UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 5 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 5 X
(Check appropriate box or boxes.)
The Staar Investment Trust
(Exact Name of Registrant as Specified in Charter)
604 McKnight Park Drive, Pittsburgh, PA 15237
(Address of Principal Executive Offices) Zip Code)
Registrant's Telephone Number(including Area Code)(412) 367-9076
J. Andre Weisbrod, 604 McKnight Park Drive, Pittsburgh, PA, 15237
(Name and Address of Agent for Services)
Copies to Alan Z. Lefkowitz, Esquire, Kabala & Geeseman, 200
First Avenue, Pittsburgh, PA 15222
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
on ______________ pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a)
on ________________ pursuant to paragraph (a) of Rule
485
As soon as possible after the effective date of the Registration
under the Securities Act of 1933
<PAGE>
THE STAAR INVESTMENT TRUST
PROSPECTUS
______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Contents
Information specific to each fund you should know before investing
<S> <C>
Intermediate Bond Fund (IBF) 1
Long Term Bond Fund (LTBF) 5
Larger Company Stock Fund (LCSF) 9
Smaller Company Stock Fund (SCSF) 13
International Fund (INTF) 17
AltCat Fund (ACF) 21
<CAPTION>
Information common to all of the funds
<S> <C>
Management 25
Buying Shares 25
Minimum Investment 26
Exchanging Shares 26
Selling Shares 26
Investor Services 27
Policies 27
Where To Learn More About the Funds Back Cover
</TABLE>
<PAGE>
Page 1
RISK/RETURN SUMMARY
Intermediate Bond Fund (IBF)
A High Grade General Bond Fund
GOAL: Income with a concern for safety for principal.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund invests, under normal conditions, in a mix of U.S. Government,
Government Agency and Corporate debt instruments. At least 65% of its assets
must be invested in debt instruments with a dollar-weighted average maturity of
between three (3) years and ten (10) years. At least 40% of its assets must be
invested in securities issued, guaranteed or otherwise backed by the U.S.
government or government agencies.
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market or
economy are experiencing excessive volatility or otherwise adverse
conditions exist. Under such circumstances, the Fund may be unable to
pursue its investment goal
to the extent it does not invest in bonds as described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. The value of bonds is
directly affected by changes in interest rates. When interest rates go
down, the value of bonds goes up, and when interest rates rise, the value
of bonds goes down. Share values may decrease if one or more holdings are
downgraded or default on interest payments. Income dividends can decrease
if interest rates go down. The death or disability of the Fund's manager,
Andre Weisbrod, could cause an adverse effect on the Fund's operations.
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a
calendar year basis. While the Fund has less than two full years of
operations, the Table information gives some indication of the risks of an
investment in the Fund by comparing the Fund's performance with a broad
measure of market performance. Past performance is not an indication of
future results.
7.41%
1998
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 3.80% (quarter ending 9/30/98)
Lowest: 1.45% (quarter ending 3/31/98)
Average Annual Total Returns
For the periods ended December 31, 1998
1 Year Life*
STAAR Intermediate Bond Fund (IBF) 7.4% 8.3%
Lehman Bros. Intermediate Govt/Corp Bond Index1 8.4% 9.4%
Morningstar Interm-Term Bd. Fds. Category Avg.2 7.3% 9.5%
*Since the Fund's public inception on 5/28/97. The Fund was in
existence from 4/4/96 to 5/28/97 as a private trust. There were no
operational changes as a result of public inception, and performance
data from private inception is available from Shareholder Services.
1 The Lehman Bros. Intermediate Government/Corporate Index is a broad bond
market index including both corporate investment grade and government (Treasury
and gov. agency)indexes including bonds with maturities up to 10 years. The
published returns are total returns including reinvestment of dividends. The
index is unmanaged and does not have expenses. For purposes of this
prospectus, this is the primary comparison index.
2 The Morningstar Intermediate-Term Bond Category is an average of the total
returns of all bond funds tracked and categorized as such by Morningstar.
<PAGE>
Page 2
FEES AND EXPENSES:
FEE TABLE
This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. They are based on the annual
period ending 12/31/98.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.49%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 0.58%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services.
These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under
Rule 12b-1 that permits it to pay marketing and other fees associated with
the sale and distribution of shares. These fees may not exceed .25%
annually of average net assets. The plan was presented to shareholders
via mail on August 26, 1998 and voted on and approved by them on
September 3, 1998. Sales of shares subject to
12b-1 fees in 1998 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required
by states for the privilege of selling shares in those states.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$58 $183 $320 $730
INVESTMENT STRATEGIES AND RELATED RISKS
The Intermediate Bond Fund's objective is to produce income with a
concern for safety for principal.
The Fund invests, under normal conditions, in a mix of U.S. Government,
Government Agency and Corporate debt instruments. These may include U.S.
Treasury Notes or Bonds and debt instruments
issued by agencies such as the Federal National Mortgage Association,
Federal Home Loan Bank, Federal Farm Credit Bank, Student Loan
Marketing Association and the Tennessee Valley Authority. Debt
instruments issued by companies (corporate bonds) may include Senior
and Junior bonds and debentures. Senior issues are secured
obligations, which are backed by a legal claim on specific property
of the issuer. Junior bonds and debentures are not secured by any
collateral.
The Fund's strategy includes a limitation to
investment grade debt instruments (bonds). At the time of purchase,
instruments will be rated AAA, AA, A or BBB by Standard & Poors
Corporation or Moody's Investor's Services. These top four categories
are considered to be "investment grade". If a holding's rating falls below
BBB, the manager will consider the size of the holding and the
circumstances causing the lower rating before selling. The manager
may hold a lower-rated security if there is reasonable cause to believe
that holding it will be advantageous to the shareholders.
At least 40% of its assets must be invested in securities issued by
the U.S. government or government agencies.
This emphasis on quality will tend to produce a lower dividend yield than
funds that invest more in lower-rated bonds. However, it will also provide
greater safety of principal.
Bonds will normally have a maturity of between two (2) and ten (10) years
when purchased. The average weighted maturity of the bonds held by the fund is
intended to be no less than three (3) and no more than seven (7) years.
The investment strategy includes intent to hold most bonds to maturity and
minimize trading unless market conditions or liquidity requirements make such
transactions advisable. This is to keep a stable portfolio base and lower
transaction costs.
In deciding to buy, hold or sell a particular bond, the manager considers
a number of factors. First, the manager considers the general trend of
interest rates to determine whether a longer or shorter maturity is more
<PAGE>
Page 3
desirable. Second, the manager compares differences in yield against quality
ratings to determine whether a particular issue is more or less attractive than
an alternative. Third, the manager will consider any call provisions.
Fourth, the manager may consider the bond's price in relation to its maturity
or call price. Fifth, the manager will consider any income tax effects of the
transaction. Sixth, the manager will consider any changes in ratings or the
financial condition of the issuers of bonds held in the portfolio.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money.
Interest Rate Changes -- The value of bonds is directly affected by changes in
interest rates. When interest rates go down, the value of bonds goes up, and
when interest rates rise, the value of bonds goes down. Generally, bonds with
shorter maturities are affected less by interest rate changes than those with
longer maturities.
Default Risk -- If the issuer of a bond finds itself in financial difficulties,
it could delay payment on the interest it owes to investors. If an issuer
entered bankruptcy, interest payments would likely stop all together and the
bond holder would have to wait until the bankruptcy proceedings were concluded
to find out how much (if any) of the amount invested would be returned to the
investor.
Credit Rating Changes -- Independent organizations rate the creditworthiness of
bond issuers. A high rating means the issuer is considered to be sound
financially and presents a low risk of default. If an issuer's rating is
lowered, this will tend to have a negative impact on a bond's price.
Income is affected when Interest Rates Change -- The dividend income per
share could decrease when interest rates fall.
Death or Disability of the Manager -- Death or disability could adversely
affect the day-to-day operations of the Fund.
Year 2000 Issues
The Fund could be adversely affected if the computers used by the
Trust or any of its third-party service providers do not properly
process date-related
information. The Trust and its managers recognize the importance of this
problem and they have diligently taken steps to address it. In-house systems
have been tested, contingency plans formulated and inquiries have been made to
all service providers. The manager has considered the effect of Y2K risks to
each of the securities underlying the portfolio.
The interdependencies on multiple computer systems are significant. While
we are confident that our internal systems will be compliant, and that most of
our service providers are expressing similar confidence, there can be no
assurance or guarantee that there will be no interruptions, delays or other
adverse effects on the Funds.
<PAGE>
Page 4
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period
of the Fund's operations). Certain information reflects financial results for
a single Fund share. The total returns in the table represent the rate that
an investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
Selected Per-Share Data
<CAPTION>
Year End December 31
1998 1997*
<S> <C> <C>
Net Asset Value Beg. of Period $10.22 $9.97
Net Investment Income 0.57 0.33
Net realized and unrealized
gains on securities 0.19 0.21
Total income from investment operations 0.76 0.54
Dividends from net Investment Income -0.51 -0.28
Distributions From Capital Gains -0.02 -0.01
Total Distributions -0.53 -0.29
Net Asset Value, end of year $10.45 $10.22
Total Return (%) 7.4% 5.4%*
Ratios/Supplemental Data
Net Assets at End of Year (in $1000's) $1154 $622
Ratio of Expenses
to Average Net Assets (%) ** 0.58% 0.58%
Ratio of Net Investment Income
to Average Net Assets (%) 5.48% 3.26%
Portfolio Turnover Rate 22.54% 6.78%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
Advisory Fees of $.01 per share in 1998.
** Such ratios are after effect of advisory fees waived of .13% in 1998 and
.13% in 1997.
<PAGE>
Page 5
RISK/RETURN SUMMARY
Long Term Bond Fund (LTBF)
A High Grade General Bond Fund
GOAL: Income with a concern for safety of principal.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund invests, under normal conditions, in a mix of U.S. Government,
Government Agency and Corporate debt instruments. At least 65% of its assets
must be invested in debt instruments with a dollar-weighted average maturity of
over ten (10) years. At least 40% of its assets must be invested in securities
issued, guaranteed or otherwise backed by the U.S. government or government
agencies.
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market or
economy are experiencing excessive volatility or otherwise adverse conditions
exist. Under such circumstances, the Fund may be unable to pursue its
investment goal to the extent it does not invest in bonds as described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. The value of
bonds is directly affected by changes in interest rates. When interest rates
go down, the value of bonds goes up, and when interest rates rise, the value
of bonds goes down. Share values may decrease if one or more holdings are
downgraded or default on interest payments. Longer-term bonds generally have
higher volatility than shorter-term bonds. Income dividends can decrease if
interest rates go down. The death or disability of the Fund's manager,
Andre Weisbrod, could cause an adverse effect on the Fund's operations.
<PAGE>
Page 7
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a
calendar year basis. While the Fund has less than two full years of
operations, the Table information gives some indication of the risks of an
investment in the Fund by comparing the Fund's performance with a broad
measure of market performance. Past performance is not an indication of
future results.
8.63%
1998
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 4.86% (quarter ending 09/30/98)
Lowest: 0.76% (quarter ending 3/31/98)
Average Annual Total Returns
For the periods ended December 31, 1998
1 Year Life*
STAAR Long Term Bond Fund (LTBF) 8.6% 12.8%
Lehman Bros. Long Term Gov/Corp Index1 11.8% 16.8%
Morningstar Long Term Bd. Fds. Category Avg.2 6.4% 10.1%
*Since the Fund's public inception on 5/28/97. The Fund was in
existence from 4/4/96 to 5/28/97 as a private trust. There were no
operational changes as a result of public inception, and performance
data from private inception is available from Shareholder Services.
1 The Lehman Bros. Long Term Government/Corporate Bond Index is a broad
bond-based market index, which includes both the LB Government and
the LB Corporate Bond Indexes. Both include bonds
having maturities of 10 years or longer. Published returns are total
returns including reinvested dividends. The indexes are unmanaged and
do not have expenses. For purposes of this prospectus, this is the
primary comparison index.
2 The Morningstar Long-Term Bond Category is an average of the total returns
of all bond funds tracked and categorized as such by Morningstar.
<PAGE>
Page 6
FEES AND EXPENSES:
This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. They are based on the annual period
ending 12/31/98.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.55%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 0.64%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services.
These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under
Rule 12b-1 that permits it to
pay marketing and other fees associated with the sale and distribution of
shares. These fees may not exceed .25% annually of average net assets. The
plan was presented to shareholders via mail on August 26, 1998 and
voted on and approved by them on September 3, 1998. Sales of shares subject to
12b-1 fees in 1998 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required
by states for the privilege of selling shares in those states.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$69 $218 $381 $868
INVESTMENT STRATEGIES AND RELATED RISKS
The Long Term Bond Fund's main objective is to produce income with a
concern for safety for principal.
The Fund invests, under normal conditions, in a mix of U.S.
Government, Government Agency and Corporate debt instruments. These
may include U.S. Treasury Notes or Bonds and debt instruments
issued by agencies such as the Federal National Mortgage Association,
Federal Home Loan Bank, Federal Farm Credit Bank, Student Loan
Marketing Association and the Tennessee Valley Authority. Debt
instruments issued by companies (corporate bonds) may include Senior
and Junior bonds and debentures. Senior issues are secured
obligations, which are backed by a legal claim on specific property
of the issuer. Junior bonds and debentures are not secured by any
collateral.
The Fund's strategy includes a limitation to higher quality debt
instruments (bonds). At the time of purchase, instruments will be rated
AAA, AA, A or BBB by Standard & Poors Corporation or Moody's Investor's
Services. These top four categories are considered to be "investment grade".
If a holding's rating falls below BBB, the manager will consider the size of
the holding and the circumstances causing the lower rating before selling.
The manager may hold a lower-rated security if there is reasonable cause
to believe that holding it will be advantageous to the shareholders.
At least 40% of its assets must
be invested in securities issued by the U.S. government or government agencies.
This emphasis on quality will tend to produce a lower dividend yield than funds
that invest more in lower-rated bonds. However, it will also provide greater
safety of principal.
Bonds will normally have a maturity of over ten (10) years when
purchased. The average weighted maturity of the bonds held by the fund is
intended to be no less than ten (10) and no more than twenty (20) years.
The investment strategy includes intent to hold most bonds to maturity and
minimize trading unless average maturity considerations, changes in credit
quality, market conditions or liq1uidity requirements make such transactions
advisable. This is to keep a stable portfolio base and lower transaction costs.
The Fund may increase or decrease its cash position depending on risk
management and liquidity considerations. While the Fund is not prohibited
from using derivatives, its strategy assumes little or no use of derivatives.
In deciding to buy, hold or sell a particular bond, the manager considers
a number of factors. First, the manager considers the general trend of
interest rates to determine whether a longer or shorter maturity is more
desirable. Second, the manager compares differences in yield against quality
ratings to determine whether a particular issue is more or less attractive than
an alternative. Third, the manager will consider any call provisions. Fourth,
the manager may consider the bond's price in relation to its maturity or call
price. Fifth, the manager will consider any income tax effects of the
<PAGE>
Page 7
transaction. Sixth, the manager will consider any changes in ratings or the
financial condition of the issuers of bonds held in the portfolio.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money. You should consider
the following risks before investing:
Interest Rate Changes -- The value of bonds is directly affected by changes in
interest rates. When interest rates go down, the value of bonds goes up, and
when interest rates rise, the value of bonds goes down. Generally, bonds with
shorter maturities are affected less by interest rate changes than those with
longer maturities; therefore, the longer the maturity, the greater the change
in value when interest rates go up or down.
Default Risk -- If the issuer of a bond finds itself in financial difficulties,
it could delay payment on the interest it owes to investors. If an issuer
entered bankruptcy, interest payments would likely stop all together and the
bond holder would have to wait until the bankruptcy proceedings were concluded
to find out how much (if any) of the amount invested would be returned to the
investor.
Credit Rating Changes -- Independent organizations rate the creditworthiness of
bond issuers. A high rating means the issuer is considered to be sound
financially and presents a low risk of default. If an issuer's rating is
lowered, this will tend to have a negative impact on a bond's price.
Income is affected when Interest Rates Change -- The dividend income per
share could decrease when interest rates fall.
Death or Disability of the Manager -- Death or disability could adversely
affect the day-to-day operations of the Fund.
Year 2000 Issues
The Fund could be adversely affected if the computers used by the
Trust or any of its third-party service providers do not properly
process date-related
information. The Trust and its managers recognize the importance of this
problem and they have diligently taken steps to address it. In-house systems
have been tested, contingency plans formulated and inquiries have been made to
all service providers. The manager has considered the effect of Y2K risks to
each of the securities underlying the portfolio.
The interdependencies on multiple computer systems are significant. While
we are confident that our internal systems will be compliant, and that most of
our service providers are expressing similar confidence, there can be no
assurance or guarantee that there will be no interruptions, delays or other
adverse effects on the Funds.
<PAGE>
Page 8
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period
of the Fund's operations). Certain information reflects financial results for
a single Fund share. The total returns in the table represent the rate that
an investor would have earned (or lost) on an investment in the Fund
(assuming reinvestment of all dividends and distributions). This information
has been audited by Carson & Co., whose report, along with the Fund's
financial statements, are included in the Fund's Annual Report, which is
available upon request.
<TABLE>
Selected Per-Share Data
<CAPTION>
Year End December 31
1998 1997*
<S> <C> <C>
Net Asset Value beg. of period $10.81 $10.07
Net investment income 0.63 0.37
Net realized and unrealized
gains on securities 0.30 0.78
Total income from investment operations 0.93 1.15
Dividends from net investment income -0.58 -0.41
Distributions From capital gains 0.00 0.00
Total Distributions -0.58 -0.41
Net Asset Value, end of period $11.16 $10.81
Total Return (%) 8.6% 11.4%*
Ratios/Supplemental Data
Net Assets at end of period (in $1000's) $598 $339
Ratio of Expenses
to Average Net Assets (%) ** 0.69% 0.70%
Ratio of Net Investment Income
to Average Net Assets (%) 5.70% 3.54%
Portfolio Turnover Rate 6.40% 0.00%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
Advisory Fees of $.01 per share were waived in 1998.
** Such ratios are after effect of advisory fees waived of .12% in 1998 and
.12% in 1997.
<PAGE>
Page 9
RISK/RETURN SUMMARY
Larger Company Stock Fund (LCSF)
A fund of funds in which the underlying investments are primarily common
stocks of large companies and larger mid-cap companies.
GOAL: Growth with Some Income
PRINCIPAL INVESTMENT STRATEGIES:
The Fund invests primarily in other mutual funds that invest in stocks
of large and larger mid-sized companies. Open-end and closed-end mutual
funds as well as unit trusts may be owned. Individual stocks
may also be owned by the Fund. Under normal conditions, at least 65% of
the Fund's assets (including assets owned by underlying mutual funds)
must be invested in common stocks of companies having market
capitalization of over $3 billion.
In terms of market composition, the majority of holdings are intended to
represent primarily United States based large companies with market
capitalization (size) of $5 billion or more. Some holdings will include larger
mid-cap stocks having market capitalization between $3 billion and $5 billion.
While some mutual funds owned by the LCSF may own some smaller companies, they
are intended to be an incidental portion of the Fund's holdings, i.e. less than
5%.
A broad mix of industries is also a strategic goal. Depending
on market conditions and trends, the Fund's manager may weight the overall
portfolio mix to higher or lower market capitalization and sectors.
In terms of investment styles, the fund will generally employ a mix of
growth and value management styles, sometimes called a "blend" style.
Depending on economic and market conditions and trends, the Fund's manager
may weight the styles toward either growth or value.
Most mutual funds and stocks owned are expected to produce some dividend
income.
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market
or economy are experiencing excessive volatility or otherwise adverse
conditions exist. Under such circumstances, the Fund may be unable to pursue
its investment goal to the extent it does not invest in stocks as
described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. Share values of the
Fund will likely decrease if the general stock market declines. Market values
can fall for numerous reasons, including changing economic and political
conditions or simply because more investors have decided to sell than buy
stocks. Individual stocks or sectors can go down in value even when the
general market is up. The death or disability of the Fund's manager could
cause an adverse effect on the Fund's operations.
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a
calendar year basis. While the Fund has less than two full years of
operations, the Table information gives some indication of the risks of an
investment in the Fund by comparing the Fund's performance with a broad
measure of market performance. Past performance is not an indication of
future results.
12.9%
1998
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 17.8% (quarter ending 12/31/98)
Lowest: -12.57% (quarter ending 9/30/98)
Average Annual Total Returns
For the periods ended December 31, 1998
1 Year Life*
STAAR Larger Company Stock Fund (LCSF) 12.9% 16.7%
Dow Jones Industrials Average 1 18.1% 16.6%
S&P 500 Index 2 28.6% 28.0%
Morningstar Growth & Inc Fds Category Avg 3 17.9% 20.5%
<PAGE>
Page 10
*Since the Fund's public inception on 5/28/97. The Fund was in
existence from 4/4/96 to 5/28/97 as a private trust. There were no
operational changes as a result of public inception, and performance
data from private inception is available from Shareholder Services.
1 The Dow Jones Industrial Average is an average of the prices of 30 stocks
representing different sectors, which is computed by summing the prices and
then dividing the total by an adjusted value to account for the effects of
stock splits. The index is unmanaged and has no expenses.
2 The S&P500 is a broad market index of the 500 largest companies in
various market sectors. It is a market-capitalization weighted
average which emphasizes the largest companies.
Published returns are total returns including
reinvested dividends. The index is unmanaged and has no expenses. For
purposes of this prospectus, this is the primary comparison index.
3 The Morningstar Growth & Income Funds Category is an average of the total
returns of all funds tracked and categorized as such by Morningstar.
FEES AND EXPENSES: This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. They are based on the annual period
ending 12/31/98.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.90%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 4 0.99%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services.
These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under
Rule 12b-1 that permits it to
pay marketing and other fees associated with the sale and distribution of
shares. These fees may not exceed .25% annually of average net assets. The
plan was presented to shareholders via mail on August 26, 1998 and
voted on and approved by them on September 3, 1998. Sales of shares subject to
12b-1 fees in 1998 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required
by states for the privilege of selling shares in those states.
4 This is a "fund of funds". The management fees and expenses of other
mutual funds owned by the LCSF are not shown in the above table. The expense
ratios of the other mutual funds owned by the LCSF in 1998 ranged from .62% to
1.5% with a median at .88%. These include 12b-1 fees paid by some of the
funds owned by the LCSF.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$99 $312 $547 $1245
INVESTMENT STRATEGIES AND RELATED RISKS
The Larger Company Stock Fund's objective is to produce long term growth
of capital with some income by investing primarily in common stocks of U.S.
based large and mid-sized companies, including other mutual funds that invest
primarily in such stocks. Larger companies are defined as those having a
market capitalization (size) of $3 billion or more.
The majority of holdings are intended to represent primarily United
States based large companies with market
capitalization (size) of $5 billion or more. Some holdings will include larger
mid-cap stocks having market capitalization between $3 billion and $5 billion.
While some mutual funds owned by the LCSF may own some smaller companies, they
are intended to be an incidental portion of the Fund's holdings.
The Fund invests, under normal conditions, a majority of its assets in a
mix of other mutual funds. The mutual funds are chosen to provide a mix of
investment styles and portfolios that represent the broad stock market as
opposed to any one index. Open-end, closed-end as well as unit trusts may be
owned. Individual stocks may also be owned by the Fund.
In terms of investment styles, the fund will generally employ a mix of
growth and value managers, sometimes called a "blend" style. Depending on
market conditions and trends, the Fund's manager may weight the styles toward
either growth or value.
A broad mix of industries is also a strategic goal. Depending on market
conditions and trends, the Fund's manager may weight the overall portfolio mix
to higher or lower market capitalization and sectors.
<PAGE>
Page 11
The goal is to provide a wide diversification of holdings and management
styles and expertise. Such diversification is designed to minimize certain
kinds of risks such as those associated with too much exposure to one manager,
management style or industry sector or the risks inherent in having too few
holdings.
In deciding to buy, hold or sell a particular mutual fund, the manager
considers a number of factors. The manager examines general economic and
market trends and their possible effect on the fund. The mutual fund's
objectives must correlate with the general objective of the Fund and it's
holdings should not significantly overlap the holdings of other mutual funds
owned by the Fund. The fund and manager's history is considered, as are
expense ratios, current holdings and management style. If a mutual fund
changes its make-up so that it no longer correlates with the Fund's objective,
it may be sold. Similarly, if a mutual fund fails to perform up to
expectations, it may be sold. The manager
will first consider whether portfolio changes or lower performance is likely
to be temporary. If so, the position may be retained. Because of tax and
other considerations, the changing of mutual fund positions may be done in
stages over a period of weeks or months.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern. The Fund's manager or the managers of
other mutual funds owned by the Fund may employ derivatives, though such
instruments will normally represent a very small portion of the Fund's
portfolio, i.e. less than 5%. Derivatives are securities that derive their
value based on the value of another asset. Examples include, but are not
limited to options and futures contracts.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money. You should
consider the following risks before investing:
Market Risk -- While stocks have historically performed better than other asset
classes over long time periods, they also have experienced more extreme ups and
downs (volatility). Regardless of the condition of any single company, the
value of its stock may go down when the general market goes down.
Investment Risk -- Regardless of the direction of the overall market, an
individual company can experience financial difficulties or even bankruptcy.
Problems with individual companies can adversely affect the Fund's value even
in an 'up" market.
Changing economic and political conditions -- The stock market and/or
individual stocks can be adversely affected by changes in the economy or
politics. Recessions, downturns in a particular industry or changes in tax or
regulatory laws can cause share values of the Fund to decrease.
Death or Disability of the Manager -- Death or disability could adversely
affect the day-to-day operations of the Fund.
Year 2000 Issues
The Fund could be adversely affected if the computers used by the
Trust or any of its third-party service providers do not properly
process date-related
information. The Trust and its managers recognize the importance of this
problem and they have diligently taken steps to address it. In-house systems
have been tested, contingency plans formulated and inquiries have been made to
all service providers. The manager has considered the effect of Y2K risks to
each of the securities underlying the portfolio. In the case of other mutual
funds owned by the Fund, inquiry has been made as to their Y2K preparation.
The interdependencies on multiple computer systems are significant. While
we are confident that our internal systems will be compliant, and that most of
our service providers are expressing similar confidence, there can be no
assurance or guarantee that there will be no interruptions, delays or other
adverse effects on the Funds.
<PAGE>
Page 12
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period
of the Fund's operations). Certain information reflects financial results for
a single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
Selected Per-Share Data
<CAPTION>
Year End December 31
1998 1997*
<S> <C> <C>
Net asset value beg. of period $12.16 $11.66
Net investment income 0.03 0.15
Net realized and unrealized
gains on securities 1.56 1.39
Total income from investment operations 1.59 1.54
Dividends from net investment income -0.04 -0.13
Distributions From capital gains -0.72 -0.91
Total Distributions -0.76 -1.04
Net asset value, end of period $12.99 $12.16
Total Return (%) 12.9% 13.2%*
Ratios/Supplemental Data
Net assets at end of period (in $1000's) $1852 $1276
Ratio of expenses
to average net assets (%) ** 1.00% 0.25%
Ratio of net investment income
to average net assets (%) 0.23% 1.81%
Portfolio turnover rate 30.21% 7.84%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
Advisory Fees of $.05 per share were waived in 1997.
** Such ratios are after effect of advisory fees waived of 0% in 1998 and .25%
in 1997.
<PAGE>
Page 13
RISK/RETURN SUMMARY
Smaller Company Stock Fund (SCSF)
A fund of funds in which the underlying investments are primarily common
stocks of small, micro-cap and smaller mid-cap companies.
GOAL: Long Term Growth
PRINCIPAL INVESTMENT STRATEGIES:
The Fund invests primarily in other mutual funds in that invest in stocks
of small-cap, micro-cap and smaller mid-sized companies. Open-end and
closed-end mutual funds as well as unit trusts may be owned. Individual stocks
may also be owned by the Fund. Under normal conditions, at least 65% of
the Fund's assets (including assets owned by underlying mutual funds)
must be invested in common stocks of companies having market
capitalization of under $3 billion.
.
In terms of market composition, the majority of holdings are intended to
represent primarily United States based small companies with market
capitalization (size) of under $1 billion. Some holdings will include smaller
mid-cap stocks having market capitalization between $1 billion and $3 billion.
The Fund may also hold Micro-cap stocks having market capitalization of under
$100 million. While some mutual funds owned by the SCSF may own some larger
companies, they are intended to be an incidental portion of the Fund's
holdings, i.e. less than 5%.
A broad mix of industries is also a strategic goal. Depending
on market conditions and trends, the Fund's manager may weight the overall
portfolio mix to higher or lower market capitalization and sectors. In terms of
investment styles, the fund will generally employ a mix of
growth and value management styles, sometimes called a "blend" style.
Depending on economic and market conditions and trends, the Fund's manager
may weight the styles toward either growth or value.
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market or
economy are experiencing excessive volatility or otherwise adverse conditions
exist. Under such circumstances, the Fund may be unable to pursue its
investment goal to the extent it does not invest in stocks as described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. Share values of the
Fund will likely decrease if the general stock market declines. Market values
can fall for numerous reasons, including changing economic and political
conditions or simply because more investors have decided to sell than buy
stocks. Individual stocks or sectors can go down in value even when the general
market is up. The death or disability of the Fund's manager could cause an
adverse effect on the Fund's operations.
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a
calendar year basis. While the Fund has less than two full years of
operations, the Table information gives some indication of the risks of an
investment in the Fund by comparing the Fund's performance with a broad
measure of market performance. Past performance is not an indication of
future results.
2.89%
1998
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 19.07% (quarter ending 12/31/98)
Lowest: -19.34% (quarter ending 9/30/98)
Average Annual Total Returns
For the periods ended December 31, 1998
1 Year Life*
STAAR Smaller Company Stock Fund (SCSF) 2.7% 10.4%
Russell 2000 Index1 -2.6% 8.6%
Morningstar Small Co. Fds. Objective Avg. 2 -0.1% 10.6%
<PAGE>
Page 14
*Since the Fund's public inception on 5/28/97. The Fund was in
existence from 4/4/96 to 5/28/97 as a private trust. There were no
operational changes as a result of public inception, and performance
data from private inception is available from Shareholder Services.
1 The Russell 200 Index is a broad index which consists of the 2000 smallest
companies in the Russell 3000 Index, representing approximately 7% of the
Russell 3000 total market capitalization. Published returns are total returns
including reinvested dividends. The index is unmanaged and has no expenses.
For purposes of this prospectus, this is the primary comparison index.
2 The Morningstar Small Company Funds Objective Average is an average of the
total returns of all funds tracked by Morningstar having that objective.
FEES AND EXPENSES: This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. They are based on the annual period
ending 12/31/98.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.90%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 0.99%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services.
These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under
Rule 12b-1 that permits it to
pay marketing and other fees associated with the sale and distribution of
shares. These fees may not exceed .25% annually of average net assets. The
plan was presented to shareholders via mail on August 26, 1998 and
voted on and approved by them on September 3, 1998. Sales of shares subject to
12b-1 fees in 1998 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required
by states for the privilege of selling shares in those states.
4 This is a "fund of funds". The management fees and expenses of other
mutual funds owned by the SCSF are not shown in the above table. The expense
ratios of the other mutual funds owned by the SCSF in 1998 ranged from .89% to
1.70% with a median at 1.04%. These include 12b-1 fees paid by some of the
funds owned by the SCSF.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$99 $312 $547 $1245
INVESTMENT STRATEGIES AND RELATED RISKS
The Smaller Company Stock Fund's objective is to produce long term growth
of capital by investing primarily in common stocks of U.S. based small and mid-
sized companies, including other mutual funds that invest primarily in such
stocks. Smaller companies are defined as those having a market capitalization
(size) of less than $3 billion. "MicroCap" stocks with market capitalization
of under $100 million may also be owned.
The Fund invests, under normal conditions, a majority of its assets in a
mix of other mutual funds. The mutual funds are chosen to provide a broadly
diversified mix of investment styles and portfolios. Open-end, closed-end as
well as unit trusts may be owned. Individual stocks may also be owned by the
Fund. Under normal conditions the Fund will invest at least 65% of its assets
in these types of investments.
In terms of investment styles, the fund will generally employ a mix of
growth and value managent, sometimes called a "blend" style. Depending on
market conditions and trends, the Fund's manager may weight the styles toward
either growth or value.
A broad mix of industries is also a strategic goal. Depending on market
conditions and trends, the Fund's manager may weight the overall portfolio mix
to higher or lower market capitalization and sectors.
The goal is to provide a wide diversification of holdings and management
styles and expertise. Such diversification is designed to minimize certain
kinds of risks such as those associated with too much exposure to one manager,
management style or industry sector or the risks inherent in having too few
holdings.
In deciding to buy, hold or sell a particular mutual fund, the manager
considers a number of factors. The manager examines general economic and
market trends and their possible effect on the fund. The mutual fund's
<PAGE>
Page 15
objectives must correlate with the general objective of the Fund and it's
holdings should not significantly overlap the holdings of other mutual funds
owned by the Fund. The fund and manager's history is considered, as are
expense ratios, current
holdings and management style. If a mutual fund changes its make-up so that it
no longer correlates with the Fund's objective, it may be sold. Similarly,
if a mutual fund fails to perform up to expectations, it may be sold. The
manager will first consider whether portfolio changes or lower performance
is likely to be temporary. If so, the position may be retained. Because
of tax and other considerations, the changing of mutual fund positions may be
done in stages over a period of weeks or months.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern. The Fund's manager or the managers of
other mutual funds owned by the Fund may employ derivatives, though such
instruments will normally represent a very small portion of the Fund's
portfolio, i.e. less than 5%. Derivatives are securities that derive their
value based on the value of another asset. Examples include, but are not
limited to options and futures contracts.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money. You should
consider the following risks before investing:
Market Risk -- While stocks have historically performed better than other asset
classes over long time periods, they also have experienced more extreme ups and
downs (volatility). Regardless of the condition of any single company, the
value of its stock may go down when the general market goes down.
Investment Risk -- Regardless of the direction of the overall market, an
individual company can experience financial difficulties or even bankruptcy.
Problems with individual companies can adversely affect the Fund's value even
in an "up" market.
Smaller Companies -- Historically, smaller companies have experienced more
extreme ups and downs (volatility) than larger company stocks. Smaller
companies may have less working capital, less liquidity and greater sensitivity
to competition and overall economic and market conditions. While smaller
companies may offer greater opportunities for growth, they also should be
considered more risky.
Changing economic and political conditions -- The stock market and/or
individual stocks can be adversely affected by changes in the economy or
politics. Recessions, downturns in a particular industry or changes in tax or
regulatory laws can cause share values of the Fund to decrease.
Death or Disability of the Manager -- Death or disability could adversely
affect the day-to-day operations of the Fund.
Year 2000 Issues
The Fund could be adversely affected if the computers used by the
Trust or any of its third-party service providers do not properly
process date-related
information. The Trust and its managers recognize the importance of this
problem and they have diligently taken steps to address it. In-house systems
have been tested, contingency plans formulated and inquiries have been made to
all service providers. The manager has considered the effect of Y2K risks to
each of the securities underlying the portfolio. In the case of other mutual
funds owned by the Fund, inquiry has been made as to their Y2K preparation.
The interdependencies on multiple computer systems are significant. While
we are confident that our internal systems will be compliant, and that most of
our service providers are expressing similar confidence, there can be no
assurance or guarantee that there will be no interruptions, delays or other
adverse effects on the Funds.
<PAGE>
Page 16
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period
of the Fund's operations). Certain information reflects financial results
for a single Fund share. The total returns in the table represent the rate
that an investor would have earned (or lost) on an investment in the Fund
(assuming reinvestment of all dividends and distributions). This information
has been audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
Selected Per-Share Data
<CAPTION>
Year End December 31
1998 1997*
<S> <C> <C>
Net asset value beg. of period $11.45 $10.32
Net investment income -0.05 -0.02
Net realized and unrealized
gains on securities 0.38 1.47
Total income from investment operations 0.33 1.44
Dividends from net investment income 0.00 0.00
Distributions from capital gains -0.33 -0.32
Total Distributions -0.33 -0.32
Net asset value, end of period $11.45 $11.45
Total return (%) 2.9% 13.92%*
Ratios/Supplemental Data
Net assets at end of period (in $1000's) $1613 $1177
Ratio of expenses
to average net assets (%) 0.99% 1.02%
Ratio of net investment income
to average net assets (%) -0.47% -0.18%
Portfolio turnover rate 6.45% 4.04%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
<PAGE>
Page 17
RISK/RETURN SUMMARY
International Fund (INTF)
A fund of funds investing primarily in stocks of companies in
countries outside the United States, including emerging markets.
GOAL: Long term growth primarily through investments in international stocks.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund invests primarily in other mutual funds in that invest in stocks
of foreign countries, including emerging markets.
A strategic goal is to maintain a broad mix of countries and industries.
Depending on market conditions and trends, the Fund's manager may weight the
overall portfolio mix to higher or lower exposure to geographical regions
and/or industry sectors. Under normal conditions, at least 65% of
the Fund's assets (including assets owned by underlying mutual funds)
must be invested in common stocks.
In terms of investment styles, the fund will generally employ a mix of
growth and value management styles, sometimes called a "blend" style.
Depending on economic and market conditions and trends, the Fund's manager
may weight the styles toward either growth or value.
At least 65% of the Fund's assets will be in foreign stocks or other
mutual funds that hold predominantly foreign stock. Occasionally, a global
fund having some U.S. investments may be included. The majority of the
Fund's investments will be in the stocks of developed nations outside the
United States.
Emerging markets are considered an increasingly important component of the
global economy. Therefore, the Fund's strategy includes ongoing investments in
developing countries. The Fund may not invest more than 35% of the Fund's
assets in emerging markets.
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market or
economy are experiencing excessive volatility or otherwise adverse conditions
exist. Under such circumstances, the Fund may be unable to pursue its
investment goal to the extent it does not invest in international stocks as
described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. Share values of
the Fund will likely decrease if the
general international stock market declines or if the markets in specific
countries decline. Market values can fall for numerous reasons, including
changing economic and political conditions or simply because more investors
have decided to sell than buy specific securities, sectors or regions.
Individual stocks or sectors can go down in value even
when the general market is up. The death or disability of the Fund's
manager, Andre Weisbrod, could cause an adverse effect on the Fund's
operations. In addition, some countries are not as compliant as the U.S.
regarding the Y2K computer problem, which could add some risk to this Fund.
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a
calendar year basis. While the Fund has less than two full years of
operations, the Table information gives some indication of the risks of an
investment in the Fund by comparing the Fund's performance with a broad
measure of market performance. Past performance is not an indication of
future results.
3.3%
1998
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 16.48% (quarter ending 12/31/98)
Lowest: -16.70% (quarter ending 9/30/98)
Average Annual Total Returns
For the periods ended December 31, 1998
1 Year Life*
STAAR International Fund (INTF) 3.3% -1.6%
MSCI EAFE Index1 20.0% 8.7%
Morningstar Foreign Stock Fds.
Category Avg.2 12.7% 3.5%
Morningstar Diversified
Emerging Mkts. Fds. Category Avg.3 -26.9% -25.5%
<PAGE>
Page 18
1 The MSCI EAFE index is a broad international index widely accepted as a
benchmark for international stock performance. It consists of an aggregate of
21 individual country indexes, which represent the major world, markets.
Published returns are total returns including reinvested dividends. The
index is unmanaged and has no expenses. For purposes of this prospectus,
this is the primary comparison index.
2 The Morningstar Foreign Stock Funds Category Average is an average of the
total returns of all funds tracked and categorized as such by Morningstar.
3 The Morningstar Diversified Emerging Markets Funds Category Average is an
average of the total returns of all funds tracked and categorized as such
by Morningstar.
*Since the Fund's public inception on 5/28/97. The Fund was in
existence from 4/4/96 to 5/28/97 as a private trust. There were no
operational changes as a result of public inception, and performance
data from private inception is available from Shareholder Services.
FEES AND EXPENSES: This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. They are based on the annual period
ending 12/31/98.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.90%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 4,5 0.99%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services.
These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under
Rule 12b-1 that permits it to
pay marketing and other fees associated with the sale and distribution of
shares. These fees may not exceed .25% annually of average net assets. The
plan was presented to shareholders via mail on August 26, 1998 and
voted on and approved by them on September 3, 1998. Sales of shares subject to
12b-1 fees in 1998 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required
by states for the privilege of selling shares in those states.
4 This is a "fund of funds". The management fees and expenses of other
mutual funds owned by the INTF are not shown in the above table. The expense
ratios of the other mutual funds owned by the INTF in 1998 ranged from .86%
to 2.11% with a median at 1.12%. These include 12b-1 fees paid by some of the
funds owned by the SCSF.
5 Foreign taxes paid are not shown here.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$99 $312 $547 $1245
INVESTMENT STRATEGIES AND RELATED RISKS
The International Fund's objective is to produce long term growth of
capital by investing primarily in equity securities in markets outside the
United States, including emerging markets.
The Fund invests, under normal conditions, a majority of its assets in a
mix of other mutual funds. The mutual funds are chosen to provide a mix of
investment styles and portfolios that represent the broad international market,
including small and developing countries. Open-end and closed-end funds as well
as unit trusts may be owned. Individual stocks may also be owned by the Fund.
Large, mid-sized and small companies may be owned.
In terms of investment styles, the fund will generally employ a mix of
growth and value managers, sometimes called a "blend" style. Depending on
market conditions and trends, the Fund's manager may weight the styles toward
either growth or value.
A broad mix of industries is also a strategic goal. Depending on market
conditions and trends, the Fund's manager may weight the overall portfolio mix
to higher or lower market capitalization and sectors.
<PAGE>
Page 19
The goal is to provide a wide diversification of holdings and management
styles and expertise. Such diversification is designed to minimize certain
kinds of risks such as those associated with too much exposure to one manager,
management style, region or industry sector as well as the risks inherent in
having too few holdings.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern. The Fund's manager or the managers of
other mutual funds owned by the Fund may employ derivatives or utilize certain
risk management techniques, such as currency hedging. Derivatives are
securities that derive their value based on the value of another asset.
Examples include, but are not limited to options and futures contracts.
In deciding to buy, hold or sell a particular mutual fund, the manager
considers a number of factors. The manager examines general economic and
market trends and their possible effect on the fund. The mutual fund's
objectives must correlate with the general objective of the Fund and it's
holdings should not significantly overlap the holdings of other mutual funds
owned by the Fund. The fund and manager's history is considered, as are
expense ratios, current holdings and management style. If a mutual fund
changes its make-up so that it no longer correlates with the Fund's
objective, it may be sold. Similarly, if a mutual fund fails to perform up to
expectations, it may be sold. The manager will first consider whether
portfolio changes or lower performance is likely to be temporary. If so,
the position may be retained. Because of tax and other considerations, the
changing of mutual fund positions may be done in stages over
a period of weeks or months.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money. You should
consider the following risks before investing:
Market Risk -- While stock markets have historically performed better than
other asset classes over long time periods, they also have experienced more
extreme ups and downs (volatility). Regardless of the condition of any
single company, the value of its stock may go down when the general market
goes down.
Investment Risk -- Regardless of the direction of the overall market, an
individual company can experience financial difficulties or even bankruptcy.
Problems with individual companies can adversely affect the Fund's value
even in an "up" market.
Foreign Securities -- Securities of entities located outside the U.S. involve
additional risks that can increase the potential for losses. These include
political changes and the fact that some countries may not require the same
accounting and financial practices that are standard in this country. The
fluctuation of foreign currencies against the dollar also can cause the value
of an investment to decrease in dollar terms even if it does not fall in
terms of its country's currency.
Emerging Markets -- While stock markets of smaller and developing countries
offer excellent opportunities for growth, they also increase the potential for
market volatility and investment losses due to political and economic
turbulence.
Smaller Companies -- Historically, smaller companies have experienced more
extreme ups and downs (volatility) than larger company stocks. Smaller
companies may have less working capital, less liquidity and greater sensitivity
to competition and overall economic and market conditions. While smaller
companies may offer greater opportunities for growth, they also should be
considered more risky.
Death or Disability of the Manager -- Death or disability could adversely
affect the day-to-day operations of the Fund.
Year 2000 Issues
The Fund could be adversely affected if the computers used by the
Trust or any of its third-party service providers do not properly
process date-related
information. The Trust and its managers recognize the importance of this
problem and they have diligently taken steps to address it. In-house systems
have been tested, contingency plans formulated and inquiries have been made to
all service providers. The manager has considered the effect of Y2K risks to
each of the securities underlying the portfolio. In the case of other mutual
funds owned by the Fund, inquiry has been made as to their Y2K preparation.
The interdependencies on multiple computer systems are significant. While
we are confident that our internal systems will be compliant, and that most of
our service providers are expressing similar confidence, there can be no
assurance or guarantee that there will be no interruptions, delays or other
adverse effects on the Funds.
The effect of Y2K in some foreign countries may be more severe than in the
United States. Reliable information regarding compliance may be unavailable.
This could expose the INTF to additional risk.
<PAGE>
Page 20
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period
of the Fund's operations). Certain information reflects financial results for
a single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
Selected Per-Share Data
<CAPTION>
Year End December 31
1998 1997*
<S> <C> <C>
Net asset value beg. of period $10.50 $11.73
Net investment income 0.07 0.12
Net realized and unrealized
gains on securities 0.31 -0.78
Total income from investment operations 0.38 -0.66
Dividends from net investment income -0.08 -0.10
Distributions from capital gains -0.20 -0.47
Total distributions -0.28 -0.57
Net Asset Value, end of Period $10.60 $10.50
Total return (%) 3.3% -5.64%*
Ratios/Supplemental Data
Net assets at end of period (in $1000's) $1608 $1126
Ratio of expenses
to average net assets (%)** 0.99% 0.70%
Ratio of net investment income
to average net assets (%) 0.65% 1.04%
Portfolio turnover rate 2.30% 0.00%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
Advisory Fees of $.03 per share were waived in 1997.
** Does not include foreign tax paid of .18% in 1998 and .18% in 1997. Such
ratios are after effect of advisory fees waived of 0% in 1998 and .35% in
1997.
<PAGE>
Page 21
RISK/RETURN SUMMARY
AltCat (Alternative Categories) Fund (ACF)
A flexibly-managed, multi-asset global fund of funds investing
primarily in assets which offer opportunities for growth of capital.
GOAL: Long term growth through broadly diversified global investments.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund's main strategy is to identify investment opportunities that will
participate in long-term or short-term trends. The Fund may invest in any kind
of investment security allowable under securities laws. Under normal
conditions, at least 65% of the Fund's assets will be invested in other mutual
funds or securities that may or may not fit the general asset allocation
categories of the other Funds in the Trust (IBF, LTBF, LCSF, SCSF and INTF).
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market or
economy are experiencing excessive volatility or otherwise adverse conditions
exist. Under such circumstances, the Fund may be unable to pursue its
investment goal to the extent it does not invest as described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. Share values of
the Fund can decrease in value if the U.S. stock markets or the markets in
specific countries decline. Market values can fall for numerous reasons,
including changing economic and political conditions, changes in currency
values or simply because more investors have decided to sell than buy certain
securities or categories of securities. Individual stocks or sectors can go
down in value even when the general market is up. The death or disability of
the Fund's manager could cause an adverse effect on the Fund's operations.
In addition, some countries are not as compliant as the U.S. regarding the
Y2K computer problem, which could add some risk to this Fund.
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a
calendar year basis. While the Fund has less than two full years of
operations, the Table information gives some indication of the risks of an
investment in the Fund by comparing the Fund's performance with a broad
measure of market performance. Past performance is not an indication of
future results.
- -5.75%
1998
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 8.32% (quarter ending 12/31/98)
Lowest: -12.06% (quarter ending 9/30/98)
Average Annual Total Returns
For the periods ended December 31, 1998
1 Year Life*
STAAR AltCat Fund (ACF) -5.8% -3.9%
Morningstar Multi-Asset Global Objective Avg. 1 9.0% 6.4%
*Since the Fund's public inception on 5/28/97. The Fund was in
existence from 4/4/96 to 5/28/97 as a private trust. There were no
operational changes as a result of public inception, and performance
data from private inception is available from Shareholder Services.
1 The Morningstar Multi-Asset Global Funds Objective Average is an average of
the total returns of all funds tracked by Morningstar having that objective.
<PAGE>
Page 22
FEES AND EXPENSES: This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. They are based on the annual period
ending 12/31/98.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.90%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 4,5 0.99%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services.
These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under
Rule 12b-1 that permits it to
pay marketing and other fees associated with the sale and distribution of
shares. These fees may not exceed .25% annually of average net assets. The
plan was presented to shareholders via mail on August 26, 1998 and
voted on and approved by them on September 3, 1998. Sales of shares subject to
12b-1 fees in 1998 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required
by states for the privilege of selling shares in those states.
4 This is a "fund of funds". The management fees and expenses of other
mutual funds owned by the ACF are not shown in the above table. The expense
ratios of the other mutual funds owned by the ACF in 1998 ranged from .97% to
2.35% with a median at 1.32%. These include 12b-1 fees paid by some of the
funds owned by the SCSF.
5 Foreign taxes paid are not shown here.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$99 $312 $547 $1245
INVESTMENT STRATEGIES AND RELATED RISKS
The AltCat Fund's objective is to produce long term growth of capital
through broadly diversified global investment in securities that have
the potential to participate in long-term or short-term trends. The projected
increase in demand for energy by developing nations is an example of a
long-term trend.
The Fund may invest in any kind of domestic or foreign security
allowable under securities laws.
Mutual funds are owned by the ACF. They are chosen to provide a variety
of investment styles and portfolios. Open-end and closed-end funds as well
as unit trusts may be owned. Individual stocks may also be owned by the
Fund. Large, mid-sized and small companies may be owned. The Fund may
also purchase bonds, real estate investment trusts (REITs), mortgage securities
preferred stocks, convertible securities and precious metals. Investments
are chosen to
provide a mix of investment styles and portfolios that represent a broad
global investment market as opposed to any one market or index.
In terms of investment styles, the fund will generally employ a mix of
growth and value managers, sometimes called a "blend" style. Depending on
market conditions and trends, the Fund's manager may weight the styles toward
either growth or value.
A broad mix of industries is also a strategic goal. Depending on market
conditions and trends, the Fund's manager may weight the overall portfolio mix
to higher or lower market capitalization and sectors.
The goal is to provide a wide diversification of holdings and management
styles and expertise. Such diversification is designed to minimize certain
kinds of risks such as those associated with too much exposure to one manager,
management style or industry sector or the risks inherent in having too few
holdings.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when
anticipated liquidity needs are a concern. Direct investments in derivatives
are allowed, but normally would represent little or none of the direct
assets held by the Fund, i.e. less than 5%. Derivatives are securities
that derive their value based on the value of another asset. Examples
include, but are not limited to options and futures contracts. Managers
of other mutual funds owned by the Fund may utilize derivatives and certain
risk management techniques, such as currency hedging.
<PAGE>
Page 23
In deciding to buy, hold or sell a particular security or mutual fund,
the manager considers a number of factors. The manager examines
general economic and market trends and their possible effect on the fund.
A fund and its manager's history is considered, as are expense ratios, current
holdings and management style. If a mutual fund fails to perform up to
expectations, it may be sold. Because of tax and other considerations,
the changing of mutual fund positions may be done in stages over
a period of weeks or months.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money. You should
consider the following risks before investing:
Market Risk -- While stock markets have historically performed better than
other asset classes over long time periods, they also have experienced more
extreme ups and downs (volatility). Regardless of the condition of any single
company, the value of its stock may go down when the
general market goes down.
Investment Risk -- Regardless of the direction of the overall market, an
individual company can experience financial difficulties or even bankruptcy.
Problems with individual companies can adversely affect the Fund's value
even in an "up" market.
Foreign Securities -- Securities of entities located outside the U.S. involve
additional risks that can increase the potential for losses. These include
political changes and the fact that some countries may not require the same
accounting and financial practices that are standard in this country. The
fluctuation of foreign currencies against the dollar also can cause the value
of an investment to decrease in dollar terms even if it does not fall in
terms of its country's currency. To the extent that an investment is
concentrated in a particular country or region, risk can be amplified.
Emerging Markets -- While stock markets of smaller and developing countries
offer excellent opportunities for growth, they also increase the potential for
market volatility and investment losses due to political and economic
turbulence.
Smaller Companies -- Historically, smaller companies have experienced more
extreme ups and downs (volatility) than larger company stocks. Smaller
companies may have less working capital, less liquidity and greater sensitivity
to competition and overall economic and market conditions. While smaller
companies may offer greater opportunities for growth, they also should be
considered more risky.
Debt Instruments -- To the extent that the Fund invests in any debt
instruments, such investments would entail the risks associated with those
instruments, including changes in interest rates, default risk and
credit rating changes.
Death or Disability of the Manager -- Death or disability could adversely
affect the day-to-day operations of the Fund.
Year 2000 Issues
The Fund could be adversely affected if the computers used by the
Trust or any of its third-party service providers do not properly
process date-related
information. The Trust and its managers recognize the importance of this
problem and they have diligently taken steps to address it. In-house systems
have been tested, contingency plans formulated and inquiries have been made to
all service providers. The manager has considered the effect of Y2K risks to
each of the securities underlying the portfolio. In the case of other mutual
funds owned by the Fund, inquiry has been made as to their Y2K preparation.
The interdependencies on multiple computer systems are significant. While
we are confident that our internal systems will be compliant, and that most of
our service providers are expressing similar confidence, there can be no
assurance or guarantee that there will be no interruptions, delays or other
adverse effects on the Funds.
The effect of Y2K in some foreign countries may be more severe than in the
United States. Reliable information regarding compliance may be unavailable.
This could expose the ACF to additional risk.
<PAGE>
Page 24
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the
period of the Fund's operations). Certain information reflects financial
results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in the Fund
(assuming reinvestment of all dividends and distributions). This information
has been audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
Selected Per-Share Data
<CAPTION>
Year End December 31
1998 1997*
<S> <C> <C>
Net asset value beg. of period $10.53 $10.68*
Net investment income 0.13 0.11
Net realized and unrealized
gains on securities -0.73 -0.16
Total income from investment operations -0.60 -0.05
Dividends from net investment income -0.13 -0.09
Distributions from capital gains -0.13 -0.01
Total distributions -0.26 -0.10
Net Asset Value, end of Period $9.67 $10.53
Total return (%) -5.8% -0.44%*
Ratios/Supplemental Data
Net assets at end of period (in $1000's) $374 $307
Ratio of expenses
to average net assets (%) ** 0.99% 0.77%
Ratio of net investment income
to average net assets (%) 1.24% 1.00%
Portfolio turnover rate 0.02% 2.74%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
** Does not include foreign tax paid of .05% in 1998. Such ratios are after
effect of advisory fees waived of 0% in 1998 and .11% in 1997.
<PAGE>
Page 25
INFORMATION COMMON TO ALL OF THE FUNDS
MANAGEMENT
STAAR Financial Advisors, Inc. (SFA), 604 McKnight Park Dr., Pittsburgh,
PA 15237 is the Fund's investment advisor. Mr. J. Andre Weisbrod, President
of SFA, is the Portfolio Manager of each Fund and has been primarily
responsible for all Funds'day-to-day management since inception. Mr.
Weisbrod's experience includes management of these Funds since
private inception on 4/4/96. He has been
President and CEO of SFA since 1993, providing financial planning and
investment advisory services to individual and corporate clients. He has also
been a registered securities representative since 1983. His broker-dealer
affiliation over the past five years has been with Hornor Townsend & Kent
(through 7/1/98) and Olde Economie Financial Consultants (since 7/1/98).
Additional information is provided in the Statement of Additional Information
(SAI), which may be obtained from Shareholder Services.
As provided in the Advisory Agreement, SFA also provides other services
(directly or indirectly) in addition to investment management, including
transfer agency, shareholder services, accounting and legal services.
The Funds paid the following fees to the Advisor in 1998 as a percentage
of average net assets:
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
1998 Fees .49% .60% .90% .90% .90% .90%
</TABLE>
Management's discussion of Fund Performance may be found in the Annual and Semi-
Annual Reports to Shareholders. These may be obtained from Shareholder
Services.
Fund History
The six Trust Funds were instituted as a private Pennsylvania business
trust on 2/28/96. Investment operations began on April 4, 1996. The Trust's
public operations began effective May, 28, 1997. Investment operations,
including the Funds' investment management, existed in the same way before and
after May 28, 1997. Information regarding operations prior to May 28, 1997 can
be obtained from Shareholder Services.
Fund of Funds
The Fund of Funds approach provides broader diversification of holdings as
well as managers. However, owning other mutual funds within some of its Funds
generally results in greater expenses for those Funds than if they held
individual securities only. (See footnote 4 under Fees and Expenses in the
RISK/RETURN SUMARY of the LCSF, SCSF, INTF and ACT.) Normally, this does not
apply to the bond funds (IBF and LTBF); while they are not prohibited from
doing so, they generally do not hold other mutual funds.
SHAREHOLDER INFORMATION
HOW FUND SHARES ARE PRICED
The Net Asset Value (NAV) of a share of each Fund is calculated based
on the closing price of securities on each day that the New York
Stock Exchange is open (normally 4:00 P.M. eastern time). The NAV is
determined by dividing the total of each Fund's net assets by the total
number of outstanding shares of each Fund. The Funds' Net Asset Values
will not be computed for any days on which the market is closed,
including national holidays (generally New Year's Day, Martin Luther
King Day, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas).
The value of mutual funds held by any of the Funds will be that value
provided by such funds according to the methods used by those funds.
Because of possible delays obtaining final pricing information regarding
other mutual funds, the calculation of the NAV of each of the Trust's
Funds will generally be completed the morning of the next business day.
Therefore, should any of the Funds be listed in newspapers, it is likely
that the prices reported in the newspapers will lag the Funds' actual
prices by one day.
The Trust can take no responsibility for errors by other mutual funds in
reporting their net asset values or by third party sources used for pricing.
BUYING SHARES
By Mail
You may open an account using the written application form. Legible
photocopies of the application form are acceptable if you desire to open more
than one account. Special applications are needed for certain retirement
accounts such as Traditional IRAs and Roth IRAs. These forms may be obtained
through Shareholder Services.
Mail the application with your check made payable to "STAAR Investment
Trust" to the Shareholder Services address listed on the inside back cover of
this prospectus. Do not forget to indicate on the Application the amounts or
percentage of your check to be put in each Fund.
<PAGE>
Page 26
Through Your Registered Investment Representative
Your representative can help you with forms and the processing of your
check.
By Wire
Call Shareholder Services for availability and instructions.
By Payroll Deduction
You may be able to purchase shares through an Employer-Sponsored Plan.
NOTE: You are responsible for any losses or fees incurred by the trust or its
Advisor or Transfer Agent or Custodian if an order is canceled because a check
does not clear, and such costs may be deducted from your account.
MINIMUM INITIAL INVESTMENT
Regular Accounts: $10,000 to the entire Trust, which may be split among the
Funds subject to a $1,000 minimum per Fund. The $10,000 minimum may be
satisfied by multiple accounts held by the same investor or members of his or
her immediate family who reside with him or her.
IRA Accounts: $1,000 to the entire Trust, which may be split among the Funds
subject to a $250 minimum per Fund.
The Trust reserves the right to waive or reduce the minimum initial and
additional investments for certain investors, including employer-sponsored
retirement plans.
ADDING TO YOUR INVESTMENTS
By Mail
You may add to your investment at any time by mailing a check payable to
"STAAR Investment Trust" to Shareholder Services. You may use the convenient
tear-off form on your statements or provide written instructions including the
account number. Be sure to specify the amounts that should credited to each
Fund. If no instructions are received, allocation of your check will be made
according to the most recent allocation instructions received.
Minumum Amounts: Additional investments to regular accounts must be no
less than $100 per Fund. If the total amount of the check is insufficient to
meet the per Fund minimum, the deposit will be made in order of the
largest Fund allocation according to the most recent allocation
instructions received.
By Automatic Investment Plan
You may establish an Automatic Investment Plan by filling out the
appropriate form, which you may obtain from Shareholder Services. An Automatic
Investment Plan authorizes direct monthly deposits from your bank account.
Minumum Amounts: Additional investments to regular accounts must be no
less than $50 per Fund. If the total amount of the check is insufficient to
meet the per Fund minimum, the deposit will be made in order of the largest
Fund allocation according to the most recent
allocation instructions received.
EXCHANGING SHARES
You may exchange shares of one Fund for another either by phone or by
signed instructions mailed or faxed to Shareholder Services.
SELLING SHARES
You can sell your shares on any day the Trust is open for business.
Generally, you can sell up to $10,000 total from any Fund or combination of
Funds over the phone or by a signed letter delivered to Shareholder
Services. Be sure to include the signatures of all registered
owners as on the original application or any subsequent
change of authorized signatures. However, to protect you and the Trust, we
may require written instructions with a signature guarantee
for each owner if:
- You are selling more than $10,000 worth of shares.
- You want to have proceeds paid to someone who is not a registered owner.
- You want to have the proceeds sent to an address other than the address
of record or a pre-authorized account.
- You have changed the address on your account by phone within the
last 15 days.
<PAGE>
Page 26
You may also redeem your shares through a broker-dealer if your shares are
held through a broker-dealer account. In this case you must call your broker-
dealer who will then execute your trade instructions. A broker-dealer may
impose a separate fee for such transactions.
Your redemption will be calculated at the share price equal to the Net
Asset Value at the end of the day your request is received if it is received
by Shareholder Services by 3:30 P.M. (Eastern Time). If the request is
received after 3:30 P.M. or on a day the Trust is not open for business, it
will be processed as of the close of the next business day.
Your redemption check will generally mailed to you via first-class mail
within seven days after we receive your request in proper form.
We will use Priority Mail or Overnight Mail if requested, but your account
will be charged for this service.
If you want to sell shares recently purchased by check or bank draft, your
distribution may be held until your check or draft has cleared, which could
take up to fifteen days from the purchase date.
INVESTOR SERVICES
DISTRIBUTION OPTIONS
You may choose one of the following options when you open your account.
You may change your option at any time by notifying us in writing.
-- Dividends and capital gains distributions are reinvested in additional
shares. (This option will be assigned if no other option is selected.)
-- Dividends and short-term gains in cash and long-term capital gains
reinvested in additional shares.
-- Dividends and capital gain distributions in cash.
Automatic Exchanges
You may request automatic monthly exchanges from one Fund to another. The
minimum is $100 per Fund.
Systematic Withdrawal Plan
You may request automatic monthly withdrawals from a Fund. The minimum
withdrawal amount is $100 per month per Fund.
TAX CONSEQUENSES
For federal income tax purposes, distributions of investment income
(including dividends and short-term gains) are taxable as ordinary income.
Long-term capital gain distributions are eligible for reduced income tax
rates. Investments in foreign securities may be subject to foreign
withholding taxes. Distributions are taxable even if reinvested unless
the account is a qualified retirement plan. You should consult your tax
advisor regarding the effect of any investment on your taxes.
An exchange of a Fund's shares for shares of another Fund will be treated
as a sale of the Fund's shares and any gain on the transaction may be
subject to federal income tax.
Statements and Reports
You will receive activity confirmations and statements that show your
account transactions. You will also receive the Trust's Annual and Semi-annual
Reports. Duplicate statements to an advisor may be requested.
POLICIES
Fees for Special Services
The Trust may charge a reasonable fee to your account for certain special
services, such as wire redemption, special mailing requests
and producing historical records.
DISTRIBUTION ARRANGEMENTS
The Trust Funds have adopted a plan under rule 12b-1 that allows the Funds
to pay distribution fees for the sale and distribution of their shares.
Because these fees are paid out of the Funds' 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.
<PAGE>
Page 29
Time Limits For Crediting Purhases, Exchanges And Redemptions
Orders received in proper order before the close of the New
York Stock Exchange (generally 4:00 PM, Eastern Time) will be
credited at the closing share price on that day. Otherwise,
the transaction will be processed at the closing share price on the next
trading day.
Accounts With Low Balances
The Trust reserves the right to close accounts with balances low enough to
cause extra expense, which would be detrimental to other shareholders.
Generally, this applies to any Fund account with a balance less than $500
in any one Fund. If the Trust elects to exercise this right, and if your
account falls into this category, a letter will be mailed to you giving you
the option of adding to your account, exchanging shares of the Fund for
shares in another Fund to meet the minimum, or closing it within 30 days.
<PAGE>
Page 28
Changes in Investment Minimums
At any time, the Trust may change its investment minimums or waive
minimums for certain types of purchases.
Joint Accounts
Where two individuals are registered as owners, the Trust will designate
the ownership as "joint tenants with rights of survivorship" unless specified
otherwise. All registered owners must agree in writing to any ownership
changes.
Right to Reject Orders
The Trust reserves the right to reject purchase, exchange or redemption
orders which it considers not properly requested or where there is some doubt
as to whether the proper owner has made the request or where the order
involves actual or potential harm to the Trust. Potential harm could be caused
by excessive orders during periods of market volatility or by large redemption
or exchange orders which adversely affect the Fund's ability to manage its
assets. The Trust may also impose limitations on the size and frequency of
exchanges to protect Shareholders from potential adverse effects of market
timing.
BROKERAGE ALLOCATION
The Trustees and/or Manager may select brokers who execute purchases and
sales of each Fund's securities and provide other brokerage and research
services. The Funds are authorized to pay commissions to such brokers in
excess of that which might be obtained with other brokers in recognition of
services provided. Where a Fund owns other mutual funds, and such funds
pay 12b-1 fees, these fees may be paid to brokers as part of their
compensation. In 1998 approximately 60% of such commissions were received
by Hornor Townsend & Kent and 40% by Olde Economie Financial
Consultants, Ltd.
The Trustees may authorize use of a broker-dealer that may
have a relationship with officers or employees of the Advisor, whereby
commissions and 12b-1 compensation can be paid
to such officers or employees. Such an arrangement existed during the past
fiscal year with Andre Weisbrod.
<PAGE>
Back cover
Where to Learn More
Mailing Address: STAAR Investment Trust, 604 McKnight Park Dr., Pittsburgh, PA
15237.
Shareholder Services: STAAR Financial Advisors, Inc. 800/332-7738 PIN 3371
E-mail Address: [email protected]
Web Site: www.staarinvest.com
Statement of Additional Information (SAI)
You may request the SAI, which contains more detailed information on all
aspects of the Trust. A current SAI has been filed with the Securities and
Exchange Commission (SEC) and is incorporated by reference into this
prospectus.
Annual and Semi-Annual Reports
Additional information about the Funds' investments is available in the
Trust's annual and semi-annual Reports to shareholders. In the Trust's
annual or semi-annual report you will find a discussion of the market
conditions and investment strategies that significantly affected the Funds'
performances during their last fiscal year or semi-annual period.
The SAI, reports and other information about the Funds can be obtained at no
charge from Shareholder Services. Call 1-800-332-9076, PIN 3370, or write to
the address above. The information requested will be mailed to you within 3
business days from the time the request is received by Shareholder Services.
The SAI, reports and other information about the Funds can be reviewed and
copied at the Securities and Exchange Commission's Public Reference Room
in Washington, DC. They may also be obtained or by
calling the Commission's Public Reference Room (1-800-SEC-0330) or on the
Commission's Internet Web Site at www.sec.gov. Copies of this information
may also be obtained, upon payment of a duplicating fee, by writing the
Public Reference Section of the Commission, Washington, DC 20549-6009.
Investment Company Act File Number 811-09152
<PAGE>
Item 10 - COVER PAGE AND TABLE OF CONTENTS
PART B
STATEMENT OF ADDITIONAL INFORMATION
THE STAAR INVESTMENT TRUST
Intermediate Bond Fund (IBF)
Long-Term Bond Fund (LTBF)
Larger Company Stock Fund (LCSF)
Smaller Company Stock Fund (SCSF
International Fund (INTF)
AltCat Fund (ACF)
604 McKnight Park Drive
Pittsburgh, PA 15237
(412) 367-9076
This Statement of Information is not a prospectus. It relates to the
Prospectus of the Staar Investment Trust (the "Trust") dated
August 17, 1999,
as supplemented from time to time.
This Statement of Additional Information should be read in conjunction
with the Prospectus. The Trust's Prospectus can be obtained by writing
to the Trust at the above address or by telephoning the Trust at
1-800-33ASSET, P.I.N. 3370.
The prospectus and annual/semi-annual reports may be incorporated into
this SAI by reference.
Date: August 17, 1999
<PAGE>
Page 1
THE STAAR INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
<TABLE>
<S> <C>
PART B:
General Information And History 2
Description of the Funds and
Their Investments and Risks 2
Management of the Funds 3
Control Persons and Principal Holders
of Securities 3
Investment Advisory and Other Services 3
Brokerage Allocation and Other Practices 4
Purchase, Redemption and Pricing of
Securities Being Offered 4
Tax Status 4
Calculation of Performance Data 5
Other Information 5
Financial Statements 6
PART C
Other Information 21
</TABLE>
<PAGE>
Page 2
Item 12 - HISTORY
The Registrant, STAAR Investment Trust (the Trust), is
an open-end, management investment company including six series
Funds. It was formed on February 28, 1996 as a private Pennsylvania business
trust for the purposes of commencing business as an investment company under
the name STAAR System Trust. It had engaged in no prior business activities.
Its public registration became effective on May 28, 1997. The name was
changed to STAAR Investment Trust on April 3, 1998. There has been no
material change in operations since the beginning of investment operations
on April 4, 1996.
Item 12 - DESCRIPTION OF THE FUNDS, THEIR INVESTMENTS AND RISKS
As described in the prospectus, the Trust consists of six series
Funds, each of which has its own objectives, policies and strategies
designed to meet different investor goals. The information below is
provided as additional information to that already provided in the
prospectus.
The Funds are:
Intermediate Bond Fund (IBF)
Long-Term Bond Fund (LTBF)
Larger Company Stock Fund (LCSF)
Smaller Company Stock Fund (SCSF
International Fund (INTF)
AltCat Fund (ACF)
Each Fund has adopted certain fundamental investment policies.
These fundamental investment policies cannot be changed unless the
change is approved by (a) 66 2/3% or more of the voting securities present
in person or by proxy at a meeting (if the holders of 50% or more of the
outstanding securities are present in person or by proxy) or (b) more than
50% of the outstanding voting securities of the Fund, whichever is lesser.
The fundamental policies provide, in addition to those listed in the
prospectus, as follows:
(1) No Fund of the Trust issues different classes of
securities or securities having preferences of seniority over other
classes.
(2) The Trust will not engage in Short Sales (borrowing stock
from someone else and selling it in anticipation of the price going down, at
which time it is repurchased and returned to the lender). However it is
possible that managers of other open or closed end funds owned by a Trust
Fund may employ short sales.
(3) The Trust will not purchase securities with borrowed money (or
margin). The Trustees will attempt to avoid purchasing shares of any
other mutual funds which utilize margin purchases other than in amounts
less than five (5%) percent of its portfolio. In general, the policy of the
registrant is to avoid debt. It will not borrow money, except where it
would become necessary to allow the Trust to maintain or improve its
day-to-day operations in the interest of Fund shareholders. For that
purpose, the Trust may obtain a line of credit or obtain specific financing
from a bank, other financial institution or individual(s).
(4) The Trust will not act as an underwriter of other issuers, except
to the extent that in selling portfolio securities, it may be deemed to be a
statutory underwriter for the purposes of the Securities Act of 1933.
(5) Except for investments in the mutual fund or Investment Company
industry, the Funds will not make investments that will result in a
concentration (as that term is defined in the 1940 act or any rule or order
under that Act) of its investment securities of issuers primarily in the same
industry; provided that this restriction does not limit the investment of the
fund assets in obligations issued or guaranteed by the U.S. Government, its
agencies or in tax-exempt securities or certificates of deposit.
(6)The purchase of real estate is permitted in the AltCat (ACF)
Fund. The majority of any real estate holdings, if any, will be in Real
Estate Investment Trust (REITs) and / or real estate-oriented mutual funds,
thereby preserving a high degree of liquidity that is not possible with
other forms of real estate ownership. However, if a special situation
arises which the Trustee considers to be advantageous to the Fund, a real
estate asset with limited liquidity may be owned as long as it does not
exceed five percent (5%) of the total value of the Fund at the time of
purchase. If other assets decline in value so as to force such an asset to
exceed five percent (5%), the Trustees will attempt to sell the asset if a
favorable price can be obtained. However, if it is not in the best
interest of the shareholders the Trustee may delay such sale until a more
favorable time.
The purchase of real estate mortgage loans is permitted in the
Bond Funds (IBF and LTBF) and the AltCat Fund (AFC). Such
mortgages will generally be in government agency backed loans such as
GNMA ("Ginnie Mae") loans. However, a minority of mortgage
securities owned by a Fund may be in non-government agency backed
loans.
(7) Commodities and Precious Metals or securities and contracts
deriving their value from Commodities and Precious Metals may be
purchased only in the AltCat Fund and not in the other Funds.
(8) Trust Funds may not loan cash or portfolio securities to any
person. However, this does not prevent managers of other mutual funds
owned by a fund from making such loans within their portfolios.
(9) The Trust and any managers it employs may use Derivatives,
which are financial instruments which derive their values from the
performance of another security, assets or index. Derivatives include
options and future contracts.
<PAGE>
Page 3
The writing of Put and Call options are permitted by the Trust and
any managers it may employ. However, the use of such options is to
represent a minority of any managers activity, and will be employed in a
conservative manner to protect a profit or offset losses in the event of
projected significant price reductions. The Trustees or a manager
employed by them may purchase a Put, which provides the right to sell a
security to another party at a predetermined price within a period of time.
Similarly a Call option may be purchased which provides the right to
purchase a security at a predetermined price within a period of time. A
Call option may also be sold to another party. Such options will be
"covered", meaning the Fund owns an amount of the underlying
security equal to or greater than the amount of the security represented in
the option. Put options will not be sold because, in the Advisor's
opinion, they expose a Fund to additional risk,
which The Trustees wish to avoid.
Similarly, options based upon indexes or other assets, such as
commodities, may be purchased to protect a portfolio, but not sold where a
Fund would be required to pay cash to another party based upon a future
price change. Any mutual funds owned by a Fund will be screened to
determine if such mutual funds' policies on options, futures, margin or
other strategies differ greatly from that of the Trust; however, the
Trustees will not be able to control the use of such strategies by mutual
funds. Therefore, at any given time a Fund's risk could be increased to
the extent managers of other mutual funds employ these kinds of strategies
in a manner inconsistent with the Trust's policies.
(10) The Funds may take temporary investment positions when the
manager(s) believes the market or economy is experiencing excessive
volatility or when such volatility is considered a significant risk.
These investments may include, but are not limited to, cash and cash
equivalents, money market instruments or funds and U.S. Treasury
obligations. Under such circumstances the Fund(s) may be unable to pursue
their investment goals.
(11) There are no restrictions regarding portfolio turnover. While
the trust recognizes that a higher portfolio turnover will, in most cases,
increase expenses, there are times when a high turnover may be justified,
either to protect a portfolio against certain kinds of risks or to take
advantage of opportunities presented by market conditions. In general, the
Trust's objective is to keep expenses, and, therefore, turnover, as low as
possible. This objective will be considered when screening other mutual
funds for possible inclusion in a Fund's portfolio.
The Trust has certain non-fundamental policies which may be
changed by the Trustees. Among these are the following:
1) No Fund may invest in securities for the purpose of
exercising control over or management of an issuer; or
2) purchase securities of a closed-end or other investment
company where the shares are not registered in the United States pursuant
to applicable securities laws.
3) The Fund portfolios shall each not invest more than 10% of
the value of its respective total assets in illiquid securities or other
illiquid assets.
Item 13 - MANAGEMENT OF THE FUNDS
Trustees
The board of trustees is responsible for providing and overseeing
management, operations and shareholder services for the Funds under the
applicable laws of the commonwealth of Pennsylvania. The board generally meets
quarterly to review Fund operations, performance and any appropriate issues and
to take action as needed.
<TABLE>
<CAPTION>
Name Position Held Principal Occupation(s)
& Address With Registrant during Past 5 Years
<S> <C> <C>
J. Andre Weisbrod* President President, STAAR
Financial Advisors, Inc.
(Investment Advisor to
the Trust)
Pittsburgh, PA
Ronald G. Benson* Secretary Business Consultant,
Regional Director,
Fellowship of Companies
for Christ,International
Pittsburgh, PA
Jeffrey A. Dewhirst Trustees Investment Banker
Principal, Corporate
Finance Associates
Sewickley, PA
Thomas J. Smith Trustee President & CEO,
Capmasters, Inc.
(A marketing firm)
Pittsburgh, PA
John H. Weisbrod*1 Trustee Retired President of
Sea Breeze Laboratories
</TABLE>
* These people are interested persons.
1 John H. Weisbrod is the father of J. Andre Weisbrod
Compensation
Each Trustee was compensated at the rate of $225 per quarter in 1998.
Indemnification
The Declaration of Trust and the By-Laws of the Trust provide for
indemnification by the Trust of its Trustees and Officers against
liabilities and expenses incurred in connection with litigation in which
they may be involved as a result of their positions with the Trust, unless
it is finally adjudicated that they engaged in willful misconduct, gross
negligence or reckless disregard of the duties involved in their offices,
or did not act in good faith in the reasonable belief that their actions
were in the best interest of the Trust and the Funds.
As a group, the board and officers of the Trust owned Fund Shares
as follows:
Fund % Owned
IBF 1.48%
LTBF 2.53%
LCSF 4.11%
SCSF 7.55%
INTF 7.52%
ACF 3.53%
Item 14 - CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
There are no Control Persons or Principal Holders to report.
Item 15 - INVESTMENT ADVISORY AND OTHER SERVICES
The Advisor to the Trust is STAAR Financial
Advisors, Inc. (SFA), 604 McKnight Park Dr., Pittsburgh, PA
15237. The President and principal owner of SFA is J. Andre
Weisbrod.
He is also on the Board of Trustees of the STAAR Investment Trust.
No other stockholder of the Advisor owns 5% or more of
the Advisor.
John H. Weisbrod, member of the Board of Trustees, is a minority
stockholder of the Advisor and father of J. Andre Weisbrod.
Fees to be paid to the Advisor by terms of the Advisory
Agreement (including "management-related service contract" provisions)
are as follows: The Trust will pay the Advisor a fee based on the average
daily assets in each Fund monthly as follows:
<TABLE>
<CAPTION>
Monthly Rate* Annualized* 1998 Amount Paid
<S> <C> <C> <C>
INTF .0750% .90% 13,319
LCSF .0750% .90% 15,017
SCSF .0750% .90% 12,940
LTBF .0600% .72% 3,017
IBF .0525% .63% 3,973
ACF .0750% .90% 3,306
</TABLE>
*These are maximum fees and will be accrued daily and paid at the
closing of the last business day of the month. The Advisor has agreed to
waive fees as needed to keep advisor fees plus any 12(b)-1 fees from
exceeding 1% of average net assets through 2000.
<PAGE>
Page 4
Under the Advisory Agreement and fees listed above, SFA also provides,
directly or indirectly, and pays for other services. These include transfer
agency, shareholder services, custody services, fund accounting, compliance,
printing, advertising and general overhead.
TRANSFER AND DIVIDEND-PAYING AGENT
STAAR Financial Advisors, Inc. (SFA), 604 McKnight Park Dr.,
Pittsburgh, PA 15237.
CUSTODIAN
Firstar
Bank, 425 Walnut St., M/L 6118, P.O. Box 1118, Cincinnati,
OH 45201-1118
INDEPENDENT PUBLIC ACCOUNTANT
Carson & Co., 201 Village Commons, Sewickley, PA 15143
Item 16 - BROKERAGE ALLOCATION AND OTHER PRACTICES
Transactions in Fund portfolios will generally be made with regard to
volume and other discounts to keep transaction expenses as low as
possible. The Trust may use brokers with which higher commissions are
paid than could be obtained elsewhere in return for research and other
services. There is no restriction as to the number of broker-dealers the
Trust may use.
It is anticipated that the Trust will use Mr. J. Andre Weisbrod,
President of the Advisor, as a broker for a portion of the Trust's
transactions. It is anticipated that, over time, the fees paid by
the Trust to the Advisor may be less due to Mr. Weisbrod's ability to
receive income from a portion of the Trust's transactions,
including 12b-1 fees paid by some mutual funds owned by Trust Funds.
Mr. Weisbrod is currently affiliated as a registered representative
with Olde Economie Financial Consultants, Ltd. 511 State St., Baden, PA 15005.
Prior to 7/1/98 he was affiliated with Hornor Townsend & Kent, 600 Dresher Rd.,
STE C2C, Horsham, PA 19044.
The criteria for selection of broker-dealers will include convenience,
reasonableness of commissions, availability and selection of securities (i.e
mutual fund selling agreements, bond inventories and access to
exchanges), and value-added services provided (i.e. research and reports).
At least once every two years, commission structures will be compared
with at least two representative firms, including a full-service brokerage
and a discount brokerage not currently used by the Trust. If the Trustees
determine that any broker(s) currently used are not reasonable with regard
to price and service, a change of such brokers will be made unless more
favorable arrangements can be obtained.
Brokerage Commissions Paid
<TABLE>
<CAPTION>
Broker-Dealer 1997* 1998 % 1998 of Trades
<S> <C> <C> <C>
Hornor Townsend & Kent 1,900 200 60%
Olde Economie Financial
Consultants, Ltd 0 450 40%
NOTE: The commissions do not reflect payments to broker-dealers of 12b-1
fees and commissions on certain bonds purchased where amounts are not
available on confirmation statements or are built into initial offerings.
It is estimated that between $10,000 and $12,000 of total commissions and
12b-1 fees were paid to these broker-dealers in 1998.
12b-1 Plan
Effective
September 3, 1998
The Trust has adopted a Plan of Distribution or
"12b-1 Plan" under which it may finance activities primarily intended to
sell shares, provided
the categories of expenses are approved in advance by the board of trustees
and the expenses paid under the Plan were incurred within the preceding 12
months and accrued while the Plan is in effect.
Among the activities to which 12b-1 expenses may be allocated are
advertising, printing and mailing prospectuses to non-shareholders and
compensation to broker-dealers for sales of shares and services to the Trust
and shareholders.
12b-1 expenses may not exceed .25% of a
Fund's average net assets annually. Any 12b-1 fees paid by the
Trust, as a percentage of net assets, for the previous year are listed
In the prospectus under "Trust Expenses". Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by the National Association of
Security Dealers, Inc.
Item 17 - CAPITAL STOCK AND OTHER SECURITIES
There is only one class of shares issued by the trust. Each share
has equal rights regarding voting, distributions and redemptions. Rights
cannot be modified other than by a majority vote of shares outstanding.
Item 18 - PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
Detailed information on Purchase and Redemption of Shares as well
as Pricing is included in the Prospectus. The Trust may suspend the right
to redeem shares or postpone the date of payment upon redemption for
more than seven (7) days for (a) any period during which the New York
Stock Exchange is closed or trading on the exchange is restricted; (b) for
any period during which an emergency exists which makes it impossible
or impractical for the Funds to dispose of securities owned by them or the
Funds cannot determine the value of their respective net assets or for
such other periods as the Securities and Exchange Commission may
permit.
Item 19 - TAX STATUS
The series Funds within the Trust intend to qualify as management
investment companies for purposes of Subchapter M of the Internal
Revenue Code and expect to be treated as a regulated investment company
for income tax purposes.
Item 20 - UNDERWRITERS
There are no underwriters of the Funds.
Item 21 - CALCULATION OF PERFORMANCE DATA
Each Fund's performance will be calculated on a Total Return
basis, which is the sum of any income paid and any realized or unrealized
gain or loss of principal. From time to time, the Funds may publish their
average total returns for periods of time. The formula for calculating such
returns is 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 payment
made at the beginning at the 1, 5 or 10 year periods at the end of the 1, 5
or 10 year periods (or fractional portions thereof) Other time periods may
be used from time to time.
Dividends and capital gains are assumed to be reinvested.
Total Return Performance Since May 28, 1998 Inception
</TABLE>
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
Payment $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Av.Annualized
Tot Ret 8.3% 12.8% 16.7% 10.4% -1.6% -3.9%
Years: 5/28/97
to 12/31/98 1.59 1.59 1.59 1.59 1.59 1.59
Ending
Value 11,348 12,111 12,797 11,708 9,748 9,386
</TABLE>
<PAGE>
Page 5
Where Yield is calculated, the following formula is used:
YIELD = 2 [(a-b + 1)6 - 1]
cd
where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the
period.
Yield Calculation 30 Days Ended 12/31/1998
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
Divs &
Int Earned 4901 3167 5568 10551 11991 4490
Expenses
Accrued 499 344 1458 1210 1252 304
Avg. Shrs.
Outstanding 95292 53710 136574 134561 145842 38521
Max
Offering
price end
of Period 10.45 11.16 12.99 11.45 10.60 9.67
30 Day
Yield 5.36% 5.72% 2.80% 7.39% 8.49% 13.86%
NOTE: Since the LCSF, SCSF, INTF and ACF tend to receive most of their
income in December, the 30 day yields may significantly overstate the
annualized yields.
</TABLE>
OTHER INFORMATION
The Prospectus and this Statement of Additional Information do not
contain all of the information contained in the Trust's registration
Statement. The Registration Statement and its exhibits may be examined
at the offices of the Securities and Exchange Commission in Washington,
D.C.
Statements contained in the Prospectus and this Statement of
Additional Information as to the contents of any agreement or other
document referred to are not necessarily complete and reference is made to
the copy of the agreement or document filed as an exhibit to the
Registration Statement for their complete and unqualified contents.
<PAGE>
Page 6
Item 22 - FINANCIAL STATEMENTS
STAAR INVESTMENT TRUST
FINANCIAL STATEMENTS
DECEMBER 31, 1998
CERTIFIED PUBLIC ACCOUNTANTS
CARSON & COMPANY
P.O. BOX 395
201 VILLAGE COMMONS
SEWlCKLEY, PA 15143
(412) 741-8588
FAX (412) 741-0833
Independent Auditor's Report
To the Shareholders and Trustees
STAAR Investment Trust
We have audited the statement of assets and liabilities, including the
schedules of investments of STAAR Investment Trust (comprising,
respectively,
the Intermediate Bond Fund, Long Term Bond Fund, Larger Company
Stock Fund, Smaller Company Stock Fund, International Fund and
Alternative Categories Fund) as of December 31, 1998, and the
related statements of operations and cash flows for the year then ended,
the statement of changes in net assets for the two years then ended, and the
selected per share data and ratios for the periods indicated. These
financial statements and per share data and ratios are the responsibility
of the Trust's management. Our responsibility
is to express an opinion on these
financial statements and per share data and ratios based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and per
share data and ratios are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1998 by
correspondence with the custodians. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and selected per share data and
ratios referred to above present fairly, in all material respects, the
financial position of each of the respective portfolios constituting the
STAAR Investment Trust as of December 31, 1998, the results of their
operations
and their cash flows for the year then ended, the changes in their net
assets for the two years
then ended, and
the selected per share data and ratios
for the periods indicated, in conformity with generally accepted accounting
principles.
Sewickley, PA
February 26, 1999
<PAGE>
Page 7
STAAR INVESTMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
ASSETS
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF
INTF ACF
<S> <C> <C> <C> <C>
<C> <C>
Investments in
securities,at value - $ 1,239,273 $ 606,264 $ 1,852,521 $ 1,614,078
$1,609,050 $ 374,005
Cash (Not including
money market funds) 0 0 0 0
0 0
Interest Receivable 16,891 7,492 560 39
95 111
Total Assets 1,256,164 613,756 1,853,081 1,614,117
1,609,145 374,116
LIABILITIES
Accounts Payable
for Securities 102,148 15,116 0 0
0 0
Accounts Payable -Other
(Advisors, TTEE,
12B-1 Fees) 513 356 1,506 1,250
1,294 314
Total Liabilities 102,661 15,472 1,506 1,250
1,294 314
NET ASSETS $ 1,153,503 $ 598,284 $ 1,851,575 $ 1,612,867
$1,607,851 $ 373,802
Shares of Beneficial
Interest Outstanding 110,356 53,612 142,510 140,866
151,734 38,641
Net Asset Value
Per Share $10.45 $11.16 $12.99 $11.45
$10.60 $9.67
</TABLE>
NOTE: The accompanying notes are an integral part of these financial
statements.
<PAGE>
Page 8
1 SST INTERMEDIATE BOND FUND Portfolio Valuation Date 12/31/1998
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of Val.
<S> <C> <C> <C> <C> <C> <C>
<C>
205,758 Cash & Equiv. 100.00 100.00 205,758 205,758 0
16.6%
Sub-Total Cash & Equiv. 205,758 205,758 0
16.6%
U.S. Treasury Obligations
20,000 US Tr Nt 6.50 4/30/99 100.73 100.63 20,146 20,125
(21) 1.6%
45,000 US Tr Nt 6.25 8/31/00 98.97 102.53 44,535 46,139
1,604 3.7%
20,000 US Tr Nt 6.375 8/15/02 100.45 105.53 20,089 21,106
1,017 1.7%
20,000 US Tr Nt 6.5 5/15/05 100.19 109.56 20,037 21,912
1,875 1.8%
25,000 US Tr Nt 7.0 7/15/06 100.76 114.09 25,191 28,523
3,332 2.3%
20,000 US Tr Nt 5.5 2/15/08 100.42 105.97 20,084 21,194
1,110 1.7%
20,000 US Tr Nt 5.375 2/15/01 100.38 101.53 20,075 20,306
231 1.6%
50,000 US Tr Nt 5.5 12/31/00 102.69 101.69 51,344 50,844
(500) 4.1%
Sub-Total U.S. Treasury 221,500 230148
8,648 18.6%
Gov. Agency Obligations
50,000 FHLMC Deb 6.49 12/19/05 100.70 102.00 50,350 51,000 650
4.1%
60,000 FHLMC Deb 6.25 6/24/08 100.00 100.31 60,000 60,188 188
4.9%
20,000 Fed Hm Ln Bk 6.17 7/30/02 102.22 103.75 20,433 20,750 307
1.7%
40,000 Fed Hm Ln Bk 5.94 1/30/01 99.82 100.06 39,929 40,025 96
3.2%
40,000 Fed Hm Ln Bk 5.925 8/14/03 100.98 100.78 40,391 40,312
(79) 3.3%
25,000 Fed Nat Mtg Ass 7.32 5/3/06 100.00 104.88 25,000 26,220
1,220 2.1%
25,000 Fed Nat Mtg Ass 7.52 4/23/04 101.39 100.71 25,348 25,178
(170) 2.0%
35,000 Fed Nat Mtg Ass 7.37 3/09/07 103.12 102.47 36,092 35,865
(227) 2.9%
75,000 Fed Nat Mtg Ass 5.39 11/5/03 99.56 98.57 74,672 73,928
(744) 6.0%
20,000 TVA Pwr 93Ser 6.125 7/15/03 97.00 102.19 19,400 20,438
1,038 1.6%
13,000 TVA Pwr 95Ser 6.375 6/15/05 97.25 105.91 12,643 13,768
1,125 1.1%
Sub-Total Gov. Agency 404,267 407,671
3,404 32.9%
Corporate Obligations
25,000 Avco Fin Srv 7.375 8/15/01 102.00 104.96 25,500 26,240 740
2.1%
30,000 Columb/HCA Hlth 6.87 9/15/03 98.63 98.54 29,588 29,652
(26) 2.4%
20,000 DetEd SecMdTr59 6.27 3/15/00 100.00 100.82 20,000 20,164 164
1.6%
20,000 IBM NT BkEntNC 7.25 11/01/02 102.14 106.94 20,427 21,388 961
1.7%
25,000 M Lynch&Co Nts NC 8.0 2/1/02 103.50 106.85 25,875 26,713 838
2.2%
15,000 Morg Stnly Nt 6.375 12/15/03 96.90 102.91 14,535 15,437 902
1.2%
30,000 Stud Ln Mkt Ass 6.07 2/14/02 99.50 100.04 29,850 30,012 162
2.4%
40,000 Disney Co Nts 6.375 3/30/01 102.79 102.82 41,117 41,128 11
3.3%
20,000 BellSouth Comm 6.5 2/01/00 100.25 101.37 20,050 20,274 224
1.6%
80,000 Ford Mtr Cr 6.0 1/14/03 102.84 101.82 82,268 81,456
(812) 6.6%
40,000 Mellon Finl Co. 6.0 3/01/04 100.09 101.89 40,036 40,756 720
3.3%
40,000 Sears Acc Corp 6.92 6/17/04 104.80 106.41 41,920 42,564 644
3.4%
Sub-Total Corporate 391,166 395,693
4,527 31.9%
Total Account 1,222,693 1,239,273
16,580 100.0%
</TABLE>
See notes to financial statements
<PAGE>
Page 9
2 SST LONG TERM BOND FUND Portfolio Valuation Date 12/31/98
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of
Val.
<S> <C> <C> <C> <C> <C>
<C> <C>
3,017 Cash & Equiv. 1.00 1.00 3,017 3,017
0 0.5%
Sub-Total Cash & Equiv. 3,017 3,017
0 0.5%
U.S. Treasury Obligations
10,000 US Tr Nt 5.625 2/15/06 92.70 105.78 9,270 10,578
1,308 1.7%
75,000 US Tr Nt 7.25 5/15/16 105.59 121.13 79,194 90,844
11,650 15.0%
25,000 US Tr Nt 7.125 2/15/23 100.88 123.03 25,219 30,758
5,539 5.1%
15,000 US Tr Nt 6.875 8/15/25 99.99 121.44 14,998 18,216
3,218 3.0%
20,000 US Tr Nt 7.25 8/15/22 100.81 124.31 20,163 24,863
4,700 4.1%
10,000 US Tr Nt 6.25 8/15/23 104.86 111.88 15,730 16,781
1,051 2.8%
Sub-Total U.S. Treasury 164,574 192,039
27,466 31.7%
Gov. Agency Obligations
20,000 FHLMC 7.375 10/25/11 99.50 101.34 19,900 20,269
369 3.3%
35,000 FHLMC 6.85 5/14/13 100.28 101.41 35,099 35,492
393 5.9%
30,000 FHLMC 6.42 8/19/13 101.26 100.72 30,378 30,215
(163) 5.0%
25,000 FHLMC 6.7 2/15/11 102.94 101.81 25,734 25,453
(281) 4.2%
Sub-Total Gov. Agency 111,111 111,429
318 18.4%
Corporate Obligations
15,000 Bankamer Corp MTN 6.5 5/6/13 100.00 100.13 15,000 15,020
20 2.5%
20,000 Bear St MtnTr798 7.4 11/20/17 100.00 100.13 20,000 20,014
14 3.3%
15,000 Chase Man Corp MTN 6.5 5/6/13 100.25 99.58 15,037 14,937
(100) 2.5%
35,000 Citicorp 7.2 9/15/10 102.38 101.47 35,831 35,514
(317) 5.9%
20,000 Disney Mtn Semi 7.75 9/30/11 100.00 101.58 20,000 20,316
316 3.4%
10,000 FPL Grp Cap Inc 7.625 5/01/13 100.26 103.84 10,025 10,384
359 1.7%
40,000 Ford Mtr Cred MTN 7.0 9/20/10 101.00 102.35 40,400 40,940
540 6.8%
25,000 GE Cap Corp 6.4 1/16/13 99.75 100.05 24,938 25,012
74 4.1%
20,000 Gen Mot Corp Nts 7.10 3/15/06 99.31 108.40 19,861 21,680
1,819 3.6%
15,000 Morgn Stnly Cap Gr 7.45 7/3/12 100.00 101.01 15,000 15,152
152 2.5%
15,000 So.Westn Bell Deb 6.75 6/01/08 96.25 100.83 14,438 15,125
687 2.5%
30,000 Xerox Cr Corp MTN 6.5 1/28/13 100.00 101.03 30,000 30,309
309 5.0%
35,000 Xerox Cr Corp MTN 6.5 2/11/13 100.00 101.07 35,000 35,375
375 5.8%
Sub-Total Corporate 295,530 299,777
4,245 49.4%
Total
Account 574,232 606,264
32,032 100.0%
</TABLE>
See notes to financial statements
<PAGE>
Page 10
3 SST LARGER COMPANY STOCK FUND Portfolio Valuation Date 12/31/98
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of Val.
<S> <C> <C> <C> <C> <C>
<C> <C>
139,226 Cash & Equiv. 1.00 1.00 139,226 139,226
0 7.5%
Sub-Total Cash & Equiv. 139,226 139,226
0 7.5%
U.S. Large Co. Stock Fds
5726 Bear Stearns S&P Stars A 20.42 22.97 116,900 131,525
14,625 7.1%
1869 Clipper Fund 69.35 75.37 129,604 140,857
11,253 7.6%
2857 Franklin Growth Fund Cl 1 24.92 31.45 71,192 89,860
18,668 4.9%
5007 Fundamental Investors Fund 25.09 28.92 125,604 144,800
19,196 7.8%
1238 Janus Twenty Fund 44.87 53.30 55,538 65,972
10,434 3.6%
31355 Putnam Investors A Fund 12.87 14.82 403,414 464,683
61,269 25.1%
3877 Torray Fund 35.08 36.48 136,023 141,444
5,421 7.6%
6315 Washington Mutual Investors 25.54 32.91 161,308 207,843
46,535 11.2%
Sub-Total Large Co. Stock Fds 1,199,584 1,386,983
187,401 74.9%
U.S. Large Co. Stock Unit Trusts
9478 Peroni Top 10 Grwth Tr 98 Ser 9.96 11.89 94,372 112,728
18,356 6.1%
Sub-Total Cash & Equiv. 94,372 112,728
18,356 6.1%
U.S. Larger Mid-Cap Stock Fds
1630 Mairs and Power Growth Fund 69.81 92.68 113,821 151,108
37,287 8.2%
1054 Strong Schafer Value Fund 60.18 59.29 63,416 62,475
(941) 3.4%
Sub-Total Larger Mid-Cap Fds 177,237 213,583
36,346 11.5%
Total
Account 1,610,418 1,852,521
242,103 100%
</TABLE>
See notes to financial statements
<PAGE>
Page 11
4 SST SMALLER COMPANY STOCK FUND Portfolio Valuation
12/31/98
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of
Val
<S> <C> <C> <C> <C> <C>
<C> <C>
47864 Cash & Equiv. 1.00 1.00 47,864 47,864
0 3.0%
Sub-Total Cash & Equiv. 47,864 47,864
0 3.0%
U.S. Small Co. Stock Funds
9261 Acorn Fund 16.25 16.85 150,510 156,045
5,535 9.7%
11156 Frnkln Small Cap Growth Fd I 20.27 22.57 226,080 251,788
25,708 15.6%
9986 Ivy Emerging Growth Fund A 26.50 32.65 264,628 326,052
61,424 20.2%
9103 SSGA Small Cap Fund 19.30 19.41 175,739 176,696
957 10.9%
Sub-Total Small Co. Stock Fds 816,957 910,581
93,624 56.4%
U.S. Smaller Mid-Cap Stocks
11323 Putnam Cap. Apprec. Fund A 22.70 22.66 257,028 256,585
(443) 15.9%
5648 T Rowe Price New Horizons Fd 23.76 23.34 134,192 131,831
(2,361) 8.2%
Sub-Total Smaller Mid-Cap Fds 391,220 388,416
(2,804) 24.1%
U.S. Microcap Stock Funds
13838 Frnkln Microcap Value Fund I 19.42 19.31 268,678 267,217
(1,461) 16.6%
Sub-Total U.S Microcap Funds 268,678 267,217
(1,461) 16.6%
Total
Account 1,524,719 1,614,078
89,359 100%
</TABLE>
See notes to financial statements
<PAGE>
Page 12
5 SST INTERNATIONAL FUND Portfolio Valuation Date 12/31/98
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of Val.
<S> <C> <C> <C> <C> <C>
<C> <C>
32867 Cash & Equiv. 1.00 1.00 32,867 32,867
0 2.0%
Sub-Total Cash & Equiv. 32,867 32,867
0 2.0%
International Stock Funds
5464 Europacific Fund 26.20 28.40 143,148 155,183
12,035 9.6%
6339 Hotchkis & Wiley Int'l Fund 22.29 23.28 141,317 147,570
6,253 9.2%
6496 Ivy International Fund 35.92 41.20 233,321 267,646
34,325 16.6%
17088 Putnam Int'l Growth Fund A 18.22 19.23 311,355 328,600
17,245 20.4%
10201 T R Price Int'l Stock Fund 13.64 14.99 139,150 152,919
13,769 9.5%
22866 Templeton Foreign Fund I 10.04 8.39 229,559 191,844
(37,715) 11.9%
9151 Warburg Pincus Int'l Eq Fd 19.35 17.79 177,065 162,804
(14,261) 10.1%
Sub-Total International Fds 1,374,915 1,406,566
31,654 87.4%
Developing Markets Funds
16468 Templeton Devel. Mkts Tr I 14.32 10.30 235,830 169,617
(66,213) 10.5%
Sub-Total Cash & Equiv. 235,830 169,617
(66,213) 10.5%
Total
Account 1,643,612 1,609,050
(34,562) 100%
</TABLE>
See notes to financial statements
<PAGE>
Page 13
6 SST ALTCAT FUND Portfolio Valuation 12/31/98
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal
UnrealG/L % of Val.
<S> <C> <C> <C> <C> <C>
<C> <C>
23829 Cash & Equiv. 1.00 1.00 23,829 23,829
0 6.4%
Sub-Total Cash & Equiv. 23,829 23,829
0 6.4%
U.S.Mid-Cap Stock Funds
1091 Muhlenkamp Fund 34.49 37.65 37,618 41,062
3,444 11.0%
Sub-Total U.S. Mid-cap Stock 37,618 41,062
3,444 11.0%
Global Small Co. Stock Funds
2257 Mutual Series Discovery Fd I 18.44 17.19 41,615 38,801
(2,814) 10.4%
446 Small Cap World Fund I 25.97 27.64 11,576 10,977
(599) 2.9%
Sub-Total Global Small Co. Stock 53,191 49,779
(3,416) 13.3%
Alternative Categories Fds
484 Franklin Gold Fund I 14.50 7.72 7,020 3,737
(3,283) 1.0%
1699 Frnkln Real Estate Sec Fd I 14.60 14.32 24,806 24,332
(474) 6.5%
2715 Frnkln Nat. Resources Fd I 14.68 10.50 39,861 28,507
(11,354) 7.6%
955 Invesco Strategic Tech Fd 31.41 34.99 30,000 33,419
3,419 8.9%
6669 Ivy China Region Fund A 8.50 6.30 56,684 42,014
(14,670) 11.2%
3802 Templeton Latin Amer Fund I 11.44 7.12 43,505 27,071
(16,434) 7.2%
1276 Templeton Global Real Est I 14.45 13.67 18,426 17,438
(988) 4.7%
1217 Vanguard Special Energy Fund 22.27 18.42 27,112 22,422
(4,690) 6.0%
624 Vanguard Special Health Fund 75.18 96.85 46,881 60,396
13,515 16.1%
Sub-Total Alternative Categories 294,295 259,335
(34,958) 69.3%
Total
Account 408,933 374,005
(34,928) 100%
</TABLE>
See notes to financial statements
<PAGE>
STAAR INVESTMENT TRUST
STATEMENT OF OPERATIONS
12 MONTH PERIOD ENDING DECEMBER 31, 1998
(Total, Six Series Funds)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Investment Income IBF LTBF LCSF SCSF INTF ACF
Mutual fund dividends
(Including Money Market
Funds) $1,881 $1,389 $20,717 $7,519 $26,850 $8,464
Less: Foreign 0 0 0 0 (2,650) ( 227)
Withholding Taxes
Interest 47,271 30,691 0 0 0 0
Total Income 49,152 32,080 20,717 7,519 24,200 8,237
Expenses
Investment advisory fees 5,006 3,620 15,017 12,940 13,319 3,306
Directors fees, filing,
tax 715 452 1,502 1,294 1,332 337
Interest 0 0 0 0 0 0
Marketing/Distrib. 12b-1 21 0 3 0 0 0
Other Expenses 0 0 387 0 0 0
Total Expenses 5,742 4,072 16,909 14,234 14,651 3,643
Less: Fees Waived (1,033) (603) 0 0 0 0
Net Expenses 4,709 3,469 16,909 14,234 14,651 3,643
Net Investment income $44,443 $28,611 $3,808 -$6,715 $9,549 $4,594
Realized and unrealized
appreciation on Investments
Realized long and short
term capital gains $1,639 $184 96,995 $47,489 $26,887 $4,944
Unrealized appreciation
(depreciation) 8,698 12,670 93,802 -13,187 -11,508 -39,359
Net Realized and
Unrealized Appreciation
(Depreciation) 10,337 12,854 190,797 34,302 15,379 -34,415
Net increase in net
assets resulting from
operations $54,780 $41,465 $194,605 $27,587 $24,928 $(29,821)
</TABLE>
NOTE: The accompanying notes are an integral part of these financial
statements.
<PAGE>
Page 15
STAAR INVESTMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Intermediate Bond Fund Long-Term Bond Fund
Large Co. Stock Fund
Year Ended Year Ended Year Ended Year Ended
Year Ended Year Ended
12/31/98 12/31/97 12/31/98 12/31/97
12/31/98 12/31/97
<S> <C> <C> <C> <C>
<C> <C>
Increase in net
assets from
operations:
Investment income- net $ 44,443 $ 24,816 $ 28,611 $ 16,027 $
3,808 $ 20,711
Net realized gain on
investments $ 1,639 $ 416 $ 184 $ 0
$96,995 $ 80,391
Unrealized appreciation
of investments $ 8,698 $ 6,335 $ 12,670 $ 14,766
$93,802 $ 113,591
Net increase in net
Assets resulting from
operations $ 54,780 $ 31,567 $ 41,465 $ 30,793
$194,605 $ 214,693
Distributions to
shareholders from:
Investment income $( 39,696) $( 19,525) $(26,356) $(14,600) $(
5,139) $( 20,697)
Realized long term gains $( 1,639) $( 416) $( 184) $ 0 $(
95,098) $( 80,391)
Total distributions $(41,335) $( 19,941) $(26,540) $(14,600)
$(100,237) $( 101,088)
Capital share
transactions
(Note 3)
Purchases $ 547,135 $ 485,679 $245,762 $ 93,954
$571,825 $ 367,927
Redemptions $( 70,349) $( 150,849) $(27,482) $( 1,000)
$(190,149) $( 42,803)
Reinvestment of
dividends $ 40,840 $ 19,941 $ 26,169 $ 14,600 $
99,911 $ 101,088
Net increase in net assets
resulting from capital
share transactions $ 517,626 $ 354,771 $244,449 $ 107,554
$481,587 $ 426,212
Total increase in
net assets $ 531,071 $ 366,397 $259,374 $ 123,747
$575,955 $ 539,817
Net assets
Beginning of period $ 622,432 $ 256,035 $ 338,910 $ 215,163
$1,275,620 $ 735,803
End of period $1,153,503 $ 622,432 $ 598,284 $ 338,910
$1,851,575 $1,275,620
</TABLE>
STAAR INVESTMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS (Cont.)
<TABLE>
<CAPTION>
Smaller Co. Stock Fund International Fund
AltCat Fund
Year Ended Year Ended Year Ended Year Ended
Year Ended Year Ended
12/31/98 12/31/97 12/31/98 12/31/97
12/31/98 12/31/97
<S> <C> <C> <C> <C>
<C> <C>
Increase in net
assets from
operations:
Investment income- net $( 6,715) $ 12,895 $ 9,549 $ 16,479 $
4,594 $ 3,034
Net realized gain on
investments $ 47,489 $ 19,460 $ 26,887 $ 41,589 $
4,944 $ 0
Unrealized appreciation
of investments $( 13,187) $ 102,497 $( 11,508) $( 50,250) $(
39,359) $ 1,692
Net increase in net
Assets resulting from
operations $ 27,587 $ 134,852 $ 24,928 $ 7,818
$(29,821) $ 4,726
Distributions to
shareholders from:
Investment income $ 0 $( 12,886) $( 10,747) $( 16,453) $(
4,797) $( 2,968)
Realized long term gains $( 41,988) $( 19,460) $( 26,887) $( 41,589) $(
4,944) $ 0
Total distributions $( 41,988) $( 32,346) $( 37,634) $( 58,042) $(
9,741) $( 2,968)
Capital share
transactions
(Note 3)
Purchases $ 522,933 $ 389,837 $ 588,719 $ 520,694 $
148,419 $186,767
Redemptions $(114,493) $( 14,389) $(131,183) $( 21,228)
$( 52,039) $(8,496)
Reinvestment of
dividends $ 41,616 $ 32,346 $ 37,328 $ 58,042 $
9,741 $ 2,968
Net increase in net assets
resulting from capital
share transactions $ 450,056 $ 407,794 $ 494,864 $ 557,508 $
106,121 $181,239
Total increase in
net assets $ 435,655 $ 510,300 $ 482,158 $ 507,284 $
66,559 $182,997
Net assets
Beginning of period $1,177,212 $ 666,912 $1,125,692 $ 618,408 $
307,242 $124,245
End of period $1,612,867 $1,177,212 $1,607,850 $1,125,692 $
373,801 $307 242
</TABLE>
NOTE: The accompanying notes are an integral part of these financial
statements.
<PAGE>
Page 16
STAAR INVESTMENT TRUST
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
IBF LTBF LCSF SCSF INTF ACF
Net increase
in cash from
operations $54,780 $41,465 $194,605 $27,587 $24,928 $(29,821)
Adjustments
required to
reconcile to
net cash
provided by
operating
activities:
Unrealized
(appreciation)
depreciation
of investments (8,698) (12,670) (93,802) 13,187 11,508 39,359
(Increase)
decrease in:
Interest
Receivable
(Accum NII) (6,292) (2,974) 0 0 0 0
Increase
(Decrease)in:
Accrued
Interest 139 91 (145) 266 277 78
Taxes Payable 0 0 0 0 0 0
Advisory/TTEE
Fees 144 148 396 226 336 48
Accounts
Payable 102,169 15,116 3 0 0 0
Net cash
provided by
Operating
activities $142,242 $41,176 $101,057 $41,266 $37,049 $9,664
Cash provided
(used) by
investment
activities
Investments
Purchased $(609,398) $(326,447) $(926,960) $(570,933) $(559,275) $(120,365)
Sales or
Redemptions 182,801 32,146 501,947 92,931 33,843 73
Net(used)by
investment
Activity $(426,597) $(294,301) $(425,013) $(478,002) $(525,432) $(120,292)
Cash provided
(used) by
financing
activities
Shareholder
Contributions $547,135 $245,762 $571,825 $522,932 $588,719 $148,420
Shareholder
Redemptions
(including
amounts
Re-invested in
other Trust
Funds) (70,349) (27,482) (190,149) (114,493) (131,184) (52,039)
Dividends
Declared (41,336) (26,540) (100,237) (41,988) (37,634) (9,741)
Dividends
reinvested by
shareholders 40,840 26,169 99,910 41,616 37,310 9,741
Net cash
provided by
financing
activities $476,290 $217,908 $381,349 $408,068 $457,212 $96,381
Increase
(Decrease)
in Cash During
Period $191,935 $(35,216) $57,393 $(28,668) $(31,172) $(14,247)
Cash Balance -
beginning of
period $13,823 $38,233 $81,833 $76,532 $64,039 $38,076
Cash Balance -
end of period $205,758 $3,017 $139,226 $47,864 $32,867 $23,829
</TABLE>
NOTE: The accompanying notes are an integral part of these financial
statements.
<PAGE>
Page 17
STAAR INVESTMENT TRUST
NOTES TO FlNANClAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - ORGANIZATION AND PURPOSE
Staar Investment Trust (the Trust) was organized as a Pennsylvania business
trust under applicable statutes of the Commonwealth of Pennsylvania. It
was formed on February 28, 1996.
The Trust is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Trust consists of six separate series portfolios (funds). The funds are
organized in such a manner that each fund corresponds to a standard asset
allocation category, with the exception of the Alternative Categories Fund
which is a flexibly managed fund that may invest in assets not included in
the other funds. The Funds are:
The STAAR Intermediate Bond Fund
The STAAR Long-Term Bond Fund
The STAAR Larger Company Stock Fund
The STAAR Smaller Company Stock Fund
The STAAR International Fund
The STAAR Alternative Categories Fund
Each fund is managed separately and has its own investment objectives and
strategies in keeping with the asset allocation category for which it is
named. Each fund may invest in other open-end funds (mutual funds) as
well as closed-end funds and individual securities.
Security Valuation - Net Asset value for each portfolio is computed as
of the close of business on each business day. New investments received
during that day purchase shares of beneficial interest based upon the
end-of-day Net Asset Value per share. Included in the end-of-day net
asset valuation for each portfolio is the net asset valuation of all
investee mutual funds as published on their respective web-sites or
elsewhere. When applicable, equity securities traded on a national
securities exchange (or reported on the NASDAQ national market) are
stated at the last reported sales price on the day of valuation; other
securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are stated at the last quoted bid
price. Short-term notes are stated at amortized cost, which is equivalent
to value. There were no restricted securities owned by any of the
portfolios as of December 31, 1998. Restricted
securities and other securities for which quotations are not readily
available will be valued at fair value as determined by the Trustees.
Federal Income Taxes - The Trust complies with the requirements of the
Internal Revenue Code that are applicable to regulated investment
companies and distributes all its taxable income to its shareholders.
Therefore, no federal or state income tax provision is required.
Distributions to shareholders - Dividends to shareholders are recorded on
the ex-dividend date.
Other - The Trust follows industry practice and records
security transactions on the trade date. Dividend income is recognized on
the ex-dividend date, and interest income is recognized on the accrual
basis. Discounts and premiums on securities purchased, if significant, are
amortized over the life of the respective securities.
Use of estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reported period. Actual results could differ from those
estimates.
NOTE 3 - SHAREHOLDER TRANSACTIONS
The declaration of Trust provides for an unlimited number of shares of
beneficial interest, without par value. The declaration of Trust also
established six series of shares which correspond to the six funds described
in Note 2. During the years ended December 31, 1998 and 1997, 99% and 100%
of dividends declared were reinvested by the respective
owners of beneficial interest. Transactions in units of beneficial
interest were as follows:
<PAGE>
Page 18
<TABLE>
STAAR INVESTMENT TRUST SHAREHOLDER TRANSACTIONS
YEAR ENDED 12/31/98
<CAPTION>
Fund December 31, 1997 Balance Sold Reinvestment Of Dividends
Redemption December 31, 1998 Balance
Shares Amount Shares Amount Shares Amount Shares
Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
Intermediate
Bond Fund 60,904 $ 605,200 52,286 $ 547,135 3,932 $ 40,840
(6,765) $ (70,349) 110,356 $1,122,826
Long-Term
Bond Fund 31,339 $ 315,763 22,345 $ 245,762 2,372 $ 26,169
(2,445) $ (27,482) 56,611 $ 560,212
Larger
Company
Stock Fund 104,889 $1,131,829 45,157 $ 571,825 7,679 $ 99,910
(15,216) $(190,149) 142,510 $1,613,415
Smaller
Company
Stock Fund 102,877 $1,075,143 45,382 $ 522,933 3,628 $ 41,616
(11,000) $(114,493) 140,886 $1,525,199
International
Fund 107,214 $1,145,174 53,791 $ 588,719 3,500 $ 37,310
(12,771) $(131,184) 151,734 $1,640,019
Alternative
Categories
Fund 29,151 $ 302,974 14,010 $ 148,420 1,001 $ 9,741
(5,520) $( 52,039) 38,641 $ 409,096
Total
Amount $4,576,083 $2,624,794 $ 255,586
$(585,696) $6,870,767
</TABLE>
<TABLE>
STAAR INVESTMENT TRUST SHAREHOLDER TRANSACTIONS
YEAR ENDED 12/31/97
<CAPTION>
Fund December 31, 1996 Balance Sold Reinvestment Of Dividends
Redemption December 31, 1997 Balance
Shares Amount Shares Amount Shares Amount Shares
Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
Intermediate
Bond Fund 25,692 $ 250,429 48,046 $ 485,679 1,976 $ 19,941
(14,811) $ (150,849) 60,904 $605,200
Long-Term
Bond Fund 20,994 $ 208,209 9,035 $ 93,954 1,404 $ 14,600
(95) $ (1,000) 31,339 $ 315,763
Larger
Company
Stock Fund 69,302 $ 705,617 30,684 $ 367,927 8,312 $ 101,088
( 3,409) $( 42,803) 104,889 $1,131,829
Smaller
Company
Stock Fund 64,689 $667,349 36,619 $ 389,837 2,827 $ 32,346
( 1,259) $( 14,389) 102,877 $1,075,143
International
Fund 57,465 $ 587,666 45,969 $ 520,694 5,528 $ 58,042
( 1,749) $(21,228) 107,213 $1,145,174
Alternative
Categories
Fund 12,129 $ 121,735 17,483 $ 186,767 282 $ 2,968
( 742) $( 8,496) 29,151 $ 302,974
Total
Amount $2,541,005 $2,044,858 $ 228,985
$(238,765) $4,576,083
</TABLE>
Net undistributed investment income (loss) for each fund as of December
31, 1998 was as follows:
IBF $14,097
LTBF $ 6,040
LCSF $(3,943)
SCSF $(1,691)
INTF $ 2,394
ACF $ (368)
NOTE 4 - SUMMARY OF UNREALIZED GAINS AND LOSSES:
Following is a summary of unrealized gains and losses for each portfolio as
of December 31, 1998:
<TABLE>
<Caption
_____Unrealized___
Market
Cost Gain Loss Net Value
<S> <C> <C> <C> <C> <C>
Intermediate Bond $1,222,693 19,159 $ (2,579) $ 16,580 $1,239,273
Long Term Bond 574,232 32,893 (861) 32,032 $ 606,264
Larger Company
Stock Fund 1,610,418 243,044 (941) 242,103 1,852,521
Smaller Company
Stock Fund 1,524,719 93,624 (4,265) 89,359 1,614,078
International Fund 1,643,612 83,627 (118,189) (34,562) 1,609,050
AltCat 408,933 20,378 (55,306) (34,928) 374,005
TOTAL $6,984,607 $492,725 $(182,141) $310,584 $7,295,191
</TABLE>
<PAGE>
Page 19
NOTE 5 - INVESTMENT ADVISORY FEES AND OTHER
TRANSACTIONS WITH AFFILIATES: Effective
April 1, 1996, the Trust entered into a Master Investment Advisory
Agreement with STAAR Financial Advisors, Inc., a related party
(advisor). This agreement appointed the Advisor to act as investment
advisor to the Trust on behalf of six series portfolios for a one year
period. This agreement has subsequently been extended through April 1,
2000. The advisor furnishes investment management and advisory services
(rate varies for each portfolio in accordance with a fee schedule ranging
from .63% to .90% of average daily net asset value). During the years ended
December 31, 1998 and 1997, the investment advisor waived fees as follows:
<TABLE>
<CAPTION>
1998 1997
Amount of Amount of
Fund FeesWaived Fees waived
<S> <C> <C>
Intermediate Bond Fund $1,033 $ 561
Long Term Bond Fund 603 309
Larger Co. Stock Fund 0 3,793
International Fund 0 2,115
AltCat Fund 0 175
</TABLE>
The president of the investment advisor is the organizer of the Trust. The
agreement provides for an expense reimbursement from the investment advisor
if the Trust's total expense for any series (fund), exclusive of taxes,
interest, costs of portfolio acquisitions
and dispositions and extraordinary
expenses, for any fiscal year, exceed the level of expenses which such
series is permitted to bear under the most restrictive expense limitation
imposed on open-end investment companies by any state in which shares of
such series are then qualified. The agreement also stipulates that all
organization expenses of the Trust are paid by the investment advisor as
well as certain marketing, legal and accounting and transfer and custodial
services for the first two years and longer if approved by both parties on
an annual basis.
The STAAR Investment Trust is also charged 0.09% of the average daily net
asset value for each Fund for various Trust expenses; from this the
Trustees are compensated as a group at a rate of $1,125
per calendar quarter.
Certain affiliated persons holding shares in the six portfolios
purchased such shares at Net Asset value on respective dates of
purchase. Those affiliated persons held aggregate investments
in the respective portfolios as of December 31, 1998 as follows:
<TABLE>
<CAPTION>
Name IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
J. Andre Weisbrod
(including
immediate family
and retirement
accounts: 2413.727 842.374 5105.495 5879.099 5162.904 2644.742
Other Trustees
Of STAAR Invest-
ment Trust: 1523.655 1243.018 5536.649 10318.688 10931.832 1163.396
Employees of
Investment
Advisor, including
retirement
accounts: 0 0 36.183 262.014 237.569 36.096
Total Shares: 3937.382 2085.392 10678.327 16459.801 16332.305 3844.234
Value: $41,146 $23,273 $138,711 $188,467 $173,122 $ 37,174
</TABLE>
Effective September 1, 1998, the Trust received approval of a 12b-1
arrangement which provides fee (commission) payments to broker/dealers
who refer investors who become shareholders in the Trust. The fee
structure is .5% for the bond funds and 1.0% for the stock funds over the
first 12 months from date of purchase and .15% for bond funds and .25% for
stock funds per year thereafter. Fees are calculated based on fair market
values and are payable monthly the first 12 months and quarterly
thereafter. Total 12b-1 expense for 1998 was $24.
Supplementary Information - Selected Per Share Data and Ratios are provided
In detail in the prospectus.
<PAGE>
Page 20
EXAMPLE OF PRICE MAKE-UP
Using 12/31/1998 Data
<TABLE>
<CAPTION>
IBF LTBF LCSF
SCSF INTF ACF
<S> <C> <C> <C>
<C> <C> <C>
Total Assets 1,137,124.51 591,148.30 1,852,521.37
1,614,077.94 1,609,050.07 374,004.69
Total Interest 16,891.28 7,491.73 561.82
38.81 95.06 110.97
Expenses -513.67 -356.21 -1,506.30
- -1,250.42 -1,293.86 -314.17
Total Net Assets 1,153,502.10 598,283.80 1,851,576.90
1,612,866.30 1,607,851.27 373,801.50
Shares Outstanding 110,355.83 53,611.18 142,510.12
140,886.38 151,734.42 38,641.27
Net Asset Value 10.4526 11.1597 12.9926
11.4480 10.5965 9.6736
</TABLE>
<PAGE>
Page 21
PART C
OTHER INFORMATION
Item 23. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
Description of Exhibit
<S> <C>
X(a) Declaration of Trust of the Registrant
X(b) By-laws of the Registrant
(c) Not Applicable
X(d) Investment Advisory Agreement between
Registrant and
Staar Financial Advisors, Inc.
(the "Advisor")
(e) Not Applicable
(f) Not Applicable
XX (g) Custodian Agreement between Registrant and StarBank.
X (h) Form of Transfer Agency and Shareholder Services
Agreement among Registrant and the Advisor (see (d) above)
X (h) Consent to Use of Name contained in (d) above
(i) Opinion of Counsel and Consent of Counsel
(j) Consent of Independent Accountants
(k) Not Applicable
(l) Not Applicable
XXX (m) Rule 12b-1 Plan
XXXX(n) Financial Data Schedule
(o) Not Applicable
X - Filed with Initial N-1A and incorporated herein by reference.
XX - Filed with Pre-effective Amendment # 1 to Form N-1A and
incorporated herein by reference.
XXX - Filed with Proxy Statement in Post Definitive 14A filing
XXXX - Filed with Form NSAR
</TABLE>
Item 24 - PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Registrant is not directly or indirectly controlled by or under common
control with any person other than the Trustees. The Registrant does not
have any subsidiaries.
Item 25 - INDEMNIFICATION
Under the Registrant's Declaration of Trust and By-laws, any past or
present Trustee or Officer of the Registrant is indemnified to the fullest
extent permitted by law against liability and all expenses reasonably
incurred by him or her in connect with any action, suit or proceeding to
which he or she may be a party or is otherwise involved by reason of his or
her being or having been a Trustee or Officer of the Registrant. The
Declaration of Trust and By-laws of the Registrant do not authorize
indemnification where it is determined, in the manner specified in the
Declaration of Trust and the By-laws of the Registrant, that such Trustee
or Officer has not acted in good faith in the reasonable belief that his or
her actions were in the best interest of the Registrant. Moreover, the
Declaration of Trust and By-laws of the Registrant do not authorize
indemnification where such Trustee or Officer is liable to the Registrant or
its shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of his duties.
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 the 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, suit 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 questions whether such indemnification is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The Registrant, its Trustees and Officers, its investment adviser, and
persons affiliated with them are insured under a policy of insurance
maintained by the Registrant and its investment adviser, within the limits
and subject to the limitations of the policy, against certain expenses in
connection with the defense of actions, suits and proceedings, and certain
liabilities that might be imposed as a result of such actions, suits and
proceedings, to which they are parties by reason of being or having been
such Trustees or Officers. The policy expressly excludes coverage for any
Trustee or Officer whose personal dishonesty, fraudulent breach of trust,
lack of good faith, or intention to deceive or defraud has been adjudicated
or may be established or who willfully fails to act prudently.
<PAGE>
Page 22
Item 26 - BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Staar Financial Advisors, Inc. (the "Adviser"), is a registered
investment adviser providing investment advice to individuals, employee
benefit plans, charitable and other nonprofit organizations, and
corporations and other business entities.
Set forth below is a list of the Officers and Directors of the Adviser
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and
directors during the past two years.
<TABLE>
<CAPTION>
Name Position with Advisor Other
Business
<S> <C> <C>
J. Andre Weisbrod President, Director Registered
Representative
Olde Economie
Financial
Consultants, Ltd
Charles Sweeney Secretary & Director Marketing Consultant
Graphic Arts Technology
Council; Before 1992
Graphic Arts Sales
Eastman Kodak
Company
James A. Gordon Director Retired
</TABLE>
Item 27 - PRINCIPAL UNDERWRITER
Inapplicable.
Item 28 - LOCATION OF ACCOUNTS AND RECORDS
The Registrant maintains the records required by Section 31(a) of the
Investment Company Act of 1940, as amended and Rules 31a-1 to 31a-3
inclusive thereunder at its Pittsburgh office located at 604 McKnight Park
Drive, Pittsburgh, PA, 15237. Certain records, including the physical
possession of its securities, may be maintained pursuant to Rule 31a-3 at
the main office of the Registrant's custodian located as to the custodian,
at FirstStar Bank, 425 Walnut St., M/L 6118, P.O. Box 1118, Cincinnati, OH,
45201-1118, and, as to the transfer and dividend disbursing agent
functions, c/o of the Advisor at 604 McKnight Park Drive, Pittsburgh, PA,
15237.
Item 29 - MANAGEMENT SERVICES
Inapplicable
Item 30 - UNDERTAKINGS
Inapplicable
NOTICE
"The Intermediate Bond Fund (IBF)," "The Long-Term Bond
Fund (LTBF)," The Larger Company Stock Fund (LCSF)," "The Smaller Company
Stock Fund (SCSF)," "The International Fund
(INTF)," and "The Alternative Categories Fund (AltCat)" are the
designations of the Trustees under the Declaration of Trust of the Trust
dated February 28, 1996 as amended from time to time. The Declaration
of Trust has been filed with the Secretary of State of the Commonwealth
of Pennsylvania. The obligations of the Registrant are not personally
binding upon, nor shall resort be had to the private property of, any of the
Trustees, shareholders, officers, employees or agents of the Registrant,
but only the Registrant's property shall be bound.
<PAGE>
Page 23
SIGNATURES
Pursuant to the requirements of (the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant (certifies that it meets all
of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Pittsburgh, and the
State of Pennsylvania on the 8th day of September, 1999.
The Staar Investment Trust
Registrant
By: J. Andre Weisbrod, Trustee
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
Ronald G. Benson
Trustee September 8, 1999
(Signature) (date)
Jeffrey A. Dewhirst
Trustee September 8, 1999
(Signature) (date)
Thomas J. Smith
Trustee September 8, 1999
(Signature) (date)
John H. Weisbrod
Trustee September 8, 1999
(Signature) (date)
J. Andre Weisbrod
Trustee September 8, 1999
(Signature) (date)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form N 1-A of the Staar Investment Trust of our report dated February 26,
1999 on the Statement of Assets and Liabilities including the schedules of
investments as of December 31, 1998, Statements of Operations and Cash Flow
for the year then ended and the Statements of Changes in Net Assets and the
selected per share data and ratios for the periods indicated.
Carson & Co.
Certified Public Accountants
Sewickley, PA
September 8, 1999
Consent & Opinion of Legal Counsel
The Undersigned consents to the use of his name and the references
in the Post Effective Amendment to the Registration Statement on
Form N-1A of the STAAR INVESTMENT TRUST, of his opinion dated
September 3, 1999.
Pittsburgh, PA. ___________________________________
Date: September 7, 1999 Alan Z. Lefkowitz
ALAN Z. LEFKOWITZ
Counselor-at-Law
2488 Mt. Royal Road
Pittsburgh, PA 15217
Phone (412) 521 0761 Fax (412) 521 8704
September 3, 1999
The Securities and Exchange Commission
Washington DC 20549
Re: The Staar Investment Trust, (Posteffective Amendment to the
Registration Statement on Form N-iA under the Securities
Act of 1933 and the Investment Company Act of 1940
Gentlemen:
I have acted as counsel for the Staar Investment Trust (the"Trust"),
a Pennsylvania business trust, in connection with the Posteffective
Amendment to the Registration Statement filed by the Trust on Form N-1A
covering an indefinite number of units of beneficial interests in
the Trust designated as Funds established by the Trust. I have examined
the Declaration of Trust, the By-Laws and the Actions of Trustees in
connection with the establishment of the Funds. Based on such
examination, I am of the opinion that:
(1) The beneficial interests of the Trust have been duly
authorized and the respective Funds of the Trust are duly established
and authorized; and, when issued will be validly issued beneficial
interests in the Trust and of the respective Funds in which such
interests are invested.
(2) When sold and issued, the said beneficial interests of the
Trust will be validly issued, fully paid and non-assessable interests
in the Trust in accordance with their respective Fund designations.
Yours Very Truly,
Alan Z. Lefkowitz
