O'SHAUGHNESSY AGGRESSIVE GROWTH FUND
60 Arch Street, Greenwich, Connecticut 06830
(800) 797-0773
The Fund
O'Shaughnessy Aggressive Growth Fund (the "Fund") is an investment
portfolio or series of O'Shaughnessy Funds, Inc., an open-end
management investment company with multiple portfolios or series
available for investment.
Investment Objective
The investment objective of the Fund is capital appreciation.
Strategy
The Fund seeks to achieve its objective through implementation of
proprietary aggressive growth models developed by O'Shaughnessy
Capital Management, Inc., the Fund's investment manager (the
"Manager").
The Fund's portfolio will generally consist of approximately 45
common stocks selected by the Manager which meet certain criteria.
For a more detailed description of the Fund, see "About the Fund
-- Investment Objective and Policies."
Risk/Reward
Although the stocks in which the Fund may invest have, in the
Manager's judgment, the potential to provide superior return, such
stocks are likely to be subject to greater than average price
volatility, which may result in substantial declines in the Fund's
share price. Accordingly, the Fund is suitable only for the most
aggressive investors. For a discussion of the additional risks
associated with an investment in the Fund, see "About the Fund --
Investment Objective and Policies."
Purchase of Shares
Shares of the Fund will be offered to investors during the
continuous offering at a price equal to the next determined net
asset value per share. There are no fees or charges to purchase or
sell shares or to reinvest dividends. There are no Rule 12b-1
fees.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PROSPECTUS
October 11, 1996
(Supplemented November 20, 1996 and March 7, 1997)
This Prospectus contains the information you should know about the
Fund before you invest. Please keep it for future reference. A
statement containing additional information about the Fund, dated
October 11, 1996, has been filed with the Securities and Exchange
Commission and is incorporated by reference into this Prospectus.
It is available, at no charge, by calling or by writing the Fund
at the telephone number or address set forth above.
O'Shaughnessy Capital Management, Inc.-Manager
First Fund Distributors, Inc.-Distributor
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TABLE OF CONTENTS
ABOUT THE FUND............................................... 2
MANAGEMENT AND ORGANIZATION OF THE FUND ..................... 6
INFORMATION ABOUT YOUR ACCOUNT .............................. 8
INFORMATION ON DISTRIBUTIONS AND TAXES ...................... 15
PERFORMANCE INFORMATION ..................................... 17
NET ASSET VALUE ............................................. 17
OTHER SHAREHOLDER SERVICES .................................. 18
ABOUT THE FUND
TRANSACTION AND FUND EXPENSES
The following table and example should help you understand the
kinds of expenses you will bear directly or indirectly as a Fund
shareholder. In the table, "Shareholder Transaction Expenses,"
shows that you pay no sales charges. All the money you invest in
the Fund goes to work for you, subject to the fees noted in the
table. "Annual Fund Operating Expenses" shows how much it would
cost to operate the Fund for a year, based on estimated expenses
through the end of the Fund's first full year. These costs you pay
indirectly, because they are deducted from the Fund's total assets
before the daily share price is calculated and before dividends
and other distributions are made. You will not see these expenses
on your account statement.
<TABLE>
<CAPTION>
<S> <C>
Fee Table
Shareholder Transaction Expenses:
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price)............. None
Maximum Sales Charge Imposed on Dividend Reinvestments.................................... None
Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds, whichever is lower)........................................ None
Redemption fee (a)........................................................................ None
Exchange Fee (b).......................................................................... None
Annual Fund Operating Expenses (as a percentage of average net assets):
Management Fees (c) (d)................................................................... 1.00%
Rule 12b-1 Fees........................................................................... None
Other Expenses (d) (e).................................................................... 0.80%
-----
Total Fund Operating Expenses (d)......................................................... 1.80%
=====
</TABLE>
(a) Shareholders who effect redemptions of Fund shares by wire
transfer will pay a $12.00 wire transfer fee. See "Information
About Your Account -- Redemption of Shares."
(b) Shareholders who effect exchanges of shares of the Fund for
shares of another fund by telephone in accordance with the
exchange privilege will be charged a $5.00 exchange fee. See
"Information About Your Account -- Exchange Privilege."
(c) See "Management and Organization of the Fund -- Management."
(d) To limit the Fund's expenses during its initial period of
operations, the Manager has voluntarily agreed to reduce its fees
or reimburse the Fund through at least September 30, 1997 to
ensure that the Fund's total operating expenses do not exceed
2.00% of average net assets annually. Any such reductions made by
the Manager in its fees or reimbursement of expenses with respect
to the Fund are subject to reimbursement by the Fund to the
Manager (recapture by the Manager), provided the Fund is able to
effect such reimbursement while keeping total operating expenses
at or below 2.00% of average net assets annually, and that no
reimbursement will be made after September 30, 2000. Any amounts
reimbursed will have the effect of increasing fees otherwise paid
by the Fund.
(e) "Other Expenses" is based on estimated amounts for the current
fiscal year.
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<TABLE>
<CAPTION>
<S> <C> <C>
Example:
Cumulative Expenses Paid for the Period of: 1 Year 3 Years
------ -------
An investor would pay the following expenses on a $1,000
investment assuming: (1) the operating expense ratio set forth in
the table above; (2) a 5% annual return throughout the
period; and (3) redemption at the end of the period:.............. $18 $58
</TABLE>
The table and example are intended to assist investors in
understanding the costs and expenses that a shareholder in the
Fund will bear directly or indirectly. "Other Expenses" is based
on estimated amounts for the current fiscal year. The example
should not be considered a representation of past or future
expenses or annual rate of return, and actual expenses or annual
rate of return may be more or less than those shown.
INVESTMENT OBJECTIVE AND POLICIES
To help you decide whether the Fund is appropriate for you, this
section takes a closer look at the Fund's investment objective and
policies.
What is the Fund's objective?
The investment objective of the Fund is capital appreciation.
There can be no assurance that the Fund will achieve its
investment objective.
What is the Fund's investment strategy?
The Fund will seek to achieve its objective through the
implementation of proprietary aggressive growth models developed
by O'Shaughnessy Capital Management, Inc., the Fund's investment
manager (the "Manager").
The Fund's portfolio will generally consist of approximately 45
stocks, selected through implementation of the Manager's
proprietary aggressive growth models. At the time of purchase,
such stocks will generally possess the following characteristics:
*a market capitalization in excess of $150 million;
*outstanding price performance during the last six months or one
year period prior to purchase;
*high earnings gains during the one year period prior to purchase;
and
*expected high future earnings gains in the general consensus of
market analysts.
It is expected that the proprietary aggressive growth models
used by the Manager in selecting stocks for the Fund's portfolio
will select stocks for investment without regard to
capitalization, except that the issuers must have market
capitalizations in excess of $150 million. The majority of these
stocks will be common stocks of domestic corporations and American
Depository Receipts ("ADRs"), and will be traded on domestic stock
exchanges or in the over-the-counter market. The Fund will not
invest in foreign securities except through the purchase of ADRs.
The Manager may invest the Fund's assets in stocks which do not
meet all of the above criteria, if, in the opinion of the Manager,
such stocks possess characteristics similar to stocks meeting such
criteria. In addition, the Manager may continue to hold a stock in
the Fund's portfolio which no longer meets the initial criteria
for investment if the Manager believes such investments are
consistent with the Fund's investment objective.
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4
What are the potential risks of investing primarily in common stocks?
The fundamental risk associated with any common stock fund is the
risk that the value of the stocks it holds might decrease. Stock
values may fluctuate in response to the activities of an
individual company or in response to general market and/or
economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term
risks than other investment choices. Smaller or newer issuers are
more likely to realize more substantial growth as well as suffer
more significant losses than larger or more established issuers.
Investments in such companies can be both more volatile and more
speculative.
OTHER INVESTMENT POLICIES AND PRACTICES
This section takes a detailed look at other investment policies
and practices of the Fund. The Fund's investments are subject to
further restrictions and risks described in the Statement of
Additional Information.
Shareholder approval is required to change the Fund's
investment objective and certain investment restrictions noted in
the following section as "fundamental policies." The Manager also
follows certain "operating policies" which can be changed without
shareholder approval. However, significant changes in operating
policies are discussed with shareholders in Fund reports.
The Fund's holdings in certain kinds of investments cannot
exceed maximum percentages of total assets, which are set forth
below. While these restrictions provide a useful level of detail
about the Fund's investments, investors should not view them as an
accurate gauge of the potential risk of such investments. The net
effect of a particular investment depends on its volatility and
the size of its overall return in relation to the performance of
all the Fund's other investments.
Cash and Short-Term Securities. The Fund may temporarily invest a
portion of its total assets in cash or liquid short-term
securities pending investment of such assets in stocks in
accordance with the Fund's investment strategy and in order to
meet redemption requests. The Fund may also invest a portion of
its assets in cash or liquid short-term securities for temporary
defensive purposes, but is under no obligation to do so.
Short-term securities in which the Fund may invest include
certificates of deposit, commercial paper, notes, obligations
issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities, and repurchase agreements involving such
securities. See "Repurchase Agreements," below.
Repurchase Agreements. The Fund may invest in repurchase
agreements. The Fund may only enter into repurchase agreements
with a member bank of the Federal Reserve System or a
well-established securities dealer in U.S. government securities.
In the event of a bankruptcy or default by the seller of the
repurchase agreement the Fund may suffer delays and incur costs or
possible losses in liquidating the underlying security which is
held as collateral, and the Fund may incur a loss if the value of
the collateral declines during this period. As a matter of
operating policy, the Fund may not invest more than 15% of its
total assets in repurchase agreements maturing in more than seven
days.
Illiquid Securities. The Fund may invest up to 15% of its total
assets in illiquid securities. Illiquid securities are securities
which cannot be readily resold because of legal or contractual
restrictions or which cannot otherwise be marketed, redeemed, put
to the issuer or a third party, or which do not mature within
seven days, or which the Manager, in accordance with guidelines
approved by the Board of Directors, has not determined to be
liquid.
The Fund may purchase, without regard to the above limitation,
securities that are not registered under the Securities Act of
1933 (the "Securities Act") but that can be offered and sold to
"qualified institutional buyers" under Rule 144A under the
Securities Act, provided that the Board of Directors, or the
Manager pursuant to guidelines adopted by the Board, continuously
determines, based on the trading markets for the specific Rule
144A security, that it is liquid.
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5
Lending of Portfolio Securities. Like other mutual funds, the Fund
may from time to time lend securities from its portfolio to banks,
brokers and other financial institutions to earn additional
income. The principal risk is that the borrower may default on its
obligation to return borrowed securities, because of insolvency or
otherwise. In this event, the Fund could experience delays in
recovering its securities and capital. In accordance with
applicable law, the Fund may not lend portfolio securities
representing in excess of 33% of its total assets. The lending
policy is a fundamental policy.
Borrowing. The Fund may borrow money from banks in an amount up to
33% of its total assets for extraordinary or emergency purposes
such as meeting anticipated redemptions, and may pledge assets in
connection with such borrowing. The borrowing policy is a
fundamental policy.
Small Cap Stocks. It is anticipated that the Fund's portfolio may
include small cap stocks (i.e., stocks whose issuers have market
capitalizations exceeding $150 million but less than $1 billion).
Small cap stocks may present greater opportunities for capital
appreciation and a higher degree of risk; they tend to be more
vulnerable to financial and other risks and thus are more volatile
than stocks of larger, more established companies. Because the
Fund may invest in stocks with greater than average volatility,
which may result in substantial declines in the Fund's share
price, it is suitable only for the most aggressive investors.
Industry Concentration. The Fund may not invest more than 25% of
its total assets in any one industry (excluding U.S. Government
securities). The concentration policy is a fundamental policy.
Foreign Securities. The Fund may invest up to 25% of its total
assets in securities of foreign issuers, either through (i) direct
purchase of securities of foreign issuers if they are listed and
traded on a U.S. national securities exchange or the NASDAQ
National Market System or (ii) purchase of American Depository
Receipts ("ADRs") which are dollar-denominated securities of
foreign issuers traded in the U.S. Such investments increase
diversification of the Fund's portfolio and may enhance return,
but they also involve some special risks such as exposure to
potentially adverse local political and economic developments,
nationalization and exchange controls; potentially lower liquidity
and higher volatility; possible problems arising from regulatory
practices that differ from U.S. standards; the imposition of
withholding taxes on income from such securities; confiscating
taxation; and the chance that fluctuations in foreign exchange
rates will decrease the investment's value (favorable changes can
increase its value). These risks are heightened for investment in
developing countries and there is no limit on the amount of the
Fund's foreign investments that may be invested in such countries.
The Fund may invest in ADRs through both sponsored and
unsponsored arrangements. The issuers of unsponsored ADRs are not
obligated to disclose material information in the United States,
and therefore, there may not be a correlation between such
information and the market value of the ADRs.
Hedging and Return Enhancement Strategies. The Fund is permitted
to utilize certain hedging and return enhancement strategies and
techniques such as options on securities and securities indices,
futures contracts on securities and securities indices and options
on futures contracts, as described below.
Futures (a type of potentially high-risk derivative) are often
used to manage or hedge risk, because they enable the investor to
buy or sell an asset in the future at an agreed upon price.
Options (another potentially high-risk derivative) give the
investor the right, but not the obligation, to buy or sell an
asset at a predetermined price in the future. The Fund may buy and
sell futures and options contracts for any number of reasons,
including: to manage its exposure to changes in securities prices;
as an efficient means of adjusting its overall exposure to certain
markets; in an effort to enhance income; and to protect the value
of portfolio securities. The Fund may purchase, sell, or write
call and put options on securities, financial indices and futures.
Futures contracts and options may not always be successful
hedges; their prices can be highly volatile. Using them could
lower the Fund's total return, and the potential loss from the use
of futures can exceed the Fund's initial investment in such
contracts.
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6
As a matter of operating policy, initial margin deposits and
premiums on options used for non-hedging purposes will not equal
more than 5% of the Fund's net asset value.
Firm Commitment Agreements and When-Issued Purchases. The Fund may
purchase securities under a firm commitment agreement or on a
when-issued basis. Firm commitment agreements and when-issued
purchases call for the purchase of securities at an agreed-upon
price on a specified future date, and would be used, for example,
when a decline in the yield of securities of a given issuer is
anticipated. The Fund as purchaser assumes the risk of any decline
in value of the security beginning on the date of the agreement or
purchase. The Fund will not enter into such transactions for the
purpose of leveraging, and accordingly, will segregate liquid
assets with its custodian equal (on a daily marked-to-market
basis) to the amount of its commitment to purchase the when-issued
securities and securities subject to the firm commitment
agreement.
Warrants. The Fund may invest in warrants, which are similar to
options to purchase securities at a specific price valid for a
specific period of time. The Fund may not invest more than 5% of
its net assets (at the time of investment) in warrants (other than
those attached to other securities). If the market price of the
underlying security never exceeds the exercise price, the Fund
will lose the entire investment in the warrant. Moreover, if a
warrant is not exercised within the specified time period, it will
become worthless and the Fund will lose the purchase price and the
right to purchase the underlying security.
Diversification. In order to maintain the Fund's status as a
diversified investment company, with respect to 75% of the Fund's
total assets: 1) not more than 5% of the Fund's assets may be
invested in the securities of a single issuer (excluding U.S.
Government securities); and 2) the Fund may not hold more than 10%
of the outstanding voting securities of a single issuer. The
diversification policy is a fundamental policy.
Portfolio Transactions. In executing portfolio transactions, the
Fund seeks to obtain the best net results, taking into account
such factors as price (including the applicable brokerage
commission or dealer spread), size of order, difficulty of
execution, operational facilities of the firm involved and the
firm's risk in positioning a block of securities. While the Fund
generally seeks reasonably competitive commission rates, the Fund
does not necessarily pay the lowest commission or spread
available. In addition, consistent with the Conduct Rules of the
National Association of Securities Dealers, Inc., the Manager may
consider sales of shares of the Fund as a factor in the selection
of brokers or dealers to execute portfolio transactions for the
Fund.
Portfolio Turnover. The Fund anticipates that its annual turnover
rate should not exceed 200% under normal conditions. The portfolio
turnover rate is calculated by dividing the lesser of the Fund's
annual sales or purchases of portfolio securities (exclusive of
purchases or sales of securities whose maturities at the time of
acquisition were one year or less) by the monthly average value of
the securities in the portfolio during the year. High portfolio
turnover involves correspondingly greater transaction costs in the
form of brokerage commissions and dealer spreads, which are borne
directly by the Fund.
MANAGEMENT AND ORGANIZATION OF THE FUND
MANAGEMENT
Who runs the Fund?
General Oversight. O'Shaughnessy Funds is governed by a Board of
Directors that meets regularly to review the Fund's investment,
performance, expenses, and other business affairs. The Board
elects the Fund's officers.
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7
Manager. O'Shaughnessy Capital Management, Inc. acts as investment
manager of the Fund pursuant to a management agreement with
O'Shaughnessy Funds on behalf of the Fund (the "Management
Agreement"). In its capacity as investment manager, the Manager is
responsible for selection and management of the Fund's portfolio
investments. For its services, the Fund pays the Manager a fee
each month, at the annual rate of 1.00% of the Fund's average
daily net assets.
The Manager's office is located at 60 Arch Street, Greenwich,
Connecticut 06830. O'Shaughnessy Capital Management was
incorporated in 1988. The Manager serves as portfolio consultant
to a unit investment trust with assets in excess of $180 million.
The Manager has no experience actively managing open-end
investment companies such as the Fund.
Portfolio Management. James P. O'Shaughnessy has had the
day-to-day responsibility for managing the Fund's portfolio and
developing and executing the Fund's investment program since
commencement of operations of the Fund. For the past five years,
Mr. O'Shaughnessy has served as President of the Manager, and in
such capacity, has managed equity accounts for high net worth
individuals and served as portfolio consultant to a unit
investment trust. Mr. O'Shaughnessy is recognized as a leading
expert and pioneer in quantitative equity analysis. He is the
author of two financial books, Invest Like the Best and What Works
on Wall Street.
Distributor. O'Shaughnessy Funds has entered into a Distribution
Agreement (the "Distribution Agreement") with First Fund
Distributors, Inc. (the "Distributor"), a registered
broker-dealer, to act as the principal distributor of the shares
of the Fund. The Distribution Agreement provides the Distributor
with the right to distribute shares of the Fund through other
broker-dealers or financial institutions with whom the Distributor
has entered into selected dealer agreements. The address of the
Distributor is 4455 E. Camelback Road, Suite 261 E, Phoenix,
Arizona 85018. The Distributor provides distribution services to
the Fund at no cost to the Fund.
Administrator. Pursuant to an Administration Agreement, Investment
Company Administration Corporation (the "Administrator") serves as
administrator of the Fund. The Administrator provides certain
administrative services, including, among other responsibilities,
coordinating relationships with independent contractors and
agents, preparing for signature by officers and filing of certain
documents required for compliance with applicable laws and
regulations, preparing financial statements, and arranging for the
maintenance of books and records. For its services, the Fund pays
the Administrator a fee each month, at the annual rate of 0.10% of
the first $100 million of the Fund's average daily net assets,
0.05% of the next $100 million of such net assets, and 0.03% of
such net assets over $200 million, with a minimum fee of $40,000
annually. The address of the Administrator is 4455 E. Camelback
Rd., Suite 261 E, Phoenix, Arizona 85018. The Administrator and
the Distributor are under common control and are therefore
considered affiliates of each other.
Transfer Agent and Custodian. Firstar Trust Company acts as the
Fund's transfer and dividend disbursing agent (the "Transfer
Agent"), as well as the Fund's custodian (the "Custodian"). The
address of the Transfer Agent and Custodian is 615 E. Michigan
Street, Third Floor, Milwaukee, Wisconsin 53202.
How are Fund expenses determined?
The Management Agreement identifies the expenses to be paid by the
Fund. In addition to the fees paid to the Manager, the Fund pays
certain additional expenses, including but not limited to, the
following: shareholder service expenses; custodial, accounting,
legal, and audit fees; administrative fees; costs of preparing and
printing prospectuses and reports sent to shareholders;
registration fees and expenses; proxy and annual meeting expenses
(if any); and independent Director fees and expenses.
<PAGE>
9
ORGANIZATION
How is the Fund organized?
The Fund is an investment portfolio or series of O'Shaughnessy
Funds. There are three other investment portfolios of
O'Shaughnessy Funds, shares of which are not offered for sale
through this Prospectus: O'Shaughnessy Cornerstone Value Fund,
O'Shaughnessy Cornerstone Growth Fund and O'Shaughnessy Dogs of
the Market(TM)Fund (the "other O'Shaughnessy Funds"). The charter
of O'Shaughnessy Funds provides that the Board of Directors may
issue additional investment portfolios of shares and/or additional
classes of shares for each investment portfolio. O'Shaughnessy
Funds was organized as a corporation in Maryland on May 20, 1996.
What is meant by "shares"?
As with all mutual funds, investors purchase shares when they
invest in the Fund. These shares are a part of a Fund's authorized
capital stock, but share certificates are not generally issued.
Each full share and fractional share entitles the shareholder
to: receive a proportional interest in the Fund's capital gain
distributions; and cast one vote per share on certain Fund
matters, including the election of Fund Directors, changes in
fundamental policies, or approval of changes in the Fund's
Management Agreement.
Shareholder inquiries may be addressed to the Fund at the
address or telephone number set forth on the cover page of this
Prospectus.
Does the Fund have annual shareholder meetings?
The Fund is not required to hold annual meetings and does not
intend to do so except when certain matters, such as a change in
the Fund's fundamental policies, are to be decided. In addition,
shareholders representing at least 10% of all eligible votes may
call a special meeting if they wish, for the purpose of voting on
the removal of any Fund Director. If a meeting is held and you
cannot attend, you can vote by proxy. Before the meeting, the Fund
will send you proxy materials that explain the issues to be
decided and include a voting card for you to mail back.
INFORMATION ABOUT YOUR ACCOUNT
PURCHASE OF SHARES
The minimum initial investment in the Fund is $5,000 and the
minimum subsequent investment is $100, except that for retirement
plans, the minimum initial investment is $500 and the minimum
subsequent investment is $50.
Investors may make an initial purchase of shares and subsequent
investments in the Fund by mail or wire as described below. The
Fund reserves the right in its sole discretion to waive the
minimum investment amounts, including in the case of investments
by employees and affiliates of the Manager and family members of
any of the foregoing, and Individual Retirement Accounts ("IRAs")
of shareholders of the Fund.
The Internal Revenue Service requires the correct reporting of
social security numbers or tax identification numbers. The failure
to provide this information will result in the rejection of an
investor's Application.
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9
How do I purchase shares by mail?
For initial investments, please send a completed Application,
together with a check payable to O'Shaughnessy Aggressive Growth
Fund to O'Shaughnessy Funds, Inc., c/o Firstar Trust Company, at
P.O. Box 701, Milwaukee, WI 53201-0701 (for Applications sent by
U.S. mail) or 615 E. Michigan Street, Third Floor, Milwaukee, WI
53202 (for Applications sent via overnight courier). Subsequent
investments must be accompanied by a letter indicating the name(s)
in which the account is registered and the account number or by
the remittance portion of the account statement and mailed to the
address stated above.
How do I purchase shares by wire?
If you are wiring funds, call the Transfer Agent at (800) 797-0773
for an account number if this is an initial investment or to
inform the Transfer Agent that a wire is expected if this is a
subsequent investment.
For an initial investment, prior to or immediately after the
funds are wired, a completed Application should be sent to
O'Shaughnessy Funds, Inc., c/o Firstar Trust Company, at P.O. Box
701, Milwaukee, WI 53201-0701 (for Applications sent by U.S. mail)
or 615 E. Michigan Street, Third Floor, Milwaukee, WI 53202 (for
Applications sent via overnight courier). Instruct your bank to
wire federal funds to O'Shaughnessy Funds, c/o Firstar Trust
Company, ABA# 075000022, DDA # 112952137.
The wire should specify the name of the Fund, the name(s) in
which the account is registered, the shareholder's social security
number or employer tax identification number, the account number
and the amount being wired. Please indicate if this is an initial
or subsequent investment. Wire purchases are normally used only
for large purchases (over $5,000). Your bank may charge you a fee
for sending the wire.
What is the purchase price of Fund shares and when do purchases become
effective?
Purchases of Fund shares become effective and shares will be
priced at the net asset value per share ("NAV") next determined
after the investor's check or wire is received by the Transfer
Agent. NAV for the Fund is calculated as of the close of business
on the New York Stock Exchange ("NYSE") (currently 4:00 p.m.,
Eastern time). If your request is received in correct form before
4:00 p.m. Eastern time, your transaction will be priced at that
day's NAV. If your request is received after 4:00 p.m., it will be
priced at the next business day's NAV. Orders that request a
particular day or price for your transaction or any other special
conditions cannot be accepted.
The time at which transactions and shares are priced and the
time until which orders are accepted may be changed in case of an
emergency or if the NYSE closes at a time other than 4:00 p.m.,
Eastern time.
The purchase order must include the documentation specified
above. Please do not send purchase orders to the Fund; the Fund
forwards purchase orders to the Transfer Agent and a purchase will
not become effective until the Transfer Agent receives all the
necessary documentation.
What are the conditions of purchase?
All purchase orders are subject to acceptance or rejection by the
Fund or the Distributor, in their sole discretion. The offering of
shares may be suspended whenever the Fund considers suspension
desirable or when required by any order, rule or regulation of any
governmental body having jurisdiction. Checks and money orders
should be drawn on United States banks; the Fund and the
Distributor reserve the right to reject checks drawn on foreign
banks.
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The Transfer Agent will mail a confirmation of each completed
purchase to the investor. If an order is canceled because an
investor's check does not clear, the investor will be responsible
for any loss incurred by the Fund, the Transfer Agent, the
Distributor, the Administrator or the Manager. If the investor is
already a shareholder, the Fund may redeem shares from the account
to cover any loss. If the investor is not a shareholder or if the
loss is greater than the value of the shareholder's account, the
Distributor will be responsible for any loss to the Fund, and will
have the right to recover such amount from the investor.
Who do I contact if I have questions about my account or need additional
information concerning an investment in the Fund?
If you have investment questions about the Fund, or if you would
like any additional information relating to an investment in the
Fund, please call (800) 797-0773 (toll-free), or write to the
Distributor at First Fund Distributors, Inc., 4455 E. Camelback
Road, Suite 261 E, Phoenix AZ 85018. If you are a shareholder and
have questions about your account, or if you wish to arrange for
wire transactions, please call the Transfer Agent at (800)
797-0773. Before telephoning, please be sure to have your account
number and social security number or employer tax identification
number readily available.
Will I receive share certificates for shares purchased?
Share certificates will not be issued for shares unless the
investor sends a written request for certificates to O'Shaughnessy
Funds, Inc., c/o Firstar Trust Company, at P.O. Box 701,
Milwaukee, WI 53201-0701 (for requests sent via U.S. mail) or 615
E. Michigan Street, Third Floor, Milwaukee, WI 53202 (for requests
sent via overnight courier). Share certificates are issued only
for full shares and may be redeposited in the shareholder's
account at any time. In order to facilitate redemptions and
exchanges, most shareholders elect not to receive certificates,
since a shareholder wishing to redeem or exchange shares
represented by a certificate must surrender such certificate,
properly endorsed on the reverse side together with a signature
guarantee. (See "Redemption of Shares -- When are signature
guarantees required?" below). If a certificate is lost, the
shareholder may incur an expense in replacing it.
Can I purchase shares through broker-dealers other than the Distributor?
O'Shaughnessy Funds may enter into agreements with various outside
brokers on behalf of the Funds through which shareholders may
purchase shares. Such shares may be held by such outside brokers
in an omnibus account rather than in the name of the individual
shareholder. The Manager may reimburse the outside brokers for
providing shareholder services to the omnibus accounts in an
amount equal to what the Fund would otherwise have paid to provide
shareholder services to each individual shareholder account.
Investors may also arrange to purchase shares of the Fund
through other outside broker-dealers with which O'Shaughnessy
Funds does not have an arrangement, and such broker-dealers may
purchase shares of the Fund by telephone if they have made
arrangements in advance with the Fund. To place a telephone order
such broker-dealer should call the Transfer Agent at (800)
797-0773.
Purchases by broker-dealers become effective and shares will be
priced as described above. If an investor purchases shares through
broker-dealers other than the Distributor, such broker-dealers may
charge the investor a service fee that is reasonable for the
service performed, bearing in mind that the investor could have
acquired or redeemed the Fund's shares directly without the
payment of any fee. No part of any such service fee will be
received by the Distributor, the Manager, the Administrator or the
Fund.
<PAGE>
11
EXCHANGE PRIVILEGE
Shares of the Fund may be exchanged for shares of each of the
other O'Shaughnessy Funds (i.e., O'Shaughnessy Cornerstone Value
Fund, O'Shaughnessy Cornerstone Growth Fund and O'Shaughnessy Dogs
of the Market(TM) Fund). Prospectuses for the other O'Shaughnessy
Funds may be obtained by writing to the Distributor at 4455 E.
Camelback Road, Suite 261 E, Phoenix AZ 85018, Attention:
O'Shaughnessy Funds, Inc. or by calling (800) 797-0773
(toll-free).
You may also exchange shares of the Fund for shares of the
Portico Money Market Fund, a money market mutual fund not
affiliated with O'Shaughnessy Funds or the Manager. Prior to
making such an exchange, you should obtain and carefully read the
prospectus for the Portico Money Market Fund. The exchange
privilege does not constitute an offering or recommendation on the
part of the Fund or the Manager of an investment in the Portico
Money Market Fund.
If you exchange into shares of the Portico Money Market Fund
you may establish checkwriting privileges on the Portico Money
Market Fund. Contact the Transfer Agent at (800) 797-0773 for a
checkwriting application and signature card.
The exchange procedures are described below.
Is there any sales charge or minimum investment applicable to an exchange?
Shareholders of the Fund may exchange their shares of the Fund,
without the payment of any sales or service charge, for shares of
any other fund into which an exchange is permitted equal in value
to the net asset value of the shares being exchanged. All
exchanges are subject to all applicable terms set forth in the
prospectus of the fund into which the exchange is being made. If a
shareholder exchanges shares through a broker-dealer other than
the Distributor, such broker-dealer may charge the shareholder a
service fee, no part of which will be received by the Distributor,
the Manager, the Fund, or the fund into which the exchange is
being made.
At what price is an exchange effected?
An exchange is effected at the respective net asset values of the
two funds with respect to which shares are being exchanged as next
determined following receipt by the fund into which the exchange
is being made of all necessary documentation in connection with
the redemption of Fund shares as described below under "Redemption
Of Shares --How do I redeem shares by mail?"
Do current instructions concerning receipt of dividends and distributions carry
over to exchanged shares?
Dividend and distribution instructions with respect to exchanged
shares will remain the same as those given previously by the
shareholders to the fund from which the shareholder is exchanging
the shares, unless the shareholder designates a change in such
instructions by writing to the Transfer Agent. Please note that
such changed instructions (i) must be signed by the registered
owners(s) of the shares, exactly as the account is registered and
signature guaranteed, and (ii) include the name of the account,
the account number, and the name of the fund for which
instructions have changed.
What are the conditions applicable to an exchange?
Exchanges involving the redemption of shares recently purchased by
personal, corporate or government check will be permitted only
after the Fund has reasonable belief that the check has cleared,
which may take up to fifteen days after the purchase date. The
exchange privilege is available only in states where shares of the
other O'Shaughnessy Funds or the Portico Money Market Fund may be
sold legally.
<PAGE>
12
The Fund, the other O'Shaughnessy Funds and the Portico Money
Market Fund each reserves the right to reject any order to acquire
its shares through exchange or otherwise and to restrict or
terminate the exchange privilege at any time. If the exchange
privilege is to be permanently terminated, the Fund will provide
its shareholders with written notice of such termination. The Fund
reserves the right to suspend temporarily the telephone exchange
privilege in emergency circumstances or in cases where, in the
judgment of the Fund, continuation of the privilege would be
detrimental to the Fund and its shareholders as a whole. Such
temporary suspension can be without prior notification.
How can I make exchanges by telephone?
Shareholders who have completed the section of the Fund's
Application entitled "Shareholder Privileges" are eligible to make
telephone requests for exchanges and may do so by telephoning the
Transfer Agent at (800) 797-0773. A shareholder who has not
completed the Shareholder Privileges section of the Application
but who wishes to become eligible to make telephone exchanges
should designate a change in such instructions by writing to the
Transfer Agent. Please note that such changed instructions must
(i) be signed by the registered owner(s) of the shares exactly as
the account is registered and signature guaranteed, and (ii)
include the name of the account, the account number and the name
of the Fund. See "Redemption Of Shares - How do I redeem shares by
telephone?" below, which describes the time of day at which
telephone redemptions and exchanges will be priced and processed.
Telephone requests for exchanges cannot be accepted with respect
to shares represented by certificates. Shares of the other
O'Shaughnessy Funds or the Portico Money Market Fund acquired
pursuant to a telephone request for exchange will be held under
the same account registration as the shares redeemed through the
exchange.
The Fund will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. Neither the
Fund nor any of its service contractors will be liable for any
loss or expense in acting on telephone instructions that are
reasonably believed to be genuine. In attempting to confirm that
telephone instructions are genuine, the Fund will use procedures
that are considered reasonable, including requesting a shareholder
to correctly state the account number, the name(s) in which the
account is registered, the social security number(s) registered to
the account, and certain additional personal identification. A
full description of these procedures is contained in the SAI. To
the extent that the Fund fails to use reasonable procedures to
verify the genuineness of telephone instructions, it and/or its
service contractors may be liable for any such instructions that
prove to be fraudulent or unauthorized.
Shareholders should be aware that, at times, the volume of
telephone calls or other factors beyond the Fund's control may
make it difficult to reach the Transfer Agent by telephone. This
will be true particularly during periods of drastic economic
market changes. In such cases, shareholders should continue to
telephone or utilize the written exchange procedures described
below.
Shareholders who effect exchanges of Fund shares by telephone
will be charged a $5.00 exchange fee.
How do I make exchanges by mail?
To exchange shares by mail, send a written request for exchange
signed by the registered owner(s) of the shares, exactly as the
account is registered to O'Shaughnessy Funds, Inc., c/o Firstar
Trust Company, at P.O. Box 701, Milwaukee, WI 53201-0701 (for
requests sent by U.S. mail) or 615 E. Michigan Street, Third
Floor, Milwaukee, WI 53202 (for requests sent via overnight
courier). The request for exchange should include the following
information: the name of the account, the account number, the
number of Fund shares or the dollar value of Fund shares to be
exchanged, the shares of which other fund (either another
O'Shaughnessy Fund or the Portico Money Market Fund) that shares
of the Fund are to be exchanged for, and the name on the account
and the account number (if already established) with such other
fund.
<PAGE>
============ Application Form
O'Shaughnessy Funds, Inc. New Accounts
------------
Mail to: Overnight delivery to:
O'Shaughnessy Funds, Inc. O'Shaughnessy Funds, Inc.
c/o Firstar Trust Company c/o Firstar Trust Company
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
DO NOT USE this form for IRAs. A special form is available for IRAs; please call
(800) 797-0773 for information or assistance.
================================================================================
1. FUND SELECTION
<TABLE>
<CAPTION>
<S> <C>
Amount ($5,000 minimum for any single Fund )
|_| O'Shaughnessy Aggressive Growth Fund $_______________________
|_| O'Shaughnessy Dogs of The Market Fund $_______________________
|_| O'Shaughnessy Cornerstone Growth Fund $_______________________
|_| O'Shaughnessy Cornerstone Value Fund $_______________________
Total Investment $_______________________
|_| By wire (Please call (800) 797-0773 for instructions)
|_| By check, payable to O'Shaughnessy Funds, Inc.
</TABLE>
================================================================================
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
2. ACCOUNT
REGISTRATION ----------------------------------------------------------------------------------------------------
For First Name Middle Name or Initial Last Name Social Security Number
Individual
or ----------------------------------------------------------------------------------------------------
Joint Owners Joint Owner Social Security Number
Registration will be "Joint Tenants with Right of Survivorship" unless
otherwise specified:
----------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
For Gift
to Minor ----------------------------------------------------------------------------------------------------
Custodian's Name (only one allowed)
----------------------------------------------------------------------------------------------------
Minor's Name (only one allowed) Minor's Social Security No.
----------------------------------------------------------------------------------------------------
State of Residence Minor's Birthdate
-------------------------------------------------------------------------------------------------------------------
For
Corporate ----------------------------------------------------------------------------------------------------
Trust, Estate, Name of Corporation, Trust, etc.
Guardianship,
or Corporate ----------------------------------------------------------------------------------------------------
Retirement Name and Date of Trust (continued)
Plan
----------------------------------------------------------------------------------------------------
Name(s) of Trustee(s), Fiduciary, etc. Tax ID Number
A Corporate resolution form is required.
=============================================================================================================================
3. ADDRESS FOR
MAILINGS ----------------------------------------------------------------------------------------------------
Number and Street
----------------------------------------------------------------------------------------------------
Apartment, Floor or Room Number Telephone No. (include area code)
----------------------------------------------------------------------------------------------------
City State Zip Code
-------------------------------------------------------------------------------------------------------------------
Send
duplicate ----------------------------------------------------------------------------------------------------
statements Number and Street
to:
----------------------------------------------------------------------------------------------------
Apartment, Floor or Room Number Telephone No. (include area code)
----------------------------------------------------------------------------------------------------
City State Zip Code
</TABLE>
================================================================================
4. DISTRIBUTIONS All dividends and distributions will be automatically
reinvested in additional shares in your account(s)
unless otherwise indicated by checking the box(es)
below.
|_| Dividends In Cash |_| Capital Gains In Cash
If you have chosen to receive your distribution(s) in
cash, you have the option of receipt either by direct
deposit into your bank account, as identified below, or
by check. Please check one box below.
|_| Direct Deposit($12.00 charge per wire) |_| Check
Please attach a voided bank check or deposit slip here
if you choose direct deposit.
<TABLE>
<CAPTION>
<S> <C> <C>
----------------------------------------------------------------------------------------------------
Name of Bank Address of Bank
----------------------------------------------------------------------------------------------------
Bank's ABA Number Account Number Name(s) on Account
----------------------------------------------------------------------------------------------------
Signature of all registered owners
</TABLE>
IMPORTANT: This form is continued on the reverse side
<PAGE>
================================================================================
5. AUTOMATIC
INVESTMENT
PLAN
<TABLE>
<CAPTION>
|_| I would like to begin Automatic Investing every |_| month, |_| quarter, on the ________ day of
the month or the first business day thereafter, in shares of the Fund(s) indicated below:
Amount ($100 minimum for any single Fund)
<S> <C>
|_| O'Shaughnessy Aggressive Growth Fund $_________________________
|_| O'Shaughnessy Dogs of The Market Fund $_________________________
|_| O'Shaughnessy Cornerstone Growth Fund $_________________________
|_| O'Shaughnessy Cornerstone Value Fund $_________________________
</TABLE>
This signed application must be received by Firstar at
least 15 business days prior to the initial
transaction. I understand that I will be assessed a $20
fee if the automatic purchase cannot be made due to
insufficient funds, stop payment, or for any other
reason. Please attach a voided check or deposit slip of
the bank account below.
<TABLE>
<CAPTION>
<S> <C> <C>
----------------------------------------------------------------------------------------------------
Name of Bank Address of Bank
----------------------------------------------------------------------------------------------------
Bank's ABA Number Account Number Name(s) on Account
----------------------------------------------------------------------------------------------------
Signature of all registered owners
</TABLE>
================================================================================
6. SYSTEMATIC CASH
WITHDRAWAL PLAN
<TABLE>
<CAPTION>
|_| I would like checks sent |_| monthly or |_| quarterly, beginning in the month of ____________
on or about the ______ day of the month. Please redeem from the following account(s):
<S> <C>
Amount ($50 minimum for any single Fund)
|_| O'Shaughnessy Aggressive Growth Fund $_________________________
|_| O'Shaughnessy Dogs of The Market Fund $_________________________
|_| O'Shaughnessy Cornerstone Growth Fund $_________________________
|_| O'Shaughnessy Cornerstone Value Fund $_________________________
</TABLE>
I understand that payments will be made by redeeming
shares from my account(s) and that if the rate of
redemption exceeds the rate of growth of the Fund(s),
my account(s) may ultimately be depleted. Account
balances must be at least $10,000 to initiate this
procedure.
<TABLE>
<S> <C>
I would like checks sent to: |_| the Address for Mailings on the front of the application.
|_| the third party address below:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
----------------------------------------------------------------------------------------------------
Number and Street
----------------------------------------------------------------------------------------------------
Apartment, Floor or Room Number Telephone No. (include area code)
----------------------------------------------------------------------------------------------------
City State Zip Code
</TABLE>
================================================================================
7. SHAREHOLDER |_| I would like to be able to place exchange
PRIVILEGES: instructions by telephone between any of the four
EXCHANGES & O'Shaughnessy Funds or the Portico Money Market Fund
REDEMPTIONS (minimum $5,000) ($5.00 per exchange).
BY TELEPHONE
|_| I would like to be able to place a redemption order
by telephone and have the proceeds mailed to Address
for Mailings on the front of the application or wired
directly to the bank account listed below ($12.00
charge per wire).
I understand that these procedures are offered as a
convenience to me, and I agree that if the
identification procedures set forth in the prospectus
are followed, neither the Funds nor the Transfer Agent
will be liable for any loss, expense or cost arising
from one of these transactions. If applicable, please
attach a voided check or deposit slip of the bank
account below to ensure proper credit to your account.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------
Name of Bank Address of Bank
----------------------------------------------------------------------------------------------------
Bank's ABA Number Account Number Name(s) on Account
</TABLE>
================================================================================
8. SIGNATURES AND CERTIFICATION
I (we) have received and read the Prospectus. I (we) understand the Funds'
investment objectives and policies and agree to be bound by the terms of the
Prospectus. I am (we are) of legal age in my (our) state of residence and have
full authority to purchase shares of the Fund and to establish and use any
related privileges.
Neither the Fund nor its transfer agent will be responsible for the authenticity
of transaction instructions received by telephone, provided that reasonable
security procedures have been followed. If an account has multiple owners, the
Fund may rely on the telephone instructions of any one account owner.
By selecting the options in Section(s) 4, 5, 6 or 7, I (we) hereby authorize the
Fund to initiate credits and debits to my (our) account at the bank indicated in
Section(s) 4, 5, 6 or 7 and for the bank to credit or debit the same to such
account through the Automated Clearing House ("ACH") system.
Under the penalty of perjury, I (we) certify the (1) the Social Security Number
or Taxpayer Identification Number shown on this form is my (our) correct
Taxpayer Identification Number, and (2) I am (we are) not subject to backup
withholding either because I (we) have not been notified by the Internal Revenue
Service (IRS) that I am (we are) subject to backup withholding as a result of a
failure to report all interest or dividends, or the IRS has notified me (us)
that I am (we are) no longer subject to backup withholding. The IRS does not
require your consent to any provision of this document other than the
certifications required to avoid backup withholding.
- --------------------------------------------------------------------------------
Signature(s) of Individual / Joint Owner* Date
- --------------------------------------------------------------------------------
Signature(s) of Authorized Officers, Partners, Trustees or Others*
- --------------------------------------------------------------------------------
Date
*If shares are to be registered in (1) joint names, both persons should sign,
(2) a custodian for a minor, the custodian should sign (3) a trust, the
trustee(s) should sign, or (4) a corporation or other entity, an officer should
sign and print name and title on space provided below.
- --------------------------------------------------------------------------------
Print name and title of officer signing for a corporation or other entity.
sc
- ----------------------------
<PAGE>
13
REDEMPTION OF SHARES
Shareholders can redeem their shares by giving instructions to the
Transfer Agent in writing or by telephone. As more fully described
below, these redemption instructions may have to be accompanied by
additional documentation, which may include a signature guarantee.
If a shareholder redeems shares through a broker-dealer other
than the Distributor, such broker-dealer may charge the
shareholder a service fee, no part of which will be received by
the Distributor, the Manager, the Administrator or the Fund.
How do I redeem shares by mail?
To redeem shares by mail, send a written request for redemption
signed by the registered owner(s) of the shares, exactly as the
account is registered to O'Shaughnessy Funds, Inc., c/o Firstar
Trust Company, at P.O. Box 701, Milwaukee, WI 53201-0701 (for
requests sent by U.S. mail) or 615 E. Michigan Street, Third
Floor, Milwaukee, WI 53202 (for requests sent via overnight
courier). The request should include the following: the name of
the account, the account number, the number of shares or the
dollar value of shares to be redeemed and whether proceeds are to
be sent by mail or wire, and if by wire, giving the wire
instructions; (ii) duly endorsed share certificates, if any have
been issued for the shares redeemed; (iii) any signature
guarantees that are required as described below; and (iv) any
additional documents which might be required for redemptions by
corporations, executors, administrators, trustees, guardians or
other similar shareholders. Except as otherwise directed by the
Fund in its discretion, the Transfer Agent will not redeem shares
until it has received all necessary documents; corporate and
institutional investors and fiduciaries should contact the
Transfer Agent to ascertain what additional documentation is
required.
May I send redemption requests to the Fund?
Please do not send redemption requests to the Fund. The Fund must
forward all redemption requests to the Transfer Agent and
instructions for redemption will not be effective until received
by the Transfer Agent. Shares redeemed will be priced at the net
asset value per share next determined after acceptance of a
complete redemption request by the Transfer Agent. Redemption
requests received by the Transfer Agent after the close of the
NYSE (currently 4:00 p.m., Eastern time) will be treated as though
received on the next business day. The Transfer Agent cannot
accept redemption requests that specify a particular date for
redemption or special redemption conditions.
When are signature guarantees required?
Except as indicated below, all of the signatures on any request
for redemption or share certificates tendered for redemption must
be guaranteed by a bank, broker-dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency or savings association. A notary public cannot
provide a signature guarantee.
The Fund will waive the signature guarantee requirement on a
redemption request that instructs that the proceeds be sent by
mail if all of the following conditions apply: (i) the redemption
is for $10,000 or less; (ii) the redemption check is payable to
the shareholder(s) of record; (iii) the redemption check is mailed
to the shareholder(s) at the address of record; and (iv) no shares
represented by certificate are being redeemed. Share certificates
submitted for redemption or exchange must be properly endorsed and
contain signature guarantees. In addition, the Fund in its
discretion may waive the signature guarantee for employees and
affiliates of the Manager, the Distributor and the Administrator,
and family members of the foregoing.
<PAGE>
14
The requirement of a guaranteed signature protects against an
unauthorized person redeeming shares and obtaining the redemption
proceeds.
How do I redeem shares by telephone?
Shareholders who have completed the section of the Fund's
Application entitled "Shareholder Privileges" are eligible to make
telephone requests for redemptions (without charge) and may do so
by telephoning the Transfer Agent at (800) 797-0773. A shareholder
who has not completed the Shareholder Privileges section of the
Application but who wishes to become eligible to make telephone
redemptions, should designate a change in such instructions by
writing to the Transfer Agent. Please note that such changed
instructions must (i) be signed by the registered owner(s) of the
shares exactly as the account is registered and signature
guaranteed, and (ii) include the name of the account, the account
number and the name of the Fund.
Telephone redemptions cannot be accepted with respect to shares
represented by certificates or for IRA accounts. In such cases,
redemption can only be made by mail as described above under
"Redemption of Shares -- How do I redeem shares by mail?"
Telephone requests for redemptions (or exchanges -- see "Exchange
Privilege" above) received before the close of business on the
NYSE (currently 4:00 p.m., Eastern time) on a business day will be
priced and processed as of the close of business on that day;
requests received after that time will be processed as of the
close of business on the next business day.
As noted above, the Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine
and may, along with their service contractors, be liable for a
failure to use such procedures. See "Exchange Privilege--How can I
make exchanges by telephone?" above.
Shareholders should be aware that, at times, the volume of
telephone calls or other factors beyond the Fund's control may
make it difficult to reach the Transfer Agent by telephone. This
will be true particularly during periods of drastic economic or
market changes. In the event of difficulty in reaching the
Transfer Agent, shareholders should continue to telephone or
utilize the written redemption procedures described above under
"Redemption of Shares -- How do I redeem shares by mail?"
The Fund reserves the right to terminate the telephone
redemption privilege at any time and, if so terminated, will
provide the shareholders with written notice of such termination.
The Fund reserves the right to suspend temporarily telephone
redemptions in emergency circumstances or in cases where, in the
judgment of the Fund, continuation of the privilege would be
detrimental to the Fund and its shareholders as a whole. Such
temporary suspension can be without prior notification.
What options do I have in receiving redemption proceeds?
Redemption proceeds may be sent to shareholders by mail or by wire
as described below. Wire redemptions will only be made if the
Transfer Agent has received appropriate written wire instructions.
Because of fluctuations in the value of the Fund's portfolio, the
net asset value of shares redeemed may be more or less than the
investor's cost.
Redemption By Mail. In the case of shareholders who request that
their redemption proceeds be sent by mail, the Transfer Agent
mails checks for redemption proceeds typically within one or two
business days, but no later than seven days, after it receives the
request and all the necessary documents.
Redemption By Wire. In the case of shareholders who request that
their redemption proceeds be sent by bank wire, the Transfer Agent
typically wires redemption proceeds the next business day, but no
later than seven days, after it receives the request and all
necessary documents.
Wire redemptions will be made only if the Transfer Agent has
received appropriate written instructions from the shareholder
either on the Fund's Application or by separate letter. A
shareholder
<PAGE>
15 who has not indicated wire instructions on the Application, but
would like to have redemption proceeds wired to a particular bank
for each redemption request, should so designate by writing to the
Transfer Agent. Please note that such instructions must (i) be
signed by the registered owner(s) of the shares exactly as the
account is registered and signature guaranteed, and (ii) include
the name of the account, the account number and the name of the
Fund.
A shareholder who would like to change the wire instructions
indicated on the Application should designate a change in such
instructions by writing to the Transfer Agent and complying with
the requirements set forth in the preceding paragraph. There is a
$1,000 minimum on redemption proceeds by bank wire. Shareholders
who effect redemptions by wire transfer will pay a $12.00 wire
transfer fee to the Transfer Agent to cover costs associated with
the transfer. In addition, a shareholder's bank may impose a
charge for receiving wires.
When would the payment of proceeds be delayed?
Please note that shares paid for by personal, corporate or
government check cannot be redeemed before the Fund has reasonable
belief that the check has cleared, which may take up to fifteen
days after payment of the purchase price. This delay can be
avoided by paying for shares by certified check or bank-wire. An
investor will be notified promptly by the Transfer Agent if a
redemption request cannot be accepted.
Would my account ever be involuntarily redeemed?
Due to the relatively high cost to the Fund of maintaining small
accounts, we ask you to maintain an account balance of at least
$5,000. If your balance is below $5,000 for three months or longer
due to redemptions, we have the right to close your account after
giving you 60 days in which to increase your balance.
INFORMATION ON DISTRIBUTIONS AND TAXES
DIVIDENDS AND OTHER DISTRIBUTIONS GENERALLY
Dividend and capital gain distributions are reinvested in
additional Fund shares in your account unless you select another
option on your Application. The advantage of reinvesting
distributions arises from compounding; that is, you receive
dividends and capital gain distributions on an increasing number
of shares. Distributions not reinvested are paid by check or
transmitted to your bank account.
INCOME DIVIDENDS
The Fund declares and pays dividends (if any) annually.
CAPITAL GAINS
A capital gain or loss is the difference between the purchase and
sale price of a security. If the Fund has net capital gains for
the year (after subtracting any capital losses), they are usually
declared and paid in December to shareholders of record on a
specified date that month.
TAX INFORMATION
You need to be aware of the possible tax consequences when: (1)
the Fund makes a distribution to your account; (2) you sell Fund
shares; or (3) you exchange shares of the Fund for shares of one
of the other
<PAGE>
16
O'Shaughnessy Funds or the Portico Money Market Fund. The
following summary does not apply to retirement accounts, such as
IRAs, which are tax-deferred until you withdraw money from them.
Will I pay taxes on redemptions or exchanges of Fund shares?
When you sell or exchange shares in the Fund, you may realize a
gain or loss. Unless you are a dealer in securities, such gain or
loss will be capital gain or loss. In addition, such gain or loss
will be a long-term capital gain or loss if you hold your shares
for more than one year, or short-term capital gain or loss if you
hold your shares for one year or less.
A loss recognized on a sale or exchange of shares of the Fund
will be disallowed if other Fund shares are acquired (whether
through automatic reinvestment of dividends or otherwise) within a
61-day period beginning 30 days before and ending 30 days after
the date that the shares are disposed of. In such case, the basis
of the shares acquired will be adjusted to reflect the disallowed
loss. In addition, if you realize a loss on the sale or exchange
of Fund shares held six months or less, your short-term loss
recognized is reclassified to long-term to the extent of any
long-term capital gain distribution received.
Will I pay taxes on Fund distributions?
Distributions of ordinary income and short-term capital gains are
taxable as ordinary income. The dividends of the Fund will be
eligible for the 70% deduction for dividends received by
corporations only to the extent the Fund's income consists of
dividends paid by U.S. corporations. Long-term gains are taxable
at the applicable long-term gain rate. The gain is long- or
short-term depending on how long the Fund held the securities, not
how long you held shares in the Fund.
What is the tax effect of the Fund's investment in foreign securities?
Pursuant to the Fund's investment objectives, the Fund may invest
in foreign securities through ADRs. Foreign taxes may be paid by
the Fund as a result of tax laws of countries in which the Fund
may invest. Income tax treaties between certain countries and the
United States may reduce or eliminate such taxes. It is impossible
to determine in advance the effective rate of foreign tax to which
the Fund will be subject, since the amount of Fund assets to be
invested in various countries is not known. Because the Fund
limits its investment in foreign securities, shareholders will not
be entitled to claim foreign tax credits with respect to their
share of foreign taxes paid by the Fund on income from investments
of foreign securities held by the Fund.
What are the tax effects of buying shares before a distribution?
If you buy shares shortly before or on the "record date" -- the
date that establishes you as the person to receive the upcoming
distribution -- you will receive, in the form of a taxable
distribution, a portion of the money you just invested. Therefore,
you may wish to find out the Fund's record date(s) before
investing. Of course, a Fund's share price may, at any time,
reflect undistributed capital gains or unrealized appreciation.
The foregoing is a general and abbreviated summary of the
applicable provisions of the Code and Treasury regulations
presently in effect, and does not address the state and local tax
consequences of an investment in the Fund. For the complete
provisions, reference should be made to the pertinent Code
sections and the Treasury regulations promulgated thereunder. The
Code and the Treasury regulations are subject to change by
legislative or administrative action either prospectively or
retroactively. For additional information regarding federal income
tax consequences of an investment in the Fund, see "Additional
Information About Dividends and Taxes" in the Statement of
Additional Information.
<PAGE>
17
Shareholders are urged to consult their own tax advisers
regarding specific questions as to Federal, state, local or
foreign taxes. Foreign investors should consider applicable
foreign taxes in their evaluation of an investment in the Fund.
PERFORMANCE INFORMATION
This section should help you understand the terms used to describe
Fund performance. The Fund's annual report will contain additional
performance information and will be available upon request and
without charge.
What is total return?
This tells you how much an investment in the Fund has changed in
value over a given time period. It reflects any net increase or
decrease in the share price and assumes that all dividends and
capital gains (if any) paid during the period were reinvested in
additional shares. Including reinvested distributions means that
total return numbers include the effect of compounding, i.e, you
receive income and capital gain distributions on an increasing
number of shares.
Advertisements for the Fund may include cumulative or compound
average annual total return figures, which may be compared with
various indices, other performance measures, or other mutual
funds.
What is cumulative total return?
This is the actual rate of return on an investment for a specified
period. A cumulative return does not indicate how much the value
of the investment may have fluctuated between the beginning and
the end of the period specified.
What is average annual total return?
This is always hypothetical. Working backward from the actual
cumulative return, it tells you what constant year-by-year return
would have produced the actual, cumulative return. By smoothing
out all the variations in annual performance, it gives you an idea
of the investment's annual contribution to your portfolio provided
you held it for the entire period in question.
NET ASSET VALUE
The price at which the Fund's shares are purchased or redeemed is
the Fund's next determined net asset value per share. The net
asset value per share is calculated as of the close of the NYSE
(currently 4:00 p.m., Eastern time) on each day that the NYSE is
open for business and on each other day in which there is a
sufficient degree of trading in the Fund's portfolio securities
that the current net asset value of the Fund's shares may be
materially affected by changes in the value of the Fund's
portfolio securities.
How is net asset value determined?
The Fund determines the net asset value per share by subtracting
the Fund's total liabilities from the Fund's total assets (the
value of the securities the Fund holds plus cash and other
assets), dividing the remainder by the total number of shares
outstanding, and adjusting the result to the nearest full cent.
<PAGE>
18
How are the securities held in the Fund's portfolio valued?
Securities listed on the NYSE, American Stock Exchange or other
national exchanges are valued at the last sale price on such
exchange on the day as of which the net asset value per share is
to be calculated. Over-the-counter securities included in the
NASDAQ National Market System are valued at the last sale price.
If there is no sale on a particular security on such day, it is
valued at the mean between the bid and asked prices. Other
securities, to the extent that market quotations are readily
available, are valued at market value in accordance with
procedures established by the Board of Directors. Any securities
and other assets for which market quotations are not readily
available are valued in good faith in a manner determined by the
Directors of the Fund best to reflect their fair value.
OTHER SHAREHOLDER SERVICES
Automatic Investment Plan
An Automatic Investment Plan allows a shareholder to make
automatic monthly or quarterly investments into a Fund account, in
amounts of at least $100, by having the Transfer Agent draw an
automatic clearing house (ACH) debit electronically against a
shareholder's checking or savings account. A shareholder may
establish an Automatic Investment Plan by completing the
appropriate section on the Application Form for new accounts or by
calling the Transfer Agent at (800) 797-0733 and requesting an
Automatic Investment Plan Application for existing accounts. A
shareholder should be aware that a signed Application should be
received by the Transfer Agent at least 15 business days prior to
the initial transaction. The Transfer Agent will assess a $20 fee
if the automatic investment cannot be made due to insufficient
funds, stop payment, or for any other reason. The Fund cannot
guarantee acceptance by your bank.
Systematic Cash Withdrawal Plan
When an account of $10,000 or more is opened or when an existing
account reaches that size, a shareholder may participate in the
Fund's Systematic Cash Withdrawal Plan by filling out the
appropriate part of the Application. Under this plan, a
shareholder may receive (or designate a third party to receive) a
monthly or quarterly check in a stated amount of not less than
$50. Fund shares will be redeemed as necessary to meet withdrawal
payments. All participants must elect to have their dividends and
capital gain distributions reinvested automatically. A shareholder
who decides later to use this service should call the Transfer
Agent at (800) 797-0773.
Reports to Shareholders
Each time a shareholder invests, redeems, transfers or exchanges
shares, or receives a distribution, the Fund will send a
confirmation of the transaction which will include a summary of
all of the shareholder's most recent transactions.
At such time as prescribed by law, the Fund will send to each
shareholder the following reports (if they are applicable), which
may be used in completing U.S. income tax returns:
Form 1099-DIV Report taxable distributions during the
preceding calendar year. (If a shareholder
did not receive taxable distributions in
the previous year, such shareholder will
not be sent a 1099-DIV.)
Form 1099-B Reports redemption proceeds paid (including
those resulting from exchanges) during the
preceding calendar year.
<PAGE>
19
Form 1099-R Report distributions from retirement plan
accounts during the preceding calendar year
Form 5498 Reports contributions to IRAs for the
previous calendar year.
If an investor's shares are held by an outside broker in an
omnibus account, it is the responsibility of such outside broker
to provide shareholders whose shares are held in the omnibus
account with any reports prescribed by law which the shareholders
require in order to complete their U.S. income tax returns.
Shareholders will also receive annual and semi-annual reports
including the financial statements of the Funds for the respective
periods.
Retirement Plans
Eligible investors may invest in the Fund under the following
prototype retirement plans:
*Individual Retirement Account (IRA)
*Simplified Employee Pension (SEP) for sole proprietors,
partnerships and corporations
*Profit-Sharing and Money Purchase Pension Plans for corporations
and their employees
The minimum initial investment is $500 and the minimum
subsequent investment is $50 for retirement plans.
Automatic Reinvestment Plan
For the convenience of investors, all dividends and distributions
are automatically reinvested in full and fractional shares of the
Fund at the net asset value per share at the close of business on
the record date, unless otherwise specified on the Application or
requested by a shareholder in writing. If the Transfer Agent does
not receive a written request for subsequent dividends and/or
distributions to be paid in cash at least three full business days
prior to a given record date, the dividends and/or distributions
to be paid to a shareholder will be reinvested. If a shareholder
elects to receive dividends and distributions in cash and the U.S.
Postal Service cannot deliver the checks, or if the checks remain
uncashed for six months, the shareholder's distribution checks
will be reinvested into the shareholder's account at the then
current net asset value.
No person has been authorized to give any information or to
make any representations, other than those contained in this
Prospectus, and, if given or made, such other information or
representations must not be relied upon as having been authorized
by the Fund, the Investment Adviser, the Administrator or the
Distributor. This Prospectus does not constitute an offering in
any state in which such offering may not lawfully be made.No
person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus,
and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Fund, the
Investment Adviser, the Administrator or the Distributor. This
Prospectus does not constitute an offering in any state in which
such offering may not lawfully be made.
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<PAGE>
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<PAGE>
No person has been authorized to give any information or to
make any representations, other than those contained in this
Prospectus, and, if given or made, such other information or
representations must not be relied upon as having been authorized
by the Fund, the Investment Adviser, the Administrator or the
Distributor. This Prospectus does not constitute an offering in
any state in which such offering may not lawfully be made.
INVESTMENT MANAGER
O'Shaughnessy Capital Management, Inc.
60 Arch Street
Greenwich, Connecticut 06830
ADMINISTRATOR
Investment Company Administration Corporation
4455 E. Camelback Road, Suite 261 E
Phoenix, Arizona 85018
DISTRIBUTOR
First Fund Distributors, Inc.
4455 E. Camelback Road, Suite 261 E
Phoenix, Arizona 85018
TRANSFER AGENT
Firstar Trust Company
615 E. Michigan Street
Milwaukee, Wisconsin 53202
AUDITORS
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, New York 10017-2416
LEGAL COUNSEL
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
<PAGE>
O'SHAUGHNESSY
60 ARCH STREET
GREENWICH CT 06830
AGGRESSIVE GROWTH FUND
800-797-0773
[] []
BUILDING
NEW STANDARDS
FOR
INVESTMENT
SUCCESS
O'Shaughnessy Funds, Inc. O'Shaughnessy Funds, Inc.
<PAGE>
O'SHAUGHNESSY DOGS OF THE MARKET(TM) FUND
60 Arch Street, Greenwich, Connecticut 06830
(800) 797-0773
The Fund
O'Shaughnessy Dogs of the Market(TM) Fund (the "Fund") is an
investment portfolio or series of O'Shaughnessy Funds, Inc., an
open-end management investment company with multiple portfolios or
series available for investment.
Investment Objective
The investment objective of the Fund is to seek total return,
consisting of capital appreciation and current income.
Strategy
The Fund will invest primarily in high dividend yielding common
stocks of large, well-established companies selected by
O'Shaughnessy Capital Management, Inc., the Fund's investment
manager (the "Manager"). These stocks are considered by the
Manager to be "Dogs" of the market. It is anticipated that
approximately 30% of the Fund's portfolio will generally consist
of the ten stocks which, at the time of purchase, were the ten
highest-yielding stocks contained in the Dow Jones Industrial
Average (the "Dow Dogs"). The remaining assets of the Fund will be
invested primarily in thirty to forty additional stocks that the
Manager believes have substantially the same qualities as the Dow
Dogs, and which meet certain additional criteria, as described
below. For a more detailed description of the Fund's investment
strategy, see "About the Fund -- Investment Objective and
Policies."
Purchase of Shares
Shares of the Fund will be offered to investors during the
continuous offering at a price equal to the next determined net
asset value per share. There are no fees or charges to purchase or
sell shares or to reinvest dividends. There are no Rule 12b-1
fees.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PROSPECTUS
October 11, 1996
(Supplemented November 20, 1996 and March 7, 1997)
This Prospectus contains the information you should know about the
Fund before you invest. Please keep it for future reference. A
statement containing additional information about the Fund, dated
October 11, 1996, has been filed with the Securities and Exchange
Commission and is incorporated by reference into this Prospectus.
It is available, at no charge, by calling or by writing the Fund
at the telephone number or address set forth above.
O'Shaughnessy Capital Management, Inc.-Manager
First Fund Distributors, Inc.-Distributor
<PAGE>
2
TABLE OF CONTENTS
ABOUT THE FUND................................................. 2
MANAGEMENT AND ORGANIZATION OF THE FUND ....................... 6
INFORMATION ABOUT YOUR ACCOUNT ................................ 8
INFORMATION ON DISTRIBUTIONS AND TAXES ........................ 15
PERFORMANCE INFORMATION........................................ 17
NET ASSET VALUE ............................................... 18
OTHER SHAREHOLDER SERVICES .................................... 18
ABOUT THE FUND
TRANSACTION AND FUND EXPENSES
The following table and example should help you understand the
kinds of expenses you will bear directly or indirectly as a Fund
shareholder. In the table, "Shareholder Transaction Expenses,"
shows that you pay no sales charges. All the money you invest in
the Fund goes to work for you, subject to the fees noted in the
table. "Annual Fund Operating Expenses" shows how much it would
cost to operate the Fund for a year, based on estimated expenses
through the end of the Fund's first full year. These costs you pay
indirectly, because they are deducted from the Fund's total assets
before the daily share price is calculated and before dividends
and other distributions are made. You will not see these expenses
on your account statement.
<TABLE>
<CAPTION>
Fee Table
<S> <C>
Shareholder Transaction Expenses:
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price)............. None
Maximum Sales Charge Imposed on Dividend Reinvestments.................................... None
Deferred Sales Charge (as a percentage of original purchase price
or redemption proceeds, whichever is lower).............................................. None
Redemption fee (a) ....................................................................... None
Exchange Fee (b) ......................................................................... None
Annual Fund Operating Expenses (as a percentage of average net assets):
Management Fees (c) (d)................................................................... 0.90%
Rule 12b-1 Fees........................................................................... None
Other Expenses (d) (e).................................................................... 0.80%
----
Total Fund Operating Expenses (d)......................................................... 1.70%
====
</TABLE>
(a) Shareholders who effect redemptions of Fund shares by wire
transfer will pay a $12.00 wire transfer fee. See "Information
About Your Account - - Redemption of Shares."
(b) Shareholders who effect exchanges of shares of the Fund for
shares of another fund by telephone in accordance with the
exchange privilege will be charged a $5.00 exchange fee. See
"Information About Your Account - - Exchange Privilege."
(c) See "Management and Organization of the Fund -- Management."
(d) To limit the Fund's expenses during its initial period of
operations, the Manager has voluntarily agreed to reduce its fees
or reimburse the Fund through at least September 30, 1997 to
ensure that the Fund's total operating expenses do not exceed
2.00% of average net assets annually. Any such reductions made by
the Manager in its fees or reimbursement of expenses with respect
to the Fund are subject to reimbursement by the Fund to the
Manager (recapture by the Manager), provided the Fund is able to
effect such reimbursement while keeping total operating expenses
at or below 2.00% of average net assets annually, and that no
reimbursement will be made after September 30, 2000. Any amounts
reimbursed will have the effect of increasing fees otherwise paid
by the Fund.
(e) "Other Expenses" is based on estimated amounts for the current
fiscal year.
<PAGE>
3
Example:
<TABLE>
<S> <C> <C>
Cumulative Expenses Paid for the Period of: 1 Year 3 Years
------ -------
An investor would pay the following expenses on a $1,000
investment assuming: (1) the operating expense ratio set forth in
the table above; (2) a 5% annual return throughout the
period; and (3) redemption at the end of the period:.............. $17 $55
</TABLE>
The table and example are intended to assist investors in
understanding the costs and expenses that a shareholder in the
Fund will bear directly or indirectly. "Other Expenses" is based
on estimated amounts for the current fiscal year. The example
should not be considered a representation of past or future
expenses or annual rate of return, and actual expenses or annual
rate of return may be more or less than those shown.
INVESTMENT OBJECTIVE AND POLICIES
To help you decide whether the Fund is appropriate for you, this
section takes a closer look at the Fund's investment objective and
policies.
What is the Fund's objective?
The investment objective of the Fund is to seek total return,
consisting of capital appreciation and current income. There can
be no assurance that the Fund will achieve its investment
objective.
What is the Fund's investment strategy?
O'Shaughnessy Capital Management, Inc., the Fund's investment
manager (the "Manager"), will manage the Fund so that generally,
the Fund will hold positions in the ten stocks which, at the time
of purchase, were among the ten highest-yielding stocks contained
in the Dow Jones Industrial Average(1) (the "Dow Dogs"). It is
anticipated that approximately 30% of the Fund's assets will be
invested in the Dow Dogs at any time. The remaining assets of the
Fund will be invested primarily in thirty to forty stocks that the
Manager believes have substantially the same qualities as the Dow
Dogs. These stocks, at the time of purchase, will generally:
*be issued by among the largest companies in the market based on
market capitalization, with no company having market
capitalization smaller than $1 billion at the time of purchase;
*have dividend yields higher than the average of all stocks in the
market; and
*have sales, common shares outstanding and cash flow higher than
the average of all stocks in the market.
The Manager may invest the Fund's assets in stocks which do not
meet all of the above criteria, if, in the opinion of the Manager,
such stocks possess characteristics similar to stocks meeting such
criteria. In addition, the Manager may continue to hold stocks in
the Fund's portfolio which no longer meet the initial criteria for
investment if the Manager believes such investments are consistent
with the Fund's investment objective.
(1) "Dow Jones Industrial Average" is a trademark of Dow Jones &
Company, Inc. ("Dow Jones"). Neither the Fund nor the Manager is
affiliated with, nor is the Fund sponsored by Dow Jones. Dow Jones
has not participated in any way in the creation of the Fund or in
the selection of stocks included in the Fund, nor has Dow Jones
reviewed or approved any information included in this Prospectus.
<PAGE>
4
What are the potential risks of investing primarily in common stocks?
The fundamental risk associated with any common stock fund is the
risk that the value of the stocks it holds might decrease. Stock
values may fluctuate in response to the activities of an
individual company or in response to general market and/or
economic conditions. Historically, common stocks have provided
greater long-term returns and have entailed greater short-term
risks than other investment choices. Smaller or newer issuers are
more likely to realize more substantial growth as well as suffer
more significant losses than larger or more established issuers.
Investments in such companies can be both more volatile and more
speculative.
OTHER INVESTMENT POLICIES AND PRACTICES
This section takes a detailed look at other investment policies
and practices of the Fund. The Fund's investments are subject to
further restrictions and risks described in the Statement of
Additional Information.
Shareholder approval is required to change the Fund's investment
objective and certain investment restrictions noted in the
following section as "fundamental policies." The Manager also
follows certain "operating policies" which can be changed without
shareholder approval. However, significant changes in operating
policies are discussed with shareholders in Fund reports.
The Fund's holdings in certain kinds of investments cannot
exceed maximum percentages of total assets, which are set forth
below. While these restrictions provide a useful level of detail
about the Fund's investments, investors should not view them as an
accurate gauge of the potential risk of such investments. The net
effect of a particular investment depends on its volatility and
the size of its overall return in relation to the performance of
all the Fund's other investments.
Cash and Short-Term Securities. The Fund may temporarily invest a
portion of its total assets in cash or liquid short-term
securities pending investment of such assets in stocks in
accordance with the Fund's investment strategy and in order to
meet redemption requests. The Fund may also invest a portion of
its assets in cash or liquid short-term securities for temporary
defensive purposes, but is under no obligation to do so.
Short-term securities in which the Fund may invest include
certificates of deposit, commercial paper, notes, obligations
issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities, and repurchase agreements involving such
securities. See "Repurchase Agreements," below.
Repurchase Agreements. The Fund may invest in repurchase
agreements. The Fund may only enter into repurchase agreements
with a member bank of the Federal Reserve System or a
well-established securities dealer in U.S. government securities.
In the event of a bankruptcy or default by the seller of the
repurchase agreement the Fund may suffer delays and incur costs or
possible losses in liquidating the underlying security which is
held as collateral, and the Fund may incur a loss if the value of
the collateral declines during this period. As a matter of
operating policy, the Fund may not invest more than 15% of its
total assets in repurchase agreements maturing in more than seven
days.
Illiquid Securities. The Fund may invest up to 15% of its total
assets in illiquid securities. Illiquid securities are securities
which cannot be readily resold because of legal or contractual
restrictions or which cannot otherwise be marketed, redeemed, put
to the issuer or a third party, or which do not mature within
seven days, or which the Manager, in accordance with guidelines
approved by the Board of Directors, has not determined to be
liquid.
The Fund may purchase, without regard to the above limitation,
securities that are not registered under the Securities Act of
1933 (the "Securities Act") but that can be offered and sold to
"qualified institutional buyers" under Rule 144A under the
Securities Act, provided that the Board of Directors,
<PAGE>
5
or the Manager pursuant to guidelines adopted by the Board,
continuously determines, based on the trading markets for the
specific Rule 144A security, that it is liquid.
Lending of Portfolio Securities. Like other mutual funds, the Fund
may from time to time lend securities from its portfolio to banks,
brokers and other financial institutions to earn additional
income. The principal risk is that the borrower may default on its
obligation to return borrowed securities, because of insolvency or
otherwise. In this event, the Fund could experience delays in
recovering its securities and capital. In accordance with
applicable law, the Fund may not lend portfolio securities
representing in excess of 33 % of its total assets. The lending
policy is a fundamental policy.
Borrowing. The Fund may borrow money from banks in an amount up to
33 % of its total assets for extraordinary or emergency purposes
such as meeting anticipated redemptions, and may pledge assets in
connection with such borrowing. The borrowing policy is a
fundamental policy.
Industry Concentration. The Fund may not invest more than 25% of
its total assets in any one industry (excluding U.S. Government
securities). The concentration policy is a fundamental policy.
Foreign Securities. The Fund may invest up to 25% of its total
assets in securities of foreign issuers, either through (i) direct
purchase of securities of foreign issuers if they are listed and
traded on a U.S. national securities exchange or the NASDAQ
National Market System or (ii) purchase of American Depository
Receipts ("ADRs") which are dollar-denominated securities of
foreign issuers traded in the U.S. Such investments increase
diversification of the Fund's portfolio and may enhance return,
but they also involve some special risks such as exposure to
potentially adverse local political and economic developments,
nationalization and exchange controls; potentially lower liquidity
and higher volatility; possible problems arising from regulatory
practices that differ from U.S. standards; the imposition of
withholding taxes on income from such securities; confiscating
taxation; and the chance that fluctuations in foreign exchange
rates will decrease the investment's value (favorable changes can
increase its value). These risks are heightened for investment in
developing countries and there is no limit on the amount of the
Fund's foreign investments that may be invested in such countries.
The Fund may invest in ADRs through both sponsored and
unsponsored arrangements. The issuers of unsponsored ADRs are not
obligated to disclose material information in the United States,
and therefore, there may not be a correlation between such
information and the market value of the ADRs.
Hedging and Return Enhancement Strategies. The Fund is permitted
to utilize certain hedging and return enhancement strategies and
techniques such as options on securities and securities indices,
futures contracts on securities and securities indices and options
on futures contracts, as described below.
Futures (a type of potentially high-risk derivative) are often
used to manage or hedge risk, because they enable the investor to
buy or sell an asset in the future at an agreed upon price.
Options (another potentially high-risk derivative) give the
investor the right, but not the obligation, to buy or sell an
asset at a predetermined price in the future. The Fund may buy and
sell futures and options contracts for any number of reasons,
including: to manage its exposure to changes in securities prices;
as an efficient means of adjusting its overall exposure to certain
markets; in an effort to enhance income; and to protect the value
of portfolio securities. The Fund may purchase, sell, or write
call and put options on securities, financial indices and futures.
Futures contracts and options may not always be successful
hedges; their prices can be highly volatile. Using them could
lower the Fund's total return, and the potential loss from the use
of futures can exceed the Fund's initial investment in such
contracts.
As a matter of operating policy, initial margin deposits and
premiums on options used for non-hedging purposes will not equal
more than 5% of the Fund's net asset value.
Firm Commitment Agreements and When-Issued Purchases. The Fund may
purchase securities under a firm commitment agreement or on a
when-issued basis. Firm commitment agreements
<PAGE>
6
and when-issued purchases call for the purchase of securities at
an agreed-upon price on a specified future date, and would be
used, for example, when a decline in the yield of securities of a
given issuer is anticipated. The Fund as purchaser assumes the
risk of any decline in value of the security beginning on the date
of the agreement or purchase. The Fund will not enter into such
transactions for the purpose of leveraging, and accordingly, will
segregate liquid assets with its custodian equal (on a daily
marked-to-market basis) to the amount of its commitment to
purchase the when-issued securities and securities subject to the
firm commitment agreement.
Warrants. The Fund may invest in warrants, which are similar to
options to purchase securities at a specific price valid for a
specific period of time. The Fund may not invest more than 5% of
its net assets (at the time of investment) in warrants (other than
those attached to other securities). If the market price of the
underlying security never exceeds the exercise price, the Fund
will lose the entire investment in the warrant. Moreover, if a
warrant is not exercised within the specified time period, it will
become worthless and the Fund will lose the purchase price and the
right to purchase the underlying security.
Diversification. In order to maintain the Fund's status as a
diversified investment company, with respect to 75% of the Fund's
total assets: 1) not more than 5% of the Fund's assets may be
invested in the securities of a single issuer (excluding U.S.
Government securities); and 2) the Fund may not hold more than 10%
of the outstanding voting securities of a single issuer. The
diversification policy is a fundamental policy.
Portfolio Transactions. In executing portfolio transactions, the
Fund seeks to obtain the best net results, taking into account
such factors as price (including the applicable brokerage
commission or dealer spread), size of order, difficulty of
execution, operational facilities of the firm involved and the
firm's risk in positioning a block of securities. While the Fund
generally seeks reasonably competitive commission rates, the Fund
does not necessarily pay the lowest commission or spread
available. In addition, consistent with the Conduct Rules of the
National Association of Securities Dealers, Inc., the Manager may
consider sales of shares of the Fund as a factor in the selection
of brokers or dealers to execute portfolio transactions for the
Fund.
Portfolio Turnover. The Fund anticipates that its annual turnover
rate should not exceed 50% under normal conditions. The portfolio
turnover rate is calculated by dividing the lesser of the Fund's
annual sales or purchases of portfolio securities (exclusive of
purchases or sales of securities whose maturities at the time of
acquisition were one year or less) by the monthly average value of
the securities in the portfolio during the year. High portfolio
turnover involves correspondingly greater transaction costs in the
form of brokerage commissions and dealer spreads, which are borne
directly by the Fund.
MANAGEMENT AND ORGANIZATION OF THE FUND
MANAGEMENT
Who runs the Fund?
General Oversight. O'Shaughnessy Funds is governed by a Board of
Directors that meets regularly to review the Fund's investment,
performance, expenses, and other business affairs. The Board
elects the Fund's officers.
Manager. O'Shaughnessy Capital Management, Inc. acts as investment
manager of the Fund pursuant to a management agreement with
O'Shaughnessy Funds on behalf of the Fund (the "Management
<PAGE>
7
Agreement"). In its capacity as investment manager, the Manager is
responsible for selection and management of the Fund's portfolio
investments. For its services, the Fund pays the Manager a fee
each month, at the annual rate of 0.90% of the Fund's average
daily net assets.
The Manager's office is located at 60 Arch Street, Greenwich,
Connecticut 06830. O'Shaughnessy Capital Management was
incorporated in 1988. The Manager serves as portfolio consultant
to a unit investment trust with assets in excess of $180 million.
The Manager has no experience actively managing open-end
investment companies such as the Fund.
Portfolio Management. James P. O'Shaughnessy has had the
day-to-day responsibility for managing the Fund's portfolio and
developing and executing the Fund's investment program since
inception of the Fund. For the past five years, Mr. O'Shaughnessy
has served as President of the Manager, and in such capacity, has
managed equity accounts for high net worth individuals and served
as portfolio consultant to a unit investment trust. Mr.
O'Shaughnessy is recognized as a leading expert and pioneer in
quantitative equity analysis. He is the author of two financial
books, Invest Like the Best and What Works on Wall Street.
Distributor. O'Shaughnessy Funds has entered into a Distribution
Agreement (the "Distribution Agreement") with First Fund
Distributors, Inc. (the "Distributor"), a registered
broker-dealer, to act as the principal distributor of the shares
of the Fund. The Distribution Agreement provides the Distributor
with the right to distribute shares of the Fund through other
broker-dealers or financial institutions with whom the Distributor
has entered into selected dealer agreements. The address of the
Distributor is 4455 E. Camelback Road, Suite 261 E, Phoenix,
Arizona 85018. The Distributor provides distribution services to
the Fund at no cost to the Fund.
Administrator. Pursuant to an Administration Agreement, Investment
Company Administration Corporation (the "Administrator") serves as
administrator of the Fund. The Administrator provides certain
administrative services, including, among other responsibilities,
coordinating relationships with independent contractors and
agents, preparing for signature by officers and filing of certain
documents required for compliance with applicable laws and
regulations, preparing financial statements, and arranging for the
maintenance of books and records. For its services, the Fund pays
the Administrator a fee each month, at the annual rate of 0.10% of
the first $100 million of the Fund's average daily net assets,
0.05% of the next $100 million of such net assets, and 0.03% of
such net assets over $200 million, with a minimum fee of $40,000
annually. The address of the Administrator is 4455 E. Camelback
Rd., Suite 261 E, Phoenix, Arizona 85018. The Administrator and
the Distributor are under common control and are therefore
considered affiliates of each other.
Transfer Agent and Custodian. Firstar Trust Company acts as the
Fund's transfer and dividend disbursing agent (the "Transfer
Agent"), as well as the Fund's custodian (the "Custodian"). The
address of the Transfer Agent and Custodian is 615 E. Michigan
Street, Third Floor, Milwaukee, Wisconsin 53202.
How are Fund expenses determined?
The Management Agreement identifies the expenses to be paid by the
Fund. In addition to the fees paid to the Manager, the Fund pays
certain additional expenses, including but not limited to, the
following: shareholder service expenses; custodial, accounting,
legal, and audit fees; administrative fees; costs of preparing and
printing prospectuses and reports sent to shareholders;
registration fees and expenses; proxy and annual meeting expenses
(if any); and independent Director fees and expenses.
<PAGE>
8
ORGANIZATION
How is the Fund organized?
The Fund is an investment portfolio or series of O'Shaughnessy
Funds. There are three other investment portfolios of
O'Shaughnessy Funds, shares of which are not offered for sale
through this Prospectus: O'Shaughnessy Cornerstone Value Fund,
O'Shaughnessy Cornerstone Growth Fund and O'Shaughnessy Aggressive
Growth Fund (the "other O'Shaughnessy Funds"). The charter of
O'Shaughnessy Funds provides that the Board of Directors may issue
additional investment portfolios of shares and/or additional
classes of shares for each investment portfolio. O'Shaughnessy
Funds was organized as a corporation in Maryland on May 20, 1996.
What is meant by "shares"?
As with all mutual funds, investors purchase shares when they
invest in the Fund. These shares are a part of a Fund's authorized
capital stock, but share certificates are not generally issued.
Each full share and fractional share entitles the shareholder
to: receive a proportional interest in the Fund's capital gain
distributions; and cast one vote per share on certain Fund
matters, including the election of Fund Directors, changes in
fundamental policies, or approval of changes in the Fund's
Management Agreement.
Shareholder inquiries may be addressed to the Fund at the
address or telephone number set forth on the cover page of this
Prospectus.
Does the Fund have annual shareholder meetings?
The Fund is not required to hold annual meetings and does not
intend to do so except when certain matters, such as a change in
the Fund's fundamental policies, are to be decided. In addition,
shareholders representing at least 10% of all eligible votes may
call a special meeting if they wish, for the purpose of voting on
the removal of any Fund Director. If a meeting is held and you
cannot attend, you can vote by proxy. Before the meeting, the Fund
will send you proxy materials that explain the issues to be
decided and include a voting card for you to mail back.
INFORMATION ABOUT YOUR ACCOUNT
PURCHASE OF SHARES
The minimum initial investment in the Fund is $5,000 and the
minimum subsequent investment is $100, except that for retirement
plans, the minimum initial investment is $500 and the minimum
subsequent investment is $50.
Investors may make an initial purchase of shares and subsequent
investments in the Fund by mail or wire as described below. The
Fund reserves the right in its sole discretion to waive the
minimum investment amounts, including in the case of investments
by employees and affiliates of the Manager and family members of
any of the foregoing, and Individual Retirement Accounts ("IRAs")
of shareholders of the Fund.
The Internal Revenue Service requires the correct reporting of
social security numbers or tax identification numbers. The failure
to provide this information will result in the rejection of an
investor's Application.
<PAGE>
9
How do I purchase shares by mail?
For initial investments, please send a completed Application,
together with a check payable to O'Shaughnessy Dogs of the
Market(TM) Fund to O'Shaughnessy Funds, Inc., c/o Firstar Trust
Company, at P.O. Box 701, Milwaukee, WI 53201-0701 (for
Applications sent by U.S. mail) or 615 E. Michigan Street, Third
Floor, Milwaukee, WI 53202 (for Applications sent via overnight
courier). Subsequent investments must be accompanied by a letter
indicating the name(s) in which the account is registered and the
account number or by the remittance portion of the account
statement and mailed to the address stated above.
How do I purchase shares by wire?
If you are wiring funds, call the Transfer Agent at (800) 797-0773
for an account number if this is an initial investment or to
inform the Transfer Agent that a wire is expected if this is a
subsequent investment.
For an initial investment, prior to or immediately after the
funds are wired, a completed Application should be sent to
O'Shaughnessy Funds, Inc., c/o Firstar Trust Company, at P.O. Box
701, Milwaukee, WI 53201-0701 (for Applications sent by U.S. mail)
or 615 E. Michigan Street, Third Floor, Milwaukee, WI 53202 (for
Applications sent via overnight courier). Instruct your bank to
wire federal funds to O'Shaughnessy Funds, c/o Firstar Trust
Company, ABA# 075000022, DDA # 112952137.
The wire should specify the name of the Fund, the name(s) in
which the account is registered, the shareholder's social security
number or employer tax identification number, the account number
and the amount being wired. Please indicate if this is an initial
or subsequent investment. Wire purchases are normally used only
for large purchases (over $5,000). Your bank may charge you a fee
for sending the wire.
What is the purchase price of Fund shares and when do purchases become
effective?
Purchases of Fund shares become effective and shares will be
priced at the net asset value per share ("NAV") next determined
after the investor's check or wire is received by the Transfer
Agent. NAV for the Fund is calculated as of the close of business
on the New York Stock Exchange ("NYSE") (currently 4:00 p.m.,
Eastern time). If your request is received in correct form before
4:00 p.m. Eastern time, your transaction will be priced at that
day's NAV. If your request is received after 4:00 p.m., it will be
priced at the next business day's NAV. Orders that request a
particular day or price for your transaction or any other special
conditions cannot be accepted.
The time at which transactions and shares are priced and the
time until which orders are accepted may be changed in case of an
emergency or if the NYSE closes at a time other than 4:00 p.m.,
Eastern time.
The purchase order must include the documentation specified
above. Please do not send purchase orders to the Fund; the Fund
forwards purchase orders to the Transfer Agent and a purchase will
not become effective until the Transfer Agent receives all the
necessary documentation.
What are the conditions of purchase?
All purchase orders are subject to acceptance or rejection by the
Fund or the Distributor, in their sole discretion. The offering of
shares may be suspended whenever the Fund considers suspension
desirable or when required by any order, rule or regulation of any
governmental body having jurisdiction. Checks and money orders
should be drawn on United States banks; the Fund and the
Distributor reserve the right to reject checks drawn on foreign
banks.
<PAGE>
10
The Transfer Agent will mail a confirmation of each completed
purchase to the investor. If an order is canceled because an
investor's check does not clear, the investor will be responsible
for any loss incurred by the Fund, the Transfer Agent, the
Distributor, the Administrator or the Manager. If the investor is
already a shareholder, the Fund may redeem shares from the account
to cover any loss. If the investor is not a shareholder or if the
loss is greater than the value of the shareholder's account, the
Distributor will be responsible for any loss to the Fund, and will
have the right to recover such amount from the investor.
Who do I contact if I have questions about my account or need additional
information concerning an investment in the Fund?
If you have investment questions about the Fund, or if you would
like any additional information relating to an investment in the
Fund, please call (800) 797-0773 (toll-free), or write to the
Distributor at First Fund Distributors, Inc., 4455 E. Camelback
Road, Suite 261 E, Phoenix AZ 85018. If you are a shareholder and
have questions about your account, or if you wish to arrange for
wire transactions, please call the Transfer Agent at (800)
797-0773. Before telephoning, please be sure to have your account
number and social security number or employer tax identification
number readily available.
Will I receive share certificates for shares purchased?
Share certificates will not be issued for shares unless the
investor sends a written request for certificates to O'Shaughnessy
Funds, Inc., c/o Firstar Trust Company, at P.O. Box 701,
Milwaukee, WI 53201-0701 (for requests sent via U.S. mail) or 615
E. Michigan Street, Third Floor, Milwaukee, WI 53202 (for requests
sent via overnight courier). Share certificates are issued only
for full shares and may be redeposited in the shareholder's
account at any time. In order to facilitate redemptions and
exchanges, most shareholders elect not to receive certificates,
since a shareholder wishing to redeem or exchange shares
represented by a certificate must surrender such certificate,
properly endorsed on the reverse side together with a signature
guarantee. (See "Redemption of Shares -- When are signature
guarantees required?" below). If a certificate is lost, the
shareholder may incur an expense in replacing it.
Can I purchase shares through broker-dealers other than the Distributor?
O'Shaughnessy Funds may enter into agreements with various outside
brokers on behalf of the Funds through which shareholders may
purchase shares. Such shares may be held by such outside brokers
in an omnibus account rather than in the name of the individual
shareholder. The Manager may reimburse the outside brokers for
providing shareholder services to the omnibus accounts in an
amount equal to what the Fund would otherwise have paid to provide
shareholder services to each individual shareholder account.
Investors may also arrange to purchase shares of the Fund
through other outside broker-dealers with which O'Shaughnessy
Funds does not have an arrangement, and such broker-dealers may
purchase shares of the Fund by telephone if they have made
arrangements in advance with the Fund. To place a telephone order
such broker-dealer should call the Transfer Agent at (800)
797-0773.
Purchases by broker-dealers become effective and shares will be
priced as described above. If an investor purchases shares through
broker-dealers other than the Distributor, such broker-dealers may
charge the investor a service fee that is reasonable for the
service performed, bearing in mind that the investor could have
acquired or redeemed the Fund's shares directly without the
payment of any fee. No part of any such service fee will be
received by the Distributor, the Manager, the Administrator or the
Fund.
<PAGE>
11
EXCHANGE PRIVILEGE
Shares of the Fund may be exchanged for shares of each of the
other O'Shaughnessy Funds (i.e., O'Shaughnessy Cornerstone Value
Fund, O'Shaughnessy Cornerstone Growth Fund and O'Shaughnessy
Aggressive Growth Fund). Prospectuses for the other O'Shaughnessy
Funds may be obtained by writing to the Distributor at 4455 E.
Camelback Road, Suite 261 E, Phoenix AZ 85018, Attention:
O'Shaughnessy Funds, Inc. or by calling (800) 797-0773
(toll-free).
You may also exchange shares of the Fund for shares of the
Portico Money Market Fund, a money market mutual fund not
affiliated with O'Shaughnessy Funds or the Manager. Prior to
making such an exchange, you should obtain and carefully read the
prospectus for the Portico Money Market Fund. The exchange
privilege does not constitute an offering or recommendation on the
part of the Fund or the Manager of an investment in the Portico
Money Market Fund.
If you exchange into shares of the Portico Money Market Fund you
may establish checkwriting privileges on the Portico Money Market
Fund. Contact the Transfer Agent at (800) 797-0773 for a
checkwriting application and signature card.
The exchange procedures are described below.
Is there any sales charge or minimum investment applicable to an exchange?
Shareholders of the Fund may exchange their shares of the Fund,
without the payment of any sales or service charge, for shares of
any other fund into which an exchange is permitted equal in value
to the net asset value of the shares being exchanged. All
exchanges are subject to all applicable terms set forth in the
prospectus of the fund into which the exchange is being made. If a
shareholder exchanges shares through a broker-dealer other than
the Distributor, such broker-dealer may charge the shareholder a
service fee, no part of which will be received by the Distributor,
the Manager, the Fund, or the fund into which the exchange is
being made.
At what price is an exchange effected?
An exchange is effected at the respective net asset values of the
two funds with respect to which shares are being exchanged as next
determined following receipt by the fund into which the exchange
is being made of all necessary documentation in connection with
the redemption of Fund shares as described below under "Redemption
Of Shares --How do I redeem shares by mail?"
Do current instructions concerning receipt of dividends and distributions carry
over to exchanged shares?
Dividend and distribution instructions with respect to exchanged
shares will remain the same as those given previously by the
shareholders to the fund from which the shareholder is exchanging
the shares, unless the shareholder designates a change in such
instructions by writing to the Transfer Agent. Please note that
such changed instructions (i) must be signed by the registered
owners(s) of the shares, exactly as the account is registered and
signature guaranteed, and (ii) include the name of the account,
the account number, and the name of the fund for which
instructions have changed.
What are the conditions applicable to an exchange?
Exchanges involving the redemption of shares recently purchased by
personal, corporate or government check will be permitted only
after the Fund has reasonable belief that the check has cleared,
which may take up to fifteen days after the purchase date. The
exchange privilege is available only in states where shares of the
other O'Shaughnessy Funds or the Portico Money Market Fund may be
sold legally.
<PAGE>
12
The Fund, the other O'Shaughnessy Funds and the Portico Money
Market Fund each reserves the right to reject any order to acquire
its shares through exchange or otherwise and to restrict or
terminate the exchange privilege at any time. If the exchange
privilege is to be permanently terminated, the Fund will provide
its shareholders with written notice of such termination. The Fund
reserves the right to suspend temporarily the telephone exchange
privilege in emergency circumstances or in cases where, in the
judgment of the Fund, continuation of the privilege would be
detrimental to the Fund and its shareholders as a whole. Such
temporary suspension can be without prior notification.
How can I make exchanges by telephone?
Shareholders who have completed the section of the Fund's
Application entitled "Shareholder Privileges" are eligible to make
telephone requests for exchanges and may do so by telephoning the
Transfer Agent at (800) 797-0773. A shareholder who has not
completed the Shareholder Privileges section of the Application
but who wishes to become eligible to make telephone exchanges
should designate a change in such instructions by writing to the
Transfer Agent. Please note that such changed instructions must
(i) be signed by the registered owner(s) of the shares exactly as
the account is registered and signature guaranteed, and (ii)
include the name of the account, the account number and the name
of the Fund. See "Redemption Of Shares - How do I redeem shares by
telephone?" below, which describes the time of day at which
telephone redemptions and exchanges will be priced and processed.
Telephone requests for exchanges cannot be accepted with respect
to shares represented by certificates. Shares of the other
O'Shaughnessy Funds or Portico Money Market Fund acquired pursuant
to a telephone request for exchange will be held under the same
account registration as the shares redeemed through the exchange.
The Fund will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. Neither the
Fund nor any of its service contractors will be liable for any
loss or expense in acting on telephone instructions that are
reasonably believed to be genuine. In attempting to confirm that
telephone instructions are genuine, the Fund will use procedures
that are considered reasonable, including requesting a shareholder
to correctly state the account number, the name(s) in which the
account is registered, the social security number(s) registered to
the account, and certain additional personal identification. A
full description of these procedures is contained in the SAI. To
the extent that the Fund fails to use reasonable procedures to
verify the genuineness of telephone instructions, it and/or its
service contractors may be liable for any such instructions that
prove to be fraudulent or unauthorized.
Shareholders should be aware that, at times, the volume of
telephone calls or other factors beyond the Fund's control may
make it difficult to reach the Transfer Agent by telephone. This
will be true particularly during periods of drastic economic
market changes. In such cases, shareholders should continue to
telephone or utilize the written exchange procedures described
below.
Shareholders who effect exchanges of Fund shares by telephone
will be charged a $5.00 exchange fee.
How do I make exchanges by mail?
To exchange shares by mail, send a written request for exchange
signed by the registered owner(s) of the shares, exactly as the
account is registered to O'Shaughnessy Funds, Inc., c/o Firstar
Trust Company, at P.O. Box 701, Milwaukee, WI 53201-0701 (for
requests sent by U.S. mail) or 615 E. Michigan Street, Third
Floor, Milwaukee, WI 53202 (for requests sent via overnight
courier). The request for exchange should include the following
information: the name of the account, the account number, the
number of
<PAGE>
============ Application Form
O'Shaughnessy Funds, Inc. New Accounts
------------
Mail to: Overnight delivery to:
O'Shaughnessy Funds, Inc. O'Shaughnessy Funds, Inc.
c/o Firstar Trust Company c/o Firstar Trust Company
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
DO NOT USE this form for IRAs. A special form is available for IRAs; please call
(800) 797-0773 for information or assistance.
================================================================================
1. FUND SELECTION
<TABLE>
<CAPTION>
<S> <C>
Amount ($5,000 minimum for any single Fund )
|_| O'Shaughnessy Aggressive Growth Fund $_______________________
|_| O'Shaughnessy Dogs of The Market Fund $_______________________
|_| O'Shaughnessy Cornerstone Growth Fund $_______________________
|_| O'Shaughnessy Cornerstone Value Fund $_______________________
Total Investment $_______________________
|_| By wire (Please call (800) 797-0773 for instructions)
|_| By check, payable to O'Shaughnessy Funds, Inc.
</TABLE>
================================================================================
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
2. ACCOUNT
REGISTRATION ----------------------------------------------------------------------------------------------------
For First Name Middle Name or Initial Last Name Social Security Number
Individual
or ----------------------------------------------------------------------------------------------------
Joint Owners Joint Owner Social Security Number
Registration will be "Joint Tenants with Right of Survivorship" unless
otherwise specified:
----------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
For Gift
to Minor ----------------------------------------------------------------------------------------------------
Custodian's Name (only one allowed)
----------------------------------------------------------------------------------------------------
Minor's Name (only one allowed) Minor's Social Security No.
----------------------------------------------------------------------------------------------------
State of Residence Minor's Birthdate
-------------------------------------------------------------------------------------------------------------------
For
Corporate ----------------------------------------------------------------------------------------------------
Trust, Estate, Name of Corporation, Trust, etc.
Guardianship,
or Corporate ----------------------------------------------------------------------------------------------------
Retirement Name and Date of Trust (continued)
Plan
----------------------------------------------------------------------------------------------------
Name(s) of Trustee(s), Fiduciary, etc. Tax ID Number
A Corporate resolution form is required.
=============================================================================================================================
3. ADDRESS FOR
MAILINGS ----------------------------------------------------------------------------------------------------
Number and Street
----------------------------------------------------------------------------------------------------
Apartment, Floor or Room Number Telephone No. (include area code)
----------------------------------------------------------------------------------------------------
City State Zip Code
-------------------------------------------------------------------------------------------------------------------
Send
duplicate ----------------------------------------------------------------------------------------------------
statements Number and Street
to:
----------------------------------------------------------------------------------------------------
Apartment, Floor or Room Number Telephone No. (include area code)
----------------------------------------------------------------------------------------------------
City State Zip Code
</TABLE>
================================================================================
4. DISTRIBUTIONS All dividends and distributions will be automatically
reinvested in additional shares in your account(s)
unless otherwise indicated by checking the box(es)
below.
|_| Dividends In Cash |_| Capital Gains In Cash
If you have chosen to receive your distribution(s) in
cash, you have the option of receipt either by direct
deposit into your bank account, as identified below, or
by check. Please check one box below.
|_| Direct Deposit($12.00 charge per wire) |_| Check
Please attach a voided bank check or deposit slip here
if you choose direct deposit.
<TABLE>
<CAPTION>
<S> <C> <C>
----------------------------------------------------------------------------------------------------
Name of Bank Address of Bank
----------------------------------------------------------------------------------------------------
Bank's ABA Number Account Number Name(s) on Account
----------------------------------------------------------------------------------------------------
Signature of all registered owners
</TABLE>
IMPORTANT: This form is continued on the reverse side
<PAGE>
================================================================================
5. AUTOMATIC
INVESTMENT
PLAN
<TABLE>
<CAPTION>
|_| I would like to begin Automatic Investing every |_| month, |_| quarter, on the ________ day of
the month or the first business day thereafter, in shares of the Fund(s) indicated below:
Amount ($100 minimum for any single Fund)
<S> <C>
|_| O'Shaughnessy Aggressive Growth Fund $_________________________
|_| O'Shaughnessy Dogs of The Market Fund $_________________________
|_| O'Shaughnessy Cornerstone Growth Fund $_________________________
|_| O'Shaughnessy Cornerstone Value Fund $_________________________
</TABLE>
This signed application must be received by Firstar at
least 15 business days prior to the initial
transaction. I understand that I will be assessed a $20
fee if the automatic purchase cannot be made due to
insufficient funds, stop payment, or for any other
reason. Please attach a voided check or deposit slip of
the bank account below.
<TABLE>
<CAPTION>
<S> <C> <C>
----------------------------------------------------------------------------------------------------
Name of Bank Address of Bank
----------------------------------------------------------------------------------------------------
Bank's ABA Number Account Number Name(s) on Account
----------------------------------------------------------------------------------------------------
Signature of all registered owners
</TABLE>
================================================================================
6. SYSTEMATIC CASH
WITHDRAWAL PLAN
<TABLE>
<CAPTION>
|_| I would like checks sent |_| monthly or |_| quarterly, beginning in the month of ____________
on or about the ______ day of the month. Please redeem from the following account(s):
<S> <C>
Amount ($50 minimum for any single Fund)
|_| O'Shaughnessy Aggressive Growth Fund $_________________________
|_| O'Shaughnessy Dogs of The Market Fund $_________________________
|_| O'Shaughnessy Cornerstone Growth Fund $_________________________
|_| O'Shaughnessy Cornerstone Value Fund $_________________________
</TABLE>
I understand that payments will be made by redeeming
shares from my account(s) and that if the rate of
redemption exceeds the rate of growth of the Fund(s),
my account(s) may ultimately be depleted. Account
balances must be at least $10,000 to initiate this
procedure.
<TABLE>
<S> <C>
I would like checks sent to: |_| the Address for Mailings on the front of the application.
|_| the third party address below:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
----------------------------------------------------------------------------------------------------
Number and Street
----------------------------------------------------------------------------------------------------
Apartment, Floor or Room Number Telephone No. (include area code)
----------------------------------------------------------------------------------------------------
City State Zip Code
</TABLE>
================================================================================
7. SHAREHOLDER |_| I would like to be able to place exchange
PRIVILEGES: instructions by telephone between any of the four
EXCHANGES & O'Shaughnessy Funds or the Portico Money Market Fund
REDEMPTIONS (minimum $5,000) ($5.00 per exchange).
BY TELEPHONE
|_| I would like to be able to place a redemption order
by telephone and have the proceeds mailed to Address
for Mailings on the front of the application or wired
directly to the bank account listed below ($12.00
charge per wire).
I understand that these procedures are offered as a
convenience to me, and I agree that if the
identification procedures set forth in the prospectus
are followed, neither the Funds nor the Transfer Agent
will be liable for any loss, expense or cost arising
from one of these transactions. If applicable, please
attach a voided check or deposit slip of the bank
account below to ensure proper credit to your account.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------
Name of Bank Address of Bank
----------------------------------------------------------------------------------------------------
Bank's ABA Number Account Number Name(s) on Account
</TABLE>
================================================================================
8. SIGNATURES AND CERTIFICATION
I (we) have received and read the Prospectus. I (we) understand the Funds'
investment objectives and policies and agree to be bound by the terms of the
Prospectus. I am (we are) of legal age in my (our) state of residence and have
full authority to purchase shares of the Fund and to establish and use any
related privileges.
Neither the Fund nor its transfer agent will be responsible for the authenticity
of transaction instructions received by telephone, provided that reasonable
security procedures have been followed. If an account has multiple owners, the
Fund may rely on the telephone instructions of any one account owner.
By selecting the options in Section(s) 4, 5, 6 or 7, I (we) hereby authorize the
Fund to initiate credits and debits to my (our) account at the bank indicated in
Section(s) 4, 5, 6 or 7 and for the bank to credit or debit the same to such
account through the Automated Clearing House ("ACH") system.
Under the penalty of perjury, I (we) certify the (1) the Social Security Number
or Taxpayer Identification Number shown on this form is my (our) correct
Taxpayer Identification Number, and (2) I am (we are) not subject to backup
withholding either because I (we) have not been notified by the Internal Revenue
Service (IRS) that I am (we are) subject to backup withholding as a result of a
failure to report all interest or dividends, or the IRS has notified me (us)
that I am (we are) no longer subject to backup withholding. The IRS does not
require your consent to any provision of this document other than the
certifications required to avoid backup withholding.
- --------------------------------------------------------------------------------
Signature(s) of Individual / Joint Owner* Date
- --------------------------------------------------------------------------------
Signature(s) of Authorized Officers, Partners, Trustees or Others*
- --------------------------------------------------------------------------------
Date
*If shares are to be registered in (1) joint names, both persons should sign,
(2) a custodian for a minor, the custodian should sign (3) a trust, the
trustee(s) should sign, or (4) a corporation or other entity, an officer should
sign and print name and title on space provided below.
- --------------------------------------------------------------------------------
Print name and title of officer signing for a corporation or other entity.
sc
- -----------------------------
<PAGE>
13
Fund shares or the dollar value of Fund shares to be exchanged,
the shares of which other fund (either another O'Shaughnessy Fund
or the Portico Money Market Fund) shares of the Fund are to be
exchanged for, and the name on the account and the account number
(if already established) with such other fund.
REDEMPTION OF SHARES
Shareholders can redeem their shares by giving instructions to the
Transfer Agent in writing or by telephone. As more fully described
below, these redemption instructions may have to be accompanied by
additional documentation, which may include a signature guarantee.
If a shareholder redeems shares through a broker-dealer other
than the Distributor, such broker-dealer may charge the
shareholder a service fee, no part of which will be received by
the Distributor, the Manager, the Administrator or the Fund.
How do I redeem shares by mail?
To redeem shares by mail, send a written request for redemption
signed by the registered owner(s) of the shares, exactly as the
account is registered to O'Shaughnessy Funds, Inc., c/o Firstar
Trust Company, at P.O. Box 701, Milwaukee, WI 53201-0701 (for
requests sent by U.S. mail) or 615 E. Michigan Street, Third
Floor, Milwaukee, WI 53202 (for requests sent via overnight
courier). The request should include the following: the name of
the account, the account number, the number of shares or the
dollar value of shares to be redeemed and whether proceeds are to
be sent by mail or wire, and if by wire, giving the wire
instructions; (ii) duly endorsed share certificates, if any have
been issued for the shares redeemed; (iii) any signature
guarantees that are required as described below; and (iv) any
additional documents which might be required for redemptions by
corporations, executors, administrators, trustees, guardians or
other similar shareholders. Except as otherwise directed by the
Fund in its discretion, the Transfer Agent will not redeem shares
until it has received all necessary documents; corporate and
institutional investors and fiduciaries should contact the
Transfer Agent to ascertain what additional documentation is
required.
May I send redemption requests to the Fund?
Please do not send redemption requests to the Fund. The Fund must
forward all redemption requests to the Transfer Agent and
instructions for redemption will not be effective until received
by the Transfer Agent. Shares redeemed will be priced at the net
asset value per share next determined after acceptance of a
complete redemption request by the Transfer Agent. Redemption
requests received by the Transfer Agent after the close of the
NYSE (currently 4:00 p.m., Eastern time) will be treated as though
received on the next business day. The Transfer Agent cannot
accept redemption requests that specify a particular date for
redemption or special redemption conditions.
When are signature guarantees required?
Except as indicated below, all of the signatures on any request
for redemption or share certificates tendered for redemption must
be guaranteed by a bank, broker-dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency or savings association. A notary public cannot
provide a signature guarantee.
The Fund will waive the signature guarantee requirement on a
redemption request that instructs that the proceeds be sent by
mail if all of the following conditions apply: (i) the redemption
is for $10,000 or less; (ii) the redemption check is payable to
the shareholder(s) of record; (iii) the redemption
<PAGE>
14
check is mailed to the shareholder(s) at the address of record;
and (iv) no shares represented by certificate are being redeemed.
Share certificates submitted for redemption or exchange must be
properly endorsed and contain signature guarantees. In addition,
the Fund in its discretion may waive the signature guarantee for
employees and affiliates of the Manager, the Distributor and the
Administrator, and family members of the foregoing. The
requirement of a guaranteed signature protects against an
unauthorized person redeeming shares and obtaining the redemption
proceeds.
How do I redeem shares by telephone?
Shareholders who have completed the section of the Fund's
Application entitled "Shareholder Privileges" are eligible to make
telephone requests for redemptions (without charge) and may do so
by telephoning the Transfer Agent at (800) 797-0773. A shareholder
who has not completed the Shareholder Privileges section of the
Application but who wishes to become eligible to make telephone
redemptions, should designate a change in such instructions by
writing to the Transfer Agent. Please note that such changed
instructions must (i) be signed by the registered owner(s) of the
shares exactly as the account is registered and signature
guaranteed, and (ii) include the name of the account, the account
number and the name of the Fund.
Telephone redemptions cannot be accepted with respect to shares
represented by certificates or for IRA accounts. In such cases,
redemption can only be made by mail as described above under
"Redemption of Shares -- How do I redeem shares by mail?"
Telephone requests for redemptions (or exchanges -- see "Exchange
Privilege" above) received before the close of business on the
NYSE (currently 4:00 p.m., Eastern time) on a business day will be
priced and processed as of the close of business on that day;
requests received after that time will be processed as of the
close of business on the next business day.
As noted above, the Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine
and may, along with their service contractors, be liable for a
failure to use such procedures. See "Exchange Privilege--How can I
make exchanges by telephone?" above.
Shareholders should be aware that, at times, the volume of
telephone calls or other factors beyond the Fund's control may
make it difficult to reach the Transfer Agent by telephone. This
will be true particularly during periods of drastic economic or
market changes. In the event of difficulty in reaching the
Transfer Agent, shareholders should continue to telephone or
utilize the written redemption procedures described above under
"Redemption of Shares -- How do I redeem shares by mail?"
The Fund reserves the right to terminate the telephone redemption
privilege at any time and, if so terminated, will provide the
shareholders with written notice of such termination. The Fund
reserves the right to suspend temporarily telephone redemptions in
emergency circumstances or in cases where, in the judgment of the
Fund, continuation of the privilege would be detrimental to the
Fund and its shareholders as a whole. Such temporary suspension
can be without prior notification.
What options do I have in receiving redemption proceeds?
Redemption proceeds may be sent to shareholders by mail or by wire
as described below. Wire redemptions will only be made if the
Transfer Agent has received appropriate written wire instructions.
Because of fluctuations in the value of the Fund's portfolio, the
net asset value of shares redeemed may be more or less than the
investor's cost.
<PAGE>
15
Redemption By Mail. In the case of shareholders who request that
their redemption proceeds be sent by mail, the Transfer Agent
mails checks for redemption proceeds typically within one or two
business days, but no later than seven days, after it receives the
request and all the necessary documents.
Redemption By Wire. In the case of shareholders who request that
their redemption proceeds be sent by bank wire, the Transfer Agent
typically wires redemption proceeds the next business day, but no
later than seven days, after it receives the request and all
necessary documents.
Wire redemptions will be made only if the Transfer Agent has
received appropriate written instructions from the shareholder
either on the Fund's Application or by separate letter. A
shareholder who has not indicated wire instructions on the
Application, but would like to have redemption proceeds wired to a
particular bank for each redemption request, should so designate
by writing to the Transfer Agent. Please note that such
instructions must (i) be signed by the registered owner(s) of the
shares exactly as the account is registered and signature
guaranteed, and (ii) include the name of the account, the account
number and the name of the Fund.
A shareholder who would like to change the wire instructions
indicated on the Application should designate a change in such
instructions by writing to the Transfer Agent and complying with
the requirements set forth in the preceding paragraph. There is a
$1,000 minimum on redemption proceeds by bank wire. Shareholders
who effect redemptions by wire transfer will pay a $12.00 wire
transfer fee to the Transfer Agent to cover costs associated with
the transfer. In addition, a shareholder's bank may impose a
charge for receiving wires.
When would the payment of proceeds be delayed?
Please note that shares paid for by personal, corporate or
government check cannot be redeemed before the Fund has reasonable
belief that the check has cleared, which may take up to fifteen
days after payment of the purchase price. This delay can be
avoided by paying for shares by certified check or bank-wire. An
investor will be notified promptly by the Transfer Agent if a
redemption request cannot be accepted.
Would my account ever be involuntarily redeemed?
Due to the relatively high cost to the Fund of maintaining small
accounts, we ask you to maintain an account balance of at least
$5,000. If your balance is below $5,000 for three months or longer
due to redemptions, we have the right to close your account after
giving you 60 days in which to increase your balance.
INFORMATION ON DISTRIBUTIONS AND TAXES
DIVIDENDS AND OTHER DISTRIBUTIONS GENERALLY
Dividend and capital gain distributions are reinvested in
additional Fund shares in your account unless you select another
option on your Application. The advantage of reinvesting
distributions arises from compounding; that is, you receive
dividends and capital gain distributions on an increasing number
of shares. Distributions not reinvested are paid by check or
transmitted to your bank account.
INCOME DIVIDENDS
The Fund declares and pays dividends (if any) annually.
<PAGE>
16
CAPITAL GAINS
A capital gain or loss is the difference between the purchase and
sale price of a security. If the Fund has net capital gains for
the year (after subtracting any capital losses), they are usually
declared and paid in December to shareholders of record on a
specified date that month.
TAX INFORMATION
You need to be aware of the possible tax consequences when: (1)
the Fund makes a distribution to your account; (2) you sell Fund
shares; or (3) you exchange shares of the Fund for shares of one
of the other O'Shaughnessy Funds or the Portico Money Market Fund.
The following summary does not apply to retirement accounts, such
as IRAs, which are tax-deferred until you withdraw money from
them.
Will I pay taxes on redemptions or exchanges of Fund shares?
When you sell or exchange shares in the Fund, you may realize a
gain or loss. Unless you are a dealer in securities, such gain or
loss will be capital gain or loss. In addition, such gain or loss
will be a long-term capital gain or loss if you hold your shares
for more than one year, or short-term capital gain or loss if you
hold your shares for one year or less.
A loss recognized on a sale or exchange of shares of the Fund
will be disallowed if other Fund shares are acquired (whether
through automatic reinvestment of dividends or otherwise) within a
61-day period beginning 30 days before and ending 30 days after
the date that the shares are disposed of. In such case, the basis
of the shares acquired will be adjusted to reflect the disallowed
loss. In addition, if you realize a loss on the sale or exchange
of Fund shares held six months or less, your short-term loss
recognized is reclassified to long-term to the extent of any
long-term capital gain distribution received.
Will I pay taxes on Fund distributions?
Distributions of ordinary income and short-term capital gains are
taxable as ordinary income. The dividends of the Fund will be
eligible for the 70% deduction for dividends received by
corporations only to the extent the Fund's income consists of
dividends paid by U.S. corporations. Long-term gains are taxable
at the applicable long-term gain rate. The gain is long- or
short-term depending on how long the Fund held the securities, not
how long you held shares in the Fund.
What is the tax effect of the Fund's investment in foreign securities?
Pursuant to the Fund's investment objectives, the Fund may invest
in foreign securities. Foreign taxes may be paid by the Fund as a
result of tax laws of countries in which the Fund may invest.
Income tax treaties between certain countries and the United
States may reduce or eliminate such taxes. It is impossible to
determine in advance the effective rate of foreign tax to which
the Fund will be subject, since the amount of Fund assets to be
invested in various countries is not known. Because the Fund
limits its investment in foreign securities, shareholders will not
be entitled to claim foreign tax credits with respect to their
share of foreign taxes paid by the Fund on income from investments
of foreign securities held by the Fund.
What are the tax effects of buying shares before a distribution?
If you buy shares shortly before or on the "record date" -- the
date that establishes you as the person to receive the upcoming
distribution -- you will receive, in the form of a taxable
distribution, a portion of the money you just invested. Therefore,
you may wish to find out the Fund's record date(s) before
<PAGE>
17
investing. Of course, a Fund's share price may, at any time,
reflect undistributed capital gains or unrealized appreciation.
The foregoing is a general and abbreviated summary of the
applicable provisions of the Code and Treasury regulations
presently in effect, and does not address the state and local tax
consequences of an investment in the Fund. For the complete
provisions, reference should be made to the pertinent Code
sections and the Treasury regulations promulgated thereunder. The
Code and the Treasury regulations are subject to change by
legislative or administrative action either prospectively or
retroactively. For additional information regarding federal income
tax consequences of an investment in the Fund, see "Additional
Information About Dividends and Taxes" in the Statement of
Additional Information."
Shareholders are urged to consult their own tax advisers
regarding specific questions as to Federal, state, local or
foreign taxes. Foreign investors should consider applicable
foreign taxes in their evaluation of an investment in the Fund.
PERFORMANCE INFORMATION
This section should help you understand the terms used to describe
Fund performance. The Fund's annual report will contain additional
performance information and will be available upon request and
without charge.
What is total return?
This tells you how much an investment in the Fund has changed in
value over a given time period. It reflects any net increase or
decrease in the share price and assumes that all dividends and
capital gains (if any) paid during the period were reinvested in
additional shares. Including reinvested distributions means that
total return numbers include the effect of compounding, i.e., you
receive income and capital gain distributions on an increasing
number of shares.
Advertisements for the Fund may include cumulative or compound
average annual total return figures, which may be compared with
various indices, other performance measures, or other mutual
funds.
What is cumulative total return?
This is the actual rate of return on an investment for a specified
period. A cumulative return does not indicate how much the value
of the investment may have fluctuated between the beginning and
the end of the period specified.
What is average annual total return?
This is always hypothetical. Working backward from the actual
cumulative return, it tells you what constant year-by-year return
would have produced the actual, cumulative return. By smoothing
out all the variations in annual performance, it gives you an idea
of the investment's annual contribution to your portfolio provided
you held it for the entire period in question.
<PAGE>
18
NET ASSET VALUE
The price at which the Fund's shares are purchased or redeemed is
the Fund's next determined net asset value per share. The net
asset value per share is calculated as of the close of the NYSE
(currently 4:00 p.m., Eastern time) on each day that the NYSE is
open for business and on each other day in which there is a
sufficient degree of trading in the Fund's portfolio securities
that the current net asset value of the Fund's shares may be
materially affected by changes in the value of the Fund's
portfolio securities.
How is net asset value determined?
The Fund determines the net asset value per share by subtracting
the Fund's total liabilities from the Fund's total assets (the
value of the securities the Fund holds plus cash and other
assets), dividing the remainder by the total number of shares
outstanding, and adjusting the result to the nearest full cent.
How are the securities held in the Fund's portfolio valued?
Securities listed on the NYSE, American Stock Exchange or other
national exchanges are valued at the last sale price on such
exchange on the day as of which the net asset value per share is
to be calculated. Over-the-counter securities included in the
NASDAQ National Market System are valued at the last sale price.
If there is no sale on a particular security on such day, it is
valued at the mean between the bid and asked prices. Other
securities, to the extent that market quotations are readily
available, are valued at market value in accordance with
procedures established by the Board of Directors. Any securities
and other assets, for which market quotations are not readily
available are valued in good faith in a manner determined by the
Directors of the Fund best to reflect their fair value.
OTHER SHAREHOLDER SERVICES
Automatic Investment Plan
An Automatic Investment Plan allows a shareholder to make
automatic monthly or quarterly investments into a Fund account, in
amounts of at least $100, by having the Transfer Agent draw an
automatic clearing house (ACH) debit electronically against a
shareholder's checking or savings account. A shareholder may
establish an Automatic Investment Plan by completing the
appropriate section on the Application for new accounts or by
calling the Transfer Agent at (800) 797-0733 and requesting an
Automatic Investment Plan Application for existing accounts. A
shareholder should be aware that a signed Application should be
received by the Transfer Agent at least 15 business days prior to
the initial transaction. The Transfer Agent will assess a $20 fee
if the automatic investment cannot be made due to insufficient
funds, stop payment, or for any other reason. The Fund cannot
guarantee acceptance by your bank.
Systematic Cash Withdrawal Plan
When an account of $10,000 or more is opened or when an existing
account reaches that size, a shareholder may participate in the
Fund's Systematic Cash Withdrawal Plan by filling out the
appropriate part of the Application. Under this plan, a
shareholder may receive (or designate a third party to receive) a
monthly or quarterly check in a stated amount of not less than
$50. Fund shares will be redeemed as necessary to meet withdrawal
payments. All participants must elect to have their dividends and
capital gain distributions reinvested automatically. A shareholder
who decides later to use this service should call the Transfer
Agent at (800) 797-0773.
<PAGE>
19
Reports to Shareholders
Each time a shareholder invests, redeems, transfers or exchanges
shares, or receives a distribution, the Fund will send a
confirmation of the transaction which will include a summary of
all of the shareholder's most recent transactions.
At such time as prescribed by law, the Fund will send to each
shareholder the following reports (if they are applicable), which
may be used in completing U.S. income tax returns:
Form 1099-DIV Report taxable distributions during the
preceding calendar year. (If a shareholder did
not receive taxable distributions in the
previous year, such shareholder will not be sent
a 1099-DIV.)
Form 1099-B Reports redemption proceeds paid (including
those resulting from exchanges) during the
preceding calendar year.
Form 1099-R Report distributions from retirement plan
accounts during the preceding calendar year
Form 5498 Reports contributions to IRAs for the previous
calendar year.
If an investor's shares are held by an outside broker in an
omnibus account, it is the responsibility of such outside broker
to provide shareholders whose shares are held in the omnibus
account with any reports prescribed by law which the shareholders
require in order to complete their U.S. income tax returns.
Shareholders will also receive annual and semi-annual reports
including the financial statements of the Funds for the respective
periods.
Retirement Plans
Eligible investors may invest in the Fund under the following
prototype retirement plans:
*Individual Retirement Account (IRA)
*Simplified Employee Pension (SEP) for sole proprietors,
partnerships and corporations
*Profit-Sharing and Money Purchase Pension Plans for corporations
and their employees The minimum initial investment is $500 and the
minimum subsequent investment is $50 for retirement plans.
Automatic Reinvestment Plan
For the convenience of investors, all dividends and distributions
are automatically reinvested in full and fractional shares of the
Fund at the net asset value per share at the close of business on
the record date, unless otherwise specified on the Application or
requested by a shareholder in writing. If the Transfer Agent does
not receive a written request for subsequent dividends and/or
distributions to be paid in cash at least three full business days
prior to a given record date, the dividends and/or distributions
to be paid to a shareholder will be reinvested. If a shareholder
elects to receive dividends and distributions in cash and the U.S.
Postal Service cannot deliver the checks, or if the checks remain
uncashed for six months, the shareholder's distribution checks
will be reinvested into the shareholder's account at the then
current net asset value.
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No person has been authorized to give any information or to
make any representations, other than those contained in this
Prospectus, and, if given or made, such other information or
representations must not be relied upon as having been authorized
by the Fund, the Investment Adviser, the Administrator or the
Distributor. This Prospectus does not constitute an offering in
any state in which such offering may not lawfully be made.
INVESTMENT MANAGER
O'Shaughnessy Capital Management, Inc.
60 Arch Street
Greenwich, Connecticut 06830
ADMINISTRATOR
Investment Company Administration Corporation
4455 E. Camelback Road, Suite 261 E
Phoenix, Arizona 85018
DISTRIBUTOR
First Fund Distributors, Inc.
4455 E. Camelback Road, Suite 261 E
Phoenix, Arizona 85018
TRANSFER AGENT
Firstar Trust Company
615 E. Michigan Street
Milwaukee, Wisconsin 53202
AUDITORS
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, New York 10017-2416
LEGAL COUNSEL
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
<PAGE>
O'SHAUGHNESSY
60 ARCH STREET
GREENWICH CT 06830
AGGRESSIVE GROWTH FUND
800-797-0773
[] []
BUILDING
NEW STANDARDS
FOR
INVESTMENT
SUCCESS
O'Shaughnessy Funds, Inc. O'Shaughnessy Funds, Inc.
