Filed pursuant to Rule 497(c)
Registration Nos: 333-7305
811-7685
FRONTEGRA FUNDS
PROSPECTUS
Frontegra Total Return Bond Fund
Frontegra Opportunity Fund
Frontegra Growth Fund
Frontegra Emerging Growth Fund
Frontegra Asset Management, Inc.
Neither the Securities and Exchange Commission nor
any state securities commission has approved or
disapproved these securities or determined if this
Prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
October 27, 2000
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Frontegra Funds, Inc.
c/o Firstar Mutual Fund Services, LLC
P. O. Box 701
Milwaukee, Wisconsin 53201-0701
1-888-825-2100
The Frontegra Total Return Bond Fund (the "Total Return
Bond Fund"), the Frontegra Opportunity Fund (the
"Opportunity Fund"), the Frontegra Growth Fund (the
"Growth Fund") and the Frontegra Emerging Growth Fund
(the "Emerging Growth Fund") are each a series of
Frontegra Funds, Inc., (the "Company").
The investment objective of the Total Return Bond Fund
is a high level of total return, consistent with the
preservation of capital. The Fund invests primarily in
a diversified portfolio of fixed income securities of
varying maturities.
The investment objective of the Opportunity Fund is
capital appreciation. The Fund invests primarily in a
diversified portfolio of equity securities of companies
with small market capitalizations.
The investment objective of the Growth and Emerging
Growth Funds is long-term capital appreciation. The
Growth Fund invests primarily in a diversified
portfolio of equity securities of companies with mid-
to large-sized market capitalizations while the
Emerging Growth Fund invests primarily in a diversified
portfolio of equity securities of companies with small-
to-medium market capitalizations.
These investment objectives may not be changed without
shareholder approval.
This Prospectus contains information you should
consider before investing in the Funds. Please read it
carefully and keep it for future reference.
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TABLE OF CONTENTS
The Frontegra Funds at a Glance 1
Fees and Expenses of the Funds 4
Principal Investment Strategy-Total Return Bond Fund 5
Implementation of Principal Investment Strategy-Total Return Bond Fund 5
Principal Investment Strategy-Opportunity Fund 7
Implementation of Principal Investment Strategy-Opportunity Fund 7
Principal Investment Strategy-Growth Fund 8
Implementation of Principal Investment Strategy-Growth Fund 8
Principal Investment Strategy-Emerging Growth Fund 8
Implementation of Principal Investment Strategy-Emerging Growth Fund 9
Prior Performance of Reams, Northern and B&H 9
Financial Highlights 13
Fund Management 15
Your Account 17
Exchange Privilege 18
Valuation of Fund Shares 19
Tax-Sheltered Retirement Plans 19
Dividends, Capital Gain Distributions and Tax Treatment 19
You should rely only on the information contained in
this Prospectus and in the Statement of Additional
Information ("SAI"), which is available upon request.
The Company has not authorized others to provide
additional information. The Company does not authorize
use of this Prospectus in any state or jurisdiction
where the offering cannot legally be made.
<PAGE>
THE FRONTEGRA FUNDS AT A GLANCE
The Frontegra Total Return Bond Fund
Investment Objective. The Total Return Bond Fund's
goal, also referred to as its investment objective, is
a high level of total return, consistent with the
preservation of capital.
Principal Investment Strategy. The Fund seeks to
achieve its goal through investment in a diversified
portfolio of fixed income securities of varying
maturities. When making purchase decisions, the Fund's
subadviser, Reams Asset Management Company, LLC
("Reams"), looks for securities that it believes are
undervalued in the fixed income market. In addition,
Reams structures the Fund so that the overall portfolio
has an average life (referred to as "duration") of
between four and six years based on market conditions.
Reams uses a two-step process in managing the Fund.
First, Reams evaluates market attractiveness to
establish a measure of the portfolio's duration. Next,
Reams assembles the Fund's portfolio from the best
available values based on analysis by the portfolio
management team.
Although the Fund will invest primarily in investment
grade fixed income securities, the Fund may invest up
to 25% of its net assets in non-investment grade fixed
income securities (junk bonds).
The Frontegra Opportunity Fund
Investment Objective. The Opportunity Fund's goal,
also referred to as its investment objective, is
capital appreciation.
Principal Investment Strategy. The Fund seeks to
achieve its goal primarily through investment in a
diversified portfolio of equity securities of companies
with small market capitalizations. For this purpose, a
small capitalization company would typically have a
market capitalization of $1.5 billion or less. In
constructing a portfolio for the Fund, Reams uses a
value-oriented discipline. The portfolio management
team selects securities with the highest expected rates
of return based on its focus list of companies meeting
certain valuation criteria. Equity securities in which
the Fund may invest include common stocks, preferred
stocks, depositary receipts, warrants to purchase
common and preferred stocks and securities convertible
or exchangeable into common or preferred stocks. Under
normal market conditions, the Fund will invest at least
80% of its net assets in these securities. Under
unusual circumstances, as a temporary defensive
technique, the Fund may invest up to 100% of its total
assets in cash and short-term fixed income securities.
When so invested, the Fund may not achieve its
investment objective.
The Frontegra Growth Fund
Investment Objective. The Growth Fund's goal, also
referred to as its investment objective, is long-term
capital appreciation.
Principal Investment Strategy. The Fund seeks to
achieve its goal primarily through investment in a
diversified portfolio of equity securities of companies
with mid- to large-sized market capitalizations. For
this purpose, a mid- to large-sized market
capitalization company would typically have a market
capitalization of $1.5 billion or more. In
constructing a portfolio for the Fund, the Fund's
subadviser, Northern Capital Management, LLC
("Northern"), selects securities with the highest
expected rates of return based on Northern's analysis
of each company's competitive position. Equity
securities in which the Fund may invest include common
stocks, preferred stocks, warrants to purchase common
stocks or preferred stocks, depositary receipts and
securities convertible or exchangeable into common or
preferred stocks. Under normal market conditions, the
Fund will invest at least 80% of its net assets in
these securities.
The Frontegra Emerging Growth Fund
Investment Objective. The Emerging Growth Fund's goal,
also referred to as its investment objective, is long-
term capital appreciation.
Principal Investment Strategy. The Fund seeks to
achieve its goal primarily through investment in a
diversified portfolio of equity securities of companies
with small-to-medium market capitalizations. For this
purpose, a small-to-
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medium sized market capitalization
company would typically have a market capitalization of
$2 billion or less and/or annual revenues of less than
$500 million. In constructing a portfolio for the
Fund, the Fund's subadviser, Berents & Hess Capital
Management Incorporated ("B&H") identifies companies
B&H believes will have a growing stream of earnings.
Equity securities in which the Fund may invest include
common stocks, preferred stocks, warrants to purchase
common stocks or preferred stocks, depositary receipts
and securities convertible or exchangeable into common
or preferred stocks. Under normal market conditions,
the Fund will invest at least 85% of its net assets in
these securities.
Principal Risk Factors. The main risks of investing in
the Funds are:
Total Return Bond, Opportunity, Growth and Emerging
Growth Funds
Market Risks. Each Fund's investments are subject to
market risk, so that the value of the Fund's
investments may decline. If the value of the Fund's
investments goes down, you may lose money. The share
price of the Funds is expected to fluctuate. Your
shares at redemption may be worth more or less than
your initial investment.
Opportunity, Growth and Emerging Growth Funds
Stock Selection Risks. The stocks selected for the
Opportunity, Growth and Emerging Growth Funds may
decline in value or not increase in value when the
stock market in general is rising.
Opportunity and Emerging Growth Funds
Small Cap Risks. Because the Opportunity and Emerging
Growth Funds will invest primarily in small
capitalization stocks, which are more volatile than
investments in larger companies, you should expect that
the value of each Fund's shares will be more volatile
than the shares of a fund that invests in medium or
large capitalization companies such as the Growth Fund.
Total Return Bond Fund
Individual Bond Risks. The Total Return Bond Fund's
investments are also subject to the risks inherent in
individual bond selections. While fixed income
securities normally fluctuate less in price than
stocks, there have been extended periods of increases
in interest rates that have caused significant declines
in fixed income securities prices.
Credit Risk. Individual issues of fixed income
securities in the Total Return Bond Fund may also be
subject to the credit risk of the issuer.
Prepayment Risk. The Total Return Bond Fund may invest
in mortgage- and asset-backed securities which are
subject to fluctuations in yield due to prepayment
rates that may be faster or slower than expected.
Growth Fund
Mid Cap Risks. Because the Growth Fund will invest in
mid-capitalization stocks, which are more volatile than
investments in larger companies, you should expect that
the value of the Growth Fund's shares will be more
volatile than a fund that invests exclusively in large
capitalization companies.
Who Should Invest. The Funds are suitable for long-
term investors only and are not designed as short-term
investment vehicles.
The Total Return Bond Fund may be an appropriate
investment for you if you:
* Seek long-term preservation of capital; and
* Want to include a bond fund in your portfolio.
The Opportunity Fund may be an appropriate investment
for you if you:
* Seek capital appreciation; and
* Want to include a small-cap fund in your portfolio.
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The Growth Fund may be an appropriate investment for you if you:
* Seek long-term capital appreciation; and
* Want to include a mid- to large-cap fund in your portfolio.
The Emerging Growth Fund may be an appropriate investment
for you if you:
* Seek long-term capital appreciation; and
* Want to include a small- to mid-cap fund in your portfolio.
Performance Bar Charts and Tables. The return
information provided in the bar charts and tables that
follows illustrates how each Fund's performance can
vary, which is one indication of the risks of investing
in a Fund. The information also provides some
indication of the risks of investing in a Fund by
showing how the Fund's average annual returns compare
with a broad measure of market performance. Please
keep in mind that a Fund's past performance does not
necessarily represent how it will perform in the
future. Performance information for the Emerging
Growth Fund is not included because it has not been in
operation for a full calendar year.
Calendar Year Total Returns(1)
1997 1998 1999
------ --------------- -----------------------
[insert bar chart] 8.59% 8.43% (10.13%) (0.14)% 3.23% 24.99%
(TRBF) (TRBF) (Opp'y) (TRBF) (Opp'y) (Growth)
(1) The Total Return Bond Fund's year-to-date return
through September 30, 2000 was 9.53%.
The Opportunity Fund's year-to-date return through
September 30, 2000 was 8.97%.
The Growth Fund's year-to-date return through
September 30, 2000 was 2.44%.
Best and Worst Quarterly Performance
(During the periods shown above)
Fund name Best quarter return Worst quarter return
Total Return Bond Fund 3.87% (3rd quarter, 1998) (0.88)% (1st quarter, 1997)
Opportunity Fund 23.20% (2nd quarter, 1999) (17.39)% (3rd quarter, 1998)
Growth Fund 26.97% (4th quarter, 1998) (15.88)% (3rd quarter, 1998)
Average Annual Total Returns
(For the calendar year ended December 31, 1999)
Fund/Index One Year Since Inception
Total Return Bond Fund (0.14)% 5.11% (11/25/96)
Lehman Brothers Aggregate
Bond Index(1) (0.82)% 5.39%
Opportunity Fund 3.23% 0.18% (7/31/97)
Russell 2000 Index(2) 21.26% 9.80%
Russell 2000 Value Index(3) (1.49)% 0.64%
Growth Fund 24.99% 18.83% (3/18/98)
S&P 500(4) 21.05% 20.05%
(1) The Lehman Brothers Aggregate
Bond Index includes fixed rate debt issues rated
investment grade or higher by Moody's Investors
Service ("Moody's"), Standard & Poor's Corporation
("S&P") or Fitch Investors Service ("Fitch"), in that
order. All issues have at least one year to maturity
and an outstanding par value of at least $100
million. The index does not reflect investment
management fees, brokerage commissions and other
expenses associated with investing in fixed income
securities.
(2) The Russell 2000 Index is an
unmanaged index generally representative of the U.S.
market for small domestic stocks. The index does not
reflect investment management fees, brokerage
commissions and other expenses associated with
investing in equity securities.
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(3) The Russell 2000 Value Index is
comprised of those securities in the Russell 2000
Index which have lower price-to-book ratios and lower
forecasted growth rates.
(4) The S&P 500 is an unmanaged
index that contains securities typically
representative of the U.S. stock market. The index
does not reflect investment management fees,
brokerage commissions and other expenses associated
with investing in equity securities.
Fees and expenses of the Funds
This table describes the fees and expenses that you
will pay if you buy and hold shares of a Fund.
Total Return Opportunity Growth Emerging
Bond Fund Fund Fund Growth Fund
Shareholder Fees (fees
paid directly from your
investment)(1) NONE NONE NONE NONE
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)(2)
Management Fees 0.40% 0.65% 0.80% 0.90%
Distribution (12b-1) Fees NONE NONE NONE NONE
Other Expenses 0.21% 0.55% 0.64% 15.67%(4)
Total Annual Fund Operating
Expenses 0.61% 1.20% 1.44% 16.57%(4)
Fee Waiver/Expense
Reimbursement(3) 0.185% 0.30% 0.64% 15.67%
Net Expenses 0.425% 0.90% 0.80% 0.90%
____________
(1) The Funds will charge a service fee of $12 for
redemptions effected via wire transfer, and $25 for
checks that do not clear.
(2) Stated as a percentage of a Fund's average daily
net assets.
(3) Pursuant to expense cap agreements most recently
amended on October 27, 2000 between the Funds'
adviser, Frontegra Asset Management, Inc.
("Frontegra") and each Fund, Frontegra contractually
agreed to waive its management fee and/or reimburse
each Fund's operating expenses to the extent
necessary to ensure that (i) the Total Return Bond
Fund's total operating expenses do not exceed 0.425%
of the Fund's average daily net assets; (ii) the
Opportunity and Emerging Growth Fund's total
operating expenses do not exceed 0.90% of the
respective Fund's average daily net assets; and (iii)
the Growth Fund's total operating expenses do not
exceed 0.80% of the Fund's average daily net assets.
The expense cap agreements will terminate on December
31, 2001 unless extended by Frontegra and the Funds.
"Other Expenses" are presented before any waivers or
expense reimbursements.
(4) "Other Expenses" and "Total Annual Fund
Operating Expenses" for the Emerging Growth Fund are
estimates for the calendar year 2000.
Example
The following Example is intended to help you compare
the cost of investing in the Funds with the cost of
investing in other mutual funds. The Example assumes
that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end
of those periods. The Example also assumes that your
investment has a 5% return each year, that the Fund's
operating expenses remain the same each year and that
Frontegra's fee waiver/expense reimbursement discussed
above will not continue beyond the period of the
current expense cap agreement, which will terminate on
December 31, 2001. Although your actual costs may be
higher or lower, based on these assumptions, your costs
would be as follows:
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Fund 1 Year 3 Years 5 Years 10 Years
Total Return Bond Fund $43 $ 177 $322 $ 744
Opportunity Fund $92 $ 351 $631 $1,428
Growth Fund $82 $ 393 $726 $1,669
Emerging Growth Fund $92 $3,154
Principal Investment Strategy - Total Return Bond Fund
The Total Return Bond Fund will seek, under normal
market conditions, to achieve its investment objective
by investing in a diversified portfolio of fixed income
securities of varying maturities. The Fund will invest
at least 65% of its net assets in bonds. The Fund
considers a bond to be any debt instrument. These
instruments include: short-term fixed income
securities; U.S. government securities; corporate debt
securities, including convertible securities and
corporate commercial paper; mortgage-backed and other
asset-backed securities; structured notes and loan
participations; bank certificates of deposit, fixed
time deposits and bankers' acceptances; repurchase
agreements; obligations of foreign governments or their
subdivisions, agencies and instrumentalities; and
obligations of international agencies or supranational
entities.
Although the Fund primarily will invest in investment
grade fixed income securities, the Fund may invest up
to 25% of its net assets in fixed income securities
that are rated below investment grade. Investment
grade fixed income securities include bonds rated in
one of the four highest rating categories, such as BBB
or higher by S&P.
The portfolio duration of the Fund will normally fall
between four and six years based on market conditions.
Duration is a measure of a fixed income security's
average life that reflects the present value of the
security's cash flow, and accordingly is a measure of
price sensitivity to interest rate changes. For
example, if interest rates decline by 1%, the market
value of a portfolio with a duration of five years
would rise by approximately 5%. Conversely, if
interest rates increase by 1%, the market value of the
portfolio would decline by approximately 5%. The
longer the duration, the more susceptible the portfolio
will be to changes in interest rates.
As the Total Return Bond Fund's subadviser, Reams
attempts to maximize total return over a long-term
horizon through opportunistic investing in a broad
array of eligible securities. The investment process
combines top-down interest rate management with bottom-
up bond selection, focusing on undervalued issues in
the fixed income market. Reams employs a two-step
process in managing the Fund. The first step is to
establish the portfolio's duration, or interest rate
sensitivity. Reams determines whether the bond market
is under- or over-priced by comparing current real
interest rates (the nominal rate on the ten year bond
less Reams' estimate of inflation) to historical real
interest rates. If the current real rate is higher
than historical norms, the market is considered
undervalued and Reams will manage portfolios with
duration greater than the market duration. If the
current real rate is less than historical norms, the
market is considered overvalued and Reams will run
defensive portfolios. Once Reams has determined an
overall market strategy, the second step is to select
the most attractive bonds for the Fund. The portfolio
management team screens hundreds of issues to determine
how each will perform in various interest-rate
environments. The team constructs these scenarios by
considering the outlook for interest rates, fundamental
credit analysis and option-adjusted spread analysis.
The team compares these investment opportunities and
assembles the Fund's portfolio from the best available
values. Reams constantly monitors the expected returns
of the securities in the Fund versus those available in
the market and of other securities the firm is
considering for purchase. Reams' strategy is to
replace securities that it feels are approaching fair
market value with those that, according to its
analysis, are significantly undervalued.
Implementation of Principal Investment Strategy - Total
Return Bond Fund
Fixed Income Securities. The Total Return Bond Fund
may invest in a wide variety of fixed income
securities. Issuers of fixed income securities have a
contractual obligation to pay interest at a specified
rate on specified dates and to repay principal on a
specified maturity date. Certain securities (usually
intermediate- and long-term bonds) have provisions that
allow the issuer to redeem or "call" a bond before its
maturity. Issuers are most likely to call such
securities during periods of falling interest rates.
As a result, the Fund may be required to invest the
unanticipated proceeds of the called security at lower
interest rates, which may cause the Fund's income to
decline.
Commercial paper generally is considered the shortest
form of fixed income security. Notes whose original
maturities are two years or less are considered short-
term obligations. The term "bond" generally refers to
securities with
<PAGE>
maturities longer than two years.
Bonds with maturities of three years or less are
considered short-term, bonds with maturities between
three and ten years are considered intermediate-term,
and bonds with maturities greater than ten years are
considered long-term.
Principal Risks: In general, the longer the maturity
of a fixed income security, the higher its yield and
the greater its sensitivity to changes in interest
rates. Conversely, the shorter the maturity, the lower
the yield but the greater the price stability. The
values of fixed income securities also may be affected
by changes in the credit rating or financial condition
of their issuers. Generally, the lower the credit
rating of a security, the higher the degree of risk as
to the payment of interest and return of principal. To
compensate investors for taking on increased risk,
issuers deemed to be less creditworthy generally must
offer investors higher interest rates than issuers with
better credit ratings.
Non-Investment Grade Debt Securities (Junk Bonds). The
Fund may invest up to 25% of its net assets in junk
bonds. Junk bonds, while generally offering higher
yields than investment grade securities with similar
maturities, involve greater risks, including the
possibility of default or bankruptcy. They are
regarded as predominantly speculative with respect to
the issuer's capacity to pay interest and repay
principal. Although it is not precluded from doing so,
the Fund generally does not invest in junk bonds rated
below "BB" by S&P.
Principal Risks: Junk bond securities tend to be more
sensitive to economic conditions than are higher-rated
securities. As a result, they generally involve more
credit risk than securities in the higher-rated
categories. During an economic downturn or a sustained
period of rising interest rates, highly leveraged
issuers of junk bond securities may experience
financial stress and may not have sufficient revenues
to meet their payment obligations. The risk of loss
due to default by an issuer of these securities is
significantly greater than issuers of higher-rated
securities because such securities are generally
unsecured and are often subordinated to other
creditors. The Fund may have difficulty disposing of
certain junk bond securities because there may be a
thin trading market for such securities. To the extent
a secondary trading market does exist, it is generally
not as liquid as the secondary market for higher-rated
securities. Periods of economic uncertainty generally
result in increased volatility in the market prices of
these securities and thus in the Fund's net asset
value.
Mortgage- and Other Asset-Backed Securities. The Fund
may invest in mortgage- and other asset-backed
securities. Mortgage-backed securities represent
direct or indirect participation in mortgage loans
secured by real property, and include single- and multi-
class pass-through securities and collateralized
mortgage obligations.
Asset-backed securities have structural characteristics
similar to mortgage-backed securities. However, the
underlying assets are not mortgage loans. Instead,
they include assets such as motor vehicle installment
sales contracts, installment loan contracts, home
equity loans, leases of various types of property and
receivables from credit card issuers or other revolving
credit arrangements.
Principal Risks: The yield characteristics of mortgage-
and asset-backed securities differ from those of
traditional debt obligations. For example, interest
and principal payments are made more frequently on
mortgage- and asset-backed securities, usually monthly,
and principal may be prepaid at any time. As a result,
if the Fund purchases these securities at a premium, a
prepayment rate that is faster than expected will
reduce yield to maturity, while a prepayment rate that
is slower than expected will increase yield to
maturity. If the Fund purchases these securities at a
discount, a prepayment rate that is faster than
expected will increase yield to maturity, while a
prepayment rate that is slower than expected will
reduce yield to maturity. Accelerated prepayments on
securities purchased at a premium also impose a risk of
loss of principal because the premium may not have been
fully amortized at the time the principal is prepaid in
full. The market for privately issued mortgage- and
asset-backed securities is smaller and less liquid than
the market for government sponsored mortgage-backed
securities.
Principal Investment Strategy - Opportunity Fund
Under normal market conditions, the Opportunity Fund
will seek to achieve its investment objective by
investing at least 65% of its total assets in equity
securities of those companies with a market
capitalization of $1.5 billion or less at the time of
the Fund's investment. The Fund will invest at least
80% of its net assets in equity securities. These
securities include: common stocks; preferred stocks;
warrants to purchase common stocks or preferred stocks;
depositary receipts; and securities convertible into
common or preferred stocks, such as convertible bonds
and debentures rated Baa or higher by Moody's or BBB or
higher by S&P, Duff & Phelp's, Inc. ("D&P") or Fitch.
As the Opportunity Fund's subadviser, Reams uses a
value-oriented discipline. Reams evaluates the small-
cap market by using a number of valuation criteria,
including both current and historical measures, for
ratios comparing price to
<PAGE>
earnings, price to book value
and price to sales. The portfolio management team then
constructs a focus list based in part on each company's
competitive position, capital structure, cash flow and
management. The team then determines a target price
for the stock, thus providing a specific expected rate
of return. The approximately 50 securities with the
highest expected rates of return would be among those
securities selected for the Fund's portfolio. Reams
constructs a portfolio using a bottom-up analysis. On
average, a security will be held by the Fund for
approximately 12 months. Ultimately, securities will
be sold due to the emergence of superior alternatives.
A holding will become "inferior" if (i) it reaches
Reams' target price, thus lowering its expected rate of
return; (ii) it experiences a negative change in
fundamentals, also lowering its expected return; or
(iii) higher ranking securities emerge based on their
expected rates of return.
Implementation of Principal Investment Strategy -
Opportunity Fund
Common Stocks and Other Equity Securities. The
Opportunity Fund will invest at least 80% of its net
assets in common stocks and other equity securities.
Other equity securities may include depositary
receipts, preferred stocks, warrants to purchase common
and preferred stocks and securities convertible or
exchangeable into common or preferred stock.
Principal Risks: Common stocks and other equity
securities generally increase or decrease in value
based on the earnings of a company and on general
industry and market conditions. A fund that invests a
significant amount of its assets in common stocks and
other equity securities is likely to have greater
fluctuations in share price than a fund that invests a
significant portion of its assets in fixed income
securities.
Small Companies. The Fund will normally invest at
least 65% of its total assets in small companies.
Small companies have a market capitalization of $1.5
billion or less at purchase.
Principal Risks: While smaller companies may have the
potential for rapid growth, investments in smaller
companies often involve greater risks than investments
in larger, more established companies because smaller
companies may lack the management experience, financial
resources, product diversification and competitive
strengths of larger companies. In addition, in many
instances the securities of smaller companies are
traded only over-the-counter or on a regional
securities exchange, and the frequency and volume of
their trading is substantially less than is typical of
larger companies. Therefore, the securities of smaller
companies may be subject to greater and more abrupt
price fluctuations. When making large sales, the Fund
may have to sell portfolio holdings at discounts from
quoted prices or may have to make a series of small
sales over an extended period of time due to the
trading volume of smaller company securities. An
investment in the Opportunity Fund may be subject to
greater price fluctuations than an investment in a fund
that invests primarily in larger companies.
Temporary Strategies. The Fund may invest up to 100%
of its total assets in cash and short-term fixed income
securities for temporary defensive purposes in response
to adverse market or economic conditions. To the
extent the Fund engages in any of these temporary
strategies, the Fund may not achieve its investment
objective.
Principal Investment Strategy - Growth Fund
Under normal market conditions, the Growth Fund will
seek to achieve its investment objective by investing
at least 65% of its total assets in the equity
securities of companies with a market capitalization of
$1.5 billion or more at the time of the Fund's
investment. The Fund will invest at least 80% of its
net assets in equity securities. These securities
include: common stocks; preferred stocks; warrants to
purchase common stocks or preferred stocks; depositary
receipts; and securities convertible into common or
preferred stocks, such as convertible bonds and
debentures rated Baa or higher by Moody's or BBB or
higher by S&P, D&P or Fitch.
As the Growth Fund's subadviser, Northern believes that
investors will pay more for a company the higher the
earnings growth rate and the longer the growth is
expected to continue. Northern conducts bottom-up
research to identify and select growth companies that
have sustainable competitive advantages. Northern
begins that stock selection process by generating a
focus list of 200 companies which have a market
capitalization greater than $1.5 billion, historical
earnings growth greater than the S&P 500 and which have
exhibited consistent earnings growth. Northern's
analysts then conduct company specific analysis to
evaluate a company's near-term growth prospects and
determine a five-year earnings growth estimate for each
company on the focus list. Northern's analysts then
look beyond the five-year time horizon to determine
whether the firm's growth is sustainable by determining
whether the company has a specific competitive
advantage in the marketplace. Utilizing the near term
forecasts of
<PAGE>
growth and the determination of the
sustainability of that growth, the analysts can
determine a five-year expected return for each company.
Stocks in the universe are then ranked by their
expected return and portfolio managers construct the
Growth Fund's portfolio from the 40-50 most attractive
stocks based on expected return, subject to
diversification constraints.
Implementation of Principal Investment Strategy -
Growth Fund
Common Stocks and Other Equity Securities. The Growth
Fund will invest at least 80% of its net assets in
common stocks and other equity securities. Other
equity securities may include depositary receipts,
preferred stocks, warrants to purchase common and
preferred stocks and securities convertible or
exchangeable into common or preferred stock.
Principal Risks: Common stocks and other equity
securities generally increase or decrease in value
based on the earnings of a company and on general
industry and market conditions. A fund that invests a
significant amount of its assets in common stocks and
other equity securities is likely to have greater
fluctuations in share price than a fund that invests a
significant portion of its assets in fixed income
securities.
Principal Investment Strategy - Emerging Growth Fund
Under normal market conditions, the Emerging Growth
Fund will seek to achieve its investment objective by
investing at least 65% of its total assets in the
equity securities of companies with a market
capitalization of $2 billion or less and/or annual
revenues of $500 million or less at the time of the
Fund's investment. The Fund will invest at least 85%
of its net assets in equity securities. These
securities include: common stocks; preferred stocks;
warrants to purchase common stocks or preferred stocks;
depository receipts; and securities convertible into
common or preferred stocks, such as convertible bonds
and debentures rated Baa or higher by Moody's or BBB or
higher by S&P, D&P or Fitch.
As the Emerging Growth Fund's subadviser, B&H starts
the stock selection process by establishing its
emerging growth universe, which encompasses
approximately 400 companies. Using a database that
includes all publicly traded securities, B&H screens
for stocks with 15% historical and/or expected earnings
growth and sales of less than $500 million. B&H
supplements its emerging growth universe with ideas
generated from various sources including internal
research, conferences and industry contacts.
B&H narrows the emerging growth universe to 125-150
companies that it believes are likely to sustain
earnings growth over the long term. Analysts review
each company's market position, looking for leading or
increasing market share. The stability of earnings and
cash flow is also analyzed. Finally, B&H assesses the
relative attractiveness of companies in the universe
with measures such as sales to market cap and price to
earnings growth.
Once the emerging growth universe is narrowed to
establish a research list, the investment team conducts
fundamental, bottom-up analysis to identify the most
favorable investment prospects. Internally B&H
evaluates corporate filings, such as annual and
quarterly reports, and reviews any street research on
the companies and their industries. Visits to
corporations, interviews and conference calls with
management by the firm's analysts are critical factors
in confirming information and forming judgments. B&H's
analysis encompasses corporate financial strength,
quality of management, product leadership, industry
dynamics and expected earnings growth. A key to the
process is B&H's emphasis on high R&D productivity, as
characterized by a product line that not only alters
its industry but also makes its existing product line
obsolete. Ultimately, the portfolio is constructed
from the most attractive 40-50 issues identified from
this process.
B&H will generally sell a security as a result of
deteriorating business fundamentals, overvaluation
based on a security's price earnings ratio relative to
its growth rate or a significant price spike. In
addition, positions will generally be cut back when
they become greater than 5% of the Fund's portfolio.
B&H will generally hold a security for 12 to 24 months.
<PAGE>
Implementation of Principal Investment Strategy -
Emerging Growth Fund
Common Stocks and Other Equity Securities. The
Emerging Growth Fund will invest at least 85% of its
net assets in common stocks and other equity
securities. Other equity securities may include
depositary receipts, preferred stocks, warrants to
purchase common and preferred stocks and securities
convertible or exchangeable into common or preferred
stock.
Principal Risks: Common stocks and other equity
securities generally increase or decrease in value
based on the earnings of a company and on general
industry and market conditions. A fund that invests a
significant amount of its assets in common stocks and
other equity securities is likely to have greater
fluctuations in share price than a fund that invests a
significant portion of its assets in fixed income
securities.
Small Companies. The Fund will invest a substantial
portion of its assets in to small-to-medium market
capitalization companies. Such companies have a market
capitalization of $2 billion or less at the time of the
Fund's purchase.
Principal Risks: While smaller companies may have the
potential for rapid growth, investments in smaller
companies often involve greater risks than investments
in larger, more established companies because smaller
companies may lack the management experience, financial
resources, product diversification and competitive
strengths of larger companies. In addition, in many
instances the securities of smaller companies are
traded only over-the-counter or on a regional
securities exchange, and the frequency and volume of
their trading is substantially less than is typical of
larger companies. Therefore, the securities of smaller
companies may be subject to greater and more abrupt
price fluctuations. When making large sales, the Fund
may have to sell portfolio holdings at discounts from
quoted prices or may have to make a series of small
sales over an extended period of time due to the
trading volume of smaller company securities. An
investment in the Fund may be subject to greater price
fluctuations than an investment in a fund that invests
primarily in larger companies.
Prior Performance of Reams, Northern and B&H
The following tables show the historical composite
performance data for all of Reams' private advisory
accounts which have investment objectives, policies,
strategies and risks substantially similar to the Total
Return Bond Fund, known as the Reams Fixed Income
Composite; the historical composite performance data
for all of Reams' private advisory accounts which have
investment objectives, policies, strategies and risks
substantially similar to the Opportunity Fund, known as
the Reams Small Capitalization Value Equity Composite;
the historical composite performance data for all of
Northern's private advisory accounts which have
investment objectives, policies, strategies and risks
substantially similar to the Growth Fund, known as the
NCM Equity Portfolio; and the historical composite
performance data for all of B&H's private advisory
accounts which have investment objectives, policies,
strategies and risks substantially similar to the
Emerging Growth Fund, known as the B&H Emerging Growth
Portfolio (collectively, the "Composites").
The Composites are not subject to the same types of
expenses to which the Funds are subject nor to the
diversification requirements, specific tax restrictions
and investment limitations imposed on the Funds by the
Internal Revenue Code of 1986, as amended and the
Investment Company Act of 1940, as amended,
respectively. Consequently, the performance results
for the Composites could have been adversely affected
if the accounts included in the Composites had been
regulated under the federal security and tax laws. The
data is provided to illustrate the past performance of
each subadviser in managing a substantially similar
portfolio as measured against a specific benchmark and
does not represent the performance of the Funds. You
should not consider this performance data as an
indication of the future performance of the Funds or a
subadviser.
All of the performance information has been calculated
in accordance with recommended standards of the
Association for Investment Management and Research
("AIMR"), retroactively applied to all time periods.
All returns presented were calculated on a total return
basis and include all dividends and interest, accrued
income, if any, and realized and unrealized gains and
losses. All returns reflect the deduction of
investment advisory fees, brokerage commissions and
execution costs paid by the accounts included in the
Composites, without provision for federal or state
income taxes. Cash and cash equivalents are included
in the performance returns. No leveraged positions
were used. Total return is calculated monthly in
accordance with the time weighted rate of return method
provided for by AIMR standards accounted for on a trade-
date and accrual basis. The monthly returns are linked
to derive an annual total return. AIMR standards for
calculation of total return differ from the standards
required by the SEC for calculation of average annual
total return.
<PAGE>
With respect to the prior performance of Reams and
Northern, the Composite expenses are lower than the
respective Fund expenses. Accordingly, if the Total
Return Bond, Opportunity and Growth Funds' expenses had
been deducted from the relevant Composite's returns,
the returns would be lower than those shown. With
respect to the prior performance of B&H, the
Composite's expenses are higher than the Emerging
Growth Fund's expenses.
The investment results of the Reams Fixed Income
Composite, the Reams Small Capitalization Composite and
the NCM Equity Composite are Level 1 AIMR compliant.
The results of the Composites are not intended to
predict or suggest the future returns of the Funds.
Reams Asset Management Company, LLC
Reams Fixed Income Composite Performance History: 6/1/81-9/30/00(1)
Reams Fixed Income
Composite Lehman Brothers
Periods Ended 9/30/00 Total Return Aggregate Bond Index(2)
1 Year 9.18% 6.98%
5 Years 7.38% 6.47%
10 Years 9.49% 8.04%
From Inception(3) 13.53% 10.68%
____________
(1) For the Total Return Bond Fund's performance, see
the return information under "The Frontegra Funds at
a Glance."
(2) The Lehman Brothers Aggregate Bond Index
includes fixed rate debt issues rated investment
grade or higher by Moody's, S&P or Fitch, in that
order. All issues have at least one year to maturity
and an outstanding par value of at least $100
million. The index does not reflect investment
management fees, brokerage commissions and other
expenses associated with investing in fixed income
securities.
(3) The Composite commenced operations on June 1, 1981.
Average Annualized Return in Percent: 6/1/81-9/30/00
Reams Fixed Income Composite Performance 13.53%
Lehman Brothers Aggregate Bond Index 10.68%
Reams Small Capitalization Value Equity Composite
Performance History: 1/1/95-9/30/00(1)
Reams Small
Capitalization
Periods Ended Composite Russell 2000 Russell 2000
9/30/00 Total Return Index(2) Value Index(3)
1 Year 11.15% 23.29% 15.36%
5 Years 11.80% 12.38% 11.50%
From Inception(4) 14.71% 15.18% 13.83%
__________
(1) For the Opportunity Fund's performance, see the
return information under "The Frontegra Funds at a
Glance."
(2) The Russell 2000 Index is an unmanaged index
generally representative of the U.S. market for small
domestic stocks. The index does not reflect
investment management fees, brokerage commissions and
other expenses associated with investing in equity
securities.
(3) The Russell 2000 Value Index is comprised of
those securities in the Russell 2000 Index which have
lower price-to-book ratios and lower forecasted growth rates.
(4) The Composite commenced operations on January 1, 1995.
<PAGE>
Average Annualized Return in Percent: 1/1/95-9/30/00
Reams Small Capitalization Composite Performance 14.71%
Russell 2000 Index 15.18%
Russell 2000 Value Index 13.83%
Northern Capital Management, LLC
NCM Equity Composite Performance History: 1/1/91-9/30/00(1)
NCM Equity Composite
Periods Ended 9/30/00 Rate of Return S&P 500(2)
1 Year 23.97% 13.28%
5 Years 21.69% 21.67%
From Inception(3) 21.64% 18.92%
____________
(1) For the Growth Fund's performance, see the
return information under "The Frontegra Funds at a
Glance."
(2) The S&P 500 is an unmanaged index generally
representative of the U.S. stock market. The index
does not reflect investment management fees,
brokerage commissions and other expenses associated
with investing in equity securities.
(3) The Composite commenced operations on January 1, 1991.
Average Annualized Return in Percent: 1/1/91-9/30/00
NCM Equity Composite Performance 21.64%
S&P 500 18.92%
Berents & Hess Capital Management Incorporated
B&H Emerging Growth Composite Performance History: 12/31/95 - 9/30/00(1)
B&H Emerging Growth Russell 2000
Periods Ended Composite Growth
9/30/00 Rate of Return Index(2)
1 Year 61.53% 29.66%
3 Years 35.58% 8.93%
From Inception(3) 30.16% 12.77%
____________
(1) For the Emerging Growth Fund's performance, see
the return information under "The Frontegra Funds at a
Glance."
(2) The Russell 2000 Growth Index is an unmanaged
index generally representative of the U.S. market for
small domestic growth stocks. The index does not
reflect investment management fees, brokerage
commissions and other expenses associated with
investing in equity securities.
(3) The Composite commenced operations on December 31, 1995.
Average Annualized Return in Percent: 12/31/95 - 9/30/00
B&H Emerging Growth Composite Performance 30.16%
Russell 2000 Growth Index 12.77%
<PAGE>
Financial Highlights
The financial highlights tables are intended to help you
understand each Fund's financial performance from its
commencement of operations to June 30, 2000. 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 each Fund for the stated periods (assuming
reinvestment of all dividends and distributions). This
information has been audited by Ernst & Young LLP, whose
report, along with the Funds' financial statements, is
included in the Funds' annual report, which is available
upon request.
<TABLE>
Eight Months November 25, 1996(1)
Year Ended Ended Year Ended to
FRONTEGRA TOTAL RETURN BOND FUND June 30, 2000 June 30, 1999(2) October 31, 1998 October 31, 1997
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $29.34 $31.38 $30.85 $30.00
INCOME FROM INVESTMENT OPERATONS:
Net investment income 1.90 1.29 1.75 1.37
Net realized and unrealized
gain (loss) on investments 0.02 (1.18) 0.59 0.70
Total Income From Investment
Operations 1.92 0.11 2.34 2.07
LESS DISTRIBUTIONS PAID:
From net investment income (1.90) (1.44) (1.75) (1.22)
From net realized gain on
investments - (0.71) (0.06) -
Total Distributions Paid (1.90) (2.15) (1.81) (1.22)
Net Asset Value, End of Period $29.36 $29.34 $31.38 $30.85
Total Return(3) 6.78% 0.32% 7.79% 7.13%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(in thousands) $70,435 $48,413 $48,457 $39,096
Ratio of expenses to average
net assets(4)(5) 0.43% 0.50% 0.50% 0.50%
Ratio of net investment income
to average net assets(4)(5) 6.82% 6.37% 5.79% 6.02%
Portfolio turnover rate(3) 438% 83% 131% 202%
</TABLE>
____________
(1) Commencement of operations.
(2) Effective June 30, 1999, the Company's fiscal
year-end was changed from October 31 to June 30.
(3) Not annualized for periods less than a full year.
(4) Net of waivers and reimbursements by Frontegra.
Without waivers and reimbursements of expenses, the
ratio of expenses to average net assets would have
been 0.71%, 0.82%, 0.78% and 1.27%, and the ratio of
net investment income to average net assets would
have been 6.54%, 6.05%, 5.51% and 5.25% for the
periods ended June 30, 2000, June 30, 1999, October
31, 1998 and October 31, 1997, respectively.
(5) Annualized.
<PAGE>
<TABLE>
Eight Months July 31, 1997(1)
Year Ended Ended Year Ended to
FRONTEGRA OPPORTUNITY FUND June 30, 2000 June 30, 1999(2) October 31, 1998 October 31, 1997
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $32.02 $27.93 $32.22 $30.00
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.27 0.07 0.26 0.04
Net realized and unrealized
gain (loss) on investments (2.44) 4.23 (4.52) 2.18
Total Income (Loss) from
Investment Operations (2.17) 4.30 (4.26) 2.22
LESS DISTRIBUTIONS PAID:
From net investment income (0.22) (0.21) (0.03) -
From net realized gain
on investments (1.42) - - -
Total Distributions Paid (1.64) (0.21) (0.03) -
Net Asset Value, End of Period $28.21 $32.02 $27.93 $32.22
Total Return(3) (6.67)% 15.49% (13.24)% 7.40%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(in thousands) $18,204 $17,211 $6,827 $5,900
Ratio of expenses to average
net assets(4)(5) 0.90% 0.90% 0.90% 0.90%
Ratio of net investment income
to average net assets(4)(5) 0.97% 1.00% 0.92% 2.61%
Portfolio turnover rate(3) 64% 38% 54% 9%
</TABLE>
____________
(1) Commencement of operations.
(2) Effective June 30, 1999, the Company changed
its fiscal year-end from October 31 to June 30.
(3) Not annualized for periods less than a full year.
(4) Net of waivers and reimbursements by Frontegra.
Without waivers and reimbursements of expenses, the
ratio of expenses to average net assets would have
been 1.44%, 1.73%, 2.53% and 12.02% and the ratio of
net investment income (loss) to average net assets
would have been 0.43%, 0.17%, (0.71)% and (8.51)%
for the periods ended June 30, 2000, June 30, 1999,
October 31, 1998 and October 31, 1997, respectively.
(5) Annualized.
March 18, 1999(1)
Year Ended Eight Months Ended to
FRONTEGRA GROWTH FUND June 30, 2000 June 30, 1999(2) October 31, 1998
Net Asset Value, Beginning
of Period $11.93 $9.29 $10.00
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income -(6) 0.01 0.01
Net realized and unrealized
gain (loss) on investments 1.82 2.64 (0.72)
Total Income (Loss) from
Investment Operations 1.82 2.65 (0.71)
LESS DISTRIBUTIONS PAID:
From net investment income (0.01) (0.01) -
From net realized gain on
investments (0.05) - -
Total Distributions Paid (0.06) (0.01) -
Net Asset Value, End of Period $13.69 $11.93 $9.29
Total Return(3) 15.33% 28.58% (7.10)%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(in thousands) $16,258 $4,619 $2,343
Ratio of expenses to average
net assets(4)(5) 0.80% 0.80% 0.80%
Ratio of net investment income
to average net assets(4)(5) 0.05% 0.16% 0.28%
Portfolio turnover rate(3) 213% 106% 67%
____________
(1) Commencement of operations.
(2) Effective June 30, 1999, the Company changed
its fiscal year-end from October 31 to June 30.
(3) Not annualized for periods less than a full year.
(4) Net of waivers and reimbursements by Frontegra.
Without waivers and reimbursements of expenses, the
ratio of expenses to average net assets would have
been 1.89%, 4.52% and 9.23% and the ratio of net
investment income (loss) to average net assets would
have been (1.04)%, (3.56)% and (8.15)% for the
periods ended June 30, 2000, June 30, 1999 and
October 31, 1998, respectively.
(5) Annualized.
(6) Less than one cent per share.
<PAGE>
Period Ended
FRONTEGRA EMERGING GROWTH FUND June 30, 2000(1)
Net Asset Value, Beginning of Period $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.01
Net realized and unrealized gain on investments 0.22
Total Income from Investment Operations 0.23
Net Asset Value, End of Period $10.23
Total Return(2) 2.30%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (in thousands) $658
Ratio of expenses to average net assets(3)(4) 0.90%
Ratio of net investment income
to average net assets(3)(4) 0.27%
Portfolio turnover rate(2) 67%
____________
(1) The Fund commenced operations on December 31, 1999.
(2) Not annualized for periods less than a full year.
(3) Net of waivers and reimbursements by Frontegra.
Without waivers and reimbursements of expenses, the
ratio of expenses to average net assets would have
been 21.69% and the ratio of net investment loss to
average net assets would have been (20.52)% for the
period ended June 30, 2000.
(4) Annualized.
Fund Management
Under the laws of the State of Maryland, the Board of
Directors of the Company (the "Board of Directors") is
responsible for managing the Company's business and
affairs. The Board of Directors also oversees duties
required by applicable state and federal law. The
Company has entered into an investment advisory
agreement with Frontegra dated October 30, 1996, as
amended as of February 1, 1998 and December 31, 1999
(the "Investment Advisory Agreement"), pursuant to
which Frontegra supervises the management of the Fund's
investments and business affairs, subject to the
supervision of the Company's Board of Directors.
Frontegra has entered into subadvisory agreements with
each of the respective subadvisers under which Reams
serves as the Total Return Bond and Opportunity Funds'
portfolio manager, Northern serves as the Growth Fund's
portfolio manager and B&H serves as the Emerging Growth
Fund's portfolio manager. Frontegra provides office
facilities for the Funds and pays the salaries, fees,
and expenses of all officers and directors of the Funds
who are interested persons of Frontegra.
Adviser. The Company is managed by Frontegra, which
supervises the management of each Fund's portfolio by
the subadvisers and administers the Company's business
affairs. Frontegra was organized in 1996 and is
located at 400 Skokie Boulevard, Suite 500, Northbrook,
Illinois 60062. Mr. William D. Forsyth III and Mr.
Thomas J. Holmberg, Jr. each own 50% of Frontegra.
Under the Investment Advisory Agreement, the Total
Return Bond Fund compensates Frontegra at the annual
rate of 0.40% of the Fund's average daily net assets;
the Opportunity Fund compensates Frontegra at the
annual rate of 0.65% of the Fund's average daily net
assets; the Growth Fund compensates Frontegra at the
annual rate of 0.80% of the Fund's average daily net
assets; and the Emerging Growth Fund compensates
Frontegra at the annual rate of 0.90% of the Fund's
average daily net assets. Pursuant to expense cap
agreements most recently amended as of October 27,
2000, Frontegra contractually agreed to waive its
management fee and/or reimburse each Fund's operating
expenses to the extent necessary to ensure that the
Total Return Bond Fund's total operating expenses do
not exceed 0.425% of the Fund's average daily net
assets; the Opportunity Fund's total operating expenses
do not exceed 0.90% of the Fund's average daily assets;
the Growth Fund's total operating expenses do not
exceed 0.80% of the Fund's average daily net assets;
and the Emerging Growth Fund's total operating expenses
do not exceed 0.90% of the Fund's average daily net
assets. The expense cap agreements will terminate on
December 31, 2001, unless extended by the mutual
agreement of the parties. The expense cap agreements
have the effect of lowering the overall expense ratio
for a Fund and increasing the Fund's overall return to
investors during the time any such amounts are waived
and/or reimbursed.
Reams. Reams operated as a corporation (Reams Asset
Management Company, Inc.) from its founding in 1981
until March 31, 1994, when it became an Indiana limited
liability company (LLC), with no change in principals,
employees or clients. Reams is located at 227
Washington Street, Columbus, Indiana 47202-0727. Under
the subadvisory
<PAGE>
agreement as amended August 2, 1999 and
May 8, 2000, and with certain exceptions described
herein, Reams is compensated by Frontegra for its
investment advisory services at the annual rate of
0.15% of the Total Return Bond Fund's average daily net
assets and 0.45% of the Opportunity Fund's average
daily net assets. In recognition of the economies of
scale that will be gained by the Funds and Frontegra,
and with the exception of defined contribution or
401(k) investments in the Funds, for initial
investments of over $30 million in the Total Return
Bond Fund and $15 million in the Opportunity Fund,
Frontegra will compensate Reams an extra 0.10% of the
average daily net assets of such investments. For the
year ended June 30, 2000, Reams received $55,773 from
Frontegra for its investment advisory services to the
Total Return Bond Fund and $20,132 from Frontegra for
its investment advisory services to the Opportunity
Fund. Reams provides continuous advice and
recommendations concerning the Funds' investments and
is responsible for selecting the broker-dealers who
execute the portfolio transactions. In executing such
transactions, Reams seeks to obtain the best net
results for each Fund. In addition to providing
investment advisory services to the Funds, Reams serves
as investment adviser to pension and profit-sharing
plans, and other institutional investors. As of
September 30, 2000, Reams had approximately $7.7
billion under management, which includes fixed income
portfolios totaling approximately $7.4 billion and
equity portfolios totaling approximately $300 million.
Total Return Bond Fund Portfolio Managers. The day-to-
day management responsibilities for the Total Return
Bond Fund's portfolio are primarily handled by a fixed
income portfolio management team which has been managed
primarily by Mr. Robert A. Crider and Mr. Mark M. Egan
since the Fund's inception. Mr. Crider has been Senior
Vice President, Fixed Income Management, of Reams since
April 1994 and was Senior Vice President, Fixed Income
Management, of Reams Asset Management Company, Inc.
from 1981 until March 1994. Mr. Egan has been a
Portfolio Manager of Reams since April 1994 and was a
Portfolio Manager of Reams Asset Management Company,
Inc. from June 1990 until March 1994. Mr. Egan was a
Portfolio Manager of National Investment Services,
until May 1990. The fixed income portfolio managers
implement decisions on a team basis with respect to the
Fund's portfolio structure and issue selection.
Portfolio strategy is reviewed weekly by the entire
fixed income committee.
Opportunity Fund Portfolio Managers. The day-to-day
management responsibilities for the Opportunity Fund's
portfolio are primarily handled by an equity portfolio
management team which has been managed primarily by
Mr. Fred W. Reams and Mr. David R. Milroy since the
Fund's inception. Since September 1999, Mr. Reams has
been the Chairman of Reams. Mr. Reams was President of
Reams from April 1994 until September 1999 and was
President of Reams Asset Management Company, Inc. from
its founding in 1981 until March 1994. Mr. Milroy has
been Senior Vice President, Equity Management, of Reams
since April 1994, was Vice President and Senior Vice
President, Equity Management, of Reams Asset Management
Company, Inc. from June 1990 until March 1994. Mr.
Milroy was a Portfolio Manager of Loomis, Sayles & Co.
from May 1985 until May 1990. The equity portfolio
management team approves scenarios established for
individual securities submitted by each analyst and
makes the final buy and sell decisions.
Northern. Northern is located at 8018 Excelsior Drive,
Suite 300, Madison, Wisconsin 53717. Under the
subadvisory agreement, Northern is compensated by
Frontegra for its investment advisory services to the
Growth Fund at the annual rate of (i) 0.25% of the
Fund's average daily net assets prior to the first date
when the Fund's average daily net assets exceed $200
million and (ii) 0.30% of the Fund's average daily net
assets on and after the first date when the Fund's
average daily net assets exceed $200 million. For the
year ended June 30, 2000, Northern received $3,260 from
Frontegra for its investment advisory services to the
Fund. Northern provides continuous advice and
recommendations concerning the Fund's investments and
is responsible for selecting the broker-dealers who
execute the portfolio transactions. In executing such
transactions, Northern seeks to obtain the best net
results for the Fund. In addition to providing
investment advisory services to the Fund, Northern
serves as investment adviser to pension and profit
sharing plans, institutional investors and private
accounts. As of September 30, 2000, Northern had
approximately $1.5 billion under management. Old
Mutual plc, a United Kingdom-based financial services
group, owns 80% of Northern. Northern was previously
organized as a corporation. Effective June 30, 2000,
Northern became a limited liability company due to a
change in its ownership structure.
Growth Fund Portfolio Managers. The day-to-day
management responsibilities for the Growth Fund's
portfolio are primarily handled by Northern's portfolio
management team which has been managed primarily by Mr.
Daniel T. Murphy and Mr. Brian A. Hellmer since the
Fund's inception. The Fund's overall investment
strategy and portfolio allocation and risk parameters
are determined by Northern's Investment Committee,
which consists of Stephen L. Hawk, Mr. Murphy and Mr.
Hellmer. Mr. Hawk, Chairman of Northern, has been with
the firm since March 1983; Mr. Murphy, the President,
Chief Investment Officer, Portfolio Manager and a
Director of Northern, joined the firm in March 1995 and
was a Senior Investment Analyst at Brinson Partners,
Inc. from December 1989 to March 1995; Mr. Hellmer,
Senior Vice President and Director of Research of
Northern, joined the firm in April 1996 and was an
<PAGE>
Investment Officer of Fleet Investment Advisors from
July 1989 to April 1996. The portfolio management team
reviews and approves the analyst's recommendations and
makes the final buy and sell decisions. The Investment
Committee reviews the Fund's portfolio on a weekly
basis.
B&H. B&H is located at 99 Summer Street, Suite 1720,
Boston, Massachusetts 02119. Under the subadvisory
agreement, B&H is compensated by Frontegra for its
investment advisory services to the Emerging Growth
Fund at the annual rate of 0.45% of the Fund's average
daily net assets. For the six months ended June 30,
2000, B&H received $1,277 from Frontegra for its
services to the Fund. B&H provides continuous advice
and recommendations concerning the Fund's investments
and is responsible for selecting the broker-dealers who
execute the portfolio transactions. In executing such
transactions, B&H seeks to obtain the best net results
for the Fund. While B&H has not previously provided
investment advice to a mutual fund, B&H serves as
investment adviser to pension and profit-sharing plans,
institutional investors and private accounts. As of
September 30, 2000, B&H had approximately $200 million
under management. Charles N. Berents, Jr. owns 46% of
B&H and Herbert P. Hess owns 54% of B&H.
Emerging Growth Fund Portfolio Managers. B&H's
portfolio managers, Mr. Berents and Mr. Hess, primarily
handle the day-to-day management responsibilities for
the Emerging Growth Fund's portfolio. Mr. Berents,
Managing Director of B&H, has been with the firm since
1984. Mr. Hess, Managing Director of B&H, has been
with the firm since 1991. The Fund's portfolio is
reviewed whenever a securities transaction opportunity
arises based on the Fund's investment strategy. The
portfolio managers make the final buy and sell
decisions for the Fund.
Custodian, Transfer Agent and Administrator. Firstar
Bank, N.A. acts as custodian of each Fund's assets.
Firstar Mutual Fund Services, LLC serves as transfer
agent for the Funds (the "Transfer Agent") and as the
Funds' administrator. Firstar Bank, N.A. and Firstar
Mutual Fund Services, LLC are affiliated entities.
Your Account
How to Purchase Shares. Shares of the Funds are sold
on a continuous basis at net asset value. Each Fund's
net asset value is determined as of the close of
trading on the New York Stock Exchange (the "NYSE")
(generally 4:00 p.m., Eastern Time) on each day the
NYSE is open. Your purchase price will be the Fund's
net asset value next determined after the Fund receives
your request in proper form. A confirmation indicating
the details of the transaction will be sent to you
promptly. Shares are credited to your account, but
certificates are not issued. However, you will have
full shareholder rights.
Each Fund's minimum initial investment is $100,000.
Subsequent investments may be made by mail or wire with
a minimum subsequent investment of $1,000. The Funds
reserve the right to change or waive these minimums at
any time. You will be given at least 30 days' notice
of any increase in the minimum dollar amount of
purchases.
If you purchase shares of a Fund by check and request
the redemption of such shares within 15 days of the
initial purchase, payment of the redemption proceeds
may be delayed for up to 12 days in order to ensure
that the check has cleared. This is a security
precaution only and does not affect your investment.
Initial Investment - Minimum $100,000. You may
purchase shares of the Funds by completing an
application and mailing it along with a check or money
order payable to "Frontegra Funds, Inc." to: Frontegra
Funds, Inc., c/o Firstar Mutual Fund Services, LLC,
P.O. Box 701, Milwaukee, Wisconsin 53201-0701. For
overnight deliveries, please use 615 East Michigan
Street, Third Floor, Milwaukee, Wisconsin 53202.
Purchases must be made in U.S. dollars and all checks
must be drawn on a U.S. bank. If your check does not
clear, you will be charged a $25 service fee. You will
also be responsible for any losses suffered by a Fund
as a result. All applications to purchase shares of
the Funds are subject to acceptance by the Company and
are not binding until so accepted. The Company
reserves the right to reject an application in whole or
in part.
Alternatively, you may place an order to purchase
shares of the Funds through a broker-dealer. Broker-
dealers may charge a transaction fee for placing orders
to purchase Fund shares. It is the responsibility of
the broker-dealer to place the order with the Fund on a
timely basis.
In addition, you may purchase shares of the Funds by
wire. To establish a new account by wire transfer,
please call the Transfer Agent at 1-888-825-2100. The
Transfer Agent will assign an account number to you at
that time. Funds should then be wired through the
Federal Reserve System as follows:
<PAGE>
Firstar Bank, N.A.
ABA Number 042000013
For credit to Firstar Mutual Fund Services, LLC
Account Number 112-952-137
For further credit to Frontegra Funds, Inc.
(investor account number)
(name or account registration)
(Social Security or Taxpayer Identification Number)
(identify Fund)
The Funds are not responsible for the consequences of
delays resulting from the banking or Federal Reserve
wire system.
Subsequent Investments - Minimum $1,000. You may make
additions to your account in amounts of $1,000 or more
by mail or by wire. When making an additional purchase
by mail, enclose a check payable to "Frontegra Funds,
Inc." along with the additional investment form
provided on the lower portion of your account
statement. To make an additional purchase by wire,
please follow the instructions listed above.
How to Redeem Shares. You may request redemption of
part or all of your Fund shares at any time. The price
you receive will be the net asset value next determined
after a Fund receives your request in proper form.
Once your redemption request is received in proper
form, the Fund normally will mail or wire your
redemption proceeds the next business day and, in any
event, no later than seven calendar days after receipt
of a redemption request. However, the Funds may hold
payment of that portion of an investment, which was
made by check that has not been collected. In addition
to the redemption procedures described below,
redemptions may also be made through broker-dealers who
may charge a commission or other transaction fee.
Written Redemption. To redeem shares in a Fund please
furnish a written, unconditional request to: Frontegra
Funds, Inc., c/o Firstar Mutual Fund Services, LLC,
P.O. Box 701, Milwaukee, Wisconsin 53201-0701. For
written redemption requests sent via overnight
delivery, please use 615 East Michigan Street, Third
Floor, Milwaukee, Wisconsin 53202. Your request must
(i) be signed exactly as the shares are registered,
including the signature of each owner and (ii) specify
the number of Fund shares or dollar amount to be
redeemed. The Transfer Agent may request additional
documentation from corporations, executors,
administrators, trustees, guardians, agents or
attorneys-in-fact. Redemption proceeds may be wired to
a commercial bank authorized on your account
application. However, you will be charged a $12
service fee for wire redemptions. If the dollar amount
requested to be redeemed is greater than the current
value of your account, your entire account balance will
be redeemed.
Signature Guarantees. Signature guarantees are
required for: (i) redemption requests mailed or wired
to a person other than the registered owner(s) of the
shares, (ii) redemption requests mailed or wired to
other than the address of record and (iii) redemption
requests submitted within 30 days of an address change.
A signature guarantee may be obtained from any bank,
savings and loan association, credit union, brokerage
firm or other eligible guarantor institution. A notary
public is not an acceptable guarantor.
Account Termination. Your account may be terminated by
a Fund on not less than 30 days' notice if the value of
the shares in the account falls below $10,000 as a
result of redemptions. Upon any such termination, a
check for the redemption proceeds will be sent to the
address of record within seven calendar days of the
redemption.
Exchange Privilege
You may exchange your shares in any Frontegra Fund for
shares in any other Frontegra Fund at any time by
written request. The value of the shares to be
exchanged and the price of the shares being purchased
will be the net asset value next determined after
receipt of instructions for exchange in proper form.
An exchange from one Fund to another is treated the
same as an ordinary sale and purchase for federal
income tax purposes and you will realize a capital gain
or loss. This is not a tax-free exchange. Exchange
requests should be directed to: Frontegra Funds, Inc.,
c/o Firstar Mutual Fund Services, LLC, P.O. Box 701,
Milwaukee, Wisconsin 53201-0701. For written exchange
requests sent via overnight delivery, please use 615
East Michigan Street, Third Floor, Milwaukee, Wisconsin
53202. Exchange requests may be subject to
limitations, including those relating to frequency,
that may be established from time to time to ensure
that the exchanges do not disadvantage a Fund or its
shareholders. The Company reserves the right to modify
or terminate the exchange privilege upon 60 days'
written notice to each shareholder prior to the
modification or termination taking effect.
<PAGE>
Valuation of Fund Shares
The price of a Fund's shares is the Fund's net asset
value, which is calculated using the market price
method of valuation and is determined as of the close
of trading on each day the NYSE is open for business.
The NYSE is closed on New Year's Day, Martin Luther
King, Jr. Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. In addition, if any of these holidays
falls on a Saturday, the NYSE will not be open for
trading on the preceding Friday, and when such holiday
falls on a Sunday, the NYSE will not be open for
trading on the succeeding Monday, unless unusual
business conditions exist, such as the ending of a
monthly or yearly period.
Tax-Sheltered Retirement Plans
The Company offers through its custodian, Firstar Bank,
N.A., various qualified retirement plans for adoption
by individuals and employers. Participants in these
plans can accumulate shares of the Funds on a tax-
deferred basis. Please call 1-888-825-2100 for a
current list of the plans offered.
Dividends, Capital Gain Distributions And Tax Treatment
For federal income tax purposes, all dividends and
distributions of net realized short-term capital gains
are taxable as ordinary income whether reinvested or
received in cash unless you are exempt from taxation or
entitled to a tax deferral. Distributions paid by a
Fund from net realized long-term capital gains, whether
received in cash or reinvested in additional shares,
are taxable as a capital gain unless you are exempt
from taxation or entitled to a tax deferral. The
capital gain holding period is determined by the length
of time the Fund has held the security and not the
length of time that you have held shares in the Fund.
Shareholders are informed annually as to the amount and
nature of all dividends and capital gains paid during
the prior year. Such capital gains and dividends may
also be subject to state or local taxes. If you are
not required to pay taxes on your income, you are
generally not required to pay federal income taxes on
the amounts distributed to you.
The Total Return Bond Fund will usually distribute
dividends quarterly and capital gains annually in
December. The Opportunity, Growth and Emerging Growth
Funds will usually distribute dividends and capital
gains at least annually. When a dividend or capital
gain is distributed, the Fund's net asset value
decreases by the amount of the payment. If you
purchase shares shortly before a distribution, you
will, nonetheless, be subject to income taxes on the
distribution, even though the value of your investment
(plus cash received, if any) remains the same. The
Total Return Bond Fund expects that, because of its
investment objective, its distributions will consist
primarily of income. The Opportunity, Growth and
Emerging Growth Funds expect that, because of their
investment objectives, their distributions will consist
primarily of capital gains.
All dividends or capital gain distributions will
automatically be reinvested in shares of the Fund at
the then prevailing net asset value unless an investor
specifically requests that either dividends or capital
gains or both be paid in cash. The election to receive
dividends or reinvest them may be changed by writing
to: Frontegra Funds, Inc., c/o Firstar Mutual Fund
Services, LLC, P.O. Box 701, Milwaukee, Wisconsin 53201-
0701. For overnight deliveries, please use 615 East
Michigan Street, Third Floor, Milwaukee, Wisconsin
53202. Such notice must be received at least five
business days prior to the record date of any dividend
or capital gain distribution.
If you do not furnish the Funds with your correct
Social Security Number or Taxpayer Identification
Number and/or a Fund receives notification from the
Internal Revenue Service requiring back-up withholding,
the Fund is required by federal law to withhold federal
income tax from your distributions and redemption
proceeds at a rate of 31%.
This section is not intended to be a full discussion of
federal income tax laws and the effect of such laws on
you. There may be other federal, state, or local tax
considerations applicable to you. You are urged to
consult your own tax adviser.
<PAGE>
DIRECTORS TRANSFER AGENT
William D. Forsyth III Firstar Mutual Fund Services, LLC
Thomas J. Holmberg, Jr. For overnight deliveries, use:
David L. Heald Frontegra Funds, Inc.
c/o Firstar Mutual Fund Services, LLC
OFFICERS 615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53202
William D. Forsyth III
Thomas J. Holmberg, Jr. For regular mail deliveries, use:
Frontegra Funds, Inc.
INVESTMENT ADVISER c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Frontegra Asset Milwaukee, Wisconsin 53201-0701
Management, Inc.
400 Skokie Boulevard, Suite 500 AUDITORS
Northbrook, Illinois 60062
Ernst & Young LLP
SUB-ADVISERS Sears Tower
233 S. Wacker Drive
Reams Asset Management Company, LLC Chicago, Illinois 60606-6301
227 Washington Street
Columbus, Indiana 47202-0727 LEGAL COUNSEL
Northern Capital Management, LLC Godfrey & Kahn, S.C.
8018 Excelsior Drive, Suite 300 780 N. Water Street
Madison, Wisconsin 53717 Milwaukee, Wisconsin 53202
Berents & Hess Capital
Management Incorporated
99 Summer Street, Suite 1728
Boston, Massachusetts 02119
CUSTODIAN
Firstar Bank, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
<PAGE>
Additional information regarding the Company and the
Funds is included in the Statement of Additional
Information ("SAI") which has been filed with the
Securities and Exchange Commission ("SEC") and is
incorporated in this Prospectus by reference. Further
information about the Funds' investments is also
available in the Funds' annual and semi-annual reports
to shareholders. The Funds' annual report provides a
discussion of the market conditions and investment
strategies that significantly affected the Funds'
performance during the last fiscal year. You may
receive the Funds' SAI, annual reports and semi-annual
reports free of charge, request other information about
the Funds and make shareholder inquiries by contacting
the Company at the address below or by calling, toll-
free, 1-888-825-2100.
Information about the Funds (including the SAI) can be
reviewed and copied at the SEC's Public Reference Room
in Washington, D.C. Please call the SEC at 1-202-942-
8090 for information relating to the operation of the
Public Reference Room. Reports and other information
about the Funds are also available on the EDGAR
database on the SEC's Internet site located at
http://www.sec.gov. Alternatively, copies of this
information may be obtained, upon payment of a
duplicating fee, by electronic request to the following
e-mail address: [email protected], or by writing the
Public Reference Section of the SEC, Washington, D.C.
20549-0102.
Frontegra Funds, Inc.
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701, Milwaukee, Wisconsin 53201-0701
The Company's 1940 Act File Number is 811-7685.
