As filed with the Securities and Exchange Commission on August 8, 1997
Registration No. 333-25073
811-08177
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. 1
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 1
THE DRESHER FAMILY OF FUNDS
(Exact Name of Registrant as Specified in Charter)
715 Twining Road, Suite 202
Dresher, Pennsylvania 19025
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
(888) 980-7500
Jeffrey C. Brown, President
The Dresher Family of Funds
715 Twining Road, Suite 202, Dresher, Pennsylvania 19025
(Name and Address of Agent for Service)
Copies of communications to:
Stephen T. Burdumy, Esquire
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, Pennsylvania 19102
Approximate Date of Proposed General Offering: As soon as practical after
the effective date of this Registration Statement.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
DECLARATION PURSUANT TO RULE 24F-2: Pursuant to Rule 24f-2
under the Investment Company Act of 1940, as amended, Registrant is
registering an indefinite number or amount of its shares of beneficial
interest under the Securities Act of 1933, as amended. The Registrant
has not filed a Rule 24f-2 Notice because it has not sold any securities
pursuant to this declaration during the most recent fiscal year.
2<PAGE>
PART A
CROSS REFERENCE SHEET
THE DRESHER FAMILY OF FUNDS
THE DRESHER COMPREHENSIVE GROWTH FUND
THE DRESHER CLASSIC RETIREMENT FUND
Part A Item Prospectus Caption
Cover Page Cover Page
Synopsis Expenses
Condensed Financial Information Inapplicable
General Description of the Fund Cover Page; The Funds; Investment
Objectives and Management Techniques;
Investment Policies and Restrictions;
Risks and Other Considerations; Trust
Management -- Portfolio Turnover;
Appendix A; Appendix B
Management of the Fund Trust Management
Management's Discussion of Fund Inapplicable
Performance
Capital Stock and Other Securities Dividends, Distributions and Taxes;
General Information
Purchase of Securities Being Offered How to Purchase Shares; Trust
Management -- Distribution Plan
Redemption or Repurchase How to Redeem Shares
Pending Legal Proceedings Inapplicable
3<PAGE>
THE DRESHER COMPREHENSIVE GROWTH FUND
THE DRESHER CLASSIC RETIREMENT FUND
THE DRESHER COMPREHENSIVE GROWTH FUND (THE
"COMPREHENSIVE GROWTH FUND") AND THE DRESHER CLASSIC
RETIREMENT FUND (THE "CLASSIC RETIREMENT FUND;" AND
TOGETHER WITH THE COMPREHENSIVE GROWTH FUND, THE
"FUNDS") are two series of shares (the "Shares") of The Dresher Family of
Funds, an open-end investment company (the "Trust"). The assets of each
Fund are separately managed portfolios consisting of shares of other mutual
funds. The Funds are designed to offer investors easy access to actively
managed funds. Both Funds are diversified by asset class and feature a core
component of domestic and international stock funds for growth potential,
combined with bond funds and money market funds for greater price stability.
The Investment Manager has the flexibility to take full advantage of changing
markets and favorable asset classes. The Investment Manager monitors
hundreds of mutual funds, analyzing the relative attractiveness of various
funds to identify and select a mix of underlying funds in order to achieve each
Fund's goals. The Comprehensive Growth Fund is a no-load aggressive
growth fund which seeks capital appreciation without regard to current
income. The Classic Retirement Fund is a no-load moderate growth fund
which seeks moderate capital appreciation and significant income. Both
Funds pursue their investment objectives by investing exclusively in shares
of other mutual funds (except for holdings in cash or cash equivalents). The
level of diversification the Funds obtain from being invested in a number of
underlying funds is intended to reduce the risks associated with an investment
in a single underlying fund. By investing in the Funds, you bear not only the
Funds' expenses, but also the expenses of the underlying funds. THE FUNDS'
STRATEGY OF INVESTING IN OTHER MUTUAL FUNDS RESULTS IN
GREATER EXPENSES THAN YOU WOULD INCUR IF YOU WERE TO
INVEST IN THE SAME FUNDS DIRECTLY.
ABOUT THIS PROSPECTUS: THIS PROSPECTUS PROVIDES YOU WITH CONCISE INFORMATION
THAT YOU SHOULD KNOW BEFORE YOU DECIDE IF THE FUNDS PROVIDE THE INVESTMENT
OPPORTUNITIES YOU SEEK. READ IT CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE.
You can find more detailed information in the Statement of Additional
Information (the "SAI") dated July 17, 1997 (as amended from time to time).
The SAI has been filed with the Securities and Exchange Commission (the "SEC")
and is incorporated in this Prospectus by reference (which means that it is
legally considered part of this Prospectus even though it is not printed here).
This Prospectus is available electronically by using the Trust's World Wide Web
address: http://www.national-advisory.com. To get a free paper copy of this
Prospectus or the SAI, call the Trust at (888) 980-7500. The SEC maintains a
Web site (http://www.sec.gov) that contains the SAI, material incorporated by
reference herein, and other information regarding registrants that file
electronically with the SEC.
Shares of the Funds are subject to investment risks, including possible
loss of principal. Shares of the Funds are not bank deposits and are not
endorsed by, insured by, guaranteed by, obligations of or otherwise
supported by the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other governmental
agency or bank.
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
4<PAGE>
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS: August 8, 1997
2<PAGE>
EXPENSES
The table below does not reflect any of the operating costs and investment
advisory fees of the underlying funds. By investing in the Funds, you bear not
only the Funds' expenses detailed below, but also the expenses of the
underlying funds. You would not incur the Funds' expenses detailed below
if you were to perform your own asset allocation, fund review and analysis
and invest in the underlying funds directly.
SHAREHOLDER TRANSACTION EXPENSES
Comprehensive Classic
Growth Retirement
Fund Fund
Sales charge on purchases None None
Sales charge on reinvested dividends None None
Deferred sales charge None None
Exchange fees None None
Redemption fee<F1> None None
<F1> A wire transfer fee is charged by the Funds' Custodian in the case of
redemptions made by wire. Such fee is subject to change and is
currently $10.00.
ANNUAL FUND OPERATING EXPENSES (as a percentage of average
daily net assets)
Comprehensive Classic
Growth Retirement
Fund Fund
Management fees (after fee waivers)<F2> 0.95% 0.95%
12b-1 fees<F3> 0.25% 0.25%
Other expenses<F4> 0.00% 0.00%
Total Fund operating expenses (after fee waivers) 1.20% 1.20%
<F2> The management fees are paid to the Investment Manager for
analyzing, selecting and monitoring the underlying funds in each
portfolio. Unlike most other mutual funds, the management fees paid
by the Funds include transfer agency, pricing, custodial, auditing and
legal services, taxes, interest, redemption fees, expenses of
non-interested Trustees and general administrative and other operating
expenses. The Distributor, an affiliate of the Investment Manager,
may receive remuneration from certain underlying funds for services
rendered to such funds in connection with investments therein. See the
discussion herein
3<PAGE>
under the caption "Fund Management -- Execution
of Portfolio Transactions." In light of this remuneration to the
Distributor, the Investment Manager will voluntarily reduce its
management fees to keep total Fund operating expenses no greater
than 1.20% (not including extraordinary expenses) until at least
December 31, 1998. After December 31, 1998, the management fee
waiver may be terminated, modified or continued. If there were no
such fee waiver, the management fee paid by each Fund would be
1.20% of its average daily net assets and each Fund's total operating
expenses would be 1.45% of its average daily net assets.
<F3> Based on average daily net assets. The 12b-1 fee is an asset-based
sales charge as defined in the Rules of Fair Practice of the National
Association of Securities Dealers (the "Rules"). See "Fund
Management -- Distribution Plan." The existence of this charge may
cause long-term shareholders to pay more in total sales charges than
the economic equivalent of the maximum front-end sales charges
permitted under the Rules.
<F4> Does not include extraordinary expenses. The Funds are newly
formed and this amount is based on estimates for the current fiscal
year for the Funds after management fee waivers. See Footnote 1
above.
EXAMPLE
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual return
and (2) redemption at the end of each time period:
1 YEAR 3 YEARS
Comprehensive Growth Fund $ 12 $ 37
Classic Retirement Fund $ 12 $ 37
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses that an investor in either Fund will bear, directly
or indirectly. See "Fund Management -- Advisory Fee -- Expenses Borne by
Each Fund." THE EXAMPLE SET FORTH IN THE FOREGOING TABLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESSER THAN THOSE SHOWN.
THE FUNDS
The Dresher Family of Funds was organized as a Delaware business trust on
March 26, 1997. The Trust is registered as an open-end management
investment company under the Investment Company Act of 1940 (the "1940
Act"). The Trust is a diversified investment company for purposes of the
1940 Act because all of its assets will be represented by securities of other
investment companies or cash (or cash equivalents). Many of the underlying
funds in which the Funds invest will themselves be diversified investment
companies. The level of diversification the Funds obtain from being invested
in a number of underlying funds is intended to reduce the risks associated
with an investment in a single underlying fund. The Funds intend to qualify
as diversified investment companies for purposes of Subchapter M of the
Internal Revenue Code (the "Code").
4<PAGE>
The Trust currently consists of two
separate series portfolios: the Comprehensive Growth Fund and the Classic
Retirement Fund. Each Fund is managed separately and has its own
investment objectives and strategies designed to meet its respective
investment goals. Investment in Shares of one or more of the Funds involves
risks. There can be no assurance that the Funds' investment objectives will
be achieved. See "Risks and Other Considerations."
INVESTMENT OBJECTIVES AND MANAGEMENT
TECHNIQUES
Each Fund seeks to achieve its investment objective by investing exclusively
(other than cash or cash equivalents) in a portfolio of other open-end "mutual
funds." (The mutual funds in which the Funds may invest are referred to in
this Prospectus as the "underlying funds.") The Funds will purchase securities
of other investment companies only as permitted under the 1940 Act,
including any exemptive relief granted by the SEC. A Fund will, under
normal circumstances, maintain its assets in a number of underlying funds.
However, for temporary defensive purposes when market conditions dictate,
up to 100% of the assets of either Fund may be invested in cash or cash
equivalents. Each Fund may invest in identical types of mutual funds. Of
course, the percentage of each Funds' assets will vary based upon the Fund's
investment objective.
THE DRESHER COMPREHENSIVE GROWTH FUND: This
Fund is an aggressive growth fund which seeks capital appreciation without
regard to current income. Under normal market conditions, at least 75% of its
assets at the time of investment will be invested in mutual funds that invest
primarily in common stock or securities convertible into or exchangeable for
common stock. The allocation of the assets of the Fund are expected to result
in the Fund being exposed to more risk than the Classic Retirement Fund.
THE DRESHER CLASSIC RETIREMENT FUND: This Fund is
a moderate growth fund which seeks moderate capital appreciation and
significant income. The mutual funds comprising this Fund will invest in
common stocks, preferred stocks, bonds and other fixed income securities.
Under normal market conditions, no more than 65% of its assets at the time
of investment will be invested in mutual funds that invest primarily in
common stock or securities convertible into or exchangeable for common
stock.
Each Fund's investment objective is non-fundamental and may be changed
by the Board of Trustees of the Trust (the "Board of Trustees") without
approval by the shareholders of that Fund. You would be notified in writing
at least 30 days before a change in the investment objective of a Fund. If
there is a change in investment objective, you should consider whether the
particular Fund remains an appropriate investment in light of your then
current financial position and needs.
The underlying funds may, but need not, have the same investment objectives,
policies and limitations as the Fund. Each Fund can elect to redeem (subject
to the 1% limitation discussed under the caption "Risks and Other
Considerations") its investment in an underlying fund if that action is
considered necessary or appropriate.
5<PAGE>
ACTIVE MANAGEMENT
The Funds will be under the active management of an investment manager
and staff experienced in assessing mutual funds. See "Trust Management --
Investment Manager, Distributor, and Transfer Agent." The Investment
Manager will seek to take advantage of changing markets, economic
conditions and underlying fund management changes by relying on public
sources of information as well as proprietary techniques.
The Investment Manager selects underlying funds in which to invest based,
in part, upon an analysis of their past performance (absolute, relative and
risk-adjusted), management style, and investment objectives and policies. The
Investment Manager also considers other factors in the selection of underlying
funds, including, but not limited to, asset size, liquidity, expense ratios,
quality of shareholder services, reputation and tenure of portfolio managers,
industry classification represented in their portfolios, and specific portfolio
holdings.
ASSET ALLOCATION
The assets of the Funds will be invested in a mix of asset classes. This tactic
is usually referred to as "asset allocation." Since the performance of asset
types does not always move in the same direction at the same time, investing
in a mix of asset classes or types can help improve performance and reduce
volatility. Thus, the Investment Manager will manage the risk to a certain
extent by varying the ratio of Fund investments among different asset
categories. Each Fund seeks to meet its investment objectives by investing
in a different mix of stock funds, bond funds and money market funds. Both
Funds are designed to provide exposure to the growth potential of the stock
market in varying degrees and are suitable for intermediate or long-term
investing as well as retirement saving.
Each Fund will allocate its assets among a number of general types of mutual
funds, including, without limitation: aggressive growth, growth and income,
equity income, small company, sector/speciality, foreign stock, global stock,
balanced, income, convertible bond, high yield bond, corporate bond,
government bond, foreign bond, global bond, municipal bond, short-term
world income and money market. The underlying funds may, among other
things, seek capital growth and appreciation by investing primarily in
common stock or securities convertible into or exchangeable for common
stock (such as convertible preferred stock, convertible debentures or
warrants); seek a combination of capital appreciation and current income
(including income from dividends, income from interest, growth of income
or any combination thereof) by investing primarily in common stocks,
preferred stocks, bonds and other fixed income securities (including
convertible preferred stock and convertible debentures); seek high current
income by investing primarily in long- or short-term bonds and other fixed
income securities (such as securities issued, guaranteed or insured by the U.S.
government, commercial paper, preferred stock, convertible preferred stock
or convertible debentures); and seek as high a level of current income as is
consistent with preservation of capital and liquidity by investing in a broad
range of high quality, short-term money market instruments which have
remaining maturities not exceeding one year (including U.S. government
securities, bank obligations, commercial paper, corporate debt securities and
repurchase agreements). (Certain additional investments which the
underlying funds may make, and certain risks associated with the underlying
funds' investments, are described in Appendix B to this Prospectus.)
6<PAGE>
It is unlikely that at any particular time either Fund will have all of its
assets invested in only one of these general types of underlying funds, and
each Fund may maintain at least some nominal investment in many of these fund
types on an ongoing basis. The Investment Manager will vary the portfolio
of each type of underlying fund based on the mix of such funds that, in the
Investment Manager's view, is most likely to achieve each Fund's investment
objective. All investments involved risk, and there is no assurance that the
investment objectives of the Funds will be achieved.
In allocating assets among general types of underlying funds, the Investment
Manager will employ both fundamental and technical analyses to assess
relative risk and reward potential in the financial markets, with the goal of
achieving each Fund's investment objective. The allocation process goes
beyond the basic determination of the degree to which the Funds' assets would
be invested in equity funds versus bond funds. The Investment Manager
engages in continuous research with regard to evolving opportunities in
various asset subclasses, including investment discipline (e.g., "growth
investment" vs. "value investing"), market capitalization (e.g., "small
company" vs. "blue chip") geo-economic considerations (i.e., "domestic" vs.
foreign"), fixed-income security maturities (i.e., "short-term" vs.
"long-term") and sector/industry relation (e.g., "basic materials" vs.
"consumer non-durables" or "aerospace/defense" vs. "electric utilities").
Generally, in seeking the Funds' objectives, the Investment Manager will alter
the composition of each Fund's portfolio as economic and market trends
change. Subject to the investment policies set forth on page 5 above, each
Fund's portfolio may vary considerably among equity, bond, and money
market mutual funds as these changes occur.
Each Fund may also deposit cash representing up to the following percentage
of each Fund's net assets in a money market deposit account maintained by
the Fund's Custodian: (i) up to 100% for temporary defensive purposes when
and to the extent that, in the judgment of the Investment Manager, other
investments involve unreasonable risk, or (ii) approximately 5% in order to
meet anticipated redemptions. To the extent that such balances exceed
$100,000, such deposits are not protected by federal insurance.
INVESTMENT POLICIES AND RESTRICTIONS
Each Fund has adopted certain fundamental investment policies. These
policies may not be changed without the vote of a majority of that Fund's
outstanding votes, as defined under "General Information -- Voting Rights."
Each Fund has also adopted certain investment policies that are not
fundamental and therefore may be changed by the Board of Trustees without
shareholder approval. Under each Fund's fundamental investment policies,
each Fund (1) may purchase securities of any issuer only when consistent with
the maintenance of such Fund's status as a diversified company under the
1940 Act, (2) may not invest 25% or more of its total assets in the securities
of mutual funds that concentrate themselves (i.e., invest 25% or more of their
total assets) in any one industry, provided that the Fund (a) may indirectly
invest 25% or more of its total assets in one industry if the underlying funds
invest their assets in the same industry and (b) will invest more than 25% of
its total assets in mutual funds, and (3) may purchase or sell commodities,
commodities contracts, or real estate, lend or borrow money, issue senior
securities, underwrite securities, or pledge, mortgage or hypothecate any of
its assets only to the extent permitted under the 1940 Act, including any
exemptive relief granted by the SEC.
7<PAGE>
Under each Fund's non-fundamental investment policies, each Fund may not
(1) invest more than 15% of its net assets in illiquid securities, (2) invest
for the purpose of exercising control or management of another issuer, (3)
purchase securities of other investment companies, except as permitted under
the 1940 Act, including any exemptive relief granted by the SEC, or (4)
purchase securities of any closed-end investment company or any investment
company the shares of which are not registered in the United States.
RISKS AND OTHER CONSIDERATIONS
Any investment in a mutual fund involves risk. Although the Funds will
invest in a number of underlying funds, this practice does not eliminate
investment risk. Some of the underlying funds in which the Funds invest may
involve more risk than others. For example, the underlying funds may invest
some or all of their assets in a broad array of corporate bonds some which are
not considered investment grade bonds by Standard & Poor's Corporation or
Moody's Investor Services, Inc. or which are unrated; foreign securities and
foreign currency transactions; convertible and debt securities, including,
without limitation, master demand notes, illiquid securities and warrants; and
the investments described in Appendix B to this Prospectus. The underlying
funds may also lend their portfolio securities; sell securities short; borrow
money in amounts up to some designated percentage of their assets for
investment purposes; write (sell) or purchase call or put options on securities
or on stock indexes; concentrate 25% or more of their total assets in assets in
one industry; enter into futures contracts or repurchase agreements; and write
(sell) or purchase options on futures contracts. Some of the risks associated
with these investment policies are described in Appendix B to this Prospectus.
Through its investment in underlying funds, each Fund indirectly may invest
more than 25% of its total assets in one industry. Such indirect concentration
of the Fund's assets may subject the Shares of that Fund to greater fluctuation
in value than would be the case in the absence of such concentration.
Each Fund, together with any "affiliated persons" (as defined in the 1940 Act)
may purchase only up to 3% of the total outstanding securities of any
underlying fund. For this purpose, shares of underlying funds held by private
discretionary investment advisory accounts managed by the Investment
Manager will be aggregated with those held by the Fund. Accordingly, when
affiliated persons and other accounts managed by the Investment Manager
hold shares of any of the underlying funds, the Funds' ability to invest fully
in shares of those funds is restricted, and the Investment Manager must then
in some instances select alternative investments that would not have been its
first preference.
Under certain circumstances, an underlying fund may determine to make a
payment for redemption of its shares to the Fund wholly or partly by a
distribution "in kind" of securities from its portfolio in lieu of cash, in
conformity with the rules of the SEC. In such cases, the Fund may hold
securities distributed by an underlying fund until the Investment Manager
determines that it is appropriate to dispose of such securities. Such
disposition may entail additional costs to the affected Fund.
Investment decisions by the investment advisers of the underlying funds are
made independently of the Funds and the Investment Manager. Therefore, the
investment adviser of an underlying fund
8<PAGE>
may be purchasing securities of the
same issuer whose securities are being sold by the investment adviser of
another underlying fund. The result of this would be an indirect expense to
the Funds without accomplishing any investment purpose.
An investor in either Fund will bear not only its proportionate share of the
expenses of such Fund but also, indirectly, similar expenses of the underlying
funds. These expenses consist of advisory fees, expenses related to the
distribution of shares, brokerage commissions, accounting, pricing and
custody expenses, printing, legal and audit expenses and other miscellaneous
expenses. The Funds intend to arrange to be included within a class of
investors entitled not to pay sales charges by purchasing load fund shares
under letters of intent, rights of accumulation, cumulative purchase privileges
and other quantity discount programs. The Funds will not, however, invest
in shares of a mutual fund that is sold with a contingent deferred sales load.
In addition, as a result of the Funds' policies of investing in other mutual
funds, an investor may receive taxable capital gains distributions to a greater
extent than would be the case if the investor invested directly in the
underlying funds. See "Dividends, Distributions and Taxes."
The underlying funds in which the Funds invest may incur distribution and
shareholder service expenses in the form of "Rule 12b-1 fees" or service fees.
In the event a Fund purchases shares of an underlying fund that imposes Rule
12b-1 or service fees, such fees will be paid by such underlying funds to the
Distributor because portfolio transactions for the Funds will generally be
placed through the Distributor. The Distributor is entitled to retain service
fees in an amount equal to the fair market value of the services provided by
it to the underlying funds. The Distributor will reimburse to the funds fees
it receives from underlying funds for effecting purchases of the underlying
funds' shares. For a description of such arrangements, please see the
discussion under the caption "Trust Management -- Execution of Portfolio
Transactions."
Because of the compensation the Distributor, an affiliate of the Investment
Manager, may receive from the underlying funds in connection with the
Funds' investments in such underlying funds, the Investment Manager may
have conflicts of interest in rendering advice to the Funds. The Investment
Manager will at all times fulfill its obligations to act in the best interests
of the Funds. In addition, because the Distributor will reimburse to the Funds
any fees received by it for effecting purchases of the underlying funds' shares,
the Trust and the Investment Manager believe that the incentive to the
Investment Manager to make investments in underlying funds which pay such fees
is greatly reduced.
The 1940 Act currently provides that any underlying fund is not required to
redeem any shares held by the Funds in excess of 1% of the underlying fund's
outstanding shares in any 30-day period, and any of the Funds' holdings in
excess of that amount may be considered illiquid. However, since the Funds
have elected to reserve the right to pay redemption requests in investment
securities, these positions may be treated as liquid.
The Investment Manager and/or its affiliates have been providing financial
services to individuals, qualified retirement programs, estates and other
business entities since 1984. Although the Investment Manager has
substantial experience and expertise in assessing mutual funds for its clients,
the Investment Manager has no previous experience in advising a mutual
fund. In addition, the Funds are newly formed and have no operating history
upon which an investor may assess investment performance.
9<PAGE>
TRUST MANAGEMENT
TRUSTEES AND OFFICERS
The business and affairs of the Trust, and thus of each Fund, are managed
under the direction of the Board of Trustees. By virtue of the
responsibilities assumed by NFA as Investment Manager (see below), the Trust
has no executive employees other than its officers, each of whom is employed
by NFA or its affiliates and none of whom devotes full time to the affairs of
the Trust. No officer, director or employee of NFA or any of its affiliates
receives any compensation from the Trust for serving as a Trustee or officer
of the Trust. The Trust pays each Trustee who is not an officer, director or
employee of NFA or any of its affiliates a fee of $100 per meeting attended
and reimburses each such Trustee for travel and out-of-pocket expenses.
These costs and expenses of "non-interested" Trustees are, in turn, reimbursed
to the Trust by the Investment Manager pursuant to the Investment Advisory
Agreement. See "Investment Manager, Distributor, and Transfer Agent"
below.
INVESTMENT MANAGER, DISTRIBUTOR, AND TRANSFER
AGENT
The Trust has retained as its investment adviser National Financial Advisors,
Inc. ("NFA" or the "Investment Manager"), 715 Twining Road, Suite 202,
Dresher, Pennsylvania 19025, an investment management organization
founded in 1992. NFA is actively engaged in providing investment
management services to trusts, institutions and high-income individuals and
is registered under the Investment Advisers Act of 1940. The Investment
Manager has not been sponsored, recommended or approved, nor have its
abilities or qualifications been passed upon, by the SEC or any other
governmental agency.
NFA is a wholly owned subsidiary of The National Advisory Group, Inc.
("The Group"), a Pennsylvania corporation with interests primarily in the
financial services industry. The Group also owns all of the shares of NFA
Brokerage Services, Inc. (the "NFA Brokerage" or the "Distributor"), the
NASD mutual funds only broker/dealer through which Shares of each Fund
are being offered. The Trust has entered into a Distribution Agreement with
NFA Brokerage under which each Fund will pay NFA Brokerage for
distribution services as permitted under the Trust's Distribution Plan. See
"Distribution Plan." The Group also owns all of the shares of National
Shareholder Services, Inc., a Pennsylvania corporation ("NSS" or the
"Transfer Agent"), which will serve as the Fund's transfer agent, dividend
paying agent and shareholder service agent. Jeffrey C. Brown (President of
The Group and President of NFA) and Larissa N. Patrylak (Vice President of
The Group and Controller of NFA) each own 50% of the outstanding capital
stock of The Group and therefore each is deemed to be in control of NFA,
NFA Brokerage and NSS.
Subject to the supervision and direction of the Board of Trustees, NFA, as
Investment Manager, manages each Fund's portfolio in accordance with the
stated policies of that Fund. NFA makes investment decisions for each Fund
and places the purchase and sale orders for portfolio transactions. In
addition, NFA furnishes office facilities and clerical and administrative
services, pays the salaries of all officers and employees who are employed by
both it and the Trust and, subject to the direction of the Board of Trustees,
is responsible for the overall management of the business affairs of each Fund,
including the provision of personnel for recordkeeping, the preparation of
governmental reports and responding to shareholder communications.
10<PAGE>
Under the Investment Advisory Agreement between the Trust and the
Investment Manager, the Investment Manager is entitled to receive from each
Fund as compensation for its services an annual fee of 1.20% on each Fund's
average daily net assets. However, the Investment Manager is contractually
obligated to reduce its management fee to keep total operating expenses for
each Fund at no greater than 1.20% (not including extraordinary expenses)
until at least December 31, 1998. The fee is paid monthly and calculated on
the basis of the month's net assets. Unlike most mutual funds, the
management fees paid by the Funds to NFA include transfer agency, pricing,
custodial, auditing and legal services, taxes, interest, redemption fees,
expenses of non-interested Trustees and general administrative and other
operating expenses of each Fund except as noted below under "Expenses
Borne by Each Fund."
Jeffrey C. Brown is the person primarily responsible for the management of
the portfolio of each of the Funds. Mr. Brown has been President of The
Group since 1984 and of The Group's affiliated entities since each of their
formation. Mr. Brown has been a Trustee of the Trust since its inception.
EXPENSES BORNE BY EACH FUND
Each Fund pays all expenses not assumed by the Investment Manager,
including extraordinary expenses and costs pursuant to the Distribution Plan
described below. Until at least December 31, 1998, the Investment Manager
is contractually obligated to reduce its management fee to keep total operating
expenses of each Fund at no greater than 1.20% of average daily net assets
(not including extraordinary) expenses.
An investor in either of the Funds should recognize that it may invest directly
in mutual funds and that, by investing in mutual funds indirectly through
either Fund, the investor will bear not only its proportionate share of the
expenses of the Fund but also indirectly similar expenses paid by underlying
funds. See "Risks and Other Considerations."
DISTRIBUTION PLAN
Rule 12b-1 ("Rule 12b-1") under the 1940 Act regulates the circumstances
under which an investment company may, directly or indirectly, bear the
expenses of distributing its shares. Rule 12b-1 defines such distribution
expenses to include the costs of "any activity which is primarily intended to
result in the sale of fund shares." Rule 12b-1 provides, among other things,
that an investment company may bear such expenses only pursuant to a plan
adopted in accordance with Rule 12b-1.
The Trust has adopted a Distribution Plan (the "Distribution Plan") with
respect to the distribution of each Fund's Shares. The Distribution Plan
permits, among other things, payments in the form of (a) compensation to
securities brokers and dealers for selling Shares; (b) compensation to
securities brokers and dealers, accountants, attorneys, investment advisors,
pension actuaries, non-profit entities not advised by the Investment Manager
or its affiliates and service organizations for services rendered by them to
their clients or members in reviewing, explaining or interpreting the Funds'
prospectus and other selling materials; (c) advertising costs; (d) costs of
telephone, mail, or other direct solicitation of prospective investors and of
responding to inquiries, as well as the compensation of persons who do the
soliciting or respond to inquiries; (e) preparing and printing
11<PAGE>
prospectuses and
other selling materials and the cost of distributing them (including postage);
(f) reimbursement of travel, entertainment and like expenditures made by the
Trustees in promoting the Funds and their investment objective and policies;
(g) fees of public relations consultants and (h) awards. The fees payable
under the Distribution Plan are payable without regard to actual expenses
incurred. Each Fund may expend as much as, but not more than, 0.25% of its
average net assets annually pursuant to the Distribution Plan.
A report of the amounts expended by each Fund under the Distribution Plan
and the purpose of the expenditure must be made to and reviewed by the
Board of Trustees at least quarterly. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
each Fund will bear for distribution without shareholder approval of the
relevant Fund and that other material amendments of the Distribution Plan
must be approved by the Board of Trustees, and by the Trustees who are not
"interested persons" (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of the Distribution Plan or in any
agreements related to the Distribution Plan, by vote cast in person at a
meeting called for the purpose of voting on the Distribution Plan. The
Distribution Plan is terminable at any time by vote of a majority of the
Trustees who are not "interested persons" and who have no direct or indirect
financial interest in the operation of the Distribution Plan or in any related
service agreement or by vote of the majority of the relevant Fund's Shares.
Any dealer or service agreement related to the Distribution Plan terminates
upon assignment and is terminable at any time, without penalty, upon not
more than 60 days' written notice to any other party to the agreement, by a
vote of a majority of the Trustees who are not "interested persons" and who
have no direct or indirect financial interest in the operation of the
Distribution Plan or in any of the related service agreements or by vote of a
majority of the relevant Fund's Shares.
NFA Brokerage, Inc. is a wholly-owned subsidiary of The Group and is
located at the same address as the Investment Manager. The Distributor
serves as the exclusive agent for the distribution of the Trust's Shares based
on a Distribution Agreement between it and the Trust.
The Distribution Agreement with the Distributor provides for the payment by
each Fund to the Distributor of a distribution fee (the "Distribution Fee") in
an amount equal to 0.25% of average daily net assets. The Distributor
determines the amount, if any, to be paid to service agents and the basis on
which such payments are made. Certain employees of The Group, NFA
Brokerage and the Investment Manager may receive compensation under the
Distribution Plan.
EXECUTION OF PORTFOLIO TRANSACTIONS
Orders for portfolio transactions of the Funds generally will be placed through
NFA Brokerage. NFA Brokerage will receive orders from the Investment
Manager, place them with the underlying fund's distributor, transfer agent or
other person, as appropriate, confirm the trades, prices and numbers of shares
purchased or sold, and assure prompt payment by or to the Fund and proper
completion of the order.
Each Fund has authority to purchase shares of underlying funds that impose
Rule 12b-1 or service fees. Such underlying funds will sign agreements with
the Distributor pursuant to which the Distributor will provide certain services
to such underlying funds in consideration of the payment of such fees. Such
services may include: sub-accounting, account status information, forwarding
12<PAGE>
of communications from such underlying funds to a Fund, and share purchase
processing, exchange, and redemption assistance. In the absence of such an
agreement, an underlying fund would retain the Rule 12b-1 or service fees.
The Distributor is entitled to retain fees for services provided by it to an
underlying fund. Such fees will not exceed the fair market value of the
services provided.
In the event an underlying fund pays a fee to the Distributor for effecting the
purchase of such fund's shares, the Distributor will reimburse all such fees to
the relevant Fund. Reimbursement will be made by the Distributor to a Fund
as soon as administratively possible.
PORTFOLIO TURNOVER
Each Fund is actively managed and has no restrictions upon portfolio
turnover. However, it is anticipated that each Fund's rate of portfolio
turnover generally will not exceed 200%. A 100% annual portfolio turnover rate
would be achieved if each security in a Fund's portfolio (other than securities
with less than one year remaining to maturity) were replaced once during the
year. A portfolio turnover rate of 100% or more is considered high and each
Fund's rate of portfolio turnover may be greater than that of many other
mutual funds. Trading also may result in realization of net short-term capital
gains that would not otherwise be realized. Shareholders are taxed on such
gains when distributed from a Fund at ordinary income tax rates. High
portfolio turnover increases the possibility that the Funds would not qualify
as regulated investment companies under Subchapter M of the Code. A Fund
will not qualify as a regulated investment company if it derives more than
30% of its gross income from gains (without offset for losses) from the sale
or other disposition of securities held for less than three months. See
"Dividends, Distributions and Taxes." There is no limit on the portfolio
turnover rates of the underlying funds.
HOW TO PURCHASE SHARES
Shares of the Funds are offered as an investment vehicle for individuals,
institutions, corporations and fiduciaries. Each Fund may invest in underlying
funds which are sold with a sales charge; however, the Funds intend to use
various quantity discount programs and/or applicable waivers to avoid
imposition of any sales loads. Prospectuses, sales material and applications
can be obtained from NSS, the Transfer Agent for each Fund, at the address
and telephone number set forth below. NSS is a subsidiary of The Group, the
parent company of the Investment Manager and the Distributor.
INITIAL PURCHASE
The minimum initial investment in a Fund is $10,000, except that the Trust
reserves the right, in its sole discretion, to waive or reduce the minimum
initial investment amount for certain investors or to waive or reduce the
minimum initial investment for tax-deferred retirement plans. The minimum
investment is waived for purchases by Trustees, officers and employees of the
Trust and of The Group, as well as for private clients of The Group, including
members of such persons' immediate families. The Trust also reserves the
right to waive the minimum initial investment for financial intermediaries.
The Trust is authorized to reject any purchase order.
PRICE OF SHARES
13<PAGE>
Shares of each Fund are sold on a continuous basis, without a sales charge, at
the net asset value (the "Net Asset Value") next determined after receipt of
a purchase order by the Transfer Agent. The Net Asset Value per Share of
each Fund is calculated on each day that the New York Stock Exchange (the
"NYSE") is open for trading. The Net Asset Value per Share of each Fund is
calculated by dividing the sum of the value of the securities held by the Fund
plus cash or other assets minus all liabilities (including estimated accrued
expenses) by the total number of outstanding Shares of the Fund, rounded to
the nearest cent.
Shares of the underlying funds are valued at their respective net asset values
under the 1940 Act. The underlying funds value securities in their portfolios
for which market quotations are readily available at their current market value
(generally the last reported sale price) and all other securities and assets at
fair value pursuant to methods established in good faith by the board of
trustees or directors of the underlying mutual fund. Money market funds with
portfolio securities with deemed maturities of 397 days or less may use the
amortized cost or penny-rounding methods to value their securities.
Securities having 60 days or less remaining to maturity generally are valued
at their amortized cost, which approximates market value.
Other assets of each Fund are valued at their current market value if market
quotations are readily available and, if market quotations are not available,
they are valued at fair value pursuant to methods established in good faith by
the Board of Trustees.
Investors should note that, due to time constraints involved in the pricing of
shares of mutual funds such as the Funds, the Net Asset Value of Fund Shares
reported in newspapers will lag behind the Funds' actual Net Asset Value by
one business day. Purchase orders received by dealers prior to 4:00 p.m. EST
on any business day, and transmitted to the Transfer Agent by 5:00 p.m. EST
that day, are confirmed at the Net Asset Value determined as of the close of
the regular sessions of trading on the NYSE on that day. It is the
responsibility of dealers to transmit properly completed orders so that they
will be received by the Transfer Agent by 5:00 p.m. EST. Broker-dealers or
other agents may charge an investor a fee for effecting transactions. Direct
purchase orders received by the Transfer Agent by 4:00 p.m. EST are
confirmed at that day's Net Asset Value. Direct investments received by the
Transfer Agent after 4:00 p.m. and orders received from dealers after 5:00
p.m. are confirmed at the Net Asset Value determined on the next following
business day.
SHAREHOLDER ACCOUNTS
When an investor invests in a Fund, NSS will establish an open account to
which all full and fractional Shares (to three decimal places) will be
credited, together with any dividends and capital gains distributions, which
are paid in additional Shares unless the shareholder otherwise instructs the
Transfer Agent. No stock certificates representing Shares will be issued.
An investor may open an account and make an initial investment in either
Fund by sending a check and completed account application form to NSS at
Twining Office Center, 715 Twining Road, Suite 202, Dresher, Pennsylvania
19025. Checks should be made payable to The Dresher Comprehensive
Growth Fund or The Dresher Classic Retirement Fund, as appropriate. An
account application kit is included with this Prospectus. Each Fund reserves
the rights to limit the amount of investments and to refuse to sell to any
person.
14<PAGE>
The Transfer Agent mails to shareholders confirmation of all purchases or
redemptions of Shares of the Funds. With a shareholder's prior consent, the
Funds will transmit confirmations and other statements to such shareholder
by e-mail or other electronic media in compliance with SEC guidelines. A
consent to receive such confirmations and statements electronically may be
revoked at any time, whereupon the shareholder will be provided with hard
copies of all such confirmations and statements. In addition, a shareholder
who has consented to electronic delivery may request hard copies at any time.
The Funds' account application contains certain provisions limiting the
liability of the Trust, NSS and certain of their affiliates for certain claims
and costs (including among others, losses resulting from unauthorized
shareholder transactions) relating to the various services (for example,
telephone redemptions and exchanges) made available to investors.
If an order to purchase Shares is canceled because an investor's check does
not clear, the investor will be responsible for any resulting losses or fees
incurred by the Fund or NSS in the transaction.
An investor may also purchase Shares of the Funds by wire. Please call NSS
at (888) 980-7500 for instructions. The investor should be prepared to give
the name in which the account is to be established, the address, telephone
number, and taxpayer identification number for the account, and the name of
the bank that will wire the money.
Investments in a Fund will be made at the Fund's Net Asset Value next
determined after a wire is received together with the account information
outlined above. If the Trust does not receive timely and completed account
information, there may be a delay in the investment of money and any accrual
of dividends. To make an initial wire purchase, an investor must mail a
completed account application to NSS. Banks may impose a charge for
sending a wire. There is presently no fee for receipt of wired funds, but NSS
reserves the right to charge shareholders for this service upon thirty days'
prior notice to shareholders.
SUBSEQUENT PURCHASES
An investor may purchase and add Shares to its account ($100 minimum)
directly by mail or by bank wire or through a dealer. Checks should be sent
to NSS, Twining Office Center, 715 Twining Road, Suite 202, Dresher,
Pennsylvania 19025. Checks should be made payable or endorsed to The
Dresher Comprehensive Growth Fund or The Dresher Classic Retirement
Fund, as appropriate. Bank wires should be sent as outlined above. Each
additional purchase request must contain the account name and number to
permit proper crediting.
SHAREHOLDER SERVICES
Contact NSS at (888) 980-7500 for additional information about the
shareholder services described below.
Tax-Deferred Retirement Plans
15<PAGE>
Shares of the Funds are available for purchase in connection with the
following tax-deferred retirement plans offered by National Actuarial
Consultants, Ltd., a wholly-owned subsidiary of The Group:
- Keogh Plans for self-employed individuals.
- Individual retirement account (IRA) plans for individuals and
their non-employed spouses.
- Qualified pension and profit-sharing plans for employees,
including those profit-sharing plans with 401(k) provision.
- 403(b)(7) custodial accounts for employees of public school
systems, hospitals, colleges and other non-profit organizations
meeting certain requirements of the Code.
HOW TO REDEEM SHARES
Shares of the Funds may be redeemed on each day that the Trust is open for
business. Redeeming shareholders will receive the Net Asset Value per Share
next determined after receipt by NSS of a redemption request in the form
described below. Payment is ordinarily sent by mail or by wire within three
business days after tender in such form. However, payment in redemption of
Shares purchased by check will be based on the Net Asset Value next
determined after receipt by NSS of a properly executed redemption request
(as described above) but will be effected only after the check has been
collected, which may take up to fifteen days from the purchase date. A
shareholder may eliminate this delay by purchasing Shares of the Funds by
certified check or wire.
BY MAIL
Shares may be redeemed by mail by writing directly to the Transfer Agent,
National Shareholder Services, Inc., Twining Office Center, 715 Twining
Road, Suite 202, Dresher, Pennsylvania 19025. The redemption request must
be signed exactly as the shareholder's name appears on the application form,
with the signature guaranteed, and must include the account number. If
Shares are owned by more than one person, the redemption request must be
signed by all owners exactly as the names appear on the registration. A
signature guarantee may generally be obtained from a bank, broker, dealer,
credit union (if authorized under state law), securities exchange or
association, clearing agency or savings association. A notary public is not an
acceptable guarantor. The Trust may waive the signature guarantee
requirement in its discretion.
A request for redemption will not be processed until all of the necessary
documents have been received in proper form by the Transfer Agent. A
shareholder in doubt as to what documents are required should contact NSS
at (888) 980-7500
THROUGH BROKER-DEALERS
Shares may also be redeemed by placing a wire redemption request through
a securities broker or dealer. Broker-dealers or other agents may impose a fee
for this service. A redeeming shareholder
16<PAGE>
will receive the Net Asset Value
per Share next determined after receipt by NSS of its wire redemption request.
It is the responsibility of broker-dealers to promptly and properly transmit
wire redemption orders.
BY TELEPHONE
Shares of the Funds may also be redeemed by telephone. The proceeds will
be sent by mail to the address designated on the redeeming shareholder's
account or wired directly to the redeeming shareholder's existing account at
any commercial bank or brokerage firm in the United States as designated on
the application. To redeem by telephone, call NSS at (888) 980-7500. The
redemption proceeds will usually be sent by mail or by wire within three
business days after receipt of telephone instructions. IRA accounts are not
redeemable by telephone.
The telephone redemption privilege is automatically available to all
shareholders. A shareholder may change the bank or brokerage account
designated under this procedure at any time by writing to NSS with the
signature guaranteed by any eligible guarantor institution or by completing a
supplemental telephone redemption authorization form. Contact NSS to
obtain this form. Further documentation will be required to change the
designated account if Shares are held by a corporation, fiduciary or other
organization.
Neither the Trust nor NSS, nor their respective affiliates, will be liable for
complying with telephone instructions they reasonably believe to be genuine
or for any loss, damage, costs or expense in acting on such telephone
instructions. The investor will bear the risk of any such loss. The Trust or
NSS, or both, will employ reasonable procedures to determine that telephone
instructions are genuine. If the Trust and/or NSS do not employ such
procedures, they may be liable for losses due to unauthorized or fraudulent
instructions. Such procedures may include, among others, requiring forms of
personal identification prior to acting upon telephone instructions, providing
written confirmation by mail or, if the shareholder has given its consent to
receipt of confirmation by such means, by e-mail (in compliance with SEC
guidelines) of the transactions and/or tape recording telephone instructions.
OTHER INFORMATION CONCERNING REDEMPTION
Each Fund reserves the right to take up to seven days to make payment if, in
the judgment of the Investment Manager, such Fund could be affected
adversely by immediate payment. In addition, the right of redemption may
be suspended or the date of payment postponed (a) for any period during
which the NYSE is closed (other than for customary weekend and holiday
closings), (b) when trading in the markets that the Fund normally utilizes is
restricted, or when an emergency, as defined by the rules and regulations of
the SEC, exists, making disposal of that Fund's investments or determination
of its Net Asset Value not reasonably practicable, or (c) for any other periods
as the SEC by order may permit. In the case of any such suspension, a
shareholder may either withdraw such shareholder's request for redemption
or receive payment based on the Net Asset Value per Share next determined
after the termination of the suspension. Although the Funds normally expect
to make all redemption requests in cash, under certain circumstances the
Funds may elect to make redemptions "in kind" by distributing underlying
fund shares rather than cash.
17<PAGE>
The Funds reserve the right to redeem Shares and close an account if, as a
result of redemptions, the aggregate value of a shareholder's account drops
below the applicable Fund's $10,000 minimum balance requirement.
Shareholders will be given 30 days' advance written notice and a chance to
increase their account balance to the minimum requirement before the Fund
redeems their Shares.
EXCHANGE PRIVILEGE
Shares of the Funds may be exchanged for each other at Net Asset Value. A
shareholder may request an exchange by sending a written request to NSS.
The request must be signed exactly as the shareholder's name appears on the
Trust's account records. Exchanges may also be requested by telephone. A
shareholder who is unable to execute a transaction by telephone (for example
during times of unusual market activity) should consider requesting that the
exchange be made by mail. An exchange will be effected at the next
determined Net Asset Value after receipt of a request by NSS.
Exchanges may only be made for Shares of Funds then offered for sale in the
shareholder's state of residence and are subject to the applicable minimum
initial investment requirements. The exchange privilege may be modified or
terminated by the Board of Trustees upon 60 days' prior notice to the
shareholders. An exchange results in a sale of the Fund Shares, which may
cause a shareholder to recognize a capital gain or loss.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund will declare and pay, at least annually, dividends to shareholders
of substantially all of its net investment income, if any, earned during the
year from investments, and will distribute net realized capital gains, if any,
once each year. All dividends and distributions will be reinvested
automatically at Net Asset Value in additional Shares of a Fund unless the
shareholder has notified such Fund in writing of the shareholder's election to
receive distributions in cash.
Each Fund intends to qualify continually as a regulated investment company
under Subchapter M of the Code. Such qualification removes from the Fund
any liability for federal income taxes upon the portion of its income
distributed to shareholders and makes federal income tax upon such
distributed income generated by such Fund's investments the sole
responsibility of the shareholders. Continued qualification requires each Fund
to distribute to its shareholders each year substantially all of its income and
capital gains. In addition, amounts not distributed on a timely basis in
accordance with a calendar year distribution requirement are subject to a
nondeductible 4% excise tax. To prevent imposition of the excise tax each
Fund must distribute for each calendar year an amount equal to the sum of (1)
at least 98% of its calendar year net ordinary income, (2) at least 98% of the
excess of its capital gains over capital losses (adjusted for certain ordinary
losses) realized during the one-year period ending December 31 of such year,
and (3) 100% of any undistributed net ordinary income and net capital gains
for previous years. A distribution will be treated as paid on December 31 of
the calendar year if it is declared by the Fund in December of that year with
a record date in December and paid by the Fund during January of the
following calendar year. Such distributions will be taxable to shareholders in
the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received. Each year the Trust
will notify shareholders of the tax status of dividends and distributions.
18<PAGE>
In addition to the distribution requirements outlined above, each Fund must
meet several additional requirements of Subchapter M, including the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of securities and certain other
income; (2) the Fund must derive less than 30% of its gross income each
taxable year from the sale or other disposition of securities held for less
than three months; (3) at the close of each quarter of the Fund's taxable year,
at least 50% of the value of its total assets must be represented by cash and
cash items, U.S. government securities, securities of other regulated
investment companies and other securities, with those other securities limited,
in respect of any issuer, to an amount that does not exceed 5% of the value of
the Fund's total assets and that does not represent more than 10% of the
outstanding voting securities of the issuer; and (4) at the close of each
quarter of the Fund's taxable year, not more than 25% of the value of its total
assets may be invested in securities (other than U.S. government securities and
securities of other regulated investment companies) of any one issuer.
Any dividend or distribution paid by a Fund has the effect of reducing the Net
Asset Value per Share on the ex-dividend date by the amount of the dividend
or distribution. Therefore, a dividend or distribution paid shortly after a
purchase of Shares by an investor would represent, in substance, a return of
capital to the shareholder, even though subject to income taxes.
Each Fund may also, from time to time, pay dividends in excess of net income
and net realized capital gains. Any such excess dividends would constitute
a non-taxable return of capital to the shareholder.
Depending on the residence of the shareholder for tax purposes, distributions
also may be subject to state and local taxes, including withholding taxes.
Investors should consult their own tax advisers as to the tax consequences of
ownership of Shares of a Fund in their particular circumstances.
In accordance with the Code, each Fund may be required to withhold a
portion of dividends, redemptions or capital gains paid to a shareholder and
remit such amount to the Internal Revenue Service if the shareholder fails to
furnish the Fund with a correct taxpayer identification number, if the
shareholder fails to supply the Fund with a tax identification number
altogether, if the investor fails to make a required certification that its
taxpayer identification number is correct and that it is not subject to backup
withholding, or if the Internal Revenue Service notifies the Fund to withhold
a portion of such distributions from a shareholder's account.
Income received from a mutual fund in that Fund's portfolio (including
dividends and distributions of short-term capital gains), as well as interest
received on cash held in the Custodian's money market deposit account and
net short-term capital gains received by the Fund on the sale of mutual fund
shares, will be distributed by the Fund (net of expenses incurred by the Fund)
and will be taxable to shareholders as ordinary income. Because each Fund
is actively managed and can realize taxable net short-term capital gains by
selling shares of an underlying fund with unrealized portfolio appreciation,
investing in the Fund rather than directly in the underlying funds may result
in increased tax liability to the shareholder because the Fund must distribute
its gain in accordance with the rules of the Code.
Distributions of net capital gains received from underlying mutual funds, as
well as net long-term capital gains realized by the Fund from the purchase and
sale of underlying mutual fund shares held
19<PAGE>
by the Fund for more than one
year, will be distributed by the Fund and will be taxable to shareholders as
long-term capital gains (even if the shareholder has held the Shares for less
than one year). However, if a shareholder who has received a capital gains
distribution suffers a loss on the sale of its Shares not more than six months
after purchase, the loss will be treated as a long-term capital loss to the
extent of the capital gains distribution received.
For purposes of determining the character of income received by the Fund
when an underlying fund distributes net capital gains to the Fund, the Fund
will treat the distribution as a long-term capital gain, even if it has held
shares of the mutual fund for less than one year. However, any loss incurred
by the Fund on the sale of that underlying fund's shares held for six months or
less will be treated as a long-term capital loss only to the extent of the gain
distribution. The tax treatment of distributions from the Fund is the same
whether the distributions are received in additional Shares or in cash.
Shareholders receiving distributions in the form of additional Shares will have
a cost basis for federal income tax purposes in each Share received equal to
the Net Asset Value of a Share of the Fund on the reinvestment date.
Either Fund may invest in underlying funds with capital loss carry-forwards.
If such an underlying fund realizes capital gains, it will be able to offset
the gains to the extent of its loss carry-forwards in determining the amount of
capital gains which must be distributed to its shareholders.
GENERAL INFORMATION
The Trust is a business trust formed under the laws of Delaware on March 26,
1997. It may issue an unlimited number of shares of beneficial interest in one
or more series or classes. Currently it offers Shares of two series. The
Board of Trustees may authorize the issuance of shares of additional series or
classes, if it deems it desirable. Shares within each series have equal,
noncumulative voting rights, and have equal rights as to distributions, assets
and liquidation of such series except to the extent that such voting rights or
rights as to distributions, assets and liquidation vary among classes of a
series.
Upon issuance and sale in accordance with the terms of this Prospectus, each
Share will be fully paid and non-assessable. Shares of the Fund have no
preemptive, subscription or conversion rights and are redeemable as set forth
under "How to Redeem Shares." Under Delaware law, shareholders of a
Delaware business trust are not subject to personal liability for the acts and
obligations of the Trust.
SHAREHOLDERS MEETINGS
The Trust is not required to hold annual shareholders' meetings and does not
intend to do so. The Trust may, however, hold special meetings in connection
with certain matters. These include changing a Fund's fundamental policies,
electing or removing Trustees, or approving or amending any investment
advisory agreement or distribution plan.
VOTING RIGHTS
Shareholders of each Fund have the right to vote on any matters which by law
or the provisions of the Declaration of Trust they may be entitled to vote
upon.
20<PAGE>
Shareholders of each Fund are entitled to one vote for each dollar of Net Asset
Value (number of Shares owned times Net Asset Value per Share) of such
Fund. Unless otherwise permitted by the 1940 Act, shareholders will vote by
series and not in the aggregate. In addition, shareholders will vote
exclusively as a class on any matters relating solely to their arrangement as a
class and on any matter in which the interests of that class differs from the
interests of any other class in that Fund. As used in this Prospectus, the
term "vote of a majority of the outstanding votes" of a Fund (or of the Trust)
means the vote of the lesser of: (1) 67% of the votes of the Fund (or of the
Trust) present at a meeting of shareholders if the holders of more than 50% of
the outstanding votes of the Fund (or the Trust) are present in person or by
proxy or (2) more than 50% of the outstanding votes of the Fund (or the Trust).
In compliance with applicable provisions of the 1940 Act, each Fund intends to
vote the shares of the underlying funds held by it in the same proportion as
the vote of all other holders of such underlying fund's securities. The
effect of such "mirror" voting will be to neutralize the Fund's influence on
corporate governance matters regarding the underlying funds in which the Fund
invests.
SHARE CERTIFICATES
To assist in minimizing administrative costs, share certificates will not be
issued. Records regarding Share ownership are maintained by the Transfer
Agent.
SHAREHOLDER INQUIRIES
All Shareholder inquiries should be directed to the Trust at the telephone
number and address shown on the back cover of this Prospectus for National
Shareholder Services.
CUSTODIAN
Firstrust Savings Bank, 1931 Cottman Avenue, Philadelphia, Pennsylvania
19111, is the custodian (the "Custodian") for each Fund's securities and cash.
AUDITORS
Sanville & Company, 1514 Old York Road, Abington, Pennsylvania 19001
have been appointed as independent accountants for the Funds.
LEGAL COUNSEL
Klehr, Harrison, Harvey, Branzburg & Ellers, 1401 Walnut Street,
Philadelphia, Pennsylvania 19102, is legal counsel to the Trust and to the
Investment Manager, the Distributor and the Transfer Agent.
HOW THE FUNDS REPORT PERFORMANCE
From time to time a Fund may advertise its "average annual total return" in
advertisements or reports to shareholders or prospective shareholders.
Quotations of "average annual total return" will be expressed in terms of the
average annual compounded rate of return of a hypothetical investment
21<PAGE>
in a
Fund over periods of 1, 5, and 10 years (up to the life of the Fund). A Fund
may also advertise total return (a "nonstandardized quotation") which is
calculated differently from "average annual total return." A nonstandardized
quotation of total return may be a cumulative return which measures the
percentage change in the value of an account between the beginning and end
of a period, assuming no activity in the account other than reinvestment of
dividends and capital gains distributions. A nonstandardized return may also
indicate average annual compounded rates of return over periods other than
those specified for "average annual total return." A nonstandardized
quotation of total return will always be accompanied by a Fund's "average
annual total return" as described above.
All total return figures will reflect the deduction of a proportionate share
of Fund expenses on an annual basis, and will assume that all dividends and
distributions are reinvested when paid. Quotations of total return reflect
only the performance of a hypothetical investment in the Funds during the
particular time period on which the calculations are based.
Total return for a Fund will vary based upon changes in market conditions and
the level of the Fund's expense and should not be considered an indication of
future performance.
The Funds may also compare their performance with that of other mutual
funds as listed in the rankings prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc., or similar independent services that monitor mutual fund
performance, and with appropriate securities indices, which may assume
reinvestment of dividends but usually do not reflect deductions for
administrative and management costs and expenses. Additional information
about the Funds' performance will be contained in the Funds' annual report to
shareholders, which may be obtained without charge from NSS at the address
or telephone number listed on the back cover of this Prospectus.
ANNUAL AND SEMI-ANNUAL REPORT MAILINGS
Twice a year, each Fund provides shareholders with a report showing its
performance and outlining its investments. To reduce mailing costs, the Trust
will combine these mailings by household. If a household has multiple
accounts and the same record address for all the accounts, the Trust will send
mailings for all accounts at that address in a single package. A shareholder
who does not want to combine mailings for its account should write to NSS
at the address on the back of this Prospectus. With a shareholder's prior
consent, the Funds will transmit their annual and semi-annual reports
electronically to such shareholder by e-mail or by posting such reports on the
Trust's World Wide Web site. If such reports are posted on the Trust's World
Wide Web site, shareholders will receive prior notice, in compliance with
SEC guidelines, that reports will be delivered in this manner. A consent to
receive such reports electronically may be revoked at any time, whereupon the
shareholder will be provided with hard copies of all such reports. In
addition, a shareholder who has consented to electronic delivery may request
a hard copy of any report at any time.
______________________________
No dealer, salesman, or other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Trust or the
22<PAGE>
Investment Manager. This Prospectus does not constitute an offering in any
state in which such offering may not lawfully be made.
23<PAGE>
APPENDIX A
DESCRIPTION OF BOND AND COMMERCIAL PAPER RATING*
STANDARD & POOR'S CORPORATION
BONDS
AAA: Bonds rated AAA have the highest rating assigned by Standards &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is extremely strong.
AA: Bonds rated AA have very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A: Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
bonds in the higher rated categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than the bonds
in higher rated categories.
BB, B, CCC AND
CC: Bonds rated BB, B, CCC and CC are regarded on balance as
predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and CC the highest degree
of speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.
COMMERCIAL PAPER
A-1: Commercial paper rated A-1 indicates that the degree of safety
regarding timely payment is very strong.
A-2: Commercial paper rated A-2 indicates that the capacity for timely
payment is strong. However, the relative degree of safety is not as
overwhelming as for issues designated A-1.
________________________
*As described by Standard & Poor's Corporation
A-1<PAGE>
APPENDIX B
DESCRIPTION OF VARIOUS SECURITIES INVESTED IN,
AND TECHNIQUES EMPLOYED BY,
UNDERLYING FUNDS IN WHICH THE FUNDS MAY INVEST
As described in this Prospectus under "Investment Objectives and
Management Techniques" and under "Risks and Other Consideration," the
Funds will invest in the shares of open-end investment companies (or "mutual
funds"). These mutual funds (collectively referred to in this Appendix as
"underlying funds") may incur risks, certain of which are described in this
Appendix B. The underlying funds may invest in a variety of investment
securities and instruments. This Appendix B is not an exhaustive list of such
investment products.
FOREIGN SECURITIES
An underlying fund may invest some or all of its assets in securities of
foreign issuers. Investments in foreign securities involve risks relating
to political and economic developments abroad as well as those that may result
from the difference between the regulation to which U.S. issuers are subject
and that applicable to foreign issuers. These risks may include expropriation,
confiscatory taxation, withholding taxes on dividends and interest, limitations
on the use or transfer of an underlying fund's assets and political or social
instability or diplomatic developments. Foreign issuers are not generally
subject to accounting, auditing and financial reporting standards and practices
comparable to those in the United States. There is often less information
publicly available about a foreign issuer than about a U.S. issuer.
Individual foreign economies may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position. Securities of foreign companies may be less liquid and
their prices more volatile than securities of comparable U.S. companies.
Moreover, the underlying funds generally calculate their net asset values and
complete orders to purchase, exchange or redeem shares only on days when
the New York Stock Exchange is open. However, foreign securities in which
the underlying funds may invest may be listed primarily on foreign stock
exchanges that may trade on other days (such as U.S. holidays and weekends).
As a result, the net asset value of an underlying fund's portfolio may be
significantly affected by trading on days when the Investment Manager does
not have access to the underlying funds and shareholders do not have access
to the Funds.
Additionally, because foreign securities ordinarily are denominated in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect an underlying fund's net asset value, the value of dividends
and interest earned, gains and losses realized on the sale of securities and
net investment income and capital gain, if any, to be distributed to
shareholders by the underlying fund. If the value of a foreign currency rises
against the U.S. dollar, the value of the underlying fund's assets denominated
in that currency will decrease. The exchange rates between the U.S. dollar
and other currencies are determined by supply and demand in the currency
exchange markets, international balance of payments, governmental intervention,
speculation and other economic and political conditions. The costs
attributable to foreign investment that an underlying fund must bear
frequently are higher that those attributable to domestic investing. For
example, the costs of maintaining custody of foreign securities are generally
higher than custodian costs relating to domestic securities.
B-1<PAGE>
Income received by an underlying fund from sources within foreign countries
may be reduced by withholding and other taxes imposed by such countries.
Tax conventions between certain countries and the United States may reduce
or eliminate such taxes. Any such taxes paid by an underlying fund will
reduce the net income of the underlying fund available for distribution to the
Funds. Special tax considerations apply to foreign securities.
Risks may be intensified in the case of investments by an underlying fund in
emerging markets or countries with limited or developing capital markets.
Securities prices in emerging markets can be significantly more volatile than
those in more developed nations, reflecting the greater uncertainties of
investment in less established markets and economies. In particular, countries
with emerging markets may have relatively unstable governments, present the
risk of nationalization of businesses, restrictions on foreign ownership, or
prohibitions on repatriation of assets, and may have less protection of
property rights than more developed countries. The economies of countries
with emerging markets may be predominately based on only a few industries,
may be highly vulnerable to changes in local or global trade conditions, and
may suffer from extreme and volatile debt or inflation rates. Local securities
markets may trade a small number of securities and may be unable to respond
effectively to increases in trading volume, potentially making prompt
liquidation of substantial holdings difficult or impossible at times.
Securities of issuers located in countries with emerging markets may have
limited marketability and may be subject to more abrupt or erratic price
movements. Debt obligations of developing countries may involve a high degree
of risk, and may be in default or present the risk of default. Governmental
entities responsible for repayment of the debt may be unwilling to repay
principal and interest when due, and may require renegotiation of rescheduling
of debt payments. In addition, prospects for repayment of principal and
interest may depend on political as well as economic factors.
FOREIGN CURRENCY TRANSACTIONS
In connection with its portfolio transactions in securities traded in a foreign
currency, an underlying fund may enter into forward contracts to purchase or
sell an agreed upon amount of a specific currency at a future date that may be
any fixed number of days from the date of the contract agreed upon by the
parties at a price set at the time of the contract. Under such an arrangement,
concurrently with the entry into a contract to acquire a foreign security for a
specified amount of currency, the underlying fund would purchase with U.S.
dollars the required amount of foreign currency for delivery at the settlement
date of the purchase. The underlying fund would enter into similar forward
currency transaction in connection with the sale of foreign securities. The
effect of such transactions would be to fix a U.S. dollar price for the
security to protect against a possible loss resulting from an adverse change in
the relationship between the U.S. dollar and the subject foreign currency
during the period between the date the security purchased or sold and the date
on which payment is made or received, the normal range of which is three to
fourteen days. These contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades. Although such contracts
tend to minimize the risk of loss due to a decline in the value of the subject
currency, they tend to limit commensurately any potential gain that might
result should the value of such currency increase during the contract period.
B-2<PAGE>
BONDS AND FIXED INCOME SECURITIES
Underlying funds may invest in long or short-term bonds and various other
types of fixed income securities (such as securities issued, guaranteed or
insured by the U.S. government, its agencies or instrumentalities, commercial
paper, preferred stock and convertible debentures). These mutual funds may
invest in investment grade bonds (bonds rated in the four highest ratings
categories by Standard & Poor's Corporation ("S&P") (AAA, AA, A and
BBB) or Moody's Investors Services, Inc. ("Moody's") (Aaa, Aa, A and Baa)
or similar nationally recognized ratings services or in bonds that are not
considered investment grade (for example, bonds rated BB or below by S&P
or Ba or below by Moody's). A description of ratings assigned to commercial
paper and corporate debt obligations by S&P can be found in Appendix A to
this Prospectus. In general, the current value of bonds varies inversely with
changes in prevailing interest rates. If interest rates increase after a bond
is purchased, the value of that security will normally decline. If prevailing
interest rates decrease after a bond is purchased, the bond's market price will
normally rise. Non-investment grade bonds are higher yielding, high risk
securities commonly known as "junk bonds."
HIGH-YIELD SECURITIES
The Funds may, from time to time, invest in shares of underlying funds which
invest in lower-rated securities or in unrated securities, when, in view of the
Investment Manager, such investments are consistent with the Fund's
investment objective. Certain risk factors that investors should recognize as
being associated the Investment Manager's discretion to invest in such
underlying funds are set forth below.
Youth and Growth of the High Yield Bond Market. The high yield,
high risk market is relatively new and at times is subject to substantial
volatility. An economic downturn or increase in interest rates may have a
significant effect on the high yield, high risk securities in an underlying
fund's portfolio and the markets for such securities, as well as on the ability
of securities' issuers to repay principal and interest. Issuers of high yield,
high risk securities may be of low credit worthiness and the high yield, high
risk securities may be subordinated to the claims of senior lenders. During
periods of economic downturn or rising interest rates, the issuers of high
yield, high risk securities may have greater potential for insolvency and a
higher incidence of high yield, high risk bond defaults may be experienced.
Sensitivity of Interest Rate and Economic Changes. Prices of high
yield, high risk securities have been found to be less sensitive to interest
rate changes than higher-rated investments, but more sensitive to adverse
economic changes or individual corporate developments. During an
economic downturn or substantial period of rising interest rates, highly
leveraged issuers may experience financial stress that would adversely affect
their ability to service their principal and interest payment obligations, to
meet projected business goals, and to obtain additional financing. If the
issuer of a high yield, high risk security owned by an underlying fund
defaults, the fund may incur additional expenses in seeking recovery. Periods
of economic uncertainty and changes can be expected to result in increased
volatility of market prices in high yield, high risk securities. Yields on
high yield, high risk securities will fluctuate over time.
Payment Expectations. Certain securities held by an underlying fund,
including high yield, high risk securities, may contain redemption or call
provisions. If an issuer exercises these provisions in a declining interest
rate market, the underlying fund would have to replace the security with a
lower yielding security, resulting in a decreased return for the investor.
Conversely, a high
B-3<PAGE>
yield, high risk security's value will decrease in a rising interest rate
market, as will the value of the underlying fund's assets.
Liquidity and Valuation. High yield, high risk securities may tend to
trade in markets that are relatively less liquid than the market for
higher-rated securities. It is thus possible that the underlying fund's
ability to dispose of such securities, when its investment adviser deems it
desirable to do so, may be limited. The lack of a liquid secondary market may
also have an adverse impact on market price and the underlying fund's ability
to dispose of particular issues when necessary to meet the underlying fund's
liquidity needs or in response to a specific economic event, such as a
deterioration in the creditworthiness of the issuer. In addition, a less
liquid market may interfere with the ability of the underlying fund to value
lower-rated securities accurately and, consequently, value the fund's assets
accurately. Furthermore, adverse publicity and investor perceptions, whether
or not based on fundamental analysis, may decrease the values and liquidity
of lower-rated securities, especially in a thinly-traded market.
Credit Ratings. Credit ratings evaluate the safety of principal and
interest payments, not the market value risk of securities. Since credit
ratings agencies may fail to change the credit ratings in a timely manner to
reflect subsequent events, the investment adviser to an underlying fund should
monitor the issuers of high yield, high risk securities in the fund's
portfolio to determine if the issuers will have sufficient cash flow and
profits to meet required principal and interest payment obligations, and to
attempt to assure the securities' liquidity so the fund can meet redemption
requests. To the extent that an underlying fund invests in high yield, high
risk securities, the achievement of the fund's investment objective may be
more dependent on the underlying fund's own credit analysis than is the case
for higher quality bonds. Subsequent to its purchase by an underlying fund, an
issue of securities may cease to be rated or its rating may be reduced below
the minimum rating required for purchase by an underlying fund.
CONVERTIBLE PREFERRED STOCKS AND DEBT SECURITIES
Certain preferred stocks and debt securities that may be held by an underlying
fund have conversion features allowing the holder to convert securities into
another specified security (usually common stock) of the same issuer at a
specified conversion ratio (e.g., two shares of preferred for one share of
common stock) at some specified future date or within a specified period.
The market value of convertible securities generally includes a premium that
reflects the conversion right. That premium may be negligible or substantial.
To the extent that any preferred stock or debt security remains unconverted
after the expiration of the conversion period, the market value will fall to
the extent represented by the premium.
ILLIQUID SECURITIES
An underlying fund may invest in securities for which no readily available
market exists ("illiquid securities") or securities the disposition of which
would be subject to legal restrictions (so-called "restricted securities") and
repurchase agreements maturing in more than seven days. A considerable
period may elapse between an underlying fund's decision to sell securities and
the time when the fund is able to sell such securities. If, during such a
period, adverse market conditions were to develop, the underlying fund might
obtain a less favorable price than prevailed when it decided to sell.
All mutual funds are subject to restrictions on the percentage of their assets
which may be composed of illiquid securities. Subject to these limitations,
an underlying fund may invest in restricted
B-4<PAGE>
securities when such investment
is consistent with its investment objectives, and such securities may be
considered to be liquid to the extent the fund's investment adviser determines
that there is a liquid institutional or other market for such securities. In
determining whether a restricted security is properly considered a liquid
security, the fund's investment adviser, under the direction of the fund's
Board of Trustees, will take into account relevant factors, including the
following: (i) the frequency of trades and quotes for the security; (ii) the
number of dealers willing to purchase or sell the security and the number of
potential purchasers; (iii) dealer undertakings to make a market in the
security; and (iv) the nature of the security and marketplace trades (e.g.,
the time needed to dispose of the security, the method of soliciting offers
and the mechanics of transfer). An underlying fund's investment in such
restricted securities could have the effect of increasing the level of the
fund's illiquidity to the extent that qualified institutional buyers become,
for a time, uninterested in purchasing these securities.
INDUSTRY CONCENTRATION
An underlying fund may concentrate its investments within one industry.
Because the scope of investment alternatives within an industry is limited,
the value of the shares of such an underlying fund may be subject to greater
market fluctuation than an investment in a fund that invests in a broader range
of securities.
OPTION ACTIVITIES
An underlying fund may write (i.e., sell) call options ("calls") if the calls
are "covered" throughout the life of the option. A call is "covered" if the
fund owns the options securities. When a fund writes a call, it receives a
premium and gives the purchaser the right to buy the underlying security at any
time during the call period (usually not more than nine months in the case of
common stock) at a fixed exercise price regardless of market price changes
during the call period. If the call is exercised, the fund will forego any
gain from an increase in the market price of the underlying security over the
exercise price.
An underlying fund may purchase a call on securities only to effect a "closing
transaction," which is the purchase of a call covering the same underlying
security and having the same exercise price and expiration date as a call,
previously written by the fund, on which it wishes to terminate its obligation.
If the underlying fund is unable to effect a closing transaction, it will not
be able to sell the underlying security until the call previously written by
the fund expires (or until the call is exercised and the fund delivers the
underlying security).
An underlying fund also may write and purchase put options ("puts"). When
a fund writes a put, it receives a premium and gives the purchaser of the put
the right to sell the underlying security to the fund at the exercise price at
any time during the option period. When a fund purchases a put, it pays a
premium in return for the right to sell the underlying security at the exercise
price at any time during the option period. An underlying fund also may
purchase stock index puts, which differ from puts on individual securities in
that they are settled in cash based on the values of the securities in the
underlying index rather than by delivery of the underlying securities.
Purchase of a stock index put is designed to protect against a decline in the
value of the portfolio generally rather than an individual security in the
portfolio. If any put is not exercised or sold, it will become worthless on
its expiration date.
An underlying fund's option positions may be closed out only on an exchange
that provides a secondary market for options of the same series, but there can
be no assurance that a liquid
B-5<PAGE>
secondary market will exist at any given time for any particular option. In
this regard, trading in options on certain securities (such as U.S. government
securities) is relatively new, so that it is impossible to predict to what
extent liquid markets will develop or continue.
An underlying fund's custodian, or a securities depository acting for it,
generally acts as escrow agent as to the securities on which the fund has
written puts or calls, or as to other securities acceptable for such escrow so
that no margin deposit is required of the fund. Until the underlying
securities are released from escrow, they cannot be sold by the fund.
In the event of a shortage of the underlying securities deliverable on
exercise of an option, the Options Clearing Corporation ("OCC") has the
authority to permit other, generally comparable securities to be delivered in
fulfillment of option exercise obligations. If the OCC exercises its
discretionary authority to allow such other securities to be delivered, it may
also adjust the exercise prices of the affected options by setting different
prices at which otherwise ineligible securities may be delivered. As an
alternative to permitting such substitute deliveries, the OCC may impose
special exercise settlement procedures. (See "Leverage" below for a
discussion of how options trading activities involve potential leveraging.)
OPTIONS TRADING MARKETS
Options in which the underlying funds will invest are generally listed on
exchanges. Exchanges on which such options currently are traded are the
Chicago Board Options Exchange and the American, New York, Pacific, and
the Philadelphia Stock Exchanges. Options on some securities may not,
however, be listed on any exchange but traded in the over-the-counter market.
Options traded in the over-the-counter market involve the additional risk that
securities dealers participating in such transactions will fail to meet their
obligations to the underlying fund. The use of options traded in the
over-the-counter market may be subject to limitations imposed by certain state
securities authorities. In addition to the limits on the use of options
discussed herein, a mutual fund is subject to the investment restrictions
described in its prospectus and statement of additional information.
The staff of the SEC currently is of the view that the premiums that a mutual
fund pays for the purchase of unlisted options, and the value of securities
used to cover unlisted options written by the underlying fund, are considered
to be invested in illiquid securities or assets for the purpose of calculating
whether a mutual fund is in compliance with any fundamental investment
restriction prohibiting it from investing more than 15% (or, in many cases,
10%) of its net assets (taken at current value) in any combination of illiquid
assets and securities.
FUTURES CONTRACTS
An underlying fund may enter into futures contracts for the purchase or sale
of debt securities and stock indexes. A futures contract is an agreement
between two parties to buy and sell a security or an index for a set price on a
future date. Futures contracts are traded on designated "contract markets"
that, through their clearing corporations, guarantee performance of the
contracts.
A financial futures contract sale creates an obligation by the seller to
deliver the type of financial instrument called for in the contract in a
specified delivery month for a stated price. A financial futures contract
purchase creates an obligation by the purchaser to take delivery of the type of
financial instrument called for in the contract in a specified delivery month at
a stated price. The specific instruments delivered or taken, respectively, at
settlement date are not determined until on or near such date. The
determination is made in accordance with the rules of the exchange on which
B-6<PAGE>
the futures contract sale or purchase was made. Futures contracts are traded
in the United States only on commodity exchanges or boards of trade (known as
"contract markets") approved for such trading by the Commodity Futures Trading
Commission (the "CFTC), and must be executed through a futures
commission merchant or brokerage firm that is a member of the relevant
contract market.
Although futures contracts by their terms call for actual delivery or
acceptance of commodities or securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery.
Closing out a futures contract sale is effected by purchasing a futures
contract for the same aggregate amount of the specific type of financial
instrument or commodity with the same delivery date. If the price of the
initial sale of the futures contract exceeds the price of the offsetting
purchase, the seller is paid the difference and realizes a gain. On the other
hand, if the price of the offsetting purchase exceeds the price of the initial
sale, the seller realizes a loss. A purchaser closes out a futures contract
purchase by entering a futures contract sale. If the offsetting sale price
exceeds the purchase price, the purchaser realizes a gain, and if the purchase
price exceeds the offsetting sale price, the purchaser realizes a loss. An
underlying fund may sell financial futures contracts in anticipation of an
increase in the general level of interest rates. Generally, as interest rates
rise, the market value of the securities held by an underlying fund will fall,
thus reducing its net asset value. This interest rate risk may be reduced
without the use of futures as a securities with shorter maturities or by holding
assets in cash. This strategy, however, entails increased transaction costs in
the form of dealer spreads and brokerage commissions and will typically reduce
the fund's average yield as a result of the shortening of maturities.
The sale of financial futures contracts serves as a means of hedging against
rising interest rates. As interest rates increase, the value of an underlying
fund's short position in the futures contracts will also tend to increase, thus
offsetting all or a portion of the depreciation in the market value of the
fund's investment being hedged. While an underlying fund will incur
commission expenses in selling and closing out futures positions (by taking an
opposite position in the futures contract), commissions on futures transactions
tend to be lower than transaction costs incurred in the purchase and sale of
portfolio securities.
An underlying fund may purchase interest rate futures contracts in
anticipation of a decline in interest rates when it is not fully invested. As
such purchases are made, an underlying fund would probably expect that an
equivalent amount of futures contracts will be closed out. Unlike when an
underlying fund purchases or sells a security, no price is paid or received by
the fund upon the purchase or sale of a futures contract. Upon entering into
a contract, the underlying fund is required to deposit with its custodian in a
segregated account in the name of the futures broker an amount of cash and/or
U.S. government securities. This is known as "initial margin." Initial margin
is similar to a performance bond or good faith deposit which is returned to an
underlying fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied. Futures contracts also involve
brokerage costs.
Subsequent payments, called "variation margin" or "maintenance margin," to
and from the broker (or the custodian) are made on a daily basis as the price
of the underlying security or commodity fluctuates, making the long and short
positions in the futures contract more or less valuable. This is known as
"marking to the market." An underlying fund may elect to close some or all
of its futures positions at any time prior to their expiration in order to
reduce or eliminate a hedge position then currently held by the fund. The
underlying fund may close its positions by taking opposite positions that will
operate to terminate the fund's position in the futures contracts. Final
determinations of variation margin are then made, additional cash is required
to be paid by a release
B-7<PAGE>
to the underlying fund, and the fund realizes a loss or a gain. Such closing
transactions involve additional commission costs.
A stock index futures contract may be used to hedge an underlying fund's
portfolio with regard to market risk as distinguished from risk relating to a
specific security. A stock index futures contract does not require the
physical delivery of securities, but merely provides for profits and losses
resulting from changes in the market value of the contract to be credited or
debited at the close of each trading day to the respective accounts of the
parties to the contract. On the contract's expiration date, a final cash
settlement occurs. Changes in the market value of a particular stock index
futures contract reflect changes in the specified index of equity securities
on which the contract is based.
There are several risks in connection with the use of futures contracts. In
the event of an imperfect correlation between the futures contract and the
portfolio position that is intended to be protected, the desired protection may
not be obtained and the underlying fund may be exposed to risk of loss.
Further, unanticipated changes in interest rates or stock price movements may
result in a poorer overall performance for the fund than if it had not entered
into futures contracts on debt securities or stock indexes.
In addition, the market price of futures contracts may be affected by certain
factors. First, all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting additional
margin deposit requirements, investors may close future contracts through
offsetting transactions that could distort the normal relationship between the
securities and futures markets. Second, from the point of view of speculators,
the deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market may also cause temporary price distortions.
Positions in futures contracts may be closed out only on an exchange or board
of trade that provides a secondary market for such futures. There is no
assurance that a liquid secondary market on an exchange or board of trade
will exist at any particular time. In order to assure that mutual funds have
sufficient assets to satisfy their obligations under their futures contracts,
the underlying funds are required to establish segregated accounts with their
custodians. Such segregated accounts are required to contain an amount of
cash, U.S. government securities and other liquid, high-grade debt securities
equal in value to the current value of the underlying instrument less the
margin deposit. (Also see "Leverage" below.)
The risk to an underlying fund from investing in futures is potentially
unlimited. Gains and losses on investments in options and futures depend
upon the underlying fund's investment adviser's ability to predict correctly
the direction of stock prices, interest rates and other economic factors.
OPTIONS ON FUTURES CONTRACTS
An underlying fund may purchase and write (sell) put and call options on
futures contracts. An option on a futures contract gives the purchaser the
right, in return for the premium paid, to assume a position in a futures
contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the option
period. When an option on a futures contract is exercised, delivery of the
futures position is accompanied by cash representing the difference between
the current market price of the futures contract and the exercise price of the
option. A fund may purchase put options on futures contracts in lieu of, and
for the same purpose as, a sale of a futures contract. It also may purchase
such put options in order to hedge a long
B-8<PAGE>
position in the underlying futures contract in the same manner as it purchases
"protective puts" on securities.
As with options on securities, the holder of an option on a futures contract
may terminate its position by selling an option of the same series. There is
no guarantee that such closing transactions can be effected. An underlying
fund is required to deposit initial margin and variation margin with respect
to put and call options on futures contracts written by it pursuant to brokers'
requirements similar to those applicable to futures contracts described above
and, in addition, net option premiums received will be included as initial
margin deposits.
In addition to the risks that apply to all options transactions, there are
several special risks relating to options on futures contracts. The ability to
establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. There can be no
certainty that liquid secondary markets for all options on futures contracts
will develop. Compared to the use of futures contracts, the purchase of options
on futures contracts involves less potential risk to an underlying fund because
the maximum amount of risk is the premium paid for the options (plus
transaction costs). However, there may be circumstances when the use of an
option on a futures contract would result in a loss to the fund when the use of
a futures contract would not, such as when there is no movement in the prices
of the underlying securities. Writing an option on a futures contract involves
risks similar to those arising in the sale of futures contracts, as described
above.
SHORT SALES
An underlying fund may sell securities short. In a short sale, the fund sells
securities that it does not own, making delivery with securities "borrowed"
from a broker. The fund is then obligated to replace the borrowed securities
by purchasing them at the market price at the time of replacement. This price
may or may not be less than the price at which the securities were sold by the
fund. Until the securities are replaced, the fund is required to pay to the
lender any dividends or interest that accrue during the period of the loan. In
order to borrow the securities, the fund may also have to pay a premium that
would increase the cost of the securities sold. The proceeds of the short sale
will be retained by the broker, to the extent necessary to meet margin
requirements, until the short position is closed out.
The fund also must deposit in a segregated account an amount of cash or U.S.
government securities equal to the difference between (a) the market value of
the securities sold short at the time they were sold short and (b) the value of
the collateral deposited with the broker in connection with the sale (not
including the proceeds from the short sale). Each day the short position is
open, the fund must maintain the segregated account at such a level that the
amount deposited in it plus the amount deposited with the broker as collateral
(1) equals the current market value of the securities sold short and (2) is not
less than the market value of the securities at the time they were sold short.
Depending upon market conditions, up to 80% of the value of a fund's net
assets may be deposited as collateral for the obligation to replace securities
borrowed to effect short sales and allocated to a segregated account in
connection with short sales. As is the case with all secured transactions, the
possibility exists that the collateral will be called to satisfy the underlying
obligations.
An underlying fund will incur a loss as a result of a short sale if the price
of the security increases between the date of the short sale and the date on
which the fund replaces the borrowed security. The fund will realize a gain
if the security declines in price between those dates. The amounts of
B-9<PAGE>
any gain will be decreased and the amount of any loss increased by the amount
of any premium, dividends or interest the fund may be required to pay in
connection with the short sale.
A short sale is "against the box" if at all times when the short position is
open the fund owns an equal amount of the securities or securities convertible
into, or exchangeable without further consideration for, securities of the same
issue as the securities sold short. Such a transaction serves to defer a gain
or loss for federal income tax purposes.
WARRANTS
An underlying fund may invest in warrants, which are options to purchase a
specified security, usually an equity security such as common stock, at a
specified price (usually representing a premium over the applicable market
value of the underlying equity security at the time of the warrant's issuance)
and usually during a specified period of time. Moreover, they are usually
issued by the issuer of the security to which they relate. While warrants may
be traded, there is often no secondary market for them. The prices of the
warrants do not necessary move parallel to the prices of the underlying
securities. Holders of warrants have no voting rights, receive no dividends
and have no rights with respect to the assets of the issuer. To the extent
that the market value of the security that may be purchased upon exercise of
the warrant rises above the exercise price, the value of the warrant will tend
to rise. To the extent that the exercise price equals or exceeds the market
value of such security, or if the warrant is not exercised within the specified
time period, it will become worthless and the fund will lose the purchase price
paid for the warrant and the right to purchase the underlying security.
MASTER DEMAND NOTES
Although the Funds themselves will not do so, underlying funds (particularly
money market mutual funds) may invest some or all of their assets in master
demand notes. Master demand notes are unsecured obligations of U.S.
corporations, redeemable upon notice, that permit investment by a fund of
fluctuating amounts at varying rates of interest pursuant to direct
arrangements between the fund and the issuing corporation. Because they are
direct arrangements between the fund and the issuing corporation, there is no
secondary market for the notes. However, they are redeemable at face value,
plus accrued interest, at any time.
REPURCHASE AGREEMENTS
Underlying funds, particularly money market funds, may enter into
repurchase agreements with banks and broker-dealers under which they
acquire securities subject to an agreement with the seller to repurchase the
securities at an agreed upon time and price. These agreements are considered
under the 1940 Act to be loans by the purchaser collateralized by the
underlying securities. If the seller should default on its obligation to
repurchase the securities, the underlying fund may experience delay or
difficulties in exercising its rights to realize upon the securities held as
collateral and might incur a loss if the value of the securities should
decline.
LOANS OF PORTFOLIO SECURITIES
An underlying fund may lend its portfolio securities provided (1) the loan is
secured continuously by collateral of U.S. government securities or cash or
cash equivalent maintained on a daily market-to-market basis in an amount
at least equal to the current market value of the securities loaned; (2) the
fund may at any time call the loan and obtain the return of the securities
loaned; (3) the fund will
B-10<PAGE>
receive any interest or dividends paid on the loaned securities;
and (4) the aggregate market value of securities loaned will not at any time
exceed one-third of the total assets of the fund. Loans of securities involve
a risk that the borrower may fail to return the securities or may fail to
provide additional collateral.
HEDGING
An underlying fund may employ many of the investment techniques described
in this section not only for investment purposes, but also for hedging
purposes. For example, an underlying fund may purchase or sell put and call
options on common stocks to hedge against movements in individual common
stock prices, or purchase and sell stock index futures and related options to
hedge against marketwide movements in common stock prices. Although such
hedging techniques generally tend to minimize the risk of loss that is hedged
against, they also limit commensurately the potential gain that might have
resulted had the hedging transaction not occurred. Also, the desired
protection generally resulting from hedging transactions may not always be
achieved.
LEVERAGE
An underlying fund may borrow up to 25% of the value of its net assets on an
unsecured basis from banks to increase its holdings of portfolio securities.
The practice of leveraging means that a Fund could lose more than the amount
it has invested in an underlying fund. Under the 1940 Act, the fund is
required to maintain continuous asset coverage of 300% with respect to such
borrowings and to sell (within three days) sufficient portfolio holdings to
restore such coverage if it should decline to less than 300% due to market
fluctuations or otherwise, even if disadvantageous from an investment
standpoint. Leveraging will exaggerate the effect of any increase or decrease
in value of portfolio securities on the fund's net asset value, and money
borrowed will be subject to interest costs (which may include commitment
fees and/or the cost of maintaining minimum average balances) which may or
may not exceed the interest and option premiums received from the securities
purchased with borrowed funds.
The staff of the SEC is currently of the view that certain types of securities
transactions, including selling securities short, purchasing or selling futures
contracts, purchasing and selling options on specific securities, stock
indexes, or interest rate futures contracts, and purchasing and selling forward
contracts on currencies also involve potential leveraging. An underlying fund
may engage in these types of transactions subject to the 300% asset coverage
requirement. In the alternative, an underlying fund may engage in these types
of transactions if it segregates assets with respect to such transactions or
"covers" such transactions.
An underlying fund may segregate assets with respect to such transactions as
follows. A fund with a long position in a futures or forward contract, or that
sells a put option, may establish a segregated account (not with a futures
commission merchant or broker) containing cash or certain liquid assets equal
to the purchase price of the contract or the strike price of the put option
(less any margin on deposit). For short positions in futures or forward
contracts, sales of call options, and short sales of securities, a fund may
establish a segregated account (not with a futures commission merchant or
broker) with cash and certain liquid securities that, when added to the
amounts deposited with a futures commission merchant or broker as margin,
equal the market value of the instruments or currency underlying the futures or
forward contracts, call options and short sales (but are not less than the
strike price of the call option or the market price at which the short
positions or short sales were established).
B-11<PAGE>
An underlying fund may "cover" such transactions in various ways depending
on the type transaction involved. For example, a fund that has a long position
in a futures or forward contract could purchase a put option on the same
futures or forward contract with a strike price as high or higher than the
price of the contract held by the fund. A fund that has sold a put option
could sell short the instruments or currency underlying the put option at the
same or higher price than the strike price of the put option. Similarly, the
fund could purchase a put option, if the strike price of the purchased put
option is the same or higher than the strike price of the put option sold by
the fund.
B-12<PAGE>
TABLE OF CONTENTS
THE DRESHER COMPREHENSIVE GROWTH FUND. . . . . . .1
THE DRESHER CLASSIC RETIREMENT FUND. . . . . . . .1
EXPENSES . . . . . . . . . . . . . . . . . . . . .2
THE FUNDS. . . . . . . . . . . . . . . . . . . . .3
INVESTMENT OBJECTIVES AND MANAGEMENT TECHNIQUES .4
INVESTMENT POLICIES AND RESTRICTIONS . . . . . . .6
RISKS AND OTHER CONSIDERATIONS . . . . . . . . . .7
TRUST MANAGEMENT . . . . . . . . . . . . . . . . .9
HOW TO PURCHASE SHARES . . . . . . . . . . . . . 13
HOW TO REDEEM SHARES . . . . . . . . . . . . . . 15
DIVIDENDS, DISTRIBUTIONS AND TAXES . . . . . . . 18
GENERAL INFORMATION. . . . . . . . . . . . . . . 20
HOW THE FUNDS REPORT PERFORMANCE . . . . . . . . 21
APPENDIX A . . . . . . . . . . . . . . . . . . .A-1
APPENDIX B . . . . . . . . . . . . . . . . . . .B-1
B-13<PAGE>
CROSS REFERENCE SHEET
THE DRESHER FAMILY OF FUNDS
Statement of Additional
Part B Item Information Caption
- - -------------- -----------------------------
Cover Page Cover Page
Table of Contents Table of Contents
General Information and History General Information and History
Investment Objectives and Policies Investment Objectives, Policies and
Restrictions
Management of the Fund Management of the Trust
Control Persons and Principal Principal Holders of Securities
Holders of Securities
Investment Advisory and Other Investment Manager, Distributor, and
Services Transfer Agent; Custodian; Auditor
Brokerage Allocation and Other Portfolio Transactions
Practices
Capital Stock and Other Capital Stock and Other Securities
Securities
Purchase, Redemption and Pricing Purchase, Redemption and Pricing of
of Securities Being Offered Securities Being Offered;
Determination of Net Asset Value
Tax Status Tax Status
Underwriters The Distributor
Calculation of Performance Data Not Applicable
Financial Statements Not Applicable
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE DRESHER FAMILY OF FUNDS
75 Twining Road, Suite 202
Dresher, Pennsylvania 19025
(888) 980-7500
This Statement of Additional Information relating to The Dresher
Family of Funds (the "Trust") is not a prospectus and should be read in
conjunction with the Trust's prospectus (the "Prospectus") as supplemented
from time to time. A copy of the Prospectus can be obtained from the Trust's
distributor, National Shareholder Services, Inc., 715 Twining Road, Suite 202,
Dresher, Pennsylvania 19025, telephone number (888) 980-7500. The date
of the Prospectus to which this Statement of Additional Information relates
is August 8, 1997.
The date of this Statement of Additional Information is August 8,
1997.
<PAGE>
TABLE OF CONTENTS
CAPTION PAGE LOCATION OF PROSPECTUS
General Information and History 1 General Information
Investment Objectives, Policies and 1 Investment Objectives and Management
Restrictions Techniques; Investment Policies and
Restrictions; Trust Management
-- Portfolio Turnover
Management of the Trust 2 Trust Management
Principal Holders of Securities 4 Not Applicable
The Investment Manager 4 Trust Management
The Distributor 5 Trust Management
The Transfer Agent 6 Trust Management
The Custodian 6 Trust Management
The Auditor 6 Trust Management
Portfolio Transactions 6 Trust Management -- Execution
of Portfolio Transactions
Capital Stock and Other Securities 7 General Information
Purchases, Redemptions and Pricing 7 How to Purchase Shares; How
of Securities Being Offered to Redeem Shares
Determination of Net Asset Value 7 How to Purchase Shares -- Price
of Shares
Tax Status 7 Dividends, Distributions and Taxes
Additional Information 7 Not Applicable
<PAGE>
GENERAL INFORMATION AND HISTORY
The Trust is a diversified, open-end management investment company
comprised of two portfolios of shares of other open-end registered investment
companies: The Dresher Comprehensive Growth Fund (the "Comprehensive
Growth Fund") and The Dresher Classic Retirement Fund (the "Classic
Retirement Fund;" and together with the Comprehensive Growth Fund, the
"Funds"). The Trust was organized as a trust under the laws of the State of
Delaware on March 26, 1997 and has no operating history.
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The Trust is an open-end, diversified management investment
company, registered as such under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently consists of two separate
portfolios (series), each with different investment objectives. The Funds seek
to achieve their investment objectives by investing in shares of other open-end
investment companies ("mutual funds"). As of the date of this Statement of
Additional Information, the Trust's series are:
THE DRESHER COMPREHENSIVE GROWTH FUND is an
aggressive growth fund which seeks capital appreciation without regard to
current income.
THE DRESHER CLASSIC RETIREMENT FUND is a moderate
growth fund which seeks moderate capital appreciation and significant
income.
The investment objectives of the Funds are described in the Prospectus
under the heading "Investment Objectives and Management Techniques." In
addition, each Fund has adopted certain fundamental investment policies.
These fundamental investment policies cannot be changed unless the change
is approved by the lesser of (1) 67% or more of the votes of the Fund (or the
Trust) present at a meeting, if the holders of more than 50% of the outstanding
votes of the Fund (or the Trust) are present or represented by proxy, or (2)
more than 50% of the outstanding votes of the Fund (or the Trust). These
fundamental policies are set forth in the Prospectus under the heading
"Investment Policies and Restrictions."
The Funds' fundamental investment policies have been adopted to
avoid wherever possible the necessity of shareholder meetings otherwise
required under the 1940 Act. This recognizes the need to react quickly to
changes in the law or new investment opportunities in the securities markets
and the cost and time involved in obtaining shareholder approvals for
diversely held investment companies. The Funds have also adopted
non-fundamental investment policies, set forth in the Prospectus. The Funds'
non-fundamental investment policies may be changed by a vote of the Board of
Trustees. Any changes in either Fund's non-fundamental investment policies
will be communicated to such Fund's shareholders prior to the effectiveness
of the changes.
1940 ACT RESTRICTIONS. Under the 1940 Act and the rules,
regulations and interpretations thereunder, a "diversified company," as to 75%
of its total assets, may not purchase securities of any issuer (other than
obligations of, or guaranteed by, the U.S. government or its agencies or
instrumentalities or securities of other investment companies) if, as a result,
more than 5% of the value of its total assets would be invested in the
securities of such issuer or more than 10% of the issuer's voting securities
would be held by the Fund. "Concentration" is generally interpreted under the
1940 Act as investing 25% or more of total assets in an industry or group of
industries. The 1940 Act limits that ability of investment companies to
borrow and lend money and to
B-1<PAGE>
underwrite securities. The 1940 Act currently
prohibits an open-end fund from issuing senior securities, as defined in the
1940 Act, except under very limited circumstances.
The mutual funds in which each of the Funds may invest may, but
need not, have the same investment objectives, policies and limitations as the
relevant Fund. Although each of the Funds may from time to time invest in
shares of the same underlying mutual funds, the percentage of each Fund's
assets so invested may vary, and the Investment Manager will determine that
such investments are consistent with the investment objectives and policies
of such Fund. The investments that may, in general, be made by underlying
funds in which the Funds may invest, as well as certain of the risks associated
with such investments, are described in the Prospectus and in Appendix B to
the Prospectus.
The Funds have no restrictions on portfolio turnover. However, it is
anticipated that each Fund's rate of portfolio turnover generally will not
exceed 200% annually. A portfolio turnover rate of 100% or more is
considered high.
MANAGEMENT OF THE TRUST
The following table provides biographical information with respect to
each current Trustee and officer of the Trust. Each Trustee who is an
"interested person" of the Trust, as defined in the 1940 Act, is indicated by
an asterisk.
Position Held with Principal Occupation(s)
Name and Address the Trust During Past 5 Years
Jeffrey C. Brown* Trustee, President President of National Advisory
715 Twining Road, Suite 202 Group, National Financial
Dresher, PA 19025 (Age: 39) Advisors, Inc. (investment
advisor), National Actuarial
Consultants, Ltd. (pension
recordkeeping), and National
Shareholder Services, Inc.
(shareholder services agent);
President and licensed
registered representative of
NFA Brokerage Services, Inc.
(NASD broker-dealer).
Brother-in-law of Kathryn A.
Brown and son of Alvin
Brown.
Stephen Patrylak* Trustee, Treasurer Vice President, National
715 Twining Road, Suite 202 Financial Advisors, Inc. and
Dresher, PA 19025 (Age: 44) National Shareholder Services,
Inc.; Consultant Vice
President of NFA Brokerage
Services, Inc. Married to
Larissa N. Patrylak.
B-2<PAGE>
Position Held with Principal Occupation(s)
Name and Address the Trust During Past 5 Years
Larissa N. Patrylak* Trustee, Secretary Secretary/Treasurer and
715 Twining Road, Suite 202 Controller of National
Dresher, PA 19025 (Age: 42) Financial Advisors, Inc.,
National Shareholder Services,
Inc., and NFA Brokerage
Services, Inc.; Vice President
of National Actuarial
Consultants, Ltd. Married to
Stephen Patrylak.
Alvin Brown* Trustee Retired. Formerly Marketing
715 Twining Road, Suite 202 Manager of Ethyl Corporation.
Dresher, PA 19025 (Age: 70) Father of Jeffrey C. Brown.
Kathryn A. Brown Trustee Founder of The Diet Center
715 Twining Road, Suite 202 (weightloss franchisor).
Dresher, PA 19025 (Age: 33) Sister-in-law of
Jeffrey C. Brown.
Howard S. Lubin Trustee Physician.
715 Twining Road, Suite 202
Dresher, PA 19025 (Age: 68)
Leonid D. Rudnytzsky Trustee Professor of Foreign
715 Twining Road, Suite 202 Languages and Literature at
Dresher, PA 19025 (Age: 60) the University of Pennsylvania
and Lasalle University.
Daniel Nyschit Vice President Director of Computer
715 Twining Road, Suite 202 Operations for The National
Dresher, PA 19025 (Age: 30) Advisory Group, Inc.,Vice
President of National
Financial Advisors, Inc., NFA
Brokerage Services, Inc. and
National ActualConsultants,
Ltd.
The following table provides compensation information with respect
to each current Trustee who is not an "interested person" of the Trust. No
officer, director or employee of National Financial Advisors, Inc., the
Investment Manager of the Trust receives any compensation from the Trust
for serving as an officer or Trustee of the Trust.
Pension or
Retirement
Aggregate Benefits Estimated Total
Name of Compensation Accrued as Annual Compensation
Person, from Part of Benefits Upon from
Position Registrant1 Registrant's Retirement Registrant1
Expenses
Kathryn A. $600 0 0 $600
Brown
B-3<PAGE>
Pension or
Retirement
Aggregate Benefits Estimated Total
Name of Compensation Accrued as Annual Compensation
Person, from Part of Benefits Upon from
Position Registrant1 Registrant's Retirement Registrant1
Expenses
Howard S. $600 0 0 $600
Lubin
Leonid D. $600 0 0 $600
Rudnytzsky
(1) Amounts shown are estimated for Registrant's first fiscal year.
PRINCIPAL HOLDERS OF SECURITIES
As of July 14, 1997, Jeffrey C. Brown and Larissa N. Patrylak each
own 50% of the outstanding shares of each of the Funds.
THE INVESTMENT MANAGER
National Financial Advisers, Inc. ("NFA" or the "Investment
Manager") serves as investment manager to the Trust and its Funds pursuant
to a written investment management agreement. NFA is a Pennsylvania
corporation organized in 1994, and is a registered investment adviser under
the Investment Advisers Act of 1940, as amended. Jeffrey C. Brown, Trustee
and President of the Trust, is President of NFA. Larissa Patrylak and Stephen
Patrylak, officers of NFA, also serve as Trustees of the Trust and as the
Trust's Secretary and Treasurer, respectively. Daniel Nyschit, Vice President
of NFA, also serves as Vice President of the Trust.
NFA is a wholly owned subsidiary of The National Advisory Group,
Inc. (The "Group"), a Pennsylvania corporation formed in 1984 which
provides non-discretionary investment advisory and retirement services to
trusts, institutions and high-income individuals. Jeffrey C. Brown and Larissa
N. Patrylak are the sole shareholders of The Group. In addition, to NFA, The
Group also owns all of the outstanding shares of the following:
NFA Brokerage Services, Inc., the NASD mutual funds only
broker/dealer through which the shares of each Fund are being offered.
National Shareholder Services, Inc., which will serve as the Funds'
transfer agent, dividend paying agent and shareholder service agent.
National Actuarial Consultants, Ltd., a pension recordkeeper.
Certain services provided by NFA under the investment management
agreement are described in the Prospectus. As compensation for its services,
each Fund pays NFA a fee based upon such Fund's average daily net asset
value. This fee is computed daily and paid monthly. The rate at which the fee
is paid is described in the Prospectus.
B-4<PAGE>
NFA pays, out of the investment management fees it receives from the
Funds, all the expenses of the Funds except expenses incurred under the
Trust's Distribution Plan and extraordinary expenses. Until at least December
31, 1998, NFA is contractually obligated to reduce its management fee to
keep total operating expenses for each Fund at no greater than 1.20% of
average daily net assets (not including extraordinary expenses).
By its terms, the Trust's investment management agreement will
remain in effect through 1999 and from year to year thereafter, subject to
annual approval by (a) the Board of Trustees or (b) a vote of the majority of
a Fund's outstanding votes (as defined in the 1940 Act); provided that in
either event continuance is also approved by a majority of the Trustees who
are not interested persons of the Trust, by a vote cast in person at a meeting
called for the purpose of voting such approval. The Trust's investment
management agreement may be terminated at any time, on sixty days' written
notice, without the payment of any penalty, by the Board of Trustees, by a
vote of the majority of the Fund's outstanding votes, or by NFA. The
investment management agreement automatically terminates in the event of
its assignment, as defined by the 1940 Act and the rules thereunder.
THE DISTRIBUTOR
NFA Brokerage Services, Inc. ("NFA Brokerage" or the
"Distributor"), a wholly-owned subsidiary of The Group, with its principal
offices at 715 Twining Road, Suite 218, Dresher, Pennsylvania 19025, serves
as the distributor of the Funds' shares. The Distributor is obligated to sell
shares of the Funds on a best efforts basis only against purchase orders for
the shares. Shares of the Funds are offered to the public on a continuous
basis.
The Trust has a Plan of Distribution (the "Distribution Plan") pursuant
to Rule 12b-1 under the 1940 Act ("Rule 12b-1"), pursuant to which the
Funds may expend up to .25% of their respective average net assets annually
for the costs of activities intended to result in the sale of Fund shares.
The Trust's Distribution Agreement with NFA Brokerage (i) provides for the
payment by each Fund to NFA Brokerage of a distribution fee of .25% of
average net assets and (ii) authorizes NFA Brokerage to make payments for
activities and expenditures permitted by the Distribution Plan.
In addition, the underlying funds in which the Funds invest may
impose such Rule 12b-1 fees. Rule 12b-1 fees imposed by an underlying fund
could be as high as .75% of an underlying fund's net assets and service fees
could be as high as .25% of an underlying fund's net assets. In the aggregate,
such combined fees could be as high as 1.00% of an underlying fund's net
assets. For a description of the arrangements pursuant to which underlying
funds imposing Rule 12b-1 or service fees pay service fees to the Distributor
in connection with services rendered by the Distributor and the process by
which the Distributor will reimburse to the Funds any fees received for
effecting purchases of underlying funds' shares, see the discussion in the
Prospectus entitled "Trust Management -- Execution of Portfolio
Transactions."
THE TRANSFER AGENT
The Board of Trustees of the Trust has approved an Administration,
Accounting and Transfer Agency Agreement among the Trust, National
Shareholder Services, Inc. ("NSS" or the "Transfer Agent") and NFA.
Pursuant to such Agreement, NSS serves as the Trust's transfer and dividend
paying agent and performs shareholder service activities. NSS also calculates
daily net asset value per share for each Fund and maintains such books and
records as are necessary to enable it to perform its duties. The
administrative services necessary for the operation of the Trust and its Funds
B-5<PAGE>
provided by NSS include among other things (i) preparation of shareholder
reports and communications, (ii) regulatory compliance, such as reports
and filings with the Securities and Exchange Commission and state securities
commissions and (iii) general supervision of the operation of the Trust and
its Funds, including coordination of the services performed by NFA, the
custodian, independent accountants, legal counsel and others. NSS is
compensated by NFA for its services out of the investment management fee paid
to NFA by each Fund.
NSS is a wholly-owned subsidiary of The Group. The business address of
NSS is 715 Twining Road, Suite 202, Dresher, Pennsylvania 19025.
THE CUSTODIAN
Pursuant to a Custodian Agreement between the Trust, Firstrust
Savings Bank and NFA, Firstrust Savings Bank serves as the Trust's
custodian. The principal business address of Firstrust Savings Bank is 1931
Cottman Avenue, Philadelphia, Pennsylvania 19111.
THE AUDITOR
Sanville & Company, independent certified public accountants located
at 1514 Old York Road, Abington, Pennsylvania 19001, has been selected as
the auditors for the Trust. In such capacity, Sanville & Company periodically
reviews the accounting and financial records of the Trust and examines its
financial statements.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Funds are made by the
Investment Manager subject to the overall supervision and review by the
Trust's Board of Trustees. Portfolio security transactions for the Funds are
effected by or under the supervision of the Investment Manager.
NFA Brokerage, the Distributor of the Fund shares, may assist in the
placement of Fund portfolio transactions. In such capacity, NFA Brokerage
may receive distribution or service payments from the underlying funds or
their underwriters or sponsors in accordance with the normal distribution
arrangements of those funds. See "The Distributor." In providing execution
assistance, NFA Brokerage may receive orders from the Investment Manager;
place them with the underlying fund's distributor, transfer agent or other
person, as appropriate; confirm the trade, price and number of shares
purchased or sold; and assure prompt and proper settlement of the order.
The Funds intend to arrange to be included within a class of investors
entitled not to pay sales charges by purchasing load fund shares under letters
of intent, rights of accumulation, cumulative purchase privileges and other
quantity discount programs.
CAPITAL STOCK AND OTHER SECURITIES
See "General Information" in the Prospectus.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES
BEING OFFERED
See "How to Purchase Shares" and "How to Redeem Shares" in the
Prospectus.
B-6<PAGE>
DETERMINATION OF NET ASSET VALUE
See "How to Purchase Shares -- Price of Shares" in the Prospectus.
TAX STATUS
See "Dividends, Distributions and Taxes" in the Prospectus.
ADDITIONAL INFORMATION
The Prospectus and this Statement of Additional Information do not
contain all of the information included in the Trust's Registration Statement
filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the securities offered hereby. Certain
portions of the Registration Statement have been omitted pursuant to the rules
and regulations of the Securities and Exchange Commission. The
Registration Statement, including the exhibits filed therewith, may be
examined at the offices of the Securities and Exchange Commission in
Washington, D.C.
Statements contained in the Prospectus and this Statement of
Additional Information as to the contents of any agreement or other
documents referred to are not necessarily complete, and, in each instance,
reference is made to the copy of such agreement or other documents filed as
an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.
B-7<PAGE>
THE DRESHER FAMILY OF FUNDS
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements.
To be supplied by amendment.
(b) Exhibits.
Exhibit
Number DESCRIPTION OF EXHIBIT
*(1) Trust Instrument of Registrant
*(2) Bylaws of Registrant
(3) Inapplicable
***(4) Instrument of Designation of Series of Beneficial
Interest of Registrant
***(5) Investment Advisory Agreement between Registrant and
National Financial Advisors, Inc. ("NFA")
***(6)(a) Distribution Agreement between Registrant and NFA
Brokerage Services ("NFA Brokerage")
**(6)(b) Form of Dealer Agreement between NFA Brokerage and
Dealers.
(7) Inapplicable
***(8) Custody Agreement among Registrant, NFA and Firstrust
Savings Bank
***(9) Administration, Accounting and Transfer Agency
Agreement among Registrant, NFA and National
Shareholder Services, Inc.
***(10) Opinion and Consent of Counsel
(11) Consent of Independent Public Accountants
(12) Inapplicable
<PAGE>
Exhibit
Number DESCRIPTION OF EXHIBIT
***(13) Subscription Agreement between Registrant and Initial
Shareholders
(14) Inapplicable
***(15)(a) Distribution Plan of Registrant
(15)(b) See Exhibit (6)
(16) Inapplicable
(17) Inapplicable
(18) Inapplicable
_______________________________
* Incorporated herein by reference to the Registration Statement as
originally filed with the Securities and Exchange Commission on
April 14, 1997.
** Incorporated herein by reference to Amendment No. 1 to the
Registration Statement filed with the Securities and Exchange
Commission on or about June 11, 1997.
*** Incorporated herein by reference to Amendment No. 2 to the
Registration Statement filed with the Securities and Exchange
Commission on or about July 17, 1997.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON
CONTROL WITH REGISTRANT
Registrant is controlled by the Trustees. Registrant does not have any
subsidiaries.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of August 6, 1997, each of (i) Jeffrey C. Brown and Susan Brown and (ii)
Stephen Patrylak and Larissa N. Patrylak SERP account own 50% of the
outstanding shares of each of the Funds.
ITEM 27. INDEMNIFICATION
Article X, Section 10.2 of Registrant's Trust Instrument, incorporated by
reference as Exhibit (1) hereto, provides for the indemnification of
Registrant's past and present Trustees and officers. Indemnification of
Registrant's investment manager, principal underwriter and custodian is
provided for, respectively, in Section 8 of the Investment Advisory
Agreement filed herewith as Exhibit (5), in Section 9 of the Distribution
Agreement filed herewith as Exhibit (6), and in Article VII of the Custody
Agreement filed herewith as Exhibit (8). In no event will Registrant
indemnify any of its Trustees, officers, employees or agents against any
liability to which such person would otherwise be subject by reason of such
person's willful misfeasance, bad faith, gross negligence in the performance
of such person's duties, or by reason of such person's reckless disregard of
the duties involved in the conduct of such person's office or arising under
such person's agreement with
C-2<PAGE>
Registrant. Registrant will comply with Rule 484
under the Securities Act of 1933 and Release No. 11330 under the Investment
Company Act of 1940 in connection with any such indemnification.
ITEM 28. BUSINESS AND OTHER CONNECTION OF
INVESTMENT ADVISER
NFA is a registered investment adviser providing investment advice to
individuals, employee benefit plans, trusts, and corporations.
The list required by this Item 28 of the officers and directors of NFA,
together with information as to any business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated herein by reference to Schedules A
and D of the Form ADV filed by NFA pursuant to the Investment Advisors Act of
1940 (SEC File No. 408-09).
ITEM 29. PRINCIPAL UNDERWRITERS
(a) None.
(b) For information as to the business, profession, vocation or
employment of a substantial nature of each of the principal
underwriter, its officers and directors, reference is made to
NFA Brokerage's Form BD (SEC File No. 8-47870).
(c) Inapplicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Registrant maintains the records required by Section 31(a) of the Investment
Company Act of 1940 and Rules 31a-1 to 31a-3 inclusive thereunder at its
office located at 715 Twining Road, Suite 202, Dresher, Pennsylvania 19025.
Certain records, including records relating to Registrant's shareholders and
the physical possession of its assets, may be maintained pursuant to Rule
31a-3 at the main offices of Registrant's transfer agent, dividend disbursing
agent and custodian located, as the custodian, at 1931 Cottman Avenue,
Philadelphia, Pennsylvania 19111, and, as to the transfer and dividend
disbursing agent functions, at 715 Twining Road, Suite 202, Dresher,
Pennsylvania 19025
ITEM 31. MANAGEMENT SERVICES
Inapplicable.
ITEM 32. UNDERTAKINGS
(a) Inapplicable.
(b) Registrant hereby undertakes to file a post-effective
amendment, using financial statements which need not be
certified, within four to six months from the effective date of
Registrant's registration statement.
(c) Inapplicable.
C-3<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, Registrant,
has duly caused this Registration Statement to be signed on behalf by the
undersigned, thereunto duly authorized, in the City of Dresher and the
Commonwealth of Pennsylvania on this 8th day of August, 1997.
THE DRESHER FAMILY OF FUNDS
By: /s/ Jeffrey C. Brown
Jeffrey C. Brown,
Trustee and President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Jeffrey C. Brown Trustee & President August 8, 1997
Jeffrey C. Brown
/s/ Stephen Patrylak Trustee & Treasurer August 8, 1997
Stephen Patrylak
/s/ Larissa N. Patrylak Trustee & Secretary August 8, 1997
Larissa N. Patrylak
/s/ Kathryn A. Brown Trustee August 8, 1997
Kathryn A. Brown
/s/ Alvin Brown Trustee August 8, 1997
Alvin Brown
/s/ Howard S. Lubin Trustee August 8, 1997
Howard S. Lubin
/s/ Leonid D. Rudnytzsky Trustee August 8, 1997
Leonid D. Rudnytzsky
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, Registrant,
has duly caused this Registration Statement to be signed on behalf by the
undersigned, thereunto duly authorized, in the City of Dresher and the
Commonwealth of Pennsylvania on this 8th day of August, 1997.
THE DRESHER FAMILY OF FUNDS
By: __________________________________
Jeffrey C. Brown,
Trustee and President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
Jeffrey C. Brown Trustee & President August 8, 1997
Stephen Patrylak Trustee & Treasurer August 8, 1997
Larissa N. Patrylak Trustee & Secretary August 8, 1997
Kathryn A. Brown Trustee August 8, 1997
Alvin Brown Trustee August 8, 1997
Howard S. Lubin Trustee August 8, 1997
Leonid D. Rudnytzsky Trustee August 8, 1997
<PAGE>
EXHIBIT 11
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and
Board of Trustees of
The Dresher Family of Funds -
The Dresher Classic Retirement Fund
We have audited the statement of assets and liabilities of The Dresher
Family of Funds - The Dresher Classic Retirement Fund. This financial
statement is the responsibility of the Fund's management. Our responsibility
is to express an opinion on this statement of assets and liabilities based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of The Dresher
Family of Funds - The Dresher Classic Retirement Fund, in conformity with
generally accepted accounting principles.
Abington, Pennsylvania
<PAGE>
July 31, 1997 Certified Public Accountants
THE DRESHER FAMILY OF FUNDS
THE DRESHER CLASSIC RETIREMENT FUND
Notes to the Statement of Assets and Liabilities
July 31, 1997
1. ORGANIZATION
The Dresher Family of Funds - The Dresher Classic Retirement
Fund (the "Fund") is a series of The Dresher Family of Funds ("the
Trust"), and is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management
investment company of other open-end registered investment
companies. The Trust was organized as a trust under the laws of
the State of Delaware on March 26, 1997.
The Fund has had no operations other than those relating to
organizational matters including the sale and issuance of 4,000
shares of the Fund to Jeffrey C. Brown and Stephen Patrylak.
2. INVESTMENT ADVISORY AGREEMENT
The Trust has retained as its investment advisor National Financial
Advisors, Inc. ("NFA" or the "Investment Manager"). Under the
Investment Advisory Agreement between the Trust and the
Investment Manager, the Investment Manager is entitled to receive
from the Fund as compensation for its services an annual fee of
1.20% on the Fund's average daily net assets. However, the
Investment Manager is contractually obligated to reduce its
management fee to keep total operating expenses for the Fund at no
greater than 1.20% (not including extraordinary expenses) until at
least December 31, 1998. The fee is paid monthly and calculated
on the basis of the month's net assets. Unlike most mutual funds,
the management fees paid by the Fund to NFA include transfer
agency, pricing, custodial, auditing and legal services, taxes, interest,
redemption fees, expenses of non-interested Trustees and general
administrative and other operating expenses of the Fund.
Certain officers and trustees of the Fund are officers and directors
of NFA.
3. DISTRIBUTION AGREEMENT
The Trust has adopted a Distribution Plan (the "Distribution Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as amended, with respect to the distribution of the Fund's Shares.
The Distribution Plan permits, among other things, payments in the
form of (a) compensation to securities brokers and dealers for
selling Shares; (b) compensation to securities brokers and dealers,
accountants, attorneys, investment advisors, pension actuaries, non-
profit entities not advised by the Investment Manager or its affiliates
and service organizations for services rendered by them to their
clients or members in reviewing, explaining or interpreting the
Funds' prospectus and other selling materials; (c) advertising costs;
(d) costs of telephone, mail, or other direct solicitation of
prospective investors and of responding to inquiries, as well as the
compensation of persons who do the soliciting or respond to
inquiries; (e) preparing and printing prospectuses and other selling
materials and
<PAGE>
THE DRESHER FAMILY OF FUNDS
THE DRESHER CLASSIC RETIREMENT FUND
Notes to the Statement of Assets and Liabilities
July 31, 1997
3. DISTRIBUTION AGREEMENT (Continued)
the cost of distributing them (including postage); (f) reimbursement
of travel, entertainment and like expenditures made by the Trustees
in promoting the Funds and their investment objective and policies;
(g) fees of public relations consultants and (h) awards. The fees
payable under the Distribution Plan are payable without regard to
actual expenses incurred. The Fund may expend as much as, but
not more than, 0.25% of its average net assets annually pursuant to
the Distribution Plan.
NFA Brokerage, Inc., an affiliate of the Investment Manager, serves
as the exclusive agent for the distribution of the Fund's shares based
upon the Distribution Agreement between it and the Trust.
Certain officers and trustees of the Fund are officers and directors
of NFA Brokerage, Inc.
<PAGE>
THE DRESHER FAMILY OF FUNDS
THE DRESHER CLASSIC RETIREMENT FUND
Statement of Assets and Liabilities
July 31, 1997
ASSETS
Cash $ 100,000
Total Assets $ 100,000
NET ASSETS $ 100,000
Net Assets Consist of:
Capital paid-in $ 100,000
Total Net Assets $ 100,000
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE (based on 4,000 shares outstanding) $ 25.00
