<PAGE>
BERKSHIRE CAPITAL INVESTMENT TRUST
BERKSHIRE CAPITAL GROWTH & VALUE FUND
475 Milan Drive, Suite #103
San Jose, California 95134-2453
1-877-526-0707
<PAGE>
BERKSHIRE CAPITAL INVESTMENT TRUST
PROSPECTUS - NOVEMBER 2, 1998
THE FUND AND INVESTMENT OBJECTIVE
Berkshire Capital Growth & Value Fund (the "Fund") is a non-diversified series
of the Berkshire Capital Investment Trust (the "Trust"), an open-end
management investment company. The Trust was organized in Delaware as a
business trust and may offer shares of beneficial interest in a number of
separate series, each series representing a distinct fund with its own
investment objectives and policies. At present, there is only one series
authorized by the Trust, which series has been designated as the Berkshire
Capital Growth & Value Fund. The Fund's investment objective is to seek
long-term capital appreciation through investments in equity securities. The
Fund seeks to accomplish its objective by investing primarily in equities of
growth companies in sectors offering the potential for above average returns
and/or those companies which the Fund's adviser believes to be undervalued at
their current market price, resulting in the potential for capital
appreciation. Receipt of income is a secondary objective, as some investments
may yield dividends, interest or other income.
FUND SHARE PURCHASE
Capital shares of the Fund may be purchased directly at net asset value as
next determined after receipt of order. The Board of Trustees has established
$5,000 as the minimum initial purchase unless investing through the vehicle of
an Individual Retirement Account ("IRA"), in which case the minimum initial
investment is $2,000. Subsequent investments in the Fund must be at least
$500, or $200 for an IRA. Please see "Purchase of Shares and Reinvestment" in
this Prospectus for more information.
ADDITIONAL INFORMATION
This Prospectus, which should be held for future reference, is designed to set
forth concisely the information that you should know before you invest. A
"Statement of Additional Information" containing more information about the
Fund has been filed with the Securities and Exchange Commission. Such
Statement is dated November 2, 1998 and has been incorporated by reference
into the Prospectus. A copy of the Statement may be obtained without charge by
writing to the Fund or by calling 1-877-526-0707.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus | 2
<PAGE>
TABLE OF CONTENTS
FUND EXPENSES ................................... 4
FINANCIAL HIGHLIGHTS ............................ 5
THE FUND ........................................ 6
INVESTMENT OBJECTIVE ............................ 6
RISK FACTORS .................................... 6
PORTFOLIO TURNOVER POLICY ....................... 6
CONCENTRATION AND NON-DIVERSIFICATION POLICY .... 7
TAX STATUS ...................................... 7
INVESTMENT RESTRICTIONS ......................... 8
INVESTMENT ADVISER .............................. 9
ADVISORY FEE .................................... 10
FUND ADMINISTRATION ............................. 10
ADVISORY AND ADMINISTRATION AGREEMENTS .......... 10
MANAGEMENT OF THE FUND .......................... 12
REMUNERATION OF OFFICERS AND TRUSTEES ........... 13
ORGANIZATION AND CAPITAL STRUCTURE .............. 13
PURCHASE OF SHARES AND REINVESTMENT ............. 13
RETIREMENT PLANS ................................ 14
PRICING OF SHARES ............................... 15
REDEMPTION OF SHARES ............................ 15
BROKERAGE ....................................... 17
SHAREHOLDERS MEETINGS ........................... 17
REPORTS TO SHAREHOLDERS ......................... 18
TRANSFER AGENT .................................. 18
CUSTODIAN ....................................... 18
AUDITORS ........................................ 18
LEGAL OPINION ................................... 18
LITIGATION ...................................... 18
ADDITIONAL INFORMATION .......................... 18
Prospectus | 3
<PAGE>
FUND EXPENSES
Set forth below is a table containing information regarding the annual
expenses which may be incurred by the Fund. The purpose of this table is to
assist an investor in understanding the various costs and expenses that a
shareholder in the Fund will bear directly or indirectly.
Shareholder Transaction Expenses:
Sales Load Imposed on Purchases ............... None
Sales Load Imposed on Reinvested Dividends .... None
Redemption Fees ............................... $10
Exchange Fees ................................. None
IRA Trustee Fees .............................. $20
Annualized Fund Operating Expenses:
Management Fees ............................... 1.50%
12b-1 Fees .................................... None
Other Expenses* ............................... 0.50%
-----
Total Operating Expenses ...................... 2.00%
=====
The Fund and the Investment Adviser may enter into arrangements with brokerage
firms and financial institutions under which shares of the Fund may be
purchased or sold. Investors may be charged a transaction fee if they effect
transactions in Fund shares through a broker or agent.
*Fees payable under the Administration Agreement between the Fund and the
Investment Adviser are fixed at 0.50% of the Fund's average daily net assets
up to $50 million, 0.45% of such assets from $50 million to $200 million,
0.40% of such assets from $200 million to $500 million, 0.35% of such assets
from $500 million to $1 billion, and 0.30% of such assets in excess of $1
billion.
The following is an example that illustrates the expenses paid on a $1,000
investment over various time periods assuming (a) 5% annual rate of return and
(b) redemption at the end of each time period. This example should not be
considered a representation of past or future expenses or performance. Actual
expenses may be greater or less than those shown.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$30 $73 $118 $243
Prospectus | 4
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights table shows the results for a share
outstanding of the Fund. You should read this information in conjunction with
the financial statements included in the Fund's most recent Annual and
Semi-Annual Reports. The Fund's December 31, 1997 financial statements were
audited by Meredith, Cardozo, Lanz & Chiu LLP, Independent Certified Public
Accountants. Their report on the financial statements and financial highlights
is included in the Annual Report. The financial statements and financial
highlights are incorporated by reference in the Fund's Statement of Additional
Information. The financial data for the six-month period ended June 30, 1998
have not been audited.
<TABLE>
<CAPTION>
BERKSHIRE CAPITAL GROWTH & VALUE FUND
Per Share Data for a Share Outstanding Throughout Each Period
===================================================================================================
Six Months Period From(a)
Ended 07/01/97
06/30/98 to
(unaudited) 12/31/97
===================================================================================================
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD: $ 8.64 $ 10.00
------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................................... .01 .10
Net realized and unrealized gains (losses) on investments ..... 2.76 (1.36)
------------ ------------
Total from investment operations ................................. 11.41 8.74
DISTRIBUTIONS:
Dividends (from net investment income) ........................ 0 (.10)
Distributions (from capital gains) ............................ 0 0
------------ ------------
Total distributions .............................................. 0 (.10)
------------ ------------
NET ASSET VALUE, END OF PERIOD: $ 11.41 $ 8.64
============ ============
TOTAL RETURN - Note (6) .......................................... 32.06%(b) (12.60%)(b)
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period ........................................ $ 156,782 $ 101,412
Ratio of expenses to average net assets(b)(c) ................. 0.95% 1.00%
Ratio of expenses to average net assets(d) .................... 0% 0%
Ratio of net investment income to average net assets (b)(c) ... (0.79%) 0.12%
Ratio of net investment income to average net assets (d) ...... 0.16% 1.12%
Portfolio turnover rate (b) ................................... 38% 13%
<FN>
(a) Date of effectiveness.
(b) Not annualized for periods less than one full year.
(c) Before fee waiver.
(d) After fee waiver.
</FN>
</TABLE>
Prospectus | 5
<PAGE>
THE FUND
Berkshire Capital Growth & Value Fund is an open-end, non-diversified
portfolio of the Berkshire Capital Investment Trust. The Trust was organized
on November 25, 1996 as a Delaware business trust and is authorized to issue
an indefinite number of shares of beneficial interest. The Trust's registered
office is 1209 Orange Street, Wilmington, Delaware 19801. Mail may be
addressed to Trust's principal executive office at 475 Milan Drive, #103, San
Jose, California 95134-2453.
INVESTMENT OBJECTIVE
Berkshire Capital Growth & Value Fund has the primary objective of long-term
capital appreciation through investments in equity securities. The Fund seeks
to accomplish this objective by investing primarily in equities of growth
companies in sectors offering the potential for above-average returns and/or
those companies which the Fund's adviser believes to be undervalued at their
current market price, resulting in the potential for capital appreciation. In
selecting investments for the Fund, the adviser's primary emphasis is
typically on evaluating a company's management, growth prospects, business
operations, revenues, earnings, cash flows, and balance sheet in relationship
to its share price. Fundamental analysis by use of dividend and cash flow
discounting models are often employed to determine the intrinsic value of a
company and then compared to the current share price. Receipt of income is a
secondary objective, as some investments may yield dividends, interest or
other income.
RISK FACTORS
Generally: Risks associated with the Fund's performance will be those due to
broad market declines and business risks from difficulties which occur to
particular companies while in the Fund's portfolio. It must be realized, as is
true of almost all securities, there can be no assurance that the Fund will
obtain its ongoing objective of capital appreciation.
Non-Diversification: The Fund will be operated as a non-diversified investment
company and as such, the Fund's shares may be more susceptible to adverse
change in value than would be the shares of a diversified investment company.
Concentration: The Fund has adopted the fundamental policy concentrating at
least 25% of its assets in the equity securities of companies in the
electronic technology industry. Because of such policy, the Fund may be
subject to greater risk than that of a fund which is fully diversified among
many market sectors.
PORTFOLIO TURNOVER POLICY
The Fund does not propose to purchase securities for short-term trading in the
ordinary course of operations. Accordingly, it is expected that the annual
turnover rate will not exceed 50%, wherein turnover is computed by dividing
the lesser of the Fund's total purchases or sales of securities within the
period by the average monthly portfolio value of the Fund during such period.
There may be times when management deems it advisable to substantially alter
the composition of the portfolio, in which event, the portfolio turnover rate
might substantially exceed 50%; this would only result from special
circumstances and not from the Fund's normal operations.
Prospectus | 6
<PAGE>
CONCENTRATION AND NON-DIVERSIFICATION POLICY
Concentration: The Fund will concentrate its investments in the equity
securities of companies in the electronic technology industry. Concentration
requires the Fund to invest 25% or more of the value of its total assets in
securities of issuers in a particular industry. Companies in the electronic
technology industry shall include businesses which are principally engaged in
the development, production, or distribution of products or services related
to the following business segments: Computers, Computer Peripherals,
Semiconductors, Software, Telecommunications and Mass Storage Devices. In some
future period or periods, due to adverse economic conditions in the electronic
technology industry, the Fund may temporarily have less than 25% of the value
of its assets invested in that industry. At such times the adviser may adopt a
temporary defensive posture and recommend the Fund invest in money market
instruments or U.S. Government securities. As a result of such concentration
in the electronic technology industry, the Fund's shares may fluctuate more
widely than the value of shares of a portfolio which invests in a broader
range of industries.
Non-Diversification: The Fund is classified as being non-diversified which
means that it may not invest more than 25% of its assets in the securities of
any one issuer and, with respect to 50% of its total assets, the Fund may not
invest more than 5% of its total assets in the securities of any one issuer.
Thus, the Fund may invest up to 25% of its total assets in the securities of
each of any two issuers. The Fund, therefore, may be more susceptible to risk
of loss than a more widely diversified fund as a result of a single economic,
political, or regulatory occurrence. The policy of the Fund, in the hope of
achieving its objective as stated above, is therefore one of selective
investments rather than broad diversification. The Fund seeks only enough
diversification for adequate representation among what it considers to be the
best performing securities and to maintain its federal non-taxable status
under Sub-Chapter M of the Internal Revenue Code.
TAX STATUS
Under the provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as
amended, the Fund intends to pay out substantially all of its investment
income and realized capital gains. As a result, the Fund intends to be
relieved of federal income tax on the amounts distributed to shareholders. In
order to qualify as a "regulated investment company" under Sub-Chapter M, at
least 90% of the Fund's income must be derived from dividends, interest, and
gains from securities transactions. No more than 30% of the Fund's profits may
be derived from securities held less than three months and no more than 50% of
the Fund assets may be held in security holdings that exceed 5% of the total
assets of the Fund at time of purchase. Distribution of any net long-term
capital gains realized by the Fund will be taxable to the shareholder as
long-term capital gains regardless of the length of time Fund shares have been
held by the investor. All income realized by the Fund, including short-term
capital gains, will be taxable to the shareholder as ordinary income.
Dividends from net income will be made annually or more frequently at the
discretion of the Fund's Board of Trustees and will automatically be
reinvested in additional Fund shares at net asset value, unless shareholder
has elected to receive payment in the form of cash. Dividends received shortly
after purchase of shares by an investor will have the effect of reducing the
per share net asset
Prospectus | 7
<PAGE>
value of the shares by the amount of such dividends or distributions and,
although in effect a return of capital, are subject to federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions)
paid to shareholders who have not complied with IRS regulations. In order to
avoid this withholding requirement you must certify on the Shareholder
Purchase Application supplied by the Fund, that your Social Security or
Taxpayer Identification Number is correct and that you are not currently
subject to back-up withholding or otherwise certify that you are exempt from
back-up withholding.
INVESTMENT RESTRICTIONS
The Fund has adopted the following fundamental investment restrictions. These
restrictions cannot be changed without approval by the holders of a majority
of the outstanding voting securities of the Fund. As defined in the Investment
Company Act of 1940 (the "Act"), the "vote of a majority of the outstanding
voting securities" means the lesser of the vote of (i) 67% of the shares of
the Fund at a meeting where more than 50% of the outstanding shares are
present in person or by proxy or (ii) more than 50% of the outstanding shares
of the Fund.
The Fund may not:
(a) Act as underwriter for securities of other issuers except insofar as the
Fund may be deemed an underwriter in selling its own portfolio securities.
(b) Borrow money or purchase securities on margin except for temporary or
emergency (not leveraging) purposes, including the meeting of redemption
requests that might otherwise require the untimely disposition of securities,
in an aggregate amount not exceeding 25% of the value of the Fund's total
assets at the time any borrowing is made. While the Fund's borrowings are in
excess of 5% of its total assets, the Fund will not purchase any additional
portfolio securities.
(c) Sell securities short.
(d) Invest in securities of other investment companies except as part of a
merger, consolidation, or purchase of assets approved by the Fund's
shareholders or by purchases with no more than 10% of the Fund's assets in the
open market involving only customary broker's commissions.
(e) Make investments in commodities, commodity contracts or real estate
although the Fund may purchase and sell securities of companies which deal in
real estate or interests therein.
(f) Make loans. The purchase of a portion of a readily marketable issue of
publicly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
(g) Acquire more than 10% of the securities of any class of another issuer,
treating all preferred securities of an issuer as a single class and all debt
securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
(h) Invest in companies for the purpose of acquiring control.
(i) Purchase or retain securities of any issuer if those officers, directors
or trustees of the Fund or its Investment Adviser individually owns more than
1/2 of 1% of any class of security or collectively own more than 5% of such
class of securities of such issuer.
(j) Pledge, mortgage or hypothecate any of its assets.
(k) Invest in securities which may be subject to registration under the
Securities Act of 1933 prior to sale to the public or
Prospectus | 8
<PAGE>
which are not at the time of purchase readily saleable.
(l) Invest more than 10% of the total Fund assets, taken at market value at
the time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
(m) Issue senior securities.
(n) Acquire any securities of companies within one industry if, as a result of
such acquisition, more than 25% of the value of the Fund's total assets would
be invested in securities of companies within such industry; provided,
however, that there shall be no limitation on the purchase of securities of
companies in the electronic technology industry.
With respect to fundamental restriction (n) above, companies in the electronic
technology industry shall be defined as businesses which are principally
engaged in the development, production, or distribution of products or
services related to the following business segments: Computers, Computer
Peripherals, Semiconductors, Software, Telecommunications and Mass Storage
Devices.
In connection with its investment objective and policies the Fund may,
however, invest in the following types of securities which can involve certain
risks:
U.S. Government Securities: The Fund may purchase securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities. Such
securities will typically include, without limitation, U.S. Treasury
securities such as Treasury Bills, Treasury Notes or Treasury Bonds that
differ in their interest rates, maturities and times of issuance.
Bank Obligations: The Fund may invest in bank obligations, including
certificates of deposit, time deposits, banker's acceptances and other
short-term obligations of banks, savings and loan associations and other
banking institutions.
Warrants: The Fund may purchase warrants, valued at the lower of cost or
market, but only to the extent that such purchase does not exceed 5% of the
Fund's net assets at the time of purchase. Included within that amount, but
not to exceed 2% of the Fund's net assets, may be warrants which are not
listed on the New York or American Stock Exchanges.
INVESTMENT ADVISER
The Fund retains Berkshire Capital Holdings, Inc., at 475 Milan Drive, #103,
San Jose, California 95134-2453, as its Investment Adviser. Berkshire Capital
Holdings, Inc. (the "Investment Adviser") is a California corporation founded
in February 1993. The company is registered as an Investment Adviser with the
Securities and Exchange Commission under the Investment Advisers Act of 1940.
The corporation is controlled and wholly-owned by Malcolm R. Fobes III and
Ronald G. Seger.
Malcolm R. Fobes III has the direct responsibility for the overall strategic
management of the Fund's portfolio and its administration. Mr. Fobes founded
Berkshire Capital Holdings, Inc. in 1993, has served as Chairman of the Board
and Chief Executive Officer since the company's inception, and has been
responsible for the direction of the company's investments in both private and
publicly-held concerns. Mr. Fobes has a B.S. degree in Finance and a minor in
Economics from San Jose State University in California. In addition to
founding the company in 1993, Mr. Fobes was also simultaneously retained by
Adobe Systems, Inc., a high-technology
Prospectus | 9
<PAGE>
software development firm, as a technical support engineer from May 1991 to
November 1994. Mr. Fobes has served exclusively in the capacity of Chairman
and Chief Executive Officer of the Investment Adviser from November 1994 to
present. Ronald G. Seger has served as Secretary and member of the Board of
Directors of the Investment Adviser since September 1996. Both Mr. Fobes and
Mr. Seger also serve as Trustees of the Fund.
ADVISORY FEE
The Fund will be managed by Berkshire Capital Holdings, Inc. The Investment
Adviser will be paid a fee of 1.5% per year on the net assets of the Fund. All
fees are computed on the average daily closing net asset value of the Fund and
are payable monthly. Such fee is higher than the fee paid by most other funds.
Notwithstanding, the Investment Adviser may at its discretion, forgo
sufficient fees which would have the effect of lowering the Fund's expense
ratio and increasing the yield to shareholders.
FUND ADMINISTRATION
In addition to its fee for serving as the Fund's Investment Adviser, Berkshire
Capital Holdings, Inc. will receive a fee for serving as the Fund's
administrator. The fee will be paid monthly at an annual rate of 0.50% of the
Fund's average daily net assets up to $50 million, 0.45% of such assets from
$50 million to $200 million, 0.40% of such assets from $200 million to $500
million, 0.35% of such assets from $500 million to $1 billion, and 0.30% of
such assets in excess of $1 billion. For such fee, Berkshire Capital Holdings,
Inc. is responsible for providing administrative and general supervisory
services to the Fund and will provide virtually all customary services
required for Fund operations.
ADVISORY AND ADMINISTRATION AGREEMENTS
On October 26, 1997 the Board of Trustees unanimously approved an investment
advisory contract (the "Advisory Agreement") and a separate administration
contract (the "Administration Agreement") with Berkshire Capital Holdings,
Inc. The Advisory Agreement and the Administration Agreement are effective
through December 31, 1998. Thereafter, both agreements may be continued for
successive periods not to exceed one year, provided that such continuance is
specifically approved annually by (a) the Fund's Board of Trustees or (b) vote
of the holders of a majority (as defined in the 1940 Act) of the outstanding
voting securities of the Fund. In either event, the continuance must be
approved by a majority of the Board of Trustees who are not "interested
persons" of the Trust (as defined in the 1940 Act) or the Investment Adviser,
by vote cast in person at a meeting called for the purpose of voting on such
approval.
Under the Advisory Agreement, Berkshire Capital Holdings, Inc. will determine
what securities will be purchased, retained or sold by the Fund on the basis
of a continuous review of its portfolio. Mr. Fobes, will have the direct
responsibility of managing the composition of the Fund's portfolio in
accordance with the Fund's investment objective. Pursuant to its contract with
the Fund, the Investment Adviser is (i) required to render research,
statistical and advisory services to the Fund, (ii) make specific
recommendations based on the Fund's investment requirements, and (iii) pay
salaries of the Fund's employees who may be officers, directors or employees
of the Investment Adviser. Excepting these items, the Fund pays all other fees
and expenses incurred in conducting its business affairs. The Investment
Prospectus | 10
<PAGE>
Adviser has paid the initial organizational costs of the Fund and will
reimburse the Fund for any and all losses incurred because of purchase
reneges.
Under the Administration Agreement, the Investment Adviser will render all
administrative and supervisory services to the Fund. The Adviser will oversee
the maintenance of all books and records with respect to the Fund's securities
transactions and the Fund's book of accounts in accordance with all applicable
federal and state laws and regulations. The Adviser will also arrange for the
preservation of journals, ledgers, corporate documents, brokerage account
records and other records which are required pursuant to Rule 31a-1
promulgated under the 1940 Act. In accordance with the Administration
Agreement, the Adviser is also responsible for the equipment, staff, office
space and facilities necessary to perform its obligations. The Fund will
assume all other expenses except to the extent of those paid by the Adviser.
The Investment Adviser assumes and shall pay all ordinary expenses of the
Fund. Examples of such expenses include: (a) organizational costs, (b)
compensation of the Investment Adviser's personnel, (c) compensation of any of
the Fund's trustees, officers or employees who are not interested persons of
the Investment Adviser or its affiliates, (d) fees and expenses of registering
the Fund's shares under the federal securities laws and of qualifying its
shares under applicable state Blue Sky laws, including expenses attendant upon
renewing such registrations and qualifications, (e) insurance premiums, (f)
fidelity bonds, (g) accounting and bookkeeping costs and expenses necessary to
maintain the Fund's books and records, (h) outside auditing and ordinary legal
expenses, (i) all costs associated with shareholders meetings and the
preparation and dissemination of proxy solicitation materials, (j) costs of
printing and distribution of the Fund's Prospectus and other shareholder
information to existing shareholders, (k) charges, if any, of custodian and
dividend disbursing agent's fees, (l) industry association fees, and (m) costs
of independent pricing services and calculation of daily net asset value. The
Adviser may, at its discretion, assume any additional expenses ordinarily
assumed by the Fund when it determines that such action is in the best
interest of the shareholders. Any extraordinary and non-recurring expenses
shall be paid by the Fund.
The Investment Adviser may act as an investment adviser and administrator to
other persons, firms, or corporations (including investment companies), and
may have numerous advisory clients besides the Fund.
The Advisory Agreement and the Administration Agreement are terminable on 60
days' written notice, without penalty, by a vote of a majority of the Fund's
outstanding shares or by vote of a majority of the Fund's entire Board of
Trustees, or by the Investment Adviser on 60 days' written notice, and
automatically terminates in the event of its assignment.
Prospectus | 11
<PAGE>
MANAGEMENT OF THE FUND
The business of the Fund is managed under the direction of its Board of
Trustees in accordance with Section 3.2 of the Declaration of Trust of
Berkshire Capital Investment Trust, which Declaration of Trust has been filed
with the Securities and Exchange Commission and is available upon request.
Pursuant to Section 2.6 of the Declaration of Trust, the trustees shall elect
officers including a president, secretary and treasurer. The Board of Trustees
retains the power to conduct, operate and carry on the business of the Fund
and has the power to incur and pay any expenses which, in the opinion of the
Board of Trustees, are necessary or incidental to carry out any of the Fund's
purposes. The trustees, officers, employees and agents of the Fund, when
acting in such capacities, shall not be subject to any personal liability
except for his or her own bad faith, willful misfeasance, gross negligence or
reckless disregard of his or her duties. The trustees and officers, together
with their addresses, age, principal occupations during the past five years
and ownership of the Fund are as follows:
<TABLE>
<CAPTION>
===================================================================================================
Principal Occupation Fund Shares Percent
Name and Address Past 5 Years Owned 11/2/98 of Class
===================================================================================================
<S> <C> <C> <C>
*Malcolm R. Fobes III BERKSHIRE CAPITAL INVESTMENT TRUST; 7,585 46.02%
475 Milan Drive, #103 Trustee/President
San Jose, CA 95134 BERKSHIRE CAPITAL HOLDINGS, INC.;
Age: 34 Chairman & CEO
ADOBE SYSTEMS, INC.;
Technical Support Engineer
*Ronald G. Seger BERKSHIRE CAPITAL INVESTMENT TRUST; 5,362 32.53%
715 Glenborough Drive Trustee/Secretary
Mountain View, CA 94041 RONALD G. SEGER, O.D.;
Age: 48 Optometrist
**Leland F. Smith BERKSHIRE CAPITAL INVESTMENT TRUST; 503 3.05%
#7 Rocky Mountain Lane Trustee
Sunriver, OR 97707 CORPORATE ASSET STRATEGIES, INC.;
Age: 59 Chairman & CEO
ELESCO, LTD.;
Chairman & CEO
Andrew W. Broer BERKSHIRE CAPITAL INVESTMENT TRUST; 839 5.09%
455 Navaro Way, #201 Trustee
San Jose, CA 95134 CISCO SYSTEMS, INC.;
Age: 32 Data Center Manager
TALIGENT, INC.;
Software Integration Engineer
<FN>
*Trustees of the Fund who are considered "interested persons" as defined in
Section 2(a)(19) of the Investment Company Act of 1940 by virtue of their
affiliation with the Investment Adviser.
**Corporate Asset Strategies, Inc. provides consulting services in the field
of corporate real estate management.
</FN>
</TABLE>
Prospectus | 12
<PAGE>
REMUNERATION OF OFFICERS AND TRUSTEES
The Fund does not intend to pay fees to the trustees until such time as the
Fund's assets exceed $2,500,000; although the Fund will reimburse trustees for
their expenses. The Fund does not compensate trustees affiliated with the
Investment Adviser except as they may benefit through payment of the Advisory
and Administrative fees.
ORGANIZATION AND CAPITAL STRUCTURE
The Trust was organized on November 25, 1996 as a Delaware business trust and
is authorized to issue an unlimited number of shares of beneficial interest.
At present there is only one series authorized by the Trust, which series has
been designated as the Berkshire Capital Growth & Value Fund. The Board of
Trustees may authorize the creation of an additional series without
shareholder approval.
All shares, when issued, will be fully paid and non-assessable and will be
redeemable and freely transferable. All shares have equal voting rights and
can be issued as full or fractional shares. A fractional share has pro rata
the same kind of rights and privileges as a full share. The shares possess no
preemptive or conversion rights.
Each shareholder has one vote for each share held irrespective of the relative
net asset value of the shares. Each share has equal dividend, distribution and
liquidation rights. The voting rights of the shareholders are non-cumulative,
so that holders of more than 50% of the shares can elect all trustees being
elected. On some issues, such as election of trustees, all shares of the Fund
vote together as one series. In the event that the Trust authorizes additional
series of shares as separate funds, on issues affecting only a particular
fund, the shares of the affected fund will vote as a separate series. An
example of such an issue would be a fundamental investment restriction
pertaining to only one fund.
The Board of Trustees of the Trust is responsible for managing the business
affairs of the Fund. The Board of Trustees consists of four members: Malcolm
R. Fobes III, Ronald G. Seger, Leland F. Smith and Andrew W. Broer. As of
November 2, 1998, the Board of Trustees owned of record or beneficially 86.69%
of the Fund's outstanding shares. Malcolm R. Fobes III and Ronald G. Seger
owned 46.02% and 32.53% of the Fund's outstanding shares respectively and are
considered control persons as defined under Section 2(a)(9) of the 1940 Act by
virtue of their ownership of more than 25% of the voting securities of the
Fund.
PURCHASE OF SHARES AND REINVESTMENT
The offering price of the shares offered by the Fund is at the Net Asset Value
("NAV") per share next determined after receipt of the purchase order by the
Fund and is computed in the manner described under the caption "Pricing of
Shares" in this Prospectus. The Fund reserves the right to terminate the
offering of the shares made by this Prospectus at any time and to refuse
purchase applications when, in the judgement of management, such termination
or refusal is in the best interests of the Fund. The Fund also reserves the
right to waive initial and subsequent investment minimums and to modify
investment minimums generally from time to time. The Fund does not intend to
issue share certificates to its shareholders whereby shares of the Fund shall
be considered "uncertificat-
Prospectus | 13
<PAGE>
ed securities" as defined under Rule 17f-1 of the Securities Exchange Act of
1934. The Fund and the Investment Adviser may enter into arrangements with
brokerage firms and financial institutions under which shares of the Fund may
be purchased or sold. Investors may be charged a transaction fee if they
effect transactions in Fund shares through a broker or agent.
Initial Investments: Initial purchase of shares of the Fund may be made by
application submitted to the Fund. For the convenience of investors, a Share
Purchase Application is provided with this Prospectus. The minimum initial
purchase of shares is $5,000 unless investing through the vehicle of an
Individual Retirement Account ("IRA"), in which case the minimum initial
investment is $2,000. Such initial investment amount is due and payable three
(3) business days after the purchase date. The Fund will be initially
registered in California and therefore restricted to California residents at
the time of purchase. There will be no solicitation out of the state of
California of potential shareholders until registration under the Blue Sky
laws of the state of residence have been met.
Subsequent Purchases: Subsequent purchases may be made by mail or by phone and
are due and payable three (3) business days after the purchase date. The
minimum is $500, or $200 for an IRA. Less may be accepted under special
circumstances.
Reinvestments: The Fund will automatically retain and reinvest dividends and
capital gains distributions and use same for the purchase of additional shares
for the shareholder at net asset value as of the close of business on the
distribution date. A shareholder may at any time by letter or forms supplied
by the Fund direct the Fund to pay dividends and/or capital gains
distributions, if any, to such shareholder in cash.
Fractional Shares: Full or fractional shares will be issued by the Fund.
Fractional shares will be issued to three decimal places as purchased from the
Fund. The Fund will maintain an account for each shareholder of shares for
which no certificates have been issued.
RETIREMENT PLANS
Generally: Shares of the Fund may be purchased directly by existing retirement
plans which allow for such investment. Self-employed individuals may purchase
shares through properly drafted Keogh plans covering the self-employed
individual or eligible employees. An investor should consult with a tax
adviser concerning the eligibility or establishment of such plans before
investing in shares of the Fund.
Individual Retirement Accounts: Certain individuals may be eligible to
establish an Individual Retirement Account (IRA) with the Fund if they meet
the applicable requirements of the Internal Revenue Code. Persons who earn
compensation and are not covered by a company retirement plan (and, if
married, your spouse is not covered by a company retirement plan) may
establish IRA accounts using Fund shares. Under such circumstances, annual
contributions by individuals, limited to the lesser of $2,000 or 100% of
compensation, are tax deductible from gross income. If you are married (filing
jointly) and each spouse establishes an IRA, each spouse may contribute up to
$2,000 to his or her IRA for a year as long as the combined compensation of
both spouses for the year is at least $4,000. Contributions to each spousal
account are fully deductible under the aforementioned guidelines. IRA
contributions may also be tax deductible for individual taxpayers and married
couples if covered by a company retirement plan as long as adjusted gross
Prospectus | 14
<PAGE>
incomes are within certain specified limits. All individuals may make
nondeductible IRA contributions to separate accounts. You may begin to make
non-penalty IRA withdrawals as early as age 59 1/2 or as late as 70 1/2. Most
withdrawals from an IRA account before age 59 1/2 are subject to a 10% penalty
tax in addition to regular income taxes. In certain situations, withdrawals
before age 59 1/2 are not subject to the 10% penalty. For example, in the
event of death or disability early withdrawals may be made without penalty.
Investors should consult their tax advisers to determine whether they are
qualified to take advantage of an IRA and whether an investment in the Fund
would be appropriate.
The Board of Trustees has selected Delaware Charter Guarantee & Trust Co. as
the Fund's trustee for qualified individuals who wish to establish an IRA
account funded with shares of the Fund. Although the Fund does not charge IRA
fees itself, there are fees charged by Delaware Charter Guarantee & Trust Co.
to open and maintain an IRA account. To establish an IRA account, all
prospective applicants are required to complete an IRA application for
Delaware Charter Guarantee & Trust Co. A disclosure statement describing the
general provisions of the IRA will be forwarded to all prospective applicants
as required by U.S. Treasury regulations. All IRAs may be revoked within seven
(7) days of their establishment with no penalty. For more information
regarding the establishment of an IRA account, please direct all inquiries to
the Fund at its principal office in San Jose, California.
PRICING OF SHARES
The net asset value of the Fund's shares is determined as of the close of
business of the New York Stock Exchange on each business day of which that
Exchange is open (presently 4:00 p.m.); Monday through Friday exclusive of
Washington's Birthday, Good Friday, Memorial Day, July 4th, Labor Day,
Thanksgiving, Christmas and New Year's Day. The price is determined by
dividing the value of its securities, plus any cash and other assets less all
liabilities, excluding capital surplus, by the number of shares outstanding.
The market value of securities listed on a national exchange is determined to
be the last recent sales price on such exchange. Listed securities that have
not recently traded and over-the-counter securities are valued at the last bid
price in such market. Short-term paper (debt obligations that mature in less
than 60 days) are valued at amortized cost which approximates market value.
Other assets are valued at fair market value as determined in good faith by
the Board of Trustees.
REDEMPTION OF SHARES
The Fund will redeem all or any portion of a shareholder's shares of the Fund
when requested in accordance with the procedures set forth below. Although the
Fund does not charge a redemption fee, there is a fee equal to that charged to
the Fund by the registered Transfer Agent for processing services, currently
$10 regardless of the number of shares redeemed.
All redemption requests should be made to the Fund at its principal office in
San Jose, California. The redemption price shall be the net asset value per
share next determined after notice is received by the Fund.
Prospectus | 15
<PAGE>
If By Mail: Send a written request, signed by all registered owners in the
exact names in which they appear on the account indicating the dollar amount
or number of shares to be redeemed. Redemption requests by corporations,
partnerships, trusts, estates, guardianships, custodial accounts and accounts
under court jurisdiction shall be accompanied with all supporting legal
documents if required by applicable law. To be in proper form, such redemption
requests shall be signed by an authorized officer and must indicate the
capacity in which the officer is acting.
If by Telephone: Shareholders who complete the Share Purchase Application
provided with this Prospectus may redeem shares of the Fund by telephone if
they have elected on the application to do so. The Fund will employ reasonable
procedures to confirm that all instructions given by telephone are genuine.
Such procedures shall include requiring the caller to provide personal and/or
account information for the purpose of establishing the caller's
identification and sending a confirmation statement on redemptions to the
address of record each time activity is initiated by telephone. As long as the
Fund's registered transfer agent follows instructions communicated by
telephone which were reasonably believed to be genuine at the time of receipt,
neither the Fund nor the registered transfer agent shall be liable for any
loss to the shareholder caused by an unauthorized transaction. In any instance
where the Fund's registered transfer agent is not reasonably satisfied that
instructions received by telephone are genuine, neither the Fund nor the
transfer agent shall be liable for any losses which may occur because of delay
in implementing a transaction.
Unless the shareholder is known to management, all signatures must be
guaranteed by an "eligible guarantor institution" as defined under Rule
17Ad-15 of the Securities Exchange Act of 1934. Generally, such institutions
include national or state banks, savings and loan associations, credit unions,
brokers and dealers which are members of a national securities exchange or a
clearing agency and maintain a net capital of at least $100,000, national
securities exchanges, registered securities associations, clearing agencies
and institutions that participate in the Securities Transfer Agent Medallion
Program ("STAMP") or other recognized signature guarantee medallion programs.
Such guarantees must be signed by an authorized signatory thereof with
"Signature Guaranteed" appearing along with the shareholder's signature. A
notarized signature will not be sufficient for the request to be in proper
form. Redemption requests by corporate and fiduciary shareholders must be
accompanied by appropriate documentation establishing authority of the person
seeking to act on behalf of the account.
The proceeds received by the shareholder may be more or less than his cost of
such shares, depending upon the net asset value per share at the time of
redemption. Any difference should be treated by the shareholder as a capital
gain or loss for federal income tax purposes.
Payment by the Fund will ordinarily be made within seven (7) business days
provided the shareholder has complied with all the aforementioned
requirements. However, if an investor has purchased Fund shares by check and
subsequently submits a redemption request, the redemption proceeds will not be
transmitted until the check used for investment has cleared, which may take up
to fifteen (15) days. The Fund may suspend the right of redemption or postpone
the date of payment if; the New York Stock Exchange is closed for other than
customary weekend or
Prospectus | 16
<PAGE>
holiday closings, or when trading on the New York Stock Exchange is
restricted as determined by the Securities and Exchange Commission or when the
Commission has determined that an emergency exists, thereby making disposal of
fund securities or valuation of net assets not reasonably practicable, or for
such other periods as the Commission may permit. The Fund intends to make
payments in cash, however, if the Board of Trustees believes that economic
conditions exist which would make such practice detrimental to the best
interests of the Fund, redemption may be accomplished through distribution of
portfolio securities of the Fund. The Fund and the Investment Adviser may
enter into arrangements with brokerage firms and financial institutions under
which shares of the Fund may be purchased or sold. Investors may be charged a
transaction fee if they effect transactions in Fund shares through a broker or
agent.
BROKERAGE
The Fund requires all brokers to effect transactions in portfolio securities
in such a manner as to get prompt execution of the orders at the most
favorable price. Under the terms of the Advisory Agreement, the Adviser is
authorized to employ all brokers to execute orders for the purchase and sale
of portfolio securities on behalf of the Fund. The Adviser will use its best
judgement in determining which broker can provide the best net price and
execution. The selected broker shall be required to provide prompt and
reliable execution at a reasonably competitive price. The Adviser may select
brokers who, in addition to meeting primary requirements of execution and
price, may furnish statistical or other factual information and services,
which, in the opinion of management, will produce a direct benefit to the Fund
or assist the Adviser in carrying out its responsibilities to the Fund. Such
information and services shall include economic studies, industry studies,
statistical analysis, corporate reports and quotations necessary to determine
the value of the Fund's net assets. No effort is made to determine the value
of these services or the amount they might have reduced the expenses of the
Adviser. Other than as set forth above, the Fund has no fixed policy, formula,
method, or criteria which it uses in allocating brokerage business to firms
furnishing these materials and services. The Board of Trustees will evaluate
and review the reasonableness of brokerage commissions paid semiannually.
SHAREHOLDERS MEETINGS
Annual meetings of shareholders will not be held unless called by the
shareholders pursuant to Delaware Business Trust Act or unless required by the
1940 Act and the rules and regulations promulgated thereunder. Special
meetings of the shareholders may be held from time to time when called upon by
(i) the Chairman of the Board of Trustees, if one exists, the President and
two or more trustees, (ii) by one or more shareholders holding ten percent or
more of the shares entitled to vote on matters presented to the meeting, or
(iii) if the annual meeting is not held within any thirteen month period, upon
application of any shareholder, a court of competent jurisdiction may
summarily order that such meeting be held. In addition, the 1940 Act requires
a shareholder vote on all investment advisory contracts and amendments
thereto. Shareholder inquiries should be directed to the Fund's principal
office at 475 Milan Drive, #103, San Jose, California 95134-2453.
Prospectus | 17
<PAGE>
REPORTS TO SHAREHOLDERS
The Fund sends all shareholders annual reports containing audited financial
statements and other periodic reports, at least semiannually, containing
unaudited financial statements.
TRANSFER AGENT
The Investment Adviser has retained Mutual Shareholder Services (the "Transfer
Agent") to provide shareholder servicing, dividend disbursing and transfer
agent services. The Transfer Agent is an indirect wholly-owned subsidiary of
Maxus Information Systems, Inc. The Investment Adviser (not the Fund) pays the
Transfer Agent's fees for these services.
CUSTODIAN
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, has been
retained to act as Custodian for the Fund's investments. Fifth Third Bank acts
as the Fund's depository, safekeeps its portfolio securities, collects all
income and other payments with respect thereto, disburses funds as instructed
and maintains records in connection with its duties.
AUDITORS
The firm of McCurdy & Associates CPA's, Inc., 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent auditors for the Fund for the
fiscal year ending December 31, 1998. McCurdy & Associates CPA's, Inc. will
perform an annual audit of the Fund's financial statements and will advise the
Fund as to certain accounting matters.
LEGAL OPINION
The legality of the shares offered hereby have been passed upon by Hall &
Evans, L.L.C., 1200 Seventeenth Street, Suite 1700, Denver, Colorado 80202.
LITIGATION
As of the date of this prospectus, there was no pending or threatened
litigation involving the Fund in any capacity whatsoever.
ADDITIONAL INFORMATION
This Prospectus omits certain information contained in the registration
statement on file with the Securities & Exchange Commission. The registration
statement may be inspected without charge at the principal office of the
Commission in Washington, D.C. and copies of all or part thereof may be
obtained upon payment of the fee prescribed by the Commission. Shareholders
may also direct inquiries to the Fund by phone or at the address given on
cover of this Prospectus.
Prospectus | 18
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Prospectus | 19
<PAGE>
BERKSHIRE CAPITAL INVESTMENT TRUST
BERKSHIRE CAPITAL GROWTH & VALUE FUND
475 Milan Drive, Suite #103
San Jose, California 95134
1-877-526-0707
PROSPECTUS
November 2, 1998
INVESTMENT ADVISER
Berkshire Capital Holdings, Inc.
475 Milan Drive, Suite #103
San Jose, California 95134
INDEPENDENT AUDITORS
McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, Ohio 44145
TRANSFER AGENT
Mutual Shareholder Services
1301 East Ninth Street, Suite 3600
Cleveland, Ohio 44114
CUSTODIAN
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
LEGAL COUNSEL
Hall & Evans, LLC
1200 Seventeenth Street, Suite 1700
Denver, Colorado 80202
(Back Cover)
<PAGE>
