UNITY FUND
CLASS A SHARES
PROSPECTUS
OCTOBER 1, 1999
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE FUND OFFERED THROUGH DELTA EQUITY SERVICES CORP., JACKSON,
SHANKLIN & SONIA INVESTMENTS, L.L.C. OR ANY OTHER INVESTMENT BROKER ARE NOT BANK
DEPOSITS. SHARES OF THE FUND ARE NOT GUARANTEED OR ENDORSED BY ANY BANK. SHARES
OF THE FUND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
("FDIC"), FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. ALL INVESTMENTS ARE SUBJECT
TO RISKS, INCLUDING THE POSSIBLE LOSS OF MONEY INVESTED.
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UNITY FUND, CLASS A
6600 Plaza Drive, Suite 310
New Orleans, LA 70127
Fund Literature (toll free): (877) LIBFUND (542-3863)
alternate: (800) 645-1704
Shareholder Services (toll-free): (888) 229-2105
TABLE OF CONTENTS
Fund Overview.......................................... 3
Understanding Expenses................................. 4
Management of the Fund................................. 5
Account Information.................................... 8
How to Invest.......................................... 10
Earnings and Taxes..................................... 13
Financial Highlights................................... 14
For More Information...................................Back Cover
More detailed information on all subjects covered in this prospectus is
contained in the Fund's STATEMENT OF ADDITIONAL INFORMATION ("SAI"). Investors
seeking more in-depth explanations of the contents of this prospectus should
request the SAI and review it before purchasing shares.
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FUND OVERVIEW
The Unity Fund was formerly known as the Liberty Freedom Fund.
INVESTMENT OBJECTIVES
The Fund's primary investment objective is the growth of capital. Its
secondary objective is to provide current income. The objectives of the
Fund may be changed only with shareholder approval.
PRINCIPAL INVESTMENT STRATEGIES
The Fund uses a disciplined approach to select securities for the Fund's
portfolio that it believes are undervalued, reasonably priced and have
prospects for continued consistent growth. The Fund uses fundamental
analysis of financial statements to select stocks of issuers which have low
price/earnings and price/book ratios as well as strong balance sheet ratios
and high and/or stable dividend yields.
The Fund will invest primarily in the stocks of large, well-recognized
companies. The Fund will usually invest at least 20% of its assets in the
stocks that comprise the S&P 100 Index. The S&P 100 Index is a
capitalization-weighted index of 100 stocks from a broad range of
industries.
Under normal market conditions, the Fund will invest at least 85% of its
total assets in stocks and other equity securities.
The Fund's annual portfolio turnover rate will usually not exceed 50%.
TYPES OF SECURITIES
The Fund invests primarily in the following securities:
* Common Stock;
* Preferred Stock;
* Convertible Securities and Warrants; and
* Standard & Poor's Depositary Receipts ("SPDRs")
Please review the SAI for further descriptions of these securities.
PRINCIPAL RISKS OF INVESTING
You may lose money by investing in the Fund. Other principal risks you
should consider include:
MARKET DECLINE - A company's stock price or the overall stock market may
experience a sudden decline.
THE EFFECT OF INTEREST RATES - The Fund may invest in bonds and other debt
instruments which may be affected by interest rate changes and changes in
the creditworthiness of the bond or debt instrument issuer.
Defensive Investments - AT THE DISCRETION OF THE SUB-ADVISOR, THE FUND MAY
INVEST UP TO 100% OF ITS ASSETS IN CASH, CASH EQUIVALENTS, AND HIGH
QUALITY, SHORT-TERM DEBT SECURITIES AND MONEY MARKET INSTRUMENTS FOR
TEMPORARY DEFENSIVE PURPOSES. DURING SUCH A PERIOD, THE FUND MAY NOT REACH
ITS INVESTMENT OBJECTIVES. FOR EXAMPLE, SHOULD THE MARKET ADVANCE DURING
THIS PERIOD, THE FUND MAY NOT PARTICIPATE AS MUCH AS IT WOULD HAVE IF IT
HAD BEEN MORE FULLY INVESTED.
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YEAR 2000 - Many computer systems, as originally encoded, cannot
distinguish the year 2000 from the year 1900. If not corrected, computer
systems may misinterpret and read incorrectly dates occurring after
December 31, 1999. This is commonly known as the "Year 2000 Problem." The
Year 2000 Problem could have a negative impact on handling securities
trades and pricing and accounting services. The Fund's Board of Trustees
have adopted a Year 2000 Project Plan that the Board of Trustees believes
is reasonably designed to address the Year 2000 Problem with respect to the
Advisor's and the Fund's service providers' computer systems. For example,
should the Board of Trustees determine that a service provider is not
converting to a Year 2000 compliant system, the Board of Trustees will
replace that service provider. Although the Advisor and the Fund's service
providers have assured the Fund that they are moving towards Year 2000
compliant computer systems, this is not a guarantee that the Fund will not
experience an adverse impact from the Year 2000 Problem. It is important to
keep in mind that the Year 2000 Problem may adversely impact the issuers in
which the Fund invests and, by extension, the value of the shares held by
the Fund.
WHO MAY WANT TO INVEST
The Fund is intended for investors who:
* Are willing to hold their shares for a long period of time (e.g.,
in preparation for retirement);
* Are diversifying their investment portfolio by investing in a
mutual fund that concentrates in large-cap companies; and/or
* Are willing to accept higher short-term risk in exchange for a
higher potential for a long-term total return.
UNDERSTANDING EXPENSES
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Load on Fund Purchases
(as a percentage of offering price)........................ 3.50%
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
Investment Advisory Fees......................................... 0.85%
Distribution (12b-1) Fees........................................ 0.50%
Shareholder Service Fees......................................... 0.25%
Other Expenses................................................... 4.64%
-----
Total Annual Fund Operating Expenses............................. 6.24%
-----
Advisory Fee Waiver and/or Fund Expense Absorption # ............ (4.14)%
Net Expenses..................................................... 2.10%
=====
# The Advisor has contractually agreed to waive its fees and/or absorb
expenses of the Fund to ensure that Total Annual Operating Expenses do not
exceed 2.10%. This contract's term is indefinite and may be terminated only
by the Board of Trustees of the Fund. If the Advisor waives any of its fees
or pays Fund expenses, the Fund may reimburse the Advisor in future years.
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EXAMPLE
This Example is intended to help you compare the costs of investing in the
Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each
year and that the Fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs
would be:
1 year 3 years 5 years 10 years
------ ------- ------- --------
$556 $985 $1,439 $2,699
MANAGEMENT OF THE FUND
THE ADVISOR
The Fund's Advisor, Liberty Bank and Trust Company ("Liberty"), 6600 Plaza
Drive, Suite 310, New Orleans, Louisiana 70127, (a subsidiary of Liberty
Financial Services, Inc.) has provided banking services to the greater New
Orleans community since 1972. Liberty's assets have grown to over $180
million and has risen to become one of the top ten African American owned
banks in the United States. Liberty has overall responsibility for the
assets under management and will be responsible for monitoring the
day-to-day activity of the Sub-Advisor. Liberty, together with the
Sub-Advisor, is responsible for formulating and implementing the Fund's
investments. Liberty furnishes the Fund with office space and certain
administrative services. As compensation for the services it receives, the
Fund pays Liberty a monthly advisory fee based upon the average daily net
assets of the Fund at the annual rate of 0.25%. For the fiscal year of the
Fund ended May 31, 1999, the Advisor waived its full fee of $6,597 and paid
Fund expenses is the amount of $99,800.
THE SUB-ADVISOR
The Fund's Sub-Advisor, The Edgar Lomax Company, 6564 Loisdale Court, Suite
310, Springfield, Virginia 22150, has provided asset management services to
individuals and institutional investors since 1986. Currently, the
Sub-Advisor has $1.2 billion in assets under management. Mr. Randall R.
Eley, President and Chief Investment Officer of the Sub- Advisor, controls
the Sub-Advisor.
The Sub-Advisor provides the Fund with advice on buying and selling
securities and manages the investments of the Fund. As compensation, the
Fund pays the Sub-Advisor a monthly management fee based upon the average
daily net assets of the Fund at the annual rate of 0.60%. For the fiscal
year of the Fund ended May 31, 1999, the Sub-Advisor received $15,131 in
fees.
PRIOR PERFORMANCE OF THE SUB-ADVISOR
The following table sets forth composite performance data relating to the
historical performance of private accounts of The Edgar Lomax Company,
Sub-Advisor to the Fund. Each of these private accounts exceeds, as of
January 1, 1994, $1 million in market value and have investment objectives,
policies, strategies and risks substantially similar to those of the Fund.
The data is provided to illustrate the past performance of the Sub-Advisor
in managing substantially similar accounts as measured against a market
index and does not represent the performance of the Fund. You should not
consider this performance data as an indication of future performance of
the Fund or of the Sub-Advisor. A complete list and description of the Sub-
advisor's composites is available by request to the Sub-Advisor.
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The composite performance data shown below were calculated in accordance
with recommended standards of the Association for Investment Management and
Research (AIMR*), retroactively applied to all time periods. All returns
presented were calculated on a total return basis and include all dividends
and interest, accrued income and realized and unrealized gains and losses.
All returns reflect the deduction of investment advisory fees, brokerage
commissions and execution costs paid by private accounts of the Sub-Advisor
without provision for federal or state income taxes. Custodial fees, if
any, were generally not included in the calculation. The Sub-Advisor's
composite includes all actual, fee-paying, discretionary private accounts
with assets in excess of $1 million (minimum account size required as of
January 1, 1994) managed by the Sub- Advisor that have investment
objectives, policies, strategies and risks substantially similar to those
of the Fund. Securities transactions are accounted for on the trade date
and accrual accounting is used. Cash and equivalents are included in
performance returns. The monthly returns of the Sub-Advisor's composite
combine the individual accounts' returns (calculated on a time-weighted
rate of return that is revalued whenever cash flows exceed 10% of an
account's current value) by asset-weighting each individual account's asset
value as of the beginning of the month. Quarterly and yearly returns are
calculated by geometrically linking the monthly and quarterly returns,
respectively.
The private accounts that are included in the Sub-Advisor's composite are
not subject to the same types of expenses to which the Fund is subject nor
to the diversification requirements, specific tax restrictions and
investment limitations imposed on the Fund by the Investment Company Act or
the Internal Revenue Code. Consequently, the performance results for the
Sub-Advisor's composite could have been adversely affected if the private
accounts included in the composite had been regulated as a mutual fund. In
addition, the operating expenses incurred by the private accounts were
lower than the anticipated operating expenses of the Fund, and,
accordingly, the performance results of the composite are greater than what
Fund performance would have been.
The investment results of the Sub-Advisor's composite presented below have
been reviewed and verified (for an AIMR Level II examination) by an
independent auditing firm, to be computed in accordance with Performance
Presentation Standards of AIMR, but these results are not intended to
predict or suggest the returns that might be experienced by the Fund or an
individual investing in the Fund. The methodology used to calculate
performance conforming to AIMR standards is different from that used by
mutual funds. Investors should also be aware that the use of a methodology
different from that used below to calculate performance could result in
different performance data.
<TABLE>
<CAPTION>
TOTAL RETURNS: YEARS ENDED, DECEMBER 31 OCT. 1, 1990 TO
ANNUALIZED CUMULATIVE 1997 1996 1995 1994 1993 1992 1991 DEC. 31, 1990
---------- ---------- ------ ------ ------ ----- ------ ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SUB-ADVISORS 21.09% 300.42% 24.18% 22.04% 45.75% 3.38% 25.02% 6.35% 27.75% 3.25%
COMPOSITE
S&P 500** 20.42% 284.69% 33.34% 22.99% 37.53% 1.30% 10.06% 7.62% 30.45% 8.96%
NUMBER OF PORTFOLIOS 28 15 9 4 3 3 2 1
END OF PERIOD
COMPOSITE ASSETS $641 $388 $187 $43 $607 $533 $361 $95
END OF PERIOD (THOUSANDS)
PERCENTAGE OF TOTAL ASSETS 90% 96% 97% 82% 1% 4% 12% 5%
REPRESENTED BY COMPOSITE
STANDARD DEVIATION 0.27% 0.51% 0.85% 0.45% 0.26% 0.56% -0- N/A
OF RETURNS
</TABLE>
* AIMR is a non-profit membership and education organization with more than
60,000 members worldwide that, among other things, has formulated a set of
performance presentation standards for investment advisors. These AIMR
standards are intended to promote full and fair presentations by investment
advisors of their performance results and ensure uniformity in reporting so
that performance results of investment advisors are directly comparable.
** The Standard & Poor's 500 Composite Stock Price Index, known as the S&P
500, is an unmanaged market value-weighted index consisting of
representative samples of stocks within important industry groups within
the U.S. economy. It includes dividends and distributions, but does not
reflect fees, brokerage commissions or other expenses of investing. It has
been taken from published sources and has not been audited by Deloitte &
Touche LLP.
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THE PORTFOLIO MANAGER
Mr. Randall R. Eley of the Sub-Advisor is principally responsible for the
day-to-day management on the Fund's portfolio. Mr Eley has been active in
the investment field professionally since the founding of the Sub-advisor
in 1986.
SHAREHOLDING SERVICING AGENT
American Data Services, Inc., P.O. Box 5536, Hauppauge, NY 11788 serves as
the Fund's Shareholder Servicing Agent and Transfer Agent.
CUSTODIAN
Firstar Bank, N.A, 425 Walnut Street, Cincinnati, Ohio 45202, serves as the
Fund's Custodian.
DISTRIBUTOR
First Fund Distributors, Inc., 4455 East Camelback Road, Suite 261E,
Phoenix, Arizona, serves as the Fund's Distributor.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New
York, 10036, serves as the Fund's Independent Accountants.
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP, 345 California Street, San
Francisco, California 94104, serves as the Fund's legal counsel.
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ACCOUNT INFORMATION
The Fund offers for sale two classes of shares, Class A and Class I. This
prospectus sets out information about Class A shares, available to
investors who do not have the minimum investment requirements to purchase
the Fund's Class I shares. Class I shares are available to institutional
investors who are willing to make an initial investment of $250,000. Class
I shares charge no sales load and have a different operating expense
structure which may result in performance for that Class which is different
from that of Class A shares. Class I shares are discussed more fully in a
separate prospectus available from the Fund.
WHEN THE FUND'S SHARES ARE PRICED
The Net Asset Value or "NAV" is calculated after the close of trading on
the New York Stock Exchange (the "NYSE"), every day that the NYSE is open.
The NAV is not calculated on days that the NYSE is closed for trading. The
NYSE usually closes at 4 p.m., Eastern time, on weekdays, except for
holidays.
HOW THE FUND'S SHARES ARE PRICED
Class A shares are offered at the public offering price. Shares of the Fund
are offered continuously for purchase at the public offering price next
determined after a purchase order is received. The public offering price
per share is equal to the NAV, plus a sales charge, which is reduced on
purchases involving amounts of $50,000 or more, as set forth in the table
below. The public offering price is effective for orders received by the
Fund or investment brokers and their agents prior to the time of the next
determination of the Fund's NAV and, in the case of orders placed with
brokers, transmitted promptly to the Transfer Agent. Orders received after
4:00 p.m., Eastern time will be entered at the following day's calculated
NAV.
The reduced sales charges apply to quantity purchases. In addition,
purchases of shares made during a thirteen month period pursuant to a
written LETTER OF INTENT are eligible for a reduced sales charge. Reduced
sales charges are also applicable to subsequent purchases based on the
aggregate of the amount being purchased and the value, at net asset value,
of shares owned at the time of investment.
Sales Charge as percent of:
Portion of sales
Offering charge retained
Amount of Purchase price NAV by dealers
------------------ ----- --- ----------
Less than $50,000 3.50% 3.63% 3.00%
$50,000 but less than $100,000 3.00% 3.09% 2.60%
$100,000 but less than $250,000 2.50% 2.56% 2.20%
$250,000 but less than $500,000 2.00% 2.04% 1.80%
$500,000 but less than $750,000 1.50% 1.52% 1.30%
$750,000 but less than $1,000,000 1.00% 1.01% 0.80%
$1,000,000 or more None None None
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LETTER OF INTENT
You may qualify for an immediate reduced sales charge on purchases by
completing the Letter on Intent section on the Application Form. You must
state an intention to purchase, during the next 13 months, a specified
amount of shares which, if made at one time, would qualify you for a
reduced sales charge as specified in the above table.
RIGHTS OF ACCUMULATION
The reduced sales charges applicable to purchases apply on a cumulative
basis over any period of time. Thus the value of all shares of the Fund
owned by you (including your regular account, IRA account, or any other
account), taken at current net asset value, can be combined with a current
purchase of shares to determine the rate of sales charge applicable to the
current purchase in order to receive the cumulative quantity reduction.
When opening a new account, the fact that you currently hold shares of the
Fund must be indicated on the Application Form in order to receive the
cumulative quantity discount. For subsequent purchases, the Fund's
Shareholder Servicing Agent ((800) 229-2105) should be notified of current
fund holdings prior to the purchase of additional shares.
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan for Class A Shares of the Fund,
pursuant to Rule 12b-1 under the Investment Company Act of 1940. The
Distribution Plan permits the Fund to pay the Advisor, as Distribution
Coordinator, for the sale and distribution of Class A shares at an annual
rate of 0.50% of the Fund's Class A shares' average annual net assets.
Payments made by the Fund pursuant to the Distribution Plan will represent
compensation for distribution and service activities, not reimbursement for
specific expenses incurred.
Because these fees are paid out of the Fund's assets on an on-going basis,
over time these fees will increase the cost of your investment in the Fund
and may cost you more than paying other types of sales charges.
SHAREHOLDER SERVICE PLAN
The Fund has adopted a Shareholder Service Plan. Under the Shareholder
Service Plan, the Advisor will provide, or arrange for others to provide,
certain services to Class A shareholders of the Fund. As compensation for
its services, the Fund will pay the Advisor, at an annual rate, of 0.25% of
the Fund's Class A shares' average annual net assets.
In addition to compensation paid by the Fund under the Distribution and
Shareholder Servicing Plans, the Advisor may, out of its own resources,
compensate third parties for distribution, marketing and other services
provided to the Fund. The Advisor may use its own resources to sponsor
seminars and educational programs on the Fund for financial intermediaries
and shareholders.
CONVERSION FEATURE
On the first business day of the month next following the fourth
anniversary of their purchase, Class A shares will automatically convert to
Class I shares and will no longer be subject to the fees associated with
the Distribution and Shareholder Service Plans. This conversion will be on
the basis of the relative NAVs of the two Classes, without the imposition
of any sales charge, fee or other expense. The purpose of the conversion
feature is to eliminate the distribution and shareholder service fees paid
by the holders of Class A shares that have been outstanding for an extended
period of time.
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HOW TO INVEST
OPENING A NEW ACCOUNT
You may purchase shares of the Fund by mail, by wire or through your
investment broker. An Application Form accompanies this Prospectus. Please
use the Application Form when purchasing by mail or wire. If you have any
questions or need further information about how to purchase shares, you may
call an account representative of the Fund at (toll-free) (888) 229-2105.
PURCHASING SHARES BY MAIL
Please complete the attached Application Form and mail it with a personal
check, payable to the UNITY FUND, CLASS A to the Fund at the following
address:
Unity Fund, Class A
c/o Firstar Bank, N.A.
P.O. Box 641265
Cincinnati, OH 45264-1265
You may not send Application Forms via overnight delivery to the Fund's
P.O. Box. If you wish to use an overnight delivery service, send your
Application Form and check to the Fund's custodian at the following
address:
Unity Fund, Class A
c/o Firstar Bank, N.A.
Mutual Fund Custody Department
425 Walnut Street, M.L. 6118, Sixth Floor
Cincinnati, Ohio 45202
PURCHASING SHARES BY WIRE
To order by wire, you must have a wire account number. Please call the Fund
at (toll-free) (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 this account number. If you send your purchase by wire
without the account number, your order will be delayed. You will be asked
to fax your Application Form.
Once you have the account number, your bank or other financial institution
may send the wire to the Fund's Custodian with the following instructions:
Firstar Bank, N.A. Cinti/Trust
ABA # 0420-0001-3
For credit to: Unity Fund, Class A
DDA # 488-920-679
For further credit to [your name and account number]
Your bank or financial institution may charge a fee for sending the wire to
the Fund.
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PURCHASING THROUGH AN INVESTMENT BROKER
Your may buy and sell shares through the Fund's approved brokers and their
agents (together "Brokers"). An order placed with a Broker is treated as if
it were placed directly with the Fund, and will be executed at the next
share price calculated by the Fund. Your Broker will hold your shares in a
pooled account in the Broker's name. The Fund may pay the Broker to
maintain your individual ownership information, for maintaining other
required records, and for providing other shareholder services. The Broker
may charge you a fee to handle your order. The Broker is responsible for
processing your order correctly and promptly, keeping you advised of the
status of your account, confirming your transactions and ensuring that you
receive copies of the Fund's prospectus.
Please contact your broker to see if it is an approved broker of the Fund
and for additional information.
MINIMUM INVESTMENTS
Your initial purchase must be at least $1,000. However, if you are
purchasing shares through an Individual Retirement Account ("IRA"), or you
are starting an Automatic Investing Plan, as described below, your initial
purchase must be at least $250. Exceptions may be made at the Fund's
discretion.
ADDITIONAL INVESTMENTS
Additional purchases may be made for $100 or more. Exceptions may be made
at the Fund's discretion. You may purchase additional shares of the Fund by
sending a check, with the stub from your account statement, to the Fund at
the addresses listed above. Please ensure that you include your account
number on the check. If you do not have the stub from your account
statement, include your name, address and account number on a separate
statement.
You may also make additional purchases by wire or through a Broker. Please
follow the procedures described above for purchasing shares through an
investment broker.
MINIMUM ACCOUNT BALANCE
Due to the relatively high cost of managing small accounts, if the value of
your account falls below $250 as a result of redemptions you have made
(except for IRA accounts), the Fund may redeem your shares. However, the
Fund will give you 30 days' written notice to give you time to add to your
account and avoid involuntary redemption of your shares. If the value of
your account falls below $250 as a result of stock market activity, your
account will not be redeemed. The Board of Trustees of the Fund believes
this policy to be in the best interest of all shareholders.
SELLING YOUR SHARES
You may sell some or all of your Fund shares on days that the NYSE is open
for trading. Your redemption may result in a realized gain or loss for tax
purposes. Your shares will be sold at the next NAV calculated for the Fund
after receiving your order. You may sell your shares by mail, wire or
through a Broker.
SELLING YOUR SHARES BY MAIL
You may redeem your shares by sending a written request to the Fund. You
must give your account number and state the number of shares you wish to
sell. You must sign the written request. If the account is in the name of
more than one person, each shareholder must sign the written request. Send
your written request to the Fund at:
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Unity Fund, Class A
c/o American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
If the dollar amount of your redemption exceeds $100,000, you must obtain a
signature guarantee (NOT A NOTARIZATION), available from may commercial
banks, savings associations, stock brokers and other NASD member firms. In
unusual circumstances, the Fund may temporarily suspend the processing of
sell requests, or postpone payments of proceeds for up to seven days as
permitted by federal securities laws.
SELLING YOUR SHARES BY TELEPHONE
If you completed the "Redemption by Telephone" section of the Fund's
Application Form, you may sell your shares by calling the Shareholder
Servicing Agent (toll-free) at (888) 229-2105. Your redemption will be
mailed or wired according to your instructions, on the next business day to
the bank account you designated on your Application Form. The minimum wire
amount is $1,000. Your bank or financial institution may charge a fee for
receiving the wire from the Fund. Telephone redemptions may not be made for
IRA accounts.
The Fund will take steps to confirm that a telephone redemption is
authentic. This may include tape recording the telephone instructions, or
requiring a form of personal identification before acting on those
instructions. The Fund reserves the right to refuse telephone instructions
if it cannot reasonably confirm the telephone instructions. The Fund may be
liable for losses from unauthorized or fraudulent telephone transactions
only if these reasonable procedures are not followed.
You may request telephone redemption privileges after your account is
opened. However, the authorization form requires a separate signature
guarantee (NOT A NOTARIZATION). The Fund may modify or terminate your
telephone privileges after giving you 60 days notice. Please be aware that
you may experience delays in redeeming your shares by telephone during
periods of abnormal market activity. In addition, the Fund may postpone
payment of proceeds for up to seven days, as permitted by federal
securities laws.
AUTOMATIC INVESTMENT PLAN
You may make regular monthly investments in the Fund using the Automatic
Investment Plan. Through the plan, it is arranged for your bank or
financial institution to transfer a predetermined amount (but not less than
$100), monthly, to purchase shares of the Fund. When the Fund receives the
transfer, the Fund will invest the amount in additional shares of the Fund
at the next calculated applicable public offering price. You may request an
Application for the Automatic Investment Plan by calling the Fund
(toll-free) at (888) 229-2105. The Fund may modify or terminate this Plan
at any time. You may terminate your participation in this Plan by calling
the Fund.
AUTOMATIC WITHDRAWAL PLAN
You may request that a predetermined amount be sent to you each month or
quarter. Your account value must have a value of at least $10,000 for you
to be eligible to participate in the Automatic Withdrawal Plan. The minimum
withdrawal amount is $50. You may request an Application for the Automatic
Withdrawal Plan by calling the Fund (toll-free) at (877) 829-8413. The Fund
may modify or terminate this Plan at any time. You may terminate your
participation in this Plan by calling the Fund.
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OTHER POLICIES
The Fund may waive the minimum investment requirements for purchases by
certain groups or retirement plans. All investments must be made in U.S.
funds, and checks must be drawn on U.S. banks. Third party checks are not
accepted. The Fund may charge you if your check is returned for
insufficient funds. The Fund reserves the right to reject any investment,
in whole or in part. The IRS requires that you provide the Fund or your
Broker with a taxpayer identification number and other information upon
opening an account. You must specify whether you are subject to backup
withholding. Otherwise, you may be subject to backup withholding at a rate
of 31%.
EARNINGS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Income dividends and capital gain distributions are normally declared and
paid by the Fund to its shareholders in December of each year. The Fund may
also make periodic dividend payments and distributions at other times in
its discretion.
Unless you invest through a tax-advantaged account, you will owe taxes on
the dividends and distributions. Dividends and distributions are
automatically reinvested in additional shares of the Fund unless you make a
written request to the Fund that you would like to receive dividends and
distributions made in cash.
TAXES
The Fund is required by Internal Revenue Service rules to distribute
substantially all of its net investment income, and capital gains, if any,
to shareholders. Capital gains may be taxable at different rates depending
upon the length of time a Fund holds its assets. You will be notified at
least annually about the tax consequences of distributions made each year.
The Fund's dividends and distributions, whether received in cash or
reinvested, may be taxable. Any redemption of a Fund's shares will be
treated as a sale and any gain on the transaction may be taxable.
Additional information about tax issues relating to the Fund may be found
in the SAI. Please consult your tax advisor about the potential tax
consequences of investing in the Fund.
13
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance during the past fiscal period. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned on an investment in
the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by McGladrey & Pullen, LLP. Their report and the
Fund's financial statements are included in the Fund's annual report which is
available upon request by calling (888) 229-2105.
FINANCIAL HIGHLIGHTS
FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------------------------------------------------------------------------
June 29, 1998*
through
May 31, 1999
- --------------------------------------------------------------------------------
Net asset value, beginning of period ............................ $10.00
------
Income from investment operations:
Net investment income ..................................... 0.05
Net realized and unrealized gain on investments ........... 1.40
------
Total from investment operations ................................ 1.45
------
Less distributions:
From net investment income ................................ (0.01)
From net realized gain from security transactions ......... (0.01)
------
Total distributions ............................................. (0.02)
------
Net asset value, end of period .................................. $11.43
======
Total return..................................................... 14.55%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands)............................ $4,056
Ratio of expenses to average net assets:
Before advisory fee waiver and absorption.................. 6.24%+
After advisory fee waiver and absorption................... 2.10%+
Ratio of net investment income to average net assets:
After advisory fee waiver and absorption................... 0.64%+
Portfolio turnover rate.......................................... 54.69%
*Commencement of operations.
+Annualized.
++ Does not include sales load and is not annualized.
14
<PAGE>
UNITY FUND, CLASS A
A SERIES OF ADVISORS SERIES TRUST
FOR MORE INFORMATION
You can find more information about the Fund in the Statement of Additional
Information ("SAI"), incorporated by reference in this prospectus, that is
available free of charge.
To request your free copy of the SAI, annual report, semi-annual report, or to
request other information, please call (toll-free) (888) 229-2105 or write to
the Fund:
Unity Fund, Class A
c/o American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
You may review and copy further information about the Fund, including the SAI,
at the Securities and Exchange Commission's ("SEC's") Public Reference Room in
Washington, D.C. Call (800) SEC-0330 for information about the operation of the
Public Reference Room.
REPORTS AND OTHER FUND INFORMATION ARE ALSO AVAILABLE ON THE SEC'S INTERNET SITE
AT www.sec.gov. COPIES OF THIS INFORMATION MAY BE OBTAINED, UPON PAYMENT OF A
DUPLICATING FEE, BY WRITING TO THE SEC'S PUBLIC REFERENCE SECTION, WASHINGTON,
D.C. 20549-6009.
SEC File Number: 811-07959
<PAGE>
UNITY FUND
CLASS I SHARES
PROSPECTUS
OCTOBER 1, 1999
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE FUND OFFERED THROUGH DELTA EQUITY SERVICES CORP., JACKSON,
SHANKLIN & SONIA INVESTMENTS, L.L.C. OR ANY OTHER INVESTMENT BROKER ARE NOT BANK
DEPOSITS. SHARES OF THE FUND ARE NOT GUARANTEED OR ENDORSED BY ANY BANK. SHARES
OF THE FUND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
("FDIC"), FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. ALL INVESTMENTS ARE SUBJECT
TO RISKS, INCLUDING THE POSSIBLE LOSS OF MONEY INVESTED.
<PAGE>
UNITY FUND, CLASS I
6600 Plaza Drive, Suite 310
New Orleans, LA 70127
Fund Literature (toll free): (877) LIBFUND (542-3863)
alternate: (800) 645-1704
Shareholder Services (toll-free): (888) 229-2105
TABLE OF CONTENTS
Fund Overview........................................... 3
Understanding Expenses.................................. 4
Management of the Fund.................................. 5
Account Information..................................... 8
How to Invest........................................... 8
Earnings and Taxes...................................... 11
For More Information....................................Back Cover
More detailed information on all subjects covered in this prospectus is
contained in the Fund's STATEMENT OF ADDITIONAL INFORMATION ("SAI"). Investors
seeking more in-depth explanations of the contents of this prospectus should
request the SAI and review it before purchasing shares.
2
<PAGE>
FUND OVERVIEW
The Unity Fund was formerly known as the Liberty Freedom Fund.
INVESTMENT OBJECTIVES
The Fund's primary investment objective is the growth of capital. Its
secondary objective is to provide current income. The objectives of the
Fund may be changed only with shareholder approval.
PRINCIPAL INVESTMENT STRATEGIES
The Fund uses a disciplined approach to select securities for the Fund's
portfolio that it believes are undervalued, reasonably priced and have
prospects for continued consistent growth. The Fund uses fundamental
analysis of financial statements to select stocks of issuers which have low
price/earnings and price/book ratios as well as strong balance sheet ratios
and high and/or stable dividend yields.
The Fund will invest primarily in the stocks of large, well-recognized
companies. The Fund will usually invest at least 20% of its assets in the
stocks that comprise the S&P 100 Index. The S&P 100 Index is a
capitalization-weighted index of 100 stocks from a broad range of
industries.
Under normal market conditions, the Fund will invest at least 85% of its
total assets in stocks and other equity securities.
The Fund's annual portfolio turnover rate will usually not exceed 50%.
TYPES OF SECURITIES
The Fund invests primarily in the following securities:
* Common Stock;
* Preferred Stock;
* Convertible Securities and Warrants; and
* Standard & Poor's Depositary Receipts ("SPDRs")
Please review the SAI for further descriptions of these securities.
PRINCIPAL RISKS OF INVESTING
You may lose money by investing in the Fund. Other principal risks you
should consider include:
MARKET DECLINE - A company's stock price or the overall stock market may
experience a sudden decline.
THE EFFECT OF INTEREST RATES - The Fund may invest in bonds and other debt
instruments which may be affected by interest rate changes and changes in
the creditworthiness of the bond or debt instrument issuer.
Defensive Investments - AT THE DISCRETION OF THE SUB-ADVISOR, THE FUND MAY
INVEST UP TO 100% OF ITS ASSETS IN CASH, CASH EQUIVALENTS, AND HIGH
QUALITY, SHORT-TERM DEBT SECURITIES AND MONEY MARKET INSTRUMENTS FOR
TEMPORARY DEFENSIVE PURPOSES. DURING SUCH A PERIOD, THE FUND MAY NOT REACH
ITS INVESTMENT OBJECTIVES. FOR EXAMPLE, SHOULD THE MARKET ADVANCE DURING
THIS PERIOD, THE FUND MAY NOT PARTICIPATE AS MUCH AS IT WOULD HAVE IF IT
HAD BEEN MORE FULLY INVESTED.
3
<PAGE>
YEAR 2000 - Many computer systems, as originally encoded, cannot
distinguish the year 2000 from the year 1900. If not corrected, computer
systems may misinterpret and read incorrectly dates occurring after
December 31, 1999. This is commonly known as the "Year 2000 Problem." The
Year 2000 Problem could have a negative impact on handling securities
trades and pricing and accounting services. The Fund's Board of Trustees
have adopted a Year 2000 Project Plan that the Board of Trustees believes
is reasonably designed to address the Year 2000 Problem with respect to the
Advisor's and the Fund's service providers' computer systems. For example,
should the Board of Trustees determine that a service provider is not
converting to a Year 2000 compliant system, the Board of Trustees will
replace that service provider. Although the Advisor and the Fund's service
providers have assured the Fund that they are moving towards Year 2000
compliant computer systems, this is not a guarantee that the Fund will not
experience an adverse impact from the Year 2000 Problem. It is important to
keep in mind that the Year 2000 Problem may adversely impact the issuers in
which the Fund invests and, by extension, the value of the shares held by
the Fund.
WHO MAY WANT TO INVEST
The Fund is intended for investors who:
* Are willing to hold their shares for a long period of time (e.g.,
in preparation for retirement);
* Are diversifying their investment portfolio by investing in a
mutual fund that concentrates in large-cap companies; and/or
* Are willing to accept higher short-term risk in exchange for a
higher potential for a long-term total return.
UNDERSTANDING EXPENSES
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Load on Fund Purchases.......................... None
(as a percentage of offering price)
Annual Fund Operating Expenses*
(expenses that are deducted from Fund assets)
Investment Advisory Fees...................................... 0.85%
Distribution (12b-1) Fees..................................... None
Shareholder Service Fees...................................... None
Other Expenses................................................ 3.00%
-----
Total Annual Fund Operating Expenses.............................. 3.85%
Advisory Fee Waiver and/or Fund Expense Absorption # ......... (2.55%)
-----
Net Expenses...................................................... 1.30%
=====
4
<PAGE>
* Other expenses have been estimated. The Advisor has contractually agreed
to waive its fees and/or absorb expenses of the Fund to ensure that Total
Annual Operating Expenses do not exceed 1.30%. This contract's term is
indefinite and may be terminated only by the Board of Trustees of the Fund.
If the Advisor waives any of its fees or pays Fund expenses, the Fund may
reimburse the Advisor in future years.
EXAMPLE
This Example is intended to help you compare the costs of investing in the
Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each
year and that the Fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs
would be:
1 year 3 years 5 years 10 years
------ ------- ------- --------
$132 $412 $713 $1,569
MANAGEMENT OF THE FUND
THE ADVISOR
The Fund's Advisor, Liberty Bank and Trust Company ("Liberty"), 6600 Plaza
Drive, Suite 310, New Orleans, Louisiana 70127, (a subsidiary of Liberty
Financial Services, Inc.) has provided banking services to the greater New
Orleans community since 1972. Liberty's assets have grown to over $180
million and has risen to become one of the top ten African American owned
banks in the United States. Liberty has overall responsibility for the
assets under management and will be responsible for monitoring the
day-to-day activity of the Sub-Advisor. Liberty, together with the
Sub-Advisor, is responsible for formulating and implementing the Fund's
investments. Liberty furnishes the Fund with office space and certain
administrative services. As compensation for the services it receives, the
Fund pays Liberty a monthly advisory fee based upon the average daily net
assets of the Fund at the annual rate of 0.25%.
THE SUB-ADVISOR
The Fund's Sub-Advisor, The Edgar Lomax Company, 6564 Loisdale Court, Suite
310, Springfield, Virginia 22150, has provided asset management services to
individuals and institutional investors since 1986. Currently, the
Sub-Advisor has $1.2 billion in assets under management. Mr. Randall R.
Eley, President and Chief Investment Officer of the Sub- Advisor, controls
the Sub-Advisor.
The Sub-Advisor provides the Fund with advice on buying and selling
securities and manages the investments of the Fund. As compensation, the
Fund pays the Sub-Advisor a monthly management fee based upon the average
daily net assets of the Fund at the annual rate of 0.60%.
5
<PAGE>
PRIOR PERFORMANCE OF THE SUB-ADVISOR
The following table sets forth composite performance data relating to the
historical performance of private accounts of The Edgar Lomax Company,
Sub-Advisor to the Fund. Each of these private accounts exceeds, as of
January 1, 1994, $1 million in market value and have investment objectives,
policies, strategies and risks substantially similar to those of the Fund.
The data is provided to illustrate the past performance of the Sub-Advisor
in managing substantially similar accounts as measured against a market
index and does not represent the performance of the Fund. You should not
consider this performance data as an indication of future performance of
the Fund or of the Sub-Advisor. A complete list and description of the Sub-
advisor's composites is available by request to the Sub-Advisor.
The composite performance data shown below were calculated in accordance
with recommended standards of the Association for Investment Management and
Research (AIMR*), retroactively applied to all time periods. All returns
presented were calculated on a total return basis and include all dividends
and interest, accrued income and realized and unrealized gains and losses.
All returns reflect the deduction of investment advisory fees, brokerage
commissions and execution costs paid by private accounts of the Sub-Advisor
without provision for federal or state income taxes. Custodial fees, if
any, were generally not included in the calculation. The Sub-Advisor's
composite includes all actual, fee-paying, discretionary private accounts
with assets in excess of $1 million (minimum account size required as of
January 1, 1994) managed by the Sub- Advisor that have investment
objectives, policies, strategies and risks substantially similar to those
of the Fund. Securities transactions are accounted for on the trade date
and accrual accounting is used. Cash and equivalents are included in
performance returns. The monthly returns of the Sub-Advisor's composite
combine the individual accounts' returns (calculated on a time-weighted
rate of return that is revalued whenever cash flows exceed 10% of an
account's current value) by asset-weighting each individual account's asset
value as of the beginning of the month. Quarterly and yearly returns are
calculated by geometrically linking the monthly and quarterly returns,
respectively.
The private accounts that are included in the Sub-Advisor's composite are
not subject to the same types of expenses to which the Fund is subject nor
to the diversification requirements, specific tax restrictions and
investment limitations imposed on the Fund by the Investment Company Act or
the Internal Revenue Code. Consequently, the performance results for the
Sub-Advisor's composite could have been adversely affected if the private
accounts included in the composite had been regulated as a mutual fund. In
addition, the operating expenses incurred by the private accounts were
lower than the anticipated operating expenses of the Fund, and,
accordingly, the performance results of the composite are greater than what
Fund performance would have been.
The investment results of the Sub-Advisor's composite presented below have
been reviewed and verified (for an AIMR Level II examination) by an
independent auditing firm, to be computed in accordance with Performance
Presentation Standards of AIMR, but these results are not intended to
predict or suggest the returns that might be experienced by the Fund or an
individual investing in the Fund. The methodology used to calculate
performance conforming to AIMR standards is different from that used by
mutual funds. Investors should also be aware that the use of a methodology
different from that used below to calculate performance could result in
different performance data.
6
<PAGE>
<TABLE>
<CAPTION>
TOTAL RETURNS: YEARS ENDED, DECEMBER 31 OCT. 1, 1990 TO
ANNUALIZED CUMULATIVE 1997 1996 1995 1994 1993 1992 1991 DEC. 31, 1990
---------- ---------- ------ ------ ------ ----- ------ ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SUB-ADVISORS 21.09% 300.42% 24.18% 22.04% 45.75% 3.38% 25.02% 6.35% 27.75% 3.25%
COMPOSITE
S&P 500** 20.42% 284.69% 33.34% 22.99% 37.53% 1.30% 10.06% 7.62% 30.45% 8.96%
NUMBER OF PORTFOLIOS 28 15 9 4 3 3 2 1
END OF PERIOD
COMPOSITE ASSETS $641 $388 $187 $43 $607 $533 $361 $95
END OF PERIOD (THOUSANDS)
PERCENTAGE OF TOTAL ASSETS 90% 96% 97% 82% 1% 4% 12% 5%
REPRESENTED BY COMPOSITE
STANDARD DEVIATION 0.27% 0.51% 0.85% 0.45% 0.26% 0.56% -0- N/A
OF RETURNS
</TABLE>
* AIMR is a non-profit membership and education organization with more than
60,000 members worldwide that, among other things, has formulated a set of
performance presentation standards for investment advisors. These AIMR
standards are intended to promote full and fair presentations by investment
advisors of their performance results and ensure uniformity in reporting so
that performance results of investment advisors are directly comparable.
** The Standard & Poor's 500 Composite Stock Price Index, known as the S&P
500, is an unmanaged market value-weighted index consisting of
representative samples of stocks within important industry groups within
the U.S. economy. It includes dividends and distributions, but does not
reflect fees, brokerage commissions or other expenses of investing. It has
been taken from published sources and has not been audited by Deloitte &
Touche LLP.
THE PORTFOLIO MANAGER
Mr. Randall R. Eley of the Sub-Advisor is principally responsible for the
day-to-day management on the Fund's portfolio. Mr Eley has been active in
the investment field professionally since the founding of the Sub-advisor
in 1986.
SHAREHOLDING SERVICING AGENT
American Data Services, Inc., P.O. Box 5536, Hauppauge, NY 11788 serves as
the Fund's Shareholder Servicing Agent and Transfer Agent.
CUSTODIAN
Firstar Bank, N.A, 425 Walnut Street, Cincinnati, Ohio 45202, serves as the
Fund's Custodian.
DISTRIBUTOR
First Fund Distributors, Inc., 4455 East Camelback Road, Suite 261E,
Phoenix, Arizona, serves as the Fund's Distributor.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New
York, 10036, serves as the Fund's Independent Accountants.
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP, 345 California Street, San
Francisco, California 94104, serves as the Fund's legal counsel.
7
<PAGE>
ACCOUNT INFORMATION
The Fund offers for sale two classes of shares, Class A and Class I. This
prospectus sets out information about Class I shares. Class A shares are
available to smaller investors who do not have the initial minimum
investment of $250,000. Class A shares charge an up-front sales load and
have a different operating expense structure which may result in
performance for that Class which is different from that of Class I shares.
Class A shares are discussed more fully in a separate prospectus available
from the Fund.
WHEN THE FUND'S SHARES ARE PRICED
The Net Asset Value or "NAV" is calculated after the close of trading on
the New York Stock Exchange (the "NYSE"), every day that the NYSE is open.
The NAV is not calculated on days that the NYSE is closed for trading. The
NYSE usually closes at 4 p.m., Eastern time, on weekdays, except for
holidays.
HOW THE FUND'S SHARES ARE PRICED
Class I shares are offered continuously for purchase at the NAV next
determined after a purchase order is received. The NAV price is effective
for orders received by the Fund or investment brokers and their agents
prior to the time of the next determination of the Fund's NAV and, in the
case of orders placed with brokers, transmitted promptly to the Transfer
Agent. Orders received after 4:00 p.m., Eastern time will be entered at the
following day's calculated NAV.
HOW TO INVEST
OPENING A NEW ACCOUNT
You may purchase shares of the Fund by mail, by wire or through your
investment broker. An Application Form accompanies this Prospectus. Please
use the Application Form when purchasing by mail or wire. If you have any
questions or need further information about how to purchase shares, you may
call an account representative of the Fund at (toll-free) (888) 229-2105.
PURCHASING SHARES BY MAIL
Please complete the attached Application Form and mail it with a personal
check, payable to the UNITY FUND, CLASS I to the Fund at the following
address:
Unity Fund, Class I
c/o Firstar Bank, N.A.
P.O. Box 641265
Cincinnati, OH 45264-1265
You may not send Application Forms via overnight delivery to the Fund's
P.O. Box. If you wish to use an overnight delivery service, send your
Application Form and check to the Fund's custodian at the following
address:
Unity Fund, Class I
c/o Firstar Bank, N.A.
Mutual Fund Custody Department
425 Walnut Street, M.L. 6118, Sixth Floor
Cincinnati, Ohio 45202
8
<PAGE>
PURCHASING SHARES BY WIRE
To order by wire, you must have a wire account number. Please call the Fund
at (toll-free) (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 this account number. If you send your purchase by wire
without the account number, your order will be delayed. You will be asked
to fax your Application Form.
Once you have the account number, your bank or other financial institution may
send the wire to the Fund's Custodian with the following instructions:
Firstar Bank, N.A. Cinti/Trust
ABA # 0420-0001-3
For credit to: Unity Fund, Class I
DDA # 488-920-679
For further credit to [your name and account number]
Your bank or financial institution may charge a fee for sending the wire to the
Fund.
PURCHASING THROUGH AN INVESTMENT BROKER
Your may buy and sell shares through the Fund's approved brokers and their
agents (together "Brokers"). An order placed with a Broker is treated as if
it were placed directly with the Fund, and will be executed at the NAV next
calculated by the Fund. Your Broker will hold your shares in a pooled
account in the Broker's name. The Fund may pay the Broker to maintain your
individual ownership information, for maintaining other required records,
and for providing other shareholder services. The Broker may charge you a
fee to handle your order. The Broker is responsible for processing your
order correctly and promptly, keeping you advised of the status of your
account, confirming your transactions and ensuring that you receive copies
of the Fund's prospectus.
Please contact your broker to see if it is an approved broker of the Fund
and for additional information.
MINIMUM AND SUBSEQUENT INVESTMENTS
The minimum initial investment in the Fund is $250,000. Generally,
subsequent investments must be at least $25,000. Exceptions may be made at
the Fund's discretion.
You may purchase additional shares of the Fund by sending a check, with the
stub from your account statement, to the Fund at the addresses listed
above. Please ensure that you include your account number on the check. If
you do not have the stub from your account statement, include your name,
address and account number on a separate statement.
You may also make additional purchases by wire or through a Broker. Please
follow the procedures described above for purchasing shares through an
investment broker.
Due to the relatively high cost of managing small accounts, if the value of
your account falls below $50,000 as a result of redemptions you have made
(except for IRA accounts), the Fund may redeem your shares. However, the
Fund will give you 30 days' written notice to give you time to add to your
account and avoid involuntary redemption of your shares. If the value of
your account falls below $50,000 as a result of stock market activity, your
account will not be redeemed. The Board of Trustees of the Fund believes
this policy to be in the best interest of all shareholders.
9
<PAGE>
SELLING YOUR SHARES
You may sell some or all of your Fund shares on days that the NYSE is open
for trading. Your redemption may result in a realized gain or loss for tax
purposes. Your shares will be sold at the next net asset value calculated
for the Fund after receiving your order. You may sell your shares by mail,
wire or through a Broker.
SELLING YOUR SHARES BY MAIL
You may redeem your shares by sending a written request to the Fund. You
must give your account number and state the number of shares you wish to
sell. You must sign the written request. If the account is in the name of
more than one person, each shareholder must sign the written request. Send
your written request to the Fund at:
Unity Fund, Class I
c/o American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
If the dollar amount of your redemption exceeds $100,000, you must obtain a
signature guarantee (NOT A NOTARIZATION), available from may commercial
banks, savings associations, stock brokers and other NASD member firms. In
unusual circumstances, the Fund may temporarily suspend the processing of
sell requests, or postpone payments of proceeds for up to seven days as
permitted by federal securities laws.
SELLING YOUR SHARES BY TELEPHONE
If you completed the "Redemption by Telephone" section of the Fund's
Application Form, you may sell your shares by calling the Shareholder
Servicing Agent (toll-free) at (888) 229-2105. Your redemption will be
mailed or wired according to your instructions, on the next business day to
the bank account you designated on your Application Form. The minimum wire
amount is $1,000. Your bank or financial institution may charge a fee for
receiving the wire from the Fund. Telephone redemptions may not be made for
IRA accounts.
The Fund will take steps to confirm that a telephone redemption is
authentic. This may include tape recording the telephone instructions, or
requiring a form of personal identification before acting on those
instructions. The Fund reserves the right to refuse telephone instructions
if it cannot reasonably confirm the telephone instructions. The Fund may be
liable for losses from unauthorized or fraudulent telephone transactions
only if these reasonable procedures are not followed.
You may request telephone redemption privileges after your account is
opened. However, the authorization form requires a separate signature
guarantee (NOT A NOTARIZATION). The Fund may modify or terminate your
telephone privileges after giving you 60 days notice. Please be aware that
you may experience delays in redeeming your shares by telephone during
periods of abnormal market activity. In addition, the Fund may postpone
payment of proceeds for up to seven days, as permitted by federal
securities laws.
10
<PAGE>
AUTOMATIC INVESTMENT PLAN
You may make regular monthly investments in the Fund using the Automatic
Investment Plan. Through this plan, it is arranged for your bank or
financial institution to transfer a predetermined amount, monthly, to
purchase shares of the Fund. When the Fund receives the transfer, the Fund
will invest the amount in additional shares of the Fund at the next
calculated NAV. You may request an Application for the Automatic Investment
Plan by calling the Fund (toll-free) at (888) 229-2105. The Fund may modify
or terminate this Plan at any time. You may terminate your participation in
this Plan by calling the Fund.
AUTOMATIC WITHDRAWAL PLAN
You may request that a predetermined amount be sent to you each month or
quarter. The minimum withdrawal amount is $100. You may request an
Application for the Automatic Withdrawal Plan by calling the Fund (toll-
free) at (877) 829-8413. The Fund may modify or terminate this Plan at any
time. You may terminate your participation in this Plan by calling the
Fund.
OTHER POLICIES
The Fund may waive the minimum investment requirements for purchases by
certain groups or retirement plans. All investments must be made in U.S.
funds, and checks must be drawn on U.S. banks. Third party checks are not
accepted. The Fund may charge you if your check is returned for
insufficient funds. The Fund reserves the right to reject any investment,
in whole or in part. The IRS requires that you provide the Fund or your
Broker with a taxpayer identification number and other information upon
opening an account. You must specify whether you are subject to backup
withholding. Otherwise, you may be subject to backup withholding at a rate
of 31%.
EARNINGS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Income dividends and capital gain distributions are normally declared and
paid by the Fund to its shareholders in December of each year. The Fund may
also make periodic dividend payments and distributions at other times in
its discretion.
Unless you invest through a tax-advantaged account, you will owe taxes on
the dividends and distributions. Dividends and distributions are
automatically reinvested in additional shares of the Fund unless you make a
written request to the Fund that you would like to receive dividends and
distributions made in cash.
TAXES
The Fund is required by Internal Revenue Service rules to distribute
substantially all of its net investment income, and capital gains, if any,
to shareholders. Capital gains may be taxable at different rates depending
upon the length of time a Fund holds its assets. You will be notified at
least annually about the tax consequences of distributions made each year.
The Fund's dividends and distributions, whether received in cash or
reinvested, may be taxable. Any redemption of a Fund's shares will be
treated as a sale and any gain on the transaction may be taxable.
Additional information about tax issues relating to the Fund may be found
in the SAI. Please consult your tax advisor about the potential tax
consequences of investing in the Fund.
11
<PAGE>
UNITY FUND, CLASS I
A SERIES OF ADVISORS SERIES TRUST
FOR MORE INFORMATION
You can find more information about the Fund in the Statement of Additional
Information ("SAI"), incorporated by reference in this prospectus, that is
available free of charge.
To request your free copy of the SAI, annual report, semi-annual report, or to
request other information, please call (toll-free) (888) 229-2105 or write to
the Fund:
Unity Fund, Class I
c/o American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
You may review and copy further information about the Fund, including the SAI,
at the Securities and Exchange Commission's ("SEC's") Public Reference Room in
Washington, D.C. Call (800) SEC-0330 for information about the operation of the
Public Reference Room.
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SEC File Number: 811-07959
