[LOGO] Kaminski Poland Fund
210 North 2nd Street, Suite 050
Minneapolis, MN 55401
Fund Literature (888) POL-FUND
Shareholder Services (888) 229-2105
The Kaminski Poland Fund (the "Fund") is a mutual fund that seeks long term
growth by investing in publicly traded securities of companies based in the
Republic of Poland. Kaminski Asset Management, Inc. (the "Advisor") is the
investment advisor to the Fund. There can be no assurance that the Fund will
achieve its investment objective.
The securities market in Poland is considered an "emerging market" with
greater risks than are present in the more developed economy and market of the
U.S. The Fund should not be considered a complete investment program. See the
Appendix "Special Considerations and Risks" at the end of this prospectus.
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 June 23, 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 to the Fund at the address
or telephone number given above.
Mutual fund shares are not deposits or obligations of (or endorsed or
guaranteed by) any bank, nor are they federally insured or otherwise protected
by the Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve Board
or any other agency. Investing in any mutual fund involves investment risks,
including the possible loss of principal, and the value and return of any mutual
fund will fluctuate. In the case of this Fund, investors should be prepared to
accept significant volatility in share price and potentially substantial loss of
principal.
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 dated June 23, 1997
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TABLE OF CONTENTS
Expense Table ............................................................. 2
Investment Objectives and Policies ........................................ 3
Management of the Fund .................................................... 5
Investor Guide ............................................................ 5
Services Available to Shareholders ........................................ 7
How to Redeem Your Shares ................................................. 7
Distributions and Taxes ................................................... 9
General Information ....................................................... 9
Appendix, Special Considerations and Risks ................................ 10
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.
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases .......................... None
Maximum Sales Load Imposed on Reinvested Dividends ............... None
Deferred Sales Load .............................................. None
Redemption Fees .................................................. None
Annual Operating Expenses
(As a percentage of average net assets)
Investment Advisory Fees ........................................... 1.45%
12b-1 Fees ......................................................... 0.25%
Other Expenses (after expense reimbursement) ....................... 1.05%
----
Total Operating Expenses (after expense reimbursement) ............. 2.75%
====
The purpose of the above table is to provide an understanding of the various
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 2.75% 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 2.75%. "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 1.55%, and "Total Operating Expenses" would be 3.25%. 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.
1 Year 3 Years
$ 28 $ 85
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 $1,000, with subsequent minimum
investments of $250 or more.
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INVESTMENT OBJECTIVES AND POLICIES
What is the Fund's investment objective?
The investment objective of the Fund is long term growth of capital. There can
be no assurance that the Fund will achieve its objective.
How does the Fund seek to achieve its objective?
Kaminski Asset Management, Inc. (the "Advisor") selects equity securities for
the Fund's portfolio that are issued by companies based in the Republic of
Poland. While there are currently more than 120 stocks listed on the Warsaw
Stock Exchange, and the Fund will invest only in certain of these stocks and
will have a fairly limited portfolio. In addition, the Fund may invest in shares
of investment companies that are being created as part of the privatization of
state-owned companies.
In selecting stocks for the Fund's portfolio, the Advisor will purchase stocks
only of issuers with aggregate market capitalization greater than $20 million
and an annual rate of earnings growth that is greater than 10%. After a security
is purchased, if it subsequently fails to meet either of these criteria, the
Advisor will consider some or all of the position, but it is not required to
eliminate the security from the Fund's portfolio. This is an operating policy of
the Fund, and not a fundamental policy, and it may be changed by a vote of the
Trustees of the Trust. The Advisor does not expect the Fund's annual turnover
rate to exceed 50%.
Because the Polish market is limited in market capitalization, the Fund may have
to close to new investors if its total assets exceed the amount that the Advisor
believes can be invested effectively.
What investment opportunities exist in the Republic of Poland?
Until relatively recently, Poland had a centrally planned economy, primarily
influenced by socialist and communist political philosophies and characterized
by nationalized industries, fixed prices and limited external trade. Since the
late 1980's, the Republic of Poland has undertaken political and economic
reforms, founded upon an ideological shift from socialism and communism to
capitalism. In 1990, a fully free election for the government was held. These
reforms have had the effect of creating a market-driven economy and have made
foreign investment possible.
The transition to a market-driven economy has been difficult and had the
immediate effect of high inflation rates, increased unemployment and a
significant decline in living standards as real wages fell. In addition, most of
Poland's external trade was formerly limited to the former Soviet Union and
other Warsaw Pact countries. As a consequence of all of these factors, Poland
experienced a significant drop in GDP.
In the last two years, these reforms have led to an improvement in the economy
of the Republic of Poland, which has been growing in real terms. In addition,
significant progress has been made in all in reducing inflation and government
budget deficits. In 1995, the GDP of the Republic of Poland was approximately
$123.5 billion. By way of comparison, in the same period, the GDP for the United
States was $7.3 trillion. In 1995, the average GDP per capita of Poland was
$2,260. By way of comparison, in the same year, the GDP per capita for Germany
was $29,643.
The Advisor believes that current conditions in Poland will result in a
significant level of economic activity, offering the potential for long-term
capital appreciation from investment in equity securities of issuers based
there. The Advisor believes that the strategic location of Poland between
Western Europe and Russia and Asia should benefit its economy by permitting it
to take advantage of the modernization, technology and capital available in
Western Europe and the large consumer base to the east. The privatization of
formerly state-run enterprises and the substantial restructuring of established
industries as the economy shifts from a quota-driven command economy to a free
market, supply and demand-driven economy and as companies begin to identify and
exploit domestic and export markets should result in investment opportunities.
The private sector, however, is not as developed in Poland as it is in Western
Europe.
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The total population of Poland is approximately 38.6 million and is
well-educated (relative to other emerging markets), with literacy rates that
compare favorably to those in Western Europe. For example, the literacy rates
averaged 99% in 1993 as compared with 100% in Germany in the same period. Annual
wage rates, however, are significantly lower than in the United States and
Germany.
What risks are associated with an investment in the Fund?
There are risks associated with all securities, but an investment in the Fund
entails more risks than in most other mutual funds. First, there are currency
risks. Most of the Fund's portfolio securities will be denominated in Polish
zlotys, and changes in the value of the zloty relative to the U.S. dollar will
affect the Fund's net asset value. If the dollar increases in value in relation
to the zloty and the price of securities is unchanged, the value of the Fund's
portfolio will decrease, and vice versa. Second, While regulation of securities
and the Warsaw Stock Exchange is similar to the regulatory framework in the
U.S., there is considerably less experience with regulation in Poland. Third,
the securities market in Poland is considered to be an "emerging market," with
greater risks than are present in the more developed economy and market of the
U.S. There is significantly less liquidity than in U.S. markets, which may lead
to difficulties in selling the Fund's portfolio securities. Finally, because the
Fund concentrates its investments in Poland, it will be subject to economic and
political developments that affect that country, unlike other international
funds which diversify among several countries. These risks are described in
detail in the Appendix at the end of this prospectus, and you should read this
Appendix carefully before investing. Also, you should not consider the Fund to
be a complete investment program, in which you should invest all, or even a
significant portion, of your assets.
Other securities the Fund might purchase and other investment techniques.
Under normal market conditions, the Fund will invest at least 80% of its total
assets in common stocks of companies based in the Republic of Poland. 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, and it may engage in
foreign exchange transactions. More information about these investments is
contained in the SAI.
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 represented by loaned securities. The Fund's loans of
portfolio securities will be collateralized at all times by high quality liquid
securities equal in value to the securities loaned.
Investment restrictions.
The Fund has adopted certain investment restrictions, which are described fully
in the Statement of Additional Information. 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 must, under normal circumstances, invest at least 80% of its assets in
securities of issuers based in the Republic of Poland. The Fund is diversified,
which means that as to 75% of its total assets, no more than 5% may be invested
in the securities of a single issuer and that no more than 10% of its total
assets may be invested in the voting securities of such issuer.
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.
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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 is Kaminski Asset Management, Inc. 210 North 2nd Street,
Suite 050, Minneapolis, MN 55401. The Advisor, which is controlled by M.G.
Kaminski, commenced operations in December, 1996. Mr. Kaminski is the President
and Chief Executive Officer of the Advisor and the portfolio manager of the
Fund. Neither the Advisor nor Mr. Kaminski has previously advised a mutual fund,
but Mr. Kaminski, who was from October, 1992 until December 1996 a Vice
President of PaineWebber Incorporated, was responsible for client assets
aggregating approximately $100 million in 1996. Prior to joining PaineWebber,
Mr. Kaminski was associated with Piper Jaffray 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 1.45%
of average net assets on the first $20 million of net assets of the Fund,
reduced to 1.25% on assets in excess of $20 million. This fee is higher than
that paid by most mutual funds.
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 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 rate 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 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 which are the Fund's obligation are
subject to reimbursement by the Fund within the following three years, provided
the Advisor specifically requests reimbursement, the Board of Trustees approves
the reimbursement at the time of the request, and the Fund is able to make the
reimbursement and still remain in compliance with the Advisor's voluntary
expense limitation.
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. Because there are
relatively few broker-dealers who can handle transactions in Polish securities,
the Fund will be limited in its selection of broker-dealers and may have to pay
higher commission rates than are paid by institutions on U.S. securities.
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
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about how to invest, or about how to complete the Application Form, please call
an account representative at (888) 229-2105.
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 the Kaminski Poland Fund) to the Fund's
Shareholder Servicing Agent:
Kaminski Poland Fund
P.O. Box 640947
Cincinnati, OH 45264-0947
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 Kaminski Poland Fund
DDA # 486479769
for further credit to [your name and account #]
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 $1,000. The minimum subsequent
investment is $250.
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.
When is money invested in the Fund?
Any money received for investment in the Fund, 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). 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
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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.
First Fund Distributors, Inc., 4455 E. Camelback Road, Suite 261E, Phoenix, AZ
85018, an affiliate of the Administrator, is the principal underwriter
("Distributor") of the Fund's shares. The Distributor may waive the minimum
investment requirements for purchases by certain group or retirement plans. All
investments must be made in U.S. dollars, and checks must be drawn on U.S.
banks. Third party checks will not be accepted. A charge may be imposed if any
check used for 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.
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 $50), 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
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. The 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.
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: Kaminski Poland Fund 24 West Carver Street, 2nd Floor
Huntington, NY 11743
Signature guarantee.
If the value of the shares you wish to redeem exceeds $5,000, the signatures on
the redemption request
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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. 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 valid request. However, the Fund may suspend the right of
redemption under certain extraordinary circumstances in accordance with rules of
the Securities and Exchange Commission.
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 can be avoided by investing by wire or by using a certified or official
bank check to make the purchase.
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
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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 Code. 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.
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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 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.
APPENDIX
SPECIAL CONSIDERATIONS AND RISKS
Because the Fund will invest primarily in equity securities of issuers based in
the Republic of Poland, an investor in the Fund should be aware of special
considerations and risks relating to investments in those issuers, and
international investment generally, which typically are not associated with
investments in securities issued by U.S. companies. The Fund is designed for
long term investment, and an investment in its shares should be considered
speculative.
Currency fluctuations.
The Fund generally will hold assets denominated and traded in the Polish zloty,
and most of its income will be received or realized in zlotys, although the Fund
will compute its net asset value and calculate and distribute any income in U.S.
dollars. Accordingly, changes in the value of the zloty against the dollar will
result in corresponding changes in the dollar value of the Fund's assets
denominated in zlotys and in the Fund's net asset value, and will also change
the dollar value of income and gains derived in zlotys. If the value of the
zloty falls relative to the dollar between accrual of the income and the payment
of Fund distributions, the amount of zlotys required to be converted into
dollars to pay these distributions will increase, and the Fund could be required
to sell portfolio securities to make the distributions. Similarly, if the value
of the zloty declines between the time the Fund incurs expenses in dollars and
the time the expenses are paid, the amount of zlotys required to be converted
into dollars to pay the expenses will be greater than the zloty equivalent of
such expenses at the time they were incurred.
The Advisor generally will not seek to hedge against a decline in the value of
the Fund's portfolio securities resulting from a decline in the value of the
zloty. As a result, the Fund will be subject to the risk of changes in the value
of the zloty affecting the value of its portfolio securities, as well as the
value of interest, dividends and net realized capital gains received in zlotys.
Economic and Political Factors.
The economy of Poland generally differs from the U.S. economy in such respects
as general development, rate of inflation, volatility of the rate of growth of
gross domestic product and balance of payments position, among others. The
following table sets forth some key economic indicators:
1992 1993 1994
---- ---- ----
GDP at current prices (Zl billion) 114.9 155.8 210.4
Real GDP growth (%) 2.6 3.8 5.3
Consumer price inflation (%) 43.0 35.3 32.2
Current account ($ billion) -3.1 -5.8 -2.6
Exchange rate, average (Zl:$) 1.36 1.81 2.27
1995 1996 (est.)
---- -----------
GDP at current prices (Zl billion) 285.5 366.2
Real GDP growth (%) 7.0 6.0
Consumer price inflation (%) 27.8 19.9
Current account ($ billion) -4.3 -8.0
Exchange rate, average (Zl:$) 2.43 2.71
Source: The Economist Intelligence Unit
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Poland has had a centrally planned socialist economy for many years. Recently
the government has generally implemented reforms directed at economic
liberalization, including efforts to decentralize the decision-making process
and to establish market-oriented economics. However, there can be no assurance
that current or future governments will continue to pursue these policies.
Furthermore, the transition from a centrally planned, socialist economy to a
competitive market economy resulted in the past in certain disruptions; for
example, in 1990 and 1991 GDP declined 11.6% and 7.0%, unemployment rose from
under 12% in 1991 to over 16% in 1994, before declining to 13% at the end of
March, 1997. There can be no assurance that disruptions will not occur again in
the future. In addition, business entities in Poland do not have any significant
recent history of operating in a market-oriented economy, and the ultimate
impact of Poland's attempts to move toward a more market-oriented environment is
unclear.
Although a democratic system of government is now generally established in
Poland, the country remains exposed to risks of political change or periods of
uncertainty. Nationalization, expropriation or confiscatory taxation, currency
blockage, government regulation, social instability or diplomatic developments
could adversely affect its economy or its securities markets. In addition, many
of the countries near Poland are similarly exposed to these same uncertainties,
and disruptions in any of these countries could adversely affect the economy of
Poland.
As a result of Poland's recent socialist history, the country does not have a
body of laws and court decisions comparable to those of the U.S. Laws may not
exist to cover all contingencies or to protect adequately, and the
administration of these laws may be subject to considerable discretion. There
also can be no assurance that laws and related interpretations will not be
changed or applied in a manner that will adversely affect the Fund and its
assets.
The Polish Commercial Code sets forth requirements regarding capitalization,
shareholders meetings, records and auditing for Polish companies. Recent
amendments to the Commercial Code are aimed at modernizing its legal norms and
adapting them to models prevailing in the European Community. All joint stock
companies, limited liability companies and certain other entities are required
to have annually audited financial statements.
Foreign Investment and Repatriation.
Currently, there are no restrictions on foreign investment in Polish securities,
except with respect to securities of issuers whose business relates to operation
of sea or air ports, real estate, the defense industry, wholesale trading of
imported consumer goods or legal services. Investments may be made in such
industries if authorization is obtained from the Ministry of Privatization.
Also, permission must be sought from the relevant licensing authority to
purchase shares of issuers in industries where licenses from the Polish
government are required, such as the banking or brokerage industry or a business
involving the production of alcohol, cigarettes or medicine.
In early 1990, internal convertibility of the Polish zloty was introduced. Both
the initial investment in and any profits resulting from business activities may
be freely repatriated, provided the currency exchange is made at an authorized
foreign exchange bank. In the case of dividends, repatriation is only allowed
after an audit certificate has been issued and the necessary taxes have been
paid. The National Bank of Poland is responsible for overseeing the banking
system in Poland and for controlling monetary policy and exchange rates.
Characteristics of Securities Markets and Regulation.
The securities markets in Poland are much smaller than those in the U.S.
Although a stock exchange first opened in Warsaw in 1817 and before World War II
there were seven stock exchanges operating in Poland, the capital markets in
Poland did not operate after that war until 1991. In structuring the capital
markets and their regulation in 1991, the Polish government reviewed several
contemporary world markets and based the system on the securities
11
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markets in France, with assistance from the Societe des Bourses Francaises. In
1991, the Act on Public Trading in Securities and Trust Funds was adopted, and
the Polish Securities Commission was created. The Warsaw Stock Exchange (the
"WSE") was also established by the State Treasury as a joint stock company. The
WSE is a self-regulatory organization (as are stock exchanges in the U.S.), and
its rules must be approved by the Polish Securities Commission. In 1994, the WSE
was admitted as a member of the International Federation of Stock Exchanges.
The Polish Securities Commission is responsible for monitoring the Polish
securities market, supervising all public trading, including trading on the WSE,
and regulating brokers. In addition, a Brokers Association is responsible for
regulating the activities and conduct of brokers. Currently, there are two
categories of publicly traded securities: securities listed on the WSE and
securities traded over-the-counter. The disclosure requirements are less
stringent for issuers whose securities are traded over-the-counter. Clearing and
settlement occurs within three business days through the National Depository for
Securities, which is operated by the WSE.
Notwithstanding the similarities between the U.S. and Polish securities markets
in terms of structure and regulation, there are significant differences. There
is, for example, substantially less trading volume on the WSE than the New York
Stock Exchange (the "NYSE"), and its aggregate market capitalization at December
31, 1996 was less than 1% of the aggregate market capitalization of the New York
Stock Exchange. There is also a high concentration of market capitalization and
trading volume in a relatively small number of issuers representing a limited
number of industries, as well as a high concentration of investors. There are,
for example, nearly 3,000 companies listed on the NYSE, while there are less
than 100 issuers listed on the WSE. As a result, the securities markets in
Poland are subject to a lack of liquidity and high price volatility relative to
the U.S. securities markets.
In addition, securities traded in Poland may be subject to risks due to the
inexperience of financial intermediaries, the lack of a sufficient capital base
to expand operations and the possibility of restrictions on trading. Finally,
since current regulations governing securities markets have only existed since
1971, the regulators in Poland do not have the experience of regulators in the
U.S., where federal securities regulation has been in effect since 1933.
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<TABLE>
<S> <C>
ADVISOR
Kaminski Asset Management, Inc.
210 North 2nd Street, Suite 050
Minneapolis, MN 55401
Web page: www.polfund.com The
Kaminski Poland Fund
DISTRIBUTOR
First Fund Distributors, Inc.
4455 E. Camelback Road, Suite 261-E
Phoenix, Arizona 85018
CUSTODIAN
Star Bank, N.A. Managed by Kaminski Asset Management, Inc.
425 Walnut Street
Cincinnati, OH 45202
210 North 2nd Street
Suite 050
TRANSFER AGENT Minneapolis, MN 55401
American Data Services, Inc.
24 West Carver Street, 2nd Floor
Huntington, NY 11743
(888) 229-2105
AUDITORS
Price Waterhouse, LLP
33 South 6th Street
Suite 3100
Minneapolis, MN 55402
Prospectus
June 23, 1997
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker
345 California Street, 29th Floor
San Francisco, CA 94104
</TABLE>
