WCT Equity Fund
A Portfolio of the WCT Funds
Shares of WCT Equity Fund, like shares of all mutual funds, are not bank
deposits, federally insured, or guaranteed. WCT Fund shares may lose value.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
CONTENTS
Fund Goals, Strategies and Risks 1
What are the Main Risks of Investing in the Fund? 1
What are the Fund's Fees and Expenses? 2
What are Equity Securities? 3
Portfolio Turnover 3
Temporary Defensive Investments 3
What do Shares Cost? 4
How is the Fund Sold? 5
How to Purchase Shares 5
How to Redeem and Exchange Shares 7
Exchange Privileges 8
Account and Share Information 9
Dividends and Capital Gains 9
Accounts With Low Balances 10
Tax Information 10
Who Manages the Fund 10
Financial Highlights 12
Report of Independent Public Accountants 22
DECEMBER 31, 1998
Fund Goals, Strategies and Risks
WHAT IS THE FUND'S GOAL?
The Fund's goal is to provide long-term capital appreciation.
WHAT IS THE FUND'S STRATEGY?
The Fund invests in value-oriented common and preferred stocks of large and
medium-sized companies with market capitalizations in excess of $1.5 billion.
The Fund may also occasionally invest in stocks of companies with smaller
capitalizations that have value characteristics. These value characteristics may
include a price-to-earnings ratio less than stocks in the S&P 500, higher-than-
average dividend yields, or lower-than-average price-to-book value. In addition,
these companies may have under-appreciated assets, or are involved in company
turnarounds and/or corporate restructurings. The Fund will invest at least 80%
of its assets in equity securities .
What are the Main Risks of Investing in the Fund?
STOCK MARKET RISKS
The value of the stocks in the Fund's portfolio will go up and down. These
fluctuations could be a sustained trend or a drastic movement. Fluctuations in
the Fund's portfolio may reflect changes in individual portfolio stocks or
general changes in stock valuations and will result in changes in the Fund's
share price. The Adviser attempts to manage market risk through diversification
by limiting the amount the Fund invests in each stock.
Equity risk is also related to the size of the company issuing stock. Companies
may be categorized as having a small, medium, or large capitalization (market
value). The potential risks are higher with small- and medium-capitalization
companies and lower with large-capitalization companies. Therefore, you should
expect that investments in the Fund will be more volatile than broad stock
market indices such as the S&P 500 or funds that invest exclusively in large-
capitalization companies.
What are the Fund's Fees and Expenses?
WCT EQUITY FUND
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
<TABLE>
<CAPTION>
Shareholder Fees
Fees Paid Directly From Your Investment
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 4.50%
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or None
redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) None
(as a percentage of offering price)
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
Annual Fund Operating Expenses (Before Waivers)1
Expenses That are Deducted From Fund Assets (as a percentage of average net assets)
Management Fee2 0.75%
Distribution (12b-1) Fee3 0.25%
Shareholder Services Fee4 0.25%
Other Expenses 0.48%
Total Annual Fund Operating Expenses 1.73%
1 Although not contractually obligated to do so, the adviser, distributor and shareholders services provider waived
certain amounts. These are shown below along with the net expenses of the Fund actually paid for the fiscal year ending
October 31, 1998.
Waiver of Fund Expenses 0.60%
Total Actual Annual Operating Expenses (after waivers) 1.13%
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The
management fee paid by the Fund (after the voluntary waiver) was 0.50% for the period ended October 31, 1998.
3 The Fund did not pay or accrue the distribution (12b-1) fee during the fiscal period ended October 31, 1998. The Fund has no
present intention of paying or accruing the distribution (12b-1) fee during the period ending October 31, 1999.
4 The Fund did not pay or accrue the Shareholder Services Fee during the period from December 16, 1997 (date of initial public
investment) to April 30, 1998. Theshareholder services fee for the Fund has been voluntary reduced. This voluntary reduction can
be terminated at any time. The shareholder services fee paid by the Fund (after the voluntary reduction) was 0.15% for the period
from May 1 to October31,1998.
</TABLE>
EXAMPLE
The following Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses are before waivers as shown above and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
Calendar Period Fund
1 Year $ 618
3 Year $ 970
5 Year $ 1,346
10 Year $ 2,399
What are Equity Securities?
EQUITY SECURITIES
Equity securities are the fundamental unit of ownership of a company. They
represent a share of the issuer's earnings and assets, after the issuer pays its
liabilities. Generally, issuers have discretion as to the payment of any
dividends or distributions. As a result, investors cannot predict the income
they will receive from equity securities. However, equity securities offer
greater potential for appreciation than many other types of securities, because
their value increases directly with the value of the issuer's business. The
following describes the types of equity securities in which the Fund invests.
Common Stocks
Common stocks are the most prevalent type of equity security. Common
stockholders receive the residual value of the issuer's earnings and assets
after the issuer pays its creditors and any preferred stockholders. As a result,
changes in an issuer's earnings directly influence the value of its common
stock.
Preferred Stocks
Preferred stocks have the right to receive specified dividends or distributions
before the issuer makes payments on its common stock. Some preferred stocks also
participate in dividends and distributions paid on common stock. Preferred
stocks may also permit the issuer to redeem the stock. The Fund will treat such
redeemable preferred stock as a fixed income security.
Portfolio Turnover
Although the Fund does not intend to invest for the purpose of seeking short-
term profits, securities will be sold without regard to the length of time they
have been held when the Fund's Adviser or Sub-Adviser believe it is appropriate
to do so in light of the Fund's investment goal. A higher portfolio turnover
rate involves greater transaction expenses which must be borne directly by the
Fund (and thus, indirectly by its shareholders), and impact Fund performance. In
addition, a high rate of portfolio turnover may result in the realization of
larger amounts of capital gains which, when distributed to the Fund's
shareholders, are taxable to them.
Temporary Defensive Investments
To minimize potential losses and maintain liquidity to meet shareholder
redemptions during adverse market conditions, the Fund may temporarily depart
from its principal investment strategy by investing up to 100% of Fund assets in
cash or short- term, high quality money market instruments (e.g., commercial
paper, repurchase agreements, etc.). This may cause the Fund to temporarily
forego greater investment returns for the safety of principal.
What do Shares Cost?
You can purchase, redeem, or exchange shares of the Fund any day the New York
Stock Exchange (NYSE) and Federal Reserve wire system are open. When the Fund
receives your transaction request in proper form, it is processed at the next
determined public offering price.
The public offering price is the net asset value (NAV) plus the applicable sales
charge. NAV is determined at the end of regular trading (normally 4:00 p.m.
eastern time) each day the NYSE and Federal Reserve wire system are open, except
Columbus Day and Veterans Day. The NAV is determined based upon the market value
of the Fund's portfolio securities.
Fund shares are sold at NAV plus a sales charge, as follows:
Purchase Amount Sales Charge as a Sales Charge as a
Percentage of Public Percentage of NAV
Offering Price
Less than $100,000 4.50% 4.71%
$100,000 but less 3.75% 3.90%
than$250,000
$250,000 but less 2.50% 2.56%
than$500,000
$500,000 but less 2.00% 2.04%
than$750,000
$750,000 but less 1.00% 1.01%
than $1 million
$1 million or greater 0.00% 0.00%
The minimum initial investment in the Fund by a trust customer of West Coast
Trust Company or other financial institution is $5,000. The minimum initial
investment for individual investors is $1,000. Subsequent investments by all
investors must be in amounts of at least $100. The Fund may waive the initial
minimum investment from time to time. An institutional investor's minimum
investment will be calculated by combining all accounts it maintains with the
Fund.
Keep in mind that financial intermediaries may charge you fees for their
services in connection with your share transactions.
The sales charge at purchase may be reduced or eliminated by:
. quantity purchases of shares;
. combining concurrent purchases of shares by you, your spouse, and your
children under age 21;
. accumulating purchases (in calculating the sales charge on an additional
purchase, you may count the current value of previous share purchases still
invested in the Fund);
. signing a letter of intent to purchase a specific dollar amount of shares
within 13 months (call the Fund for an application and more information);
. reinvesting redemption proceeds within 30 days;or
. investing the proceeds, within 60 days, from a redemption of unaffiliated
mutual fund shares sold with a sales charge.
If your investment qualifies for a reduction or elimination of the sales charge,
you or your investment professional must notify the Fund's distributor at the
time of purchase. If the distributor is not notified, you will receive the
reduced sales charge only on additional purchases, and not retroactively on your
previous purchases.
In addition, no sales charge is imposed on:
. purchases by West Coast Trust for accounts in which it holds or manages
assets;
. trust companies and trust departments of other financial institutions;
. banks and savings and loan associations for their own accounts;
. trustees, employees, emeritus trustees and retired employees of the Trust,
West Coast Trust, West Coast Bancorp, and Edgewood Services, Inc. and their
respective subsidiaries, and their spouses and children under 21; and
. customers, employees and employee benefit plans of Becker Capital Management,
Inc. and their spouses and children under 21.
How is the Fund Sold?
The Fund's Distributor, Edgewood Services, Inc. markets the shares described in
this prospectus to institutions or individuals, directly or through financial
intermediaries. When the Distributor receives sales charges and marketing fees,
it may pay some or all of them to financial intermediaries. The Distributor and
its affiliates may pay out of their assets other amounts (including items of
material value) to financial intermediaries for marketing and servicing shares.
The Distributor is a subsidiary of Federated Investors, Inc. (Federated).
RULE 12B-1 PLAN
The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to
the Distributor and financial intermediaries for the sale, distribution and
customer servicing of the Fund's shares. The Fund is not presently paying or
accruing 12b-1 fees. The Fund will not pay or accrue these fees until a separate
class of shares has been created for certain institutional investors. Once the
Fund begins accruing the 12b-1 fee, Fund expenses will rise.
How to Purchase Shares
You may purchase shares through an investment professional
or directly from the Fund.
THROUGH WEST COAST TRUST
Trust customers placing an order to purchase shares of the Fund may open an
account by calling West Coast Trust at 1-888-5-WCT-FUND (1-888-592-8386).
Information needed to establish the account will be taken over the telephone.
DIRECTLY FROM THE FUND
. Individual investors may establish an account with the Fund by submitting a
completed account application available from West Coast Trust Shareholder
Servicing Center at WCT Funds, POBox8612, Boston, MA 02266-8612 or by calling
WestCoast Trust at 1-888-5-WCT-FUND (1-888-592-8386); and
. Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of shares and your shares will be priced at the next
calculated NAV after the Fund receives your wire or your check. If your check
does not clear, your purchase will be canceled and you could be liable for any
losses or fees the Fund or its transfer agent incurs.
An institution may establish an account and placean order by calling the Fund
and the Shares will be priced at the NAV on the day the Fund receives the order.
By Wire
Send your wire to:
State Street Bank and Trust Company
Boston, MA
ABA Number 011000028
Account Number 72097967
Wire Order Number, Dealer Number, or Group Number
Dollar Amount
For Credit to: WCT Equity Fund
Account Name and Number
You cannot purchase shares by wire on holidays when wire transfers are
restricted.
By Check
Make your check payable to "WCT Equity Fund," note your account number on the
check, and mail it to:
WCT Funds
P.O. Box 8612
Boston, MA 02266-8612
If you send your check by a private courier or overnight delivery service that
requires a street address, send it to:
WCT Funds
c/o Federated Services Company
1099 Hingham Street
Rockland, MA 02266
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third- party checks (checks originally payable to someone other than
the Fund). If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.
THROUGH AN INVESTMENT PROFESSIONAL
. Establish an account with the investment professional; and
. Submit your purchase order to the investment professional before the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). You will
receive the next calculated NAV if the investment professional forwards the
order to the Fund on the same day and the Fund receives payment within three
business days. You will become the owner of the shares and receive dividends
when the Fund receives your payment.
. Financial intermediaries should send payments according to the instructions in
the sections ByWire or By Check.
THROUGH AN EXCHANGE
An investor may exchange shares of the Fund into any other portfolio of the
Trust, when and if created, subject to the minimum initial investment
requirements for the other portfolio. In addition, shares of the Fund may also
be exchanged for certain other funds administered or distributed by subsidiaries
of Federated that are not advised by West Coast Trust ("Federated Funds"). For
further information on the availability of Federated Funds for exchange, call
West Coast Trust Shareholder Servicing Center at 1-888-5-WCT-FUND (1-888-592-
8386). Both accounts must have a common owner.
BY SYSTEMATIC INVESTMENT PROGRAM
Once you have opened an account, you may automatically purchase additional
shares on a regular basis by completing the Systematic Investment Program
section of the account application or contacting the Fund or your investment
professional.
BY AUTOMATED CLEARINGHOUSE (ACH)
Once you have opened an account, you may purchase additional shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the account application.
RETIREMENT INVESTMENTS
You may purchase shares as retirement investments (such as qualified plans and
IRAs). For further details, contact the West Coast Trust Shareholder Servicing
Center at 1-888-5-WCT-FUND (1-888-592-8386). We suggest that you discuss these
retirement investments with your tax adviser.
You may be charged an IRA account fee.
How to Redeem and Exchange Shares
You should redeem or exchange shares:
. through an investment professional if you purchased shares through an
investment professional;or
. directly from the Fund if you purchased shares directly from the Fund.
DIRECTLY FROM WEST COAST TRUST
By Telephone
You may redeem or exchange shares by calling the West Coast Shareholder
Servicing Center at 1-888-5-WCT-FUND (1-888-592-8386) once you have completed
the appropriate authorization form for telephone transactions. If you call
before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time)
you will receive a redemption amount based on that day's NAV.
By Mail
You may redeem or exchange shares by mailing a written request to the Fund.
You will receive a redemption amount based on the next calculated NAV after your
written request is received by the Fund in proper form.
Send requests by mail to:
WCT Funds
P.O. Box 8612
Boston, MA 02266-86012
Send requests by private courier or overnight delivery to:
WCT Funds
c/o Federated Services Company
1099 Hingham Street
Rockland, MA 02266
All requests must include:
. Fund Name, registered account name andnumber;
. amount to be redeemed or exchanged;
. signatures of all shareholders exactly as registered;and
. if exchanging, the Fund/Class Name, registered account name and number into
which you are exchanging.
Signature Guarantees
Signatures must be guaranteed if:
. your redemption is to be sent to an address other than the address of record;
. your redemption is to be sent to an address of record that was changed within
the last thirty days;or
. a redemption is payable to someone other than the shareholder(s) of record.
Your signature can be guaranteed by any federally insured financial institution
(such as a bank or credit union) or a broker/dealer that is a domestic stock
exchange member, but not by a notary public.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption or exchange request to your investment professional by
the end of regulartrading on the NYSE (normally 4:00 p.m. Eastern time). The
redemption amount you will receive is based upon the next calculated NAV
afterthe Fund receives the order from your investment professional.
PAYMENT OPTIONS
Your redemption proceeds will be mailed by check to your address of record.
However, the following payment options are available if you complete the
appropriate authorization form. These payment options require a signature
guarantee if they were not established prior to redeeming shares:
. an electronic transfer to your depository account at a financial institution
that is an ACH member;or
. wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. However, payment may be delayed up to seven
days:
. to allow your purchase payment to clear;
. during periods of market volatility; or
. when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
REDEMPTION IN KIND
Although the Fund intends to pay share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole orinpart by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets of
the Fund during any 90-day period.
Any share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving the portfolio securities and selling them
before their maturity could receive less than the redemption value of the
securities and could incur certain transaction costs.
RETIREMENT DISTRIBUTIONS
A minimum of 10% of the value of your retirement distribution (redemption) will
be withheld for taxes in the absence of your specific instructions.
Exchange Privileges
You may exchange shares of the Fund into shares of certain Federated Funds with
common account owners. To do this, you must:
. meet any minimum initial investment requirements;and
. receive a prospectus for the fund into which you wish to exchange.
An exchange is treated as a redemption and a subsequent purchase, and is a
taxable transaction. Signatures must be guaranteed if you request an exchange
into another fund with a different shareholder registration.
The Fund may modify or terminate the exchange privilege at any time. The
Fund's management or Adviser may determine from the amount, frequency and
pattern of exchanges that a shareholder is engaged in excessive trading which is
detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other Federated Funds.
SYSTEMATIC WITHDRAWAL/EXCHANGE PROGRAM
You may automatically redeem or exchange shares on a regular basis by completing
the appropriate form or contacting your investment professional or the Fund.
Your account value must have an account value of at least $10,000 to be eligible
to participate in this program. This program may reduce, and eventually deplete,
your account, and the payments should not be considered yield or income.
Generally, it is not advisable to continue to purchase shares subject to a sales
charge while redeeming shares using this program.
ADDITIONAL CONDITIONS
Telephone Transactions
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions. The Fund will notify you if it changes
telephone transaction privileges.
Account and Share Information
CONFIRMATIONS AND ACCOUNT STATEMENTS
You will receive confirmation of purchases, redemptions and exchanges (except
for systematic transactions). In addition, you will receive periodic statements
reporting all account activity, including systematic transactions, dividends and
capital gains paid. The Fund does not issue share certificates.
Dividends and Capital Gains
The Fund declares and pays any dividends quarterly to shareholders. Dividends
are paid to all shareholders invested in the Fund on the record date.
In addition, the Fund pays any capital gains at least annually. Your dividends
and capital gains distributions will be automatically reinvested in additional
shares without a sales charge, unless you elect cash payments.
If you purchase shares just before the Fund declares a dividend or capital
gain distribution, you will pay the full price for the shares and then receive a
portion of the price back in the form of a distribution, whether or not you
reinvest the distribution in shares. Therefore, you should consider the tax
implications of purchasing shares shortly before the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.
Accounts With Low Balances
Non-retirement accounts may be closed if redemptions or exchanges cause the
account balance to fall below the minimum initial investment amount. Before an
account is closed, the shareholder will be notified and allowed 30 days to
purchase additional shares to meet the minimum.
Tax Information
The Fund sends you an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Capital gains distributions are taxable at different
rates depending upon the length of time the Fund holds its assets.
Fund distributions are expected to be both dividends and capital gains.
Redemptions and exchanges are taxable sales.
Please consult your tax adviser regarding your federal, state, and local tax
liability.
Who Manages the Fund?
The WCT Funds are governed by a Board of Trustees. The Board selects and
oversees the Adviser, West Coast Trust Company, Inc. The Adviser manages the
Fund's assets, including buying and selling portfolio securities. The Adviser's
address is 1000 Broadway, Suite 1100, Portland, Oregon 97205.
ADVISORY FEES
The Fund's Adviser receives an annual maximum investment advisory fee equal to
0.75% of the Fund's average daily net assets. The Adviser may voluntary choose
to waive a portion of its fee or reimburse the Fund for certain operating
expenses. The Adviser can terminate this voluntary waiver of its advisory fee at
any time at its sole discretion. The Adviser has delegated daily management of
the Fund assets to the Sub-Adviser, Becker Capital Management, Inc., who is paid
by the Adviser and not by the Fund.
ADVISER'S BACKGROUND
The Adviser is a wholly-owned subsidiary of West Coast Bancorp ("Bancorp").
Organized in 1981, Bancorp held approximately $1.2 billion in total assets as of
October 31, 1998, and is the second largest bank holding company based in
Oregon. Through its subsidiaries, The Commercial Bank, Valley Commercial Bank,
The Bank of Newport, The Bank of Vancouver and West Coast Trust, Bancorp offers
a full range of commercial banking services, including trust services to
individuals, partnerships, corporations, and institutions and acts as fiduciary
of estates and conservatorships, and as a trustee under various wills, trusts,
and pension and profit-sharing plans. In addition, Bancorp and its subsidiaries
offer tax-deferred annuities, single-premium whole life insurance, other
insurance investment products and securities products. The Adviser has not
previously served as an investment adviser to a mutual fund.
The Adviser manages common and collective funds with assets totaling
approximately $33.7 million as of October 31, 1998.
SUB-ADVISER
Pursuant to the terms of an investment sub-advisory agreement between the
Adviser and Becker Capital Management, Inc., the Sub-Adviser will make all
investments on behalf of the Fund, and shall take such steps as may be necessary
to implement the same, including the placement of purchases and sale orders on
behalf of the Fund. For the services provided and the expenses incurred by the
Sub-Adviser pursuant to the sub-advisory agreement, the Sub-Adviser is entitled
to receive an annual sub-advisory fee equal to 0.50% of the daily assets of the
Fund payable by the Adviser from the advisory fees. The Sub-Adviser may elect to
waive some or all of its fee. Inno event shall the Fund be responsible for any
fees due to the Sub-Adviser for its services to the Adviser.
SUB-ADVISER'S BACKGROUND
The Sub-Adviser is a registered investment advisory firm founded in 1976 as P.E.
Becker Inc. In 1992, the Sub-Adviser changed its name to Becker Capital
Management, Inc. The Sub-Adviser manages assets totaling approximately $2.0
billion for individuals, corporate pensions and profit sharing trusts, multi-
employer trusts and endowment funds. The Sub-Adviser is a 100% employee owned
firm. The Sub-Adviser is currently a sub-adviser for another mutual fund.
DONALD L. WOLCOTT
Donald L. Wolcott, Chartered Financial Analyst, has been the Fund's portfolio
manager since November17, 1997. Mr. Wolcott is a Vice President and Portfolio
Manager of Becker Capital Management, Inc., and has served in that capacity
since 1987. His responsibilities include the management of portfolios for
taxable individuals and charitable foundations and Mr. Wolcott also participates
in strategic asset allocation decisions for the firm's balanced account
portfolios. Mr. Wolcott received a B.A. in business from the University
of Nebraska.
YEAR 2000 READINESS
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December31,
1999. The Year 2000 problem may cause systems to process information incorrectly
and could disrupt businesses that rely on computers, like the Fund.
While it is impossible to determine in advance all of the risks to the Fund,
the Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors ordisruptions in Fund share
transactions or Fund communications.
The Fund's service providers are making changes to their computer systems to
fix any Year 2000 problems. In addition, they are working to gather information
from third-party providers to determine their Year 2000 readiness.
Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase.
The financial impact of these issues for the Fund is still being determined.
There can be no assurance that potential Year 2000 problems would not have a
material adverse effect on the Fund.
Financial Information
FINANCIAL HIGHLIGHTS
The following financial highlights will help you understand the Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the Fund is shorter. Some of the information is presented on a per share basis.
Total returns represent the rate an investor would have earned (or lost) on an
investments in the Fund, assuming reinvestment of any dividends and capital
gains.
This information has been audited by ArthurAndersen LLP, whose report, along
with the Fund's audited financial statements, is included in this prospectus.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Auditors/Public Accountants on
page 22.
Period Ended October 31 1998/1/
Net Asset Value, Beginning of Period $10.09
Income From Investment Operations:
Net investment income 0.12
Net realized and unrealized (loss) on investments (0.75)
TOTAL FROM INVESTMENT OPERATIONS (0.63)
Less Distributions:
Distributions from net investment income (0.10)
Net Asset Value, End of Period $ 9.36
Total Return2 (6.25%)
Ratios to Average Net Assets:
Expenses 1.13%/3/
Net investment income 1.27%/3/
Expense waiver4 0.35%/3/
Supplemental Data:
Net assets, end of period (000 omitted) $49,106
Portfolio turnover 69%
1 Reflects operations for the period from December 16, 1997 (date of initial
public investment) to October 31, 1998. For the period from November 17, 1997
(start of business) to December 15, 1997, the investment income was
distributed to Federated Services Company, the Fund's Administrator.
2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Portfolio of Investments
OCTOBER 31, 1998
Shares Value
COMMON STOCKS91.8%
Chemicals1.8%
37,000 Millennium Chemicals, Inc. $ 901,875
Commercial Services1.5%
25,000 Standard Register 717,187
Consumer Durables7.6%
60,000 Clayton Homes, Inc. 926,250
18,000 Ford Motor Co. 976,500
15,000 General Motors Corp. 945,938
16,000 Goodyear Tire & Rubber Co. 862,000
TOTAL 3,710,688
Electronic Technology9.6%
45,000 1 Andrew Corp. 736,875
12,000 Intel Corp. 1,070,250
65,000 1 LSI Logic Corp. 983,125
25,000 Rockwell International Corp. 1,026,562
50,000 Tektronix, Inc. 893,750
TOTAL 4,710,562
Finance14.6%
23,000 Allstate Corp. 990,438
58,002 Comdisco, Inc. 895,406
13,000 Federal National Mortgage Association 920,562
26,000 GATX Corp. 897,000
16,000 PNC Bank Corp. 800,000
22,000 SAFECO Corp. 952,875
20,000 SLM Holding Corp. 801,250
Washington Federal, Inc. 934,063
35,000
TOTAL 7,191,594
Health Technology3.6%
20,000 Bard (C.R.), Inc. 853,750
33,000 Mallinckrodt, Inc. 940,500
TOTAL 1,794,250
Non-Energy Minerals1.2%
36,300 Quanex Corp. 612,562
COMMON STOCKScontinued
Oil15.5%
Atlantic Richfield Co. $ 1,033,125
15,000
52,000 Enron Oil & Gas Co. 867,750
Halliburton Co. 1,078,125
30,000
45,000 Occidental Petroleum Corp. 894,375
20,000 Repsol SA, ADR 1,000,000
50,000 Sante Fe International Corp. 921,875
30,000 Ultramar Diamond Shamrock Corp. 808,125
35,000 YPF Sociedad Anonima, ADR 1,012,813
TOTAL 7,616,188
Process Industries5.3%
30,000 Tenneco, Inc. 911,250
19,100 Weyerhaeuser Co. 894,119
25,000 Willamette Industries, Inc. 775,000
TOTAL 2,580,369
Producer Manufacturing9.7%
40,000 Case Corp. 880,000
20,000 Caterpillar, Inc. 900,000
13,500 Eaton Corp. 913,781
22,500 1 Gulfstream Aerospace Corp. 995,625
35,000 1 Raychem Corp. 1,069,687
TOTAL 4,759,093
Real Estate1.8%
30,000 Mack-Cali Realty Corp. 888,750
Retail Trade4.0%
30,000 Dillards, Inc., Class A 931,875
52,900 1 Toys 'R' Us, Inc. 1,034,856
TOTAL 1,966,731
Technology Services5.5%
40,000 Arrow Electronics, Inc. 872,500
1 Marshall Industries 862,500
30,000
Xerox Corp. 968,750
10,000
TOTAL 2,703,750
Transportation6.5%
12,000 1 AMR Corp. 804,000
40,000 Knightbridge Tankers Ltd. 870,000
COMMON STOCKScontinued
Transportationcontinued
33,900 Teekay Shipping Corp. $ 593,250
32,000 Tidewater, Inc. 906,000
TOTAL 3,173,250
Utilities3.6%
16,000 Enron Corp. 844,000
12,000 Telecomunicacoes Brasileiras SA, ADR 911,250
TOTAL 1,755,250
TOTAL COMMON STOCKS (IDENTIFIED COST $37,298,714) 45,082,099
Mutual Funds4.6%
1,868,334 SSGA US Government Money Market Fund, Series A 1,868,334
404,180 Seven Seas Money Market Fund 404,180
TOTAL MUTUAL FUNDS (AT NET ASSET VALUE) 2,272,514
2 TOTAL INVESTMENTS (IDENTIFIED COST $39,571,228) $ 47,354,613
1 Non-income producing security.
2 The cost of investments for federal tax purposes amounts to $39,665,756. The
net unrealized appreciation of investments on a federal tax basis amounts to
$7,688,857 which is comprised of $10,287,353 appreciation and $2,598,496
depreciation at October 31, 1998.
Note: The categories of investments are shown as a percentage of net assets
($49,105,954) at October 31, 1998.
The following acronyms are used throughout this portfolio:
ADR--American Depositary Receipt
SA --Support Agreement
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
OCTOBER 31, 1998
<TABLE>
<CAPTION>
Assets:
<S> <C> <C>
Total investments in securities, at value (identified cost $39,571,228 and tax
cost $39,665,756) $ 47,354,613
Income receivable 79,651
Receivable for investments sold 4,991,142
Receivable for shares sold 4,939
TOTAL ASSETS 52,430,345
Liabilities:
Payable for investments purchased $ 3,130,471
Payable for shares redeemed 31,914
Accrued expenses 162,006
TOTAL LIABILITIES 3,324,391
Net Assets for 5,246,904 shares outstanding $ 49,105,954
Net Assets Consist of:
Paid in capital $ 37,322,384
Net unrealized appreciation of investments 7,783,385
Accumulated net realized gain on investments 3,905,629
Undistributed net investment income 94,556
TOTAL NET ASSETS $ 49,105,954
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share ($49,105,954 / 5,246,904 shares outstanding) $ 9.36
Offering Price Per Share (100/95.50 x $9.36)/1/ $ 9.80
Redemption Proceeds Per Share $ 9.36
</TABLE>
1 See "What Shares Cost" in the Prospectus.
See Notes which are an integral part of the Financial Statements
Statement of Operations
FOR THE PERIOD ENDED OCTOBER 31, 1998/1/
<TABLE>
<CAPTION>
Investment Income:
<S> <C> <C> <C>
Dividends (net of foreign taxes withheld of $16,086) $ 1,113,854
Interest 87,019
TOTAL INCOME 1,200,873
Expenses:
Investment advisory fee $ 376,233
Administrative personnel and services fee 75,247
Custodian fees 15,600
Transfer and dividend disbursing agent fees and expenses 32,000
Directors'/Trustees' fees 4,000
Auditing fees 15,001
Legal fees 5,001
Portfolio accounting fees 48,000
Shareholder services fee 69,008
Share registration costs 51,305
Printing and postage 10,499
Insurance premiums 3,501
Miscellaneous 12,000
TOTAL EXPENSES 717,395
Waivers:
Waiver of investment advisory fee $ (125,411)
Waiver of shareholder services fee (26,975)
TOTAL WAIVERS (152,386)
Net expenses 565,009
Net investment income 635,864
Realized and Unrealized Gain on Investments:
Net realized gain on investments 3,905,629
Net change in unrealized appreciation of investments 7,783,385
Net realized and unrealized gain on investments 11,689,014
Change in net assets resulting from operations $ 12,324,878
</TABLE>
1 Reflects operations for the period from December 16, 1997 (date of initial
public investment) to October 31, 1998.
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<S> <C>
Period Ended October 31 1998/1/
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 635,864
Net realized gain on investments ($4,000,157, as computed for federal tax purposes) 3,905,629
Net change in unrealized appreciation 7,783,385
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 12,324,878
Distributions to Shareholders:
Distributions from net investment income (541,308)
Share Transactions:
Proceeds from sale of shares 53,909,696
Net asset value of shares issued to shareholders in payment of distributions declared 264,287
Cost of shares redeemed (16,951,599)
Change in net assets resulting from share transactions 37,222,384
Change in net assets 49,005,954
Net Assets:
Beginning of period 100,000
End of period (including undistributed net investment income of $94,556) $ 49,105,954
</TABLE>
1 For the period from December 16, 1997 (date of initial public investment) to
October 31, 1998.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
OCTOBER 31, 1998
ORGANIZATION
WCT Funds (the "Trust") is registered under the Investment Company Act of 1940,
as amended (the"Act"), as an open-end, management investment company. The Trust
consists of one portfolio. The financial statements included herein are only
those of WCT Equity Fund (the "Fund"), a diversified portfolio. The investment
objective of the Fund is to provide long-term capital appreciation.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
Investment Valuations
Listed equity securities are valued at the last sale price reported on a
national securities exchange. Short-term securities are valued at the prices
provided by an independent pricing service. However, short-term securities with
remaining maturities of sixty days or less at the time of purchase may be valued
at amortized cost, which approximates fair market value. Investments in other
open-end regulated investment companies are valued at net asset value.
Investment Income, Expenses and Distributions
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the"Code"). Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
Federal Taxes
It is the Fund's policy to comply with the provisions of theCode applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of its income. Accordingly, no provisions for federal tax are
necessary.
When-Issued and Delayed DeliveryTransactions
The Fund may engage in when-issued or delayed deliverytransactions. The Fund
records when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.
Other
Investment transactions are accounted for on the tradedate.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<S> <C> <C>
Period Ended October 31, December 15,
1998/1/ 1997
Seeded share/2/ -- 10,000
Shares sold 6,998,669 --
Shares issued to shareholders in payment of distributions declared 26,439 --
Shares redeemed (1,788,204) --
NET CHANGE RESULTING FROM SHARE TRANSACTIONS 5,236,904 10,000
</TABLE>
1 Reflects operations from December 16, 1997 (date of initial public investment)
to October 31, 1998.
2 Reflects the issuance of 10,000 shares at $10.00 per share to the
Administrator on November 17, 1997 (start of business).
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Advisory Fee
West Coast Trust Company, Inc., the Fund's investment adviser (the "Adviser"),
receives for its services an annual investment advisory fee equal to 0.75% of
the Fund's average daily net assets. The Adviser may voluntarily choose to waive
any portion of its fee. The Adviser can modify or terminate this voluntary
waiver at any time at its sole discretion.
Under the terms of a sub-advisory agreement between the Adviser and Becker
Capital Management, Becker Capital Management receives an annual fee from the
Adviser equal to 0.50% of the Fund's average daily net assets. In addition,
Becker Capital Management may voluntarily choose to reduce its compensation. For
the period ended October 31, 1998, Becker Capital Management, Inc. earned a sub-
advisory fee of $203,303.47.
Administrative Fee
Federated Services Company ("FServ") provides the Fund with certain
administrative personnel and services. The fee paid to FServ is based on the
level of average aggregate net assets of the Fund for the period.
Distribution Services Fee
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act. Under the terms of the Plan, the Fund will compensate Edgewood
Services, Inc., the principal distributor, from the net assets of the Fund to
finance activities intended to result in the sale of the Fund's shares. The Plan
provides that the Fund may incur distribution expenses up to 0.25% of the
average daily net assets of the Fund shares, annually, to compensate Edgewood
Services, Inc. For the period ended October 31, 1998, the Fund did not incur a
distribution services fee.
Shareholder Services Fee
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company ("FSS"), the Fund will pay FSS up to 0.25% of average daily net
assets of the Fund shares for the period. The fee paid to FSS is used to finance
certain services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive any portion of its fee. FSS can modify or terminate
this vountary waiver at any time at its sole discretion. For the period from
December 16, 1997 to April30, 1998, the Fund did not incur a shareholder
services fee.
Transfer and Dividend Disbursing Agent Fees and Expenses
FServ, through its subsidiary, FSSC serves as transfer and dividend disbursing
agent for the Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
Portfolio Accounting Fees
FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.
General
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1998, were as follows:
Purchases $ 71,607,491
Sales $ 38,214,405
YEAR 2000 (UNAUDITED)
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
Report of Independent Public Accountants
TO THE BOARD OF TRUSTEES OF WCT FUNDS
AND SHAREHOLDERS OF WCT EQUITY FUND:
We have audited the accompanying statement of assets and liabilities of WCT
Equity Fund (an investment portfolio of WCT Funds, a Massachusetts business
trust), including the schedule of portfolio investments, as of October 31, 1998,
the related statement of operations for the period then ended, the statement of
changes in net assets for the period then ended, and the financial highlights
for the period presented. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audit.
We conducted our audit in accordance with generally accepted standards. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of October 31, 1998, by
correspondence with the custodian and brokers. As to securities purchased but
not received, we requested confirmation from brokers and when replies were not
received, we carried out alternative auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of WCT
Equity Fund (an investment portfolio of WCT Funds) as of October31, 1998, the
results of its operations for the period then ended, the changes in its net
assets for the period then ended, and its financial highlights for the period
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
December 23, 1998
WCT Equity Fund
A Portfolio of the WCT Funds
[WCT FUNDS LOGO]
DECEMBER 31, 1998
An investment in WCT Equity Fund is not a deposit of a bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
A Statement of Additional Information (SAI) dated December 31, 1998 is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Funds' annual and semi-annual reports to
shareholders. The annual report discusses market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year. To obtain the SAI, the annual and semi-annual reports and other
information without charge write to or call West Coast TrustServicing Center at
1-888-5-WCT-FUND (1-888-592-8386).
You can obtain information about WCT Funds by visiting or writing the Public
Reference Room of the Securities and Exchange Commission in Washington, DC,
20549-6009, or from the SEC's Internet Web site at: http://www.sec.gov. You
cancall 1-800-SEC-0330 for information on the Public Reference Room's operations
and copying charges.
Edgewood Services, Inc.
Distributor
SEC File No. 811-08335
Cusip 9293E100
G02161-01 (12/98) [RECYCLED PAPER LOGO]
WCT Equity Fund
(a portfolio of WCT Funds)
The WCT Equity Fund is intended to provide long-term capital appreciation
without subjecting shareholders to undue risk. The Fund pursues its objective by
investing primarily in common or preferred stock of large or medium sized
companies with market capitalizations in excess of $1.5 billion. Occasionally,
the Fund will hold small cap issues which satisfy the manager's valuation
discipline. The common and preferred stocks the Fund invests in are generally
characterized as having low price to earnings ratios, and as having growth and
quality characteristics which match or exceed those companies which comprise the
S&P 500 Index. As a matter of investment policy, the Fund will invest so that,
under normal circumstances, at least 80% of its total assets are invested in
equity securities.
While interest rates moved persistently lower during the year (30-year U.S.
Treasury Bond yields broke below 5% for the first time ever on September 30th)
and inflation remains subdued, the economy has clearly slowed. Further, August's
market decline was the most severe since the 1987 crash and, notably, the month
witnessed the first net withdrawals from stock mutual funds since 1990. Taken
all together, we view the recent period as a "stealth" bear market, the
magnitude of which has been masked by the relative resistance to decline by the
largest companies in the major indexes. Investment markets abhor uncertainty
and, to state the obvious, the U.S. and global economies are very unsettled.
Within this very unsettled economic backdrop, the extraordinary narrow nature of
what has become an "expensive" market, persists and is worrisome. Valuation
disparity between large-cap, high multiple company stock and small/mid-cap
issues is near record levels. This gap will compress, implying very attractive
opportunity among laggard groups and among quality, fundamentally sound mid- cap
issues.
In the near-term, however, the volatile global economic picture has helped
create an investor attitude of focusing primarily upon perceived "quality"
afforded by stock of larger companies with little regard for levels of
valuation. Consequently, and due in part to the Fund's average market
capitalization of $13.5 billion, performance by the Fund has significantly
lagged the large-cap dominated S&P500 Index. Further, the Fund's exposure to the
economically sensitive market sectors of energy (19% of the portfolio), capital
goods (9%), and the material & services group (10%) and an underweighted
representation in consumer non-durable issues (7.6%) has also impaired near-term
results.
We continue to believe that recession in the U.S. will be avoided, although an
economic slowdown is certainly underway. Less earnings growth will result and,
in many instances, year over year earnings declines are likely due to narrowing
profit margins. In part, the concern reflected by falling share prices is not
knowing how far profits will decline and how overly optimistic '98 and '99
earnings estimates might be. In our view the market is being impacted by three
elements of uncertainty:
. The length and magnitude of the downturn in the Asian economies which is now
clearly affecting other economies. We continue tobelieve that the U.S. will
avoid a recession; as economist Paul Samuelson once observed "the stock market
has forecast 9 of the last 5 recessions." Nevertheless, earnings growth for
many U.S. companies has slowed, and will continue to be a key concern for the
market.
. A domestic and foreign leadership vacuum has contributed to a lack of decisive
action to stem the tide of problems related to currencies and overseas
markets.
. Concern over whether the recent bailout of a large, leveraged hedge fund (Long
Term Capital, L.P.) represented an isolated event or a much larger problem for
the markets and regulators. Since then, other hedge funds have reported
liquidity problems and significant losses.
All of the concerns noted above notwithstanding, there are clear reasons to be
optimistic on the prospects for many stocks. Corporate balance sheets are in the
best shape seen in many years as a result of low interest rates and equity
market strength. Given the valuation adjustment this market has produced, it
would not surprise us to see this balance sheet strength used to increase share
repurchases or undertake mergers and acquisitions. Management buyouts are
another distinct possibility. Combined, these could be the catalysts that
produce better results for many broad market stocks. Finally, management focus,
cost-cutting, and elimination of inefficient capacity have left U.S. companies
among the most productive businesses in the world, and in good position to
garner increased share of markets in an economic slowdown. The result could be
that earnings prove to be much less vulnerable in this downturn than previous
cycles would suggest.
Conditions are never the same, but sell-offs do present opportunity. Selection
is critical and disciplines must be followed. Strategically, we'll upgrade
fundamental quality where the opportunity is presented. Energy, financial
service issues, technology and many cyclical oriented companies which have been
under extreme price pressure afford attractive long-term appreciation potential.
Further, our available "selection pool" has enlarged as larger cap issues, which
had been too expensive to satisfy our value disciplines, have corrected in price
enough to now be considered.
Our value-oriented convictions are being tested, but we have been through
periods of disappointing performance before. Ultimately, adherence to our
disciplines has been rewarding in subsequent periods.
WCT Equity Fund
Growth of $10,000 Invested in WCT Equity Fund
The graph below illustrates the hypothetical investment of $10,000* in WCT
Equity Fund (the"Fund") from December 16, 1997** to October 31, 1998, compared
to the Russell Mid-Cap Value Index.+
[GRAPH APPEARS HERE. SEE APPENDIX FOR DESCRIPTION]
Past performance is not predictive of future performance. Your investment return
and principal value will fluctuate, so when shares are redeemed, they may be
worth more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge= $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The Russell Mid-Cap Value has been adjusted to
reflect reinvestment of dividends on securities in the index.
** Reflects date of initial public investment.
*** Total Return quoted reflects all applicable sales charges.
+ The Russell Mid-Cap Value Index is not adjusted to reflect sales charges,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. The indices are unmanaged.
Edgewood Securities, Inc.
G02309-06 (12/98)
Appendix
The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. WCT Equity
Fund based on a 4.50% sales load are represented by a solid line. The Russell
Mid-Cap Value Index is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Fund and the Russell Mid-Cap Value Index. The "x" axis
reflects computation periods from 12/16/97 (start of performance) to 10/31/98.
The "y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Fund, based on a 4.50% sales
load, as compared to the Russell Mid-Cap Value Index. The ending values were
$8,953 and $10,298, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Fund's Total Return from the Fund's start of
performance (12/16/97) to 10/31/98. The total returns is (6.25%).
