UNITED SERVICES FUNDS
U.S. ALL AMERICAN EQUITY FUND
P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234
1-800-US-FUNDS (1-800-873-8637)
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
PROSPECTUS
NOVEMBER 1, 1995
This prospectus presents information that a prospective investor should
know about the U.S. All American Equity Fund (the "All American Equity Fund" or
the "Fund"), a fund of United Services Funds (the "Trust"). The Fund is one of
numerous portfolios of the Trust, a diversified, open-end management investment
company. SHARES OF THE TRUST ARE NOT INSURED, GUARANTEED, SPONSORED, RECOMMENDED
OR APPROVED BY THE UNITED STATES OR ANY AGENCY OR OFFICER THEREOF. Read and
retain this prospectus for future reference.
A Statement of Additional Information dated November 1, 1995 has been filed
with the Securities and Exchange Commission and is incorporated herein by
reference. The Statement is available free from United Services Funds upon
written request at the address set forth above or by calling 1-800-US-FUNDS
(1-800-873-8637).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DIS-
APPROVED BY THE SECURITIES AND EXCHANGE COM-
MISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COM-
MISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
PAGE
----
Summary of Fees and Expenses .......................... 3
Financial Highlights .................................. 5
Investment Objectives and
Considerations ...................................... 7
Special Considerations ................................ 8
How to Purchase Shares ................................ 11
How to Exchange Shares ................................ 14
How to Redeem Shares .................................. 15
How Shares are Valued ................................. 20
Dividends and Taxes ................................... 20
The Trust ............................................. 22
Management of the Fund ................................ 23
Performance Information ............................... 25
2
SUMMARY OF FEES AND EXPENSES
The following summary, which is based on the Advisor's voluntary agreement
to cap expenses at 0.70% of average net assets of the Fund until June 30, 1996,
is provided to assist you in understanding the various costs and expenses a
shareholder in the Fund could bear directly or indirectly.
ALL AMERICAN
EQUITY FUND
------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load ............................ None
Redemption Fee ................................ None
Short-term Trading Fee (on the
redemption or exchange of
shares held less than 14
days) ...................................... 0.10%
Administrative Exchange Fee ................... $ 5
Account Closing Fee (does not
apply to exchanges) ........................ $ 10
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET
ASSETS)(1)
Management Fees (net of waivers
and reimbursements) ........................ 0.00%(2)
12b-1 Fees .................................... None
Other Expenses including
Transfer Agency and
Accounting Services Fees ................... 0.70%
Total Fund Operating Expenses
(net of waivers and
reimbursements) ............................ 0.70%(2)
The Fund assesses an account maintenance fee of $3 per quarter, for a total
of $12 annually. The purpose of the fee is to allocate part of the cost of
maintaining shareholder accounts equally to all accounts. This fee will be
deducted first from the annual dividends paid by the Fund to each shareholder
account. See "Account Maintenance Fee" at page 19 for more information on this
fee.
Except for active ABC Investment Plan(R), UGMA/UTMA and retirement
accounts, if an account balance falls, for any reason other than market
fluctuations, below $1,000 at any time during a month, that account will be
subject to a monthly small account charge of $1 which will be payable quarterly.
See "Small Accounts" on page 18.
A shareholder who requests delivery of redemption proceeds by wire transfer
will be subject to a $10 charge. International wires will be higher.
3
HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption at the end of each period.
1 year .................................. $ 29
3 years ................................. 99
5 years ................................. 172
10 years ................................. 367
Included in these estimates are account maintenance fees of $12, $36, $60 and
$120, respectively, for the periods shown and the account closing fee of $10 for
each period. These fees are flat charges which do not vary with the size of your
investment. Accordingly, for investments larger than $1,000, your total expenses
will be substantially lower in percentage terms than this illustration implies.
The examples should not be considered a representation of past or future
expenses. Actual expenses may be more or less than those shown.
- ------------------------------------------------------------------------------
(1) Annual Fund Operating Expenses are based on the Fund's historical expenses.
Management fees are paid to United Services Advisors, Inc. (the "Advisor") for
managing its investments and business affairs. The Fund incurs other expenses
for maintaining shareholder records, furnishing shareholder statements and
reports, and for other services. Transfer agency and accounting services fees
are paid to United Shareholder Services, Inc. ("USSI" or the "Transfer Agent"),
a subsidiary of the Advisor, and are not charged directly to individual
shareholder accounts. The Transfer Agent charges the Fund $23.00 per shareholder
account per year. The account closing fee, account maintenance fee and small
account charge will be paid by the shareholder directly to the Transfer Agent
which will, in turn, reduce its charges to the Fund by like amount. Please refer
to the section entitled "Management of the Fund" on page 23 for further
information.
(2) The Advisor has guaranteed that Total Fund Operating Expenses of the All
American Equity Fund (as a percentage of net assets) will not exceed 0.70% on an
annualized basis through June 30, 1996 and until such later date as the Advisor
determines. Based on actual operating expenses of the Fund for the year ended
June 30, 1995, Management Fees, Other Expenses, Transfer Agency Fees, Accounting
Service Fees and Total Fund Operating Expenses would be 0.75%, 0.94%, 0.23%,
0.23%, and 2.15%, respectively, in the absence of the fee waiver and expense
reimbursement by the Advisor.
4
FINANCIAL HIGHLIGHTS
U.S. ALL AMERICAN EQUITY FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout each of the five years ended June 30, 1995 has been
audited by Price Waterhouse LLP, the Fund's Independent Accountants. The related
financial statements and the report of Independent Accountants are included in
the Funds" 1995 Annual Report to Shareholders and are incorporated by reference
into the Statement of Additional Information ("SAI"). In addition to the data
set forth below, further information about the performance of the Fund is
contained in the Annual Report to Shareholders and SAI which may be obtained
without charge.
Selected data for a capital share outstanding throughout each year is as
follows:
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
---------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................ $ 19.52 $ 20.60 18.79 17.12 16.11 16.67 16.44
--------- --------- --------- --------- --------- --------- ---------
Net investment income(a).......................... .44 .44 .36 .17 .14 .49 .43
Net realized and unrealized gain (loss) on
investments(b)................................... 2.68 (.75) 1.91 1.62 .97 (.55) .28
--------- --------- --------- --------- --------- --------- ---------
Total from investment operations.................... 3.12 (.31) 2.27 1.79 1.11 (.06) .71
--------- --------- --------- --------- --------- --------- ---------
Less dividends and distributions:
Dividends from net investment income.............. (.39) (.44) (.37) (.12) (.10) (.50) (.48)
Distributions in excess of net investment
income(c)........................................ -- (.02) (.09) -- -- -- --
Distributions from net realized gains............. -- (.31) -- -- -- -- --
Distributions in excess of net realized gain(c)... (2.17) -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Total dividends and distributions................... (2.56) (.77) (.46) (.12) (.10) (.50) (.48)
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Net asset value, end of period...................... $ 20.08 19.52 20.60 18.79 17.12 16.11 16.67
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Total Investment Return(d).......................... 17.98% (1.67) 12.15 10.51 6.84 (0.40) 4.45
Ratios/Supplemental Data:
Net assets, end of period (in thousands)............ $ 11,931 10,227 12,331 11,825 10,306 9,763 11,992
Ratio of expenses to average net assets............. 0.70 (e) 0.61 1.03 2.03% 2.80 2.10 1.97
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Ratio of net income to average net assets........... 2.33 (e) 2.11 1.86 .78% .83 2.63 2.62
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Portfolio turnover rate............................. 96.92% 116.61 11.55 34.83% 209.26 258.30 113.24
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
1988 1987 1986
--------- --------- ---------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................ 20.24 18.38 14.55
--------- --------- ---------
Net investment income(a).......................... .40 .32 .35
Net realized and unrealized gain (loss) on
investments(b)................................... (3.46) 1.92 3.65
--------- --------- ---------
Total from investment operations.................... 3.06 2.24 4.00
--------- --------- ---------
Less dividends and distributions:
Dividends from net investment income.............. (.74) (.38) (.17)
Distributions in excess of net investment
income(c)........................................ -- -- --
Distributions from net realized gains............. -- -- --
Distributions in excess of net realized gain(c)... -- -- --
--------- --------- ---------
Total dividends and distributions................... (.74) (.38) (.17)
--------- --------- ---------
--------- --------- ---------
Net asset value, end of period...................... 16.44 20.24 18.38
--------- --------- ---------
--------- --------- ---------
Total Investment Return(d).......................... (15.45) 12.59 27.71
Ratios/Supplemental Data:
Net assets, end of period (in thousands)............ 16,817 36,368 32,650
Ratio of expenses to average net assets............. 1.43 1.35 1.40
--------- --------- ---------
--------- --------- ---------
Ratio of net income to average net assets........... 1.68 1.68 1.98
--------- --------- ---------
--------- --------- ---------
Portfolio turnover rate............................. 179.67 58.26 91.21
--------- --------- ---------
--------- --------- ---------
(FOOTNOTES ON FOLLOWING PAGE)
</TABLE>
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
(a) Net of expense reimbursements; (b) Includes the effect of capital share
transactions throughout the year; (c) Distributions in excess of net investment
income and net realized gains and tax returns of capital are presented in
accordance with SOP 93-2, Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distribution by
Investment Companies, which was first implemented by the Funds in fiscal 1993.
Information for prior years has not been restated; (d) Total return does not
reflect the effect of account fees; (e) Expense ratio is net of expense
reimbursements or fee waivers. Had such reimbursements not been made, the
expense ratio subject to the most restrictive state limitation would have been
2.17% and the net investment income ratio would have been 0.83%. (f) For the
period November 2, 1990 to November 22, 1993, the Fund was passively managed as
an index fund.
6
INVESTMENT OBJECTIVES AND CONSIDERATIONS
United Services Funds (the "Trust") is an open-end management investment
company consisting of various separate, diversified portfolios managed by United
Services Advisors, Inc. (the "Advisor"). The U.S. All American Equity Fund (the
"Fund") is a sub-trust or series of the Trust. Each investor is responsible for
determining whether or not an investment in the Fund is appropriate for his or
her needs.
The Fund's investment objective is to seek capital appreciation by
investing primarily in a broadly diversified portfolio of domestic common
stocks. Although many of the common stocks the Fund invests in will produce
dividends, the Fund seeks capital appreciation and does not emphasize income.
There is no assurance that the Fund will achieve its objective. The Fund's
objective is not a fundamental policy and may be changed by the Board of
Trustees without shareholder approval. However, shareholders will be notified in
writing at least 60 days prior to any material change to the Fund's objective.
The Fund will invest at least 75% of its total assets in common stocks
under normal conditions. The Fund will seek to generate a return which exceeds
that of the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500").
In pursuing this goal, the Fund attempts to maintain an industry diversification
similar to that of the S&P 500. However, the individual stocks the Fund
purchases within each industry may differ and are expected to cover a broad
range of domestic companies of all sizes.
Although the Fund will invest primarily in common stocks, the Fund may also
maintain a reasonable position in high quality short-term debt securities and
money market instruments to be prepared to meet redemption requests or in
preparation for investment in common stocks. These securities and money market
instruments may include obligations of the U.S. Government and its agencies and
instrumentalities and repurchase agreements. Under normal conditions, the Fund
will not invest more than 25% of its total net assets in such securities. In
addition, the Fund may purchase and sell index options, stock index futures
contracts or purchase or write options on such futures contracts to manage cash
flow and to remain fully invested in equity securities, instead of or in
addition to buying and selling the underlying securities. See "Special
Considerations -- Futures Contracts and Related Options" at page 9.
7
SPECIAL CONSIDERATIONS
PORTFOLIO TURNOVER
The Fund's total portfolio turnover rate is shown in the "Financial
Highlights Table" on page 5. It is the policy of the Fund to seek capital
appreciation. The Fund will effect portfolio transactions without regard to its
holding period, if, in the judgment of the Advisor, such transactions are
advisable.
BORROWING
The Fund may borrow from a bank up to a limit of 5% of its total assets for
temporary or emergency purposes; and, it may borrow up to 33 1/3% of its total
assets (reduced by the amount of all liabilities and indebtedness other than
such borrowings) when deemed desirable or appropriate to meet redemption
requests. To the extent that the Fund borrows money prior to selling securities,
the Fund may be leveraged. At such times, the Fund may appreciate or depreciate
in value more rapidly than its benchmark index. The All American Equity Fund
will repay any money borrowed in excess of 5% of the value of its total assets
prior to purchasing additional portfolio securities.
LENDING OF PORTFOLIO SECURITIES
The Fund may lend securities to broker-dealers or institutional investors
for their use in connection with short sales, arbitrages and other securities
transactions. The Fund will not lend portfolio securities unless the loan is
secured by collateral (consisting of any combination of cash, U.S. Government
securities or irrevocable letters of credit) in an amount at least equal (on a
daily mark-to-market basis) to the current market value of the securities
loaned. In the event of a bankruptcy or breach of agreement by the borrower of
the securities, the Fund could experience delays and costs in recovering the
securities loaned. The Fund will not enter into securities lending agreements
unless its custodian bank/lending agent will fully indemnify the Fund against
loss due to borrower default. The Fund may not lend securities with an aggregate
market value of more than one-third of the Fund's total net assets.
REPURCHASE AGREEMENTS
The Fund may invest a portion of its assets in repurchase agreements with
United States broker-dealers, banks and other financial institutions, provided
the Fund's custodian always has possession of securities serving as collateral
or has evidence of book entry receipt of such securities. In a repurchase
agreement, the Fund purchases securities subject to the seller's agreement to
repurchase such securities at a specified time (normally one day) and price. The
repurchase price reflects an agreed-upon interest rate
8
during the time of investment. All repurchase agreements must be collateralized
by U.S. Government or government agency securities, the market values of which
equal or exceed 102% of the principal amount of the repurchase obligation. If an
institution enters an insolvency proceeding, the resulting delay in liquidation
of securities serving as collateral could cause the Fund some loss if the value
of the securities declined prior to liquidation. To minimize the risk of loss,
the Fund will enter into repurchase agreements only with institutions and
dealers which the Board of Trustees considers creditworthy.
FUTURES CONTRACTS AND RELATED OPTIONS
The Fund may invest in stock index futures contracts and related options. A
stock index futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to a specified
dollar amount multiplied by the difference between the index value at the close
of the last trading day of the contract and the price at which the futures
contract is originally struck. No physical delivery of underlying stocks in the
index is made. The Fund may purchase stock index futures contracts and purchase
options thereon in anticipation of an increase in the market price of securities
it intends to acquire. When the Fund anticipates a significant market or market
sector advance, the purchase of a stock index futures contract or related option
protects against not participating in such advance at a time when the Fund is
not fully invested. There is a risk that futures contract price movements will
not correlate perfectly with movements in the value of the underlying stock
index. There is a further risk that a liquid secondary trading market may not
exist at all times for these contracts, in which event the Fund might be unable
to terminate a futures position at the desired time.
The Fund may use stock index futures and related options contracts in only
a portion of its portfolio. The underlying value of all such futures contracts
will not exceed 35% of the Fund's total net assets. Furthermore, the Fund will
not commit more than 5% of its total net assets to premiums on options and
initial margin on futures contracts. The Fund will not borrow money to purchase
futures or options, and will segregate cash or cash equivalents or cover its
potential obligations in conformance with Securities and Exchange Commission
guidelines. For a full description of these procedures see "Stock Index Futures
Contracts and Related Options" in the Statement of Additional Information.
PUT AND CALL OPTIONS
SELLING (OR WRITING) COVERED CALL OPTIONS. The Fund may sell (or write)
covered call options on portfolio securities to hedge against adverse movements
in the prices of these securities. A call option gives the buyer of the option,
upon payment of a premium, the right to call upon the writer to
9
deliver a security on or before a fixed date at a predetermined price, referred
to as the strike price. If the price of the hedged security should fall or
remain below the strike price, the Fund will not be called upon to deliver the
security and the Fund will retain the premium received for the option as
additional income, offsetting all or part of any decline in the value of the
security. The hedge provided by writing covered call options is limited to a
price decline in the security of no more than the option premium received by the
Fund for writing the option. If the security owned by the Fund appreciates above
the options strike price the Fund will generally be called upon to deliver the
security, which will prevent the Fund from receiving the benefit of any price
appreciation above the strike price.
BUYING CALL OPTIONS. The Fund may purchase call options on securities which
the Fund intends to purchase to take advantage of anticipated positive movements
in the prices of these securities. The Fund will realize a gain from the
exercise of a call option if, during the option period, the price of the
underlying security to be purchased increases by more than the amount of the
premium paid. The Fund will realize a loss equal to all or a portion of the
premium paid for the option if the price of the underlying security decreases or
does not increase by more than the premium.
BUYING PUT OPTIONS. The Fund may purchase put options on portfolio
securities to hedge against adverse movements in the prices of these securities.
A put option gives the buyer of the option, upon payment of a premium, the right
to sell a security to the writer of the option on or before a fixed date at a
predetermined price. The fund will realize a gain from the exercise of a put
option if, during the option period, the price of the security declines by an
amount in excess of the premium paid. The Fund will realize a loss equal to all
or a portion of the premium paid for the option if the price of the security
increases or does not decrease by more than the premium.
CLOSING TRANSACTIONS. The Fund may dispose of an option written by the Fund
by entering into a "closing purchase transaction" for an identical option and
may dispose of an option purchased by the Fund by entering into a "closing sale
transaction" for an identical option. In each case, the closing transaction will
have the effect of terminating the rights of the option holder and the
obligations of the option purchaser and will result in a gain or loss to the
Fund based upon the relative amount of the premiums paid or received for the
original option and the closing transaction. The Fund may sell (or write) put
options solely for the purpose of entering into closing sale transactions.
INDEX OPTIONS. The Fund may purchase and sell call options and purchase put
options on stock indices in order to manage cash flow, reduce equity exposure,
or to remain fully invested in equity securities. Options on securities indices
are similar to options on a security except that, upon the
10
exercise of an option on a securities index, settlement is made in cash rather
than in specific securities.
LIMITATIONS. The Fund will purchase and sell only options that are listed
on a securities exchange. The Fund will not purchase any option if, immediately
thereafter, the aggregate market value of all outstanding options purchased and
written by the Fund would exceed 5% of the Fund's total assets. The Fund will
not write any call options if, immediately thereafter, the aggregate value of
the Fund's securities subject to outstanding call options would exceed 25% of
the value of the Fund's total assets.
SPECIAL LIMITATIONS
The Fund may: (1) borrow up to 5% of the value of the total assets of the
Fund from banks as a temporary measure (for extraordinary purposes). The All
American Equity Fund may borrow up to 33 1/3% of the amount of its total assets
(reduced by the amount of all liabilities and indebtedness other than such
borrowings) when deemed desirable or appropriate to effect redemptions,
provided, however, that the Fund will not purchase additional securities while
borrowings exceed 5% of the Fund's total assets; (2) invest up to 5% of the
value of the total assets of the Fund in securities of any one issuer (except
such limitation does not apply to obligations issued or guaranteed by the United
States Government, its agencies and/or instrumentalities); (3) not acquire more
than 10% of the voting securities of any one issuer; and (4) lend portfolio
securities with an aggregate market value of not more than one-third of the
Fund's total net assets.
HOW TO PURCHASE SHARES
The minimum initial investment is $1,000. The minimum subsequent investment
is $50. The minimum initial investment for persons enrolled in ABC Investment
Plan(R) is $100 and the minimum subsequent investment pursuant to such a plan is
$30 or more per month per account. There is no minimum purchase for retirement
plan accounts administered by the Advisor or its agents and a reduced $50
minimum on initial purchases for custodial accounts for minors.
YOU MAY INVEST IN THE FOLLOWING WAYS:
BY MAIL
Send your application and check, made payable to the Fund, to P.O. Box
781234, San Antonio, Texas 78278-1234.
When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment or indicate
on your check or a separate piece of paper your name, address and account number
and mail to the address mentioned above. Do not use
11
the remittance portion of your confirmation statement for a different fund as it
is pre-coded. This may cause your investment to be invested into the wrong fund.
If you wish to purchase shares in more than one fund, send a separate check or
money order for each fund. Third party checks will not be accepted; and the
Trust reserves the right to refuse to accept second party checks.
BY TELEPHONE
Once your account is open, you may make investments by telephone by calling
1-800-US-FUNDS (1-800-873-8637). Investments by telephone are not available in
money market funds or any retirement account, administered by the Advisor or its
agents. The maximum telephone purchase is ten times the value of the shares
owned, calculated at the last available net asset value. Payment for shares
purchased by telephone is due within seven business days after the date of the
transaction. You cannot exchange shares purchased by telephone until after the
payment has been received and accepted by the Trust.
BY WIRE
You may make your initial or subsequent investments in United Services
Funds by wiring funds. To do so, call United Services Funds at 1-800-US-FUNDS
(1-800-873-8637) for a confirmation number and wiring instructions.
BY ABC INVESTMENT PLANT
Once your account is open, you may make investments automatically by
completing the ABC Investment PlanT (Automatically Building Capital Investment
Plan) form authorizing United Services Funds to draw on your bank account
regularly for as little as $30 a month beginning within thirty (30) days after
the account is opened. You should inquire at your bank whether it will honor
debits through the Automated Clearing House ("ACH") or, if necessary,
preauthorized checks. You may change the date or amount of your investment or
discontinue the Plan any time by letter received by United Services Funds at
least five business days before the change is to become effective.
ADDITIONAL INFORMATION ABOUT PURCHASES
All purchases of shares are subject to acceptance by the Trust and are not
binding until accepted. United Services Funds reserves the right to reject any
application or investment. Orders received by the Fund's transfer agent or a
sub-agent before 4:00 p.m., Eastern time, Monday through Friday exclusive of
business holidays, and accepted by the Fund will receive the share price next
computed after receipt of the order.
12
If your telephone order to purchase shares is cancelled due to nonpayment
or late payment (whether or not your check has been processed by the Fund), you
will be responsible for any loss incurred by the Trust by reason of such
cancellation.
If checks are returned unpaid due to nonsufficient funds, stop payment or
other reasons, the Trust will charge $20 and you will be responsible for any
loss incurred by the Trust with respect to cancelling the purchase.
To recover any such loss or charge, the Trust reserves the right, without
further notice, to redeem shares of any portfolio already owned by any purchaser
whose order is cancelled, for whichever reason, and such a purchaser may be
prohibited from placing further orders unless investments are accompanied by
full payment by wire or cashier's check.
United Services Funds charges no sales commissions or "loads" of any kind.
However, investors may purchase and sell shares through registered
broker-dealers who may charge fees for their services.
Investments paid for by checks drawn on foreign banks may be deferred until
such checks have cleared the normal collection process. In such instances, any
amounts charged to the Trust for collection procedures will be deducted from the
amount invested.
If the Trust incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.
TAX IDENTIFICATION NUMBER
The Fund is required by Federal law to withhold and remit to the United
States Treasury a portion of the dividends, capital gain distributions and
proceeds of redemptions paid to any shareholder who fails to furnish the Fund
with a correct taxpayer identification number, who underreports dividend or
interest income or who fails to provide certification of tax identification
number. In order to avoid this withholding requirement, you must certify on your
application, or on a separate Form W-9 supplied by the Transfer Agent, that your
taxpayer identification number is correct and that you are not currently subject
to backup withholding or you are exempt from backup withholding. For
individuals, your taxpayer identification number is your social security number.
Instructions to exchange or transfer shares held in established accounts
will be refused until the certification has been provided. In addition, the Fund
assesses a $50 administrative fee if the taxpayer identification number is not
provided by year-end.
13
CERTIFICATES
When you open your account, United Services Funds will send you a
confirmation statement, which will be your evidence that you have opened an
account with United Services Funds. The confirmation statement is nonnegotiable,
so if it is lost or destroyed, you will not be required to buy a lost instrument
bond or be subject to other expense or trouble, as you would with a negotiable
stock certificate. At your written request, United Services Funds will issue
negotiable stock certificates. Unless your shares are purchased with wired
funds, a certificate will not be issued until 15 days have elapsed from the time
of purchase, or United Services Funds has satisfactory proof of payment, such as
a copy of your cancelled check. Negotiable certificates will not be issued for
fewer than 100 shares.
HOW TO EXCHANGE SHARES
You have the privilege of exchanging into any of the other United Services
Funds or affiliated funds which are registered in your state. An exchange
involves the simultaneous redemption (sale) of shares of one fund and purchase
of shares of another fund at the respective closing net asset value and is a
taxable transaction.
BY TELEPHONE
You will automatically have the privilege to direct United Services Funds
to exchange your shares by calling toll free 1-800-US-FUNDS (1-800-873-8637). In
connection with such exchanges neither the Fund nor the Transfer Agent will be
responsible for acting upon any instructions reasonably believed by them to be
genuine. The shareholder, as a result of this policy, will bear the risk of
loss. The Fund and/or its Transfer Agent will, however, employ reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including requiring some form of personal identification, providing written
confirmation and tape recording conversations); and if either party does not
employ reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent transactions.
BY MAIL
You may direct United Services Funds in writing to exchange your shares
between identically registered accounts. The request must be signed exactly as
the name appears in the registration. (Before writing, read "Additional
Information About Exchanges.")
ADDITIONAL INFORMATION ABOUT EXCHANGES
(1) There is a $5 charge, which is paid to United Shareholder Services,
Inc. ("USSI" or the "Transfer Agent"), for each exchange out of any fund
account. Retirement accounts administered by the Advisor or its
14
agents are charged $5 for each exchange exceeding three per quarter. The
exchange fee is charged to cover administrative costs associated with handling
these exchanges.
(2) Like any other redemption, the Fund reserves the right to hold exchange
proceeds for up to seven days. In such event, the purchase side of the exchange
transaction will also be delayed. You will be notified immediately if the Fund
is exercising said right.
(3) If the shares you wish to exchange are represented by a negotiable
stock certificate, the certificate must be returned before the exchange can be
effected.
(4) Shares may not be exchanged unless you have furnished United Services
Funds with your tax identification number, certified as prescribed by the
Internal Revenue Code and Regulations, and the exchange is to an account with
like registration and tax identification number. (See "Tax Identification
Number" at page 13.)
(5) Exchanges out of United Services Funds" equity funds of shares held
less than 14 days are subject to a short-term trading fee described at page 17.
(6) The exchange privilege may be terminated at any time. The exchange fee
and other terms of the privilege are subject to change.
HOW TO REDEEM SHARES
You may redeem any or all of your shares at will. Redemption requests
received in proper order by the Trust's transfer agent or a sub-agent before
4:00 p.m., Eastern time, Monday through Friday exclusive of business holidays,
will receive the share price next computed after receipt of the request.
BY MAIL
A written request for redemption must be in "proper order," which requires
the delivery of the following to the Transfer Agent:
(1) a written request for redemption signed by each registered owner
exactly as the shares are registered, the account number and the number of
shares or the dollar amount to be redeemed;
(2) negotiable stock certificates for any shares to be redeemed for which
certificates have been issued;
(3) signature guarantees when required; and
15
(4) such additional documents as are customarily required to evidence the
authority of persons effecting redemptions on behalf of corporations, executors,
trustees, and other fiduciaries. Redemptions will not become effective until all
documents, in the form required, have been received by the Transfer Agent.
(Before writing, read "Additional Information About Redemptions.")
SPECIAL REDEMPTION ARRANGEMENTS
Special arrangements may be made by institutional investors, or on behalf
of accounts established by brokers, advisers, banks or similar institutions, to
have redemption proceeds transferred by wire to pre-established accounts upon
telephone instructions. For further information call the Trust at
1-800-873-8637.
Telephone redemptions are available for accounts with a balance of at least
$50,000. To establish telephone redemption privileges, call 1-800-873-8637 for
information.
SIGNATURE GUARANTEE
Redemptions in excess of $15,000 currently require a signature guarantee. A
signature guarantee is required for all redemptions, regardless of the amount
involved, when the proceeds are to be paid to someone other than the registered
owner of the shares to be redeemed or if proceeds are to be mailed to an address
other than the registered address of record. When a signature guarantee is
required, each signature must be guaranteed by: (a) a federally insured bank or
thrift institution; (b) a broker or dealer (general securities, municipal, or
government) or clearing agency registered with the U.S. Securities and Exchange
Commission that maintains net capital of at least $100,000; or (c) a national
securities exchange or national securities association. The guarantee must: (i)
include the statement "Signature(s) Guaranteed'; (ii) be signed in the name of
the guarantor by an authorized person, the person's printed name and position
with guarantor; and (iii) include a recital that the guarantor is federally
insured, maintains the requisite net capital or is a national securities
exchange or association. Shareholders living abroad may acknowledge their
signatures before a U.S. consular officer. Military personnel may acknowledge
their signatures before officers authorized to take acknowledgments (e.g., legal
officers and adjutants).
REDEMPTION PROCEEDS MAY BE SENT TO YOU:
BY MAIL
If your redemption check is mailed, it is usually mailed within 48 hours;
however, the Fund reserves the right to hold redemption proceeds for up to seven
days. If the shares to be redeemed were purchased by check, the
16
redemption proceeds will not be mailed until the purchase check has cleared,
which may take up to seven days. You may avoid this requirement by investing by
bank wire (Federal funds). Redemption checks may be delayed if you have changed
your address in the last 30 days. Please notify the Fund promptly in writing, or
by telephone, of any change of address.
BY WIRE
You may authorize the Fund to transmit redemption proceeds by wire,
provided you send written wiring instructions with a signature guarantee at the
time of redemption. Proceeds from your redemption will usually be transmitted on
the first business day following the redemption. However, the Trust reserves the
right to hold redemptions for up to seven days. If the shares to be redeemed
were purchased by check, the redemption proceeds will not be mailed or wired
until the purchase check has cleared, which may take up to seven days. There is
a $10 charge to cover the wire, which is deducted from redemption proceeds.
International wire charges will be higher.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS
The redemption price may be more or less than your cost, depending on the
net asset value of the Fund's portfolio next determined after your request is
received.
A request to redeem shares in an IRA or similar retirement account must be
accompanied by an IRS Form W4-P and a reason for withdrawal as specified by the
IRS. Proceeds from the redemption of shares from a retirement account may be
subject to withholding tax.
The Trust has the authority to redeem existing accounts and to refuse a
potential account the privilege of having an account in the Trust if the Trust
reasonably determines that the failure to so redeem, or to so prohibit, would
have a material adverse consequence to the Trust and its shareholders. No
account closing fee or redemption fee will be charged to investors whose
accounts are closed under this provision.
Excessive short-term trading has an adverse impact on effective portfolio
management as well as upon Fund expenses. The Trust has reserved the right to
refuse investments from shareholders who engage in short-term trading.
TRADER'S FEE PAID TO FUND
A trader's fee will be assessed to shareholders who redeem or exchange
shares out of certain United Services Funds" equity funds when those shares have
been held less than the designated holding period. The
17
Trader's Fee will be paid to the equity fund to benefit remaining shareholders
by protecting them against expenses due to excessive trading. A Trader's fee of
ten basis points or 0.10% of the value of shares redeemed or exchanged will be
assessed to shareholders who redeem or exchange shares of U.S. All American
Equity Fund held less than fourteen (14) calendar days. For more information
about other equity funds consult the appropriate equity fund prospectus.
ACCOUNT CLOSING FEE
In order to reduce Fund expenses an account closing fee of $10 will be
assessed to shareholders who redeem all shares in their Fund account and direct
that redemption proceeds be delivered to them by mail or wire. The charge is
payable directly to the Fund's Transfer Agent which, in turn, will reduce its
charges to the Fund by an equal amount. The purpose of the charge is to allocate
to redeeming shareholders a more equitable portion of the Transfer Agent's fee,
including the cost of tax reporting, which is based upon the number of
shareholder accounts. The account closing fee does not apply to exchanges
between the United Services Funds" funds nor does it apply to any account which
is involuntarily redeemed.
SMALL ACCOUNTS
Fund accounts which fall, for any reason other than market fluctuations,
below $1,000 at any time during the month, will be subject to a monthly small
account charge of $1 which will be payable quarterly. The charge is payable
directly to the Fund's Transfer Agent which, in turn, will reduce its charges to
the Fund by an equal amount. The purpose of the charge is to allocate the costs
of maintaining shareholder accounts more equally among shareholders.
Active ABC Investment Plan(R), UGMA/UTMA and retirement plan accounts
administered by the Advisor or its agents or its affiliates will not be subject
to the small account charge.
In order to reduce expenses of the Fund, the Trust may redeem all shares in
any shareholder account, other than active ABC Investment Plan(R), UGMA/UTMA and
retirement plan accounts, if, for a period of more than three months, the
account has a net asset value of $500 or less and the reduction in value is not
due to market fluctuations. If the Fund elects to close such accounts, it will
notify shareholders whose accounts are below the minimum of its intention to do
so, and will provide those shareholders with an opportunity to increase their
accounts by investing a sufficient amount to bring their accounts up to the
minimum amount within ninety (90) days of the notice. No account closing fee
will be charged to investors whose accounts are closed under this redemption
provision.
18
ACCOUNT MAINTENANCE FEE
The Fund will automatically deduct a $3 per quarter ($12 annually) account
maintenance fee from the dividend income paid to each shareholder account. If
the dividend to be paid to an account is less than the fee to be deducted,
sufficient shares will be redeemed from an account to make up the difference.
Redeeming shares is a taxable event which may result in taxable gains or losses.
The account maintenance fee is payable directly to the Fund's Transfer Agent
which, in turn, will reduce its charge to the Fund by an equal amount.
CONFIRMATION STATEMENTS
Shareholders normally will receive a confirmation statement after each
transaction showing the activity in the account. However, when account activity
is produced solely from dividend reinvestment, confirmation statements will be
mailed on a quarterly basis.
OTHER SERVICES
The Trust has available a number of plans and services to meet the special
needs of certain investors. Plans available include:
(1) payroll deduction plans, including military allotments;
(2) custodial accounts for minors;
(3) a flexible, systematic withdrawal plan; and
(4) various retirement plans such as IRA, SEP/IRA, 403(b)(7), 401(k) and
employer-adopted defined contribution plans.
Application forms and brochures describing these plans and services can be
obtained from the Transfer Agent by calling 1-800-US-FUNDS (1-800-873-8637).
There is an annual charge for each retirement plan fund account with
respect to which Security Trust & Financial Company ("ST&FC"), a wholly-owned
subsidiary of the Advisor, acts as custodian (for example, $10 for IRAs and $15
for SEP/IRAs, 403(b)(7)s, profit sharing and other such accounts). If this
administrative charge is not paid separately prior to the last business day of a
calendar year or prior to a total redemption, it will be deducted from the
shareholder's account.
SHAREHOLDER SERVICES
United Shareholder Services, Inc. ("USSI"), a wholly-owned subsidiary of
the Advisor, acts as transfer and dividend paying agent for all fund accounts.
Simply write or call 1-800-US-FUNDS for prompt service on any questions about
your account.
19
24 HOUR CURRENT INFORMATION
Shareholders can also access 24 hours a day current information on yields,
prices, latest dividends, account balances and deposits and redemptions for the
previous and current months. Just call 1-800-US-FUNDS and press the appropriate
codes into your touch-tone phone.
HOW SHARES ARE VALUED
Shares of the Fund are purchased or redeemed, on a continuing basis without
a sales charge, at their next determined net asset value per share. The net
asset value per share of the Fund is calculated separately by United Shareholder
Services, Inc. Net asset value per share is determined and orders become
effective as of 4:00 p.m. Eastern time, Monday through Friday, exclusive of
business holidays on which the NYSE is closed, by dividing the aggregate net
assets of the Fund by the total number of shares of the Fund outstanding. In the
event that the NYSE and other financial markets close earlier, as on the eve of
a holiday, the net asset value per share will be determined earlier in the day
at the close of trading on the NYSE.
A portfolio security listed or traded on a stock exchange or quoted on
NASDAQ is valued at the last reported sale price prior to the time when assets
are valued. Lacking any sales on that day, the security is valued at the mean
between the last reported bid and ask prices. Over-the-counter portfolio
securities for which market quotations are readily available are valued at the
mean between the most recent bid and ask prices as obtained from one or more
dealers that make markets in the securities. Portfolio securities which are
traded both in the over-the-counter market and on a stock exchange are valued
according to the broadest and most representative market as determined by the
Advisor. When market quotations are not readily available, or when restricted
securities or other assets are being valued, such assets are valued at fair
value as determined in good faith by or under procedures established by the
Board of Trustees.
Debt securities with maturities of 60 days or less at the time of purchase
are valued on the basis of the amortized cost. This involves valuing an
instrument at its cost initially and, thereafter, assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.
DIVIDENDS AND TAXES
The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the
20
'Code"). By complying with the applicable provisions of the Code, a Fund will
not be subject to Federal income tax on its net investment income and capital
gain net income that are distributed to shareholders.
All income dividends and capital gain distributions are normally
reinvested, without charge, in additional full and fractional shares of the
Fund. Alternatively, investors may choose: (1) automatic reinvestment of capital
gain distributions in Fund shares and payment of income dividends in cash; (2)
payment of capital gain distributions in cash and automatic reinvestment of
dividends in Fund shares; or (3) all income dividend and capital gain
distributions paid in cash. The share price of the reinvestment will be the net
asset value of the Fund shares computed at the close of business on the date the
dividend or distribution is paid. Dividend checks returned to the Fund as being
undeliverable and dividend checks not cashed after 180 days will automatically
be reinvested at the price of the Fund on the day returned or on or about the
181st day and the distribution option will be changed to "reinvest."
At the time of purchase, the share price of the Fund may reflect
undistributed income, capital gains or unrealized appreciation of securities.
Any dividend or capital gain distribution paid to a shareholder shortly after a
purchase of shares will reduce the per share net asset value by the amount of
the distribution. Although in effect a return of capital to the shareholder,
these distributions are fully taxable.
The Fund generally pays dividends quarterly and distributes capital gains,
if any, annually.
The Fund is subject to a nondeductible 4 percent excise tax calculated as a
percentage of certain undistributed amounts of taxable ordinary income and
capital gains net of capital losses. The Fund intends to make such distributions
as may be necessary to avoid this excise tax.
Dividends from taxable net investment income and distributions of net
short-term capital gains paid by the Fund are taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares of
the Fund. A portion of these dividends may qualify for the 70 percent dividends
received deduction available to corporations. Distributions of net capital gains
will be taxable to shareholders as long-term capital gains, whether paid in cash
or reinvested in additional shares, regardless of the length of time the
investor has held his shares.
Each January, the Fund will report to its shareholders the Federal tax
status of dividends and distributions paid or declared by the Fund during the
preceding calendar year. This statement will also indicate whether and to what
extent distributions qualify for the 70 percent dividends received deduction
available to corporations.
21
The foregoing discussion relates only to generally applicable Federal
income tax provisions in effect as of the date of this prospectus. Shareholders
should consult their tax advisers about the status of distributions from the
Fund in their own states and localities.
THE TRUST
United Services Funds (the "Trust") is an open-end management investment
company, consisting of numerous separate, diversified portfolios, each of which
has its own investment objectives and policies. The portfolios are designed to
serve a wide range of investor needs.
The Trust was formed July 31, 1984 as a "business trust" under the laws of
the Commonwealth of Massachusetts. It is a "series" company which is authorized
to issue series of shares without par value, each series representing interests
in a separate portfolio, or divide the shares of any series into classes. Shares
of numerous series have been authorized. The Board of Trustees of the Trust has
the power to create additional series, or divide existing series into two or
more classes, at any time, without a vote of shareholders of the Trust.
Under the Trust's First Amended and Restated Master Trust Agreement (the
"Master Trust Agreement"), no annual or regular meeting of shareholders is
required, although the Trustees may authorize special meetings from time to
time. Under the terms of the Master Trust Agreement, the Trustees will be a
self-perpetuating body and will continue their positions until they resign, die
or are removed by a written instrument signed by at least two-thirds of the
Trustees, by vote of shareholders holding not less than two-thirds of the shares
then outstanding of the Trust cast at any meeting called for that purpose, or by
a written declaration signed by shareholders holding not less than two-thirds of
the shares then outstanding.
On any matter submitted to shareholders, shares of each portfolio entitle
their holder to one vote per share, irrespective of the relative net asset
values of each portfolio's shares. On matters affecting an individual portfolio,
a separate vote of shareholders of the portfolio is required. Each portfolio's
shares are fully paid and non-assessable by the Trust, have no preemptive or
subscription rights, and are fully transferable, with no conversion rights.
22
MANAGEMENT OF THE FUND
TRUSTEES
The business affairs of the Fund are managed by the Trust's Board of
Trustees. The Trustees establish policies, as well as review and approve
contracts and their continuance. The Trustees also elect the officers and select
the Trustees to serve as executive and audit committee members.
THE INVESTMENT ADVISOR
United Services Advisors, Inc., 7900 Callaghan Road, San Antonio, Texas
78229, under an investment advisory agreement with the Trust dated October 26,
1989, furnishes investment advice and is responsible for overall management of
the Trust's business affairs. Frank E. Holmes is Chief Executive Officer and
Chairman of the Board of Directors of the Advisor, as well as President and
Trustee of the Trust. Since October 1989, Mr. Holmes has owned more than 25% of
the voting stock of the Advisor and is its controlling person. The Advisor was
organized in 1968.
The Advisor provides to the Trust, and to each of the funds within the
Trust, management and investment advisory services. The Advisor furnishes an
investment program for each of the funds, determines, subject to the overall
supervision and review of the Board of Trustees of the Trust, what investments
should be purchased, sold and held, and makes changes on behalf of the Trust in
the investments of each of the funds. The Advisor utilizes a team approach to
manage the assets of the Fund. The team meets regularly to review portfolio
holdings and to discuss purchase and sale activity. Mr. Bin Shi has been
appointed team leader of the Fund. He has been a research analyst for the
Advisor since January 1994, focusing on equity securities. Mr. Shi was a
doctoral candidate in business administration at Freeman School of Business of
Tulane University from 1990 to 1994. He received a Masters of Arts degree in
Economics while enrolled in the doctoral program.
The Advisor provides the Trust with office space, facilities and business
equipment and provides the services of executive and clerical personnel for
administering the affairs of the Trust. The Advisor pays the expense of printing
and mailing prospectuses and sales materials used for promotional purposes.
NOTWITHSTANDING THE FOLLOWING DESCRIPTION OF FEES AND OTHER EXPENSES, THE
ADVISOR HAS GUARANTEED THAT TOTAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF
NET ASSETS) FOR THE ALL AMERICAN EQUITY FUND WILL NOT EXCEED 0.70% ON AN
ANNUALIZED BASIS THROUGH JUNE 30, 1996 OR UNTIL SUCH LATER DATE AS THE ADVISOR
DETERMINES.
23
The Advisory Agreement with the Trust provides for the Fund to pay the
Advisor an annual management fee based upon the average net assets of the Fund
of 0.75% of average net assets up to and including $250 million and 0.50% of
average net assets over $250 million. The fee paid to the Advisor for managing
the Fund for the fiscal year ended June 30, 1995 was 0.00% of average net assets
due to Advisor waivers.
The Advisor may, out of profits derived from its management fee, pay
certain financial institutions (which may include banks, securities dealers and
other industry professionals) a "servicing fee" for performing certain
administrative servicing functions for Fund shareholders to the extent these
institutions are allowed to do so by applicable statute, rule or regulation.
These fees will be paid periodically and will generally be based on a percentage
of the value of the institutions" client Fund shares.
The Transfer Agency Agreement with the Trust provides for each fund to pay
USSI an annual fee of $23.00 per account ( 1/12 of $23.00 monthly). In
connection with obtaining/providing administrative services to the beneficial
owners of Trust shares through broker-dealers, banks, trust companies and
similar institutions which provide such services and maintain an omnibus account
with the Transfer Agent, each fund shall pay to the Transfer Agent a monthly fee
equal to one-twelfth ( 1/12) of 12.5 basis points (.00125) of the value of the
shares of the funds held in accounts at the institutions, which payment shall
not exceed $1.92 multiplied by the average daily number of accounts holding
Trust shares at the institution. These fees cover the usual transfer agency
functions. In addition, the funds bear certain other Transfer Agent expenses
such as the costs of record retention and postage, plus the telephone and line
charges (including the toll-free 800 service) used by shareholders to contact
the Transfer Agent. For the fiscal period ending June 30, 1995, the All American
Equity Fund paid USSI a total of $0 for the transfer agency, lockbox and
printing fee due USSI. Transfer Agent fees and expenses including reimbursed
expenses, are reduced by the amount of small account charges, account closing
fees, and account maintenance fees the Transfer Agent is paid.
USSI performs bookkeeping and accounting services, and determines the daily
net asset value for the Fund. Bookkeeping and accounting services are provided
to the Fund for an asset based fee of 0.03% of the first $250 million in average
net assets, 0.02% of the next $250 million in average net assets, and 0.01% of
assets in excess of $500 million -- subject to an annual minimum fee of $24,000.
USSI received fees of $0 with respect to the Fund for the year ended June 30,
1995.
Additionally, the Advisor is reimbursed certain costs for in-house legal
services pertaining to the Fund.
The Trust pays all other expenses for its operations and activities. Each
of the funds of the Trust pays its allocable portion of these expenses. The
24
expenses borne by the Trust include the charges and expenses of any shareholder
servicing agents, custodian fees, legal and auditors" expenses, brokerage
commissions for portfolio transactions, the advisory fee, extraordinary
expenses, expenses of shareholders and trustee meetings, expenses for preparing,
printing, and mailing proxy statements, reports and other communications to
shareholders, and expenses of registering and qualifying shares for sale, among
others.
PERFORMANCE INFORMATION
From time to time, in advertisements or in reports to shareholders or
prospective shareholders, the Fund may compare its performance, either in terms
of its yield, total return or its yield and total return, to that of other
mutual funds with similar investment objectives and to stock or other indices.
For example, the Fund may compare its performance to rankings prepared by Lipper
Analytical Services, Inc. ("Lipper"), a widely recognized independent service
which monitors the performance of mutual funds; to Morningstar's Mutual Fund
Values; to the S&P 500 Index; or to the Consumer Price Index. Performance
information and rankings as reported in Changing Times, Business Week,
Institutional Investor, The Wall Street Journal, Mutual Fund Forecaster, No-Load
Investor, Money Magazine, Forbes, Fortune and Barron's magazine may also be used
in comparing performance of the Fund. Performance comparisons should not be
considered as representative of the future performance of the Fund.
The Fund's average annual total return is computed by determining the
average annual compounded rate of return for a specified period that, if applied
to a hypothetical $1,000 initial investment, would produce the redeemable value
of that investment at the end of the period, assuming reinvestment of all
dividends and distributions and with recognition of all recurring charges. The
Fund may also utilize a total return for differing periods computed in the same
manner but without annualizing the total return.
The Fund's "yield" refers to the income generated by an investment in the
Fund over a 30-day (or one month) period (which period will be stated in the
advertisement). Yield is computed by dividing the net investment income per
share earned during the most recent calendar month by the maximum offering price
per share on the last day of such month. This income is then "annualized." That
is, the amount of income generated by the investment during that 30-day period
is assumed to be generated each month over a 12-month period and is shown as a
percentage of the investment.
For purposes of the yield calculation, interest income is computed based on
the yield to maturity of each debt obligation and dividend income
25
is computed based upon the stated dividend rate of each security in the Fund's
portfolio and all recurring charges are recognized.
The standard total return and yield results do not take into account
recurring and nonrecurring charges for optional services which only certain
shareholders elect and which involve nominal fees such as the $5 fee for
exchanges.
Effective November 22, 1993, the Fund changed investment objectives and
policies from passive to active management of the portfolio.
26
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UNITED SERVICES FUNDS
SHARES OF THE FUND ARE SOLD
AT NET ASSET VALUE WITHOUT SALES COMMISSIONS,
REDEMPTION FEES OR 12B-1 FEES
U.S. All American Equity Fund
INVESTMENT ADVISOR
United Services Advisors, Inc.
7900 Callaghan Road
Mailing Address: P.O. Box 29467
San Antonio, Texas 78229
TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234
CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, New York 10005
LEGAL COUNSEL
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Riverwalk Place, Ste. 900
San Antonio, Texas 78205
100% No Load
Be Sure to Retain This Prospectus;
It Contains Valuable Information.
