As filed with the Securities and Exchange Commission on March 1, 1999
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. 3 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940[ ]
Amendment No. 3 [ ]
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:
Lisa A. Ernst, Esquire
Ledgewood Law Firm, P.C.
1521 Locust Street
Philadelphia, Pennsylvania 19102
It is proposed that this filing will become effective (check appropriate box):
[X] Immediately upon filing [ ] On (date) pursuant to
pursuant to paragraph (b) paragraph (b)
[ ] 60 days after filing [ ] On (date) pursuant to
pursuant to paragraph (a)(1) paragraph (a)(1)
[ ] 75 days after filing [ ] On (date) pursuant to
pursuant to paragraph (a)(2) paragraph (a)(2) of rule 485
If appropriate, check the following box:
[X]This post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
<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. Registrant's Rule 24f-2 Notice for the fiscal year ended December
31, 1998 was filed with the Securities and Exchange Commission on or about March
31, 1999.
<PAGE>
PART A
CROSS REFERENCE SHEET
THE DRESHER FAMILY OF FUNDS
THE DRESHER COMPREHENSIVE GROWTH FUND
THE DRESHER CLASSIC RETIREMENT FUND
Part A
Item No. Registration Statement Caption Prospectus Caption
1. Front and Back Cover Pages Cover Pages
2. Risk/Return Summary: Investments, Risk/Return Summary
Risks, and Performance
3. Risk/Return Summary: Fee Table Fees and Expenses of
the Funds
4. Investment Objectives, Principal Investment
Investment Strategies, and Related Objectives and
Risks Strategies and
Related Risks;
Appendix A
5. Management's Discussion of Fund Inapplicable
Performance (included in Annual
Report)
6. Management, Organization, and Management of the
Capital Structure Trust
7. Shareholder Information Determination of the
Net Asset Value; How
to Purchase Shares;
How to Redeem
Shares; Dividends,
Distributions and
Taxes
8. Distribution Arrangements Distribution Plan
9. Financial Highlights Information Financial Highlights
Part B
Item No. Registration Statement Caption SAI Caption
10. Cover Page and Table of Contents Cover Page; Table of
Contents
11. Fund History Investment
Objectives, Policies
and Restrictions
12. Description of the Fund and Its Investment
Investment and Risks Objectives, Policies
and Restrictions
13. Management of the Fund Management of the
Trust
14. Control Persons and Principal Principal Holders of
Holders of Securities Securities
15. Investment Advisory and Other The Investment
Services Manager; The
Distributor and the
Distribution Plan;
The Transfer Agent;
The Custodian; The
Auditor
16. Brokerage Allocation and Other Portfolio
Practices Transactions
17. Capital Stock and Other Securities Capital Stock and
Shareholders
18. Purchase, Redemption and Pricing Purchase, Redemption
of Shares and Pricing of Shares
19. Taxation of the Fund Taxes Status
20. Underwriters The Distributor and
the Distribution Plan
21. Calculation of Performance Data Inapplicable
22. Financial Statements Annual Report
<PAGE>
PROSPECTUS May 3, 1999
THE DRESHER FAMILY OF FUNDS:
THE DRESHER COMPREHENSIVE GROWTH FUND
AND
THE DRESHER CLASSIC RETIREMENT FUND
The Dresher Family of Funds (the "Trust") is an open-end diversified management
investment company. It consists of two separate portfolios. We refer to each
portfolio in this prospectus as a "Fund" and the two together as the "Funds."
"We" are National Financial Advisors, Inc., the investment manager of the Funds.
The Funds seek to achieve their investment objectives by investing in shares of
other open-end investment companies. The Funds, as well as the other open-end
investment companies in which they invest, are commonly called "mutual funds."
This strategy results in greater expenses than you would incur if you invested
directly in mutual funds.
THE DRESHER COMPREHENSIVE GROWTH FUND seeks aggressive growth of capital without
regard to current income.
THE DRESHER CLASSIC RETIREMENT FUND seeks moderate growth of capital and a
significant level of current income.
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. We have the
flexibility to take full advantage of changing markets and favorable asset
classes. We monitor 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 Funds are no load funds. They sell and redeem their shares as net asset
value. There are no sales loads or commissions imposed upon the purchase of Fund
shares or any fees imposed upon redemption. The Funds do not charge deferred
sales charges, but do incur 12b-1 distribution fees. The Funds may invest in
shares of mutual funds that normally charge sales loads, redemption fees, and/or
pay their own 12b-1 distribution expenses. The Funds will not pay a sales load
to buy these underlying funds. Instead the Funds will use available quantity
discounts or waivers to avoid paying a sales load.
This prospectus has information about the Funds that you should known before you
invest. Please read it carefully and keep with your investment records. Although
these securities have been registered with the Securities and Exchange
Commission, the Commission has not judged them for investment merit and does not
guarantee the accuracy or adequacy of the information in this Prospectus. Anyone
who informs you otherwise is committing a criminal offense.
<PAGE>
RISK/RETURN SUMMARY
WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?
The Dresher Comprehensive Growth Fund seeks aggressive growth of capital without
regard to current income. Under normal market conditions, at least 75% of the
total assets of this Fund will be invested in mutual funds that invest primarily
in common stocks or securities convertible into or exchangeable for common
stock. The allocation of the assets of The Dresher Comprehensive Growth Fund
among the underlying funds is expected to result in the Fund incurring more risk
than The Dresher Classic Retirement Fund.
The Dresher Classic Retirement Fund seeks moderate growth of capital and a
significant level of current income. The mutual funds in this will Fund invest
primarily in common stocks, bonds and other fixed-income securities. Under
normal market conditions, no more than 65% of its assets will be invested in
mutual funds that invest primarily in common stock or securities convertible
into or exchangeable for common stock.
WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?
Each Fund seeks to achieve its investment objective by investing in a portfolio
of other mutual funds. (The mutual funds in which the Funds may invest are
referred to in this prospectus as the "underlying funds.") A Fund will, under
normal market conditions, maintain its assets invested in a number of underlying
funds. Each Fund may invest in identical types of mutual funds or even in the
same mutual funds; however, the percentage of each Fund's assets so invested
will vary depending upon the Fund's investment objective. Our investment
strategy focuses on asset allocation (varying the concentration of asset classes
in the funds), fund selection (looking for a unique edge provided by an
underlying fund's management) and portfolio structure strategies (buy-and-hold
and sector rotation). The Funds expect to be fully invested in underlying mutual
funds at all times. To provide liquidity, as well as to assist in achieving the
Funds' investment objective, each Fund may invest in money market mutual funds.
When we believe market conditions justify a defensive strategy, a Fund may
invest up to 100% of its assets in money market mutual funds.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?
Any investment involves risk. Even though the Funds invest in a number of
mutual funds, this investment strategy cannot eliminate risk.
Some of the underlying funds in which the Funds invest may involve more
risk than others.
Through its investments in the underlying funds, a Fund may have an
indirect concentration in one or more industries. Such concentrated
investments may have greater fluctuations in value than more diversified
investments.
You could lose money by investing in the Funds.
By investing in other mutual funds, the Funds incur greater expenses than
you would incur if you invested directly in mutual funds.
PERFORMANCE SUMMARY
The bar charts and performance tables shown provide an indication of the risks
of investment in the Funds by showing by how the average annual returns of the
Funds compare to those of a broad-based securities market index. How the Funds
have performed in the past is not necessarily an indication of how they will
perform in the future.
THE DRESHER COMPREHENSIVE GROWTH FUND
[Insert bar chart representing the Performance in 1998 of 9.70%]
During the period shown in the bar chart, the highest return for a quarter was
18.58% during the quarter ended December 31, 1998 and the lowest return for a
quarter was (15.41)% during the quarter ended September 30, 1998.
THE DRESHER CLASSIC RETIREMENT FUND
[Insert bar chart representing the Performance in 1998 of 7.98%]
During the period shown in the bar chart, the highest return for a quarter was
17.51% during the quarter ended December 31, 1998 and the lowest return for a
quarter was (13.00)% during the quarter ended September 30, 1998.
Average Annual Total Returns for Period Ended December 31, 1998
One Year
Dresher Comprehensive Growth Fund 9.70%
Lipper Growth Fund Index 25.65%
Dresher Classic Retirement Fund 7.89%
Lipper Balanced Fund Index 15.09%
FEES AND EXPENSES OF THE FUNDS
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Funds.
SHAREHOLDER FEES
Sales Charge (Load) Imposed on Purchases None
Sales (Load) Imposed on Reinvested Dividends None
Deferred Sales Fees (Load) None
Exchange Fee None
Redemption Fee None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
Comprehensive Classic
Growth Retirement
Fund Fund
Management Fees1 1.20% 1.20%
Distribution (12b-1) Fees 0.25% 0.25%
Other Expenses 0.00% 0.00%
Total Annual Fund Operating 1.45% 1.45%
Expenses
1 We voluntarily reduce our management fee so that each Fund's actual annual
operating expenses are no greater than 1.20% (not including extraordinary
expenses). Our management fee waiver will continue until at least December
31, 2000, after which date it may be continued, modified or terminated. Our
management fee includes transfer agency, pricing, custodial, auditing and
legal services, taxes, interest, redemption fees, fees and expenses of
non-interested Trustees and general administrative expenses.
EXAMPLE
This example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds. It assumes that you invest
$10,000 in a Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
Comprehensive Growth Fund $123 $388 $681 $1550
Classic Retirement Fund $123 $388 $681 $1550
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
Comprehensive Growth Fund $123 $388 $681 $1550
Classic Retirement Fund $123 $388 $681 $1550
INVESTMENT OBJECTIVES AND STRATEGIES AND RELATED RISKS
INVESTMENT OBJECTIVES
Each Fund seeks to achieve its investment objective by investing in a portfolio
of other mutual funds. The level of diversification the Funds obtain from being
invested in a number of underlying funds reduces the risk associated with an
investment in a single underlying fund. This risk is further reduced because
each underlying fund's investments are also spread over a range of issuers,
industries, and countries. Each Fund has its own investment objectives and
strategies designed to meet different investment goals:
The investment objective of The Dresher Comprehensive Growth Fund is capital
appreciation without regard to current income. Under normal market
conditions, at least 75% of the total assets of the Fund will be invested in
mutual funds that invest primarily in common stock or securities convertible
into or exchangeable for common stock (such as convertible preferred stock,
convertible debt securities with warrants attached and debt securities
entitling the fund to purchase common stock when the principal amount of the
debt securities can be used at face value to exercise the Warrants). This
allocation of assets among the underlying funds means that this Fund will
likely incur more risk than The Dresher Classic Retirement Fund.
The investment objective of The Dresher Classic Retirement Fund is 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.
Both Funds will, under normal circumstances, maintain substantially all of their
assets in a number of underlying funds. Each Fund will usually keep
approximately 5% of its net assets in money market mutual funds in order to meet
anticipated redemptions. In addition, each Fund may invest up to 100% of its
assets in money market mutual funds for temporary defensive purposes when we
believe that other investments involve unreasonable risk. Under such
circumstances, the Funds may not achieve their investment objectives and may
experience a significant reduction in investment returns.
Each Fund's investment objective is non-fundamental and may be changed by the
Board of Trustees of the Trust 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 such 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 will not necessarily, have the same investment
objectives and policies as the Funds. A general discussion of the investments
that may be made by underlying funds and the risk associated with such
investments is found in Appendix A to this prospectus.
INVESTMENT STRATEGIES
We try to get the greatest return for the level of risk assumed by each Fund.
Our investment strategy stresses three factors: asset allocation, fund selection
and portfolio structure.
Asset Allocation
Different asset classes produce different results, both absolutely and relative
to each other, over various periods. Diversification across asset classes is the
appropriate protection against the risk of being wrong about the prospects for
an asset class because it (1) allows an investor to counterbalance the more
volatile swings in value typically experienced by riskier asset classes with the
greater stability of less risky asset classes and (2) allows for the tendency of
certain asset classes to behave contrary to the behavior of other asset classes
during a given investment period.
As part of the asset allocation process, we perform a forward-looking analysis
of economic and market trends which include both broad macro-economic concerns
and more narrowly-focused sector concerns. We perform a "top down"
macro-economic analysis on a global basis, examining the strength of the economy
as a whole, as well as various sectors, inflation, currency, money flows, and
interest rate considerations and political concerns. Additionally, we use
various technical and fundamental analytical techniques to determine at any
given point the actual relative weighting of various asset classes in a Fund.
After performing the "top down" macro-economic analysis and market analysis
described above the fund manager survey described below under "Fund Selection"
and "Portfolio Structure," we arrive at positive, neutral, or negative outlooks
for the short, intermediate, and long terms. Comparing the outlooks at which we
arrive to current condition period trends, we examine whether the outlook at
indicates confirmation and continuation of a particular trend or potential
reversal of a trend.
Fund Selection
Among mutual funds in a particular category, the performance of the best funds
often varies substantially from the average. As part of our fund selection
process, we analyze general historical performance of funds over at least the
past one, three, and five year periods. In this regard, we use both absolute and
risk-adjusted measures. We also identify the "current condition period" (the
time that the current investing conditions have been in place) and research and
analyze fund performance in other particular time frames using various absolute
and risk-adjusted measures. In doing so, we look for what we call "idiosyncratic
advantage," which means a unique edge provided by a fund's management based on
its knowledge, methods, skills and insights.
In evaluating a fund, we calculate the fund's volatility during the period under
consideration, both as a measure of risk inherent in the fund and as a basis for
comparison with other funds. We also conduct fundamental and technical analysis
of the fund's portfolio. In addition, we evaluate the fund's management for
background, service capability, stability, technical and research support, and
other indications of quality of investment judgment including, to the extent
feasible, interviews with the fund's portfolio manager.
Portfolio Structure
We believe that strategies of portfolio structure and management should also be
diversified. In managing the Funds, we use a combination of the buy-and-hold and
sector rotation strategies.
A buy-and-hold strategy involves researching mutual funds primarily by doing
fundamental analysis. This includes analysis of performance records and
capabilities and investment styles of fund managers. The objective is to match a
fund or combination of funds to the goals and tolerance for risk of each Fund.
Mutual funds so selected are considered to be long-term investment vehicles and
are not likely to be subject, under normal market conditions, to frequent
trading. A buy-and-hold strategy focuses on results over one or more market
cycles rather than short-term performance. Risks of the buy-and-hold strategy
include management turnover, managers of funds losing their ability or their
interest in managing the fund, and a fund growing so large that its ability to
invest in restricted.
A sector rotation strategy is based on a view of the market as a mix of many
sub-markets. It is intended to take advantage of the fact that certain
sub-markets are not closely correlated with many other-sub-markets. Sector
rotation is an active strategy, relying on techniques for shifting asset
concentrations to and from various sectors to realize the benefits of sectors
anticipated to strengthen and to diminish the effects of sectors anticipated to
decline. A sector rotation strategy thus allows a portfolio to remain more fully
invested over time by frequently replacing assets in one sector with assets from
others. The primary risk associated with sector rotation is that anticipated
trends may not appear.
The assumption is that there is limited correlation between certain sectors
(utility stocks vs. technology stocks, for example) and that at any given point
there are likely to be one or more sectors that are outperforming or have the
potential to outperform the overall market. A sector rotator will thus likely
stay fully invested over time, but may well frequently buy and sell in order to
move assets from one sector to another. On the other hand, a market timer will
stay fully invested only when he or she believes the market is going up and will
hold varying percentages of cash, up to 100% cash, depending on his or her level
of confidence that the market is going down.
The Funds have no restrictions on portfolio turnover. However, we do not
anticipate that the Funds will engage in active and frequent trading for the
foreseeable future. Trading 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. See "Dividends,
Distributions and Taxes." There is no limit on the portfolio turnover rates of
the underlying funds.
OTHER RISK CONSIDERATIONS
The Funds' Investment Strategy Does not Eliminate Risk. 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 A 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; 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 A to this prospectus.
Sector rotation strategies are complex, involve risks that contemporary economic
theory of financial markets suggests may not be fully compensated measured by
expected return, and are highly dependent on subjective judgments. Further, any
strategy designed to enhance returns also enhances risk of loss and thus carries
with it the potential instead for reducing gains or causing losses. There can be
no assurance that in carrying out sector rotation strategies, we will
successfully enhance the performance of the Funds.
Industry Concentration. 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.
Underlying Funds May Make "In Kind" Distributions. 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 we
determine that it is appropriate to dispose of such securities. Such disposition
may entail additional costs to the affected Fund.
Two Tiers of Expenses. You could invest directly in the underlying funds. By
investing in mutual funds indirectly through the Funds, you bear not only your
proportionate share of the expenses of the Funds but also, indirectly, similar
expenses (including operating costs and investment advisory fees) of the
underlying funds. You may indirectly bear expenses paid by underlying funds
related to the distribution of such mutual funds' shares. (The Funds intend to
purchase load fund shares under discount programs so that they will not incur
sales load charges.) In addition, as a result of the Funds' policies of
investing in other mutual funds, you may receive taxable capital gains
distributions to a greater extent than would be the case if you invested
directly in the underlying funds. See "Dividends, Distributions and Taxes."
An Underlying Fund May Sell a Particular Security at the Same Time Another
Underlying Fund is Purchasing the Same Security. The investment advisers of the
underlying funds will make their investment decisions independently of the
Funds. Therefore, the investment adviser of an underlying fund 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.
Distributor May Receive Fees from Underlying Funds. The underlying funds in
which the Funds invest may incur distribution and shareholder service expenses
in the form of 12b-1 fees or service fees. In the event a Fund purchases shares
of an underlying fund that imposes 12b-1 or service fees, such fees will be paid
by such underlying funds to the Distributor because portfolio transactions for
the Funds are generally 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 "Management of the
Trust-- Execution of Portfolio Transactions." The Distributor is affiliated with
us, and as a result of that relationship, a conflict of interest in rendering
advice to the Funds could arise. However, because the Distributor will reimburse
to the Funds any fees received by it for effecting purchases of the underlying
funds' shares, we believe that our incentive to make investments in underlying
funds which pay such fees to the Distributor is greatly reduced.
MANAGEMENT OF THE TRUST
TRUSTEES
The business and affairs of the Trust are managed under the direction of the
Board of Trustees. Additional information about the Trustees and the executive
officers of the Trust may be found in the Statement of Additional Information
under "Management of the Trust."
INVESTMENT MANAGER
We maintain our principal office at 715 Twining Road, Suite 202, Dresher,
Pennsylvania 19025. In addition to serving as investment adviser to the Trust
and its Funds, we provide investment supervisory services on a continuous basis
to high-income individuals, pension and profit sharing plans, corporations,
partnerships, trusts and estates (including charitable organizations). Pursuant
to an Investment Management Agreement with the Trust, we are responsible for the
investment management of each Fund's assets, including the responsibility for
making investment decisions and placing orders for the purchase and sale of the
Funds' investments. Unlike most mutual funds, the management fees paid by the
Funds to us include transfer agency, pricing, custodial, auditing and legal
services, taxes, interest, redemption fees, fees and expenses of non-interested
Trustees and general administrative and other operating expenses of each Fund.
For the services provided to the Funds, we are entitled to receive from each
Fund a fee, payable monthly, at the annual rate of 1.20% average daily net
assets. We are contractually obligated to reduce our management fee to keep
total operating expenses for each Fund to 1.20% (not including extraordinary
expenses) until at least December 31, 2000.
We are a subsidiary of the National Advisory Group, Inc. (the "Group"), a
Pennsylvania corporation with interests primarily in the financial services
industry. The Group also owns NFA Brokerage Services, Inc. (the "Distributor"),
the NASD mutual funds only broker/dealer through which shares of each fund are
offered, and National Shareholder Services, Inc. (the "Transfer Agent"), the
Funds' transfer agent, dividend paying agent and shareholder service agent.
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 each of The Groups affiliated entities since their
formation. Mr. Brown has been a Trustee of the Trust since its inception.
YEAR 2000 READINESS
Like other mutual funds and financial and business organizations worldwide, the
Funds could be adversely affected if computer systems on which the Funds rely,
which primarily include those used by us or other service providers, are unable
to correctly process date-related information on and after January 1, 2000. This
risk is commonly called the Year 2000 issue. Failure to successfully address the
Year 2000 issue could result in interruptions to and other material adverse
effects on the Funds' businesses and operations, such as problems calculating
net asset value and difficulties in implementing the Funds' purchase and
redemption procedures. We have assessed our date-sensitive information
technology systems and believe that they are Year 2000 capable. We have also
communicated with the underlying funds in which the Funds invest to determine
their Year 2000 compliance. As of the date of this prospectus, all of such
underlying funds have advised us that they are Year 2000 compliant or have
initiated programs that will make them Year 2000 compliant.
EXECUTION OF PORTFOLIO TRANSACTIONS
We generally place orders for the purchase and sale of portfolio securities for
the Funds' accounts through the Distributor. Each Fund has authority to purchase
shares of underlying funds that impose 12b-1 or service fees. The Distributor
may enter into agreements with the underlying funds to provide certain services
to them in consideration of the payment of such fees. Such services may include:
sub-accounting, account status information, forwarding of communications from
such underlying funds to a Fund, and share purchase processing, exchange, and
redemption assistance. In the absence of such agreements, an underlying fund
would retain the 12b-1 or service fees. The Distributor is entitled to retain
fees for services provided by it to an underlying fund, which 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.
DETERMINATION OF NET ASSET VALUE
The share price (net asset value) of the shares of each Fund is determined as of
the close of the regular session of trading on the New York Stock Exchange
(normally at 4:00 p.m., Eastern time). The Funds are open for business on each
day the New York Stock Exchange is open for business. 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. The price at which a purchase of
redemption of a Fund's share is effected is based on the next calculation of net
asset value after the redemption request is placed.
Shares of the underlying funds are valued at their respective net asset values.
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 directors of the
underlying fund. Money market funds with portfolio securities that mature in one
year 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.
If market quotations are not readily available, securities are valued at their
fair market value as determined in good faith in accordance with procedures
established by and under the general supervision of the Trust's Board of
Trustees. The net asset value per share of each Fund will fluctuate with the
value of the securities it holds.
HOW TO PURCHASE SHARES
Shares of each Fund are sold without a sales charge at the next price calculated
after receipt of an order to proper form by the Transfer Agent. Your initial
investment in a Fund ordinarily must be at least $10,000, except that the Trust
reserves the right, in its sole discretion, to waive 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
private clients of The Group, including members of such persons' immediate
families. Each Fund also reserves the right to waive the minimum initial
investment for financial intermediaries. All purchase payments are invested in
full and fractional shares. The Trust may reject any purchase order.
Purchase orders will be priced as follows:
Direct purchase orders received by the Transfer Agent by 4:00 p.m., Eastern
time, on any business day are confirmed at that day's net asset value;
Purchase orders received by dealers prior to 4:00 p.m., Eastern time, on
any business day and transmitted to the Transfer Agent by 5:00 p.m.,
Eastern time, that day are confirmed at the net asset value determined as
of the close of regular session of trading on the New York Stock Exchange
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., Eastern time. Dealers or other agents may charge you a fee for
effecting transactions.
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 next determined on the following business day.
You may open an account and make an initial investment in either Fund by sending
a check and completed account application form to the Transfer Agent, National
Shareholder Services, Inc., 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. If
your order to purchase shares is canceled because your check does not clear, you
will be responsible for any resulting losses or fees incurred by the Fund or the
Transfer Agent in the transaction.
You may also purchase shares of the Funds by wire. Please call the Transfer
Agent at (888) 980-7500 for instructions. You 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. Investment in a Fund will be made at the Fund's net
asset value next determined after your 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, you must mail a
completed account application to the Transfer Agent. Banks may impose a charge
for sending a wire. There is presently no fee for receipt of wired funds, but
the Transfer Agent reserves the right to charge shareholders for this service
upon thirty days' prior notice to shareholders.
The Trust mails you confirmations of all purchases or redemptions of shares of
the Funds. With your prior consent, the Trust will transmit confirmations and
other statements to you by e-mail or other electronic media in compliance with
SEC guidelines. You may revoke your consent to receive such confirmations and
statements electronically at any time and thereafter will receive hard copies of
all such confirmations and statements. Regardless, you may request hard copies
at any time.
The Funds' account application contains certain provisions limiting the
liability of the Trust, the Transfer Agent 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.
You may purchase and add shares to your account ($100 minimum) directly by mail
or by bank wire or through a dealer. Each additional purchase request must
contain the account name and number to permit proper crediting.
<PAGE>
Tax-Deferred Retirement Plans
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) provisions.
- 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
You may redeem shares of the Funds on each day that the Trust is open for
business. You will receive the net asset value per share next determined after
receipt by the Transfer Agent of your redemption request in the form described
below. The Trust will generally send your redemption payment by mail or by wire
within three business days after receipt of redemption request. However, payment
in redemption of shares purchased by check will be made only after the check has
been collected, which may take up to 15 days from the purchase date. You may
eliminate this delay by purchasing shares of the Funds by certified check or
wire.
BY TELEPHONE
To redeem by telephone, call the Transfer Agent at (888) 980-7500. The proceeds
will be sent by mail to the address designated on your account or wired directly
to your existing account at any commercial bank or brokerage firm in the United
States as designated on the application. IRA accounts are not redeemable by
telephone.
The telephone redemption privilege is automatically available to all
shareholders. You may change the bank or brokerage account designated under this
procedure at any time by writing to the Transfer Agent, or by completing a
supplemental telephone redemption authorization form. Contact the Transfer Agent
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 the Transfer Agent, nor their affiliates, will be liable
for complying with telephone instructions any of them reasonably believes to be
genuine or for any loss, damage, costs or expense in acting on such telephone
instructions. The affected shareholders will bear the risk of any such loss. The
Trust or the Transfer Agent, or both, will employ reasonable procedures to
determine that telephone instructions are genuine. If the Trust and/or the
Transfer Agent 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 before 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.
BY MAIL
You may redeem your shares by mail by writing directly to the Transfer Agent at
Twining Office Center, 715 Twining Road, Suite 202, Dresher, Pennsylvania 19025.
The redemption request must be signed exactly as your name appears on the
Trust's records and must include the account number. If the 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.
THROUGH BROKER-DEALERS
You may also redeem shares by placing a wire redemption request through a
securities broker or dealer. Broker-dealers or other agents may impose a fee for
this service. You will receive the net asset value per share next determined
after receipt by the Transfer Agent of your wire redemption request. It is the
responsibility of broker-dealers to promptly and properly transmit wire
redemption orders.
OTHER INFORMATION CONCERNING REDEMPTION
Each Fund reserves the right to take up to seven days to make payment if, in our
judgment, the 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 New York Stock Exchange 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, you may either withdraw your request for redemption
or receive payment based on the net asset value per share next determined after
the termination of the suspension.
Each Fund will pay all redemptions, up to the lesser of $250,000 or 1% of its
net assets per shareholder per 90-day period, in cash. The Funds may pay
redemptions above such limits wholly or partly "in kind" with shares of the
underlying funds in which the Fund invests. Nevertheless, redemption request
above the limits will usually be paid wholly in cash unless we believe that
economic or market conditions exist that would make such cash payments against
the Fund's best interests. If redemption proceeds are paid in underlying fund
shares, such securities will be valued as set forth under the caption
"Determination of Net Asset Value." Such underlying fund shares will be readily
redeemable or marketable.
The Trust reserves the right to close your account and redeem your shares if the
aggregate value of your account drops below $10,000 (based on actual amounts
invested, unaffected by market fluctuations). After notification to you of the
Trust's intention to close your account, you will be given 30 days to increase
the value of your account to $10,000. An exchange constitutes sale of shares,
which may cause you to recognize a capital loss or gain. See "Dividends,
Distributions and Taxes."
EXCHANGE PRIVILEGE
Shares of the Funds may be exchanged for each other at net asset value. You may
request an exchange by sending a written request to the Transfer Agent. The
request must be signed exactly as your name appears on the Trust's account
records. Exchanges may also be requested by telephone. An exchange will be
effected at the next determined net asset value after receipt of a request by
the Transfer Agent. Exchanges may only be made for shares of Funds then offered
for sale in your state of residence and are subject to the applicable minimum
initial investment requirements. The exchange privilege may be modified or
terminated by the Trust's Board of Trustees upon 60 days' prior notice to you.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund intends to qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code of 1986 (the "Code"). In any year in which a Fund
qualifies as a regulated investment company and distributes substantially all of
its investment company taxable income (which includes,among other items, the
excess of net short-term capital gains over net long-term capital losses) and
its net capital gains (the excess of net long-term capital gains over net
short-term capital losses), the Fund will not be subject to federal income tax
to the extent it distributes such income and capital gains in the manner
required under the Code.
Income received by a Fund from a mutual fund owned by that Fund (including
dividends and distributions of short-term capital gains) will be distributed by
the Fund (after deductions for expenses) and will be taxable to you as ordinary
income. Because the Funds are actively managed and may realize taxable net
short-term capital gains by selling shares of a mutual fund with unrealized
portfolio appreciation, investing in a Fund rather than directly in the
underlying funds may result in increased tax liability to you because the Fund
must distribute its gains in accordance with certain rules under the Code.
Distributions of net capital gains (the excess of net long-term capital gains
over net short-term capital losses) received by a Fund from the underlying
funds, as well as net long-term capital gains realized by the Fund from the
purchase and sale (or redemption) of mutual fund shares or other securities held
by a Fund for more than one year, will be distributed by the Fund and will be
taxable to you as long-term capital gains (even if you have held the shares for
less than one year). If a shareholder who has received a capital gains
distribution suffers a loss on the sale of his or her 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. Long-term capital gains,
including distributions of net capital gains, are currently subject to a maximum
federal tax rate of 20%, which rate is less than the maximum rate imposed on
other types of taxable income. Capital gains may be advantageous also because
they may be offset in full by capital losses. By contrast, no ordinary income
received by corporations, and only the first $3,000 of ordinary income received
by individuals, may be offset by capital losses. For purposes of determining the
character of income received by a 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 the Fund has held shares of the underlying fund for less
than one year. Any loss incurred by a Fund on the sale of such mutual fund's
shares held for six months or less, however, will be treated as a long-term
capital loss to the extent of the gain distribution.
The tax treatment of distributions from a 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.
A Fund may invest in mutual funds with capital loss carryforwards. If such a
mutual fund realizes capital gains, it will be able to offset the gains to the
extent of its loss carryforwards in determining the amount of capital gains
which must be distributed to shareholders. To the extent that gains are offset
in this manner, distributions to a Fund and its shareholders will not be
characterized as capital gain dividends but may be ordinary income. Capital
gains may be advantageous also because they may be offset in full by capital
losses. By contrast, no ordinary income received by corporations, and only the
first $3,000 of ordinary income received by individuals, may be offset by
capital losses.
Redemptions of shares of the Funds are taxable events on which you may realize a
gain or loss. An exchange of a Fund's shares for shares of another Fund will be
treated as a sale of such shares and any gain on the transaction may be subject
to federal income tax. Each year the Trust will notify you of the tax status of
dividends and distributions made during the year. Depending upon your residence
for tax purposes, distributions may also be subject to state and local taxes,
including withholding taxes. You should consult your own tax adviser regarding
the tax consequences of ownership of shares of a Fund in your particular
circumstances.
Each Fund will distribute investment company taxable income and any net realized
capital gains at least annually. All dividends and distributions will be
reinvested automatically at net asset value in additional shares of the Fund
making the distribution, unless you notify the Fund in writing of your election
to receive distributions in cash.
DISTRIBUTION PLAN
The Trust adopted a distribution and shareholder services plan under which each
Fund pays the Distributor a fee at the annual rate of 0.25% of average daily net
assets for the sale of its shares and services provided to shareholders. The
Distributor uses the fee to defray the cost of commissions and service fees paid
to financial service firms which have sold Fund shares or provided information
to prospective investors, and to defray other expenses such as prospectus
printing and distribution, advertising and shareholder servicing costs. Should
the fees exceed the Distributor's expenses in any year, the Distributor would
realize a profit. Because the distribution and shareholder service fees are paid
out of Fund assets on an ongoing basis, they will, over time, increase the costs
of investment and may cost more than other types of sales charges.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Funds'
financial performance. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned on an investment in the Funds (assuming reinvestment
of all dividends and distributions). This information has been audited by
Sanville & Company, whose report, along with the Funds' financial statements,
are included in the Trust's annual report, which is available upon request.
<PAGE>
THE DRESHER COMPREHENSIVE GROWTH FUND
Per Share Data for Share
Outstanding
October 1, 1997
(commencement
of investment
operations)
Year Ended through
December 31, December 31,
1998 1997
Net asset value at beginning of $ 24.44 $ 25.44
period
Income from investment operations:
Net investment income $ (0.08) $ 0.33
Net realized and unrealized $ 2.45 $ (0.27)
gains on investments
Less distributions:
Dividends from net investment $ ---- $ (0.33)
income
Distributions in excess of net
investment income $ ---- $ ----
Distributions from net realized $ (0.37) $ (0.43)
gains
Total distributions $ (0.37) $ (0.76)
Net asset value at the end of $ 26.44 $ 24.44
the period
Total return 9.70% 0.28%
Net assets at end of period $10,434 $ 3,593
(000's)
Ratio of expenses to average 1.20% 1.20%
net assets
Portfolio turnover rate 48.23% 22.39%
<PAGE>
THE DRESHER CLASSIC RETIREMENT FUND
Per Share Data for Share
Outstanding
October 1, 1997
(commencement
of investment
operations)
Year Ended through
December 31, December 31,
1998 1997
Net asset value at beginning of $ 24.20 $ 25.23
period
Income from investment operations:
Net investment income $ (0.05) $ 0.34
Net realized and unrealized $ 1.96 $ (0.40)
gains on investments
Less distributions:
Dividends from net investment $ (0.11) $ (0.34)
income
Distributions in excess of net
investment income $ ---- $ ----
Distributions from net realized $ ---- $ (0.63)
gains
Total distributions $ (0.11) $ (0.97)
Net asset value at the end of $ 26.00 $ 24.20
the period
Total return 7.89% (0.20%)
Net assets at end of period $ 9,731 $ 4,665
(000's)
Ratio of expenses to average 1.20% 1.20%
net assets
Portfolio turnover rate 96.94 6.77
<PAGE>
APPENDIX A
FOREIGN SECURITIES
An underlying fund may invest up to 100% of its assets in securities of foreign
issuers. Investments in foreign securities involve risks and considerations that
are not present when a fund invests in domestic securities.
EXCHANGE RATES
Since an underlying fund may purchase securities denominated in foreign
currencies, changes in foreign currency exchange rates will affect the value of
the underlying fund's (and accordingly a Fund's) assets from the perspective of
U.S. investors. Changes in foreign currency exchange rates may also affect the
value of dividends and interest earned, gains and losses realized on the sale of
securities and net investment income and gains, if any, to be distributed by a
mutual fund. An underlying fund may seek to protect itself against the adverse
effects of currency exchange rate fluctuations by entering into
currency-forward, futures or options contracts. Hedging transactions will not,
however, always be fully effective in protecting against adverse exchange rate
fluctuations. Furthermore, hedging transactions involve transaction costs and
the risk that the underlying fund will lose money, because exchange rates move
in an unexpected direction, because another party to a hedging contract
defaults, or for other reasons.
EXCHANGE CONTROLS
The value of foreign investments and the investment income derived from them may
also be affected by exchange control regulations. Although it is expected that
underlying funds will invest only in securities denominated in foreign
currencies that are fully exchangeable into U.S. dollars without legal
restriction at the time of investment, there is no assurance that currency
controls will not be imposed after the time of investment. In addition, the
value of foreign fixed-income investments will fluctuate in response to changes
in U.S. and foreign interest rates.
LIMITATIONS OF FOREIGN MARKETS
There is often less information publicly available about a foreign issuer than
about a U.S. issuer. Foreign issuers are not generally subject to accounting,
auditing, and financial reporting standards and practices comparable to those in
the United States. The securities of some foreign issuers are less liquid and at
times more volatile than securities of comparable U.S. issuers.
<PAGE>
FOREIGN LAWS, REGULATIONS AND ECONOMIES
There may be a possibility of nationalization or expropriation of assets,
imposition of currency exchange controls, confiscatory taxation, political or
financial instability, and diplomatic developments that could affect the value
of an underlying fund's investments in certain foreign countries.
FOREIGN TAX CONSIDERATIONS
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.
EMERGING MARKETS
Risks may be intensified in the case of investments by an underlying fund in
emerging markets or countries with limited or developing capital markets.
Security prices in emerging markets can be significantly more volatile than in
more developed nations. 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 predominantly 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 or rescheduling
of debt payments.
CALCULATION OF NET ASSET VALUE
Foreign securities in which the underlying funds may invest may be listed
primarily on foreign stock exchanges that may trade on days when the New York
Stock Exchange is not open for business. Accordingly, the net asset value of an
underlying fund may be significantly affected by such trading on days when we do
not have access to the underlying funds and you do not have access to the Funds.
<PAGE>
FOREIGN CURRENCY TRANSACTIONS
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, a fund would,
at the time it enters into a contract to acquire a foreign security for a
specified amount of currency, 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 transactions 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 particular foreign currency during the period between the
date the security is purchased or sold and the date on which payment is made or
received (usually 3 to 14 days). While forward contracts tend to minimize the
risk of loss due to a decline in the value of the currency involved, they also
tend to limit any potential gain that might result if the value of such currency
were to increase during the contract period.
REPURCHASE AGREEMENTS
An underlying fund may enter into repurchase agreements with banks and
broker-dealers under which it acquires securities, subject to an agreement with
the seller to repurchase the securities at an agreed-upon time and an
agreed-upon price. Repurchase agreements involve certain risks, such as default
by, or insolvency of, the other party to the repurchase agreement. An underlying
fund's right to liquidate its collateral in the event of a default could involve
certain costs, losses or delays. To the extent that proceeds from any sale upon
default of the obligation to repurchase are less than the repurchase price, the
underlying fund could suffer a loss.
ILLIQUID AND RESTRICTED SECURITIES
An underlying fund may invest up to 15% of its net assets in securities for
which there is no readily available market ("illiquid securities"). This figure
includes securities whose disposition would be subject to legal restrictions
("restricted securities") and repurchase agreements having more than seven days
to maturity. Illiquid and restricted securities are not readily marketable
without some time delay. This could result in the underlying fund being unable
to realize a favorable price upon disposition of such securities, and in some
cases might make disposition of such securities at the time desired by the
mutual fund impossible.
LOANS OF PORTFOLIO SECURITIES
An underlying fund may lend its portfolio securities. Lending portfolio
securities involves risk of delay in the recovery of the loaned securities and
in some cases, the loss of rights in the collateral if the borrower fails.
<PAGE>
SHORT SALES
An underlying fund may sell securities short. In a short sale the underlying
fund sells stock it does not own and makes delivery with securities "borrowed"
from a broker. The underlying fund then becomes obligated to replace the
security borrowed by purchasing it at the market price at the time of
replacement. This price may be more or less than the price at which the security
was sold by the underlying fund. Until the security is replaced, the underlying
fund is obligated to pay to the lender any dividends or interest accruing during
the period of the loan. In order to borrow the security, the underlying fund may
be required to pay a premium that would increase the cost of the security 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.
SHORT SALES "AGAINST THE BOX"
A short sale is "against the box" if at all times when the short position is
open the underlying 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.
INDUSTRY CONCENTRATION
An underlying fund may concentrate its investments within one industry. The
value of the shares of such a fund may be subject to greater market fluctuation
than an investment in a fund that invests in a broader range of securities.
MASTER DEMAND NOTES
An underlying fund (particularly an underlying money market fund) may invest up
to 100% of its assets in master demand notes. These are unsecured obligations of
U.S. corporations redeemable upon notice that permit investment by a mutual fund
of fluctuating amounts at varying rates of interest pursuant to direct
arrangements between the mutual fund and the issuing corporation. Because master
demand notes are direct arrangements between the mutual fund and the issuing
corporation, there is no secondary market for the notes. The notes are, however,
redeemable at face value plus accrued interest at any time.
OPTIONS
An underlying fund may write (sell) listed call options ("calls") if the calls
are covered through the life of the option. A call is covered if the underlying
fund owns the optioned securities. When an underlying 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 underlying
fund will forgo 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 to effect a "closing
purchase transaction." This 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 fund is unable to effect a closing purchase 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 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 underlying fund at the exercise price at
any time during the option period. When an underlying 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 upon 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.
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" which,
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.
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. The closing out of a futures contract purchase is effected by the
purchaser entering into 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 hedge by selling such securities and either
reinvesting the proceeds in 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 would 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 investments being hedged.
A stock index futures contract may be used to hedge an underlying fund's
portfolio with regard to market risk as distinguished from risk related to a
specific security. A stock index futures contract is a contract to buy or sell
units of an index at a specified future date at a price agreed upon when the
contract is made.
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 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 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 securities equal in value to the current value of the underlying
instrument less the margin deposit.
OPTIONS ON FUTURES CONTRACTS
An underlying fund may also purchase and sell listed 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. The
underlying fund may also purchase put options on futures contracts in lieu of,
and for the same purpose as, a sale of a futures contract. An underlying fund
may also purchase such put options in order to hedge a long position in the
underlying futures contract in the same manner as it purchases "protective puts"
on securities.
The holder of an option may terminate the position by selling an option of the
same series. There is, however, no guarantee that such a closing transaction can
be effected. An underlying fund is required to deposit initial and maintenance
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 which apply to all options transactions, there are
several risks relating to options on futures contracts. The ability to establish
and close out positions on such options is subject to the development and
maintenance of a liquid secondary market. It is not certain that this market
will develop. In comparison with the use of futures contracts, the purchase of
options on futures contracts involves less potential risk to a fund because the
maximum amount of risk is the premium paid for the option (plus transaction
costs). There may, however, be circumstances when the use of an option on a
futures contract would result in a loss to an underlying 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.
HEDGING
An underlying fund may employ many of the investment techniques described above
for investment and hedging purposes. Although hedging techniques generally tend
to minimize the risk of loss that is hedged against, they also may limit 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.
WARRANTS
An underlying fund may invest in warrants. Warrants are options to purchase
equity securities at specific prices valid for a specified period of time. The
prices do not necessarily move in parallel to the prices of the underlying
securities. Warrants have no voting rights, receive no dividends and have no
rights with respect to the assets of the issuer. If a warrant is not exercised
within the specified time period, it becomes worthless and the mutual fund loses
the purchase price and the right to purchase the underlying security.
LEVERAGE
An underlying fund may borrow on an unsecured basis from banks to increase its
holdings of portfolio securities. Under the Investment Company Act of 1940, such
fund is required to maintain continuous asset coverage of 300% with respect to
such borrowings and to sell (within three days) sufficient portfolio holdings in
order to restore such coverage if it should decline to less than 300% due to
market fluctuation or otherwise. Such sale must occur even if disadvantageous
from an investment point of view. Leveraging aggregates the effect of any
increase or decrease in the value of portfolio securities on the underlying
fund's net asset value. In addition, money borrowed is 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.
HIGH YIELD SECURITIES AND THEIR RISKS
An underlying fund may invest in high yield, high-risk, lower-rated securities,
commonly known as "junk bonds." Such fund's investment in such securities is
subject to the risk factors outlined below.
<PAGE>
YOUTH AND GROWTH OF THE HIGH YIELD BOND MARKET
The high yield, high risk market has at times been subject to substantial
volatility. An economic downturn or increase in interest rates may have a more
significant effect on such securities as well as on the ability of securities'
issuers to repay principal and interest. Issuers of such securities may be of
low creditworthiness and the 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.
SENSITIVITY OF INTEREST RATE AND ECONOMIC CHANGES
The prices of high yield, high risk securities have been found to be less
sensitive to interest rate changes than higher-rated investments but are more
sensitive to adverse economic changes or individual corporate developments.
Yields on high yield, high risk securities will fluctuate over time.
Furthermore, in the case of high yield, high risk securities structured as zero
coupon or pay-in-kind securities, their market prices are affected to a greater
extent by interest rate changes and thereby tend to be more volatile than market
prices of securities which pay interest periodically and in cash.
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, such fund would have to
replace the security with a lower yielding security, resulting in a decreased
return for the investor. Conversely, a high 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
The secondary market may at times become less liquid or respond to adverse
publicity or investor perceptions, making it more difficult for an underlying
fund to accurately value high yield, high risk securities or dispose of them. To
the extent such fund owns or may acquire illiquid or restricted high yield, high
risk securities, these securities may involve special registration
responsibilities, liabilities and costs, and liquidity difficulties, and
judgment will play a greater role in valuation because there is less reliable
and objective data available.
TAXATION
Special tax considerations are associated with investing in high yield bonds
structured as zero coupon or pay-in-kind securities. An underlying fund will
report the interest on these securities as income even though it receives no
cash interest until the security's maturity or payment date.
<PAGE>
CREDIT RATINGS
Credit ratings evaluate the safety of principal and interest payments, not the
market value risk of high yield, high risk securities. Since credit rating
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 payments, 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
ASSET-BACKED SECURITIES
An underlying fund may invest in mortgage pass-through securities, which are
securities representing interests in pools of mortgage loans secured by
residential or commercial real property in which payments of both interest and
principal on the securities are generally made monthly, in effect passing
through monthly payments made by individual borrowers on mortgage loans which
underlie the securities (net of fees paid to the issuer or guarantor of the
securities). Early repayment of principal on some mortgage-related securities
(arising from prepayments of principal due to sale of the underlying property,
refinancing, or foreclosure, net of fees and costs which may be incurred) may
expose an underlying fund to a lower rate of return upon reinvestment of
principal. Also, if a security subject to prepayment has been purchased at a
premium, the value of the premium would be lost in the event of prepayment.
Like other fixed-income securities, when interest rates rise, the value of a
mortgage-related security generally will decline; however, when interest rates
are declining, the value of mortgage-related securities with prepayment features
may not increase as much as other fixed income securities. An underlying fund
may invest in collateralized mortgage obligations ("CMOs"), which are hybrid
mortgage-related instruments. Similar to a bond, interest and pre-paid principal
on a CMO are paid, in most cases, semiannually. CMOs are collateralized by
portfolios of mortgage pass-through securities and are structured into multiple
classes with different stated maturities. Monthly payments of principal,
including prepayments, are first returned to investors holding the shortest
maturity class; investors holding the longer maturity classes receive principal
only after the first class has been retired. Other mortgage-related securities
in which an underlying fund may invest include other securities that directly or
indirectly represent a participation in, or are secured by and payable from,
mortgage loans on real property, such as CMO residuals or stripped
mortgage-backed securities, and may be structured in classes with rights to
receive varying proportions of principal and interest. In addition, the
underlying funds may invest in other asset-backed securities that have been
offered to investors or will be offered to investors in the future. Several
types of asset-backed securities have already been offered to investors,
including certificates for automobile receivables, which represent undivided
fractional interests in a trust whose assets consist of a pool of motor vehicle
retail installment sales contracts and security interest in the vehicles
securing the contracts.
<PAGE>
You will find additional information about the Funds in the Statement of
Additional Information and in shareholder reports. Shareholder inquiries may be
made by calling the toll-free number listed below. The Statement of Additional
Information contains more detailed information on the Funds' investments and
operations. The semiannual and annual shareholder reports contain a discussion
of the market conditions and the investment strategies that significantly
affected the Funds' performance during the last fiscal year, as well as a
listing of portfolio holdings and financial statements. These and other Trust
documents may be obtained without charge from the following sources:
By Phone: 1-888-980-7500
By Mail: National Shareholder Services, Inc.
Twining Office Center, Suite 202
715 Twining Road
Dresher, PA 19025
or
Public Reference Section
Securities and Exchange Commission
Washington, D.C. 20549-6009
(a duplication fee is charged)
In Person: Public Reference Room
Securities and Exchange Commission
Washington, D.C.
(Call 1-800-SEC-0330 for more information.)
By Internet: http://www.dresherfunds.com or http://www.sec.gov
The Statement of Additional Information is incorporated by reference into this
prospectus (is legally a part of this prospectus).
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 3, 1999
THE DRESHER FAMILY OF FUNDS:
THE DRESHER COMPREHENSIVE GROWTH FUND
AND
THE DRESHER CLASSIC RETIREMENT FUND
This Statement of Additional Information is not a prospectus and supplements
the prospectus of The Dresher Family of Funds (the "Trust"), dated May 3, 1999,
as supplemented from time to time. This Statement of Additional Information
should be read in conjunction with the prospectus. A copy of the prospectus can
be obtained from the Trust, 715 Twining Road, Suite 202, Dresher, Pennsylvania
19025, telephone number (888) 980-7500.
As permitted by the rules of the Securities and Exchange Commission, the
Trust's annual report for the year ended December 31, 1998, previously filed
with the Commission, is incorporated by reference in this Statement of
Additional Information. A copy of the annual report has been delivered along
with this Statement of Additional Information.
<PAGE>
TABLE OF CONTENTS
CAPTION PAGE LOCATION OF PROSPECTUS
Investment Objectives, 1 Investment Objectives and
Policies and Restrictions Strategies and Related Risks
Management of the Trust 2 Management of the Trust
Principal Holders of 4 Not required
Securities
The Investment Manager 4 Management of the Trust
The Distributor 5 Management of the Trust
The Transfer Agent 6 Management of the Trust
The Custodian 6 Not required
The Auditor 6 Not required
Portfolio Transactions 6 Management of the Trust
Capital Stock and Other 7 Not required
Securities
Purchase, Redemption and 7 Determination of Net Asset
Pricing of Securities Value; How to Purchase
Being Offered Shares; How to Redeem Shares
Tax Status 7 Dividends, Distributions and
Taxes
Financial Statements 7 Financial Highlights
<PAGE>
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The Trust was organized as a Delaware business trust on March 26, 1997 and
registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), later that same year. The
Trust is a diversified investment company for the purposes of the 1940 Act
because all of its assets consist of securities of other investment companies or
cash (or cash equivalents). The Trust currently consists of two separate
portfolios (series), each with different investment objectives (the "Funds").
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 Strategies and Related Risks." Each
Fund's investment objective is non-fundamental and may be changed by the Board
of Trustees of the Trust without approval by the shareholders of that Fund.
Shareholders would be notified in writing at least 30 days before a change in
the investment objective of a Fund. The other non-fundamental policies of each
of the Funds are:
It may not invest more than 15% of its assets in securities that are not
readily marketable.
It may not invest for the purposes of exercising control or management of
any issuer.
It may not purchase securities of any closed-end investment company or
unregistered securities of any investment company.
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). 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.
Each Fund's fundamental investment policies are:
It may purchase securities of an issuer only when consistent with the
maintenance of the Fund's status as a "diversified" company. This means
that at least 75% of each fund's total assets must be comprised of:
Cash or cash items;
U.S. Government securities;
Securities other investment companies; or
Other securities, so long as not more than 5% of the Fund's total
assets are invested in any one issuer and the Fund owns not more than
10% of the outstanding voting securities of that issuer.
It may not invest 25% or more of is 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 (however, a fund may indirectly invest
25% or more of its assets in any one industry if two or more of the
underlying funds invest their assets in that industry).
It may purchase or sell commodities, commodities contracts or real estate;
lend or borrow money; issue senior securities; underwrite securities; or
pledge or mortgage any of its assets only as permitted under the 1940 Act.
(Although the Trust has the flexibility to engage in these practices, it
does not do so and does not anticipate doing so for the foreseeable
future.)
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 A to the prospectus.
The Funds have no restrictions on portfolio turnover. However, it is not
anticipated that the portfolio turnover rate will vary significantly from that
reported in the Financial Highlights of the prospectus.
MANAGEMENT OF THE TRUST
TRUSTEES AND OFFICERS
The Board of Trustees is responsible for the overall management of the Trust,
and thus of each Fund, including general supervision and review of the Funds'
investment activities. By virtue of the responsibilities assumed by NFA as
Investment Manager (see below), the Trust has no employees other than its
executive officers, each of whom is employed by NFA or its affiliates and none
of whom devotes full time to the affairs 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.
Name and Address Position Held Principal Occupation(s)
with During Past 5 Years
the
Trust
Jeffrey C. Brown* Trustee, President of National
715 Twining Road, President Advisory Group, National
Suite 202 Financial Advisors, Inc.
Dresher, PA 19025 (investment advisor),
(Age: 41) 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).
Larissa N. Patrylak* Trustee, Secretary/Treasurer and
715 Twining Road, Secretary Controller of National
Suite 202 Financial Advisors, Inc.,
Dresher, PA 19025 National Shareholder
(Age: 44) Services, Inc., and NFA
Brokerage Services, Inc.;
Vice President of National
Actuarial Consultants,
Ltd. Married to Stephen
Patrylak.
Howard S. Lubin Trustee Physician. Member of the
715 Twining Road, Board of Directors - Main
Suite 202 Line Multispecialty Group,
Dresher, PA 19025 P.C.
(Age: 69)
<PAGE>
Leonid D. Rudnytzky Trustee Professor of Foreign
715 Twining Road, Languages and Literature
Suite 202 at the University of
Dresher, PA 19025 Pennsylvania and Lasalle
(Age: 63) University.
Orest Tkach
715 Twining Road, Trustee Sales Consultant -
Suite 202 Pharmaceuticals - Carmick
Dresher, PA 19025 Laboratories; Cedar
(Age: 49) Knolls, NJ
Stephen Patrylak Treasurer Vice President, National
715 Twining Road, Financial Advisors, Inc.
Suite 202 and National Shareholder
Dresher, PA 19025 Services, Inc.; Consultant
(Age: 45) to National Actuarial
Consultants, Ltd.; Vice
President of NFA Brokerage
Services, Inc. Married to
Larissa N. Patrylak.
Daniel B. Nysch Vice President Director of Computer
715 Twining Road, Operations for The
Suite 202 National Advisory Group,
Dresher, PA 19025 Inc., Vice President of
(Age: 31) National Financial
Advisors, Inc., NFA
Brokerage Services, Inc.
and National Actuarial
Consultants, 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 the Investment Manager or any of its affiliates receives
any compensation from the Trust for serving as an officer or Trustee of the
Trust. The Investment Manager is contractually obligated to reimburse to the
Trust the compensation paid to the non-interested Trustees.
Pension or Estimated
Retirement Annual
Benefits Benefits
Accrued as Upon Total
Aggregate Part of Retirement Compensation
Name of Compensation Trust's from
Person from Trust Expenses Trust
Howard S. $ 600 0 0 $ 600
Lubin
Leonid D. $ 600 0 0 $ 600
Rudnytzky
Orest Tkach $ 200 0 0 $ 200
PRINCIPAL HOLDERS OF SECURITIES
As of January 31, 1999, the following persons were known by the Trust to
be owners of record and beneficially of more than 5% of the outstanding shares
of each of the funds:
Percentage of
Name and Address Shares Owned
A. The Dresher Comprehensive
Growth Fund
C.W. Group Retirement Plan 5.700%
130 James Way
Southampton, PA 18966
Frame Lehigh 401(k) Plan 14.819%
80 Broad Street
Beaver Meadows, PA 18216
Harriet Carter Gifts, Inc. 13.824%
Profit Sharing Plan
425 Stump Road
Montgomeryville, PA 18936
B. The Dresher Classic
Retirement Fund
Harriet Carter Gifts, Inc. 15.675%
Profit Sharing Plan
425 Stump Road
Montgomeryville, PA 18936
Frame Lehigh 401(k) Plan 11.919%
80 Broad Street
Beaver Meadows, PA 18216
As of January 31, 1999, the Trust's Trustees and officers as a group owned
2.61% of the outstanding shares of The Dresher Comprehensive Growth Fund and
1.25% of the outstanding shares of The Dresher Classic Retirement Fund.
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, Trustee and Secretary of the Trust, also
serves as the Secretary/Treasurer and Controller of NFA. Daniel B. Nysch and
Stephen Patrylak, Vice President and Treasurer, respectively, of the Trust, also
serve as Vice Presidents of NFA.
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 the Funds 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.
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.
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, 2000. 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, fees and expenses of non-interested
Trustees and general administrative and other operating expenses of each Fund
except expenses under the Trust's Distribution Plan and extraordinary expenses.
The following table shows the compensation paid to, and the management fee
waived by, the Investment Manager since the Trust commenced investment
operations:
Oct. 1, Oct. 1,
1997 - 1997 -
Dec. 31, Dec. 31,
1998 1998 1997 1997
Management Management Management Management
Fee Fee Fee Fee
Paid Waived Paid Waived
Comprehensive Growth $84,981 $17699 $8,573 $2,257
Fund
Classic Retirement 88,697 18473 11,178 2,955
Fund
THE DISTRIBUTOR AND THE DISTRIBUTION PLAN
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 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 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.
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. During the 1998 fiscal year ,
$36,172 was expended by the Trust pursuant to the Distribution Plan, of which
$20,064 was spent on advertising, $10,025 on printing prospectuses for delivery
to other than current shareholders and $6,083 on professional fees.
The Trustees believe that the Distribution Plan has benefited and will
continue to benefit each of the Funds and their shareholders. Among these
benefits are reductions in per share expenses of each fund as a result of
increased assets in the Fund and a more predictable flow of cash which may
provide investment flexibility in seeking each Fund's investment objective and
may better enable the Fund to meet redemption demands without liquidating
portfolio securities at inopportune times.
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 "Management of the
Trust-- 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 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 and NFA, Firstrust
Savings Bank serves as the Trust's custodian. The custodian is responsible for
holding the Funds' cash reserves. The principal business address of the
Custodian 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.
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 receives no Compensation
from the 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 SHAREHOLDERS
The Trust currently it offers common 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 the 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 in
the prospectus 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.
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.
Shareholders have the right to vote on any matters which by law or the
provisions of the Trust's Declaration of Trust they may be entitled to vote
upon. Shareholders 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. 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.
PURCHASE, REDEMPTION AND PRICING OF SHARES
For a description of how the shares are priced and how to purchase and redeem
shares, see "Determination of Net Asset Value," "How to Purchase Shares" and
"How to Redeem Shares" in the prospectus.
If the Board of Trustees of the Trust determines that it would be detrimental
to the best interests of the remaining shareholders of a Fund to make payment
wholly or partly in cash, that Fund may pay the redemption price in whole or in
part by a distribution in kind of securities (mutual fund shares) from the
portfolio of that Fund, instead of in cash, in conformity with applicable rules
of the Securities and Exchange Commission. The Trust will, however, redeem
shares solely in cash up to the lesser of $250,000 or 1% of its net assets
during any 90-day period for any one shareholder. The proceeds of redemption may
be more or less than the amount invested and, therefore, a redemption may result
in a gain or loss for federal income tax purposes.
TAX STATUS
The prospectus describes generally the tax treatment of distributions by the
Funds. This section of the Statement of Additional Information includes
additional information concerning federal taxes.
Each Fund has qualified and intends to qualify annually for the special tax
treatment afforded a "regulated investment company" under Subchapter M of the
Internal Revenue Code so that it does not pay federal taxes or income and
capital gains distributed to shareholders. To so qualify a Fund must, among
other things, (i) derive at least 90% of its gross income in each taxable year
from dividends, interest, payments with respect to securities loans, gains from
the sale or other disposition of stock, securities or foreign currency, or
certain other income (including but not limited to gains from options, futures
and forward contracts) derived with respect to its business of investing in
stock, securities or currencies; and (ii) diversify its holdings so that at the
end of each quarter of its taxable year the following two conditions are met:
(a) at least 50% of the value of the Fund's total assets is represented by cash,
U.S. Government securities, securities of other regulated investment companies
and other securities (for this purpose such other securities will qualify only
if the Portfolio's investment is limited in respect to any issuer to an amount
not greater than 5% of the Fund's assets and 10% of the outstanding voting
securities of such issuer) and (b) not more than 25% of the value of the Fund's
assets is invested in securities of any one issuer (other than U.S. Government
securities or securities of other regulated investment companies).
A Fund's net realized capital gains from securities transactions will be
distributed only after reducing such gains by the amount of any available
capital loss carryforwards. Capital losses may be carried forward to offset any
capital gains for eight years, after which any undeducted capital loss remaining
is lost as a deduction.
A federal excise tax at the rate of 4% will be imposed on the excess, if any,
of a Fund's "required distribution" over actual distributions in any calendar
year. Generally, the "required distribution" is 98% of a Fund's ordinary income
for the calendar year plus 98% of its net capital gains recognized during the
one year period ending on October 31 of the calendar year plus undistributed
amounts from prior years. The Trust intends to make distributions sufficient to
avoid imposition of the excise tax.
The Trust is required to withhold and remit to the U.S. Treasury a portion
(31%) of dividend income on any account unless the shareholder provides a
taxpayer identification number and certifies that such number is correct and
that the shareholder is not subject to backup withholding.
FINANCIAL STATEMENTS
Incorporated by reference to the financial statements in the Trust's Annual
Report for the fiscal year ended December 31, 1998 as filed with the SEC on Form
N-SAR on March 1, 1999.
<PAGE>
THE DRESHER FAMILY OF FUNDS
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
EXHIBIT DESCRIPTION OF EXHIBIT
NUMBER
*(a) Trust Instrument of Registrant
*(b) Bylaws of Registrant
***(c) Instrument of Designation of Series of
Beneficial Interest of Registrant
***(d) Investment Advisory Agreement between
Registrant and National Financial
Advisors, Inc. ("NFA")
***(e)(1) Distribution Agreement between
Registrant and NFA Brokerage Services
("NFA Brokerage")
***(e)(2) Form of Dealer Agreement between NFA
Brokerage and Dealers
***(g) Custody Agreement among Registrant, NFA
and Firstrust Savings Bank
***(h) Administration, Accounting and Transfer
Agency Agreement among Registrant, NFA
and National Shareholder Services, Inc.
***(i) Opinion and Consent of Counsel
(j) Consent of Independent Public Accountants
****(k) Financial Statements
***(l) Subscription Agreement between
Registrant and Initial Shareholders
***(m)(1) Distribution Plan of Registrant
***(m)(2) See Exhibits (e)
(n)(1) Financial Data Schedule - The Dresher
Comprehensive Growth Fund
(n)(2) Financial Data Schedule - The Dresher
Classic Retirement Fund
- -------------------------------
* 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.
**** Incorporated herein by reference to the Trust's annual report on Form N-SAR
as filed with the Securities and Exchange Commission on March 1, 1999.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Registrant is controlled by the Trustees. Registrant does not have any
subsidiaries.
ITEM 25. 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 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.
<PAGE>
ITEM 26. 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 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 27. 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 28. 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 29. MANAGEMENT SERVICES
Inapplicable.
ITEM 30. UNDERTAKINGS
Inapplicable.
<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
1st day of March, 1999
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. Trustee & President March 1, 1999
Brown
Jeffrey C. Brown
/s/ Stephen Trustee & Treasurer March 1, 1999
Patrylak
Stephen Patrylak
/s/ Larissa N. Trustee & Secretary March 1, 1999
Patrylak
Larissa N. Patrylak
/s/ Howard S. Trustee March 1, 1999
Lubin
Howard S. Lubin
/s/ Leonid D. Trustee March 1, 1999
Rudnytzky
Leonid D. Rudnytzky
/s/ Orest Trustee March 1, 1999
Tkach
Orest Tkach
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the use of our report, dated February 12, 1999, on the annual
financial statements and financial highlights of the The Dresher Family of Funds
- - The Dresher Classic Retirement Fund, which is included in Part A and Part B in
Post Effective Amendment No. to Registration Statement under the Securities Act
of 1933 and included in the Prospectus and Statement of Additional Information,
as specified, and to the reference made to us under the capiton "Independent
Auditors" in the Statement of Additional Information.
Abington
Pennsylvania
Sanville & Company
February 27, 1999 Certified Public Accountants
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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