* 25,000 1,037,891
Nokia Oyji-Spons ADR 56,000 2,796,500
Nextel Communication Inc.* 12,000 734,250
Research in Motion* 12,000 543,000
Sonera Corp. 39,000 1,794,000
USA Talks.com Inc.*(1) 320,000 30,000
-------------
8,909,391
-------------
TOTAL COMMON STOCK (COST: $ 84,817,240) 102,290,979
PREFERRED STOCKS: 0.51%
Ntown Inc.*(1) (Cost $525,000) 275,000 525,000
LONG OPTIONS: 0.02%
Microsoft & Inc. call January 2001 at 120 (Cost $164,066) 150 21,094
-------------
TOTAL INVESTMENTS IN SECURITIES 100.59% 102,837,073
(Cost $85,506,306)
Liabilities in Excess of Other Assets 0.59% (611,459)
-------------
NET ASSETS 100% $ 102,225,614
=============
<FN>
*Non-dividend paying securities.
(1)Restricted/illiquid securities.
</FN>
</TABLE>
See accompanying Notes To Financial Statements
F-5
<PAGE>
WWW TRUST
WWW INTERNET FUND
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Dividends $ 110,049
Interest 190,506
------------
Total Investment Income 300,555
EXPENSES
Investment advisory fees 1,184,737
Administration fees 145,000
Custodian fees 17,000
Professional fees 43,500
Distribution fees 393,780
Registration fees 51,000
Trustee fees 14,000
Service fees 89,932
Printing and other 43,350
------------
Total expenses 1,982,299
Less expense reimbursement (17,367)
------------
Net expenses 1,964,932
------------
NET INVESTMENT LOSS (1,664,377)
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gain from investment transactions 9,115,285
Net change in unrealized appreciation of investments 11,330,526
------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 20,445,811
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 18,781,434
============
</TABLE>
See accompanying Notes To Financial Statements
F-6
<PAGE>
WWW TRUST
WWW INTERNET FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
---- ----
OPERATIONS
<S> <C> <C>
Net investment loss $ (1,664,377) $ (232,807)
Net realized gain from investment transactions 9,115,285 29,950
Net change in unrealized appreciation of investments 11,330,526 5,941,215
------------- -------------
Net increase in net assets from operations 18,781,434 5,738,358
DISTRIBUTIONS TO SHAREHOLDERS
from net capital gains on investments (745,301) (112,653)
CAPITAL SHARE TRANSACTIONS
Net increase from capital share transactions 50,871,194 25,064,257
------------- -------------
NET INCREASE IN NET ASSETS 68,907,327 30,689,962
NET ASSETS
Beginning of year 33,318,287 2,628,325
------------- -------------
End of year $ 102,225,614 $ 33,318,287
============= =============
UNDISTRIBUTED NET INVESTMENT LOSS
AT END OF YEAR $ (1,897,184) $ (232,807)
============= =============
</TABLE>
See accompanying Notes To Financial Statements
F-7
<PAGE>
WWW TRUST
WWW INTERNET FUND
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout the years ended June 30, 2000, 1999 and
1998 and for the period from inception (August 1, 1996) through June 30, 1997)
<TABLE>
<CAPTION>
2000 1999 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.64 $ 10.95 $ 10.99 $ 10.00
Income from investment operations
Net investment loss (0.52) (0.37) (0.21) (0.16)
Net realized and unrealized gain on investments 14.91 12.39 1.70 1.36
-------- ---------- --------- ---------
Total from investment operations 14.39 12.02 1.49 1.20
-------- ---------- --------- ---------
Less distributions from realized gains from
security transactions (0.40) (0.33) (1.53) (0.21)
-------- ---------- --------- ---------
Net asset value, end of period $ 36.63 $ 22.64 $ 10.95 $ 10.99
======== ========== ========= =========
Total return** 63.56% 112.01% 15.96% 13.08%
======== ========== ========= =========
Ratios/supplemental data
Net assets end of period (in thousands) $102,226 $ 33,318 $ 2,628 $ 1,472
Ratio of expenses to average net assets before
expense reimbursement 2.51% 3.65% 5.10% 7.23%*
Ratio of expenses to average net assets after
expense reimbursement 2.49% 2.50% 2.50% 2.50%*
Ratio of net investment (loss) to average net
Assets (2.13%) (3.07%) (4.47%) (1.62%)*
Ratio of net investment (loss) to average net
assets net of reimbursement (2.11%) (1.90%) (1.89%) (0.62%)*
Portfolio turnover rate 229.28% 48.03% 70.52% 109.52%
<FN>
* Annualized
**Based on net asset value per share
</FN>
</TABLE>
See accompanying Notes To Financial Statements
F-8
<PAGE>
WWW TRUST
WWW INTERNET FUND
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
The WWW Trust (comprising the WWW Internet Fund) (the "Fund") was organized
as an Ohio business trust, on April 23, 1996, and commenced operations on
August 1, 1996. The Trust is registered under the Investment Company Act of
1940 (1940 Act), as amended, as a diversified, open end management
investment company. The Trust is authorized to issue an indefinite number
of shares of beneficial interest, par value $.001 per share. The Trust was
formed to achieve the investment objective of long term growth through
capital appreciation by investing primarily in equity securities of
companies that are designing, developing or manufacturing hardware or
software products or services for the Internet and/or World Wide Web.
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
SECURITIES VALUATIONS - Portfolio securities, including covered call
options if written by the 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 Board of Trustees.
FEDERAL INCOME TAXES - The Fund intends to qualify each year as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended. By so qualifying, the Fund will not be subject to federal income
taxes to the extent that it distributes substantially all of its net
investment income and any realized capital gains.
DIVIDENDS AND DISTRIBUTIONS - The Fund intends to distribute substantially
all of its net investment income as dividends to its shareholders on an
annual basis. The Fund intends to distribute its net long term capital
gains and its net short term capital gains at least once a year.
SHARE VALUATION - The net asset value per share is calculated daily by
dividing the total value of the Fund's investments and other assets, less
liabilities, by the total number of shares outstanding. 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 the Fund's shares.
INVESTMENTS - The fund follows industry practice and records security
transactions on the trade date. The specific identification method is used
for determining gains or losses for financial statements and income tax
purposes. Dividend income is recorded on the ex-dividend date and interest
income is recorded on an accrual basis.
2. INVESTMENT ADVISORY AGREEMENT
The Board of Trustees provides broad supervision over the affairs of the
Fund. Pursuant to a Management Agreement between the Fund and WWW Advisors,
Inc. (the "Manager") and subject to the authority of the Board of Trustees,
the Manager manages the investments of the Fund and is responsible for the
overall management of the business affairs of the Fund.
F-9
<PAGE>
Under the terms of the Management Agreement, the Fund has agreed to pay the
manager a base monthly management fee at the annual rate of 1.00% of the
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 the Fund, after expenses, exceeded or
was exceeded by the percentage change of the S&P 500 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 the Fund's average
daily net assets.
All expenses incurred in the operation of the Fund will be borne by the
Fund, except to the extent it is specifically assumed by the manager. The
expenses to be borne by the 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 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 Fund's Distribution and Shareholder
Servicing Plan (the "Plan") and any extraordinary expenses.
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 the Fund for any fiscal year exceed 2.50% of
average annual net assets of the Fund, except that the amount of such fee
waiver shall not normally exceed the amount of fees received by the Manager
under the Management Agreement for such fiscal year. The fee waiver, if
any, will be on a monthly basis, subject to year-end adjustment. Interest
expenses, taxes, brokerage fees and commissions, and extraordinary expenses
are not included as expenses for these purposes. For the year ended June
30, 2000, the Manager has reimbursed all expenses in excess of 2.49%.
3. DISTRIBUTION AGREEMENT
Under a plan adopted by the Fund's Board of Trustees pursuant to Rule 12b-1
under the 1940 Act (the "Plan"), the Fund pays the Manager a shareholder
servicing and distribution fee at the annual rate of .50% of the average
daily net assets of the Fund. Such fee will be used in its entirety by the
Manager to make payments for administration, shareholder services and
distribution assistance, including, but not limiting to (1) 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, (2) compensation to
Service Organizations for providing administration, accounting and other
shareholder services with respect to Fund shareholders, and (3) 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 investors. The
fees paid to the Manager under the Plan are in addition to the fees payable
under the Management Agreement and are payable without regard to actual
expenses incurred. The 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 that may be received by them from the Manager under the Plan.
For the year ended June 30, 2000, the amount paid or accrued for such
expenses was $393,780.
4. CAPITAL SHARE TRANSACTIONS
As of June 30, 2000 there was an unlimited number of $.001 par value shares
of capital shares authorized for the Fund. Capital share transactions for
2000 and 1999 were as follows:
<TABLE>
<CAPTION>
2000 1999
------------------------------ ----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares sold 2,760,813 $ 104,000,465 1,920,436 $ 38,668,211
Shares issued by
reinvestment of dividends 21,577 709,683 7,579 98,532
Shares redeemed
(net of redemption fees) (1,463,204) (53,838,954) (696,500) (13,702,486)
---------- ------------- ---------- -----------
Net increase 1,319,186 $ 50,871,194 1,231,515 $25,064,257
========== ============= ========= ===========
</TABLE>
F-10
<PAGE>
5. INVESTMENTS
For the year ended June 30, 2000, purchases and sales of investment
securities, other than short-term investments, aggregated $224,061,871 and
$172,861,639 respectively. The gross unrealized appreciation for all
securities totaled $25,752,401 and the gross unrealized depreciation for
all securities totaled $8,421,634 for a net unrealized appreciation of
$17,330,767. The aggregate cost of securities for federal income tax
purposes at June 30, 2000 was $85,506,306.
6. RELATED PARTY TRANSACTIONS
Certain owners of WWW Advisors, Inc. are also Owners and/or Trustees of the
Fund. These individuals may receive benefits from any Management fee paid
to the Advisor.
7. DISTRIBUTIONS
For the year ended June 30, 2000, Distributions of $0.16 aggregating
$299,451 and $0.24 aggregating $445,850 were made from Short Term Capital
Gains and Long Term Capital Gains respectively.
8. RESTRICTED AND OTHER ILLIQUID SECURITIES
Investments in restricted securities and investments where market
quotations are not available, are valued at fair value as determined in
good faith by the Board of Trustees, or a committee composed of members of
the Board of Trustees of the Fund.
The Fund may acquire portfolio securities called restricted securities,
which can be sold only pursuant to an effective registration statement
under the Securities Act of 1933 or an exemption from such registration. In
addition, other securities held by the Fund may be illiquid which means
they cannot be sold or disposed of in the ordinary course of business at
approximately the quoted market value of such securities, or in the absence
of such quoted market value, the price at which the Fund has valued such
securities. The Fund will not invest in restricted and other illiquid
securities if, as a result of such investment, the value of the Fund's
illiquid assets would exceed 15% of the value of the Fund's net assets.
During 1999, the Board of Trustees further limited such investments to 5%
of the value of the Fund's net assets.
Restricted securities eligible for resale under Rule 144A under the
Securities Act of 1933 that have been determined to be liquid by the Fund's
Board of Trustees based upon trading markets for the securities and any
other restricted securities that become registered under the Securities Act
of 1933 or that may be otherwise freely sold without registration
thereunder are not subject to the foregoing limitation, unless they are
otherwise illiquid.
The Fund normally will be able to purchase restricted securities at a
substantial discount from the market value of similar unrestricted
securities, but there are certain risks which the Fund will necessarily
assume in acquiring restricted securities. The principal risk is that the
Fund may have difficulty in disposing of such securities without
registration under the Securities Act of 1933, and the Fund will have to
bear the risk of market conditions prior to such registration. In the
absence of an agreement obtained at the time of purchase of such
securities, there can be no assurance that the issuer will register the
restricted securities. Furthermore, if the Fund disposes of restricted
securities without registration, it may be necessary to sell such shares at
a discount similar to or greater than that at which the Fund purchased the
shares.
F-11
<PAGE>
INDEPENDENT AUDITORS REPORT
TO THE SHAREHOLDERS AND
BOARD OF TRUSTEES
WWW TRUST
We have audited the accompanying statement of assets and liabilities of the WWW
Trust, an Ohio business trust, (comprising the WWW Internet Fund) including the
schedule of investments in securities, as of June 30, 2000, the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the three years in the period then ended. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights for the period from inception (August 1, 1996) through June 30, 1997
were audited by other auditors whose report dated July 22, 1997, expressed an
unqualified opinion on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of June 30, 2000, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
WWW Trust as of June 30, 2000, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the three years in the
period then ended, in conformity with generally accepted accounting principles.
BERGE & COMPANY LTD
CINCINNATI, OHIO
AUGUST 7, 2000
F-12
<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) Amended Distribution and Shareholder Servicing Plan.
(15f) 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.
C-1
<PAGE>
Item 26. Business and Other Connections of Investment Adviser
Reference is made to the section in the Prospectus entitled "Management
Services".
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 28 day of
October, 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 October 28, 2000.
SIGNATURE TITLE
/S/ LAWRENCE S. YORK Chairman of the Board (Principal executive
--------------------------- officer, financial officer and accounting
Lawrence S. York 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
15f Code of Ethics
27 Financial Data Schedule meeting the requirements of Rule 483 under the
Securities Act of 1933
* Previously filed
C-4
<PAGE>
