Investment Company Administration Corporation
4455 E. Camelback Rd., Suite 261E
Phoenix, Arizona 85018
(602) 952-1100
July 23, 1997
Securities and Exchange Commission
Attn: Filing Desk, Stop 1-4
450 Fifth Street, N.W.
Washington, DC 20549
Re: Advisors Series Trust
File No. 333-17391 and 811-07959
Dear Sir or Madam:
On behalf of the above Registrant and pursuant to Rule 497(c) under the
Securities Act of 1933, I enclose for filing via EDGAR for the Ridgeway Helms
Millennium Fund series of the registrant a copy of the Prospectus dated July 15,
1997 and a copy of a supplement dated July 15, 1997 to the Prospectus dated July
15, 1997.
Sincerely yours,
/s/Robert H. Wadsworth
Robert H. Wadsworth
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Ridgeway Helms Millennium Fund
Supplement dated 7/15/97 to Prospectus dated 7/15/97
The Fund's investment advisor, Ridgeway Helms Investment Management,
LLC ("RHIM"), is in the process of registering as an investment advisor with the
Securities and Exchange Commission. Until RHIM's advisor registration is
effective, a previously registered advisory affiliate of RHIM, Ridgeway Helms
Securities Corporation ("RHSC"), will act as the Fund's advisor under the same
terms and negotiated fee schedule. The facilities, personnel and ownership of
RHIM and RHSC are the same, and both entities have been approved to act as the
Fund's investment advisor.
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Ridgeway Helms Millennium Fund
This Prospectus sets forth basic information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. The Fund is a separate series of Advisors Series
Trust (the "Trust"), an open-end registered management investment company. A
Statement of Additional Information ("SAI") dated July 15, 1997, as may be
amended from time to time, has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. This Statement of Additional
Information is available without charge upon request by calling the Fund at
(800) 801-5992.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS,
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus
July 15, 1997
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TABLE OF CONTENTS
Expense Table............................................................ 3
Investment Objectives and Policies....................................... 4
Other Investment Techniques............................................... 5
Management of the Fund.................................................... 6
Investor Guide........................................................... 7
Services Available to Shareholders....................................... 9
How to Redeem Your Shares................................................. 10
Distributions and Taxes................................................... 12
General Information....................................................... 13
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Ridgeway Helms Millennium Fund
303 Twin Dolphin Drive, Suite 530
Redwood Shores, CA 94065
Fund Literature (800) 801-5992
Shareholder Services (888) 229-2105
The Ridgeway Helms Millennium Fund (the "Fund") is a mutual fund with the
investment objective of growth of capital. The Fund attempts to achieve its
objective by investing in equity securities. See "Investment Objective and
Policies." There can be no assurance that the Fund will achieve its investment
objective.
EXPENSE TABLE
Expenses are one of several factors to consider when investing in the Fund.
There are two types of expenses involved: shareholder transaction expenses, such
as sales loads, and annual operating expenses, such as investment advisory fees.
The Fund is a no-load mutual fund and has no shareholder transaction expenses.
Annual Operating Expenses
(As a percentage of average net assets)
Investment Advisory Fees............................................... 0.95%
Other Expenses (after expense reimbursement)........................... 0.50%
--------
Total Fund Operating Expenses (after expense reimbursement)............ 1.45%
========
The purpose of the above fee table is to provide an understanding of the various
annual operating expenses which may be borne directly or indirectly by an
investment in the Fund. Actual expenses may be more or less than those shown.
The Fund's total operating expenses are not expected to exceed 2.00% of average
net assets annually, but in the event that they do, the Advisor has agreed to
reduce its fees to insure that the expenses for the Fund will not exceed 2.00%.
"Other Expenses" in the above table have been estimated for the first fiscal
year of the Fund. If the Advisor did not limit the Fund's expenses, it is
expected that "Other Expenses" in the above table would be 1.45% and "Total
Operating Expenses" would be 2.40%. If the Advisor does waive any of its fees,
the Fund may reimburse the Advisor in future years. See "Management of the
Fund."
Example
This table illustrates the net operating expenses that would be incurred by an
investment in the Fund over different time periods assuming a $1,000 investment,
a 5% annual return, and redemption at the end of each time period.
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1 Year 3 Years
$15 $46
The Example shown above should not be considered a representation of past or
future expenses and actual expenses may be greater or less than those shown. In
addition, federal regulations require the Example to assume a 5% annual return,
but the Fund's actual return may be higher or lower. See "Management of the
Fund."
The minimum initial investment in the Fund is $2,500, with subsequent minimum
investments of $100 or more ($1,000 and $100, respectively, for retirement
plans). Shares will be redeemed at their net asset value.
INVESTMENT OBJECTIVES AND POLICIES
What is the Fund's investment objective? The investment objective of the Fund is
to seek growth of capital. There can be no assurance that the Fund will achieve
its objective.
How does the Fund seek to achieve its objective? Ridgeway Helms Investment
Management (the "Advisor") selects equity securities for the Fund's portfolio
that it believes are experiencing, or has the potential to experience, growth in
earnings that exceeds the average growth rate of companies within the Standard &
Poor's 500 Composite Stock Price Index. The Advisor will also consider the
relationship between the price/earnings ratio of the security and its expected
growth rate. In seeking investments, the Advisor's primary emphasis is on
evaluating a company's management, growth prospects, business operations,
competitive forces, revenues, earnings, cash flow and balance sheet in relation
to its share price. The Advisor may select stocks which it believes offer
substantial growth in any or all of the above criteria and/or stocks which it
believes are undervalued relative to its current price.
The Fund will invest in small, medium and large companies; the minimum market
capitalization of a portfolio security is expected to be $25 million. A small
company is considered to be one which has a market capitalization of less than
$500 million at the time of investment. Currently, the Advisor expects
approximately 20% of the Fund's portfolio to be invested in small companies, but
the Advisor could invest up to two-thirds of the Fund's assets in stocks of
small companies. To the extent that the Fund does invest in small capitalization
stocks, there is the risk that its portfolio will be less marketable and may be
subject to greater fluctuations in price than a portfolio holding stocks of
larger issuers. Small capitalization stocks often pay no dividends, but income
is not a primary goal of the Fund. The Advisor does not expect the Fund's annual
turnover rate to exceed 100%.
There is, of course, no assurance that the Fund's objective will be achieved.
Because prices of common stocks and other securities fluctuate, the value of an
investment in the Fund will vary as the market value of its investment portfolio
changes.
PROSPECTUS PAGE 4
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Other securities the Fund might purchase. Under normal market conditions, the
Fund will invest at least 85% of its total assets in equity securities,
consisting of common stocks and securities having the characteristics of common
stocks, such as convertible securities, rights and warrants. If the Advisor
believes that market conditions warrant a temporary defensive posture, the Fund
may invest without limit in high quality, short-term debt securities and money
market instruments. These short-term debt securities and money market
instruments include commercial paper, certificates of deposit, bankers'
acceptances, U.S. Government securities and repurchase agreements. The Fund may
buy or write options on equities and on stock indices. More information about
these investments is contained in the SAI.
OTHER INVESTMENT TECHNIQUES
Lending Securities. To increase its income, the Fund may lend securities from
its portfolio to brokers, dealers and other financial institutions. No more than
one-third of the Fund's total assets may be loaned. The Fund's loans of
portfolio securities will be collateralized at all times by high quality liquid
securities. Under the present regulatory requirements which govern loans of
portfolio securities, the loan collateral must, on each business day, at least
equal the value of the loaned securities and must consist of cash, letters of
credit of domestic banks or domestic branches of foreign banks, or securities of
the U.S. Government or its agencies. To be acceptable as collateral, letters of
credit must obligate a bank to pay amounts demanded by the Fund if the demand
meets the terms of the letter. Such terms and the issuing bank would have to be
satisfactory to the Fund. Any loan might be secured by any one or more of the
three types of collateral. The terms of the Fund's loans must permit the Fund to
reacquire loaned securities on five days' notice or in time to vote on any
serious matter and must meet certain tests under the Internal Revenue Code of
1986 (the "Code").
Selling Short. The Fund may sell securities short by borrowing securities it
does not own and selling them. The Fund is then obligated to replace the
securities borrowed by purchasing them at the market price at the time of
replacement. If the securities sold short increase in value between the time of
sale and the time the Fund purchases them, the Fund will incur a loss. On the
other hand, if the securities decline in value, the Fund may repurchase them at
a lower price and realize a profit. There are limits on the extent to which the
Fund may engage in short sales, as described in the SAI.
Borrowing Money. The Fund may borrow money from banks for leverage, up to
one-third of its total assets. The use of borrowing by the Fund involves special
risk considerations that may not be associated with other funds having similar
objectives and policies. Since substantially all of the Fund's assets fluctuate
in value, whereas the interest obligation resulting from a borrowing will be
fixed by the terms of the Fund's agreement with its lender, the asset value per
share of the Fund will tend to increase more when its portfolio assets decrease
in value than would
PROSPECTUS PAGE 5
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otherwise be the case if the Fund did not borrow funds. In addition, interest
costs on borrowings may fluctuate with changing market rates of interest and may
partially offset or exceed the return earned on borrowed funds. Under adverse
market conditions, the Fund might have to sell portfolio securities to meet
interest or principal payments at a time when fundamental investment
considerations would not favor such sales. The Fund is required to segregate
high quality liquid assets with its custodian equal to the amount it has
borrowed.
Investment restrictions. The Fund has adopted certain investment restrictions,
which are described fully in the SAI. Like the Fund's investment objective,
certain of these restrictions are fundamental and may be changed only by a
majority vote of the Fund's outstanding shares. As a fundamental policy, the
Fund is a non-diversified fund, which may involve greater risks and volatility
than would be found in a diversified fund.
MANAGEMENT OF THE FUND
The Board of Trustees of the Trust establishes the Fund's policies and
supervises and reviews the management of the Fund.
The Advisor. The Fund's Advisor, Ridgeway Helms Investment Management, LLC, 303
Twin Dolphin Drive, Suite 530, Redwood Shores, California 94065, is a newly
organized investment advisor formed to provide advice to Ridgeway Helms mutual
funds and similar investment products. The Advisor, acting through its advisory
affiliate Ridgeway Helms Securities Corporation, provides asset management
services to individuals and institutional investors since June, 1995. The
Advisor has not previously managed a mutual fund. Robert A. Dowlett and N.
Joseph Nahas are principally responsible for the management of the Fund's
portfolio. Mr. Dowlett (who controls the Advisor) is the President of the
Advisor and has been active in the investment field professionally for the past
five years. Prior to founding the Advisor, he was a financial consultant and
guided portfolio manager with Smith Barney Inc. Mr. Nahas has also been active
professionally in the investment field for the past five years. Prior to joining
the Advisor as First Vice President in August, 1996, he was First Vice President
- - Investments of Round Hill Securities (since November, 1994) and prior to that
a financial consultant and guided portfolio manager with Smith Barney Inc.
The Advisor provides the Fund with advice on buying and selling securities,
manages the investments of the Fund, furnishes the Fund with office space and
certain administrative services, and provides most of the personnel needed by
the Fund. As compensation, the Fund pays the Advisor a monthly management fee
based upon the average daily net assets of the Fund at the annual rate of 0.95%.
The Administrator. Investment Company Administration Corporation (the
"Administrator") prepares various federal and state regulatory filings, reports
and returns for the Fund, prepares reports and materials to be supplied to the
trustees, monitors the activities of the Fund's custodian, shareholder servicing
agent and
PROSPECTUS PAGE 6
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accountants, and coordinates the preparation and payment of Fund expenses and
reviews the Fund's expense accruals. For its services, the Administrator
receives a monthly fee at the annual rate of 0.20%, subject to a $30,000 annual
minimum.
Other operating expenses. The Fund is responsible for its own operating
expenses, including but not limited to, the advisory and administration fees;
custody, record keeping and shareholder servicing agent fees; legal and auditing
expenses; federal and state registration fees; and fees to the Trust's
disinterested trustees. The Advisor may reduce its fees or reimburse the Fund
for expenses at any time in order to reduce the Fund's expenses. Reductions made
by the Advisor in its fees or payments or reimbursements of expenses that are
the Fund's obligation are subject to reimbursement by the Fund provided the Fund
is able to do so and remain in compliance with any applicable expense
limitations.
Brokerage transactions. The Advisor considers a number of factors in determining
which brokers or dealers to use for the Fund's portfolio transactions. While
these are more fully discussed in the Statement of Additional Information, the
factors include, but are not limited to, the reasonableness of commissions,
quality of services and execution, and the availability of research which the
Advisor may lawfully and appropriately use in its investment advisory
capacities. Provided the Fund receives prompt execution at competitive prices,
the Advisor may also consider the sale of Fund shares as a factor in selecting
broker-dealers for the Fund's portfolio transactions. Subject to overall
requirements of obtaining the best combination of price and execution on a
particular transaction, the Fund may place portfolio transactions through an
affiliate of the Advisor in accordance with procedures adopted by the Board of
Trustees.
INVESTOR GUIDE
How to purchase shares of the Fund. There are several ways to purchase shares of
the Fund. An Application Form, which accompanies this Prospectus, is used if you
send money directly to the Fund by mail or by wire. If you have questions about
how to invest, or about how to complete the Application Form, please call an
account representative at (888) 229-2105. Ridgeway Helms Securities Corporation,
303 Twin Dolphin Drive, Redwood Shores, California 94065, an affiliate of the
Advisor, is the principal underwriter ("Distributor") of the Fund's shares.
You may send money to the Fund by mail. If you wish to invest by mail, simply
complete the Application Form and mail it with a check (made payable to Ridgeway
Helms Millennium Fund) to the Fund's Shareholder Servicing Agent, American Data
Services, Inc. at the following address:
Ridgeway Helms Millennium Fund
P.O. Box 640947
Cincinnati, OH 45264-0947
PROSPECTUS PAGE 7
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You may wire money to the Fund. Before sending a wire, you should call the Fund
at (888) 229-2105 between 9:00 a.m. and 5:00 p.m., Eastern time, on a day when
the New York Stock Exchange ("NYSE") is open for trading, in order to receive an
account number. It is important to call and receive this account number, because
if your wire is sent without it or without the name of the Fund, there may be a
delay in investing the money you wire. You should then ask your bank to wire
money to:
Star Bank, N.A. Cinti/Trust
ABA # 0420-0001-3
for credit to Ridgeway Helms Millennium Fund DDA # 486479777
for further credit to [your name and account number]
The Fund will charge you a $10.00 wire fee. In addition your bank may charge you
a fee for sending a wire to the Fund.
You may purchase shares through an investment dealer. You may be able to invest
in shares of the Fund through an investment dealer, if the dealer has made
arrangements with the Distributor. The dealer may place an order for you with
the Fund; the price you will pay will be the net asset value which is next
calculated after receipt of the order from the dealer. It is the responsibility
of the dealer to place your order promptly. A dealer may charge you a fee for
placing your order, but you could avoid paying such a fee by sending an
Application Form and payment directly to the Fund. The dealer may also hold the
shares you purchase in its omnibus account rather than in your name in the
records of the Fund's transfer agent. The Fund may reimburse the dealer for
maintaining records of your account as well as for other services provided to
you.
Your dealer is responsible for sending your money to the Fund promptly after
placing the order to purchase shares, and the Fund may cancel the order if
payment is not received from the dealer promptly.
Minimum investments. The minimum initial investment in the Fund is $2,500. The
minimum subsequent investment is $100. However, if you are investing in an
Individual Retirement Account ("IRA"), or you are starting an Automatic
Investment Plan (see below), the minimum initial and subsequent investments are
$1,000 and $100, respectively.
Subsequent investments. You may purchase additional shares of the Fund by
sending a check, with the stub from an account statement, to the Fund at the
address above. Please also write your account number on the check. (If you do
not have a stub from an account statement, you can write your name, address and
account number on a separate piece of paper and enclose it with your check.) If
you want to send additional money for investment by wire, it is important for
you to call the Fund at (888) 229-2105. You may also make additional purchases
through an investment dealer, as described above.
PROSPECTUS PAGE 8
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When is money invested in the Fund? Any money received for investment in the
Fund from an investor, whether sent by check or by wire, is invested at the net
asset value of the Fund which is next calculated after the money is received
(assuming the check or wire correctly identifies the Fund and account). Orders
received from dealers are invested at the net asset value next calculated after
the order is received. The net asset value is calculated at the close of regular
trading of the NYSE, currently 4:00 p.m., Eastern time. A check or wire received
after the NYSE closes is invested as of the next calculation of the Fund's net
asset value.
What is the net asset value of the Fund? The Fund's net asset value per share is
calculated by dividing the value of the Fund's total assets, less its
liabilities, by the number of its shares outstanding. In calculating the net
asset value, portfolio securities are valued using current market values, if
available. Securities for which market quotations are not readily available are
valued at fair values determined in good faith by or under the supervision of
the Board of Trustees of the Trust. The fair value of short-term obligations
with remaining maturities of 60 days or less is considered to be their amortized
cost.
Other information. The Distributor may waive the minimum investment requirements
for purchases by certain group or retirement plans. All checks must be drawn on
U.S. banks. Third party checks will not be accepted. A charge may be imposed if
a check used to make an investment does not clear. The Fund and the Distributor
reserve the right to reject any investment, in whole or in part. Federal tax law
requires that investors provide a certified taxpayer identification number and
other certifications on opening an account in order to avoid backup withholding
of taxes. See the Application Form for more information about backup
withholding. The Fund is not required to issue share certificates; all shares
are normally held in non-certificated form on the books of the Fund, for the
account of the shareholder. The Fund, under certain circumstances, accept
investments of securities appropriate for the Fund's portfolio, in lieu of cash.
Prior to making such a purchase, you should call the Advisor to determine if
such an investment may be made.
SERVICES AVAILABLE TO SHAREHOLDERS
Retirement Plans. You may obtain a prototype IRA plan from the Fund. Shares of
the Fund are also eligible investments for other types of retirement plans.
Automatic investing by check. You may make regular monthly investments in the
Fund using the "Automatic Investment Plan." A check is automatically drawn on
your personal checking account each month for a predetermined amount (but not
less than $100), as if you had written it directly. Upon receipt of the
withdrawn funds, the Fund automatically invests the money in additional shares
of the Fund at the current net asset value. Applications for this service are
available from the Fund. There is no charge by the Fund for this service. The
Fund may terminate or
PROSPECTUS PAGE 9
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modify this privilege at any time, and shareholders may terminate their
participation by notifying the Shareholder Servicing Agent in writing,
sufficiently in advance of the next withdrawal.
Automatic withdrawals. The Fund offers a Systematic Withdrawal Program whereby
shareholders may request that a check drawn in a predetermined amount be sent to
them each month or calendar quarter. To start this Program, your account must
have Fund shares with a value of at least $10,000, and the minimum amount that
may be withdrawn each month or quarter is $50. This Program may be terminated or
modified by a shareholder or the Fund at any time without charge or penalty. A
withdrawal under the Systematic Withdrawal Program involves a redemption of
shares of the Fund, and may result in a gain or loss for federal income tax
purposes. In addition, if the amount withdrawn exceeds the dividends credited to
your account, the account ultimately may be depleted.
Exchange Privilege. You may exchange your shares of the Fund (in amounts of
$1,000 or more) for shares of RNC Liquid Assets Fund, Inc. ("RNC Fund"), a money
market fund not affiliated with the Fund or the Advisor, if shares of RNC Fund
are offered in the state where you live. Prior to making an exchange, you should
obtain and read carefully the prospectus of RNC Fund. The exchange privilege is
not an offering or recommendation of RNC Fund by the Fund or the Advisor. For
more information, call the Shareholder Servicing Agent at (888) 229-2105.
HOW TO REDEEM YOUR SHARES
You have the right to redeem all or any portion of your shares of the Fund at
their net asset value on each day the NYSE is open for trading.
Redemption in writing. You may redeem your shares by simply sending a written
request to the Fund. You should give your account number and state whether you
want all or part of your shares redeemed. The letter should be signed by all of
the shareholders whose names appear in the account registration. You should send
your redemption request to:
Ridgeway Helms Millennium Fund
c/o American Data Services
P.O. Box 5536
Hauppauge, NY 11788-0132
Signature guarantee. If the value of the shares you wish to redeem exceeds
$5,000, the signatures on the redemption request must be guaranteed by an
"eligible guarantor institution." These institutions include banks,
broker-dealers, credit unions and savings institutions. A broker-dealer
guaranteeing a signature must be a member of a clearing corporation or maintain
net capital of at least $100,000.
PROSPECTUS PAGE 10
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Credit unions must be authorized to issue signature guarantees. Signature
guarantees will be accepted from any eligible guarantor institution which
participates in a signature guarantee program. A notary public is not an
acceptable guarantor.
Redemption by telephone. If you complete the Redemption by Telephone portion of
the Fund's Application Form, you may redeem shares on any business day the NYSE
is open by calling the Fund's Shareholder Servicing Agent at (888) 229-2105
before 4:00 p.m. Eastern time. Redemption proceeds will be mailed or wired, at
your direction, on the next business day to the bank account you designated on
the Application Form. The minimum amount that may be wired is $1,000 (wire
charges, if any, will be deducted from redemption proceeds).
Telephone redemptions cannot be made for IRA accounts.
By establishing telephone redemption privileges, you authorize the Fund and its
Shareholder Servicing Agent to act upon the instruction of any person who makes
the telephone call to redeem shares from your account and transfer the proceeds
to the bank account designated in the Application Form. The Fund and the
Shareholder Servicing Agent will use procedures to confirm that redemption
instructions received by telephone are genuine, including recording of telephone
instructions and requiring a form of personal identification before acting on
these instructions. If these normal identification procedures are followed,
neither the Fund nor the Shareholder Servicing Agent will be liable for any
loss, liability, or cost which results from acting upon instructions of a person
believed to be a shareholder with respect to the telephone redemption privilege.
The Fund may change, modify, or terminate these privileges at any time upon at
least 60-days' notice to shareholders.
You may request telephone redemption privileges after your account is opened;
however, the authorization form will require a separate signature guarantee.
Shareholders may experience delays in exercising telephone redemption privileges
during periods of abnormal market activity.
What price is used for a redemption? The redemption price is the net asset value
of the Fund's shares, next determined after shares are validly tendered for
redemption. All signatures of account holders must be included in the request,
and a signature guarantee, if required, must also be included for the request to
be valid.
When are redemption payments made? As noted above, redemption payments for
telephone redemptions are sent on the day after the telephone call is received.
Payments for redemptions sent in writing are normally made promptly, but no
later than seven days after the receipt of a request that meets requirements
described above. However, the Fund may suspend the right of redemption under
certain extraordinary circumstances in accordance with rules of the Securities
and Exchange Commission.
PROSPECTUS PAGE 11
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If shares were purchased by wire, they cannot be redeemed until the day after
the Application Form is received. If shares were purchased by check and then
redeemed shortly after the check is received, the Fund may delay sending the
redemption proceeds until it has been notified that the check used to purchase
the shares has been collected, a process which may take up to 15 days. This
delay may be avoided by investing by wire or by using a certified or official
bank check to make the purchase.
Repurchases from dealers. The Fund may accept orders to repurchase shares from
an investment dealer on behalf of a dealer's customers. The net asset value for
a repurchase is that next calculated after receipt of the order from the dealer.
The dealer is responsible for forwarding any documents required in connection
with a redemption, including a signature guarantee, promptly, and the Fund may
cancel the order if these documents are not received promptly.
Other information about redemptions. A redemption may result in recognition of a
gain or loss for federal income tax purposes. Due to the relatively high cost of
maintaining smaller accounts, the shares in your account (unless it is a
retirement plan or Uniform Gifts or Transfers to Minors Act account) may be
redeemed by the Fund if, due to redemptions you have made, the total value of
your account is reduced to less than $500. If the Fund determines to make such
an involuntary redemption, you will first be notified that the value of your
account is less than $500, and you will be allowed 30 days to make an additional
investment to bring the value of your account to at least $500 before the Fund
takes any action.
DISTRIBUTIONS AND TAXES
Dividends and other distributions. Dividends from net investment income, if any,
are normally declared and paid by the Fund in December. Capital gains
distributions, if any, are also normally made in December, but the Fund may make
an additional payment of dividends or distributions if it deems it desirable at
another time during any year.
Dividends and capital gain distributions (net of any required tax withholding)
are automatically reinvested in additional shares of the Fund at the net asset
value per share on the reinvestment date unless you have previously requested in
writing to the Shareholder Servicing Agent that payment be made in cash. Any
dividend or distribution paid by the Fund has the effect of reducing the net
asset value per share on the record date by the amount of the dividend or
distribution. You should note that a dividend or distribution paid on shares
purchased shortly before that dividend or distribution was declared will be
subject to income taxes even though the dividend or distribution represents, in
substance, a partial return of capital to you.
Taxes. The Fund intends to qualify and elect to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986 (the
"Code").
PROSPECTUS PAGE 12
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As long as the Fund continues to qualify, and as long as the Fund distributes
all of its income each year to the shareholders, the Fund will not be subject to
any federal income or excise taxes. Distributions made by the Fund will be
taxable to shareholders whether received in shares (through dividend
reinvestment) or in cash. Distributions derived from net investment income,
including net short-term capital gains, are taxable to shareholders as ordinary
income. A portion of these distributions may qualify for the intercorporate
dividends-received deduction. Distributions designated as capital gains
dividends are taxable as long-term capital gains regardless of the length of
time shares of the Fund have been held. Although distributions are generally
taxable when received, certain distributions made in January are taxable as if
received the prior December. You will be informed annually of the amount and
nature of the Fund's distributions. Additional information about taxes is set
forth in the Statement of Additional Information. You should consult your own
advisers concerning federal, state and local taxation of distributions from the
Fund.
GENERAL INFORMATION
The Trust. The Trust was organized as a Delaware business trust on October 3,
1996. The Agreement and Declaration of Trust permits the Board of Trustees to
issue an unlimited number of full and fractional shares of beneficial interest,
without par value, which may be issued in any number of series. The Board of
Trustees may from time to time issue other series, the assets and liabilities of
which will be separate and distinct from any other series.
Shareholder Rights. Shares issued by the Fund have no preemptive, conversion, or
subscription rights. Shareholders have equal and exclusive rights as to
dividends and distributions as declared by the Fund and to the net assets of the
Fund upon liquidation or dissolution. The Fund, as a separate series of the
Trust, votes separately on matters affecting only the Fund (e.g., approval of
the Investment Advisory Agreement); all series of the Trust vote as a single
class on matters affecting all series jointly or the Trust as a whole (e.g.,
election or removal of Trustees). Voting rights are not cumulative, so that the
holders of more than 50% of the shares voting in any election of Trustees can,
if they so choose, elect all of the Trustees. While the Trust is not required
and does not intend to hold annual meetings of shareholders, such meetings may
be called by the Trustees in their discretion, or upon demand by the holders of
10% or more of the outstanding shares of the Trust for the purpose of electing
or removing Trustees.
Performance Information. From time to time, the Fund may publish its total
return in advertisements and communications to investors. Total return
information will include the Fund's average annual compounded rate of return
over the most recent four calendar quarters and over the period from the Fund's
inception of operations. The Fund may also advertise aggregate and average total
return information over different periods of time. The Fund's total return will
be based upon the value of
PROSPECTUS PAGE 13
<PAGE>
the shares acquired through a hypothetical $1,000 investment at the beginning of
the specified period and the net asset value of those shares at the end of the
period, assuming reinvestment of all distributions. Total return figures will
reflect all recurring charges against Fund income. You should note that the
investment results of the Fund will fluctuate over time, and any presentation of
the Fund's total return for any prior period should not be considered as a
representation of what an investor's total return may be in any future period.
Shareholder Inquiries. Shareholder inquiries should be directed to the
Shareholder Servicing Agent at (888) 229-2105.
PROSPECTUS PAGE 14
<PAGE>
ADVISOR
Ridgeway Helms Investment Management, LLC
303 Twin Dolphin Drive, Suite 530
Redwood Shores, CA 94065
DISTRIBUTOR
Ridgeway Helms Securities Corporation
303 Twin Dolphin Drive, Suite 530
Redwood Shores, California 94065
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202
TRANSFER AGENT
American Data Services, Inc.
P.O. Box 5536
Hauppauge, NY 11788-0132
AUDITORS
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, NY 10017
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker, LLP
345 California Street, 29th Floor
San Francisco, CA 94104
