As filed with the Securities and Exchange Commission on January 28, 2000
1933 Act Registration No. 333-22095
1940 Act Registration No. 811-8065
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 6
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 7
(Check appropriate box or boxes)
IMPACT MANAGEMENT INVESTMENT TRUST
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(exact name of Registrant as Specified in Charter)
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487
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(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (970) 879-1189
Charles R. Clark
Chairman
Impact Management Investment Trust
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487
(Name and Address of Agent for Service)
Approximate date of proposed sale to the public: immediately upon effectiveness.
It is proposed that this filing will become effective (check appropriate box)
[x] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
<PAGE>
PROSPECTUS
January 28, 2000
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
Retail Class Shares
Traditional Class Shares
1-800-556-5856
(Toll Free)
The U.S. Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
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TABLE OF CONTENTS
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Page
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PORTFOLIO SUMMARIES.........................................................
Investment Objectives and Strategies...............................
Principal Risks....................................................
Performance of the Portfolio.......................................
Portfolio Expenses.................................................
FINANCIAL HIGHLIGHTS........................................................
INVESTMENT POLICIES AND RISKS...............................................
MANAGEMENT OF THE PORTFOLIO.................................................
Investment Advisor.................................................
Sub-Investment Advisor.............................................
Portfolio Managers.................................................
Advisory Fees......................................................
PRICING PORTFOLIO SHARES....................................................
HOW TO PURCHASE SHARES......................................................
General............................................................
Purchasing By Mail.................................................
Purchasing by Wire.................................................
HOW TO REDEEM SHARES........................................................
Written Requests...................................................
Signatures.........................................................
Telephone Redemptions..............................................
Redemption in Kind.................................................
Receiving Payment..................................................
Accounts with Low Balances.........................................
DISTRIBUTION ARRANGEMENTS...................................................
General ..........................................................
Plans Of Distribution..............................................
DIVIDENDS, DISTRIBUTIONS AND TAXES..........................................
Dividends and Distributions........................................
Tax Consequences...................................................
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<PAGE>
PORTFOLIO SUMMARIES
INVESTMENT OBJECTIVES AND STRATEGIES
The investment objective of the Impact Total Return Portfolio (the
"Portfolio") is to provide maximum long-term total return consistent with
reasonable risk to capital. The total return on the Portfolio is expected to
consist of capital appreciation and income.
The Portfolio seeks to achieve its objective by investing on average 65% of
its total assets in the equity securities of companies listed in the Russell
1000(R) Value Index. The Russell 1000 Value Index companies generally are the
companies from which the Portfolio selects its portfolio securities; however,
equity securities may also be selected from companies outside the Russell 1000
Value Index if such companies have characteristics similar to those of the
Russell 1000 Value Index companies. The Russell 1000 Value Index consists of the
1000 largest U.S. companies with lower price-to-book ratios and lower forecasted
growth than all companies included in the Russell 3000 Index. The Russell 3000
Index measures the performance of the 3000 largest U.S. companies based on total
market capitalization. The smallest company in the Russell 1000 Value Index has
an approximate market capitalization of $1.4 billion.
The Portfolio will invest in securities that exhibit the following
characteristics:
o have low price-to-earnings and low price-to-book value ratios;
o have higher dividend yields than the universe of growth stocks;
o have lower forecasted growth rates than the universe of growth stocks;
o are typically considered out of favor by the market.
The Portfolio will sell securities when
o a security becomes widely recognized by the professional investment
community;
o a security appreciates in value to the point that it is considered to
be overvalued;
o the Portfolio's holdings should be rebalanced to include a more
attractive stock or stocks; or
o a security's earnings potential is believed to be jeopardized.
The Portfolio seeks capital appreciation through investment in
value-oriented growth securities. Income may come from dividend income generated
by the Portfolio's equity holdings, and/or interest income generated by the
Portfolio's invested cash positions. During periods of adverse market
conditions, the Portfolio may hold a substantial percentage of its assets
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in cash or money market securities, thereby seeking total return through income,
without regard to capital appreciation.
PRINCIPAL RISKS
o Fluctuation of share values in response to market conditions, economic
conditions and financial conditions of issuers of the Portfolio's
portfolio securities.
o Companies with mid-size market capitalizations may be more volatile
than larger companies, so there may be greater risk of depreciation of
the securities of mid-cap companies than securities of companies with
larger market capitalizations.
o Value investing involves risks because investments are made in
securities that are sold at a discount to their intrinsic value. These
securities are considered out-of-favor by the investment community
because of their indeterminate growth potential.
o As with an investment in any fund, there is risk of loss of all or
part of your investment.
PERFORMANCE OF THE PORTFOLIO
The bar chart and table below provide an indication of the risks of
investing in the Portfolio by showing changes in the Portfolio's performance
from year-to-year, and by showing how the Portfolio's performance over time
compares to that of a relevant broad-based securities market index. The results
shown are for the Retail Class only. As of the date of this prospectus, the
Traditional Class was not yet operational. The bar chart shows you how the
Retail Class performed for the 1998 and 1999 calendar years. The table compares
the Retail Class performance over time to that of the Russell 1000 Value Index,
the Russell 2000 Index and S&P 500 Index, each a widely recognized, unmanaged
index of stock performance. The bar chart and table assume reinvestment of
dividends and distributions. As with all mutual funds, the past is not a
prediction of future performance results.
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INVESTMENT RESULTS
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1999 14.36%
1998 -1.27%
Note: The Fund's fiscal year is other than a calendar year. The fiscal
year-to-date return for the three months ended December 31, 1999 was
10.47%.
The Retail Class' highest/lowest quarterly results during this time period were:
o Highest 10.47% (quarter ended December 31, 1999)
o Lowest -11.85% (quarter ended September 30, 1998)
For periods ended December 31, 1999:
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AVERAGE ANNUAL TOTAL RETURN
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CATEGORY TOTAL RETURN
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Impact Total Return Portfolio One Year Lifetime*
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14.36% 0.09%
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Russell 1000 Value Index** 7.35% 16.15%
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Russell 2000 Index ** 21.26% 12.85%
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S&P 500 Index ** 21.05% 27.72%
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* The Retail Class began operations on June 17, 1997
** The Russell 1000 Value Index, the Russell 2000 Index and the S&P 500 Index
each represent stocks. These Indexes are unmanaged and do not reflect
expenses.
PORTFOLIO EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold Portfolio shares.
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SHAREHOLDER FEES (1)
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(paid directly from your investment)
RETAIL CLASS TRADITIONAL CLASS
Maximum Sales Charge (Load) Imposed None 5.75% (2)
on Purchases (as a percentage of offering
price)
ANNUAL FUND OPERATING EXPENSES
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(expenses that are deducted from Fund assets) RETAIL CLASS TRADITIONAL CLASS
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Management Fees 1.25% 1.25%
Distribution (12b-1) Fees (3) 1.00% 0.25%
Other Expenses (4) 0.35% 0.35%
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Total Annual Fund Operating Expenses 2.60% 1.85%
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(1) Brokers which have not entered into a selling dealer's agreement with the
Portfolio's principal distributor may impose a charge on the purchase of
shares. If such a fee is charged, it will be charged directly by the
broker, and not by the Portfolio.
(2) Reduced for purchases of $50,000 or more, decreasing to zero for purchases
over $1 million. See "Distribution Arrangements."
(3) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by rules of the National
Association of Securities Dealers, Inc. See "Distribution Arrangements."
(4) "Other Expenses" are based on the current fees incurred by the Retail
Class Shares of the Portfolio.
EXAMPLE
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This example is intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds.
You would pay the following expenses on a $10,000 investment, assuming (1)
5% annual return, (2) redemption at the end of each time period, (3)
reinvestment of all dividends and capital distribution, and (4) operating
expenses remain the same. Actual expenses in the future may be greater or lesser
than those shown.
1 Year 3 Years 5 Years 10 Years
Retail Class $267 $ 840 $1,473 $3,352
Traditional Class $759 $1,144 $1,568 $2,828
This example should not be considered a representation of past or future
expenses or performance.
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FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Portfolio's financial performance for the Retail Class shares for the fiscal
periods indicated. "Total return" shows how much your investment in the
Portfolio would have increased (or decreased) during each period, assuming you
had reinvested all dividends and distributions. The figures for the period June
17, 1997 to September 30, 1997, and for the fiscal year ended September 30, 1998
have been audited by Arthur F. Bell, Jr. & Associates, L.L.C., the portfolio's
prior independent accountants. The figures for the fiscal year ended September
30, 1999 have been audited by Spicer, Jeffries & Co., whose report, along with
the Portfolio's financial statements, are included in the Portfolio's Annual
Report to Shareholders, which is available upon request. Information regarding
Traditional Class shares has not been included with this table because those
shares were not offered before the date of this prospectus.
<TABLE>
<CAPTION>
YEAR Year June 17,
ENDED Ended 1997+ to
SEPTEMBER 30, September 30, September 30,
1999 1998 1997
------------ ------------ ------------
PER SHARE DATA*
<S> <C> <C> <C>
Investment income $ .26 $ .29 $ .01
Expenses (.22) (.21) (.01)
------------ ------------ ------------
Net investment income .04 .08 .00
Distributions from net investment income (.08) (.01) .00
Net realized and unrealized gain (loss) on investments .86 (1.66) (.08)
Distributions from realized gains on investments (.69) .00 .00
------------ ------------ ------------
Net increase (decrease) in net asset value .13 (1.59) (.08)
Net asset value:
Beginning of period 8.33 9.92 10.00
------------ ------------ ------------
End of period $ 8.46 $ 8.33 $ 9.92
============ ============ ============
RATIOS AND SUPPLEMENTAL DATA
Total return# 11.50% (15.93)% (.80)%^
Ratio of expenses to average net assets# 2.47% 2.25% 2.25%t
Ratio of net investment income to average net assets# 0.42% 0.88% 0.00%t
Portfolio turnover rate 254.79% 221.45% 0.00%t
Average commission rate paid $ .0612 $ .1296 $ .1437
Net assets, end of period $ 6,270,819 $ 3,925,928 $ 501,758
Shares of beneficial interest outstanding, end of period 741,369 471,512 50,567
Number of shareholder accounts, end of period 156 136 17
</TABLE>
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+ Commencement of operations.
* Selected data for a share of beneficial interest outstanding throughout each
period.
^ Not annualized
t Annualized
# Excludes administrative fee and account closing fee charged directly to
shareholder accounts.
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INVESTMENT POLICIES AND RISKS
The Portfolio seeks to achieve its objective by investing on average 65% of
its total assets in the equity securities of the Russell 1000(R) Value Index
(the "Value Index"). The Value Index is composed of the 1,000 largest stocks
with a less-than-average growth orientation in the Russell 3000 Index, a market
value weighted index of the 3,000 largest U.S. publicly traded companies.
Securities in the Value Index tend to exhibit low price-to-book and
price-to-earnings ratios, higher dividend yields and lower forecasted growth
rates than the universe of growth stocks. The Portfolio's investment advisor
determines the allocation between invested and defensive positions in the
Portfolio. The Portfolio's sub-investment advisor selects the securities for the
invested portion of the Portfolio. It is anticipated that the Portfolio will be
more fully invested during favorable market periods and may reduce its
investment in equity securities during unfavorable market periods.
The advisor primarily seeks to keep the Portfolio in harmony with the
trends of the stock market. The advisor conducts a daily and weekly analysis of
quantitative market data such as relative market strength, breadth, volume,
momentum, and moving averages. As this data alerts the advisor to changes in the
underlying trends of the market, adjustments in the level of investment are made
to attempt to take advantage of rising market trends and to avoid declining
market trends.
In pursuing a "value" investment strategy, the Portfolio primarily invests
in stocks with low prices in relation to their attractive earnings prospects.
The sub-advisor selects securities for the Portfolio using a fundamental method
of analysis. Sources of information used in researching and selecting stocks
include annual reports, prospectuses, filings with the Securities and Exchange
Commission, company press releases, financial newspapers and magazines, research
materials prepared by others and inspections of corporate activities. The
sub-advisor seeks to identify companies in which positive change is taking place
that has not yet been fully recognized by the investing public and/or the
professional investment community. Positive change can include change in
management, change in the supply and demand relationships in a company's
industry, forthcoming changes in response to capital expenditures necessary to
expand or improve the company's business, and other changes that the sub-advisor
considers positive.
The sub-advisor sells securities when the advisor believes that impending
and/or current market trends warrant reducing the Portfolio's investment in
equity securities. The sub-advisor also sells securities when such securities
become more widely recognized by the professional investment community, and have
appreciated to the point that such securities are considered to be overvalued. A
security may be sold and replaced by another security that presents greater
potential for capital appreciation, and/or may be sold when upside earning
potential is believed to be jeopardized.
The foregoing investment policies of the Portfolio are non-fundamental and
may be changed by the Board of Trustees without the approval of shareholders.
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PORTFOLIO TURNOVER. Although the Portfolio does not intend to invest for
the purpose of seeking short-term profits, securities held by it will be sold
whenever the advisor believes it is appropriate to do so in light of the
Portfolio's investment objectives, without regard to the length of time a
particular security may have been held.
The Portfolio does not attempt to set or meet any specific portfolio
turnover rate, since turnover is incidental to transactions undertaken in an
attempt to achieve the Portfolio's investment objective. A higher turnover rate
(100% or more) increases transaction costs (i.e., brokerage commissions) and
adverse tax consequences for Portfolio shareholders. With frequent trading
activity, a greater proportion of any dividends that you receive from the
Portfolio will be characterized as ordinary income, which is taxed at higher
rates than long-term capital gains. It is expected that under normal market
conditions, the annual turnover rate for the Portfolio will not exceed 100%.
TEMPORARY INVESTMENTS. For temporary defensive purposes, when the advisor
determines that market conditions so warrant, the Portfolio may invest up to
100% of its assets in cash, cash items, and money market instruments. To the
extent that the Portfolio is invested in temporary defensive investments, it may
not be pursuing its primary investment objective.
RISK FACTORS. The Portfolio is managed with a view to total return with a
minimum ten-year investment horizon. The Portfolio's net asset value will
fluctuate to reflect the investment performance of the securities held by the
Portfolio, so that the value that a shareholder receives upon redemption may be
greater or lesser than the value of such shares when purchased. Investments in
common stocks in general are subject to market risks that may cause their prices
to fluctuate over time. In addition, investment in the securities of companies
with medium sized market capitalizations presents risks. Mid-cap companies may
be more volatile than larger companies, so there may be greater risk of
depreciation of the securities of mid-cap companies than securities of companies
with larger market capitalizations.
Value investing involves substantial risk because investments are made in
securities that are sold at a discount to their intrinsic value. These
securities are considered to be out-of-favor by the investment community because
of their indeterminate growth potential. There is a risk that these securities
may decline in value.
MANAGEMENT OF THE PORTFOLIO
INVESTMENT ADVISOR
Jordan American Holdings, Inc., d/b/a Equity Assets Management is the
Portfolio's investment advisor. Subject to the authority of the Board of
Trustees, the Advisor is responsible for the overall management of the
Portfolio. The advisor continually conducts investment research and supervision
for the Portfolio and determines the allocation between the invested and the
cash positions of the Portfolio.
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The advisor is a professional investment manager and a registered
investment advisor, which was founded in 1972 under the name Equity Assets
Management, Inc. Jordan American Holdings, Inc. d/b/a Equity Assets Management,
is a publicly held company which trades under the symbol "JAHI". The advisor's
principal place of business is located at 2155 Resort Drive, Suite 108,
Steamboat Springs, Colorado 80487. In addition to advising the Portfolio, the
advisor provides investment advisory services to individuals, corporations,
foundations, limited partnerships, and individual retirement, corporate, and
group pension and profit-sharing plans. The advisor currently has discretionary
management authority with respect to approximately $75 million in assets.
SUB-INVESTMENT ADVISOR
Schneider Capital Management, 460 East Swedesford Road, Suite 1080, Wayne,
PA 19087, is the Portfolio's sub-investment adviser. Schneider Capital is a
registered investment advisor founded in 1996. Schneider Capital provides
discretionary investment management services primarily to institutional clients.
Arnold C. Schneider, III, founder, President and Chief Investment Officer of
Schneider Capital has over 17 years of investment management experience (see
"Portfolio Manager" below). Mr. Schneider directs day-to-day investment
activities for a number of Schneider Capital financial products, including SCM
Small Cap Value Fund, approximating $500 million in assets.
Subject to the authority of the Board of Trustees, the sub-adviser manages
the Portfolio's assets in accordance with the Portfolio's investment objectives
and policies described above. The sub-adviser provides the adviser and the
Portfolio with on-going research, analysis, advice and judgments regarding the
Portfolio's investments. The sub-adviser also purchases and sells securities on
behalf of the Portfolio.
PORTFOLIO MANAGERS
The portfolio managers of the Portfolio are:
W. Neal Jordan, founder and Senior Portfolio Manager of Jordan
American Holdings, Inc. since the company's inception in 1972. Mr.
Jordan continues to serve as Senior Portfolio Manager of Jordan
American, and also serves as Chief Investment Officer.
Charles R. Clark, Senior Assistant Portfolio Manager of Jordan
American Holdings, Inc. since 1993. From October 1991 through the end
of 1993, he was a Technical Research Analyst for Jordan American
Holdings, Inc.
Arnold C. Schneider, III, CFA, founder, President and CIO of Schneider
Capital Management since its inception in 1996. Mr. Schneider is also
a Portfolio Manager with Schneider Capital. From 1982 through 1996,
Mr. Schneider was employed with Wellington Management Company
(1983-1991 as a securities analyst; 1991 to 1996 as Senior Vice
President and portfolio manager). Mr. Schneider was made a partner at
Wellington in 1991. Mr. Schneider managed the Compass Equity Income
Fund from 1993-1995 and the Mentor Income Growth Fund from 1993-1996.
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ADVISORY FEES
Under the Portfolio's investment advisory contract, the Portfolio pays an
annual investment advisory fee equal to 1.25% of the Portfolio's average daily
net assets. Pursuant to the investment advisory contract, the advisor may
voluntarily waive some or all of its fee. The advisory fee is calculated daily
and paid on a monthly basis. The sub-adviser's fee is 0.60% of the Portfolio's
average daily net assets, and is paid by the adviser out of its fees. For the
fiscal year ended September 30, 1999, the Portfolio paid an aggregate advisory
fee of 1.25% of the Portfolio's average net assets.
PRICING PORTFOLIO SHARES
Retail Class shares are sold at net asset value per share, while
Traditional Class shares are sold at the offering price per share. The offering
price per share consists of the net asset value per share next computed after an
order is received, plus any applicable front-end sales charges. The methodology
and procedures for determining net asset value are identical for each class of
shares of the Portfolio, but because the distribution expenses and other costs
allocable to each class varies, the net asset value for each class likewise will
vary.
Net asset value fluctuates. The net asset value for shares of the Portfolio
is determined by calculating the value of all securities and other assets of the
Portfolio, subtracting the liabilities of the Portfolio, and dividing the
remainder by the total number of shares outstanding. Expenses and fees of each
class of the Portfolio, including the advisory, distribution and administrative
fees, are accrued daily and taken into account for the purpose of determining
the net asset value.
Portfolio securities listed or traded on a securities exchange for which
representative market quotations are available will be valued at the last quoted
sales price on the security's principal exchange on that day. Listed securities
not traded on an exchange that day, and other securities which are traded in the
over-the-counter market, will be valued at the mean between the last closing bid
and asked prices in the market on that day, if any. Securities for which market
quotations are not readily available and all other assets will be valued at
their respective fair market value as determined in good faith by, or under
procedures established by, the Board of Trustees. In determining fair value, the
Trustees may employ an independent pricing service.
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Money market securities with less than sixty days remaining to maturity
when acquired by the Portfolio will be valued on an amortized cost basis by the
Portfolio, excluding unrealized gains or losses thereon from the valuation. This
is accomplished by valuing the security at cost and then assuming a constant
amortization to maturity of any premium or discount. If the Portfolio acquires a
money market security with more than sixty days remaining to its maturity, it
will be valued at current market until the 60th day prior to maturity, and will
then be valued on an amortized cost basis based upon the value on such date
unless the Trustees determine during such 60-day period that this amortized cost
value does not represent fair market value.
The offering price and net asset value of shares of each class of the
Portfolio is determined as of the close of trading (normally 4:00 p.m., Eastern
time) on the New York Stock Exchange (the "Exchange"), Monday through Friday,
except on: (i) days on which there are not sufficient changes in the value of
the Portfolio's portfolio securities that its net asset value might be
materially affected; (ii) days during which no shares are tendered for
redemption and no orders to purchase shares are received; or (iii) the following
holidays when the Exchange is closed: New Year's Day, Martin Luther King Jr.
Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
HOW TO PURCHASE SHARES
GENERAL
Shares of the Portfolio are distributed through IMPACT Financial Network,
Inc. ("IFNI"), the Portfolio's distributor. Shares are sold on days on which the
Exchange is open. Retail Class shares are sold without a sales charge at the net
asset value next determined after receipt of a purchase order in proper form by
the Portfolio's sub-transfer agent. Traditional Class shares are sold at the net
asset value next determined, plus an initial maximum sales charge of up to 5.75%
of the offering price (6.10% of the net amount invested), reduced for
investments of $50,000 or more. See "Distribution Arrangements" below.
The minimum initial investment for both the Retail Class and Traditional
Class of the Portfolio is $1,000. Brokers that have not entered into a selling
dealer's agreement with IFNI may impose their own charge on the purchase of
shares. An institutional investor's minimum investment will be calculated by
combining all of the accounts it maintains with the Portfolio. Accounts
established through a non-affiliated bank or broker may, therefore, be subject
to a smaller minimum investment. Accounts established through a qualified
retirement plan and Individual Retirement Accounts ("IRAs") are not subject to
the minimum investment requirement. The Portfolio reserves the right to vary the
initial investment minimum and the minimum for subsequent investments at any
time.
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Additional investments can be made in amounts of at least $100. No minimum
applies to subsequent purchases effected through reinvestment of dividends and
capital gains or for subsequent purchases through qualified retirement plans or
IRAs.
Purchases will be made in full and fractional shares of the Portfolio
calculated to three decimal places. The Portfolio will not issue certificates
representing shares of the Portfolio. Quarterly account statements will be sent
to each shareholder. In addition, detailed confirmations of each purchase or
redemption are sent to each shareholder. Annual confirmations are sent to each
shareholder to report dividends paid during that period. The Portfolio reserves
the right to reject any purchase request.
PURCHASING BY MAIL
To purchase shares by mail, complete and sign the attached Application and
mail it together with a check (in the amount of at least $1,000 for an initial
investment or $100 for a subsequent investment) made payable to IMPACT TOTAL
RETURN PORTFOLIO: [SPECIFY RETAIL OR TRADITIONAL CLASS] to: IMPACT MANAGEMENT
PORTFOLIO c/o Fifth Third Bank, P.O. Box 632164, Cincinnati, OH 45263-2164.
Payment for purchases of shares received by mail will be credited to an
account at the next share price calculated for the Portfolio after receipt.
Payment does not have to be converted into Federal Funds (monies credited to the
Portfolio's custodian bank by a Federal Reserve Bank) before the Portfolio will
accept it for investment.
PURCHASING BY WIRE
To purchase shares by wire, contact Albert John & Company, Inc. ("AJCI"),
the Portfolio's sub-transfer agent, at 1-800-556-5856 to obtain a shareholder
account number and then wire the amount to be invested to IMPACT TOTAL RETURN
PORTFOLIO: [SPECIFY RETAIL OR TRADITIONAL CLASS] c/o Fifth Third Bank, the
Portfolio's Custodian Bank, at the following address:
The Fifth Third Bank
ABA # 042000314
Impact Total Return Portfolio:
Credit Account #728-62611
Account Name (your name)
Account Number (your personal account number)
Forward a completed Application to the Portfolio at the address shown on
the form. Federal Funds purchases will be accepted only on a day on which both
the Exchange and the Portfolio's custodian bank are open for business.
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HOW TO REDEEM SHARES
The Portfolio redeems shares at net asset value as determined at the close
of the day on which the Portfolio receives the redemption request. Redemption
requests must be received in proper form and can be made by written request.
WRITTEN REQUESTS
Shares may be redeemed by sending a written request to AJCI. Call toll-free
at 1-800-556-5856 for specific instructions before redeeming by letter. The
shareholder will be asked to provide in the request his or her name, the
Portfolio name, his or her account number, and the share or dollar amount
requested.
SIGNATURES
Shareholders requesting a redemption of $50,000 or more, a redemption of
any amount to be sent to an address other than that on record with AJCI, or a
redemption payable other than to the shareholder of record must have signatures
on written redemption requests guaranteed by:
o a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund ("BIF"), which is administered by the Federal
Deposit Insurance Corporation ("FDIC");
o a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
o a savings bank or savings and loan association whose deposits are
insured by the Savings Association Insurance Fund ("SAIF"), which is
administered by the FDIC; or
o any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Portfolio does not accept signatures guaranteed by a notary public.
TELEPHONE REDEMPTIONS
Shareholders who have so indicated on the Application, or have subsequently
arranged in writing to do so, may redeem shares by instructing AJCI by
telephone. To arrange for redemption by wire or telephone after an account has
been opened, or to change the bank or account designated to receive redemption
proceeds, a written request, accompanied by a signature guarantee, must be sent
to AJCI at the address on the back of this prospectus.
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Neither the Portfolio nor any of its service contractors will be liable for
any loss or expense in acting upon any telephone instructions that are
reasonably believed to be genuine. In attempting to confirm that telephone
instructions are genuine, the Portfolio will use such procedures as are
considered reasonable, including requesting a shareholder to correctly state his
or her Portfolio account number, the name in which his or her bank account is
registered, his or her banking institution, bank account number and the name in
which his or her bank account is registered. To the extent that the Portfolio
fails to use reasonable procedures to verify the genuineness of telephone
instructions, it and/or its service contractors may be liable for any such
instructions that prove to be fraudulent or unauthorized.
The Portfolio reserves the right to refuse a wire or telephone redemption
if it is believed advisable to do so. Procedures for redeeming Portfolio shares
by wire or telephone may be modified or terminated at any time by the Portfolio.
The Portfolio and AJCI have adopted standards for accepting signature
guarantees from the above institutions. The Portfolio may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Portfolio and AJCI reserve the right to amend
these standards at any time without notice.
REDEMPTION IN KIND
The Trust has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940, under which the Trust is obligated to redeem Shares for any
one shareholder in cash only up to the lesser of $250,000 or 1% of the
respective class's net asset value during any 90-day period.
Any redemption beyond this amount will also be in cash unless Trustees
determine that payments should be in kind. In such a case, the Portfolio will
pay all or a portion of the remainder of the redemption in portfolio
instruments, valued in the same way as the Portfolio determines net asset value.
The portfolio instruments will be selected in a manner that Trustees deem fair
and equitable.
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving their securities and selling them before
their maturity could receive less than the redemption value of their securities
and could incur certain transactions costs.
To the extent that a fund qualifies for treatment as a regulated investment
company, it will not be subject to federal income tax on income and net capital
gains paid to shareholders in the form of dividends or capital gains
distributions. If a fund fails to qualify for such treatment, it is required to
pay such taxes.
-13-
<PAGE>
RECEIVING PAYMENT
Normally, a check for the redemption proceeds is mailed within one business
day, but in no event more than seven calendar days after the receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the
Portfolio may redeem shares in any account and pay the proceeds to the
shareholder if the balance falls below the required minimum of $1,000 due to
shareholder redemptions. This procedure would not apply, however, if the balance
falls below $1,000 solely because of a decline in the Portfolio's net asset
value.
DISTRIBUTION ARRANGEMENTS
GENERAL
The Portfolio offers four classes of shares: Retail Class, Traditional
Class, Wholesale Class and Institutional Class. The four classes represent
interest in the same portfolio of investments of the Portfolio, generally have
the same rights and are identical in all respects, except for differing 12b-1
fees (none for Institutional Class), minimum investment requirements, and sales
charges (imposed on Traditional Class only). Each class has exclusive voting
rights with respect to its 12b-1 plan. This prospectus pertains only to Retail
Class and Traditional Class Shares.
Traditional Class
-----------------
Total Sales Charge as a Percentage of
-------------------------------------
Investment Amount Offering Price Net Amount Invested
- ----------------- -------------- -------------------
Under $50,000 5.75% 6.10%
$50,000, but less than $100,000 4.50% 4.71%
$100,000, but less than $250,000 3.50% 3.63%
$250,000, but less than $500,000 2.50% 2.56%
$500,000, but less than $1,000,000 2.00% 2.04%
$1,000,000 or more 0% 0%
See "Distribution of Shares" in the Portfolio's Statement of Additional
Information for more information about the purchase of Traditional Class shares.
-14-
<PAGE>
PLANS OF DISTRIBUTION
The Portfolio has adopted separate plans of distribution ("Plans") pursuant
to Rule 12b-1 for both the Retail Class shares and the Traditional Class shares
of the Portfolio under the Investment Company Act of 1940, as amended. Pursuant
to each Plan, the Portfolio may reimburse IFNI or others for expenses actually
incurred by IFNI or others in the promotion and distribution of the shares of
the Retail and Traditional Classes of the Portfolio ("distribution expense") and
servicing their shareholders by providing personal services and/or maintaining
shareholder accounts ("service fees"). With respect to Retail Class shares, the
Portfolio reimburses IFNI and others for distribution expenses and service fees
at an annual rate of up to 1.00% (0.25% of which is a service fee) payable on a
monthly basis, of the Portfolio's aggregate average daily net assets
attributable to the Retail Class shares. With respect to Traditional Class
shares, the Portfolio reimburses IFNI and others for distribution expenses at an
annual rate of up to 0.25%, payable on a monthly basis, of the Portfolio's
aggregate average daily net assets attributable to Traditional Class shares.
Since 12b-1 fees are paid out of the Portfolio's assets on an on-going basis,
over time these fees will increase the cost of your investment and may cost you
more than paying other types of sales charges.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Substantially all of the net investment income and capital gains of the
Portfolio is distributed at least annually.
Shareholders automatically receive all dividends and capital gain
distributions in additional shares at the net asset value determined on the next
business day after the record date, unless the shareholder has elected to take
such payment in cash. Shareholders may receive payments for cash distributions
in the form of a check.
-15-
<PAGE>
Dividends and distributions of the Portfolio are paid on a per share basis.
The value of each share will be reduced by the amount of the payment. If shares
are purchased shortly before the record date for a dividend or distribution of
capital gains, a shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution.
TAX CONSEQUENCES
The Portfolio will distribute all of its net investment income (including,
for this purpose, net short-term capital gain) to shareholders. Dividends from
net investment income will be taxable to shareholders as ordinary income whether
received in cash or in additional shares. Distributions from net investment
income will qualify for the dividends-received deduction for corporate
shareholders only to the extent such distributions are derived from dividends
paid by domestic corporations. It can be expected that only certain dividends of
the Portfolio will qualify for that deduction. Any net capital gains will be
distributed annually and will be taxed to shareholders as long-term capital
gains, subject to certain limitations regardless of how long the shareholder has
held shares and regardless of whether the distributions are received in cash or
in additional shares. The Portfolio will make annual reports to shareholders of
the federal income tax status of all distributions, including the amount of
dividends eligible for the dividends-received deduction.
Certain securities purchased by the Portfolio may be sold with original
issue discount and thus would not make periodic cash interest payments. If the
Portfolio acquired such securities, it would be required to include as part of
its current net investment income the accrued discount on such obligations for
purposes of the distribution requirement even though the portfolio has not
received any interest payments on such obligations during that period. Because
the Portfolio distributes all of its net investment income to its shareholders,
the Portfolio may have to sell portfolio securities to distribute such accrued
income, which may occur at a time when the Advisor would not have chosen to sell
such securities and which may result in taxable gain or loss.
Income received on direct U.S. obligations is exempt from income tax at the
state level when received directly by the Portfolio and may be exempt, depending
on the state, when received by a shareholder as income dividends from the
Portfolio provided certain state-specific conditions are satisfied. Not all
states permit such income dividends to be as exempt and some require that a
certain minimum percentage of an investment company's income be derived from
state tax-exempt interest. The Portfolio will inform shareholders annually of
the percentage of income and distributions derived from direct U.S. obligations.
You should consult your tax advisor to determine whether any portion of the
income dividends received from the Portfolio is considered tax exempt in your
particular state.
Each sale or redemption of the Portfolio's shares is a taxable event to the
shareholder. Shareholders are urged to consult their own tax advisors regarding
the status of their accounts under state and local tax laws.
-16-
<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
Impact Total Return Portfolio
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487
Investment Advisor
Jordan American Holdings, Inc.
d/b/a Equity Assets Management
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487
Sub-Investment Advisor
Schneider Capital Management
460 East Swedesford Road
Suite 1080
Wayne, PA 19087
Distributor
IMPACT Financial Network, Inc.
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487
Administrator, Transfer Agent and Dividend Disbursing Agent
IMPACT Administrative Services, Inc.
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487
Sub-Administrator, Sub-Transfer Agent and Sub-Dividend Disbursing Agent
Albert John & Company, Inc.
2933 Jack's Run Road
White Oak, PA 15131
Custodian
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, OH 45263
Legal Counsel
Pepper Hamilton LLP
3000 Two Logan Square
Philadelphia, PA 19103-7098
-17-
<PAGE>
BACK COVER PAGE
This prospectus contains the information you should read and know before
you invest in shares of the Portfolio. Please read this prospectus carefully and
keep it for future reference. The Portfolio has filed a Statement of Additional
Information with the Securities and Exchange Commission. The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information, free of charge, or make inquiries about the Portfolio by
contacting Albert John & Company, Inc., the Portfolio's sub-administrator, by
calling toll-free 1-800-556-5856.
Additional information about the Portfolio's investments also is available
in the Portfolio's annual and semi-annual reports to shareholders. In the annual
and semi-annual reports, you will find a discussion of the market conditions and
investment strategies that significantly affected the Portfolio's performance
during its last fiscal year. The annual and semi-annual reports also may be
obtained free of charge by calling 1-800-556-5856.
Information about the Portfolio (including the Statement of Additional
Information) can be reviewed and copied at the SEC's Public Reference Room in
Washington, D.C. The Public Reference Room's hours of operation may be obtained
by calling 1-800-SEC-0330. Reports and other information about the Portfolio are
available on the SEC's Internet site at http://www.sec.gov. Copies of this
information may be obtained, upon payment of a duplicating fee, by writing the
Public Reference Section of the SEC, Washington, D.C. 20549-6009.
Sec File No. 811-8065
-18-
<PAGE>
PROSPECTUS
January 28, 2000
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
Wholesale Class Shares
Institutional Class Shares
1-800-556-5856
(Toll Free)
The U.S. Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
PORTFOLIO SUMMARIES.........................................................
Investment Objectives and Strategies...............................
Principal Risks....................................................
Performance of the Portfolio.......................................
Portfolio Expenses.................................................
INVESTMENT POLICIES AND RISKS...............................................
MANAGEMENT OF THE PORTFOLIO.................................................
Investment Adviser.................................................
Sub-Investment Adviser.............................................
Portfolio Managers.................................................
Advisory Fees......................................................
PRICING PORTFOLIO SHARES....................................................
HOW TO PURCHASE SHARES......................................................
General............................................................
Purchasing By Mail.................................................
Purchasing by Wire.................................................
HOW TO REDEEM SHARES........................................................
Written Requests...................................................
Signatures ........................................................
Telephone Redemptions..............................................
Redemption in Kind.................................................
Receiving Payment..................................................
Accounts with Low Balances.........................................
DISTRIBUTION ARRANGEMENTS...................................................
General ..........................................................
Plan Of Distribution...............................................
DIVIDENDS, DISTRIBUTIONS AND TAXES..........................................
Dividends and Distributions........................................
Tax Consequences...................................................
-i-
<PAGE>
PORTFOLIO SUMMARIES
INVESTMENT OBJECTIVES AND STRATEGIES
The investment objective of the Impact Total Return Portfolio (the
"Portfolio") is to provide maximum long-term total return consistent with
reasonable risk to capital. The total return on the Portfolio is expected to
consist of capital appreciation and income.
The Portfolio seeks to achieve its objective by investing on average 65% of
its total assets in the equity securities of companies listed in the Russell
1000(R) Value Index. The Russell 1000 Value Index companies generally are the
comapnies from which the Portfolio selects its portfolio securities; however,
equity securities may also be selected from companies outside the Russell 1000
Value Index if such companies have characteristics similar to those of the
Russell 1000 Value Index companies. The Russell 1000 Value Index consists of the
1000 largest U.S. companies with lower price-to-book ratios and lower forecasted
growth than all companies listed in the Russell 3000 Index. The Russell 3000
Index measures the performance of the 3000 largest U.S. companies based on total
market capitalization. The smallest company in the Russell 1000 Value Index had
an approximate market capitalization of $1.4 billion.
The Portfolio will invest in securities that exhibit the following
characteristics:
o have low price-to-earnings and low price-to-book value ratios;
o have higher dividend yields than the universe of growth stocks;
o have lower forecasted growth rates than the universe of growth stocks;
o are typically considered out of favor by the market.
The Portfolio will sell securities when
o a security becomes widely recognized by the professional investment
community;
o a security appreciates in value to the point that it is considered to
be overvalued;
o the Portfolio's holdings should be rebalanced to include a more
attractive stock or stocks; or
o a security's earnings potential is believed to be jeopardized.
-1-
<PAGE>
The Portfolio seeks capital appreciation through investment in
value-oriented growth securities. Income may come from dividend income generated
by the Portfolio's equity holdings, and/or interest income generated by the
Portfolio's invested cash positions. During periods of adverse market
conditions, the Portfolio may hold a substantial percentage of its assets in
cash or money market securities, thereby seeking total return through income,
without regard to capital appreciation.
PRINCIPAL RISKS
o Fluctuation of share values in response to market conditions, economic
conditions and financial conditions of issuers of the Portfolio's
portfolio securities.
o Companies with mid-size market capitalizations may be more volatile
than larger companies, so there may be greater risk of depreciation of
the securities of mid-cap companies than securities of companies with
larger market capitalizations.
o Value investing involves risks because investments are made in
securities that are sold at a discount to their intrinsic value. These
securities are considered out-of-favor by the investment community
because of their indeterminate growth potential.
o As with an investment in any fund, there is risk of loss of all or
part of your investment.
PERFORMANCE OF THE PORTFOLIO
The bar chart and table below provide an indication of the risks of
investing in the Portfolio by showing changes in the Portfolio's performance
from year-to-year, and by showing how the Portfolio's performance over time
compares to that of a relevant broad-based securities market index. The results
shown are for the Retail Class only (the shares of which are offered in a
separate prospectus). The performance of the Retail Class is described because
the Institutional Class had not begun operations at the date of this prospectus
and the Wholesale Class did not commence operations until October 6, 1999. The
returns for the Wholesale and Institutional Classes would be similar to those of
the Retail Class because Wholesale Class and Institutional Class shares are
invested in the same portfolio of securities as the Retail Class and annual
returns would differ only to the extent that the Classes do not have the same
expenses.
The bar chart shows you how the Retail Class performed for the 1998 and
1999 calendar years. The table compares the Retail Class' performance over time
to that of the Russell 1000 Value Index, the Russell 2000 Index and S&P 500
Index, each a widely recognized, unmanaged index of stock performance.
-2-
<PAGE>
The bar chart and table assume reinvestment of dividends and distributions. As
with all mutual funds, the past is not a prediction of future performance
results.
------------------
INVESTMENT RESULTS
------------------
1999 14.36%
1998 -1.27%
Note: The Fund's fiscal year is other than a calendar year. The fiscal
year-to-date return for the three months ended December 31, 1999 was
10.47%.
The Portfolio's highest/lowest quarterly results during this time period were:
o Highest 10.47% (quarter ended December 31, 1999)
o Lowest -11.85% (quarter ended September 30, 1998)
For periods ended December 31, 1999:
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
CATEGORY TOTAL RETURN
- --------------------------------- ----------------------------------------
Impact Total Return Portfolio One Year Lifetime*
---------------- ---------------
14.36% 0.09%
- --------------------------------- ---------------- ---------------
Russell 1000 Value Index** 7.35% 16.15%
- --------------------------------- ---------------- ---------------
Russell 2000 Index ** 21.26% 12.85%
- --------------------------------- ---------------- ---------------
S&P 500 Index ** 21.05% 27.72%
- --------------------------------------------------------------------------------
* The Portfolio began operations on June 17, 1997.
** The Russell 1000 Value Index, the Russell 2000 Index and the S&P 500 Index
each represent stocks. These indexes are unmanaged and do not reflect
expenses.
PORTFOLIO EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold Portfolio shares.
-3-
<PAGE>
SHAREHOLDER FEES(1) WHOLESALE CLASS INSTITUTIONAL CLASS
- ------------------- --------------- -------------------
(paid directly from your investment) None None
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
- ------------------------------
(expenses that are deducted from Fund assets) WHOLESALE CLASS INSTITUTIONAL CLASS
--------------- -------------------
<S> <C> <C>
Management Fees 1.25% 1.25%
Distribution (12b-1) Fees(2) 0.25% None
Other Expenses(3) 0.35% 0.35%
----- -----
Total Annual Fund Operating Expenses 1.85% 1.60%
</TABLE>
- -------------------------
(1) Brokers which have not entered into a selling dealer's agreement with the
Portfolio's principal distributor may impose a charge on the purchase of shares.
If such a fee is charged, it will be charged directly by the broker, and not by
the Portfolio.
(2) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by rules of the National Association of
Securities Dealers, Inc. See "Distribution Arrangements."
(3) "Other Expenses" are based on the current fees incurred by the Wholesale
Class shares of the Portfolio.
EXAMPLE
- -------
This example is intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds.
You would pay the following expenses on a $10,000 investment, assuming (1)
5% annual return, (2) redemption at the end of each time period, (3)
reinvestment of all dividends and capital distribution, and (4) operating
expenses remain the same. Actual expenses in the future may be greater or lesser
than those shown.
1 Year 3 Years 5 Years 10 Years
Wholesale Class: $190 $598 $1,048 $2,385
Institutional Class: $164 $517 $ 906 $2,063
This example should not be considered a representation of past or future
expenses or performance.
-4-
<PAGE>
INVESTMENT POLICIES AND RISKS
The Portfolio seeks to achieve its objective by investing on average 65% of
its total assets in the equity securities of the Russell 1000(R) Value Index
(the "Value Index"). The Value Index is composed of the 1,000 largest stocks
with a less-than-average growth orientation in the Russell 3000 Index, a market
value weighted index of the 3,000 largest U.S. publicly traded companies.
Securities in the Value Index tend to exhibit low price-to-book and
price-to-earnings ratios, higher dividend yields and lower forecasted growth
rates than the universe of growth stocks. The Portfolio's investment advisor
determines the allocation between invested and defensive positions in the
Portfolio. The Portfolio's sub-investment advisor selects the securities for the
invested portion of the Portfolio. It is anticipated that the Portfolio will be
more fully invested during favorable market periods and may reduce its
investment in equity securities during unfavorable market periods.
The advisor primarily seeks to keep the Portfolio in harmony with the
trends of the stock market. The advisor conducts a daily and weekly analysis of
quantative market data such as relative market strength, breadth, volume,
momentum, and moving averages. As this data alerts the advisor to changes in the
underlying trends of the market, adjustments in the level of investment are made
to attempt to take advantage of rising market trends and to avoid declining
market trends.
In pursuing a "value" investment strategy, the Portfolio primarily invests
in stocks with low prices in relation to their attractive earnings prospects.
The sub-advisor selects securities for the Portfolio using a fundamental method
of analysis. Sources of information used in researching and selecting stocks
include annual reports, prospectuses, filings with the Securities and Exchange
Commission, company press releases, financial newspapers and magazines, research
materials prepared by others and inspections of corporate activities. The
sub-advisor seeks to identify companies in which positive change is taking place
that has not yet been fully recognized by the investing public and/or the
professional investment community. Positive change can include change in
management, change in the supply and demand relationships in a company's
industry, forthcoming changes in response to capital expenditures necessary to
expand or improve the company's business, and other changes that the sub-advisor
considers positive.
The sub-advisor sells securities when the advisor believes that impending
and/or current market trends warrant reducing the Portfolio's investment
inequity securities. The sub-advisor also sells securities when such securities
become more widely recognized by the professional investment community, and have
appreciated to the point that such securities are considered to be overvalued. A
security may be sold and replaced by another security that presents greater
potential for capital appreciation, and/or may be sold when upside earning
potential is believed to be jeopardized.
-5-
<PAGE>
The foregoing investment policies of the Portfolio are non-fundamental and
may be changed by the Board of Trustees without the approval of shareholders.
PORTFOLIO TURNOVER. Although the Portfolio does not intend to invest for
the purpose of seeking short-term profits, securities held by it will be sold
whenever the advisor believes it is appropriate to do so in light of the
Portfolio's investment objectives, without regard to the length of time a
particular security may have been held.
The Portfolio does not attempt to set or meet any specific portfolio
turnover rate, since turnover is incidental to transactions undertaken in an
attempt to achieve the Portfolio's investment objective. A higher turnover rate
(100% or more) increases transaction costs (i.e., brokerage commissions) and
adverse tax consequences for Portfolio shareholders. With frequent trading
activity, a greater proportion of any dividends that you receive from the
Portfolio will be characterized as ordinary income, which is taxed at higher
rates than long-term capital gains. It is expected that under normal market
conditions, the annual turnover rate for the Portfolio will not exceed 100%.
TEMPORARY INVESTMENTS. For temporary defensive purposes, when the advisor
determines that market conditions so warrant, the Portfolio may invest up to
100% of its assets in cash, cash items, and money market instruments. To the
extent that the Portfolio is invested in temporary defensive investments, it may
not be pursuing its primary investment objective.
RISK FACTORS. The Portfolio is managed with a view to total return with a
minimum ten-year investment horizon. The Portfolio's net asset value will
fluctuate to reflect the investment performance of the securities held by the
Portfolio, so that the value that a shareholder receives upon redemption may be
greater or lesser than the value of such shares when purchased. Investments in
common stocks in general are subject to market risks that may cause their prices
to fluctuate over time. In addition, investment in the securities of companies
with medium sized market capitalizations presents risks. Mid-cap companies may
be more volatile then larger companies, so there may be greater risk of
depreciation of the securities of mid-cap companies than securities of companies
with larger market capitalizations.
Value investing involves substantial risk because investments are made in
securities that are sold at a discount to their intrinsic value. These
securities are considered to be out-of-favor by the investment community because
of their indeterminate growth potential. There is a risk that these securities
may decline in value.
-6-
<PAGE>
MANAGEMENT OF THE PORTFOLIO
INVESTMENT ADVISER
Jordan American Holdings, Inc., d/b/a Equity Assets Management is the
Portfolio's investment adviser. Subject to the authority of the Board of
Trustees, the adviser is responsible for the overall management of the
Portfolio. The adviser continually conducts investment research and supervision
for the Portfolio and determines the allocation between the invested and the
cash positions of the Portfolio.
The adviser is a professional investment manager and a registered
investment adviser, which was founded in 1972 under the name Equity Assets
Management, Inc. Jordan American Holdings, Inc. d/b/a Equity Assets Management,
is a publicly held company which trades under the symbol "JAHI". The adviser's
principal place of business is located at 2155 Resort Drive, Suite 108,
Steamboat Springs, Colorado 80487. In addition to advising the Portfolio, the
adviser provides investment advisory services to individuals, corporations,
foundations, limited partnerships, and individual retirement, corporate, and
group pension and profit-sharing plans. The adviser currently has discretionary
management authority with respect to approximately $75 million in assets.
SUB-INVESTMENT ADVISER
Schneider Capital Management, 460 East Swedesford Road, Suite 1080, Wayne,
PA 19087, is the Portfolios sub-investment adviser. Schneider Capital is a
registered investment adviser founded in 1996. Schneider Capital provides
discretionary investment management services primarily to institutional clients.
Arnold C. Schneider, III, founder, President and Chief Investment Officer of
Schneider Capital has over 17 years of investment management experience (see
"Portfolio Managers" below). Mr. Schneider directs day-to-day investment
activities for a number of Schneider Capital financial products, including SCM
Small Cap Value Fund, approximating $500 million in assets.
Subject to the authority of the Board of Trustees, the sub-adviser manages
the Portfolio's assets in accordance with the Portfolio's investment objectives
and policies described above. The sub-adviser provides the adviser and the
Portfolio with on-going research, analysis, advice, and judgments regarding the
Portfolio's investments. The sub-adviser also purchases and sells securities on
behalf of the Portfolio.
PORTFOLIO MANAGERS
The portfolio managers of the Portfolio are:
W. Neal Jordan, founder and Senior Portfolio Manager of Jordan
American Holdings, Inc. since the company's inception in 1972. Mr.
Jordan continues to serve as Senior Portfolio Manager of Jordan
American and also serves as Chief Investment Officer.
-7-
<PAGE>
Charles R. Clark, Senior Assistant Portfolio Manager of Jordan
American Holdings, Inc. since 1993. From October 1991 through the end
of 1993, he was a Technical Research Analyst for Jordan American
Holdings, Inc.
Arnold C. Schneider, III, CFA, founder, President and CIO of Schneider
Capital Management since its inception in 1996. Mr. Schneider is also
a portfolio manager with Schneider Capital. From 1982 through 1996,
Mr. Schneider was employed with Wellington Management Company
(1983-1991 as a securities analyst; 1991 to 1996 as Senior Vice
President and portfolio manager). Mr. Schneider was made a partner at
Wellington in 1991. Mr. Schneider managed the Compass Equity Income
Fund from 1993-1995 and the Mentor Income Growth Fund from 1993- 1996.
ADVISORY FEES
Under the Portfolio's investment advisory contract, the Portfolio pays an
annual investment advisory fee equal to 1.25% of the Portfolio's average daily
net assets. Pursuant to the investment advisory contract, the advisor may
voluntarily waive some or all of its fee. The advisory fee is calculated daily
and paid on a monthly basis. The sub-advisor's fee is 0.60% of the Portfolio's
average daily net assets, and is paid by the adviser out of its fees. For the
fiscal year ended September 30, 1999, the Portfolio paid an aggregate advisory
fee of 1.25% of the Portfolio's average net assets.
PRICING PORTFOLIO SHARES
The price of Portfolio shares is based on the Portfolio's net asset value.
The Portfolio's net asset value per share fluctuates. The net asset value for
shares of the Portfolio is determined by calculating the value of all securities
and other assets of the Portfolio, subtracting the liabilities of the Portfolio,
and dividing the remainder by the total number of shares outstanding. Expenses
and fees of the Portfolio, including the advisory, distribution and
administrative fees, are accrued daily and taken into account for the purpose of
determining the net asset value.
Portfolio securities listed or traded on a securities exchange for which
representative market quotations are available will be valued at the last quoted
sales price on the security's principal exchange on that day. Listed securities
not traded on an exchange that day, and other securities which are traded in the
over-the-counter market, will be valued at the mean between the last closing bid
and asked prices in the market on that day, if any. Securities for which market
quotations are not readily available and all other assets will be valued at
their respective fair market value as determined in good faith by, or under
procedures established by, the Board of Trustees. In determining fair value, the
Trustees may employ an independent pricing service.
-8-
<PAGE>
Money market securities with less than sixty days remaining to maturity
when acquired by the Portfolio will be valued on an amortized cost basis by the
Portfolio, excluding unrealized gains or losses thereon from the valuation. This
is accomplished by valuing the security at cost and then assuming a constant
amortization to maturity of any premium or discount. If the Portfolio acquires a
money market security with more than sixty days remaining to its maturity, it
will be valued at current market until the 60th day prior to maturity, and will
then be valued on an amortized cost basis based upon the value on such date
unless the Trustees determine during such 60-day period that this amortized cost
value does not represent fair market value.
The net asset value of shares of the Portfolio is determined as of the
close of trading (normally 4:00 p.m., Eastern time) on the New York Stock
Exchange (the "Exchange"), Monday through Friday, except on: (i) days on which
there are not sufficient changes in the value of the Portfolio's portfolio
securities that its net asset value might be materially affected; (ii) days
during which no shares are tendered for redemption and no orders to purchase
shares are received; or (iii) the following holidays when the Exchange is
closed: New Year's Day, Martin Luther King Jr. Day, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
HOW TO PURCHASE SHARES
GENERAL
Shares of the Portfolio are distributed through IMPACT Financial Network,
Inc. ("IFNI"), the Portfolio's distributor. Shares are sold on days on which the
Exchange is open. Wholesale Class and Institutional Class shares are sold
without a sales charge at the net asset value next determined after receipt of a
purchase order in proper form by the Portfolio's sub-transfer agent.
The minimum initial investment in Wholesale Class shares is $10,000 and the
minimum initial investment in Institutional Class shares is $250,000. Brokers
that have not entered into a selling dealer's agreement with IFNI may impose
their own charge on the purchase of shares. An institutional investor's minimum
investment will be calculated by combining all of the accounts it maintains with
the Portfolio. Accounts established through a non-affiliated bank or broker may,
therefore, be subject to a smaller minimum investment. Accounts established
through a qualified retirement plan and Individual Retirement Accounts ("IRAs")
are not subject to the minimum investment requirement. The Portfolio reserves
the right to vary the initial investment minimum and the minimum for subsequent
investments at any time.
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<PAGE>
Additional investments can be made in amounts of at least $1,000 for
Wholesale Class shares, and $25,000 for Institutional Class shares. No minimum
applies to subsequent purchases effected through reinvestment of dividends and
capital gains or for subsequent purchases through qualified retirement plans or
IRAs.
Purchases will be made in full and fractional shares of the Portfolio
calculated to three decimal places. The Portfolio will not issue certificates
representing shares of the Portfolio. Quarterly account statements will be sent
to each shareholder. In addition, detailed confirmations of each purchase or
redemption are sent to each shareholder. Annual confirmations are sent to each
shareholder to report dividends paid during that period. The Portfolio reserves
the right to reject any purchase request.
PURCHASING BY MAIL
To purchase shares by mail, complete and sign the attached Application and
mail it together with a check in the appropriate minimum initial investment
amount ($10,000 for Wholesale Class shares and $250,000 for Institutional Class
shares), or subsequent investment amount ($1,000 for Wholesale Class shares and
$25,000 for Institutional Class shares) made payable to IMPACT TOTAL RETURN
PORTFOLIO: SPECIFY WHOLESALE OR INSTITUTIONAL CLASS] to: IMPACT MANAGEMENT
PORTFOLIO c/o Fifth Third Bank, P.O. Box 632164, Cincinnati, OH 45263-2164.
Payment for purchases of shares received by mail will be credited to an
account at the next share price calculated for the Portfolio after receipt.
Payment does not have to be converted into Federal Funds (monies credited to the
Portfolio's custodian bank by a Federal Reserve Bank) before the Portfolio will
accept it for investment.
PURCHASING BY WIRE
To purchase shares by wire, contact Albert John & Company, Inc. ("AJCI"),
the Portfolio's sub-transfer agent, at 1-800-556-5856 to obtain a shareholder
account number and then wire the amount to be invested to IMPACT TOTAL RETURN
PORTFOLIO: SPECIFY WHOLESALE OR INSTITUTIONAL CLASS, c/o Fifth Third Bank, the
Portfolio's Custodian Bank, at the following address:
The Fifth Third Bank
ABA # 042000314
Impact Total Return Portfolio
Credit Account #728-62611
Account Name (your name)
Account Number (your personal account number)
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Forward a completed Application to the Portfolio at the address shown on
the form. Federal Funds purchases will be accepted only on a day on which both
the Exchange and the Portfolio's custodian bank are open for business.
HOW TO REDEEM SHARES
The Portfolio redeems shares at net asset value as determined at the close
of the day on which the Portfolio receives the redemption request. Redemption
requests must be received in proper form and can be made by written request.
WRITTEN REQUESTS
Shares may be redeemed by sending a written request to AJCI. Call toll-free
at 1-800-556-5856 for specific instructions before redeeming by letter. The
shareholder will be asked to provide in the request his or her name, the
Portfolio name, his or her account number, and the share or dollar amount
requested.
SIGNATURES
Shareholders requesting a redemption of $50,000 or more, a redemption of
any amount to be sent to an address other than that on record with AJCI, or a
redemption payable other than to the shareholder of record must have signatures
on written redemption requests guaranteed by:
o a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund ("BIF"), which is administered by the Federal
Deposit Insurance Corporation ("FDIC");
o a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
o a savings bank or savings and loan association whose deposits are
insured by the Savings Association Insurance Fund ("SAIF"), which is
administered by the FDIC; or
o any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Portfolio does not accept signatures guaranteed by a notary public.
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<PAGE>
TELEPHONE REDEMPTIONS
Shareholders who have so indicated on the Application, or have subsequently
arranged in writing to do so, may redeem shares by instructing AJCI by
telephone. To arrange for redemption by wire or telephone after an account has
been opened, or to change the bank or account designated to receive redemption
proceeds, a written request, accompanied by a signature guarantee, must be sent
to AJCI at the address on the back of this prospectus.
Neither the Portfolio nor any of its service contractors will be liable for
any loss or expense in acting upon any telephone instructions that are
reasonably believed to be genuine. In attempting to confirm that telephone
instructions are genuine, the Portfolio will use such procedures as are
considered reasonable, including requesting a shareholder to correctly state his
or her Portfolio account number, the name in which his or her bank account is
registered, his or her banking institution, bank account number and the name in
which his or her bank account is registered. To the extent that the Portfolio
fails to use reasonable procedures to verify the genuineness of telephone
instructions, it and/or its service contractors may be liable for any such
instructions that prove to be fraudulent or unauthorized.
The Portfolio reserves the right to refuse a wire or telephone redemption
if it is believed advisable to do so. Procedures for redeeming Portfolio shares
by wire or telephone may be modified or terminated at any time by the Portfolio.
The Portfolio and AJCI have adopted standards for accepting signature
guarantees from the above institutions. The Portfolio may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Portfolio and AJCI reserve the right to amend
these standards at any time without notice.
REDEMPTION IN KIND
The Trust has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940, under which the Trust is obligated to redeem Shares for any
one shareholder in cash only up to the lesser of $250,000 or 1% of the
respective class's net asset value during any 90-day period.
Any redemption beyond this amount will also be in cash unless Trustees
determine that payments should be in kind. In such a case, the Portfolio will
pay all or a portion of the remainder of the redemption in portfolio
instruments, valued in the same way as the Portfolio determines net asset value.
The portfolio instruments will be selected in a manner that Trustees deem fair
and equitable.
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<PAGE>
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving their securities and selling them before
their maturity could receive less than the redemption value of their securities
and could incur certain transaction costs.
To the extent that a fund qualifies for treatment as a regulated investment
company, it will not be subject to federal income tax on income and net capital
gains paid to shareholders in the form of dividends or capital gains
distributions. If a fund fails to qualify for such treatment, it is required to
pay such taxes.
RECEIVING PAYMENT
Normally, a check for the redemption proceeds is mailed within one business
day, but in no event more than seven calendar days after the receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the
Portfolio may redeem shares in any account and pay the proceeds to the
shareholder if the balance falls below the required minimum of $10,000 for
Wholesale Class accounts, or $250,000 for Institutional Class accounts, due to
shareholder redemptions. This procedure would not apply, however, if the balance
falls below $10,000 for Wholesale Class accounts, or $250,000 for Institutional
Class accounts, solely because of a decline in the Portfolio's net asset value.
DISTRIBUTION ARRANGEMENTS
GENERAL
The Portfolio offers four classes of shares: Retail Class, Traditional
Class, Wholesale Class and Institutional Class. The four classes represent
interests in the same portfolio of investments of the Portfolio, generally have
the same rights, and are identical in all respects, except for differing 12b-1
fees (none for Institutional Class), minimum investment requirements, and sales
charges (imposed on Traditional Class only). Each class has exclusive voting
rights with respect to its 12b-1 plan. This prospectus pertains only to
Wholesale Class and Institutional Class shares.
PLAN OF DISTRIBUTION
The Portfolio has adopted a plan of distribution ("Plan") pursuant to Rule
12b-1 for the Wholesale Class under the Investment Company Act of 1940, as
amended, whereby it may reimburse IFNI or others for expenses actually incurred
by IFNI or others in the promotion and distribution of the shares of the
Wholesale Class of the Portfolio. The Portfolio reimburses IFNI and others for
distribution expenses at an annual rate of up to 0.25%, payable on a monthly
basis, of the Portfolio's aggregate average daily net assets attributable to the
shares. Since 12b-1 fees are paid out of the Portfolio's assets on an on-going
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.
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<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Substantially all of the net investment income and capital gains of the
Portfolio is distributed at least annually.
Shareholders automatically receive all dividends and capital gain
distributions in additional shares at the net asset value determined on the next
business day after the record date, unless the shareholder has elected to take
such payment in cash. Shareholders may receive payments for cash distributions
in the form of a check.
Dividends and distributions of the Portfolio are paid on a per share basis.
The value of each share will be reduced by the amount of the payment. If shares
are purchased shortly before the record date for a dividend or distribution of
capital gains, a shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution.
TAX CONSEQUENCES
The Portfolio will distribute all of its net investment income (including,
for this purpose, net short-term capital gain) to shareholders. Dividends from
net investment income will be taxable to shareholders as ordinary income whether
received in cash or in additional shares. Distributions from net investment
income will qualify for the dividends-received deduction for corporate
shareholders only to the extent such distributions are derived from dividends
paid by domestic corporations. It can be expected that only certain dividends of
the Portfolio will qualify for that deduction. Any net capital gains will be
distributed annually and will be taxed to shareholders as long-term capital
gains, subject to certain limitations regardless of how long the shareholder has
held shares and regardless of whether the distributions are received in cash or
in additional shares. The Portfolio will make annual reports to shareholders of
the federal income tax status of all distributions, including the amount of
dividends eligible for the dividends-received deduction.
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<PAGE>
Certain securities purchased by the Portfolio may be sold with original
issue discount and thus would not make periodic cash interest payments. If the
Portfolio acquired such securities, it would be required to include as part of
its current net investment income the accrued discount on such obligations for
purposes of the distribution requirement even though the portfolio has not
received any interest payments on such obligations during that period. Because
the Portfolio distributes all of its net investment income to its shareholders,
the Portfolio may have to sell portfolio securities to distribute such accrued
income, which may occur at a time when the Advisor would not have chosen to sell
such securities and which may result in taxable gain or loss.
Income received on direct U.S. obligations is exempt from income tax at the
state level when received directly by the Portfolio and may be exempt, depending
on the state, when received by a shareholder as income dividends from the
Portfolio provided certain state-specific conditions are satisfied. Not all
states permit such income dividends to be as exempt and some require that a
certain minimum percentage of an investment company's income be derived from
state tax-exempt interest. The Portfolio will inform shareholders annually of
the percentage of income and distributions derived from direct U.S. obligations.
You should consult your tax advisor to determine whether any portion of the
income dividends received from the Portfolio is considered tax exempt in your
particular state.
Each sale or redemption of the Portfolio's shares is a taxable event to the
shareholder. Shareholders are urged to consult their own tax advisors regarding
the status of their accounts under state and local tax laws.
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<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
Impact Total Return Portfolio
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487
Investment Advisor
Jordan American Holdings, Inc.
d/b/a Equity Assets Management
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487
Sub-Investment Advisor
Schneider Capital Management
460 East Swedesford Road
Suite 1080
Wayne, PA 19087
Distributor
IMPACT Financial Network, Inc.
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487
Administrator, Transfer Agent and Dividend Disbursing Agent
IMPACT Administrative Services, Inc.
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487
Sub-Administrator, Sub-Transfer Agent and Sub-Dividend Disbursing Agent
Albert John & Company, Inc.
2933 Jack's Run Road
White Oak, PA 15131
Custodian
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, OH 45263
Legal Counsel
Pepper Hamilton LLP
3000 Two Logan Square
Philadelphia, PA 19103-7098
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<PAGE>
BACK COVER PAGE
This prospectus contains the information you should read and know before
you invest in shares of the Portfolio. Please read this prospectus carefully and
keep it for future reference. The Portfolio has filed a Statement of Additional
Information with the Securities and Exchange Commission. The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information, free of charge, or make inquiries about the Portfolio by
contacting Albert John & Company, Inc., the Portfolio's sub-administrator, by
calling toll-free 1-800-556-5856.
Additional information about the Portfolio's investments also is available
in the Portfolio's annual and semi-annual reports to shareholders. In the annual
and semi-annual reports, you will find a discussion of the market conditions and
investment strategies that significantly affected the Portfolio's performance
during its last fiscal year. The annual and semi-annual reports also may be
obtained free of charge by calling 1-800-556-5856.
Information about the Portfolio (including the Statement of Additional
Information) can be reviewed and copied at the SEC's Public Reference Room in
Washington, D.C. The Public Reference Room's hours of operation may be obtained
by calling 1-800-SEC-0330. Reports and other information about the Portfolio are
available on the SEC's Internet site at http://www.sec.gov. Copies of this
information may be obtained, upon payment of a duplicating fee, by writing the
Public Reference Section of the SEC, Washington, D.C. 20549-6009.
SEC File No. 811-8065
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<PAGE>
IMPACT MANAGEMENT INVESTMENT TRUST
IMPACT TOTAL RETURN PORTFOLIO
Retail Class Shares
Traditional Class Shares
Wholesale Class Shares
Institutional Class Shares
STATEMENT OF ADDITIONAL INFORMATION
January 28, 2000
Impact Total Return Portfolio (the "Portfolio") is a diversified portfolio
of Impact Management Investment Trust ("IMIT"). This Statement of Additional
Information is not a prospectus, but supplements and should be read in
conjunction with the prospectus for Impact Total Return Portfolio dated January
28, 2000. To receive a copy of the prospectus, call toll-free, at
1-800-556-5856. Retain this Statement of Additional Information for future
reference.
The Portfolio's most recent annual report to shareholders is a separate
document that is incorporated by reference into this Statement of Additional
Information. The Portfolio's annual and semi-annual reports to shareholders are
available without charge by calling 1-800-556-5856.
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
INFORMATION ABOUT THE TRUST.................................................
INVESTMENT STRATEGIES, POLICIES AND RISKS...................................
Restricted and Illiquid Securities.................................
Temporary Investments..............................................
Money Market Instruments...........................................
U.S. Government Obligations........................................
When-issued and Delayed Delivery Transactions......................
Repurchase Agreements..............................................
Securities of Other Investment Companies...........................
Portfolio Turnover.................................................
INVESTMENT LIMITATIONS......................................................
Concentration Of Investments.......................................
Investing In Real Estate...........................................
Buying On Margin...................................................
Selling Short......................................................
Issuing Senior Securities And Borrowing Money......................
Lending Cash Or Securities.........................................
Underwriting.......................................................
Investing In Minerals..............................................
Commodities or Commodity Contracts.................................
Diversification Of Investments.....................................
Investing In Issuers Whose Securities Are Owned By
Officers And Trustees Of The Trust.................................
Pledging Assets....................................................
Acquiring Securities...............................................
MANAGEMENT OF THE PORTFOLIO.................................................
TRUST OWNERSHIP.............................................................
INVESTMENT ADVISORY SERVICES................................................
DISTRIBUTION OF SHARES......................................................
Distribution of Traditional Class Shares....................................
Distribution Plan..................................................
ADMINISTRATIVE SERVICES, TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT...................................................
Custodian..........................................................
Independent Auditors...............................................
BROKERAGE TRANSACTIONS......................................................
SHARES OF BENEFICIAL INTEREST...............................................
General Information................................................
Voting Rights......................................................
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Page
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Massachusetts Partnership Law......................................
PURCHASING SHARES...........................................................
REDEEMING SHARES............................................................
TAX STATUS..................................................................
PERFORMANCE INFORMATION.....................................................
Performance Comparisons............................................
FINANCIAL STATEMENTS........................................................
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<PAGE>
INFORMATION ABOUT THE TRUST
Impact Total Return Portfolio (the "Portfolio") is a diversified portfolio
of Impact Management Investment Trust ("IMIT"). IMIT was established as a
Massachusetts business trust under a Declaration of Trust dated December 18,
1996. IMIT is an open-end management investment company. As of the date of this
Statement of Additional Information, IMIT consists of only one portfolio, the
Impact Total Return Portfolio, and offers four classes of shares.
INVESTMENT STRATEGIES, POLICIES AND RISKS
CONVERTIBLE SECURITIES. The Portfolio may invest in convertible securities.
Convertible securities are usually preferred stock, bond issues or warrants that
may be converted or exchanged by the holder into shares of the underlying common
stock at a stated exchange ratio. A convertible security may also be subject to
redemption by the issuer but only after a particular date and under certain
circumstances (including a specified-price) established upon issue. If a
convertible security held by the Portfolio is called for redemption, the
Portfolio could be required to tender it for redemption, convert it to the
underlying common stock, or sell it to a third party.
FIXED-INCOME SECURITIES. The Portfolio may invest in fixed-income
securities such as corporate bonds, debentures and notes if market conditions
are such that the advisor believes that they present an opportunity for
above-average performance over common stocks. Even though interest-bearing
securities are investments which promise a stable stream of income, the prices
of such securities are affected by changes in interest rates. In general, bond
prices rise when interest rates fall and fall when interest rates rise. The
values of fixed-income securities also may be affected by changes in the credit
rating or financial condition of the issuing entities. Once the rating of a
portfolio security has been changed, the Portfolio will consider all
circumstances deemed relevant in determining whether to continue to hold the
security.
CREDIT QUALITY. When investing in fixed income securities, the Portfolio
will invest in those securities which are rated at the time of purchase within
the four highest grades assigned by Moody's Investors Service, Inc.
("Moody's")(Aaa, Aa, A, or Baa) or Standard & Poor's ("S&P")(AAA, AA, A, or
BBB). Securities that are rated Baa by Moody's or BBB by S&P, or, if unrated,
are of comparable quality, may have speculative characteristics, and changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than is the case with higher
rated debt securities.
RESTRICTED AND ILLIQUID SECURITIES. The Portfolio expects that any
restricted securities acquired would be either from institutional investors who
originally acquired the securities in private placements or directly from the
issuers of the securities in private placements. Restricted securities and other
securities that are not readily marketable may sell at a discount from the price
they would bring if freely marketable. The Portfolio will not invest more than
15% of the value of its net assets in illiquid securities, including repurchase
agreements providing for settlement in more than seven days after notice, and
certain restricted securities not determined by Trustees to be liquid.
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<PAGE>
TEMPORARY INVESTMENTS. The Portfolio may invest in the following temporary
investments for defensive purposes:
Money Market Instruments
- ------------------------
The Portfolio may invest in the following money market instruments:
o instruments of domestic and foreign banks and savings and loans if
they have capital, surplus, and undivided profits of over
$100,000,000, or if the principal amount of the instrument is insured
in full by the Bank Insurance Fund, which is administered by the
Federal Deposit Insurance Corporation ("FDIC"), or the Savings
Association Insurance Fund, which is administered by the FDIC; and
o prime commercial paper (rated A-1 by Standard and Poor's Ratings
Group, Prime-1 by Moody's Investors Service, Inc., or F-1 by Fitch
Investors Service, Inc.).
U.S. Government Obligations
- ---------------------------
The types of U.S. government obligations in which the Portfolio may invest
generally include direct obligations of the U.S. Treasury (such as U.S. Treasury
bills, notes, and bonds) and obligations issued or guaranteed by U.S. government
agencies or instrumentalities. These securities are backed by:
o the full faith and credit of the U.S. Treasury;
o the issuer's right to borrow from the U.S. Treasury;
o the discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or
o the credit of the agency or instrumentality issuing the obligations.
Examples of agencies and instrumentalities which may not always receive
financial support from the U.S. government are:
o Federal Farm Credit Banks;
o Federal Home Loan Banks;
o Federal National Mortgage Association;
o Student Loan Marketing Association; and
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<PAGE>
o Federal Home Loan Mortgage Corporation.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Portfolio may purchase
and sell securities on a "when issued" or "delayed delivery" basis.
"When-issued" refers to securities whose terms and indenture are available, and
for which a market exists, but which are not available for immediate delivery.
When-issued transactions may be expected to occur a month or more before
delivery is due. Delayed delivery is a term used to describe settlement of a
securities transaction in the secondary market which will occur sometime in the
future. No payment or delivery is made by the Portfolio until it receives
payment or delivery from the other party to any of the above transactions. It is
possible that the market price of the securities at the time of delivery may be
higher or lower than the purchase price. The Portfolio will maintain a separate
account of cash or liquid securities at least equal to the value of purchase
commitments until payment is made. Typically, no income accrues on securities
purchased on a delayed delivery basis prior to the time delivery is made
although the Portfolio may earn income on securities it has deposited in a
segregated account.
The Portfolio may engage in these types of purchases in order to buy
securities that fit with its investment objectives at attractive prices - not to
increase its investment leverage. The Portfolio does not intend to engage in
when-issued and delayed delivery transactions to an extent that would cause the
segregation of more than 20% of the total value of its assets.
REPURCHASE AGREEMENTS. The Portfolio may invest in repurchase agreements
collateralized by U.S. Government securities, certificates of deposit, and
certain bankers' acceptances and other securities outlined above under
"Temporary Investments." In a repurchase agreement, the Portfolio buys a
security and simultaneously commits to sell that security back at an agreed upon
price plus an agreed upon market rate of interest. Under a repurchase agreement,
the seller is required to maintain the value of securities subject to the
agreement at not less than 100% of the repurchase price. The value of the
securities purchased will be evaluated daily, and the advisor will, if
necessary, require the seller to maintain additional securities to ensure that
the value is in compliance with the previous sentence. The use of repurchase
agreements involves certain risks. For example, a default by the seller of the
agreement may cause the Portfolio to experience a loss or delay in the
liquidation of the collateral securing the repurchase agreement. The Portfolio
might also incur disposition costs in liquidating the collateral. While the
Portfolio's management acknowledges these risks, it is expected that they can be
controlled through stringent security selection criteria and careful monitoring
procedures. The Portfolio will only enter into repurchase agreements with banks
and other recognized financial institutions, such as broker/dealers, which are
found by the Portfolio's investment advisor to be creditworthy pursuant to
guidelines established by the Board of Trustees (the "Trustees").
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<PAGE>
SECURITIES OF OTHER INVESTMENT COMPANIES. The Portfolio may invest up to
10% of its assets in securities of other investment companies. Since all
investment companies incur certain operating expenses, such as management fees
and accounting fees, similar to the expenses of the Portfolio, any investment by
the Portfolio in shares of another investment company would involve duplication
of such expenses.
PORTFOLIO TURNOVER. Although the Portfolio does not intend to invest for
the purpose of seeking short-term profits, securities in its portfolio will be
sold whenever the advisor and/or sub-advisor believe it is appropriate to do so
in light of the Portfolio's investment objective, without regard to the length
of time a particular security may have been held. The Portfolio will not attempt
to set or meet a portfolio turnover rate since any turnover would be incidental
to transactions undertaken in an attempt to achieve the Portfolio's investment
objective. Portfolio turnover for the fiscal years ended September 30, 1999, and
September 30, 1998 was 255% and 221%, respectively. The portfolio turnover
during fiscal year 1999 included a 100% portfolio turnover related to a change
in the Portfolio's investment strategy during that year. The portfolio turnover
during fiscal year 1998 was greater than anticipated by the Portfolio due to the
short-term investment decisions that resulted during the turbulent period in the
market from July 1998 through September 1998.
INVESTMENT LIMITATIONS
The investment objectives of the Portfolio and certain investment
limitations set forth herein are fundamental policies of the Portfolio. The
Portfolio's fundamental limitations cannot be changed without the consent of the
holders of a majority of the Portfolio's outstanding shares.
The following limitations are fundamental policies of the Portfolio.
CONCENTRATION OF INVESTMENTS
- ----------------------------
The Portfolio will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets at the time of purchase
would be invested in any one industry. However, the Portfolio may at times
invest 25% or more of the value of its total net assets in cash or cash items
(not including certificates of deposit), securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities, or repurchase agreements
secured by such instruments.
INVESTING IN REAL ESTATE
- ------------------------
The Portfolio will not purchase or sell real estate, although it may invest
in the securities of companies whose business involves the purchase or sale of
real estate, or in securities which are secured by real estate or interests in
real estate.
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<PAGE>
BUYING ON MARGIN
- ----------------
The Portfolio will not purchase any securities on margin but may obtain
such short-term credits as may be necessary for the clearance of transactions.
SELLING SHORT
- -------------
The Portfolio will not sell securities short.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
- ---------------------------------------------
The Portfolio will not issue senior securities, except as permitted by its
investment objective and policies, and except that the Portfolio may borrow
money only in amounts up to one-third of the value of its net assets, including
the amounts borrowed. Any such borrowings shall be from banks. The Portfolio
will borrow money only as a temporary, extraordinary, or emergency measure, to
facilitate management of the portfolio by enabling the Portfolio to meet
redemption requests where the liquidation of portfolio securities is deemed to
be inconvenient or disadvantageous. The Portfolio will not purchase any
securities while any such borrowings are outstanding.
LENDING CASH OR SECURITIES
- --------------------------
The Portfolio may not lend any of its assets except portfolio securities;
however, it is not anticipated that the Portfolio will lend its portfolio
securities.
UNDERWRITING
- ------------
The Portfolio will not underwrite any issue of securities, except as it may
be deemed to be an underwriter under the Securities Act of 1933 in connection
with the sale of securities in accordance with its investment objective,
policies, and limitations.
INVESTING IN MINERALS
- ---------------------
The Portfolio will not purchase interests in oil, gas, or other mineral
exploration or development programs, although it may purchase the securities of
issuers which invest in or sponsor such programs.
COMMODITIES OR COMMODITY CONTRACTS
- ----------------------------------
The Portfolio will not purchase or sell any commodities, or commodities
contracts, including futures.
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<PAGE>
DIVERSIFICATION OF INVESTMENTS
- ------------------------------
With respect to 75% of its assets, the Portfolio will not purchase the
securities of any issuer (other than securities of the U.S. government, its
agencies, or instrumentalities, or instruments secured by securities of such
issuers, such as repurchase agreements) if, as a result, more than 5% of the
value of its total assets would be invested in the securities of such issuer,
nor will the Portfolio acquire more than 10% of any class of voting securities
of any issuer. For these purposes, the Portfolio takes all common stock and all
preferred stock of an issuer each as a single class, regardless of priorities,
series, designations, or other differences.
The following limitations are nonfundamental policies, which means that
they may be changed by the Trustees without shareholder approval. Shareholders
will be notified before any material changes in these limitations become
effective.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES OF IMIT
- --------------------------------------------------------------------------------
The Portfolio will not purchase or retain the securities of any issuer if
the officers and Trustees of IMIT, or the advisor, own individually more than
1/2 of 1% of the issuer's securities, or together own more than 5% of the
issuer's securities.
PLEDGING ASSETS
- ---------------
The Portfolio will not mortgage, pledge, or hypothecate any assets, except
to secure permitted borrowings. In those cases, it may pledge assets having a
market value not exceeding the lesser of the dollar amounts borrowed or 10% of
the value of total net assets at the time of the borrowing.
ACQUIRING SECURITIES TO EXERCISE CONTROL
- ----------------------------------------
The Portfolio will not purchase securities of a company for the purpose of
exercising control or management. However, the Portfolio may hold up to 10% of
the voting securities of any one issuer and may exercise its voting powers
consistent with the best interests of the Portfolio. In addition, the Portfolio,
other companies advised by the advisor, and other affiliated companies may
together buy and hold substantial amounts of voting stock of a company and may
vote together in regard to such company's affairs. In some such cases, the
Portfolio and its affiliates might collectively be considered to be in control
of such company. In some cases, Trustees and other persons associated with IMIT
and its affiliates might possibly become directors of companies in which IMIT
holds stock.
For purposes of its policies and limitations, the Portfolio considers
certificates of deposit and demand and time deposits issued by a U.S. branch of
a domestic bank or savings and loan having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash items."
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Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in percentage
resulting from any change in value or net assets will not result in a violation
of such restriction. The Portfolio has no present intent to borrow money in
excess of 5% of the value of its total assets.
MANAGEMENT OF THE PORTFOLIO
IMIT and the Portfolio are managed by a Board of Trustees. The Trustees
appoint officers to the Portfolio, and oversee the management and operations of
the Portfolio. Officers and Trustees are listed with their addresses, birth
dates, present positions with IMIT, and principal occupations.
Name: Charles R. Clark*
Birthdate: November 16, 1959
Address: 2155 Resort Drive, Suite 108
Steamboat Springs, Colorado 80487
Position with
Portfolio Chairman of the Board of Trustees
Occupation: Chief Market Analyst and Senior Assistant Portfolio Manager of
Jordan American Holdings, Inc. d/b/a Equity Assets Management
since 1993. Vice-President of IMPACT Financial Network, Inc.
since 1993.
Name: A.J. Elko*
Birthdate: September 4, 1963
Address: 2933 Jack's Run Road
White Oak, Pennsylvania 15131
Position with
Portfolio: President, Treasurer and Secretary
Occupation: Chief Operating Officer and Chief Financial Officer of Jordan
American Holdings, Inc. since 1999. Vice President of IMPACT
Financial Network, Inc. and Impact Administrative Services,
Inc. since 1999. President and founder of Albert John &
Company, Inc. since 1998. Chief Operating Manager and founder
of A.J. Elko & Associates, LLC, (a tax planning and tax
preparation services company) since 1995. President and
co-founder of Tummino Construction, Inc. (a general
contractor) since 1996.
Name: Oleen Eagle
Birthdate: September 28, 1930
Address: 3215 Chestnut Street
Murrysville, PA 15668
Position with
Portfolio: Trustee
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Occupation: President of Cornerstone TeleVision since 1987, Vice President
and General Manager of Cornerstone TeleVision, 1976-1987,
President and Director of Group C (a for profit subsidiary of
Cornerstone TeleVision) since 1991, Vice President and
Director of Christian Advance International (a nonprofit
Christian missionary organization) since 1985.
Name: Gerald L. Bowyer
Birthdate: August 31, 1962
Address: 820 Pine Hollow Road
McKees Rocks, PA 15136
Position with
Portfolio: Trustee
Occupation: President, Allegheny Institute (a non-partisan research and
educational institute) since 1994; host of "Focus on the
Issues," a syndicated public affairs television program
originating on WPCB, Cornerstone TeleVision.
Name: Steven J. Fellin*
Birth date: April 1, 1965
Address: 460 E. Swedesford Rd, Suite 1080
Wayne, PA 19087
Position with
Portfolio: Trustee
Occupation: Vice President and Chief Financial Officer of Schneider
Capital Management since 1998. Assistant Vice President of
Schneider Capital Management since 1997. From July 1995
through October of 1997, he was a Senior Manager of Fund
Accounting and Administration at SEI Investments.
* An "interested person" of IMIT, as defined in the Investment Company Act of
1940, as amended.
Trustees who are not interested persons of IMIT or the advisor receive
compensation of $500 per meeting attended.
TRUST OWNERSHIP
As of January 15, 2000, officers and Trustees of IMIT owned individually
and together less than 1% of IMIT's outstanding Shares.
As of January 15, 2000, the following person owned beneficially more than
5% of the outstanding voting shares of the Portfolio:
Dr. William Bunting, 209 Maclean Avenue, Cheswick PA 15024 (6.7%)
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INVESTMENT ADVISORY SERVICES
The Portfolio's advisor, Jordan American Holdings, Inc. ("JAHI") is a
publicly held company which trades under the symbol "JAHI". W. Neal Jordan is
considered to be a control person of JAHI because he owns more than 25% of
JAHI's voting stock. Mr. Jordan is the founder, Senior Portfolio Manager and
Chief Investment Officer of JAHI. The Portfolio's principal distributor, IMPACT
Financial Network, Inc., is a wholly owned subsidiary of JAHI.
Schneider Capital Management, the Portfolio's sub-adviser, is a
Pennsylvania corporation and is employee owned. Arnold C. Schneider III is
considered to be a control person of Schneider Capital because he owns more than
25% of Schneider Capital's voting stock.
During the period June 17, 1997 to September 30, 1997, IMIT paid the
adviser $503 for advisory services on behalf of the Portfolio. During the fiscal
years ended September 30, 1998 and September 30, 1999, IMIT paid the adviser
$54,723 and $93,115, respectively for advisory services on behalf of the
Portfolio. The sub-adviser began providing advisory services to the Portfolio on
May 1, 1999, and for the period ended September 30, 1999 was paid $29,662 for
subadvisory services.
Each class of shares of the Portfolio pays its respective pro rata portion
of the advisory fees payable by the Portfolio.
DISTRIBUTION OF SHARES
IMPACT Financial Network, Inc. ("IFNI") is the principal distributor of
shares of IMIT. IFNI is located at 1875 Ski Time Square Drive, Suite One,
Steamboat Springs, CO 80487. IFNI is a Florida corporation, and is a
wholly-owned subsidiary of Jordan American Holdings, Inc., the Portfolio's
adviser. IFNI does not receive any fee or other compensation except as described
under "Distribution Plan" below, and "Brokerage Transactions" herein.
DISTRIBUTION OF TRADITIONAL CLASS SHARES
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Traditional Class shares of the Portfolio are sold with a front-end sales
charge. This sales charge is discussed in the Portfolio's prospectus pertaining
to Retail Class and Traditional Class shares.
The amount of sales charge reallowed to dealers, as a percentage of the
offering price of Traditional Class shares, is as follows:
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Amount of Purchase Amount Paid to Dealers
- ------------------ ----------------------
Under $50,000 5.00%
$50,000, but less than $100,000 3.75%
$100,000, but less than $250,000 2.75%
$250,000, but less than $500,000 2.00%
$500,000, but less than $1,000,000 1.60%
A commission will be paid to authorized dealers who initiate and are
responsible for purchases of $1 million or more of Traditional Class shares
during the first 12 months of operation of the Traditional Class.
IFNI will pay the dealer concession to those selected dealers who have
entered into an agreement with IFNI. The dealer's concession may be changed from
time to time. Further, IFNI may from time to time offer incentive compensation
to dealers who sell Portfolio shares subject to sales charges, allowing such
dealers to retain an additional portion of the sales charge. On some occasions,
such cash or incentives will be conditioned upon the sale of a specified minimum
dollar amount of the Portfolio shares during a specified period of time. A
dealer who receives all or substantially all of the sales charge may be
considered an "underwriter" under federal securities laws. All such sales
charges are paid to the securities dealer involved in the trade, if any. No
sales charge will be assessed on the reinvestment of dividends or distributions.
DISTRIBUTION PLANS
- ------------------
The Portfolio has adopted Rule 12b-1 Plans (the "Plans"), for the Retail,
Traditional and Wholesale Classes of its shares. The Plans provide that IFNI, as
distributor, is entitled to a reimbursement each month for the actual expenses
incurred in the distribution and promotion of the Portfolio's shares, including
but not limited to, printing of prospectuses and reports used for sales
purposes, preparation and printing of sales literature and related expenses,
advertisements, and other distribution-related expenses as well as any
distribution or service fees paid to securities dealers or others who have
executed a dealer agreement with IFNI. Any expense of distribution in excess of
the 12b-1 fees under the Plans will be borne by the advisor without any
reimbursement or payment by the Portfolio.
The Plans also provides that to the extent that the Portfolio, the advisor,
IFNI or other parties on behalf of the Portfolio, the advisor or IFNI makes
payments that are deemed to be payments for the financing of any activity
primarily intended to result in the sale of shares issued by the Portfolio
within the context of Rule 12b-1, such payments shall be deemed to be made
pursuant to the applicable Plan. In no event shall the payments made under the
Plans, plus any other payments deemed to be made pursuant to the Plan, exceed
the amount permitted to be paid pursuant to the Conduct Rules of the National
Association of Securities Dealers, Inc., Article III, Section 26(d)(4).
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Other expenses of distribution and marketing in excess of the maximum
amounts permitted by the Plans per annum will be borne by IFNI, and any amounts
paid for the above services will be paid pursuant to a servicing or other
agreement.
The Plans were approved by the Board, including a majority of the Trustees
who are not "interested persons" of IMIT as defined in the 1940 Act (and each of
whom has no direct or indirect financial interest in the Plans or any agreement
related thereto, referred to herein as the ("12b-1 Trustees"). The Board
determined that a Plan may be of benefit to the relevant class of the Portfolio,
to the shareholders of such class, and to the Trust by helping the Portfolio and
its classes facilitate sales of shares to increase the assets in the Portfolio,
and, therefore, to achieve economies of scale. The Plans may be terminated at
any time by the vote of the Board or the 12b-1 Trustees, or by the vote of a
majority of the outstanding applicable class of shares of the Portfolio.
IFNI, the Portfolio's distributor, and JAHI, adviser to the Portfolio and
parent company of IFNI, each have a financial interest in the operation of the
Plans. Charles R. Clark, Trustee and Portfolio Manger to the Portfolio, CEO of
JAHI, and Vice President of IFNI, has a direct financial interest in the
operation of the Plans.
During the fiscal year ended September 30, 1999 the Portfolio paid IFNI
$74,429 in 12b-1 fees on behalf of Retail Class shares. The manner in which
12b-1 fees accrued during the same period is as follows:
1999
----
Advertising $ -0-
Fund Serve Software 17,856
Printing, Supplies, & Office
Expenses - Sales 7,504
Office Space - Sales 5,175
Equipment 4,249
Marketing Consultant 56,300
Sales Personnel Compensation 50,282
--------
Total $141,366
========
Unreimbursed expenses, which will carry forward, totalled $79,496, or 1.3%
of the portfolio's net assets on September 30, 1999. This amount includes a
balance carried forward from the previous fiscal year in the amount of $12,559.
ADMINISTRATIVE SERVICES, TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
IMPACT Administrative Services, Inc., ("IASI"), 2155 Resort Drive, Suite
108, Steamboat Springs, CO 80487, is responsible for performing and overseeing
administrative, transfer agent, dividend disbursing and fund accounting services
on behalf of the Portfolio. IASI is a wholly-owned subsidiary of Jordan American
Holdings, Inc., the advisor. The fee paid to IASI for services is 0.35% of the
Portfolio's average net assets. IASI has subcontracted most of these services to
Albert John & Company, Inc. ("AJCI"), 2933 Jack's Run Road, White Oak, PA 15131.
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AJCI provides all administrative services to the Portfolio other then those
relating to the investment portfolio of the Portfolio. AJCI also provides the
Portfolio's transfer agency services and provides fund accounting services to
the Portfolio. IASI pays AJCI for its services from the fee it receives from the
Portfolio. Under its contract with IASI, AJCI also is reimbursed for all
out-of-pocket costs related to its subadministrative and subtransfer agent
services to the Portfolio. A.J. Elko, sole owner and President of AJCI, is also
Chief Operating Officer and Chief Financial Officer of JAHI, the Portfolio's
investment adviser.
From the commencement of Portfolio operations until May 1, 1999,
shareholders were directly charged $165 per account per year for Portfolio
administrative services. Total fees charged to shareholder accounts for the
period June 17, 1997 (commencement of operations) to September 30, 1997 amounted
to $114. This entire amount was paid to IMPACT Management Services, Inc.
("IMSI"), the Portfolio's former administrator. Total fees charged to
shareholder accounts for the fiscal years ended September 30, 1999 and September
30, 1998 amounted to $16,505 and $16,498 respectively. From these amounts,
$14,391 and $8,068 respectively was paid to IASI, $0 and $7,130 was paid to
IMSI, and $2,114 and $1,300 was paid to AJCI. The amounts paid to IASI and IMSI
were in turn paid to AJCI as reimbursement for out-of-pocket costs.
In addition to the above, shareholders pay the transfer agent a fee in the
amount of $2.00 per closed account. Closed accounts will remain in the
shareholder files until all Forms 1099 and 5498 have been sent to shareholders
and reported (via magnetic media) to the Internal Revenue Service.
CUSTODIAN
- ---------
The custodian for the securities and cash of IMIT and the Portfolio is
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, OH 45263. The
custodian's fee is paid by IASI from its administrative services fee.
INDEPENDENT AUDITORS
From the Portfolio's inception until January 15, 1999, Arthur F. Bell, Jr.
& Associates, L.L.C. served as auditors for the Portfolio. Effective April 29,
1999, Spicer, Jeffries & Co. serves as the independent auditor for the
Portfolio. The auditor's fees are paid by IASI from the administrative services
fee.
BROKERAGE TRANSACTIONS
The advisor, when effecting the purchases and sales of portfolio securities
for the account of the Portfolio, will seek execution of trades either (i) at
the most favorable and competitive rate of commission charged by any broker,
dealer or member of an exchange, or (ii) at a higher rate of commission charges
if reasonable in relation to brokerage and research services provided to the
Portfolio or the advisor by such member, broker, or dealer. Such services may
include, but are not limited to, any one or more of the following: information
on the availability of securities for
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purchase or sale, statistical or factual information, or opinions pertaining to
investments. The advisor may use research and services provided to it by brokers
and dealers in servicing all its clients; however, not all such services will be
used by the advisor in connection with the Portfolio. Brokerage may also be
allocated to dealers in consideration of the Portfolio's share distribution but
only when execution and price are comparable to that offered by other brokers.
Some securities considered for investment by the Portfolio may also be
appropriate for other clients served by the advisor. If purchases or sales of
securities consistent with the investment policies of the Portfolio and one or
more of these other clients served by the advisor is considered at or about the
same time, transactions in such securities will be allocated among the Portfolio
and clients in a manner deemed fair and reasonable by the advisor. Although
there is no specified formula for allocating such transactions, the various
allocation methods used by the advisor, and the results of such allocations, are
subject to periodic review by the Portfolio's Board of Trustees.
For the period June 17, 1997 (commencement of operations) to September 30,
1997, the aggregate amount of commissions paid by the Portfolio to IFNI was
$1,875, representing 100% of total commissions paid by the Portfolio during that
period. For the fiscal year ended September 30, 1998, the aggregate amount of
commissions paid by the Portfolio to IFNI was $41,000, also representing 100% of
commissions paid by the Portfolio during that period. For the fiscal year ended
September 30, 1999, the aggregate amount of commissions paid by the Portfolio
was $77,783, of which $27,081 was paid to IFNI, representing 35% of total
commissions paid by the portfolio during that period. Also for the fiscal year
ended September 30, 1999, $10,140 of broker commissions related to portfolio
transactions valued at $19,777,006 were paid to brokers providing research
services to the Sub-Advisor.
SHARES OF BENEFICIAL INTEREST
GENERAL INFORMATION
IMIT is a Massachusetts business trust. IMIT's Declaration of Trust
authorizes the Board of Trustees to issue an unlimited number of shares, which
are shares of beneficial interest, without par value. The Trust presently has
one series of shares, with four classes, designated as the Retail Class,
Traditional Class, Wholesale Class and Institutional Class, which represent
interests in the Portfolio. The Declaration of Trust authorizes the Board of
Trustees to divide or redivide any unissued shares of the Trust into one or more
additional series by setting or changing in any one or more respects their
respective preferences, conversion or other rights, voting power, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption.
Shares have no subscription or preemptive rights and only such conversion
or exchange rights as the Board of Trustees may grant in its discretion. When
issued for payment as described in the Prospectus and this Statement of
Additional Information, the Portfolio's shares will be fully paid and
non-assessable. In the event of a liquidation or dissolution of the Trust,
shareholders of the Portfolio are entitled to receive the assets available for
distribution belonging to the Portfolio. As used in the Prospectus and in this
Statement of Additional Information, "assets belonging to the Portfolio" means
the consideration received by the Portfolio upon the issuance or sale of shares
in the Portfolio together with all income, earnings, profits, and proceeds
derived from the investment thereof, including any proceeds from the sale,
exchange or liquidation of such investments, and any funds or amounts derived
from any reinvestment of such proceeds.
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VOTING RIGHTS
Each share of the Portfolio gives the shareholder one vote in Trustee
elections and all other matters submitted to shareholders for a vote. All shares
in IMIT have equal voting rights. If and when IMIT creates other portfolios,
shares in any such portfolios will also be able to vote in elections of Trustees
and in certain trust matters. Only holders of shares of a particular Class will
be able to vote on matters relating solely to that Class.
As a Massachusetts business trust, IMIT is not required to hold annual
shareholder meetings, and does not intend to hold annual meetings.
Trustees may be removed by the Board of Trustees or by shareholders at a
special meeting. A special meeting of shareholders may be called by the Board of
Trustees at any time and will be called by Trustees upon the written request of
shareholders owning at least 10% of IMIT's outstanding shares of all series
entitled to vote.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Trust shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each series affected by the matter. For purposes of determining whether the
approval of a majority of the outstanding shares of a series will be required in
connection with a matter, a series will be deemed to be affected by a matter
unless it is clear that the interests of each series in the matter are
identical, or that the matter does not affect any interest of the series. Under
Rule 18f-2, the approval of any amendment to the investment advisory agreement
or any change in investment policy submitted to shareholders would be
effectively acted upon with respect to a series only if approved by a majority
of the outstanding shares of such series. However, Rule 18f-2 also provides that
the ratification of independent public accountants, the approval of principal
underwriting contracts, and the election of Trustees may be effectively acted
upon by shareholders of the Trust voting without regard to series.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of IMIT. To protect its
shareholders, IMIT has filed legal documents with Massachusetts that expressly
disclaim the liability of its shareholders for acts or obligations of IMIT.
These documents require notice of this disclaimer to be given in each agreement,
obligation, or instrument IMIT or its Trustees enter into or sign.
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In the unlikely event that a shareholder is held personally liable for
IMIT's obligations, IMIT is required by its Declaration of Trust to use its
property to protect or compensate the shareholder. On request, IMIT will defend
any claim made and pay any judgment against a shareholder for any act or
obligation of IMIT. Therefore, financial loss resulting from liability as a
shareholder will occur only if IMIT itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
PURCHASING SHARES
Except under certain circumstances described in the prospectus, shares are
sold at their net asset value on days the New York Stock Exchange is open for
business. The procedure for purchasing shares is explained in the Prospectus
under "How To Purchase Shares."
REDEEMING SHARES
The Portfolio redeems shares at the next computed net asset value after the
Portfolio receives the redemption request. Redemption procedures are explained
in the prospectus under "How To Redeem Shares."
REDEMPTION IN KIND. IMIT has elected to be governed by Rule 18f-1 of the
Investment Company Act of 1940, under which IMIT is obligated to redeem Shares
for any one shareholder in cash only up to the lesser of $250,000 or 1% of the
respective class's net asset value during any 90-day period.
Any redemption beyond this amount will also be in cash unless Trustees
determine that payments should be in kind. In such a case, the Portfolio will
pay all or a portion of the remainder of the redemption in portfolio
instruments, valued in the same way as the Portfolio determines net asset value.
The portfolio instruments will be selected in a manner that Trustees deem fair
and equitable.
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving their securities and selling them before
their maturity could receive less than the redemption value of their securities
and could incur certain transaction costs.
TAX STATUS
The Portfolio intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To
qualify for this treatment, the Portfolio must, among other requirements:
o derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;
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<PAGE>
o invest in securities within certain statutory limits; and
o distribute to its shareholders at least 90% of its net income earned
during the year.
To the extent that a fund qualifies for treatment as a regulated investment
company, it will not be subject to federal income tax on income and net capital
gains paid to shareholders in the form of dividends or capital gains
distributions. If a fund fails to qualify for such treatment, it is required to
pay such taxes.
Shareholders are subject to federal income tax on dividends and capital
gains received as cash or additional Shares. No portion of any income dividend
paid by the Portfolio is eligible for the dividends received deduction available
to corporations. These dividends, and any short-term capital gains, are taxable
as ordinary income.
Shareholders will pay federal tax at capital gains rates on long-term
capital gains distributed to them regardless of how long they have held the
Portfolio Shares.
PERFORMANCE INFORMATION
From time to time, the Portfolio may advertise its total return. These
figures will be based on historical earnings and are not intended to indicate
future performance. No representations can be made regarding actual future
returns.
Total return represents the change, over a specific period of time, in the
value of an investment in the Portfolio after reinvesting all income and capital
gains distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
The average annual total return for shares of the Portfolio is the average
compounded rate of return for a given period that would equate a $1,000 initial
investment to the ending redeemable value of that investment. The ending
redeemable value is computed by multiplying the number of shares owned at the
end of the period by the net asset value per share at the end of the period. The
number of shares owned at the end of the period is based on the number of shares
purchased at the beginning of the period with $1,000, less any applicable sales
load adjusted over the period by any additional shares, assuming the quarterly
reinvestment of all dividends and distributions.
Average annual total return quotations used in the Portfolio's advertising
and promotional materials are calculated according to the following formula:
n
P(1 + T) = ERV
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Where P equals a hypothetical initial payment of $1000; T equals average
annual total return; n equals the number of years; and ERV equals the ending
redeemable value at the end of the period of a hypothetical $1000 payment made
at the beginning of the period.
Under the foregoing formula, the time periods used in advertising will be
based on rolling calendar quarters, updated to the last day of the most recent
quarter prior to submission of the advertising for publication. Average annual
total return, or "T" in the above formula, is computed by finding the average
annual compounded rates of return over the period that would equate the initial
amount invested to the ending redeemable value. Average annual total return
assumes the reinvestment of all dividends and distributions. Average annual
total return for the one year period ended September 30, 1999 was 14.36%, and
for the period June 17, 1997 (commencement of operations) to September 30, 1999
was 0.09%.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in any class
of shares, the performance will be reduced for those shareholders paying those
fees.
PERFORMANCE COMPARISONS
- -----------------------
The performance of shares depends upon such variables as:
o portfolio quality;
o average portfolio maturity;
o type of instruments in which the portfolio is invested;
o changes in interest rates and market value of portfolio securities;
o changes in the Portfolio's expenses; and
o various other factors.
The Portfolio's performance fluctuates on a daily basis largely because net
earnings and offering price per share fluctuate daily. Both net earnings and
offering price per share are factors in the computation of total return.
To help investors evaluate how the Portfolio might satisfy their investment
objective, advertisements regarding the Portfolio may discuss total return for
the Portfolio as reported by various financial publications. Advertisements may
also compare total return to total return as reported by other investments,
indices and averages. The following publications, indices and averages may be
used:
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o Standard & Poor's 500 Composite Stock Price Index
o Russell 1000 Value Index
FINANCIAL STATEMENTS
The audited financial statements and financial highlights of the Portfolio
for the fiscal year ended September 30, 1999 as set forth in the Portfolio's
annual report to shareholders, and the report thereon of Spicer Jeffries & Co.,
independent accountants, are incorporated herein by reference. Prior to January
16, 1999, Aurthur F. Bell Jr. & Associates, L.L.C. served as the Portfolio's
independent accountants.
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PART C
Other Information
Item 23. Exhibits
a. Declaration of Trust dated December 18, 1996*
b. By-Laws*
c. Article III of the Declaration of Trust*
d. (i) Amended and Restated Investment Advisory Agreement***
(ii) Form of Sub-Investment Advisory Agreement with Schneider
Capital Management*****
e. Amended and Restated Underwriting Agreement***
f. Inapplicable
g. Form of Custody Agreement**
h. (i) Administrative Services Agreement***
(ii) Form of Amendment to Administrative Services Agreement****
(iii) Mutual Fund Services Agreement***
i. Opinion and Consent of Counsel**
j. Consent of Independent Auditors - filed herewith
k. Financial Statements
(i) Financial Statements included in Part A of the Registration
Statement: Financial Highlights for the period June 17, 1997
to September 30, 1997, and for the fiscal years ended
September 30, 1999 and September 30, 1998.
(ii) Statements incorporated by reference into Part B of the
Registration Statement: Audited Financial Statements for the
fiscal year ended September 30, 1999.
l. Subscription Agreement**
m. Distribution Plans pursuant to Rule 12b-1
(i) Retail Class***
(ii) Form of Amendment to Retail Class****
(iii) Form of 12b-1 Plan for Traditional Class****
(iv) Form of 12b-1 Plan for Wholesale Class****
n. Inapplicable
o. Rule 18f-3 Plan****
p. Power of Attorney*
* Incorporated by reference to IMIT's Registration Statement on Form N-1A, which
was filed via EDGAR on February 18, 1997.
** Incorporated by reference to Pre-Effective Amendment No. 2 which was filed
via EDGAR on June 26, 1997.
*** Incorporated by reference to Post-Effective Amendment No. 3, which was filed
via EDGAR on April 3, 1998.
**** Incorporated by reference to Post-Effective Amendment No. 4, which was
filed via EDGAR on February 16, 1999.
***** Incorporated by reference to Post-Effective Amendment No. 5, which was
filed via EDGAR on April 30, 1999.
<PAGE>
Item 24. Persons Controlled by or Under Common Control with Registrant -
Inapplicable
Item 25. Indemnification
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question as to whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
Information pertaining to business and other connections of the
Registrant's investment adviser is hereby incorporated by reference to the
section of the Prospectus captioned "Management of the Portfolio" and to the
section of the Statement of Additional Information captioned "Investment
Advisers". Charles R. Clark, Trustee and officer of IMIT and A.J. Elko, Officer
of IMIT are members of the Board of Directors of the advisor and are officers of
the advisor. The advisor has engaged, and is currently engaged, in providing
financial advisory services for individual investors as well as common trust
funds.
No director or officer of the advisor has engaged in any other business
during the past two years.
Item 27. Principal Underwriters
(a) Inapplicable
(b) The following is certain information with respect to the officers
and directors of IMPACT Financial Network, Inc., the principal
distributor for IMIT, and the Impact Management Growth Portfolio:
<PAGE>
Positions and Positions and
Offices with Offices with
Name and Address Underwriter Registrant
- ---------------- ----------- ----------
W. Neal Jordan
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487 President None
Charles R. Clark
2155 Resort Drive, Suite 108
Steamboat Springs, CO 80487 Vice-President Trustee and Chairman
A.J. Elko
2933 Jack's Run Road
White Oak, PA 15131 Vice-President President, Treasurer
and Secretary
(c) Inapplicable.
Item 28. Location of Accounts and Records
All such accounts, books and other documents are maintained by Section
31(a) of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3
promulgated thereunder are maintained at one or more of the following locations:
Registrant, 2155 Resort Drive, Suite 108, Steamboat Springs, CO 80487,
Jordan American Holdings, Inc., 2155 Resort Drive, Suite 108, Steamboat
Springs, CO 80487,
IMPACT Administrative Services, Inc., 2155 Resort Drive, Suite 108,
Steamboat Springs, CO 80487,
Albert John & Company, Inc., 2933 Jack's Run Road, White Oak, PA 15131
The Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263.
Item 29. Management Services
Inapplicable
<PAGE>
Item 30. Undertakings
(a) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this registration statement under Rule
485(b) under the Securities Act and has duly caused this Post Effective
Amendment No. 6 to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Pittsburgh and the
Commonwealth of Pennsylvania on the 28th day of January, 2000.
Impact Management Investment Trust
By: /s/ A.J. Elko
President
Pursuant to the requirement of the Securities Act of 1933, this amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
Signature Title Date
/s/ Charles R. Clark* Chairman of the January 28, 2000
Charles R. Clark Board of Trustees
/s/ A.J. Elko President, Treasurer and January 28, 2000
A.J. Elko Secretary
/s/ Oleen Eagle* Trustee January 28, 2000
Oleen Eagle
/s/ Gerald L. Bowyer* Trustee January 28, 2000
Gerald L. Bowyer
/s/ Steven J. Fellin Trustee January 28, 2000
Steven J. Fellin
* By /s/ Charles R. Clark
Charles R. Clark
Attorney-in-fact (pursuant to power of attorney)
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Document
23(j) Consent of Independent Auditors
Exhibit 23(j)
-------------
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
We hereby consent to the incorporation by reference in the Post-Effective
Amendment No. 6 to the Registration Statement on Form N-1A of Impact Management
Investment Trust of our report dated October 13, 1999, accompanying the
financial statements and the financial highlights of Impact Management Growth
Portfolio (a Series of Impact Management Investment Trust) for the year ended
September 30, 1999. We also consent to the references to our firm under the
caption "Financial Highlights" included in the Prospectus and under the captions
"Independent Auditors" and "Financial Statements" included in the Statement of
Additional Information.
/s/ SPICER, JEFFRIES & CO.
Denver, Colorado
January 27, 2000
<PAGE>
Exhibit 23(j)
-------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
We consent to the incorporation by reference in Post-Effective Amendment No. 6
to the Registration Statement of Impact Management Investment Trust on Form N-1A
of our report dated October 22, 1998 on our audits of the statement of changes
in net assets of Impact Management Growth Portfolio (a Series of Impact
Management Investment Trust) for the year ended September 30, 1998, and the
financial highlights for the year ended September 30, 1998 and for the period
June 17, 1997 (commencement of operations) to September 30, 1997. We also
consent to the references to our firm under the caption "Financial Highlights"
included in the Prospectus and under the captions "Independent Auditors" and
"Financial Statements" included in the Statement of Additional Information.
/s/ Arthur F. Bell, Jr. & Associates, L.L.C.
Hunt Valley, Maryland
January 26, 2000