As filed with the Securities and Exchange Commission on
September 16, 1996
Securities Act File No. 33-
Investment Company Act File No. 811-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
X
Pre-Effective Amendment No.
Post-Effective Amendment No.
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
Amendment No.
INSIGHT PREMIER FUNDS
(Exact Name of Registrant as Specified in Charter)
One Exchange Place, Boston, MA 02109
Registrant's Telephone Number, including Area Code: (617)
573-1557
Name and Address of Agent for Service: Copies to:
Gail A. Hanson, Esq. Pamela Wilson, Esq.
Insight Premier Funds Hale and Dorr
One Exchange Place 60 State Street
Boston, MA 02109 Boston, MA 02109
Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement
becomes effective.
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
on pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
on pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on __________ pursuant to paragraph (a)(2) of
Rule 485.
Page 1 of __ Pages
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF
1933
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
Being Being Price Per Offering Registration
Registered Registered Unit Price Fee
Shares of Beneficial
Interest, $.001
par value Indefinite* * Indefinite* $500
* An indefinite number of shares of beneficial interest
of the Registrant is being registered by this Registration
Statement pursuant to Rule 24f-2 under the Investment
Company Act of 1940.
Registrant hereby amends this Registration Statement
on such date or dates as may be necessary to delay its
effective date until Registrant files a further amendment
that specifically states that this Registration Statement
will thereafter become effective in accordance with Section
8(a) of the Securities Act of 1933, as amended, or until
this Registration Statement becomes effective on such date
as the Commission, acting pursuant to Section 8(a) of the
Securities Act of 1933, as amended, may determine.
INSIGHT PREMIER FUNDS
FORM N-1A
CROSS REFERENCE SHEET
PURSUANT TO RULE 495 (a)
Part A.
Item No. Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Expense Information
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Investment
Objectives and
Policies;
Additional
Information
5. Management of the Fund Management of the Funds
5A. Management's Discussion of Not Applicable
Fund Performance
6. Capital Stock and Other Securities How to Purchase
Shares; How to
Redeem Shares;
Determination of
Net Asset Value;
Dividends,
Distributions and
Taxes; Additional
Information
7. Purchase of Securities Being Offered How to
Purchase
Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Not Applicable
Part B. Statement of Additional
Item No. Information Caption
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Investment
Objectives and
Policies;
Description of the
Trust; Additional
Information
13. Investment Objectives and Policies Investment
Objectives and
Policies;
Investment
Restrictions
14. Management of the Registrant Management of the Trust
and the Funds
15. Control Persons and Principal Management of the Trust
Holders of Securities and the Funds
16. Investment Advisory and Other Services Management
of the Trust
and the
Funds;
Custodian,
Counsel and
Independent
Accountants;
Portfolio
Transactions
17. Brokerage Allocation Portfolio Transactions
18. Capital Stock and Other Securities Description of the
Trust
19. Purchase, Redemption and Pricing of Purchase,
Securities Being Offered Redemption
and
Determination
of Net Asset Value
20. Tax Status Dividends, Distributions and
Taxes
21. Underwriters Management of the Trust and
the Funds
22. Calculation of Performance Data Performance
Information
23. Financial Statements Not Applicable
PART A
INSIGHT PREMIER FUNDS
Insight Growth Fund
Insight Moderate Growth Fund
Insight Conservative Allocation Fund
Prospectus
November __, 1996
Insight Premier Funds is a no-load open-end diversified
investment company that currently includes three series:
Insight Growth Fund, Insight Moderate Growth Fund and
Insight Conservative Allocation Fund. Each fund pursues
the investment objectives outlined below by investing in
a diversified portfolio consisting primarily of mutual
funds. The primary focus of each fund is to develop an
appropriate asset allocation strategy and to select from
the wide range of mutual funds currently available.
The investment adviser to the funds is Insight
Management, Inc. ("Insight Management"). Insight
Management has extensive experience in managing mutual
fund portfolios for high net worth individuals and
corporations with minimum $250,000 account sizes.
Insight Management currently manages over 1,000 client
accounts with assets totaling approximately $670 million.
As the funds' investment adviser, Insight Management may
select from virtually all publicly available mutual
funds. Due to its size and buying power, many mutual
funds that would otherwise be sold with a front-end sales
charge may be available to the Insight Premier funds at
net asset value. The funds will not purchase shares of
open-end mutual funds if a front-end sales charge would
be imposed on such purchase. The funds' strategy of
investing in other mutual funds results in greater
expenses than shareholders would incur if they invested
directly in mutual funds.
Insight Growth Fund seeks long-term growth of capital
without regard to current income and with a volatility
level approximating that of the S&P 500 Index.
Insight Moderate Growth Fund seeks long-term growth of
capital without regard to current income and with a
volatility level below that of the S&P 500 Index.
Insight Conservative Allocation Fund seeks enough
long-term growth of capital to maintain purchasing power
in the face of inflation with a volatility level below
that of the S&P 500 Index.
Shares of the funds are not deposits or obligations of or
guaranteed or endorsed by, any bank and are not federally
insured by the Federal Deposit Insurance Corporation, the
Federal Reserve Board or any other agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This prospectus contains information about the funds that
you should consider before investing. Please read the
prospectus carefully and retain it for future reference.
A statement of additional information dated November ,
1996 has been filed with the Securities and Exchange
Commission. The statement of additional information
contains more information about the funds and is
incorporated by reference into this prospectus. The
statement of additional information is available without
charge and can be obtained by writing the distributor at
the address shown on the back cover or calling the
telephone number shown below.
The principal distributor (the "Distributor") of the
funds' shares is Insight Brokerage Services, Inc. For
further information, please call the Insight Premier
funds toll free at 800-___-____.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<C> <S>
Expense Information How to Redeem Shares
Investment Objectives and Policies Exchange Privilege
Management of the Funds Shareholder Services
Determination of Net Asset Value Dividends, Distributions and Taxes
How to Purchase Shares Additional Information
</TABLE>
EXPENSE INFORMATION
<TABLE>
<CAPTION>
<C> <S> <S> <S>
Conservative
Growth Moderate Allocation
Fund Growth Fund Fund
Shareholder Transaction Expenses
Sales Load Imposed on
Purchases None None None
Sales Load Imposed on
Reinvested Dividends None None None
Deferred Sales Load None None None
Exchange Fee None None None
Redemption Fee1 None None None
Annual Fund Operating Expenses
(As a Percentage of Average Net Assets)
Advisory fees2 0.75% 0.75% 0.75%
Distribution (Rule 12b-1)
fees None None None
Other expenses (after expense
limitation)3 0.25% 0.25% 0.25%
Total fund operating
expenses (after expense
limitation)3 1.00% 1.00% 1.00%
</TABLE>
1 A transaction fee of $10.00 may be charged for
redemption proceeds paid by wire.
2 An Insight Premier fund may invest in shares of an
underlying mutual fund that (1) makes payments of Rule
12b-1 revenues with respect to shares held by the Insight
Premier fund or (2) whose investment adviser is willing
to share a portion of the underlying fund's advisory fee
attributable to underlying fund shares held by the
Insight Premier fund. Any Rule 12b-1 or revenue sharing
payments made with respect to shares of any underlying
fund will be applied to the advisory fees owed to Insight
Management by the affected Insight Premier fund.
3 Insight Management has voluntarily agreed to limit
each fund's other expenses to 0.25% of the fund's average
daily net assets. Without this expense limitation and
without the revenues from underlying funds (described in
note 2 above), the estimated other expenses and total
fund operating expenses, respectively, of each fund would
be -- Growth Fund: 0.26% and 1.01%; Moderate Growth Fund:
0.31% and 1.06 %; and Conservative Allocation Fund: 0.44%
and 1.19%.
Example
You would pay the following expenses on a hypothetical
$1,000 investment assuming (1) a 5% annual return and (2)
redemption at the end of each time period.
<TABLE>
<CAPTION>
<C> <S> <S> <S>
Conservative
Growth Moderate Allocation
Fund Growth Fund Fund
1 year $10 $10 $10
3 years $32 $32 $32
</TABLE>
The purpose of the above tables is to help you understand
the various costs and expenses that investors in the
funds will bear, directly or indirectly. These expenses
are based on the estimated expenses for each fund's first
fiscal year, after any applicable expense limitation, and
should not be considered representative of past or future
expenses. Actual expenses may be greater or less than
those shown. Also, while the example assumes a 5% annual
return, a fund's actual performance may vary and may
result in a return greater or less than 5%.
INVESTMENT OBJECTIVES AND POLICIES
Insight Growth Fund, Insight Moderate Growth Fund and
Insight Conservative Allocation Fund are diversified
mutual funds. Each fund has its own investment
objective, policies and practices, as described below.
Each fund pursues its investment objective by investing
primarily in other mutual funds, but may also invest
directly in securities that are suitable investments for
that fund. There is no guarantee that a fund will be
able to achieve its objectives.
Insight Growth Fund
Investment Objective
The investment objective of Insight Growth Fund is
long-term growth of capital without regard to current
income. By using an active asset allocation strategy,
the fund seeks reduced volatility (risk) over a full
market cycle to a level approximating that of the S&P 500
Index. However, at any particular time, the fund's
volatility may be higher or lower than its target
volatility. Under normal market conditions, at least 65%
of the fund's total assets will be invested in open-end
and closed-end, U.S. and international stock funds. The
fund may invest up to 35% of total assets in fixed income
funds or directly in stocks, bonds, money market
instruments, options, futures contracts and other
permissible investments.
Who should invest in the fund?
Insight Growth Fund is designed for investors seeking
growth of capital and a volatility level approximating
that of the S&P 500 Index. These investors should have a
minimum five year time horizon and no need for current
income.
Insight Moderate Growth Fund
Investment Objective
The investment objective of Insight Moderate Growth Fund
is long-term growth of capital without regard to current
income. By using an active asset allocation strategy,
the fund seeks reduced volatility (risk) over a full
market cycle to a level approximately 20% below that of
the S&P 500 Index. However, at any particular time, the
fund's volatility may be higher or lower than its target
volatility. Under normal market conditions, at least 65%
of the fund's total assets will be invested in open-end
and closed-end, growth and growth and income funds.
These may include both U.S. and international funds. The
fund may invest up to 35% of total assets in fixed income
funds or directly in stocks, bonds, money market
instruments, options, futures contracts and other
permissible investments.
Who should invest in the fund?
Insight Moderate Growth Fund is designed for investors
seeking growth of capital and a volatility level below
that of the S&P 500 Index. These investors should have a
minimum 3 to 5 year time horizon and modest income needs.
Insight Conservative Allocation Fund
Investment Objective
The investment objective of Insight Conservative
Allocation Fund is enough long-term growth of capital to
maintain purchasing power in the face of inflation.
Current income is a secondary objective. By using an
active asset allocation strategy, the fund seeks reduced
volatility (risk) over a full market cycle to a level
approximately 30% below that of the S&P 500 Index.
However, at any particular time, the fund's volatility
may be higher or lower than its target volatility. The
fund expects, under normal market conditions, to invest
at least 40% of its total assets in open-end and closed-
end, growth and growth and income funds. These may
include both U.S. and international funds. In addition,
at least 20% of the fund's total assets will be invested
in income producing funds or securities. The fund may
invest up to 40% of its total assets directly in stocks,
bonds, money market instruments, options, futures
contracts and other permissible investments.
Who should invest in the fund?
Insight Conservative Allocation Fund is designed for
investors seeking enough long-term growth of capital to
offset the loss of purchasing power due to inflation, as
well as current income. Although not without risk, the
fund may be suitable for conservative investors willing
to sacrifice some growth potential in exchange for less
volatility.
All Funds: Characteristics and Risks of Investment
Securities and Practices
Insight Management's Investment Process. Insight
Management intends to construct for each Insight Premier
fund a diversified portfolio in a risk controlled manner
consistent with the fund's investment objectives.
Insight Management uses a multi-faceted approach and
relies on fundamental valuations and analysis to make
investment decisions for the funds. Insight Management
identifies asset classes and investment styles that
appear to be undervalued relative to their earnings
potential or other characteristics. Insight Management
seeks to identify and avoid industries or types of
securities that appear overvalued. In selecting
investments in other mutual funds, Insight Management
considers a variety of quantitative factors such as
historical total returns, style analysis, volatility
levels, expenses and underlying fund size. In addition
to quantitative analysis techniques, a variety of
qualitative factors may be used to identify appropriate
funds for investment. These may include interviews with
underlying fund managers and their research staff.
Insight Management will combine the underlying funds in
such a manner as to achieve an asset allocation mix that
reflects its views of the financial markets as well as
the objectives of each fund.
Investments in Other Mutual Funds. Each fund will invest
primarily in the shares of open-end and closed-end funds
(sometimes referred to in this prospectus as "mutual
funds"). Mutual funds pool the investments of many
investors and use professional management to select and
purchase securities and other investments for their
portfolios. The underlying funds in the Insight Premier
funds' portfolios may invest in any or all of the
investments described in this prospectus and will expose
the Insight Premier funds to all of the risks that would
be associated with the direct ownership of these
investments. The underlying funds may be authorized by
their investment policies to engage in investment
practices that the Insight Premier funds do not engage in
directly.
As the funds' investment adviser, Insight Management may
select from virtually all publicly available open-end and
closed-end funds. Due to its size and buying power, many
mutual funds that would otherwise be sold with a front-
end sales charge may be available to the Insight Premier
funds at net asset value.
Investing in mutual funds through the Insight Premier
funds involves additional and duplicative expenses and
certain tax results that would not be present if you were
to make a direct investment in the underlying mutual
funds. By investing in mutual funds indirectly through
the funds, you bear not only your proportionate share of
the expenses of the funds (including operating costs and
investment advisory and administrative fees) but also,
indirectly, similar expenses of the underlying funds.
Investment decisions by the investment advisers of the
underlying funds are made independently of Insight
Management and the Insight Premier funds. At any
particular time, one underlying fund may be purchasing
shares of an issuer whose shares are being sold by
another underlying fund. As a result, an Insight Premier
fund would incur indirectly certain transaction costs
without accomplishing any investment purpose. In
addition, an underlying fund may incur service fees or
expenses related to the distribution of the underlying
fund's shares. As a shareholder of the Insight Premier
funds, you may receive taxable capital gains
distributions to a greater extent than if you invested
directly in the underlying funds.
A fund, together with the other Insight Premier funds,
Insight Management and any of their affiliated persons,
may purchase only up to 3% of the total outstanding
securities of an underlying fund. Accordingly, each
fund's ability to invest fully in shares of an underlying
fund is limited to the extent that the other Insight
Premier funds, Insight Management or their affiliates
also hold shares of the same underlying fund.
Equity Securities. The funds and the underlying funds in
their portfolios invest in equity securities of U.S. and
foreign companies. Equity securities consist of
exchange-traded, over-the-counter ("OTC") and unlisted
common and preferred stocks, warrants, rights,
convertible debt securities, trust certificates, limited
partnership interests and equity participations. The
prices of the funds' equity investments will change in
response to stock market movements.
Warrants and Convertible Securities. Warrants acquired
by a fund (or an underlying fund in its portfolio) will
entitle it to buy common stock from the issuer at a
specified price and time. Warrants are subject to the
same market risks as stocks, but may be more volatile in
price. A fund's investment in warrants will not entitle
it to receive dividends or exercise voting rights and
will become worthless if the warrants cannot be
profitably exercised before their expiration dates.
Convertible debt securities and preferred stock acquired
by a fund will entitle it to acquire the issuer's stock
by exchange or purchase. Convertible securities are
subject both to the credit and interest rate risks
associated with fixed income securities and to the stock
market risk associated with equity securities.
Fixed Income Securities. Each fund (and the underlying
funds in its portfolio) may invest, to the extent
permitted by its investment policies, in any type of
fixed income security. Fixed income securities include:
(1) securities issued or guaranteed by the U.S.
government and any of its agencies and instrumentalities
("U.S. government securities") and custodial receipts
based on U.S. government securities; (2) [dollar
denominated] securities issued or guaranteed by a foreign
government, any of its political subdivisions,
authorities, agencies and instrumentalities or
supranational entities such as the World Bank; (3) debt
securities issued by U.S. and foreign companies; (4)
certificates of deposit, bankers' acceptances and time
deposits issued by or maintained at U.S. and foreign
banks; (5) commercial paper; and (6) mortgage-backed,
asset-backed, indexed and derivative securities.
The value of fixed income securities, including U.S.
government securities, varies inversely with changes in
interest rates. When interest rates decline, the value
of fixed income securities tends to rise. When interest
rates rise, the value of fixed income securities tends to
decline. The market prices of zero coupon, delayed
coupon and payment-in-kind securities are affected to a
greater extent by interest rate changes and tend to be
more volatile than the market prices of securities
providing for regular cash interest payments.
In addition, fixed income securities are subject to the
risk that the issuer may default on its obligation to pay
principal and interest. The value of fixed income
securities may also be reduced by the actual or perceived
deterioration in an issuer's creditworthiness, including
credit rating downgrades.
Fixed income securities may be subject to both call
(prepayment) risk and extension risk. Call risk is the
risk that an issuer of a security will exercise its right
to pay principal on an obligation earlier than scheduled.
Early principal payments tend to be made during periods
of declining interest rates. This forces the affected
fund to reinvest the unanticipated cash flow in lower
yielding securities. Extension risk is the risk that an
issuer will exercise its right to pay principal later
than scheduled. This typically happens during periods of
rising interest rates and prevents the affected fund from
reinvesting in higher yielding securities. Unscheduled
principal prepayments and delays in payment can both
reduce the value of an affected security. Unlike most
conventional fixed income securities, mortgage-backed and
asset-backed securities are generally subject to both
call (prepayment) risk and extension risk.
High Yield "Junk" Bonds. Each fund will not invest
directly more than 35% of its total assets in below
investment grade fixed income securities, which are often
referred to as "junk bonds." Junk bonds are securities
rated below the top 4 bond rating categories of Standard
& Poor's Ratings Group, Moody's Investors Service, Inc.
or another nationally recognized statistical rating
organization or, if unrated, determined by the investment
adviser to be of comparable credit quality. There is no
minimum credit quality standard for fixed income
securities held by the Insight Premier funds or by the
underlying funds.
The prices of high yield bonds can be very volatile and
may decline more steeply following an economic downturn
or increase in interest rates than would the prices of
investment grade debt securities. An adverse economic or
interest rate climate may also impair the ability of high
yield bond issuers to repay principal and interest,
resulting in a default or credit downgrade that may
substantially reduce the yield on, or value of, a fund's
investment.
Repurchase Agreements. Each fund (and the underlying
funds in its portfolio) may, to the extent permitted by
its investment policies, enter into repurchase
agreements. A repurchase agreement consists of the sale
to a fund of a U.S. government security or other debt
obligation together with an agreement to have the selling
counterparty repurchase the security at a specified
future date and repurchase price. If a repurchase
agreement counterparty defaults on its repurchase
obligation, a fund may, under some circumstances, be
limited or delayed in disposing of the repurchase
agreement collateral, which could result in a loss to the
fund.
Defensive Investing. For temporary defensive purposes
under abnormal market conditions, Insight Growth Fund and
Insight Moderate Growth Fund may each may hold or invest
more than 35% of total assets in cash, investment grade
fixed income securities, repurchase agreements and/or
money market fund shares. Insight Conservative
Allocation Fund may hold more than 35% of total assets in
these securities regardless of market conditions.
Restricted and Illiquid Securities. Each fund may invest
up to 15% of its net assets in illiquid securities,
including certain restricted and private placement
securities. It may be difficult to dispose of illiquid
securities quickly or at a price that fully reflects
their fair value. Restricted securities that are
eligible for resale in reliance on Rule 144A under the
Securities Act of 1933 and commercial paper offered under
Section 4(2) of the Act are not subject to the funds' 15%
limit on illiquid investments, if they are determined to
be liquid.
An underlying fund whose shares are held by an Insight
Premier fund is obligated to redeem these shares only in
an amount up to 1% of the underlying fund's outstanding
securities during any period of less than 30 days.
Accordingly, a fund's holdings of underlying fund shares
representing more than 1% of the underlying fund's
outstanding securities may be subject to the 15%
limitation on illiquid investments. However, the funds
have reserved the right to pay redemption requests in
portfolio securities and therefore, these positions may
be treated as liquid.
An underlying fund may elect to pay the proceeds of a
redemption by an Insight Premier fund through a
distribution in kind of securities of portfolio
securities, instead of cash. If a fund receives
securities that are not considered by Insight Management
to be desirable investments, the fund will incur
additional transaction costs in disposing of the
securities.
Foreign Investments. Each fund (and the underlying funds
in its portfolio) may, to the extent permitted by its
investment policies, invest in securities of foreign
issuers. These investments may be in the form of
American Depositary Receipts ("ADRs") or similar
securities representing interests in an underlying
foreign security. ADRs are not necessarily denominated
in the same currency as the underlying foreign
securities. If an ADR is not sponsored by the issuer of
the underlying foreign security, the institution issuing
the ADR may have reduced access to information about the
issuer.
Investments in foreign securities involve risks in
addition to those associated with investments in the
securities of U.S. issuers. These risks include less
publicly-available financial and other information about
foreign companies; less rigorous securities regulation;
the potential imposition of currency controls, foreign
withholding and other taxes; and war, expropriation or
other adverse governmental actions. Foreign equity
markets may be less liquid than United States markets and
may be subject to delays in the settlement of portfolio
transactions. Brokerage commissions and other
transaction costs in foreign markets tend to be higher
than in the United States. The value of foreign
securities denominated in a foreign currency will vary in
accordance with changes in currency exchange rates, which
can be very volatile.
Mortgage-Backed, Asset-Backed, Indexed and Derivative
Securities. Each fund (and the underlying funds in its
portfolio) may invest in mortgage-backed, asset-backed
and indexed securities. Some of these securities are
considered to be derivative securities. Mortgage-backed
securities represent participation interests in pools of
adjustable and fixed rate mortgage loans.
Mortgage-backed securities either may be issued or
guaranteed by agencies of the U.S. Government or may be
privately issued. Unlike conventional debt obligations,
mortgage-backed securities provide monthly payments
derived from the monthly interest and principal payments
(including any prepayments) made by the individual
borrowers on the pooled mortgage loans.
A fund's investments in mortgage-backed securities may
include conventional mortgage pass through securities,
stripped mortgage-backed securities ("SMBS") and certain
classes of multiple class collateralized mortgage
obligations ("CMOs"). Examples of SMBS include interest
only ("IO") and principal only ("PO") securities. Senior
CMO classes typically have priority over less senior and
residual CMO classes as to the receipt of principal
and/or interest payments on the underlying mortgages.
The CMO classes in which the fund may invest include
sequential and parallel pay CMOs, including planned
amortization class securities ("PACs").
The principal and interest on asset-backed securities are
collateralized by pools of assets such as auto loans,
credit card receivables, leases, installment contracts
and personal property. Asset-backed securities generally
are not collateralized as securely as mortgage-backed
securities.
A fund may invest in floating rate and other indexed
securities. The interest rate and/or the principal
payable at the maturity of an indexed security may change
positively or inversely in relation to one or more
interest rates, financial indices, currency rates or
other reference prices. In addition, changes in the
amount payable on a leveraged indexed security may be a
multiple of changes in the reference rate or price.
Examples of indexed securities include IOs, POs, inverse
floaters, inverse IOs, super floaters, capped floaters,
range floaters, dual index or yield curve floaters and
Cost of Funds Index ("COFI") floaters.
Mortgage-backed, asset-backed and indexed securities are
subject to different combinations of call (prepayment),
extension, interest rate and other market risks. These
risks and the price volatility of a security are
magnified to the extent that a security has imbedded
leverage. Under adverse market conditions, any of these
risks could lead to a decline in the yield on or market
value of these securities. In addition, these securities
can at times be difficult to price accurately or to
liquidate at a fair price.
Conventional mortgage-backed securities and sequential
pay CMOs are subject to all of these risks, but are
typically not leveraged. PACs and other senior classes
of sequential and parallel pay CMOs usually involve less
exposure to prepayment, extension and interest rate risk
than other mortgage- backed securities, provided that
prepayment rates stay within expected prepayment ranges
or collars. Call or prepayment risk is the risk
primarily associated with mortgage IOs and superfloaters.
Mortgage POs, inverse IOs, inverse floaters, capped
floaters and COFI floaters are especially susceptible to
extension and interest rate risk. Range floaters are
subject to the risk that a designated interest rate will
float outside the specified interest rate collar. Dual
index floaters are subject to depreciation if there is an
unfavorable change in the spread between two designated
interest rates.
When-Issued and Forward Commitment Transactions. The
funds (and the underlying funds in their portfolios) may
purchase when-issued securities and enter into other
forward commitments to purchase or sell securities. The
value of securities purchased on a when-issued or forward
commitment basis may decline between the purchase date
and the settlement date.
Futures, Options, Swaps and Currency Contracts. Each
fund (and the underlying funds in its portfolio) may
enter into derivative contracts to hedge against
fluctuations in securities prices or as a substitute for
the purchase or sale of securities. These derivative
contracts may include the purchase or sale of futures
contracts on securities, indices or currencies; options
on futures contracts; options on securities, indices or
currencies; interest rate and currency swaps, caps,
floors and collars; and forward contracts to buy or sell
foreign currencies.
All of the funds' transactions in derivative contracts
involve a risk of loss or depreciation due to
unanticipated adverse changes in securities prices,
interest rates or currency exchange rates. A fund incurs
liability to a counterparty in connection with
transactions in futures contracts, swaps and forward
contracts and the selling of options, caps, floors and
collars. As a result, the loss on these derivative
contracts may exceed a fund's initial investment. A fund
may also lose the entire premium paid for purchased
options, caps, floors and collars that expire before they
can be profitably exercised by the fund. In addition,
the funds incur transaction costs in opening and closing
positions in derivative contracts.
Derivative contracts may sometimes increase or leverage a
fund's exposure to a particular market risk. Leverage
magnifies the price volatility of derivative contracts
held by a fund. A fund may cover, or partially offset
the leverage inherent in, derivative contracts by
maintaining a segregated account consisting of cash and
liquid securities, by holding offsetting portfolio
securities or contracts or by covering written options.
A fund's success in using derivative contracts to hedge
portfolio assets depends on the degree of price
correlation between the derivative contract and the
hedged asset. Imperfect correlation may be caused by
several factors, including temporary price disparities
among the trading markets for the derivative contract,
the assets underlying the derivative contract and the
fund's portfolio assets.
During periods of extreme market volatility, a commodity
or options exchange may suspend or limit trading in an
exchange-traded derivative contract, which may make the
contract temporarily illiquid and difficult to price.
The staff of the Securities and Exchange Commission
("SEC") takes the position that certain over-the-counter
options are subject to each fund's 15% limit on illiquid
investments. The funds' ability to terminate
over-the-counter options, swaps, caps, floors, collars
and forward contracts may depend on the cooperation of
the counterparties to such contracts. For thinly traded
derivative contracts, the only source of price quotations
may be the selling dealer or counterparty. In addition,
over-the-counter derivative contracts involve a risk that
the counterparty will fail to perform its contractual
obligations.
Portfolio Securities Loans. Each fund (and the
underlying funds in its portfolio) may lend portfolio
securities with a value equal to one-third of its total
assets. Each loan must be fully collateralized by cash
or other eligible assets. The funds may pay reasonable
fees in connection with securities loans. Insight
Management will evaluate the creditworthiness of
prospective institutional borrowers and monitor the
adequacy of the collateral to reduce the risk of default
by borrowers from the Insight Premier funds.
Borrowing and Reverse Repurchase Agreements. An
underlying fund in a fund's portfolio may borrow money
from banks or through reverse repurchase agreements for
emergency and/or leverage purposes. Using the cash
proceeds of reverse repurchase agreements to finance the
purchase of additional investments is a form of leverage.
Leverage magnifies the sensitivity of a fund's net asset
value to changes in the market prices of the fund's
portfolio securities. However, each Insight Premier fund
will borrow solely for temporary or emergency (and not
for leverage) purposes. The aggregate amount of such
borrowings and reverse repurchase agreements may not
exceed one-third of any fund's total assets.
Short-Term Trading. Each fund is actively managed and
may have a portfolio turnover rate that exceeds 100%. A
100% annual portfolio turnover rate would be achieved if
each security in a fund's portfolio (other than
securities with less than one year remaining to maturity)
were replaced once during the year. Trading may also
increase transaction costs and the realization of capital
gains, which are taxable to shareholders.
Investment Policies and Restrictions. Except as
otherwise stated in this prospectus or the funds'
statement of additional information, the funds'
investment objectives, policies and restrictions are not
fundamental and may be changed without shareholder
approval. Each Insight Premier fund is diversified and
therefore may not, with respect to 75% of its total
assets, (1) invest more than 5% of its total assets in
the securities of any one issuer, other than U.S.
government securities and other mutual funds, or (2)
acquire more than 10% of the outstanding voting
securities of any one issuer. No Insight Premier fund
will concentrate (invest 25% or more of its total assets)
in the securities of issuers in any one industry.
MANAGEMENT OF THE FUNDS
Trustees. The funds are series of Insight Premier Funds
(the "Trust"). The Trustees of the Trust decide upon
matters of general policy and review the actions of
Insight Management and other service providers. The
Trustees of the Trust are identified in the statement of
additional information.
Investment Adviser. Each fund has retained the services
of Insight Management as investment adviser. Insight
Management provides investment advice and portfolio
management services to the funds. Subject to the
supervision of the Trustees, Insight Management makes the
funds' day-to-day investment decisions, arranges for the
execution of portfolio transactions and generally manages
the funds' investments.
Insight Management, a registered investment adviser, was
established in 1987. Although Insight Management has not
previously managed a mutual fund, it has extensive
experience in managing mutual fund portfolios for high
net worth individuals and corporations with minimum
$250,000 account sizes. Insight currently manages over
1,000 client accounts with assets totaling approximately
$670 million. Insight Management has historically used
mutual funds, rather than individual securities, as the
primary investment vehicle for its client accounts. Eric
M. Kobren, the President and Director of Insight
Management, owns all of Insight Management's stock. Mr.
Kobren is also the sole shareholder of the Distributor
and principal shareholder of Mutual Fund Investors
Association, Inc., the publisher of Fidelity Insight and
FundsNet Insight newsletters with approximately 130,000
paid subscribers.
Mr. Kobren is each fund's primary portfolio manager. Mr.
Kobren has been the president of Insight Management and
of the Distributor since 1987 and of Mutual Fund
Investors Association, Inc. since 1985. Mr. Kobren has
been in the investment business since 1976.
As compensation for the services rendered and related
expenses borne by Insight Management under its investment
advisory agreement with each fund, each fund has agreed
to pay to Insight Management a monthly fee at the annual
rate, as a percentage of that fund's average daily net
assets, shown below.
<TABLE>
<CAPTION>
<C> <S>
Name of Fund Annual Advisory Fee Rate
Insight Growth Fund 0.75%
Insight Moderate Growth Fund 0.75%
Insight Conservative Allocation Fund 0.75%
</TABLE>
An Insight Premier fund may invest in shares of an
underlying mutual fund that (1) makes payments of Rule
12b-1 revenues with respect to shares held by the Insight
Premier fund or (2) whose investment adviser is willing
to share a portion of the underlying fund's advisory fee
attributable to underlying fund shares held by the
Insight Premier fund. Any Rule 12b-1 or revenue sharing
payments made with respect to shares of any underlying
fund will be applied to the advisory fees owed to Insight
Management by the affected Insight Premier fund.
Expenses. Each fund is responsible for all expenses not
expressly assumed by Insight Management or the
Administrator. These include, among other things,
organization expenses, legal fees, audit and accounting
expenses, insurance costs, the compensation and expenses
of the Trustees, the expenses of printing and mailing
reports, notices and proxy statements to fund
shareholders, registration fees under federal and state
securities laws, brokerage commissions, interest, taxes
and extraordinary expenses (such as for litigation).
Insight Management has agreed to reimburse each fund to
the extent necessary to maintain the fund's operating
expenses (excluding investment advisory fees, brokerage
commissions, taxes, interest and litigation,
indemnification and other extraordinary expenses) at
0.25% annually of the fund's average daily net assets.
Although this reimbursement arrangement can be revoked at
any time, Insight Management currently plans to continue
this arrangement through January 1, 2000.
Administrator. First Data Investor Services Group, Inc.
("First Data") serves as each fund's administrator,
accounting agent and transfer agent. As the funds'
administrator and subject to the oversight of the
Trustees, First Data supervises each fund's day-to-day
operations, other than the management of the fund's
investments.
DETERMINATION OF NET ASSET VALUE
Net Asset Value
Each fund computes the net asset value per share ("NAV")
of its shares at the close of regular trading on the New
York Stock Exchange (normally 4:00 p.m. New York time) on
each weekday that is not a holiday listed in the
statement of additional information (a "business day").
If the New York Stock Exchange closes early, the time of
computing the NAV and the deadlines for purchasing and
redeeming shares will be accelerated to the earlier
closing time. The NAV of each fund's shares is
determined by subtracting from the value of the fund's
total assets the amount of the fund's liabilities and
dividing the remainder by the number of outstanding fund
shares. Although the NAV will be calculated at the close
of all regular trading days, the NAV reported to Nasdaq
for distribution to news agencies will be delayed by one
business day.
HOW TO PURCHASE SHARES
Shares of the funds are available to individuals,
institutions, companies and fiduciaries. Prospectuses,
sales material and applications can be obtained from the
Distributor or First Data at the address and telephone
number listed on the back cover of this prospectus.
Shares of each fund may be purchased without a sales
charge at the NAV next calculated after receipt of an
order in proper form by First Data.
Method of Purchase Purchase Procedures
By check:
Initial purchases: You may open an account and make
an initial investment in any fund by sending a check made
payable to Insight Premier Funds and a completed account
application form to First Data Investor Services Group,
Inc., P.O. Box ______, One Exchange Place, Boston, MA
02109. An account application kit is attached to this
prospectus.
Subsequent purchases: Each additional request to
purchase shares by check must contain the account name
and number to permit proper crediting.
All purchases: Checks should be made payable to Insight
Premier Funds. If an order to purchase shares is
cancelled because your check does not clear, you will be
responsible for any resulting losses or fees incurred by
the Trust, the Distributor or First Data in the
transaction.
Through broker-dealers: Contact your dealer to find out
about its procedures for processing orders to purchase
fund shares. Purchase orders received by dealers prior
to 4:00 p.m. Eastern time on any business day, and
transmitted to First Data by 5:00 p.m. Eastern time on
that day receive that day's net asset value. It is the
responsibility of dealers to transmit properly completed
orders so that they will be received by First Data by
5:00 p.m. Eastern time. Dealers or other agents may
charge you a fee for effecting transactions.
By wire:
Initial purchases: You may purchase shares of the
funds by wire. Please call First Data at 800-___-____
for instructions. You should be prepared to give the
name in which the account will be opened, the address,
telephone number and taxpayer identification number for
the account and the name of the bank that will wire the
purchase price. For initial wire purchases, you must
confirm the information provided by telephone by mailing
to First Data a completed account application. If First
Data does not receive timely and complete account
information, there may be a delay in the purchase of fund
shares and in the accrual of dividends (if any).
Subsequent purchases: Each additional wire purchase
request must contain your account name and number to
permit proper crediting.
All purchases: Banks may impose a charge for sending a
wire. First Data does not currently charge any fee for
handling wired funds, but reserves the right to charge
shareholders for this service in the future.
Minimum Investment Amounts. The minimum initial
investment in a fund is $25,000, but the officers of the
Trust may, in their sole discretion, waive or reduce the
minimum initial investment amount for certain investors
and financial intermediaries. The minimum initial
investment is waived for purchases by Trustees,
directors, officers and employees of the Trust and
Insight Management, private clients of Insight Management
and members of exempt persons' immediate families. The
minimum subsequent investment is $1,000. The minimum
initial investment for purchases of fund shares through
the following networks is $2,500: Charles Schwab Mutual
Fund Marketplace, Fidelity FundsNetwork and Jack White
Mutual Fund Network.
Other Information About Purchasing Shares. Certificates
representing shares will not be issued. The Trust and
the Distributor reserve the right to limit the amount of
investments and to reject any order to purchase fund
shares.
HOW TO REDEEM SHARES
Shares of the funds may be redeemed on each business day.
You will receive the NAV next determined after the
receipt by First Data of a redemption request in the
proper form. Payment is ordinarily sent by mail or by
wire within three business days after the effective date
of the redemption. However, the payment of redemption
proceeds for shares purchased by check will be made only
after the check has cleared, which may take up to fifteen
days from the purchase date. The Trust reserves the
right to suspend the right of redemption or to postpone
the date of payment for more than three business days
under unusual circumstances as determined by the SEC. In
addition, the Trust may redeem shares involuntarily under
circumstances determined to be in the best interest of
shareholders.
Method of Redemption Redemption Procedures
By mail: Shares of the funds may be redeemed by sending
a written redemption request to First Data Investor
Services Group, Inc., P.O. Box ______, One Exchange
Place, Boston, MA 02109. The request must state the
number of shares or the dollar amount to be redeemed and
the applicable account number. The request must be
signed exactly as your name appears on the Trust's
account records. If the shares to be redeemed have a
value of $50,000 or more, your signature must be
guaranteed by one of the eligible guarantor institutions
listed in "Signature Guarantees" below.
Written redemption requests may direct that the proceeds
be deposited directly in the bank account or brokerage
account designated on an investor's account application
for telephone redemptions.
By telephone: To redeem by telephone, call First Data
toll-free at 800-___-____. The proceeds will be sent by
mail to the address designated on your account or wired
directly to your existing account in any commercial bank
or brokerage firm in the United States, as designated on
the application.
The telephone redemption privilege is automatically
available to you. You may change the bank or brokerage
account designated under this procedure at any time by
sending to First Data a written request or completed
supplemental telephone redemption authorization form
(available from First Data) that has been signature
guaranteed by any eligible guarantor institution.
Further documentation will be required to change the
designated account if shares are held by a company,
fiduciary or other organization.
Through broker-dealers: Contact your dealer to find out
about its procedures for processing orders to redeem fund
shares. Redemption orders received by dealers prior to
4:00 p.m. Eastern time on any business day, and
transmitted to First Data by 5:00 p.m. Eastern time on
that day, receive that day's NAV. It is the
responsibility of broker-dealers to promptly transmit
wire redemption orders. Broker-dealers may impose a fee
for this service.
Payment of Redemption Proceeds by Wire or ACH Transfer.
For each payment of redemption proceeds by wire, the
funds' custodian will charge a wire fee of $10.00. The
funds and the custodian reserve the right to change the
processing fee. Your bank or brokerage firm may also
impose a charge for processing the wire. In the event
that the wire transfer of redemption proceeds is
impossible or impracticable, the redemption proceeds will
be sent by mail to the designated account.
Redemption requests may direct that the proceeds be
deposited directly in a shareholder's account with a
commercial bank or other depository institution by way of
an Automated Clearing House (ACH) transaction. There is
currently no charge for ACH transactions. Contact First
Data for more information about ACH transactions.
Signature Guarantees. Written requests to redeem shares
above a specified amount or to change the address or
account information for telephone redemptions should be
accompanied by a signature guarantee. The institutions
from whom the funds will accept a signature guarantee
include banks, brokers and dealers, credit unions,
national securities exchanges, registered securities
associations, clearing agencies and savings associations.
In addition, shareholders that are corporations,
partnerships, trusts, estates or other associations may
be required to furnish appropriate evidence that a
redemption request has been properly authorized.
Responsibility for Unauthorized Telephone Instructions.
Neither the Trust, the Distributor, First Data nor their
respective affiliates will be liable for complying with
telephone instructions which they reasonably believe to
be genuine or for any loss, damage, cost or expense in
acting on such telephone instructions. The shareholder
will bear the risk of any such loss. The Trust and First
Data will employ reasonable procedures to determine that
telephone instructions are genuine. If the Trust or
First Data does not employ such procedures, it may be
liable for losses due to unauthorized or fraudulent
instructions. Such procedures may include, among others,
requiring forms of personal identification prior to
acting upon telephone instructions, providing written
confirmation of the transactions and/or tape recording
telephone instructions.
Redemptions of Sub-Minimum Accounts. The Trust reserves
the right to require you to close your account if at any
time the value of the shares is less than $5,000 (based
on actual amounts invested, without regard market
fluctuations) or such other minimum amount as the
Trustees may establish. After notification of the
Trust's intention to close your account, you will be
given sixty days to increase the value of your account to
the minimum amount. The Trust reserves the right to
suspend the right of redemption or to postpone the date
of payment for more than three business days under
unusual circumstances as determined by the SEC.
EXCHANGE PRIVILEGE
Shares of each fund may be exchanged for shares of the
other funds at net asset value. You may request an
exchange by sending a written request to First Data. The
request must be signed exactly as your name appears on
the Trust's account records. Exchanges may also be
requested by telephone. If you are unable to execute a
transaction by telephone (for example during times of
unusual market activity) you should consider requesting
the exchange by mail. An exchange will be effected at
the next determined NAV of each fund after receipt of a
request by First Data. Exchanges may only be made for
shares of funds then offered for sale in your state of
residence and are subject to the applicable minimum
initial investment requirements of the fund whose shares
will be received in the exchange. To protect the
interests of other shareholders of the fund, a fund may
cancel the exchange privileges of any persons that, in
the opinion of the fund, are using market timing
strategies or making more than four exchanges per owner
or controlling person per calendar year. The exchange
privilege may be modified or terminated by the Trustees
upon 60 days' prior notice to shareholders. An exchange
results in a sale of fund shares, which may cause you to
recognize a capital gain or loss for tax purposes.
SHAREHOLDER SERVICES
Call First Data toll-free at 800-___-____ for additional
information about the shareholder services described
below.
Systematic Withdrawal Plan. If the shares in your
account have a value of at least $25,000, you may elect
to receive, or may designate another person to receive,
monthly, quarterly, or annual payments in a specified
amount. There is no charge for this service.
Automatic Investment Plan. You may make automatic
monthly investments in the funds from your bank, savings
and loan or other depository institution account. The
minimum initial and subsequent investments must be
$25,000 and $500 under the plan. The Trust pays the
costs associated with these transfers, but reserves the
right to make reasonable charges for this service. A
depository institution may impose its own charge for
debiting your account, which would reduce the return from
an investment in a fund.
Tax-Deferred Retirement Plans. Shares of the funds with
the following tax-deferred retirement plans: Keogh Plans
for self-employed individuals; SEP and SARSEP plans;
individual retirement account (IRA) plans for individuals
and their non-employed spouses; and qualified pension and
profit-sharing plans for employees, including 401(k)
plans and 403(b)(7) custodial accounts for employees of
public school systems, hospitals, colleges and other
non-profit organizations. Contact the Insight Premier
funds for further information and the necessary forms.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Dividends and Distributions. The net investment income
and realized net capital gains, if any, of Insight Growth
Fund, Insight Moderate Growth Fund and Insight
Conservative Allocation Fund will ordinarily be declared
and paid in accordance with the following schedule.
<TABLE>
<CAPTION>
<C> <S>
Type of Distribution
and Name of Fund Declared and Paid
Dividends from net
investment income
Insight Growth Fund Declared and paid annually
Insight Moderate
Growth Fund Declared and paid annually
Insight Conservative
Allocation Fund Declared and paid quarterly
Distributions from
realized net capital gains
All funds Declared and paid annually
</TABLE>
Dividends and distributions will be payable to
shareholders of record on the record date. If investors
purchase shares shortly before the record date of a
dividend or distribution, they may be subject to adverse
tax consequences as described under "Taxes."
A fund's dividends and distributions are paid in
additional shares of the same fund unless the shareholder
elects to have them paid in cash. Cash dividends and
distributions are paid by a check and mailed to the
shareholder's address of record. The tax effects of
dividends and distributions are the same whether they are
paid in shares or cash.
Taxes. Each fund is treated as a separate entity for tax
purposes. Each fund intends to elect to be treated as a
regulated investment company under Subchapter M of the
Internal Revenue Code of 1986 (the "Code"). To qualify
as such, each fund must satisfy certain requirements
relating to the sources of its income, diversification of
its assets and distribution of its income to
shareholders. As a regulated investment company, each
fund will not be subject to federal income or excise tax
on any net investment income and net realized capital
gains that are distributed to shareholders in accordance
with certain timing requirements of the Code.
Dividends paid by a fund from net investment income and
the excess of short-term capital gain over net long-term
capital loss will be taxable to its shareholders as
ordinary income. Distributions paid by a fund from the
excess of net long-term capital gain over net short-term
capital loss will be taxable as long-term capital gains
regardless of how long shareholders have held their
shares. These tax consequences will apply whether
distributions are received in additional shares or in
cash. The dividends paid by each fund to its corporate
shareholders and that are attributable to qualifying
dividends received by the fund from U.S. domestic
corporations may be eligible, in the hands of these
corporate shareholders, for the corporate
dividends-received deduction, subject to certain holding
period requirements and debt financing limitations under
the Code. Shareholders will be informed annually about
the amount and character, for federal income tax
purposes, of distributions received from the funds.
Investors should consider the adverse tax implications of
buying fund shares immediately before a distribution.
Investors who purchase shares shortly before the record
date for a distribution will pay a per share price that
includes the value of the anticipated distribution and
will be taxed on the distribution even though the
distribution represents a return of a portion of the
purchase price.
Redemptions of shares, whether for cash or in-kind, are
taxable events on which a shareholder may recognize a
gain or loss. Individuals and certain other shareholders
may be subject to 31% backup withholding of federal
income tax on distributions and redemptions if they fail
to furnish their correct taxpayer identification number
and certain certifications or if they are otherwise
subject to backup withholding.
In addition to federal taxes, a shareholder may be
subject to state or local taxes on distributions received
from the funds. Shareholders are urged to consult their
own tax advisers concerning specific questions about
federal, state and local taxes.
ADDITIONAL INFORMATION
Shareholder Reports and Confirmations. Each fund sends
to its shareholder annual and semiannual reports. The
financial statements appearing in annual reports are
audited by independent accountants. Shareholders will
also be sent confirmations of each transaction and
monthly statements reflecting all account activity.
Performance Advertising. Each fund may advertise
historical performance information and compare its
performance to other investments or relevant indexes. An
advertisement may also include data supplied by Lipper
Analytical Services, Inc., Micropal Inc., Morningstar
Inc., Ibbotson Associates and other industry publications
or services.
The funds may advertise average annual total return and
other forms of total return data. Average annual total
return is determined by computing the average annual
percentage change in value of $1,000 invested at NAV for
specified periods ending with the most recent calendar
quarter. The total return calculation assumes a complete
redemption of the investment at the end of the relevant
period and reflects the deduction of any applicable
redemption fee. Each fund may also advertise total
return on a cumulative, average, year-by-year or other
basis for specified periods. The investment results of a
fund will fluctuate over time and should not be
considered a representation of the fund's performance in
the future.
In addition, each fund may advertise its yield. Yield
reflects a fund's rate of income on portfolio investments
as a percentage of its NAV. The yield on fund shares is
computed by annualizing the result of dividing the net
investment income per share over a 30 day period by the
NAV on the last day of that period. Yield is calculated
by accounting methods that are standardized for all stock
and bond funds and differ from the methods used for other
accounting purposes. Therefore, the yield on fund shares
may not equal the income paid on these shares or the
income reported in a fund's financial statements.
Organization. The Trust was organized on September 13,
1996 as a Massachusetts business trust. The Trust
currently has three series of shares of a single class,
which are the funds and shares offered by this
prospectus. The Trustees reserve the right to authorize
and issue additional series and classes of shares.
Shareholders of each fund are entitled to one full or
fractional vote for each share. There is no cumulative
voting and shares have no preemption or conversion
rights. The Trust does not intend to hold annual
meetings of shareholders. The Trustees will call special
meetings of shareholders to the extent required by the
Trust's Declaration of Trust or the Investment Company
Act of 1940 (the "1940 Act"). The 1940 Act requires the
Trustees, under certain circumstances, to call a meeting
to allow shareholders to vote on the removal of a Trustee
and to assist shareholders in communicating with each
other.
INSIGHT PREMIER FUNDS
Insight Growth Fund
Insight Moderate Growth Fund
Insight Conservative Allocation Fund
Prospectus
November __, 1996
<TABLE>
<CAPTION>
<C> <S>
INVESTMENT ADVISER ADMINISTRATOR AND TRANSFER
AGENT
Insight Management, Inc. First Data Investor
20 William Street, Services Group, Inc.
Suite 310 One Exchange Place
P.O. Box 9135 Boston, MA 02109-2873
Wellesley Hills, MA 02181 Toll-free: 1-800-___-____
Toll-free: 1-800-566-4274
PRINCIPAL DISTRIBUTOR CUSTODIAN
Insight Brokerage Services, Inc.
20 William Street, Suite 310
P.O. Box 9135
Wellesley Hills, MA 02181
Toll-free: 1-800-566-4274
INDEPENDENT ACCOUNTANTS LEGAL COUNSEL
Hale and Dorr
60 State Street
Boston, MA 02109
</TABLE>
PART B
November , 1996
INSIGHT PREMIER FUNDS
STATEMENT OF ADDITIONAL INFORMATION
This statement of additional information is not a
prospectus, but expands upon and supplements the information
contained in the prospectus of Insight Premier Funds (the
"Trust"), dated November , 1996, as supplemented from time
to time. The statement of additional information should be
read in conjunction with the prospectus. The Trust's
prospectus may be obtained by writing to the Trust at P.O.
Box , Boston, Massachusetts 02109 or by telephoning the
Trust toll free at 800- . Capitalized terms not otherwise
defined herein have the same meaning as in the prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<C> <S>
PAGE
I. INVESTMENT OBJECTIVES AND POLICIES 2
II. INVESTMENT RESTRICTIONS 16
III. MANAGEMENT OF THE TRUST AND THE FUNDS
A. Trustees and Officers 18
B. Investment Adviser 21
C. Distributor 22
D. Administrator,Transfer Agent
and Dividend Paying Agent 23
IV. PURCHASE, REDEMPTION AND
DETERMINATION OF NET ASSET VALUE 23
V. SPECIAL REDEMPTIONS 24
VI. PORTFOLIO TRANSACTIONS 24
VII. PERFORMANCE INFORMATION
A. Total Return 24
B. Non-Standardized Total Return 25
C. Other Information Concerning
Fund Performance 25
VIII. DIVIDENDS, DISTRIBUTIONS AND TAXES 31
IX. CUSTODIAN, COUNSEL AND INDEPENDENT
ACCOUNTANTS 33
X. DESCRIPTION OF THE TRUST 34
XI. ADDITIONAL INFORMATION 34
APPENDIX 36
</TABLE>
I. INVESTMENT OBJECTIVES AND POLICIES
Insight Premier Funds is a no-load open-end,
diversified investment company, registered as such under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Trust currently consists of three separate series, each
with different investment objectives (each, a "fund" and
collectively, the "funds"). The funds seek to achieve their
investment objectives by investing primarily in shares of
other investment companies ("underlying funds" or "mutual
funds"). As of the date of this statement of additional
information, the Trust's series are:
INSIGHT GROWTH FUND, which seeks long-term growth of
capital without regard to current income and with a
volatility level approximating that of the S&P 500 Index;
INSIGHT MODERATE GROWTH FUND, which seeks long-term
growth of capital without regard to current income and with
a volatility level below that of the S&P 500 Index; and
INSIGHT CONSERVATIVE ALLOCATION FUND, which seeks
enough long-term growth of capital to maintain purchasing
power in the face of inflation with a volatility level below
that of the S&P 500 Index.
Each fund will concentrate its investments in the
shares of mutual funds. Mutual funds pool the investments
of many investors and use professional management to select
and purchase securities of different issuers for their
portfolios. Some mutual funds invest in particular types of
securities (i.e., equity or debt), some concentrate in
certain industries, and others may invest in a variety of
securities to achieve a particular type of return or tax
result. Some of the underlying funds are, like the funds,
"open-end" funds and, as such, stand ready to redeem their
shares. Any investment in a mutual fund involves risk. Even
though the funds may invest in a number of mutual funds,
this investment strategy cannot eliminate investment risk.
Investing in mutual funds through a fund involves additional
and duplicative expenses and certain tax results that would
not be present if an investor were to make a direct
investment in the underlying funds. See "Expense
Information" and "Dividends, Distributions and Taxes" in the
prospectus. A fund, together with the other funds and any
"affiliated persons" (as such term is defined in the 1940
Act) may purchase only up to 3% of the total outstanding
securities of an underlying mutual fund. Accordingly, when
affiliated persons of Insight Management, Inc. ("Insight
Management" or the "Adviser") hold shares of any of the
underlying funds, each fund's ability to invest fully in
shares of such mutual funds is restricted, and the Adviser
must then, in some instances, select alternative investments
for the fund that would not have been its first investment
choice.
The 1940 Act also provides that a mutual fund whose
shares are purchased by a fund is obliged to redeem shares
held by the fund only in an amount up to 1% of the
underlying mutual fund's outstanding securities during any
period of less than 30 days. Accordingly, shares held by a
fund in excess of 1% of an underlying mutual fund's
outstanding securities will be considered not readily
marketable securities. Together with other such securities,
these mutual funds may not exceed 15% of the Insight Premier
fund's assets. However, since the funds have reserved the
right to pay redemption requests in portfolio securities,
these positions may be treated as liquid. These limitations
are not fundamental and may therefore be changed by the
Board of Trustees of the Trust without shareholder approval.
Under certain circumstances an underlying fund may determine
to make payment of a redemption by a fund (wholly or in
part) by a distribution in kind of securities from its
portfolio, instead of in cash. As a result, a fund may hold
securities distributed by an underlying fund until such time
as Insight Management determines it appropriate to dispose
of such securities. Such disposition will impose additional
costs on the fund.
In the case of an issuer that concentrates in a
particular industry or industry group, events may occur that
impact that industry or industry group more significantly
than the stock market as a whole. Accordingly, an
investment in a non-diversified investment company that
concentrates can normally be expected to have greater
fluctuations in value than an investment in a fund that
includes a broader range of investments. To the extent a
fund invests in diversified investment companies that do not
have a policy of concentration, the impact of conditions
affecting an industry or industry group will be decreased.
Investment decisions by the investment advisers of the
underlying funds are made independently of the funds and the
Adviser. At any particular time, one underlying fund may be
purchasing shares of an issuer whose shares are being sold
by another underlying fund. As a result, a fund would incur
indirectly certain transaction costs without accomplishing
any investment purpose. Each fund limits its investments in
underlying funds to mutual funds whose shares a fund may
purchase without the imposition of an initial sales load.
The underlying funds may incur distribution expenses in the
form of Rule 12b-1 fees. An investor could invest directly
in the underlying funds. By investing in mutual funds
indirectly through the funds, the investor bears not only
his or her proportionate share of the expenses of the funds
(including operating costs and investment advisory and
administrative fees) but also, indirectly, similar expenses
of the underlying funds. An investor may indirectly bear
expenses paid by underlying funds related to the
distribution of such mutual funds' shares. As a result of
the funds' policies of investing in other mutual funds, an
investor may receive taxable capital gains distributions to
a greater extent than would be the case if he or she
invested directly in the underlying funds. See "Dividends,
Distributions and Taxes" in the prospectus.
A description of the types of securities that may be
acquired by the funds and the underlying funds and the
various investment techniques which either may employ
including the risks associated with these investments are
described herein.
FOREIGN INVESTMENTS
Foreign Securities. A fund or an underlying fund may invest
at least a portion of its assets in securities of foreign
issuers. Investments in foreign securities involve special
risks and considerations that are not present when a fund
invests in domestic securities.
Exchange Rates. Since a fund or an underlying fund may
purchase securities denominated in foreign currencies,
changes in foreign currency exchange rates will affect the
value of the assets from the perspective of U.S. investors.
Changes in foreign currency exchange rates may also affect
the value of dividends and interest earned, gains and losses
realized on the sale of securities and net investment income
and gains, if any, to be distributed to the investor by a
mutual fund. The rate of exchange between the U.S. dollar
and other currencies is determined by the forces of supply
and demand in foreign exchange markets. These forces are
affected by the international balance of payments and other
economic and financial conditions, government intervention,
speculation and other factors. A fund or an underlying fund
may seek to protect itself against the adverse effects of
currency exchange rate fluctuations by entering into
currency-forward, futures, options or swaps contracts.
Hedging transactions will not, however, always be fully
effective in protecting against adverse exchange rate
fluctuations. Furthermore, hedging transactions involve
transaction costs and the risk that the fund or the
underlying fund will lose money, either because exchange
rates move in an unexpected direction, because another party
to a hedging contract defaults, or for other reasons.
Exchange Controls. The value of foreign investments and the
investment income derived from them may also be affected
(either favorably or unfavorably) by exchange control
regulations. Although it is expected that a fund or an
underlying fund will invest only in securities denominated
in foreign currencies that are fully exchangeable into U.S.
dollars without legal restriction at the time of investment,
there is no assurance that currency controls will not be
imposed after the time of investment. In addition, the
value of foreign fixed-income investments will fluctuate in
response to changes in U.S. and foreign interest rates.
Limitations of Foreign Markets. There is often less
information publicly available about a foreign issuer than
about a U.S. issuer. Foreign issuers are not generally
subject to accounting, auditing, and financial reporting
standards and practices comparable to those in the United
States. The securities of some foreign issuers are less
liquid and at times more volatile than securities of
comparable U.S. issuers. Foreign brokerage commissions,
custodial expenses, and other fees are also generally higher
than for securities traded in the United States. Foreign
settlement procedures and trade regulations may involve
certain risks (such as delay in payment or delivery of
securities or in the recovery of a fund's assets held
abroad) and expenses not present in the settlement of
domestic investments. A delay in settlement could hinder
the ability of a fund or an underlying fund to take
advantage of changing market conditions, with a possible
adverse effect on net asset value. There may also be
difficulties in enforcing legal rights outside the United
States.
Foreign Laws, Regulations and Economies. There may be a
possibility of nationalization or expropriation of assets,
imposition of currency exchange controls, confiscatory
taxation, political or financial instability, and diplomatic
developments that could affect the value of a fund's or an
underlying fund's investments in certain foreign countries.
Legal remedies available to investors in certain foreign
countries may be more limited than those available with
respect to investments in the United States or in other
foreign countries. The laws of some foreign countries may
limit a fund or an underlying fund's ability to invest in
securities of certain issuers located in those countries.
Moreover, individual foreign economies may differ favorably
or unfavorably from the U.S. economy in such respects as
growth or gross national product, inflation rate, capital
reinvestment, resource self-sufficiency and balance of
payment positions.
Foreign Tax Considerations. Income received by a fund or an
underlying fund from sources within foreign countries may be
reduced by withholding and other taxes imposed by such
countries. Tax conventions between certain countries and
the United States may reduce or eliminate such taxes. Any
such taxes paid by a fund will reduce the net income of the
fund available for distribution. Special tax considerations
apply to foreign securities.
Emerging Markets. Risks may be intensified in the case of
investments by a fund or an underlying fund in emerging
markets or countries with limited or developing capital
markets. Security prices in emerging markets can be
significantly more volatile than in more developed nations,
reflecting the greater uncertainties of investing in less
established markets and economies. In particular, countries
with emerging markets may have relatively unstable
governments, present the risk of nationalization of
businesses, restrictions on foreign ownership, or
prohibitions on repatriation of assets, and may have less
protection of property rights than more developed countries.
The economies of countries with emerging markets may be
predominantly based on only a few industries, may be highly
vulnerable to changes in local or global trade conditions,
and may suffer from extreme and volatile debt or inflation
rates. Local securities markets may trade a small number of
securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt
liquidation of substantial holdings difficult or impossible
at times. Securities of issuers located in countries with
emerging markets may have limited marketability and may be
subject to more abrupt or erratic price movements. Debt
obligations of developing countries may involve a high
degree of risk, and may be in default or present the risk of
default. Governmental entities responsible for repayment of
the debt may be unwilling to repay principal and interest
when due, and may require renegotiation or rescheduling of
debt payments. In addition, prospects for repayment of
principal and interest may depend on political as well as
economic factors.
Foreign Currency Transactions. A fund or an underlying fund
may enter into forward contracts to purchase or sell an
agreed-upon amount of a specific currency at a future date
that may be any fixed number of days from the date of the
contract agreed upon by the parties at a price set at the
time of the contract. Under such an arrangement, a fund
would, at the time it enters into a contract to acquire a
foreign security for a specified amount of currency,
purchase with U.S. dollars the required amount of foreign
currency for delivery at the settlement date of the
purchase; the fund would enter into similar forward currency
transactions in connection with the sale of foreign
securities. The effect of such transactions would be to fix
a U.S. dollar price for the security to protect against a
possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the particular
foreign currency during the period between the date the
security is purchased or sold and the date on which payment
is made or received (usually 3 to 14 days). These contracts
are traded in the interbank market between currency traders
(usually large commercial banks) and their customers. A
forward contract usually has no deposit requirement and no
commissions are charged for trades. While forward contracts
tend to minimize the risk of loss due to a decline in the
value of the currency involved, they also tend to limit any
potential gain that might result if the value of such
currency were to increase during the contract period.
Calculation of Net Asset Value. The funds and the
underlying funds will generally calculate their net asset
values and complete orders to purchase, exchange or redeem
shares only on a Monday through Friday basis, excluding
holidays on which the New York Stock Exchange is closed (see
"Purchase, Redemption and Determination of Net Asset Value"
below). Foreign securities in which the funds or the
underlying funds may invest may be listed primarily on
foreign stock exchanges that may trade on other days (i.e.,
Saturday). Accordingly, the net asset value of a fund's or
an underlying fund's portfolio may be significantly affected
by such trading on days when Insight Management does not
have access to the underlying funds and an investor does not
have access to the funds.
Portfolio Securities Loans. A fund or an underlying fund
may lend its portfolio securities as long as: (1) the loan
is continuously secured by collateral consisting of U.S.
government securities or cash or cash equivalents maintained
on a daily mark-to-market basis in an amount at least equal
to the current market value of the securities loaned; (2)
the fund or the underlying fund may at any time call the
loan and obtain the securities loaned; (3) the fund or the
underlying fund will receive any interest or dividends paid
on the loaned securities; and (4) the aggregate market value
of the securities loaned will not at any time exceed one-
third of the total assets of the fund or the underlying
fund. Lending portfolio securities involves risk of delay
in the recovery of the loaned securities and in some cases,
the loss of rights in the collateral if the borrower fails.
Short Sales. A fund or an underlying fund may sell
securities short. In a short sale the fund sells stock it
does not own and makes delivery with securities "borrowed"
from a broker. The fund then becomes obligated to replace
the security borrowed by purchasing it at the market-price
at the time of replacement. This price may be more or less
than the price at which the security was sold by the fund.
Until the security is replaced, the fund is obligated to pay
to the lender any dividends or interest accruing during the
period of the loan. In order to borrow the security, the
fund may be required to pay a premium that would increase
the cost of the security sold. The proceeds of the short
sale will be retained by the broker, to the extent necessary
to meet margin requirements, until the short position is
closed out.
When it engages in short sales, a fund or an
underlying fund must also deposit in a segregated account an
amount of cash or U.S. government securities equal to the
difference between (1) the market value of the securities
sold short at the time they were sold short and (2) the
value of the collateral deposited with the broker in
connection with the short sale (not including the proceeds
from the short sale). While the short position is open, the
fund must maintain daily the segregated account at such a
level that (1) the amount deposited in the account plus the
amount deposited with the broker as collateral equals the
current market value of the securities sold short, and (2)
the amount deposited in it plus the amount deposited with
the broker as collateral is not less than the market value
of the securities at the time they were sold short.
Depending upon market conditions, up to 80% of the value of
a fund's net assets may be deposited as collateral for the
obligation to replace securities borrowed to effect short
sales and allocated to a segregated account in connection
with short sales.
A fund will incur a loss as a result of a short sale
if the price of the security increases between the date of
the short sale and the date on which the fund replaces the
borrowed security. The fund will realize a gain if the
security declines in price between such dates. The amount
of any gain will be decreased and the amount of any loss
increased by the amount of any premium, dividends or
interest the fund may be required to pay in connection with
a short sale.
Short Sales "Against the Box". A short sale is "against the
box" if at all times when the short position is open the
fund or an underlying fund owns an equal amount of the
securities or securities convertible into, or exchangeable
without further consideration for, securities of the same
issue as the securities sold short. Such a transaction
serves to defer a gain or loss for federal income tax
purposes.
Industry Concentration. An underlying fund may concentrate
its investments within one industry. Since the investment
alternatives within an industry are limited, the value of
the shares of such a fund may be subject to greater market
fluctuation than an investment in a fund that invests in a
broader range of securities.
Master Demand Notes. An underlying fund (particularly an
underlying money market fund) may invest up to 100% of its
assets in master demand notes. These are unsecured
obligations of U.S. corporations redeemable upon notice that
permit investment by a mutual fund of fluctuating amounts at
varying rates of interest pursuant to direct arrangements
between the mutual fund and the issuing corporation.
Because master demand notes are direct arrangements between
the mutual fund and the issuing corporation, there is no
secondary market for the notes. The notes are, however,
redeemable at face value plus accrued interest at any time.
Options. A fund or an underlying fund may write (sell)
listed call options ("calls") if the calls are covered
through the life of the option. A call is covered if the
fund owns the optioned securities. When a fund writes a
call, it receives a premium and gives the purchaser the
right to buy the underlying security at any time during the
call period (usually not more than nine months in the case
of common stock) at a fixed exercise price regardless of
market price changes during the call period. If the call is
exercised, the fund will forgo any gain from an increase in
the market price of the underlying security over the
exercise price.
A fund or an underlying fund may purchase a call on
securities to enhance total return or to effect a "closing
purchase transaction." This is the purchase of a call
covering the same underlying security and having the same
exercise price and expiration date as a call previously
written by the fund on which it wishes to terminate its
obligation. If the fund is unable to effect a closing
purchase transaction, it will not be able to sell the
underlying security until the call previously written by the
fund expires (or until the call is exercised and the fund
delivers the underlying security).
A fund or an underlying fund may write and purchase
put options ("puts"). When a fund writes a put, it receives
a premium and gives the purchaser of the put the right to
sell the underlying security to the fund at the exercise
price at any time during the option period. When a fund
purchases a put, it pays a premium in return for the right
to sell the underlying security at the exercise price at any
time during the option period. A fund or an underlying fund
also may purchase stock index puts, which differ from puts
on individual securities in that they are settled in cash
based upon values of the securities in the underlying index
rather than by delivery of the underlying securities.
Purchase of a stock index put is designed to protect against
a decline in the value of the portfolio generally rather
than an individual security in the portfolio. If any put is
not exercised or sold, it will become worthless on its
expiration date.
A mutual fund's option positions may be closed out
only on an exchange which provides a secondary market for
options of the same series, but there can be no assurance
that a liquid secondary market will exist at any given time
for any particular option. It is impossible to predict to
what extent liquid markets will develop or continue.
A custodian, or a securities depository acting for it,
generally acts as escrow agent for the securities upon which
the fund has written puts or calls, or as to other
securities acceptable for such escrow so that no margin
deposit is required of the fund. Until the underlying
securities are released from escrow, they cannot be sold by
the fund.
In the event of a shortage of the underlying
securities deliverable in the exercise of an option, the
Options Clearing Corporation has the authority to permit
other generally comparable securities to be delivered in
fulfillment of option exercise obligations. If the Options
Clearing Corporation exercises its discretionary authority
to allow such other securities to be delivered, it may also
adjust the exercise prices of the affected options by
setting different prices at which otherwise ineligible
securities may be delivered. As an alternative to
permitting such substitute deliveries, the Options Clearing
Corporation may impose special exercise settlement
procedures.
Options Trading Markets. Options in which the funds or the
underlying funds will invest are generally listed on
exchanges. Exchanges on which such options currently are
traded are the Chicago Board Options Exchange and the
American, New York, Pacific, and Philadelphia Stock
Exchanges. Options on some securities may not, however, be
listed on any exchange, but may be traded in the over-the-
counter market. Options traded in the over-the-counter
market involve the additional risk that securities dealers
participating in such transactions would fail to meet their
obligations to the fund. The use of options traded in the
over-the-counter market may be subject to limitations
imposed by certain state securities authorities. In
addition to the limits on the use of options discussed
herein, a mutual fund is subject to the investment
restrictions described in its prospectus and the statement
of additional information.
The staff of the Securities and Exchange Commission
currently takes the position that the premiums that a mutual
fund pays for the purchase of unlisted options, and the
value of securities used to cover unlisted options written
by the fund, are considered to be invested in illiquid
securities or assets for the purpose of calculating whether
a mutual fund is in compliance with its limitation on
illiquid investments.
Futures Contracts. A fund or an underlying fund may enter
into futures contracts for the purchase or sale of debt
securities and stock indexes. A futures contract is an
agreement between two parties to buy and sell a security or
an index for a set price on a future date. Futures
contracts are traded on designated "contract markets" which,
through their clearing corporations, guarantee performance
of the contracts.
A financial futures contract sale creates an
obligation by the seller to deliver the type of financial
instrument called for in the contract in a specified
delivery month for a stated price. A financial futures
contract purchase creates an obligation by the purchaser to
take delivery of the type of financial instrument called for
in the contract in a specified delivery month at a stated
price. The specific instruments delivered or taken,
respectively, at settlement date are not determined until on
or near such date. The determination is made in accordance
with the rules of the exchange on which the futures contract
sale or purchase was made. Futures contracts are traded in
the United States only on commodity exchanges or boards of
trade (known as "contract markets") approved for such
trading by the Commodity Futures Trading Commission (the
"CFTC"), and must be executed through a futures commission
merchant or brokerage firm that is a member of the relevant
contract market.
Although futures contracts by their terms call for
actual delivery or acceptance of commodities or securities,
in most cases the contracts are closed out before the
settlement date without the making or taking of delivery.
Closing out a futures contract sale is effected by
purchasing a futures contract for the same aggregate amount
of the specific type of financial instrument or commodity
with the same delivery date. If the price of the initial
sale of the futures contract exceeds the price of the
offsetting purchase, the seller is paid the difference and
realizes a gain. On the other hand, if the price of the
offsetting purchase exceeds the price of the initial sale,
the seller realizes a loss. The closing out of a futures
contract purchase is effected by the purchaser's entering
into a futures contract sale. If the offsetting sale price
exceeds the purchase price, the purchaser realizes a gain,
and if the initial purchase price exceeds the offsetting
sale price, the purchaser realizes a loss.
A fund or an underlying fund may sell financial
futures contracts in anticipation of an increase in the
general level of interest rates. Generally, as interest
rates rise, the market value of the securities held by a
fund will fall, thus reducing its net asset value. This
interest rate risk may be reduced without the use of futures
as a hedge by selling such securities and either reinvesting
the proceeds in securities with shorter maturities or by
holding assets in cash. This strategy, however, entails
increased transaction costs in the form of dealer spreads
and brokerage commissions and would typically reduce the
fund's average yield as a result of the shortening of
maturities.
The sale of financial futures contracts serves as a
means of hedging against rising interest rates. As interest
rates increase, the value of a fund's short position in the
futures contracts will also tend to increase, thus
offsetting all or a portion of the depreciation in the
market value of the fund's investments being hedged. While
a fund will incur commission expenses in selling and closing
out futures positions (by taking an opposite position in the
futures contract), commissions on futures transactions tend
to be lower than transaction costs incurred in the purchase
and sale of portfolio securities.
A fund or an underlying fund may purchase interest
rate futures contracts in anticipation of a decline in
interest rates when it is not fully invested. As such
purchases are made, a fund would probably expect that an
equivalent amount of futures contracts will be closed out.
Unlike when a fund purchases or sells a security, no
price is paid or received by the fund upon the purchase or
sale of a futures contract. Upon entering into a contract,
the fund is required to deposit with its custodian in a
segregated account in the name of the futures broker an
amount of cash and/or U.S. government securities. This is
known as "initial margin." Initial margin is similar to a
performance bond or good faith deposit which is returned to
the fund upon termination of the futures contract, assuming
all contractual obligations have been satisfied. Futures
contracts also involve brokerage costs.
Subsequent payments, called "variation margin" or
"maintenance margin", to and from the broker (or the
custodian) are made on a daily basis as the price of the
underlying security or commodity fluctuates, making the long
and short positions in the futures contract more or less
valuable. This is known as "marking to the market."
A fund or an underlying fund may elect to close some
or all of its futures positions at any time prior to their
expiration in order to reduce or eliminate a hedge position
then currently held by the fund. The fund may close its
positions by taking opposite positions that will operate to
terminate the fund's position in the futures contracts.
Final determinations of variation margin are then made,
additional cash is required to be paid by or released to the
fund, and the fund realizes a loss or a gain. Such closing
transactions involve additional commission costs.
A stock index futures contract may be used to hedge a
fund or an underlying fund's portfolio with regard to market
risk as distinguished from risk related to a specific
security. A stock index futures contract is a contract to
buy or sell units of an index at a specified future date at
a price agreed upon when the contract is made. A stock
index futures contract does not require the physical
delivery of securities, but merely provides for profits and
losses resulting from changes in the market value of the
contract to be credited or debited at the close of each
trading day to the respective accounts of the parties to the
contract. On the contract's expiration date, a final cash
settlement occurs. Changes in the market value of a
particular stock index futures contract reflect changes in
the specified index of equity securities on which the future
is based.
In the event of an imperfect correlation between the
futures contract and the portfolio position that is intended
to be protected, the desired protection may not be obtained
and the fund may be exposed to risk of loss. Further,
unanticipated changes in interest rates or stock price
movements may result in a poorer overall performance for the
fund than if it had not entered into futures contracts on
debt securities or stock indexes.
The market prices of futures contracts may also be
affected by certain factors. First, all participants in the
futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit
requirements, an investor may close futures contracts
through offsetting transactions, which could distort the
normal relationship between the securities and futures
markets. Second, the deposit requirements in the futures
market are less stringent than margin requirements in the
securities market. Accordingly, increased participation by
speculators in the futures market may also cause temporary
price distortions.
Positions in futures contracts may be closed out only
on an exchange or board of trade providing a secondary
market for such futures. There is no assurance that a
liquid secondary market on an exchange or board of trade
will exist for any particular contract or at any particular
time.
In order to assure that mutual funds have sufficient
assets to satisfy their obligations under their futures
contracts, the funds are required to establish segregated
accounts with their custodians. Such segregated accounts
are required to contain an amount of cash and liquid
securities equal in value to the current value of the
underlying instrument less the margin deposit.
The risk to a fund or an underlying fund from
investing in futures is potentially unlimited. Gains and
losses on investments in options and futures depend upon the
fund's investment adviser's ability to predict correctly the
direction of stock prices, interest rates and other economic
factors.
Options on Futures Contracts. A fund or an underlying fund
may also purchase and sell listed put and call options on
futures contracts. An option on a futures contract gives
the purchaser the right in return for the premium paid, to
assume a position in a futures contract (a long position if
the option is a call and a short position if the option is a
put), at a specified exercise price at any time during the
option period. When an option on a futures contract is
exercised, delivery of the futures position is accompanied
by cash representing the difference between the current
market price of the futures contract and the exercise price
of the option. The fund may also purchase put options on
futures contracts in lieu of, and for the same purpose as, a
sale of a futures contract. A fund may also purchase such
put options in order to hedge a long position in the
underlying futures contract in the same manner as it
purchases "protective puts" on securities.
The holder of an option may terminate the position by
selling an option of the same series. There is, however, no
guarantee that such a closing transaction can be effected.
A fund is required to deposit initial and maintenance margin
with respect to put and call options on futures contracts
written by it pursuant to brokers' requirements similar to
those applicable to futures contracts described above and,
in addition, net option premiums received will be included
as initial margin deposits.
In addition to the risks which apply to all options
transactions, there are several risks relating to options on
futures contracts. The ability to establish and close out
positions on such options is subject to the development and
maintenance of a liquid secondary market. It is not certain
that this market will be liquid. In comparison with the use
of futures contracts, the purchase of options on futures
contracts involves less potential risk to a fund because the
maximum amount of risk is the premium paid for the option
(plus transaction costs). There may, however, be
circumstances when the use of an option on a futures
contract would result in a loss to a fund when the use of a
futures contract would not, such as when there is no
movement in the prices of the underlying securities.
Writing an option on a futures contract involves risks
similar to those arising in the sale of futures contracts,
as described above.
Hedging. A fund or an underlying fund may employ many of
the investment techniques described for investment and
hedging purposes. For example, a fund may purchase or sell
put and call options on common stocks to hedge against
movements in individual common stock prices, or purchase and
sell stock index futures and related options to hedge
against market wide movements in common stock prices.
Although such hedging techniques generally tend to minimize
the risk of loss that is hedged against, they also may limit
the potential gain that might have resulted had the hedging
transaction not occurred. Also, the desired protection
generally resulting from hedging transactions may not always
be achieved.
Leverage. An underlying fund may borrow on an unsecured
basis from banks to increase its holdings of portfolio
securities. Under the 1940 Act, such fund is required to
maintain continuous asset coverage of 300% with respect to
such borrowings and to sell (within three days) sufficient
portfolio holdings in order to restore such coverage if it
should decline to less than 300% due to market fluctuation
or otherwise. Such sale must occur even if disadvantageous
from an investment point of view. Leveraging aggregates the
effect of any increase or decrease in the value of portfolio
securities on the underlying fund's net asset value. In
addition, money borrowed is subject to interest costs (which
may include commitment fees and/or the cost of maintaining
minimum average balances) which may or may not exceed the
interest and option premiums received from the securities
purchased with borrowed funds.
HIGH YIELD INVESTMENTS
High Yield Securities and Their Risks. A fund or an
underlying fund may invest in high yield, high-risk, lower-
rated securities, commonly known as "junk bonds." Such
fund's investment in such securities is subject to the risk
factors outlined below.
Growth of the High Yield Bond Market. The high yield, high
risk market is at times subject to substantial volatility.
An economic downturn or increase in interest rates may have
a more significant effect on the high yield, high risk
securities in a fund's portfolio and their markets, as well
as on the ability of securities' issuers to repay principal
and interest. Issuers of high yield, high risk securities
may be of low credit worthiness and the high yield, high
risk securities may be subordinated to the claims of senior
lenders. During periods of economic downturn or rising
interest rates, the issuers of high yield, high risk
securities may have greater potential for insolvency and a
higher incidence of high yield, high risk bond defaults may
be experienced.
Sensitivity of Interest Rate and Economic Changes. The
prices of high yield, high risk securities may be more or
less sensitive to interest rate changes than higher-rated
investments but are more sensitive to adverse economic
changes or individual corporate developments. During an
economic downturn or substantial period of rising interest
rates, highly leveraged issuers may experience financial
stress that would adversely affect their ability to service
their principal and interest payment obligations, to meet
projected business goals, and to obtain additional
financing. If the issuer of a high yield, high risk
security owned by an underlying fund defaults, the fund may
incur additional expenses in seeking recovery. Periods of
economic uncertainty and changes can be expected to result
in increased volatility of market prices of high yield, high
risk securities and the fund's net asset value. Yields on
high yield, high risk securities will fluctuate over time.
Furthermore, in the case of high yield, high risk securities
structured as zero coupon or pay-in-kind securities, their
market prices are affected to a greater extent by interest
rate changes and thereby tend to be more volatile than
market prices of securities which pay interest periodically
and in cash.
Payment Expectations. Certain securities held by a fund or
an underlying fund, including high yield, high risk
securities, may contain redemption or call provisions. If
an issuer exercises these provisions in a declining interest
rate market, such fund would have to replace the security
with a lower yielding security, resulting in a decreased
return for the investor. Conversely, a high yield, high
risk security's value will decrease in a rising interest
rate market.
Liquidity and Valuation. The secondary market may at times
become less liquid or respond to adverse publicity or
investor perceptions, making it more difficult for a fund or
an underlying fund to accurately value high yield, high risk
securities or dispose of them. To the extent such fund owns
or may acquire illiquid or restricted high yield, high risk
securities, these securities may involve special
registration responsibilities, liabilities and costs, and
liquidity difficulties, and judgment will play a greater
role in valuation because there is less reliable and
objective data available.
Taxation. Special tax considerations are associated with
investing in high yield bonds structured as zero coupon or
pay-in-kind securities. A fund will report the interest on
these securities as income even though it receives no cash
interest until the security's maturity or payment date.
Further, a fund must distribute substantially all of its
income to its shareholders to qualify for pass-through
treatment under the tax law. Accordingly, such a fund may
have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash or may have
to leverage itself by borrowing the cash to satisfy
distribution requirements.
Credit Ratings. Credit ratings evaluate the safety of
principal and interest payments, not the market value risk
of high yield, high risk securities. Since credit rating
agencies may fail to change the credit ratings in a timely
manner to reflect subsequent events, the investment adviser
to the funds or an underlying fund should monitor the
issuers of high yield, high risk securities in the fund's
portfolio to determine if the issuers will have sufficient
cash flow and profits to meet required principal and
interest payments, and to attempt to assure the securities'
liquidity so the fund can meet redemption requests. To the
extent that an underlying fund invests in high yield, high
risk securities, the achievement of the fund's investment
objective may be more dependent on the underlying fund's own
credit analysis than is the case for higher quality bonds.
A fund or an underlying fund may retain a portfolio security
whose rating has been changed. See "Appendix" for credit
rating information.
Mortgage-Backed, Asset-Backed, Indexed and Derivative
Securities. A fund or an underlying fund may invest in
mortgage pass-through securities, which are securities
representing interest in pools of mortgage loans secured by
residential or commercial real property in which payments of
both interest and principal on the securities are generally
made monthly, in effect passing through monthly payments
made by individual borrowers on mortgage loans which
underlie the securities (net of fees paid to the issuer or
guarantor of the securities). Early repayment of principal
on some mortgage-related securities (arising from
prepayments of principal due to sale of the underlying
property, refinancing, or foreclosure, net of fees and costs
which may be incurred) may expose a fund to a lower rate of
return upon reinvestment of principal. Also, if a security
subject to prepayment has been purchased at a premium, in
the event of prepayment the value of the premium would be
lost.
Like other fixed income securities, when interest
rates rise, the value of a mortgage-related security
generally will decline; however, when interest rates are
declining, the value of mortgage-related securities with
prepayment features may not increase as much as other fixed
income securities.
A fund or an underlying fund may invest in
collateralized mortgage obligations (CMOs), which are hybrid
mortgage-related instruments. Similar to a bond, interest
and pre-paid principal on a CMO are paid, in most cases,
semiannually. CMOs are collateralized by portfolios of
mortgage pass-through securities and are structured into
multiple classes with different stated maturities. Monthly
payments of principal, including prepayments, are first
returned to investors holding the shortest maturity class;
investors holding the longer maturity classes receive
principal only after the first class has been retired.
Other mortgage-related securities in which a fund or
an underlying fund may invest include other securities that
directly or indirectly represent a participation in, or are
secured by and payable from, mortgage loans on real
property, such as CMO residuals or stripped mortgage-backed
securities, and may be structured in classes with rights to
receive varying proportions of principal and interest. In
addition, the funds or the underlying funds may invest in
other asset-backed securities that have been offered to
investors or will be offered to investors in the future.
Several types of asset-backed securities have already been
offered to investors, including certificates for automobile
receivables, which represent undivided fractional interests
in a trust whose assets consist of a pool of motor vehicle
retail installment sales contracts and security interest in
the vehicles securing the contracts.
II. INVESTMENT RESTRICTIONS
FUNDAMENTAL INVESTMENT POLICIES. Each fund has
adopted certain fundamental investment policies. These
fundamental investment policies cannot be changed unless the
change is approved by the lesser of (1) 67% or more of the
voting securities present at a meeting, if the holders of
more than 50% of the outstanding voting securities of the
fund are present or represented by proxy, or (2) more than
50% of the outstanding voting securities of the fund. These
fundamental policies provide that a fund may not:
1. Invest 25% or more of its total assets in any one
industry (securities issued or guaranteed by the United
States government, its agencies or instrumentalities are not
considered to represent industries);
2. Borrow money or issue senior securities except to the
extent permitted by the 1940 Act;
3. Make loans of securities to other persons, except
loans of securities not exceeding 33 1/3% of the fund's
total assets, investments in debt obligations and
transactions in repurchase agreements;
4. Underwrite securities of other issuers, except insofar
as the fund may be deemed an underwriter under the
Securities Act of 1933, as amended (the "1933 Act") in
selling portfolio securities;
5. Purchase or sell real estate or any interest therein,
including interests in real estate limited partnerships,
except securities issued by companies (including real estate
investment trusts) that invest in real estate or interests
therein and real estate acquired as a result of owning
securities.
6. Invest in commodities or commodity futures contracts,
provided that this limitation shall not prohibit the
purchase or sale by the fund of forward currency contracts;
financial futures contracts and options on financial futures
contracts; options on securities; currencies and on
securities indices; and swaps, caps, floors and collars, as
permitted by the fund's prospectus.
Additional investment restrictions adopted by the
funds, which may be changed by the Board of Trustees,
provide that a fund may not:
1. With respect to 75% of the fund's assets, invest more
than 5% of the fund's assets (taken at a market value at the
time of purchase) in the outstanding securities of any
single issuer or own more than 10% of the outstanding voting
securities of any one issuer, in each case other than (1)
securities issued or guaranteed by the United States
government, its agencies or instrumentalities, or (2)
securities of other investment companies;
2. Invest more than 15% of its net assets (taken at
market value at the time of purchase) in illiquid
securities;
3. Purchase or sell interests in oil, gas or other
mineral exploration or development plans or leases;
4. Invest in warrants if at the time of acquisition more
than 5% of its total assets, taken at market value at the
time of purchase, would be invested in warrants, and if at
the time of acquisition more than 2% of its total assets,
taken at market value at the time of purchase, would be
invested in warrants not traded on the New York Stock
Exchange or American Stock Exchange. For purposes of this
restriction, warrants acquired by the fund in units or
attached to securities may be deemed to be without value;
5. Invest more than 5% of its total assets in securities
of issuers which together with any predecessors have a
record of less than three years of continuous operation.
This restriction shall not apply with respect to securities
rated at least investment grade by a nationally recognized
statistical rating organization; securities issued by a
special purpose funding vehicle for a company with a record
of at least three years of continuous operation; real estate
investment trusts the sponsor of which has a record of at
least three years of continuous operation; or to investments
in securities of other investment companies.
6. Pledge, mortgage or hypothecate its assets other than
to secure borrowings permitted by fundamental restriction 2
above (collateral arrangements with respect to margin
requirements for options and futures transactions are not
deemed to be pledges or hypothecations for this purpose);
7. Make investments for the purpose of exercising control
or management; or
8. Invest in other investment companies except as
permitted under the 1940 Act.
The mutual funds in which the funds may invest may,
but need not, have the same investment policies as a fund.
Although all of the funds may from time to time invest in
shares of the same underlying mutual fund, the percentage of
each fund's assets so invested may vary, and Insight
Management will determine that such investments are
consistent with the investment objective and policies of
each fund. The investments that may, in general, be made by
underlying funds in which the funds may invest, as well as
the risks associated with such investments, are described in
the prospectus.
III. MANAGEMENT OF THE TRUST AND THE FUNDS
A. Trustees and Officers
The principal occupations of the Trustees and officers
of the Trust during the past five years are set forth below:
Each Trustee who is deemed to be an "interested person" of
the Trust, as defined in the 1940 Act is indicated by an
asterisk.
ERIC M. KOBREN, 20 William Street, Suite 310, P.O. Box 9135,
Wellesley Hills, Massachusetts 02181 - President. Mr.
Kobren has served as President of Mutual Fund Investors
Association, Inc. since 1985 and as President of Insight
Management and Insight Brokerage Services, Inc. ("Insight
Brokerage") since 1987. These are a financial publishing
concern, a registered investment advisory firm and a
registered broker-dealer, respectively. Mr. Kobren is 42
years old.
MICHAEL P. CASTELLANO, 20 William Street, Suite 310, P.O.
Box 9135, Wellesley Hills, Massachusetts 02181 - Treasurer.
Since December 1994, Mr. Castellano has served as Chief
Administrative Officer of Insight Management and as a
Registered Representative of Insight Brokerage. From
October 1993 to December 1994, Mr. Castellano was employed
as Executive Vice President and Chief Administrative Officer
of Wall Street Investor Services, a registered broker-
dealer. Prior to that time, he was a Senior Vice President
with Fidelity Investments, a registered investment advisory
firm and broker-dealer. Mr. Castellano is 55 years old.
ERIC J. GODES, 20 William Street, Suite 310, P.O. Box 9135,
Wellesley Hills, Massachusetts 02181 - Vice President and
Secretary. Mr. Godes, a Vice President of Insight
Management and a registered representative of Insight
Brokerage, has been associated with both companies since
1990. He is 35 years old.
EDWARD R. GOLDFARB, 20 William Street, Suite 310, P.O. Box
9135, Wellesley Hills, Massachusetts 02181 - Vice President.
Since September 1995, Mr. Goldfarb has been Director of
Research and Chief Strategist of Insight Management, as well
as a registered representative, of Insight Brokerage. From
June 1992 to September 1995, he was employed as a registered
representative of Aeltus Capital, Inc. and, from March 1994
to September 1995, he also served as Managing Director of
Aeltus Investment Management, Inc. From September 1982 to
September 1995, Mr. Goldfarb was employed as a Vice
President of Aetna Life & Casualty serving in various
capacities. During that time, he was also a registered
representative of Aetna Financial Services, Inc. and, from
May 1992 to March 1994, a registered representative of Aetna
Capital Management, Inc. Mr. Goldfarb is 36 years old.
The Trustees who are not employed by the Adviser each
receive a $5,000 annual retainer, plus a $1,000 fee for each
regularly scheduled board meeting attended and out-of-pocket
expenses incurred in attending such meetings.
Compensation Table
The following table sets forth the anticipated
compensation to be paid to the Trustees of the Trust for the
fiscal period ending December 31, 1996. No compensation is
paid to any officers of the Trust by the funds.
<TABLE>
<CAPTION>
<C> <S> <S>
TOTAL
AGGREGATE COMPENSATION
NAME OF PERSON COMPENSATION FROM THE TRUST
AND POSITION FROM THE TRUST PAID TO TRUSTEES
Chairman of the
Board and Trustee $0 $0
Trustee $0 $0
Trustee $2,250 $2,250
Trustee $2,250 $2,250
Trustee $2,250 $2,250
Trustee $2,250 $2,250
</TABLE>
Control Persons and Principal Holders of Securities
As of the date of this statement of additional
information, the following entity owned 5% or more of the
outstanding shares of the Trust:
Insight Management, Inc. 100.00%
20 William Street, Suite 310
P.O. Box 9135
Wellesley Hills, Massachusetts 02181
As of the date of this statement of additional
information, Mr. Kobren, by virtue of his ownership of
Insight Management, could be deemed to be a control person
and principal holder of the Trust's securities.
The Trust's Declaration of Trust provides that the
Trust will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with
litigation in which they may be involved as a result of
their positions with the Trust, unless, as to liability to
the Trust or its shareholders, it is finally adjudicated
that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in
their offices, or unless with respect to any other matter it
is finally adjudicated that they did not act in good faith
in the reasonable belief that their actions were in the best
interests of the Trust and its funds. In the case of
settlement, such indemnification will not be provided unless
it has been determined by a court or other body approving
the settlement or other disposition, or by a reasonable
determination, based upon a review of readily available
facts, by vote of a majority of disinterested Trustees or in
a written opinion of independent counsel, that such officers
or Trustees have not engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of their
duties.
B. Investment Adviser
Insight Management serves as investment adviser to the
Trust and its funds pursuant to a written investment
advisory agreement. Insight Management is a Massachusetts
corporation organized in 1987, and is a registered
investment adviser under the Investment Advisers Act of
1940, as amended.
Certain services provided by Insight Management under
the investment advisory agreement are described in the
prospectus. In addition to those services, Insight
Management may, from time to time, provide the funds with
office space for managing their affairs, with the services
of required executive personnel, and with certain clerical
services and facilities. These services are provided
without reimbursement by the funds for any costs incurred.
As compensation for its services, each fund pays Insight
Management a fee computed daily and paid monthly at the
annual rate of 0.75% of the fund's average daily net assets.
This fee will be reduced by agreements the Insight Premier
funds have structured with underlying funds to receive 12b-1
fees and share in a portion of their advisory fee revenue.
Each fund is responsible for all expenses not
expressly assumed by Insight Management or the
administrator. These include, among other things,
organization expenses, legal fees, audit and accounting
expenses, insurance costs, the compensation and expenses of
the Trustees, the expenses of printing and mailing reports,
notices and proxy statements to fund shareholders,
registration fees under federal and state securities laws,
brokerage commissions, interest, taxes and extraordinary
expenses (such as for litigation).
Insight Management has agreed to reimburse each fund
to the extent necessary to maintain the fund's operating
expenses (excluding investment advisory fees, brokerage
commissions, taxes, interest and litigation, indemnification
and other extraordinary expenses) at 0.25% annually of the
fund's average daily net assets. The investment advisory
agreement with Insight Management provides that if the total
expenses of a fund in any fiscal year exceed the permissible
limits applicable to the fund in any state in which shares
of the fund are then qualified for sale, the compensation
due Insight Management for such fiscal year shall be reduced
by the amount of such excess by a reduction or refund
thereof at the time such compensation is payable after the
end of each calendar month during such fiscal year of the
fund, subject to readjustment during the fund's fiscal year.
Until December 31, 1996, the only state expense limitation
provision applicable to the funds limits each fund's
expenses to 2 1/2% of the first $30 million of average net
assets, 2% of the next $70 million of average net assets and
1 1/2% of any remaining average net assets. Taxes,
brokerage costs, interest expenses and extraordinary
expenses are excluded from this limitation.
By its terms, the Trust's investment advisory
agreement will remain in effect through November , 1998
and from year to year thereafter, subject to annual approval
by (a) the Board of Trustees or, with respect to a
particular fund, (b) a vote of the majority of that fund's
outstanding voting securities; provided that in either event
continuance is also approved by a majority of the Trustees
who are not interested persons of the Trust, by a vote cast
in person at a meeting called for the purpose of voting such
approval. The Trust's investment advisory agreement may be
terminated at any time, on sixty days' written notice,
without the payment of any penalty, by the Board of
Trustees, by a vote of the majority of a particular fund's
outstanding voting securities, or by Insight Management.
The investment advisory agreement automatically terminates
in the event of its assignment, as defined by the 1940 Act
and the rules thereunder.
C. Distributor
Insight Brokerage Services, Inc., an affiliate of
Insight Management, 20 William Street, Suite 310, P.O. Box
9135, Wellesley Hills, Massachusetts 02181, serves as each
fund's distributor pursuant to an agreement which is
renewable annually. Each fund's shares are sold on a
continuous basis by Insight Brokerage as agent, although
Insight Brokerage is not obligated to sell any particular
amount of shares. The distributor pays the cost of printing
and distributing prospectuses to persons who are not
shareholders of a fund (excluding preparation and printing
expenses necessary for the continued registration of a
fund's shares) and of preparing, printing and distributing
all sales literature.
D. Administrator, Transfer Agent and Dividend Paying Agent
The Board of Trustees of the Trust has approved an
Administration Agreement between the Trust and First Data
Investor Services Group, Inc. ("First Data"), a subsidiary
of First Data Corporation, pursuant to which First Data
serves as administrator to the Trust and to each of the
funds. First Data is located at One Exchange Place, Boston,
Massachusetts 02109. The administrative services necessary
for the operation of the Trust and its funds provided by
First Data include among other things: (i) preparation of
shareholder reports and communications, (ii) regulatory
compliance, such as reports to and filings with the
Securities and Exchange Commission and state securities
commissions and (iii) general supervision of the operation
of the Trust and its funds, including coordination of the
services performed by the transfer agent, custodian,
independent accountants, legal counsel and others. For
these services, First Data is entitled to receive the
following annual fees on a per fund basis: $67,500 for
administration and fund accounting.
First Data also serves as the Trust's transfer and
dividend paying agent and performs shareholder service
activities. The services of First Data are provided
pursuant to a Transfer Agency and Services Agreement between
the Trust and First Data. Pursuant to such Agreement, First
Data will receive from the Trust, with respect to each fund,
an annual fee of $14 per shareholder account (subject to a
$32,000 annual minimum). First Data also receives
reimbursement under the Transfer Agency and Services
Agreement for certain out-of-pocket expenses incurred in
rendering such services.
IV. PURCHASE, REDEMPTION AND DETERMINATION
OF NET ASSET VALUE
Detailed information on purchase and redemption of
shares is included in the prospectus. The Trust may suspend
the right to redeem its shares or postpone the date of
payment upon redemption for more than three business days
(i) for any period during which the New York Stock Exchange
is closed (other than customary weekend or holiday closings)
or trading on the exchange is restricted; (ii) for any
period during which an emergency exists as a result of which
disposal by a fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable
for a fund fairly to determine the value of its net assets;
or (iii) for such other periods as the Securities and
Exchange Commission may permit for the protection of
shareholders of the Trust.
Each fund's underlying funds are valued according to
the net asset value per share ("NAV") furnished by that
fund's accounting agent. Each fund's investment securities
are valued at the last sale price on the securities exchange
or national securities market on which such securities
primarily are traded. Securities not listed on an exchange
or national securities market, or securities in which there
were no transactions, are valued at the average of the most
recent bid and asked prices. Bid price is used when no
asked price is available. Short-term investments are
carried at amortized cost, which approximates market value.
Any securities or other assets for which recent market
quotations are not readily available are valued at fair
value as determined in good faith by the Board of Trustees.
Income, expenses and fees, including the advisory and
administration fees, are accrued daily and taken into
account for the purpose of determining the net asset value
of each fund's shares.
Each fund computes the NAV of its shares at the close
of regular trading on the New York Stock Exchange (normally
4:00 p.m. New York time) on each weekday that is not a
holiday. The holidays (as observed) on which the New York
Stock Exchange is scheduled to be closed currently are: New
Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. If
the New York Stock Exchange closes early, the time of
computing the NAV and the deadlines for purchasing and
redeeming shares will be accelerated to the earlier closing
time. The NAV of each fund's shares is determined by
subtracting from the value of the fund's total assets the
amount of the fund's liabilities and dividing the remainder
by the number of outstanding fund shares. Although the NAV
will be calculated at the close of all regular trading days,
the NAV reported to NASDAQ for distribution to news agencies
will be delayed by one business day.
V. SPECIAL REDEMPTIONS
If the Board of Trustees of the Trust determines that
it would be detrimental to the best interests of the
remaining shareholders of a fund to make payment wholly or
partly in cash, that fund may pay the redemption price in
whole or in part by a distribution in kind of securities
from the portfolio of that fund, instead of in cash, in
conformity with applicable rules of the Securities and
Exchange Commission. [The Trust will, however, redeem
shares solely in cash up to the lesser of $250,000 or 1% of
its net assets during any 90-day period for any one
shareholder.] The proceeds of redemption may be more or
less than the amount invested and, therefore, a redemption
may result in a gain or loss for federal income tax
purposes.
VI. PORTFOLIO TRANSACTIONS
Insight Management is responsible for decisions to buy
and sell securities for the funds and for the placement of
the funds' portfolio business and negotiation of
commissions, if any, paid on these transactions.
The funds will arrange to be included within a class
of investors entitled not to pay sales charges by purchasing
load fund shares under letters of intent, rights of
accumulation, cumulative purchase privileges and other
quantity discount programs.
VII. PERFORMANCE INFORMATION
A. Total Return
From time to time, quotations of a fund's performance
may be included in advertisements, sales literature or
reports to shareholders or prospective investors. These
performance figures may be calculated in the following
manner:
Total return is computed by finding the average annual
compounded rates of return over the designated periods that
would equate the initial amount invested to the ending
redeemable value, according to the following formula:
P(1+T)n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the designated
period assuming a hypothetical $1,000 payment made at
the beginning of the designated period
The calculation set forth above is based on the
further assumptions that: (i) all dividends and
distributions of a fund during the period were reinvested at
the net asset value on the reinvestment dates; and (ii) all
recurring expenses that were charged to all shareholder
accounts during the applicable period were deducted.
Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of
reinvesting dividends and capital gain distributions, and
any change in the fund's net asset value per share (NAV)
over the period. Average annual returns are calculated by
determining the growth or decline in value of a hypothetical
historical investment in a fund over a stated period, and
then calculating the annually compounded percentage rate
that would have produced the same result if the rate of
growth or decline in value had been constant over the
period. For example, a cumulative return of 100% over ten
years would produce an average annual return of 7.18%, which
is the steady annual return rate that would equal 100%
growth on a compounded basis in ten years. While average
annual returns are a convenient means of comparing
investment alternatives, investors should realize that a
fund's performance is not constant over time, but changes
from year to year, and that average annual returns represent
averaged figures as opposed to the actual year-to-year
performance of the fund.
B. Non-Standardized Total Return
In addition to the performance information described
above, a fund may provide total return information for
designated periods, such as for the most recent rolling six
months or most recent rolling twelve months. A fund may
quote unaveraged or cumulative total returns reflecting the
simple change in value of an investment over a stated
period. Average annual and cumulative total returns may be
quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments,
and/or a series of redemptions over any time period. Total
returns may be broken down into their components of income
and capital (including capital gains and changes in share
price) in order to illustrate the relationship of these
factors and their contributions to total return. Total
returns and other performance information may be quoted
numerically or in a table, graph or similar illustration.
C. Other Information Concerning Fund Performance
A fund may quote its performance in various ways,
using various types of comparisons to market indices, other
funds or investment alternatives, or to general increases in
the cost of living. All performance information supplied by
a fund in advertising is historical and is not intended to
indicate future returns. A fund's share prices and total
returns fluctuate in response to market conditions and other
factors, and the value of a fund's shares when redeemed may
be more or less than their original cost.
A fund may compare its performance over various
periods to various indices or benchmarks or combinations of
indices and benchmarks, including the performance record of
the Standard & Poor's 500 Composite Stock Price Index
("S&P"), the Dow Jones Industrial Average ("DJIA"), the
NASDAQ Industrial Index, the Ten Year Treasury Benchmark and
the cost of living (measured by the Consumer Price Index, or
CPI) over the same period. Comparisons may also be made to
yields on certificates of deposit, treasury instruments or
money market instruments. The comparisons to the S&P and
DJIA show how such fund's total return compared to the
record of a broad average of common stock prices (S&P) and a
narrower set of stocks of major industrial companies (DJIA).
The fund may have the ability to invest in securities or
underlying funds not included in either index, and its
investment portfolio may or may not be similar in
composition to the indices. Figures for the S&P and DJIA
are based on the prices of unmanaged groups of stocks, and
unlike the fund's returns, their returns do not include the
effect of paying brokerage commissions and other costs of
investing.
Comparisons may be made on the basis of a hypothetical
initial investment in the fund (such as $1,000), and reflect
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (that is, their cash
value at the time they were reinvested). Such comparisons
may also reflect the change in value of such an investment
assuming distributions are not reinvested. Tax consequences
of different investments may not be factored into the
figures presented.
A fund's performance may be compared in advertising to
the performance of other mutual funds in general or to the
performance of particular types of mutual funds, especially
those with similar objectives.
Other groupings of funds prepared by Lipper Analytical
Services, Inc. ("Lipper") and other organizations may also
be used for comparison to the funds. Although Lipper and
other organizations such as Investment Company Data, Inc.
("ICD"), CDA Investment Technologies, Inc. ("CDA") and
Morningstar Investors, Inc. ("Morningstar"), include funds
within various classifications based upon similarities in
their investment objectives and policies, investors should
be aware that these may differ significantly among funds
within a grouping.
From time to time a fund may publish the ranking of
the performance of its shares by Morningstar, an independent
mutual fund monitoring service that ranks mutual funds,
including the funds, in broad investment categories (equity,
taxable bond, tax-exempt and other) monthly, based upon each
fund's one-, three-, five- and ten-year average annual total
returns (when available) and a risk adjustment factor that
reflects fund performance relative to three-month U.S.
treasury bill monthly returns. Such returns are adjusted
for fees and sales loads. There are five ranking categories
with a corresponding number of stars: highest (5), above
average (4), neutral (3), below average (2) and lowest (1).
Ten percent of the funds, series or classes in an investment
category receive 5 stars, 22.5% receive 4 stars, 35% receive
3 stars, 22.5% receive 2 stars, and the bottom 10% receive
one star.
From time to time, in reports and promotional
literature, a fund's yield and total return will be compared
to indices of mutual funds and bank deposit vehicles such as
Lipper's "Lipper - Fixed Income Fund Performance Analysis,"
a monthly publication which tracks net assets, total return,
and yield on approximately 1,700 fixed income mutual funds
in the United States. Ibbotson Associates, CDA Wiesenberger
and F.C. Towers are also used for comparison purposes as
well as the Russell and Wilshire Indices. Comparisons may
also be made to bank certificates of deposit ("CD"), which
differ from mutual funds, such as the funds, in several
ways. The interest rate established by the sponsoring bank
is fixed for the term of a CD, there are penalties for early
withdrawal from CDs, and the principal on a CD is insured.
Comparisons may also be made to the 10 year Treasury
Benchmark.
Performance rankings and ratings reported periodically
in national financial publications such as Money Magazine,
Forbes, Business Week, The Wall Street Journal, Micropal,
Inc., Morningstar, Stanger's, Barron's, etc. will also be
used.
Ibbotson Associates of Chicago, Illinois ("Ibbotson")
and others provide historical returns of the capital markets
in the United States. A fund may compare its performance to
the long-term performance of the U.S. capital markets in
order to demonstrate general long-term risk versus reward
investment scenarios. Performance comparisons could also
include the value of a hypothetical investment in common
stocks, long-term bonds or treasuries. A fund may discuss
the performance of financial markets and indices over
various time periods.
The capital markets tracked by Ibbotson are common
stocks, small capitalization stocks, long-term corporate
bonds, intermediate-term government bonds, long-term
government bonds, Treasury Bills, and the U.S. rate of
inflation. These capital markets are based on the returns
of several different indices. For common stocks the S&P is
used. For small capitalization stocks, return is based on
the return achieved by Dimensional Fund Advisors Small
Company Fund. This fund is a market value-weighted index of
the ninth and tenth decimals of the New York Stock Exchange
("NYSE"), plus stocks listed on the American Stock Exchange
and over-the-counter with the same or less capitalization as
the upper bound of the NYSE ninth decile.
Long-term corporate bond returns are based on the
performance of the Salomon Brothers Long-Term-High-Grade
Corporate Bond Index which includes nearly all Aaa- and Aa-
rated bonds. Returns on intermediate-term government bonds
are based on a one-bond portfolio constructed each year,
containing a bond which is the shortest noncallable bond
available with a maturity not less than 5 years. This bond
is held for the calendar year and returns are recorded.
Returns on long-term government bonds are based on a one-
bond portfolio constructed each year, containing a bond that
meets several criteria, including having a term of
approximately 20 years. The bond is held for the calendar
year and returns are recorded. Returns on U.S. Treasury
bills are based on a one-bill portfolio constructed each
month, containing the shortest-term bill having not less
than one month to maturity. The total return on the bill is
the month-end price divided by the previous month-end price,
minus one. Data up to 1976 is from the U.S. Government Bond
file at the University of Chicago's Center for Research in
Security Prices; the Wall Street Journal is the source
thereafter.
Inflation rates are based on the CPI. Ibbotson
calculates total returns in the same method as the fund.
Other widely used indices that the funds may use for
comparison purposes include the Lehman Bond Index, the
Lehman Aggregate Bond Index, The Lehman GNMA Single Family
Index, the Lehman Government/Corporate Bond Index, the
Salomon Brothers Long-Term High Yield Index, the Salomon
Brothers Non-Government Bond Index, the Salomon Brothers
Non-U.S. Government Bond Index, the Salomon Brothers World
Government Bond Index and the J.P. Morgan Government Bond
Index. The Salomon Brothers World Government Bond Index
generally represents the performance of government debt
securities of various markets throughout the world,
including the United States. Lehman Government/Corporate
Bond Index generally represents the performance of
intermediate and long-term government and investment grade
corporate debt securities. The Lehman Aggregate Bond Index
measures the performance of U.S. corporate bond issues, U.S.
government securities and mortgage-backed securities. The
J.P. Morgan Government Bond Index generally represents the
performance of government bonds issued by various countries
including the United States. The foregoing bond indices are
unmanaged indices of securities that do not reflect
reinvestment of capital gains or take investment costs into
consideration, as these items are not applicable to indices.
The funds may also discuss in advertising the relative
performance of various types of investment instruments, such
as stocks, treasury securities and bonds, over various time
periods and covering various holding periods. Such
comparisons may compare these investment categories to each
other or to changes in the CPI. In addition, the funds may
employ historical mutual fund performance data and industry
asset allocation studies in their advertisements.
A fund may advertise examples of the effects of
periodic investment plans, including the principle of dollar
cost averaging. In such a program, the investor invests a
fixed dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares
when prices are low. While such a strategy does not assure
a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed
numbers of shares had been purchased at those intervals. In
evaluating such a plan, investors should consider their
ability to continue purchasing shares through periods of low
price levels.
The funds may be available for purchase through
retirement plans or other programs offering deferral of or
exemption from income taxes, which may produce superior
after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually,
compounded monthly, would have an after-tax value of $2,009
after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred
investment would have an after-tax value of $2,178 after ten
years, assuming tax was deducted at a 31% rate from the
deferred earnings at the end of the ten year period.
Evaluations of fund performance made by independent
sources may also be used in advertisements concerning the
funds, including reprints of, or selections from, editorials
or articles about the fund. These editorials or articles
may include quotations of performance from other sources
such as Lipper or Morningstar. Sources for fund performance
information and articles about the funds may include the
following:
BANXQUOTE, an on-line source of national averages for
leading money market and bank CD interest rates, published
on a weekly basis by Masterfund, Inc. of Wilmington,
Delaware.
BARRON'S, a Dow Jones and Company, Inc. business and
financial weekly that periodically reviews mutual fund
performance data.
THE BOSTON GLOBE, a regional daily newspaper.
BUSINESS WEEK, a national business weekly that periodically
reports the performance rankings and ratings of a variety of
mutual funds investing abroad.
CDA INVESTMENT TECHNOLOGIES, INC., an organization which
provides performance and ranking information through
examining the dollar results of hypothetical mutual fund
investments and comparing these results against appropriate
market indices.
CONSUMER DIGEST, a monthly business/financial magazine that
includes a "Money Watch" section featuring financial news.
FINANCIAL WORLD, a general business/financial magazine that
includes a "Market Watch" department reporting on activities
in the mutual fund industry.
FORBES, a national business publication that from time to
time reports the performance of specific investment
companies in the mutual fund industry.
FORTUNE, a national business publication that periodically
rates the performance of a variety of mutual funds.
IBC/DONOGHUES' MONEY FUND REPORT, a weekly publication of
the Donoghue Organization, Inc. of Holliston, Massachusetts,
reporting on the performance of the nation's money market
funds, summarizing money market fund activity, and including
certain averages as performance benchmarks, specifically
"Donoghue's Money Fund Average," and "Donoghue's Government
Money Fund Average."
IBBOTSON ASSOCIATES, INC., a company specializing in
investment research and data.
INVESTMENT COMPANY DATA, INC., an independent organization
which
provides performance ranking information for broad classes
of mutual funds.
INVESTOR'S DAILY, a daily newspaper that features financial,
economic, and business news.
KIPLINGER'S PERSONAL FINANCE, a monthly business
publication.
LIPPER ANALYTICAL SERVICES, INC.'S MUTUAL FUND PERFORMANCE
ANALYSIS, a weekly publication of industry-wide mutual fund
averages by type of fund.
MONEY, a monthly magazine that from time to time features
both specific funds and the mutual fund industry as a whole.
MORNINGSTAR INVESTOR and MORNINGSTAR ONDISC, monthly mutual
fund reporting services.
MUTUAL FUND MAGAZINE, a monthly business magazine published
by the Institute for Econometric Research.
MUTUAL FUND VALUES, a bi-weekly Morningstar, Inc.
publication that provides ratings of mutual funds based on
fund performance, risk and portfolio characteristics.
THE NEW YORK TIMES, a nationally distributed newspaper which
regularly covers financial news.
PERSONAL INVESTING NEWS, a monthly news publication that
often reports on investment opportunities and market
conditions.
PERSONAL INVESTOR, a monthly investment advisory publication
that includes a "Mutual Funds Outlook" section reporting on
mutual fund performance measures, yields, indices and
portfolio holdings.
SMART MONEY, a Dow Jones & Company, Inc. monthly business
magazine.
SUCCESS, a monthly magazine targeted to the world of
entrepreneurs and growing business, often featuring mutual
fund performance data.
USA TODAY, a nationally distributed newspaper.
U.S. NEWS AND WORLD REPORT, a national business weekly that
periodically reports mutual fund performance data.
THE WALL STREET JOURNAL, a Dow Jones & Company, Inc.
newspaper which regularly covers financial news.
WIESENBERGER INVESTMENT COMPANIES SERVICES, an annual
compendium of information about mutual funds and other
investment companies, including comparative data on funds'
background, management policies, salient features,
management results, income and dividend records, and price
ranges.
WORTH MAGAZINE, a Fidelity Investments-owned monthly
business publication.
When comparing yield, total return and investment risk
of shares of a fund with other investments, investors should
understand that certain other investments have different
risk characteristics than an investment in shares of the
funds. For example, certificates of deposit may have fixed
rates of return and may be insured as to principal and
interest by the FDIC, while a fund's returns will fluctuate
and its share values and returns are not guaranteed. Money
market accounts offered by banks also may be insured by the
FDIC and may offer stability of principal. U.S. Treasury
securities are guaranteed as to principal and interest by
the full faith and credit of the U.S. government. Money
market mutual funds may seek to offer a fixed price per
share.
The performance of the funds is not fixed or
guaranteed. Performance quotations should not be considered
to be representative of performance of a fund for any period
in the future. The performance of a fund is a function of
many factors including its earnings, expenses and number of
outstanding shares. Fluctuating market conditions,
purchases and sales of underlying funds, sales and
redemptions of shares of beneficial interest, and changes in
operating expenses are all examples of items that can
increase or decrease a fund's performance.
VIII. DIVIDENDS, DISTRIBUTIONS AND TAXES
Each fund intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). In any year in which a fund
qualifies as a regulated investment company and distributes
substantially all of its investment company taxable income
(which includes, among other items, the excess of net short-
term capital gains over net long-term capital losses) and
its net capital gains (the excess of net long-term capital
gains over net short-term capital losses) the fund will not
be subject to federal income tax to the extent it
distributes to shareholders such income and capital gains in
the manner required under the Code. Amounts not distributed
on a timely basis in accordance with a calendar year
distribution requirement are subject to a nondeductible 4%
excise tax. To avoid imposition of the excise tax, each
fund must distribute for each calendar year an amount equal
to the sum of (1) at least 98% of its net ordinary income
(excluding any capital gains or losses) for the calendar
year, (2) at least 98% of the excess of its capital gains
over capital losses (adjusted for certain ordinary losses)
realized during the one-year period ending October 31 of
such year, and (3) all ordinary income and capital gains for
previous years that were not distributed during such years.
A distribution will be treated as paid on December 31 of the
calendar year if it is declared by a fund in October,
November or December of that year with a record date in such
a month and paid by the fund during January of the following
calendar year. Such distributions will be taxable to a
shareholder in the calendar year in which the distributions
are declared, rather than the calendar year in which the
distributions are received. Each fund intends to distribute
its income in accordance with this requirement to prevent
application of the excise tax. Each year the Trust will
notify shareholders of the tax status of dividends and
distributions.
Income received by a fund from a mutual fund in that
fund's portfolio (including dividends and distributions of
short-term capital gains) will be distributed by the fund
(after deductions for expenses) and will be taxable to
shareholders as ordinary income. Because the funds are
actively managed and may realize taxable net short-term
capital gains by selling shares of a mutual fund in its
portfolio with unrealized portfolio appreciation, investing
in a fund rather than directly in the underlying funds may
result in increased tax liability to a shareholder since the
fund must distribute its gains in accordance with certain
rules under the Code. A fund's ability to dispose of shares
of underlying funds held less than three months may be
limited by requirements relating to a fund's qualification
as a regulated investment company for federal income tax
purposes.
Distributions of net capital gains (the excess of net
long-term capital gains over net short-term capital losses)
received by a fund from the underlying funds, as well as net
long-term capital gains realized by a fund from the purchase
and sale (or redemption) of mutual fund shares or other
securities held by a fund for more than one year, will be
distributed by the fund and will be taxable to a shareholder
as long-term capital gains (even if the shareholder has held
the shares for less than one year). If a shareholder who
has received a capital gains distribution suffers a loss on
the sale of his or her shares not more than six months after
purchase, the loss will be treated as a long-term capital
loss to the extent of the capital gains distribution
received. Long-term capital gains, including distributions
of net capital gains are currently subject to a maximum
federal tax rate of 28% which is less than the maximum rate
imposed on other types of taxable income. Capital gains may
be advantageous since, unlike ordinary income, they may be
offset by capital losses.
For purposes of determining the character of income
received by a fund when an underlying fund distributes net
capital gains to a fund, the fund will treat the
distribution as a long-term capital gain, even if the fund
has held shares of the underlying fund for less than one
year. Any loss incurred by a fund on the sale of such
mutual fund's shares held for six months or less, however,
will be treated as a long-term capital loss to the extent of
the gain distribution.
The tax treatment of distributions from a fund is the
same whether the distributions are received in additional
shares or in cash. Shareholders receiving distributions in
the form of additional shares will have a cost basis for
federal income tax purposes in each share received equal to
the net asset value of a share of the fund on the
reinvestment date.
A fund may invest in mutual funds with capital loss
carry-forwards. If such a mutual fund realizes capital
gains, it will be able to offset the gains to the extent of
its loss carryforwards in determining the amount of capital
gains which must be distributed to shareholders. To the
extent that gains are offset in this manner, distributions
to a fund and its shareholders will not be characterized as
capital gain dividends but may be ordinary income.
Depending upon a shareholder's residence for tax
purposes, distributions may also be subject to state and
local taxes, including withholding taxes. Shareholders
should consult their own tax advisers regarding the tax
consequences of ownership of shares of a fund in their
particular circumstances.
The funds are generally required to withhold federal
income tax at a rate of 31% ("backup withholding") from
dividends paid to a shareholder if (1) the shareholder fails
to furnish the Trust with and to certify his or her correct
taxpayer identification number or social security number,
(2) the Internal Revenue Service (the "IRS") notifies the
Trust that the shareholder has failed to report properly
certain interest and dividend income to the IRS and to
respond to notices to that effect or (3) the shareholder
fails to certify that he or she is not subject to backup
withholding.
Each fund will distribute investment company taxable
income and any net realized capital gains at least annually.
All dividends and distributions will be reinvested
automatically at net asset value in additional shares of the
fund making the distribution, unless the shareholder
notifies the fund in writing of his or her election to
receive distributions in cash.
IX. CUSTODIAN, COUNSEL AND INDEPENDENT ACCOUNTANTS
Pursuant to a Custodian Agreement between the Trust
and [ ], [ ] provides custodial services to
the Trust and each of the funds. The principal business
address of [ ].
Hale and Dorr, 60 State Street, Boston, Massachusetts
02109, is counsel for the Trust.
[ ] has been selected as auditors of the
Trust.
X. DESCRIPTION OF THE TRUST
The Trust is an open-end, diversified series
management investment company established as an
unincorporated business Trust under the laws of The
Commonwealth of Massachusetts pursuant to a Declaration of
Trust dated September 13, 1996.
The Trustees of the Trust have authority to issue an
unlimited number of shares of beneficial interest in an
unlimited number of series, each share with a par value of
$.001. Currently, the Trust consists of three series. Each
share in a particular series represents an equal
proportionate interest in that series with each other share
of that series and is entitled to such dividends and
distributions as are declared by the Trustees of the Trust.
Upon any liquidation of a series, shareholders of that
series are entitled to share pro rata in the net assets of
that series available for distribution. Shareholders in one
of the series have no interest in, or rights upon
liquidation of, any of the other series.
The Trust will normally not hold annual meetings of
shareholders to elect Trustees. If less than a majority of
the Trustees of the Trust holding office have been elected
by shareholders, a meeting of shareholders of the Trust will
be called to elect Trustees. Under the Declaration of Trust
and the 1940 Act, the record holders of not less than two-
thirds of the outstanding shares of the Trust may remove a
Trustee by votes cast in person or by proxy at a meeting
called for the purpose or by a written declaration filed
with the Trust's custodian bank. Except as described above,
the Trustees will continue to hold office and may appoint
successor Trustees.
Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the
obligations of the Trust. However, the Declaration of Trust
disclaims shareholder liability for acts or obligations of
the Trust and requires that notice of this disclaimer be
given in each agreement, obligation or instrument entered
into or executed by the funds or the Trustees. The
Declaration of Trust provides for indemnification out of the
Trust's property for all loss and expense of any shareholder
held personally liable for obligations of the Trust and its
funds. Accordingly, the risk of a shareholder of the Trust
incurring a financial loss on account of shareholder
liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations. The
likelihood of such circumstances is remote.
XI. ADDITIONAL INFORMATION
The prospectus and this statement of additional
information do not contain all of the information included
in the Trust's registration statement filed with the
Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the securities offered
hereby. Certain portions of the registration statement have
been omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. Such registration
statement, including the exhibits filed therewith, may be
examined at the offices of the Securities and Exchange
Commission in Washington, D.C.
Statements contained in the prospectus and this
statement of additional information as to the contents of
any agreement or other documents referred to are not
necessarily complete, and, in each instance, reference is
made to the copy of such agreement or other documents filed
as an exhibit to the registration statement, each such
statement being qualified in all respects by such reference.
APPENDIX
RATINGS OF DEBT INSTRUMENTS
Standard & Poor's Ratings Group ("S&P") Corporate Bond
Ratings. An S&P corporate bond rating is a current
assessment of the credit worthiness of an obligor, with
respect to a specific obligation. This assessment may take
into consideration obligors such as guarantors, insurers or
lessees. The debt rating is not a recommendation to
purchase, sell or hold a security inasmuch as it does not
comment as to market price or suitability for a particular
investor. The ratings are based on current information
furnished by the issuer or obtained by S&P from other
sources it considers reliable. S&P does not perform any
audit in connection with the ratings and may, on occasion,
rely on unaudited financial information.
The ratings are based, in varying degrees, on the
following considerations: (a) likelihood of default
capacity and willingness of the obligor as to the timely
payment of interest and repayment of principal in accordance
with the terms of the obligation; (b) nature of and
provisions of the obligation; and (c) protection afforded by
and relative position of the obligation in the event of
bankruptcy reorganization or other arrangement under the
laws of bankruptcy and other laws affecting creditors'
rights. To provide more detailed indications of credit
quality, ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing
within the major rating categories.
A provisional rating is sometimes used by S&P. It
assumes the successful completion of the project being
financed by the debt being rated and indicates that payment
of debt service requirements is largely or entirely
dependent upon the successful and timely completion of the
project. This rating, however, while addressing credit
quality subsequent to completion of the project, makes no
comment on the likelihood of, or the risk of default upon
failure of, such completion.
Bond ratings are as follows:
AAA -- Bonds rated AAA have the highest rating assigned by
S&P. Capacity to pay interest and repay principal is
extremely strong.
AA -- Bonds rated AA have a very strong capacity to pay
interest and repay principal and differs from the higher
rated issues only in small degree.
A -- Bonds rated A have strong capacity to pay interest and
repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB -- Bonds rated BBB are regarded as having an adequate
capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher
rated categories.
BB, B, CCC, CC -- Bonds rated BB, B, CCC or CC are regarded
on balance, as predominantly speculative with respect to the
issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree
of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed
by large uncertainties or major risk exposures to adverse
conditions.
C -- The rating C is reserved for income bonds on which no
interest is being paid.
D -- Debt rated D is in default, and payment of interest
and/or repayment of principal is in arrears.
S&P Note Ratings. An S&P note rating reflects the liquidity
concerns and market access risks unique to notes. Notes due
in three years or less will likely receive a note rating.
Notes maturing beyond three years will most likely receive a
long-term debt rating. The following criteria are used in
making that assessment: (a) Amortization schedule (the
larger the final maturity relative to other maturities, the
more likely it will be treated as a note), and (b) Source of
payment (the more dependent the issue is on the market for
its refinancing, the more likely it will be treated as a
note).
Note ratings are as follows:
SP-1 -- Very strong or strong capacity to pay principal and
interest. Those issues determined to possess overwhelming
safety characteristics will be given a plus (+)
designation.
SP-2 -- Satisfactory capacity to pay principal and interest.
SP-3 -- Speculative capacity to pay principal and interest.
Demand Bonds. S&P assigns "Dual" ratings to all long-term
debt issues that have as part of their provisions a demand
or double feature. The first rating addresses the
likelihood of repayment of principal and interest as due,
and the second rating addresses only the demand feature.
The long-term debt rating symbols are used for bonds to
denote the long-term maturity and the commercial paper
rating symbols are used to denote the put options (for
example, "AAA/A-1+). For the newer "Demand Notes," S&P note
rating symbols, combined with the commercial paper symbols,
are used (for example, "SP-1+/A-1+").
Moody's Corporate Bond Ratings. Moody's ratings are as
follows:
Aaa -- Bonds that are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk
and are generally referred to as "gilt-edge." Interest
payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various
protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa -- Bonds that are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they
comprise what are generally known as high grade bonds. They
are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of great amplitude
or there may be other elements present that make the long-
term risks appear somewhat larger than in Aaa securities.
A -- Bonds that are rated A possess many favorable
investment attributes and are to be considered as upper
medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements
may be present that suggest a susceptibility to impairment
sometime in the future.
Baa -- Bonds that are rated Baa are considered as medium
grade obligations, i.e., they are neither highly protected
nor poorly secured. Interest payments and principal
security appear adequate for the present, but certain
protective elements may be lacking or may be
characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.
Moody's applies numerical modifiers, 1, 2 and 3, in each
generic rating classification from Aa through Baa in its
corporate bond rating system. The modifier 1 indicates that
the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.
Ba -- Bonds that are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may
be very moderate and thereby not well safeguarded during
good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B -- Bonds that are rated B generally lack characteristics
of the desirable investment. Assurance of interest and
principal payments, or of maintenance of other terms of the
contract over any long period of time, may be small.
Caa -- Bonds rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger
with respect to principal or interest.
Ca -- Bonds rated Ca represent obligations that are
speculative in a high degree. Such issues are often in
default or have other marked shortcomings.
C -- Bonds rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.
Moody's Note Ratings. Moody's Short-Term Loan Ratings --
Moody's ratings for short-term obligations will be
designated Moody's Investment Grade (MIG). This distinction
is in recognition of the differences between short-term
credit risk and long-term risk. Factors affecting the
liquidity of the borrower are uppermost in importance in
short-term borrowing, while various factors of major
importance in bond risk are of lesser importance over the
short run.
Rating symbols and their meanings follow:
MIG 1 -- This designation denotes best quality. There is
present strong protection by established cash flows,
superior liquidity support, or demonstrated broad-based
access to the market for refinancing.
MIG 2 -- This designation denotes high quality. Margins of
protection are ample, although not so large as in the
preceding group.
MIG 3 -- This designation denotes favorable quality. All
security elements are accounted for, but this is lacking the
undeniable strength of the preceding grades. Liquidity and
cash flow protection may be narrow and market access for
refinancing is likely to be less well established.
MIG 4 -- This designation denotes adequate quality.
Protection commonly regarded as required of an investment
security is present and, although not distinctly or
predominantly speculative, there is specific risk.
C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
List all financial statements and exhibits filed as
part of the Registration Statement.
(a) Financial Statements:
Included in Part A
None
Included in Part B
(i) Statements of Assets and
Liabilities*
(ii) Report of Independent Accountants*
(b) Exhibits:
(1)(a) Declaration of Trust
(2) By-Laws
(3) Not Applicable
(4) Not Applicable
(5) Form of Investment Advisory Agreement
between Registrant and Insight Management, Inc.*
(6) Form of Distribution Agreement between
Registrant and Insight
Brokerage Services, Inc.*
(7) Not Applicable
(8) Form of Custodian Agreement*
(9)(a) Form of Transfer Agency Agreement
between Registrant and First Data Investor Services Group,
Inc.*
(b) Form of Administration Agreement
between Registrant and First Data Investor Services Group,
Inc.*
(10) Opinion and Consent of Hale and Dorr*
(11) Consent of Independent Accountants*
(12) Not Applicable
(13) Purchase Agreement relating to Initial
Capital*
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
* To be filed by amendment
Item 25. Persons Controlled by or Under Common Control
with Registrant.
It is anticipated that as of the effective date of
this Registration Statement all of the shares of Registrant
will be owned by Insight Management, Inc.
Item 26. Number of Holders of Securities.
It is anticipated that there will be one record holder
of the Registrant's shares of beneficial interest, $.001 par
value, on the date the Registrant's Registration Statement
becomes effective.
Item 27. Indemnification.
Under Section 4.3 of Registrant's Declaration of
Trust, any past or present Trustee or officer of Registrant
(including persons who serve at Registrant's request as
directors, officers or trustees of another organization in
which Registrant has any interest as a shareholder, creditor
or otherwise [hereinafter referred to as a "Covered
Person"]) is indemnified to the fullest extent permitted by
law against all liability and all expenses reasonably
incurred by him or her in connection with any claim, action,
suit or proceeding to which he or she may be a party or
otherwise involved by reason of his or her being or having
been a Covered Person. This provision does not authorize
indemnification when it is determined, in the manner
specified in the Declaration of Trust, that such Covered
Person has not acted in good faith in the reasonable belief
that his or her actions were in or not opposed to the best
interests of Registrant. Moreover, this provision does not
authorize indemnification when it is determined, in the
manner specified in the Declaration of Trust, that such
Covered Person would otherwise be liable to Registrant or
its shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his or her
duties. Expenses may be paid by Registrant in advance of
the final disposition of any claim, action, suit or
proceeding upon receipt of an undertaking by such Covered
Person to repay such expenses to Registrant in the event
that it is ultimately determined that indemnification of
such expenses is not authorized under the Declaration of
Trust and the Covered Person either provides security for
such undertaking or insures Registrant against losses from
such advances or the disinterested Trustees or independent
legal counsel determines, in the manner specified in the
Declaration of Trust, that there is reason to believe the
Covered Person will be found to be entitled to
indemnification.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933, as amended (the
"Securities Act"), may be permitted to Trustees, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
Trustee, officer, or controlling person of the Registrant in
connection with the successful defense of any claim, action,
suit or proceeding) is asserted against the Registrant by
such Trustee, officer or controlling person in connection
with the shares being registered, the Registrant will,
unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment
Adviser.
Insight Management, Inc., established in 1987, manages
the investment needs of clients seeking to invest in the
fixed revenue and equity markets.
The list required by this Item 28 of officers and
directors of Insight Management, Inc., together with the
information as to any other business, profession, vocation
or employment of substantial nature engaged in by such
officers and directors during the past two years, is
incorporated by reference to Schedules A and D of Form ADV
filed by Insight Management, Inc. pursuant to the Investment
Advisers Act of 1940 (SEC File No. 801-30125).
Item 29. Principal Underwriters.
(a) Insight Brokerage Services, Inc., the Fund's
Distributor, does not act as principal underwriter,
depositor or investment adviser for any other mutual funds.
(b) For information with respect to each Director and
officer of the principal underwriter of the Fund, see the
following:
<TABLE>
<CAPTION>
<C> <S> <S>
Position and
Position and Offices Offices
Name and Principal with Insight Brokerage with the
Business Address* Services, Inc. Registrant
Eric M. Kobren Director, President President
and Treasurer
Cathy Kobren Secretary None
</TABLE>
* The business address of the above-listed persons is 20
William Street, Suite 310, P.O. Box 9135, Wellesley Hills,
Massachusetts 02181.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
All accounts books and other documents required to be
maintained by Registrant by Section 31(a) of the Investment
Company Act of 1940 and the Rules thereunder will be
maintained at the offices of:
Insight Management, Inc.
20 William Street, Suite 310
P.O. Box 9135
Wellesley Hills, Massachusetts 02181
(records relating to its functions as investment
adviser)
Insight Brokerage Services, Inc.
20 William Street, Suite 310
P.O. Box 9135
Wellesley Hills, Massachusetts 02181
(records relating to its functions as distributor)
First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
(records relating to its functions as administrator)
First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
(records relating to its functions as transfer agent)
Item 31. Management Services.
Not Applicable.
Item 32. Undertakings.
(a) Not Applicable.
(b) The undersigned Registrant hereby undertakes to
file a post-effective amendment, using financial statements
which need not be certified, regarding the Fund within four
to six months after the effective date of the Registration
Statement under the Securities Act of 1933.
(c) The undersigned Registrant will afford to
shareholders of the Fund the rights provided by Section
16(c) of the Investment Company Act of 1940 so long as
Registrant does not hold annual meetings of its
shareholders.
(d) The Registrant will furnish each person to whom
a prospectus is delivered with a copy of the Registrant's
latest annual report to shareholders, upon request and
without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant
has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, in
the City of Boston, and The Commonwealth of Massachusetts,
on the 16th day of September, 1996.
INSIGHT PREMIER FUNDS
By: GAIL A. HANSON
Gail A. Hanson
President
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by
the following persons in the capacities and on the date
indicated.
Signature Title Date
GAIL A. HANSON President and Trustee September 16, 1996
Gail A. Hanson
PAULA A. LORDI Secretary and Treasurer September 16, 1996
Paula A. Lordi and Trustee
EXHIBIT INDEX
Exhibit
Number Description
1 Declaration of Trust
2 By-Laws
5 Form of Investment Advisory Agreement between
Registrant and Insight Management, Inc.*
6 Form of Distribution Agreement between Registrant
and Insight Brokerage Services, Inc.*
8 Form of Custodian Agreement*
9(a) Form of Transfer Agency Agreement between Registrant
and First Data Investor Services Group, Inc. *
9(b) Form of Administration Agreement between Registrant
and First Data Investor Services Group, Inc. *
10 Opinion and Consent of Hale and Dorr*
11 Consent of Independent Accountants*
13 Purchase Agreement relating to Initial Capital*
* To be filed by amendment
DECLARATION OF TRUST
OF
INSIGHT PREMIER FUNDS
DECLARATION OF TRUST
OF
INSIGHT PREMIER FUNDS
DECLARATION OF TRUST made this 13th day of September,
1996 by Gail A. Hanson and Paula A. Lordi (together with all
other persons from time to time duly elected, qualified and
serving as Trustees in accordance with the provisions of
Article II hereof, the "Trustees");
WHEREAS, the Trustees wish to establish a trust for
the investment and reinvestment of funds contributed
thereto;
WHEREAS, the Trustees desire that the beneficial
interest in the trust assets be divided into transferable
shares of beneficial interest as hereinafter provided;
WHEREAS, the Trustees declare that all money and
property contributed to the trust established thereunder
shall be held and managed in trust for the benefit of the
holders, from time to time, of the shares of beneficial
interest issued thereunder and subject to the provisions
hereof and in consideration of the foregoing premises and
the agreements herein contained declare as follows:
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created
hereby is Insight Premier Funds (the "Trust").
Section 1.2. Definitions. Wherever they are used
herein, the following terms have the following respective
meanings:
(a) "Administrator" means the party, other than the
Trust, to the contract described in Section 3.3 hereof.
(b) "By-Laws" means the By-Laws referred to in
Section 2.8 hereof, as from time to time amended.
(c) The terms "Commission" and "Interested Person"
have the meanings given them in the 1940 Act. Except as
otherwise defined by the Trustees in conjunction with the
establishment of any Series of Shares, the term "vote of a
majority of the Shares outstanding and entitled to vote"
shall have the same meaning as the term "vote of a majority
of the outstanding voting securities" given it in the 1940
Act.
(d) "Class" means any division of shares within a
Series, which Class is or has been established within such
Series in accordance with the provision of Article V.
(e) "Custodian" means any Person other than the
Trust who has custody of any Trust Property as required by
Sec. 17(f) of the 1940 Act, but does not include a system for
the central handling of securities described in said Sec. 17(f).
(f) "Declaration" means this Declaration of Trust as
amended from time to time. Reference in this Declaration of
Trust to "Declaration", "hereof", "herein", and "hereunder"
shall be deemed to refer to this Declaration rather than
exclusively to the article or section in which such words
appear.
(g) "Distributor" means the party, other than the
Trust, to the contract described in Section 3.1 hereof.
(h) The "1940 Act" means the Investment Company Act
of 1940, as amended from time to time.
(i) "Fund" or "Funds" individually or collectively
means the separate Series of Shares of the Trust, together
with the assets and liabilities assigned thereto.
(j) "His" shall include the feminine and neuter, as
well as the masculine, genders.
(k) "Investment Adviser" means the party, other than
the Trust, to the contract described in Section 3.2 hereof.
(l) "Person" means and includes individuals,
corporations, partnerships, trusts, associations, joint
ventures and other entities, whether or not legal entities,
and governments and agencies and political subdivisions
thereof.
(m) "Prospectus" means and includes the currently
effective Prospectus and Statement of Additional Information
of the Trust or any Series or Class of the Trust under the
Securities Act of 1933.
(n) "Series" individually or collectively means the
separate Series of the Trust (or, if the Trust shall have
only one such component, then that one) as may be
established and designated from time to time by the Trustees
pursuant to Section 5.11 hereof.
(o) "Shareholder" means the record owner of
Outstanding Shares.
(p) "Shares" means the equal proportionate units of
interest into which the beneficial interest in the Trust
shall be divided from time to time, including the Shares of
any and all Series or of any Class within any Series which
may be established by the Trustees, and includes fractions
of Shares as well as whole Shares. "Outstanding" Shares
means those Shares shown from time to time on the books of
the Trust or its Transfer Agent as then issued and
outstanding, but shall not include Shares which have been
redeemed or repurchased by the Trust and which are at the
time held in the treasury of the Trust.
(q) "Transfer Agent" means any Person other than the
Trust who maintains the Shareholder records of the Trust,
such as the list of Shareholders, the number of Shares
credited to each account, and the like.
(r) "Trust" means Insight Premier Funds.
(s) "Trust Property" means any and all property,
real or personal, tangible or intangible, which is owned or
held by or for the account of the Trust or the Trustees.
(t) The "Trustees" means the persons who have signed
this Declaration, so long as they shall continue in office
in accordance with the terms hereof, and all other persons
who may from time to time be duly elected, qualified and
serving as Trustees in accordance with the provisions of
Article II hereof, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in this
capacity or their capacities as trustees hereunder.
ARTICLE II
TRUSTEES
Section 2.1. General Powers. The Trustees shall
have exclusive and absolute control over the Trust Property
and over the business of the Trust to the same extent as if
the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of
delegation as may be permitted by this Declaration. The
Trustees shall have power to conduct the business of the
Trust and carry on its operations in any and all of its
branches and maintain offices both within and without The
Commonwealth of Massachusetts, in any and all states of the
United States of America, in the District of Columbia, and
in any and all commonwealths, territories, dependencies,
colonies, possessions, agencies or instrumentalities of the
United States of America and of foreign governments, and to
do all such other things and execute all such instruments as
they deem necessary, proper or desirable in order to promote
the interests of the Trust although such things are not
herein specifically mentioned. Any determination as to what
is in the interests of the Trust made by the Trustees in
good faith shall be conclusive. In construing the
provisions of this Declaration, the presumption shall be in
favor of a grant of power to the Trustees.
The enumeration of any specific power herein shall not
be construed as limiting the aforesaid power. Such powers
of the Trustees may be exercised without order of or resort
to any court.
Section 2.2. Investments. The Trustees shall
have the power:
(a) To operate as and carry on the business of an
investment company, and exercise all the powers necessary
and appropriate to the conduct of such operations.
(b) To invest in, hold for investment, or reinvest
in, securities, including common and preferred stocks;
warrants; bonds, debentures, bills, time deposits, notes and
all other evidences of indebtedness; negotiable or non-
negotiable instruments; government securities, including
securities of any state, municipality or other political
subdivision thereof, or any governmental or quasi-
governmental agency or instrumentality; and money market
instruments including bank certificates of deposit, finance
paper, commercial paper, bankers acceptances and all kinds
of repurchase agreements, of any U.S. or non-U.S.
corporation, company, trust, association, firm, investment
company or other business organization however established,
and of any country, state, municipality or other political
subdivision, or any governmental or quasi-governmental
agency or instrumentality.
(c) To acquire (by purchase, subscription or
otherwise), to hold, to trade in and deal in, to acquire any
rights or options to purchase or sell, to sell or otherwise
dispose of, to lend and to pledge any such securities, to
enter into repurchase agreements, reverse repurchase
agreements, firm commitment agreements and forward foreign
currency exchange contracts, to purchase and sell options on
securities, indices, currency or other financial assets,
futures contracts and options on futures contracts of all
descriptions, swaps, caps, floors and collars, and other
derivative securities, and to engage in all types of
hedging and risk management transactions.
(d) To exercise all rights, powers and privileges of
ownership or interest in all securities and repurchase
agreements included in the Trust Property, including the
right to vote thereon and otherwise act with respect thereto
and to do all acts for the preservation, protection,
improvement and enhancement in value of all such securities
and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and
to hold, use, maintain, develop and dispose of (by sale or
otherwise) any property, real or personal, including cash,
and any interest therein.
(f) To borrow money and in this connection issue
notes or other evidence of indebtedness; to secure
borrowings by mortgaging, pledging or otherwise subjecting
as security the Trust Property; and to endorse, guarantee,
or undertake the performance of any obligation or engagement
of any other Person and to lend Trust Property.
(g) To aid by further investment any corporation,
company, trust, association or firm, any obligation of or
interest in which is included in the Trust Property or in
the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to
protect, preserve, improve or enhance the value of such
obligation or interest; and to guarantee or become surety on
any or all of the contracts, stocks, bonds, notes,
debentures and other obligations of any such corporation,
company, trust, association or firm.
(h) To enter into a plan of distribution and any
related agreements whereby the Trust may finance directly or
indirectly any activity which is primarily intended to
result in sale of Shares.
(i) In general to carry on any other business in
connection with or incidental to any of the foregoing
powers, to do everything necessary, suitable or proper for
the accomplishment of any purpose or the attainment of any
object or the furtherance of any power herein before set
forth either alone or in association with others, and to do
every other act or thing incidental or appurtenant to or
arising out of or connected with the aforesaid business or
purposes, objects or powers.
(j) Notwithstanding any other provision of this
Declaration to the contrary, the Trustees shall have the
power in their discretion without any requirement of
approval by Shareholders to either invest all or a portion
of the Trust Property or the Property of a Series of the
Trust, or sell all or a portion of the Trust Property or the
Property of a Series of the Trust and invest the proceeds of
such sales, in one or more other investment companies
registered under the 1940 Act.
The foregoing clauses shall be construed both as
objects and powers, and the foregoing enumeration of
specific powers shall not be held to limit or restrict in
any manner the general powers of the Trustees
The Trustees shall not be limited to investing in
obligations maturing before the possible termination of the
Trust, nor shall the Trustees be limited by any law limiting
the investments which may be made by fiduciaries.
Section 2.3. Legal Title. Legal title to all the
Trust Property shall be vested in the Trustees as joint
tenants except that the Trustees shall have power to cause
legal title to any Trust Property to be held by or in the
name of one or more of the Trustees, or in the name of the
Trust of any Series of the Trust, or in the name of any
other Person as nominee, on such terms as the Trustees may
determine, provided that the interest of the Trust therein
is deemed appropriately protected. The right, title and
interest of the Trustees shall vest automatically in each
Person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or
death of a Trustee he shall automatically cease to have any
right, title or interest in any of the Trust Property, and
the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees.
Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and
delivered.
Section 2.4. Issuance and Repurchase of Shares.
The Trustees shall have the power to issue, sell,
repurchase, redeem, retire, cancel, acquire, hold, resell,
reissue, dispose of, transfer, and otherwise deal in Shares
and, subject to the provisions set forth in Articles VI and
VII and Section 5.11 hereof, to apply to any such
repurchase, redemption, retirement, cancellation, or
acquisition of Shares any funds or property of the Trust,
whether capital or surplus or otherwise, to the full extent
now or hereafter permitted by the laws of The Commonwealth
of Massachusetts governing business corporations.
Section 2.5. Delegation; Committees. The
Trustees shall have the power to delegate from time to time
to such of their number or to officers, employees or agents
of the Trust the doing of such things and the execution of
such instruments either in the name of the Trust or any
Series of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient, to the same
extent as such delegation is permitted by the 1940 Act.
Section 2.6. Collection and Payment. Subject to
Section 5.11 hereof, the Trustees shall have power to
collect all property due to the Trust; to pay all claims,
including taxes, against the Trust Property; to prosecute,
defend, compromise or abandon any claims relating to the
Trust Property; to foreclose any security interest securing
any obligations, by virtue of which any property is owed to
the Trust; and to enter into releases, agreements and other
instruments.
Section 2.7. Expenses. Subject to Section 5.11
hereof, the Trustees shall have the power to incur and pay
any expenses which in the opinion of the Trustees are
necessary or incidental to carry out any of the purposes of
the Trust, and to pay reasonable compensation from the funds
of the Trust to themselves as Trustees. The Trustees shall
fix the compensation of all officers, employees and
Trustees.
Section 2.8. Manner of Acting; By-Laws. Except
as otherwise provided herein or in the By-Laws, any action
to be taken by the Trustees may be taken by a majority of
the Trustees present at a meeting of Trustees (a quorum
being present), including any meeting held by means of a
conference telephone circuit or similar communications
equipment by means of which all persons participating in the
meeting can hear each other, or by written consents of a
majority of Trustees then in office. The Trustees may adopt
By-Laws not inconsistent with this Declaration to provide
for the conduct of the business of the Trust and may amend
or repeal such By-Laws to the extent such power is not
reserved to the Shareholders.
Notwithstanding the foregoing provisions of this
Section 2.8 and in addition to such provisions or any other
provision of this Declaration or of the By-Laws, the
Trustees may by resolution appoint a committee consisting of
less than the whole number of Trustees then in office, which
committee may be empowered to act for and bind the Trustees
and the Trust, as if the acts of such committee were the
acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review or
investigation of any action, suit or proceeding which shall
be pending or threatened to be brought before any court,
administrative agency or other adjudicatory body.
Section 2.9. Miscellaneous Powers. Subject to
Section 5.11 hereof, the Trustees shall have the power to:
(a) employ or contract with such Persons as the Trustees may
deem desirable for the transaction of the business of the
Trust or any Series thereof; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c)
remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate
such agents or employees as they consider appropriate, and
appoint from their own number, and terminate, any one or
more committees which may exercise some or all of the power
and authority of the Trustees as the Trustees may determine;
(d) purchase, and pay for out of Trust Property or the
Property of the appropriate Series of the Trust, insurance
policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, administrators,
distributors, selected dealers or independent contractors of
the Trust against all claims arising by reason of holding
any such position or by reason of any action taken or
omitted by any such Person in such capacity, whether or not
constituting negligence, or whether or not the Trust would
have the power to indemnify such Person against such
liability; (e) establish pension, profit-sharing, share
purchase and other retirement, incentive and benefit plans
for any Trustees, officers, employees and agents of the
Trust; (f) to the extent permitted by law, indemnify any
person with whom the Trust or any Series thereof has
dealings, including the Investment Adviser, Distributor,
Administrator, Transfer Agent and selected dealers, to such
extent as the Trustees shall determine; (g) guarantee
indebtedness or contractual obligations of others; (h)
determine and change the fiscal year of the Trust or any
Series thereof and the method by which its accounts shall be
kept; and (i) adopt a seal for the Trust, but the absence of
such seal shall not impair the validity of any instrument
executed on behalf of the Trust.
Section 2.10. Principal Transactions. Except in
transactions not permitted by the 1940 Act or rules and
regulations adopted by the Commission, the Trustees may, on
behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust or any Series
thereof to, any Trustee or officer of the Trust or any firm
of which any such Trustee or officer is a member acting as
principal, or have any such dealings with the Investment
Adviser, Distributor or transfer agent or with any
Interested Person of such Person; and the Trust or Series
thereof may employ any such Person, or firm or company in
which such Person is an Interested Person, as broker, legal
counsel, registrar, transfer agent, dividend disbursing
agent or custodian upon customary terms.
Section 2.11. Number of Trustees. The number of
Trustees shall initially be two (2), and thereafter shall be
such number as shall be fixed from time to time by written
instrument signed by a majority of the Trustees, provided,
however, that the number of Trustees shall in no event be
less than one (1) nor more than fifteen (15).
Section 2.12. Election and Term. Except for the
Trustees named herein or appointed to fill vacancies
pursuant to Section 2.14 hereof, the Trustees shall be
elected by the Shareholders owning of record a plurality of
the Shares voting at a meeting of Shareholders on a date
fixed by the Trustees. Except in the event of resignation
or removals pursuant to Section 2.13 hereof, each Trustee
shall hold office until such time as less than a majority of
the Trustees holding office have been elected by
Shareholders. In such event the Trustees then in office
will call a Shareholders' meeting for the election of
Trustees. Except for the foregoing circumstances, the
Trustees shall continue to hold office and may appoint
successor Trustees.
Section 2.13. Resignation and Removal. Any
Trustee may resign his trust (without the need for any prior
or subsequent accounting) by an instrument in writing signed
by him and delivered to the other Trustees and such
resignation shall be effective upon delivery, or at a later
date according to the terms of the instrument. Any of the
Trustees may be removed (provided the aggregate number of
Trustees shall not be less than one) with cause, by the
action of two-thirds of the remaining Trustees or by the
action of two-thirds of the Outstanding Shares of the Trust
at a meeting duly called pursuant to Section 5.10 hereof by
the Shareholders for such purpose. Upon the resignation or
removal of a Trustee, or his otherwise ceasing to be a
Trustee, he shall execute and deliver such documents as the
remaining Trustees shall require for the purpose of
conveying to the Trust or the remaining Trustees any Trust
Property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf
such documents as the remaining Trustees shall require as
provided in the preceding sentence.
Section 2.14. Vacancies. The term of office of a
Trustee shall terminate and a vacancy shall occur in the
event of his death, resignation, removal, bankruptcy,
adjudicated incompetence or other incapacity to perform the
duties of the office of a Trustee. No such vacancy shall
operate to annul the Declaration or to revoke any existing
agency created pursuant to the terms of the Declaration. In
the case of an existing vacancy, including a vacancy
existing by reason of an increase in the number of Trustees,
subject to the provisions of Section 16(a) of the 1940 Act,
the remaining Trustees shall fill such vacancy by the
appointment of such other person as they in their discretion
shall see fit. Any such appointment shall not become
effective, however, until the person named in the written
instrument of appointment shall have accepted in writing
such appointment and agreed to be bound by the terms of the
Declaration. An appointment of a Trustee may be made in
anticipation of a vacancy to occur at a later date by reason
of retirement, resignation or increase in the number of
Trustees, provided that such appointment shall not become
effective prior to such retirement, resignation or increase
in the number of Trustees. Whenever a vacancy in the number
of Trustees shall occur, until such vacancy is filled as
provided in this Section 2.14, the Trustees in office,
regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by the Declaration. A written
instrument certifying the existence of such vacancy signed
by a majority of the Trustees in office shall be conclusive
evidence of the existence of such vacancy.
Section 2.15. Delegation of Power to Other
Trustees. Any Trustee may, by power of attorney, delegate
his power for a period not exceeding six (6) months at any
one time to any other Trustee or Trustees; provided that in
no case shall fewer than two (2) Trustees personally
exercise the powers granted to the Trustees under this
Declaration except as herein otherwise expressly provided.
ARTICLE III
CONTRACTS
Section 3.1. Distribution Contract. The Trustees
may in their discretion from time to time enter into an
exclusive or non-exclusive distribution contract or
contracts providing for the sale of Shares to net the Trust
or the applicable Series of the Trust not less than the
amount provided for in Section 7.1 of Article VII hereof,
whereby the Trustees may either agree to sell the Shares to
the other party to the contract or appoint such other party
their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the
By-Laws, and such further terms and conditions as the
Trustees may in their discretion determine not inconsistent
with the provisions of this Article III or of the By-Laws;
and such contract may also provide for the repurchase of the
Shares by such other party as agent of the Trustees.
Section 3.2. Advisory or Management Contract.
The Trustees may in their discretion from time to time enter
into investment advisory contracts, portfolio management
contracts or investment sub-advisory contracts, or separate
investment advisory contracts with respect to each Series,
whereby the other party to such contract or contracts shall
undertake to manage the investment operations of one or more
Series of the Trust and the compositions of the portfolios
of the Trust or such Series, including the purchase,
retention and disposition of securities and other assets in
accordance with the investment objectives, policies and
restrictions of the Trust or such Series and all upon such
terms and conditions as the Trustees may in their discretion
determine, including the grant of authority to such other
party to determine what securities shall be purchased or
sold by the Trust or applicable Series of the Trust and what
portion of its assets shall be uninvested, which authority
shall include the power to make changes in the investments
of the Trust or any Series.
Section 3.3. Administration Contract. The
Trustees may in their discretion from time to time enter
into an administration contract or contracts whereby the
other party to such contract shall undertake to supervise
all or any part of the operations of the Trust or any Series
thereof and to provide all or any part of the administrative
and clerical personnel, office space and office equipment
and services appropriate for the efficient administration
and operations of the Trust and any Series thereof.
Section 3.4. Affiliations of Trustees or
Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or
officers of the Trust is a shareholder, director, officer,
partner, member, trustee, employee, manager, adviser or
distributor of or for any partnership, corporation, company,
trust, association or other organization, or of or for any
parent or affiliate of any organization, with which a
contract of the character described in Sections 3.1 or 3.2
above or for services as Custodian, Administrator, Transfer
Agent or disbursing agent or for related services may have
been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a
Shareholder of or has any interest in the Trust, or that
(ii) any partnership, corporation,
company, trust, association or other organization with which
a contract of the character described in Sections 3.1 or 3.2
above or for services as Custodian, Administrator, Transfer
Agent or disbursing agent or for related services may have
been, hereafter may be made or has any one or more of such
contracts with one or more other partnerships, corporations,
companies, trusts, associations or other organizations, or
has other business or interests,
shall not affect the validity of any such
contract or disqualify any Shareholder, Trustee or officer
of the Trust from voting upon or executing the same or
create any liability or accountability to the Trust or its
Shareholders.
Section 3.5. Compliance with 1940 Act. Any
contract entered into or pursuant to Sections 3.1 or 3.2
shall be consistent with and subject to the requirements of
Sections 12(b) and 15 of the 1940 Act (including any other
applicable Act of Congress hereafter enacted) with respect
to its continuance in effect, its termination and the method
of authorization and approval of such contract or renewal
thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND
OTHERS
Section 4.1. No Personal Liability of
Shareholders, Trustees, Etc. No Shareholder shall be
subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations
or affairs of the Trust. No Trustee, officer, employee or
agent of the Trust shall be subject to any personal
liability whatsoever to any Person, other than to the Trust
or its Shareholders, in connection with Trust Property or
the affairs of the Trust, save only that arising from bad
faith, willful misfeasance, gross negligence or reckless
disregard of his duties with respect to such Person; and all
such Persons shall look solely to the Trust Property, or to
the Property of one or more specific Series of the Trust if
the claim arises from the conduct of such Trustee, officer,
employee or agent with respect to only such Series, for
satisfaction of claims of any nature arising in connection
with the affairs of the Trust. If any Shareholder, Trustee,
officer, employee, or agent, as such, of the Trust, is made
a party to any suit or proceeding to enforce any such
liability of the Trust, he shall not, on account thereof, be
held to any personal liability. The Trust shall indemnify
and hold each Shareholder harmless from and against all
claims and liabilities, to which such Shareholder may become
subject by reason of his being or having been a Shareholder,
and shall reimburse such Shareholder out of the Trust
Property for all legal and other expenses reasonably
incurred by him in connection with any such claim or
liability. The indemnification and reimbursement required
by the preceding sentence shall be made only out of assets
of the one or more Series whose Shares were held by said
Shareholder at the time the act or event occurred which gave
rise to the claim against or liability of said Shareholder.
The rights accruing to a Shareholder under this Section 4.1
shall not impair any other right to which such Shareholder
may be lawfully entitled, nor shall anything herein
contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even
though not specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc. No
Trustee, officer, employee or agent of the Trust shall be
liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee or agent thereof for
any action or failure to act (including without limitation
the failure to compel in any way any former or acting
Trustee to redress any breach of trust) except for his own
bad faith, willful misfeasance, gross negligence or reckless
disregard of the duties involved in the conduct of his
office.
Section 4.3. Mandatory Indemnification.
(a) Subject to the exceptions and
limitations contained in paragraph (b) below:
(i) every person who is, or has been, a Trustee or officer
of the Trust shall be indemnified by the Trust, or by one or
more Series thereof if the claim arises from his or her
conduct with respect to only such Series, to the fullest
extent permitted by the law against all liability and
against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue
of his being or having been a Trustee or officer and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim", "action", "suit", or "proceeding"
shall apply to all claims, actions, suits or proceedings
(civil, criminal, or other, including appeals), actual or
threatened; and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and
other liabilities.
(b) No indemnification shall be provided
hereunder to a Trustee or officer:
(i) against any liability to the Trust, a Series thereof
or the Shareholders by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office;
(ii) with respect to any matter as to which he shall have
been finally adjudicated not to have acted in good faith in
the reasonable belief that his action was in the best
interest of the Trust or a Series thereof;
(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)
(ii) resulting in a payment by a Trustee or officer, unless
there has been a determination that such Trustee or officer
did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in
the conduct of his office
(A) by the court or other body approving the settlement or
other disposition; or
(B) based upon a review of readily available facts (as
opposed to a full trial-type inquiry) by (x) vote of a
majority of the Non-Interested Trustees acting on the matter
(provided that a majority of the Non-Interested Trustees
then in office act on the matter) or (y) written opinion of
independent legal counsel.
(c) The rights of indemnification herein
provided may be insured against by policies maintained by
the Trust, shall be severable, shall not affect any other
rights to which any other Trustee or officer may now or
hereafter be entitled, shall continue as to a person who has
ceased to be such Trustee or officer and shall inure to the
benefit of the heirs, executors, administrators and assigns
of such a person. Nothing contained herein shall affect any
rights to indemnification to which personnel of the Trust
other than Trustees and officers may be entitled by contract
or otherwise under law.
(d) Expenses of preparation and
presentation of a defense to any claim, action, suit or
proceeding of the character described in paragraph (a) of
this Section 4.3 may be advanced by the Trust or a Series
thereof prior to final disposition thereof upon receipt of
an undertaking by or on behalf of the recipient to repay
such amount if it is ultimately determined that he is not
entitled to indemnification under this Section 4.3, provided
that either:
(i) such undertaking is secured by surety bond or some
other appropriate security provided by the recipient, or the
Trust or Series thereof shall be insured against losses
arising out of any such advances; or
(ii) a majority of the Non-Interested Trustees acting on
the matter (provided that a majority of the Non-Interested
Trustees act on the matter) or an independent legal counsel
in a written opinion shall determine, based upon a review of
readily available facts (as opposed to a full trial-type
inquiry) that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
As used in this section 4.3, a "Non-Interested
Trustee" is one who is not (i) an "Interested Person" of the
Trust (including anyone who has been exempted from being an
"Interested Person" by any rule, regulation, or order of the
Commission), or (ii) involved in the claim, action, suit or
proceeding.
Section 4.4. No Bond Required of Trustees. No
Trustee shall be obligated to give any bond or other
security for the performance of any of his duties hereunder.
Section 4.5. No Duty of Investigation; Notice in
Trust Instruments, Etc. No purchaser, lender, transfer
agent or other Person dealing with the Trustees or any
officer, employee or agent of the Trust or a Series thereof
shall be bound to make any inquiry concerning the validity
of any transaction purporting to be made by the Trustees or
by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered
to or on the order of the Trustees or of said officer,
employee or agent. Every obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series
thereof or undertaking, and every other act or thing
whatsoever executed in connection with the Trust shall be
conclusively presumed to have been executed or done by the
executors thereof only in their capacity as Trustees under
this Declaration or in their capacity as officers, employees
or agents of the Trust or a Series thereof. Every written
obligation, contract, instrument, certificate, Share, other
security of the Trust or a Series thereof or undertaking
made or issued by the Trustees may recite that the same is
executed or made by them not individually, but as Trustees
under the Declaration, and that the obligations of the Trust
or a Series thereof under any such instrument are not
binding upon any of the Trustees or Shareholders
individually, but bind only the Trust Property or the Trust
Property of the applicable Series, and may contain any
further recital which they may deem appropriate, but the
omission of such recital shall not operate to bind the
Trustees individually. The Trustees shall at all times
maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its
Shareholders, Trustees, officers, employees and agents in
such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 4.6. Reliance on Experts, Etc. Each
Trustee, officer or employee of the Trust or a Series
thereof shall, in the performance of his duties, be fully
and completely justified and protected with regard to any
act or any failure to act resulting from reliance in good
faith upon the books of account or other records of the
Trust or a Series thereof, upon an opinion of counsel, or
upon reports made to the Trust or a Series thereof by any of
its officers or employees or by the Investment Adviser, the
Distributor, Administrator, Transfer Agent, selected
dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees,
officers or employees of the Trust, regardless of whether
such counsel or expert may also be a Trustee.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest
of the beneficiaries hereunder shall be divided into
transferable shares of beneficial interest, par value $.001
per share. The Trustees shall have the authority to
establish and designate one or more Series of shares and one
or more Classes thereof as provided in Section 5.11 hereof.
The number of shares of beneficial interest authorized
hereunder is unlimited. All Shares issued hereunder
including, without limitation, Shares issued in connection
with a dividend in Shares or a split of Shares, shall be
fully paid and non-assessable.
Section 5.2. Rights of Shareholders. The
ownership of the Trust Property of every description and the
right to conduct any business hereinbefore described are
vested exclusively in the Trustees, and the Shareholders
shall have no interest therein other than the beneficial
interest conferred by their Shares, and they shall have no
right to call for any partition or division of any property,
profits, rights or interests of the Trust nor can they be
called upon to share or assume any losses of the Trust or
suffer an assessment of any kind by virtue of their
ownership of Shares. The Shares shall be personal property
giving only the rights specifically set forth in this
Declaration. The Shares shall not entitle the holder to
preference, preemptive, appraisal, conversion or exchange
rights, except as the Trustees may determine with respect to
any Series of Shares.
Section 5.3. Trust Only. It is the intention of
the Trustees to create only the relationship of Trustee and
beneficiary between the Trustees and each Shareholder from
time to time. It is not the intention of the Trustees to
create a general partnership, limited partnership, joint
stock association, corporation, bailment or any form of
legal relationship other than a trust. Nothing in this
Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 5.4 Issuance of Shares. The Trustees in their
discretion may, from time to time without vote of the
shareholders, issue Shares, in addition to the then issued
and outstanding Shares and Shares held in the treasury, to
such party or parties and for such amount and type of
consideration including cash or property, at such time or
times and on such terms as the Trustees may deem best, and
may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the
assumption of, liabilities) and businesses. In connection
with any issuance of Shares, the Trustees may issue
fractional Shares and Shares held in the treasury. The
Trustees may from time to time divide or combine the Shares
of the Trust or, if the Shares be divided into Series, of
any Series of the Trust, into a greater or lesser number
without thereby changing the proportionate beneficial
interests in the Trust or in the Trust Property allocated or
belonging to such Series. Contributions to the Trust or
Series thereof may be accepted for, and Shares shall be
redeemed as, whole Shares and/or 1/1,000ths of a Share or
integral multiples thereof.
Section 5.5. Register of Shares. A register
shall be kept at the principal office of the Trust or an
office of the Transfer Agent which shall contain the names
and addresses of the Shareholders and the number of Shares
held by them respectively and a record of all transfers
thereof. Such register shall be conclusive as to who are
the holders of the Shares and who shall be entitled to
receive dividends or distributions or otherwise to exercise
or enjoy the rights of Shareholders. No Shareholder shall
be entitled to receive payment of any dividend or
distribution, nor to have notice given to him herein or in
the By-Laws provided, until he has given his address to the
Transfer Agent or such other officer or agent of the
Trustees as shall keep the said register for entry thereon.
It is not contemplated that certificates will be issued for
the Shares; however, the Trustees, in their discretion, may
authorize the issuance of share certificates and promulgate
appropriate rules and regulations as to their use.
Section 5.6. Transfer of Shares. Shares shall be
transferable on the records of the Trust only by the record
holder thereof or by his agent thereunto duly authorized in
writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with
such evidence of the genuineness of each such execution and
authorization and of other matters as may reasonably be
required. Upon such delivery the transfer shall be recorded
on the register of the Trust. Until such record is made,
the Shareholder of record shall be deemed to be the holder
of such Shares for all purposes hereunder and neither the
Trustees nor any transfer agent or registrar nor any
officer, employee or agent of the Trust shall be affected by
any notice of the proposed transfer.
Any person becoming entitled to any Shares in
consequence of the death, bankruptcy, or incompetence of any
Shareholder, or otherwise by operation of law, shall be
recorded on the register of Shares as the holder of such
Shares upon production of the proper evidence thereof to the
Trustees or the Transfer Agent, but until such record is
made, the Shareholder of record shall be deemed to be the
holder of such Shares for all purposes hereunder and neither
the Trustees nor any Transfer Agent or registrar nor any
officer or agent of the Trust shall be affected by any
notice of such death, bankruptcy or incompetence, or other
operation of law.
Section 5.7. Notices. Any and all notices to
which any Shareholder may be entitled and any and all
communications shall be deemed duly served or given if
mailed, postage pre-paid, addressed to any Shareholder of
record at his last known address as recorded on the register
of the Trust.
Section 5.8. Treasury Shares. Shares held in the
treasury shall, until resold pursuant to Section 5.4, not
confer any voting rights on the Trustees, nor shall such
Shares be entitled to any dividends or other distributions
declared with respect to the Shares.
Section 5.9. Voting Powers. The Shareholders
shall have power to vote only (i) for the election of
Trustees as provided in Section 2.12; (ii) with respect to
any investment advisory contract entered into pursuant to
Section 3.2; (iii) with respect to termination of the Trust
or a Series thereof to the extent and as provided in Section
8.2; (iv) with respect to any amendment of this Declaration
to the extent and as provided in Section 8.3; (v) with
respect to any merger, consolidation or sale of assets to
the extent and as provided in Section 8.4; (vi) with respect
to incorporation of the Trust to the extent and as provided
in Section 8.5; (vii) to the same extent as the stockholders
of a Massachusetts business corporation as to whether or not
a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on
behalf of the Trust or a Series thereof or the Shareholders
of either; (viii) with respect to any plan adopted pursuant
to Rule 12b-1 (or any successor rule) under the 1940 Act,
and related matters; and (ix) with respect to such
additional matters relating to the Trust as may be required
by this Declaration, the By-Laws or any registration of the
Trust as an investment company under the 1940 Act with the
Commission (or any successor agency) or as the Trustees may
consider necessary or desirable. Unless the Trustees adopt
dollar-based voting, each whole Share shall be entitled to
one vote as to any matter on which it is entitled to vote
and each fractional Share shall be entitled to a
proportionate fractional vote. If the Trustees adopt
dollar-based voting, each dollar of net asset value (number
of Shares owned multiplied by the net asset value per Share
of the applicable Series or Class) shall be entitled to one
vote on any matter on which such Shares are entitled to vote
and each fractional dollar amount shall be entitled to a
proportionate fractional vote. On any matter submitted to
Shareholders all shares shall be voted in the aggregate and
not by individual Series or Class except that (1) when
required by the 1940 Act or any rule thereunder Shares shall
be voted by individual Series or Class and (2) when the
Trustees shall have determined that the matter affects only
the interests of one or more Series or Classes thereof, then
only the Shareholders of such Series or Classes thereof
shall be entitled to vote thereon. The Trustees may, in
conjunction with the establishment of any Series or any
Classes of Shares, establish conditions under which the
several Series or Classes of Shares shall have separate
voting rights or no voting rights. There shall be no
cumulative voting in the election of Trustees. Until Shares
are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this
Declaration or the By-Laws to be taken by Shareholders. The
By-Laws may include further provisions for Shareholders'
votes and meetings and related matters.
Section 5.10. Meetings of Shareholders. Meetings
of the Shareholders of the Trust may be called at any time
by the Chairman of the Board (if there is one) or the
President, and shall be called by the President or the
Secretary at the request, in writing or by resolution, of a
majority of the Trustees, or at the written request of the
holder or holders of ten percent (10%) or more of the total
number of Shares then issued and outstanding of the Trust
entitled to vote at such meeting. Meetings of the
Shareholders of any Series of the Trust shall be called by
the President or the Secretary at the written request of the
holder or holders of ten percent (10%) or more of the total
number of Shares then issued and outstanding of such Series
of the Trust entitled to vote at such meeting. Any such
request shall state the purpose of the proposed meeting.
Section 5.11. Series and Class Designation. The
Trustees, in their discretion, may authorize the division of
Shares into two or more Series or Classes thereof, and the
different Series and Classes shall be established and
designated, and the variations in the relative rights and
preferences as between the different Series and Classes
shall be fixed and determined, by the Trustees; provided
that all Shares shall be identical except that there may be
variations so fixed and determined between different Series
or Classes as to investment objective, policies and
restrictions, purchase price, payment obligations,
distribution expenses, right of redemption, special and
relative rights as to dividends and on liquidation,
conversion rights, exchange rights and conditions under
which the several Series or Classes shall have separate
voting rights, all of which are subject to the limitations
set forth below. All references to Shares in this
Declaration shall be deemed to be Shares of any or all
Series or Classes as the context may require.
Without limiting the authority of the Trustees to
establish and designate any further Series or Classes of
Shares, the Trustees hereby establish and designate three
Series, each with one Class of Shares: Insight Growth Fund,
Insight Moderate Growth Fund and Insight Conservative
Allocation Fund. The Shares of such Series and any Shares
of any further Series or Classes of Shares that may from
time to time be established and designated by the Trustees
shall (unless the Trustees otherwise determine with respect
to some further Series or Class at the time of establishing
and designating the same) be subject to the following
provisions:
(a) The number of authorized Shares and the number
of Shares of each Series or Class thereof that may be issued
shall be unlimited. The Trustees may classify or reclassify
any unissued Shares or any Shares previously issued and
reacquired of any Series or Class into one or more Series or
one or more Classes that may be established and designated
from time to time. The Trustees may hold as treasury shares
(of the same or some other Series or Class), reissue for
such consideration and on such terms as they may determine,
or cancel any Shares of any Series or Class reacquired by
the Trust at their discretion from time to time.
(b) All consideration received by the Trust for the
issue or sale of Shares of a particular Series or Class
thereof, together with all assets in which such
consideration is invested or reinvested, all income,
earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of
such assets and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may
be, shall irrevocably belong to that Series for all
purposes, subject only to the rights of creditors of such
Series and except as may otherwise be required by applicable
tax laws, and shall be so recorded upon the books of account
of the Trust. In the event that there are any assets,
income, earnings, profits, and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to
any particular Series, the Trustees shall allocate them
among any one or more of the Series established and
designated from time to time in such a manner and on such
basis as they, in their sole discretion, deem fair and
equitable. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series
and Classes for all purposes. No holder of Shares of any
Series shall have any claim on or right to any assets
allocated or belonging to any other Series.
(c) The assets belonging to each particular Series
shall be charged with the liabilities of the Trust in
respect of that Series or the appropriate Class or Classes
thereof and all expenses, costs, charges and reserves
attributable to that Series or Class or Classes thereof, and
any general liabilities, expenses, costs, charges or
reserves of the Trust which are not readily identifiable as
belonging to any particular Series or Class shall be
allocated and charged by the Trustees to and among any one
or more of the Series or Classes established and designated
from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable.
Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding
upon the Shareholders of all Series and Classes for all
purposes. The Trustees shall have full discretion, to the
extent not inconsistent with the 1940 Act, to determine
which items are capital; and each such determination and
allocation shall be conclusive and binding upon the
Shareholders. The assets of a particular Series of the
Trust shall, under no circumstances, be charged with
liabilities attributable to any other Series or Class or
Classes thereof of the Trust. All persons extending credit
to, or contracting with or having any claim against a
particular Series or Class thereof of the Trust shall look
only to the assets of that particular Series for payment of
such credit, contract or claim.
(d) The power of the Trustees to pay dividends and
make distributions shall be governed by Section 7.2 of this
Declaration with respect to any Series or Class which
represents the interests in the assets of the Trust
immediately prior to the establishment of two or more Series
or Classes. With respect to any other Series or Class,
dividends and distributions on Shares of a particular Series
or Class may be paid with such frequency as the Trustees may
determine, which may be daily or otherwise, pursuant to a
standing resolution or resolutions adopted only once or with
such frequency as the Trustees may determine, to the holders
of Shares of that Series or Class, from such of the income
and capital gains, accrued or realized, from the assets
belonging to that Series, as the Trustees may determine
after providing for actual and accrued liabilities belonging
to that Series or Class. All dividends and distributions on
Shares of a particular Series or Class shall be distributed
pro rata to the Shareholders of that Series or Class in
proportion to the number of Shares of that Series or Class
held by such Shareholders at the time of record established
for the payment of such dividends or distribution.
(e) Each Share of a Series of the Trust shall
represent a beneficial interest in the net assets of such
Series. Each holder of Shares of a Series or Class thereof
shall be entitled to receive his pro rata share of
distributions of income and capital gains made with respect
to such Series or Class thereof. Upon redemption of his
Shares or indemnification for liabilities incurred by reason
of his being or having been a Shareholder of a Series or
Class thereof, such Shareholder shall be paid solely out of
the funds and property of such Series of the Trust. Upon
liquidation or termination of a Series or Class thereof of
the Trust, Shareholders of such Series or Class thereof
shall be entitled to receive a pro rata share of the net
assets of such Series. A Shareholder of a particular Series
of the Trust shall not be entitled to participate in a
derivative or class action on behalf of any other Series or
the Shareholders of any other Series of the Trust.
(f) Subject to compliance with the requirements of
the 1940 Act, the Trustees shall have the authority to
provide that the holders of Shares of any Series or Class
shall have the right to convert or exchange said Shares, or
that such Shares will automatically convert, into Shares of
one or more Series or Classes of Shares in accordance with
such requirements and procedures as may be established by
the Trustees.
The establishment and designation of any additional
Series or Classes of Shares shall be effective upon the
execution by a majority of the then Trustees of an
instrument setting forth such establishment and designation
and the relative rights and preferences of such Series or
Classes, or as otherwise provided in such instrument. At
any time that there are no Shares outstanding of any
particular Series or Class previously established and
designated, the Trustees may by an instrument executed by a
majority of their number abolish that Series or Class and
the establishment and designation thereof. Each instrument
referred to in this section shall have the status of an
amendment to this Declaration.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. All Shares of
the Trust shall be redeemable at the redemption price
determined in the manner set out in this Declaration.
Redeemed or repurchased Shares may be resold by the Trust.
The Trust shall redeem the Shares of the Trust or any
Series or Class thereof at the price determined as
hereinafter set forth, upon appropriately verified written
application of the record holder thereof (or upon such other
form of request as the Trustees may determine) at such
office or agency as may be designated from time to time for
that purpose by the Trustees. The Trustees may from time to
time specify additional conditions, not inconsistent with
the 1940 Act, regarding the redemption of Shares in the
Trust's Prospectus.
Section 6.2. Price. Shares shall be redeemed at
their net asset value determined as set forth in Section 7.1
hereof as of such time as the Trustees shall have
theretofore prescribed by resolution. In absence of such
resolution, the redemption price of Shares deposited shall
be the net asset value of such Shares next determined as set
forth in Section 7.1 hereof after receipt of such
application.
Section 6.3. Payment. Payment of the redemption
price of Shares of the Trust or any Series or Class thereof
shall be made in cash or in property to the Shareholder at
such time and in the manner, not inconsistent with the 1940
Act or other applicable laws, as may be specified from time
to time in the Trust's Prospectus, subject to the provisions
of Section 6.4 hereof.
Section 6.4. Effect of Suspension of
Determination of Net Asset Value. If, pursuant to Section
6.9 hereof, the Trustees shall declare a suspension of the
determination of net asset value with respect to Shares of
the Trust or any Series or Class thereof, the rights of
Shareholders (including those who shall have applied for
redemption pursuant to Section 6.1 hereof but who shall not
yet have received payment) to have Shares redeemed and paid
for by the Trust or a Series or Class thereof shall be
suspended until the termination of such suspension is
declared. Any record holder who shall have his redemption
right so suspended may, during the period of such
suspension, by appropriate written notice of revocation at
the office or agency where application was made, revoke any
application for redemption not honored and withdraw any
certificates on deposit. The redemption price of Shares for
which redemption applications have not been revoked shall be
the net asset value of such Shares next determined as set
forth in Section 7.1 after the termination of such
suspension, and payment shall be made within seven (7) days
after the date upon which the application was made plus the
period after such application during which the determination
of net asset value was suspended.
Section 6.5. Repurchase by Agreement. The Trust
may repurchase Shares directly, or through the Distributor
or another agent designated for the purpose, by agreement
with the owner thereof at a price not exceeding the net
asset value per share determined as of the time when the
purchase or contract of purchase is made or the net asset
value as of any time which may be later determined pursuant
to Section 7.1 hereof, provided payment is not made for the
Shares prior to the time as of which such net asset value is
determined.
Section 6.6. Redemption of Shareholder's
Interest. The Trust shall have the right at any time
without prior notice to the Shareholder to redeem Shares of
any Shareholder for the then current net asset value per
Share if at such time the Shareholder owns Shares of any
Series or Class having an aggregate net asset value per
Series or Class of less than such minimum amount as the
Trustees may approve, and subject to the Trust's giving
general notice to all Shareholders of its intention to avail
itself of such right, either by publication in the Trust's
Prospectus, if any, or by such other means as the Trustees
may determine.
Section 6.7. Redemption of Shares in Order to
Qualify as Regulated Investment Company; Disclosure of
Holding. If the Trustees shall, at any time and in good
faith, be of the opinion that direct or indirect ownership
of Shares or other securities of the Trust has or may become
concentrated in any Person to an extent which would
disqualify the Trust or any Series of the Trust as a
regulated investment company under the Internal Revenue Code
of 1986, then the Trustees shall have the power by lot or
other means deemed equitable by them (i) to call for the
redemption by any such Person a number, or principal amount,
of Shares or other securities of the Trust or any Series of
the Trust sufficient to maintain or bring the direct or
indirect ownership of Shares or other securities of the
Trust or any Series of the Trust into conformity with the
requirements for such qualification and (ii) to refuse to
transfer or issue Shares or other securities of the Trust or
any Series of the Trust to any Person whose acquisition of
the Shares or other securities of the Trust or any Series of
the Trust in question would result in such disqualification.
The redemption shall be effected at the redemption price and
in the manner provided in Section 6.1.
The holders of Shares or other securities of the Trust
shall upon demand disclose to the Trustees in writing such
information with respect to direct and indirect ownership of
Shares or other securities of the Trust as the Trustees deem
necessary to comply with the provisions of the Internal
Revenue Code of 1986, or to comply with the requirements of
any other taxing authority.
Section 6.8. Reductions in Number of Outstanding
Shares pursuant to Net Asset Value Formula. The Trust may
also reduce the number of outstanding Shares of the Trust or
of any Series of the Trust pursuant to the provisions of
Section 7.3.
Section 6.9. Suspension of Right of Redemption.
The Trust may declare a suspension of the right of
redemption or postpone the date of payment or redemption for
the whole or any part of any period (i) during which the New
York Stock Exchange is closed other than customary weekend
and holiday closings, (ii) during which trading on the New
York Stock Exchange is restricted, (iii) during which an
emergency exists as a result of which disposal by the Trust
or a Series thereof of securities owned by it is not
reasonably practicable or it is not reasonably practicable
for the Trust or a Series thereof fairly to determine the
value of its net assets, or (iv) during any other period
when the Commission may for the protection of Shareholders
of the Trust by order permit suspension of the right of
redemption or postponement of the date of payment or
redemption; provided that applicable rules and regulations
of the Commission shall govern as to whether the conditions
prescribed in (ii), (iii), or (iv) exist. Such suspension
shall take effect at such time as the Trust shall specify
but not later than the close of business on the business day
next following the declaration of suspension, and thereafter
there shall be no right of redemption or payment on
redemption until the Trust shall declare the suspension at
an end, except that the suspension shall terminate in any
event on the first day on which said stock exchange shall
have reopened or the period specified in (ii) or (iii) shall
have expired (as to which in the absence of an official
ruling by the Commission, the determination of the Trust
shall be conclusive). In the case of a suspension of the
right of redemption, a Shareholder may either withdraw his
request for redemption or receive payment based on the net
asset value extending after the termination of the
suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE, NET INCOME AND
DISTRIBUTIONS
Section 7.1. Net Asset Value. The value of the
assets of the Trust or of any Series of the Trust may be
determined on the basis of the amortized cost of such
securities, by appraisal of the securities owned by the
Trust or any Series of the Trust, or by such other method as
shall be deemed to reflect the fair value thereof,
determined in good faith by or under the direction of the
Trustees. From the total value of said assets, there shall
be deducted all indebtedness, interest, taxes, payable or
accrued, including estimated taxes on unrealized book
profits, expenses and management charges accrued to the
appraisal date, net income determined and declared as a
distribution and all other items in the nature of
liabilities which shall be deemed appropriate, as incurred
by or allocated to any Series or Class of the Trust. The
resulting amount which shall represent the total net assets
of the Trust, Series or Class thereof shall be divided by
the number of Shares of the Trust, Series or Class thereof
outstanding at the time and the quotient so obtained shall
be deemed to be the net asset value of the Shares of the
Trust, Series or Class thereof. The net asset value of the
Shares shall be determined at least once on each business
day, as of the close of regular trading on the New York
Stock Exchange or at such other time or times as the
Trustees shall determine. The power and duty to make the
daily calculations may be delegated by the Trustees to the
Investment Adviser, the Administrator, the Custodian, the
Transfer Agent or such other Person as the Trustees by
resolution may determine. The Trustees may suspend the
daily determination of net asset value to the extent
permitted by the 1940 Act.
Section 7.2. Distributions to Shareholders. The
Trustees shall from time to time distribute ratably among
the Shareholders of the Trust, a Series or Class thereof
such proportion of the net profits, surplus (including paid-
in surplus), capital, or assets of the Trust or such Series
held by the Trustees as they may deem proper. Such
distributions may be made in cash or property (including
without limitation any type of obligations of the Trust,
Series or Class or any assets thereof), and the Trustees may
distribute ratably among the Shareholders of the Trust or
Series or Class thereof additional Shares of the Trust,
Series or Class thereof issuable hereunder in such a manner,
at such times, and on such terms as the Trustees may deem
proper. Such distributions may be among the Shareholders of
the Trust, Series or Class thereof at the time of declaring
a distribution or among the Shareholders of the Trust,
Series or Class thereof at such other date or time or dates
or times as the Trustees shall determine. The Trustees may
in their discretion determine that, solely for the purposes
of such distributions, Outstanding Shares shall exclude
Shares for which orders have been placed subsequent to a
specified time on the date the distribution is declared or
on the next preceding day if the distribution is declared as
of a day on which Boston banks are not open for business,
all as described in the Prospectus. The Trustees may always
retain from the net profits such amount as they may deem
necessary to pay the debts or expenses of the Trust, a
Series or Class thereof or to meet obligations of the Trust,
Series or Class thereof, or as they may deem desirable to
use in the conduct of its affairs or to retain for future
requirements or extensions of the business. The Trustees
may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans or related
plans as the Trustees shall deem appropriate. The Trustees
may in their discretion determine that an account
administration fee or other similar charge may be deducted
directly from the income and other distributions paid on
Shares to a Shareholder's account in each Series or Class.
Inasmuch as the computation of net income and gains
for Federal income tax purposes may vary from the
computation thereof on the books, the above provisions shall
be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary
dividends and as capital gains distributions, respectively,
additional amounts sufficient to enable the Trust, a Series
or Class thereof to avoid or reduce liability for taxes.
Section 7.3. Determination of Net Income;
Constant Net Asset Value; Reduction of Outstanding Shares.
Subject to Section 5.11 hereof, the net income of the Series
and Classes thereof of the Trust shall be determined in such
manner as the Trustees shall provide by resolution.
Expenses of the Trust or of a Series or Class thereof,
including the advisory or management fee, shall be accrued
each day. Each Class shall bear only expenses relating to
its Shares and an allocable portion of Series and Trust
expenses in accordance with such policies as may be
established by the Trustees from time to time and as are not
inconsistent with the provisions of this Declaration of
Trust, of any applicable document filed by the Trust with
the Commission or of the Internal Revenue Code of 1986.
Such net income may be determined by or under the direction
of the Trustees as of the close of trading on the New York
Stock Exchange on each day on which such market is open or
as of such other time or times as the Trustees shall
determine, and, except as provided herein, all the net
income of any Series or Class of the Trust, as so
determined, may be declared as a dividend on the Outstanding
Shares of such Series or Class. If, for any reason, the net
income of any Series or Class of the Trust determined at any
time is a negative amount, the Trustees shall have the power
with respect to such Series or Class (i) to offset each
Shareholder's pro rata share of such negative amount from
the accrued dividend account of such Shareholder, or (ii) to
reduce the number of Outstanding Shares of such Series or
Class by reducing the number of Shares in the account of
such Shareholder by that number of full and fractional
Shares which represents the amount of such excess negative
net income, or (iii) to cause to be recorded on the books of
the Trust an asset account in the amount of such negative
net income, which account may be reduced by the amount,
provided that the same shall thereupon become the property
of the Trust with respect to such Series or Class and shall
not be paid to any Shareholder, of dividends declared
thereafter upon the Outstanding Shares of such Series or
Class on the day such negative net income is experienced,
until such asset account is reduced to zero; or (iv) to
combine the methods described in clauses (i) and (ii) and
(iii) of this sentence, in order to cause the net asset
value per Share of such Series or Class to remain at a
constant amount per Outstanding Share immediately after such
determination and declaration. The Trustees shall also have
the power to fail to declare a dividend out of the net
income for the purpose of causing the net asset value per
Share to be increased to a constant amount. The Trustees
shall have full discretion to determine whether any cash or
property received shall be treated as income or as principal
and whether any item of expense shall be charged to the
income or the principal account, and their determination
made in good faith shall be conclusive upon the
Shareholders. In the case of stock dividends received, the
Trustees shall have full discretion to determine, in the
light of the particular circumstances, how much if any of
the value thereof shall be treated as income, the balance,
if any, to be treated as principal. The Trustees shall not
be required to adopt, but at any time may adopt, discontinue
or amend the practice of maintaining the net asset value per
Share of a Series at a constant amount.
Section 7.4. Power to Modify Foregoing
Procedures. Notwithstanding any of the foregoing provisions
of this Article VII, the Trustees may prescribe, in their
absolute discretion, such other bases and times for
determining the net asset value per Share of the Shares of
the Trust or a Series or Class thereof, or the declaration
and payment of dividends and distributions as they may deem
necessary or desirable. Without limiting the generality of
the foregoing, the Trustees may establish several Series or
Classes of Shares in accordance with Section 5.11, and
declare dividends thereon in accordance with Section
5.11(d).
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A SERIES; AMENDMENT;
MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue
without limitation of time but subject to the provisions of
this Article VIII.
Section 8.2 Termination of the Trust, a Series or a
Class. (a) The Trust, or any Series or Class thereof may be
terminated (i) by the affirmative vote of the shareholders
of not less than two-thirds of the Shares outstanding and
entitled to vote at any meeting of Shareholders of the Trust
or the appropriate Series or Class thereof or (ii) without
the vote or consent of Shareholders by an instrument in
writing signed by a majority of the Trustees. The Trustees
shall provide written notice to the affected Shareholders of
a termination under clause (ii) above. Upon the termination
of the Trust or the Series or Class,
(i) The Trust or the Series or Class shall carry on no
business except for the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of
the Trust or the Series or Class and all of the powers of
the Trustees under this Declaration shall continue until the
affairs of the Trust shall have been wound up, including the
power to fulfill or discharge the contracts of the Trust or
the Series, collect its assets, sell, convey, assign,
exchange, transfer or otherwise dispose of all or any part
of the remaining Trust Property or Trust Property allocated
or belonging to such Series or Class to one or more persons
at public or private sale for consideration which may
consist in whole or in part of cash, securities or other
property of any kind, discharge or pay its liabilities, and
do all other acts appropriate to liquidate its business;
provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all
the Trust Property or Trust Property allocated or belonging
to such Series or Class (other than as provided in (iii)
below) shall require Shareholder approval in accordance with
Section 8.4 hereof.
(iii) After paying or adequately providing for the payment
of all liabilities, and upon receipt of such releases,
indemnities and refunding agreements as they deem necessary
for their protection, the Trustees may distribute the
remaining Trust Property or the remaining property of the
terminated Series or Class, in cash or in kind or partly
each, among the Shareholders of the Trust or the Series or
Class according to their respective rights.
(b) After termination of the Trust or the Series or
Class and distribution to the Shareholders as herein
provided, a majority of the Trustees shall execute and lodge
among the records of the Trust and file with the Secretary
of The Commonwealth of Massachusetts an instrument in
writing setting forth the fact of such termination, and the
Trustees shall thereupon be discharged from all further
liabilities and duties with respect to the Trust or the
terminated Series or Class, and the rights and interests of
all Shareholders of the Trust or the terminated Series or
Class shall thereupon cease.
Section 8.3. Amendment Procedure. (a) This
Declaration may be amended by a vote of the holders of a
majority of the Shares outstanding and entitled to vote or
by any instrument in writing, without a meeting, signed by a
majority of the Trustees and consented to by the holders of
a majority of the Shares outstanding and entitled to vote.
The Trustees may amend this Declaration without the vote or
consent of Shareholders so long as such amendment does not
materially adversely affect the rights of Shareholders.
(b) No amendment may be made under this Section 8.3
which would change any rights with respect to any Shares of
the Trust or Series or Class thereof by reducing the amount
payable thereon upon liquidation of the Trust or Series or
Class thereof or by diminishing or eliminating any voting
rights pertaining thereto, except with the vote or consent
of the holders of two-thirds of the Shares of the Trust or
such Series or Class outstanding and entitled to vote.
Nothing contained in this Declaration shall permit the
amendment of this Declaration to impair the exemption from
personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust or to permit assessments
upon Shareholders.
(c) A certificate signed by a majority of the
Trustees setting forth an amendment and reciting that it was
duly adopted by the Shareholders or by the Trustees as
aforesaid or a copy of the Declaration, as amended, and
executed by a majority of the Trustees, shall be conclusive
evidence of such amendment when lodged among the records of
the Trust.
Section 8.4. Merger, Consolidation and Sale of
Assets. The Trust or any Series thereof may merge or
consolidate with any other corporation, association, trust
or other organization or may sell, lease or exchange all or
substantially all of the Trust Property or Trust Property
allocated or belonging to such Series, including its good
will, upon such terms and conditions and for such
consideration when and as authorized (a) without the vote or
consent of Shareholders by a majority of the Trustees either
at a meeting or by written consent or (b) at any meeting of
Shareholders called for the purpose by the affirmative vote
of the holders of two-thirds of the Shares of the Trust or
such Series outstanding and entitled to vote, or by an
instrument or instruments in writing without a meeting,
consented to by the holders of two-thirds of the Shares of
the Trust or such Series; provided, however, that, if such
merger, consolidation, sale, lease or exchange is
recommended by the Trustees, the vote or written consent of
the holders of a majority of the Shares of the Trust or such
Series outstanding and entitled to vote shall be sufficient
authorization. Any such merger, consolidation, sale, lease
or exchange shall be deemed for all purposes to have been
accomplished under and pursuant to Massachusetts law.
Section 8.5. Incorporation. The Trustees may
without the vote or consent of Shareholders cause to be
organized or assist in organizing a corporation or
corporations under the laws of any jurisdiction or any other
trust, partnership, limited liability company, association
or other organization to take over all of the Trust Property
or the Trust Property allocated or belonging to such Series
or to carry on any business in which the Trust shall
directly or indirectly have any interest, and to sell,
convey and transfer the Trust Property or the Trust Property
allocated or belonging to such Series to any such
corporation, trust, limited liability company, partnership,
association or organization in exchange for the shares or
securities thereof or otherwise, and to lend money to,
subscribe for the shares or securities of, and enter into
any contracts with any such corporation, trust, partnership,
limited liability company, association or organization, or
any corporation, partnership, limited liability company,
trust, association or organization in which the Trust or
such Series holds or is about to acquire shares or any other
interest. The Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and
any such corporation, trust, partnership, limited liability
company, association or other organization if and to the
extent permitted by law, as provided under the law then in
effect. Nothing contained herein shall be construed as
requiring approval of Shareholders for the Trustees to
organize or assist in organizing one or more corporations,
trusts, partnerships, limited liability companies,
associations or other organizations and selling, conveying
or transferring a portion of the Trust Property to such
organization or entities.
ARTICLE IX
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to
the Shareholders of each Series a written financial report
of the transactions of the Trust, including financial
statements which shall at least annually be certified by
independent public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. Execution and Filing. This
Declaration and any amendment hereto shall be filed in the
office of the Secretary of The Commonwealth of Massachusetts
and in such other places as may be required under the laws
of Massachusetts and may also be filed or recorded in such
other places as the Trustees deem appropriate. Each
amendment so filed shall be accompanied by a certificate
signed and acknowledged by a Trustee, or in the alternative
by the Secretary or Assistant Secretary of the Trust,
stating that such action was duly taken in a manner provided
herein, and unless such amendment or such certificate sets
forth some later time for the effectiveness of such
amendment, such amendment shall be effective upon its
execution. A restated Declaration, integrating into a
single instrument all of the provisions of the Declaration
which are then in effect and operative, may be executed from
time to time by a majority of the Trustees and filed with
the Secretary of The Commonwealth of Massachusetts. A
restated Declaration shall, upon execution, be conclusive
evidence of all amendments contained therein and may
hereafter be referred to in lieu of the original Declaration
and the various amendments thereto.
Section 10.2. Governing Law. This Declaration is
executed by the Trustees and delivered in The Commonwealth
of Massachusetts and with reference to the laws thereof, and
the rights of all parties and the validity and construction
of every provision hereof shall be subject to and construed
according to the laws of said State.
Section 10.3. Counterparts. This Declaration may
be simultaneously executed in several counterparts, each of
which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any
such original counterpart.
Section 10.4. Reliance by Third Parties. Any
certificate executed by an individual who, according to the
records of the Trust appears to be a Trustee hereunder or
officer of the Trust, certifying (a) the number or identity
of Trustees or Shareholders, (b) the due authorization of
the execution of any instrument or writing, (c) the form of
any vote passed at a meeting of Trustees or Shareholders,
(d) the fact that the number of Trustees or Shareholders
present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (e) the form
of any By-Laws adopted by or the identity of any officers
elected by the Trustees, or (f) the existence of any fact or
facts which in any manner relate to the affairs of the
Trust, shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees
and officers and their successors.
Section 10.5. Provisions in Conflict with Law or
Regulations. (a) The provisions of this Declaration are
severable, and if the Trustees shall determine, with the
advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code of 1986 or with
other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part
of this Declaration; provided, however, that such
determination shall not affect any of the remaining
provisions of this Declaration or render invalid or improper
any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be
held invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such
provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any
other provision of this Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this
instrument this 13th day of September, 1996.
GAIL A. HANSON, Trustee
Gail A. Hanson, as Trustee and not individually
PAULA A. LORDI, Trustee
Paula A. Lordi, as Trustee and not individually
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK COUNTY MASSACHUSETTS
September 13, 1996
Then personally appeared the above-named persons who
acknowledged the foregoing instrument to be their free act
and deed.
Before me,
THOMAS A. GORMLEY III
Notary Public
My commission expires: November 27, 1998
The address of the Trust is:
One Exchange Place
Boston, MA 02109
The addresses of the Trustees are:
Gail A. Hanson
One Exchange Place
Boston, MA 02109
Paula A. Lordi
One Exchange Place
Boston, MA 02109
25
BY-LAWS
OF
INSIGHT PREMIER FUNDS
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS 1
ARTICLE II - OFFICES 1
Section 1. Principal Office 1
Section 2. Other Offices 1
ARTICLE III - SHAREHOLDERS 1
Section 1. Meetings 1
Section 2. Notice of Meetings 1
Section 3. Record date for
Meetings and Other
Purposes 2
Section 4. Proxies 2
Section 5. Inspection of Records 2
Section 6. Action without Meeting 2
ARTICLE IV - TRUSTEES 2
Section 1. Meetings of the Trustees 2
Section 2. Quorum and Manner of Acting 3
ARTICLE V - COMMITTEES 3
Section 1. Executive and Other
Committees 3
Section 2. Audit Committee 3
Section 3. Nominating Committee 4
Section 4. Meetings, Quorum and
Manner of Acting 4
ARTICLE VI - OFFICERS 4
Section 1. General Provisions 4
Section 2. Term of Office and
Qualifications 4
Section 3. Removal 4
Section 4. Powers and Duties of
the Chairman 4
Section 5. Powers and Duties of
the President 5
Section 6. Powers and Duties of
Vice Presidents 5
Section 7. Powers and Duties of
the Treasurer 5
Section 8. Powers and Duties of
the Secretary 5
Section 9. Powers and Duties of
Assistant Officers 5
Section 10. Powers and Duties of
Assistant Secretaries 5
Section 11. Compensation of
Officers and Trustees
and Members of an
Advisory Board 6
ARTICLE VII - FISCAL YEAR 6
ARTICLE VIII - SEAL 6
ARTICLE IX - SUFFICIENCY AND WAIVERS OF NOTICE 6
TABLE OF CONTENTS (continued)
Page
ARTICLE X - CUSTODY OF SECURITIES 6
Section 1. Employment of a
Custodian 6
Section 2. Action Upon Termination
of a Custodian Agreement 6
Section 3. Provisions of
Custodian Contract 7
Section 4. Central Certificate
System 7
Section 5. Acceptance of Receipts
in Lieu of Certificates 7
ARTICLE XI - AMENDMENTS 8
ARTICLE XII - MISCELLANEOUS 8
BY-LAWS
OF
INSIGHT PREMIER FUNDS
ARTICLE I
DEFINITIONS
The terms "Administrator," "By-Laws," "Class,"
"Commission," "Custodian," "Declaration," "Distributor,"
"Fund" or "Funds," "His," "Interested Person," "Investment
Adviser," "1940 Act," "Person," "Prospectus," "Series,"
"Shareholder," "Shares," "Transfer Agent," "Trust," "Trust
Property," "Trustees," and "vote of a majority of the Shares
outstanding and entitled to vote," have the respective
meanings given them in the Declaration of Trust of Insight
Premier Funds.
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the
Trustees, the principal office of the Trust shall be One
Exchange Place, Boston, Massachusetts 02109.
Section 2. Other Offices. The Trust may have offices
in such other places without as well as within the
Commonwealth of Massachusetts as the Trustees may from time
to time determine.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. Meetings of the Shareholders of
the Trust or a Series thereof shall be held as provided in
the Declaration at such place within or without the
Commonwealth of Massachusetts as the Trustees shall
designate. The holders of a majority of outstanding Shares
of the Trust or a Series or Class thereof present in person
or by proxy shall constitute a quorum at any meeting of the
Shareholders of the Trust or a Series or Class thereof.
Section 2. Notice of Meetings. Notice of all
meetings of the Shareholders, stating the time, place and
purposes of the meeting, shall be given by the Trustees by
mail to each Shareholder at his address as recorded on the
register of the Trust mailed at least ten (10) days and not
more than ninety (90) days before the meeting, provided,
however, that notice of a meeting need not be given to a
shareholder to whom such notice need not be given under the
proxy rules of the Commission under the 1940 Act and the
Securities Exchange Act of 1934, as amended. Any adjourned
meeting may be held as adjourned without further notice. No
notice need be given to any Shareholder who shall have
failed to inform the Trust of his current address or if a
written waiver of notice, executed before or after the
meeting by the Shareholder or his attorney thereunto
authorized, is filed with the records of the meeting.
Section 3. Record Date for Meetings and Other
Purposes. For the purpose of determining the Shareholders
who are entitled to notice of and to vote at any meeting, or
to participate, the Trustees may from time to time close the
transfer books for such period, not exceeding thirty (30)
days, as the Trustees may determine; or without closing the
transfer books the Trustees may fix a date not more than one
hundred twenty (120) days prior to the date of any meeting
of Shareholders or distribution or other action as a record
date for the determination of the persons to be treated as
Shareholders of record for such purposes, except for
dividend payments, which shall be governed by the
Declaration.
Section 4. Proxies. At any meeting of Shareholders,
any holder of Shares entitled to vote thereat may vote by
proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Secretary,
or with such other officer or agent of the Trust as the
Secretary may direct, for verification prior to the time at
which such vote shall be taken. Proxies may be solicited in
the name of one or more Trustees or one or more of the
officers of the Trust. Only Shareholders of record shall be
entitled to vote. Each whole share shall be entitled to one
vote as to any matter on which it is entitled by the
Declaration to vote, and each fractional Share shall be
entitled to a proportionate fractional vote. When any Share
is held jointly by several persons, any one of them may vote
at any meeting in person or by proxy in respect of such
Share, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or
their proxies so present disagree as to any vote to be cast,
such vote shall not be received in respect of such Share. A
proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or
prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. If the holder of any such
share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as
regards the charge or management of such Share, he may vote
by his guardian or such other person appointed or having
such control, and such vote may be given in person or by
proxy. The signing of a Shareholder's name on a proxy
pursuant to telephonic or electronically transmitted
instructions obtained in accordance with procedures
reasonably designed to verify that such instructions have
been properly authorized by such Shareholder shall
constitute the valid execution of such proxy by or on behalf
of such Shareholder.
Section 5. Inspection of Records. The records of the
Trust shall be open to inspection by Shareholders to the
same extent as is permitted shareholders of a Massachusetts
business corporation.
Section 6. Action Without Meeting. Any action which
may be taken by Shareholders may be taken without a meeting
if a majority of Shareholders entitled to vote on the matter
(or such larger proportion thereof as shall be required by
law, the Declaration or these By-Laws for approval of such
matter) consent to the action in writing and the written
consents are filed with the records of the meetings of
Shareholders. Such consents shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees
may in their decision provide for regular or stated meetings
of the Trustees. Notice of regular or stated meetings need
not be given. Meetings of the Trustees other than regular
or stated meetings shall be held whenever called by the
President, or by any one of the Trustees, at the time being
in office. Notice of the time and place of each meeting
other than regular or stated meetings shall be given by the
Secretary or an Assistant Secretary or by the officer or
Trustee calling the meeting and shall be mailed to each
Trustee at least two days before the meeting, or shall be
telegraphed, cabled, or wirelessed to each Trustee at his
business address, or personally delivered to him at least
one day before the meeting. Such notice may, however, be
waived by any Trustee. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed
by him before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the
meeting without protesting prior thereto or at its
commencement the lack of notice to him. A notice or waiver
of notice need not specify the purpose of any meeting. The
Trustees may meet by means of a telephone conference circuit
or similar communications equipment by means of which all
persons participating in the meeting can hear each other at
the same time and participation by such means shall be
deemed to have been held at a place designated by the
Trustees at the meeting. Participation in a telephone
conference meeting shall constitute presence in person at
such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees
without a meeting if all the Trustees consent to the action
in writing and the written consents are filed with the
records of the Trustees' meetings. Such consents shall be
treated as a vote for all purposes.
Section 2. Quorum and Manner of Acting. A majority
of the Trustees shall be present in person at any regular or
special meeting of the Trustees in order to constitute a
quorum for the transaction of business at such meeting and
(except as otherwise required by law, the Declaration or
these By-Laws) the act of a majority of the Trustees present
at any such meeting, at which a quorum is present, shall be
the act of the Trustees. In the absence of a quorum, a
majority of the Trustees present may adjourn the meeting
from time to time until a quorum shall be present. Notice
of an adjourned meeting need not be given.
ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The
Trustees by vote of a majority of all the Trustees may elect
from their own number an Executive Committee to consist of
not less than three (3) members to hold office at the
pleasure of the Trustees, which shall have the power to
conduct the current and ordinary business of the Trust while
the Trustees are not in session, including the purchase and
sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust or a Series
thereof, and such other powers of the Trustees as the
Trustees may, from time to time, delegate to them except
those powers which by law, the Declaration or these By-Laws
they are prohibited from delegating. The Trustees may also
elect from their own number other Committees from time to
time, the number composing such Committees, the powers
conferred upon the same (subject to the same limitations as
with respect to the Executive Committee) and the term of
membership on such Committees to be determined by the
Trustees. The Trustees may designate a chairman of any such
Committee. In the absence of such designation the Committee
may elect its own Chairman.
Section 2. Audit Committee. The Trustees may by the
affirmative vote of a majority of the Trustees appoint from
their members an Audit Committee composed of two or more
Trustees who are not "interested persons" (as defined in the
1940 Act) of the Trust, as the Trustees may from time to
time determine. The Audit Committee shall (a) recommend
independent public accountants for selection by the
Trustees, (b) review the scope of the audit, accounting and
financial internal controls and the quality and adequacy of
the Trust's accounting staff with the independent public
accountants and such other persons as may be deemed
appropriate, (c) review with the accounting staff, the
Administrator and the independent public accountants the
compliance of transactions of the Trust with the financial
terms of applicable agreements, (d) review reports of the
independent public accountants and comment to the Trustees
when warranted, (e) report to the Trustees at least once a
year and at such other times as the committee deems
desirable, and (f) be directly available at all times to
independent public accountants and responsible officers of
the Trust for consultation on audit, accounting and related
financial matters.
Section 3. Nominating Committee. The Trustees may by
the affirmative vote of a majority of the Trustees appoint
from their members a Nominating Committee composed of two or
more Trustees. The Nominating Committee shall recommend to
the Trustees a slate of persons to be nominated for election
as Trustees by the shareholders at a meeting of shareholders
and a person to fill any vacancy occurring for any reason in
the Board of Trustees. Notwithstanding anything in this
Section 3 to the contrary, so long as the Trust has in
effect one or more plans pursuant to Rule 12b-1 under the
1940 Act, the selection and nomination of those Trustees who
are not "interested persons" (as defined in the 1940 Act)
shall be committed to the discretion of such disinterested
Trustees.
Section 4. Meetings, Quorum and Manner of Acting.
The Trustees may (1) provide for stated meetings of any
Committee, (2) specify the manner of calling and notice
required for special meetings of any Committee, (3) specify
the number of members of a Committee required to constitute
a quorum and the number of members of a Committee required
to exercise specified powers delegated to such Committee,
(4) authorize the making of decisions to exercise specified
powers by written consent of the requisite number of members
of a Committee without a meeting, and (5) authorize the
members of a Committee to meet by means of a telephone
conference circuit.
The Executive Committee and any other committee of the
Board of Trustees shall keep regular minutes of their
meetings and records of decisions taken without a meeting
and cause them to be recorded in a book designated for that
purpose and kept in the office of the Trust.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the
Trust shall be a President, a Treasurer and a Secretary, who
shall be elected by the Trustees. The Trustees may elect or
appoint such other officers or agents as the business of the
Trust may require, including one or more Vice Presidents,
one or more Assistant Secretaries, and one or more Assistant
Treasurers. The Trustees may delegate to any officer or
Committee the power to appoint any subordinate officers or
agents.
Section 2. Term of Office and Qualifications. Except
as otherwise provided by law, the Declaration or these By-
Laws, the President, the Treasurer and the Secretary shall
each hold office until his successor shall have been duly
elected and qualified, and all other officers shall hold
office at the pleasure of the Trustees. The Secretary and
the Treasurer may be the same person. Any two or more
offices, except those of President and Vice President, may
be held by the same person, but no person shall execute,
acknowledge or verify any instrument in more than one
capacity if such instrument is required by law, the
Declaration or these By-Laws to be executed, acknowledged or
verified by two or more officers. Any officer may be but
need not be a Trustee or Shareholder.
Section 3. Removal. The Trustees, at any regular or
special meeting of the Trustees, may remove any officer
without cause, by a vote of a majority of the Trustees then
in office. Any officer or agent appointed by an officer or
Committee may be removed with or without cause by such
appointing officer or Committee.
Section 4. Powers and Duties of the Chairman. The
Trustees may, but need not, appoint from among their number
a Chairman. When present he shall preside at the meetings
of the Shareholders and of the Trustees. He may call
meetings of the Trustees and of any Committee thereof
whenever he deems it necessary. He shall be the chief
executive officer of the Trust and shall exercise general
supervision and direction over the affairs of the Trust. He
shall have the power to employ attorneys and counsel for the
Trust or any Series thereof and to employ such subordinate
officers, agents, clerks and employees as he may find
necessary to transact the business of the Trust or any
Series thereof. He shall also have the power to grant,
issue, execute or sign such powers of attorney, proxies or
other documents as may be deemed advisable or necessary in
furtherance of the interests of the Trust or any Series
thereof.
Section 5. Powers and Duties of the President. In
the absence of the Chairman, the President may call meetings
of the Trustees and of any Committee thereof when he deems
it necessary and shall preside at all meetings of the
Shareholders. Subject to the control of the Trustees and to
the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, the
President shall have such powers and duties, as from time to
time may be conferred upon or assigned to him by the
Trustees.
Section 6. Powers and Duties of Vice Presidents. In
the absence or disability of the President, the Vice
President or, if there be more than one Vice President, any
Vice President designated by the Trustees shall perform all
the duties and may exercise any of the powers of the
President, subject to the control of the Trustees. Each
Vice President shall perform such other duties as may be
assigned to him from time to time by the Trustees and the
President.
Section 7. Powers and Duties of the Treasurer. The
Treasurer shall be the principal financial and accounting
officer of the Trust. He shall deliver all funds of the
Trust or any Series thereof which may come into his hands to
such Custodian as the Trustees may employ pursuant to
Article X of these By-Laws. He shall render a statement of
condition of the finances of the Trust or any Series thereof
to the Trustees as often as they shall require the same and
he shall in general perform all the duties incident to the
office of a Treasurer and such other duties as from time to
time may be assigned to him by the Trustees. The Treasurer
shall give a bond for the faithful discharge of his duties,
if required so to do by the Trustees, in such sum and with
such surety or sureties as the Trustees shall require.
Section 8. Powers and Duties of the Secretary. The
Secretary shall keep the minutes of all meetings of the
Trustees and of the Shareholders in proper books provided
for that purpose; he shall have custody of the seal of the
Trust; he shall have charge of the Share transfer books,
lists and records unless the same are in the charge of the
Transfer Agent. He shall attend to the giving and serving
of all notices by the Trust in accordance with the
provisions of these By-Laws and as required by law; and
subject to these By-Laws, he shall in general perform all
duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the
Trustees.
Section 9. Powers and Duties of Assistant Officers.
In the absence or disability of the Treasurer, any officer
designated by the Trustees shall perform all the duties, and
may exercise any of the powers, of the Treasurer. Each
officer shall perform such other duties as from time to time
may be assigned to him by the Trustees. Each officer
performing the duties and exercising the powers of the
Treasurer, if any, and any Assistant Treasurer, shall give a
bond for the faithful discharge of his duties, if required
so to do by the Trustees, in such sum and with such surety
or sureties as the Trustees shall require.
Section 10. Powers and Duties of Assistant
Secretaries. In the absence or disability of the Secretary,
any Assistant Secretary designated by the Trustees shall
perform all the duties, and may exercise any of the powers,
of the Secretary. Each Assistant Secretary shall perform
such other duties as from time to time may be assigned to
him by the Trustees.
Section 11. Compensation of Officers and Trustees and
Members of an Advisory Board. Subject to any applicable
provisions of the Declaration, the compensation of the
officers and Trustees and members of an Advisory Board shall
be fixed from time to time by the Trustees or, in the case
of officers, by any Committee or officer upon whom such
power may be conferred by the Trustees. No officer shall be
prevented from receiving such compensation as such officer
by reason of the fact that he is also a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first
day of January in each year and shall end on the last day of
December in each year, provided, however, that the Trustees
may from time to time change the fiscal year. The fiscal
year of the Trust shall be the taxable year of each Series
of the Trust.
ARTICLE VIII
SEAL
The Trustees may adopt a seal which shall be in such
form and shall have such inscription thereon as the Trustees
may from time to time prescribe.
ARTICLE IX
SUFFICIENCY AND WAIVERS OF NOTICE
Whenever any notice whatever is required to be given
by law, the Declaration or these By-Laws, a waiver thereof
in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein,
shall be deemed equivalent thereto. A notice shall be
deemed to have been telegraphed, cabled or wirelessed for
the purposes of these By-Laws when it has been delivered to
a representative of any telegraph, cable or wireless company
with instructions that it be telegraphed, cabled or
wirelessed.
ARTICLE X
CUSTODY OF SECURITIES
Section 1. Employment of a Custodian. The Trust
shall place and at all times maintain in the custody of one
or more Custodians (including any sub-custodian for the
Custodian) all funds, securities and similar investment
included in the Trust Property or the Trust Property
allocated or belonging to a Series or Class thereof. The
Custodian (and any sub-custodian) shall be a bank having not
less than $2,000,000 aggregate capital, surplus and
undivided profits and shall be appointed from time to time
by the Trustees, who shall fix its remuneration.
Section 2. Action Upon Termination of Custodian
Agreement. Upon termination of a Custodian Agreement or
inability of the Custodian to continue to serve, the
Trustees shall promptly appoint a successor custodian, but
in the event that no successor custodian can be found who
has the required qualifications and is willing to serve, the
Trustees shall call as promptly as possible a special
meeting of the Shareholders of the Trust or a Series or
Class thereof to determine whether the Trust or Series or
Class thereof shall function without a custodian or shall be
liquidated. If so directed by vote of the holders of a
majority of the outstanding voting securities, the Custodian
shall deliver and pay over all Trust Property or the Trust
Property allocated or belonging to a Series or Class thereof
held by it as specified in such vote.
Section 3. Provisions of Custodian Contract. The
following provisions shall apply to the employment of a
Custodian and to any contract entered into with the
Custodian so employed:
The Trustees shall cause to be delivered to the Custodian
all securities included in the Trust Property or the Trust
Property allocated or belonging to a Series or Class thereof
or to which the Trust or such Series or Class may become
entitled, and shall order the same to be delivered by the
Custodian only in completion of a sale, exchange, transfer,
pledge, loan of securities to another person, or other
disposition thereof, all as the Trustees may generally or
from time to time require or approve or to a successor
Custodian; and the Trustees shall cause all funds included
in the Trust Property or the Trust Property allocated or
belonging to a Series or Class thereof or to which it may
become entitled to be paid to the Custodian, and shall order
the same disbursed only for investment against delivery of
the securities acquired, or the return of cash held as
collateral for loans of portfolio securities, or in payment
of expenses, including management compensation, and
liabilities of the Trust or Series or Class thereof,
including distributions to Shareholders, or for other proper
Trust purposes, or to a successor Custodian.
Notwithstanding anything to the contrary in these By-Laws,
upon receipt of proper instructions, which may be standing
instructions, the Custodian may deliver funds in the
following cases: In connection with repurchase agreements,
the Custodian shall transmit, prior to receipt on behalf of
the Trust or Series or Class thereof of any securities or
other property, funds from the custodian account of the
Trust or Series or Class thereof to a special custodian
approved by the Trustees of the Trust, which funds shall be
used to pay for securities to be purchased by the Trust or
Series or Class thereof subject to the obligations of the
Trust or Series or Class thereof to sell and the seller's
obligation to repurchase such securities. In such case, the
securities shall be held in the custody of the special
custodian. In connection with the purchase or sale of
financial futures contracts, the Custodian shall transmit,
prior to receipt on behalf of the Trust of any securities or
other property, funds from the custodian account of the
Trust or Series or Class thereof in order to furnish to and
maintain funds with brokers as margin to guarantee the
performance of the futures obligations of the Trust or
Series or Class thereof in accordance with the applicable
requirements of commodities exchanges and brokers.
Section 4. Central Certificate System. Subject to
such rules, regulations and orders as the Commission may
adopt, the Trustees may direct the Custodian to deposit all
or any part of the securities owned by the Trust or Series
or Class thereof in a system for the central handling of
securities established by a national securities exchange or
a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Commission, or
otherwise in accordance with the 1940 Act, pursuant to which
system all securities of any particular class or series of
any issuer deposited within the system are treated as
fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of such securities, provided
that all such deposits shall be subject to withdrawal only
upon the order of the Trust or Series or Class thereof.
Section 5. Acceptance of Receipts in Lieu of
Certificates. Subject to such rules, regulations and orders
as the Commission may adopt, the Trustees may direct the
Custodian to accept written receipts or other written
evidences indicating purchases of securities held in book-
entry form in the Federal Reserve System in accordance with
regulations promulgated by the Board of Governors of the
Federal Reserve System and the local Federal Reserve Banks
in lieu of receipt of certificates representing such
securities.
ARTICLE XI
AMENDMENTS
These By-Laws, or any of them, may be altered, amended
or repealed, or new By-Laws may be adopted by (a) vote of a
majority of the Shares outstanding and entitled to vote or
(b) by the Trustees, provided, however, that no By-Law may
be amended, adopted or repealed by the Trustees if such
amendment, adoption or repeal requires, pursuant to law, the
Declaration or these By-Laws, a vote of the Shareholders.
ARTICLE XII
MISCELLANEOUS
(A) Except as hereinafter provided, no officer or
Trustee of the Trust and no partner, officer, director or
shareholder of the Investment Adviser of the Trust (as that
term is defined in the 1940 Act) or of an underwriter of the
Trust, and no Investment Adviser or underwriter of the
Trust, shall take long or short positions in the securities
issued by the Trust or any Series thereof.
(1) The foregoing provision shall not prevent an
underwriter from purchasing Shares from the Trust or any
Series if such purchases are limited (except for reasonable
allowances for clerical errors, delays and errors of
transmission and cancellation of orders) to purchases for
the purpose of filling orders for such Shares received by
the underwriter, and provided that orders to purchase from
the Trust or any Series thereof are entered with the Trust
or any Series thereof or the Custodian promptly upon receipt
by the underwriter of purchase orders for such Shares,
unless the underwriter is otherwise instructed by its
customer.
(2) The foregoing provision shall not prevent an
underwriter from purchasing Shares of the Trust or any
Series thereof as agent for the account of the Trust or any
Series thereof.
(3) The foregoing provision shall not prevent the
purchase from the Trust or any Series thereof or from the
underwriter of Shares issued by the Trust or any Series
thereof, by any officer, or Trustee of the Trust or any
Series thereof or by any partner, officer, director or
shareholder of the Investment Adviser of the Trust or any
Series thereof or of an underwriter of the Trust at the
price available to the public generally at the moment of
such purchase, or as described in the Prospectus of the
Trust.
(4) The foregoing shall not prevent the Investment
Adviser, or any affiliate thereof, of the Trust or any
Series or Class thereof from purchasing Shares prior to the
effectiveness of the first registration statement relating
to the Shares under the Securities Act of 1933.
(B) Neither the Trust nor any Series thereof shall
lend assets of the Trust or of such Series to any officer or
Trustee of the Trust or Series, or to any partner, officer,
director or shareholder of, or person financially interested
in, the Investment Adviser of the Trust or Series or an
underwriter of the Trust.
(C) The Trust shall not impose any restrictions upon
the transfer of the Shares of the Trust or any Series
thereof except as provided in the Declaration or as may be
required to comply with federal or state securities laws,
but this requirement shall not prevent the charging of
customary transfer agent fees.
END OF BY-LAWS
